TIDMBAR

RNS Number : 0510O

Brand Architekts Group PLC

30 September 2019

Brand Architekts Group plc

("Brand Architekts" or the "Group")

Final results for the year ended 29 June 2019

Business Transformation to Brand only

and

Board Succession

Brand Architekts Group plc, formerly known as Swallowfield PLC, announces its final results for the 52 weeks ended 29 June 2019.

Results

 
                                                         2019     2018 
                           Brands     MFG*     Central    Total    Total 
                             GBPm     GBPm        GBPm     GBPm     GBPm 
 Revenue                     19.7     62.0       (4.4)     77.3     73.9 
 Underlying Operating 
  Profit                      3.6      2.5       (1.7)      4.4      5.5 
 Adjusted PBT                                               5.1      5.0 
 Reported PBT                                               4.1      4.5 
 EPS - Adjusted                                            25.3     23.2 
 EPS - basic                                               20.7     20.9 
 
 Dividend per share - 
  paid and proposed                                        6.5p     6.2p 
 
 Net Debt                                                   7.2     11.8 
 
 *Disposal on 23 Aug 
  2019 for                            35.0 
 
 

Brendan Hynes, Executive Chairman commented:

"On the 23 August 2019 the Group disposed of its Manufacturing business for GBP35m to KDC/One Inc. This transformational deal is another significant milestone for our strategy of accelerating the growth of our Owned Brands business and simplifying the Group. We will now focus all our time, resources and investment growing and developing the higher margin part of our business.

The value achieved on disposal represents a very good return for shareholders, it also strengthens our balance sheet, moving the Group from a net debt position of GBP11.8m last financial year end, to a significant positive cash position on completion of GBP24.0m.

The new Group has been renamed the Brand Architekts Group Plc and has an outstanding, stand-alone operational team with an excellent track record and strong relationships with our retail customers. The business is now well capitalised and we will use some of the proceeds from the disposal to grow the business organically and through selective acquisitions that will deliver further profitability and scale.

We are now well positioned to continue to build a more profitable and sustainable business, which will generate further shareholder value."

Business review statement

Over the last four years we have developed, both organically and through acquisition, a growing portfolio of brands that are owned and managed by the Group and which we control from formulation development through to distribution.

Following the disposal of the Manufacturing business, we now have complete focus on the Owned Brands business as well as the necessary financial resources to invest and grow the business further.

Financial highlights

-- Group Revenues for the 52 weeks increased by 8% to GBP77.3m (2018: GBP71.6m on a comparable 52 week basis).

   --      Owned Brands represented 25% of revenues and 59% of underlying operational profits. 

-- Owned Brand revenues decreased by 6.7%, impacted by lower consumer confidence and by challenges faced by retailers in a restricted marketplace.

   --      Adjusted profit before taxation* increased by 1% to GBP5.1m (2018: GBP5.0m). 
   --      Underlying operating profit** decreased by 19% to GBP4.4m (2018: GBP5.5m). 
   --      Adjusted EPS increased by 9% year on year to 25.3 pence (2018: 23.2 pence). 

-- Proposed final dividend of 4.35p per share (2018: 4.2p), in addition to the interim dividend of 2.15p already paid, to give a full year dividend of 6.5p (2018: 6.2p), an increase of 5%.

   --      Net Debt as at 29 June 2019 decreased to GBP7.2m (2018: GBP11.8m). 

*calculated as per page 6

**as per note 6

Operational highlights

-- Creation of a solely Owned Brands business following the disposal of the Contract Manufacturing Business for GBP35 million, a premium to the market capitalisation of the Group as at 15 July 2019. Net proceeds receivable by the Company are GBP33.75 million.

-- Ongoing business renamed Brand Architekts Group plc on 29 August 2019 to reflect sole focus on Owned Brands.

   --      New product development ("NPD") continues with 80 new products launched in the year. 
   --      Net cash as at 31 August of GBP24m. 
   --      Net Assets as at 31 August of GBP38m. 

Dividend

Given our strong cash position and confidence in the business it is the Board's intention to propose a final dividend of 4.35 pence. Together with the interim dividend already paid of 2.15 pence, this represents a total dividend for the year of 6.5 pence, an improvement of 5% over the prior year (2018: 6.2p).

It remains the Directors' intention to align future dividend payments to the underlying earnings and cash flow of the stand-alone business, taking into account the investment and operational requirements of the business.

Board succession

Following the successful completion of the deal to dispose of the Manufacturing business on 23 August, which represents a fundamental change to the scale of business for the Group, the Board has mutually agreed with Tim that he will step down from the PLC Board and as Chief Executive and leave the company on 30 September 2019.

Brendan Hynes will take on an executive Chairman role until a permanent replacement is appointed. The successful brand management team remains in place and unchanged and will continue to be supported until the end of the calendar year by Mathew Gazzard, formerly Group Finance Director and Jane Fletcher, formerly Group Sales and Marketing Director, under the transitional services agreement. In addition, we will be putting in place an interim CFO to work on the transition and to support the stand-alone Brands business, until a full CFO is appointed.

The Board wishes to thank Tim for his contribution to the Group during his time with us and wish him all the very best for the future.

Outlook

We expect the economic and consumer uncertainty seen in the UK in the second half year to June 2019 to continue into our new financial year. The slow-down in momentum in our Owned Brands business will be addressed by enabling management to focus on this business following the disposal, innovative NPD and a stronger focus on distribution in both the UK and internationally.

Given the strength of our balance sheet, we also remain alert to further acquisition opportunities which offer the potential to build scale and deliver incremental shareholder value

Following the successful disposal of the Manufacturing business, we are confident that our new strategic focus will enable us to deliver the best outcome for all our stakeholders.

 
 For further information please contact: 
 Swallowfield plc 
                          --------------------  ---------- 
 Brendan Hynes             Executive Chairman     via Alma 
                          --------------------  ---------- 
 
 Shaun Dobson / George                            0207 496 
  Tzimas                   N+1 Singer (Nomad)      3000 
                          --------------------  ---------- 
 Josh Royston / Hilary                            0203 405 
  Buchanan / Sam Modlin    Alma PR                 0205 
                          --------------------  ---------- 
 

Strategic Report

Fundamental transformation - focus on brands

Over the last four years our stated strategy has been to develop, both organically and though acquisition, a portfolio of brands that are owned and managed by the Group and which we control from formulation development through to distribution.

