4th November 2024
Samarkand Group
plc
("Samarkand", the "Company"
or together with its subsidiaries the "Group")
Interim
Results
Shift in Strategy to Owned
Brands Progressing Well
Samarkand Group plc,
(AQSE:SMK), the consumer brand owner and cross
border eCommerce distribution services group announces its unaudited interim
results for the half year ending 30 September 2024 ("H1
2025").
As stated in our annual results
FY24, our future is as a scale up platform
for meaningfully different, high potential, niche brands in the
health and healing space, targeted at specific consumer segments
with long term growth potential, specifically natural herbal health
and beauty and fertility and reproductive health.
The Group has made strong progress
in shifting its strategy to focus on growing our portfolio of owned
brands (Napiers the
Herbalists, Zita
West, Nature's Greatest
Secret and Benatural) and in restructuring our
China distribution operations. This is reflected in our first half
performance with owned brands growing strongly year over year,
particularly in the UK, and China related revenues declining as we
focus on a smaller portfolio of third-party brands.
Financial Highlights
·
Revenues decreased by 22% to £6.3m (H1 2024:
£8.1m)
o Brand Ownership revenues up 14% to £4.1m (H1 2024:
£3.6m)
o Brand Acceleration revenues of third party brands decreased by
57% to £1.8m (H1 2024: £4.1m)
o Distribution revenues remained flat at £0.4m (H1 2024:
£0.4m)
·
Gross margin decreased 22% to £3.8m (H1 2024: £4.9
m) in line with reduction in revenues
·
Adjusted EBITDA loss* reduced by 10% to £0.6m (H1
2024: £0.7m)
·
Cash and cash equivalents were £0.68m (H1 2024:
£1.66m)
*adjusted for restructuring costs,
impairment on intangible assets, profit on disposal of Brand Asset
and share based payments.
Operational Highlights
·
Strong growth in owned brand revenues with H1
sales for our portfolio of owned brands Napiers the Herbalists, Zita West, Nature's Greatest Secret and
Benatural up 64% in the UK
over prior year on a like for like basis
·
Napiers the
Herbalists revenue grew over 100% in
the UK vs prior year as a result of product innovation, social
commerce activities and expansion in the independent sales
channel
·
Zita
West revenues grew 22% in the UK as
a result of new product introductions, upgraded packaging and
ongoing investment in education and provision of a high-touch
customer experience
·
Performance of recently acquired Optimised
Energetics Ltd running ahead of expectations with owned brands
Natures Greatest Secret and
Benatural growing at over
100% and the flexible manufacturing capacity which is now part of
the Group improving our speed to market and ability to respond to
fast moving consumer trends
·
Restructuring of China distribution activities and
associated costs in the period as we focus on a far smaller
portfolio of third-party brands
·
Reduction in Group's adjusted EBITDA losses by 10%
vs prior year and good progress made towards goal of monthly
breakeven
David Hampstead, Chief Executive Officer of Samarkand Group,
commented: "Our strategic shift to
focus on growing our owned, proprietary brands and taking a more
selective approach to distributing 3rd party brands
gathered pace in the first half. We are delighted with the growth
momentum behind our owned brands and the acquisition of Optimised
Energetics has strengthened our portfolio of meaningfully different
premium health and healing brands and improved our competitive
position with the addition of flexible manufacturing
services.
Reaching monthly profitability
remains our top priority and I'm pleased to report this strategy is
bearing fruit with September bringing a profit of c.£40k at
adjusted EBITDA level, a material improvement on previous months.
This, together with the significant improvement in our owned brands
and ongoing restructuring of our China operations, is moving us
closer to that goal. I am confident in the future potential of our
brands."
For
more information, please contact:
|
Samarkand Group plc
|
|
|
David Hampstead, Chief Executive
Officer
Eva Hang, Chief Financial
Officer
|
http://samarkand.global/
info@samarkand.global
|
|
|
|
|
Guild Financial Advisory Limited
|
|
|
Ross Andrews
Tomas Klaassen
|
+44 (0) 7973839767
+44 (0) 7834458095
|
|
|
|
Notes to Editors
Samarkand is a consumer brand owner
and distributor operating a scale up platform for niche, premium,
multichannel, health and healing brands. Core owned brands include
Napiers the Herbalists, Scotland's oldest natural herbal apothecary
and Zita West, a leading specialist supplement line for fertility
and reproductive health. Platform services include marketing, sales
and channel development with a focus on social commerce, China
market entry, international expansion and manufacturing. In
addition, the group works as the exclusive China market partner for
a select portfolio of niche luxury skin care brands and connects
these brands to the Chinese consumer via cross border
eCommerce.
