1 Jul 2014 07:00
For Immediate Release | 1 July 2014
|
Preliminary Results
Koovs plc ("Koovs" or the "Company")
Koovs plc (AIM:KOOV), the fashion business focused on the young e-commerce market in India, today announces that in the three months since the acquisition of Koovs India, weekly traffic to the Koovs.com website has increased 46% and resulting sales have increased by 57%.
Key developments
At the time of the IPO we set out the five key steps which we consider are critical to achieving our objectives. The business has made good progress since then:
Build the Koovs private label - the spring 2014 ranges were launched on the website and the autumn 2014 ranges were presented to the press to an enthusiastic reception.
Bring international brands to India - we launched New Look, Lipsy, Gas and AX Paris to complement the existing fashion brands on the site.
Extend fashion credentials - we introduced an exclusive product collaboration with Patrick Cox and a hugely high-profile partnership with Henry Holland.
Develop delivery and price promises - the delivery timeframe has been shortened to five days from seven days and 70% of the private label product on the site is priced below the key £20 level.
Use technology to empower customers - we launched a mobile version of the site; 25% of our visitors are using mobile devices when they access the site.
Board appointment
We are pleased to announce the appointment of Mary Turner to the Board as a Non-Executive Director.
Commenting on the announcement Waheed Alli, Chairman, said:
"I'm pleased with our performance, having grown traffic by 46% and resulting sales by 57% since we acquired the business. We have introduced leading international brands to the Indian consumer including names such as New Look, Gas and Lipsy and we are successfully delivering on our price and delivery promises. We have also recently improved access to Koovs for consumers across India by launching the mobile version of the site.
We are focused on continuing to deliver on the five core strategic objectives set out at the time of the IPO though our unrivalled passion for fashion with a credible and experienced team, strengthened by the addition of Mary Turner who will bring enormous experience in internet technology and marketing.
Looking to the future, we expect to continue our strong growth, enhancing our fashion credentials, developing our private label ranges and introducing further exclusive collaborations as we capitalise on the exciting e-commerce opportunity in India."
Financial Results
The financial results of the Group announced today cover the six-month period ended 31 March 2014 and include the effects of the IPO and the acquisition of Koovs India on 10 March 2014. The results therefore only include three weeks trading of the new Koovs plc business.
Koovs plc | Six months to 31 March 2014 |
£000 | |
Revenue | 633 |
Loss for the period | (2,076) |
Net assets | 28,924 |
Closing cash | 21,735 |
Notes to Editors
Koovs is focused on building Koovs.com into the leading fashion destination in India. The Company is headquartered in London, where the majority of its design and buying team is based, with all other operational functions based in India.
Koovs plc acquired Koovs India on 10 March and therefore the results for the period include only three weeks' trading of the new business and 23 weeks of the privately operated business which preceded it.
For further information, please contact: |
Peel Hunt LLP | |
Dan Webster / Richard Kauffer / Richard Brown
| Tel: +44 (0) 20 7418 8900 |
Brunswick Group LLP | |
Justine McIlroy / Rebecca Lum | Tel: +44 (0) 20 7404 5959 |
CHAIRMAN'S STATEMENT
Dear Shareholders,
Following our successful fundraising and admission to AIM we are now firmly focused on supporting Koovs.com to become India's number one fashion destination.
We are at the beginning of a journey to deliver a focused and exclusive range of high-fashion products to India's increasingly aspirational young population. We believe we will succeed by building fashion credibility through strong brands, carefully curated collections and exclusive, high fashion own-label products delivered in the environment of a fashion-forward, knowledgeable and respected website.
We have made good progress since the IPO, having grown traffic by 46% and resulting sales by 57%, albeit from a low base. The conversion rate and average basket size are both consistent and have been running slightly ahead of our expectations.
At the time of the admission we set out five key steps which we would focus on to achieve our goals:
· to build the Koovs private label and establish its fashion credibility;
· to bring strong international brands to the new Indian consumer;
· to extend Koovs.com's fashion credentials by bringing both established and new designers to the consumer in India through exclusive design collaborations;
· to develop delivery and price promises for the consumer that are reliable, affordable and price-worthy; and
· to use technology to power the consumers' fashion needs.
I'm pleased to say we are making good progress in each of these areas:
Build the Koovs private label - the spring 2014 ranges were launched on the website in February and the autumn 2014 ranges were presented to the press to an enthusiastic reception in early June.
