TIDMBAR
RNS Number : 5213F
Brand Architekts Group PLC
10 March 2020
Brand Architekts Group plc
("Brand Architekts" or the "Group")
Interim results
Brand Architekts Group plc, a market leader in the development
and supply of beauty and personal care brands, announces its
interim results for the 28 weeks ended 11 January 2020
Business highlights
-- Disposal of the manufacturing business completed on the 23 August 2019
-- Quentin Higham appointed as Chief Executive Officer, he will
join the Company and the Board on 4 May 2020
-- Operational transition to a stand-alone branded business now complete
-- New ERP system successfully implemented
-- A number of key 'drive' brands continue positive growth trend
-- Further growth in e-commerce sales
-- 2 major brands relaunched, 99 new product lines launched
Financial highlights
Continuing Operations
-- Revenues declined by 15% to GBP10.6m significantly impacted
by a strong decline in international sales (-23% vs prior year)
resulting from currency devaluation in a key market and tariff
pressures
-- UK sales declined by 13% vs prior year impacted by a challenging retail environment
-- Gross profit margin improved to 37.6% (FY19: 35.1%) helped by
focus on higher margin brands and channels
-- Underlying operating profit (before central costs) of GBP1.6m (FY19: GBP2.5m)
-- Underlying operating profit margin (before central costs) is at 15% (FY19: 20%)
Group
-- PBT of GBP6.6m (FY19: GBP0.7m) heavily impacted by profit on
disposal of the manufacturing business (GBP8.8m) offset by a loss
on discontinued operations (including exceptional costs) of
GBP2.5m
-- Underlying PBT (continuing operations) declined 33% to GBP1.2m (FY19: GBP1.7m)
-- GBP15.1m net cash positions us well for future growth
-- Interim dividend proposed at 0.9p per share
GBPm unless otherwise stated 2020 2019
---------------------------------------------- --------- ----------------
Reported results from continuing operations
(1)
--------- ----------------
Revenue GBP10.6m GBP12.5m
--------- ----------------
Underlying operating profit (1) GBP1.2m GBP1.7m
--------- ----------------
Adjusted basic earnings per share (1) 3.9p 7.0p
--------- ----------------
Statutory results for the whole group
including discontinued operations
--------- ----------------
Revenue GBP18.0m GBP41.4m
--------- ----------------
Operating profit before exceptional GBP0.1m GBP1.4m
items
--------- ----------------
Profit on disposal of manufacturing GBP8.8m -
business
--------- ----------------
Basic earnings per share 37.7p 3.1p
--------- ----------------
Total dividend per share 0.9p 2.15p
--------- ----------------
Net cash / (debt) GBP15.1m GBP(6.8)m
--------- ----------------
(1) Underlying operating profit is calculated before LTIP,
amortisation of acquisition related intangibles, exceptional items
and net borrowing costs. Adjusted earnings per share is calculated
using operating profit before exceptional items and amortisation of
acquisition related intangibles.
Brendan Hynes, Executive Chairman, commented: "The business is
now through a challenging calendar year where the difficult market
conditions, the distraction of the sale of the manufacturing
business and significant management changes have all had an impact
on results. Having now completed the operational transition to a
fully focused branded business with a very strong balance sheet and
appointment of a CEO with deep industry experience, the business is
well positioned to build scale and deliver further profitable
growth."
For further information please contact:
Brand Architekts Group plc
----------------------------------- ---------------
Chris How Chief Executive Officer (Interim) 0208 614 4474
----------------------------------- ---------------
Brendan Hynes Executive Chairman Via Alma PR
----------------------------------- ---------------
Shaun Dobson / George Tzimas N+1 Singer 0207 496 3000
----------------------------------- ---------------
Josh Royston / Sam Modlin Alma PR 0203 405 0206
----------------------------------- ---------------
Note: This announcement contains information that was previously
inside information for the purposes of Article 7 of regulation
596/2014 (MAR).
Business Review (Continuing Operations)
Having disposed of the manufacturing business in August 2019,
the business is now fully focussed on further developing its
profitable branded business and has the necessary financial
resources to invest and grow further. The appointment of Quentin
Higham as CEO will bring renewed focus and energy to executing the
growth strategy.
It has been a challenging period for the business with a number
of factors contributing to an overall decline in revenue of 15% to
GBP10.6m.
International sales declined by 23%, heavily impacted by
currency devaluation in a key market and the effect of increased
tariffs on cosmetic goods shipped from China to USA. We believe
that we are well placed to recover a large proportion of the
affected USA business should the tariffs be reversed.
Sales to UK customers declined by 13% despite encouraging volume
growth across 3 'drive' brands, 2 of which were re-launched within
the period. The decline was largely due to one significant
customer, however, overall low consumer confidence and pressure
within the retail environment has resulted in a reduction of both
category space and the effectiveness of promotional activity.
Pleasingly, direct to consumer e-commerce sales recorded another
period of strong growth reflecting a continued commitment to
develop this particularly profitable channel by building engaging
and precisely targeted marketing content.
Gross margins improved slightly as sales mix was steered towards
higher margin brands within the portfolio and more profitable trade
channels. Furthermore, strong management of our supply base also
ensured control over our input costs, which further supported the
resilience of the gross margin.
In line with our long-term confidence in the growth potential of
our brands, advertising and promotional investment increased as we
look to ensure that major brand relaunches in the period achieve
sustained success.
Operational overheads were managed tightly through the
transition period although some exceptional costs (GBP0.16m) have
been recognised in relation to the implementation of a new ERP
system and the establishment of new operational, finance, admin and
HR functions at our Teddington office. Whilst its implementation
utilised a significant amount of management time, the new ERP
system is of an appropriate design for the scale and nature of our
business and will enable efficiencies and an improved control
environment going forward.
The result of all the above was a reduction in underlying
operating profit for continuing operations (excluding central
costs) to GBP1.6m (prior year GBP2.5m). This represents a ratio of
15% to sales.
Board Succession
Following an extensive search, the Board is pleased to confirm
the appointment of Quentin Higham as CEO effective 4 May 2020.
Quentin is currently Managing Director of Yardley of London Ltd.
Previously he has been Marketing Director at Coty, with
responsibility for the Rimmel cosmetics brand and Head of Marketing
at global cosmetics company Revlon. In addition, he has in-depth
knowledge of our brands having been Commercial Director at KMI
brands with responsibility for the Fish brand.