Founded in 2016, Samarkand is
headquartered in Tonbridge, UK with offices in Shanghai.
For further information please
visit https://www.samarkand.global/
CEO
Review
Our focus in the first half of this
financial year has been on implementing our strategic shift to a
scale up platform for niche, differentiated health and healing
brands. I am pleased to report strong performance of our owned
brand portfolio in the period with Napiers the Herbalists revenues in the
UK doubling year over year, Zita
West growing at 22% and Nature's Greatest Secret and
Benatural growing over
100%.
Our owned brand portfolio in the UK
is generating profitable growth with gross margins in the range of
70%-80%. The addition of the Nature's Greatest Secret brand to our
portfolio has been positive, boosting the overall growth rate of
the portfolio.
In parallel we have taken steps to
restructure and simplify our China distribution operations to
concentrate our efforts on a smaller portfolio of our proprietary
and third-party brands. Sales of third-party brands in China
declined 57% in the period and we have worked hard to adjust costs
accordingly.
As a result of growth in our owned
brands and reduction in China sales, the Group is now less
dependent on the China market with UK and ROW sales accounting for
over 60% (H1 2024: 40%) of revenues in the first half- a material
step up from the same period last year.
We have been successful in reducing
adjusted EBITDA losses vs prior year by 11%. We have taken
restructuring and cost actions in the period as we reconfigure our
resources around our owned brands, which we expect to materialise
in terms of improved margins in H2.
Losses in H1, on an adjusted basis,
have been slightly higher than our initial expectation as a result
of restructuring costs and a faster than forecast decline in
revenues from the China market as we transition to a smaller
portfolio of 3rd party brands in an increasingly
competitive operating environment.
We remain of the view that the value
of the Company, in terms of its assets, capabilities and potential,
is not currently reflected in the share price, and are focused on
improving the underlying performance of the business, reaching
profitability and increasing shareholder value.
Outlook
Our immediate focus is to continue
to grow our portfolio of owned brands profitably, leveraging our
platform resources effectively across all our brands. We are
confident in the growth momentum and future potential of our owned
brands and will continue to work towards our goal of reaching
consistent monthly profitability.
Our overall goal is to establish
Samarkand as a scale up platform for niche differentiated premium
brands, with a shared playbook for growth acceleration and
efficient operations. In the future we may explore opportunities to
invest at a higher rate behind our current owned brand portfolio
and may consider bolt on acquisitions in our health and healing
sweet spot.
David Hampstead
Chief Executive Officer
FINANCIAL REVIEW
Overview
During the period the Group's
revenues decreased by 22% to £6.3m (H1 2024: £8.1m) as a result of
significant reduction in sales of third-party brands in China.
Gross profit decreased by 22% to £3.8m (H1 2024: £4.9m) in line
with the decrease in revenue, with gross margin maintaining at 61%
(H1 2024: 61%).
Brand ownership revenue is up 14% to
£4.1m (H1 2024: £3.6m), with gross margins improving from 63% to
69%. Brand acceleration revenue is down 57% to £1.8m (H1 2024:
£4.1m) with gross margins declining from 59% to 38% as the group
restructures the way it operates in China. Revenues from our
distribution business remained flat at £0.4m (H1 2024:
£0.4m).
Adjusted EBITDA loss improved by 10%
from £0.7m to £0.6m.
Operating expenses
Selling and distribution expenses
decreased to 31% (H1 2024: 34%) of revenue, as a result of a change
in sales mix and successful cost minimising actions in the last six
months.
Administrative expenses, excluding
one-off costs such as a share-based payment expense and
restructuring related costs, increased to 39% (H1 2024: 34%) of
revenue as a faster than forecast decline in sales of our
third-party brands in China. The number of employees at 30
September 2024 was 56 (30 September 2024: 85), down from 87 at 31
March 2024.
Earnings per share
Basic earnings per share was 0.13p
(H1 2024: loss 5.19p per share) and diluted earnings per share was
0.12p (H1 2024: loss 5.19p per share).
Net
debt
|
|
Sep-24
|
Sep-23
|
Mar-24
|
|
Cash and cash equivalents
|
681,688
|
1,658,643
|
867,524
|
|
Right-of-use lease
liabilities
|
(885,579)
|
(418,101)
|
(716,400)
|
|
Borrowings
|
(1,798,291)
|
(1,459,278)
|
(1,496,488)
|
|
Net
debt
|
(2,002,182)
|
(218,736)
|
(1,345,364)
|
At the period end, the Group's net
debt position was £2.0m (H1 2024: £0.2m), excluding the IFRS 16
lease liabilities, net debt was £1.1m (H1 2024: net cash
£0.2m).
