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(RNS)
2009-11-17 07:02
Burberry Group PLC - Interim Results - Part 2 |
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RNS Number : 5972C Burberry Group PLC 17 November 2009
CONDENSED GROUP INCOME STATEMENT - UNAUDITED
2009
£m £m £m Non-GAAP measures Operating profit/(loss) 82.1 100.1 (9.9) Restructuring costs 4 4.2 - 54.9 Goodwill impairment charges 4 - - 116.2 Store impairment and onerous lease provisions 4 - - 13.4 Negative goodwill 4 - (1.7) (1.7) Relocation of headquarters 4 - - 7.9 Adjusted operating profit 3 86.3 98.4 180.8 Adjusted earnings per share Dividends per share 30 September)
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME - UNAUDITED
Other comprehensive income:
differences
Tax on other comprehensive
income:
differences
(expense)/income for the
period, net of tax
the period
Total comprehensive income
attributable to:
2009
ASSETS
Non-current assets
Current assets
LIABILITIES
Non-current liabilities
liabilities
liabilities and charges
Current liabilities
liabilities
liabilities and charges
EQUITY
Capital and reserves
attributable to the Company's
equity holders
reserve
CONDENSED GROUP statement of changes in equity - UNAUDITED
Other comprehensive income:
deferred in equity
transferred to income
differences
income
the period
Transactions with owners: Employee share option scheme Purchase of own shares by - - - (5.4) (5.4) - (5.4) ESOPS
2008
Other comprehensive income:
deferred in equity
transferred to income
differences
income
the period Transactions with owners: Employee share option scheme Sale of own shares by ESOPs - - - 0.4 0.4 - 0.4 Capital contribution by - - - - - 2.2 2.2 minority interest
2009
2009
Cash flows from operating
activities
plant and equipment
derivative instruments
share incentive schemes
inventories
receivables
payables
activities
Cash flows from investing
activities
intangible fixed assets
property, plant and equipment
minority interest
investing activities
Cash flows from financing
activities
capital
ESOPs
year and remaining in equity
financing activities
cash and cash equivalents
changes on opening balances
beginning of period
end of period
ANALYSIS OF CASH AND CASH EQUIVALENTS
2008
per the balance sheet
per the cash flow statement
notes to the consolidated financial statements 1. Corporate information Burberry Group (the 'Group') is a luxury goods manufacturer, wholesaler and retailer in Europe, the Middle East, the Americas and Asia Pacific. Licensing activity is also carried out, principally in Japan. All of the companies which comprise the Group are owned by Burberry Group plc (the 'Company') directly or indirectly. 2. Accounting policies and basis of preparation The financial information contained in this report is unaudited. The Condensed Group Income Statement, Condensed Group Statement of Comprehensive Income, Condensed Group Statement of Changes in Equity and Condensed Group Statement of Cash Flows for the interim period to 30 September 2009, and the Condensed Group Balance Sheet as at 30 September 2009 and related notes have been reviewed by the auditors and their report to the Company is set out on page 27. These interim financial statements do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2009 were approved by the Board of Directors on 18 May 2009 and filed with the Registrar of Companies. The report of the auditors on the statutory accounts for the year ended 31 March 2009 was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under Section 237 of the Companies Act 1985. These condensed consolidated financial statements for the six months ended 30 September 2009 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. This report should be read in conjunction with the Group's financial statements for the year ended 31 March 2009, which have been prepared in accordance with IFRSs as adopted by the European Union. Accounting policies and presentation are consistent with those applied in the Group's financial statements for the year ended 31 March 2009, as set out on pages 80 to 84, with the exception of the adoption of IAS 1(Revised) Presentation of financial statements and IFRS 8 Operating segments, both of which are discussed below. The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 April 2009: IAS 1 (Revised) Presentation of financial statements Requires the presentation of items of income and expenses (that is 'non-owner changes in equity') in either a single performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income) and requires such items to be presented separately from owner changes in equity in the statement of changes in equity. The Group has elected to present this information in the format of two performance statements - an income statement and a statement of comprehensive income, in line with the revised disclosure requirements. IFRS 8 Operating segments Requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes and regularly reviewed by the Board, in its capacity as the Chief Operating Decision Maker, in order to allocate resources to the segment and assess its performance. In order to comply with the requirements of this new standard, the Group has amended its segmental reporting information, restating comparative information as appropriate. The new standards, amendments and interpretations issued and effective for the financial period commencing on or after 1 April 2009 which have not had a material impact on the financial statements of the Group include: IAS 23 (Revised) Borrowing Costs IFRS 2 (Amendment) Share-based payments IAS 1 (Amendment) Presentation of financial statements IAS 39 (Amendment) Financial instruments: Recognition and measurement IFRS 1 (Amendment) First time adoption of IFRS and IAS 27 (Amendment) Consolidated and separate financial statements IFRIC 14 IAS 19 - The limit on a defined benefit asset minimum funding requirements and their interaction IFRIC 16 Hedges of a net investment in foreign operations The following new standards, amendments and interpretations have been issued, but are not yet effective for the financial period beginning 1 April 2009, and have not been early adopted: IFRS 3 (Revised) Business combinations The standard will continue to apply the acquisition method to business combinations, but with certain significant changes. All payments to purchase a business will be recorded at fair value at the acquisition date, with some contingent payments subsequently remeasured at fair value through income. Goodwill and non-controlling (minority) interests may be calculated on a gross or net basis. All transaction costs will be expensed. The amendments will take effect for annual periods beginning on or after 1 July 2009, and will be applied by the Group to all business combinations with effect from 1 April 2010. Non-GAAP measures Non-GAAP measures are those items that are largely one-off and material in nature and are presented in order to provide a clear and consistent presentation of the underlying performance of the Group's ongoing business. 3. Segmental analysis The Chief Operating Decision Maker has been identified as the Board of Directors. The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on the reports used by the Board. The Board considers Burberry's business through its two channels to market, being Retail/Wholesale and Licensing. Retail/Wholesale revenues are generated by the sale of luxury goods through Burberry mainline stores, concessions and outlets as well as Burberry franchisees and prestige department stores globally. Licensing revenues are generated through the receipt of royalties from Burberry's partners in Japan and global licensees of fragrances, eyewear, timepieces and European childrenswear. The Board assesses channel performance based on a measure of adjusted earnings before interest and tax (EBIT). This measurement basis excludes the effects of non-recurring events. The measure of earnings for each operating segment that is reviewed by the Board includes an allocation of corporate and central costs. Interest income and expenditure are not included in the result for each operating segment that is reviewed by the Board. Comparative information has been restated on the adoption of IFRS 8.
2009 2008 2009 2008 2009 2008
customers
segments)
(1) Refer to Condensed Group Income Statement for details of non-GAAP measures
2009 2008 2009
4. Non-GAAP measures Included in operating profit for the six months ended 30 September 2009 are net restructuring charges of £4.2m associated with the Group's cost efficiency programme which was announced in the year to 31 March 2009.
The effective underlying rate of tax on adjusted profit for the full year is estimated to be 27.0% (31 March 2009: 23.8%; 30 September 2008: 29.5%).
The calculation of basic earnings per share is based on profit attributable to equity holders of the company for the period divided by the weighted average number of ordinary shares in issue during the period. Basic and diluted earnings per share based on adjusted operating profit and the underlying effective tax rate are also disclosed to indicate the underlying profitability of Burberry Group.
2009 2008 2009
period before non-GAAP
measures(1)
(after taxation)
the period (1) Refer to Condensed Group Income Statement for the details of non-GAAP measures The weighted average number of ordinary shares represents the weighted average number of Burberry Group plc ordinary shares in issue throughout the period, excluding ordinary shares held in Burberry Group's share option plan trusts 'ESOP trusts'. Diluted earnings per share is based on the weighted average number of ordinary shares in issue during the period. In addition, account is taken of any awards made under the share incentive schemes which will have a dilutive effect when exercised.
