Last checked at 25 Nov 2008 07:00
Blavod Extreme Spirits PLC ("Blavod" or "the Group")
Interim Results for the six months to 30 September 2008
Blavod Extreme Spirits PLC (AIM: BES), the owner and licencee of a number of spirits brands including Blavod Black Vodka and Blackwood's Gin and Vodka worldwide, and a distributor of a number of branded spirits and wines in the UK, announces its interim results for the six months to 30 September 2008.
Chairman's Statement
Blavod announces that sales increased 36% to £2.47 million in the first six months of the financial year ending 30th September 2008. The Group made an interim profit before tax for the first time of £43k (2007: loss £1.321 million). Stripping out discontinued operations from the comparative period last year, this shows an improvement of some £120k.
Sales grew across all brands in both UK and export markets. Blavod Black Vodka grew by 11%. While the export business flourished, UK volumes were held back because the brand was absent temporarily from the shelves of one major customer.
Blackwoods Gin and Vodka, which the Group began to sell in the summer, took time to reach full production. However, distribution was achieved in many of the targeted up-scale outlets and sales were encouraging. Our first export sales were made in the period and there is continued high level of interest in the brand.
Gross margin is an important measure of performance. Reported revenue includes excise tax on sales to some UK customers: the Group makes no margin on this activity as a tax-collector. .Gross margin on sales net of excise tax was 28%, the comparative figure in 2007 was 29.7%. Commission income, which is included in revenue and gross profit, rose only marginally in the period, and this accounts for the slight decline in the overall rate of gross margin.
Administrative costs increased by 4%, due to higher promotional expenditure behind Blavod Black Vodka and the recruitment of an additional salesperson. In total, other administration costs were reduced.Finances, already bolstered by raising £400k of new capital in December 2007, were further strengthened by arranging an invoice discounting facility in the spring.Prospects
A strong level of forward orders and customer forecasts has encouraged the increase of promotional budgets and allows the Board to be confident of a strong performance over the Christmas season. Furthermore, higher margin export interest in the brands is increasing, particularly in Russia and in the bellwether Duty Free markets.
Whilst these factors are encouraging, it would however be rash to forecast that current economic conditions will not affect levels of demand or put pressure on margins in due course.
The performance, in what is traditionally the weaker half of the year would, in more congenial economic times, justify the recruitment of people to develop our potential and substantially increased investment in advertising and promotion. However, given the current environment we believe it is more appropriate for the Group to continue to maintain a cautious approach and strict control of all costs. We shall thus be well-placed for faster expansion when the economic climate improves.
Finally the Directors have decided, after a review of the audit services provided to the Group, to propose the appointment of Grant Thornton LLP in place of Nexia Smith & Williamson Audit Limited as the Group's auditor.
Colin Campbell
Non-executive Chairman
For further information, please contact:
Blavod Extreme Spirits plc
Richard Ambler (Managing Director) 0207 352 2096
Brewin Dolphin (Nominated Adviser)
Neil Baldwin/Alison Barrow 0845 270 8600
Condensed consolidated interim income statement
| | | Six months ended 30 September 2008 | Six months ended 30 September 2007 | Year ended 31 March 2008 |
| | | Un-audited | Un-audited | Audited |
| | | | | |
| | | £’000 | £’000 | £’000 |
| | | | | |
| Revenue | | 2,473 | 1,815 | 4,092 |
| | | | | |
| Cost of sales | | (1,837) | (1,340) | (3,091) |
| | | | | |
| Gross profit | | 636 | 475 | 1,001 |
| | | | | |
| Administrative costs | | (583) | (558) | (1,166) |
| | | | | |
| Operating profit/(loss) | | 53 | (83) | (165) |
| | | | | |
| Finance (expense)/income | | (10) | 6 | 10 |
| | | | | |
| Net finance (cost)/income | | (10) | 6 | 10 |
| | | | | |
| Profit/(loss) before tax from continuing operations | | 43 | (77) | (155) |
| | | | | |
| Discontinued operations | | | | |
| (Loss)/profit for the period from discontinued operations | | - | (1,244) | 1,238 |
