Brand Architekts Group PLC Half-year Report

Fecha : 10/03/2020 @ 02:00
Fuente : UK Regulatory (RNS & others)
Emisora : Brand Architekts Group Plc (BAR)
Cotización : 122.5  0.0 (0.00%) @ 19:00
Brand Architekts Cotización de acciones Gráfica

Brand Architekts Group PLC Half-year Report

Brand Architekts (LSE:BAR)
Gráfica de Acción Histórica


De Ene 2020 a Jul 2020

Haga Click aquí para más Gráficas Brand Architekts.

TIDMBAR

RNS Number : 5213F

Brand Architekts Group PLC

10 March 2020

Brand Architekts Group plc

("Brand Architekts" or the "Group")

Interim results

Brand Architekts Group plc, a market leader in the development and supply of beauty and personal care brands, announces its interim results for the 28 weeks ended 11 January 2020

Business highlights

   --      Disposal of the manufacturing business completed on the 23 August 2019 

-- Quentin Higham appointed as Chief Executive Officer, he will join the Company and the Board on 4 May 2020

   --      Operational transition to a stand-alone branded business now complete 
   --      New ERP system successfully implemented 
   --      A number of key 'drive' brands continue positive growth trend 
   --      Further growth in e-commerce sales 
   --      2 major brands relaunched, 99 new product lines launched 

Financial highlights

Continuing Operations

-- Revenues declined by 15% to GBP10.6m significantly impacted by a strong decline in international sales (-23% vs prior year) resulting from currency devaluation in a key market and tariff pressures

   --      UK sales declined by 13% vs prior year impacted by a challenging retail environment 

-- Gross profit margin improved to 37.6% (FY19: 35.1%) helped by focus on higher margin brands and channels

   --      Underlying operating profit (before central costs) of GBP1.6m (FY19: GBP2.5m) 
   --      Underlying operating profit margin (before central costs) is at 15% (FY19: 20%) 

Group

-- PBT of GBP6.6m (FY19: GBP0.7m) heavily impacted by profit on disposal of the manufacturing business (GBP8.8m) offset by a loss on discontinued operations (including exceptional costs) of GBP2.5m

   --      Underlying PBT (continuing operations) declined 33% to GBP1.2m (FY19: GBP1.7m) 
   --      GBP15.1m net cash positions us well for future growth 
   --      Interim dividend proposed at 0.9p per share 
 
  GBPm unless otherwise stated                     2020          2019 
----------------------------------------------  ---------  ---------------- 
 
  Reported results from continuing operations 
   (1) 
                                                ---------  ---------------- 
  Revenue                                        GBP10.6m      GBP12.5m 
                                                ---------  ---------------- 
  Underlying operating profit (1)                GBP1.2m        GBP1.7m 
                                                ---------  ---------------- 
  Adjusted basic earnings per share (1)            3.9p          7.0p 
                                                ---------  ---------------- 
 
  Statutory results for the whole group 
   including discontinued operations 
                                                ---------  ---------------- 
  Revenue                                        GBP18.0m      GBP41.4m 
                                                ---------  ---------------- 
  Operating profit before exceptional            GBP0.1m        GBP1.4m 
   items 
                                                ---------  ---------------- 
  Profit on disposal of manufacturing            GBP8.8m                  - 
   business 
                                                ---------  ---------------- 
  Basic earnings per share                        37.7p          3.1p 
                                                ---------  ---------------- 
  Total dividend per share                         0.9p          2.15p 
                                                ---------  ---------------- 
   Net cash / (debt)                             GBP15.1m      GBP(6.8)m 
                                                ---------  ---------------- 
 

(1) Underlying operating profit is calculated before LTIP, amortisation of acquisition related intangibles, exceptional items and net borrowing costs. Adjusted earnings per share is calculated using operating profit before exceptional items and amortisation of acquisition related intangibles.

Brendan Hynes, Executive Chairman, commented: "The business is now through a challenging calendar year where the difficult market conditions, the distraction of the sale of the manufacturing business and significant management changes have all had an impact on results. Having now completed the operational transition to a fully focused branded business with a very strong balance sheet and appointment of a CEO with deep industry experience, the business is well positioned to build scale and deliver further profitable growth."

 
  For further information please contact: 
 Brand Architekts Group plc 
                                -----------------------------------  --------------- 
 Chris How                       Chief Executive Officer (Interim)     0208 614 4474 
                                -----------------------------------  --------------- 
 Brendan Hynes                   Executive Chairman                   Via Alma PR 
                                -----------------------------------  --------------- 
 Shaun Dobson / George Tzimas     N+1 Singer                           0207 496 3000 
                                -----------------------------------  --------------- 
 Josh Royston / Sam Modlin        Alma PR                              0203 405 0206 
                                -----------------------------------  --------------- 
 

Note: This announcement contains information that was previously inside information for the purposes of Article 7 of regulation 596/2014 (MAR).

Business Review (Continuing Operations)

Having disposed of the manufacturing business in August 2019, the business is now fully focussed on further developing its profitable branded business and has the necessary financial resources to invest and grow further. The appointment of Quentin Higham as CEO will bring renewed focus and energy to executing the growth strategy.

It has been a challenging period for the business with a number of factors contributing to an overall decline in revenue of 15% to GBP10.6m.

International sales declined by 23%, heavily impacted by currency devaluation in a key market and the effect of increased tariffs on cosmetic goods shipped from China to USA. We believe that we are well placed to recover a large proportion of the affected USA business should the tariffs be reversed.

Sales to UK customers declined by 13% despite encouraging volume growth across 3 'drive' brands, 2 of which were re-launched within the period. The decline was largely due to one significant customer, however, overall low consumer confidence and pressure within the retail environment has resulted in a reduction of both category space and the effectiveness of promotional activity.

Pleasingly, direct to consumer e-commerce sales recorded another period of strong growth reflecting a continued commitment to develop this particularly profitable channel by building engaging and precisely targeted marketing content.

Gross margins improved slightly as sales mix was steered towards higher margin brands within the portfolio and more profitable trade channels. Furthermore, strong management of our supply base also ensured control over our input costs, which further supported the resilience of the gross margin.

In line with our long-term confidence in the growth potential of our brands, advertising and promotional investment increased as we look to ensure that major brand relaunches in the period achieve sustained success.

Operational overheads were managed tightly through the transition period although some exceptional costs (GBP0.16m) have been recognised in relation to the implementation of a new ERP system and the establishment of new operational, finance, admin and HR functions at our Teddington office. Whilst its implementation utilised a significant amount of management time, the new ERP system is of an appropriate design for the scale and nature of our business and will enable efficiencies and an improved control environment going forward.