Chris How, who has held the position of Interim CEO since
October, will remain with the business to assist and support the
Company and Quentin through the handover process.
The search for a new Chief Financial Officer is well advanced
and we expect to be able to confirm appointment of an appropriate
candidate in due course.
Central Costs
Following the sale of the manufacturing business, the Company
segments its central corporate costs to enable shareholders to have
clear visibility of the financial performance of the operating
business. This segment includes all board costs (executive and
non-executive), plc costs and costs (including PPF levy) related to
the Swallowfield Defined Benefit pension scheme.
Clearly, these central costs could become more proportionate in
the event the Board decides to utilise the Company's strong cash
reserves to make further acquisitions.
On a pre-exceptional basis these costs reduced versus prior year
reflecting an intent to acknowledge the reduced scale of the Group
following the sale of the manufacturing business and the fact that
both the CEO and CFO positions have been vacant during part of the
reporting period.
Within central costs, an exceptional cost of GBP0.3m is
recognised in relation to the departure in September of the former
Chief Executive Officer.
Strategic Report
Fundamental transformation - 100% focus on brands
Over the last 4 years our stated strategy has been to develop,
both organically and through acquisitions, a portfolio of brands
which are owned and managed by the Group.
Following the disposal of the manufacturing business in August
2019, we have accelerated our strategic realignment and are now
solely focused on brands that we own and control. The disposal has
also eliminated group debt and strengthened the balance sheet
through a significant cash position.
The Board believe that we are now well-positioned to drive
further value by focusing solely on our Owned Brands business with
its higher margins, minimal capital investment requirements and
superior financial returns.
Strategic Priorities
The strategic priorities for the Group are:
-- Build Scale: Accelerate sales and profit growth organically and via accretive acquisitions
-- New Product Development (NPD): Continue to execute consumer relevant NPD at pace
-- International Expansion: Develop new customers in new geographies
-- On-line expansion: Accelerate E-commerce and digital presence
-- Build organisational capability: Continue to invest in people and skills
Progress against our strategic priorities
Notwithstanding that it has been a challenging trading period,
we are pleased to have made meaningful progress across a number of
strategic priorities.
-- Build Scale
The Board has continued to review acquisition opportunities
through the reporting period against strict strategic and financial
criteria. No opportunity has been sufficiently compelling to pursue
meaningfully and the Board has also been mindful of the impending
CEO appointment. We remain open to acquisition opportunities and
will continue to apply our strict strategic and financial criteria
in reviewing these opportunities.
-- New Product Development (NPD)
In late Autumn we completed and began shipping a complete range
refresh (design update and new lines) across 2 of our drive brands
Dirty Works and Fish. These were well received by our retail
customers and these brands started to rebuild growth momentum in
the reporting period.
We were also pleased to launch a new skincare range and a new
male bath and body range in our Kind Natured brand.
SuperFacialist, our fastest growing brand over the last 2 years,
built on the trend for concentrated skincare ingredients by
launching 2 'intense booster ' serums in Retinol and Vitamin C and
also further extending the successful Retinol anti-ageing sub-range
into tonics and cleansers.
In total, 99 new individual product lines were introduced or
refreshed in the reporting period.
-- International Expansion
It was a difficult period for our International business. A key
market was effectively lost due to a currency devaluation rendering
it commercially unviable. Additionally, our important gift and
accessories business in the USA was impacted by the introduction of
prohibitive tariffs on Chinese produced imports.
Notwithstanding these setbacks caused by external factors
outside the control of the business, we were pleased that we made
good progress in extending our gifting ranges into a number of new
European geographies and overall saw growth in Australia, South
Africa, the Netherlands, Ireland, Switzerland and Chile.
International continues to be an area where we firmly believe
there is significant growth potential for our brands and we
continue to be active in identifying and progressing
opportunities.
-- On-line expansion
We are pleased that our growth momentum in this area has
continued and the focus of investment over the last 3 years
continues to deliver tangible benefits.
We saw growth across our own direct to consumer e-commerce sites
as well as good growth through major global and regional
e-retailers. This has been driven by further development of our
in-house resource and expertise and a more active digital
engagement and advertising programme including a step up in the use
of relevant influencers on key social platforms.
Additionally, we made significant upgrades to our Dirty Works
and Fish brand websites to coincide with the product range
relaunches which we expect to have a positive impact on brand image
and further boost e-commerce sales.
-- Build Organisational Capability
Having previously been supported by the Swallowfield Group
system, we are pleased to have successfully implemented a new
stand-alone ERP system for the business within a relatively short
timeframe following the transaction.
Similarly, a number of functions that were previously housed
within the Swallowfield Group organisation in Somerset have been
established at our Teddington office. These include Finance, Supply
Chain, IT, HR and other administrative functions. Whilst we
recognise that the reorganisation has caused some operational
disruption in the transition period, we are pleased with the
successful outcome of this re-organisation which positions us well
for the future. Going forward we now have the solid foundation of a
modern, appropriately supported ERP system and support functions
located on the same site as the sales and customer facing
commercial team.
Net Debt and Cash Flow
Following the sale of the manufacturing business in August 2019,
the Group's net cash position has improved to GBP15.1m (2019:
GBP6.8m net debt) primarily as a result of the net proceeds from
the disposal of the manufacturing business in August 2019. A final
tranche of GBP1.3m of the full consideration of GBP35.0m is due to
be paid in the coming weeks. This amount is a retention sum held
pending the finalisation of the completion accounts which is
expected shortly.
Following the disposal, there was a significant challenge to
establish new operational, finance and administrative functions at
our Teddington head office simultaneously with the design and
implementation of a new ERP system. Both of these complex tasks
have now been successfully completed, however, it impacted the day
to day management of working capital in the transition period which
resulted in increased inventories and a slower collection of
receivables. Going forward, we expect a return to tighter control
over managing working capital.
Financing costs of GBP0.18m (2019: GBP0.22m) comprised interest
expense of GBP0.08m (2019: GBP0.15m) and a pension scheme notional
charge of GBP0.10m (2019: GBP0.07m).
Discontinued Operations
On 23 August 2019, the Group sold its 100% interest in Curzon
Supplies Ltd for consideration of GBP35m, resulting in a complete
disposal of its manufacturing business enabling the Group to become
a solely brand focussed business.
