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Market Cap
£8.42m
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Share Price
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Interim Results
Jacques Vert PLC
12 January 2007
DATE: Embargoed until 07.00am, Friday 12 January 2007
CONTACTS: Paul Allen, Chief Executive
Ian Johnson, Group Finance Director
Jacques Vert Plc
Tel: 08700 345636
Alistair Mackinnon-Musson
Nicola Savage
Hudson Sandler
Tel: 020 7796 4133
Email: jacquesvert@hspr.com
Photographs available: Please contact Hudson Sandler, as above
JACQUES VERT PLC
INTERIM RESULTS
Jacques Vert Plc, the womenswear clothing retailer, is pleased to announce its
Interim results for the 26 weeks ended 28 October 2006, together with an update
on trading for the 10 weeks since that date.
The Group retails four womenswear brands: Jacques Vert, Windsmoor, Planet and
Precis. Sales are made predominantly in the UK, Canada and Eire through circa
960 outlets.
The key points are:
• Retail sales up 8.9% to £57.7m (2005: £53.0m) and 7.8% on a like for like
basis
• Operating profit before exceptional items from continuing operations
increased by 52% to £2.4m (2005: £1.6m)
• Profit before tax of £12.1m (2005: £1.2m) is after a net exceptional credit
of £10.0m (2005: £nil) primarily in respect of a curtailment gain on the
winding up of the Baird Group Pension Scheme
• Sale of Wholesale Business, Melka Tenson, completed for an Enterprise
Value of £6.25m, yielding net cash to the Group of approximately £2.1m
• Balance sheet strengthened - pro forma Group net assets at 28 October 2006
are £20.6m including net cash of £1.1m (after reflecting the Melka Tenson
sale)
• Retail sales ahead by 7.8% in the 10 weeks since 28 October 2006; like
for like sales increased by 8.0%
Commenting, Derek Lovelock, Chairman, said
"We are delighted with the progress made over the past 12 months which means the
Group is now able to concentrate on its core womenswear retail business. We look
forward to building on the encouraging trading performance since the beginning
of the year."
Chief Executive's Statement
Overview and Results
This period has been a particularly important one for the Group. The resolution
of the legacy issues, which were announced during the past 12 months together
with the recently completed sale of the Wholesale Division allows the Group to
focus on developing the Retail Division.
The trading results for the 26 weeks to 28 October 2006 also show pleasing
progress. Group turnover was £68.8m (2005: £65.7m) and the Group generated a
profit before tax (pre-exceptional items) of £2.1m (2005: £1.2m restated). The
results for the period reflect a net exceptional credit of £10.0m which mainly
relates to the Baird Group Pension Scheme compromise agreement which was
announced on 7 July 2006.
After exceptional items the Group made a profit before tax of £12.1m (2005: £1.2m restated).
Retail Division
Total sales for the Retail Division increased by 8.9% to £57.7m (2005: £53.0m)
and on a like for like basis sales were up by 7.8%. This is a very creditable
performance in what is a difficult trading environment. We are particularly
pleased with the performance of the Planet and Precis brands.
Gross margin for the period was 64.3% compared to 65.2% last year.
Operating costs excluding exceptional items increased to £34.5m (2005: £32.9m
restated) mainly as a result of an increase in the amount of retail space.
Operating profit before exceptional items was £2.4m (2005: £1.6m restated).
Impact of the sale of the Wholesale Division
On 29 December 2006, Jacques Vert completed the disposal of its Wholesale
Division through the sale of 100% of its shareholding in MT Owner AB and its
subsidiaries to Lagrummet December 1331 AB, a company incorporated and financed
by EQT Opportunity, part of Sweden's largest private equity group. The results
of the Division have therefore been treated as discontinued operations in this
statement.
The Enterprise Value of the transaction of approximately £6.25 million, included
the repayment of existing Group debt and the assumption by the purchaser of net
debt outstanding to third parties at completion including pension liabilities.
After costs relating to the transaction, Jacques Vert received net cash of
approximately £2.1 million.
The net book value of the net assets of M/T Owner AB included in the
consolidated statutory accounts of Jacques Vert Plc at 29 April 2006 was £1.83
million. Jacques Vert will recognise a profit on disposal of the Wholesale
Division of approximately £1.9m in the year ending 28 April 2007.
