28 Mar 2013 07:02
28 March 2013
LiteBulb Group Limited
("LiteBulb" or the "Company" or the "Group")
Interim Results
LiteBulb (AIM: LBB) announces unaudited results for the six months ended 31 December 2012 in line with management expectations.
Operational highlights
·; Launch of Scootrix Range into Halfords and first order from Tesco
·; Launch of Cartoon Stripz with Moshi Monsters brand - now selling in Toys R Us
·; Successful marketing of ila Safety products on QVC US, UK and Germany
·; Acquisition of Scarlett Willow, the homeware and gifts specialist (September 2012)
·; £0.75m loan agreement to fund future growth (July 2012)
Financial highlights
·; Revenue of £1.03m (2011: £1.63m) (reflecting the decision to discontinue Premium Factory's non-performing product lines)
·; Gross Margins improved to 35.7% (2011: 26.0%)
·; Gross profit of £0.37m (2011: £0.42m)
·; Operating loss of £0.53m (2011: £0.59m)
Post-Period End
·; Acquisition of Bluwstuff - expected to significantly enhance sales and earnings
·; Launch of in-house brand agency Rizon Studios
·; £1.1m expansion capital raised through secured Convertible Loan Notes
Simon McGivern, Chief Executive of LiteBulb, commented:
"In a short period of time, LiteBulb has established a strong distribution channel and has now become a supplier to a large number of the UK's leading retailers. The Group also has a growing network of international distributors, giving LiteBulb a strong platform from which to sell its product ranges.
It has been a busy six months in the run-up to December. The acquisition of Bluwstuff took up considerable management time in Q4 of 2012 and was completed in February this year. This was a major acquisition for LiteBulb and the enlarged entity should give the Group an enhanced pipeline of products, a stronger position with both retailers and suppliers, and lead to an increase in sales and earnings growth.
Having worked with their team through the latter half of 2012, in February this year we brought Rizon Studios into the Group. Rizon is a brand extension specialist for major entertainment houses in the US such as Disney, Mattel, Sony Pictures, and Paramount Pictures. This should lead to further opportunities for the Group and we hope to be making announcements on progress soon.
Financial performance for the period was in line with management forecasts. During the period, we took moves to consolidate operations, with non-performing low margin lines from the Premium Factory acquisition being discontinued. This led to a temporary reduction in revenues, but an increase in gross margins.
We are confident that we have successfully embarked upon a strategy that combines enhancing acquisitions with the internal launch of new, innovative products and brands to drive growth in 2013 and beyond. We are actively looking for further acquisition opportunities, as well as expanding our current brand lines."
Enquiries:
LiteBulb Group Limited | www.litebulbgroup.com |
Simon McGivern, Chief Executive | Tel: 020 3384 7131 |
finnCap (NOMAD & Joint Broker) | Tel: 020 7220 0500 |
Stuart Andrews/Ben Thompson (Corporate Finance) | |
Joanna Weaving (Corporate Broking) | |
First Columbus LLP (Joint Broker) | Tel: 020 3002 2070 |
Chris Crawford | |
Walbrook PR Limited | Tel: 020 7933 8780 or litebulb@walbrookpr.com |
Bob Huxford | Mob: 07747 635 908 |
Paul McManus | Mob: 07980 541 893 |
PG Capital | Tel: 01725 510 383 |
Paul Gazzard |
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 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
BLINK Mints - UK distribution for confectionary product range
Scarlet Willow - Stylish tableware and personalised gifts
Bluwstuff - Range of innovative gifts and toys
Rizon - Product innovation and brand specialist agency
LiteBulb also owns product development specialist Premium Factory, which develops and manufactures promotional items for multi-nationals clients including Nestle and Unilever. 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 a large number of 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 13% 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 six months to 30 June 2012 has seen continued progress as we develop LiteBulb into an international business with strong marketing expertise and a portfolio of high quality innovative brands that fulfil unmet consumer needs.
The first half of the year reflects our focus on finding selective acquisitions which will add to our existing innovative portfolio products that can benefit from our strong relationships with Blue Chip retail customers. Much of the benefit of this strategy will be reflected in the performance for the rest of the financial period.
Financial Results
Revenue was down in comparison to the same period last year at £1.03m (H1 2011: £1.63m), attributable to the phasing out non-performing accounts that were inherited as part of the Premium Factory acquisition. This has had a beneficial effect on gross margins which improved to 35.7% (H1 2011: 26.0%), whilst gross profits reduced to £0.37m (H1 2011: £0.42m). We recorded an operating loss for the period of £0.56 (2011: £0.59m) and a basic loss per share of 0.06p (2011: 0.06p).