Inventories
The Group reduced gross inventories
from £3.1m to £2.1m. Improvements in inventory management and
ordering process along with the reduction in inventory held for
third party brands has resulted in the Group holding lower
inventory levels. To reduce complexity, the Group focused on
reducing the breadth of inventory in its UK and bonded
warehouses.
Depreciation and amortisation
The total depreciation and
amortisation costs were £0.1m and £0.1m respectively (H1 2024:
£0.2m and £0.4m, respectively).
Adjusted EBITDA loss
Adjusted EBITDA loss improved by 10%
from £0.7m to £0.6m. The improvements in adjusted EBITDA loss is
driven principally by the decrease in staff cost and operating
costs as the Group restructures its China distribution
business.
Condensed
Consolidated Statement of Comprehensive Income
For the six-month period ended 30
September 2024
|
|
|
Period ended 30 September
2024
|
|
Period ended 30 September
2023
|
|
Year ended
31 March
2024
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
Notes
|
£
|
|
£
|
|
£
|
|
|
Revenue
|
3
|
6,323,275
|
|
8,132,309
|
|
16,922,669
|
|
|
Cost of sales
|
3
|
(2,522,939)
|
|
(3,208,355)
|
|
(6,695,544)
|
|
|
Gross profit
|
|
3,800,336
|
|
4,923,954
|
|
10,227,125
|
|
|
Selling and distribution
expenses
|
|
(1,953,349)
|
|
(2,805,574)
|
|
(5,715,219)
|
|
|
Administrative expenses
|
4
|
(1,529,367)
|
|
(4,450,721)
|
|
(8,135,412)
|
|
|
Adjusted EBITDA
|
|
(597,700)
|
|
(664,195)
|
|
(893,366)
|
|
|
Restructuring costs
|
5
|
(93,127)
|
|
(77,292)
|
|
(457,594)
|
|
|
Impairment on intangible
assets
|
5
|
-
|
|
(1,489,580)
|
|
(2,080,746)
|
|
|
Profit on disposal of Brand
Asset
|
|
1,083,127
|
|
-
|
|
-
|
|
|
Share-based payment and related
expenses
|
5
|
(75,680)
|
|
(101,274)
|
|
(191,800)
|
|
|
EBITDA
|
|
317,620
|
|
(2,332,341)
|
|
(3,623,506)
|
|
|
Depreciation and
amortisation
|
|
(185,941)
|
|
(627,085)
|
|
(989,208)
|
|
|
Operating profit/ (loss)
|
|
131,679
|
|
(2,959,426)
|
|
(4,612,714)
|
|
|
Finance income
|
|
3,801
|
|
2,051
|
|
6,856
|
|
|
Finance costs
|
|
(108,587)
|
|
(106,084)
|
|
(261,722)
|
|
|
Profit/(loss) before taxation
|
|
26,893
|
|
(3,063,459)
|
|
(4,867,580)
|
|
|
Taxation
|
|
21,452
|
|
13,627
|
|
69,520
|
|
|
Profit/(loss) after taxation
|
|
48,345
|
|
(3,049,832)
|
|
(4,798,060)
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
|
|
|
|
|
|
|
|
(1,349)
|
|
(6,034)
|
|
(7,227)
|
|
|
Items that may be reclassified to profit and loss in
subsequent periods
|
|
|
|
|
|
|
|
|
|
(1,349)
|
|
(6,034)
|
|
(7,227)
|
|
|
Total comprehensive profit/(loss) for the
period
|
|
46,996
|
|
(3,055,866)
|
|
(4,805,287)
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
73,430
|
|
(3,029,365)
|
|
(4,756,999)
|
|
|
Non-controlling interests
|
|
(25,085)
|
|
(20,467)
|
|
(41,061)
|
|
|
|
|
48,345
|
|
(3,049,832)
|
|
(4,798,060)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive profit/(loss) attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
72,081
|
|
(3,035,399)
|
|
(4,764,226)
|
|
|
Non-controlling interests
|
|
(25,085)
|
|
(20,467)
|
|
(41,061)
|
|
|
|
|
46,996
|
|
(3,055,866)
|
|
(4,805,287)
|
|
|
Earnings/(loss) per share (basic and
diluted)
|
|
|
|
|
|
|
|
Basic
|
6
|
0.0013
|
|
(0.0519)
|
|
(0.0815)
|
|
Diluted
|
6
|
0.0012
|
|
(0.0519)
|
|
(0.0815)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Condensed
Consolidated Statement of Financial Position
For the six-month ended 30 September
2024
|
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
Restated
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
Notes
|
£
|
|
£
|
|
£
|
|
ASSETS
|
|
|
|
|
|
|
|
Intangible assets
|
7
|
5,600,129
|
|
5,551,141
|
|
4,585,661
|
|
Property, plant and
equipment
|
|
247,948
|
|
160,291
|
|
77,092
|
|
Right-of-use assets
