30 Sep 2013 07:00
30 September 2013
LiteBulb Group Limited
("LiteBulb" or the "Company" or the "Group")
Interim Results
LiteBulb (AIM: LBB), which creates and delivers branded products to retail, announces unaudited results for the six months ended 30 June 2013 in line with management expectations.
Operational highlights
· Successful acquisition and integration of Bluwstuff Limited ("Bluw") and Rizon Studios
· Orders received for over £2.5m for delivery post period end
· Strong and growing pipeline aided by introduction of Bluw product suite to existing retail client base
· Significant orders from HMV and QVC during the period
· £1.1m expansion capital raised through secured Convertible Loan Notes
Financial highlights
· Revenue from continuing operations increased to £1.4m (H1 2012: £0.28m)
· Gross profit margins increased to 43% (H1 2012: 11%)
· Gross profit of £0.6m (H1 2012: £0.03m)
· Adjusted loss before tax of £0.91m* (H1 2012: £0.78m*)
· Reduction of Group debt by £0.56m through closure of Premium Factory
*before finance costs and exceptional administrative expenses and excluding losses from discontinued operations
Post-Period End
· Appointment of Michael Brennan as a non-executive director
· £0.83m fund raise after expenses to accelerate organic growth and meet working capital requirements of enlarged Group following acquisitions
Simon McGivern, Chief Executive of LiteBulb, commented:
"The six months under review were a transformational period for LiteBulb during which time we acquired Bluw, significantly broadening our product portfolio, and brought creative agency Rizon Studios into the Group, enabling us to present new and exciting opportunities to UK licensees. The integration of both of these businesses is progressing well and they are introducing material operational efficiencies. With strong relationships with leading retailers now in place we will continue to seek further acquisitions that broaden the portfolio of products we can offer to our clients.
"We are also delighted to have received investment from both new and existing shareholders to enable us to accelerate our growth. Margins are growing and we are seeing increasing demand for our portfolio of products and services, with Bluw and Rizon Studios currently trading ahead of expectations. In addition, early responses from retailers to new product ranges have been highly positive. We have also significantly enhanced our pipeline and current order intake gives us confidence in meeting full year forecasts."
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) | |
| |
Walbrook PR Limited | Tel: 020 7933 8780 or litebulb@walbrookpr.com |
Bob Huxford | Mob: 07747 635 908 |
Paul McManus | Mob: 07980 541 893 |
About LiteBulb Group
LiteBulb Group designs, manufactures and distributes innovative brands and products to the global retail market.
LiteBulb Products' branded ranges are sold in over 30 countries through blue chip retailers including: ASDA, BHS, Tesco, Sainsbury's, WH Smith, Halfords, Morrisons, QVC, Next, Fenwicks and Toys R Us.
LiteBulb Creative is a creative agency with global reach, delivering compelling and agile brand extension programmes to the entertainment industry. LiteBulb Creative has designed products and campaigns for clients around the world, including Disney, Mattel and Miramax.
Chief Executive's Statement
Introduction
The six months to 30 June 2013 has been a period of considerable transformation for the Group. During this time we made two very successful acquisitions which have now been fully integrated into the Group and have substantially expanded our portfolio of products and branding services.
We also continued to strengthen our platform in terms of expanding our list of suppliers, developing our distribution and logistics capabilities and further improving our relationships with retailers. Retailers want suppliers that they can trust and also desire fewer suppliers with broader product portfolios in order to reduce their overhead in managing these suppliers. Having now established deep and trusting relationships with the leading retailers, the next step in our strategy is to offer these clients a greater number of quality products.
We believe LiteBulb's positioning with these clients, combined with the infrastructure we currently have in place, offers the potential for significant operational leverage and we expect to increasingly see the benefits of this going forward. It is our belief that we can significantly increase our revenues before we see any material increase in costs.
Despite the retail industry having been heavily affected by the recession during recent years, LiteBulb has continued to expand its business and develop its relationships with many of the leading retailers in the UK and abroad. We have now built an excellent reputation with these retailers and are seeing signs of renewed confidence within the markets in which we operate. We therefore look forward to the remainder of the year with confidence.
Financial Results
Revenue for the period increased to £1.4m (H1 2012: £0.28m). This led to a significant increase in gross profits to £0.6m (H1 2012: £0.03m) with gross margins increasing to 43% (H1 2012: 11%).
