SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 13, 2004
OXFORD INDUSTRIES, INC.
GEORGIA (STATE OR OTHER JURISDICTION OF INCORPORATION) |
001-04365 (COMMISSION FILE NO.) |
58-0831862 (IRS EMPLOYER IDENTIFICATION NUMBER) |
222 PIEDMONT AVENUE NE, ATLANTA, GEORGIA 30308
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(404) 659-2424
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)
NONE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 9. REGULATION FD DISCLOSURE | ||||||||
SIGNATURE | ||||||||
FINANCIAL INFORMATION |
ITEM 9. REGULATION FD DISCLOSURE
On July 30, 2004, Oxford Industries, Inc. announced its completion of the acquisition of all outstanding capital stock of Ben Sherman Limited for a total purchase price of £80 million or approximately $145 million, plus transaction expenses. Certain financial information relating to Ben Sherman (prepared in accordance with United Kingdom GAAP) is furnished herewith. Oxford Industries, Inc. will file U.S. GAAP-reconciled financial information, as well as required pro forma financial information, under Item 7 in a subsequent Form 8-K. This Exhibit 99.1 is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended but is furnished pursuant to Regulation FD.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
OXFORD INDUSTRIES, INC. | ||||
By: | /s/ Ben B. Blount, Jr. | |||
Ben B. Blount, Jr. Executive Vice President and Chief Financial Officer |
||||
Date: August 13, 2004 |
EXHIBIT 99.1
COMPANY REGISTRATION NO: 3998077
BEN SHERMAN LIMITED
REPORT AND FINANCIAL STATEMENTS
30 JUNE 2003
DELOITTE & TOUCHE LLP
CHARTERED ACCOUNTANTS
BELFAST
BEN SHERMAN LIMITED
REPORT AND FINANCIAL STATEMENTS 2003
CONTENTS
PAGE |
||||
Officers and professional advisors |
1 | |||
Directors’ report |
2-3 | |||
Independent auditors’ report |
4 | |||
Consolidated profit and loss account |
5 | |||
Consolidated balance sheet |
6 | |||
Company balance sheet |
7 | |||
Cash flow statement |
8 | |||
Notes to the accounts |
9-20 |
BEN SHERMAN LIMITED
REPORT AND FINANCIAL STATEMENTS 2003
OFFICERS AND PROFESSIONAL ADVISORS
DIRECTORS
Michael Lamont
Robert McGowan-Smyth
Miles Gray
Mark Sater
Bernard Solomons
Miles Templeman
SECRETARY
Michael Lamont
REGISTERED OFFICE
2 Eyre Street Hill
Clerkenwell
London
EC1R 5ET
BANKERS
Bank of Scotland
The Mound
Edinburgh
EH1 1YZ
SOLICITORS
Maclay Murray Spens
151 St Vincent Street
Glasgow
G2 5NJ
AUDITORS
Deloitte & Touche LLP
Chartered Accountants
Belfast
1
BEN SHERMAN LIMITED
DIRECTORS’ REPORT
The directors present their report and the audited financial statements for the year to 30 June 2003.
PRINCIPAL ACTIVITY AND BUSINESS REVIEW
The principal activities of the Group consist of the design, importing and distribution of apparel and footwear.
REVIEW OF BUSINESS
The directors are satisfied with the results for the year, the investment of recent years is showing through in strong performances for Ben Sherman footwear and apparel, in the UK and international markets.
RESULTS AND DIVIDENDS
The profit for the year after taxation is £3,048k (2002: loss £575k). The directors propose a dividend of £1,038k (2002: £494k).
DIRECTORS AND THEIR INTERESTS
The directors who served during the year are shown below:
Michael Lamont
Robert McGowan-Smyth
Miles Gray
Mark Sater
Bernard Solomons
Miles Templeman (appointed 1 June 2002)
The directors who served at the year end had an interest in the shares of the company as follows:
30 JUNE 2003 | 30 JUNE 2002 | |||||||
£1 ORDINARY | £1 ORDINARY | |||||||
SHARES |
SHARES |
|||||||
Miles Gray |
14,583 | 12,500 | ||||||
Mike Lamont |
9,583 | 6,250 | ||||||
Mark Sater |
6,250 | 6,250 | ||||||
Bernard Solomons |
1,667 | — | ||||||
Miles Templeman |
3,334 | — |
2
BEN SHERMAN LIMITED
DIRECTORS’ REPORT (CONT’D)
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
United Kingdom company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and the group as at the end of the financial year and of the profit or loss of the group for that year. In preparing those financial statements, the directors are required to:
• | select suitable accounting policies and then apply them consistently; | |||
• | make judgements and estimates that are reasonable and prudent; | |||
• | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and | |||
• | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and which enable them to ensure that the financial statements are prepared in compliance with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
AUDITORS
On 1 August 2003, Deloitte & Touche, the Company’s auditors transferred their business to Deloitte & Touche LLP, a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000. The Company’s consent has been given to treating the appointment of Deloitte & Touche as extending to Deloitte & Touche LLP with effect from 1 August 2003 under the provisions of section 26(5) of the Companies Act 1989. A resolution to re-appoint Deloitte & Touche LLP as the Company’s auditors will be proposed at the forthcoming Annual General Meeting.