The profit on disposal recognised was GBP8.8m representing a
GBP10.2m profit on assets disposed less directly related deal costs
of GBP1.4m. A further GBP1.5m of exceptional costs have been
recognised, GBP1.1m of which relate to management bonuses directly
related to the completion of the deal and the remainder to various
stock write-offs and adjustments.
The accounts shown as 'Discontinued Operations' cover
operational activities for the period from the last financial year
end to the date of disposal (23 August 2019) and also include any
impacts of the final completion accounts for the transaction. The
operations over that period were affected by significant
manufacturing inefficiencies and higher than planned labour costs.
The overall result was an operating loss before exceptional items
of GBP1.0m.
Defined Benefit Pension Plan
The Scheme is now closed to new members and to further accruals
of benefits. The last scheme funding valuation of the Scheme was as
at 5 April 2017 and revealed a funding deficit of GBP2.6m.
The Company pays contributions to the Scheme to cover the
funding deficit of GBP0.3m per annum. The magnitude of such
payments will be reviewed following the next scheme funding
valuation as at April 2020. In addition, the Company meets the cost
of administrative expenses and Pension Protection Fund insurance
premiums for the Scheme.
We recognise that the Plan and the Trustee are key long-term
stakeholders who hold an active interest in the Company's success.
We continue to work closely with the Trustee and believe that our
objectives over the long-term are aligned with those of the Trustee
- to ensure a robust Company that is able to support and provide a
strong covenant to the plan.
Dividend
Following the sale of the manufacturing business, the Company
currently delivers less absolute profitability. Accordingly, the
Board has approved an interim payment of 0.9p per share which
represents a broadly similar dividend cover to the average over the
last 3 years. This dividend will be paid on 29 May 2020 to
shareholders on the register at the close of business on 11 May
2020. The ex-dividend date will be 7 May 2020.
The Directors' intention is to have a progressive dividend
policy that aligns future dividend payments to the underlying
earnings and cash flow of the business, taking in to account the
gearing and the operational requirements of the business.
Coronavirus
The company sources most of its Christmas gift ranges and some
beauty accessories from China. The majority of this volume is
produced from June to August and shipped in September/October. We
are in close contact with our Chinese suppliers to understand the
level of supply risk and possible mitigation options related to the
current Coronavirus outbreak. At this point we expect to be able to
source all required goods, however, we continue to review the
situation closely due to the growing uncertainty.
The business has taken the necessary steps to ensure appropriate
arrangements are in place for all staff members to operate
effectively with minimal disruption to the business.
Outlook
Over the last calendar year the business has had to deal with a
number of internal and external challenges. Whilst this has had an
impact on trading performance and, notwithstanding continued
economic and consumer uncertainty, we do believe the business is
now well positioned to move back towards a growth phase. We expect
the second half to be challenging but to be broadly in line with
the revenue generated in the comparative period last year and for
that improved momentum to build into the next financial year.
However, the Board has reassessed its outlook for the rest of
the financial year and based on the continuing challenging market
conditions and the slower pace of sales in the first half, has
reduced its revenue expectations.
In addition, given the level of competitive pricing and
promotional pressure experienced in the market, the Board
anticipates that the Group's operating profit will be impacted
resulting in a significant decrease to previous market
expectations.
Given the strength of our balance sheet, we also remain open to
further acquisition opportunities which offer the potential to
build scale and deliver incremental shareholder value.
We also look forward to welcoming, Quentin Higham, our new CEO
and fully expect that his experience and energy will further
enhance and accelerate our ability to drive growth
opportunities.
Group Statement of Comprehensive Income
28 weeks ended 28 weeks ended 52 weeks ended
*
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
Continuing operations Notes GBP'000 GBP'000 GBP'000
Revenue 3 10,568 12,451 19,676
Cost of sales (6,597) (8,078) (12,680)
------------------------------------- ------ --------------- --------------- ---------------
Gross profit 3,971 4,373 6,996
Commercial and administrative
costs (3,120) (2,883) (5,016)
------------------------------------- ------ --------------- --------------- ---------------
Operating profit before exceptional
items 851 1,490 1,980
Exceptional items 4 (472) (269) (48)
------------------------------------- ------ --------------- --------------- ---------------
Operating profit 379 1,221 1,932
------------------------------------- ------ --------------- --------------- ---------------
Finance income 46 1 -
Finance costs 5 (123) (79) (144)
Profit before taxation 302 1,143 1,788
Taxation (57) (216) (198)
------------------------------------- ------ --------------- --------------- ---------------
Profit after taxation 245 927 1,590
Profit / (loss) on Discontinued
Operations after taxation 10 6,278 (337) 2,050
------------------------------------- ------ --------------- --------------- ---------------
Profit after taxation 6,523 590 3,640
Other comprehensive (loss) / income for the
period:
Re-measurement of defined
benefit liability (1,040) (1,617) (4,011)
Items that will be reclassified
subsequently to profit or
loss:
Exchange differences on translating
foreign operations (48) (50) (35)
Gain / (loss) on available
for sale financial assets - 529 (6)
Other comprehensive loss
for the period (1,088) (1,138) (4,052)
------------------------------------- ------ --------------- --------------- ---------------
Total comprehensive income
/ (loss) for the period 5,435 (548) (412)
===================================== ====== =============== =============== ===============
Profit attributable to:
------------------------------------- ------ --------------- --------------- ---------------
Equity shareholders 6,456 537 3,539
------------------------------------- ------ --------------- --------------- ---------------
Non-controlling interests 67 53 101
Continuing Operations - Profit
attributable to:
--------------------------------------------- --------------- --------------- ---------------
Equity shareholders 178 874 1,489
------------------------------------- ------ --------------- --------------- ---------------
Non-controlling interests 67 53 101
Total comprehensive income
/ (loss) attributable to:
------------------------------------- ------ --------------- --------------- ---------------
Equity shareholders 5,368 (601) (513)
------------------------------------- ------ --------------- --------------- ---------------
Non-controlling interests 67 53 101
Earnings per share
- basic 6 37.7p 3.1p 20.7p
- diluted 6 37.5p 3.0p 20.0p
Dividend
Paid in period (GBP'000) 745 720 1,088
Paid in period (pence per
share) 4.35p 4.2p 6.35p
Proposed (GBP'000) 154 368 745
Proposed (pence per share) 7 0.9p 2.15p 4.35p
* 28 weeks ended 12 Jan 2019 comparatives have been restated for
discontinued operations - see note 10 for further information.