As at 29 June 2019, Owned Brands represented 59% of group underlying operation profits.

Following a strategic review process, the Board concluded that the Manufacturing business would be better served as part of a business with bigger scale and that GBP35 million sale proceeds represented excellent value for shareholders. With the disposal of the Manufacturing business in August 2019, we have accelerated our strategic re-alignment and will now be 100% focused on the brands that we own and control. The disposal has also strengthened the balance sheet, eliminated group debt and leaves the group in a significantly cash positive position.

The Board believe that we are now better positioned to drive further value by focusing solely on our Owned Brands business with its higher margins, lower capital investment requirements and superior financial returns.

New name - stronger focus

The new group is now called Brand Architekts Group plc, which more appropriately reflects the future focus of the group

Strategic priorities

The challenging market conditions, particularly in the UK require us to have a clear strategic focus. The strategic priorities for the Group are:

   --      Build Scale: Accelerate sales and profit growth organically and via accretive acquisitions 
   --      New Product Development (NPD): Continue to execute at pace 
   --      International expansion: Develop new customers in new geographies 
   --      On-line expansion: Accelerate E-commerce and digital presence 
   --      Build organisation capability: Continue to invest in people and skills 

Progress against our strategic priorities

   --      New Product Development (NPD) 

We are pleased that the pace of NPD continues with over 80 new lines launched over the 12 month period across 11 brands.

We continue to evaluate and develop the brand portfolio to ensure that we are focusing the appropriate level of resource and support to drive maximum performance and growth. Within the portfolio we have defined a number of 'Drive' brands where we are specifically focused on extending distribution, new product development, international growth and increasing support through both instore and digital promotion.

   --      International expansion 

Our focus continues on developing sales in new international markets and building relationships with appropriate distribution and retail partners for our brand portfolio. Bi-lingual pack formats have been developed for specific brands, allowing us to maximise opportunity whilst carefully managing inventory levels. The launch of the Dirty Works brand into France and Belgium has been followed by new distribution in the Middle East. Our range of therapeutic bath solutions, Dr Salts, has launched successfully in South Africa; the Real Shaving Company has launched in New Zealand.

   --      On-line expansion 

We continue to invest in the area of developing in-house expertise to grow the reach of Owned Brands business within multi channels to market. Strong relationships with key e-tailers have been established enhancing the breadth of distribution and partners for our brand portfolio.

   --      Build organisation capability 

We will continue to build and develop the stand alone capability of our Owned Brands business by investing in further Marketing, Digital, Technical and Supply chain skills.

Financial review

Group statutory revenue at GBP77.3m from continuing and discontinued operations was up 5% against prior year. The Owned Brands business endured a difficult year against strong comparatives, declining by 6.7%, adversely impacted by the decline in consumer confidence and retailer pressures. In the Group's Manufacturing business, revenues increased by 13% against prior year comparators, driven by increased volumes through the launch of three new contract wins.

On a comparable 52-week basis, revenue increased by 8% to GBP77.3m (2018: GBP71.6m). The weakness of Sterling against the US dollar has increased sales revenue by GBP0.5m. Revenue increase on a constant currency basis would have been 4.0%.

The adverse currency impact on revenue has been offset by an equivalent favourable currency impact on cost of goods, reflecting the Group's broadly natural hedge profile.

The pressure experienced on the margin accretive Owned Brands revenues, whilst slightly offset by higher volume sales in the Manufacturing business, has resulted in a reduction in the underlying operating profit at GBP4.4m (2018: GBP5.5m).

Underlying operating profit is shown before charges for share-based payments, with a charge made of GBP0.1m (2018: GBP0.3m). Share options are put in place in order to incentivise the Group's wider management team (including the Executive Directors) and to ensure that their interests are aligned with shareholders.

The net effect is that the Group made an adjusted operating profit of GBP4.3m (2018: GBP5.2m). Adjusted profit before tax increased to GBP5.1m (2018: GBP5.0m).

Total exceptional costs of GBP0.7m were incurred by the Group in the current period. This is in part due to the GMP equalisation charge on the Group's DB Pension Scheme of GBP0.3m netted off by a GBP0.2m release of previously provided for contingent consideration (included in continuing operations) and GBP0.7m of "one off" costs relating to the Group's disposal of the Manufacturing business and wider restructure (included in discontinued operations). In 2018 there was an exceptional charge of GBP0.28m mainly relating to the writing down of the investment in Sterling Shave Club.

The overall effective rate of the new Group taxation for the period was 11.1% (2018: 19%) of pre-tax profits. The effective tax rate fell due to Group investment income.

This results in adjusted earnings per share of 25.3p (2018: 23.2p).

A reconciliation of underlying operating profit to statutory profit before taxation is shown below:

 
                                                     2019           2019                                2018           2018 
                                        2019   Continuing   Discontinued                   2018   Continuing   Discontinued 
                                       Total   operations     operations                  Total   operations     operations 
                                     GBP'000      GBP'000        GBP'000                GBP'000      GBP'000        GBP'000 
---------------------  ---------------------  -----------  -------------  ---------------------  -----------  ------------- 
 Underlying profit 
  from operations 
  (see note 6)                         4,428        2,355          2,073                  5,470        3,319          2,151 
---------------------  ---------------------  -----------  -------------  ---------------------  -----------  ------------- 
 Charge for 
  share-based 
  payments                             (115)        (115)              -                  (297)        (297)              - 
---------------------  ---------------------  -----------  -------------  ---------------------  -----------  ------------- 
 Adjusted operating 
  profit                               4,313        2,240          2,073                  5,173        3,022          2,151 
 Net borrowing costs                     757        (144)            901                  (173)        (161)           (12) 
---------------------  ---------------------  -----------  -------------  ---------------------  -----------  ------------- 
 Adjusted profit 
  before taxation                      5,070        2,096          2,974                  5,000        2,861          2,139 
 Amortisation of 
  acquisition-related 
  intangibles                          (260)        (260)              -                  (197)        (197)              - 
 Exceptional (costs)                   (717)         (48)          (669)                  (279)        (279) 
 Profit before 
  taxation                             4,093        1,788          2,305                  4,524        2,385          2,139 
---------------------  ---------------------  -----------  -------------  ---------------------  -----------  ------------- 
 

The Group's strategic investment shareholding in Shanghai Colour Cosmetics Technology Company Limited (SCCTC) has reduced from 19% to 13.3% within the period. However, the carrying value remains unchanged during the period, based on a fair value of SCCTC's commercially, externally assessed valuation of the business. The initial cost of this investment was GBP0.14m and this is now valued at GBP1.39m. This improved valuation reflects a strong trading performance, supplying customers in Europe and the USA. Income totalling GBP1.15m was received in the year (2018: GBP0.19m). This investment was part of the Manufacturing business on disposal and is classified as held for sale at the period end.