2009 2008 2009
ordinary shares in issue
during the period
incentive schemes
number of ordinary shares in issue during the period
2009 2008 2009
before non-GAAP measures(1)
(after taxation)
Diluted earnings per share
before non-GAAP measures(1)
(after taxation)
(1) Refer to Condensed Group Income Statement for the details of non-GAAP measures
The interim dividend of 3.50p (2008: 3.35p) per share has been approved by the Board of directors after 30 September 2009. Accordingly, this dividend has not been recognised as a liability at the period end. The interim dividend will be paid on 4 February 2010 to Shareholders on the Register at the close of business on 8 January 2010. A dividend of 8.65p (2008: 8.65p) per share was paid during the period ended 30 September 2009 in relation to the year ending 31 March 2009. 8. Intangible assets In the period there were additions to intangible assets of £4.7m (2008: £5.2m) and disposals with a net book value of £0.5m (2008: £nil). Impairment testing Assets that have an indefinite useful economic life are not subject to amortisation and are tested annually for impairment. Goodwill at 30 September 2009 is £31.6m (2008: £129.6m). Management has performed a review for indicators of impairment as at 30 September 2009. With the exception of Guam, discussed below, there is no indication that the remaining goodwill balance may be impaired. The annual impairment test will be performed at 31 March 2010. On 30 August 2008, the Group terminated its franchisee agreement in Guam, thereby settling a pre-existing liability. A new company, Burberry Guam Inc., was incorporated which acquired the retailing business from the terminated franchisee. Based on management's current estimates, the recoverable amount of goodwill in respect of Burberry Guam Inc. does not exceed its carrying value. Consequently, the net book value of £1.4m has been written off in full during the period. 9. Property, plant and equipment In the period there were additions to property, plant and equipment of £28.5m (2008: £37.3m) and disposals with a net book value of £0.2m (2008: £0.2m). Capital commitments contracted but not provided for by the Group amounted to £6.7m (2008: £16.8m). Impairment testing Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. At 30 September 2009, a net impairment charge of £1.1m has been recognised in the income statement in respect of certain retail store assets.
Non-current
other receivables
Current
receivables
Non-current
deferred income
other payables
Current
security costs
payables
rate changes
13. Bank overdrafts and borrowings
Unsecured
Bank overdrafts are offset by the Group's positive cash pooling balances arrangement. On 16 March 2009, a £200m multi-currency revolving facility was agreed with a syndicate of third party banks. This facility replaced the £200m five year multi-currency revolving facility in place as at 30 September 2008 which was due to mature on 30 March 2010. At 30 September 2009, there were no outstanding drawings (2008: £143.5m drawn down in Sterling and US dollars). Interest is charged on this loan at LIBOR plus 2.00%. The facility matures on 30 June 2012. On 13 June 2008, bilateral multi-currency revolving credit facilities totalling £60m were agreed with two banks. At 30 September 2009, there were no outstanding drawings (2008: nil). Interest is charged on each of these facilities at LIBOR plus 0.95% on drawings less than 50% of the loan principal and at LIBOR plus 1.05% on drawings over 50% of the loan principal. The facilities mature on 13 June 2011.
The cost of own shares held in the Burberry Group ESOP Trusts has been offset against retained earnings, as the amounts paid reduce the profits available for distribution by the Group and the Company. As at 30 September 2009 the amount offset against this reserve was £3.4m (2008: £4.5m). Options exercised during the first half to 30 September 2009 resulted in 579,199 shares being issued (2008: 266,418). 347,573 options had no exercise price (2008: 266,418), with a related weighted average price at the time of exercise of £4.56 (2008: £4.56) per share. 231,626 options had an exercise price of £3.51 per share (2008: nil options), with cash exercise proceeds received of £0.7m. 15. Contingent liabilities There have been no material changes to the Group's contingent liabilities since 31 March 2009. 16. Related party disclosures The Group's significant related parties are disclosed in the Annual Report for the year ended 31 March 2009. There were no material changes to these related parties in the period. No material related party transactions have taken place during the first six months of the current financial year. 17. Foreign currency The results of overseas subsidiaries are translated into the Group's presentation currency of Sterling each month at the weighted average exchange rate for the period according to the phasing of the Group's trading results. The weighted average exchange rate is used, as it is considered to approximate the actual exchange rates on the dates of the transactions. The assets and liabilities of such undertakings are translated at period end exchange rates. Differences arising on the retranslation of the opening net investment in subsidiary companies, and on the translation of their results, are taken directly to the foreign currency translation reserve within equity.
