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Date: Thursday 26 June 2008

Embargoed: 7.00am

Slimma plc

('Slimma' or 'the Company')

Interim Results

for the 26 weeks ended 28 March 2008

STATEMENT BY THE NON-EXECUTIVE CHAIRMAN, CAROLYN SIMONS

The combination of unseasonable weather conditions, rising household expenditure, falling house prices and adverse credit publicity is, in our opinion, having a negative impact on our customers' purchasing. However, we are making good progress in adapting the business to combat this challenging climate which appears set to continue for some time.

Our primary initiative during the period under review was to achieve a recovery from the significant fall in profits experienced by the Company during the second half of the previous financial year. Management was determined that this fall in profit would not continue during the first half of the current financial year and I am pleased to report that we have succeeded in achieving this.

Our next challenge was to reposition operating overheads in line with the current sales environment. This has entailed re-organisation of the Company targeted at achieving a reduction of approximately £1.5 million of overheads in the current financial year when compared with the previous financial year. Again, I am very pleased to report that excellent progress is being made and by the end of the current financial year, we expect to have achieved this objective. The board anticipates that the full benefits of this re-organisation will be recognised in our next financial year commencing October 2008.

Our focus on margin recovery initiatives is helping the Company to achieve similar margin levels to those achieved in the last financial year and we hope that further projected savings in logistics costs will help counter cost increases in this area of our business.

Our premier brand, Frank Usher, together with its sub brands, successfully avoided the sales problems experienced with the rest of our branded portfolio and retained sales at the same levels as last year. Although this included a significant sales reduction in Italy, Spain and Canada, a strong performance in sales to UK independent shops produced a sales increase, when compared to the same period last year, in excess of 6%, which served to offset the export loss.

The remainder of our brands experienced disappointing sales falls of between 16% and 30% when compared to the same period last year. Mail Order was worst effected, with trade customers tightening their buying budgets and stock controls in view of the deteriorating economic climate. We are currently interviewing both our branded agents and retail customers to aid us in constructing revised marketing plans and sales initiatives to match the current trading environment and to help ensure no further sales loss occurs as we form a new platform for growth.

Export sales for the period were 30.2% of total sales and remain an important feature of our business.

Given that savings on expenses and margin recovery initiatives will not be fully realised until the commencement of our Spring/Summer 2009 selling period, the Company faces challenging trading for the remainder of the current financial year. Despite this, we are cautiously optimistic that we can return a much improved result for the new financial year commencing October 2008.

Enquiries:
Stephen Thwaite, Chief Executive	David Youngman	Katie Dale, Head of Financial PR/IR
Slimma plc	WH Ireland Limited	Golley Slater
Tel: 01538 399 141	Tel: 0161 832 2174	Tel: 0121 384 9743
www.slimma.com		Mobile: 07918 716 754

  Interim Income Statement  

For the 26 weeks ended 28 March 2008 

		Interim		Interim		Final
		26 weeks		26 weeks		52 weeks
		ended		ended		ended
		28 March		30 March		28 September
		2008		2007		2007
		(unaudited)		(unaudited)		(audited)
		£'000		£'000		£'000
Revenue		8,130		9,270		15,702
Operating expenses		(7,953)		(9,054)		(16,586)
Operating profit /(loss)		177		216		(884)
Finance income		-		2		12
Finance costs		(113)		(71)		(164)
Profit/(loss) before income tax		64		147		(1,036)
Income tax (expense)/credit		(20)		(48)		281
Profit/(loss) for the period		44		99		(755)
Profit/(loss) attributable to equity holders of the Company		44		99		(755)
Earnings per ordinary share (basic and diluted)		0.47p		1.06p		(8.05p)

Statement of recognised income and expense

		Interim		Interim		Final
		26 weeks		26 weeks		52 weeks
		ended		ended		ended
		28 March		30 March		28 September
		2008		2007		2007
		(unaudited)		(unaudited)		(audited)
		£'000		£'000		£'000
Profit/(loss) for the period		44		99		(755)
Actuarial gain on defined benefit pension scheme		-		-		221
Related deferred tax on actuarial gain		-		-		(81)
Total recognised income and expense		44		99		(615)
Attributable to equity holders of the Company		44		99		(615)

