Ekf Diagnostics Regulatory News (EKF)

15 Aug 2005 06:00

Embargoed: 07:00hrs 15th August 2005 International Brand Licensing PLC ("IBL" or the "Company") Interim Results for the 6 month period ended 30 June 2005 Chairman's StatementI am pleased to present my first statement as Chairman of a company that I havetaken great interest in since its admission to AIM in 2002.For the six months ending 30 June 2005 turnover increased by ‚£130,000 to ‚£1,456,000 (2004: ‚£1,326,000) and profits on ordinary activities before taxincreased by ‚£50,000 to ‚£101,000 (2004: profit of ‚£51,000); in addition, anexceptional gain before tax of ‚£534,000 was generated on the disposal of theMountain Equipment trademarks.The 9.8% increase in turnover is almost all attributable to exceptional salesof the Admiral England cricket replica kit in advance of, and during, the longsummer programme against Australia. With England well positioned in the currentAshes Series that continues through to the middle of September, Admiral cricketsales in 2005 will achieve a record level for the second successive year.The media coverage of England cricket this year has reached unprecedentedlevels, as has the visibility of the Admiral brand both on television andthrough the press. This widespread exposure of the Admiral logo, together withthat achieved through the number of Admiral cricket replica shirts sold andworn, has significantly raised the profile of the brand, adding further valuefor the future.Other than the cricket replicas, Admiral sales at ASDA during the first half ofthe year were below the levels of 2004 which themselves were boosted by theEuro 2004 Football Championship. However, with new products being launchedduring the second half of the year, we are confident that overall sales at ASDAin 2005 will show a strong increase on 2004 despite the difficult tradingconditions of the UK retail sector.In February we entered into a new long term license agreement with IPGI Inc forAdmiral in Japan. Admiral has been present in the traditional Japanesesportswear market for over twenty years, but this new representation will driveAdmiral into the huge and lucrative Japanese sports fashion sector for thefirst time.The company is presently involved in negotiations with potential Admirallicensee partners in several other major international markets, and ifsuccessfully concluded these new alliances will generate valuable additionalrevenue streams in the years to come.On 28th April we announced the sale of the Mountain Equipment trademarks toSwiss Cutlery for a cash consideration of ‚£3,000,000. The proceeds were used topay off the balance of the company's term loan, and to invest in additionalAdmiral cricket inventory to service the demand this season. In terms of theroyalties received since its acquisition in 1999 together with the saleproceeds, this represented an excellent transaction for the company.On 21st April we announced the appointment of Gordon Hall as non executivedirector, and further Board changes were announced on 28th June with theresignation of Mark Kirkland as Finance Director, and the appointment of hissuccessor, Paul Foulger. My transition from non executive director to nonexecutive Chairman was also announced on the same day. The Board would like tothank Mark for his contribution to the company and at the same time welcomePaul who brings with him extensive experience of public company operations.The current year finds the company in a much stronger and healthier positionthan at any time since its foundation. Having eliminated its debt andstrengthened the balance sheet, the company can now focus on driving forwardits major asset, Admiral, where the opportunities are extensive. The Board isvery confident that future prospects are significant, and that 2005 willrepresent the start of a strong period of growth.Adam ReynoldsChairman15th August 2005Group Profit and Loss AccountFor the period ended 30 June 2005 6 month 6 month Year ended period ended period ended 31 December 30 June 30 June 2004 2005 2004 (unaudited) (unaudited) (audited) Notes ‚£000 ‚£000 ‚£000 Turnover 1,456 1,326 2,235 Cost of sales (521) (322) (561) _________ __________ __________ Gross Profit 935 1,004 1,674 Administrative expenses (770) (864) (1,963) _________ __________ __________ Operating Profit/(Loss) 165 140 (289) Exceptional profit on sale of 534 - -intangible fixed asset Interest payable and similar (64) (89) (216)charges _________ __________ __________ Profit/(Loss) on ordinary 635 51 (505)activities before tax Tax on ordinary activities -current year (36) (63) (84) -prior year - (70) ¯¼ -on Exceptional item (153) - - __________ __________ __________ (189) (133) (84) Profit/(Loss) on ordinary 446 (82) (589)activities after tax Ordinary dividend on equity - - -shares __________ _________ __________ Retained Profit/(Loss) for the 446 (82) (589)period ========== ========= ========== Earnings/(Loss) per ordinary share - basic 3 1.3p (0.3p) (1.9p) - diluted 3 1.3p (0.3p) (1.9p)Group Statement of Total Recognised Gains and LossesFor the period ended 30 June 2005 6 month 6 month Year ended period ended period ended 31 December 30 June 30 June 2004 2005 2004 (unaudited) (unaudited) (audited) ‚£000 ‚£000 ‚£000 Profit/(Loss) for the period 446 (82) (589) Exchange differences (276) (145) 28 --------- ---------- ---------- Total recognised gains or 170 (227) (561)losses relating to the period ========= ========== ==========Group Balance SheetFor the period ended 30 June 2005 30 June 2005 30 June 2004 31 December 2004 (unaudited) (unaudited) (audited) Notes ‚£000 ‚£000 ‚£000 Fixed assets Intangible assets 3,391 5,659 5,952 Tangible assets 12 18 15 ---------- ---------- ---------- 3,403 5,677 5,967 ---------- ---------- ---------- Current assets Stock 329 271 217 Debtors 1,612 944 364 Cash at bank and in hand 63 9 109 ---------- ---------- ---------- 2,004 1,224 690 Creditors: amounts falling due (2,122) (2,237) (3,542)within one year ---------- ---------- ---------- Net current liabilities (118) (1,013) (2,852) ---------- ---------- ----------Total assets less current 3,285 4,664 3,115liabilities Creditors: amounts falling due - (1,937) -after more than one year ---------- ---------- ----------Net assets 3,285 2,727 3,115 ========== ========== ========== Capital and reserves Share capital 333 303 333 Share premium 3,048 2,356 3,048 Merger reserve 244 244 244 Profit and loss account (340) (176) (510) ---------- ---------- ----------Equity shareholders' funds 3,285 2,727 3,115 ========== ========== ==========The financial statements were approved by the Board on 15th August 2005Group statement of cash flowsFor the period ended 30 June 2005 6 month 6 month Year ended period ended period ended 31 December 30 June 2005 30 June 2004 2004 (unaudited) (unaudited) (audited) Notes ‚£000 ‚£000 ‚£000 Net cash inflow/(outflow) from 5(a) 21 (429) (430)operating activities Returns on investments and servicing of finance Interest paid (67) (89) (224) Taxation Tax paid - (9) (198) Capital expenditure and financial investment Purchase of intangible fixed (41) - (82)assets Proceeds from sale of 2,639 - -intangible fixed asset ---------- --------- ---------- Net cash inflow/(outflow) 2,552 (527) (934)before financing ---------- ---------- ---------- Financing Repayment of bank borrowings (2,563) - (250) Issue of ordinary shares - 496 1,329 Less Expenses of issue - - (111) ---------- ---------- ---------- Net cash (outflow)/inflow from (2,563) 496 968financing ---------- ---------- ---------- (Decrease)/increase in cash in 5(b) (11) (31) 34the period ========== ========== ========== Notes to the Interim ReportAt 30 June 20051. Basis of preparation and abridged accountsThe financial information for the 6 months ended 30 June 2005 is prepared underthe historical cost convention and in accordance with applicable United Kingdomlaw and accounting standards and has been prepared on the basis of theaccounting policies set out in the group's statutory accounts for the yearended 31 December 2004 and is unaudited.The financial information set out on pages 3 to 6 does not constitute fullfinancial statements as defined in section 240 of the Companies Act 1985. Thefinancial information for the full preceding year is based on the statutoryaccounts for the financial year ended 31 December 2004. These accounts, uponwhich the auditors issued an unqualified opinion, have been delivered to theRegistrar of Companies.Intangible assetsIntangible assets represent acquired trademarks and are recorded at historiccost. No amortisation is charged as they are regarded as having infinite lives.The results reflect the significant expenditure incurred in the support anddevelopment of these brands. In addition, the trademarks are supported by theexistence of international licensee agreements, which establish obligations asto guaranteed minimum licence income and marketing arrangements with the viewto maximising long-term growth. The directors believe that the licenceagreements will be renewed at the end of their legal expiry dates and that thevalue of the trademarks will be maintained. The carrying values are reviewedannually in accordance with Financial Reporting Standard No. 11 "Impairment offixed assets and goodwill" with a view to write down if impairment arises.StockStocks are stated at the lower of cost and net realisable value.2. TaxThe tax charge for the six month period ended 30 June 2005 is calculated on thebasis of the standard corporate tax rate for the full year.3. Earnings/(Loss) per ordinary share 6 month period 6 month period Year ended 31 ended 30 June ended 30 June December 2004 2005 2004 No. No. No. Weighted average ordinary shares 33,343,353 29,874,281 30,864,935in issue during the period Dilutive effect of share options 329,005 252,197 276,229 ------------ ----------- ------------ Diluted weighted average ordinary 33,672,358 30,126,478 31,141,164shares ============ =========== ============ ‚£000 ‚£000 ‚£000 Net profit/(loss) for the 446 (82) (589)financial period ============ =========== ============ Pence Pence Pence Basic earnings/(loss) per 1p 1.3 (0.3) (1.9)ordinary share Diluted earnings/(loss) per 1p 1.3 (0.3) (1.9)ordinary share 4. Notes to the statement of cash flows(a) Reconciliation of operating profit/(loss) to net cash inflow/(outflow) fromoperating activities 6 month 6 month Year ended 31 period ended period ended December 2004 30 June 2005 30 June 2004 ‚£000 ‚£000 ‚£000 Operating profit/(loss) 165 140 (289) Depreciation 1 4 7 (Increase)/decrease in debtors (1,248) (565) (30) (Increase)/decrease in stock (112) (201) (147) Increase/(decrease) in creditors 985 199 60 Gain/(loss) on exchange (304) (6) (31) Exceptional profit on sale of 534 - -intangible asset ----------- ----------- ----------- 21 (429) (430) =========== =========== ===========(b) Reconciliation of net cash flow to movement in net debt 6 month period 6 month period Year ended 31 ended 30 June ended 30 June December 2004 2005 2004 ‚£000 ‚£000 ‚£000 (Decrease)/increase in cash in (11) (31) 34the period Decrease in bank borrowings 2,563 - 250 ----------- ----------- ----------- Change in net debt arising from 2,552 (31) 284cash flows Exchange differences - - Net debt at beginning of period (2,489) (2,773) (2,773) ----------- ----------- ----------- 63 (2,804) (2,489) =========== =========== ===========(c) Analysis of net debt At 1 Cash Exchange At 30 January flows differences June 2005 2005 ‚£000 ‚£000 ‚£000 ‚£000 Cash at bank 74 (11) - 63 Bank borrowings (2,563) (2,563) - - ------- -------- -------- --------- (2,489) (2,574) - 63 ======= ======= ======== =========For further information please contact:Adam Reynolds, ChairmanPaul Foulger, Finance DirectorInternational Brand Licensing Plc+44 (0)20 7245 1100ENDINTERNATIONAL BRAND LICENSING PLC