| | | | | |
| Profit/(loss) for the period | | 43 | (1,321) | 1,083 |
| | | | | |
| | | | | |
| Earnings per share: | | | | |
| From continuing operations | | | | |
| | | | | |
| Basic (pence per share) | | 0.05 | (0.11) | (0.20) |
| | | | | |
| Diluted (pence per share) | | 0.05 | (0.11) | (0.20) |
Condensed consolidated interim balance sheet
| | | As at 30 September 2008 | As at 30 September 2007 | As at 31 March 2008 |
| | | Un-audited | Un-audited | Audited |
| | | | | |
| | | £’000 | £’000 | £’000 |
| | | | | |
| ASSETS | | | | |
| Non current assets | | | | |
| Property, plant and equipment | | 6 | 1 | 1 |
| Intangible assets | | 1,066 | 641 | 615 |
| | | | | |
| Total non-current assets | | 1,072 | 642 | 616 |
| | | | | |
| Current assets | | | | |
| Inventories | | 288 | 230 | 220 |
| Trade and other receivables | | 1,396 | 881 | 1,057 |
| Cash and cash equivalents | | 63 | 247 | 502 |
| | | 1,747 | 1,358 | 1,779 |
| Non current assets classified as held for sale | | - | 1,306 | - |
| | | | | |
| Total current assets | | 1,747 | 2,664 | 1,779 |
| Total assets | | 2,819 | 3,306 | 2,395 |
| | | | | |
| LIABILITIES | | | | |
| Current liabilities | | | | |
| Trade and other payables | | (1,310) | (1,079) | (929) |
| Liabilities directly associated with non-current assets classified as held for sale | | - | (2,923) | - |
| | | | | |
| Total current liabilities | | (1,310) | (4,002) | (929) |
| Total liabilities | | (1,310) | (4,002) | (929) |
| | | | | |
| Net assets/(liabilities) | | 1,509 | (696) | 1,466 |
| | | | | |
| EQUITY | | | | |
| Equity attributable to equity holders of the parent | | | | |
| Share capital | | 878 | 732 | 878 |
| Share premium account | | 18,489 | 18,240 | 18,489 |
| Shares to be issued | | 96 | 1,105 | 682 |
| Other reserve | | - | 26 | - |
| Profit and loss account | | (17,954) | (21,442) | (18,583) |
| Translation reserve | | - | 643 | - |
| | | | | |
| | | | | |
| Total equity | | 1,509 | (696) | 1,466 |
Condensed consolidated interim cash flow statement
| | | Six months ended 30 September 2008 | Six months ended 30 September 2007 | Year ended 31 March 2008 |
| | | Un-audited | Un-audited | Audited |
| | | | | |
| | | £’000 | £’000 | £’000 |
| | | | | |
| Cash flows from operating activities | | | | |
| Profit/(loss) before taxation | | 43 | (1,321) | 1,083 |
| Adjustments for: | | | | |
| Depreciation | | - | 33 | 32 |
| Amortisation | | 27 | 41 | 54 |
| Share-based payment | | - | 12 | 27 |
| Share of losses in associates | | - | 223 | - |
| Net foreign exchange (gain)/loss | | 9 | 43 | (66) |
| Net finance costs/(income) | | - | 112 | (10) |
| Disposal of US operations | | - | - | (2,274) |
| | | | | |
| | | 79 | (857) | (1,154) |
| Movements in working capital | | | | |
| (Increase)/decrease in inventories | | (68) | 91 | 1,523 |
| (Increase)/decrease in trade receivables | | (339) | 164 | 524 |
| Increase/(decrease) in trade payables | | 381 | 516 | (1,335) |
| | | | | |
| Cash gained from/(used by) operations | | 53 | (86) | (442) |
| Interest paid | | (12) | (91) | (79) |
| | | | | |
| Net cash used in operating activities | | 41 | (177) | (521) |
| | | | | |
| Cash flows from investing activities | | | | |
| Interest received | | 2 | 6 | 10 |
| Purchase of property, plant and equipment | | (5) | (38) | - |
| Proceeds from the sale of subsidiary and associate | | - | - | 220 |
| Expenditure relating to the registration of trademarks | | (478) | - | (3) |
| | | | | |
| Net cash used in investing activities | | (481) | (32) | 227 |
| | | | | |
| Cash flows from financing activities | | | | |
| Proceeds from the issue of share capital | | - | - | 395 |
| Proceeds from long term borrowings | | - | 66 | - |
| | | | | |
| Net cash from financing activities | | - | 66 | 395 |
| | | | | |
| Net (decrease)/increase in cash and cash equivalents | | (440) | (143) | 101 |
| Cash and cash equivalents at beginning of period | | 502 | 401 | 401 |
| Effects of exchange rate changes on balance of cash held in foreign currencies | | 1 | (2) | - |
| | | | | |
| Cash and cash equivalents at end of period | | 63 | 256 | 502 |
Notes:
1. Basis of preparation: un-audited, but in accordance with the Group's accounting policies as declared as at 31 March 2008
2. Availability of interim statement
Copies of this interim statement will be available from the Group's head office at 202 Fulham Road, London, SW10 9PJ.
In addition they are available on the Group's website: www.blavodextreme.com