  Balance Sheet

As at 28 March 2008

		28 March		30 March		28 September
		2008		2007		2007
		(unaudited)		(unaudited)		(audited)
		£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment		181		638		584
Intangible assets		584		652		629
Deferred income tax assets		187		-		207
Pension scheme surplus		242		-		242
		1,194		1,290		1,662
Current assets
Inventories		2,177		2,324		2,441
Trade and other receivables		5,816		6,323		4,029
Financial assets		3		33		-
Cash and cash equivalents		20		19		40
Total current assets		8,016		8,699		6,510
Total assets		9,210		9,989		8,172
Non-current assets held for sale		371		-		-
LIABILITIES
Non-current assets
Pension scheme deficit		-		60		-
		-		60		-
Current liabilities
Financial liabilities		3,301		2,989		2,678
Trade and other payables		2,305		2,178		1,563
Total current liabilities		5,606		5,167		4,241
Total Liabilities		5,606		5,227		4,241
Total net assets		3,975		4,762		3,931
Equity
Share capital		521		521		521
Share premium		3,024		3,024		3,024
Capital reserve		62		62		62
Capital redemption reserve		285		285		285
Treasury shares		(600)		(600)		(600)
Retained earnings		683		1,470		639
Total equity attributable to the equity holders of the Company		3,975		4,762		3,931

  Cash Flow Statement

For the 26 weeks ended 28 March 2008

		26 weeks		26 weeks		52 weeks
		Ended		ended		ended
		28 March		30 March		28 September
		2008		2007		2007
		(unaudited)		(unaudited)		(audited)
		£'000		£'000		£'000
Operating activities
Profit/(loss) before income tax		64		147		(1,036)
Finance income		-		(2)		(12)
Finance costs		113		71		164
Impact of defined benefit pension scheme		-		-		(191)
Depreciation charge		59		73		148
Amortisation of intellectual property assets		34		35		69
Amortisation of design assets		208		211		411
Taxation repaid		0		77		75
		478		612		(372)
Changes in working capital
Inventories		264		(260)		(377)
Trade and other receivables		(1,787)		(1,686)		697
Financial assets		(3)		(2)		31
Financial liabilities		(47)		50		27
Trade and other payables		742		94		(447)
		(831)		(1,804)		(69)
Cash from operating activities		(353)		(1,192)		(441)
Net financing cost		(113)		(69)		(162)
Net cash from operating activities		(466)		(1,261)		(603)
Investing activities
Capital expenditure less disposals		(27)		(38)		(59)
Capitalisation of expenditure on design asset		(197)		(193)		(404)
Net cash used in investing activities		(224)		(231)		(463)
Financing activities
Financing treasury shares		-		(600)		(600)
Equity dividends paid		-		(164)		(281)
Increase in overdraft		670		2,246		1,958
Net cash used in financing activities		670		1,482		1,077
Net (decrease in)/addition to cash and cash equivalents		(20)		(10)		11
Cash and cash equivalents at beginning of the period		40		29		29
Cash and cash equivalents at end of the period		20		19		40

  Statement of Changes in Equity

	Share capital		Share premium		Capital reserve		Capital redemption reserve		Treasury shares		Retained earnings		Total equity
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
	£'000		£'000		£'000		£'000		£'000		£'000		£'000
At 1 October 2006	521		3,024		62		285		(600)		1,535		4,827
Profit for the period to 30 March 2007	-		-		-		-		-		99		99
Dividends	-		-		-		-		-		(164)		(164)
At 30 March 2007	521		3,024		62		285		(600)		1,470		4,762
Loss for the period to 28 September 2007	-		-		-		-		-		(854)		(854)
Dividends	-		-		-		-		-		(117)		(117)
Actuarial gain on pension scheme net of tax	-		-		-		-		-		140		140
At 28 September 2007	521		3,024		62		285		(600)		639		3,931
Profit for the period to 28 March 2008	-		-		-		-		-		44		44
At 28 March 2008	521		3,024		62		285		(600)		683		3,975

  Notes to the interim announcement

For the 26 weeks ended 28 March 2008

• Basis of preparation

Prior to 2007, the Company prepared its audited financial statements under UK Generally Accepted Accounting Principles (UK GAAP). For the 53 weeks ended 3 October 2008 the Company is required to prepare its annual financial statements in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards (IFRS)).  

