Top Ten Holdings Plc News Announcement
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Top Ten Holdings PLC - Interim Results
RNS Number:6428L
Top Ten Holdings PLC
07 November 2006
TOP TEN HOLDINGS PLC
Interim Results for 26 weeks ended 24 September 2006
Top Ten Holdings plc ('Top Ten' or the 'Group') is the third largest UK bingo
operator with 44 bingo clubs. It is pleased to announce Interim Results for the
26 weeks to 24 September 2005.
2006 2005
Turnover (£m) 14.7 10.2
Operating profit (£m) 2.06 1.67
Pre-tax profit (£m) 0.9 1.4
Earnings per Share (pre exceptional items)(p) 2.85 3.38
Key Points:
* 23% increase in operating profit to £2.06 million ( 2005 £1.67 million)
* Underlying performance masked by exceptional and non-recurring items
* EBITDA of £2.9 million (2005 £2.3 million).
* Successful refurbishment and upgrading programme generating enhanced
performance
* One strategic acquisition completed during the period
* Net asset value of 84p per share
7 November 2006
Commenting on the results Sir Aubrey Brocklebank, Chairman, said,
'We have continued to make progress with the implementation of our strategy of
growing organically and by selective acquisition. We have a resilient business
and a robust model. We are seeing the benefits of acquisitions, refurbishments
and investment made in 2005. However, the Company faces the challenge forced
upon it by the impending smoking ban in England and Wales and is taking every
possible step to be prepared for and to minimise its impact. Trading following
the very hot summer has normalised and the Group anticipates reporting further
progress for the current financial year.'
For Further Information:
Top Ten Holdings plc 01727 850793
Sir Aubrey Brocklebank, Chairman
Graham Kerr Chief Executive
College Hill 020 7457 2020
Matthew Smallwood
Jamie Ramsay
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report interim results for 26 weeks ending 24th September 2006.
Top Ten continues to expand its operations through selective acquisition and by
the improved underlying performance of our clubs through investment in
refurbishing our units and tactical group-wide promotions.
Results
Operating profits rose to £2.1m (2005 £1.7m). Pre-tax profits were £846,000
after taking into account exceptional items of £206,000 which comprised
predominantly reorganisation costs and the loss on sale of fixed assets of
£6,086. It is anticipated that on an annualised basis the savings attributed to
the exceptional item will accrue as profit. Interest more than doubled to over
a £1m reflecting our acquisition activity last year. EPS before exceptional
items was 2.85p and 2.27p after exceptional items.
The Group benefited from the contribution of the three Apollo Bingo clubs and
the three Bravo clubs acquired before the beginning of the period.
As previously announced our profits suffered from the prolonged period of hot
weather during the summer, but normalised trading patterns resumed during
August, demonstrating the resilience of our business and the robustness of our
business model.
Following previously established patterns the Board does not propose an interim
dividend.
Acquisitions
During the period Top Ten acquired the freehold Empire Bingo club in Mexborough,
South Yorkshire for a consideration of £1,050,000 satisfied by £844,119 in cash
and the issue of 181,138 new ordinary shares at a 113p per share.
This club was situated in very close proximity to our existing club in
Mexborough and after completing minor works, we transferred the business into
the newly acquired premises in October. We will sell our existing freehold site.
Capital Expenditure
The group has an active capital expenditure programme and has continued to
upgrade the estate where it can see a significant financial benefit. During the
period capital expenditure of £700,000 was made primarily focussed in upgrading,
enhancing and adding to our machine estate, bringing the total of machines to
over 1000.
Subsequent to the year end on 1 October we have launched our internet bingo site
www.toptenbingo.com. Early indications are encouraging.
Legislation
Full deregulation and enactment of the Gambling Act is anticipated in Autumn
2007.
There has been a great deal of publicity concerning the smoking ban in public
places. A ban will be implemented in Wales on 2nd April 2007 and it is expected
to take effect in England either in May or July 2007.