Net debt and cash flow

Net debt decreased significantly to GBP7.2m (2018: GBP11.8m). A re-balancing of the Group's working capital from the prior year has helped 'normalise' the net debt closing balance. The Group maintains a broadly natural hedge position on the Euro and US Dollar, and manages timing differences through a multi-currency invoice finance facility. At the reporting date, the Group was maintaining a hedged position by holding Euro and US Dollar cash balances, whilst drawing on its GBP facility. Note 11 provides an analysis of net debt.

The components of working capital highlight the unwinding of the impact of the introduction of the three new major account wins in the Manufacturing business which were being implemented at the end of the prior year. This aspect combined with a more linear shape to trade debtors have positively impacted the total working capital invested at year end.

Financing costs of GBP0.4m (2018: GBP0.36m) comprised interest expense of GBP0.26m (2018: GBP0.21m) plus a pension plan notional finance charge of GBP0.13m (2018: charge GBP0.15m). Finance income is the receipt of GBP1.15m (2018: GBP0.19m) income from our investment holding in SCCTC.

Capital expenditure was GBP1.1m which was behind the level of depreciation. We have continued to make a number of investments to improve line efficiencies and support incremental new customer contracts.

Defined benefit pension plan

The defined benefit pension plan underwent its last triennial valuation on 5 April 2017. The deficit on a statutory funding basis was GBP2.6m and the Group entered into a revised deficit recovery plan and schedule of contributions in July 2018. Under this there is a commitment to make deficit reduction payments of GBP318k per annum (previously GBP108k per annum) for seven years and GBP210k for a further three years, and to pay certain administration costs and the PPF levy for the life of the plan. This commitment will be re-assessed once the results of the next triennial valuation at 5 April 2020 are available.

Accounting Standards require the discount rate used for valuations under IAS19 'employee benefits' to be based on yields on high quality (usually AA-rated) corporate bonds of appropriate currency, taking into account the term of the relevant pension plan's liabilities. Corporate bond indices are used as a proxy to determine the discount rate. At the reporting date, the yields on bonds of all types were lower than they were at 30 June 2018. This has resulted in lower discount rates being adopted for accounting purposes compared to last year. In addition, inflation rates are higher than last year. The combination of these two factors have materially increased the fair value of the plan liabilities as measured under IAS 19, which combined with the anticipated investment return performance, has translated into an increased liability under the IAS19 methodology. For accounting purposes at 29 June 2019, the Group recognised under IAS19 'employee benefits', a net liability of GBP9.4m (2018: GBP4.5m).

Dividends

The Board is pleased to announce that it will be proposing a final dividend of 4.35 pence. Together with the interim dividend already paid of 2.15 pence this represents a total dividend for the year of 6.5 pence, an improvement of 5% over the prior year (2018: 6.2p). If approved, the final dividend will be paid on 6 December 2019 to shareholders on the register on 15 November 2019. The shares will be marked as ex-dividend on 14 November 2019.

Group Statement of Comprehensive Income

For the 52 weeks ended 29 June 2019 and 53 weeks ended 30 June 2018

 
                                                                                    2019      2018* 
                                                                        Notes    GBP'000    GBP'000 
 
 Revenue                                                                    6     19,676     21,085 
 Cost of sales                                                                  (12,680)   (12,705) 
---------------------------------------------------------------------  ------  ---------  --------- 
 Gross profit                                                                      6,996      8,380 
 Commercial and administrative costs                                             (5,016)    (5,556) 
---------------------------------------------------------------------  ------  ---------  --------- 
 Operating profit before exceptional items                                         1,980      2,824 
 Exceptional items                                                          7       (48)      (279) 
---------------------------------------------------------------------  ------  ---------  --------- 
 Operating profit                                                                  1,932      2,545 
---------------------------------------------------------------------  ------  ---------  --------- 
 Finance income                                                                        -          - 
 Finance costs                                                                     (144)      (160) 
---------------------------------------------------------------------  ------  ---------  --------- 
 Profit before taxation                                                     8      1,788      2,385 
---------------------------------------------------------------------  ------  ---------  --------- 
 Taxation                                                                   9      (198)      (453) 
---------------------------------------------------------------------  ------  ---------  --------- 
 Profit for the year                                                               1,590      1,932 
---------------------------------------------------------------------  ------  ---------  --------- 
 Profit on Discontinued Operations after taxation                          12      2,050      1,701 
---------------------------------------------------------------------  ------  ---------  --------- 
 Profit for the year                                                               3,640      3,633 
=====================================================================  ======  =========  ========= 
 Other comprehensive income/(loss): 
 Items that will not be reclassified subsequently to profit or loss: 
 Re-measurement of defined benefit liability                                     (4,011)      1,403 
--------------------------------------------------------------------- 
 Items that will be reclassified subsequently to profit or loss: 
 Exchange differences on translating foreign operations                             (35)         30 
 (Loss)/gain on financial assets held at fair value                                  (6)        156 
 Other comprehensive (loss)/income for the year                                  (4,052)      1,589 
---------------------------------------------------------------------  ------  ---------  --------- 
 Total comprehensive (loss)/income for the year                                    (412)      5,222 
=====================================================================  ======  =========  ========= 
 
 Profit attributable to: 
---------------------------------------------------------------------  ------  ---------  --------- 
 Equity shareholders                                                               3,539      3,542 
---------------------------------------------------------------------  ------  ---------  --------- 
 Non-controlling interests                                                           101         91 
 
 Total comprehensive income attributable to: 
---------------------------------------------------------------------  ------  ---------  --------- 
 Equity shareholders                                                               (513)      5,131 
---------------------------------------------------------------------  ------  ---------  --------- 
 Non-controlling interests                                                           101         91 
 
 
 Earnings per share 
 - basic                                                                   10      20.7p      20.9p 
 - diluted                                                                 10      20.0p      20.3p 
 
 Dividends 
 Paid in year (GBP'000)                                                            1,088        933 
 Paid in year (pence per share)                                                    6.35p       5.5p 
 Proposed (GBP'000)                                                                  745        720 
 Proposed (pence per share)                                                        4.35p       4.2p 
 

*2018 comparatives have been restated for discontinued operations - see note 6 for further information.

