TIDMBAGR
RNS Number : 6035Q
Bagir Group Ltd
13 September 2017
The following replaces the announcement released on 13th Sep
2017 at 07.00 RNS Number 5654Q. In the 'Outlook' section, the
expected trouser production date should read mid-2018, not
mid-2019. All other information remains unchanged. The full amended
text appears below.
13 September 2017
Bagir Group Ltd.
("Bagir" or the "Company")
Interim results
for the six months ended 30 June 2017
Bagir (AIM: BAGR), a designer, creator and provider of
innovative tailoring, is pleased to announce its results for the
six months ended 30 June 2017.
H1 Highlights
-- Revenues of $28.1m for the first half of 2017, in line with
revised expectations (H1 2016 $33.5m).
-- EBITDA* and Adjusted EBITDA of $1.9m and $0.8m respectively
in the first half of 2017, compared with EBITDA of $0.8m in H1
2016
-- Operating income of $1.0m for the first half of 2017 ($(0.1)m
excluding the one-off capital gain, net of other expenses) compared
with $0.0m in H1 2016
-- Cash and cash equivalents at 30 June 2017 of $7.0m ($8.6 and
$4.0m at 31 December 2016 and 30 June 2016, respectively). The
reduction in cash is mainly attributable to the acquisition in
Ethiopia
-- Completed the strategic acquisition of the remaining 50%
shareholding in Nazareth Garments, Ethiopia. This competitive edge
site combines tariff free trade and low production costs with good
connectivity for onward distribution
-- New product development has been an area of strength with six
new concepts released in April including: The Transit Suit; City
Traveller; Pack Away; Shaper Pants; 0.755 Suit; and the Heater Body
Suit. Initial orders have already been taken for some of these
lines from new and existing customers
* 'EBITDA' is a non-IFRS measure that the Company uses to
measure its performance. It is defined as Earnings Before Interest,
Taxation, Depreciation and Amortisation and non-cash share based
compensation. The Adjusted EBITDA figure excludes $1.1m one-off
capital gain attributable to the acquisition in Ethiopia, net of
other expenses. The capital gain calculation is subject to final
measurement of asset valuation that is expected to be completed by
the annual audited report, but the Company does not expect any
material change to this figure.
Eran Itzhak, CEO of Bagir, said:
"These results show the Group's continued progress towards
establishing a core manufacturing base in Ethiopia coupled with the
sites in Vietnam and Egypt that enables the Company to compete
effectively for business from the world's leading retailers. The
acquisition of 100% ownership of our Ethiopian site was an
important step towards achieving this aim.
We continue to deliver on our reputation as an innovative
tailor, building upon our 50 year heritage servicing major
high-profile retailers with April's release of six new concepts
already securing orders from high-street brands in the UK and
Europe. Sales levels have been slightly slower than forecast but
the medium term prospects coupled with increased capacity in
Ethiopia remain very exciting."
For further information, please contact:
Bagir Group Ltd. via Novella Communications
Eran Itzhak, Chief Executive on:
Officer +44 (0) 20 3151 7008
Udi Cohen, Chief Financial
Officer
Tessa Laws, Non-Executive
Chairman
N+1 Singer
Alex Price +44 (0) 20 7496 3000
Novella
Tim Robertson
Toby Andrews +44 (0) 20 3151 7008
Chairman's statement
Introduction
Following on from the significant progress made in 2016, during
which the Company repaid the bank debt, reduced annual costs by
c.30% and created a stable platform, the Company has continued to
implement its restructuring programme to create internationally
competitive manufacturing bases to combine with the Company's
innovative tailoring capabilities.
The Group generated revenues of $28.1m and EBITDA of $1.9m
($0.8m excluding one-off capital gain attributable to the
acquisition in Ethiopia net of other expenses) compared with $0.8
in H1 2016.
Development of the new production lines at our facilities in
Vietnam Hanoi and Ethiopia in order to support competitive solution
orders has progressed, but is behind the original timetable, which
impacted the Company's ability to secure these orders. Progress has
been made on all fronts albeit slower than anticipated and the
current level of our order book is in line with the board's
expectations.
Bagir is a stable business and remains well placed. We remain
confident of our strategic plan and our ability to substantially
increase our customer base. Taking 100% control of our Ethiopian
site at the end of June was a significant step forward in achieving
this aim and creating a long-term competitive advantage for the
Company.
Financial review
Revenue for the six months ended 30 June 2017 was $28.1m. The
slight reduction in sales from the previous year was mainly in the
UK market as a result of a reduction in order volumes driven by the
Company's refusal to manufacture at non-profitable price levels.
