The following amendment has been made to the final results announcement released on 31 March 2010 at 7.00 am under RNS 4690J.  A paragraph relating to "Going Concern" was omitted from Note 1 in the announcement.  All other details remain unchanged.  A full amended text is shown below.

 

 

 

 

 

 

Slimma plc

Unaudited Final Results

for the period ended 2 October 2009

 

 

STATEMENT BY THE CHAIRMAN, CAROLYN SIMONS

 

The continuing and challenging global economic circumstances have had a major adverse effect on the Company's local and international market sector and are reflected in the results for the year ended 2 October 2009.

 

Sales for the year amounted to £10.46million (2008: £13.49million), a fall of 22%. Some of this decrease was a direct result of the withdrawal from low margin contract sales and, excluding the lost revenue attributable to this, sales were down 18% as compared to the same period last year.  Export sales accounted for 28% of Company sales (2008: 26%). 

 

Despite a very competitive market place, margins were held at the same level as last year.  Operating losses for the year, before exceptional costs, amounted to £617,000 (2008: £436,000).  This loss includes £100,000 of additional bad debt provisions compared to last year.

 

International accounting standards require the recognition of unrealised losses on derivative contracts. The Company entered into a cap and floor agreement with the bank in June 2008, which has resulted in the requirement for a provision of £168,000 in the year and a restatement of last year's pre tax losses by £173,000.

 

The significantly increased bad debt risks associated with the sector in which the Company operates, the lack of credit insurance, and the tightened and more expensive credit facilities on offer to small businesses in conjunction with the Company's own strengthened credit controls, have contributed to the shortfall in sales and made it increasingly difficult to predict future sales with any degree of certainty.  With this in mind, and with the potential for further sales losses, the Company has accelerated its reorganisation programme based upon a revision of the Company's 2008 strategic financial model.  The revised plan is due to be completed by the end of March 2010 and includes the closure of smaller loss-making brands to allow full concentration by management on the Company's key brands. This revised model should assist the Company in its efforts to move away from its loss making position and provide a better platform for success on the back of an eventual economic recovery.  We are making satisfactory progress towards this goal.

 

Although results continue to be disappointing, management and staff are working extremely hard to ensure the right platform is in place to build for future recovery.  Despite the current market conditions, the board believes the Company will be well placed to take advantage of what it hopes to be an improving economic situation in the coming financial years.

 

 

 

 

 

Enquiries:
Stephen Thwaite, Chief Executive	Dan Bate	Katie Dale
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

 

 

 

 

 

INCOME STATEMENT

For the 52 week period ended 2 October 2009

	52 weeks ended 2 October 2009	53 weeks ended 3 October 2008 (As restated)
	£000	£000
REVENUE - continuing operations	10,459	13,494
Direct costs before exceptional expenses	(11,076)	(13,930)
Exceptional expenses - redundancy costs	(182)	(173)
Exceptional trade receivable impairment	(313)	-
Operating expenses	(11,571)	(14,103)
OPERATING LOSS - continuing operations	(1,112)	(609)
Finance income	20	16
Finance costs	(179)	(237)
Losses from derivatives not designated as hedging instruments	(168)	(173)
LOSS BEFORE INCOME TAX	(1,439)	(1,003)
Income tax (charge)/credit	(297)	216
LOSS FOR THE PERIOD	(1,736)	(787)
LOSS ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY	(1,736)	(787)
EARNINGS PER ORDINARY SHARE (basic and diluted)	(18.50p)	(8.39p)

 

 

 

 

 

STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the 52 week period ended 2 October 2009

	52 weeks ended 2 October 2009	53 weeks ended 3 October 2008 (As restated)
	£000	£000
Loss for the period as previously reported	(1,736)	(614)
Actuarial gain on defined benefit pension scheme	-	4
Related deferred tax on actuarial gain	-	(1)
Prior period adjustment (see note 4)	-	(173)
TOTAL RECOGNISED INCOME AND EXPENSE	(1,736)	(784)
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY	(1,736)	(784)

 

 

 

 

 

 

 

 

 

BALANCE SHEET

At 2 October 2009

	2 October 2009	3 October 2008 (As restated)
ASSETS	£000	£000
NON-CURRENT ASSETS
Property, plant and equipment	433	498
Intangible assets	537	529
Deferred tax assets	58	355
Pension scheme surplus	383	383
	1,411	1,765
CURRENT ASSETS
Inventories	2,887	2,151
Trade and other receivables	2,839	4,149
Financial assets	-	15
Cash at bank and in hand	33	61
TOTAL CURRENT ASSETS	5,759	6,376
TOTAL ASSETS	7,170	8,141
CURRENT LIABILITIES
Financial liabilities	3,560	3,219
Trade and other payables	1,820	1,592
TOTAL CURRENT LIABILITIES	5,380	4,811
NON-CURRENT LIABILITIES
Financial liability	341	173
	341	173
TOTAL LIABILITIES	5,721	4,984
TOTAL NET ASSETS	1,449	3,157
EQUITY
Share capital	521	521
Share premium	3,052	3,024
Capital redemption reserve	285	285
Treasury shares	(600)	(600)
Retained (losses)/earnings	(1,809)	(73)
TOTAL EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE COMPANY	1,449	3,157

