Last checked at 19 Sep 2007 07:00
CHAIRMAN'S STATEMENT
During the first six months of the year Group Revenue decreased by 11.7% to ‚£1,534,000 (2006: ‚£1,738,000), and Operating Profit before exceptionals decreased by 35.4% to ‚£204,000 (2006: ‚£316,000). It should be noted that administrative expenses include ‚£50,000 (2006: Nil) of costs associated with developing the Muscle Athletic brand.
The reduction in revenues and operating profit was due entirely to a decline in the Admiral England cricket replica sales compared with the first half of 2006. This was due to a combination of factors, not least the team's performance in the ICC Cricket World Cup in the West Indies, exceptionally poor weather, and a very depressed UK sports retail sector.
Against this backdrop the board decided to take advantage of an offer to terminate its exclusive Admiral ECB sponsorship one year early, as at 31 March 2008, in return for a cash consideration of ‚£1,600,000. This represented an excellent transaction for the company in terms of strengthening the balance sheet.
After three record years in succession we firmly believe that the cricket sales potential peaked last year in the aftermath of England's 2005 Ashes victory. Admiral's worldwide licensing operations, however, continue to grow, and although the UK remains very challenging, we successfully appointed the Henderson Group as Admiral's first ever watch licensee for the UK and Ireland.
In addition we are pleased to announce a first ever licensee appointment in Korea, Geoclick Ltd, which will boost our overall presence in Asia. This five year agreement will generate minimum guaranteed revenue of ‚£135,000, with expectations significantly higher. Furthermore, we are in advanced discussions with a potential new licensee for China that, if concluded, will see the Admiral brand launched there for the first time to coincide with the Beijing Olympic Games next summer.
Our development of Muscle Athletic is on schedule for its launch at the end of the year, and we already have a number of parties interested in licensing the brand across several categories in their territories.
Your board will continue to pursue opportunities to add value to the company from both a corporate and licensing perspective and we remain very confident in the future prospects of the business.
Adam ReynoldsChairman
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED INCOME STATEMENTFOR THE PERIOD ENDED 30 JUNE 2007 Six months to Six months to Year to 30.06.07 30.06.06 31.12.06 Notes Unaudited Unaudited Unaudited ‚£000 ‚£000 ‚£000 Group Revenue 4 1,534 1,738 3,077 Cost of Sales (669) (813) (1,503) _________ _________ _________GROSS PROFIT 865 925 1,574 Administrative Expenses (661) (609) (927) _________ _________ _________PROFIT FROM OPERATIONS BEFORE 204 316 647
EXCEPTIONAL ITEMS
Exceptional profit on sale ofintangible assets 1,496 201 121Exceptional write off of 2 (150) - -sponsorship costsShare based payments (30) (139) (182)Diminution in value of 2 (300) - -intangible asset _________ _________ _________PROFIT FROM OPERATIONS AFTER 1,220 378 586EXCEPTIONAL ITEMS Finance revenue 16 - -Finance costs (8) (2) (4) _________ _________ _________ PROFIT BEFORE TAXATION 1,226 376 582 Income tax expense 5 (296) (33) 14 _________ _________ _________ PROFIT FOR THE PERIOD 932 343 596
ATTRIBUTABLE TO EQUITY HOLDERS
________ ________ ________ Earnings per shareBasic and diluted 6 2.8p 1.0p 1.8p ________ ________ ________
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE PERIOD ENDED 30 JUNE 2007
At At At 30.06.07 30.06.06 31.12.06 Unaudited Unaudited Unaudited ‚£000 ‚£000 ‚£000Profit for the period 932 343 596Differences on translation on (118) 3 (161)translations of foreign operationsPrior year adjustment - - (62) _______ _______ _______ Total recognised income and expenditure 814 346 373for the period all attributed to equityshareholders ________ ________ ________
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2007 At At At 30.6.07 30.06.06 31.12.06ASSETS Unaudited Unaudited Unaudited ‚£000 ‚£000 ‚£000 Non-current assetsIntangible assets - Trademarks 2,814 2,964 3,142Plant and equipment 8 9 9 _______ _______ _______ 2,822 2,973 3,151 _______ _______ _______ Current assetsInventories 614 505 593Trade and other receivables 1,534 1,925 1,377Cash and cash equivalents 1,255 271 40 _______ _______ _______ 3,403 2,701 2,010 _______ _______ _______ Current liabilitiesTrade and other payables (1,112) (1,530) (862) _______ _______ _______ (1,112) (1,530) (862) _______ _______ _______ Net current assets 2,275 1,171 1,148 _______ _______ _______ NET ASSETS 5,113 4,144 4,299 _______ _______ _______ EQUITY Issued share capital 336 333 336Share premium account 3,090 3,048 3,090Reverse acquisition - Merger reserve 244 244 244Retained profits 1,443 519 629 _______ _______ _______ TOTAL EQUITY 5,113 4,144 4,299 _______ _______ _______
The financial statements were approved by the Board of Directors on 17 September 2007
Paul FoulgerDirector
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED CASH FLOW STATEMENTFOR THE PERIOD ENDED 30 JUNE 2007 Six months Six months Year to ended ended 31.12.06 30.06.07 30.06.06 Unaudited Unaudited Unaudited ‚£000 ‚£000 ‚£000Cash flow from operating activitiesProfit from operations 1,220 378 586 Adjusted for:Depreciation of tangible assets 1 3 5Diminution in value of intangible asset 300 - -Exchange differences (118) 3 -Share based payments 30 84 182Increase in trade and other receivables (157) (1,112) (598)(Increase)/decrease in inventories (22) 336 (369)Increase(decrease) in trade payables 129 (253) (341)Finance revenue 16 - - Finance costs (8) (2) (4) Exceptional profit on sale of intangible (1,496) (201) (121)asset Tax paid (11) (22) (166) ________ ________ ________Net cash from operating activities (116) (786) (826) ________ ________ ________ Cash flows from investing activitiesProceeds from disposal of intangible assets 1,600 721 775 Purchase of property, plant and equipment - (3) (4) Cash expended on purchase of intangible - (13) (446)