Approved by the Board of Directors on 22 September 2003
and signed on behalf of the Board
M Lamont
Secretary
3
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF BEN SHERMAN LIMITED
We have audited the financial statements of Ben Sherman Limited for the year ended 30 June 2003 which comprise the profit and loss account, the balance sheets, the cash flow statement, and the related notes 1 to 23. These financial statements have been prepared under the accounting policies set out therein.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described in the statement of directors’ responsibilities, the company’s directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report if, in our opinion, the directors’ report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and transactions with the company and other members of the group is not disclosed.
We read the directors’ report for the above year as described in the contents section and consider the implications for our report if we become aware of any apparent misstatements.
BASIS OF OPINION
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company’s and the group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state of affairs of the company and the group as at 30 June 2003 and of the profit of the group for the year then ended and have been properly prepared in accordance with the Companies Act 1985.
DELOITTE & TOUCHE LLP
Chartered Accountants and Registered Auditors
Belfast
17 October 2003
4
BEN SHERMAN LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2003
2003 | 2002 | |||||||||||
NOTE |
£’000 |
£’000 |
||||||||||
TURNOVER |
1, 2 | 90,124 | 83,290 | |||||||||
Cost of sales |
(56,190 | ) | (52,816 | ) | ||||||||
GROSS PROFIT |
33,934 | 30,474 | ||||||||||
Selling and distribution costs |
||||||||||||
- Exceptional distribution costs |
— | (351 | ) | |||||||||
- Normal distribution costs |
(16,389 | ) | (16,663 | ) | ||||||||
(16,389 | ) | (17,014 | ) | |||||||||
Administrative expenses |
||||||||||||
- Amortisation of goodwill |
(1,980 | ) | (1,980 | ) | ||||||||
- Other administration expenses |
(10,122 | ) | (8,908 | ) | ||||||||
(12,102 | ) | (10,888 | ) | |||||||||
Other operating income |
2,429 | 1,662 | ||||||||||
OPERATING PROFIT |
3 | 7,872 | 4,234 | |||||||||
Profit/(loss) on disposal of fixed assets |
193 | (8 | ) | |||||||||
Interest payable and similar charges: |
||||||||||||
Interest |
(2,569 | ) | (3,701 | ) | ||||||||
Amortisation of costs of loan finance |
(119 | ) | (119 | ) | ||||||||
4 | (2,688 | ) | (3,820 | ) | ||||||||
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION |
5,377 | 406 | ||||||||||
Taxation on profit on ordinary activities |
7 | (2,329 | ) | (981 | ) | |||||||
PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION |
3,048 | (575 | ) | |||||||||
Equity dividends proposed |
9 | (1,038 | ) | (494 | ) | |||||||
RETAINED PROFIT/(LOSS) FOR THE YEAR |
19 | 2,010 | (1,069 | ) | ||||||||
All activities derive from continuing operations.
There were no recognised gains or losses other than the profit for the financial year and the loss for the preceding financial year. Accordingly, no statement of total recognised gains or losses is given.