The result of all the above was a reduction in underlying operating profit for continuing operations (excluding central costs) to GBP1.6m (prior year GBP2.5m). This represents a ratio of 15% to sales.

Board Succession

Following an extensive search, the Board is pleased to confirm the appointment of Quentin Higham as CEO effective 4 May 2020. Quentin is currently Managing Director of Yardley of London Ltd. Previously he has been Marketing Director at Coty, with responsibility for the Rimmel cosmetics brand and Head of Marketing at global cosmetics company Revlon. In addition, he has in-depth knowledge of our brands having been Commercial Director at KMI brands with responsibility for the Fish brand.

Chris How, who has held the position of Interim CEO since October, will remain with the business to assist and support the Company and Quentin through the handover process.

The search for a new Chief Financial Officer is well advanced and we expect to be able to confirm appointment of an appropriate candidate in due course.

Central Costs

Following the sale of the manufacturing business, the Company segments its central corporate costs to enable shareholders to have clear visibility of the financial performance of the operating business. This segment includes all board costs (executive and non-executive), plc costs and costs (including PPF levy) related to the Swallowfield Defined Benefit pension scheme.

Clearly, these central costs could become more proportionate in the event the Board decides to utilise the Company's strong cash reserves to make further acquisitions.

On a pre-exceptional basis these costs reduced versus prior year reflecting an intent to acknowledge the reduced scale of the Group following the sale of the manufacturing business and the fact that both the CEO and CFO positions have been vacant during part of the reporting period.

Within central costs, an exceptional cost of GBP0.3m is recognised in relation to the departure in September of the former Chief Executive Officer.

Strategic Report

Fundamental transformation - 100% focus on brands

Over the last 4 years our stated strategy has been to develop, both organically and through acquisitions, a portfolio of brands which are owned and managed by the Group.

Following the disposal of the manufacturing business in August 2019, we have accelerated our strategic realignment and are now solely focused on brands that we own and control. The disposal has also eliminated group debt and strengthened the balance sheet through a significant cash position.

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

Strategic Priorities

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 consumer relevant NPD at pace 
   --      International Expansion: Develop new customers in new geographies 
   --      On-line expansion: Accelerate E-commerce and digital presence 
   --      Build organisational capability: Continue to invest in people and skills 

Progress against our strategic priorities

Notwithstanding that it has been a challenging trading period, we are pleased to have made meaningful progress across a number of strategic priorities.

   --      Build Scale 

The Board has continued to review acquisition opportunities through the reporting period against strict strategic and financial criteria. No opportunity has been sufficiently compelling to pursue meaningfully and the Board has also been mindful of the impending CEO appointment. We remain open to acquisition opportunities and will continue to apply our strict strategic and financial criteria in reviewing these opportunities.

   --      New Product Development (NPD) 

In late Autumn we completed and began shipping a complete range refresh (design update and new lines) across 2 of our drive brands Dirty Works and Fish. These were well received by our retail customers and these brands started to rebuild growth momentum in the reporting period.

We were also pleased to launch a new skincare range and a new male bath and body range in our Kind Natured brand.

SuperFacialist, our fastest growing brand over the last 2 years, built on the trend for concentrated skincare ingredients by launching 2 'intense booster ' serums in Retinol and Vitamin C and also further extending the successful Retinol anti-ageing sub-range into tonics and cleansers.

In total, 99 new individual product lines were introduced or refreshed in the reporting period.

   --      International Expansion 

It was a difficult period for our International business. A key market was effectively lost due to a currency devaluation rendering it commercially unviable. Additionally, our important gift and accessories business in the USA was impacted by the introduction of prohibitive tariffs on Chinese produced imports.

Notwithstanding these setbacks caused by external factors outside the control of the business, we were pleased that we made good progress in extending our gifting ranges into a number of new European geographies and overall saw growth in Australia, South Africa, the Netherlands, Ireland, Switzerland and Chile.

International continues to be an area where we firmly believe there is significant growth potential for our brands and we continue to be active in identifying and progressing opportunities.

   --      On-line expansion 

We are pleased that our growth momentum in this area has continued and the focus of investment over the last 3 years continues to deliver tangible benefits.

We saw growth across our own direct to consumer e-commerce sites as well as good growth through major global and regional e-retailers. This has been driven by further development of our in-house resource and expertise and a more active digital engagement and advertising programme including a step up in the use of relevant influencers on key social platforms.

Additionally, we made significant upgrades to our Dirty Works and Fish brand websites to coincide with the product range relaunches which we expect to have a positive impact on brand image and further boost e-commerce sales.

   --      Build Organisational Capability 

Having previously been supported by the Swallowfield Group system, we are pleased to have successfully implemented a new stand-alone ERP system for the business within a relatively short timeframe following the transaction.

Similarly, a number of functions that were previously housed within the Swallowfield Group organisation in Somerset have been established at our Teddington office. These include Finance, Supply Chain, IT, HR and other administrative functions. Whilst we recognise that the reorganisation has caused some operational disruption in the transition period, we are pleased with the successful outcome of this re-organisation which positions us well for the future. Going forward we now have the solid foundation of a modern, appropriately supported ERP system and support functions located on the same site as the sales and customer facing commercial team.

Net Debt and Cash Flow

Following the sale of the manufacturing business in August 2019, the Group's net cash position has improved to GBP15.1m (2019: GBP6.8m net debt) primarily as a result of the net proceeds from the disposal of the manufacturing business in August 2019. A final tranche of GBP1.3m of the full consideration of GBP35.0m is due to be paid in the coming weeks. This amount is a retention sum held pending the finalisation of the completion accounts which is expected shortly.

Following the disposal, there was a significant challenge to establish new operational, finance and administrative functions at our Teddington head office simultaneously with the design and implementation of a new ERP system. Both of these complex tasks have now been successfully completed, however, it impacted the day to day management of working capital in the transition period which resulted in increased inventories and a slower collection of receivables. Going forward, we expect a return to tighter control over managing working capital.

Financing costs of GBP0.18m (2019: GBP0.22m) comprised interest expense of GBP0.08m (2019: GBP0.15m) and a pension scheme notional charge of GBP0.10m (2019: GBP0.07m).

Discontinued Operations

On 23 August 2019, the Group sold its 100% interest in Curzon Supplies Ltd for consideration of GBP35m, resulting in a complete disposal of its manufacturing business enabling the Group to become a solely brand focussed business.