Sales for the Wholesale Division were £11.1m (2005: £12.7m) and gross margin was
44.0% (2005: 44.1%). Operating costs excluding exceptional items reduced by 3.8%
to £5.1m (2005: £5.3m). The Division made an operating loss of £0.1m in the six
months to 29 October 2006 compared with an operating profit of £0.3m in the
prior year.
Exceptional Items
The net credit of £10.0m comprises a curtailment gain of £11.0m from the winding
up of the William Baird Group Pension Scheme offset by exceptional charges
within discontinued operations in respect of the restructuring of the Wholesale
Division and costs within the Retail Division relating to onerous property lease
provisions.
Balance Sheet
The Group's balance sheet position is improved by the resolution of the legacy
issues with net assets at 28 October 2006 of £18.7m (2005: £1.9m).
The position has been further improved through the sale of the Wholesale
Division and an unaudited proforma balance sheet reflecting the disposal is set
out below:
As at Pro forma Adjusted as at
28 October 2006 adjustment 28 October 2006
unaudited unaudited unaudited
£m £m £m
Fixed assets 9.0 (1.4) 7.6
Working capital 20.5 (1.6) 18.9
Net (debt)/cash (1.0) 2.1 1.1
Provisions (9.8) 2.8 (7.0)
Shareholders' funds 18.7 1.9 20.6
Current Trading and Future Prospects
Sales in the Retail Division in the 10 weeks since the period end are ahead of
last year by 7.8% and by 8.0% on a like for like basis. This represents a
relatively good performance in the current retail market, but we expect that
difficult market conditions will prevail for the remainder of the financial
year.
Looking to the future, the resolution of the legacy issues and the sale of the
Wholesale Division allows the Group to focus solely on developing the retail
business, by growing the Group's existing brands and through exploring other
strategic opportunities.
Paul Allen
Chief Executive
12 January 2007
Consolidated Profit and Loss Account
For the 26 weeks ended 28 October 2006
Note 26 weeks ended 28 26 weeks ended 29 52 weeks Ended 29
October 2006 October 2005 April 2006
(unaudited) (unaudited) (audited)
(restated) (restated)
£000 £000 £000 £000 £000 £000
Turnover 2
Continuing operations 57,717 52,977 108,953
Discontinued operations 11,067 12,687 24,349
68,784 65,664 133,302
Cost of sales (26,816) (25,466) (51,543)
Gross profit 41,968 40,198 81,759
Operating expenses before 4 (39,672) (38,294) (78,297)
exceptional items
Operating profit before
exceptional items:
- continuing operations 2,426 1,599 3,255
- discontinued operations (130) 305 207
2,296 1,904 3,462
Net exceptional items 3 10,047 - 1,256
Operating profit from 12,907 1,599 4,511
continuing operations
Operating profit from (564) 305 207
discontinued operations
Operating profit 12,343 1,904 4,718
Net interest payable 5a (214) (168) (303)
Unwinding of discount on
provisions and 5b 18 (492) (801)
similar items
Profit on ordinary
activities before 2 12,147 1,244 3,614
taxation
Tax (charge) / credit on
profit on ordinary
activities 6 (60) 20 (834)
Profit on ordinary
activities after taxation
and retained profit for the
period
12,087 1,264 2,780
Basic earnings per share 7
- total 6.39p 0.67p 1.47p
- continuing operations 6.73p 0.55p 1.50p
Diluted earnings per share 7
- total
- continuing operations 6.23p 0.67p 1.47p
6.56p 0.55p 1.50p
The comparative figures have been restated following the adoption of FRS20,
"Share based Payment" (see note 1).
