LBB.L Regulatory News (LBB)

10 December 2012

LiteBulb Group Limited

("LiteBulb" or "the Company")

Final Results

LiteBulb (AIM: LBB), which identifies, engineers, manufactures and distributes innovative branded consumer products, announces audited results for the year ended 30 June 2012.

Financial highlights

·; Revenue up 71.6% to £3.02m (2011: £1.76m)

·; Gross profit up 10.6% to £0.52m (2011: £0.47m)

·; Operating loss before exceptionals of £1.41m (2011: £0.88m)

·; Loss before tax and exceptionals of £1.45m (2011: £0.89m)

·; Loss per share of 0.18p (2011: 0.12p)

Operational highlights

·; Halfords deal for Scootrix to stock scooter accessories nationwide

·; Successful marketing of ila Safety on QVC US

·; Products now sold in over 12 key major retailers (inc. Tesco, ASDA, Sainsbury's, Morrisons, Next)

·; New international distributors grow global reach of products

Post-Period End

·; £750,000 loan agreement to fund future growth (July 2012)

·; Acquisition of homeware and gifts specialist Scarlett Willow (September 2012)

·; Launch of Cartoon Stripz with Moshi Monsters brand - now selling in Toys R Us

Simon McGivern, Chief Executive of LiteBulb, commented: "This transitional year has seen us establish strong relationships with a wider range of blue chip retailers and an increasing network of international distributors, which combined with our increasing portfolio of innovative products and an active acquisition strategy, gives us confidence that we will deliver further significant growth in 2013 and beyond."

About LiteBulb Group

LiteBulb Group is a full turnkey solutions provider enabling innovative brands and products to be rapidly and successfully taken to market. LiteBulb's own successful brands include:

ila Safety - Stylish and functional personal safety accessories for women

Scootrix - Accessories for personalising children's scooters

Shirt Box - Lunch and sandwich boxes with designs of favourite football teams and superheroes

Cartoon Stripz - Snap and twist collectable play sets for children

Scarlet Willow - Stylish tableware and personalised gifts

Litebulb also owns product development specialist Premium Factory, which develops and manufactures promotional items for multi-nationals clients including Nestle and Unilever. The Premium Factory also provides the Company with access to over 30 varied manufacturers so that a wide range of new products can be manufactured rapidly and cost effectively.

LiteBulb products are sold by over 12 blue chip retailers including: ASDA, BHS, Tesco, Wilkinsons, Sainsbury's, WH Smith, Halfords, Morrisons, QVC, Next, Fenwicks, Toys R Us, and Dunnes Stores in Ireland.

In addition, the Company has unrivalled access to market intelligence from multinational advertising company Bartle Bogle Heggarty (BBH), which own 18% of LiteBulb and co-founded the business in 2009 in order to outsource development, production and distribution of its innovative products. BBH's on-going research into markets and trends on behalf of its clients means that it is continually identifying gaps in markets, allowing them to work with LiteBulb to create innovative products to fill those gaps.

Chief Executive's Statement

Introduction

The year to 30 June 2012 has seen continued strong progress as we develop LiteBulb into an international business with strong marketing expertise and a portfolio of high quality innovative brands that fulfill unmet consumer needs. The past year has seen us increase our new product range, establish relationships with a wider group of leading retail customers and expand our international sales footprint.

Our strategy of increasing our portfolio of products continues post-period end with the successful acquisition of homeware and personalised gifts specialist Scarlett Willow, the launch of further products expected in the next few months and our assessment of potential acquisition opportunities.

Financial Results

Revenue for the period was up 71.6% to £3.02m (2011: £1.76m) with gross profit up 10.6% to £0.52m (2011: £0.47m). Gross margins dropped to 17% from 27% during the period which reflects a number of lower margin projects inherited with the Premium Factory acquisition. These projects are being phased out and we expect a return to a higher gross margin going forward. During the period we invested in new team members (we now have 17 employees at the year-end compared to 12 at the previous year end) and infrastructure to ensure that we have the capacity to deliver more products to our increasing number of blue chip retail clients. As a result operating loss before exceptionals increased to £1.41m (2011: £0.88m). Loss before tax and exceptionals increased to £1.45m (2011: £0.89m) resulting in a basic loss per share of 0.18p (2011: 0.12p).

