presentation to annual general meeting 29 september 2004
TRANSCRIPT
Presentation to Annual General Meeting
29 September 2004
Review of Financial Year ended 30 April 2004
‘Platform for Growth’
• Average Sales per Retailing Distributor per period (ASR) increased 19.6% to £610
• Improved Operating Margin
• New distribution centre providing capacity for expansion
• New higher value brands introduced
Financial Year ended 30 April 2004
‘Dividend Resumed & Net Debt Down’
•Turnover on continuing operations £158.9m (2003: £164.1m)
•Normalised operating profit unchanged at £8.5m
•Operating margin increased to 5% (2003: 4.7%)
•Normalised basic EPS increased to 12.8p (2003: 12.7p)
•Net debt reduced by 30% to £11.2m (2003: £16.0m)
•Final dividend 2p (2003: nil), total for the year 3p (2003: nil)
Financial Year ended 30 April 2004
‘Improved Performance at Kleeneze UK’
2004 2003 % change
£m £m
Turnover 82.6 86.3 -4.3%
Operating profit 6.6 6.6 0.0%
Exceptional costs (1.1) -
Operating profit margin 8.0% 7.6%
Average active distributors 14,900 16,900 -11.8%
ASR1 £610 £510 19.6%
1 ASR represents the average sales per retailing distributor per 4 week period
Financial Year ended 30 April 2004
‘Improved Margin at Farepak’
2004 2003 %
£m £m change
Turnover 76.3 77.9 -2.1%
Operating profit 1.2 1.2
Share of associate's profit 0.6 0.7 -14.3%
Operating profit margin 1.6% 1.5%
Kleeneze UK
• Improve retention of distributors
• Focus on catalogue range & performance
• European expansion
• Operational efficiencies from new site
• Capacity for growth
Farepak
• Focus on reduction of fixed overheads
Group
• Reviewing acquisition opportunities to accelerate growth
Summary of Financial Year ended 30 April 2004
‘Well Positioned for Future Growth’
Trading Update
‘Further Growth Opportunities Introduced’
• Sales at Kleeneze UK in first 4 months ahead of last year
• Further increase in ASR - compounding 20% increase in previous year
• Acquisition of Cabouchon reflecting move to higher value, branded goods
• Commencement of trading of Dutch Operation
• Farepak trading in line with focus on cost base and vouchers
• Announcement of expansion into Television Shopping
Dutch Operation
• Launched in September
• Over 1,000 distributors signed up – above initial target
• Over 500,000 catalogues to be distributed by Christmas
• Network response positive
• First conference in Amsterdam in October – 1,000 attendees expected
Expansion into TV Shopping
‘The Investment’
• Investment of some £4 million over next 2 years
• Joint venture with JML
• Re-branded as ‘eezee TV’
• Currently broadcasting pre-recorded on Channel 664
• To be relaunched as live channel in March 2005
Expansion into TV Shopping
‘The Growth Opportunity’
• TV shopping market same demographic characteristics as the Group
• Effective Recruitment and Retention tool for Kleeneze
• Significant cross selling opportunities for the Group
• TV shopping market worth over £500 million in 2004
• Market forecast to grow to over £750 million by 2008
‘Strong Growth in TV Shopping’
Source: Mintel - figures exclude revenues from travel channels
146
221 246
328
441
505
581637
708751
806
198
-
100
200
300
400
500
600
700
800
900
£m
• TV shopping has benefited from the uptake of digital TV
• Freeview has been a major influence in growth
• FreeSat being launched in October
• Over 15 million homes forecast to have digital TV by the end of 2004
• Analogue switch-off will further drive penetration levels
• Switch-off date has been set by the Government by 2012
Expansion into TV Shopping
‘Digital TV driving the Growth’
Group Strategy
Kleeneze UK
• Increase product range
• Geographic expansion
• Increase channels to market
Farepak
• Re-stimulate demand for shopping vouchers
• Reduction of fixed overheads
Group
• To become the leading Home Shopping specialist
Presentation to Annual General Meeting
29 September 2004