TIDMBAR
RNS Number : 5836G
Brand Architekts Group PLC
20 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 (THE "EUWA")) ("UK MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Brand Architekts Group PLC
("Brand Architekts" or the "Company" or the "Group")
Trading Update & Resolution of Legal Claim
Brand Architekts Group plc, a challenger British Beauty brand
business, announces an update on trading for the 52 weeks to 30
June 2023 and a resolution of its legal claim with its joint
venture counterpart in Mr Haircare Ltd.
Group sales for FY23 are expected to be c.GBP20.1million (FY22:
GBP14.2m) an increase of 41% on the prior year due primarily to the
full year effect of the acquisition of InnovaDerma Plc, which
completed end of May 2022. Excluding InnovaDerma, revenue increased
by c7% due to strong international sales offset by challenging
trading conditions in UK channels.
Despite the challenging trading environment the Group generated
a reduced operating loss in H2, a significant improvement on the
performance in H1, due to a focus on better targeted advertising
& promotions resulting in improved contribution. Full year
losses are expected to see similar improvement.
The Group retains a healthy net cash position of cGBP8.2m at the
year-end, slightly better than the position at the half year and
also slightly ahead of market expectations.
Business Highlights
-- Continued implementation of the strategy to invest and
support our Invest & Nurture brands, which command higher
retail prices, engender strong consumer loyalty and deliver
stronger margins.
-- Completed integration of InnovaDerma, core functions now
based in the UK, full synergies to be realised by January 2024.
-- New Super Facialist Clear Skin, targeting problematic teenage
skin care needs, launched on Amazon in September and in Boots in
June 23.
-- New Super Facialist D2C site launched in March 23
-- New Skinny Tan brand awareness and customer acquisition
campaigns launched in July 2023 to capitalise on the tanning
season.
-- The Solution Menopause range to launch in 2024.
-- Strong growth vs the prior year in international channel
sales driven by post COVID-19 rebound in volumes from General
Merchandise stores across North America and Europe, benefitting
Dirty Works.
-- Confirmed distribution roll out to AS Watson stores in 2023
& 2024 across the Middle East and Asia (Thailand - 200 stores,
Vietnam - 7, The Gulf - 16, Philippines - 100, Malaysia - 66,
Taiwan - 200, Singapore - 40, Turkey -100).
Mr Haircare Limited:
As announced at the time of the Groups' final results in
November, the Group was subject to a legal claim brought by Jamie
Stevens Media Limited (JSML), its joint venture
counterparty/co-shareholder in Mr Haircare Ltd (premium male
haircare brand), which alleged a breach of shareholders' agreement
between the parties dating back to the company's acquisition of
Fish in 2018 . After taking appropriate legal advice and following
constructive dialogue the Group has agreed to a full and final
settlement of all claims in the sum of GBP200,000 together with
legal costs of GBP225,000.
The Company has also agreed to purchase JSML's 55% shareholding
in Mr Haircare Ltd in cash at a fair value price to be determined
by an external valuer later in the year. MR sales for FY23 are
expected to be GBP0.54m (FY22 GBP0.5m). The transaction is expected
to conclude before the end of the 2023 calendar year and a further
announcement will be made in due course. The proposed acquisition
of the remaining JV shares is in line with the company's strategic
vision to invest and build its portfolio of high-performance,
problem-solving and margin accretive brands. The brand will be
relaunched as 'MR' and the company's vision is to expand the brand
into adjacent male grooming problem solving categories and invest
in the master brand to accelerate brand awareness and stimulate
consumer trial.
Outlook:
Against a backdrop of continued challenging market conditions
and inflationary pressures the management team is focused on
realising both the strategic and financial aims of the Group. The
immediate priorities are driving brand awareness of key invest and
nurture brands, delivering revenue synergies through international
expansion, a laser focus on brand contribution and releasing
working capital tied up in harvest brands. W e remain confident
that the foundations we are building will enable us to return to
profitability and achieve our medium and long-term goals.
The Group expects to announce its full year results for the 52
weeks to 30 June 2023 in late October.
Quentin Higham, Chief Executive, commented:
"We have successfully integrated InnovaDerma and the new team
has worked extremely hard in focussing on improving brand
contribution. We continue to focus our resources on our key invest
and nurture brands. I am positive about the future and optimistic
to see the growth potential in our performance focussed portfolio.
We are confident that our brand development and brand reach
strategic pillars will help us achieve our profit goals."
For further information please contact :
Brand Architekts Group PLC
Quentin Higham / Geoff Ellis
Singer Capital Markets
Shaun Dobson / Jen Boorer / (Nominated adviser and
Alex Emslie broker) 020 7496 3000
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END
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July 20, 2023 02:00 ET (06:00 GMT)
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