TIDMMUBL
RNS Number : 3626L
MBL Group PLC
24 December 2018
24 December 2018
MBL GROUP PLC
(AIM: MUBL)
("MBL" or the "Group" or the "Company")
Unaudited Interim Results for the Six Months Ended 30 September
2018 and Shareholder Update
The Board of MBL Group plc announces its unaudited interim
results for the six months ended 30 September 2018.
Key points:
-- Group revenue, including discontinued operations, decreased
by 81.3% to GBP1.19 million (2017: GBP6.38 million);
-- Group loss before taxation GBP0.7 million (2017: GBP0.7 million);
-- Net cash of GBP1.0 million (2017: GBP1.4 million) and the Group remains debt free;
-- No dividend is proposed;
-- The Garden and Home division was sold in March 2018 for GBP0.8 million in cash;
-- The Home Entertainment division entered administration on 15 June 2018;
-- The Company became an AIM Rule 15 Cash Shell under the AIM
Rules for Companies from 15 June 2018;
-- Material claim against the Company, referred to in the Annual
Report and Accounts to 31 March 2018, remains unresolved; and
-- The accounts have been prepared on a non-going concern basis,
as the Directors do not expect the Group to continue trading within
the next twelve months.
Anton Lane, Chairman of MBL, commented:
"The financial year ending 31 March 2018 saw the Company
undergoing further board changes, incur costs of an AIM fine and
disciplinary notice received in August 2018, as well as complete
the strategic review and commence a sales process to dispose of the
Group's trading subsidiaries. In addition, the Board faced and
undertook two further investigations at the request of certain
shareholders. The Group has faced considerable challenges for a
prolonged period which inevitably affected performance. There have
been several one-off exceptional costs that the Group incurred in
connection with the above changes and challenges that resulted in a
loss at Group level. On behalf of the Board, I take this further
opportunity to draw to shareholders attention the desire to explore
opportunities for future Group activities and/or the return of
capital to shareholders.
"As set out in my Chairman's statement to the Annual Report, the
Board has sought to explore opportunities for future Group
activities and/or the return of capital to shareholders.
"The Board intends to advance options for a possible return of
capital to the shareholders alongside considering possible
opportunities of a reverse takeover. Unless a reverse takeover is
completed within six months of the shares having been suspended
under AIM Rule 15 (17 December 2018), the admission of the
Company's Ordinary Shares to trading on AIM will be cancelled.
"The material litigation noted below will very likely disrupt a
normal timetable for the above strategies and it may not prove
possible to conclude that strategy before June 2019.
"To further these strategies and in particular to provide the
Board with the option to advance proposals for the payment of any
dividend or return of capital to shareholders, if approved, the
options the Board propose to consider include:
-- to seek a suitable candidate for a reverse takeover that may
permit a realisation of a premium on the cash value of shares in
the Company and to advance an enhanced return of capital or cash to
the shareholders; and/or,
-- seeking approval of the shareholders for a reduction of share
capital (and then approval of the court) to establish a level of
distributable profits that would permit the board to review whether
and if considered appropriate, in what terms to advance options for
a return of cash to shareholders by way of income as a dividend or
as a purchase of own shares; and/or
-- seeking approval of a (solvent) members voluntary liquidation
to permit a return of capital to the shareholders.
"The Board will consult with the shareholders on the above
strategic options to gain a broad consensus before significant
costs are incurred to take a particular course of action."
Material Litigation
Proceedings have been issued against the Company by
Administrators of a former landlord seeking payment of sums claimed
to be due under an agreement dated 2011 as referenced in note 18 to
the March 2018 Financial Statements. The claim is made in a sum of
approximately GBP600,000 inclusive of interest, plus costs. The
Company has taken advice and disputes the claims. The claim
proceeds to a case management hearing in March 2019 and unless
resolved by earlier court determination or agreement, will proceed
to a trial thereafter (not before Autumn 2019).
A copy of the Unaudited Interim Results will be available on the
Company's website - www.mblgroup.co.uk
For further information please contact:
MBL Group plc Tel: 01454 777 831
Anton Lane, Chairman
SPARK Advisory Partners Limited Tel: 0113 370 8970
Mark Brady
SI Capital Limited Tel: 01483 413500
Nick Emerson
CHAIRMAN'S STATEMENT
The Group consisted of two divisions that had historically
performed well. However, in 2016 the senior management team
employment ceased. The divisions were the subject of a strategic
review following a General Meeting on 14 October 2016. The Board
consisting of Peter Palframan and Tim Jackson Smith continued with
the strategic review and sales process although and despite in
receipt of offers, were unable to secure a disposal of either
trading divisions. An update to the market on 14 August 2017,
commented on the difficulties with the sales process. The Company
was also the subject of a public censure after it was latterly
determined that the Company had breached AIM Rule 10, 11, and 31
leading up to the 2017 AGM, as detailed in the notice released
through RNS dated 13 August 2018.
The current Board continued the process and sold the Garden
Homes Division on 15 March 2018.
The Group had also been looking to dispose of the Home
Entertainment division for some time. Whilst pursuing the strategy,
it has become clear to the Board that the process would take longer
than first envisaged. Trading worsened and the Group had to
consider whether to inject further capital. Insolvency and legal
advice was taken and it was decided to appoint administrators to
Windsong International Limited. The decision was made to preserve
the Company's cash reserves and not erode them further by providing
further support to Windsong. On 15 June 2018 the Board announced
that administrators were appointed to Windsong International
Limited.
Operational Review
Home Entertainment
30 September 2018 30 September
GBP'000 2017
GBP'000
------------------------ ----------------- ------------
Revenue 1,152 3,300
======================== ================= ============
Operating loss before
exceptional items (61) (9)
------------------------ ----------------- ------------
The Group's Home Entertainment division was one of the UK's
leading suppliers of music and entertainment
products to online and physical retailers around the world.
Over the past few years, due to increased competition in the
market and trading challenges, revenues had fallen to GBP1.1
million for the period until administration (2017: GBP3.3 million).
Reduced performance therefore led to an operating loss for the
period of GBP61,000 (2017: GBP44,000). Gross profit margins were
lower than the same period last year at 6.5% (2017: 12.2%).
The division was placed into administration on 15 June 2018 and
has been treated as a discontinued operation.
Garden & Home
30 September 2018 30 September 2017
GBP'000 GBP'000
-------------------------- ----------------- -----------------
Revenue - 3,064
========================== ================= =================
Operating profit before
exceptional items - 203
-------------------------- ----------------- -----------------
Our Garden & Home division specialised in the online and
mail order sale of garden bird food, aquatics supplies and
associated wildlife products.
The division was sold in March 2018 and has been treated as a
discontinued operation. No trading activity took place in the
current period. In the prior year sales were GBP3.1 million and
operating profit before exceptional items for the period was
GBP203,000.
Financial Review
The Financial Statements have been prepared to separately
present the financial performance of the Group's operations
including the prior year comparatives. The Segmental Analysis in
the Notes to the Financial Statements presents the Group's
consolidated revenue streams.
Overall, Group revenue for the year decreased by 81% to GBP1.2
million (2017: GBP6.4 million). Group gross margins decreased to
9.35% (2017: 25.3%).
The Group loss for the period before taxation was GBP0.7million
(2017: GBP0.7 million) and this has been caused by the disposal of
the Home Entertainment trading division and a series of
exceptional, one-off costs in the period that have been incurred by
the Company as part of the recent changes that have been made.
The Group is a relatively small business and as such it is
possible for investment in future performance or operating
challenges to have a disproportionate effect on our short term
financial performance. We are also sensitive to the costs of
maintaining an AIM listing and these costs have a sizeable impact
on the costs of administering the Group.