The principal exchange rates used were as follows:
2009 2008 2009
2009 2008 2009
The average exchange rate achieved by the Group on its Yen licensing income, taking into account its use of Yen forward sale contracts on a monthly basis approximately 12 months in advance of royalty receipts, was Yen 170.4: £1 in the six months to 30 September 2009 (Six months to 30 September 2008: Yen 223.2: £1; Year to 31 March 2009: Yen 213.1: £1). statement of directors' responsibilities The directors confirm to the best of their knowledge that this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7 and 4.2.8, namely:
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; and
related party transactions described in the last Annual Report. The directors of Burberry Group plc are listed in the Burberry Group plc Annual Report for the year ended 31 March 2009. A list of current directors is maintained on the Burberry Group website: www.burberryplc.com. By order of the Board John Peace Chairman 17 November 2009 Stacey Cartwright Chief Financial Officer 17 November 2009 independent review report to burberry group plc Introduction We have been engaged by the Company to review the interim financial information in the half-yearly financial report ('interim report') for the six months ended 30 September 2009, which comprises the Condensed Group Income Statement, Condensed Group Statement of Comprehensive Income, Condensed Group Balance Sheet, Condensed Group Statement of Changes in Equity, Condensed Group Statement of Cash Flows and the related notes on pages 15 to 25. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the interim financial information. Directors' responsibilities The interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. Our responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the six months ended 30 September 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. PricewaterhouseCoopers LLP Chartered Accountants 17 November 2009 London (a) The maintenance and integrity of the Burberry Group plc web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial report since it was initially presented on the website. (b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.
SHAREHOLDER INFORMATION Registrar Any enquiries relating to your shareholding, for example transfers of shares, change of name or address, amalgamation of share accounts, lost share certificates or dividend cheques, should be referred to the Company's Registrar, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, telephone: 0871 384 2839 (or +44 121 415 7047 from outside the UK). In addition, Equiniti offer a range of shareholder information online at www.shareview.co.uk. A textphone facility for those with hearing difficulties is available by calling: 0871 384 2266 (or +44 121 415 7028 from outside the UK). Amalgamating share accounts Shareholders who have more than one account due to inconsistency in the name and address details may avoid duplicate mailings by asking the Registrar to amalgamate their holdings. Dividends The interim dividend of 3.50p per share will be paid on 4 February 2010 to shareholders on the register at the close of business on 8 January 2010. Dividend Reinvestment Plan The Group's Dividend Reinvestment Plan (DRIP) enables shareholders to use their cash dividends to buy further shares in the Company. Full details of the DRIP can be obtained from the Registrars. If you would like your interim and future dividends to qualify for the DRIP, completed application forms must be returned by 21 January 2010. Electronic Communication Shareholders may at any time choose to receive all shareholder documentation in electronic form via the internet, rather than through the post in paper format. Shareholders who decide to register for this option will receive an email each time a statutory document is published on the internet. To register to receive electronic communications please register at www.shareview.co.uk, you will need your Shareholder Reference Number which can be found on share certificates, dividend vouchers and most other shareholder correspondence. ShareGift Shareholders with a small number of shares, the value of which makes it uneconomic to sell them, may wish to consider donating their shares to charity through ShareGift, a donation scheme operated by The Orr Mackintosh Foundation (registered charity 1052686). A ShareGift donation form can be obtained from Equiniti Limited. Further information is available at www.sharegift.org or by telephone on +44 (0) 20 7930 3737. Company Website This Interim Report and other information on Burberry including share price information and results announcements, is available via the internet on the Group's website at www.burberryplc.com.
Financial calendar
Registered office Burberry Group plc Horseferry House Horseferry Road London SW1P 2AW
www.burberryplc.com Registered in England and Wales Registered Number 03458224 <HR>--------------------------------------- This information is provided by RNS The company news service from the London Stock Exchange END
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