Consolidated Balance Sheet
At 28 October 2006
Note 26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
£000 £000 £000
Fixed Assets
Intangible assets 2,359 2,503 2,431
Tangible assets 6,630 6,911 6,889
8,989 9,414 9,320
Current assets
Stocks 30,120 26,098 28,309
Debtors: amounts due within one year 19,517 22,033 19,984
Current asset investment - 100 -
Cash at bank and in hand 4,847 5,486 3,065
54,484 53,717 51,358
Creditors: amounts due within one year
Borrowings (5,854) (3,435) (3,463)
Trade and other creditors (29,071) (24,354) (23,703)
(34,925) (27,789) (27,166)
Net current assets 19,559 25,928 24,192
Total assets less current liabilities 28,548 35,342 33,512
Provisions for liabilities and charges 8 (9,592) (33,415) (26,489)
Net assets 18,956 1,927 7,023
Capital and reserves
Called up equity share capital 19,244 19,244 19,244
Share premium account 4,599 4,599 4,599
Merger reserve 969 969 969
Profit and loss deficit (5,856) (22,885) (17,789)
Equity shareholders' funds 18,956 1,927 7,023
Consolidated Cash Flow Statement
For the 26 weeks ended 28 October 2006
26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
(restated) (restated)
£000 £000 £000
Net cash inflow from operating activities 773 3,733 2,412
Returns on investments and servicing of finance
Income from current asset investment - 300 300
Interest received 150 75 117
Interest paid (395) (243) (464)
(245) 132 (47)
Taxation
Corporation tax received 9 20 9
Capital
Purchase of tangible fixed assets (1,111) (1,423) (2,447)
Proceeds from sale of fixed assets - 724 752
(1,111) (699) (1,695)
Cash inflow before financing (574) 3,186 679
Financing
Sale/ (purchase) of own shares under an 36 (431) (426)
employee ownership plan
Increase in bank loans 2,500 - -
Increase in cash in the period 1,962 2,755 253
Reconciliation of operating profit to net cash
inflow from operating activities
Operating profit 12,343 1,904 4,718
Depreciation charge 1,148 1,080 2,188
Amortisation of goodwill 72 72 144
Value of employee services under share options 79 57 114
Decrease in working capital 3,820 2,865 873
Decrease in provisions (16,689) (2,245) (5,625)
Net cash inflow from operating activities 773 3,733 2,412
Reconciliation of net cash flow to
movement in net (debt)/cash
Increase in cash in the period 1,962 2,755 253
Increase in bank loans (2,500) - -
Change in net debt resulting from cash flows (538) 2,755 253
Exchange rate differences (71) (153) (100)
Movement in net debt in the period (609) 2,602 153
Net debt at beginning of period (398) (551) (551)
(1,007) 2,051 (398)
Net (debt)/cash at end of period
Statement of Total Recognised Gains and Losses
For the 26 weeks ended 28 October 2006
26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
(restated) (restated)
£000 £000 £000
Profit attributable to ordinary shareholders 12,087 1,264 2,780
Currency translation differences on foreign (269) 29 (171)
currency net investments
Actuarial gain on pension scheme - - 3,718
Total recognised gains and losses relating to the 11,818 1,293 6,327
period
Reconciliation of Movements in Equity Shareholders'
Funds
For the 26 weeks ended 28 October 2006
26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
(restated) (restated)
£000 £000 £000
Opening equity shareholder' funds 7,023 1,008 1,008
Profit attributable to shareholders for the period 12,087 1,264 2,780
Currency translation differences on foreign (269) 29 (171)
currency net investments
Transfer/(purchase) of shares under an Employee 36 (431) (426)
Share Ownership Plan
Value of employee services under share 79 57 114
options
Actuarial gain on pension scheme - - 3,718
Closing equity shareholders' funds 18,956 1,927 7,023
Notes to the Financial Statements
For the 26 weeks ended 28 October 2006
1. Accounting policies
Basis of preparation
The interim consolidated financial information is not audited and does not
constitute statutory financial statements as defined in section 240 of the
Companies Act 1985. Comparative figures for the year ended 29 April 2006,
restated as detailed below, have been extracted from the Group Financial
Statements on which the auditors gave an unqualified opinion and did not include
a statement under section 237 (2) or (3) of the Companies Act 1985. The Group
Financial Statements for the year ended 29 April 2006 have been filed with the
registrar of Companies.
The results for the first half of the financial year are prepared on the basis
of the accounting policies set out in the Group's 2006 Annual Report and
Financial Statements except as stated below.
Change in accounting policy
The Group adopted FRS20, "Share based payments", for the first time during the
period ended 28 October 2006. Accordingly, the prior year comparatives have been
restated to reflect this change in accounting policy. The impact of this change
on the profit and loss account was a reduction in profits for the period to 29
October 2005 of £57,000 and a reduction in profits for the year to 29 April 2006
of £114,000.
The adoption of this accounting policy has no impact on the net assets of the
Group at 29 October 2005 or 29 April 2006.
2. Segmental analysis
The tables below set out information on a global basis for each of the
Group's business segments.