Group Statement of Financial Position

For the 52 weeks ended 29 June 2019, and 53 weeks ended 30 June 2018

 
                                                            2019                 2018 
                                                                   Restated - Note 13 
                                                 Notes   GBP'000              GBP'000 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                                21               11,438 
 Intangible assets                                        12,817               13,852 
 Deferred tax assets                                       1,714                  803 
 Investments                                                   -                1,391 
----------------------------------------------  ------  --------  ------------------- 
 Total non-current assets                                 14,552               27,484 
 Current assets 
 Inventories                                               5,211               13,825 
 Trade and other receivables                               3,475               19,283 
 Assets held for resale                             12    22,700                    - 
 Cash and cash equivalents                          11       381                  934 
 Current tax receivable                                      285                  109 
----------------------------------------------  ------  --------  ------------------- 
 Total current assets                                     32,052               34,151 
----------------------------------------------  ------  --------  ------------------- 
 Total assets                                             46,604               61,635 
----------------------------------------------  ------  --------  ------------------- 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables                                  6,628               23,709 
 Interest-bearing loans and borrowings                     1,139                1,127 
 Current tax payable                                         527                  503 
----------------------------------------------  ------  --------  ------------------- 
 Total current liabilities                                 8,294               25,339 
----------------------------------------------  ------  --------  ------------------- 
 Non-current liabilities 
 Interest-bearing loans and borrowings                     2,091                3,230 
 Post-retirement benefit obligations                       9,417                4,489 
 Deferred tax liabilities                                  1,061                1,555 
 Total non-current liabilities                            12,569                9,274 
----------------------------------------------  ------  --------  ------------------- 
 Total liabilities                                        20,863               34,613 
----------------------------------------------  ------  --------  ------------------- 
 Net assets                                               25,741               27,022 
----------------------------------------------  ------  --------  ------------------- 
 
 EQUITY 
 Share capital                                               857                  857 
 Share premium                                            11,987               11,987 
 Revaluation of investment reserve                         1,241                1,247 
 Exchange reserve                                          (147)                (112) 
 Pension re-measurement reserve                          (6,502)              (2,491) 
 Retained earnings                                        18,160               15,455 
----------------------------------------------  ------  --------  ------------------- 
 Equity attributable to holders of the parent             25,596               26,943 
----------------------------------------------  ------  --------  ------------------- 
 Non-controlling interest                                    145                   79 
----------------------------------------------  ------  --------  ------------------- 
 Total equity                                             25,741               27,022 
----------------------------------------------  ------  --------  ------------------- 
 

Group Statement of Changes in Equity

For the 52 weeks ended 29 June 2019 and 53 weeks ended 30 June 2018

 
                      Share     Share   Revaluation   Exchange          Pension   Retained   Non-controlling     Total 
                    Capital   Premium       of         Reserve   re-measurement   Earnings          interest    Equity 
                                        investment                      reserve 
                                          reserve 
 Group              GBP'000   GBP'000       GBP'000    GBP'000          GBP'000    GBP'000           GBP'000   GBP'000 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Balance as at 
  June 2018             857    11,987         1,247      (112)          (2,491)     15,455                79    27,022 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Dividends                -         -             -          -                -    (1,088)              (35)   (1,123) 
 Non-controlling 
  interest                -         -             -          -                -          -               101       101 
 Share based 
  payments                -         -             -          -                -        254                 -       254 
 Transactions 
  with owners             -         -             -          -                -      (834)                66     (768) 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Profit for the 
  year                    -         -             -          -                -      3,539                 -     3,539 
 Other 
 comprehensive 
 income: 
 Re-measurement 
  of defined 
  benefit 
  liability               -         -             -          -          (4,011)          -                 -   (4,011) 
 Exchange 
  difference on 
  translating 
  foreign 
  operations              -         -             -       (35)                -          -                 -      (35) 
 Fair value 
  movements for 
  financial 
  assets                  -         -           (6)          -                -          -                 -       (6) 
 Total 
  comprehensive 
  income for the 
  year                    -         -           (6)       (35)          (4,011)      3,539                 -     (513) 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Balance as at 
  June 2019             857    11,987         1,241      (147)          (6,502)     18,160               145    25,741 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 
 
                      Share     Share   Revaluation   Exchange          Pension   Retained   Non-controlling     Total 
                    Capital   Premium       of         Reserve   re-measurement   Earnings          interest    Equity 
                                        investment                      reserve 
                                          reserve 
 Group              GBP'000   GBP'000       GBP'000    GBP'000          GBP'000    GBP'000           GBP'000   GBP'000 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Balance as at 
  June 2017             844    11,744         1,091      (142)          (3,894)     12,749                18    22,410 
-----------------  -------- 
 Dividends                -         -             -          -                -      (933)              (30)     (963) 
 Issue of new 
  shares                 13       243             -          -                -          -                 -       256 
 Non-controlling 
  interest                -         -             -          -                -          -                91        91 
 Share based 
  payments                -         -             -          -                -         97                 -        97 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Transactions 
  with owners            13       243             -          -                -      (836)                61     (519) 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Profit for the 
  year                    -         -             -          -                -      3,542                 -     3,542 
 Other 
 comprehensive 
 income: 
 Re-measurement 
  of defined 
  benefit 
  liability               -         -             -          -            1,403          -                 -     1,403 
 Exchange 
  difference on 
  translating 
  foreign 
  operations              -         -             -         30                -          -                 -        30 
 Fair value 
  movements for 
  financial 
  assets                  -         -           156          -                -          -                 -       156 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Total 
  comprehensive 
  income for the 
  year                    -         -           156         30            1,403      3,542                 -     5,131 
 Balance as at 
  June 2018             857    11,987         1,247      (112)          (2,491)     15,455                79    27,022 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 
 