In July 2012 we announcedthat 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. In February 2013 £450,000 of the funding was converted into 90,000,000 Ordinary Shares at a conversion price of 0.5 pence per ordinary share.
To give a better reflection of the Company's annual trading performance, the year-end has been changed from 30th June to 31st December.
Operational Review
We are confident that we have successfully embarked upon a strategy that will quickly increase the critical mass of the business through the pursuit of strategic acquisitions and the launch of new innovative products to drive growth in the second half and beyond.
We were pleased to announce at the end of 2012 that we completed the trial of our ila range of stylish personal safety products with QVC USA which exceeded our initial targets. We had further successful airings on QVC USA in January 2013 and QVC recently went on to sell two exclusive designs of our ila PEBBLE keyring alarm product on its UK shopping channel. This also led to a launch of the products in 2013 in QVC Germany, which sold out of all its stock in the first airing.
In September 2012 we moved into the stylish homeware and gift market through the acquisition of the company website, brand and stock of Scarlett Willow Ltd. Whilst Scarlett Willow only contributed to three months of the period under review we have already seen that sales at Scarlett Willow are significantly above the same period last year.
In October 2012 we announced the launch of Cartoon Stripz, our new brand of play sets for children, featuring one of the UK's fastest-selling merchandising brands, Moshi Monsters, as its first license. The Moshi Monsters Cartoon Stripz have seen good sales in Toys 'R' Us and Next stores in the UK and Heatons in Ireland. We also announced the launch of Scootrix in Halfords. This was followed by initial orders from Tesco's and Fenwick's. Further orders have since been received in Q1 2013 from Tesco, Asda and Toys R US.
New retailers & International Distributors
During the period, a number of new retailers were signed up, including Morrisons, Wilkinson and BHS. Orders were placed internationally, with new distributors from Australia, Japan, South Africa, France, Netherlands, Singapore, China, Thailand and Indonesia, amongst others.
Post-Period End events
Acquisition of Bluwstuff Limited
In February 2013, we completed the acquisition of Bluwstuff Limited, a global designer, manufacturer and distributor of award winning innovative products, predominantly for the gift and toy markets. The integration has gone well and the acquisition brings LiteBulb a strong pipeline of new brands and products as well as additional strong relationships with a wider range of retail channels.
Bluwstuff recorded unaudited revenues of £4.5m and a positive EBITDA for the year ended 31 December 2012. Sales growth is expected in 2013 and the acquisition should significantly enhance sales over the next twelve months and be earnings enhancing before interest, tax, depreciation and amortisation.
Integration of Branding Agency Rizon Studios
Rizon Studios became part of the Group in February 2013. Rizon Studios is a brand extension agency for major entertainment houses in the US such as Disney, Mattel, Sony Pictures, and Paramount. Its speciality lies in inventing new revenues streams for major brands from their intellectual property, principally from creating ideas for new product lines. There is a clear strategic fit with LiteBulb's core business, and it is expected that Rizon Studio's core business will benefit from the scale and skillsets that LiteBulb Group offers.
£1.1m Fundraising
In February 2013 we also completed a £1.1m fundraising to provide further expansion capital by means of a secured Convertible Loan Note. This round of fundraising attracted well respected institutional investors, which we see as a further endorsement of our strategic plan and growth ambitions.
Launch of Blink Mints
Post the period end we also announced the UK launch of our BLINK Mints confectionery product range and secured an initial purchase order from major UK retailer WH Smith to stock the range in over 300 WH Smith stores nationwide. BLINK Mints are a range of sugar free sweets that are already successfully sold across countries in Europe, Asia, and the Middle East. LiteBulb has secured exclusive distribution rights for the product range in the UK and is in discussions with several other UK retailers about the range.
Outlook
In a short period of time, LiteBulb has established a strong distribution channel and has now become a supplier to a large number of the UK's leading retailers. The Group also has a growing network of international distributors, giving LiteBulb a strong, growing sales platform for its product ranges.
Recent acquisitions have dramatically enhanced the new pipeline of products that we can offer our customers. In addition, we are currently looking at a number of new product ranges.