These interim financial statements have been prepared in accordance with the accounting policies set out below, taking into account the requirements and options in IFRS 1 'First-time adoption of International Financial Reporting Standards'. The Company has not adopted the reporting requirements of IAS 34 'Interim Financial Reporting'. The transition date for the Company's application of IFRS is 1 October 2006 and the comparative figures for 30 March 2007 and 28 September 2007 have been restated accordingly. Reconciliations of the income statement (previously profit and loss account) and balance sheet from previously reported UK GAAP to IFRS are shown in note 9.

IFRS 1 grants certain exemptions from the full requirements of IFRSs in the transition period. The following exemptions have been taken in these consolidated financial statements.

• Business combinations that took place prior to 1 August 2005 have not been revisited under IFRS 3 'Business Combinations'. IFRS 3 has been applied prospectively from the date of transition.

• The Barngate Street property has been measured at fair value. This fair value has been adopted as deemed cost at the date of transition.

• IFRS 2 'Share-based Payment' has not been applied to share-based payments granted before 2002 nor those granted after 7 November 2002 that had vested prior to 1 August 2005.

The interim statements are prepared on the basis of all International Accounting Standards (IAS) and IFRS published by the International Accounting Standards Board (IASB) that are currently in issue. An element of uncertainty still surrounds the application of IFRS as the EU may not endorse all IASB pronouncements, new interpretations may be issued by the International Financial Reporting Interpretations Committee (IFRIC) on existing standards, and best practice continues to evolve. It is therefore possible that the accounting policies set out below may be updated by the time the Company prepares its first full set of financial statements under IFRS for the 53 weeks ending 3 October 2008.

The information relating to the 26 weeks ended 28 March 2008 and 30 March 2007 is unaudited and does not constitute statutory accounts. The comparative figures for the 52 weeks to 28 September 2007 are not the Company's statutory accounts for that financial year. The statutory accounts for the 52 weeks ended 28 September 2007, prepared under UK GAAP, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The interim financial statements are unaudited and have not been reviewed by the auditors.

2    Accounting policies

The interim financial statements have been prepared on the basis of the accounting policies set out in the Company's 28 September 2007 Annual Report other than the following changes which reflect the implementation of International Financial Reporting Standards (see note 1):

a)    Presentation of financial statements

The primary statements within the financial information contained in this document have been presented in accordance with IAS 1, 'Presentation of Financial Statements'.

b)    Impairment of goodwill

The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the fair value less cost to sell of the cash generating units to which the goodwill is allocated. Estimating a fair value less cost to sell requires management to make an estimate of the realisable value of the cash generating units.

c)    Research and development costs

Expenditure on development and improvement of new and existing products that do not meet the recognition criteria of an intangible asset are expensed as incurred. Research costs are expensed as incurred.  

Where development expenditure results in new or substantially improved clothing ranges and it is probable that recovery will take place, it is capitalised and amortised on a straight line basis over the life of the range. Development costs are capitalised as intangible assets in accordance with IAS 38.

d)    Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation with the exception of the Barngate Street property where the fair value at the transition date has been restated as deemed cost. Expenditures incurred after equipment has been placed into operation, such as repairs and maintenance and overhaul costs, are charged to the income statement in the period in which the costs are incurred.