Nevertheless, the Company still managed to achieve important client
wins during the period and secured orders from a number of
well-known customers in France, South Africa and Australia.
The gross margin for the six months ended 30 June 2017 was
16.3%, compared with 17.8% for the first half of 2016. This
decrease is primarily attributed to the reduction in revenues which
in turn reduces our economies of scale and to the sales mix
itself.
Selling and marketing expenses decreased to $2.6m in H1 2017 (H1
2016: $3.6m) and development costs decreased to $0.4m in H1 2017
(H1 2016: $1.0m), reflecting the lower operating costs following
the recovery plan that the Company implemented during 2016. The
Company is planning achieving further cost savings and a review is
underway to identify opportunities to improve efficiencies across
the business.
EBITDA for the first half of 2017 was in line with our revised
expectations, with EBITDA of $1.9m ($0.8m excluding one-off capital
gain attributable to the acquisition in Ethiopia net of other
expenses) compared to $0.8 in H1 2016.
The operating income for the first half of 2017 amounted to
$1.0m ($(0.1)m excluding the one-off capital gain, net of other
expenses) compared with $0.0m in H1 2016.
Cash and cash equivalents at 30 June 2017 amounted to $7.0m (H1
2016 and 31 December 2016 $4.0m and $8.6m respectively) with the
reduction in cash being mainly as a result of the investment in the
acquisition of the remaining 50% shareholding in Ethiopia.
Operational review
The business is now focused on three core manufacturing
geographies in Vietnam, Egypt and Ethiopia. A core part of our
strategy being to streamline the Company's manufacturing base
whilst also improving it. This has been achieved. The combination
of the three bases provide strong competitive advantages as they
enable us to benefit from duty free export status for sales to both
the EU and US, highly competitive production costs and local
governmental support for the textile industry.
In June 2017, the Company completed the strategic acquisition of
the remaining 50% shareholding in Nazareth Garments, the joint
venture owner of its manufacturing site in Nazareth, Ethiopia, for
a total consideration of US$1.9 million. Our Ethiopian site is a
key asset for the business as it has the potential to be a
significant catalyst for future growth. Ethiopia offers tariff free
trade and low production costs combined with good connectivity for
onward distribution. Completing the acquisition took slightly
longer than expected which had a knock-on effect on our operational
plans, however, as 100% owners Bagir has full control over the
company and the site is making good progress towards expanding its
capacity.
In Vietnam, the readiness of production lines in Hanoi with a
new subcontractor took longer than anticipated but progress is
being made and this site too is expected to be able to provide a
competitive solution for our UK, Europe and US markets.
Innovation and quality remains at the heart of all Company
activity. Bagir is intensely proud of its track record created over
the last 50 years of servicing leading western retailers. New
product development has been an area of strength with the Company
developing platforms to support made-to-measure and personalized
garments. In April, six new concepts were released including: The
Transit Suit; City Traveller; Pack Away; Shaper Pants; 0.755 Suit
and the Heater Body Suit. Initial orders have already been taken
for some of these lines from major high-street retailers in the UK
and in Europe.
Outlook
Interest in Bagir's products and manufacturing capabilities from
international retailers is high, in particular, in the potential
output from our Ethiopia site. We are progressing this site and we
remain confident of its ability to act as a catalyst for the Group
to win high volume sales orders. We expect that by mid-2018 the
site will be able to produce approximately 3,000 trousers per day.
At this level and at the price point together with the tariff free
advantages it can offer we believe that this will be one of the
most attractive places in the world for manufacturing of tailored
goods. It does take time to establish but we are following a clear
plan and are confident of achieving our goals.
As we look towards the end of FY17 and beyond into FY18, we are
seeing more requests for trial orders and have hosted site
inspection visits from international retailers at our Ethiopian
facility. This leads us to being confident in our ability to secure
commercial orders from these retailers in the short-to-medium
term.
Innovation remains core to Bagir's future strategy and we will
be launching further new products aimed at not just cementing our
product development reputation and relationships with existing
international retailers but also at attracting new ones.
Over the last 18 months we have made significant cost reductions
and, whilst this process is now largely complete, there remain one
or two areas within which we hope to be able to make further
savings in order to drive operational efficiencies. At the same
time, we continue to look for synergistic acquisition targets or
potential joint venture partners.