|
|
798,083
|
|
352,661
|
|
688,628
|
|
Deferred Tax Asset
|
|
217,721
|
|
-
|
|
179,350
|
|
Non-current assets
|
|
6,863,881
|
|
6,064,093
|
|
5,530,731
|
|
Inventories
|
8
|
1,881,136
|
|
2,572,847
|
|
2,370,941
|
|
Trade receivables
|
|
1,312,673
|
|
1,343,409
|
|
1,175,380
|
|
Corporation tax
recoverable
|
|
59,377
|
|
126,616
|
|
59,376
|
|
Other receivables and
prepayments
|
|
907,466
|
|
540,997
|
|
625,248
|
|
Cash and cash equivalents
|
|
681,688
|
|
1,658,643
|
|
867,524
|
|
Held for sale
|
|
-
|
|
-
|
|
216,597
|
|
Current assets
|
|
4,842,340
|
|
6,242,512
|
|
5,315,066
|
|
Total assets
|
|
11,706,221
|
|
12,306,605
|
|
10,845,797
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
|
|
Share capital
|
9
|
583,582
|
|
583,582
|
|
583,582
|
|
Share premium
|
|
22,954,413
|
|
22,954,413
|
|
22,954,413
|
|
Merger relief reserve
|
|
(2,063,814)
|
|
(2,063,814)
|
|
(2,063,814)
|
|
Accumulated loss
|
|
(16,801,093)
|
|
(15,829,992)
|
|
(16,950,203)
|
|
Currency translation
reserve
|
|
(87,936)
|
|
(85,394)
|
|
(86,587)
|
|
Total equity attributable to parent
|
|
4,585,152
|
|
5,558,795
|
|
4,437,391
|
|
Non-controlling interest
|
|
(205,388)
|
|
(159,709)
|
|
(180,303)
|
|
Total equity
|
|
4,379,764
|
|
5,399,086
|
|
4,257,088
|
|
|
|
|
|
|
|
|
|
Right-of-use lease
liabilities
|
|
719,478
|
|
107,066
|
|
617,819
|
|
Borrowings
|
|
87,176
|
|
1,403,516
|
|
1,434,895
|
|
Deferred tax liability
|
|
548,653
|
|
334,257
|
|
492,787
|
|
Accrued liabilities
|
|
430,000
|
|
512,441
|
|
-
|
|
Total non-current liabilities
|
|
1,785,307
|
|
2,357,280
|
|
2,545,501
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
3,379,027
|
|
3,521,220
|
|
3,401,814
|
|
Deferred revenue
|
|
284,906
|
|
662,222
|
|
480,220
|
|
Borrowings
|
|
1,711,116
|
|
55,762
|
|
61,593
|
|
Right-of-use lease
liabilities
|
|
166,101
|
|
311,035
|
|
99,581
|
|
Total current liabilities
|
|
5,541,150
|
|
4,550,239
|
|
4,043,208
|
|
Total liabilities
|
|
7,326,457
|
|
6,907,519
|
|
6,588,709
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
11,706,221
|
|
12,306,605
|
|
10,845,797
|
|
|
|
|
|
|
|
|
​
Condensed
Consolidated Statement of Cash Flows
For the six-month period ended 30
September 2024
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Audited)
|
|
|
£
|
|
£
|
|
£
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
Profit/(loss) after
taxation
|
48,345
|
|
(3,049,832)
|
|
(4,798,060)
|
|
Cash flow from operations reconciliation:
|
|
|
|
|
|
|
Depreciation and
amortisation
|
185,941
|
|
627,086
|
|
989,208
|
|
Impairment on intangible
assets
|
-
|
|
1,489,580
|
|
2,080,746
|
|
Profit on disposal of Brand
Asset
|
(1,113,152)
|
|
|
|
|
|
Finance costs
|
92,149
|
|
48,445
|
|
113,225
|
|
Finance income
|
(3,801)
|
|
(2,051)
|
|
(6,856)
|
|
Share option expense
|
75,680
|
|
101,274
|
|
191,800
|
|
Income tax credit
|
(21,452)
|
|
(13,627)
|
|
(69,520)
|
|
Working capital adjustments:
|
|
|
|
|
|
|
Inventories
|
71,623
|
|
(360,620)
|
|
(158,714)
|
|
Trade and other
receivables
|
228,535
|
|
521,999
|
|
628,522
|
|
Trade and other payables
|
(459,735)
|
|
629,941
|
|
187,942
|
|
Cash
generated (used in) operating activities
|
(895,867)
|
|
(7,805)
|
|
(841,707)
|
|
Corporation tax
(paid)/received
|
(49,706)
|
|
-
|
|
224,615
|
|
Net
cash generated (used in) operating activities
|
(945,573)
|
|
(7,805)
|
|
(8,047,840)
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
(100,369)
|
|
(1,654)
|
|
(37,484)
|
|
Disposal of property, plant and
equipment
|
1,076
|
|
1,565
|
|
84,206
|
|
Disposal of right of use
asset
|
-
|
|
-
|
|
(47,813)
|
|
Disposal of intangible
asset
|
5,629
|
|
-
|
|
16,435
|
|
Payment of intangible
assets
|
(5,724)
|
|
(147,929)
|
|
(220,734)
|
|
Disposal of Brand Asset
|
1,279,337
|
|
-
|
|
-
|
|