Cash Flow Statement

For the 52 weeks ended 29 June 2019 and 53 weeks ended 30 June 2018

 
                                                              Group              Company 
                                                           2019      2018      2019      2018 
                                                        GBP'000   GBP'000   GBP'000   GBP'000 
 Cash flow from operating activities 
 Profit before taxation                                   4,093     4,524       461       699 
 Depreciation                                             1,262     1,283     1,064     1,058 
 Amortisation                                               944       583       768       418 
 Finance income                                         (1,146)     (191)   (1,182)     (822) 
 Finance cost                                               389       364       382       363 
 (Increase) in inventories                              (2,129)   (2,395)     (877)   (1,279) 
 Decrease /(increase) in trade and other receivables      1,252   (2,648)   (1,693)        71 
 Increase in trade and other payables                     3,059       944     7,712     2,563 
 (Decrease) in share-based payments provision             (221)   (1,666)     (221)   (1,666) 
 Contributions to defined benefit plans                   (282)     (108)     (282)     (108) 
 Cash generated from operations                           7,221       690     6,132     1,297 
-----------------------------------------------------  --------  --------  --------  -------- 
 Finance expense paid                                     (263)     (209)     (256)     (208) 
 Taxation paid                                            (593)     (762)     (197)     (247) 
-----------------------------------------------------  --------  --------  --------  -------- 
 Net cash flow from operating activities                  6,365     (281)     5,679       842 
-----------------------------------------------------  --------  --------  --------  -------- 
 Cash flow from investing activities 
 Dividend income received                                 1,146       191     1,182       822 
 Purchase of property, plant and equipment              (1,088)   (1,631)     (900)   (1,486) 
 Purchase of intangible assets                            (699)   (3,850)     (699)   (3,850) 
 Purchase of subsidiary                                       -   (1,850)         -   (1,850) 
 Net cash flow from investing activities                  (641)   (7,140)     (417)   (6,364) 
-----------------------------------------------------  --------  --------  --------  -------- 
 Cash flow from financing activities 
 Movements in invoice discounting facility              (4,027)     2,741   (3,637)     1,701 
 Proceeds from new loan                                       -     3,000         -     3,000 
 Issue of new share capital                                   -       256         -       256 
 Repayment of loans                                     (1,127)     (736)   (1,127)     (736) 
 Finance income received                                      -         -         -         - 
 Dividends paid                                         (1,123)     (963)   (1,088)     (933) 
-----------------------------------------------------  --------  --------  --------  -------- 
 Net cash flow from financing activities                (6,277)     4,298   (5,852)     3,288 
-----------------------------------------------------  --------  --------  --------  -------- 
 Net (decrease) in cash and cash equivalents              (553)   (3,123)     (590)   (2,234) 
 Cash and cash equivalents at beginning of year             934     4,057       737     2,971 
-----------------------------------------------------  --------  --------  --------  -------- 
 Cash and cash equivalents at end of year                   381       934       147       737 
-----------------------------------------------------  --------  --------  --------  -------- 
 
   1.   Statutory Accounts 

The financial information does not constitute statutory accounts as defined in section 435 of the Companies Act 2006, but has been extracted from the statutory accounts for the year ended June 2019 on which an unqualified audit report has been issued and which will be delivered to the Registrar following their adoption at the Annual General Meeting.

The statutory accounts for the financial year ended June 2018 have been delivered to the Registrar of Companies with an unqualified audit report and did not contain a statement under section 498 of the Companies Act 2006.

Copies of the 2019 Annual Report and Accounts will be posted to shareholders with the notice of the Annual General Meeting. Further copies may be obtained by contacting the Company Secretary at Brand Architekts Group plc, 8 Waldegrave Rd, Teddington, TW11 8GT. An electronic copy will be available on the Group's web site (www.brandarchitektsplc.com).

   2.   Basis of preparation 

The Group has prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and also in accordance with IFRS issued by the International Accounting Standards Board. These financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain non-current assets and financial instruments.

The Directors have considered trading and cash flow forecasts prepared for the Group, and based on these, and the confirmed banking facilities, are satisfied that the Group will continue to be able to meet its liabilities as they fall due for at least one year from the date of signing of these accounts. On this basis, they consider it appropriate to adopt the going concern basis in the preparation of these accounts.

The consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand (GBP'000) except where otherwise indicated.

   3.   Basis of consolidation 

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings. The results and net assets of undertakings acquired or disposed of during a financial year are included in the Group Statement of Comprehensive Income and Group Statement of Financial Position from the effective date of acquisition or to the effective date of disposal. Subsidiary undertakings have been consolidated using the purchase method of accounting. In accordance with the exemptions given by section 408 of the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income.

   4.   Accounting Policies 

The principal accounting policies which apply in preparing the financial statements for the year ended 29 June 2019 are consistent with those disclosed in the Group's audited accounts for the year ended 30 June 2018, other than adopting IFRS9 and IFRS15 for the first time. The transition impact of both of these news standards has not been material to the Group.

5. Discontinued Activities

As a result of the agreed disposal of the manufacturing business (completed post year-end), these operations have been disclosed as discontinued and the related assets classified as held for sale at the period end. See note 12 for further details.

   6.   Segmental Analysis 

The Group is a market leader in the development, formulation, and supply of personal care and beauty products.

The reportable segments of the Group are aggregated as follows:

-- Brands - we leverage our skilled resources to develop and market a growing portfolio of Brand Architekts Group owned and managed Brands. These include organically developed Bagsy, MR. and Tru, plus the acquisitions of The Real Shaving Company (in 2015), the portfolio of Brands included in The Brand Architekts acquisition (in 2016) and the Fish brand acquired during this financial year.