Loss before tax, finance costs and exceptionals, and excluding discontinued operations, increased to £0.91m (2011: £0.78m). The increased loss during the period is as a result of investments we made in bringing on board new staff members (we now have over 40 employees at the period end) and infrastructure. These investments were made in order to ensure that we have sufficient capacity to deliver more products to our increasing number of blue chip retail clients in order that we benefit more from the operational gearing inherent within the Company.
In addition, the consolidation of the product sourcing and development teams between Bluw and Premium Factory has created operational efficiencies which have led to the closing of the Premium Factory operation. This has reduced Group debt by £0.56m.
Losses from discontinued operations were £0.72m in the period (H1 2012: £0.16m). This resulted in a total loss for the period of £1.74m (H1 2012: £0.97m) translating to a basic and diluted EPS loss of 0.14p (H1 2012 EPS loss of 0.10p).
To give a better reflection of the Company's annual trading performance, the year-end has been changed from 30th June to 31st December.
Acquisitions
Bluw
In February 2013, we completed the acquisition of Bluw, a global designer, manufacturer and distributor of award winning innovative products, predominantly for the gift and toy markets. Bluw is trading ahead of internal expectations as we have introduced its extensive product portfolio to a wider audience of our retail clients. Bluw received purchase orders of £1m in April and May alone including orders for a broad range of products from Debenhams, Tesco and Menkind. Bluw also received its first orders from HMV, WH Smith and Shop Direct Group during the period and the acquisition has considerably expanded our growing pipeline.
Rizon Studios
Rizon Studios, a brand extension agency for major entertainment houses in the US such as Disney, Mattel, Sony Pictures, and Paramount, was brought into the Group in March 2013. This has led us to establish our Creative Division ("CD") enabling us to cater to our retail clients' desire to stock branded products and assist them in developing these brands.
CD has also enabled LiteBulb to become a licensor, opening new markets to the Company with relationships and contracts in place with major licensors, film studios, media firms and music production companies. Our licensor capabilities can also enable us to increase margins on some of our products and extend our reach into certain retailers.
Trading continues to grow strongly, with a number of recent client wins, notably from Disney, Miramax, Mattel, HIT and Beatrix Potter. In addition, we are now working for a new division of Disney, Disney Stores, demonstrating the potential for us to expand horizontally within our client base. Billing for May totalled over £100,000 and the pipeline of sales going forward is extremely encouraging. We are therefore actively looking to expand this division with new hires and are potentially seeking further acquisitions within this field.
Fundraisings
£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.
£0.825m Fundraising
Post the period end, in July 2013, LiteBulb raised £825,000 after expenses which will be used to accelerate the Company's organic growth and to supplement the working capital requirements of the enlarged group following the successful integration of Bluw and Rizon Studios. This also gave the Company funds to pursue further acquisition opportunities.
Board and Management Changes
We believe we now have the correct management team in place at LiteBulb to carry the Company forward during this important time as we look to increase our scale to capitalise on our strong positioning.
Post period end Michael Brennan was appointed to the board of LiteBulb as a non-executive director. He has over 14 years of experience working in equity capital markets, predominantly in a corporate finance capacity, focussing on small and mid-sized companies. His experience is expected to be invaluable to LiteBulb during this time of growth for the Company.
At the same time Nick Christie, Executive Director, stood down from the Board, but remains in employment with Litebulb and retains his position as a member of the Operational Board. In addition, Sir Richard Greenbury, former Chairman and Chief Executive of Marks & Spencer stepped down as a Non-Executive Director of LiteBulb to spend more time with his wife and family. Sir Richard had been instrumental in growing LiteBulb from a single product Company, selling solely through Marks & Spencer, to its current position as a provider of a diverse and extensive product range to many leading retailers around the globe.
Outlook
The six months under review were a transformational period for LiteBulb during which time we acquired Bluw, significantly broadening our product portfolio, and brought creative agency Rizon Studios into the Group, enabling us to present new and exciting opportunities to UK licensees. The integration of both of these businesses is progressing well and they are introducing material operational efficiencies. With strong relationships with leading retailers now in place we will continue to seek further acquisitions that broaden the portfolio of products we can offer to our clients in order to leverage.
We are also delighted to have received investment from both new and existing shareholders to enable us to accelerate our growth. Margins are growing and we are seeing increasing demand for our portfolio of products and services, with Bluw and Rizon Studios currently trading ahead of expectations. In addition, early responses from retailers to new product ranges have been highly positive. We have also significantly enhanced our pipeline and current order intake gives us confidence in meeting full year forecasts.