Group Statement of Changes in Equity
Share Share Revaluation Exchange Pension Retained Non-controlling Total
Capital Premium of Reserve re-measurement Earnings interest Equity
investment reserve
reserve
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- --------- ------------ --------- --------------- --------- ---------------- ---------
Balance as
at June 2019 857 11,987 1,241 (147) (6,502) 18,160 145 25,741
----------------- -------- --------- ------------ --------- --------------- --------- ---------------- ---------
Dividends - - - - - (745) (33) (778)
Non-controlling
interest - - - - - - 67 67
Realisation
of exchange
differences
on sale of
subsidiary - - - 195 - - - 195
Realised profit
on asset sold - - (1,241) - - 1,241 - -
Transactions
with owners
and reserve
transfers - - (1,241) 195 - 496 34 (516)
----------------- -------- --------- ------------ --------- --------------- --------- ---------------- ---------
Profit for
the period - - - - - 6,456 - 6,456
Other
comprehensive
income:
Re-measurement
of defined
benefit
liability - - - - (1,040) - - (1,040)
Exchange
difference
on translating
foreign
operations - - - (48) - - - (48)
Total
comprehensive
income for
the year - - - (48) (1,040) 6,456 - 5,368
----------------- -------- --------- ------------ --------- --------------- --------- ---------------- ---------
Balance as
at 11 January
2020 857 11,987 - - (7,542) 25,112 179 30,593
----------------- -------- --------- ------------ --------- --------------- --------- ---------------- ---------
Share Share Revaluation Exchange Pension Retained Non-controlling Total
Capital Premium of Reserve re-measurement Earnings interest Equity
investment reserve
reserve
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Balance as
at June 2018 857 11,987 1,247 (112) (2,491) 15,455 79 27,022
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Dividends - - - - - (720) - (720)
Non-controlling
interest - - - - - - 53 53
Share based
payments - - - - - 143 - 143
Transactions
with owners - - - - - (577) 53 (524)
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Profit for
the period - - - - - 537 - 537
Other
comprehensive
income:
Re-measurement
of defined
benefit
liability - - - - (1,617) - - (1,617)
Exchange
difference
on translating
foreign
operations - - - (50) - - - (50)
Gain on
available
for sale
financial
assets - - 529 - - - - 529
Total
comprehensive
income for
the year - - 529 (50) (1,617) 537 - (601)
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Balance as
at 12 January
2019 857 11,987 1,776 (162) (4,108) 15,415 132 25,897
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Share Share Revaluation Exchange Pension Retained Non-controlling Total
Capital Premium of Reserve re-measurement Earnings interest Equity
investment reserve
reserve
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Balance as at
June 2018 857 11,987 1,247 (112) (2,491) 15,455 79 27,022
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Dividends - - - - - (1,088) (35) (1,123)
Non-controlling
interest - - - - - - 101 101
Share based
payments - - - - - 254 - 254
Transactions
with owners - - - - - (834) 66 (768)
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Profit for the
year - - - - - 3,539 - 3,539
Other
comprehensive
income:
Re-measurement
of defined
benefit
liability - - - - (4,011) - - (4,011)
Exchange
difference
on translating
foreign
operations - - - (35) - - - (35)
Loss on
available
for sale
financial
assets - - (6) - - - - (6)
Total
comprehensive
income for the
year - - (6) (35) (4,011) 3,539 - (513)
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Balance as at
June 2019 857 11,987 1,241 (147) (6,502) 18,160 145 25,741
----------------- -------- -------- ------------ --------- --------------- --------- ---------------- --------
Group Statement of Financial Position
As at As at As at
11 Jan 2020 12 Jan 2019 29 June 2019
Restated -
Note 11
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 195 11,257 21
Intangible assets 12,757 13,720 12,817
Deferred tax assets 1,926 1,138 1,714
Investments - 1,920 -
Total non-current assets 14,878 28,035 14,552
------------------------------- ------ ------------ ------------ -------------
Current assets
Inventories 6,210 15,150 5,211
Trade and other receivables 8,277 14,792 3,475
Assets held for resale - - 22,700
Cash and cash equivalents 20,000 1,747 381
Current tax receivable 555 508 285
------------------------------- ------ ------------ ------------ -------------
Total current assets 35,042 32,197 32,052
------------------------------- ------ ------------ ------------ -------------
Total assets 49,920 60,232 46,604
------------------------------- ------ ------------ ------------ -------------
LIABILITIES
Current liabilities
Trade and other payables 5,893 21,409 6,628
Interest-bearing loans
and borrowings 1,075 1,140 1,139
Current tax payable 259 994 527
------------------------------- ------ ------------ ------------ -------------
Total current liabilities 7,227 23,543 8,294
------------------------------- ------ ------------ ------------ -------------
Non-current liabilities
Interest-bearing loans
and borrowings 1,548 2,623 2,091
Post-retirement benefit
obligations 9 9,505 6,614 9,417
Deferred tax liabilities 1,047 1,555 1,061
Total non-current liabilities 12,100 10,792 12,569
------------------------------- ------ ------------ ------------ -------------
Total liabilities 19,327 34,335 20,863
------------------------------- ------ ------------ ------------ -------------
Net assets 30,593 25,897 25,741
------------------------------- ------ ------------ ------------ -------------
EQUITY
Share capital 857 857 857
Share premium 11,987 11,987 11,987
Revaluation of investment
reserve - 1,776 1,241
Exchange reserve - (162) (147)
Re-measurement of defined
benefit liability (7,542) (4,108) (6,502)
Retained earnings 25,112 15,415 18,160
------------------------------- ------ ------------ ------------ -------------
Total equity 30,414 25,765 25,596
------------------------------- ------ ------------ ------------ -------------
Non-controlling interest 179 132 145
------------------------------- ------ ------------ ------------ -------------
Total equity 30,593 25,897 25,741
------------------------------- ------ ------------ ------------ -------------
Group Cash Flow Statement
28 weeks 28 weeks 12 months
ended ended ended
11 Jan 2020 12 Jan 2019 30 June 2019
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Profit before taxation 6,580 728 4,093
Depreciation 12 667 1,262
Amortisation 142 154 944
Profit on disposal of manufacturing
business 10 (8,762) - -
Increase in assets held for (3,008) - -
resale
Finance income (46) (386) (1,146)
Finance cost 181 218 389
(Increase) in inventories (999) (1,325) (2,129)
(Increase) / decrease in trade
and other receivables (3,512) 3,757 1,252
Increase in trade and other
