Spar Finland plc s Interim Report January March 2006

Transcription

1 SPAR FINLAND PLC STOCK EXCHANGE RELEASE 10 MAY 2006, 4.00 PM 1 (6) Spar Finland plc s Interim Report January March 2006 The restructuring of Spar Finland Group has been started following the change in its ownership. At the close of the first quarter SOK held 99.6 % of the Spar Finland plc shares. Spar Finland Group s net sales totalled MEUR 109.2, which was 13.2 % less than in the first quarter last year. Net income amounted to MEUR -6.7 (-0.6). The weaker result was due to a reduction in the number of retail stores and to the costs arising from restructuring. Earnings per share were EUR (-0.57). OWNERSHIP AND SHARE REDEMPTION PROCEDURE On 12 January 2006 Spar Finland plc became a subsidiary of SOK Corporation (SOK), at which time SOK held 92.3 % of Spar Finland plc s shares and 95.1 % of the votes conferred by the total number of shares. SOK s holding rose to 99.6 % through a redemption procedure that commenced on 23 January 2006 and ended on 23 February Consequently SOK obtained the right, under the Finnish Companies Act, to redeem all the outstanding Spar Finland plc shares. This right was recorded in the Trade Register on 31 January 2006 and announced in various newspapers on 7 February 2006 and to shareholders separately by letter. On 25 January 2006 the Helsinki District Court appointed attorney-at-law Jarmo Henriksson as the trustee to represent absent Spar Finland shareholders during the redemption procedure. On 13 March 2006 the Redemption Committee of the Central Chamber of Commerce set up a court of arbitration to consider the right to redeem the Spar Finland plc shares, appointing Jukka Luoma as the arbitrator. The court of arbitration meets for the first time on 10 May Spar Finland plc will apply to the OMX Helsinki Stock Exchange for de-listing of its share from the Investors List as soon as the decision that makes this possible is taken by the court of arbitration. RESTRUCTURING SOK s aim is to integrate some of the Spar Finland store network within the S Group s retail network of regional co-operative societies in a controlled and incremental way. The integration of these operations, and the conditions set by the Finnish Competition Authority in its decision issued on 4 January 2006, require changes in Spar Finland s operations and business units. The Finnish Competition Authority gave its conditional approval to the restructuring of Spar Finland plc on 4 January 2006 and announced its decision on 18 January Among other things, this decision excludes 30 Spar stores from the scope of the deal and requires these stores to be sold to other food retail companies. Fourteen of this total are owned by Spar Finland plc. Under the integration plan 85 Spar stores will be moved to the retail store network of the regional co-operative societies. The first move, of Spar Finland stores, took place in March. The independent retailer stores will be moved as their co-operative contracts expire. Tuko Logistics Oy, which is 35% owned by Spar Finland plc, still holds responsibility for the company s supply chain management for the time being. The decision of the Finnish Competition Authority requires Spar Finland to relinquish its holding in Tuko Logistics Oy during the transition period, after which material deliveries to the Spar stores will be moved to Inex Partners Oy. Integration with the S Group meant the start of personnel negotiations on 6 February As a result of these negotiations, concluded on 27 March 2006, 217 employees were made redundant and it was decided to close 29 stores.

2 2 At the end of the first quarter the Spar Group s store chains comprised altogether 249 stores (31 December 2005: 262). Of this total, 85 (94) were Spar Finland stores. IFRS REPORTING The first-quarter interim report has been prepared applying IFRS recognition and measurement principles. NET SALES Consolidated net sales in the period totalled MEUR (Q1/2005: MEUR 125.8). Net sales decreased by 13.2 %. RESULT Operating income in the period amounted to MEUR -6.8 (-1.1). Income before tax was MEUR -6.8 (-1.1). The weakening of the result was attributable to a reduction in the number of stores and the costs arising from restructuring. The restructuring of operations in the first quarter resulted in net costs totalling MEUR 3.8, shown under Other operating expenses in the income statement. Income tax in the period included tax calculated on the result and the change in deferred tax liability and assets. The impacts, if any, of the change of ownership on tax entries have not been taken into account. Earnings per share in the period were EUR (-0.57). BALANCE SHEET, FINANCING AND CONTINGENT LIABILITIES The balance sheet at the close of the period totalled MEUR 99.7 (31 December 2005: 120.7). Non-current assets amounted to MEUR 52.5 (72.0) and current assets to MEUR 47.2 (48.7). Shareholders equity on 2006 stood at MEUR 34.0 (40.7). Non-current liabilities at the end of the period were MEUR 12.7 (14.1) and current liabilities totalled MEUR 53.0 (65.9). The solvency ratio was 35.7 % (33.8). Net cash flow from operating activities was MEUR -3.3 (same period in 2005: 1.8), net cash flow after investing activities was MEUR 15.4 (-0.6) and after financing activities MEUR -8.7 (-1.0). The change in cash and cash equivalents was MEUR 3.4 (0.2). Cash and cash equivalents on 31 March 2006 amounted to MEUR 12.5 (13.7). Interest-bearing liabilities totalled MEUR 18.4 (19.8). Contingent liabilities on 2006 stood at MEUR 44.3 ( 46.4). Spar Finland plc has leased retail and office premises from a number of property owners. The number of sites is approximately 260. The largest landlord is mutual pension insurance company Varma. MEUR 7.4 was paid in rents for business and retail premises during the period. Rental commitments for retail premises based on lease agreements average MEUR 21.7 per year over the following five years. The aggregate rental commitment at the end of the first quarter was MEUR CAPITAL EXPENDITURE Gross capital expenditure during the reporting period totalled MEUR 0.0 (1.0). The entire share capital of property company Kiinteistö Oy Turun Saarikeskus and 90.4 % of property company Kiinteistö Oy Koroisten Liikekeskus were sold during the period.

