Half-yearly report
(Thomson Reuters ONE) - Chairman's Statement and Chief Executive's ReviewCHAIRMAN'S STATEMENTThe first half of the year has seen both continued progress withpreviously reported operational initiatives aimed at stabilising thebusiness and the further integration of the Company into the CrownCrest Group.Whilst the reported loss before taxation for the period of £3.7million represents a significant improvement on the £7.1 million lossreported for the same period last year, it would be wrong tocharacterise this as evidence of a turnaround in the Company'sfortunes. However, it does demonstrate some degree of stabilisationand that the correct actions are being taken.Nevertheless, it is equally true that the discount sector is becomingever more competitive in the current economic downturn. Althoughthere is some evidence of consumers 'trading down' in the generalmerchandise sector, thishas not been seen to the same extent as with, for example, food. As aresult the present trading environment remains extremely difficultwith ever increasing pressure on margins.The Board recognises that Crown Crest's investment in and commitmentto the Company has been, and will continue to be, of vitalimportance. Not only is Crown Crest providing material financialsupport by way of loan and trade credit facilities, it is alsoassisting through initiatives such as joint buying and logisticalsupport.While such assistance is provided always on a commercial and 'arm'slength' basis, these are avenues of finance and credit that may wellnot have been available to the Company at all from traditionalsources. The Board believes that even when general economicconditions improve, the Company's substantial dependence on the CrownCrest Group will continue and that the Company's interests will bebest served by some or all of the Company's indebtedness to CrownCrest being converted into share capital. If approved, this woulddecrease further the proportion of theCompany's shares in public hands and bring into question thecontinuing appropriateness of maintaining the Company's listing.For this and other reasons, the Company will today be separatelyannouncing a proposal to seek cancellation of the admission of itsshares to the Official List and to their trading on the London StockExchange, and subsequentlythe arrangement of a tender offer for its shares and itsre-registration as a private limited company. A Circular setting outthe reasons for and the details of these proposals, together with anotice convening a general meeting, will be posted to shareholdersshortly. The Board unanimously believes this proposal to be in thebest interests of shareholders as a whole, and is recommending thatshareholders vote in favour.John JacksonChairman29th October 2009CHIEF EXECUTIVE'S REVIEWDuring the first half of the year we have continued to implement thechanges required to return the business to its heritage as a valueretailer with a reputation for low everyday prices and fantasticoffers.As a clear signal to consumers of our intentions in this regard wehave pressed ahead with the programme of returning all our coreestate to the 'Poundstretcher' brand, and have converted 58 storesduring the period under review at minimal expense.To enable customers to be offered the best possible value for moneywe have continued to both refine our buying strategy and to reviewcosts across the business.With regard to costs, we have continued to successfully achievefavourable rent and lease renewals and are renegotiating third partycontracts for services wherever possible. I am pleased to report thatour ongoing reviewof costs has not resulted in any significant redundancies and ourfocus has been to more tightly control staff hours on a store bystore basis.Unfortunately we have experienced somewhat higher than anticipateddistribution costs in the first half of the year. This has been duein part to the process of bedding in the logistics support now beingprovided by Crown Crest butprincipally due to the imperative of filling certain gaps that hadarisen in our stock range. Ensuring that such gaps are eradicated andthat all 'events', such as back-to-school, are fully ranged will bean area of focus for us going forward.Despite such stock issues, our sales for the first half remainbroadly in line with our expectations and ahead of last year. Theperformance of our 19 store 'Coloroll' estate remains disappointing,however, although we have seensome encouraging signs following a review and rationalisation