Bring international brands to India - we launched New Look, Lipsy, Gas and AX Paris to complement the existing fashion brands on the site.
Extend fashion credentials - we introduced an exclusive product collaboration with Patrick Cox and a high-profile partnership with Henry Holland.
Develop delivery and price promises - the delivery timeframe has been shortened to five days and 70% of the private label product on the site is priced below the key £20 level.
Use technology to empower customers - we launched a mobile version of the site; 25% of our visitors are using mobile devices when they access the site.
Encouraged by progress so far, we intend to remain focused on our strategy while working hard to maintain a strong level of growth.
It has been a very busy few months for Koovs plc and I thank all of our staff for their focus and hard work, while looking forward to an exciting and even busier year ahead.
Board Appointment
I am pleased to announce the appointment of Mary Turner to the Board as a Non-Executive Director.
Mary is Chief Executive of AlertMe.com, a leading provider of smart controls platform and analytics for the connected homes sector. Previously she was Managing Director and Chief Executive Officer of Tiscali UK Limited from 2001 to 2009 and was a non-executive director of ASOS plc between 2009 and 2013. Prior to joining Tiscali, Mary was Chief Executive Officer of BTLineOne, the joint venture between BT and United News Media, and Senior Vice President Marketing (Europe) at CompuServe Information Services. She has also held the position of product & merchandising at Innovation Group and prior to that, worked in sales and marketing at Avon Cosmetics and Elizabeth Arden.
Mary will be a strong addition to the Koovs Board, bringing with her a wealth of e-commerce and technology experience. I look forward to working with her as our business continues to grow and develop.
STRATEGIC REPORT
OPERATIONS REVIEW
Acquisition of Koovs India
Following a successful placing of shares on 10 March 2014 Koovs plc acquired a 57.5% stake in Koovs Marketing Consulting Private Limited ("Koovs India"). This created the Koovs plc Group (the "Group") allowing closer liaison between the two businesses while providing appropriate funds for the development of the fledgling operations.
Operations
Following the acquisition of Koovs India, the Group supplies branded fashion garments and accessories for exclusive distribution through the Koovs.com website including international fashion brands, iconic British high street brands and Koovs own-label product designed by a talented team based in London. The Koovs Group wholesales these products exclusively to Marble E-retail Private Limited ("Marble"), an independently owned and managed company which operates the Koovs.com website and the associated e-commerce retail distribution business under a licence granted by the Koovs Group.
Recent developments
Koovs private label
We continue to expand our ranges with a constant pipeline of new ranges and the addition of new categories including shoes, accessories, jewellery and lingerie. Menswear was launched in February 2014 and is growing as planned. The ranges for autumn 2014 were recently previewed to the press in Delhi and Mumbai resulting in excellent feed-back and immediate requests for product to be featured in the fashion press.
International brands
The brand mix is key to our fashion credibility and accounts for 60% of our sales, as planned. We are introducing fashionable high-street brands to the consumer in India including New Look, Lipsy, AX Paris, Daisy Street and Dead Lovers.
Collaborations
In January 2014 we launched our collaboration with Patrick Cox with a range of shoes and accessories for both men and women and in May we launched a range of products designed in association with Henry Holland which gathered a high level of press interest and drove further traffic to the website. We have further collaborations planned for the rest of the year.
Delivery and price promise
Our pricing reflects the quality of design and manufacture invested in our products yet is competitive in the market and attractive to the consumer. Over 70% of private label products are priced below the critical INR2000 (£20) level. We offer free deliver on orders over £5. In May the delivery promise was improved to 5 days but over 80% of orders received are delivered by the operators of the website well within that target.
Technology
Through engaging with a new technology supplier the web site load times have been improve to be best-in-class and a mobile version of the site was launched in support of the 25% of visits which are made from mobile devices. Home page features are updated weekly and more video content and celebrity style features have been added with easy links to the product shopping pages.
Key performance indicators
We monitor the Group's performance in a number of ways including assessing the performance of Koovs.com which, although it is operated by a third party, reflects the performance of the products and marketing managed by the Group. The Group monitors such metrics as traffic to the website, the rate of conversion of that traffic to sales orders, the size of those orders and the resulting sales generated. Each of these reflect the success of the Koovs.com website which is the Group's major customer and whose success is fundamental to the success of the Group.
