30 Mar 2011 07:00
ILA GROUP LIMITED
("Ila" or the "Company")
Interim Results
ILA Group, the AIM listed retail marketing specialist is pleased to announce its results for the six months ended 31 December 2010.
Highlights:
·; Increase in sales of 375% to £646,995, compared to six months to June 2010 (£136,105)
·; Operating losses decreased to £378,818, compared to £598,752 (before exceptional) in six months to June 2010.
·; Rollout of ILA range with the launch of 4 new products.
·; Substantial increase in distribution, with products now selling in over 20 countries worldwide.
Post period end
·; Acquisition of Premium Factory increased the product range, retail presence and manufacturing capabilities, as well as an acceleration of top-line growth.
·; Appointment of Gordon Black as adviser to the Company.
Commenting on the results, Simon McGivern, Chief Executive stated:
"ILA Group has made considerable progress, with sales rising four-fold compared to the last six months and operating losses reducing by over 35%. Most importantly, ILA's distribution footprint is increasing rapidly, with the Company's products now selling in over 20 countries worldwide. In line with group strategy, product ranges are increasing organically (through new product development) and by acquisition. As such, we were pleased to announce the acquisition of Premium Factory shortly after the period end. This brings a new range of products, new manufacturing capabilities and new distribution channels, most notably giving an immediate introduction to multiple retailers, including Asda and Sainsbury's, where contracts are in place."
For further information, please see www.ilasecurity.com or contact:
Ila Group Limited 020 3384 7131
Simon McGivern, Chief Executive
Paul Gazzard, Chief Operating Officer
finnCap 020 7600 1658
Charles Cunningham - corporate finance
Joanna Weaving - corporate broking
Lothbury Financial Services 020 7868 2010
Gary Middleton
Simon Astley
CHIEF EXECUTIVE'S STATEMENT
I am pleased to say that the Company has made significant progress in the past six months and this has continued into the current financial period. We have seen strong organic growth and this is now enhanced by the acquisition of Premium Factory.
Financial performance
Revenue for the six months to 31 December 2010 was £646,995 (six months to 30 June 2010: £136,105) and the total loss for the period before exceptional items was £378,818 (6 months to 30 June 2010: £598,752).
Current trading and prospects
Trading has continued strongly in the first half of the financial year. The Directors are committed to delivering long term growth through the delivery of four main strategies:
1. Increasing distribution channels (both domestically and through international sales channels).
2. Development of cost efficient marketing strategies with core marketing partner, BBH
3. Increasing branded product ranges.
4. Actively looking for suitable acquisition targets
The Board is confident that this can be achieved by the continued hard work of the management team which includes Sir Richard Greenbury and which Gordon Black CBE has recently joined as an adviser. We believe that we will see a sharp rise in turnover from both existing and new products in the second half, complemented by a steadily growing distribution network.
The outlook for the next six months, and looking further ahead, is very positive and the Directors remain confident that the business plan can deliver sustained growth in what is a specialist market.