assets
________ ________ ________Net cash inflow from investing activities 1,600 705 325 ________ ________ ________ Net increase/(decrease) in cash & cash 1,484 (81) (501)
equivalents
Opening cash & cash equivalents (229) 272 272 ________ ________ ________ Closing cash & cash equivalents 1,255 191 (229) ________ ________ ________
INTERNATIONAL BRAND LICENSING PLC
STATEMENT OF CHANGES IN EQUITYFOR THE PERIOD ENDED 30 JUNE 2007 Share Share Merger Profit and Total Capital Premium Reserve Loss account equity ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 At 1 January 2007 336 3,090 244 629 4,299 Profit for the - - - 932 932period Exchange - - - (118) (118)differences ontranslation offoreign operation ________ ________ ________ ________ ________At 30 June 2007 336 3,090 244 1,443 5,113 ________ ________ ________ ________ ________
INTERNATIONAL BRAND LICENSING PLC
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. Basis of preparation of the financial statements
The company has previously prepared its previous financial statements under UK GAAP. With effect for periods commencing on or after 1 January 2007, the group is required to prepare its financial statements in accordance with International Financial Reporting Standards (IFRS) as endorsed for use in the European Union.
The financial information presented in this report has been prepared using accounting policies that will be used in the preparation of the financial statements for the year ended 31 December 2007. These policies are in accordance with IFRS and International Financial Reporting Interpretation Committee (IFRIC) interpretations that are expected to be applicable for the year ended 31 December 2007.
The comparative figures included in this report for the six months ended 30 June 2006 and the full year ended 31 December 2006 are restated for IFRS and are unaudited.
The conversion to IFRS has resulted in presentational changes only. Accordingly no disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS are given.
IFRS 1 permits companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period. Accordingly business combinations prior to the date of transition to IFRS have not been restated to comply with IFRS 3 `Business Combinations'. Changes resulting from the adoption of IFRS 2 / FRS 20 had already been recognised in the accounts for the year ended 31 December 2006.
The comparatives for full year ended 31 December 2006 are based on the latest published audited accounts, but are subject to unaudited restatement to IFRS as endorsed for use in the European Union. Accordingly they are not the company's full statutory accounts for the year. A copy of the statutory accounts for that year was prepared in accordance with UK GAAP and has been delivered to the Register of Companies. The auditors' report on those accounts was unqualified, did not includes any references to matters to which the auditors drew attention by way of emphasis without qualifying their report; and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
2. Intangible assets
Intangible assets represent acquired trademarks and are recorded at historic cost. No amortisation is charged as they are regarded as having infinite lives. The annual results reflect the significant expenditure incurred in the support and development of these brands. In addition, the trademarks are supported by the existence of international licensee agreements, which establish obligations as to guaranteed minimum licence income and marketing arrangements with the view to maximising long-term growth. The directors believe that the licence agreements will be renewed at the end of their legal expiry dates and that the value of the trademarks will be maintained. The carrying values are reviewed annually and written down to the estimated recoverable amount as necessary.
The directors have not yet been able to estimate fully the impact of the sale of the England and Wales cricket contract which will be reviewed at the year-end. In the meantime, however, the directors feel it prudent to make a provision for capitalised sponsorship costs and for a diminution in value of intangible asset.
3. Share-based payment
The group operates share incentive and option schemes for directors and employees. For all share awards the fair value as at the date of grant is calculated using an option pricing model and the charge to profit and loss account is recognised as a staff cost over the vesting period.
INTERNATIONAL BRAND LICENSING PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS (CONTINUED)
4. Revenue 6 months to 6 months to Year to 30.06.07 30.06.06 31.12.06 Unaudited Unaudited Unaudited ‚£000 ‚£000 ‚£000Licensing 280 275 429Replica Kit 1,254 1,463 2,648 ________ ________ _______ Total 1,534 1,738 3,077 ________ ________ ________ 5. Taxation
Taxation is based upon the estimated taxable profit for the year and has been calculated at the standard rate of 30%
6. Earning per share
The basic earnings per share is calculated by dividing the profitfor the financial year attributable to shareholders by the weighted averagenumber of shares in issue. 6 month 6 month Year ended period ended period 31.12.06 30.06.07 ended Unaudited Unaudited 30.06.06 Unaudited Weighted average number of shares 33,593,353 33,343,353 33,585,819Dilutive effect of share options 40,500 9,438 13,956 ________ ________ ________
Diluted weighted average ordinary shares 33,633,853 33,352,791 33,599,775
________ ________ ________ Profit for the period ‚£000 ‚£000 ‚£000 932 343 596 ________ ________ ________ Pence Pence Pence
Basic and diluted earnings per 1p ordinary share 2.8 1.0 1.8
________ ________ ________ Enquiries:
Paul Foulger, Finance Director - 020 7823 1733
INTERNATIONAL BRAND LICENSING PLC