Cash flow, working capital and borrowing facilities
The Group ended the period with cash balances of GBP1.0 million
(2017: GBP1.4 million). The net cash inflow from operating
activities was GBP0.7million (2017: GBP0.2 million outflow). The
Group remains debt free.
Dividends
The Board is not recommending the payment of a dividend.
Future Strategy
The Company became a Rule 15 Cash Shell under Rule 15 of the AIM
Rules for Companies from 15 June 2018. Within six months of
becoming an AIM Rule 15 cash shell, the Company must make an
acquisition or acquisitions which constitute(s) a reverse takeover
under Rule 14 of the AIM Rules for Companies. In the event that the
Company did not complete a reverse takeover under AIM Rule 14
within six months of becoming a cash shell, the Exchange will
suspend trading in the Company's ordinary shares pursuant to AIM
Rule 40; this occurred on 17 December 2018. If, within a further
six months from suspension of trading, the Company has not
completed a reverse takeover, admission to trading on AIM will be
cancelled. The Board intends to seek further guidance from
shareholders on desired future Group activities and the return of
capital to shareholders.
The Group currently has no trading activity since an
Administrator was appointed to Windsong International Limited on 15
June 2018. As at the time of writing, Air Music and Media Copyright
Limited remains as the only subsidiary within MBL Group, generating
GBP36,000 of residual revenue in the period from digital catalogue
sales. This is also included in discontinued operations as this has
ceased to trade, and as the sole shareholder, the Company approved
a resolution to place Air Music Media Copyright Limited into
voluntary liquidation with effect from 24 December 2018.
Anton Lane
Chairman
24 December 2018
Consolidated Statement of Comprehensive Income
For the period ended 30 September 2018
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September
2018 2017 2018
Note GBP'000 GBP'000 GBP'000
(restated)
Continuing operations
Administrative expenses -
normal (152) (148) (321)
- exceptional (117) (417) (712)
Operating (loss)/profit (269) (565) (1,033)
Finance income - - 1
Finance Expense - - -
-------------- -------------- ------------
(Loss)/profit before tax (269) (565) (1,032)
Taxation 5 - - -
-------------- -------------- ------------
(Loss)/profit from continued
activities (269) (565) (1,032)
(Loss)/profit from discontinued
activities (440) (176) (467)
-------------- -------------- ------------
Total comprehensive (expense)/income
for the period (709) (741) (1,499)
-------------- -------------- ------------
There are no items other than those stated above that would comprise
comprehensive income. All the items above are attributable to equity
holders of the Company. Continuing operations comprise the parent
company only. All other activities of the group are included within
discontinued operations. In accordance with IFRS 5, the comparative
profit and loss account has been restated so that discontinued
operations include those activities classified as discontinued
in the current year.