CONSOLIDATED INCOME STATEMENT
Unaudited | Audited | ||
6 months to | 6 months to | ||
31 December | 30 June | ||
2010 | 2010 | ||
£ | £ | ||
Revenue | 646,995 | 136,105 | |
Cost of sales | (417,585) | (87,094) | |
Gross profit | 229,410 | 49,011 | |
Administrative expenses | (608,228) | (647,763) | |
Exceptional administrative expense | - | (280,938) | |
Operating loss | (378,818) | (879,690) | |
Finance costs | (6,568) | (1,333) | |
Interest income | 3,607 | 40 | |
Loss before tax | (381,779) | (880,983) | |
Deferred tax | 78,375 | 123,617 | |
Loss for the period | (303,404) | (757,366) | |
Loss per share |
|
| |
Basic and diluted loss per ordinary share | (0.0004) | (0.0012) |
CONSOLIDATED BALANCE SHEET
|
| Unaudited | Audited |
|
| 6 months to | 6 months to |
31 December | 30 June | ||
2010 | 2010 | ||
Assets | £ | £ | |
Non-current assets | |||
Deferred tax assets | 201,992 | 123,617 | |
Current assets | |||
Inventories | 133,091 | 60,922 | |
Trade and other receivables | 159,746 | 295,764 | |
Cash and cash equivalents | 1,582,407 | 163,958 | |
|
| 1,875,244 | 520,644 |
Total assets | 2,077,236 | 644,261 | |
Equity and liabilities | |||
Issued capital and reserves | |||
Stated capital | 15,155,245 | 13,480,954 | |
Contingent consideration reserve | 972,725 | 972,725 | |
Share based payment reserve | 120,148 | 102,148 | |
Reverse acquisition reserve | (13,221,177) | (13,221,177) | |
Retained earnings | (1,325,975) | (1,004,571) | |
Total equity | 1,700,966 | 330,079 | |
Non-current liabilities | |||
Interest bearing borrowings | 83,226 | 98,456 | |
Current liabilities | |||
Trade and other payables | 262,045 | 184,727 | |
Interest bearing borrowings | 30,999 | 30,999 | |
|
| 293,044 | 215,726 |
Total equity and liabilities | 2,077,236 | 644,261 |
GROUP CASH FLOW STATEMENT
Unaudited | Audited | ||
6 months to | 6 months to | ||
31 December | 30 June | ||
2010 | 2010 | ||
£ | £ | ||
Cash inflow from operating activities | |||
Net loss for the period | (381,779) | (880,983) | |
Non-cash movements | |||
Goodwill written off | - | 30,990 | |
Shares issued in lieu of payment in respect of professional costs |
- | 35,795 | |
Share based payments |
| - | 17,550 |
Increase in working capital | |||
Increase in inventories | (72,169) | (44,729) | |
Decrease in trade and other receivables | 136,018 | 68,998 | |
Increase in trade and other payables | 57,908 | 18,167 | |
Increase in accruals | 19,410 | 4,963 | |
Net cash outflow from operating activities | (240,612) | (749,249) | |
|
| ||
Cash flows from investing activities | |||
Cash acquired with acquired entities | - | 672,010 | |
Net cash inflow from investing activities | - | 672,010 | |
Cash flow from financing activities | |||
Repayment of bank loans | (15,230) | (15,230) | |
Share issue | 1,674,291 | - | |
Net cash (used)/generated from financing activities | 1,659,061 | (15,230) | |
|
| ||
Net (decrease)/increase in cash and cash equivalents | 1,418,449 | (92,469) | |
|
| ||
Cash and cash equivalent at 1 July 2010 |
| 163,958 | 256,427 |
Cash and cash equivalent at 31 December 2010 |
|
1,582,407 |
163,958 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Stated capital | Contingent consid-eration reserve | Share premium | Reverse acquisition reserve | Share based payment reserve | Retained earnings | Total equity | ||
£ | £ | £ | £ | £ | £ | £ | ||
Balance 31 December 2009 as restated | 1,189 | - | 273,823 | - | 84,598 | (247,205) | 112,405 | |
Loss for the period | - | - | - | - | - | (757,366) | (757,366) | |
Shares issued in period: | ||||||||
Initial Consideration Shares | 659,614 | - | - | - | - | - | 659,614 | |
In respect of transaction costs | 35,795 | - | - | - | - | - | 35,795 | |
Contingent Consideration Shares | - | 262,081 | - | - | - | 262,081 | ||
Share based payment reserve | - | - | - | - | 17,550 | 17,550 | ||
IFRS 3 reverse acquisition conversion | 12,784,356 | 710,644 | (273,823) | (13,221,177) | - | - | - | |
At 30 June 2010 | 13,480,954 | 972,725 | - | (13,221,177) | 102,148 | (1,004,571) | 330,079 | |
Loss for the period |
| - | - | - | - | - | (303,404) | (303,404) |
Shares issued in period: |
| 1,674,291 | - | - | - | - | - | 1,674,291 |
|
| 15,155,245 | 972,725 | - | (13,221,177) | 102,148 | (1,307,975) | 1,700,966 |
1. Accounting Policies
Basis of preparation
The interim financial statementsThe interim financial statements of the Group for the six months ended 31 December 2010, which are unaudited, have been prepared in accordance with the accounting policies set out in the annual report and accounts for the year ended 30
June 2010, which were prepared under International Financial Reporting Standards
("IFRS").