Simon McGivern
Chief Executive
30 September 2013
CONSOLIDATED INCOME STATEMENT
Continuing operations | Unaudited 6 months to 30 June 2013 | Unaudited 6 months to 30 June 2012 | Unaudited 12 months to 30 June 2013 | Audited 12 months to 30 June 2012 | |
£ | £ | ||||
Revenue | 1,403,965 | 275,538 | 2,018,123 | 621,244 | |
Cost of sales | (803,066) | (245,293) | (1,058,829) | (458,655) | |
Gross profit | 600,899 | 30,245 |
| 959,295 | 162,589 |
Administrative expenses | (1,507,911) | (809,550) | (2,310,030) | (1,512,160) | |
Exceptional administrative expense | (45,569) | (13,870) | (45,569) | (115,641) | |
Operating loss | (952,581) | (793,175) |
| (1,396,304) | (1,465,212) |
Finance costs | (61,892) | (13,803) | (84,079) | (14,390) | |
Loss before tax | (1,014,473) | (806,978) |
| (1,480,383) | (1,479,602) |
Taxation | - | - | - | - | |
Loss for the period from continuing operations | (1,014,473) | (806,978) |
| (1,480,383) | (1,479,602) |
Discontinued operations |
|
|
|
|
|
Loss for the period from discontinued operations | (724,234) | (161,201) |
| (814,355) | (85,208) |
Loss for the period | (1,738,707) | (968,179) |
| (2,294,738) | (1,564,810) |
Loss per share |
|
|
|
|
|
Basic and diluted loss per ordinary share | (0.0014) | (0.0010) |
| (0.0021) | (0.0016) |
CONSOLIDATED BALANCE SHEET
Unaudited as at 30 June 2013 | Audited as at 30 June 2012 | |
|
| |
|
| |
Non-current assets |
|
|
Intangible assets | 2,320,840 | 943,957 |
Property, plant and equipment | 186,986 | 35,105 |
Deferred tax assets | 163,617 | 163,617 |
Current assets |
|
|
Inventories | 847,035 | 382,517 |
Trade and other receivables | 958,803 | 456,975 |
Cash and cash equivalents | 186,803 | 116,342 |
| 1,992,641 | 955,834 |
Total assets | 4,664,084 | 2,098,513 |
Equity and liabilities |
|
|
Capital and reserves attributable to equity shareholders |
|
|
Issued share capital | 19,748,778 | 17,520,689 |
Share based payment reserve | 102,148 | 102,148 |
Reverse acquisition reserve | (13,221,177) | (13,221,177) |
Convertible loan notes issued | 111,861 | - |
Retained earnings | (5,807,836) | (3,513,098) |
Total equity | 933,774 | 888,562 |
Non-current liabilities |
|
|
Interest bearing borrowings | 1,342,529 | 294,011 |
Current liabilities |
|
|
Trade and other payables | 2,008,660 | 753,882 |
Interest bearing borrowings | 379,121 | 162,058 |
| 2,387,781 | 915,940 |
Total equity and liabilities | 4,664,084 | 2,098,513 |
GROUP CASH FLOW STATEMENT
Unaudited months to 31 June 2013 | Audited 12 months to 30 June 2012 | |
£ | £ | |
Cash flows from operating activities | ||
Loss after tax | (2,294,738) | (1,564,810) |
Non-cash adjustments |
|
|
Amortisation | 7,924 | 30,679 |
Depreciation | 33,487 | 13,505 |
Exceptional | 565,544 | - |
Interest converted | 5,589 | - |
Increase in working capital |
|
|
(Increase)/decrease in inventories | (142,423) | (22,099) |
(Increase)/decrease in trade and other receivables | (34,761) | 307,574 |
Increase/(decrease) in trade and other payables | 501,498 | (185,098) |
Net cash flows from operating activities | (1,357,881) | (1,420,249) |
Cash flows from financing activities | ||
Repayment of bank loans | (222,181) | (211,945) |
New loans | 2,196,964 | - |
Conversion | (450,000) | - |
Purchase of fixed assets | (74,985) | (9,352) |
Product development costs | (47,621) | (18,125) |
Purchase of subsidiaries | (32,825) | - |
Acquisition cash | 58,990 | - |
Shares issued | - | 1,392,719 |
Net cash from financing activities | 1,428,342 | 1,153,297 |
Net (decrease)/increase in cash and cash equivalents | 70,461 | (266,952) |
Opening cash | 116,342 | 383,294 |
Closing cash | 186,803 | 116,342 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Share capital | Reverse acquisition reserve | Share based payment reserve | Convertible loan notes | 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 |
Convertible loan notes issued | - | - | - | 111,861 | - | 111,861 |
Shares issued in period |
|
|
|
| ||
Cash | 450,000 | - | - | - | - | 450,000 |
Interest | 5,589 | - | - | - | - | 5,589 |
Acquisitions | 1,772,500 | - | - | - | - | 1,772,500 |
Comprehensive income: | ||||||
Loss for the period | - | - | - | - | (2,294,738) | (2,294,738) |
19,748,778 | (13,221,177) | 102,148 | 111,861 | (5,807,836) | 933,774 |
1. Basis of preparation
The interim financial information set out in this statement for the six months to 30 June 2013 and the twelve months to 30 June 2013 are unaudited. This financial information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. It does not comply with IAS 34 'Interim Financial Reporting', as is permissible under the rules of the AIM market.