Operational Review

The strong growth of the business has been driven by the successful marketing of our existing brand portfolio and the extension of this portfolio through the launch of new innovative products.

ila Safety - personal safety accessories for women

Our ila brand of personal safety accessories for women continues to perform well both in the UK and in international markets. Before the year end we announced our first deal with QVC to sell our range of ila products in the US, traditionally a very difficult market for UK based companies to enter. The initial order was for $100,000 and following a series of very successful airings we have exceeded our expectations and created additional demand. We also announced that we've expanded this product's scope internationally with a new order from Ireland's largest retailer Dunnes Stores. 

Shirt Box - Lunch and sandwich boxes for children

We continue to expand the number of UK retailers that now stock our range of lunch boxes for children, shaped and in the design of the team shirts of popular football teams or a favourite superhero or cartoon character. During the year we signed new relationships with UK retailers including Tesco, BHS and Wilkinson and received repeat orders from Asda, Sainsbury's and Next. 

Scootrix - accessories for personalising children's scooters

With half of children between three and six years old, and nearly three quarters of 7-10 year olds owning a scooter, along with a growing trend towards customisation of children's products there is strong demand for our scooter accessories. Our range of accessories for scooters carried out a soft-launch pre-Christmas with John Lewis and JoJo Maman Bebe. In May we signed our first major purchase order from Halfords, and our range of scooter accessories have been available nationwide across Halfords stores since October. We are very pleased with the take up of this range and sales at Halfords are performing to expectations.

Cartoon Stripz - Snap and twist collectable play sets for children

Our most recently launched product is a range of collectable play sets for children created to engage children in imaginative play with characters they usually watch on television rather than interact with. The collectable sets are designed to be perfect pocket money toys, party bag fillers and stocking fillers. We signed a licensing deal with the latest children's craze Moshi Monsters and the first Cartoon Stripz range was launched in September 2012 alongside a major UK distributor and are already available nationwide in Toys R Us and Next in the UK and in Heatons department stores across Ireland.

Premium Factory - develops and manufactures promotional items for multi-nationals

The Premium Factory develops and manufactures promotional items for multi-national clients and major brands. Clients include Lynx, PG Tips, Kellogg's, and Guinness. Following on from the statement at the Interim Results the promotional products market continues to be challenging and remains dependent on the recovery of marketing budgets of major blue chip customers. We continue to pitch for a number of contracts and we remain confident that the Premium Factory is extremely well placed to take advantage as marketing spend increases.

The Premium Factory also provides us with access to over 30 varied manufacturers which means that a wide range of new products can be manufactured rapidly and cost effectively.

New retailers

As already mentioned above, we have formed a number of new relationships with key major retailers as we continue to expand our portfolio of branded products. We now have products sold by over 12 blue chip retailers including: ASDA, BHS, Tesco, Wilkinsons, Sainsbury's, WH Smith, Halfords, Morrisons, QVC, Next, Fenwicks, Toys R Us, Shop Direct, The Hut and Dunnes Stores in Ireland.

Having secured relationships with the leading UK retailers we have come a long way from our beginnings, when we only sold into Marks & Spencer. The major hurdle for companies looking to introduce products to the retail market is to establish relationships with the product buyers at the major retailers. LiteBulb is now well positioned, therefore, to bring new products to market quickly.

International Distributors

We also continue to add to the distribution coverage of the group internationally to ensure that our products get to the widest retail market as quickly as possible. During the year we signed up new distributors in Australia, the Netherlands, Ireland, Switzerland, Hungary,Malaysia, Taiwan, Japan and China. We were very pleased that our ila Safety products won the Best New product at the Fukuoka International Gift Show in Japan. In addition, we continue to support our existing range of global distributors and agents.

Post-Period End events

In July we announced that we had secured £750,000 in financing to fund the expansion of our product ranges, customer base and international scope. The funding was provided by shareholder Andrew Black, co-founder of Betfair Group Plc. £450,000 of the funding is in the form of a two-year secured convertible loan, carrying a coupon of 5% and a conversion price of 0.6p. The remaining £300,000 is in the form of a secured two-year term loan with a 7% coupon.

Scarlett Willow

In September we moved into the area of stylish tableware and personalised gifts through the acquisition of Scarlett Willow Ltd, including the company website, brand and stock. At the time of acquisition we believed that the Scarlett Willow brand had significant potential for growth with the opportunity to build on the brand's reputation for quality and style. Already, as part of the LiteBulb Group stable, sales at Scarlett Willow in the last month are approximately 60% above the same period last year. By leveraging our existing manufacturing relationships we believe that we will be able to reduce the production costs of Scarlett Willow products, increasing profitability without compromising on brand quality.

