REG - Hornby PLC - Final Results <Origin Href="QuoteRef">HRN.L</Origin> - Part 7

HornbyAnnouncement

16/07/2015 11:29

- Part 7: For the preceding part double click  ID:nRSR4957Qf 

                     10,210      10,463     1,160       1,151      
 
 
1,151 
 
The redundancy costs form part of the restructuring costs in the year classified as exceptional items. 
 
Average monthly number of people (including Executive Directors) employed by the Group: 
 
                                    Group        Company     
                                    2015 Number  2014Number  2015 Number  2014Number  
 Operations                         65           96          2            2           
 Sales, marketing and distribution  140          114         -            -           
 Administration                     47           40          3            3           
                                    252          250         5            5           
 
 
5 
 
Key management compensation: 
 
                                                 Group       Company    
                                                 2015 £'000  2014£'000  2015£'000  2014£'000  
 Salaries and short-term employee benefits       1,799       1,601      855        674        
 Share-based payments                            205         274        103        85         
 Other pension costs                             171         156        92         56         
 Redundancy and compensation for loss of office  -           40         -          40         
                                                 2,175       2,071      1,050      855        
 
 
855 
 
Key management comprise the individuals involved in major strategic decision making and includes all Group and subsidiary
Directors. 
 
A detailed numerical analysis of Directors' remuneration and share options showing the highest paid Director, number of
Directors accruing benefits under money purchase pension schemes, is included in the Directors' Remuneration Report on
pages 24 to 27 and forms part of these financial statements. 
 
24. PENSION COMMITMENTS 
 
The Group operates a defined contribution pension scheme by way of a Stakeholder Group Personal Pension Plan set up through
the Friends Provident Insurance Group. 
 
Alexander Forbes International is appointed as Independent Financial Adviser to work in liaison with the Company. 
 
The level of contributions to the Group Personal Pension Plan for current members is fixed by the Company. 
 
The Group pension cost for the year was £414,000 (2014 - £526,000) representing the actual contributions payable in the
year and certain scheme administration costs. The Company pension cost for the year was £92,000 (2014 - £56,000). No
contributions were outstanding at the year end of 31 March 2015. 
 
25. FINANCIAL COMMITMENTS 
 
 GROUP                                  2015 £'000  2014£'000  
 At 31 March capital commitments were:                         
 Contracted for but not provided        1,706       1,529      
 
 
The commitments relate to the acquisition of property, plant and equipment. 
 
The Company does not have any capital commitments. 
 
Contingent Liabilities 
 
The Company and its subsidiary undertakings are, from time to time, parties to legal proceedings and claims, which arise in
the ordinary course of business. The Directors do not anticipate that the outcome of these proceedings and claims, either
individually or in aggregate, will have a material adverse effect upon the Group's financial position. 
 
26. OPERATING LEASE COMMITMENTS 
 
The total of future minimum lease payments in respect of non-cancellable property, plant and motor vehicle operating leases
falling due are as follows: 
 
 GROUP                                             2015 £'000  2014£'000  
 Not later than one year                           494         480        
 Later than one year but not more than five years  536         540        
 More than five years                              -           -          
                                                   1,030       1,020      
 
 
As mentioned in the Chief Executive's report and Operating and Financial review this year Hornby took the decision to
outsource the distribution arm of the business to a 3PL Company, DS Logistics. The initial agreement with DS Logistics is 5
years from August 2014 and approximate costs under the contract if it were to be terminated early are approximately £1
million a year for the remainder of the term. 
 
27. RELATED PARTY DISCLOSURES 
 
During the year, B Ahir was appointed as Managing Director of Hornby Hobbies Asia and a Director of Hornby Hobbies Limited,
a subsidiary of Hornby Plc. 28One, not to be confused with companies of a similar name, owned by B Ahir has provided
ongoing support to manage product delivery for which Hornby Hobbies has paid £46,000 in relation to these services since 8
August 2014. No payments remained outstanding to 28One as at 31 March 2015. Hornby Hobbies Limited continues to use these
services on an ongoing basis. 
 