Our current order book for FY17 and FY18 is underpinned by long
term clients and we are working on expanding upon this with our
pipeline of good new business opportunities. We are on track to
meet market forecasts although given that our financial year end
falls in the middle of our peak manufacturing period, as is always
the case a small percentage of orders may end up being manufactured
in FY18.
Tessa Laws
Chairman
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
------------------------ -----------
Unaudited Audited
------------------------ -----------
2017 2016 2016
---------------- ------ -----------
U.S. dollars in thousands
-------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 7,050 3,979 8,624
Short-term deposit 132 475 81
Trade receivables 4,728 5,502 3,972
Other receivables 2,414 2,813 2,288
Inventories 5,219 5,130 5,337
---------------- ------ -----------
19,543 17,899 20,302
---------------- ------ -----------
NON-CURRENT ASSETS:
Investment in a joint venture - 1,875 1,580
Property, plant and equipment 8,560 673 668
Goodwill 5,689 5,689 5,689
Other intangible assets 3,149 4,545 3,873
Deferred taxes 360 328 340
---------------- ------ -----------
17,758 13,110 12,150
---------------- ------ -----------
37,301 31,009 32,452
================ ====== ===========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
------------------ ------------
Unaudited Audited
------------------ ------------
2017 2016 2016
-------- -------- ------------
U.S. dollars in thousands
--------------------------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Credit from banks, current
maturities of long-term loans
and other short-term credit 3,234 608 -
Trade payables 4,832 3,950 3,848
Other payables 4,474 3,983 4,618
12,540 8,541 8,466
-------- -------- ------------
NON-CURRENT LIABILITIES:
Loans from banks - 20,397 -
Employee benefit liabilities 270 410 210
Payable for acquisition of
subsidiary 2,382 2,790 2,594
Deferred taxes 1,379 - -
-------- -------- ------------
4,031 23,597 2,804
-------- -------- ------------
EQUITY:
Share capital 3,284 576 3,284
Share premium 86,306 78,380 86,306
Capital reserve for share-based
payment transactions 1,702 1,441 1,580
Capital reserve for transactions
with shareholders 10,165 10,165 10,165
Adjustments arising from translation
of foreign operations (8,895) (8,895) (8,895)
Accumulated deficit (73,778) (84,742) (73,204)
-------- -------- ------------
EQUITY ATRIBUTABLE TO EQUITY
HOLDERS OF THE COMPANY 18,784 (3,075) 19,236
Non-controlling interests 1,946 1,946 1,946
-------- -------- ------------
Total equity (deficiency) 20,730 (1,129) 21,182
-------- -------- ------------
37,301 31,009 32,452
======== ======== ============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
12 September
2017
-------------------- ------------- ---------------- -----------------
Date of approval Tessa Rebecca Eran Itzhak Yehuda Cohen
of the Laws
financial statements Chairman of CEO and Director CFO, Deputy
the Board CEO and Director
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
------------------ ------------
Unaudited Audited
------------------ ------------
2017 2016 2016
-------- -------- ------------
U.S. dollars in thousands
--------------------------------
Revenues from sales 28,093 33,503 64,071
Cost of sales 23,516 27,543 53,541
-------- -------- ------------
Gross profit 4,577 5,960 10,530
Selling and marketing expenses 2,644 3,570 6,172
General and administrative
expenses 1,688 1,449 3,050
Development costs 427 962 1,652
Other income (1,392) - -
Other expenses 250 6 2
-------- -------- ------------
Operating income (loss) 960 (27) (346)
Finance income - - 13,305
Finance expenses (1,054) (1,468) (2,676)
Company's share of losses of
a joint venture (184) (119) (414)
Income (loss) before taxes
on income (278) (1,614) 9,869
Tax benefit (expenses) (296) 24 32
-------- -------- ------------
Net income (loss) for the period
(all attributable to the
equity holders of the company) (574) (1,590) 9,901
-------- -------- ------------
Other comprehensive loss:
Items not to be reclassified
to profit or loss in subsequent
periods:
Remeasurment gain on defined
benefit plans - - 47
-------- -------- ------------
Total other comprehensive income - - 47
-------- -------- ------------
Total comprehensive income
(loss) (574) (1,590) 9,948
======== ======== ============
Net income (loss) attributable
to equity holders of the
Company (574) (1,590) 9,901
======== ======== ============
Total comprehensive income
(loss) attributable to equity
holders of the Company (574) (1,590) 9,948
======== ======== ============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME (Cont.)