payables * 1,086 2,720 3,059
(Decrease) in share-based
payments provision (48) (158) (221)
Contributions to defined benefit
plan (159) (175) (282)
Cash generated from operations (8,533) 6,200 7,221
------------------------------------- ------ ------------ ------------ -------------
Finance expense paid (83) (153) (263)
Taxation paid (595) (202) (593)
------------------------------------- ------ ------------ ------------ -------------
Net cash flow from operating
activities (9,211) 5,845 6,365
------------------------------------- ------ ------------ ------------ -------------
Cash flow from investing activities
Dividend income received - 386 1,146
Purchase of property, plant
and equipment (27) (639) (1,088)
Purchase of intangibles (81) (23) (699)
Sale of property, plant and - 154 -
equipment
Proceeds from disposal of
manufacturing business 10 32,274 - -
Net cash flow from investing
activities 32,166 (122) (641)
------------------------------------- ------ ------------ ------------ -------------
Cash flow from financing activities
Finance income received 46 - -
Movements in invoice discounting
facility (1,997) (3,596) (4,027)
Repayment of loans (607) (594) (1,127)
Dividends paid (778) (720) (1,123)
------------------------------------- ------ ------------ ------------ -------------
Net cash flow from financing
activities (3,336) (4,910) (6,277)
------------------------------------- ------ ------------ ------------ -------------
Net increase / (decrease)
in cash and cash equivalents 19,619 813 (553)
Cash and cash equivalents
at beginning of period 381 934 934
------------------------------------- ------ ------------ ------------ -------------
Cash and cash equivalents
at end of period 20,000 1,747 381
------------------------------------- ------ ------------ ------------ -------------
* Increase in trade and other payables of GBP1,086k in the cash
flow statement is the movement on trade payables, social security
and other taxes, and general accruals only. The GBP1,086k excludes
the decrease in the commercial invoice discounting facility of
GBP1,997k and the decrease in the share based payment accrual of
GBP48k, which are both shown as separate lines in the cash flow
statement in investing activities.
Notes to the Accounts
Note 1 Basis of preparation
The Group has prepared its interim results for the 28-week
period ended 11 January 2020 in accordance with the recognition and
measurement principles of International Financial Reporting
Standards (IFRS) as adopted by the European Union and also in
accordance with the recognition and measurement principles of IFRS
issued by the International Accounting Standards Board.
The Directors have considered trading and cash flow forecasts
prepared for the Group, and based on these, and the confirmed
banking facilities, are satisfied that the Group will continue to
be able to meet its liabilities as they fall due for at least one
year from the date of approval of the Interim Report. On this
basis, they consider it appropriate to adopt the going concern
basis in the preparation of these accounts.
As permitted, this interim report has been prepared in
accordance with the AIM rules and not in accordance with IAS34
'Interim Financial Reporting'.
These interim financial statements do not constitute full
statutory accounts within the meaning of section 434 of the
Companies Act 2006 and are unaudited. The unaudited interim
financial statements were approved by the Board of Directors on 09
March 2020.
The consolidated financial statements are prepared under the
historical cost convention as modified to include the revaluation
of certain non-current assets. The accounting policies used in the
interim financial statements are consistent with IFRS and those
which will be adopted in the preparation of the Group's Annual
Report and Financial Statements for the year ended June 2020.
The statutory accounts for the year ended June 2019, which were
prepared under IFRS, have been filed with the Registrar of
Companies. These statutory accounts carried an unqualified Auditors
Report and did not contain a statement under Section 498(2) or
498(3) of the Companies Act 2006.
In August 2019, the Group sold its 100% interest in Curzon
Supplies Ltd for consideration of GBP35m (completing the disposal
of the Manufacturing segment) which is the only operation presented
as discontinued operations. Curzon Supplies Ltd was incorporated in
March 2019. The impact of the disposal is disclosed in Note 10.
Note 2 Changes to accounting policies
The Group has adopted IFRS 16 Leases from 30 June 2019, using
the modified retrospective method. Applying this method, the
comparative information for the 2019 fiscal year has not been
restated. At 30 June 2019, the Group recognised right-of-use assets
of GBP185k and lease liabilities of GBP185k. The Group has decided
not to apply the new guidance to leases whose term will end within
twelve months of the date of initial application and leases with a
low value. In such cases, the leases will be accounted for as
short-term leases and the lease payments associated with them will
be recognised as an expense from short-term leases. The following
reconciliation to the opening balance for the lease liabilities as
at 30 June 2019 is based upon the operating lease obligations as at
29 June 2019:
28 weeks ended
11 January
2020
(unaudited)
GBP'000
---------------
Operating lease obligations at 29 June 2019 189
Relief option for short-term leases (4)
Lease liabilities at 30 June 2019 185
Note 3 Segmental analysis
The Group is a market leader in the development and supply of
beauty and personal care brands.
The reportable segments of the Group are aggregated as
follows:
-- Brands - since the disposal of the manufacturing business in
August 2019 this has become the Group's sole focus and is referred
elsewhere in these results as 'continuing operations'. The
portfolio of brands consists primarily of brands acquired by the
Group as part of the acquisition of The Brand Architekts in 2016
plus the acquisitions of Real Shaving Company (2015) and Fish
(2018).
-- Manufacturing - the development, formulation and production
of quality products for many of the world's leading personal care
and beauty brands. The manufacturing business was sold in August
2019 and its results in the period have been treated as
discontinued operations. The impact of the disposal is disclosed in
Note 10. The profit on disposal of the manufacturing business is
included as an exceptional item in the segmental information.
-- Eliminations and Central Costs - other Group-wide activities
and expenses, including defined benefit pension costs (closed
defined benefit scheme), LTIP expenses, amortisation of
acquisition-related intangibles, interest, taxation and
eliminations of intersegment items, are presented within
'Eliminations and central costs'.
