REG - Creightons PLC - Half-year Report <Origin Href="QuoteRef">CRGT.L</Origin>

CreightonsAnnouncement

22/11/2017 07:12

RNS Number : 1435X
Creightons PLC
22 November 2017
For Immediate Release 22 November 2017
Creightons plc Group
(the "Group" or "Creightons")
Unaudited interim financial report
for the six months ended 30 September 2017
Financial highlights
 Revenue increased by 7% 16.7m. (2016: 15.6m).
 Operating profit margin of 5.8% (2016 5.1%).
 Profit before tax increased by 21% to 956,000 (2016: 790,000).
 Diluted EPS 1.09p (2016: 1.00p) 
 ROCE 10.7% (2016: 9.5%)
 Paid final dividend of 0.23p per ordinary share in August 2017 (2016: No dividend).
 Interim dividend of 0.15p per ordinary share to be paid in December 2017
Chairman's statement
The Group has continued to make progress in the first half of the year and the impact of the continuing growth can be seen in the results for the period ending 30 September 2017.
Sales
Group Sales were 16,734,000 for the six months ended 30 September 2017 (2016: 15,600,000) an increase of 7.3%. This has been achieved in conjunction with an order intake during the period which is 13.5% up on the same period last year. Sales have increased for the period through growth with key existing customers and by bringing on new customers. Sales of our branded products for the first 6 months have exceeded group growth at 12% through existing customers, new export markets and ongoing development of licenced brands. During the period we have focused on winning and extending business with key UK retailers which are growing their personal care and beauty market share as well as a realignment of key contract accounts based on margin performance.
Margin and overheads
Our gross margin was 42.1% in the six months to 30 September 2017 (2016: 41.0%). We have continued to benefit from the economies of scale generated by the sales growth in the year to March 2017 and on supplier base consolidation. We intend to focus efforts to improve our margins through targeted investment in plant and machinery which will increase production capacity and improve unit cost of manufacture. This will be key to our success especially in the current economic climate as we continue to see the trend of consumers in the UK focussing on value.
We will continue to manage our overhead cost base and working capital requirements to ensure they are aligned with the anticipated sales levels of the Group, whilst retaining the skills necessary to meet growth opportunities as they arise. 
Profit before tax
Profit before tax was 956,000 (2016: 790,000), which represents an increase of 21.0%. The increased sales together with the tight control on costs results in an operating profit margin of 5.8% (2016: 5.1%).
Tax
It should be noted that the Group utilised all of its historic tax losses in the financial year to 31 March 2017 and therefore we have provided a tax charge within these results of 232,000 (2016: 119,000 - reduced rate due to utilization of historic losses).
Earnings per share
I am pleased to report that the impact of the above is a diluted earnings per share of 1.09p (2016: 1.00p) an increase of 9%.
Dividend Payments
The Board is pleased to announce that it will be paying an interim dividend of 0.15 pence per ordinary share, reflecting the continued strong performance the group has shown in the first half. I anticipate that this will be paid before Christmas. This is in addition to the dividend of 0.23 pence per ordinary share we paid in August 2017, the charge for which is shown in the accounts to 30 September 2017. The total payment in relation to the dividend paid in August was 139,000 (2016: 0). 
Working capital and loans
Net cash on hand (cash and cash equivalents less short term borrowings and loans) is a net borrowing of 246,000 (2016: 43,000). The main reason for the decrease in net cash on hand is the higher working capital requirement to support the sales growth during the period. 
The Board and I believe that this half year's sales of 16,734,000 and profit after tax of 724,000 continues to place the Group in a good position to take advantage of any opportunities that may arise. 
I would like to take this opportunity to thank each and every one of the Group's employees for the hard work and effort they have put in over what has been a challenging period. I would also like to thank our customers, shareholders and suppliers for their support and loyalty to the Group.
W O McIlroy
Executive Chairman 21 November 2017
Responsibility statement
The names and functions of the Directors of the Company are as follows:
William O McIlroy Executive Chairman
Bernard Johnson  Executive Managing Director
Mary T Carney Non-executive Director
Nicholas O'Shea  Non-executive Director
William Glencross Non-executive Director
Martin Stevens Deputy Managing Director
Pippa Clark Group Sales and Marketing Director
Paul Forster Group Finance and Commercial Director
The Board confirms that to the best of its knowledge the condensed set of financial statements gives a true and fair view of the assets and liabilities, financial position and profit of the Group and has been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules as issued by the Financial Conduct Authority, namely:
 DTR 4.2.7: An indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year.
 DTR 4.2.8: Details of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the enterprise during that period. Together with any changes in the related parties transactions described in the last annual report that could have a material effect on the enterprise in the first six months of the current financial year.
By order of the Board
Nicholas O'Shea
Company Secretary and Director   21 November 2017
Principal risks and uncertainties
Risks
The Board regularly monitors exposure to key risks, such as those related to production efficiencies, cash position and competitive position relating to sales. It has also taken account of the economic situation over the past 12 months, and the impact that has had on costs and consumer purchases.
It also monitors those risks not directly or specifically financial, but capable of having a major impact on the business's financial performance if there is any failure, such as product contamination and manufacture outside specification, maintenance of satisfactory levels of customer and consumer service, accident ratios, failure to meet environmental protection standards or any of the areas of regulation mentioned above. 
Capital structure, cash flow and liquidity
The business is funded using retained earnings and invoice discounting, with a bank facility secured against its assets. 
Consolidated income statement - unaudited