Six months ended Year ended
30 June 31 December
------------------ ------------
Unaudited Audited
------------------ ------------
2017 2016 2016
--------- ------- ------------
U.S. dollars in thousands
(except share and per
share data)
--------------------------------
Earnings (loss) per share attributable
to equity holders of the Company
(in dollars)
Basic and diluted Earnings
(loss) per share (0.002) (0.03) 0.11
========= ======= ============
Weighted average number of
Ordinary shares for basic and
diluted earnings (loss) per
share (in thousands) 310,543 50,428 90,231
========= ======= ============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
------------------------------------------------------------------------------
Capital Capital Adjustments
reserve reserve arising
for for from
share-based transactions translation
Share Share payment with of foreign Accumulated Non-controlling Total
capital premium transactions shareholders operations deficit Total interests equity
------- ------- ------------ ------------ ----------- ----------- ------ --------------- ------
Unaudited
-------------------------------------------------------------------------------------------------------
U.S. dollars in thousands
-------------------------------------------------------------------------------------------------------
Balance at 1
January 2017 3,284 86,306 1,580 10,165 (8,895) (73,204) 19,236 1,946 21,182
------- ------- ------------ ------------ ----------- ----------- ------ --------------- ------
Total loss and
comprehensive
loss - - - - - (574) (574) - (574)
Cost of
share-based
payment - - 122 - - - 122 - 122
------- ------- ------------ ------------ ----------- ----------- ------ --------------- ------
Balance at 30
June 2017 3,284 86,306 1,702 10,165 (8,895) (73,778) 18,784 1,946 20,730
======= ======= ============ ============ =========== =========== ====== =============== ======
Attributable to equity holders of the Company
-------------------------------------------------------------------------------
Capital Capital Adjustments
reserve reserve arising
for for from
share-based transactions translation Total
Share Share payment with of foreign Accumulated Non-controlling equity
capital premium transactions shareholders operations deficit Total interests (deficiency)
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------------
Unaudited
--------------------------------------------------------------------------------------------------------------
U.S. dollars in thousands
--------------------------------------------------------------------------------------------------------------
Balance at 1
January 2016 576 78,342 1,438 10,165 (8,895) (83,152) (1,526) 1,946 420
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------------
Total loss and
comprehensive
loss - - (1,590) (1,590) - (1,590)
Exercise of
options *) 38 (35) 3 3
Cost of
share-based
payment - - 38 - - - 38 - 38
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------------
Balance at 30
June 2016 576 78,380 1,441 10,165 (8,895) (84,742) (3,075) 1,946 (1,129)
======= ======= ============ ============ =========== =========== ======= =============== ============
*) Less than $1 thousand.
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
-------------------------------------------------------------------------------
Capital Capital Adjustments
reserve reserve arising
for for from
share-based transactions translation
Share Share payment with of foreign Accumulated Non-controlling Total
capital premium transactions shareholders operations deficit Total interests equity
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------
Audited
--------------------------------------------------------------------------------------------------------
U.S. dollars in thousands
--------------------------------------------------------------------------------------------------------
Balance at 1
January 2016 576 78,342 1,438 10,165 (8,895) (83,152) (1,526) 1,946 420
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------
Profit for the
year - - - - - 9,901 9,901 - 9,901
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------
Other
comprehensive
income:
Remeasurement
gain on
defined
benefit plans - - - - - 47 47 - 47
------- ------- ------------ ------------ ----------- ----------- ------- --------------- ------
Total
comprehensive
income - - - - - 9,948 9,948 - 9,948
Exercise of
options *) 38 (35) 3 3
Cost of
share-based
payment - - 177 - - - 177 - 177
Issue of share
capital
(net of issue
expenses
of $0.56 million) 2,494 7,256 - - - - 9,750 - 9,750
Conversion of
loans from
Banks into shares 214 670 - - - - 884 - 884
Balance at 31
December
2016 3,284 86,306 1,580 10,165 (8,895) (73,204) 19,236 1,946 21,182
======= ======= ============ ============ =========== =========== ======= =============== ======
*) Less than $1 thousands.