This is the basis on which the Group presents its operating
results to the Board of Directors, which is considered to be the
chief operating decision maker (CODM) for the purposes of IFRS
8.
a) Principal measures of profit and loss - Income Statement segmental information:
28 weeks ended 11 January 2020 28 weeks ended 12 January 2019
Brands Manufacturing Eliminations Total Brands Manufacturing Eliminations Total
and Central and Central
Costs Costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
UK revenue 8,744 4,841 - 13,585 10,055 19,915 - 29,970
International
revenue 1,819 2,639 - 4,458 2,360 9,111 - 11,471
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Revenue - External 10,563 7,480 - 18,043 12,415 29,026 - 41,441
Revenue - Internal 5 990 (995) - 36 2,214 (2,250) -
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Total revenue 10,568 8,470 (995) 18,043 12,451 31,240 (2,250) 41,441
Discontinued
Operations - (8,470) 990 (7,480) - (31,240) 2,250 (28,990)
Total revenue 10,568 - (5) 10,563 12,451 - - 12,451
Underlying
operating
profit/(loss) 1,637 (969) (483) 185 2,580 230 (1,182) 1,628
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Charge for
share based
payments - - (161) (161) - - (67) (67)
Amortisation
of
acquisition-related
intangibles - - (142) (142) - - (133) (133)
Net exceptional
items (132) 7,305 (340) 6,833 - (600) (269) (869)
Net borrowing
income / (costs) (25) (58) (52) (135) (16) 248 (64) 168
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Tax credit
on discontinued
operations - - - - - 79 - 79
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Segment (profit)
/ loss included
in Discontinued
Operations - (6,278) - (6,278) - 43 294 337
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Profit/(loss)
before taxation 1,480 - (1,178) 302 2,564 - (1,421) 1,143
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Tax charge - - (57) (57) - - (216) (216)
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
Profit/(loss)
for the period
from Continuing
Operations 1,480 - (1,235) 245 2,564 - (1,637) 927
--------------------- -------- -------------- ------------- -------- -------- -------------- ------------- ---------
The segmental Income Statement disclosures are measured in
accordance with the Group's accounting policies as set out in note
1.
Inter segment revenue earned by Manufacturing from sales to
Brands is determined on normal commercial trading terms as if
Brands were any other third party customer.
All defined benefit pension costs and LTIP expenses are
recognised for internal reporting to the CODM as part of Group-wide
activities and are included within 'Eliminations and central costs'
above. Other costs, such as Group insurance and auditors'
remuneration which are incurred on a Group-wide basis are recharged
by the head office to segments on a reasonable and consistent basis
for all periods presented and are included within segment results
above.
Included in Net exceptional items in Manufacturing is profit on
disposal of the manufacturing business of GBP8,762k offset with
bonuses paid out on deal completion of GBP1,116k and stock
provision adjustments of GBP341k.
b) Other Income Statement segmental information
The following additional items are included in the measures of
profit and loss reported to the CODM and are included within (a)
above:
28 weeks ended 11 January Brands Manufacturing Eliminations Total
2020 and Central
Costs
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------------- ------------- --------
Depreciation 12 - - 12
Amortisation - - 142 142
28 weeks ended 12 January Brands Manufacturing Eliminations Total
2019 and Central
Costs
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------------- ------------- --------
Depreciation 6 661 - 667
Amortisation - 21 133 154
c) Principal measures of assets and liabilities
The Groups assets and liabilities are managed centrally by the
CODM and consequently there is no reconciliation between the
Group's assets per the statement of financial position and the
segment assets.
d) Additional entity-wide disclosures
The distribution of the Group's external revenue by destination
is shown below:
Geographical segments 28 weeks ended 28 weeks ended 52 weeks ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------
UK 13,585 29,970 52,144
Other European Union countries 2,430 7,956 17,482
Rest of the World 2,028 3,515 7,712
--------------- --------------- ---------------
18,043 41,441 77,338
--------------- --------------- ---------------
Geographical segments - Continuing 28 weeks ended 28 weeks ended 52 weeks ended
Operations
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------
UK 8,744 10,055 16,456
Other European Union countries 288 427 609
Rest of the World 1,531 1,933 2,611
--------------- --------------- ---------------
10,563 12,415 19,676
--------------- --------------- ---------------
In the 28 weeks ended 11 January 2020, the Group had two
customers that exceeded 10% of revenues from Continuing Operations,
being 21.2% and 11.5% respectively. In the 28 weeks ended 12
January 2019, the Group had two customers that exceeded 10% of
revenues from Continuing Operations, being 26.4% and 14.0%
respectively.
Note 4 Exceptional items from continuing operations
In the period ended 11 January 2020 exceptional items charge
represents GBP0.3m in relation to the departure in September of the
former Chief Executive Officer and GBP0.2m exceptional consultancy
fees.
The prior year exceptional items charge represents a provision
of GBP0.3m made in respect to the GMP equalisation on the Group's
DB Pension scheme.
Note 5 Finance costs
28 weeks ended 28 weeks ended 52 weeks ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------
Total
Bank loans and overdrafts 83 153 263
Notional pension scheme costs 98 65 126
--------------- --------------- ---------------
181 218 389
--------------- --------------- ---------------
28 weeks ended 28 weeks ended 52 weeks ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------
Continuing Operations
Bank loans and overdrafts 25 15 18
Notional pension scheme costs 98 64 126
--------------- --------------- ---------------
123 79 144
--------------- --------------- ---------------
Note 6 Earnings per share
28 weeks ended 28 weeks ended 52 weeks ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
--------------- --------------- ---------------
Basic and diluted
Profit attributable to equity
shareholders (GBP'000) 6,456 537 3,539
Profit attributable to equity
shareholders Continuing Operations
('000) 178 874 1,489
Basic weighted average number
of
ordinary shares in issue during
the period 17,135,542 17,135,542 17,135,542
Diluted number of shares 17,230,703 17,659,183 17,659,183
Basic earnings per share 37.7p 3.1p 20.7p
--------------------------------------- --------------- --------------- ---------------
Diluted earnings per share 37.5p 3.0p 20.0p
--------------------------------------- --------------- --------------- ---------------
Basic earnings per share Continuing
Operations 1.0p 5.1p 8.7p
--------------------------------------- --------------- --------------- ---------------
Diluted earnings per share Continuing
Operations 1.0p 5.0p 8.4p
--------------------------------------- --------------- --------------- ---------------
Basic earnings per share has been calculated by dividing the
profit for each financial period by the weighted average number of
ordinary shares in issue in the period.