5
BEN SHERMAN LIMITED
CONSOLIDATED BALANCE SHEET
30 JUNE 2003
2003 | 2002 | |||||||||||
NOTE |
£’000 |
£’000 |
||||||||||
FIXED ASSETS |
||||||||||||
Intangible assets |
10(iii) | 33,993 | 35,973 | |||||||||
Tangible assets |
11 | 2,570 | 1,969 | |||||||||
36,563 | 37,942 | |||||||||||
CURRENT ASSETS |
||||||||||||
Stock |
12 | 12,476 | 13,740 | |||||||||
Debtors |
13 | 17,057 | 15,605 | |||||||||
Cash at bank and at hand |
1,449 | — | ||||||||||
30,982 | 29,345 | |||||||||||
CREDITORS — AMOUNTS FALLING DUE WITHIN ONE YEAR |
14 | (22,516 | ) | (19,232 | ) | |||||||
NET CURRENT ASSETS |
8,466 | 10,113 | ||||||||||
TOTAL ASSETS LESS CURRENT LIABILITIES |
45,029 | 48,055 | ||||||||||
CREDITORS — AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
15 | (42,399 | ) | (47,484 | ) | |||||||
PROVISION FOR LIABILITIES AND CHARGES |
7 | — | (38 | ) | ||||||||
NET ASSETS |
2,630 | 533 | ||||||||||
CAPITAL AND RESERVES |
||||||||||||
Called up share capital |
16 | 56 | 48 | |||||||||
Share premium account |
19 | 3,327 | 3,248 | |||||||||
Profit and loss account |
19 | (753 | ) | (2,763 | ) | |||||||
EQUITY SHAREHOLDERS’ FUNDS |
17 | 2,630 | 533 | |||||||||
Approved by the Board of Directors on 22 September 2003
and signed on its behalf by:
Director
6
BEN SHERMAN LIMITED
COMPANY BALANCE SHEET
30 JUNE 2003
2003 | 2002 | |||||||||||
NOTE |
£’000 |
£’000 |
||||||||||
FIXED ASSETS |
||||||||||||
Investments |
10 | (i) | 53,072 | 53,072 | ||||||||
CURRENT ASSETS |
||||||||||||
Debtors |
13 | 3,138 | 11,524 | |||||||||
CREDITORS — AMOUNTS FALLING DUE WITHIN ONE YEAR |
14 | (10,428 | ) | (13,785 | ) | |||||||
NET CURRENT LIABILITIES |
(7,290 | ) | (2,261 | ) | ||||||||
TOTAL ASSETS LESS CURRENT LIABILITIES |
45,782 | 50,811 | ||||||||||
CREDITORS — AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
15 | (42,399 | ) | (47,484 | ) | |||||||
3,383 | 3,327 | |||||||||||
CAPITAL AND RESERVES |
||||||||||||
Called up share capital |
16 | 56 | 48 | |||||||||
Share premium account |
19 | 3,327 | 3,248 | |||||||||
Profit and loss account |
— | 31 | ||||||||||
EQUITY SHAREHOLDERS’ FUNDS |
3,383 | 3,327 | ||||||||||
Approved by the Board of Directors on 22 September 2003
and signed on its behalf by:
Director
7
BEN SHERMAN LIMITED
CASH FLOW STATEMENT
YEAR ENDED 30 JUNE 2003
2003 | 2002 | |||||||||||
NOTE |
£’000 |
£’000 |
||||||||||
Net cash inflow from operating activities |
21 | 11,661 | 6,916 | |||||||||
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE |
||||||||||||
Interest paid |
(1,873 | ) | (5,922 | ) | ||||||||
NET CASH (OUTFLOW) FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE |
(1,873 | ) | (5,922 | ) | ||||||||
TAXATION |
||||||||||||
UK Corporation tax paid |
(794 | ) | (888 | ) | ||||||||
CAPITAL EXPENDITURE |
||||||||||||
Payments to acquire tangible fixed assets |
(1,347 | ) | (474 | ) | ||||||||
Receipts from sales of fixed assets |
307 | 70 | ||||||||||
NET CASH/(OUTFLOW) FROM CAPITAL EXPENDITURE |
(1,040 | ) | (404 | ) | ||||||||
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING |
7,954 | (298 | ) | |||||||||
FINANCING |
||||||||||||
Issue of share capital |
187 | 63 | ||||||||||
New loans |
97 | 249 | ||||||||||
Capital element of finance leases |
— | (8 | ) | |||||||||
Repayment of loans |
(5,267 | ) | — | |||||||||
NET CASH (OUTFLOW)/INFLOW FROM FINANCING |
(4,983 | ) | 304 | |||||||||
INCREASE IN CASH IN THE YEAR |
22 | 2,971 | 6 | |||||||||
8
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
1. | ACCOUNTING POLICIES | |||
The financial statements are prepared in accordance with applicable accounting standards. The particular accounting policies adopted by the directors are described below. | ||||
BASIS OF CONSOLIDATION | ||||
The Group accounts consolidate the accounts of the Company and its subsidiaries made up to 30 June 2003. On the acquisition of a business results are included in trading results from the date control passes. | ||||
TURNOVER | ||||
Turnover comprises the invoiced value of goods and services supplied by the Group net of value added tax and trade discounts. | ||||
LEASED ASSETS | ||||
