RNS Number:0757G
Aquabella Group PLC
22 October 2007
22 October 2007
AQUABELLA GROUP PLC
("Aquabella" or "the Company")
Final Results for the Year ended 31 March 2007
This is the first preliminary results statement issued by Aquabella Group plc
following our listing on AIM on 5 September 2006.
This statement covers the year to 31 March 2007, a period during which much
progress has been made towards the achievement of our objective of producing and
supplying through our wholly owned subsidiary, International Aqua Farms Limited,
high quality Barramundi fish to the UK Market on a sustainable basis. At the
beginning of the year we were looking forward with some anticipation to lifting
our first batches of fish for trial sales in the retail market. At the end of it
we were confident that this had become a reality having overcome a number of
hurdles along the way, and we felt well set to build sales and maintain the high
quality of the fish. We are now building sales towards full annual production
capacity of 450 tonnes.
Financial Result and Operational Review
The financial results for the year to 31 March 2007 reflect the hurdles we have
had to overcome which slowed our progress both operationally and financially:
Financial Highlights
Turnover #456,105 (2006: #1,308)
Gross loss #699,791 (2006: loss #90,850)
Loss before interest and tax #2,610,521 (2006: loss #1,043,223)
The turnover of the Group for the year was below expectations, albeit the second
half showed a 143% increase over the first six months. The year included a more
protracted trial period than anticipated as we focused on improvements to the
production process to develop the taste and texture of our fish for the Western
European palate. These improvements were not completed until quarter three with
the commissioning of the ozone injection system, but we were then faced with the
seasonality of the product in terms of Christmas and the slow nature of sales in
January as is normal in the food industry, with wholesale in particular
suffering.
During the year some 61 tonnes of fish were sold with retail sales making up 73%
of the total, with wholesale at 21% and direct sales at 6%.
The costs of running the facility are by and large fixed with the only variable
costs being fingerlings and feed. By virtue of the fixed nature of costs, the
key to the success of the business is to build sales to match the maximum annual
production, thereby spreading the costs over higher output. This is our priority
over the coming months.
Operationally, as reported in the Interim Statement, improvements to the
production process to improve both taste and texture were a key priority in the
first six months and continued to be so through quarter three. By the start of
2007 the improvements were starting to come through in terms of quality of
product so that in the fourth quarter the operation of the fish farm had
stabilised and a normal production process established; however this was at
least six months later than anticipated, which had a consequential effect on our
results.
Events since the Year End
Key events since the year end have been:
Shore Capital Stockbrokers Limited appointed brokers to the Group in June 2007.
Shore Capital and Corporate Limited appointed Nomad in June 2007.
Equity fundraising of #2.0 million in July 2007
Peter Salter stepped down as group finance director August 2007 and was
appointed a non-executive director.
David Stanley appointed group finance director August 2007.
Alan Smith appointed a non-executive director August 2007.
On 25 September the Board announced it had requested a temporary suspension of
trading its shares on AIM pending clarification of its financial position, a
situation which has now been remedied as a result of the fundraising announced
today, referred to below.
Equity fundraising of #785k and issue of Convertible Loan Notes of #900k in
October 2007.
Current Trading
Sales volumes since April 2007 have been encouraging and are on an upward trend,
with an average of 3.4 tonnes per week being sold in September. Barramundi sales
promotions have recently taken place in three leading supermarket chains with
good levels of sell through and further promotions have been booked for October.
It is our challenge to maintain sales at full price following such promotions.
We are currently selling into four of the major retailers where New Forest
Barramundi is for sale over the wet fish counters; in addition we are supplying
smaller retail chains in the North West of England and Eire. Retail accounts for
67% of our turnover at present. We are also selling into both national and
regional wholesalers, albeit at lower levels than we had hoped.
Our key objective for the remainder of the current financial year will be to
move towards full production and sales at a weekly level approaching 8 tonnes,
which is roughly twice our current rate. This we believe will be helped by the
introduction of fillets which retailers inform us, based on their experience of
other species (e.g. sea bass), outsell whole fish by a multiple of 3 to 5 times.