0BAdjusted earnings per share 28 weeks ended 28 weeks 52 weeks
ended ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
--------------- ------------ -------------
Profit attributable to equity
shareholders (GBP'000) 6,456 537 3,539
Add back: Net exceptional items*
(GBP'000) (6,833) 869 717
Add back: Amortisation of Acquisition
Related Intangibles (GBP'000) 142 133 260
Notional tax charge on above
items (GBP'000) (393) (190) (186)
--------------------------------------- --------------- ------------ -------------
Adjusted (loss) / profit before
exceptional items (GBP'000) (628) 1,349 4,330
--------------------------------------- --------------- ------------ -------------
Basic weighted average number
of
ordinary shares in issue during
the period 17,135,542 17,135,542 17,135,542
Diluted number of shares 17,230,703 17,659,183 17,659,183
--------------------------------------- --------------- ------------ -------------
Adjusted basic earnings per
share (3.7)p 7.9p 25.3p
--------------------------------------- --------------- ------------ -------------
Adjusted diluted earnings per
share (3.6)p 7.6p 24.5p
--------------------------------------- --------------- ------------ -------------
1BAdjusted earnings per share 28 weeks ended 28 weeks 52 weeks
- Continuing Operations ended ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
--------------- ------------ -------------
Profit attributable to equity
shareholders (GBP'000) 178 874 1,489
Add back: Net exceptional items*
(GBP'000) 472 269 48
Add back: Amortisation of Acquisition
Related Intangibles (GBP'000) 142 133 260
Notional tax charge on above
items (GBP'000) (117) (76) (59)
--------------------------------------- ----------- ----------- -----------
Adjusted profit before exceptional
items (GBP'000) 675 1,200 1,738
--------------------------------------- ----------- ----------- -----------
Basic weighted average number
of
ordinary shares in issue during
the period 17,135,542 17,135,542 17,135,542
Diluted number of shares 17,230,703 17,659,183 17,659,183
--------------------------------------- ----------- ----------- -----------
Adjusted basic earnings per share 3.9p 7.0p 10.1p
--------------------------------------- ----------- ----------- -----------
Adjusted diluted earnings per
share 3.9p 6.8p 9.8p
--------------------------------------- ----------- ----------- -----------
Adjusted earnings per share has been calculated by dividing the
adjusted profit (after allowing for the notional tax charge on
exceptional items) by the weighted average number of shares in
issue in the period.
*Net exceptional items are calculated as follows:
28 weeks ended
11 Jan 2020
(unaudited)
(GBP'000)
---------------
Profit on disposal of manufacturing
business 8,762
Bonuses paid out following disposal
of manufacturing business (1,116)
Stock provision adjustments (341)
Departure of former Chief Executive
Officer (310)
Consultancy fees (162)
------------------------------------- --------
Total 6,833
------------------------------------- --------
Note 7 Dividends
The Directors have declared an interim dividend payment of 0.9p
per share (2019: Interim: 2.15p; Final: 4.35p). The interim
dividend will be paid on 29 May 2020 to shareholders on the
register at the close of business on 11 May 2020. The ex-dividend
date will be 7 May 2020.
Note 8 Notes to Cash Flow Statement
(a) Reconciliation of cash and cash equivalents to movement in
net debt:
28 weeks ended 28 weeks ended 52 weeks ended
11 Jan 2020 12 Jan 2019 29 June 2019
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------- --------------- ---------------
Increase / (decrease) in cash
and cash equivalents in the
period 19,619 813 (553)
Net cash outflow from decrease
in borrowings 2,604 4,190 5,154
------------------------------------ --------------- --------------- ---------------
Change in net debt resulting
from cash flows 22,223 5,003 4,601
Net cash / (debt) at the beginning
of the period (7,168) (11,769) (11,769)
------------------------------------ --------------- --------------- ---------------
Net cash / (net debt) at the
end of the period 15,055 (6,766) (7,168)
------------------------------------ --------------- --------------- ---------------
(b) Analysis of net debt:
Closing Cash flow Closing
29 June 2019 11 Jan 2020
GBP'000 GBP'000 GBP'000
-------------- ---------- -------------
Cash at bank and in hand 381 19,619 20,000
CID facility (4,319) 1,997 (2,322)
Borrowings due within one year (1,139) 64 (1,075)
Borrowings due after one year (2,091) 543 (1,548)
-------------------------------- -------------- ---------- -------------
(7,168) 22,223 15,055
-------------------------------- -------------- ---------- -------------
Note 9 IAS 19 'Employee Benefits'
Expected future cash flows to and from the Group's defined
benefit pension scheme:
The Scheme is closed to new members and to further accruals of
benefits. It is subject to the scheme funding requirements outlined
in UK legislation. The last scheme funding valuation of the Scheme
was as at 5 April 2017 and revealed a funding deficit of GBP2.6m.
The liabilities of the Scheme are based on the current value of
expected benefit payments to members of the Scheme over the next 60
to 80 years. The average duration of the liabilities is
approximately 20 years.
In accordance with the schedule of contributions dated 4
September 2018, the Company is expected to pay contributions to the
Scheme to make good shortfalls in funding identified in the 5 April
2017 funding valuation and has agreed to pay GBP0.3m per annum. The
magnitude of such payments will be reviewed following the next
scheme funding valuation as at April 2020.
In addition, the Company has agreed to meet the cost of
administrative expenses and Pension Protection Fund insurance
premiums for the Scheme.
Payments made by the Company to the Scheme and in respect of
Scheme liabilities were:
28 weeks ended 28 weeks ended 52 weeks ended
11 January 2020 12 January 2019 29 June 2019
GBP'000 GBP'000 GBP'000
----------------- ----------------- ---------------
Company pension contributions - - -
Deficit recovery payments 159 175 282
Scheme administrative
expenses 138 92 179
Pension Protection Fund
premium 120 108 108
------------------------------- ----------------- ----------------- ---------------
Total 417 375 569
------------------------------- ----------------- ----------------- ---------------
The amounts expensed in the Group Statement of Comprehensive
Income were:
28 weeks ended 28 weeks ended 52 weeks ended
11 January 2020 12 January 2019 29 June 2019
GBP'000 GBP'000 GBP'000
----------------- ----------------- ---------------
In Operating profit:
Company pension contributions - - -
Scheme administrative
expenses 92 96 179
Pension Protection Fund
premium 65 58 108
GMP Equalisation - 288 290
----------------- ----------------- ---------------
157 442 577
In Finance costs:
Unwinding of notional
discount factor 98 65 126
------------------------------- ----------------- ----------------- ---------------
Total 255 507 703
------------------------------- ----------------- ----------------- ---------------
IAS 19 requires a separate valuation of the Scheme on a
different basis to the funding valuation referred to above.