Since the acquisition of Koovs India weekly traffic has shown good growth and both conversion rate and average basket size have been consistent and are running slightly ahead of expectations, resulting in strong growth in sales.
Trading performance
It remains very early days in the development of our business but we continue to be encouraged by progress so far and intend to remain focused on our strategy while working hard to maintain a strong level of growth. In these early days of development, revenue is at a low level and gross margins are compromised by the low volumes. Our overhead structure is considerably higher than the gross profit generated and we expect therefore to generate trading losses in the immediate future as revenues and gross margins improve. The results for the six months to 31 March 2014 include only 21 days of trading of the newly combined group. Trading in that period and since the year end has been slightly ahead of our expectations.
Outlook
We intend to remain resolutely focused on our strategy in order to capitalise on the growing Indian market.
FINANCE REVIEW
The financial results of the Koovs plc group in this report cover the six-month period from 1 October 2013 to 31 March 2014 and include the effects of a significant share issue and the acquisition of Koovs India on 10 March 2014. The comparable period was the first period of trading for the Company and covered the period from 2 August 2012 to 30 September 2013 during which time the Company had no subsidiaries.
Prior to the acquisition of Koovs India the Company's principal activity was that of providing proprietary design and merchandising services to Koovs India in connection with the development of its fashion business in India. These services were fulfilled by a talented team of designers and merchandisers based in London along with strategic and positioning guidance supplied by the senior management team.
Following the acquisition, the Group's principal activity is that of supplying branded fashion garments and accessories for sale by a third party through a branded website principally in the Republic of India. The Company changed its accounting period shortly following the acquisition in recognition of the significantly changed nature of the operations of the Group.
IPO and acquisition of Koovs India
The most significant financial event during the period was the IPO and the acquisition of Koovs India on 10 March 2014. In connection with an IPO on the AIM market of the London Stock Exchange, Koovs plc issued 14,666,667 new shares at £1.50, raising a total of £22,000,000. Of this, £16,826,000 was invested in 165,986,056 newly issued shares of Koovs India on the same day resulting in a 57.5% shareholding in Koovs India. Costs of the share issue amounted to £861,000 which has been deducted from equity. The cost of the IPO amounted to £749,000 and the costs associated with the investment in Koovs India amounted to £52,000 both of which have been expensed within operating expenses.
Financial results
Prior to the acquisition, the Company generated revenue of £544,000 through the arrangements to supply designs and merchandising services to Koovs India. Following the acquisition the revenue of the Group reflects the sale of products in India at wholesale to the business which operates the Koovs.com website and amounted to £89,000 in the 21 day period since acquisition.
Overhead costs in the UK amounted to £2,379,000 during the six month period including £801,000 of expense arising from the IPO, listing and investment process. In addition the Group incurred £235,000 of overhead expense arising in Koovs India during the 21 days of ownership.
Net interest income arising mainly in India amounted to £101,000.
In total the Group incurred trading losses amounting to £2,076,000 during the period.
Taxation
The charge for taxation in the period amounted to £88,000 and related entirely to withholding tax deducted at source in India on payments made to Koovs plc in relation to services provided to Koovs India. This withholding tax is available to offset against Corporation Tax liabilities arising in the same period, but since there was no Corporation Tax liability arising, the entire amount has been expensed.
Basic earnings per share
Earnings per share amounted to a loss of 27.2 pence per share based on earnings attributable to equity holders of £2,011,000 and weighted shares in issue of 7,400,568 reflecting the shares issued during the period. The earnings per share in the previous period was £940 based on the weighted shares in issue of 653 at that time.
Cash flow and funds
As a result of the shares issued in the period, £22,417,000 (net of expenses) was received by the Group during the period. Much of this funding was used to acquire newly issued shares in Koovs India and the funds therefore remained in the Group. The net cash effect of the acquisition was to generate an additional inflow of £857,000.
Cash of £2,181,000 was utilised in funding losses incurred in the period and investment in working capital, mainly inventory.
In total, net cash increased in the period by £21,164,000 and cash at the close of the period was £21,735,000 which will be carefully managed to fund the operations in future periods.
Financial position
Following the injection of capital as a result of the IPO, the net assets of the Group amount to £28,924,000. This includes £6,213,000 of goodwill arising on the acquisition.