Following the acquisition of Bluw, management expect strong sales growth over 2013. Bluw has had a positive start to 2013 and a good reaction to its new ranges. Bluw won Best Gift at the 2013 Spring Fair, and its innovative homeware range won 'Commended in Class'. The recent Star Wars licence has enabled us to achieve a listing with Argos for the first time, and has received strong interest from other mainstream retailers. Likewise, the 'Tryble' range of electronic products has received early indications of interest from a number of the larger UK retail chains.
Rizon Studios is expected to increase revenue and provide strategic benefits through helping to extend product ranges and introducing cross-selling opportunities with its existing client base. Furthermore, being part of a larger group gives the Rizon team the ability to increase its offerings to its major customers.
The Company has a strategy to acquire complementary businesses that will benefit from our existing distribution and add scale to revenues. We are now actively talking to a number of parties.
In summary, LiteBulb is delighted with the progress made over the period and with the acquisitions made post period. The focus of the Company is to grow relationships with retail partners and international distributors, and increase the scale of the business through strategic acquisitions. As the Company scales, we will have a greater offering for our retail partners and we are excited by the prospects for the Group for 2013.
Simon McGivern
Chief Executive
28 March 2013
CONSOLIDATED INCOME STATEMENT
Unaudited 6 months to 31 December 2012 | Audited 12 months to 30 June 2012 | Unaudited 6 months to 31 December 2011 | |
£ | £ | £ | |
Revenue | 1,030,637 | 3,015,347 | 1,633,701 |
Cost of sales | (662,555) | (2,497,239) | (1,209,017) |
Gross profit | 368,082 | 518,108 | 424,684 |
Administrative expenses | (893,755) | (1,926,716) | (914,886) |
Exceptional administrative expense | - |
(115,641) |
(101,771) |
Operating loss | (525,673) | (1,524,249) | (591,973) |
Finance costs | (30,358) | (40,561) | (4,658) |
Total comprehensive loss for the year | (556,031) | (1,564,810) | (596,631) |
Loss per share | |||
Basic and diluted loss per ordinary share | (0.0006) | (0.0016) | (0.0006) |
CONSOLIDATED BALANCE SHEET
Unaudited as at 31 December 2012 | Audited as at 30 June 2012 | Unaudited as at 31 December 2011 | |
£ | |||
Non-current assets | |||
Intangible assets | 1,042,639 | 943,957 | 975,670 |
Property, plant and equipment | 29,958 | 35,105 | 32,278 |
Deferred tax assets | 163,617 | 163,617 | 163,617 |
Current assets | |||
Inventories | 304,285 | 382,517 | 410,695 |
Trade and other receivables | 618,791 | 456,975 | 823,724 |
Cash and cash equivalents | 149,607 | 116,342 | 665,016 |
1,072,683 | 955,834 | 1,899,435 | |
Total assets | 2,308,897 | 2,098,513 | 3,071,000 |
Equity and liabilities | |||
Capital and reserves attributable to equity shareholders | |||
Issued share capital | 17,580,689 | 17,520,689 | 17,585,360 |
Share based payment reserve | 102,148 | 102,148 | 102,148 |
Reverse acquisition reserve | (13,221,177) | (13,221,177) | (13,221,177) |
Retained earnings | (4,069,129) | (3,513,098) | (2,544,919) |
Total equity | 392,531 | 888,562 | 1,921,412 |
Non-current liabilities | |||
Interest bearing borrowings | 503,169 | 294,011 | 328,070 |
Current liabilities | |||
Trade and other payables | 770,909 | 753,882 | 594,700 |
Interest bearing borrowings | 642,288 | 162,058 | 226,818 |
1,413,197 | 915,940 | 821,518 | |
Total equity and liabilities | 2,308,897 | 2,098,513 | 3,071,000 |
GROUP CASH FLOW STATEMENT
Unaudited 6 monthsto 31 December 2012 | Audited 12 months to 30 June 2012 | Unaudited 6 monthsto 31 December 2011 | |
£ | £ | £ | |
Cash flows from operating activities | |||
Loss after tax | (556,031) | (1,564,810) | (596,631) |
Non-cash adjustments | |||
Amortisation | 14,892 | 30,679 | 10,339 |
Depreciation | 7,733 | 13,505 | 6,752 |
Increase in working capital | |||
(Increase)/decrease in inventories | 93,332 | (22,099) | (50,277) |
(Increase)/decrease in trade and other receivables | (160,300) | 307,574 | (59,175) |
Increase/(decrease) in trade and other payables | 37,274 | (185,098) | (344,280) |
Net cash flows from operating activities | (563,100) | (1,420,249) | (1,033,272) |