Assets held under finance leases and hire purchase contracts are capitalised at their fair value on the inception of the leases and depreciated over the shorter of the period of the lease and the estimated useful economic lives of the assets. The finance charges are allocated over the year of the lease in proportion to the capital amount outstanding and are charged to the profit and loss account. | ||||
Operating lease rentals are charged to profit and loss in equal annual amounts over the lease term. | ||||
DEPRECIATION | ||||
Fixed assets are stated at cost to the company less provision for any impairment. The cost is depreciated at fixed rates on a straight line basis over the expected useful lives of the assets as follows: |
Buildings |
50 years | |||
Plant and machinery |
10 years | |||
Fixtures and fittings |
3 to 5 years | |||
Motor vehicles |
4 years |
STOCKS | ||||
Stocks are valued at the lower of cost and net realisable value after making due allowance for any obsolete or slow moving items. | ||||
DEFERRED TAXATION | ||||
Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in financial statements. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the asset. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. | ||||
PENSION SCHEME | ||||
The group operates defined contribution schemes in respect of certain employees. Contributions are determined at the commencement of each financial year and are charged in full against the profit and loss account for the year. |
9
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
1. | ACCOUNTING POLICIES (CONT’D) | |||
REVENUE GRANTS | ||||
Grants received are credited to income in the same year as the expenditure to which they relate. | ||||
CAPITAL GRANTS | ||||
Capital grants are deferred and amortised at the same rate as those assets to which they relate. | ||||
GOODWILL | ||||
On the acquisition of a business, fair values are attributed to the Group’s share of net tangible assets. Where the cost of acquisition exceeds the values attributable to such net assets the difference is treated as purchased goodwill and is amortised on a systematic basis over the estimated useful economic life of the business, depending on specific circumstances. | ||||
INVESTMENTS | ||||
Investments held as fixed assets are stated at cost, except where provision is required for impairment. | ||||
FOREIGN CURRENCIES | ||||
Foreign currency transactions in the year have been translated at the rates of exchange then ruling. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated at the rates ruling at that date. The translation differences arising are dealt with in the profit and loss account. | ||||
The financial statements of foreign subsidiaries are translated into sterling using the net investment method. Balance sheet assets and liabilities are translated using the closing rate of exchange, whilst profit and loss account items are translated using the average rate for the year. The differences arising from the translation of the opening net investment in subsidiaries at the closing rate are taken directly to reserves. | ||||
2. | ANALYSIS OF TURNOVER | |||
In accordance with Paragraph 55(5) of Schedule 4 to the Companies Act 1985, analysis of turnover has been omitted. The directors believe that disclosure of such information would be seriously prejudicial to the interests of the company. |
10
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
3. | OPERATING PROFIT |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Operating profit is stated after charging: |
||||||||
Auditors’ remuneration: |
||||||||
Audit services |
33 | 39 | ||||||
Non audit services |
46 | 31 | ||||||
Depreciation - owned assets |
632 | 694 | ||||||
- assets held under finance leases |
— | 17 | ||||||
Property rentals |
1,046 | 489 | ||||||
Exceptional item — licence fee surcharge |
— | 351 | ||||||
4. | INTEREST PAYABLE AND SIMILAR CHARGES |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Bank interest receivable and similar income |
(14 | ) | — | |||||
Bank loan and overdraft interest (on borrowings
repayable within five years) |
2,583 | 3,701 | ||||||
Amortisation of costs of loan finance |
119 | 119 | ||||||
2,688 | 3,820 | |||||||
5. | EMPLOYEE INFORMATION |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Staff costs: |
||||||||
Wages and salaries |
8,908 | 6,732 | ||||||
Social security costs |
723 | 580 | ||||||
Pension costs |
116 | 136 | ||||||
9,747 | 7,448 | |||||||