Outlook

We are very pleased with the progress of the business to date, particularly as we have grown revenues organically and by acquisition from £0.54m for the 18 months to 31 December 2009 to over £3.0m in the year ending 30 June 2012. We are confident that this pattern of significant growth will continue and that the substantial expansion of our retail relationships and our pipeline of new brands and products will deliver considerable shareholder value.

We remain confident that strong organic growth will be driven by our expanding portfolio of products, and we expect to update the market as new deals and orders are concluded. As already mentioned above, our ila Safety range has been marketed very successfully in the US with QVC. The target sales for our initial slot was to record over $6,000 of sales per minute and we were delighted that we exceeded this, recording over $9,000 of sales per minute and overselling QVC's initial order. We are currently in talks with QVC regarding further slots in the US, as well as in other geographies, for ila products and our other ranges and we will provide an update when they conclude.

We are in discussion with a number of other major retailers and international distributors for the Scootrix range and expect to announce further deals in the coming months Whilst it is early days for Cartoon Stripz the feedback so far has been positive and if successful there is the opportunity to negotiate further licensing deals to feature other well-known global brands as part of the Cartoon Stripz range.

The expansion of our range continues apace and we will soon launch two new products, one of which is a range of gardening products for children and the other is a novel confectionary product for newsagents and general stores. We expect to provide further information on these products as they launch.

We are also assessing a number of potential acquisition opportunities, as well as possible technology joint ventures, which would add to our existing innovative product lines and benefit from our end-to-end capability which can rapidly take a product from design, development and manufacturing, through to marketing, logistics and distribution into leading retailers.

This transitional year has seen us establish strong relationships with a wider range of blue chip retailers and an increasing network of international distributors, which combined with our increasing portfolio of innovative products and an active acquisition strategy, gives us confidence that we will deliver further significant growth in 2013 and beyond.

Simon McGivern

Chief Executive

7 December 2012

Consolidated statement of comprehensive income

The above results are derived from continuing activities.

Consolidated statement of financial position

At 30 June 2012

Consolidated statement of cash flows

Consolidated statement of changes in equity

1. Basis of preparation

The Group's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board as adopted by the European Union ("Adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in December 2012.

As a result of the application of Amendments to IAS 1 Presentation of Financial Statements: A Revised Presentation the Group has elected to present a single Consolidated Statement of Comprehensive Income. Previously the Group presented an income statement only, with movements in other comprehensive income recognised as part of total recognised income and expense in the Consolidated Statement of Changes in Shareholders' Equity. In addition, certain primary statement titles have changed in order to align with the terms used in IAS 1. The Amendment does not change the recognition or measurement of transactions and balances in the financial statements.

Going concern

The Company's activities are funded by a combination of long term equity capital and term loans. The day to day operations are funded by cash generated from trading.

The Board has reviewed the Company's profit and cash flow projections and are of the opinion that the Company will meet its obligations as they fall due with the use of existing facilities.

The financial statements do not reflect the adjustments that would be necessary were the trading performance of the Company to deteriorate significantly.

Exceptional items

The Group presents as exceptional items on the face of the income statement those significant items of income and expense which, because of their size, nature and infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the period, so as to facilitate comparison with prior periods to assess trends in financial performance more readily.

2. Segment information

As the Company operates in one business segment and as such this is the primary reporting segment. The Company's secondary segment is geographical. The segmental results by geographical area are shown below:

3. Loss per share

The calculation of basic loss per share is based on the loss attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the period.

The calculation of diluted loss per share is based on loss per share attributable to ordinary shareholders and the weighted average number of ordinary shares that would be in issue, assuming conversion of all dilutive potential ordinary shares into ordinary shares.

Reconciliations of the loss and weighted average number of shares used in the calculations are set out below:

Due to the Group's loss for the period, the diluted loss per share is the same as the basic loss per share.

4. Share capital

Allotted and called up:

On 6 December 2010 the Company issued 117,000,000 shares for cash at 1.2p per share.

On 13 April 2011 the Company issued 154,400,846 Contingent Consideration Shares.

On 8 August 2011 the Company issued 129,166,660 shares for £1,550,000.