Turnover by destination 26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
£000 £000 £000
Geographic Area
United Kingdom 50,202 48,199 95,929
Rest of Europe 12,774 12,889 27,853
Rest of World 5,808 4,576 9,520
68,784 65,664 133,302
Activity
Retail - continuing 57,717 52,977 108,953
Wholesale - discontinued 11,067 12,687 24,349
68,784 65,664 133,302
Discontinued operations comprise the Wholesale Division. The sale of the
Wholesale Division was completed on 29 December 2006.
Of the turnover from the Rest of Europe, £10,029,000 relates to discontinued
operations (26 weeks to 29 October 2005: £11,387,000; 52 weeks to 29 April
2006: £21,810,000). Of the turnover from the UK, £1,038,000 relates to
discontinued operations (26 weeks to 29 October 2005: £1,300,000; 52 weeks to 29
April 2006: £2,539,000).
Turnover by origin is not materially different from turnover by destination.
2. Segmental analysis (continued)
Profit/(loss) before tax 26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (restated) (restated)
(unaudited) (audited)
Geographic Area £000 £000 £000
United Kingdom 11,148 152 3,303
Rest of Europe (69) 410 (239)
Rest of World 1,068 682 550
12,147 1,244 3,614
Activity
Retail - continuing 1,823 1,528 3,415
Wholesale - discontinued (757) 208 (256)
Legacy business provisions - continuing 11,081 (492) 455
12,147 1,244 3,614
Of the profit / (loss) before tax from the Rest of Europe, a £488,000 loss
relates to discontinued operations (26 weeks to 29 October 2005: £534,000
profit; 52 weeks to 29 April 2006: £279,000 profit). Of the profit / (loss)
before tax from the UK, £269,000 loss relates to discontinued operations (26
weeks to 29 October 2005: £326,000 loss; 52 weeks to 29 April 2006: £752,000
loss).
Net Assets 26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
Geographic Area £000 £000 £000
United Kingdom 13,906 (4,009) 2,643
Rest of Europe 3,738 4,758 3,958
Rest of World 1,312 1,178 422
18,956 1,927 7,023
Activity
Retail - continuing 29,687 26,290 27,927
Wholesale - discontinued 3,108 4,758 4,016
Legacy business provisions - continuing (13,839) (29,121) (24,920)
18,956 1,927 7,023
Of the net assets held in the Rest of Europe at 28 October 2006, £4,129,000
relate to discontinued operations (29 October 2005: £5,084,000; 29 April 2006:
£5,094,000). Of the net assets held in the UK at 28 October 2006, a £1,021,000
liability relates to discontinued operations (29 October 2005: £326,000
liability; 29 April 2006: £1,078,000 liability).
3. Net exceptional items
The exceptional items included in operating profit are as follows:
26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
£000 £000 £000
Legacy
Increase / (Release) of provisions relating to 551 - (1,256)
legacy issues
Curtailment gain on pension scheme (11,032) - -
(see note 9)
Total Exceptional Credit on continuing operations (10,481) - (1,256)
Discontinued operations
Restructuring costs 434 - -
Total Exceptional Credit (10,047) - (1,256)
Exceptional costs within discontinued operations comprise mainly the
restructuring of administration functions in the Wholesale Division, which was
disposed of on 29 December 2006.
Legacy business refers to activities acquired as part of William Baird Ltd
(formerly William Baird PLC) and considered by the directors to constitute
separate activities. These include provisions relating to onerous leases,
defined benefit pension schemes and industrial disease claims.
4. Net operating expenses
26 weeks ended 28 October 2006 26 weeks 52 weeks ended 29 April 2006
ended 29
October 2005
Before Exceptional After After Before Exceptional After
Exceptional Items Exceptional Exceptional Exceptional Items Exceptional
Items Items Items Items Items
(unaudited) (unaudited) (unaudited) (unaudited) (audited) (audited) (audited)
(restated) (restated) (restated)
£000 £000 £000 £000 £000 £000 £000
Distribution 31,232 - 31,232 30,195 65,083 - 65,083
costs
Administration 8,440 (10,047) (1,607) 8,099 13,214 (1,256) 11,958
expenses
39,672 (10,047) 29,625 38,294 78,297 (1,256) 77,041
There were no exceptional items in the 26 weeks ended 29 October 2005.