Depreciation is provided on all property, plant and equipment at rates calculated to write down each asset to its estimated residual value over its expected useful life as follows:

Freehold properties            -     3.3% per annum straight line

Short leasehold properties        -     over life of lease

Fixtures, fittings and equipment        -     7-33% per annum straight line

The assets' residual values, useful lives and methods of depreciation are reviewed, and adjusted, if appropriate, at each financial year end.

e)    Lease 

In accordance with IAS 17 the existing leases have been reviewed and continue as operating leases. New leases are reviewed by management and will be classified as operating or finance leases in accordance with the standard. Lease payments made under operating leases are charged to operating expenses as the expense is incurred.

f)    Employee benefits

Liabilities for employee benefits are recognised on the basis of a legal constructive obligation. Liabilities and expenses for employee benefits, which would include outstanding holidays, are recognised in the period in which the service is rendered.

g)    Operating profit

The operating profit represents the profit of the Company before accounting for finance costs or income and income tax credits and expense.

h)    Cash flow

The cash flow statement has been restated to explain the movement in short term cash and cash equivalents. The movement in the overdraft is shown in Financing Activities.

i)    IFRS comparative

For a reconciliation from UK GAAP to IFRS for prior period comparatives see note 9.

Management have re-valued the Barngate Street property on the existing use basis. The property is for sale. At the date of transition this value has been treated as deemed cost in the balance sheet.

3    IAS 19 Employee Benefits

The year ended 28 September 2007 retirement benefit obligations under IAS 19 were provided by the Actuary for the Scheme. The 26 weeks to 28 March 2008 and 30 March 2007 have assumed no movement on the prior September year end deficits.

4    Tax on profit on ordinary activities

Tax for the 26 weeks ended 28 March 2008 has been provided at 30% of profits, which is the anticipated effective rate for the 53 weeks ending 3 October 2008.

5    Dividends

No dividend is proposed.

6    Earnings per share

Earnings per share for 2008 have been calculated on the number of shares in issue, excluding shares held in treasury, throughout the period of 9,382,442 (2007: 9,382,442) and on the profits after taxation for each period. There was no dilutive impact on the earnings per share for the reported periods.  

7    Approval of the Interim Announcement

The Interim Announcement was approved by the Board of Directors on 26 June 2008.

8    Availability of the Interim Announcement

The Interim Announcement will be circulated to all shareholders and will be available from the Company's Registered Office at:

Slimma plc

PO Box 30

Barngate Street

Leek

Staffordshire

ST13 8AR

and also on our web site www.slimma.com where you can also find more information on our brands and products.

9    IFRS Reconciliation of prior period comparatives

The effects of the transition from UK GAAP to IFRS are shown in the reconciliation statements below:

The adjustments relate to the following:

i)    Amortisation of goodwill has been reversed to restate the goodwill as at the transitional balance sheet date of 1 October 2006. Goodwill has been reviewed for impairment on an annual basis, thereafter under the guidance of IAS 36 'Impairment of Assets'.

ii)    Outstanding holiday pay has been reviewed and accrued as appropriate.

iii)    Research and development expenditure was previously expensed as incurred under UK GAAP.

    Under IFRS, development expenditure that results in new or substantially improved products or processes, where it is deemed probable that recovery will take place, are capitalised and amortised on a straight line basis over the product's expected useful economic life.

iv)    The fair values of unsettled forward foreign exchange contracts have been recognised at the balance sheet date.  Movements in fair value are recognised in the income statement.

v)    The Company has re-valued the Barngate Street property on the existing use basis. At the date of transition this value has been treated as deemed cost in the balance sheet.

vi)    The deferred tax implications of the above adjustments have been adjusted in the reconciliations.

vii)    The UK GAAP columns included in the reconciliations represent the numbers previously reported, however the presentation has been amended to comply with IAS 1.

  a)    Balance sheet reconciliation as at 1 October 2006 (transition date)