Acquistion of Subsidiary, net of cash
acquired
|
(576,692)
|
|
-
|
|
-
|
|
Interest received
|
3,801
|
|
2,051
|
|
6,856
|
|
Net
cash (used in) investing activities
|
607,058
|
|
(145,967)
|
|
(198,534)
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
Repayment of right-of-use lease
liabilities
|
(55,601)
|
|
(164,888)
|
|
(283,218)
|
|
Proceeds from other loans
|
297,181
|
|
-
|
|
31,363
|
|
Interest paid
|
(14,253)
|
|
(9,883)
|
|
(21,717)
|
|
Repayment of borrowings
|
(72,796)
|
|
(30,324)
|
|
(54,857)
|
|
Net cash (used in)/from financing
activities
|
154,531
|
|
(205,095)
|
|
(328,429)
|
|
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
(183,984)
|
|
(358,867)
|
|
(1,144,055)
|
|
Cash and cash equivalents at
beginning of period
|
867,524
|
|
2,017,150
|
|
2,017,150
|
|
Effect of FX changes on cash and cash
equivalents
|
(1,852)
|
|
360
|
|
(5,571)
|
|
Cash
and cash equivalents at end of period
|
681,688
|
|
1,658,643
|
|
867,524
|
|
|
|
|
|
|
|
Notes to the
Consolidated Financial Statements
For the period ended 30 September 2024
1.
General
information
Samarkand Group plc was incorporated
in England and Wales on 12 January 2021. The address of its
registered office is Unit 13 Tonbridge Trade Park, Ingot Way, TN9
1GN.
2.
Basis of
preparation and measurement
(a) Basis of
preparation
The condensed consolidated interim
financial statements of Samarkand Group plc and its subsidiaries
(together referred to as the "Group"),
comprises the results of the Group for the 6 months ended 30
September 2024. These interim financial statements are not audited
nor reviewed by independent auditors, were approved by the board of
directors on 1 November 2024.
The financial information in this
interim report has been prepared in accordance with UK adopted
international accounting standards. The accounting policies applied
by the Group in this financial information are the same as those
applied by the Group in its financial statements for the year ended
31 March 2024 and which will form the basis of the 2024 financial
statements.
The financial information for the
year ended 31 March 2024 included in these financial statements
does not constitute the full statutory accounts for that year. The
Annual Report and Financial Statements for 2024 have been filed
with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Financial Statement for 2024 was (i)
unqualified, although included an emphasis of matter in respect of
material uncertainty around going concern and (ii) did not contain
a statement under section 498(2) or (3) of the Companies Act
2006.
Unless otherwise stated, the
financial statements are presented in Pounds Sterling (£) which is
the currency of the primary economic environment in which the Group
operates.
Transactions in foreign currencies
are translated into £ at the rate of exchange on the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rate ruling at the
reporting date. The resulting gain or loss is reflected in the
"Consolidated Statements of
Comprehensive Income" within either "Finance income" or "Finance costs".
The financial statements have been
prepared under the historical cost convention except for certain
financial instruments that have been measured at fair
value.
The financial statements have been
prepared on the going concern basis, which contemplates the
continuity of normal business activity and the realisation of
assets and the settlement of liabilities in the normal course of
business. The directors of Samarkand Group plc have reviewed the
Group's overall position and outlook and are of the opinion that
the Group is sufficiently well funded to be able to operate as a
going concern for at least the next twelve months from the date of
approval of these financial statements.