 

 

 

 

 

 

 

 

 

STATEMENT OF CHANGES IN EQUITY

For the 52 week period ended 2 October 2009

 

	Share Capital	Share Premium	Capital Redemption Reserve	Treasury Shares	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000	£000
At 28 September 2007	521	3,024	285	(600)	711	3,941
Loss for the period to 3 October 2008 (as previously stated)	-	-	-	-	(614)	(614)
Prior period adjustment	-	-	-	-	(173)	(173)
Actuarial gain on pension scheme net of tax	-	-	-	-	3	3
At 3 October 2008	521	3,024	285	(600)	(73)	3,157
Loss for the period to 2 October 2009	-	-	-	-	(1,736)	(1,736)
VAT refund received on share issue costs	-	28	-	-	-	28
At 2 October 2009	521	3,052	285	(600)	(1,809)	1,449

 

CASH FLOW STATEMENT

For the 52 week period ended 2 October 2009

	52 weeks ended 2 October 2009	53 weeks ended 3 October 2008 (as restated)
	£000	£000
OPERATING ACTIVITIES
Loss before income tax	(1,439)	(1,003)
Finance income	(20)	(16)
Finance costs	179	237
Impact of defined benefit pension scheme	-	(42)
Losses from interest rate derivatives	168	173
Losses/(gains) from foreign currency forward contracts	15	(87)
Depreciation charge	79	117
Amortisation of designs, patents and trademarks	79	69
Amortisation of development costs	391	404
	(548)	(148)
CHANGES IN WORKING CAPITAL
Inventories	(736)	290
Trade and other receivables	1,310	(121)
Trade and other payables	193	12
	767	181
CASH FROM OPERATING ACTIVITIES	219	33
Net financing cost	(159)	(221)
Taxation repaid	-	-
NET CASH GENERATED FROM/(USED IN) OPERATING ACTIVITIES	60	(188)
INVESTING ACTIVITIES
Capital expenditure	(14)	(31)
Capitalisation of expenditure on design asset	(378)	(373)
Purchase of new brand	(65)	-
NET CASH USED IN INVESTING ACTIVITIES	(457)	(404)
FINANCING ACTIVITIES
VAT refund on share issue costs	28	-
NET CASH GENERATED FROM FINANCING ACTIVITIES	28	-
NET REDUCTION IN CASH AND CASH EQUIVALENTS	(369)	(592)
Cash and cash equivalents at beginning of the period	(3,158)	(2,566)
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	(3,527)	(3,158)

 

Slimma plc

NOTES

 

1.   Preparation of the financial statement

 

The information in this unaudited preliminary results announcement has been prepared on the basis of the accounting policies which will be set out in the full financial statements for the period ended 2 October 2009 and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

 

The results for the period ended 3 October 2008 are an abridged version of the Company's full financial statements for that period, which have been filed with the Registrar of Companies. The report of the auditors thereon was unqualified and did not contain statements under Section 237(2) of the Companies Act 1985. The full financial statements for the period ended 2 October 2009 will be delivered to the Registrar of Companies on 31 March 2010.

 

 

GOING CONCERN

The Company's business activities and financial position, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement. 

 

The directors have carefully considered the likely working capital requirements for the forthcoming period to 30 September 2011. They have prepared detailed profit and cash flow forecasts which, based on conservative assumptions, indicate that they will be able to operate within the proposed overdraft facilities offered by the Company's bank.

 

On 17 March 2010 the Company's banker informed the Company that it was prepared to grant additional overdraft facilities to the Company subject to agreeing satisfactory terms and conditions.  The discussions with the Company's banker indicate that it is supportive and that there is no intention to withdraw the facilities.  The renewal letter for the facilities offered by the Company's bank includes certain conditions which the Board is considering, and negotiations on renewal of the facilities are ongoing.

 

The current global economic environment remains challenging and the Company has reported an operating loss for the year. The directors consider that the outlook presents significant challenges in terms of sales volumes and competition. Whilst the directors have implemented a reorganisation plan, including measures to preserve cash having implemented substantial cost savings, these circumstances create material uncertainties over future trading results and cash flows and the availability of adequate finance facilities.