Earnings per share: Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September
2018 2017 2018
Note pence pence pence
Basic and diluted loss per
share 6 (4.1) (4.3) (8.7)
Basic and diluted loss per
share
(continuing) 6 (1.6) (3.3) (6.0)
Basic and diluted loss per
share
(discontinuing) 6 (2.5) (1.0) (2.7)
Consolidated Statement of Financial Position
As at 30 September 2018
Unaudited Unaudited Audited at
at at 31 March
30 September 30 September
2018 2017 2018
Note GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment - 179 -
Intangible assets - 140 -
Deferred tax assets - 53 -
Total non-current assets - 372 -
-------------- -------------- -----------
Current assets
Inventories - 747 -
Trade and other receivables 48 1,468 847
Cash and cash equivalents 1,010 1,354 360
-------------- -------------- -----------
1,058 3,569 1,207
Assets held for disposal - - 1,596
-------------- -------------- -----------
Total current assets 1,058 3,569 2,803
-------------- -------------- -----------
Current liabilities
Trade and other payables (81) (1,181) (374)
Provisions 7 (472) (788) (472)
-------------- -------------- -----------
(553) (1,969) (846)
Liabilities held for disposal - - (743)
-------------- -------------- -----------
Total current liabilities (553) (1,969) (1,589)
-------------- -------------- -----------
Net assets 505 1,972 1,214
-------------- -------------- -----------
Equity attributable to equity
holders of the parent
Share capital 1,297 1,297 1,297
Merger reserve - (2,800) -
Retained earnings (792) 3,475 (83)
-------------- -------------- -----------
Total equity 505 1,972 1,214
-------------- -------------- -----------
Consolidated Statement of Changes in Equity
For the period ended 30 September 2018
Share Merger Retained Total
capital reserve earnings
GBP000 GBP000 GBP000 GBP000
At 1 April 2017 1,297 (2,800) 4,216 2,713
Total comprehensive expense
for the period - - (741) (741)
-------- --------- --------- -------
At 30 September 2017 1,297 (2,800) 3,475 1,972
======== ========= ========= =======
Transfers - 2,800 (2,800) -
Total comprehensive expense
for the period - - (758) (758)
-------- --------- --------- -------
At 31 March 2018 1,297 - (83) 1,214
======== ========= ========= =======
Total comprehensive expense
for the period - - (709) (709)
-------- --------- --------- -------
At 30 September 2018 1,297 - (792) 505
======== ========= ========= =======
Consolidated Statement of Cash Flows
For the period ended 30 September 2018
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September
2018 2017 2018
Note GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss for the period (709) (741) (1,499)
Adjustments for:
Depreciation - 31 67
Loss on disposal of subsidiary 415 - 37
Financial income - - (1)
Financial expense - - -
Taxation - 35 11
-------------- -------------- ------------
(294) (675) (1,385)
Decrease/(increase) in
inventories - (44) 319
Decrease/(increase) in
trade and other receivables 799 214 1,279
(Decrease)/increase in
trade and other payables (293) 235 (380)
Decrease/(increase) in
assets/liabilities held
for sale 511 - (853)
-------------- -------------- ------------
Net cash flow from operating
activities 723 (270) (1,020)
-------------- -------------- ------------
Cash flow from investing
activities
Interest received - 1 1
Acquisition of property,
plant and equipment - (3) (4)
Cash leaving group on disposal
of subsidiaries (73) - (243)
Net cash flow from investing
activities (73) (2) (246)
-------------- -------------- ------------
Cash flows from financing
activities
Interest paid - - -
Net cash flow from financing - - -
activities
-------------- -------------- ------------
Net (decrease)/increase
in cash and cash equivalents 650 (272) (1,266)
Cash and cash equivalents
at 1 April 360 1,626 1,626
Cash and cash equivalents
at end of period 1,010 1,354 360
Notes
1. Basis of preparation
MBL Group Plc (the 'Company') is a company incorporated and
domiciled in the United Kingdom. The half- year financial report
for the 6 month period to 30 September 2018 represents that of the
Company and its subsidiaries (together referred to as the
'Group').
This half-year financial report is an interim management report
as required by Rule 18 of the AIM Rules for Companies and was
authorised for issue by the Board of Directors on 24 December
2018.
The half-year financial report is prepared in accordance with
the EU endorsed standard IAS 34 'Interim Financial Reporting'. The
comparative figures for the year ended 31 March 2018 are not the
Group's statutory accounts for that financial year. Those accounts
have been reported on by the Group's Auditor and delivered to the
Registrar of Companies. The Report of the Auditor was:
(i) unqualified;
(ii) included an 'Emphasis of Matter' paragraph, drawing
attention to the fact the financial statements were prepared on the
basis that neither the group nor the company is a going concern,
without modifying their opinion; and
(iii) did not contain a statement under section 498 of the Companies Act 2006.