	29 September
	2006		IAS 16
	(audited)		Property,
	As previously		plant		IAS 38		IAS 19		IAS 39		IAS 12		Restated
	reported		and		Intangible		Employee		Forward		Tax		under
	(UK GAAP)		equipment		assets		benefits		contracts		Adjustments		IFRS
	£'000s		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s
ASSETS
Non-current assets
Property, plant and equipment	594		79		-		-		-		-		673
Intangible assets	374		-		331		-		-		-		705
Deferred tax assets	7		-		-		-		-		(7)		0
Pension scheme surplus	-		-		-		-		-		-		0
	975		79		331		-		-		(7)		1,378
Current assets
Inventories	2,064		-		-		-		-		-		2,064
Trade and other receivables	4,798		-		-		-		-		-		4,798
Financial assets	-		-		-		-		31		-		31
Cash and cash equivalents	29		-		-		-		-		-		29
Total current assets	6,891		-		-		-		31		-		6,922
Total assets	7,866		79		331		-		31		(7)		8,300
LIABILITIES
Non-current assets
Pension scheme deficit	60		-		-		-		-		-		60
Deferred tax liability	0		-		-		-		-		110		110
	60		-		-		-		-		110		170
Current liabilities
Financial liabilities	648		-		-		-		45		-		693
Trade and other payables	2,603		-		-		7		-		-		2,610
Total current liabilities	3,251		-		-		7		45				3,303
Total Liabilities	3,311		-		-		7		45		110		3,473
Total net assets	4,555		79		331		(7)		(14)		(117)		4,827
Equity
Share capital	521		-		-		-		-		-		521
Share premium	3,024		-		-		-		-		-		3,024
Capital reserve	62		-		-		-		-		-		62
Capital redemption reserve	285		-		-		-		-		-		285
Treasury shares	(600)		-		-		-		-		-		(600)
Retained earnings	1,263		79		331		(7)		(14)		(117)		1,535
Total equity attributable to equity holders of the Company	4,555		79		331		(7)		(14)		(117)		4,827

  b)    Reconciliation of income statement for the 26 weeks ended 30 March 2007

		26 weeks ended
		30 March
		2007
		(unaudited)				IAS 36
		As previously		IAS 38		Impairment		IAS 19		IAS 39		Restated
		reported		Intangible		of assets		Employee		Forward		under
		(UK GAAP)		assets		(goodwill)		benefits		contracts		IFRS
		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s
Revenue		9,270		-		-		-		-		9,270
Operating expenses		(8,976)		(19)		22		(33)		(48)		(9,054)
Operating profit /(loss)		294		(19)		22		(33)		(48)		216
Finance income		2		-		-		-		-		2
Finance costs		(71)		-		-		-		-		(71)
Profit/(loss) before income tax		225		(19)		22		(33)		(48)		147
Income tax expense		(74)		6		(7)		11		16		(48)
Profit/(loss) for the period		151		(13)		15		(22)		(32)		99
Profit/(loss) attributable to equity holders of the Company		151		(13)		15		(22)		(32)		99

  c)    Balance sheet reconciliation as at 30 March 2007

	30 March
	2007		IAS 16
	(unaudited)		Property,				IAS 36
	As previously		plant		IAS 38		Impairment		IAS 19		IAS 39		IAS 12		Restated
	reported		and		Intangible		of assets		Employee		Forward		Tax		under
	(UK GAAP)		equipment		assets		(goodwill)		benefits		contracts		Adjustments		IFRS
	£'000s		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s
ASSETS
Non-current assets
Property, plant and equipment	559		79		-		-		-		-		-		638
Intangible assets	318		-		312		22		-		-		-		652
	877		79		312		22		-		-		-		1,290
Current assets
Inventories	2,324		-		-		-		-		-		-		2,324
Trade and other receivables	6,414		-		-		-		-		-		(91)		6,323
Financial assets	-		-		-		-		-		33		-		33
Cash and cash equivalents	19		-		-		-		-		-		-		19
Total current assets	8,757		-		-		-		-		33		(91)		8,699
Total assets	9,634		79		312		22		-		33		(91)		9,989
LIABILITIES
Non-current assets
Pension scheme deficit	60		-		-		-		-		-		-		60
	60		-		-		-		-		-		-		60
Current liabilities
Financial liabilities	2,894		-		-		-		-		95		-		2,989
Trade and other payables	2,138		-		-		-		40		-		-		2,178
Total current liabilities	5,032		-		-		-		40		95		-		5,167
Total Liabilities	5,092		-		-		-		40		95		-		5,227
Total net assets	4,542		79		312		22		(40)		(62)		(91)		4,762
Equity
Share capital	521		-		-		-		-		-		-		521
Share premium	3,024		-		-		-		-		-		-		3,024
Capital reserve	62		-		-		-		-		-		-		62
Capital redemption reserve	285		-		-		-		-		-		-		285
Treasury shares	(600)		-		-		-		-		-		-		(600)
Retained earnings	1,250		79		312		22		(40)		(62)		(91)		1,470
Total equity attributable to equity holders of the Company	4,542		79		312		22		(40)		(62)		(91)		4,762