of theproduct range. We keep our options for this business under review.Finally, our property strategy remains one of prudence, keeping themarket under constant review and assessing the relative merits ofopportunities as they arise. During the period we have opened fivenew stores, including two former Woolworths sites, and closed four,giving a total of 329 stores at the half year.Trading Performance and Financial ResultsTotal sales in the 26 weeks to 29th August 2009 were £139.8 million,an increase of 2.9% against the £135.8 million achieved in the sameperiod last year. Within this total, like-for likesales showed an increase of 1.3%, reflecting the favourable weatherduring the first quarter and strong performances from textiles andFMCG.Cost of sales before exceptional items increased to £127.7 million(2008: £124.6 million), with savings in payroll and reduced rentsoffset by increased energy charges, together with higher thananticipated distribution costs incurred asgaps in the stock range were filled.Nevertheless, gross profit before exceptional items has increased to£12.1 million (2008: £11.2 million) increasing gross profit marginslightly to 8.6% (2008: 8.3%).After net operating expenses before exceptional items of £15.1million (2008: £17.5 million), the business reported a net operatingloss before exceptional items for the period of £3.2 million, a £3.1million improvement versus last year's loss for the same period of£6.3 million.After the exceptional costs of £0.4 million, relating to theimpairment of property, plant and equipment and an onerous leaseprovision (2008: £0.7 million relating to costs of the offer fromSechem Investments and employee sharemovements), and after net interest paid of £0.2 million (2008: £0.1million), the total loss before taxation for the period was £3.7million, compared with last year's £7.1 million.The basic loss per share was 1.98p (2008: 3.32p).Balance SheetCapital expenditure in the 26 week period to 29th August 2009 was£0.7 million (2008: £0.3 million), partly reflecting the decision torebrand the estate to the 'Poundstretcher' fascia. Fixed assets atthe period end had decreased from £30.1 million to £21.7 million.Stock amounted to £44.4 million, an increase of 11.9% on 2008 levels,reflecting both the new product lines being brought into the businessand the acquisitions made of ex-Woolworth stock.At the half-year end, the Group had net cash balances of £3.2 million(2008: £6.9 million), after a net decrease in cash of £3.7 million(2008: £3.3 million).Risk and UncertaintiesThe Group faces a number of risks and uncertainties, both over theremainder of the financial year and beyond, and it is Instore'spolicy to mitigate these risks to the greatest extent possible.The Company is, and in the view of the Directors likely to remain,significantly dependent on the support of the Crown Crest Group. Thefinancial support from Crown Crest, which takes the form of a loan of£5 million, a guarantee to support the Company's banking facilitiesand trade credit facilities amounting to £5 million, is carefullymonitored by the Board's Audit Committee to ensure it is providedalways on an 'arm's length' basis and at commercial terms whichreflect those applied to Crown Crest by its own lenders.In common with most retailers, the Group's performance is affected bythe underlying economic climate. The Board considers that the fulleffects of the current recession have yet to be seen, but that theeconomic downturn presents opportunities as well as challenges, giventhe 'value' nature of Instore's offer and the possibility of thatoffer becomingincreasingly attractive to a wider range of customers. Nevertheless,in such circumstances the value retail sector is likely to becomeever more competitive, and the Group and its management will have toensure sourcing remains robust if Instore is to continue to offer itscustomers best value.Group performance in every year is also heavily dependent on the keyChristmas trading period and accordingly management spends a greatdeal of time planning for this period and ensuring such plans arewell executed. In addition, sales of our seasonal lines, particularlyour gardening and outdoor living ranges, are to a large extentdependent on the UK enjoying good, seasonal weather during the springand summer months.As regards sourcing, the Group acquires a significant proportion ofgoods for resale from outside the UK, paid for in foreign currency,and it is the Group's policy to manage the inherent