The information contained in the half-year financial report for
the 6 month period to 30 September 2018 and 30 September 2017 is
unaudited and should be read in conjunction with the annual
financial statements for the year ended 31 March 2018, which have
been prepared in accordance with the IFRS adopted by the European
Union.
As required by AIM Rule 18, the half-year financial report has
been prepared and presented in a form consistent with that which
will be adopted in the preparation of the Group's annual report and
accounts for the year ended 31 March 2019.
The Directors have indicated the intention to consult with
shareholders on the future of the Group although currently the
Directors do not envisage the Group will continue to trade for 12
months. Accordingly, these interim results have been prepared on a
non-going concern basis.
The consolidated financial statements of the Group for the year
ended 31 March 2018 are available upon request from the Company's
registered office at MBL Group plc, Edge House, Unit B1, Vantage
Office Park, Old Gloucester Road, Bristol, BS16 1RS.
2. Going concern
The Directors have assessed the future trading position for the
Group and have determined that it is not a going concern on the
basis that the Group does not expect to continue trading for 12
months from the date of this report. Accordingly, the directors
have prepared this report to reflect this assumption while still
reflecting the financial position of the group at the balance sheet
date.
The Group had a cash balance of GBP1.0m as at 30 September 2018
and currently does not have a bank overdraft or loan
facilities.
3. Unaudited segmental analysis
The Group comprises the following main business segments, all of
which are categorized as discontinued operations in this
report:
Home Entertainment The sale of home entertainment products
predominantly to the export market.
Garden & Home The sale of garden bird, aquatics, wildlife
and pet related products direct to consumer via mail order and
online channels.
Other A combination of revenue streams including the license of
film and music rights for manufacture, sale and download.
Consolidated statement of comprehensive income for period ended
30 September 2018:
Home Garden & Group
Entertainment Home Other Total
GBP'000 GBP'000 GBP'000 GBP'000
(discontinued) (discontinued) (discontinued)
Gross revenue 1,152 - 36 1,188
Intersegment revenue - - - -
--------------- --------------- --------------- ---------
Net revenue 1,152 - 36 1,188
--------------- --------------- --------------- ---------
Operating profit/(loss) before
exceptional and central costs (61) - 36 (25)
Exceptional costs allocated
to segments - - - -
--------------- --------------- --------------- ---------
Operating profit/(loss) before
exceptional group and central
costs (61) - 36 (25)
--------------- --------------- ---------------
Exceptional group costs (117)
Loss on disposal of Home
Entertainment (415)
Central costs (152)
---------
Operating loss (709)
Finance income -
Taxation -
---------
Total comprehensive expense
for the period (709)
=========
Home Garden & Other, incl. Group
Entertainment Home Group Total
GBP'000 GBP'000 GBP'000 GBP'000
Total assets and liabilities
Total assets - - 1,058 1,058
Total liabilities - - (553) (553)
--------------- --------------- --------------- ---------
Total segment net assets - - 505 505
=============== =============== =============== =========
Capital expenditure
Tangible fixed assets - - - -
--------------- --------------- --------------- ---------
Depreciation - - - -
--------------- --------------- --------------- ---------
Consolidated statement of comprehensive income for period ended
30 September 2017:
Home Garden & Group
Entertainment Home Other Total
GBP'000 GBP'000 GBP'000 GBP'000
(discontinued) (discontinued) (discontinued)
Gross revenue 3,300 3,064 14 6,378
Intersegment revenue - - - -
--------------- --------------- --------------- ---------
Net revenue 3,300 3,064 14 6,378
--------------- --------------- --------------- ---------
Operating profit/(loss) before
exceptional and central costs (9) 203 15 209
Exceptional costs allocated
to segments (35) (316) - (351)
--------------- --------------- --------------- ---------