The profit on disposal recognised was GBP8.8m representing a GBP10.2m profit on assets disposed less directly related deal costs of GBP1.4m. A further GBP1.5m of exceptional costs have been recognised, GBP1.1m of which relate to management bonuses directly related to the completion of the deal and the remainder to various stock write-offs and adjustments.

The accounts shown as 'Discontinued Operations' cover operational activities for the period from the last financial year end to the date of disposal (23 August 2019) and also include any impacts of the final completion accounts for the transaction. The operations over that period were affected by significant manufacturing inefficiencies and higher than planned labour costs. The overall result was an operating loss before exceptional items of GBP1.0m.

Defined Benefit Pension Plan

The Scheme is now closed to new members and to further accruals of benefits. The last scheme funding valuation of the Scheme was as at 5 April 2017 and revealed a funding deficit of GBP2.6m.

The Company pays contributions to the Scheme to cover the funding deficit of GBP0.3m per annum. The magnitude of such payments will be reviewed following the next scheme funding valuation as at April 2020. In addition, the Company meets the cost of administrative expenses and Pension Protection Fund insurance premiums for the Scheme.

We recognise that the Plan and the Trustee are key long-term stakeholders who hold an active interest in the Company's success. We continue to work closely with the Trustee and believe that our objectives over the long-term are aligned with those of the Trustee - to ensure a robust Company that is able to support and provide a strong covenant to the plan.

Dividend

Following the sale of the manufacturing business, the Company currently delivers less absolute profitability. Accordingly, the Board has approved an interim payment of 0.9p per share which represents a broadly similar dividend cover to the average over the last 3 years. This dividend will be paid on 29 May 2020 to shareholders on the register at the close of business on 11 May 2020. The ex-dividend date will be 7 May 2020.

The Directors' intention is to have a progressive dividend policy that aligns future dividend payments to the underlying earnings and cash flow of the business, taking in to account the gearing and the operational requirements of the business.

Coronavirus

The company sources most of its Christmas gift ranges and some beauty accessories from China. The majority of this volume is produced from June to August and shipped in September/October. We are in close contact with our Chinese suppliers to understand the level of supply risk and possible mitigation options related to the current Coronavirus outbreak. At this point we expect to be able to source all required goods, however, we continue to review the situation closely due to the growing uncertainty.

The business has taken the necessary steps to ensure appropriate arrangements are in place for all staff members to operate effectively with minimal disruption to the business.

Outlook

Over the last calendar year the business has had to deal with a number of internal and external challenges. Whilst this has had an impact on trading performance and, notwithstanding continued economic and consumer uncertainty, we do believe the business is now well positioned to move back towards a growth phase. We expect the second half to be challenging but to be broadly in line with the revenue generated in the comparative period last year and for that improved momentum to build into the next financial year.

However, the Board has reassessed its outlook for the rest of the financial year and based on the continuing challenging market conditions and the slower pace of sales in the first half, has reduced its revenue expectations.

In addition, given the level of competitive pricing and promotional pressure experienced in the market, the Board anticipates that the Group's operating profit will be impacted resulting in a significant decrease to previous market expectations.

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

We also look forward to welcoming, Quentin Higham, our new CEO and fully expect that his experience and energy will further enhance and accelerate our ability to drive growth opportunities.

Group Statement of Comprehensive Income

 
                                                28 weeks ended   28 weeks ended   52 weeks ended 
                                                                              * 
                                                   11 Jan 2020      12 Jan 2019     29 June 2019 
                                                   (unaudited)      (unaudited)        (audited) 
 Continuing operations                  Notes          GBP'000          GBP'000          GBP'000 
 
 Revenue                                    3           10,568           12,451           19,676 
 Cost of sales                                         (6,597)          (8,078)         (12,680) 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Gross profit                                            3,971            4,373            6,996 
 Commercial and administrative 
  costs                                                (3,120)          (2,883)          (5,016) 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Operating profit before exceptional 
  items                                                    851            1,490            1,980 
 Exceptional items                          4            (472)            (269)             (48) 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Operating profit                                          379            1,221            1,932 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Finance income                                             46                1                - 
 Finance costs                              5            (123)             (79)            (144) 
 Profit before taxation                                    302            1,143            1,788 
 Taxation                                                 (57)            (216)            (198) 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Profit after taxation                                     245              927            1,590 
 Profit / (loss) on Discontinued 
  Operations after taxation                10            6,278            (337)            2,050 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Profit after taxation                                   6,523              590            3,640 
 
   Other comprehensive (loss) / income for the 
   period: 
 Re-measurement of defined 
  benefit liability                                    (1,040)          (1,617)          (4,011) 
 Items that will be reclassified 
  subsequently to profit or 
  loss: 
 Exchange differences on translating 
  foreign operations                                      (48)             (50)             (35) 
 Gain / (loss) on available 
  for sale financial assets                                  -              529              (6) 
 Other comprehensive loss 
  for the period                                       (1,088)          (1,138)          (4,052) 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Total comprehensive income 
  / (loss) for the period                                5,435            (548)            (412) 
=====================================  ======  ===============  ===============  =============== 
 
 Profit attributable to: 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Equity shareholders                                     6,456              537            3,539 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Non-controlling interests                                  67               53              101 
 
 Continuing Operations - Profit 
  attributable to: 
---------------------------------------------  ---------------  ---------------  --------------- 
 Equity shareholders                                       178              874            1,489 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Non-controlling interests                                  67               53              101 
 
 Total comprehensive income 
  / (loss) attributable to: 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Equity shareholders                                     5,368            (601)            (513) 
-------------------------------------  ------  ---------------  ---------------  --------------- 
 Non-controlling interests                                  67               53              101 
 
 Earnings per share 
 - basic                                    6            37.7p             3.1p            20.7p 
  - diluted                                 6            37.5p             3.0p            20.0p 
 
 Dividend 
 Paid in period (GBP'000)                                  745              720            1,088 
  Paid in period (pence per 
   share)                                                4.35p             4.2p            6.35p 
 Proposed (GBP'000)                                        154              368              745 
  Proposed (pence per share)                7             0.9p            2.15p            4.35p 
 

* 28 weeks ended 12 Jan 2019 comparatives have been restated for discontinued operations - see note 10 for further information.