The financial information contained in the interim report does not constitute statutory accounts. The financial information for the preceding period is based on the statutory accounts for the 6 months ended 30 June 2010. The Auditors' report for the 6 months ended 30 June 2010 was unqualified.
As permitted, this interim report has been prepared in accordance with the AIM Rules for Companies and not in accordance with IAS 34 "Interim Financial Reporting". Therefore it is not fully compliant with IFRS.
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.
2. Segment Information
As the company operates in one business segment and as such this is the primary business segment. The company's secondary segment is geographical. The segmental results by geographical area are shown below:
|
| Unaudited | Audited | Unaudited | Audited |
|
| 6 months to | 6 months to | 6 months to | 6 months to |
|
| 31 December | 30 June | 31 December | 30 June |
2010 | 2010 | 2010 | 2010 | ||
Sales | Sales | Assets | Assets | ||
| £ | £ | £ | £ | |
UK | 293,744 | 15,560 | 196,326 | 76,222 | |
EU | 84,768 | 61,037 | 11,185 | 6,568 | |
North America | 129,506 | 56,259 | 85,326 | 47,550 | |
Rest of the World | 138,977 | 3,249 | - | 226,346 | |
646,995 | 136,105 | 292,837 | 356,686 |
3. Components of income tax expense
| Unaudited | Audited | |
| 6 months to | 6 months to | |
| 31 December | 30 June | |
| 2010 | 2010 | |
| |||
| |||
£ | £ | ||
Current income tax expense |
|
| |
Current income tax charge | - | - | |
Deferred income tax credit |
|
| |
Losses to be utilised in future periods | 78,375 | 123,617 | |
78,375 | 123,617 | ||
Major component of tax expense |
|
| |
Loss on ordinary activities before taxation | 381,779 | 880,983 | |
|
| ||
Deferred tax at the domestic rate of 21% | 80,174 | 185,006 | |
Tax effect of expenses not deductible for tax purposes | (1,799) | (95,014) | |
Adjustment from previous period | - | 33,625 | |
Deferred income tax credit | 78,375 | 123,617 |
4. Earnings per Ordinary 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:
|
| Unaudited | Audited |
|
| 6 months to | 6 months to |
|
| 31 December | 30 June |
2010 | 2010 | ||
£ | £ | ||
Basic loss per share |
|
| |
Reported loss | (303,404) | (757,366) | |
Reported loss per share | (0.0004) | (0.0012) | |
|
| ||
Number of shares | Number of shares | ||
Weighted average number of ordinary shares: |
|
| |
Shares issued for ILA Security Ltd | 388,600,221 | 388,600,221 | |
Contingent Consideration shares | 154,400,846 | 154,400,846 | |
Effect of ILA shares post-reverse acquisition | 146,300,787 | 95,378,414 | |
Effect of shares issued in respect of professional costs |
| 5,681,819 | 3,704,169 |
Shares issued in period |
| 26,974,685 | - |
Weighted average number of ordinary shares | 721,958,358 | 642,083,650 |
Due to the Group's loss for the period, the diluted loss per share is the same as the basic loss per share.
6. Events after the reporting period
On 3 August 2010, the Company placed 27,029,141 ordinary shares of no par value raising £270,291 and on 24 December the Company placed 117,000,000 ordinary shares of no par value raising £1,404,000 before expenses
On 16 March 2010 the Company completed the acquisition of 100% of the issued share capital of Premium Factory Ltd for £100.