NO. OF EMPLOYEES |
||||||||
2003 |
2002 |
|||||||
The average number employed by the company (including
directors) during the year: |
244 | 220 | ||||||
11
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
6. | DIRECTORS’ EMOLUMENTS |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Fees |
45 | 152 | ||||||
Aggregate emoluments |
444 | 371 | ||||||
Pension scheme contributions |
44 | 42 | ||||||
Retirement benefits are accruing to two (2002: 2) of the directors under the company’s defined contribution scheme. |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Highest paid director: |
||||||||
Aggregate emoluments |
205 | 177 | ||||||
Pension scheme contributions |
26 | 25 | ||||||
7. | TAX ON PROFIT ON ORDINARY ACTIVITIES |
(i) | Analysis of tax charge on ordinary activities: |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
United Kingdom corporation tax at 30%
(2002: 30%) for the year |
2,370 | 995 | ||||||
Foreign tax paid |
177 | — | ||||||
Double tax relief |
(177 | ) | — | |||||
Adjustment in respect of prior years: |
||||||||
UK corporation tax |
83 | — | ||||||
Foreign tax paid |
201 | — | ||||||
Double tax relief |
(201 | ) | — | |||||
2,453 | 995 | |||||||
Deferred tax: |
||||||||
Timing differences, origination and reversal |
(24 | ) | (14 | ) | ||||
Adjustment in respect of prior years |
(100 | ) | — | |||||
Tax charge for the year |
2,329 | 981 | ||||||
12
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
7. | TAX ON PROFIT ON ORDINARY ACTIVITIES (CONT’D) |
(ii) | Factors affecting the tax charge for the period |
The tax assessed for the period is more than the standard rate of corporation tax in the UK (30%). The differences are explained below: |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Profit on ordinary activities before tax |
5,377 | 406 | ||||||
Tax at 30% (2002: 30%) thereon |
1,613 | 122 | ||||||
Effects of: |
||||||||
Goodwill — amortisation |
594 | 594 | ||||||
Overseas losses (brought)/carried forward |
(70 | ) | 74 | |||||
Non qualifying depreciation |
30 | 61 | ||||||
Other |
203 | 144 | ||||||
Adjustment in respect of prior years |
83 | — | ||||||
2,453 | 995 | |||||||
(iii) | Movement on deferred taxation balance in the year: |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
As at 1 July |
38 | 52 | ||||||
Credit to the profit and loss account |
(124 | ) | (14 | ) | ||||
As at 30 June — note 13 |
(86 | ) | 38 | |||||
(iv) | Analysis of deferred taxation balance: |
2003 | 2003 | 2002 | 2002 | |||||||||||||
£’000 | £’000 | £’000 | £’000 | |||||||||||||
PROVIDED |
UNPROVIDED |
PROVIDED |
UNPROVIDED |
|||||||||||||
Accelerated capital allowances |
(59 | ) | — | 48 | 1 | |||||||||||
Short term timing differences |
(27 | ) | — | (10 | ) | — | ||||||||||
Total (asset)/provision |
(86 | ) | — | 38 | 1 | |||||||||||
8. | PROFIT OF PARENT COMPANY | |||
As permitted by Section 228(1) of the Companies Act, the profit and loss account of the parent company is not presented as part of these accounts. The parent company’s profit before dividends for the financial year amounted to £1,007k (2002: £464k). |
13
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
9. | EQUITY DIVIDENDS |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
“A” Ordinary Shares — Fixed Dividend |
228 | 228 | ||||||
“B” Ordinary Shares — Fixed Dividend |
55 | 55 | ||||||
“A” Ordinary Shares — Participating Dividend |
607 | 170 | ||||||
“B” Ordinary Shares — Participating Dividend |
148 | 41 | ||||||
1,038 | 494 | |||||||
10. | INVESTMENTS AND INTANGIBLE ASSETS |
(i) | THE COMPANY SHARES IN SUBSIDIARIES |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Cost |
53,072 | 53,072 |
(ii) | SUBSIDIARY INFORMATION |
PROPORTION OF | ||||||||
NATURE OF | COUNTRY OF | EQUITY SHARES | ||||||
BUSINESS |
INCORPORATION |
HELD |
||||||
Ben Sherman Group Limited
|
Trading | Northern Ireland | 100 | % | ||||
Ben Sherman (Australia) Pty Ltd
|
Trading | Australia | 100 | % | ||||
The Branded Shirt Company Limited
|
Dormant | England | 100 | % | ||||
Tern Shirts Limited
|
Dormant | England | 100 | % | ||||
Neal and Cooper Limited
|
Dormant | England | 100 | % | ||||
Dunkeld Fashions Limited
|
Dormant | England | 100 | % | ||||
Slix Limited
|
Dormant | England | 100 | % | ||||
Sherman Cooper Inc.