Consolidated Income Statement
For the period from 1 October 2013 to 31 March 2014
Notes | 1 October 2013 to 31 March 2014 | 2 August 2012 to 30 September2013 | ||
£000 | £000 | |||
Revenue | 2 | 633 | 3,225 | |
Cost of sales | (108) | - | ||
Gross profit | 525 | 3,225 | ||
Operating expenses | (2,614) | (2,021) | ||
Operating (loss)/profit | (2,089) | 1,204 | ||
Other expenses | - | (156) | ||
Finance income | 102 | - | ||
Finance expense | (1) | - | ||
(Loss)/Profit for the period before tax | (1,988) | 1,048 | ||
Tax expense | (88) | (434) | ||
(Loss)/Profit for the period | (2,076) | 614 | ||
(Loss)/Profit attributable to: | ||||
Equity holders of the Company | (2,011) | 614 | ||
Non-controlling interests | (65) | - | ||
(Loss)/Profit for the period | (2,076) | 614 | ||
(Loss)/Profit per share | ||||
Basic (loss)/profit per share | 3 | (27.2)p | £940 | |
Diluted (loss)/profit per share | (27.2)p | £940 | ||
All results relate to continuing operations.
Consolidated Statement of Comprehensive Income
For the period from 1 October 2013 to 31 March 2014
1 October 2013 to 31 March 2014 | 2 August 2012 to 30 September2013 | ||
£000 | £000 | ||
(Loss)/Profit for the period | (2,076) | 614 | |
Other comprehensive income | |||
Items that may be reclassified to income statement in subsequent periods: | |||
Currency translation differences from overseas operations - equity holders of the parent company | 411 | - | |
Currency translation differences from overseas operations - non-controlling interest | 196 | - | |
Other comprehensive income, net of tax | 607 | - | |
Total comprehensive (loss)/ income for the period | (1,469) | 614 | |
Total comprehensive income attributable to: | |||
Equity holders of the Company | (1,600) | 614 | |
Non-controlling interests | 131 | - | |
Total income and expense recognised in the period | (1,469) | 614 | |
Consolidated Statement of Financial Position
At 31 March 2014 | 31 March 2014 | 30 September 2013 | ||
Notes | £000 | £000 | ||
Non-current assets | ||||
Intangible assets | 4 | 6,240 | - | |
Property, plant & equipment | 219 | - | ||
Non-current cash deposits | 124 |
| - | |
Total non-current assets | 6,583 |
| - | |
Current assets | ||||
Inventories | 1,089 | - | ||
Trade receivables, other receivables, prepayments and other assets | 621 | 212 | ||
Cash and cash equivalents | 21,735 | 140 | ||
Total current assets | 23,445 | 352 | ||
Total assets | 30,028 | 352 | ||
Non-current liabilities | ||||
Long-term liabilities | (34) | - | ||
Total non-current liabilities | (34) | - | ||
Current liabilities | ||||
Trade and other payables | (1,070) | (336) | ||
Total current liabilities | (1,070) | (336) | ||
Total liabilities | (1,104) | (336) | ||
NET ASSETS | 28,924 | 16 | ||
Capital and reserves | ||||
Equity share capital | 241 | 1 | ||
Share premium reserve | 22,194 | - | ||
Other reserves | 412 | - | ||
Retained earnings | (1,996) | 15 | ||
Non-controlling interest | 8,073 | - | ||
TOTAL EQUITY | 28,924 | 16 |
Consolidated Statement of Changes in Equity
For the period from 1 October 2013 to 31 March 2014
| Attributable to the equity holders of the parent | ||||||||
| Equity share capital | Share premium reserve | Share based payment reserve | Currency translation reserves | Total other reserves | Retained earnings |
Total |
Non-controlling interests | Total Equity |
£000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | |
Balance at 2 August 2012 | - | - | - | - | - | - | - | - | - |
Loss for the period - total comprehensive income | - | - | - | - | - | 614 | 614 | - | 614 |
Shares issued | 1 | - | - | - | - | - | 1 | - | 1 |
Equity dividends paid | - | - | - | - | - | (599) | (599) | - | (599) |
At 30 September 2013 | 1 | - | - | - | - | 15 | 16 | - | 16 |
Loss for the period | - | - | - | - | - | (2,011) | (2,011) | (65) | (2,076) |
Other comprehensive income | - | - | - | 411 | 411 | - | 411 | 196 | 607 |
Total comprehensive income | - | - | - | 411 | 411 | (2,011) | (16,00) | (131) | (1,469) |
Shares issued | 240 | 23,055 | - | - | - | - | 23,295 | - | 23,295 |
Costs of share issue | - | (861) | - | - | - | - | (861) | - | (861) |
On acquisition of subsidiary | - | - | - | - | - | - | - | 7,942 | 7,942 |
Share based payments reserve | - | - | 1 | - | 1 | - | 1 | - | 1 |
At 31 March 2014 | 241 | 22,194 | 1 | 411 | 412 | (1,996) | 20,851 | 8,073 | 28,924 |
Consolidated Statement of Cash Flows