3 3 PERSONNEL Calculated in terms of full-time personnel, the Group had 752 employees on average during the period, which was 47 less than last year. At the end of the period the Group had 869 employees compared to 1,110 employees one year earlier. GENERAL MEETINGS AND ADMINISTRATION Since 3 February 2006 the Board of Directors has had six members: Arto Hiltunen (chairman), Risto Malin (deputy chairman), Taavi Heikkilä, Tapio Kankaanpää, Veli-Matti Puutio and Markku Viljanen. Until 3 February 2006 the Board had eight members: Lars Nilsson (chairman), Risto Wartiovaara (deputy chairman ), Bodil Eriksson, Raoul Hasselgren, Matti Linnainmaa, Mats Jansson, Anders Nyberg and Pekka Kosonen. Since 20 January 2006 the President and CEO of the company has been Jouko Vuoti MBA. His predecessor was Pekka Kosonen MSc (Econ.). An extraordinary general meeting was held on 3 February 2006 which appointed a new Board of Directors for the company and a new auditor, Tomi Englund APA, in addition to the current auditors KPMG Oy Ab. The meeting also approved changes to the company s articles of association. The Board of Directors has no unexercised authorizations to raise the share capital or issue convertible bonds, bonds with warrants or stock options. The company does not own any of its own shares, nor is the Board authorized to purchase such shares. FULL-YEAR PROSPECTS Restructuring of the company will continue throughout the financial year. SOK intends to acquire all the outstanding shares of Spar Finland through the redemption procedure, after which Spar Finland will apply for de-listing of its shares from the Investors List of the OMX Helsinki Stock Exchange. Vantaa, Finland, 10 May 2006 SPAR FINLAND PLC Board of Directors FURTHER INFORMATION Jouko Vuoti, President and CEO, tel or Timo Säiläkivi, CFO, tel or DISTRIBUTION OMX Helsinki Stock Exchange Principal media

4 CONSOLIDATED INCOME STATEMENT ( MEUR ) 1-3/ / Change MEUR 1-12/2005 Net sales Other operating income Materials and services Personnel expenses Depreciation, amortization and impairment charges Other operating expenses Operating income Financial expenses, net Share of associated companies results Income before taxes Direct taxes Net income for the period Earnings per share, basic, EUR Earnings per share, diluted, EUR CONSOLIDATED BALANCE SHEET (MEUR) 2006 % 2005 % 31 Dec 2005 % ASSETS Non-current assets Property, plant and equipment Goodwill Intangible assets Holdings in associated companies Investments Deferred tax assets Non-current receivables Total non-current assets Current assets Inventories Current receivables Cash and cash equivalents Total current assets Total assets SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity Share capital Other share capital Minority interest Total shareholders equity Non-current liabilities Interest-bearing Deferred tax liabilities Provisions Other non-current liabilities Total non-current liabilities Current liabilities Interest-bearing Other current liabilities Total current liabilities Total shareholders equity and liabilities

5 5 CONSOLIDATED CASH FLOW (MEUR) 1-3 / / / 2005 Operating income Depreciation and other adjustments Changes in working capital Financial items and taxes Cash flow from operating activities Capital expenditure on non-current assets Capital gains on sale of non-current assets Dividends received Cash flow after investing activities Loans raised Loans repaid Dividends paid Cash flow after financing activities Increase / decrease in cash and cash equivalents CHANGES IN SHAREHOLDERS EQUITY (MEUR) Share capital Reserve fund Retained earnings Total Minority interest Shareholders equity total Shareholders equity 31 Dec Net income for the period Q1 / Minority interest Shareholders equity Shareholders equity 31 Dec Net income for the period Q1 / Shareholders equity OTHER INFORMATION 1-3/06 1-3/05 Change 1-12/05 Solvency ratio, % Equity per share, EUR Gross capital expenditure, MEUR % of net sales Personnel on average PLEDGES AND CONTINGENT LIABILITIES, GROUP (MEUR) Dec 2005 Pledges given for own commitments Mortgages on property Corporate mortgages Pledges Pledges provided, total Debts guaranteed by pledges of asset items Financial institution loans

6 Contingent liabilities For own commitments Leasing commitments Redemption commitments Total Guarantees given for others MAJOR SHAREHOLDERS 2006 % of voting rights % of total shares SOK Corporation Sundström Lars Mutikainen Esko Antero Talvioja Tuomas Hälläväliä Oy Aura Gun-Maj Polon Peter Ajalin-Laapotti Hillevi Kelly Kirjanpitopalvelu Sivu Oy M Ventures Oy Total The figures in this report are unaudited.