|
Dormant | USA | 100 | % | ||||
Ben Sherman (Lurgan) Limited
|
Dormant | Northern Ireland | 100 | % | ||||
Ben Sherman (Manufacturing) Limited
|
Dormant | Northern Ireland | 100 | % | ||||
Sherman Cooper Marketing Limited
|
Trading | England | 100 | % | ||||
Textile Caledonia Investments Limited
|
Non — Trading | Scotland | 100 | % |
The results of Textile Caledonia Investments Limited have been excluded from consolidation on the grounds of materiality. |
(iii) | THE GROUP — INTANGIBLE ASSETS |
2003 | 2002 | |||||||
£’000 | £’000 | |||||||
Goodwill | ||||||||
Opening Balance |
35,973 | 37,953 | ||||||
Amortised during the year |
(1,980 | ) | (1,980 | ) | ||||
At end of year |
33,993 | 35,973 | ||||||
Goodwill arising on the acquisition of subsidiary undertakings is being amortised over 20 years which reflects the economic life of the acquired goodwill. |
14
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
11. | TANGIBLE ASSETS | |||
GROUP: |
FREEHOLD | LEASEHOLD | |||||||||||||||||||||||
LAND AND | LAND AND | PLANT AND | FIXTURES AND | MOTOR | ||||||||||||||||||||
BUILDINGS | BUILDINGS | MACHINERY | FITTINGS | VEHICLES | TOTAL | |||||||||||||||||||
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|||||||||||||||||||
COST: |
||||||||||||||||||||||||
At 1 July 2002 |
108 | 1,231 | 315 | 2,230 | 222 | 4,106 | ||||||||||||||||||
Additions |
— | 46 | — | 1,301 | — | 1,347 | ||||||||||||||||||
Disposals |
(108 | ) | — | — | (20 | ) | (116 | ) | (244 | ) | ||||||||||||||
Transfers |
— | 8 | 3 | (11 | ) | — | — | |||||||||||||||||
At 30 June 2003 |
— | 1,285 | 318 | 3,500 | 106 | 5,209 | ||||||||||||||||||
DEPRECIATION: |
||||||||||||||||||||||||
At 1 July 2002 |
20 | 215 | 291 | 1,442 | 169 | 2,137 | ||||||||||||||||||
Charge for year |
— | 32 | 17 | 557 | 26 | 632 | ||||||||||||||||||
Disposals |
(20 | ) | — | — | (5 | ) | (105 | ) | (130 | ) | ||||||||||||||
Transfers |
— | — | 2 | (2 | ) | — | — | |||||||||||||||||
At 30 June 2003 |
— | 247 | 310 | 1,992 | 90 | 2,639 | ||||||||||||||||||
NET BOOK VALUE: |
||||||||||||||||||||||||
At 30 June 2003 |
— | 1,038 | 8 | 1,508 | 16 | 2,570 | ||||||||||||||||||
At 1 July 2002 |
88 | 1,016 | 24 | 788 | 53 | 1,969 | ||||||||||||||||||
The net book value of leasehold land and buildings comprises: |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Short term leases |
51 | 8 | ||||||
Long term leases |
987 | 1,008 | ||||||
1,038 | 1,016 | |||||||
Fixed assets include £nil (2002 - £4k) held under finance leases and hire purchase contracts. | ||||
12. | STOCK |
THE GROUP | THE GROUP | |||||||
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Finished Goods |
12,476 | 13,740 | ||||||
There is no material difference between the replacement cost of stocks and their balance sheet values. |
15
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
13. | DEBTORS |
THE GROUP | THE COMPANY | THE GROUP | THE COMPANY | |||||||||||||
2003 | 2003 | 2002 | 2002 | |||||||||||||
Amounts falling due within one year: | £’000 |
£’000 |
£’000 |
£’000 |
||||||||||||
Trade debtors |
15,406 | — | 13,653 | — | ||||||||||||
Amounts owed by group undertakings |
— | 3,138 | — | 11,422 | ||||||||||||
Other debtors including corporation tax
|
781 | — | 1,116 | 100 | ||||||||||||
Prepayments |
784 | — | 836 | 2 | ||||||||||||
Deferred tax asset — note 7 |
86 | — | — | — | ||||||||||||
17,057 | 3,138 | 15,605 | 11,524 | |||||||||||||
14. | CREDITORS — AMOUNTS FALLING DUE WITHIN ONE YEAR |
THE GROUP | THE COMPANY | THE GROUP | THE COMPANY | |||||||||||||
2003 | 2003 | 2002 | 2002 | |||||||||||||
£’000 |
£’000 |
£’000 |
£’000 |
|||||||||||||
Bank loans and overdrafts (note 15) |
7,290 | 7,290 | 8,685 | 12,288 | ||||||||||||
Other loans (note 15) |
34 | 34 | 127 | 127 | ||||||||||||
Trade creditors |
3,934 | — | 3,174 | — | ||||||||||||
Other creditors |
393 | — | 959 | — | ||||||||||||
Corporation tax |