risks from suchcurrency exposure by entering into forward contracts in respect ofpayments to such overseas suppliers.The day-to-day operation of the business is hugely dependent on theefficient and uninterrupted operation of Instore's logistics and ITsystems. Given their centralised nature, the Group has invested mucheffort in establishing a robust business continuity plan, which it ishoped will minimise the impact of any major disaster suffered at theGroup's head office location. Nevertheless, these effects cannot beeradicated fully, and any such disaster would have a significantshort-term impact on the Group's business.OutlookTotal sales were down 7.7% in the seven weeks ended 17th October2009, equivalent to an 8.3% like-for-like decrease. As in previousyears the full year outcome will be heavily dependent on the keyChristmas trading period.Responsibility Statement of the Directors in Respect of the InterimFinancial ReportWe confirm that to the best of our knowledge: * the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, inancial position and loss of the Group; * the interim management report includes a fair review of the information required by:(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being anindication of important events that have occurredduring the first six months of the financial year and their impact onthe condensed set of financial statements; and a description of theprincipal risks and uncertainties for the remaining six months of theyear; and(b) DTR 4.2.8R of the Disclosure and Transparency Rules, beingrelated party transactions that have taken placein the first six months of the current financial year and that havematerially affected the financial position or performance of theentity during that period; and any changes in the related partytransactions described in the lastannual report that could do so.Aziz TayubChief Executive29th October 2009Independent Review Report to Instore plcIntroductionWe have been engaged by the Company to review the condensed set offinancial statements in the interim financial report for the 26 weeksended 29th August 2009 which comprises the Consolidated IncomeStatement, the Consolidated Statement of Comprehensive Income, theConsolidated Statement of Changes in Shareholcers' Equity,the Consolidated Statement of Financial Position, the ConsolidatedStatement of Cash Flows and the related notes. We have read the otherinformation contained in the interim financial report and consideredwhether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set offinancial statements.This report is made solely to the Company in accordance with theterms of our engagement. Our review has been undertaken so that wemight state to the Company those matters we are required to state toit in this report andfor no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the Companyfor our review work, for this report, or for the conclusions we havereached.Directors' ResponsibilitiesThe interim financial report is the responsibility of, and has beenapproved by, the Directors. The Directors are responsible forpreparing the interim financial report in accordance with theDisclosure and Transparency Rules of the United Kingdom's FinancialServices Authority.As disclosed in note 3, the annual financial statements of the Groupare prepared in accordance with IFRSs as adopted by the EuropeanUnion. The condensed set of financial statements included in thisinterim financial report has been prepared in accordance withInternational Accounting Standard 34, "Interim Financial Reporting",as adopted by the European Union.Our ResponsibilityOur responsibility is to express to the Company a conclusion on thecondensed set of financial statements in the interim fi nancialreport based on our review.Scope of ReviewWe conducted our review in accordance with International Standard onReview Engagements (UK and Ireland) 2410, "Review of InterimFinancial Information Performed by the Independent Auditor of theEntity" issued by the Auditing Practices Board for use in the UnitedKingdom. A review of interim financial information consists of makingenquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an auditconducted in accordance with International Standards on Auditing (UKand Ireland) and consequently does not enable us to obtain assurancethat we would become aware of all significant matters that might beidentified in an audit. Accordingly, we do not express an auditopinion.ConclusionBased on our review, nothing has come to our attention