Additionally, in Hornby France S.A.S the Group currently leases its French warehouse and office from Mr and Mrs Lanter who
are both general managers and statutory directors of Hornby France S.A.S for approx. E10,000 a month. Termination of this
lease requires 6 months notice. 
 
There were no other contracts with the Company or any of its subsidiaries existing during or at the end of the financial
year in which a Director of the Company or any of its subsidiaries was materially interested. There are no other
related-party transactions. 
 
The Company received management fees from subsidiaries of £1,346,000 (2014 - £1,456,000), interest of £174,000 (2014 -
£174,000) and dividends from subsidiaries of £nil (2014 - £ nil) and incurred interest of £192,000 (2014 - £208,000) on
intercompany borrowings. 
 
28. POST BALANCE SHEET EVENTS 
 
Group Refinancing 
 
The announcement today of a proposed £15 million equity placing has allowed us to reduce reliance on debt facilities and we
have signed a new revolving credit facility of £10 million with our main UK bankers Barclays. This facility is conditional
on the additional equity raise being approved by shareholders and is expected to allow sufficient headroom for trading
working capital needs for the next four years up to  August 2019. 
 
Move of Head office to Discovery Park, Sandwich 
 
Additionally, and as also previously mentioned within this report, the Group moved its head office site to Sandwich in
April 2015, benefiting from reduced business rates and an initial rent free period at the Enterprise Zone of Discovery
Park, from its historic site at Margate which was no longer fit for purpose. The term of this contract is 10 years with a
break clause after 5 years. The lease cost is approximately £314,000 a year. 
 
As a result of this office move the Company is now in negotiations with a potential purchaser for the Margate site. Based
on negotiations conducted to date, the directors have a reasonable expectation that the sale will proceed successfully. 
 
Board change 
 
Nick Stone has informed the Board of his decision to leave Hornby later this summer and will be replaced by Steve Cooke who
 joined the business on 10 June 2015. 
 
Five Year Summary (Unaudited) 
 
                                                       2015 £'000  2014£'000  2013£'000  2012£'000  2011£'000  
 Revenue                                               58,135      51,557     57,395     64,447     63,372     
 (Loss)/Profit on ordinary activities before taxation  (184)       (4,557)    (3,387)    3,989      4,129      
 Taxation                                              64          112        886        (825)      (1,274)    
 (Loss)/Profit on ordinary activities after taxation   (120)       (4,445)    (2,501)    3,164      2,855      
 Assets employed:                                                                                              
 Non-current assets                                    24,894      24,340     26,338     27,969     28,509     
 Net current assets                                    7,156       7,408      12,037     16,673     16,623     
 Non-current borrowings                                (163)       (242)      (1,815)    (4,888)    (8,026)    
 Deferred tax liabilities                              (131)       (136)      (159)      (573)      (337)      
 Net assets                                            31,756      31,370     36,401     39,181     36,769     
 Total capital employed                                31,756      31,370     36,401     39,181     36,769     
 Earnings per share                                                                                            
 - basic                                               (0.31)p     (11.35)p   (6.4)p     8.2p       7.5p       
 - diluted                                             (0.31)p     (11.35)p   (6.4)p     8.1p       7.4p       
 Dividend per share (net)                              -           -          -          3.7p       5.0p       
 Net assets per share                                  81.1p       80.0p      92.9p      100.0p     95.7p      
 
 
Shareholders' Information Service 
 
Hornby welcomes contact with its shareholders. 
 
If you have questions or enquiries about the Group or its products, please contact: 
 
N P Stone, Finance Director 
 
Hornby Plc 
 
Westwood 
 
Margate 
 
Kent CT9 4JX 
 
Hornby Plc 
 
Westwood 
 
Margate 
 
Kent 
 
CT9 4JX 
 
www.hornby.com 
 
This information is provided by RNS
The company news service from the London Stock Exchange