1,659 | — | — | — | ||||||||||||
Other taxes and social security |
1,552 | — | 665 | — | ||||||||||||
Accruals and deferred income |
5,879 | 1,329 | 4,885 | 633 | ||||||||||||
Dividend payable |
1,775 | 1,775 | 737 | 737 | ||||||||||||
22,516 | 10,428 | 19,232 | 13,785 | |||||||||||||
15. | CREDITORS — AMOUNTS FALLING DUE AFTER ONE YEAR |
THE GROUP | THE COMPANY | THE GROUP | THE COMPANY | |||||||||||||
2003 | 2003 | 2002 | 2002 | |||||||||||||
£’000 |
£’000 |
£’000 |
£’000 |
|||||||||||||
Bank loans |
7,699 | 7,699 | 13,000 | 13,000 | ||||||||||||
Other loans |
34,938 | 34,938 | 34,841 | 34,841 | ||||||||||||
42,637 | 42,637 | 47,841 | 47,841 | |||||||||||||
Less unamortised cost of
loan finance |
(238 | ) | (238 | ) | (357 | ) | (357 | ) | ||||||||
42,399 | 42,399 | 47,484 | 47,484 | |||||||||||||
16
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
15. | CREDITORS — AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (CONT’D) |
THE GROUP | THE COMPANY | THE GROUP | THE COMPANY | |||||||||||||
2003 | 2003 | 2002 | 2002 | |||||||||||||
£’000 |
£’000 |
£’000 |
£’000 |
|||||||||||||
ANALYSIS OF LOAN REPAYMENT AND OVERDRAFTS |
||||||||||||||||
Bank overdraft: |
2,290 | 2,290 | 3,812 | 7,415 | ||||||||||||
Bank loans: |
||||||||||||||||
- within one year |
5,000 | 5,000 | 4,873 | 4,873 | ||||||||||||
- between one and two years |
5,000 | 5,000 | 6,000 | 6,000 | ||||||||||||
- between two and five years |
2,699 | 2,699 | 7,000 | 7,000 | ||||||||||||
Other loans: |
||||||||||||||||
- within one year |
34 | 34 | 127 | 127 | ||||||||||||
- between one and two years |
3,662 | 3,662 | — | — | ||||||||||||
- between two and five years |
22,738 | 22,738 | 17,805 | 17,805 | ||||||||||||
- after more than five years |
8,538 | 8,538 | 17,036 | 17,036 | ||||||||||||
49,961 | 49,961 | 56,653 | 60,256 | |||||||||||||
The Group’s bank borrowings and other loans are secured by fixed and floating charges over the assets of the Group. | ||||
Loans due after more than five years comprises two loans and two variable rate unsecured PiK notes repayable in annual instalments on 31 August from 2004 to 2008. The applicable interest rate is LIBOR and is calculated on a six monthly basis for the loan and a quarterly basis for the variable rate unsecured PiK notes. | ||||
Term loans by Bank of Scotland are secured using debentures by Ben Sherman Limited, dated 22 August 2000 and registered 30 August 2000 and debentures by Ben Sherman Group Limited (Formerly Sherman Cooper Limited) and Sherman Cooper Marketing Limited dated 22 August 2000 and registered 4 September 2000 incorporating a fixed charge over 18 Portadown Road, Lurgan, Craigavon. |
17
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
16. | SHARE CAPITAL |
THE COMPANY | THE COMPANY | |||||||
2003 | 2002 | |||||||
£ |
£ |
|||||||
AUTHORISED: |
||||||||
66,667 (2002: 50,000) £1 Ordinary Shares |
66,667 | 50,000 | ||||||
“A” Ordinary Shares 228,033 at 1p |
2,280 | 2,280 | ||||||
“B” Ordinary Shares 55,300 at 1p |
553 | 553 | ||||||
69,500 | 52,833 | |||||||
CALLED UP, ALLOTTED AND FULLY PAID: |
||||||||
54,999 (2002: 46,250) £1 Ordinary Shares |
54,999 | 46,250 | ||||||
“A” Ordinary Shares 90,000 at 1p |
900 | 900 | ||||||
“B” Ordinary Shares 55,300 at 1p |
553 | 553 | ||||||
56,452 | 47,703 | |||||||
Holders of “A” Ordinary Shares are entitled to a fixed dividend of £2.533 per share and for each financial year of the company up to 30 June 2003, 12.072% of net profit and for each financial year of the company following 30 June 2003, 16.096% of net profit. | ||||
Holders of “B” Ordinary Shares are entitled to a fixed dividend of £1 per share and for each financial year of the company up to 30 June 2003, 2.928% of net profit and for each financial year of the company following 30 June 2003, 3.904% of net profit. | ||||