Group Statement of Changes in Equity

 
                     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 2019         857      11,987       1,241       (147)        (6,502)        18,160          145          25,741 
-----------------  --------  ---------  ------------  ---------  ---------------  ---------  ----------------  --------- 
 Dividends             -         -            -           -             -           (745)          (33)          (778) 
 Non-controlling 
  interest             -         -            -           -             -             -             67             67 
 Realisation 
  of exchange 
  differences 
  on sale of 
  subsidiary           -         -            -          195            -             -              -            195 
 Realised profit 
  on asset sold        -         -         (1,241)        -             -           1,241            -             - 
 Transactions 
  with owners 
  and reserve 
  transfers             -         -         (1,241)       195            -            496            34           (516) 
-----------------  --------  ---------  ------------  ---------  ---------------  ---------  ----------------  --------- 
 Profit for 
  the period           -         -            -           -             -           6,456            -           6,456 
 Other 
 comprehensive 
 income: 
 Re-measurement 
  of defined 
  benefit 
  liability            -         -            -           -          (1,040)          -              -          (1,040) 
 Exchange 
  difference 
  on translating 
  foreign 
  operations           -         -            -          (48)           -             -              -            (48) 
 Total 
  comprehensive 
  income for 
  the year             -         -            -          (48)        (1,040)        6,456            -           5,368 
-----------------  --------  ---------  ------------  ---------  ---------------  ---------  ----------------  --------- 
 Balance as 
  at 11 January 
  2020                 857      11,987         -           -          (7,542)        25,112          179          30,593 
-----------------  --------  ---------  ------------  ---------  ---------------  ---------  ----------------  --------- 
 
 
                     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             -         -           -           -             -           (720)            -           (720) 
 Non-controlling 
  interest             -         -           -           -             -             -             53            53 
 Share based 
  payments             -         -           -           -             -            143             -            143 
 Transactions 
  with owners          -         -           -           -             -           (577)           53           (524) 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Profit for 
  the period           -         -           -           -             -            537             -            537 
 Other 
 comprehensive 
 income: 
 Re-measurement 
  of defined 
  benefit 
  liability            -         -           -           -          (1,617)          -              -          (1,617) 
 Exchange 
  difference 
  on translating 
  foreign 
  operations           -         -           -          (50)           -             -              -           (50) 
 Gain on 
  available 
  for sale 
  financial 
  assets               -         -          529          -             -             -              -            529 
 Total 
  comprehensive 
  income for 
  the year             -         -          529         (50)        (1,617)         537             -           (601) 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 Balance as 
  at 12 January 
  2019                 857    11,987       1,776       (162)        (4,108)        15,415          132         25,897 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 
                     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) 
 Loss on 
  available 
  for sale 
  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 
-----------------  --------  --------  ------------  ---------  ---------------  ---------  ----------------  -------- 
 
 

Group Statement of Financial Position

 
                                                As at         As at          As at 
                                          11 Jan 2020   12 Jan 2019   29 June 2019 
                                                         Restated - 
                                                            Note 11 
                                          (unaudited)   (unaudited)      (audited) 
                                  Notes       GBP'000       GBP'000        GBP'000 
 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                    195        11,257             21 
 Intangible assets                             12,757        13,720         12,817 
 Deferred tax assets                            1,926         1,138          1,714 
 Investments                                        -         1,920              - 
 Total non-current assets                      14,878        28,035         14,552 
-------------------------------  ------  ------------  ------------  ------------- 
 Current assets 
 Inventories                                    6,210        15,150          5,211 
 Trade and other receivables                    8,277        14,792          3,475 
 Assets held for resale                             -             -         22,700 
 Cash and cash equivalents                     20,000         1,747            381 
 Current tax receivable                           555           508            285 
-------------------------------  ------  ------------  ------------  ------------- 
 Total current assets                          35,042        32,197         32,052 
-------------------------------  ------  ------------  ------------  ------------- 
 Total assets                                  49,920        60,232         46,604 
-------------------------------  ------  ------------  ------------  ------------- 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables                       5,893        21,409          6,628 
 Interest-bearing loans 
  and borrowings                                1,075         1,140          1,139 
 Current tax payable                              259           994            527 
-------------------------------  ------  ------------  ------------  ------------- 
 Total current liabilities                      7,227        23,543          8,294 
-------------------------------  ------  ------------  ------------  ------------- 
 Non-current liabilities 
 Interest-bearing loans 
  and borrowings                                1,548         2,623          2,091 
 Post-retirement benefit 
  obligations                         9         9,505         6,614          9,417 
 Deferred tax liabilities                       1,047         1,555          1,061 
 Total non-current liabilities                 12,100        10,792         12,569 
-------------------------------  ------  ------------  ------------  ------------- 
 Total liabilities                             19,327        34,335         20,863 
-------------------------------  ------  ------------  ------------  ------------- 
 Net assets                                    30,593        25,897         25,741 
-------------------------------  ------  ------------  ------------  ------------- 
 
 EQUITY 
 Share capital                                    857           857            857 
 Share premium                                 11,987        11,987         11,987 
 Revaluation of investment 
  reserve                                           -         1,776          1,241 
 Exchange reserve                                   -         (162)          (147) 
 Re-measurement of defined 
  benefit liability                           (7,542)       (4,108)        (6,502) 
 Retained earnings                             25,112        15,415         18,160 
-------------------------------  ------  ------------  ------------  ------------- 
 Total equity                                  30,414        25,765         25,596 
-------------------------------  ------  ------------  ------------  ------------- 
 Non-controlling interest                         179           132            145 
-------------------------------  ------  ------------  ------------  ------------- 
 Total equity                                  30,593        25,897         25,741 
-------------------------------  ------  ------------  ------------  ------------- 
 