  d)    Reconciliation of income statement for the year ended 28 September 2007

		52 weeks ended
		28 September
		2007
		(audited)				IAS 36
		As previously		IAS 38		Impairment		IAS 39		Restated
		reported		Intangible		of assets		Forward		under
		(UK GAAP)		assets		(goodwill)		contracts		IFRS
		£'000s		£'000s		£'000s		£'000s		£'000s
Revenue		15,702		-		-		-		15,702
Operating expenses		(16,565)		(7)		44		(58)		(16,586)
Operating profit /(loss)		(863)		(7)		44		(58)		(884)
Finance income		12		-		-		-		12
Finance costs		(164)		-		-		-		(164)
Profit/(loss) before income tax		(1,015)		(7)		44		(58)		(1,036)
Income tax expense		275		2		(12)		16		281
Profit/(loss) for the period		(740)		(5)		32		(42)		(755)
Profit/(loss) attributable to equity holders of the Company		(740)		(5)		32		(42)		(755)

  e)    Balance sheet reconciliation as at 28 September 2007

		28 September
		2007		IAS 16
		(audited)		Property,				IAS 36
		As previously		plant		IAS 38		Impairment		IAS 19		IAS 39		IAS 12		Restated
		reported		and		Intangible		of assets		Employee		Forward		Tax		under
		(UK GAAP)		equipment		assets		(goodwill)		benefits		contracts		Adjustments		IFRS
		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s		£'000s
ASSETS
Non-current assets
Property, plant and equipment		505		79		-		-		-		-		-		584
Intangible assets		261		-		324		44		-		-		-		629
Deferred tax assets		318		-		-		-		-		-		(111)		207
Pension scheme surplus		242		-		-		-		-		-		-		242
		1,326		79		324		44		-		-		(111)		1,662
Current assets
Inventories		2,441		-		-		-		-		-		-		2,441
Trade and other receivables		4,029		-		-		-		-		-		-		4,029
Financial assets		-		-		-		-		-		-		-		-
Cash and cash equivalents		40		-		-		-		-		-		-		40
Total current assets		6,510		-		-		-		-		-		(111)		6,510
Total assets		7,836		79		324		44		-		0		(111)		8,172
LIABILITIES
Current liabilities
Financial liabilities		2,606		-		-		-		-		72		-		2,678
Trade and other payables		1,556		-		-		-		7		-		-		1,563
Total current liabilities		4,162		-		-		-		7		72		-		4,241
Total Liabilities		4,162		-		-		-		7		72		-		4,241
Total net assets		3,674		79		324		44		(7)		(72)		(111)		3,931
Equity
Share capital		521		-		-		-		-		-		-		521
Share premium		3,024		-		-		-		-		-		-		3,024
Capital reserve		62		-		-		-		-		-		-		62
Capital redemption reserve		285		-		-		-		-		-		-		285
Treasury shares		(600)		-		-		-		-		-		-		(600)
Retained earnings		382		79		324		44		(7)		(72)		(111)		639
Total equity attributable to equity holders of the Company		3,674		79		324		44		(7)		(72)		(111)		3,931

ENDIR ZELFLVQBFBBE