Going Concern
For the year ended 31 March 2024,
the Group continued to face challenging market conditions in China
with revenues generated from third-party consumer brands in China
falling year on year as a result of increasingly competitive market
conditions and higher levels of price and promotional intensity.
This has continued into H1 2025, with the revenues from sale
of third-party brands in China declining faster than forecasted. As
such, the Group continues to reconfigure and restructure by
focusing on fewer third-party brands which have the potential for
long term success. This will enable greater attention and focus on
development of our own brands in China.
The Group's owned brands have
performed ahead of expectations in the period, with strong revenue
growth and profitable contribution from Napiers, Zita West and
newly acquired Natures Greatest Secret and Benatural in the
UK.
The Directors recognise the
importance of moving the Group into profitability and have made
significant progress towards this goal, with the month of September
generating adjusted EBITDA profit of c£40k.
In addition, the Directors are
actively exploring additional funding options including trade
financing and other strategic opportunities to support the Group's
operations and long-term viability. In June 2024, the Group
completed the disposal of its Probio7 brand. The proceeds of the
disposal have enabled the Group to acquire Optimised Energetics, a
premium skincare manufacturer to secure its manufacturing services
to Napiers, improving the overall Group's margins and
profitability. Proceeds from the disposal will also allow the Group
to increase resources to support the growing working capital
requirements of Napiers and Zita West.
Despite the cost base reduction and
ongoing exploration of additional funding, in the event that
trading does not proceed as planned and in conjunction with the
loan with Global Smollan Holdings becoming due in September 2025,
the Group's financial performance and cash flow projections
indicate the existence of material uncertainties that may cast
significant doubt on the Group's ability to continue as a going
concern. Global Smollan Holdings, our largest strategic shareholder
has expressed ongoing support for the business and have indicated
their willingness to re-negotiate the loan when it falls
due.
Although there are material
uncertainties, several mitigating factors have been considered by
the Directors in their assessment of the going concern assumption.
These include the steps taken to further reduce costs and the
progress made in exploring various strategic options to raise
additional funds. The Directors believe that these factors, will
enable the Group to overcome the identified challenges and continue
its operations.
To address the material
uncertainties, the Directors will continue to closely monitor the
Group's financial performance, cash flow projections, and market
conditions. They will continue to proactively manage the Group's
cost base, seeking further efficiencies where possible.
The Directors are confident in the
Group's ability to mitigate the identified risks and uncertainties.
As a result, the financial statements have been prepared on a going
concern basis, acknowledging the material uncertainties that may
cast significant doubt on the Group's ability to continue as a
going concern.
(b) Basis of
consolidation
The Consolidated Group financial
statements comprises the financial statements of Samarkand Group
plc and its subsidiaries.
A subsidiary is defined as an entity
over which Samarkand Group plc has control. Samarkand Group plc
controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date
that control ceases.
Changes in the Group's interest in a
subsidiary that do not result in a loss of control are accounted
for as equity transactions. The carrying amounts of the Group's
interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiary. Any
difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid
or received is recognised directly in equity and attributed to
owners of the Company.
Intra-group transactions, balances
and unrealised gains on transactions are eliminated; unrealised
losses are also eliminated unless cost cannot be recovered. Where
necessary, adjustments are made to the financial statements of
subsidiaries to ensure consistency of accounting policies with
those of the Group.
The total comprehensive income of
non-wholly owned subsidiaries is attributed to owners of the parent
and to the non-controlling interests in proportion to their
relative ownership interests.
(c) Restatement of Prior Year
Opening Balances
During the period the Group reviewed
the classification and presentation of the accruals made in
relation to the Bonus Scheme for the financial year ending 31 March
2023. It was determined that following this review, the accrual was
made in error, although the Financial and
Non-Financial Performance Targets were met, the vesting conditions
associated with nominal cost options were not. The opening balances
for the year ending 31 March 2024 has therefore been restated, as a
result, the Consolidated statement of financial position as at 31
March 2024 has been restated as follows:
|
|
As reported 31 March
2024
|
|
Impact of
Restatement
|
|
Restated
31 March
2024
|
|
Consolidated statement of financial position
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Trade and other payables
|
(3,897,739)
|
|
495,925
|
|
(3,401,814)
|
|
Accumulated loss
|
(17,446,128)
|
|
495,925
|
|
(16,950,203)
|
3.