Group Cash Flow Statement

 
                                                   28 weeks      28 weeks      12 months 
                                                      ended         ended          ended 
                                                11 Jan 2020   12 Jan 2019   30 June 2019 
                                        Notes   (unaudited)   (unaudited)      (audited) 
                                                    GBP'000       GBP'000        GBP'000 
 Cash flow from operating activities 
 Profit before taxation                               6,580           728          4,093 
 Depreciation                                            12           667          1,262 
 Amortisation                                           142           154            944 
 Profit on disposal of manufacturing 
  business                                 10       (8,762)             -              - 
 Increase in assets held for                        (3,008)             -              - 
  resale 
 Finance income                                        (46)         (386)        (1,146) 
 Finance cost                                           181           218            389 
 (Increase) in inventories                            (999)       (1,325)        (2,129) 
 (Increase) / decrease in trade 
  and other receivables                             (3,512)         3,757          1,252 
 Increase in trade and other 
  payables *                                          1,086         2,720          3,059 
 (Decrease) in share-based 
  payments provision                                   (48)         (158)          (221) 
 Contributions to defined benefit 
  plan                                                (159)         (175)          (282) 
 Cash generated from operations                     (8,533)         6,200          7,221 
-------------------------------------  ------  ------------  ------------  ------------- 
 Finance expense paid                                  (83)         (153)          (263) 
 Taxation paid                                        (595)         (202)          (593) 
-------------------------------------  ------  ------------  ------------  ------------- 
 Net cash flow from operating 
  activities                                        (9,211)         5,845          6,365 
-------------------------------------  ------  ------------  ------------  ------------- 
 Cash flow from investing activities 
 Dividend income received                                 -           386          1,146 
 Purchase of property, plant 
  and equipment                                        (27)         (639)        (1,088) 
 Purchase of intangibles                               (81)          (23)          (699) 
 Sale of property, plant and                              -           154              - 
  equipment 
 Proceeds from disposal of 
  manufacturing business                   10        32,274             -              - 
 Net cash flow from investing 
  activities                                         32,166         (122)          (641) 
-------------------------------------  ------  ------------  ------------  ------------- 
 Cash flow from financing activities 
 Finance income received                                 46             -              - 
 Movements in invoice discounting 
  facility                                          (1,997)       (3,596)        (4,027) 
 Repayment of loans                                   (607)         (594)        (1,127) 
 Dividends paid                                       (778)         (720)        (1,123) 
-------------------------------------  ------  ------------  ------------  ------------- 
 Net cash flow from financing 
  activities                                        (3,336)       (4,910)        (6,277) 
-------------------------------------  ------  ------------  ------------  ------------- 
 Net increase / (decrease) 
  in cash and cash equivalents                       19,619           813          (553) 
 Cash and cash equivalents 
  at beginning of period                                381           934            934 
-------------------------------------  ------  ------------  ------------  ------------- 
 Cash and cash equivalents 
  at end of period                                   20,000         1,747            381 
-------------------------------------  ------  ------------  ------------  ------------- 
 

* Increase in trade and other payables of GBP1,086k in the cash flow statement is the movement on trade payables, social security and other taxes, and general accruals only. The GBP1,086k excludes the decrease in the commercial invoice discounting facility of GBP1,997k and the decrease in the share based payment accrual of GBP48k, which are both shown as separate lines in the cash flow statement in investing activities.

Notes to the Accounts

Note 1 Basis of preparation

The Group has prepared its interim results for the 28-week period ended 11 January 2020 in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) as adopted by the European Union and also in accordance with the recognition and measurement principles of IFRS issued by the International Accounting Standards Board.

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 approval of the Interim Report. On this basis, they consider it appropriate to adopt the going concern basis in the preparation of these accounts.

As permitted, this interim report has been prepared in accordance with the AIM rules and not in accordance with IAS34 'Interim Financial Reporting'.

These interim financial statements do not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006 and are unaudited. The unaudited interim financial statements were approved by the Board of Directors on 09 March 2020.

The consolidated financial statements are prepared under the historical cost convention as modified to include the revaluation of certain non-current assets. The accounting policies used in the interim financial statements are consistent with IFRS and those which will be adopted in the preparation of the Group's Annual Report and Financial Statements for the year ended June 2020.

The statutory accounts for the year ended June 2019, which were prepared under IFRS, have been filed with the Registrar of Companies. These statutory accounts carried an unqualified Auditors Report and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.

In August 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 operations. Curzon Supplies Ltd was incorporated in March 2019. The impact of the disposal is disclosed in Note 10.

Note 2 Changes to accounting policies

The Group has adopted IFRS 16 Leases from 30 June 2019, using the modified retrospective method. Applying this method, the comparative information for the 2019 fiscal year has not been restated. At 30 June 2019, the Group recognised right-of-use assets of GBP185k and lease liabilities of GBP185k. The Group has decided not to apply the new guidance to leases whose term will end within twelve months of the date of initial application and leases with a low value. In such cases, the leases will be accounted for as short-term leases and the lease payments associated with them will be recognised as an expense from short-term leases. The following reconciliation to the opening balance for the lease liabilities as at 30 June 2019 is based upon the operating lease obligations as at 29 June 2019:

 
                                                28 weeks ended 
                                                    11 January 
                                                          2020 
                                                   (unaudited) 
                                                       GBP'000 
                                               --------------- 
 
 Operating lease obligations at 29 June 2019               189 
 Relief option for short-term leases                       (4) 
 Lease liabilities at 30 June 2019                         185 
 

Note 3 Segmental analysis

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

The reportable segments of the Group are aggregated as follows:

-- Brands - since the disposal of the manufacturing business in August 2019 this has become the Group's sole focus and is referred elsewhere in these results as 'continuing operations'. The portfolio of brands consists primarily of brands acquired by the Group as part of the acquisition of The Brand Architekts in 2016 plus the acquisitions of Real Shaving Company (2015) and Fish (2018).

-- Manufacturing - the development, formulation and production of quality products for many of the world's leading personal care and beauty brands. The manufacturing business was sold in August 2019 and its results in the period have been treated as discontinued operations. The impact of the disposal is disclosed in Note 10. The profit on disposal of the manufacturing business is included as an exceptional item in the segmental information.

-- Eliminations and Central Costs - other Group-wide activities and expenses, including defined benefit pension costs (closed defined benefit scheme), LTIP 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 Board of Directors, which is considered to be the chief operating decision maker (CODM) for the purposes of IFRS 8.

   a)   Principal measures of profit and loss - Income Statement segmental information: 
 
                     28 weeks ended 11 January 2020                                 28 weeks ended 12 January 2019 
                        Brands    Manufacturing   Eliminations    Total    Brands    Manufacturing   Eliminations    Total 
                                                   and Central                                        and Central 
                                                      Costs                                              Costs 
                        GBP'000      GBP'000        GBP'000      GBP'000   GBP'000      GBP'000        GBP'000      GBP'000 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
      UK revenue         8,744        4,841            -         13,585    10,055       19,915            -          29,970 
    International 
        revenue          1,819        2,639            -          4,458     2,360        9,111            -          11,471 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
  Revenue - External    10,563        7,480            -         18,043    12,415       29,026            -          41,441 
  Revenue - Internal       5           990           (995)          -        36          2,214         (2,250)         - 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
    Total revenue       10,568        8,470          (995)       18,043    12,451       31,240         (2,250)       41,441 
     Discontinued 
      Operations           -         (8,470)          990        (7,480)      -        (31,240)         2,250       (28,990) 
    Total revenue       10,568          -             (5)        10,563    12,451          -              -          12,451 
      Underlying 
       operating 
     profit/(loss)       1,637        (969)          (483)         185      2,580         230          (1,182)       1,628 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
      Charge for 
      share based 
       payments            -            -            (161)        (161)        -            -             (67)         (67) 
     Amortisation 
          of 
  acquisition-related 
      intangibles          -            -            (142)        (142)        -            -            (133)        (133) 
   Net exceptional 
         items           (132)        7,305          (340)        6,833       -          (600)          (269)        (869) 
    Net borrowing 
   income / (costs)      (25)         (58)            (52)        (135)     (16)          248            (64)         168 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
      Tax credit 
    on discontinued 
      operations           -            -              -            -         -           79              -            79 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
   Segment (profit) 
    / loss included 
    in Discontinued 
      Operations           -         (6,278)           -         (6,278)      -           43             294          337 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
    Profit/(loss) 
    before taxation      1,480          -           (1,178)        302      2,564          -           (1,421)       1,143 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
      Tax charge           -            -             (57)        (57)        -            -            (216)        (216) 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
    Profit/(loss) 
    for the period 
    from Continuing 
      Operations         1,480          -           (1,235)        245      2,564           -          (1,637)        927 
---------------------  --------  --------------  -------------  --------  --------  --------------  -------------  --------- 
 