5. Analysis of net interest payable and similar items
26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
£000 £000 £000
a) Net interest payable
Continuing operations 171 88 137
Discontinued operations 43 80 166
214 168 303
b) Unwinding of discount on provisions and
similar charges
Unwinding of discount on provisions 217 363 435
Finance (credit) / charge on pension schemes (235) 129 366
(18) 492 801
Net interest payable and similar items 196 660 1,104
6. Tax on profit on ordinary activities
No UK tax on profit on ordinary activities has been recognised in the period
to 28 October 2006 (2005: £nil; year to 29 April 2006: £nil).
A charge of £60,000 has been made in the period to 28 October 2006
relating to tax on overseas operations (2005: £20,000 credit; year ended 29
April 2006: £34,000 credit).
7. Earnings per Share
Basic/diluted earnings per share
The basic earnings per share have been calculated by dividing the
profit after taxation for the period by the weighted average number of shares in
issue during the period excluding those held by the employee share ownership
plan ("ESOP"). At 28 October 2006, 3,370,678 shares were held in the ESOP
(October 2005: 4,147,100; April 2006: 3,584,880).
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 two classes of dilutive potential ordinary shares: those
share options granted to employees where the exercise price is lower than the
average market price of the company's ordinary shares during the year and the
awards under the company's long-term incentive plan ("the LTIP") to the extent
that performance criteria attached to those awards are expected to be met.
Adjusted earnings per share
The directors consider that an appropriate measure of performance of
the group is the adjusted earnings per share for the continuing operations ("
adjusted EPS"). The adjusted EPS has been calculated by dividing an adjusted
profit for the period by the weighted average number of shares in issue during
the period as shown below:
26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
(restated) (restated)
Adjusted earnings per share 1.22p 0.85p 1.34p
- Basic
Adjusted earnings per share 1.18p 0.85p 1.34p
- Diluted
The calculation of adjusted earnings is shown below:
Adjusted profit for the period: 26 weeks ended 26 weeks ended 52 weeks ended
28 October 2006 29 October 2005 29 April 2006
(unaudited) (unaudited) (audited)
£000 (restated) (restated)
£000 £000
Profit for the period 12,087 1,264 2,780
Loss /(profit) from discontinued
operations 638 (225) 56
Profit on ordinary activities after tax - 12,725 1,039 2,836
continuing
Exceptional items - continuing (10,481) - (1,256)
Goodwill amortisation 72 72 144
Unwinding of discount on provisions (18) 492 801
Adjusted profit for the period - continuing 2,298 1,603 2,525
8. Provisions
Pension Other legacy Total
provisions business
provisions
(unaudited) (unaudited) (unaudited)
£000 £000 £000
At 30 April 2006 21,028 5,461 26,489
(Credited)/ charged to Profit and Loss (11,032) 551 (10,481)
account
Utilised (5,487) (873) (6,360)
Unwinding of discount 31 186 217
Finance credit (235) - (235)
Exchange rate adjustments (35) (3) (38)
At 28 October 2006 4,270 5,322 9,592
9. Curtailment gain on pension scheme
The Board entered into a compromise agreement with the Trustee of
the Baird Group Pension Scheme ("BGPS") on 7 July 2006. Under the terms of this
agreement, a new defined benefit scheme will be established and the members of
the BGPS will be offered options of either a buyout of their benefits, transfer
to the new defined benefit scheme, transfer to another registered pension
scheme, or, in some cases, a cash lump sum.
At 29 October 2006, the wind-up process was still underway and the
BGPS remained in existence. A finance credit has been calculated in accordance
with FRS17 based on the estimated returns on scheme assets and liabilities at
the beginning of the period. The provision to wind up the BGPS, under the terms
of the compromise agreement, gives rise to an estimated curtailment gain of
£11,032,000 (see note 3). The final curtailment gain will be calculated once the
final outcome of the winding up of the BGPS is known.
10. Post balance sheet event
On 29 December 2006 the Group sold 100% of the shares in M/T Owner
AB ("Melka Tenson") whose activities comprise the Group's Wholesale Division.
The results of the subsidiary have been disclosed as discontinued operations.
The preliminary purchase price received on 29 December 2006 gives rise to a
profit on disposal of approximately £1.9m. The final purchase price will be
adjusted to take account of any difference between estimated and actual working
capital as shown in the completion balance sheet of M/T Owner AB as at 29
December 2006.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange