| Regulatory Announcement |
|
| Company |
Blavod Extreme Spirits PLC
|
| TIDM |
BES |
| Headline |
Interim Results |
| Released |
07:00 02-Jan-07 |
| Number |
8166O |
|
RNS Number:8166O
Blavod Extreme Spirits PLC
29 December 2006
29 December 2006
BLAVOD EXTREME SPIRITS PLC
INTERIM REPORT
For the six months ended 30 September 2006
Financial
• Turnover increased by 61% to £3.54m (2005: £2.20m)
• Case equivalent shipments increased by 35%
• Gross profit of £986k (2005: £737k) increase by 34%
• Gross profit margin of 28% (down from 34% in 2005)
• Improved operating loss (excluding associate) of £1.49m (2005: £1.57m)
Brands
• Brand Portfolio offerings delivering solid performances
• Brands continue to increase distribution in both the UK and US
• Added new wine and spirit partnerships
Joint Venture
• Joint venture with Suntory International progressing well
• El Diamante del Cielo Tequila is now distributed in 44 US States
• Strengthened the Group's position within the drinks sector
Commenting on the results, Chief Executive Officer, Jeff Hopmayer, said:
"We have continued to benefit from a strong marketplace, the continued roll-out
of our Tequila El Diamante del Cielo and the introduction of Cockspur Rum which
have accelerated our growth. Turnover in the UK and the US have increased
substantially. However, some of this growth has been at the cost of lower
margins, specifically on Blavod Black Vodka, as we continue to support the
brand. Measures have been put in place to correct this in the second half of the
year which is traditionally the main season for wine and spirit sales."
Enquires:
Blavod Extreme Spirits plc 020 7930 0777
Jeff Hopmayer, Chief Executive 001 615 771 9111
Tony Murphy, Finance Director
Brewin Dolphin Securities Ltd 0113 241 0130
Mark Brady
Keith Williams
CHIEF EXECUTIVE'S STATEMENT
Blavod Extreme Spirits plc ("the Group") has continued to make good progress in
its strategic and marketing objectives for the six months ended 30 September,
2006. Turnover increased by 61% to £3.54m, led by El Diamante del Cielo, our
wine portfolio and the introduction of new agency brands.
The global market for wines and spirits continues to expand in the areas where
we operate, while industry consolidation continues.
Results
Total revenue of £3.54m (2005: £2.20m) represented an increase in per case
revenue of 19%. Equivalent case shipments increased in the US by 23%, while
increasing 52% in the UK and other markets.
Recorded gross profit margin in the US fell to 26% (2005: 30%) as a direct
result of heavy promotions for Blavod Black Vodka. Gross profit margins for
Players Extreme and our wine portfolio increased over last year. Gross profit
margin in the UK finished at 18% (2005: 24%), driven by margin decreases on
Blavod Black Vodka. These decreases were the result of the competitive
environment and the promotional demands to grow consumer brand awareness. We
believe that there continues to be potential for further margin gains on many of
our brands and we are taking steps to restore decreasing margins in our brand
portfolio for the second half of the year.
Total marketing costs decreased by 10%, while other administrative expenses
increased by 24%. Over the full year, marketing and other administrative
expenses are expected to be in-line with the previous year. The Group recorded
an increase in gross profits to £986k (2005: £737k).
United Kingdom
In the UK markets, new listings further expanded distribution. All agency brands
are contributing ahead of last year's figures, despite higher advertising and
promotion costs. This trend indicates that all brands have attained
profitability. Initial indications for the Christmas holiday period show forward
orders significantly ahead of last year.
United States
In the US, distribution expanded and equivalent case shipments increased by 23%.
Gross margins on Players Extreme and our wine portfolio have increased and all
brands are contributing after advertising and promotion costs. Initial
indications for the second half of the year appear very promising and strongly
ahead of last year.
Diamante Spirits (Associate)
The first brand launched by our Joint Venture with Suntory is a new luxury
tequila, El Diamante del Cielo Tequila. The brand has been positively received
in the 44 US States to which it has been currently introduced. The company
recorded a share of loss in Associate of £198k; however, working capital for the
joint venture is contributed by our partner. The brands in the joint venture
continue to contribute significantly to Blavod Extreme Spirits.
Partnerships
The Group continues to form partnerships with other drinks companies to
distribute their brands in the UK and US. In the UK, the Group distributes
Mickey Finn, Fernet Branca, Molinari Sambuca, the wines of the Domaines de Baron
Rothschild and recently added Cockspur Rum and Matariki Wines. The
representation and distribution relationships have all made positive
contributions and they now represent 65% of our UK business. In the US, we
distribute an Italian wine portfolio, including wines from Bruno Rocca,
Baroncini, L'Illuminata, Petra and Contadi Castaldi among others, which now
represent 31% of our US business.
These partnerships have made positive contributions and continue to increase the
Group's presence amongst key distributors and accounts.
Possible offer for the issued share capital in the Company
Further to our announcement on 28 November 2006, the Company confirms that
discussions regarding this possible offer are still ongoing. A further
announcement will be made in due course.
Outlook
The Group is continuing to establish its brands in its major target markets. In
the second half of the year the Group expects to continue the momentum of the
first half. The second half of the year is the main season for wine and spirit
sales and there are early positive indications that our brands are continuing to
demonstrate their potential.
Jeffrey S. Hopmayer
Chief Executive
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 30
SEPTEMBER 2006
Year to
Six months to 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated
Notes £ 000 £ 000 £ 000
Turnover 3,540 2,203 5,353
Cost of sales (2,554) (1,466) (3,682)
-------- -------- --------
Gross profit 986 737 1,671
Marketing and
administrative expenses (2,484) (2,315) (4,188)
-------- -------- --------
Operating loss (1,498) (1,578) (2,517)
Share of operating loss
in associate (198) (78) (470)
-------- -------- --------
(1,696) (1,656) (2,987)
Bank interest receivable
Group 13 39 48
Associate 0 1 3
-------- -------- --------
13 40 51
Loss on ordinary
activities before
taxation (1,683) (1,616) (2,936)
Taxation 0 0 0
-------- -------- --------
Loss for the financial
period (1,683) (1,616) (2,936)
======== ======== ========
Loss per share 2 (2.36p) (2.47p) (4.11p)
Diluted loss per share 2 (2.36p) (2.47p) (4.11p)
UNAUDITED CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the
six months ended 30 SEPTEMBER 2006
Year to
Six months to 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Restated
Notes £ 000 £ 000 £ 000
Loss for the financial
period (1,683) (1,616) (2,936)
Investment in
associated undertaking
recognised in other
reserves 1 0 635 931
Foreign exchange
differences on
conversion of net
investments (59) 246 (384)
-------- -------- --------
Total recognised losses
for the period (1,742) (735) (2,389)
Prior year adjustments 1 (1,052) 0 0
-------- -------- --------
Total recognised losses
since the last audited
financial statements (2,794) (735) (2,389)
======== ======== ========
UNAUDITED CONSOLIDATED BALANCE SHEET as at 30 SEPTEMBER 2006
31 March
2006
2006 Unaudited 2005 Unaudited Audited
Restated
Notes £ 000 £ 000 £ 000
Fixed assets
Intangible
assets 3,779 3,847 3,728
Tangible assets 35 66 55
Investment in
associate 266 558 464
-------- -------- --------
4,080 4,471 4,247
-------- -------- --------
Current assets
Stock 1,309 1,052 1,089
Debtors 1,972 1,375 1,405
Cash at bank 372 880 1,070
-------- -------- --------
3,653 3,307 3,564
Creditors:
amounts
falling due
within one
year (3,361) (1,177) (1,716)
-------- -------- --------
Net current
assets 292 2,130 1,848
-------- -------- --------
Total assets
less current
liabilities 4,372 6,601 6,095
Creditors:
amounts
falling due
after one year 0 (10) (5)
-------- -------- --------
Net assets 4,372 6,591 6,090
======== ======== ========
Capital and reserves
Called up
share capital 714 654 714
Share premium
account 18,001 16,916 18,001
Other reserves 3 266 558 464
Shares to be
issued 3 1,077 1,044 1,052
Profit and
loss account 3 (15,686) (12,581) (14,141)
-------- -------- --------
Shareholders'
funds 4,372 6,591 6,090
======== ======== ========
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT for the period ended 30 SEPTEMBER
2006
Year to
Six months to 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
£ 000 £ 000 £ 000
Cash outflow from operating
activities (1,738) (1,289) (2,251)
Returns on investments
Interest received 13 40 48
-------- -------- --------
Net cash inflow from returns on
investments 13 40 48
Capital expenditure
Purchase of tangible fixed
assets (3) (9) (2)
Expenditure relating to the
registration of trademarks 0 (3) (10)
-------- -------- --------
Net cash outflow for capital
expenditure (3) (12) (12)
-------- -------- --------
Cash outflow before financing (1,728) (1,261) (2,215)
Financing
Draw-down on credit facility 1,030 0 0
Issue of ordinary share capital 0 0 1,240
Share issue costs 0 0 (95)
Repayment of capital element of
finance lease rental 0 (1) (2)
-------- -------- --------
Net cash inflow/(outflow) from
financing 1,030 (1) 1,143
-------- -------- --------
Decrease in cash in the period (698) (1,262) (1,072)
======== ======== ========
NOTES TO THE FINANCIAL STATEMENTS for the six months ended 30 SEPTEMBER 2006
1. Basis of preparation
The financial information in this interim statement is prepared under the
historical cost convention and in accordance with applicable accounting
standards. It does not constitute statutory accounts as defined in Section 240
of the Companies Act 1985. The financial information for the full preceding year
is based on the statutory accounts for the year to 31 March 2006, restated to
adopt Financial Reporting Standard 20: Share-based payments. The statutory
accounts for the year to 31 March 2006, upon which the auditors issued an
unqualified opinion, have been delivered to the Registrar of Companies. As a
result of adoption of Financial Reporting Standard 20, profit for the year to 31
March 2006 is reduced by £20,000 from that stated in the statutory accounts for
the year to 31 March 2006 and unaudited profit for the period to 30 September
2005 is reduced by £12,000 from that stated in the interim report for the six
months ended 30 September 2005.
Whilst net assets are unaffected, the profit and loss reserve 31 March 2006 is
reduced by £1,052,000 (September 2005 unaudited: £1,044,000) and the shares to
be issued reserve is increased by an equivalent amount.
Other than adoption of FRS 20, the interim financial information has been
prepared on the basis of the accounting policies set out in the Group's
statutory accounts for the year ended 31 March 2006.
In the prior period, Blavod Extreme Spirits PLC acquired a 50% holding in an
associated undertaking, Diamante Spirits LLC,at zero cost. The associate is
included in the consolidated accounts on an equity accounting basis, in that the
Group's share of the net assets of the associate are included within investment
in associate and the Group share of the profits or losses are included within
the profit and loss account.Suntory International Corporation, which owns the
other 50% of the associate, has invested £1,754,483 in Diamante Spirits, LLC
since its formation, and the Group's share of this amount is included within
other reserves. A transfer equivalent to the Group's share of the loss for the
period has been made between other reserves and the profit and loss account
within shareholders' funds.
2. Loss per share
The calculations of earnings per share for the six months, both basic and
diluted, are based on a loss of £1,683,000 (2005: £1,616,000) and 71,379,700
(2005: 65,443,633) shares in issue. The calculations of earnings per share for
the full year to 31 March 2006 are based on a loss of £2,936,000, and 71,379,700
shares in issue.
3. Movement in reserves
Other Shares to be Profit and
Reserves Issued Loss
At 31 March
2006 as
previously
stated 464 0 (13,089)
Prior period
adjustment 0 1,052 (1,052)
-------- -------- --------
At 31 March
2006 adjusted 464 1,052 (14,141)
Loss for the
period 0 0 (1,683)
Share of loss
in associate (198) 0 198
Foreign 0 0 (59)
Share options 0 25 0
-------- -------- --------
At 30
September 2006 266 1,077 (15,685)
======== ======== ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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