-- Manufacturing - the contracted development, formulation and production of quality products for many of the world's leading personal care and beauty Brands. This segment has been disposed of post period end as described in Note 12.

-- Eliminations and Central Costs. Other Group-wide activities and expenses, including defined benefit pension costs, share-based payment expenses, amortisation of acquisition-related intangibles, interest, taxation and eliminations of intersegment items, are presented within 'Eliminations and central costs'.

This is the basis on which the Group presents its operating results to the Directors, which is considered to be the Chief Operating Decision Maker (CODM) for the purposes of IFRS 8. Comparative full year numbers have been presented on the same basis.

a) Principal measures of profit and loss - Income Statement segmental information for 52 weeks ending 29 June 2019 and 53 weeks ending 30 June 2018:

 
 52 weeks ended 30                                                             Eliminations and                                                2018 
 June 2019                                Brands            Manufacturing         Central Costs                     Total                     Total 
                                         GBP'000                  GBP'000               GBP'000                   GBP'000                   GBP'000 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 UK revenue                               16,381                   35,763                     -                    52,144                    51,284 
 International 
  revenue                                  3,220                   21,974                     -                    25,194                    22,661 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Revenue - External                       19,601                   57,737                     -                    77,338                    73,945 
 Revenue - Internal                           75                    4,235               (4,310)                         -                         - 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Total revenue                            19,676                   61,972               (4,310)                    77,338                    73,945 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Discontinued 
  Operation                                    -                 (61,972)                 4,310                  (57,662)                  (52,860) 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Total Revenue                            19,676                        -                     -                    19,676                    21,085 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Underlying profit 
  from operations*                         3,619                    2,515               (1,706)                     4,428                     5,470 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Charge for 
  share-based 
  payments                                     -                        -                 (115)                     (115)                     (297) 
 Amortisation of 
  acquisition-related 
  intangibles                                  -                        -                 (260)                     (260)                     (197) 
 Exceptional costs                             -                    (669)                  (48)                     (717)                     (279) 
 Net finance income / 
  (costs)                                      -                      901                 (144)                       757                     (173) 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Tax charge on 
  discontinued 
  operations                                   -                    (255)                     -                     (255)                     (438) 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Segment Profit 
  included in 
  Discontinued 
  Operations                                   -                  (2,492)                   442                   (2,050)                   (1,701) 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Profit before 
  taxation                                 3,619                        -               (1,831)                     1,788                     2,385 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Tax charge                                                                               (198)                     (198)                     (453) 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Profit for the 
  period from 
  continuing 
  activities                               3,619                        -               (2,029)                     1,590                     1,932 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 

*The underlying profit net of eliminations and central costs are as follows:

 
                                       Continuing       Discontinued     Total 
                                       operations         operations 
                                         - Brands    - Manufacturing 
                                          GBP'000            GBP'000   GBP'000 
 Underlying profit from operations 
  - operating segments                      3,619              2,515     6,134 
 Eliminations and central costs           (1,264)              (442)   (1,706) 
                                     ------------  -----------------  -------- 
 Underlying profit from operations          2,355              2,073     4,428 
 
 
 
  53 weeks ended 30                                                            Eliminations and                                                2017 
  June 2018                               Brands            Manufacturing         Central Costs                     Total                     Total 
                                         GBP'000                  GBP'000               GBP'000                   GBP'000                   GBP'000 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 UK revenue                               17,086                   34,167                     -                    51,253                    44,732 
 International 
  revenue                                  3,968                   18,724                     -                    22,692                    29,582 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Revenue - External                       21,054                   52,891                     -                    73,945                    74,314 
 Revenue - Internal                           31                    1,940               (1,971)                         -                         - 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Total revenue                            21,085                   54,831               (1,971)                    73,945                    74,314 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Discontinued 
  Operation                                    -                 (54,831)                 1,971                    52,860                         - 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Total Revenue                            21,085                        -                     -                    21,085                    74,314 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Underlying profit 
  from operations                          4,806                    2,539               (1,875)                     5,470                     5,617 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Charge for 
  share-based 
  payments                                     -                        -                 (297)                     (297)                   (1,755) 
 Amortisation of 
  acquisition-related 
  intangibles                                  -                        -                 (197)                     (197)                     (187) 
 Exceptional costs                             -                        -                 (279)                     (279)                     (343) 
 Net borrowing costs                           -                     (12)                 (161)                     (173)                     (217) 
 Tax charge on 
  discontinued 
  operations                                   -                    (438)                     -                         -                     (438) 
 Segment Profit 
  included in 
  Discontinued 
  Operations                                   -                  (2,089)                   388                   (1,701)                         - 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Profit before 
  taxation                                 4,806                        -               (2,421)                     2,385                     3,115 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Tax charge                                                                               (453)                     (453)                     (543) 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 Profit for the 
  period from 
  continuing 
  activities                               4,806                        -               (2,874)                     1,932                     2,572 
---------------------  -------------------------  -----------------------  --------------------  ------------------------  ------------------------ 
 

*The underlying profit net of eliminations and central costs are as follows:

 
                                       Continuing       Discontinued     Total 
                                       operations         operations 
                                         - Brands    - Manufacturing 
                                          GBP'000            GBP'000   GBP'000 
 Underlying profit from operations 
  - operating segments                      4,806              2,539     6,134 
 Eliminations and central costs           (1,487)              (388)   (1,875) 
                                     ------------  -----------------  -------- 
 Underlying profit from operations          3,319              2,151     5,470 
 

Inter segment revenue earned by Manufacturing from sales to Brands is determined on commercial trading terms as if Brands were a third-party customer.

