TIDMBAR
RNS Number : 6538G
Brand Architekts Group PLC
31 March 2022
Brand Architekts Group plc
("Brand Architekts" or the "Group")
Interim results
Brand Architekts Group plc, a market leader in the development
and supply of beauty and personal care brands, announces its
interim results for the 6-month period ended 31 December 2021.
Business highlights:
-- Progress and focus on the implementation of the four strategic
pillars: brand development; brand reach; ESG; the unexpekted -
to achieve the Project 50 goal.
-- Continued distribution gains for Super Facialist including Morrisons
and Look Fantastic and Dirty Works internationally. After a successful
trial period Super Facialist will be launching 14 products into
200+ Tesco stores in June 2022.
-- The successful relaunch of Root Perfect resulted in strong distribution
gains in 300+ Normal stores (a pan European retail chain) across
Europe and Morrisons. Following the renegotiation of retailer exclusive
distribution, we expect to see strong distribution gains in H1
2022/23.
-- Relaunched seven brands in September & October 2021 (Dr Salts;
Root Perfect; Argan +; SenSpa; Kind Natured; Happy Naturals; Beautopia).
The benefits of the relaunch (new designs, formulations and environmentally
friendly packaging) will be seen in H2 and beyond.
-- The pandemic and broader macro economic & supply chain headwinds,
resulted in a temporary margin squeeze and a delay in several of
the brand relaunches.
-- The launch of our own marketplace www.theunexpektedstore.com at
the end of September 2021 , thereby moving away from the complexity
and inefficiency of eight silo DTC sites.
Financial highlights:
-- Revenues for the period of GBP7.4m, a decline of 19% on the prior
year (GBP9.0m) as a result of delays to brand relaunches landing
in store and planned product range rationalisation.
-- Underlying Gross Profit Margin1 of 32.5% (H1 2021: 36.3%) impacted
primarily by increased freight charges on Christmas gift product
range sourced from China.
-- Loss before tax of GBP1.1m (H1 2021: profit before tax of GBP0.4m)
absorbing additional freight charges and also increased marketing
spend for theunexpektedstore.com marketplace launch.
-- Net cash position as at the period end was GBP17.3m reflecting
an additional GBP1.0m contribution to the Group's defined benefit
pension scheme and planned capex investment in the new DTC marketplace.
H1 2022 H1 2021
------------------------------------------- -------------- ---------------
Revenue (Note 2 of financial statements) GBP7.4m GBP9.0m
Underlying operation (loss)/profit(1) GBP(0.8)m GBP0.5m
(Loss)/profit before taxation GBP(1.1)m GBP0.4m
Basic (loss)/earnings per share (Note 4
of financial statements) (7.7)p 2.3p
Net cash GBP17.3m GBP19.0m
------------------------------------------- -------------- ---------------
(1) Underlying gross profit is calculated before exceptional
items
(2) Underlying operating (loss)/profit is calculated before
exceptional items, share-based payments and amortisation of
acquisition-related intangibles.
Quentin Higham, Chief Executive, commented:
"Throughout the period we have focused on implementing our four
strategic pillars, which will ultimately enable the Group to reach
its Project 50 goal. Our plans to relaunch seven of our brands were
impacted by retail headwinds created by the COVID pandemic, which
resulted in three key retailers delaying the brand relaunches by
three months. In addition, cost price increases throughout the
supply chain, including freight, raw materials, componentry and
energy impacted our short term performance.
We are confident that effectively implementing our brand reach
and brand development strategies will drive growth in the future.
We are pleased with the launch of our marketplace
theunexpektedstore.com, which enables us to offer consumers a fully
omnichannel solution. In the second half of the year, we will look
to accelerate our digital first strategy and build out further
distribution gains, as we seek to add scale to our business. We
have also been working hard to offset many of the price increases
though the supply chain to normalise our margins. Whilst challenges
remain in the markets in which we operate we remain confident in
our strategy and the Group's ability to achieve our aims."
For further information please contact:
Brand Architekts Group PLC via Alma
Quentin Higham / Tom Carter
Singer Capital Markets (Nominated adviser and
Shaun Dobson / Jen Boorer broker) 0207496 3000
Alma PR
Josh Royston / Sam Modlin 0203 405 0205
CEO's Review
The trading environment throughout the last six months has
continued to be challenging, with the impact of COVID and the well
publicised supply chain issues effecting retailers' buying
patterns, freight costs and therefore margin. We have focused on
implementing our four strategic pillars, so that we can position
ourselves to take advantage of future opportunities. Despite these
headwinds, I am pleased with the operational progress that has been
made in the first half of the year. We will be focusing on securing
omnichannel distribution gains and implementing a digital mindset,
so that we can ultimately deliver our Project 50 goal.
Key achievements include:
-- Relaunched seven brands in September & October 2021 (Dr Salts; Root
Perfect; Argan +; SenSpa; Kind Natured; Happy Naturals; Beautopia).
The benefits of the relaunch (new designs, formulations and environmentally
friendly packaging) will be seen in H2 and beyond.
-- The successful relaunch of Root Perfect resulted in strong distribution
gains in 300+ Normal stores across Europe and Morrisons.
-- Continued distribution gains for Super Facialist (Morrisons; Look
Fantastic) and Dirty Works Internationally. After a successful trial
period Super Facialist will be launching 14 products into 200+ Tesco
stores in June 2022.
-- Launched our own marketplace www.theunexpektedstore.com at the end
of September 2021 .
Performance review
Net sales for the period were GBP7.4m, a decrease of 19% on the
prior year (H1FY 2021: GBP9.0m). This decline was as a result of
two factors; firstly key retailers delaying the implementation of
our brand relaunches, caused by the COVID pandemic and secondly
planned rationalisation of our product ranges by 25% to optimise
our productivity. With many of our brands needing to be relaunched
and product ranges rationalised to reflect consumer demand and
improve productivity, this delay meant that sales for the first
three months were affected, as stocks of the previous ranges were
run down. The impact of these delays was felt across both the high
street and grocer retailers, which remain our dominant revenue
generators.
International sales increased, with Root Perfect rolling out to
300+ Normal stores in Europe and Dirty Works launching in Peru. We
also increased both our e-commerce (Amazon and Look Fantastic) and
international sales but not significantly enough to counter the
high street impact.
Gross margin in the period was significantly impacted and
declined to 32.5% versus 36.3% in the prior year period (on an
adjusted basis). This reflects a wide range of cost pressures felt
throughout our supply chain, that we could not pass onto retailers
due to previously agreed pricing commitments. The main impact was
the significant increase in shipping container costs for goods from
overseas (principally Christmas Gift Sets and bath salts), which at
the time of shipping were 500% higher than historical prices.
Alongside this we have had to contend with other significant cost
increases throughout the supply chain, notably in raw materials,
componentry and energy. As we enter the second half and as we
approach Christmas 2022 planning, we plan to offset the majority of
these costs.
The Company experienced a first half loss before tax of GBP1.1m
(H1FY 2021: profit of GBP0.4m).
Net cash decreased by GBP1.7m, as a result of a GBP1.0 million
contribution to the defined benefit pension scheme and the factors
detailed above. The Company still enjoys a very strong net cash
position of GBP17.3m (H1 2021: GBP19.0m) which positions it well
for future growth.
Progress against the Company's four strategic pillars are
outlined below:
1. Brand Development
Since 2020/21 we have rationalised the number of brands within
the portfolio from 22 to 13 and halved our number of products. We
have completed the relaunch of Dr Salts, Root Perfect, Argan +,
Happy Naturals, Kind Natured, Senspa, Beautopia, giving them a
contemporary look and feel which will help them gain traction with
their target audiences and grow market share.
Data led insights are vital components of our new product
development program and we will be looking to relaunch the balance
of our portfolio in 2023. On the back of key brand Super Facialist
we will be launching a new sub brand called Super Facialist Clear
Skin, targeting teenagers into 220 Superdrug stores in September
2022. This is an exciting brand development initiative and will
enable younger consumers to enter into the brand, thereby
increasing the brand's lifetime value, whilst at the same time
enabling the brand to engage with an increasingly important
demographic.
The transition towards becoming a digital first business is
integral to our future aspirations, and we are making steady
progress. Now that many of the brands have been relaunched, we are
focussing on creating and developing digital assets which we will
be able to use throughout our digital footprint (DTC; e-com and
social). This will help build a more engaging profile on our unique
marketplace - theunexpektedstore, whilst also attracting consumers
on other e-commerce sites such as Amazon and Look Fantastic.
Last year saw the company increase its advertising spend on its
star brand, Super Facialist, to help drive distribution gains and
take advantage of the inherent brand strength. The results to date
have been in line with our ambitions and we have been able to
substantially increase its distribution network with the range now
available through Boots, Sainsbury's, Waitrose, Morrisons and Tesco
as well as online with Amazon, Look Fantastic, Feel Unique and
theunexpekted.
Portfolio Management M&A
M&A remains a key tenet of our development strategy and the
Board has been working hard on identifying and advancing
opportunities that meet our investment criteria. Having invested
across all areas of operation efficiency and built our platform,
theunexpektedstore, we are confident that adding greater scale will
significantly advance our strategic objectives.
2. Brand Reach
We are making good progress in implementing an omnichannel
strategy, so that our consumers can buy our products wherever
(online and offline) and whenever they want. In tandem with our
brand relaunch program, we have worked hard to exit the
constrictive exclusive agreements that were in place across most of
our brand portfolio. Our focus in the second half of this year will
now be on widening distribution. After a successful trial period in
Tesco's 34 Beauty stores, Super Facialist will be launching 14
products into 200+ Tesco stores in June 2022 (2 products in 500+
stores; 5 products in 300+ stores and 7 products in 200+ stores).
We are aiming to replicate the distribution success of Super
Facialist, which until a few years ago had been a retailer
exclusive, across other brands within the portfolio, in particular
Dirty Works.
International remains a key strategic focus. We are beginning to
see a number of markets that had been severely affected by the
pandemic begin to open up and we will be looking to capitalise on
our strong relationships with those distributors that want to
support and grow a portfolio of our brands and also work with
international retailers who have a presence in multiple markets. We
launched Root Perfect into 300+ stores across Europe and we will be
launching Kind Natured Haircare in the same number of stores in
June 2022. Dirty Works distribution increased in multiple markets
and we launched the brand into Peru in December 2021.
Theunexpektedstore
www.theunexpektedstore.com launched in time for Black Friday
& Cyber Monday and now all our brands and products (180+) are
featured on the site. We have various initiatives in train that
will substantially enhance the site's overall offering &
consumer engagement. We are committed to exceed the expectations of
everyday beauty. In the second half of the year, we will improve
the content of the site by appointing a beauty editor; we will
launch a "Friends of" initiative, whereby we can sell non-competing
brands that share our values and complement our existing ranges;
and we will upgrade the site with our new library of digital
assets. Most importantly we will also be launching theunexpekted
community, a forum where we will encourage and empower the
community to share their feedback on our products efficacy; how we
can improve and answer their requests for help and advice. The
community will be built on collaboration and will provide a
knowledge base of experience, ideas and views. Our mission is to
break the mould of everyday beauty and as such we will engage with
the community and respond to their needs by making affordable
products that meet their needs. These initiatives resonate with our
challenger identity and can help to drive a deeper engagement
between consumer and brand. We are also confident that
theunexpekted will let us scale new products and future
acquisitions more quickly and effectively. Going forward the focus
will be on building our CRM database; building awareness and
engagement and ensuring that we have a positive return on ad spend
(ROAS) .
3. Environmental and Societal Responsibility
We remain committed to our pledge to ensure that all our plastic
and packaging is 100% recyclable, reusable or bio-sourced by 2025.
This ambition is firmly at the heart of our business and can be
seen through our brand relaunch & new product development
programmes, whereby all new lines co ntain a minimum of 30% Post
Consumer Recycled (PCR) material; all UK sourced card and outer
packaging is Forest Stewardship Council (FSC) certified and all
products are recyclable.
4. Theunexpekted
Over the next few years, we expect theunexpekted to become our
culture and way of life, a mantra that we live by as a company.
Incorporating our corporate values, we will aspire to become an
Unexpekted beauty company. Our goal is to challenge the
expectations of ourselves and the market we exist in, unconstrained
by conventional thinking or ways of working. We want to innovate
and disrupt the beauty industry by giving a voice to our community.
Our focus to deliver this will be on the quality and performance of
the product, our editorial content and community engagement and how
we respond and react to user generated content and recommendations.
If the business lives by theunexpekted mantra, we should be in a
position for our brands to flourish and challenge.
Outlook
There have been a number of challenging headwinds in H1, firstly
with COVID, then with a wide range of supply chain issues, while we
expect cost price pressures to persist particularly with regards to
energy prices following recent events in Ukraine. Despite this, we
are starting to see progress on a number of fronts. We have a
rationalised our portfolio of brands and we have exited the
exclusive agreements that saw us tied to individual distribution
channels. For the remainder of this year and beyond, we will focus
strongly on building distribution gains and take advantage of the
hard work done on relaunching many of our brands. This will be
combined with creating much stronger brand assets, which will help
improve engagement across all channels. We will be advancing our
digital first focus and building brand loyalty through the
unexpekted community. We also believe that the hard work of the
last eighteen months, will enable us to add scale as required and
that we are a stronger business as we enter the second half and
remain confident in our strategy and the Groups' ability to achieve
our aims.
Group Statement of Comprehensive Income
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
--------------------------------------------------- ----------- ------------ ------------
Revenue 2 7,354 9,049 15,875
Cost of sales (4,964) (5,517) (9,530)
---------------------------------------------- --- ----------- ------------ ------------
Gross profit 2,390 3,532 6,345
Commercial and administrative costs (3,347) (2,974) (6,408)
---------------------------------------------- --- ----------- ------------ ------------
Operating (loss)/profit before exceptional
items (957) 558 (63)
Exceptional items - - (1,600)
---------------------------------------------- --- ----------- ------------ ------------
Operating (loss)/profit (957) 558 (1,663)
---------------------------------------------- --- ----------- ------------ ------------
Finance income 1 2 2
Finance costs 3 (99) (125) (224)
---------------------------------------------- --- ----------- ------------ ------------
(Loss)/profit before taxation (1,055) 435 (1,885)
Taxation (250) (17) (314)
---------------------------------------------- --- ----------- ------------ ------------
(Loss)/profit after taxation (1,305) 418 (2,199)
---------------------------------------------- --- ----------- ------------ ------------
Other comprehensive (loss)/income for
the period:
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined benefit liability 122 (113) 2,786
Other comprehensive (loss)/income
for the period 122 (113) 2,786
---------------------------------------------- --- ----------- ------------ ------------
Total comprehensive (loss)/income
for the period (1,183) 305 587
---------------------------------------------- --- ----------- ------------ ------------
(Loss)/profit attributable to:
---------------------------------------------- --- ----------- ------------ ------------
Equity shareholders (1,334) 392 (2,253)
---------------------------------------------- --- ----------- ------------ ------------
Non-controlling interests 29 26 54
---------------------------------------------- --- ----------- ------------ ------------
Total comprehensive (loss)/income attributable
to:
--------------------------------------------------- ----------- ------------ ------------
Equity shareholders (1,212) 279 533
---------------------------------------------- --- ----------- ------------ ------------
Non-controlling interests 29 26 54
---------------------------------------------- --- ----------- ------------ ------------
(Loss)/earnings per share 4
(7.7)p 2.3p (13.1)p
* basic (7.7)p 2.3p (13.1)p
* diluted
Group Statement of Financial Position
As at As at As at
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
-------------------------------- ----- ----------- ----------- ------------
ASSETS
Non-current assets
Property, plant and equipment
including right-of-use assets 68 130 67
Intangible assets 10,161 11,637 10,118
Deferred tax assets 2,299 2,526 2,605
-------------------------------- ----- ----------- ----------- ------------
Total non-current assets 12,528 14,293 12,790
-------------------------------- ----- ----------- ----------- ------------
Current assets
Inventories 2,655 2,251 2,299
Trade and other receivables 5,080 4,962 3,651
Cash and cash equivalents 17,284 19,026 19,018
Current tax receivable 432 413 432
-------------------------------- ----- ----------- ----------- ------------
Total current assets 25,451 26,652 25,400
-------------------------------- ----- ----------- ----------- ------------
Total assets 37,979 40,945 38,190
-------------------------------- ----- ----------- ----------- ------------
LIABILITIES
Current liabilities
Trade and other payables 4,786 3,059 2,602
Current tax payable - 25 -
-------------------------------- ----- ----------- ----------- ------------
Total current liabilities 4,786 3,084 2,602
-------------------------------- ----- ----------- ----------- ------------
Non-current liabilities
Post-retirement benefit
obligations 6 9,195 13,195 10,418
Lease liabilities - 57 -
Deferred tax liabilities 1,459 1,154 1,475
-------------------------------- ----- ----------- ----------- ------------
Total non-current liabilities 10,654 14,406 11,893
-------------------------------- ----- ----------- ----------- ------------
Total liabilities 15,440 17,490 14,495
-------------------------------- ----- ----------- ----------- ------------
Net assets 22,539 23,455 23,695
-------------------------------- ----- ----------- ----------- ------------
EQUITY
Share capital 862 862 862
Share premium 11,987 11,987 11,987
Pension remeasurement reserve (7,680) (10,701) (7,802)
Retained earnings 17,189 21,183 18,496
-------------------------------- ----- ----------- ----------- ------------
Total equity 22,358 23,331 23,543
-------------------------------- ----- ----------- ----------- ------------
Non-controlling interest 181 124 152
-------------------------------- ----- ----------- ----------- ------------
Total equity 22,539 23,455 23,695
-------------------------------- ----- ----------- ----------- ------------
Group Statement of Changes in Equity
Share Pension Non-
Share premium remeasurement Retained controlling Total equity
capital reserve earnings interest
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Balance as at 30
June 2021 862 11,987 (7,802) 18,496 152 23,695
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Non-controlling
interest - - - - 29 29
Share-based
payments - - - 27 - 27
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Transactions
with
owners - - - 27 29 56
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Loss for the
period - - - (1,334) - (1,334)
Other
comprehensive
income:
Remeasurement of
defined benefit
liability - - 122 - - 122
Total
comprehensive
loss for the
period - - 122 (1,334) - (1,212)
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Balance as at 31
December 2021 862 11,987 (7,680) 17,189 181 22,539
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Pension Non-
Share Share remeasurement Retained controlling Total equity
capital premium reserve earnings interest
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Balance as at 27
June
2020 862 11,987 (10,588) 20,711 98 23,070
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Non-controlling
interest - - - - 26 26
Share-based
payments - - - 80 - 80
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Transactions
with
owners - - - 80 26 106
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Profit for the
period - - - 392 - 392
Other
comprehensive
income:
Remeasurement of
defined
benefit
liability - - (113) - - (113)
Total
comprehensive
income for the
period - - (113) 392 - 279
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Balance as at 31
December
2020 862 11,987 (10,701) 21,183 124 23,455
------------------ ----------- ----------------- ---------------- ----------- ----------------- ----------------
Pension Non-
Share Share remeasurement Retained controlling Total equity
capital premium reserve earnings interest
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ----------- ---------------- ---------------- ------------ ----------------- ----------------
Balance as at 27
June
2020 862 11,987 (10,588) 20,711 98 23,070
------------------ ----------- ---------------- ---------------- ------------ ----------------- ----------------
Non-controlling
interest - - - - 54 54
Share-based
payments - - - 38 - 38
Transactions
with
owners - - - 38 54 92
------------------ ----------- ---------------- ---------------- ------------ ----------------- ----------------
Loss for the
year - - - (2,253) - (2,253)
Other
comprehensive
income:
Remeasurement of
defined
benefit
liability - - 2,786 - - 2,786
Total
comprehensive
income for the
year - - 2,786 (2,253) - 533
------------------ ----------- ---------------- ---------------- ------------ ----------------- ----------------
Balance as at 30
June
2021 862 11,987 (7,802) 18,496 152 23,695
------------------ ----------- ---------------- ---------------- ------------ ----------------- ----------------
Group Cash Flow Statement
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ ------------
Cash flow from operating activities
(Loss)/profit after taxation (1,305) 418 (2,199)
Depreciation 13 28 7
Amortisation 187 138 1,880
Tax charge 250 17 314
Finance income (1) (2) (2)
Finance cost 99 125 224
(Increase)/decrease in inventories (356) 1,473 1,425
(Increase)/decrease in trade and other
receivables (1,429) (993) 318
Increase/(decrease) in trade and other
payables 2,185 (300) (687)
Share-based payment expense 27 80 38
Contributions to defined benefit plan (1,159) (159) (318)
------------------------------------------------ ------------ ------------ ------------
Cash (utilised in)/generated from operations (1,489) 825 1,000
------------------------------------------------ ------------ ------------ ------------
Finance expense paid (1) (123) (28)
Taxation received - 407 381
------------------------------------------------ ------------ ------------ ------------
Net cash flow from operating activities (1,490) 1,109 1,353
------------------------------------------------ ------------ ------------ ------------
Cash flow from investing activities
Purchase of property, plant and equipment (14) (13) (66)
Purchase of intangibles (231) (61) (284)
Net cash flow from investing activities (245) (74) (350)
------------------------------------------------ ------------ ------------ ------------
Cash flow from financing activities
Finance income received 1 2 2
Repayment of invoice discounting facility - (1,132) (1,132)
Repayment of loans - (2,095) (2,095)
Lease payments - (24) -
Net cash flow from financing activities 1 (3,249) (3,225)
------------------------------------------------ ------------ ------------ ------------
Net decrease in cash and cash equivalents (1,734) (2,214) (2,222)
------------------------------------------------ ------------ ------------ ------------
Cash and cash equivalents at beginning
of period 19,018 21 ,240 21,240
------------------------------------------------ ------------ ------------ ------------
Cash and cash equivalents at end of
period 17,284 19,026 19,018
------------------------------------------------ ------------ ------------ ------------
Notes to the Accounts
Note 1 Basis of preparation
The Group has prepared its interim results for the six-month
period ended 31 December 2021 in accordance with the recognition
and measurement principles of International Financial Reporting
Standards (IFRS) as adopted by the UK and also in accordance with
the recognition and measurement principles of IFRS issued by the
International Accounting Standards Board.
The Directors have considered trading and cash flow forecasts
prepared for the Group, and based on these, and the confirmed
banking facilities, are satisfied that the Group will continue to
be able to meet its liabilities as they fall due for at least one
year from the date of approval of the Interim Report. On this
basis, they consider it appropriate to adopt the going concern
basis in the preparation of these accounts.
These interim financial statements do not constitute full
statutory accounts within the meaning of section 434 of the
Companies Act 2006 and are unaudited. The unaudited interim
financial statements were approved by the Board of Directors on 9
March 2022.
The consolidated financial statements are prepared under the
historical cost convention. The accounting policies used in the
interim financial statements are consistent with IFRS and those
which will be adopted in the preparation of the Group's Annual
Report and Financial Statements for the year ended 30 June
2022.
The statutory accounts for the year ended 30 June 2021, which
were prepared under IFRS, have been filed with the Registrar of
Companies. These statutory accounts carried an unqualified Auditors
Report and did not contain a statement under Section 498(2) or
498(3) of the Companies Act 2006.
The Group has not changed any of its accounting policies in the
6 months to 31 December 2021.
Note 2 Segmental analysis
The reportable segments of the Group were aggregated as
follows:
- Brands - we leverage our skilled resources to develop and
market a growing portfolio of Brand Architekts Group owned and
managed brands. These include those organically developed plus the
acquisitions of the portfolio of brands included in the Brand
Architekts acquisition (in 2016) and the Fish brand acquired during
2018.
- Eliminations and central costs - other group-wide activities
and expenses, including defined benefit pension costs, share-based
payment expenses/(credits), amortisation of acquisition-related
intangibles, interest, taxation and eliminations of inter-segment
items, are presented within "Eliminations and central costs".
IFRS 15 requires the disaggregation of revenue into categories
that depict how the nature, timing, amount and uncertainty of
revenue and cash flows are affected by economic factors. The
directors have considered how the Group's revenue might be
disaggregated in order to meet the requirements of IFRS 15 and have
concluded that the activity and geographical segmentation
disclosures set out below represent the most appropriate categories
of disaggregation.
(a) Principal measures of profit and loss - Income Statement
segmental information:
Period ended 31 December Period ended 31 December
2021 2020
Eliminations Eliminations
and central and central Total
Brands costs Total Brands costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
UK revenue 5,845 - 5,845 7,791 - 7,791
International revenue 1,509 - 1,509 1,258 - 1,258
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
Revenue - external 7,354 - 7,354 9,049 - 9,049
Revenue - internal - - - - - -
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
Total revenue 7,354 - 7,354 9,049 - 9,049
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
Underlying operating (loss)/profit (208) (602) (810) 1,155 (629) 526
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
Charge for share-based
payments (6) (21) (27) (14) (66) (80)
Amortisation of acquisition-related
intangibles - (120) (120) - (138) (138)
Exceptional items included
in cost of sales - - - 250 250
Net borrowing costs - (98) (98) (5) (118) (123)
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
(Loss)/profit before taxation (214) (841) (1,055) 1,386 (951) 435
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
Tax (charge)/credit - (250) (250) (25) 8 (17)
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
(Loss)/profit for the
period (214) (1,091) (1,305) 1,361 (943) 418
------------------------------------ ---------- -------------- --------- ---------- -------------- ---------
(b) Other Income Statement segmental information:
The following additional items are included in the measures of
underlying profit and loss reported to the CODM and are included
within (a) above:
Period ended 31 December 2021 Eliminations
Brands and central Total
costs
GBP'000 GBP'000 GBP'000
------------------------------- -------- ------------ -------
Depreciation 13 - 13
Amortisation - 187 187
------------------------------- -------- ------------ -------
Period ended 31 December 2020 Eliminations
Brands and central Total
costs
GBP'000 GBP'000 GBP'000
------------------------------- -------- ------------ -------
Depreciation 28 - 28
Amortisation - 138 138
------------------------------- -------- ------------ -------
(c) Principal measures of assets and liabilities:
The Groups assets and liabilities are managed centrally by the
CODM and consequently there is no reconciliation between the
Group's assets per the Statement of Financial Position and the
segment assets.
(d) Additional entity-wide disclosures:
The distribution of the Group's external revenue by destination
is shown below:
Geographical segments Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
------------------------- ---------------- ------------ ------------
GBP'000 GBP'000 GBP'000
UK 5,845 7,791 13,447
European Union countries 603 373 970
Rest of the World 906 885 1,458
------------------------- ---------------- ------------ ------------
7,354 9,049 15,875
------------------------- ---------------- ------------ ------------
In the period ended 31 December 2021, the Group had three
customers that exceeded 10% of total revenues, being 16.8%, 13.0%
and 10.2% respectively. In the period ended 31 December 2020, the
Group had two customers that exceeded 10% of revenues, being 24%
and 11.8% respectively.
Note 3 Finance costs
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------ ------------ ------------ ------------
Bank loans and overdrafts 1 27 28
Pension plan notional finance
charge 98 98 196
------------------------------ ------------ ------------ ------------
99 125 224
------------------------------ ------------ ------------ ------------
Note 4 Earnings per share
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
--------------------------------------- --------------------- ------------------ ------------
Basic and diluted
(Loss)/profit attributable to equity
shareholders (GBP'000) (1,334) 392 (2,253)
Basic weighted average number of
ordinary shares in issue during the
period 17,230,702 17,277,146 17,230,702
Diluted number of shares 17,319,702 17,366,146 17,319,702
--------------------------------------- --------------------- ------------------ ------------
Basic (loss)/earnings per share (7.7)p 2.3p (13.1)p
--------------------------------------- --------------------- ------------------ ------------
Diluted (loss)/earnings per share (7.7)p 2.3p (13.1)p
--------------------------------------- --------------------- ------------------ ------------
Basic earnings/(loss) per share has been calculated by dividing
the profit/(loss) for each financial period by the weighted average
number of ordinary shares in issue in the period.
Note 5 Notes to Cash Flow Statement
(a) Reconciliation of cash and cash equivalents to movement in
net cash:
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
---------------------------------------- ------------------- ------------------ ---------------
Decrease in cash and cash equivalents
in the period (1,734) (2,214) (2,222)
Net cash outflow from decrease in
borrowings - 3,227 3,227
---------------------------------------- ------------------- ------------------ ---------------
Change in net cash resulting from
cash flows (1,734) 1,013 1,005
Net cash at the beginning of the
period 19,018 18,013 18,013
---------------------------------------- ------------------- ------------------ ---------------
Net cash at the end of the period 17,284 19,026 19,018
---------------------------------------- ------------------- ------------------ ---------------
(b) Analysis of net cash:
Closing Closing
30 June 2021 Cash flow 31 Dec 2021
GBP'000 GBP'000 GBP'000
--------------------------- ----------------- --------------------- ------------
Cash at bank and in hand 19,018 (1,734) 17,284
--------------------------- ----------------- --------------------- ------------
Note 6 IAS 19 'Employee Benefits'
Expected future cash flows to and from the Group's defined
benefit pension scheme:
The Scheme is closed to new members and to further accruals of
benefits. It is subject to the scheme funding requirements outlined
in UK legislation. The last scheme funding valuation of the Plan
was at 5 April 2020 and revealed a deficit of GBP21,125,000. The
deficit reduction payments were based on the actuarial deficit
including an allowance for the impact of changes in financial
market conditions up to 31 March 2021, which was GBP15,100,000. The
next triennial valuation of the Plan will take place on 5 April
2023.
The deficit reduction payment will be GBP318,000 per annum for
three years to 2024, as well as an additional one-off payment of
GBP1m in 2021, followed by GBP791,000 per annum for a further 13
years to 2037.
In addition, the Company has agreed to meet the cost of
administrative expenses and Pension Protection Fund insurance
premiums for the Scheme. Anticipated payments by the Company in
respect of plan administrative expenses and the Pension Protection
Fund premium in the year ending 30 June 2022 are expected to be of
a similar order of magnitude to payments in 2021.
Payments made by the Company to the Scheme and in respect of
Scheme liabilities were:
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ -------------
Deficit recovery payments 1,159 159 318
Scheme administrative expenses 63 69 155
Pension Protection Fund
premium 112 101 165
--------------------------------- ------------ ------------ -------------
Total 1,334 329 638
--------------------------------- ------------ ------------ -------------
The amounts expensed in the Group Statement of Comprehensive
Income were:
Period ended Period ended Year ended
31 Dec 2021 31 Dec 2020 30 June 2021
GBP'000 GBP'000 GBP'000
-------------------------------------- ------------ -------------
In operating profit:
Plan administrative expenses 53 69 155
Pension Protection Fund
premium 63 101 165
---------------------------------
116 170 320
In finance costs:
Unwinding of notional discount
factor 98 98 196
--------------------------------- --- ------------ -------------
Total 214 268 516
--------------------------------- --- ------------ -------------
IAS 19 Employee benefits:
IAS 19 requires a separate valuation of the Scheme on a
different basis to the funding valuation referred to above. The key
assumptions used were:
At 31 December At 31 December At 30 June
2021 2020 2021
--------------------------- -------------- -------------- ----------
Discount rate 1.95% 1.40% 2.00%
Inflation assumption (RPI) 3.30% 2.85% 3.10%
Inflation assumption (CPI) 2.90% 1.95% 2.75%
--------------------------- -------------- -------------- ----------
The amounts recognised in the Group Statement of Financial
Position were:
At 31 December 2021 At 31 December At 30 June
2020 2021
GBP'000 GBP'000 GBP'000
----------------------------------------------------------------- ----------------- -------------- ----------
Present value of funded
obligations (37,102) (38,714) (36,553)
Fair value of scheme assets 27,907 25,519 26,135
----------------------------------------------------------------- ----------------- -------------- ----------
Deficit (9,195) (13,195) (10,418)
----------------------------------------------------------------- ----------------- -------------- ----------
Note 7 Announcement of results
The Interim Report will be sent to shareholders and is available
to members of the public at the Company's Registered Office at 8
Waldegrave Road, Teddington, TW11 8GT and on the Company's
website.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BUGDXLXXDGDG
(END) Dow Jones Newswires
March 31, 2022 02:00 ET (06:00 GMT)
Swallowfield (LSE:SWL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Swallowfield (LSE:SWL)
Historical Stock Chart
From Sep 2023 to Sep 2024