The segmental Income Statement disclosures are measured in accordance with the Group's accounting policies as set out in note 1.

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

All defined benefit pension costs and LTIP 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.

Included in Net exceptional items in Manufacturing is profit on disposal of the manufacturing business of GBP8,762k offset with bonuses paid out on deal completion of GBP1,116k and stock provision adjustments of GBP341k.

b) Other Income Statement segmental information

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

 
 28 weeks ended 11 January     Brands   Manufacturing   Eliminations     Total 
  2020                                                   and Central 
                                                               Costs 
                              GBP'000         GBP'000        GBP'000   GBP'000 
---------------------------  --------  --------------  -------------  -------- 
 Depreciation                      12               -              -        12 
 Amortisation                       -               -            142       142 
 
 
 28 weeks ended 12 January     Brands   Manufacturing   Eliminations     Total 
  2019                                                   and Central 
                                                               Costs 
                              GBP'000         GBP'000        GBP'000   GBP'000 
---------------------------  --------  --------------  -------------  -------- 
 Depreciation                       6             661              -       667 
 Amortisation                       -              21            133       154 
 
 

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             28 weeks ended   28 weeks ended   52 weeks ended 
                                      11 Jan 2020      12 Jan 2019     29 June 2019 
                                      (unaudited)      (unaudited)        (audited) 
                                          GBP'000          GBP'000          GBP'000 
                                  ---------------  ---------------  --------------- 
 UK                                        13,585           29,970           52,144 
 Other European Union countries             2,430            7,956           17,482 
 Rest of the World                          2,028            3,515            7,712 
                                  ---------------  ---------------  --------------- 
                                           18,043           41,441           77,338 
                                  ---------------  ---------------  --------------- 
 
 
 Geographical segments - Continuing    28 weeks ended   28 weeks ended   52 weeks ended 
  Operations 
                                          11 Jan 2020      12 Jan 2019     29 June 2019 
                                          (unaudited)      (unaudited)        (audited) 
                                              GBP'000          GBP'000          GBP'000 
                                      ---------------  ---------------  --------------- 
 UK                                             8,744           10,055           16,456 
 Other European Union countries                   288              427              609 
 Rest of the World                              1,531            1,933            2,611 
                                      ---------------  ---------------  --------------- 
                                               10,563           12,415           19,676 
                                      ---------------  ---------------  --------------- 
 

In the 28 weeks ended 11 January 2020, the Group had two customers that exceeded 10% of revenues from Continuing Operations, being 21.2% and 11.5% respectively. In the 28 weeks ended 12 January 2019, the Group had two customers that exceeded 10% of revenues from Continuing Operations, being 26.4% and 14.0% respectively.

Note 4 Exceptional items from continuing operations

In the period ended 11 January 2020 exceptional items charge represents GBP0.3m in relation to the departure in September of the former Chief Executive Officer and GBP0.2m exceptional consultancy fees.

The prior year exceptional items charge represents a provision of GBP0.3m made in respect to the GMP equalisation on the Group's DB Pension scheme.

Note 5 Finance costs

 
                                  28 weeks ended   28 weeks ended   52 weeks ended 
                                     11 Jan 2020      12 Jan 2019     29 June 2019 
                                     (unaudited)      (unaudited)        (audited) 
                                         GBP'000          GBP'000          GBP'000 
                                 ---------------  ---------------  --------------- 
 
 Total 
 Bank loans and overdrafts                    83              153              263 
 Notional pension scheme costs                98               65              126 
                                 ---------------  ---------------  --------------- 
                                             181              218              389 
                                 ---------------  ---------------  --------------- 
 
 
                                  28 weeks ended   28 weeks ended   52 weeks ended 
                                     11 Jan 2020      12 Jan 2019     29 June 2019 
                                     (unaudited)      (unaudited)        (audited) 
                                         GBP'000          GBP'000          GBP'000 
                                 ---------------  ---------------  --------------- 
 
 Continuing Operations 
 Bank loans and overdrafts                    25               15               18 
 Notional pension scheme costs                98               64              126 
                                 ---------------  ---------------  --------------- 
                                             123               79              144 
                                 ---------------  ---------------  --------------- 
 

Note 6 Earnings per share

 
                                          28 weeks ended   28 weeks ended   52 weeks ended 
                                             11 Jan 2020      12 Jan 2019     29 June 2019 
                                             (unaudited)      (unaudited)        (audited) 
                                         ---------------  ---------------  --------------- 
 
 Basic and diluted 
 Profit attributable to equity 
  shareholders (GBP'000)                           6,456              537            3,539 
 Profit attributable to equity 
  shareholders Continuing Operations 
  ('000)                                             178              874            1,489 
 Basic weighted average number 
  of 
 ordinary shares in issue during 
  the period                                  17,135,542       17,135,542       17,135,542 
 Diluted number of shares                     17,230,703       17,659,183       17,659,183 
 Basic earnings per share                          37.7p             3.1p            20.7p 
---------------------------------------  ---------------  ---------------  --------------- 
 Diluted earnings per share                        37.5p             3.0p            20.0p 
---------------------------------------  ---------------  ---------------  --------------- 
 Basic earnings per share Continuing 
  Operations                                        1.0p             5.1p             8.7p 
---------------------------------------  ---------------  ---------------  --------------- 
 Diluted earnings per share Continuing 
  Operations                                        1.0p             5.0p             8.4p 
---------------------------------------  ---------------  ---------------  --------------- 
 

Basic earnings per share has been calculated by dividing the profit for each financial period by the weighted average number of ordinary shares in issue in the period.