that causes usto believe that the condensed set of financial statements in theinterim financial report for the 26 weeks ended 29th August 2009 isnot prepared, in all material respects, in accordance withInternational Accounting Standard 34 as adopted by the European Unionand Disclosure and Transparency Rules of the Financial ServicesAuthority.PKF (UK) LLPNottingham29th October 2009Unaudited Consolidated Income Statementfor the 26 weeks ended 29th August 2009 26 weeks ended 29th August 26 weeks ended 30th 2009 August 2008 Before Before Exceptional Exceptional exceptional items exceptional items items (note Total items (note Total 6) 6) Notes £'000 £'000 £'000 £'000 £'000 £'000Revenue 139,792 - 139,792 135,821 - 135,821Cost of sales (127,736) (440) (128,176) (124,580) - (124,580)Gross profit 12,056 (440) 11,616 11,241 - 11,241Distribution (8,815) - (8,815) (10,155) - (10,155)costsAdministrative (6,276) - (6,276) (7,319) (782) (8,101)expensesOperating (3,035) (440) (3,475) (6,233) (782) (7,015)(loss)/profitFinance income 1 - 1 33 - 33Finance (183) - (183) (104) - (104)expensesLoss before (3,217) (440) (3,657) (6,304) (782) (7,086)taxationTaxation 7 (695) - (695) (194) - (194)Loss for theperiodattributableto theequity holdersof theParent Company (3,912) (440) (4,352) (6,498) (782) (7,280)Loss per share(pence)- Basic and 8 (1.98) (3.32)dilutedUnaudited Consolidated Statement of Comprehensive Incomefor the 26 weeks ended 29th August 2009 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 £'000 £'000Loss for the period attributable to theequity holders of the Parent Company (4,352) (7,280)Cash flow hedges- Fair value gains in period 382 3,123- Transfers to net profit (2,169) (2,013)Total comprehensive expense for the periodattributableto the equity holders of the Parent Company (6,139) (6,170)(net of tax)Unaudited Consolidated Statement ofChanges in Shareholders' Equity for the 26 weeks ended 29th August2009 Share Share Other Accumulated capital premium Reserves losses Total £'000 £'000 £'000 £'000 £'000As at 2nd March 2008 aspreviously reported 28,721 97,794 3,729 (104,089) 26,155Prior year adjustmentseenotes below - - (219) - (219)At 2nd March 2008as restated 28,721 97,794 3,510 (104,089) 25,936Net loss - - - (7,280) (7,280)Cash flow hedges- Fair value gains in - - 3,123 - 3,123period- Transfers to net - - (2,013) - (2,013)profitAt 30th August 2008as restated 28,721 97,794 4,620 (111,369) 19,766At 1st March 2009 28,721 97,794 3,184 (114,214) 15,485Net loss - - - (4,352) (4,352)Cash flow hedges- Reclassification toretained earnings - - (1,787) 1,787 -- Fair value gains in - - - 382 382period- Transfers to net - - - (2,169) (2,169)profitAt 29th August 2009 28,721 97,794 1,397 (118,566) 9,346Prior year adjustmentAt 1st March 2008 the deferred tax adjustment relating to hedging wasnot recognised.An adjustment of £219,000 was made between deferred tax and theequity hedge reserve as per the Company's Statutory accounts for the52 weeks ended 28th February 2009.Reclassification to accumulated lossesThe reclassification of the hedge reserve is due to the novation ofthe forward contracts and options held by the Company as per IAS 39(see note 14).Unaudited Consolidated Statement of Financial Position as at 29thAugust 2009 29th August 30th August 28th February 2009 2008 2009 As restated Notes £'000 £'000 £'000AssetsNon-current assetsProperty, plant and 9 21,685 30,138 25,222equipmentDeferred tax - 1,759 -Other non-current - 50 -receivables 21,685 31,947 25,222Current assetsInventories 44,352 39,635 45,168Trade and other 8,213 7,751 6,346receivablesDerivative financial - 4,142 7,345assetsCash and cash equivalents 3,152 6,913 6,327 55,717 58,441 65,186Total assets 77,402 90,388 90,408LiabilitiesCurrent liabilitiesTrade and other payables 11a (53,305) (52,842) (56,432)Derivative financial - (2,679) (3,316)liabilitiesCurrent tax payable - (112) -Provisions 12 (558) (1,618) (1,091) (53,863) (57,251) (60,839)Net current assets 1,854 1,190 4,347Non-current liabilitiesProvisions 12 (10,506) (9,710) (10,501)Other non-current 11b (3,687) (3,659) (3,583)payables (14,193) (13,369) (14,084)Total liabilities (68,056) (70,620) (74,923)Net assets 9,346 19,768 15,485Shareholders' equityCalled up share capital 28,721 28,721 28,721Share premium 97,794 97,794 97,794Other reserves 1,397 4,622 3,184Accumulated losses (118,566) (111,369) (114,214)Total equity 9,346 19,768 15,485Prior year adjustment - taken to equity hedge reserveAt 1st March 2008 the deferred