Distil Regulatory News (DIS)

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 

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