 

The directors have concluded that the combination of these circumstances represent a material uncertainty that casts significant doubt over the Company's ability to continue as a going concern. Nevertheless after making enquiries, and considering the uncertainties described above, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.

 

 

2.   Segmental Report

 

For management purposes, the Company's primary segments are analysed by geographical markets in which the business operates. The Company's risks and rates of return are affected predominantly by the countries in which it operates. As a result the Company's primary reporting format is geographical segments. The Company's revenue, profit before taxation and net assets were all derived from its principal activities.

 

PRIMARY REPORTING FORMAT - Geographical segments

 

52 week period ended 2 October 2009	UK	Other European	North America	Rest of World	Consolidation
	£000	£000	£000	£000	£000
Revenue	7,514	2,565	116	264	10,459
RESULT
Operating loss	(574)	(196)	(322)	(20)	(1,112)
Finance income					20
Finance costs					(179)
Losses from derivatives					(168)
Loss before tax					(1,439)
Income tax (expenses)/credit					(297)
Loss after tax					(1,736)
Capital additions (property, plant and equipment)	14	-	-	-	14
Capital additions (intangible assets)	478	-	-	-	478
Depreciation	79	-	-	-	79
Amortisation	391	-	-	-	470
Assets	6,327	973	-	-	7,300
Liabilities	(5,532)	(132)	(187)		(5,851)

 

 

Segmental report (continued)

 

53 week period ended 3 October 2008 (As restated)	UK	Other European	North America	Rest of World	Consolidation
	£000	£000	£000	£000	£000
Revenue	9,955	2,692	440	407	13,494
RESULT
Operating loss	(449)	(122)	(20)	(18)	(609)
Finance income					16
Finance costs					(237)
Losses from derivatives					(173)
Loss before tax					(1,003)
Income tax (expenses)/credit					216
Loss after tax					(787)
Capital additions (property, plant and equipment)	31	-	-	-	31
Capital additions (intangible assets)	373	-	-	-	373
Depreciation	117	-	-	-	117
Amortisation	473	-	-	-	473
Assets	6,377	927	944	-	8,248
Liabilities	4,126	(822)	(143)	-	(5,091)

 

 

3.   Earnings per Ordinary Share

 

The calculations of earnings per share are based on the following profits and number of shares:

 

	Basic 52 weeks ended 2 October 2009	Basic adjusted 52 weeks ended 2 October 2009	Basic 53 weeks ended 3 October 2008 (As restated)	Basic adjusted 53 weeks ended 3 October 2008 (As restated)
	£000	£000	£000	£000
Loss for the financial period	(1,736)	(1,736)	(787)	(787)
Exceptional items	-	495	-	173
Tax effect	-	(139)	-	(48)
Adjusted loss for the financial period	(1,736)	(1,380)	(787)	(662)

 

 

 

Weighted average number of shares	52 weeks ended 2 October 2009	53 weeks ended 3 October 2008
	Number	Number
For basic, diluted and basic adjusted earnings per share *	9,382,442	9,382,442
The Company's earnings per share are as follows:	2009	2008 (As restated)
- Basic	(18.50p)	(8.39p)
- Basic adjusted	(14.71p)	(7.05p)

 

* Excludes treasury shares

 

The effect of the prior period adjustment on the earnings per share for 2008 was to increase the basic loss per share from 6.54p to 8.39p per share.

 

 

4.   Prior period adjustment

 

The prior period adjustment is caused by the recognition of an interest rate collar agreement entered into on 12 June 2008.  The agreement was for a 15 year duration and fixes the interest rate at 5.99% on borrowings of £1.5 million.

 

The valuation of the derivative as at 3 October 2008 was £173,000 and as at 2 October 2009 was £341,000.

 

The change in fair value of these contacts is recognised in the Income Statement.

 

The movement in the fair value of the contact between inception and 3 October 2008 was a loss of £173,000.  This was not recorded in the financial statements for the period ended 3 October 2008 and has therefore been recorded as a prior period adjustment in the current year financial statements.

 

The derivative contract was not in place at the commencement of the period ended 3 October 2008.

 

 

5.   Approval of the Financial Statements

 

This preliminary announcement was approved by the Board of Directors on 30^th March 2010.

 

 

6.   Annual General Meeting

 

The Annual General Meeting will be held at Slimma plc, Slimma House, Barngate Street, Leek, Staffordshire, ST13 8AR at 10.00am on 23^rd April 2010.

 

 

7.   Availability of the Financial Statements

 

The full Report and Financial Statements will be dispatched to all shareholders on or before 31 March 2010 and will be available to the public free of charge from the Company's Registered Office at Slimma plc, Slimma House, Barngate Street, Leek, Staffordshire, ST13 8AR. They will also appear on the Company's website www.slimma.com in due course.