A similar ban was introduced in Scotland in March 2006. Your Board has been
monitoring the situation there closely. It remains difficult to assess a truly
accurate picture in Scotland as evidence of the effect of the ban is largely
anecdotal and needs to be interpreted with care.
The Board has initially concluded that there is likely to be a reduction in the
interval spend primarily in the areas of slot bingo and fruit machines and the
impact on profits in the interim will be significant. Indeed, it may take 2 or
even 3 years to recover fully.
The Board is taking every possible step to be prepared for and to minimise any
impact that the smoking ban may have by the creation of outside smoking areas
(where possible) together with the rollout of the latest hand held electronic
equipment.
The Board will continue to review the performance of each and every club as to
their economic viability versus the value to shareholders of alternative uses.
Management Changes
In September Bruce Roberts retired as Operations Director after some 20 years
with the company as part of our reorganisation programme. On behalf of everyone
at Top Ten I should like to thank him for all his hard work and wisdom over the
years that we have worked together and wish him well in his retirement.
Allen Walsh has become Operations Director of Top Ten Bingo Limited, our
operating company.
Prospects
We have had a reasonable start to the year and the board looks forward to
reporting further progress for the rest of the year.
Sir Aubrey Brocklebank
Chairman
7 November 2006
Summary Consolidated Profit and Loss Account
26 weeks to 26 weeks to 52 weeks to
24 September 25 September 27 March
2006 2005 2006
Unaudited Unaudited Audited
£ £ £
(restated) (restated)
Turnover (see note 3) 14,690,201 10,162,398 23,687,848
Cost of sales (2,264,353) (1,390,120) (3,581,895)
Gross profit 12,425,848 8,772,278 20,105,953
Distribution costs (9,113,410) (6,349,524) (14,792,166)
Administration costs (1,247,465) (752,664) (1,836,625)
Operating profit 2,064,973 1,670,090 3,477,162
(Loss)/profit on sale of fixed assets (6,086) 149,110 145,022
Exceptional reorganisation costs (200,043) - -
Interest (1,012,537) (439,435) (1,251,511)
Profit on ordinary activities before 846,307 1,379,765 2,370,673
taxation
Taxation (270,297) (337,539) (680,198)
Profit on ordinary activities after 576,010 1,042,226 1,690,475
taxation
Dividend (see note 4) (367,228) (228,781) (228,781)
Retained profit 208,782 813,445 1,461,964
EPS before Exceptional Items
Earnings per ordinary share (pence) 2.85 3.38 6.86
Diluted earnings per ordinary share 2.85 3.38 6.86
(pence)
EPS after Exceptional Items
Earnings per ordinary share (pence) 2.27 5.29 7.94
Diluted earnings per ordinary share 2.27 5.29 7.94
(pence)
The restatement relates to the adoption of FRS 20 as set out in note 2.
Summary Consolidated Balance Sheet
24 September 25 September 26 March
2006 2005 2006
Unaudited Unaudited Audited
£ £ £
(restated) (restated)
Fixed Assets
Intangible assets 16,557,844 13,611,461 16,171,890
Tangible assets 36,563,311 23,996,615 35,802,997
53,121,155 37,608,076 51,974,887
Current Assets
Stocks 417,950 383,270 419,708
Debtors 2,160,274 1,288,387 923,744
Cash 2,038,589 2,394,361 1,718,871
4,616,813 4,066,018 3,062,323
Creditors: amounts falling due within one year (5,665,958) (3,005,330) (4,789,685)
Net current assets (1,049,145) 1,060,688 (1,727,362)
Long term liabilities (30,134,543) (21,238,417) (28,724,739)
Provisions for liabilities and charges (367,898) (53,464) (367,895)
21,569,569 17,376,884 21,154,891
Share Capital 13,979,753 10,651,180 13,776,170
Profit and loss account 7,580,477 6,723,419 7,371,668
Equity reserve 9,339 2,285 7,053
21,569,569 17,376,884 21,154,891
The restatement relates to the adoption of FRS 20 as set out in note 2.
