Mobus Fabrics Limited

The principal activity of the Company continued to be the design, manufacture and sale of fabrics for the upholstery market. Results, performance and developments during the year We are pleased to report another profitable year of operations. Mobus UK turnover has fallen by 1% to £20.1m which given the weak consumer confidence in big ticket items and knowledge of the market trading conditions is a reasonable result. Margin has decreased by 2.1% due to higher costs in raw materials, particularly FR finishing costs which have continued to increase since the year end. New distribution costs, investments in new pattern books, testing costs and sampling have increased in the period. Mobus has invested £2.1m into stock, this has supported all collections to provide customers with faster service and continuity of supply. This comes at a time where trade routes have changed due to global circumstances, adding an additional 4 weeks on our traditional transit times and putting additional pressure on cash flow. Mobus has continued to invest in new FR technology, infrastructure, and new markets - developing future opportunities for the long-term success of the group. Principal risks and uncertainties The Directors consider that the key risks and principal uncertainties faced by the Company are: Raw material price volatility Exchange rate variances Supply chain disruption These risks are managed through monitoring of the appropriate markets, the use of forward contracts and currency hedges, maintaining close supplier relationships and multiple sourcing of key resources. Financial instruments Due to the nature of the financial instruments used by the company there is no material exposure to price risk. The Company's approach to managing other risk applicable to the financial instruments concerned are shown below. In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of short term invoice finance and trade loan facilities. Trade debtors are managed in respect of credit and cash flow by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. Key performance indicators Key performance indicators monitored by management include order in-take, gross margin, stock volumes and cash collection. Outlook The market is extremely challenging, employment and logistical costs are increasing, with global uncertainty this has led to a severe lack of consumer confidence in all our markets. However, at the end of the year the run rate of sales is positive, stock has maintained and cash flow remains robust, so Mobus can continue to support customers with the best service, quality and new trends.