 
 0BAdjusted earnings per share   28 weeks ended      28 weeks       52 weeks 
                                                        ended          ended 
                                    11 Jan 2020   12 Jan 2019   29 June 2019 
                                    (unaudited)   (unaudited)      (audited) 
                                ---------------  ------------  ------------- 
 
 
 Profit attributable to equity 
  shareholders (GBP'000)                           6,456           537          3,539 
 Add back: Net exceptional items* 
  (GBP'000)                                      (6,833)           869            717 
 Add back: Amortisation of Acquisition 
  Related Intangibles (GBP'000)                      142           133            260 
 Notional tax charge on above 
  items (GBP'000)                                  (393)         (190)          (186) 
---------------------------------------  ---------------  ------------  ------------- 
 Adjusted (loss) / profit before 
  exceptional items (GBP'000)                      (628)         1,349          4,330 
---------------------------------------  ---------------  ------------  ------------- 
 Basic weighted average number 
  of 
 ordinary shares in issue during 
  the period                                  17,135,542    17,135,542     17,135,542 
 Diluted number of shares                     17,230,703    17,659,183     17,659,183 
---------------------------------------  ---------------  ------------  ------------- 
 Adjusted basic earnings per 
  share                                           (3.7)p          7.9p          25.3p 
---------------------------------------  ---------------  ------------  ------------- 
 Adjusted diluted earnings per 
  share                                           (3.6)p          7.6p          24.5p 
---------------------------------------  ---------------  ------------  ------------- 
 
 1BAdjusted earnings per share            28 weeks ended      28 weeks       52 weeks 
  - Continuing Operations                                        ended          ended 
                                             11 Jan 2020   12 Jan 2019   29 June 2019 
                                             (unaudited)   (unaudited)      (audited) 
                                         ---------------  ------------  ------------- 
 
 
 Profit attributable to equity 
  shareholders (GBP'000)                         178          874        1,489 
 Add back: Net exceptional items* 
  (GBP'000)                                      472          269           48 
 Add back: Amortisation of Acquisition 
  Related Intangibles (GBP'000)                  142          133          260 
 Notional tax charge on above 
  items (GBP'000)                              (117)         (76)         (59) 
---------------------------------------  -----------  -----------  ----------- 
 Adjusted profit before exceptional 
  items (GBP'000)                                675        1,200        1,738 
---------------------------------------  -----------  -----------  ----------- 
 Basic weighted average number 
  of 
 ordinary shares in issue during 
  the period                              17,135,542   17,135,542   17,135,542 
 Diluted number of shares                 17,230,703   17,659,183   17,659,183 
---------------------------------------  -----------  -----------  ----------- 
 Adjusted basic earnings per share              3.9p         7.0p        10.1p 
---------------------------------------  -----------  -----------  ----------- 
 Adjusted diluted earnings per 
  share                                         3.9p         6.8p         9.8p 
---------------------------------------  -----------  -----------  ----------- 
 

Adjusted earnings per share has been calculated by dividing the adjusted profit (after allowing for the notional tax charge on exceptional items) by the weighted average number of shares in issue in the period.

*Net exceptional items are calculated as follows:

 
      28 weeks ended 
         11 Jan 2020 
         (unaudited) 
           (GBP'000) 
     --------------- 
 
 
 Profit on disposal of manufacturing 
  business                                8,762 
 Bonuses paid out following disposal 
  of manufacturing business             (1,116) 
 Stock provision adjustments              (341) 
 Departure of former Chief Executive 
  Officer                                 (310) 
 Consultancy fees                         (162) 
-------------------------------------  -------- 
 Total                                    6,833 
-------------------------------------  -------- 
 

Note 7 Dividends

The Directors have declared an interim dividend payment of 0.9p per share (2019: Interim: 2.15p; Final: 4.35p). The interim dividend will be paid on 29 May 2020 to shareholders on the register at the close of business on 11 May 2020. The ex-dividend date will be 7 May 2020.

Note 8 Notes to Cash Flow Statement

(a) Reconciliation of cash and cash equivalents to movement in net debt:

 
                                       28 weeks ended   28 weeks ended   52 weeks ended 
                                          11 Jan 2020      12 Jan 2019     29 June 2019 
                                          (unaudited)      (unaudited)        (audited) 
                                              GBP'000          GBP'000          GBP'000 
                                      ---------------  ---------------  --------------- 
 
 Increase / (decrease) in cash 
  and cash equivalents in the 
  period                                       19,619              813            (553) 
 Net cash outflow from decrease 
  in borrowings                                 2,604            4,190            5,154 
------------------------------------  ---------------  ---------------  --------------- 
 Change in net debt resulting 
  from cash flows                              22,223            5,003            4,601 
 Net cash / (debt) at the beginning 
  of the period                               (7,168)         (11,769)         (11,769) 
------------------------------------  ---------------  ---------------  --------------- 
 Net cash / (net debt) at the 
  end of the period                            15,055          (6,766)          (7,168) 
------------------------------------  ---------------  ---------------  --------------- 
 

(b) Analysis of net debt:

 
                                         Closing   Cash flow        Closing 
                                    29 June 2019                11 Jan 2020 
                                         GBP'000     GBP'000        GBP'000 
                                  --------------  ----------  ------------- 
 
 Cash at bank and in hand                    381      19,619         20,000 
 CID facility                            (4,319)       1,997        (2,322) 
 Borrowings due within one year          (1,139)          64        (1,075) 
 Borrowings due after one year           (2,091)         543        (1,548) 
--------------------------------  --------------  ----------  ------------- 
                                         (7,168)      22,223         15,055 
--------------------------------  --------------  ----------  ------------- 
 

Note 9 IAS 19 'Employee Benefits'

Expected future cash flows to and from the Group's defined benefit pension scheme:

The Scheme is closed to new members and to further accruals of benefits. It is subject to the scheme funding requirements outlined in UK legislation. The last scheme funding valuation of the Scheme was as at 5 April 2017 and revealed a funding deficit of GBP2.6m. The liabilities of the Scheme are based on the current value of expected benefit payments to members of the Scheme over the next 60 to 80 years. The average duration of the liabilities is approximately 20 years.

In accordance with the schedule of contributions dated 4 September 2018, the Company is expected to pay contributions to the Scheme to make good shortfalls in funding identified in the 5 April 2017 funding valuation and has agreed to pay GBP0.3m per annum. The magnitude of such payments will be reviewed following the next scheme funding valuation as at April 2020.