tax adjustment relating to hedging wasnot recognised.An adjustment of £219,000 was made between deferred tax and theequity hedge reserve as per the Company's Statutory accounts for the52 weeks ended 28th February 2009.Unaudited Consolidated Statement ofCash Flows for the 26 weeks ended 29th August 2009 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 Notes £'000 £'000Cash flows from operating activitiesCash (absorbed by) operations 10 (2,281) (1,176)Interest received 1 33Interest paid (183) (104)Net cash outflow from operating (2,463) (1,247)activitiesCash flows from investing activitiesPurchase of property, plant and (712) (551)equipmentNet cash used in investing activities (712) (551)Net decrease in cash, cash equivalents (3,175) (1,798)and overdraftsCash and cash equivalents at beginning 6,327 8,711of periodCash, cash equivalents and overdrafts 3,152 6,913at end of periodNotes to the Interim Report for the 26 weeks ended 29th August 20091 GENERAL INFORMATIONThe Company is a limited liability company incorporated and domiciledin the UK. The address of its registered office is Trident BusinessPark, Leeds Road, Huddersfield, HD2 1UA.The Company has its primary listing on the London Stock Exchange.This condensed consolidated interim financial information wasapproved for issue on 29th October 2009.These interim financial results do not comprise statutory accountswithin the meaning of Section 435 of the Companies Act 2006.Statutory accounts for the 52 weeks ended 28th February 2009 wereapproved by the Board of Directors on 29th June 2009 and delivered tothe Registrar of Companies. The financial information contained inthis interim report in respect of the 52 weeks ended 28th February2009 has been extracted from the 2009 annual report and financialstatements. The report of the auditors on those accounts wasunqualified, did not contain an emphasis of matter paragraph and didnot contain any statement under Section 498 (2) or (3) of theCompanies Act 2006.2 SEASONALITY OF OPERATIONSThe Company's principal activity is retail within the value sector.Historically, approximately 55% of sales revenue is generated in thesecond half-year, although this is partially offset by acorresponding rise in variable costs.3 BASIS OF PREPARATIONThis condensed consolidated interim financial information for theperiod ended 29th August 2009 has been prepared in accordance withthe Disclosure and Transparency Rules of the Financial ServicesAuthority and with IAS 34, "Interim financial reporting" as adoptedby the European Union. The half-yearly condensed consolidatedfinancial report should be read in conjunction with the annualfinancial statements for the 52 weeks ended 28th February 2009, whichhave been prepared in accordance with IFRSs as adopted by theEuropean Union.In view of the Group's ongoing trading losses the Directors havecarried out a detailed review to determine whether the going concernbasis of preparation remains appropriate. In carrying out this reviewthe Directors have noted the improved results that have been achievedduring the interim period compared to the comparative period in linewith the turnaround plan. The Directors are aware that continuedachievement of the turnaround plan is dependent on the ongoing levelof demand for the Group's products, exchange rate fluctuationsbetween sterling and dollar, and the availability of bank finance inthe foreseeable future.During the interim period the Group breached one of its borrowingcovenants. However, the consent of the bank was sought prior to suchbreach occurring and the Directors subsequently obtained a formalwaiver by the bank after the period end. There have been nosubsequent breaches.The Directors have prepared detailed cash flow forecasts which theyconsider prudently model trading performance taking account of thecurrent economic environment and demonstrate that the business shouldbe able to continue to operate within its current banking facilitiesfor the foreseeable future. The committed facilities are due forreview on 30th June 2010. The Group will open renewal negotiationswith the bank in due course and has at this stage not sought anywritten commitment that the facility will be renewed. However, theGroup has held discussion with its bankers about its future borrowingneeds and no matters have been drawn to its attention to suggest thatrenewal may not be forthcoming on acceptable terms.The Directors recognise that in order to operate within itsfacilities the Group is dependent on the ongoing