Six months ended 
30 September (Unaudited)
Year ended 
31 March (Audited)


2017
2016
2017

Note
000
000
000




Revenue

16,734
15,600
30,586
Cost of sales

(9,691)
(9,201)
(17,598)





Gross profit

7,043
6,399
12,988





Distribution costs

(626)
(605)
(1,280)
Administrative expenses

(5,452)
(4,995)
(10,195)





Operating profit

965
799
1,513










Finance costs

(9)
(9)
(24)





Profit before tax

956
790
1,489





Taxation
3
(232)
(119)
(238)





Profit for the period from continuing operations attributable to the equity shareholders of the parent company

724
671
1,251
Dividend

Six months ended 30 September (Unaudited)
Six months ended 30 September (Unaudited)
Year ended 
31 March (Audited)


2017
2016
2017





Dividend Paid in period ('000) 

139
-
-
Paid in period (pence per share)

0.23
-
-
Earnings per share

Six months ended 30 September (Unaudited)
Year ended 31 March (Audited)
Note
2017
2016
2017
Basic
2
1.20p
1.12p
2.09p
Diluted
2
1.09p
1.00p
1.88p
Consolidated statement of comprehensive income - Unaudited


Six months ended 30 September (Unaudited)
Year ended 31 March (Audited)


2017
2016
2017


000
000
000




Profit for the year

724
671
1,251




Exchange differences on translating of foreign operations

-
-
3
Exercise of derivatives

30
-
26





Total comprehensive income for the period attributable to the equity holders of the company

754
671
1,280
Consolidated balance sheet - unaudited


30 September 
31 March


2017
(Unaudited)
2016 (Unaudited)
2017 (Audited)