Summary Consolidated Cash Flow Statement
26 weeks to 26 weeks to 52 weeks to
24 September 26 September 26 March
2006 2005 2006
Unaudited Unaudited Audited
£ £ £
Net cash inflow from operating activities 2,491,252 1,851,224 4,129,823
Returns on investment and servicing of
finance
Interest received 775
907 2,222
Interest paid (1,013,312) (440,342) (1,253,733)
Net cash outflow from returns on (1,012,537) (439,435) (1,251,511)
investments and servicing of finance
Taxation (211,265) (285,557) (416,914)
Capital expenditure and financial
investment
Payments to acquire intangible assets - - (38,000)
Payments to acquire tangible assets (438,871) (1,426,114) (2,355,997)
Receipts from sales of tangible assets 29,933 273,364 310,74
Net cash outflow for capital expenditure (408,938) (1,152,750) (2,083,233)
Acquisitions and disposals
Purchase of subsidiary undertaking (982,375) (4,780,116) (18,258,229)
Net cash acquired with subsidiary - 97,089 144,688
(982,375) (4,683,027) (18,113,541)
Equity dividends paid (367,224) (228,781) (228,781)
Net cash inflow /(outflow) before (451,087) (4,938,326) (17,964,157)
management of liquid resources and
financing
Financing
Issue of ordinary share capital - 479,000 5,652,368
Share premium - 1,847,700 -
Cost of share issue - (40,800) (200,678)
Bank loans advanced 900,000 20,100,924 30,100,000
Bank loans repaid - (4,237,474) (4,237,474)
Loan arrangement fees - (350,000) (552,075)
Vendor loans repaid on acquisition of - (7,753,006) (7,880,661)
subsidiary
Bank loans repaid on acquisition of - (3,564,642) (3,910,591)
subsidiary
- - -
Capital element of finance leases paid (89,195) (188,876) (327,722)
Net cash inflow/(outflow) from financing 810,805 6,292,826 322,029
(Decrease)/ increase in cash in the 319,718 1,354,500 679,010
period
NOTES
1. Publication of non-statutory accounts
The financial information contained in this interim statement does not
constitute accounts as defined by section 240 of the Companies Act 1985.The
financial information for the full preceding year is based on the statutory
accounts for the financial year ended 27 March 2006. Those accounts, upon which
the auditors issued an unqualified opinion, have been delivered to the Registrar
of Companies.
2. Basis of preparation of interim financial information
The accounting policies used in the interim statement are consistent with those
used in the financial statements for the 52 weeks ended 24 March 2006 except in
respect of the adoption of FRS 20 Share Based Payments, which has been adopted
from 25 March 2006.
In accordance with the transitional provisions, the Group has applied FRS 20 to
all grants of equity instruments after 7 November 2002 that had not vested as of
25 March 2006.
The Group has issued share options under an Enterprise Management Incentive
Scheme to employees. The fair value determined at the grant date is expensed on
a straight-line basis over the vesting period, based on the Group's estimate of
shares that will eventually vest. The expected life used in the model has been
adjusted based on management's best estimate, for the effects of non
transferability, exercise restrictions, and behavioural considerations.
3. Turnover includes £ - (2005: £329,385) in relation to a refund of overpaid
value added tax.
4. The board is not declaring an interim dividend (2005: £Nil). The dividend
charged to the profit and loss account relates to the prior year however the
adoption of FRS 21 'Events After The Balance Sheet Date' in the year ended 26
March 2006 requires dividends to be charged in the period they are declared.
Previously dividends were accrued in the period to which they related.
5. The earnings per share is calculated by reference to the results and the
weighted average of 25,363,643 shares in issue during the period (2005:
19,459,313:). The number of shares in issue at 24 September 2006 was
25,505,751. 180,952 (2005: 210,250) potential ordinary shares have been treated
as dilutive.
6. There are no recognised gains and losses other than those passing through
the profit and loss account.
7. The interim statement will be sent to shareholders. Copies may be
obtained from the Company Secretary, Top Ten Holdings PLC, Unit 8, Verulam
Industrial Estate, 224 London Road, St Albans, Hertfordshire AL1 1JF.
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