support of CrownCrest (Leicester) plc, the Company's principal shareholder. TheDirectors have obtained written confirmation that Crown Crest(Leicester) plc will not recall its loan during the next year andwill continue to provide ongoing support in relation to trade creditfacilities and buying and logistic support for the foreseeable futureto ensure the Group can meet its liabilities as they fall due. Inconsideration of its ability to provide the ongoing support CrownCrest (Leicester) plc has reviewed its own funding requirements andhas agreed extended facilities to provideadditional headroom to cover any delays with the ongoing turnaroundof the Group.Taking the above into consideration the Directors believe that thepreparation of the accounts on a going concern basis is appropriate.4 ACCOUNTING POLICIESThe accounting policies adopted are consistent with those of thefinancial statements for the 52 weeks ended 28th February 2009, asdescribed in those annual financial statements.There have been no significant changes in the bases upon whichestimates have been determined, compared to those applied at 28thFebruary 2009 and no change in estimate has had a material effect onthe current period.These condensed consolidated interim financial statements have beenprepared on the basis of IFRS in issue that are effective oravailable for early adoption at the Group annual reporting date as at27th February 2010.5 SEGMENT INFORMATIONThe Group derives its revenue from a single activity, being varietydiscount retailing. This is carried out throughout the UK andapplying IFRS 8 the Directors consider this to be a single operatingsegment.6 EXCEPTIONAL ITEMSItems that are both material in size and unusual and infrequent innature are presented as exceptional items in the income statement.The Directors are of the opinion that the separate recording ofexceptional items provides helpful information about the Group'sunderlying business performance.Operating exceptional items are analysed as follows: 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 £'000 £'000Cost of sales:1) Impairment of property, plant and (354) -equipment2) Onerous lease provision (86) - (440) -Administration expenses:3) Cost of share offer - (245)4) Employee share loan provision - (537) - (782) (440) (782)1) As a result of the provisions under IAS 36, the Directorshave conducted an assessment of the future cash flows of all tradingoutlets. An impairment charge of £0.4 million (2008: £nil) has beenrecognised on those stores where the anticipated cash flows do notsupport the carrying value of the associated assets.2) During the financial period ended 29th August 2009, theDirectors have conducted an assessment of the future cash flows ofall trading outlets and as result an onerous lease charge of £0.1million (2008: £nil) was recognised on those stores where theanticipated cash flows were not expected to cover the contractedlease charges.3) During the period ended 30th August 2008, Seaham InvestmentsLimited made an offer to the minority shareholders of Instore plc tobuy their shares. The cost of evaluating and effecting this offer was£0.3 million.4) During the period ended 30th August 2008, an impairmentcharge of £0.5 million hasbeen recognised in respect of a potential shortfall on loans made toemployees for the purpose of acquiring shares in the Company.7 TAXATIONThe tax charge for the period is £695,000 (2008: £194,000). Theeffective rate of tax is lower than the prevailing UK statutory rateof 28% as no deferred tax asset has been recognised in relation tolosses arising in the period. The tax change relates to movements indeferred tax relating to short-term timing differences.8 LOSS PER SHAREBasic loss per share is calculated by dividing the earningsattributable to ordinary shareholders by the weighted average numberof ordinary shares outstanding during the period, excluding thoseheld in the employee share trust which are treated as cancelled.For diluted loss per share, the weighted average number of ordinaryshares in issue is adjusted to assume conversion of all dilutivepotential ordinary shares. The Group has one class of potentiallydilutive ordinary shares: those share options granted to employeeswhere the exercise price is less than the average market price of theCompany's ordinary shares during the period.Reconciliations of the earnings and weighted average number of sharesused in the calculations are set out below. 