Cash flows from financing activities | |||
Repayment of bank loans | (81,169) | (211,945) | (113,126) |
New loans | 750,000 | - | - |
Purchase of fixed assets | (2,014) | (9,352) | (9,352) |
Product development costs | (54,528) | (18,125) | (19,918) |
Purchase of subsidiary | (20,000) | - | - |
Acquisition cash | 4,076 | - | - |
Shares issued | 0 | 1,392,719 | 1,457,390 |
Net cash from financing activities | 596,365 | 1,153,297 | 1,314,994 |
Net (decrease)/increase in cash and cash equivalents | 33,265 | (266,952) | 281,722 |
Opening cash | 116,342 | 383,294 | 383,294 |
Closing cash | 149,607 | 116,342 | 665,016 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital | Reverse acquisition reserve | Share based payment reserve | Retained earnings | Total equity | |
£ | £ | £ | £ | £ | |
Group | |||||
At 30 June 2011 | 16,127,970 | (13,221,177) | 102,148 | (1,948,288) | 1,060,653 |
Shares issued in period | |||||
Cash | 1,550,000 | - | - | - | 1,550,000 |
Cost of share issue | (157,281) | - | - | - | (157,281) |
Comprehensive income: | |||||
Loss for the period | - | - | - | (1,564,810) | (1,564,810) |
At 30 June 2012 | 17,520,689 | (13,221,177) | 102,148 | (3,513,098) | 888,562 |
Shares issued in period | 60,000 | - | - | - | 60,000 |
Comprehensive income: | |||||
Loss for the period | - | - | - | (556,031) | (556,031) |
17,580,689 | (13,221,177) | 102,148 | (4,069,129) | 392,531 |
1. Basis of preparation
The financial information for the period ended 31 December 2012 has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The financial information for the period ended 31 December 2012 is unaudited along with the comparative for the period ended 31 December 2011, the comparative financial information for the full year ended 30 June 2012 has, however, been derived from the audited statutory financial statements for that year. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.
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 6 months to 31 December 2012 | Audited 12 months to 30 June 2012 | Unaudited 6 months to 31 December 2011 | Unaudited as at 31 December 2012 | Audited as at 30 June 2012 | Unaudited as at 31 December 2011 | |
Sales | Sales | Sales | Assets | Assets | Assets | |
£ | £ | £ | £ | £ | £ | |
UK | 605,354 | 933,770 | 251,795 | 702,574 | 499,847 | 599,983 |
EU | 215,275 | 1,324,744 | 982,483 | 64,813 | 144,534 | 413,573 |
Rest of the World | 210,008 | 756,833 | 399,423 | 155,689 | 195,111 | 220,863 |
1,030,637 | 3,015,347 | 1,633,701 | 923,076 | 839,492 | 1,234,419 |
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:
Unaudited 6 months to 31 December 2013 | Audited 12 months to 30 June 2012 | Unaudited 6 months to 31 December 2011 | |
£ | £ | ||
Basic loss per share | |||
Reported loss | (556,031) | (1,564,810) | (593,631) |
Reported loss per share (pence) | (0.0006) | (0.0016) | (0.0006) |
Number of Shares | Number of Shares | Number of Shares | |
Weighted average number of ordinary shares: | |||
As at 30 December 2010 | 839,012,814 | 839,012,814 | 839,012,814 |
Shares issued on 8 August 2011 | 129,166,660 | 115,719,172 | 101,917,803 |
Shares issued on 17 Dec 2012 | 869,109 | - | - |
Weighted average number of ordinary shares | 969,048,583 | 954,731,986 | 940,930,617 |
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
Unaudited as at 31 December 2012 | Audited as at 30 June 2012 | Unaudited as at 31 December 2011 | |
Authorised | |||
Founder shares of no par value | 10 | 10 | 10 |
Ordinary shares of no par value | Unlimited | Unlimited | Unlimited |
Issued and fully paid | |||
Founder shares of no par value | 2 | 2 | 2 |
Ordinary shares of no par value | 979,508,934 | 968,179,474 | 968,179,474 |
On 17 December 2012, the Company issued 6,818,180 ordinary shares as part consideration for Scarlett Willow Ltd, a company acquired by the Group in September last year, and 4,511,280 ordinary shares to a creditor for services provided to the Company
5. Events after the reporting period
The Group has acquired 100% of the issued share capital of Bluwstuff Limited, a global designer, manufacturer and distributor innovative products. At the same time, in order to finance the acquisition, the Group has borrowed £1,100,000 under 10% convertible loan notes.