TIDMBAR
RNS Number : 8806S
Brand Architekts Group PLC
14 July 2020
14th July 2020
Brand Architekts Group PLC
("Brand Architekts" or the "Group")
Trading Update and Board Succession
Brand Architekts, the personal care and beauty products group
with its own portfolio of brands, announces an update on trading
for the 52 weeks to 27 June 2020 and board succession.
Trading performance
Sales performance during the second half of the financial year
("FY"), which was inevitably impacted by the COVID-19 pandemic, was
stronger than the Board had anticipated and communicated at the
time of our last trading update in April. However, revenue
generated in H2 2020 is still significantly below the comparative
period last year.
Net sales for FY20 were GBP16.3m, which excludes sales from
discontinued operations, a decline of 17% on the prior year. Sales
in the first half were GBP10.6m, a decline of 15% when compared to
H1 2019 (GBP12.5m). Sales in the second half of FY20 declined by
21%, with net sales of GBP5.7m (H2 2019: GBP7.2m).
COVID-19 impact
During the last quarter of FY20, the COVID-19 pandemic had a
significant effect on the sales mix. Our brands' performance within
UK Grocers showed single digit growth whilst our online sales
channels, whether through large e-tailers such as Amazon, or our
own branded websites have delivered significant growth.
These gains did not offset the significant decline in other high
street outlets whose store traffic was adversely impacted during
lockdown. Additionally, several key international markets did not
place orders during the last quarter of FY20, as a result of the
closure of most general merchandise and department stores. However,
the board is confident that the new branded business model and
structure will allow the business to respond to the significant
changes in consumer shopping behaviour effectively &
efficiently.
Consequently, the board expect Group pre-tax profit for the full
year will be significantly below last year.
Balance Sheet and Cash
Net cash position of GBP18.0m is a significant improvement when
compared to the position reported at our interim results to January
11(th) of GBP15.1m and the GBP7.2m of net debt last year.
In the light of the disruption of Covid-19 and a review of the
role of particular brands in the portfolio we are conducting a
detailed review of stock valuation and will update at our final
results in September.
Board Succession
Following the disposal of the Contract Manufacturing business in
August 2019, we have now put in place a new executive management
team, led by Quentin Higham as CEO, focused completely on the new
stand-alone Brands business. As part of the Board succession
planning, to refresh the Board and to ensure that we have the
appropriate balance of skills, experience and knowledge for the
long-term success of the business, we also announce the following
changes.
Non-Executive Chairman
After 7 years in the role and having transformed the Group into
a strong, completely brands focussed, cash positive business,
Brendan Hynes has informed the Group of his intention to step down
from the Board following the announcement of preliminary results,
which will take place on the 28th September 2020. This will provide
sufficient time for an orderly handover and allow the new executive
management team to fully establish itself.
Brendan will be succeeded by Roger McDowell, the incumbent
Senior Independent Director and Chair of the Remuneration
Committee. Roger is an experienced Chairman and non-executive
director, with extensive knowledge of the business and provides for
a smooth and seamless transition.
Non-Executive Director appointment
Chris How will be appointed as a non-executive director with
immediate effect. Chris was formerly the CEO of Swallowfield PLC
(the previous name of the Group) and has recently held the position
of interim CEO of Brand Architekts. Chris brings continuity,
detailed knowledge of the business and extensive, relevant sector
experience, having previously held senior UK and International
leadership positions at PZ Cussons and Colgate Palmolive. Ch ris
will assume the role of Chair of the Remuneration Committee on 28th
September 2020.
Outlook
The UK government's easing of the lockdown measures are now
underway, and as a result we anticipate increased consumer demand
over the next few months. However, there is still a great deal of
uncertainty surrounding the impact of COVID-19 on the wider economy
and consumer confidence, we expect this will continue into the
first half of FY21, with some improvement in the second half. As a
result of this uncertainty, the Board continues to withhold
financial guidance.
However, with a new executive team in place, a strong balance
sheet which includes a significant positive net cash position and a
clarity of direction the Board remains confident in the Group's
long-term prospects.
Notes
Pursuant to Schedule 2(g) of the AIM Rules for Companies,
Christopher Gerard How (aged 60) currently holds and has held the
following directorships or partnerships in the past five years:
Current directorships/partnerships Directorships/partnerships held
in the last five years:
Braebrook Limited Swallowfield Consumer Products
Limited
Brand Architekts Group PLC (formerly
Swallowfield PLC)
Atlas Group Limited
Atlas Pencil (Sales) Limited
The Yellow Can Company Limited
Aerosols International Limited
Bagsy Beauty Limited
New Value Connections LTD
Cosmetics, Toiletry and Perfumery
Association Limited (The)
MR Haircare Limited
Tru Products Limited
The Brand Architekts Limited
Sterling Shave Club Limited
Fish London LTD.
Mr How currently has a beneficial interest of 196,698 ordinary
shares in the share capital of Group.
There is no further information to be disclosed in respect of
the above appointment pursuant to Rule 17 and Schedule 2 paragraph
(g) of the AIM Rules for Companies.
For further information please contact :
Brand Architekts Group PLC
Quentin Higham
Tom Carter
N+1 Singer
Shaun Dobson / George Tzimas (Nominated adviser and
/ Iqra Amin broker) 0207496 3000
Alma PR
Josh Royston / Sam Modlin 0203 405 0205
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END
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