All defined benefit pension costs and share-based payment expenses are recognised for internal reporting to the CODM as part of Group-wide activities and are included within 'Eliminations and central costs' above. Other costs, such as Group insurance and auditors' remuneration which are incurred on a Group-wide basis are recharged by the head office to segments on a reasonable and consistent basis for all periods presented, and are included within segment results above.

b) Other Income Statement segmental information

The following additional items are included in the measures of underlying profit and loss reported to the CODM and are included within (a) above:

 
 52 weeks ended 29 June 2019                                               Eliminations and Central 
                                       Brands           Manufacturing                         Costs              Total 
                                      GBP'000                 GBP'000                       GBP'000            GBP'000 
-----------------------------  --------------  ----------------------  ----------------------------  ----------------- 
 Depreciation                              13                   1,249                             -              1,262 
 Amortisation                               -                     700                           260                960 
 53 weeks ended 30 June 2018                                               Eliminations and Central 
                                       Brands           Manufacturing                         Costs              Total 
                                      GBP'000                 GBP'000                       GBP'000            GBP'000 
-----------------------------  --------------  ----------------------  ----------------------------  ----------------- 
 Depreciation                              13                   1,270                             -              1,283 
 Amortisation                               -                     386                           197                583 
 

c) Principal measures of assets and liabilities

The Groups assets and liabilities are managed centrally by the CODM and consequently there is no reconciliation between the Group's assets per the statement of financial position and the segment assets.

d) Additional entity-wide disclosures

The distribution of the Group's external revenue by destination is shown below:

 
 Geographical segments - Continuing 
  and discontinued operations           52 weeks ended   53 weeks ended 
                                          29 June 2019     30 June 2018 
                                               GBP'000          GBP'000 
                                       ---------------  --------------- 
 UK                                             52,144           51,284 
 Other European Union countries                 17,482           16,891 
 Rest of the World                               7,712            5,770 
                                       ---------------  --------------- 
                                                77,338           73,945 
                                       ---------------  --------------- 
 
 
 Geographical segments - Continuing 
  operations                            52 weeks ended   53 weeks ended 
                                          29 June 2019     30 June 2018 
                                               GBP'000          GBP'000 
                                       ---------------  --------------- 
 UK                                             16,456           17,021 
 Other European Union countries                    609              520 
 Rest of the World                               2,611            3,544 
                                       ---------------  --------------- 
                                                19,676           21,085 
                                       ---------------  --------------- 
 

In the 52 weeks ended 29 June 2019, the Group had two customers that exceeded 10% of total revenues, being 12% and 11% respectively. In the 53 weeks ended 30 June 2018, the Group had two customers that exceeded 10% of total revenues, this being 13% and 12% respectively.

   7.   Exceptional Items 

The exceptional item of GBP0.048m in the current period is due to the GMP equalisation charge on the Group's DB Pension Plan of GBP0.288m offset by the release (credit) of unrequired earn-out that arose in a prior-year of GBP0.240m.

   8.   Profit before taxation 
 
                                                                                         2019      2018 
                                                                                      GBP'000   GBP'000 
 (a) This is stated after charging/ (crediting) 
 Depreciation of property, plant and equipment of purchased assets                      1,262     1,283 
 Amortisation of intangible assets                                                        944       583 
 Research and development                                                               1,039       972 
 Foreign exchange gains                                                                  (37)       (9) 
 
   Operating leases: 
 Hire of plant and machinery                                                              125        80 
 Rent of buildings                                                                        782       679 
 
 (b) Auditors' remuneration 
 Audit services: 
 Audit of the Company financial statements - PKF Francis Clark                             35         - 
 Audit of the Company financial statements - Grant Thornton UK LLP                          -        42 
 Audit of subsidiary undertakings - PKF Francis Clark                                      12         - 
 Audit of subsidiary undertakings - Grant Thornton UK LLP                                   -        20 
 Audit related services: 
 Interim review - Grant Thornton UK LLP                                                     -         9 
 Taxation compliance services: 
 Corporation tax compliance - Grant Thornton UK LLP                                         -        21 
 Other non-audit services: 
 Acquisition advice - Grant Thornton UK LLP                                                 -        19 
 
 (c) Earnings before interest, taxation, depreciation and amortisation ('EBITDA')* 
 Operating profit before exceptional items                                              4,053     4,976 
 Depreciation of property, plant and equipment                                          1,262     1,283 
 Amortisation of intangible assets                                                        701       386 
 Amortisation of acquisition-related intangibles                                          260       197 
 EBITDA before exceptional operating items                                              6,276     6,842 
 Exceptional operating items                                                            (717)     (279) 
                                                                                     --------  -------- 
 EBITDA after exceptional operating items                                               5,559     6,563 
                                                                                     --------  -------- 
 

*Operating profit before exceptional items were derived from continuing activities of GBP1,980,000 (2018: GBP2,824,000) and from discontinued activities of GBP2,073,000 (2018: GBP2,150,000)

   9.   Taxation 
 
                                                  2019      2018 
     (a) Analysis of tax charge in the year    GBP'000   GBP'000 
                        UK corporation tax: 
                    - on profit for the year       528       901 
  - adjustment in respect of previous years      (171)         - 
                                -foreign tax        77      (11) 
                    Total current tax charge       434       890 
                                              --------  -------- 
                              Deferred tax: 
                      -current year (credit)      (28)      (60) 
               -prior year charge / (credit)        47        61 
                          Total deferred tax        19         1 
                                              --------  -------- 
                                  Tax charge       453       891 
                                              --------  -------- 
 

Total tax charge of GBP453,000 (2018: GBP891,000) comprised tax on ongoing operations of GBP198,000 (2018: GBP453,000) plus tax on discontinued operations of GBP255,000 (2018: GBP438,000).

(b) Factors affecting total tax charge for the year

The tax assessed on the profit before taxation for the year is lower (2018: higher) than the standard rate of UK corporation tax of 19.00% (2018: 19.00%). The differences are reconciled below:

 
                                                            2019      2018 
                                                         GBP'000   GBP'000 
                                Profit before taxation     4,093     4,524 
                                                        --------  -------- 
   Tax at the applicable rate of 19.00% (2018: 19.00%)       778       860 
                                           Effect of: 
               Adjustment in respect of previous years     (124)      (60) 
                           Adjustment to deferred tax        (7)         - 
         Differences between UK and foreign tax rates         10         - 
                       Permanent differences and other     (168)        91 
                                       R&D tax credit       (36)         - 
                                     Actual tax charge       453       891 
                                                        --------  -------- 
 
   10.   Earnings per share 
 
                                                                                               2019           2018 
  Basic and Diluted 
                    Profit for the year attributable to equity shareholders(GBP'000)          3,539          3,542 
              Profit for the year attributable to equity shareholder from continuing 
                                                                 operations(GBP'000)          1,489          1,841 
 