Operating profit/(loss) before
exceptional group and central
costs (44) (113) 15 (142)
--------------- --------------- ---------------
Exceptional group costs (417)
Central costs (147)
---------
Operating loss (706)
Finance income -
Taxation (35)
---------
Total comprehensive expense
for the period (741)
=========
Home Garden & Other, incl. Group
Entertainment Home Group Total
GBP'000 GBP'000 GBP'000 GBP'000
Total assets and liabilities
Total assets 1,656 833 1,312 3,801
Goodwill - 140 - 140
Total liabilities (701) (291) (977) (1,969)
--------------- --------------- --------------- ---------
Total segment net assets 955 682 335 1,972
=============== =============== =============== =========
Capital expenditure
Tangible fixed assets 3 - - 3
--------------- --------------- --------------- ---------
Depreciation 2 6 23 31
--------------- --------------- --------------- ---------
Consolidated statement of comprehensive income for period ended
31 March 2018:
Home Garden & Group
Entertainment Home Other Total
GBP'000 GBP'000 GBP'000 GBP'000
(discontinued) (discontinued) (discontinued)
Gross revenue 7,259 5,925 30 13,214
Intersegment revenue - - - -
--------------- --------------- --------------- ---------
Net revenue 7,259 5,925 30 13,214
--------------- --------------- --------------- ---------
Operating profit/(loss) before
exceptional and central costs (46) 373 51 378
Exceptional costs allocated
to segments (58) (316) - (374)
--------------- --------------- --------------- ---------
Operating profit/(loss) before
exceptional group and central
costs (104) 57 51 4
--------------- --------------- ---------------
Exceptional group costs (712)
Impairment of Home Entertainment (423)
Loss on disposal of Garden
& Home (37)
Central costs (321)
---------
Operating loss (1,489)
Finance income 1
Taxation (11)
---------
Total comprehensive expense
for the period (1,499)
=========
Home Garden & Other, incl. Group
Entertainment Home Group Total
GBP'000 GBP'000 GBP'000 GBP'000
Total assets and liabilities
Assets held for sale 1,591 - 5 1,596
Liabilities held for sale (743) - - (743)
Total assets (excluding held
for sale) - - 1,207 1,207
Total liabilities (excluding
held for sale) - - (846) (846)
--------------- --------------- --------------- ---------
Total segment net assets 848 - 366 1,214
=============== =============== =============== =========
Capital expenditure
Tangible fixed assets 3 1 - 4
--------------- --------------- --------------- ---------
Depreciation 11 11 45 67
--------------- --------------- --------------- ---------
4. Exceptional items
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September
2018 2017 2018
GBP'000 GBP'000 GBP'000
Home Entertainment
Loyalty bonus for consultant
at Windsong - 35 35
One-off IT costs - - 23
-------------- -------------- ------------
- 35 58
-------------- -------------- ------------
Garden & Home
Conclusion of pending and threatened
litigation - 316 316
-------------- -------------- ------------
Group
Conclusion of pending and threatened
litigation - 69 115
Strategic review and process 54 188 209
Shareholder matters and Board
investigations 1 51 123
AIM fine - - 75
Additional Board remuneration
dealing with above matters 62 109 190
-------------- -------------- ------------
117 417 712
-------------- -------------- ------------
Total exceptional costs 117 768 1,086
============== ============== ============
5. Taxation
The income tax charge has been estimated by the Group based on
the level of losses incurred in the period ending 30 September
2018.
6. Earnings per share
The calculation of the basic earnings per share is based on the
(loss)/profit after taxation divided by the weighted average number
of shares in issue, being 17,296,068 (2017: 17,296,068; year ended
31 March 2018: 17,296,068).
7. Provisions
Unaudited Unaudited Audited at
at at 31 March
30 September 30 September
2018 2017 2018
GBP'000 GBP'000 GBP'000
Current liabilities
Lease Commitment 472 472 472
Employment Tribunal settlement - 316 -
-------------- -------------- -----------
Total equity and liabilities 472 788 472
============== ============== ===========
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
IR TIBBTMBMTMPP
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