For the period from 1 October to 31 March 2014
1 October 2013 to 31 March 2014 | 2 August 2012 to 30 September2013 | |||
£000 | £000 | |||
Operating activities | ||||
(Loss)/Profit for the period | (2,076) | 614 | ||
Adjustments to reconcile profit for the period to net cash flow from operating activities | ||||
Depreciation | 13 | - | ||
Cost of acquisition | 52 | - | ||
Other non-cash items | (1) | - | ||
Interest income | (102) | - | ||
Taxation charge in period | 88 | 434 | ||
Working capital adjustments: | ||||
Increase in inventories | (159) | - | ||
Decrease/(Increase) in trade and other receivables | 52 | (212) | ||
Increase in trade and other payables | 40 | 336 | ||
Cash flows from operations | (2,093) | 1,172 | ||
Income tax paid | (88) | (434) | ||
Net cash flow from operating activities | (2,181) | 738 | ||
Investing activities | ||||
Net cash from purchase of a subsidiary | 857 | - | ||
Purchase of plant and equipment | (32) | - | ||
Proceeds from sale of plant and equipment | 2 | - | ||
Interest income | 102 | - | ||
Net cash flow from investing activities | 929 | - | ||
Financing activities | ||||
Proceeds from issue of shares | 23,295 | 1 | ||
Costs of share issues | (878) | - | ||
Interest expense | (1) | - | ||
Dividends paid to the parent company | - | (599) | ||
Net cash flow from financing activities | 22,416 | (598) | ||
Net increase in cash and cash equivalents | 21,164 | 140 | ||
Cash and cash equivalents at start of period | 140 | - | ||
Exchange differences | 431 | - | ||
Cash and cash equivalents at end of period | 21,735 | 140 |
NOTES
1. Basis of preparation
Whilst the information included in this condensed consolidated financial information ("preliminary announcement") has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") as adopted for use in the European Union, this preliminary announcement does not itself contain sufficient information to comply with IFRSs.
The financial information contained within this preliminary announcement for the period to 31 March 2014 does not comprise statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Report and Financial Statements for the period to 30 September 2013 have been filed with the Registrar of Companies and those for the period to 31 March 2014 will be filed following the Company's annual general meeting. This preliminary announcement has been prepared on a basis consistent with the financial accounting policies set out in the Accounting Policies section of the Report and Financial Statements for the period ended 31 March 2014.
The condensed consolidated financial information contained in this report should be read in conjunction with the Group's Report and Financial Statements for the period ended 31 March 2014, which have been prepared in accordance with IFRSs as adopted by the European Union. The auditors' report on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under s498(2) or s498(3) of the Companies Act 2006.
The Group's business activities together with the factors that are likely to affect its future developments, performance and position are set out in the Strategic Report. The Strategic Report describes the Group's financial position and cash flows and also highlights the principal risks and uncertainties facing the Group. The Report and Financial Statements for the period ended 31 March 2014 includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.
The Directors have reviewed current performance and forecasts, combined with expenditure commitments, including capital expenditure. After making enquiries, the Directors have a reasonable expectation that the Group has adequate financial resources to continue its current operations for the foreseeable future. For this reason, they have continued to adopt the going concern basis in preparing the financial statements.
In preparing this preliminary announcement, the Directors have also made reasonable and prudent judgements and estimates and prepared the preliminary announcement on the going concern basis. The preliminary announcement and reports contained herein give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.
The Group's annual report for the period ended 31 March 2014 will be made available in due course for viewing and downloading from the Group's corporate website: www.koovs.com/corporate. The annual report will also be circulated to shareholders in printed form.