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
------------------- ------------
Unaudited Audited
------------------- ------------
2017 2016 2016
------- ---------- ------------
U.S. dollars in thousands
---------------------------------
Cash flows from operating
activities:
Profit (loss) (574) (1,590) 9,901
------- ---------- ------------
Adjustments to reconcile loss
to net cash provided by (used
in) operating activities:
Gain from remeasurement of
previous investment in joint
venture (1,223) - -
Bargain purchase gain (95) - -
Company's share of losses
of a joint venture 184 119 414
Depreciation and amortization 855 851 1,738
Change in employee benefit
liabilities 60 (29) (182)
Cost of share-based payment 122 38 177
Loss from sale of property,
plant and equipment - 19 20
Finance expenses, net 451 927*) 1,773*)
Deferred taxes, net (20) (24) (36)
Income tax expense, net 316 - 4
Gain on extinguishment of
debt - - (13,305)
650 1,901 (9,397)
------- ---------- ------------
Changes in asset and liability
items:
Decrease (increase) in trade
receivables (355) (1,074)*) 818*)
Increase in other receivables (165) (759) (319)
Decrease in inventories 162 3,196 2,989
Increase (decrease) in trade
payables 792 (1,466) (1,568)
Decrease in other payables (693) (1,104) (516)
------- ---------- ------------
(259) (1,207) 1,404
------- ---------- ------------
Cash paid during the period
for:
(1,033) (1,968)
Interest paid (590) *) *)
Taxes paid (316) - -
(1,033) (1,968)
(906) *) *)
------- ---------- ------------
Net cash used in operating
activities (1,089) (1,929) (60)
------- ---------- ------------
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
*) Reclassified.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
------------------ ------------
Unaudited Audited
------------------ ------------
2017 2016 2016
-------- -------- ------------
U.S. dollars in thousands
--------------------------------
Cash flows from investing activities:
Acquisition of initially consolidated
subsidiary (a) (1,811) - -
Investment in a joint venture (1,169) - -
Purchase of property, plant
and equipment (273) (207) (375)
Additions to intangible assets - - (43)
Purchase of short-term deposits,
net (51) (11) (5)
Release of pledged bank deposits - - 387
Net cash used in investing
activities (3,304) (218) (36)
-------- -------- ------------
Cash flows from financing activities:
Issue of shares, net of expenses - - 9,750
Receipt of short-term credit
from others 3,219 - -
Exercise of options - 3 3
Payment of long-term liabilities
from banks - (232) (6,988)
Repayment to joint venture - (708) (708)
Payment of liability for acquisition
of subsidiary (400) (400) (800)
Net cash provided by (used
in) financing activities 2,819 (1,337) 1,257
-------- -------- ------------
Increase (decrease) in cash
and cash equivalents (1,574) (3,484) 1,161
Cash and cash equivalents at
the beginning of the period 8,624 7,463 7,463
-------- -------- ------------
Cash and cash equivalents at
the end of the period 7,050 3,979 8,624
======== ======== ============
a) Acquisition of initially consolidated subsidiary
The subsidiary's assets and liabilities at date of
acquisition:
Working capital (excluding (1,893) - -
cash and cash equivalents)
Property, plant and equipment 7,750 - -
Deferred taxes (1,379) - -
Gain from remeasurement of (1,223) - -
investment in company previously
accounted for at equity
Bargain purchase gain (95) - -
Investment in company previously (1,349) - -
accounted for at equity
--------
1,811 - -
========
b) Significant non-cash transactions:
Waiver of receivable from partner
in joint venture (see Note
3) 672 - -
=== ===
Issuance of shares upon extinguishment
of loans from Banks into shares - -844
=== ===
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
NOTE 1:- GENERAL
a. Company description:
Bagir Group Ltd. ("the Company") is registered in Israel. The
Company and its subsidiary ("the Group") specialize in the
manufacturing and marketing of men's and women's tailored fashion.
The Company's Headquarters are located in Kiryat Gat, Israel. The
Group's products are manufactured by subsidiaries in Egypt and
Ethiopia and subcontractors. The Group's products are marketed in
U.S., Europe (mainly in the U.K.) and in other countries. As for
operating segments, see Note 4.
b. The interim condensed consolidated financial statements for
the six months ended 30 June 2017 were approved for issue in
accordance with a resolution of the Board of Directors on 12
September 2017.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
a. Basis of preparation of the interim consolidated financial statements:
The interim condensed consolidated financial statements for the
six months ended 30 June 2017 have been prepared in accordance with
IAS 34, Interim Financial Reporting, as adopted by the European
Union. The interim condensed consolidated financial statements do
not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with
the Group's annual consolidated financial statements as at 31
December 2016.
The accounting policies applied in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the Group's consolidated
annual financial statements for the year ended 31 December
2016.
b. Assessment of going concern:
The Board of Directors has considered the principal risks and
uncertainties of the business, the trading forecasts prepared by
management covering a twelve month period following the approval of
the financial statements and the resources available to meet the
Group's obligations for the aforementioned period. After taking all
of the above factors into consideration, the Board of Directors has
concluded that it is appropriate to apply the going concern basis
of accounting in preparing the financial statements.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3:- BUSINESS COMBINATION
The Company held 50% of the shares of Nazareth Garments ("NGSC")
which, up to the acquisition of the remaining 50% and the beginning
of consolidation, was treated as an investment in a joint
venture.