Segmental
analysis
An analysis of the Group's revenue
and cost of sales is as follows:
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
|
|
Revenue analysed by class of business:
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Brand ownership
|
4,130,094
|
|
3,615,063
|
|
7,748,048
|
|
Brand acceleration
|
1,770,107
|
|
4,081,351
|
|
8,204,409
|
|
Distribution
|
360,463
|
|
355,635
|
|
740,999
|
|
Nomad Checkout
|
48,203
|
|
69,157
|
|
149,337
|
|
Other
|
14,408
|
|
11,103
|
|
79,876
|
|
Total revenue
|
6,323,275
|
|
8,132,309
|
|
16,922,669
|
|
|
|
|
|
|
|
|
Cost
of sale by business unit:
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Brand ownership
|
1,272,027
|
|
1,323,972
|
|
2,772,796
|
|
Brand acceleration
|
1,101,391
|
|
1,680,524
|
|
3,539,317
|
|
Distribution
|
149,520
|
|
183,627
|
|
351,413
|
|
Nomad Checkout
|
-
|
|
20,231
|
|
31,707
|
|
Other
|
-
|
|
-
|
|
311
|
|
Total cost of sale
|
2,522,939
|
|
3,208,355
|
|
6,695,544
|
Segment assets:
The non-current assets of the Group
are not measured or reported internally on a segmental basis as
they are not considered to be attributable to any specific business
segment.
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
|
|
Revenue by geographical destination:
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
UK
|
3,625,447
|
|
3,076,487
|
|
6,529,226
|
|
China
|
2,473,549
|
|
4,829,173
|
|
9,764,724
|
|
Rest of the World
|
224,279
|
|
226,649
|
|
628,719
|
|
|
|
|
|
|
|
|
Total revenue
|
6,323,275
|
|
8,132,309
|
|
16,922,669
|
4.
Expenses by
nature
An analysis of the Group's expenses
by nature is as follows:
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
|
|
Administrative expenses:
|
|
£
|
|
£
|
|
£
|
|
Property costs
|
|
102,142
|
|
125,386
|
|
246,956
|
|
Staff costs
|
|
1,747,184
|
|
2,039,593
|
|
3,932,703
|
|
Professional fees
|
|
275,405
|
|
221,678
|
|
476,932
|
|
Other
|
|
318,956
|
|
395,918
|
|
748,681
|
|
Impairment on intangible
assets
|
|
-
|
|
1,489,580
|
|
2,080,746
|
|
Restructuring costs
|
|
93,127
|
|
77,292
|
|
457,594
|
|
Share based payment charge
|
|
75,680
|
|
101,274
|
|
191,800
|
|
Profit on disposal of Brand
Asset
|
|
(1,083,127)
|
|
-
|
|
-
|
|
Total administrative expenses
|
|
1,529,367
|
|
4,450,721
|
|
8,135,412
|
5.
Adjusted
EBITDA
EBITDA and Adjusted EBITDA are
non-GAAP measures and exclude exceptional items, depreciation, and
amortisation. Exceptional items are those items the Group considers
to be non-recurring or material in nature that may distort an
understanding of financial performance or impair
comparability.
Adjusted EBITDA is stated before
exceptional items as follows:
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
|
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Restructuring costs
|
(93,127)
|
|
(77,292)
|
|
(457,594)
|
|
Share based payment charge
|
(75,680)
|
|
(101,274)
|
|
(191,800)
|
|
Profit on disposal of Brand
Asset
|
1,083,127
|
|
|
|
|
|
Impairment on intangible
assets
|
-
|
|
(1,486,580)
|
|
(2,080,746)
|
|
|
914,320
|
|
(1,665,146)
|
|
(2,730,140)
|
|
|
|
|
|
|
|
6.
Earnings per
share
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
30 September
2024
|
30 September
2023
|
31 March
2024
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
Basic earnings/(loss) per
share
|
0.13
pence
|
(5.19)
pence
|
(8.15)
pence
|
|
Diluted earnings/(loss) per
share
|
0.12
pence
|
(5.19)
pence
|
(8.15)
pence
|
|
|
|
|
|
|
Earnings
|
|
|
|
|
Profit/(loss) for the purpose of
basic and diluted earnings per share
|
73,430
|
(3,029,365)
|
(4,756,999)
|
|
|
|
|
|
|
Number of shares
|
|
|
|
|
Basic and diluted weighted average
number of shares in issue
|
58,358,201
|
58,358,201
|
58,358,201
|
7.