000
000
000
Non-current assets




Goodwill

331
331
331
Other intangible assets

320
180
212
Property, plant and equipment

1,767
1,582
1,637


2,418
2,093
2,180
Current assets




Inventories

5,736
4,554
4,024
Trade and other receivables

7,901
6,373
4,861
Cash and cash equivalents

213
1,001
2,631
Derivative financial instruments

56
14
19







13,906
11,942
11,535





Total assets

16,324
14,035
13,715





Current liabilities




Trade and other payables

6,618
5,097
4,564
Short term borrowings

459
455
68
Bank loan - under 12 months

-
132
116
Derivative financial instruments

-
40
56


7,077
5,724
4,804
Net current assets

6,829
6,218
6,731





Non-current liabilities




Deferred tax liability

66
-
26
Bank loan

-
457
418


66
457
444





Total liabilities

7,143
6,181
5,248





Net assets

9,181
7,854
8,467





Equity




Share capital

606
599
606
Share premium account

1,260
1,249
1,259
Other reserves

25
25
25
Translation reserve

(9)
(12)
(9)
Cash flow hedge reserve

56
(26)
(37)
Retained earnings

7,243
6,019
6,623
Total equity attributable to the equity shareholders

9,181
7,854
8,467
Statement of changes in shareholders' equity - unaudited

Share capital
Share premium account
Other reserves
Translation reserve
Cash flow hedge reserve
Retained earnings
Total

000
000
000
000
000
000
000








Balance at 1 April 2016
599
1,249
25
(12)
(26)
5,307
7,142
Profit for six months ended 30 September 2016
-
-
-
-
-
671
671
Share based payments
-
-
-
-
-
41
41
Exercise of derivatives
-
-
-
-
26
-
26
Charge in relation to derivative financial instruments
-
-
-
-
(26)
-
(26)
Balance at 30 September 2016
599
1,249
25
(12)
(26)
6,019
7,854
Profit for six months ended 31 March 2017
-
-
-
-
-
580
580
Share based payments
-
-
-
-
-
49
49
Exchange differences on translation of foreign operations



3
-
-
3
Exercise of options
7
10
-
-
-
-
17
Charge in relation to derivative financial instruments
-
-
-

(11)
-
(11)
Deferred tax through Equity





(25)
(25)
Balance at 31 March 2017
606
1,259
25
(9)
(37)
6,623
8,467
Profit for six months ended 30 September 2017
-
-
-
-
-
724
724
Payment of dividend
-
-
-
-
-
(139)
(139)
Share based payments
-
-
-
-
-
35
35
Exercise of options
-
1
-
-
-
-
1
Exercise of derivatives
-
-
-
-
30
-
30
Charge in relation to derivative financial instruments
-
-
-
-
63
-
63
Balance at 30 September 2017
606
1,260
25
(9)
56
7,243
9,181
Consolidated cash flow statement - unaudited

Note
Six months ended 30 September (Unaudited)
Year ended 
31 March (Audited)


2017
2016
2017


000
000
000




Net cash (outflow) / inflow from operating activities
4
(1,532)
(403)
2,058





Cash flow from investing activities




Purchase of property, plant and equipment

(296)
(350)
(551)
Expenditure on intangible assets

(309)
(98)
(306)





Net cash (used in) investing activities

(605)
(448)
(857)





Cash flow from financing activities




Repayment of finance lease obligations

-
(7)
(7)
Proceeds on issue of shares

1
-
17
Payment of dividend

(139)
-
-
(Repayment) / increase of bank loans and invoice finance facilities

(143)
1,044
602
Net cash (used in) / generated from financing activities

(281)
1,037
612





Net (decrease) / increase in cash and cash equivalents

(2,418)
186
1,813





Cash and cash equivalents at start of period

2,631
814
814





Effect of foreign exchange rate changes

-
1
4





Cash and cash equivalents at end of period

213
1,001
2,631
Notes to the unaudited interim financial report
1. Basis of preparation
The interim financial statements for the six months ended 30 September 2016 and 30 September 2017 and for the twelve months ended 31 March 2017 do not constitute statutory accounts for the purposes of Section 434 of the Companies Act 2006. The Annual Report and Financial Statements for the year ended 31 March 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 March 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. The 30 September 2017 statements were approved by the Board of Directors on 21 November 2017. This unaudited interim report has not been audited or reviewed by auditors pursuant to the Financial Reporting Council guidance on Review of Interim Financial Information.
The condensed financial statements in this Interim Report have been prepared in accordance with the requirements of IAS 34 'Interim Financial Reporting' as adopted by the European Union.
As required by the Disclosure and Transparency Rules of the UK's Financial Conduct Authority, the condensed set of financial statements has been prepared by applying the accounting policies and presentation that were applied in the preparation on the Company's published consolidated financial statements for the year ended 31 March 2017, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
The condensed interim financial statements for the six months ended 30 September 2017 and the comparative figures for the six months ended 30 September 2016 are unaudited. The figures for the year ended 31 March 2017 have been extracted from the Annual Report on which the Auditors issued an unqualified audit report and which have been filed with the Registrar of Companies.
2. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:


Six months ended 
30 September (Unaudited)
Year ended
31 March (Audited)


2017 
2016 
2017 


000
000
000
Earnings




Net profit attributable to the equity holders of the parent company

724
671
1,251


Six months ended 
30 September (Unaudited)
Year ended
31 March (Audited)


2017
2016
2017 


Number
Number
Number
Number of shares




Weighted average number of ordinary shares for the purposes of basic earnings per share

60,563,551
59,837,243
59,905,805





Effect of dilutive potential ordinary shares relating to Share options

5,928,689
7,005,000
6,850,137





Weighted average number of ordinary shares for the purposes of diluted earnings per share

66,492,240
66,842,243
66,755,942
3. Taxation


Six months ended 
30 September (Unaudited)
Year ended
31 March (Audited)


2017 
2016 
2017


000
000
000




Current tax

192
119
237
Deferred tax

40
-
1





Total

232
119
238
The charge for the period can be reconciled to the profit per the income statement as follows:


Six months ended 
30 September (Unaudited)
Year ended
31 March (Audited)


2017 
2016 
2017 


000
000
000




Profit before taxation

956
790
1,489




Tax charge at the UK corporation tax rate of 19% (2016 - 20%) 

(182)
(158)
(298)
Tax effect of expenses that are not deductible in determining taxable profit

(7)
-
(1)
Deferred tax charge on temporary differences

(1)
-
(1)
Deferred tax credited directly to retained earnings

-
-
25
Adjustment in respect of prior periods

(56)
-
-
Tax effect of utilisation of brought forward tax losses

-
54
54
Adjust closing deferred tax to average rate

(12)
-
5
Adjust opening deferred tax to average rate

(3)
-
1
Deferred tax not recognised

-
-
9
Other differences

29
(15)
(32)
Total expense and effective rate for the year

(232)
(119)
(238)
4. Notes to cash flow statement


Six months ended 
30 September (Unaudited)
Year ended 31 March (Audited)


2017 
2016 
2017 









000





Profit from operations

733
680
1,275





Adjustments for:




Depreciation on property, plant and equipment

166
142
288
Amortisation of intangible assets

201
157
333
Share based payment charge

35
41
90







1,135
1,020
1,986





Increase in inventories

(1,712)
(640)
(112)
Increase in trade and other receivables

(3,040)
(2,324)
(813)
Increase in trade and other payables

2,054
1,551
1,021
Increase in deferred tax provision

40
-
26
Movement in non-cash derivatives

-
-
(26)





Cash (utilised in) / generated from operations

(1,523)
(393)
2,082





Interest (paid)

(9)
(8)
(24)





Net cash (outflow) / inflow from operating activities

(1,532)
(401)
2,058
5. Related party transactions
The related party transactions that occurred in the six months ended 30 September 2017 are not materially different in size or nature to those reported in the Company's Annual Report for the year ended 31 March 2017.
6. Availability of Interim Report
The Interim Report is being made available to shareholders on the company website www.creightonsplc.com. Further copies can be obtained from the Company's Registered Office, 1210 Lincoln Road, Peterborough, PE4 6ND.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014
For more information: 
Nicholas O'Shea, Director, Creightons plc 01733 281000
Roland Cornish, Beaumont Cornish Limited  0207 628 3396

This information is provided by RNS
The company news service from the London Stock Exchange
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