 
           Basic weighted average number of ordinary shares in issue during the year     17,135,542     16,934,762 
                                                                                      -------------  ------------- 
                                                            Diluted number of shares     17,659,183     17,454,505 
                                                                                      -------------  ------------- 
                                                            Basic earnings per share          20.7p          20.9p 
                                                                                      -------------  ------------- 
                                                          Diluted earnings per share          20.0p          20.3p 
                                                                                      -------------  ------------- 
                                      Basic earnings per share continuing operations           8.7p          10.8p 
                                                                                      -------------  ------------- 
                                    Diluted earnings per share continuing operations           8.4p          10.5p 
                                                                                      -------------  ------------- 
 

Basic earnings per share has been calculated by dividing the profit for each financial year by the weighted average number of ordinary shares in issue at 29 June 2019 and 30 June 2018 respectively. There is a difference at June 2019 between the basic net earnings per share and the diluted net earnings per share of 0.7p due to the 523,641 share options awarded.

 
                                                                                     2019           2018 
  Adjusted earnings per share 
                            Adjusted Profit for the year after tax (GBP'000)        4,330          3,928 
 
   Basic weighted average number of ordinary shares in issue during the year   17,135,542     16,934,762 
                                                    Diluted number of shares   17,659,183     17,454,505 
                                                                              -----------  ------------- 
                                                    Basic earnings per share        25.3p          23.2p 
                                                                              -----------  ------------- 
                                                  Diluted earnings per share        24.5p          22.5p 
                                                                              -----------  ------------- 
 

Adjusted profit for the current year from continuing and discontinued operations of GBP4.33m is shown after adding back Exceptional Items of GBP0.72m and Amortisation of Acquisition Related Intangibles of GBP0.26m, and then deducting a notional tax charge of GBP0.19m. Adjusted earnings per share has been calculated by dividing the adjusted profit of GBP4.33m by the weighted average number of ordinary shares in issue at 29 June 2019. The 2018 comparative figures have also been adjusted to a comparable basis.

11. Note to Cash Flow Statement

 
 
 (a) Reconciliation of cash and cash equivalents to movement in net debt: 
 
                                                              2019                                            2018 
                                                           GBP'000                                         GBP'000 
          (Decrease) in cash and cash equivalents            (553)                                         (3,123) 
         Net cash flow from changes in borrowings            5,154                                         (5,005) 
                                                   ---------------                                   ------------- 
                               Change in net debt            4,601                                         (8,128) 
                                 Opening net debt         (11,769)                                         (3,641) 
                                                   ---------------                                   ------------- 
                                 Closing net debt          (7,168)                                        (11,769) 
                                                   ---------------                                   ------------- 
 
 
 (b) Analysis of net debt:                            Closing 2018    Cash Flow   Non-Cash Movement   Closing 2019 
                                                           GBP'000      GBP'000             GBP'000        GBP'000 
                         Cash at bank and in hand              934        (561)                   8            381 
                                     CID facility          (8,346)        4,027                   -        (4,319) 
                   Borrowings due within one year          (1,127)         (12)                   -        (1,139) 
                    Borrowings due after one year          (3,230)        1,139                   -        (2,091) 
                                                   ---------------  -----------  ------------------  ------------- 
                                                          (11,769)        4,593                   8        (7,168) 
                                                   ---------------  -----------  ------------------  ------------- 
 

12. Non-adjusting post period end events - discontinued operations

In July 2019, the Group sold its 100% interest in Curzon Supplies Ltd for consideration of GBP35m (completing the disposal of the Manufacturing segment) which is the only operation presented as discontinued operation in 2019. Curzon Supplies Ltd was incorporated in March 2019.

Although the transaction completed after the period end it was more likely than not to go through at the balance sheet date and so results have been disclosed here. The financial results of this business has been treated as discontinued operations in both the current and prior year financial statements in line with IFRS5. The remaining activities within the Group are referred to as continuing operations.

As a result the following assets and liabilities have been classified as held for sale:

 
                                                                   2019 
 Net assets held for sale                                       GBP'000 
 Property, plant and equipment                                   11,190 
 Intangible fixed assets                                            779 
 Equity instruments held at fair value                            1,385 
 Inventories                                                     10,743 
 Trade and other receivables                                     13,966 
 Trade and other payables                                      (14,800) 
 Deferred tax liability                                           (563) 
 
                                                                 22,700 
                                                   -------------------- 
 
 
 
 
 
   Result of discontinued operations                    2019       2018 
                                                     GBP'000    GBP'000 
 
 Revenue                                              57,663     52,860 
 Expenses other than finance costs                  (55,835)   (50,709) 
 Investment Income                                     1,146       (12) 
 Exceptional costs                                     (669)          - 
 Tax (expense) / credit                                (255)      (438) 
 
 Profit for the year                                   2,050      1,701 
                                                   ---------  --------- 
 
 Earnings per share from discontinued operations        2019       2019 
                                                           P          p 
 
 Basic earnings per share                               12.6       10.0 
 Diluted earnings per share                             11.6        9.7 
 
 
 
 
 
 Cashflow in respect of discontinued activities       2019     2018 
                                                    GBP000   GBP000 
 Operating cash flows                                6,717    1,619 
 Investing cash flows                                (602)    (879) 
 Financing cash flows                              (3,637)    1,701 
                                                  --------  ------- 
 Total cash flows                                    2,478    2,441 
                                                  --------  ------- 
 

Included in Exceptional costs in discontinued operations are restructuring charges of GBP581k and deal fees of GBP88k.

13. Prior Year Adjustment

A deferred tax liability was not recognised in respect of customer relationships and brands, which were assets that were separately identified in the acquisition of Brand Architeks Limited. This has historically resulted in an understatement of Goodwill and the deferred tax liability of GBP1,145,000. This has been restated in the comparative information. There has been no impact to the previously stated retained earnings, net assets and cash flows.

14. Annual Report

This report will also be available from the Company's registered office and on the Company's website www.brandarchitektsplc.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR SEMEFUFUSESU

(END) Dow Jones Newswires

September 30, 2019 02:02 ET (06:02 GMT)

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