Intangible
assets
|
|
Development
costs
|
Trademarks
|
Brands
|
Goodwill
|
Website
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
Cost
|
|
|
|
|
|
|
|
At 1 April 2024
|
3,587,428
|
64,988
|
2,024,175
|
2,813,283
|
69,350
|
8,559,224
|
|
Additions
|
-
|
1,503
|
-
|
-
|
-
|
1,503
|
|
Disposal
|
-
|
(6,454)
|
-
|
-
|
-
|
(6,454)
|
|
Acquisitions
|
-
|
-
|
249,832
|
840,221
|
-
|
1,090,053
|
|
At 30 September 2024
|
3,587,428
|
60,037
|
2,274,007
|
3,653,504
|
69,350
|
9,644,326
|
|
Amortisation
|
|
|
|
|
|
|
|
At 1 April 2024
|
3,587,428
|
28,225
|
308,130
|
10,236
|
39,544
|
3,973,563
|
|
Amortisation charge
|
-
|
3,379
|
66,312
|
-
|
5,486
|
75,176
|
|
Disposal
|
-
|
(4,543)
|
-
|
-
|
-
|
(4,543)
|
|
At 30 September 2024
|
3,587,428
|
27,061
|
374,442
|
10,236
|
45,030
|
4,044,197
|
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
|
At 31 March 2024
|
-
|
36,763
|
1,716,045
|
2,803,047
|
29,806
|
4,585,661
|
|
At 30 September 2024
|
-
|
32,975
|
1,899,565
|
3,643,268
|
24,320
|
5,600,129
|
|
|
Development
costs
|
Trademarks
|
Brands
|
Goodwill
|
Website
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
Cost
|
|
|
|
|
|
|
|
At 1 April 2023
|
3,406,596
|
118,220
|
2,484,091
|
2,829,718
|
70,980
|
8,909,605
|
|
Additions
|
142,897
|
5,032
|
-
|
-
|
-
|
147,929
|
|
At 30 September 2023
|
3,549,493
|
123,252
|
2,484,091
|
2,829,718
|
70,980
|
9,057,534
|
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
At 1 April 2023
|
1,066,292
|
46,611
|
433,640
|
-
|
24,178
|
1,570,721
|
|
Amortisation charge
|
347,406
|
8,153
|
80,980
|
-
|
9,553
|
446,092
|
|
Impairment*
|
1,489,580
|
-
|
-
|
-
|
-
|
1,489,580
|
|
At 30 September 2023
|
2,903,278
|
54,764
|
514,620
|
-
|
33,731
|
3,506,393
|
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
|
At 31 March 2023
|
2,340,304
|
71,609
|
2,050,451
|
2,829,718
|
46,802
|
7,338,884
|
|
At 30 September 2023
|
646,215
|
68,488
|
1,969,471
|
2,829,718
|
37,249
|
5,551,141
|
8.
Inventories
|
|
|
|
|
|
|
|
|
|
|
30 September
2024
|
|
30 September
2023
|
|
31 March
2024
|
|
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
|
Finished goods
|
|
2,148,220
|
|
3,112,475
|
|
2,770,112
|
|
Provision for obsolescence
|
|
(267,084)
|
|
(539,628)
|
|
(399,171)
|
|
Total inventories
|
|
1,881,136
|
|
2,572,847
|
|
2,370,941
|
|
|
|
|
|
|
|
|
|
Cost
of inventory recognised in profit and loss
|
|
2,522,939
|
|
3,208,355
|
|
6,695,544
|
|
|
|
|
|
|
|
|
9.
Share
capital
|
|
|
Number of
shares
|
|
Share
capital
|
|
|
|
No.
|
|
£
|
|
At 30 September 2023, 31 March 2024
and 30 September 2024
|
|
58,358,201
|
|
583,581
|
10.
Notes to the
statements of cash flows
Net
debt reconciliation:
|
|
Opening
balances
|
Cash flows
|
Non-cash
movements
|
Closing
balances
|
|
|
£
|
£
|
£
|
£
|
|
Six-month period ended 30 September 2024
|
|
|
|
|
|
Cash and cash equivalents
|
867,524
|
(183,983)
|
(1,853)
|
681,688
|
|
Right of use lease
liabilities
|
(716,400)
|
55,601
|
(224,780)
|
(885,579)
|
|
Borrowings
|
(1,496,488)
|
(224,385)
|
(77,418)
|
(1,798,291)
|
|
Totals
|
(1,345,364)
|
(352,767)
|
(304,051)
|
(2,002,182)
|
|
|
|
|
|
|
|
Six-month period ended 30 September 2023
|
|
|
|
|
|
Cash and cash equivalents
|
2,017,150
|
(358,867)
|
360
|
1,658,643
|
|
Right of use lease
liabilities
|
(573,785)
|
164,888
|
(9,204)
|
(418,101)
|
|
Borrowings
|
(1,453,298)
|
30,324
|
(36,304)
|
(1,459,278)
|
|
Totals
|
(9,933)
|
(163,655)
|
(45,148)
|
(218,736)
|