2009 2008 Weighted Weighted average average number of Per number of Per share share Earnings shares amount Earnings shares amount £'000 millions pence £'000 millions penceBasic loss pershare:Earningsattributable toordinary (4,352) 219.4 (1.98) (7,280) 219.5 (3.32)shareholdersEffect ofdilutivesecurities:Options - - - - - -Diluted loss per (4,352) 219.4 (1.98) (7,280) 219.5 (3.32)shareThe dilutive effect of options is disregarded in the current andprior periods as a loss was incurred.9 PROPERTY, PLANT AND EQUIPMENT 26 weeks 26 weeks 52 weeks ended ended ended 29th August 30th August 28th February 2009 2008 2009 £'000 £'000 £'000Opening net book amount 1stMarch 2009/2nd March 2008/2nd March 2008 25,222 33,987 33,987Additions at cost 677 259 2,536Disposals (148) (478) (672)Depreciation, amortisation and (3,712) (3,630) (8,530)other movementsImpairment charge (note 6) (354) - (2,099)Closing net book amount 29thAugust 2009/30th August 2008 21,685 30,138 25,222Due to indications the properties have been reviewed for impairmentat the balance sheet date. The recoverable amount of each propertyhas been based on estimated value in use calculations. Value in usecalculations have been based on a subjective discount rate of 8.7%.10 CASH FLOW FROM OPERATING ACTIVITIESCash absorbed by operations 26 weeks 26 weeks ended ended 29th August 30th August 2009 2008 £'000 £'000Loss for the financial period (4,352) (7,280)Adjustments for:Taxation 695 194Finance income (1) (33)Finance costs 183 104Depreciation 3,712 4,125Impairment of fixed assets 354 (495)Loss on disposal of property, plant and 148 478equipmentShare-based payment (credit) - (171)Fair value movements on derivative financial 1,547 -instrumentsDecrease/(Increase) in inventories 816 (3,929)(Increase) in trade and other receivables (1,867) (2,420)Increase/(Decrease) in payables (2,988) 9,047(Decrease) in provisions (528) (796) (2,281) (1,176)11 LIABILITIES(a) Trade and other payables 29th August 30th August 28th February 2009 2008 2009 £'000 £'000 £'000Trade payables 35,099 35,369 38,090Other tax and social security 1,790 2,514 1,001payableOther payables 2,073 2,121 1,769Loan from Crown Crest 5,000 - 5,000(Leicester) plc (note 14)Accruals and deferred income 9,343 12,838 10,572 53,305 52,842 56,432(b) Other non-currentliabilities 29th August 30th August 28th February 2009 2008 2009 £'000 £'000 £'000Other payables 3,687 3,659 3,583Other payables represent capital contributions from landlords, leasepremiums andrent-free periods.12 PROVISIONS Dilapidation Closed store Onerous lease provision provision provision Total £'000 £'000 £'000 £'000At 2nd March 2008 9,634 690 1,800 12,124Charged to profit and 112 - - 112loss accountUtilised during the (57) (583) - (640)periodReleased during the (28) - (240) (268)periodAt 30th August 2008 9,661 107 1,560 11,328At 2nd March 2008 9,634 690 1,800 12,124Charged to profit and 260 134 1,085 1,479loss accountUtilised during the (221) (798) (443) (1,462)periodReleased during the (27) (26) (496) (549)periodAt 28th February 2009 9,646 - 1,946 11,592At 1st March 2009 9,646 - 1,946 11,592Charged to profit and 20 - 86 106loss accountUtilised during the (2) - - (2)periodReleased during the - - (632) (632)periodAt 29th August 2009 9,664 - 1,400 11,064Provisions have been analysed between current and non-current asfollows: 29th August 30th August 28th February 2009 2008 2009 £'000 £'000 £'000Current 558 1,618 1,091Non-current 10,506 9,710 10,501 11,064 11,328 11,59213 CONTINGENCIESLiabilitiesThe Group had guaranteed certain lease obligations of its subsidiaryundertakings, which were disposed of to Tradegro Limited during theperiod ended 22nd February 2003.Tradegro Limited has agreed to indemnify the Company against claimsreceived under the guarantees. These leases all expire in between 8and 10 years. The maximum potential annual liability under theseleases is £336,000 (2008: £336,000).As at 28th February 2009 the Group had guarantees in respect ofCustoms and Excise duty deferment of £500,000 (2008: £500,000) andstand-by letters of credit given to suppliers of £630,000 (2008:£nil).AssetsIn previous years a compulsory purchase order was issued over one ofthe Group's stores.Subject to final agreement of the value, the minimum compensation isexpected to be £650,000 after costs.14 RELATED PARTY TRANSACTIONSCrown Crest (Leicester) plc and Seaham Investments Limited arerelated parties to Instore plc and its subsidiary undertakings. At29th August 2009 Seaham Investments owned 56.98% of the ordinary 10pshares in Instore plc. A A Tayub