In January 2017, the Company signed an agreement to acquire the
remaining 50% of the joint venture. The acquisition was conditional
on the fulfillment of certain procedural matters. In June 2017, the
Company completed the acquisition for a total consideration of $2.6
million, $1.9 million in cash and $0.7 million for waiver of
receivable from the partner in the joint venture.
As of 30 June 2017, the Company has recognized the fair value of
the assets acquired and liabilities assumed in the business
combination according to a provisional measurement. As of the date
of the approval of the interim financial statements, a final
valuation by an external valuation specialist of the identifiable
assets acquired and liabilities assumed has not been completed. The
identification and measurement of the acquired assets and
liabilities may be adjusted within the measurement period (up to 12
months from the acquisition date).
The provisional fair values of the identifiable assets and
liabilities of NGSC on the acquisition date:
U.S. dollars
in thousands
-----------------
Cash and cash equivalents 89
Trade receivables 45
Other receivables 22
Inventories 44
Property, plant and equipment, net 7,750
Trade and other payables (1,332)
Deferred tax liability (1,379)
-----------------
Total fair value of net identifiable
assets 5,239
Gain from remeasurement to fair
value of previous investment in
the
joint venture (1,223)
Bargain purchase gain (95)
Carrying amount of investment in
the joint venture (1,349)
Purchase price 2,572
=================
The deferred tax liability comprises the tax effect of the fair
value adjustments of the identifiable assets and liabilities.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3:- BUSINESS COMBINATIONS (Cont.)
Purchase consideration:
U.S. dollars
in thousands
-------------
Cash paid 1,900
Waiver of receivable due from the
partner in the joint venture 672
Total consideration 2,572
=============
Acquisition costs that are directly attributable to the
transaction of approximately $ 59 thousand were carried as an
expense to other expenses, net.
Cash flow on the acquisition:
C U.S. dollars
in thousands
-------------
Cash and cash equivalents acquired 89
Cash paid (1,900)
-------------
Net cash outflow (1,811)
=============
NOTE 4:- OPERATING SEGMENTS
a. General:
The Group's activity is the manufacturing and marketing of men's
and women's tailored fashion (mainly men's).
The operating segments are identified on the basis of
information that is reviewed by the chief operating decision maker
("CODM") to make decisions about resources to be allocated and
assess its performance. The Group's products are primarily marketed
to two geographical areas: U.S. and Europe and, accordingly, the
Company has two geographical segments. The
Company's activities in Europe are concentrated primarily in the
U.K.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATMENTS
NOTE 4:- OPERATING SEGMENTS (Cont.)
b. Financial information on operating segments:
Europe
(mainly
the
U.S. U.K.) Other Total
------ -------- ----- -------
Unaudited
--------------------------------
U.S. dollars in thousands
Six months ended 30
June 2017 :
Total revenues from
external customers 21,839 5,638 616 28,093
Segment profit (loss) 1,255 (1,606) 173 (178)
====== ======== ===== =======
Unallocated income,
net 954
Finance expenses, net (1,054)
-------
Loss before income
taxes (278)
=======
Europe
(mainly
the
U.S. U.K.) Other Total
------ -------- ----- -------
Unaudited
--------------------------------
U.S. dollars in thousands
Six months ended 30
June 2016 :
Total revenues from
external customers 22,095 10,119 1,289 33,503
Segment profit (loss) 1,578 (1,878) 273 (27)
====== ======== ===== =======
Unallocated expenses,
net (119)
Finance expenses, net (1,468)
-------
Loss before income
taxes (1,614)
=======
Europe
(mainly
the
U.S. U.K.) Other Total
------ -------- ----- ----------
Audited
-----------------------------------
U.S. dollars in thousands
-----------------------------------
Year ended 31 December
2016:
Total revenues from
external customers 45,064 17,000 2,007 64,071
====== ======== ===== ==========
Segment profit (loss) 1,998 (2,690) 346 (346)
====== ======== ===== ==========
Unallocated expenses,
net (414)
Finance income, net 10,629
----------
Income before income
taxes 9,869
==========
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UOVNRBRAKARR
(END) Dow Jones Newswires
September 13, 2017 02:55 ET (06:55 GMT)
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