We have so far successfully trialled fillets in one major retail chain and a
national wholesaler using hand filleters, but to optimise efficiency we have
ordered a filleting machine which is expected to be fully commissioned by early
November.
The introduction of fillets will, we believe, help us achieve greater
penetration of the retailer's estates beyond the 30% we estimate we are
currently in, and to approach those retail chains who do not sell wet fish other
than in pre-packed form. This could be done with a variety of marinades and
sauces, and even extended into prepared meals over time. Finally, fillets also
lend themselves to smoking as in-house trials have successfully proven.
The Future
The commercial success of New Forest Barramundi is coming through, albeit slower
than anticipated. The sustainable production process, the healthy, white fish
variety, the taste and texture, and the freshness of the fish available to the
consumer on a daily basis we believe will win through, particularly when
presented as fillets in the convenience market.
We are aiming to achieve full production/sales in spring 2008 at which point we
will move to the next stage, the building of an extension to the existing
facility which will treble output to in excess of 1,200 tonnes per annum.
We remain grateful for the continuing support of our shareholders in particular
in the recent fundraisings.
Pieter W Totte
Chairman
Contacts
The Company
Pieter Totte 020 7234 0570
Shore Capital - Nominated Adviser to the Company
Guy Peters 020 7408 4090
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2007
As restated
Year ended Period ended
31 March 31 March
2007 2006
# #
TURNOVER 456,105 1,308
Cost of sales (1,155,896) (92,158)
GROSS LOSS (699,791) (90,850)
Selling and distribution costs (115,106) (19,528)
Administrative expenses (1,621,147) (932,845)
OPERATING LOSS (2,436,044) (1,043,223)
Loss on disposal (174,477) -
Interest receivable 13,771 29,370
Interest payable (46,639) (13,183)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,643,389) (1,027,036)
Tax on loss on ordinary activities
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (2,643,389) (1,027,036)
Basic and diluted loss per share (0.15) (0.07)
All amounts relate to continuing operations.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 March 2007
As restated
Year ended Period ended
31 March 31 March
2007 2006
# #
LOSS FOR THE FINANCIAL YEAR (2,643,389) (1,027,036)
TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE PERIOD (2,643,389) (1,027,036)
Prior year adjustment (100,603)
TOTAL GAINS AND LOSSES RECOGNISED SINCE LAST FINANCIAL STATEMENTS (2,743,992)
CONSOLIDATED BALANCE SHEET
As at 31 March 2007
As restated
31 March 31 March
2007 2006
# # # #
FIXED ASSETS
Intangible fixed assets 39,292 44,905
Tangible fixed assets 4,454,439 4,609,065
4,493,731 4,653,970
CURRENT ASSETS
Stocks 243,803 77,057
Debtors: amounts falling due after more 153,000 325,000
than one year
176,459 65,391
Debtors: amounts falling due within one 176,459 65,391
year
Cash at bank and in hand 11,957 186,658
585,219 654,106
CREDITORS: amounts falling due within one (1,412,922) (717,151)
year
NET CURRENT LIABILITIES (827,703) (63,045)
TOTAL ASSETS LESS CURRENT LIABILITIES 3,666,028 4,590,925
CREDITORS: amounts falling due after more (303,922) (500,000)
than one year
PROVISIONS FOR LIABILITIES
Other provisions 24,425 -
NET ASSETS 3,337,681 4,090,925
CAPITAL AND RESERVES
Called up share capital 732,993 638,279
Share premium account 6,223,876 4,562,329
Share option reserve 234,487 100,603
Profit and loss account (3,853,675) (1,210,286)
SHAREHOLDERS' FUNDS 3,337,681 4,090,925
COMPANY BALANCE SHEET
As at 31 March 2007
As restated
31 March 31 March
2007 2006
# # # #
FIXED ASSETS
Fixed asset investments 57,331 57,331
CURRENT ASSETS