The statements are presented in sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.
2. Revenue
Revenue recognised in the Income Statement is analysed as follows:
2014 | 2013 | |
£000 | £000 | |
Supply of proprietary information | 544 | 3,225 |
Sale of fashion garments | 89 | - |
633 | 3,225 |
During the period the Group operated in two principal area of activity, being those of providing proprietary know-how and design services for the fashion industry and, following the acquisition of Koovs India, the wholesale of fashion garments. Both revenue streams make up more than 10% of the total revenue.
Geographical information
2014 | 2013 | |
Revenue from external customers | £000 | £000 |
India | 633 | 3,225 |
The revenue information above is based on the location of the customers.
Operating segment
All of the Group's revenue is generated by Koovs India through its operations as a supplier of branded fashion products. The chief operating decision maker is the Chairman who makes resource allocation decisions based on Group management accounts and operating reports for the entire Group. The Group therefore represents a single cash generating unit and a single operating segment.
3. Earnings per Share
Basic earnings per share is calculated by dividing the earnings attributable to the owners of the Parent Company by the weighted average number of ordinary shares in issue during the period.
2014 | 2013 | ||
Weighted average shares in issue for basic earnings per share | 7,400,568 | 653 | |
Effect of dilutive options | - | - | |
Weighted average shares in issue for diluted earnings per share | 7,400,568 | 653 | |
Earnings attributable to the owners of the Parent (£000) | (2,011) | 614 | |
Basic (loss)/earnings per share | (27.2)p | £940 | |
Diluted (loss)/earnings per share | (27.2)p | £940 |
Diluted earnings per share is calculated by dividing the earnings attributable to the owners of the Parent Company by the weighted average number of ordinary shares in issue during the period, adjusted for the effects of potentially dilutive share options. The effect of the share options in issue is anti-dilutive and therefore no adjustment has been made to the weighted average shares in issue for diluted earnings per share.
4. Acquisition of Koovs India
As part of the strategic development of the Group and in accordance with an undertaking which was subject to the successful listing of the Company on AIM, on 10 March 2014 the Company acquired 57.5% of the issued share capital and voting rights of Koovs Marketing Consulting Private Limited ("Koovs India") a company incorporated in the Republic of India. Koovs India operates a wholesale business supplying fashion clothing and accessories. The Koovs.com website is operated independently by a third party under an exclusive contract and Koovs India sources appropriate fashion products and supplies them for sale through the Koovs.com website.
Assets acquired and liabilities assumed
The provisional fair values of the identifiable assets and liabilities of Koovs India as at the date of acquisition were:
Provisional fair value | |||
£000 | |||
Assets | |||
Property plant and equipment | 202 | ||
Intangible assets | 26 | ||
Other non-current assets | 113 | ||
Cash and cash equivalents | 17,735 | ||
Trade and other receivables | 455 | ||
Inventories | 906 | ||
Liabilities | |||
Trade payables | (624) | ||
Other liabilities | (108) | ||
Total identifiable net assets at fair value | 18,705 | ||
Non-controlling interest measured at fair value | (7,942) | ||
Goodwill arising on acquisition | 6,063 | ||
Purchase consideration, entirely in cash | 16,826 |
Analysis of cash flow on acquisition | £000 | ||
Consideration paid | (16,826) | ||
Transaction costs of the acquisition (included in cash flow from operating activities) | (52) | ||
Net cash acquired with the subsidiary (included in cash flows from investing activities) | 17,735 | ||
Net cash flow on acquisition | 857 | ||
The underlying goodwill is denominated in Indian Rupees and has therefore been retranslated at 31 March 2014 to £6,213,000. The goodwill is entirely allocated to the Group's single cash generating unit. None of the goodwill is expected to be deductible for taxation purposes.
The value of the non-controlling interest in Koovs India has been calculated as the relevant proportion of the fair values of the identifiable net assets of Koovs India as at the date of acquisition.
The gross value of receivables acquired was £467,000. The fair value of the receivables and the best estimate of the cash flows expected to arise from these receivables is £455,000.
From the date of acquisition, Koovs India has contributed £89,000 of revenue and a loss before tax of £153,000. If the combination had taken place at the beginning of the period, Group revenue would have been £502,000 and the loss before tax for the Group would have been £4,550,000.
Transaction costs of £52,000 have been expensed within operating expenses in the income statement.