and A R Tayub are Directors of CrownCrest (Leicester) plc and A A Tayub is a Director of SeahamInvestments Limited. A A Tayub and A R Tayub are also Directors ofInstore plc.Material transactions between related parties in relation to CrownCrest (Leicester) plc and Seaham Investments Limited in the period to29th August 2009 were:(a) £29.9 million (30th August 2008: £8.6 million; 28th February2009: £24.5 million) was payable to Crown Crest (Leicester) plcduring the period for purchases of goods for resale during theordinary course of business. As at 29th August 2009 an amount of£14.2 million (30th August 2008: £2,635,000; 28th February 2009: £5.3million) was owed to Crown Crest (Leicester) plc in respect of thesepurchases.(b) On 25th August 2009, $27.3 million of Forward Contracts andOptions were novated to Crown Crest (Leicester) plc as part of thestrategy of purchasing the Company's previously imported goodsdirectly from Crown Crest.(c) In January 2009, the Group received an unsecured short-termloan of £5 million to cover working capital requirements. Interest ischarged at 1.25% above LIBOR until May 2009 when the rate increasesto 2.25% above LIBOR. At 29th August 2009 the amount outstandingincluded in current liabilities was £5 million (28th February2009: £5 million).M & S Toiletries Ltd is also a related party to Instore plc and itssubsidiary undertakings. S Tayub, a Director and shareholder of M & SToiletries Ltd, is related to A A Tayub and A R Tayub, Directors ofInstore plc.Material transactions between related parties in relation to M & SToiletries Ltd in the period to 29th August 2009 were:(a) £2.0 million (30th August 2008: £nil; 28th February 2009:£1.1 million) was payable to M & S Toiletries Ltd during the periodfor purchases of goods for resale during the ordinary course ofbusiness. As at 29th August 2009 an amount of £149,000 (30th August2008: £nil; 28th February 2009: £21,000) was owed to M & S ToiletriesLtdin respect of these purchases.Sert UK plc is another related party to Instore plc and itssubsidiary undertakings. S Tayub, a Director and shareholder of SertUK plc, is related to A A Tayub and A R Tayub, Directors of Instoreplc.Material transactions between related parties in relation to Sert UKplc in the period to 29th August 2009 were:(a) £nil (30th August 2008: £360,000; 28th February 2009:£426,000) was payable to Sert UK plc during the period for purchasesof goods for resale during the ordinary course of business. As at29th August 2009 an amount of £nil (30th August 2008: £nil; 28thFebruary 2009: £nil) was owed to Sert UK plc in respect of thesepurchases.(b) £nil (29th August 2008: £nil; 28th February 2009: £152,000)was receivable from Sert UK plc during the period for purchases ofgoods for resale during the ordinary course of business. As at 28thAugust 2009 an amount of £nil (29th August 2008: £nil; 28th February2009: £nil) was receivable from Sert UK plc in respect of thesepurchases.Tradehold Limited, Tradegro Limited and Tradegro (UK) Limited arerelated parties to Instore plc and its subsidiary undertakings. At28th February 2009 Tradegro Limited owned 15.86% of the ordinary 10pshares in Instore plc.Material transactions between related parties in relation toTradehold Limited, Tradegro Limited and Tradegro (UK) Limited in theperiod to 29th August 2009 were:(a) £nil (30th August 2008: £35,000; 28th February 2009: £nil)was payable to Tradegro (UK) in respect of the purchase of sharesfrom Directors of a subsidiary company.(b) £nil (30th August 2008: £6,000; 28th February 2009: £nil) waspaid to Tradegro (UK) for travel costs incurred during the period.(c) £nil (30th August 2008: £56,000; 28th February 2009: £nil)was received from Tradegro (UK) in respect of rental paymentsreimbursed in connection with the indemnity arrangements agreed onthe disposal of previously held subsidiaries.Key management represents the current Executive Directors. Keymanagement compensation amounted to £85,000 for the period to 29thAugust 2009 (30th August 2008: £nil; 28th February 2009: £58,000).This figure comprises of salaries and other short-term benefits. Forthe period to 29th August 2009 an amount of £6,000 (30th August 2008:£42,000; 28th February 2009: £54,000) was paid to Forrest Burlinson,a firm of Chartered Accountants, in respect of the services of anExecutive Director.---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 29.10.2009 - 08:02 Uhr
Sprache: Deutsch
News-ID 7586
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