24 Oct 2017 07:00
24 October 2017
MBL Group PLC
("MBL" or the "Company")
Board Changes, Update re Suspension and Trading Update
MBL announces that it has appointed Anton Lane to the Board as a Non-Executive Director with immediate effect. In light of recent events, it has been agreed that Tim Jackson-Smith will remain on the Board for a short period to ensure an orderly handover. The Board intends to appoint an Executive Director to the Board as soon as practicable.
Following this appointment, there is no longer any uncertainty over the Company's ability to conduct the business of the Company and therefore suspension of trading in the Company's ordinary shares will be lifted with effect from 7.30am today.
Further to the AGM Statement announcement on 28 September 2017, the Directors have set out a more detailed trading update below.
The previous financial year had seen a significant improvement in the trading performance of the Garden and Home Division and the budget for the YE 31 March 2018 recognised that the same level of growth was unlikely but that there should still be an increase in both turnover and profit relative to the prior year. The business has seen increased competition and this has had an impact on turnover. We are now seeing that the growth in turnover has not materialised as expected in the first 6 months and is currently behind the prior year numbers. We expect that revenue will remain below the prior year number for the full financial year. Despite these issues the improved margin as budgeted has been delivered and consequently EBITDA for the year to date is slightly ahead of the prior year though still behind budget.
The Home Entertainment Division had an exceptional year in 2017 and it was felt that, as with the Garden and Home Division, whilst that level of growth was unlikely to be repeated in the YE 31 March 2018, there was still room for both turnover and profit to grow. The budget anticipated a small increase in turnover and profit. This hasn't happened and the business has struggled to replicate last year's performance in the year to date. The business is materially behind where it was this time last year both in terms of profit and turnover. We are not expecting a significant turnaround during the busy Christmas trading period and consequently the full year forecast is expected to be materially behind the prior year.
In addition, the Company has incurred a number of exceptional costs associated primarily with the sale process. This combined with the performance of Home Entertainment Division has led to a loss at Group level for the year to date. The Directors do not anticipate this position changing materially in the second half of this financial year although it is expected that there will be less costs incurred in connection with the sale process in that period. The Board can also confirm that it is reviewing the Group's cost base in response to the lower than expected turnover in order to mitigate the size of the expected loss in the year. The Board will provide a further update on trading upon the publication of the Group's Interim Accounts in December.
After consultation with certain of the Company's substantial shareholders, the Board intends to work with those shareholders to look into concerns that they have regarding the dilution of Company assets in recent times, and in particular an allegation regarding a breach of the Group's IT security. The Board has previously investigated this matter and found no evidence of wrongdoing but is prepared to work with the shareholders to further look into this matter. A further update will be made when appropriate.
Information in respect of Mr Lane, as required by Schedule 2(g) of the AIM Rules for Companies, is set out below:
Full Name: Anton Dominic Lane
Age: 43
Current Directorships / Partnerships:
Edge Tax Professional Services Ltd
Cotswold Hamper Company Limited
Sugar Press Media Limited
Roadl Ghimpati Ltd
Edge Professional Trustees Limited
Edge Tax LLP
Previous Directorships / Partnerships in the last five years:
Mesopheric Ltd
Roadl Titu Ltd
Edge Law LLP
Ignition Investments Holdings Limited
Ignition Investments Group LLP
Landeq LLP
Pay Angels Limited
Haven Tax Consultancy Ltd
W A Group Limited
Ignition Investments Limited
Elite Tax Services Limited
Jampot Solutions Limited
Mr Lane was appointed company director of Edge Tax Consultancy Limited, a tax consultancy specialising in off-shore structures, which is currently undergoing a creditors' voluntary liquidation with a creditors' shortfall of £113,913. There were no criticisms/findings against Mr Lane in relation to this case.
ENDS
For further information, please contact:
MBL Group plc Tel: 01772 440440
Anton Lane
Tim Jackson-Smith
SPARK Advisory Partners Limited Tel: 0113 370 8970
(NOMAD)
Sean Wyndham-Quin
Mark Brady