Debtors: amounts falling due after more 6,941,773 5,194,351
than one year
Cash at bank and in hand 7,335 -
6,949,108 5,194,351
CREDITORS: amounts falling due within one - (1,504)
year
NET CURRENT ASSETS 6,949,108 5,192,847
TOTAL ASSETS LESS CURRENT LIABILITIES 7,006,439 5,250,178
CAPITAL AND RESERVES
Called up share capital 732,993 638,279
Share premium account 6,223,876 4,562,329
Other reserve 234,487 100,603
Profit and loss account (184,917) (51,033)
SHAREHOLDERS' FUNDS 7,006,439 5,250,178
COMPANY CASHFLOW STATEMENT
As at 31 March 2007
Year ended Period ended
31 March 31 March
2007 2006
# #
Net cash flow from operating activities (1,870,252) (939,035)
Returns on investments and servicing of finance (32,868) 16,187
Capital expenditure and financial investment (452,419) (3,153,071)
CASH OUTFLOW BEFORE FINANCING (2,355,539) (4,075,919)
Financing 1,677,831 2,438,379
DECREASE IN CASH IN THE PERIOD (677,708) (1,637,540)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT
For the year ended 31 March 2007
2007 2006
Note # #
Decrease in cash during the period 26 (677,708) (1,637,540)
Cash outflow/(inflow) from decrease/(increase) in debt and 26 78,431 (500,000)
lease financing
MOVEMENT IN NET DEBT IN THE PERIOD 26 (599,277) (2,137,540)
Net (debt)/funds at 1 April 2006 26 (313,342) 1,824,198
NET DEBT AT 31 MARCH 2007 26 (912,619) (313,342)
NOTES
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.
OPERATING LOSS
The operating loss is stated after charging:
2007 2006
# #
Amortisation of intangible fixed assets 5,613 5,613
Research and development costs 7,944 -
Depreciation of tangible fixed assets:
- owned by the group 432,568 999
Auditors remuneration (note 6) 43,284 15,000
Operating lease rentals
- plant and machinery 51,649 4,449
- land and buildings 306,000 88,393
Taxation
Factors affecting tax charge for the year:
The tax assessed for the year is lower than the standard rate of corporation tax
in the UK (30%). The differences are explained below:
Year ended Period ended
31 March 31 March
2007 2006
# #
Loss on ordinary activities before tax (2,643,389) (1,027,036)
Loss on ordinary activities multiplied by standard
rate of corporation tax in the UK of 30% (2006 - 30%) (793,017) (308,111)
Effects of:
Expenses not deductible for tax purposes 283 36,094
Ineligible depreciation 38,288 -
Capital allowances for the year (in excess)/less than depreciation (41,193) (84,230)
Unrelieved tax losses and other deductions arising during the period 795,639 356,247
Current tax charge for the year - -
LOSS PER SHARE
The calculation of the basic loss per share is based on a loss after tax of
#2,643,389 (2006: #1,027,036), and on the weighted average number of ordinary
shares in issue during the year of 17,284,301 (2006: 14,643,322).
The calculation of diluted loss per share, which shows the dilutive effect of
share options and warrants, has not been reflected in these financial statements
as the effect would be anti-dilutive.
After the balance sheet date 5,198,750 shares were issued. These have not been
taken into account in arriving at the loss per share figures disclosed.
STATUTORY ACCOUNTS
The financial information set out above does not constitute the Group's
statutory information for the year ended 31 March 2007, but is derived from
those accounts. Statutory accounts for the year will be delivered to the
Registrar of Companies on or before 31 October 2007.
The Company's auditors have reported on the full accounts and have accompanied
them with an unqualified report.
COPIES OF THE FINAL REPORT & ACCOUNTS
The annual report and accounts will be posted to all shareholders of the Company
and copies will be available on request from the Company's registered office, 53
Lafone Street, Shad Thames, London SE1 2LX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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