On a winding up, holders of “A” Ordinary Shares and “B” Ordinary Shares have equal first priority over the £1 Ordinary Share capital and are entitled to the balance of any assets. | ||||
During the year 18,749 £1 Ordinary shares were issued for £10 per share and 10,000 shares were cancelled. | ||||
17. | RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS’ FUNDS |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Profit/(loss) for the financial period |
3,048 | (575 | ) | |||||
Dividends |
(1,038 | ) | (494 | ) | ||||
2,010 | (1,069 | ) | ||||||
Opening shareholders’ funds |
533 | 1,539 | ||||||
Shares issued in the period: |
||||||||
Nominal value |
18 | 7 | ||||||
Share premium |
169 | 56 | ||||||
Shares cancelled in the period: |
||||||||
Nominal value |
(10 | ) | — | |||||
Share premium |
(90 | ) | — | |||||
Closing shareholders’ funds |
2,630 | 533 | ||||||
18
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
18. | COMMITMENTS AND CONTINGENCIES | |||
(i) | At 30 June 2003 the group was committed to making the following payments during the next year in respect of operating leases: |
2003 | 2002 | 2003 | 2002 | |||||||||||||
PROPERTY | PROPERTY | OTHER | OTHER | |||||||||||||
£’000 |
£’000 |
£’000 |
£’000 |
|||||||||||||
Operating Leases which expire: |
||||||||||||||||
In less than one year |
41 | 105 | 12 | — | ||||||||||||
Between one and two years |
281 | 30 | — | — | ||||||||||||
Between two and five years |
9 | 487 | 59 | 5 | ||||||||||||
After five years |
583 | — | — | — | ||||||||||||
(ii) | The group has entered into cross guarantees in favour of the Bank of Scotland to secure the respective liabilities of all group companies and is committed to letters of credit for £380k (2002 - £1,696k). | |||
19. | RESERVES |
GROUP | ||||||||
PROFIT AND LOSS | SHARE | |||||||
ACCOUNT | PREMIUM | |||||||
£’000 |
£’000 |
|||||||
At 30 June 2002 |
(2,763 | ) | 3,248 | |||||
Shares issued |
— | 169 | ||||||
Shares cancelled |
— | (90 | ) | |||||
Profit for the year |
2,010 | — | ||||||
Balance at the end of year |
(753 | ) | 3,327 | |||||
20. | PENSION SCHEME | |||
The group operates a defined contribution scheme, by providing contributions to the personal pension plans of certain individuals. The assets of the Scheme are held separately from those of the group and are invested with insurance companies. The charge for the year was £116k (2002: £136k) representing the contributions paid during the year. | ||||
21. | RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Operating profit |
7,872 | 4,234 | ||||||
Goodwill amortisation |
1,980 | 1,980 | ||||||
Depreciation |
632 | 711 | ||||||
Increase in debtors |
(1,466 | ) | (1,540 | ) | ||||
Increase in creditors |
1,379 | 2,889 | ||||||
Decrease/(Increase) in stock |
1,264 | (1,358 | ) | |||||
Net cash inflow from operating activities |
11,661 | 6,916 | ||||||
19
BEN SHERMAN LIMITED
NOTES TO THE ACCOUNTS
YEAR ENDED 30 JUNE 2003
22. | RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT |
2003 | 2002 | |||||||
£’000 |
£’000 |
|||||||
Increase in cash in the year |
2,971 | 6 | ||||||
Cash inflow/(outflow) from decrease/(increase)
in debt and lease financing |
5,170 | (241 | ) | |||||
Changes in net debt resulting from cashflows |
8,141 | (235 | ) | |||||
Net debt at start of year |
(56,296 | ) | (55,942 | ) | ||||
Amortisation of cost of loan finance |
(119 | ) | (119 | ) | ||||
Net debt at end of year |
(48,274 | ) | (56,296 | ) | ||||
23. | ANALYSIS OF NET DEBT |
AT 30/6/02 | CASH FLOW | OTHER | AT 30/6/03 | |||||||||||||
£’000 |
£’000 |
£’000 |
£’000 |
|||||||||||||
Cash at bank |
— | 1,449 | — | 1,449 | ||||||||||||
Overdrafts |
(3,812 | ) | 1,522 | — | (2,290 | ) | ||||||||||
(3,812 | ) | 2,971 | — | (841 | ) | |||||||||||
Debt due after more than one year |
(47,484 | ) | 170 | 4,915 | (42,399 | ) | ||||||||||
Debt due within one year |
(5,000 | ) | 5,000 | (5,034 | ) | (5,034 | ) | |||||||||
(56,296 | ) | 8,141 | (119 | ) | (48,274 | ) | ||||||||||
20