MUBL.L Regulatory News (MUBL)

MBL GROUP PLC

Full Year Results for the Year Ended 31 March 2017

MBL Group plc ("MBL" or the "Group") announces its final audited results for the year ended 31 March 2017. 

Key points:

· Group revenue increased 8% to £16.0 million (2016: £14.8 million);

· Both trading divisions were profitable, with the Garden & Home division seeing a 1,600% increase in operating profit;

· Group loss for the year after taxation was £158,000 (2016: £75,000 profit) due to exceptional costs of £693,000 in the year (2016: £nil)

· Net cash of £1.6 million (2016: £1.9 million) and the Group remains debt free

· Group diluted loss per share of 0.9p (2016: profit 0.4p)

· No dividend is proposed

· Sales process underway following completion of strategic review

Commenting on these results, Tim Jackson-Smith, Chairman of MBL, said:

"The financial year ending 31 March 2017 saw the Group undergoing many changes including the completion of a strategic review and the commencement of a formal sales process. However, despite the many challenges and distractions that these changes presented I am pleased to say that both trading divisions performed well and were each profitable and cash generative. There were a number of one-off exceptional costs that the Group incurred in connection with the above changes that resulted in a loss at Group level. On behalf of the Board, I would like to thank everyone across the Group for their hard work and dedication."

Extracts from the final results appear below and a full version will be available on the Company's website, www.mblgroup.co.uk, from 22 August 2017.

For further information please contact:

MBL Group plc Tel: 01772 440440

Tim Jackson-Smith, Chairman

SPARK Advisory Partners Limited Tel: 0203 368 3555

Sean Wyndham-Quin

Mark Brady

SI Capital Limited Tel: 01483 413500

Nick Emerson

Andy Thacker

CHAIRMAN'S STATEMENT

I am pleased to report that during the year the Group achieved an 8% growth in sales, driven by a strong performance in the Garden & Home division.

Operational Review

Sales within the home entertainment market were encouraging with a 7% increase in sales achieved in a very challenging market.

Home Entertainment

Our Home Entertainment division experienced a satisfying year with an increase in revenue of 7% to £9.5 million (2016: £8.9 million). Exports account for 64% of the division's sales (2016: 70%). Sales have been stimulated with the continued growth of the vinyl market and back catalogue sales in the audio market driven by the death of high profile artists which revived interest in their music. Gross profit margins dropped marginally to 12.9% from 14.7% due mainly to a change in the mix of sales. Profitability improved compared with the prior year at £383,000 (2016: £180,000), a 112% increase.

Garden & Home

Our Garden & Home division specialises in the mail order and online sales of garden bird food and associated wildlife products and aquatics supplies.

Sales during the year increased by 10% to £6.4 million (2016: £5.9 million). The sales increase was driven by continued investment in marketing, new product sourcing and a commitment to providing a good customer experience. There has also been a continued focus on controlling costs and this combined with the increase in sales has led to an operating profit for the business of £247,000 (2016: £14,000), an impressive increase of over 1,600%. The UK market for bird food remains highly competitive but the ability to buy competitively and to switch customers away from less profitable products has helped maintain margins within the division.

STRATEGIC REPORT

Financial Review

The Segmental Analysis in the Notes to the Financial Statements presents the Group's performance and position by division.

Overall, Group revenue for the year increased by 8% to £16.0 million (2016: £14.8 million). Group gross margins reduced by 1% to 24% (2016: 25%).

Throughout the year the Board has kept a close eye on the Group's cost base and as a result normal recurring expenditure fell by 15% from £2.7 million to £2.3 million. The Group loss for the year after taxation was £158,000 (2016: £75,000 profit) however it is worth noting that there were £693,000 of exceptional items in the year (2016: £nil).

The Group is a relatively small business and as such it is possible for investment in future performance or operating challenges to have a disproportionate effect on our short term financial performance. We are also sensitive to the costs of maintaining an AIM listing and these costs have a sizeable impact on the costs of administering the Group. These factors were taken into account as part of the strategic review and were relevant in reaching the conclusion that shareholder value should be maximised through a sale of the Group's trading businesses.

Cash flow, working capital and borrowing facilities

Despite a number of one-off exceptional costs incurred by the Group, it ended the year with cash balances of £1.6 million (2016: £1.9 million). The net cash outflow from operating activities was £0.2 million (2016: inflow £0.2 million) with £21,000 invested in capital expenditure. Exceptional items of £693,000 adversely affected the Group cash position. The Group remains debt free.

Dividends

The Board is not recommending the payment of a dividend.

Strategy

As previously stated, a strategic review was carried out towards the end of 2016 with the aim of maximising value for shareholders. The conclusion of that review was that a third party may be better placed to develop the potential in the Company's trading businesses and take them forward to the next phase of their development. The Board has therefore recently been conducting, and continues to conduct, a formal sales process regarding each of the Company's trading businesses. 

Current Trading

Despite the inevitable uncertainty created by the strategic review and the sale process that is being carried out, our Garden & Home division has started the year well and sales are broadly in line with management expectations. Our Home Entertainment division has seen a reduction in sales in the first quarter of this financial year compared to the same period last year. The Board continues to keep a close eye on costs and these are under control.

Board Changes

The Board has seen significant changes during the year with D A Johnson stepping down as Non-Executive Chairman, and L Clarke and C Jones also resigning from the Board. T Jackson-Smith and P Palframan joined the Board during the year.

T Jackson-Smith

Chairman

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2017

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2017

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2017

Notes to the Financial Statements

for the year ended 31 March 2017

1. Source of Information

The preliminary financial statements for the financial year ended 31 March 2017 were approved by the Board of Directors on 18 August 2017. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2017 or 2016 but is derived from those accounts. Statutory accounts for 2016 have been delivered to the registrar of companies, and those for 2017 will be delivered following the Company's Annual General Meeting.

The auditor, Moore & Smalley LLP, has reported on those accounts; their report for 2017 was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.

2. Operating segments

The segments disclosed below reflect the Group's management and internal reporting structure.

Consolidated statement of comprehensive income for year ended 31 March 2017:

Consolidated statement of comprehensive income for year ended 31 March 2016:

3. (Loss)/profit per share

The calculation of basic (loss)/profit per share has been calculated on the (loss)/profit after tax of £158,000 (2016: profit £75,000) and the weighted average number of shares in issue during the year of 17,296,067 shares of 7.5p each (2016: 17,296,067 shares of 7.5p each).

The calculation of diluted (loss)/profit per share is identical to that used for the basic (loss)/profit per share.

The adjusted (loss)/profit per share, as disclosed below, was calculated using the (loss)/profit after tax for the financial year calculated with reference to the basic and diluted weighted average share in issue during the year.

4. Consolidated statement of changes in equity

 5. Annual Report

The Annual Report will be posted to shareholders in early September. Copies of the Annual Report will be available on request from the MBL Group plc, Unit 1 Millennium City Park, Millennium Road, Preston, PR2 5BL and will be available to download from the Company's website at www.mblgroup.co.uk.