This interim statement, which is neither audited nor reviewed, has been prepared in accordance with 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).
2. Status of financial information
The comparative financial information for the financial year ended 30 June 2012 has 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 report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
3. 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 30 June 2013 | Unaudited 6 months to 30 June 2012 | Unaudited 12 months to 30 June 2013 | Audited 12 months to 30 June 2012 | |
UK | 519,846 | 197,027 | 931,071 | 237,027 |
EU | 92,855 | 14,657 | 110,075 | 28,657 |
USA | 360,824 | 21,616 | 360,824 | 181,616 |
Rest of the World | 430,440 | 42,238 | 616,153 | 173,944 |
1,403,965 | 275,538 | 2,018,123 | 621,244 |
4. 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 30 June 2013 | Unaudited 6 months to 30 June 2012 | Unaudited 12 months to 30 June 2013 | Audited 12 months to 30 June 2012 | |
£ | £ | |||
Basic loss per share | ||||
Reported loss | (1,738,707) | (968,179) | (2,294,738) | (1,564,810) |
Reported loss per share | (0.0014) | (0.0010) | (0.0021) | (0.0016) |
Number of Shares | Number of Shares | Number of Shares | Number of Shares | |
Weighted average number of ordinary shares: | ||||
As at 30 June 2011 | 839,012,814 | 839,012,814 | 839,012,814 | 839,012,814 |
Shares issued on: | ||||
8 August 2011 | 129,166,660 | 129,166,660 | 129,166,660 | 115,719,172 |
19 December 2012 | 11,329,460 | - | 5,990,646 | - |
18 February 2013 | 245,245,902 | - | 122,958,904 | - |
10 April 2013 | 494,767 | - | 248,062 | - |
Weighted average number of ordinary shares | 1,225,249,603 | 968,179,474 | 1,097,377,085 | 954,731,986 |
Due to the Group's loss for the period, the diluted loss per share is the same as the basic loss per share.
5. Discontinued operations
Unaudited 6 months to 30 June 2013 | Unaudited 6 months to 30 June 2012 | Unaudited 12 months to 30 June 2013 | Audited 12 months to 30 June 2012 | ||
Revenue | 14,666 | 1,106,108 | 431,145 | 2,394,103 | |
Cost of sales | (13,989) | (1,042,929) | (420,781) | (2,038,584) | |
GROSS PROFIT | 677 | 63,179 | 10,363 | 355,519 | |
Administrative expenses | (74,717) | (202,280) | (166,353) | (414,556) | |
Exceptional items | (658,365) | - | (658,365) | - | |
Operating loss | (732,405) | (139,101) | (814,355) | (59,037) | |
Finance costs | 8,171 | (22,100) | 0 | (26,171) | |
LOSS BEFORE TAX | (724,234) | (161,201) | (814,355) | (85,208) | |
Taxation | - | - | - | - | |
LOSS FOR THE PERIOD | (724,234) | (161,201) | (814,355) | (85,208) |
6. Stated capital
| Unaudited as at 30 June 2013 | Audited as at 30 June 2012 |
Authorised | ||
Founder shares of no par value | 10 | 10 |
Ordinary shares of no par value | Unlimited | Unlimited |
Issued and fully paid | ||
Founder shares of no par value | 2 | 2 |
Ordinary shares of no par value | 1,320,626,742 | 968,179,474 |
On 19 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
On 18 February 2013, the Company issued 250,000,000 Ordinary Shares as initial consideration for the acquisition of Bluwstuff Limited, and 90,000,000 Ordinary Shares in respect of the conversion of the £450,000 two-year secured convertible loan
On 10 April 2013, the Company issued 1,117,808 Ordinary Shares as consideration for interest payable on the convertible loan notes currently in issue.
7. Events after the reporting period
On 19 July 2013, the Company issued 137,666,664 Ordinary Shares for a cash subscription.