The effects of the application of IAS19 on the statement of
financial position at 11 January 2020 are:
11 January
2020
GBP'000
-----------
Increase in net pension and other benefit
obligations 247
Reduction in deferred tax (25)
Decrease in equity 222
--------------------------------------------- -----------
The key assumptions used were:
As at 11 January As at 12 January As at 29 June
2020 2019 2019
----------------- ----------------- --------------
Discount Rate 2.00% 3.05% 2.40%
Rate of inflation (RPI) 2.90% 3.20% 3.10%
Rate of inflation (CPI) 2.00% 2.10% 2.10%
The amounts recognised in the Group statement of financial
position were:
As at 11 January As at 12 January As at 29 June
2020 2020 2019
GBP'000 GBP'000 GBP'000
----------------- ----------------- --------------
Present value of funded
obligations (34,367) (29,065) (33,562)
Fair value of scheme assets 24,862 22,451 24,145
----------------------------- ----------------- ----------------- --------------
(Deficit) (9,505) (6,614) (9,417)
----------------------------- ----------------- ----------------- --------------
Note 10 Discontinued operations
In August 2019, the Group sold its 100% interest in Curzon
Supplies Ltd for consideration of GBP35m (completing the disposal
of the Manufacturing segment) which is the only operation presented
as discontinued operations. Curzon Supplies Ltd was incorporated in
March 2019.
At Disposal
23 August 2019
Net book value GBP'000
Property, plant and equipment 11,338
Intangible fixed assets 695
Equity instruments held at fair
value 1,753
Inventories 9,509
Trade and other receivables 13,196
Trade and other payables (10,025)
Post-retirement pension obligations
* (1,103)
Deferred tax liability (561)
24,802
--------------------
Deal costs 1,476
Profit on disposal 8,762
Satisfied by:
Cash consideration 35,040
Of the cash consideration of GBP35,040k, GBP1,290k is deferred and
is recognised in other receivables on the Balance Sheet.
* Post-retirement pension scheme obligations figure of GBP1,103k in
this table relates to reassessment of annual uprating of pension liabilities.
Proceeds on disposal of manufacturing 28 weeks ended
segment recognised in the Cash 11 Jan 2020
Flow Statement: GBP'000
Cash consideration 35,040
Less deferred consideration (1,290)
Less deal costs (1,476)
32,274
---------------
Result of discontinued operations: 28 weeks 28 weeks 52 weeks
ended ended ended
11 January 12 January 29 June
2020 2019 2019
GBP'000 GBP'000 GBP'000
Revenue 7,480 29,026 57,663
Expenses other than finance costs (8,449) (29,090) (55,835)
(Finance costs) / investment income (58) 248 1,146
Exceptional costs (1,457) (600) (669)
Profit on disposal of manufacturing
business 8,762
Tax credit / (expense) - 79 (255)
Profit / (Loss) for the year 6,278 (337) 2,050
-------------------- ------------- ----------
Included in Exceptional costs in discontinued operations are bonuses
paid out on deal completion of GBP1.1m and stock provision adjustments
of GBP0.3m.
Earnings per share from discontinued 28 weeks 28 weeks 52 weeks
operations: ended ended ended
11 January 12 January 29 June
2020 2019 2019
Basic earnings per share 36.6p (2.0)p 12.0p
Diluted earnings per share 36.4p (1.9)p 11.6p
Earnings per share from discontinued 28 weeks
operations excluding profit on ended
disposal of manufacturing business: 11 January
2020
Basic earnings per share (14.5)p
Diluted earnings per share (14.4)p
Cash flow in respect of discontinued 28 weeks 28 weeks 52 weeks
operations: ended ended ended
11 January 12 January 29 June
2020 2019 2019
GBP'000 GBP'000 GBP'000
Operating cash flows 3,220 1,937 6,717
Investing cash flows - (122) (602)
Financing cash flows (3,592) (2,904) (3,637)
-------------------- ------------- ----------
Total cash flows (372) (1,089) 2,478
-------------------- ------------- ----------
Note 11 Prior Year Adjustment
A deferred tax liability was not recognised in respect of
customer relationships and brands, which were assets that were
separately identified in the acquisition of Brand Architekts
Limited. This has historically resulted in an understatement of
goodwill and the deferred tax liability of GBP1,145k. This has been
restated in the comparative information. There has been no impact
to the previously stated retained earnings, net assets and cash
flows.
Note 12 Announcement of results
The Interim Report will be sent to shareholders and is available
to members of the public at the Company's Registered Office at 8
Waldegrave Road, Teddington, TW11 8GT and on the Company's
website.
Independent review report to Brand Architekts Group plc
Introduction
We have reviewed the accompanying Group Statement of Financial
Position of Brand Architekts Group plc as of 11 January 2020 and
the Group Statement of Comprehensive Income, Group Statement of
Changes in Equity and Group Cash Flow Statement for the 28 week
period then ended, and a summary of significant accounting policies
and other explanatory notes.
This report is made solely to the Group in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to the Group those matters we are required to state to
it in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Group for our review work, for this
report, or for the conclusion we have formed.
Management is responsible for the preparation and fair
presentation of this interim financial information in accordance
with International Accounting Standard 34 as adopted by the
European Union. Our responsibility is to express a conclusion on
this interim financial information based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements 2410, "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity." A
review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying interim financial
information does not give a true and fair view of the financial
position of the entity as at 11 January 2020 and of its financial
performance and its cash flows for the 28 week period then ended in
accordance with International Financial Reporting Standards as
adopted by the European Union.
PKF Francis Clark
Statutory Auditor
Centenary House
Peninsula Park
Rydon Lane
Exeter
EX2 7XE
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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