In addition, the Company has agreed to meet the cost of administrative expenses and Pension Protection Fund insurance premiums for the Scheme.

Payments made by the Company to the Scheme and in respect of Scheme liabilities were:

 
                                    28 weeks ended     28 weeks ended   52 weeks ended 
                                   11 January 2020    12 January 2019     29 June 2019 
                                           GBP'000            GBP'000          GBP'000 
                                 -----------------  -----------------  --------------- 
 Company pension contributions                   -                  -                - 
 Deficit recovery payments                     159                175              282 
 Scheme administrative 
  expenses                                     138                 92              179 
 Pension Protection Fund 
  premium                                      120                108              108 
-------------------------------  -----------------  -----------------  --------------- 
 Total                                         417                375              569 
-------------------------------  -----------------  -----------------  --------------- 
 

The amounts expensed in the Group Statement of Comprehensive Income were:

 
                                    28 weeks ended     28 weeks ended   52 weeks ended 
                                   11 January 2020    12 January 2019     29 June 2019 
                                           GBP'000            GBP'000          GBP'000 
                                 -----------------  -----------------  --------------- 
 In Operating profit: 
 Company pension contributions                   -                  -                - 
 Scheme administrative 
  expenses                                      92                 96              179 
 Pension Protection Fund 
  premium                                       65                 58              108 
 GMP Equalisation                                -                288              290 
                                 -----------------  -----------------  --------------- 
                                               157                442              577 
 In Finance costs: 
 Unwinding of notional 
  discount factor                               98                 65              126 
-------------------------------  -----------------  -----------------  --------------- 
 Total                                         255                507              703 
-------------------------------  -----------------  -----------------  --------------- 
 

IAS 19 requires a separate valuation of the Scheme on a different basis to the funding valuation referred to above.

The effects of the application of IAS19 on the statement of financial position at 11 January 2020 are:

 
                                                11 January 
                                                      2020 
                                                   GBP'000 
                                               ----------- 
 Increase in net pension and other benefit 
  obligations                                          247 
 Reduction in deferred tax                            (25) 
 Decrease in equity                                    222 
---------------------------------------------  ----------- 
 

The key assumptions used were:

 
                            As at 11 January   As at 12 January   As at 29 June 
                                        2020               2019            2019 
                           -----------------  -----------------  -------------- 
 Discount Rate                         2.00%              3.05%           2.40% 
 Rate of inflation (RPI)               2.90%              3.20%           3.10% 
 Rate of inflation (CPI)               2.00%              2.10%           2.10% 
 

The amounts recognised in the Group statement of financial position were:

 
                                As at 11 January   As at 12 January   As at 29 June 
                                            2020               2020            2019 
                                         GBP'000            GBP'000         GBP'000 
                               -----------------  -----------------  -------------- 
 Present value of funded 
  obligations                           (34,367)           (29,065)        (33,562) 
 Fair value of scheme assets              24,862             22,451          24,145 
-----------------------------  -----------------  -----------------  -------------- 
 (Deficit)                               (9,505)            (6,614)         (9,417) 
-----------------------------  -----------------  -----------------  -------------- 
 

Note 10 Discontinued operations

In August 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 operations. Curzon Supplies Ltd was incorporated in March 2019.

 
                                                                         At Disposal 
                                                                      23 August 2019 
 Net book value                                                              GBP'000 
 Property, plant and equipment                                                11,338 
 Intangible fixed assets                                                         695 
 Equity instruments held at fair 
  value                                                                        1,753 
 Inventories                                                                   9,509 
 Trade and other receivables                                                  13,196 
 Trade and other payables                                                   (10,025) 
 Post-retirement pension obligations 
  *                                                                          (1,103) 
 Deferred tax liability                                                        (561) 
                                                                              24,802 
                                                                -------------------- 
  Deal costs                                                                   1,476 
  Profit on disposal                                                           8,762 
  Satisfied by: 
   Cash consideration                                                         35,040 
  Of the cash consideration of GBP35,040k, GBP1,290k is deferred and 
   is recognised in other receivables on the Balance Sheet. 
   * Post-retirement pension scheme obligations figure of GBP1,103k in 
   this table relates to reassessment of annual uprating of pension liabilities. 
    Proceeds on disposal of manufacturing     28 weeks ended 
     segment recognised in the Cash              11 Jan 2020 
     Flow Statement:                                 GBP'000 
    Cash consideration                                35,040 
    Less deferred consideration                      (1,290) 
    Less deal costs                                  (1,476) 
                                                      32,274 
                                             --------------- 
 
  Result of discontinued operations:                                        28 weeks       28 weeks    52 weeks 
                                                                               ended          ended       ended 
                                                                          11 January     12 January     29 June 
                                                                                2020           2019        2019 
                                                                             GBP'000        GBP'000     GBP'000 
 Revenue                                                                       7,480         29,026      57,663 
 Expenses other than finance costs                                           (8,449)       (29,090)    (55,835) 
 (Finance costs) / investment income                                            (58)            248       1,146 
 Exceptional costs                                                           (1,457)          (600)       (669) 
 Profit on disposal of manufacturing 
  business                                                                     8,762 
 Tax credit / (expense)                                                            -             79       (255) 
 
 Profit / (Loss) for the year                                                  6,278          (337)       2,050 
                                                                --------------------  -------------  ---------- 
 
 Included in Exceptional costs in discontinued operations are bonuses 
  paid out on deal completion of GBP1.1m and stock provision adjustments 
  of GBP0.3m. 
  Earnings per share from discontinued                                      28 weeks       28 weeks    52 weeks 
   operations:                                                                 ended          ended       ended 
                                                                          11 January     12 January     29 June 
                                                                                2020           2019        2019 
 Basic earnings per share                                                      36.6p         (2.0)p       12.0p 
 Diluted earnings per share                                                    36.4p         (1.9)p       11.6p 
 
 
 Earnings per share from discontinued                                       28 weeks 
  operations excluding profit on                                               ended 
  disposal of manufacturing business:                                     11 January 
                                                                                2020 
 Basic earnings per share                                                    (14.5)p 
 Diluted earnings per share                                                  (14.4)p 
 
 Cash flow in respect of discontinued                                       28 weeks       28 weeks    52 weeks 
  operations:                                                                  ended          ended       ended 
                                                                          11 January     12 January     29 June 
                                                                                2020           2019        2019 
                                                                             GBP'000        GBP'000     GBP'000 
 Operating cash flows                                                          3,220          1,937       6,717 
 Investing cash flows                                                              -          (122)       (602) 
 Financing cash flows                                                        (3,592)        (2,904)     (3,637) 
                                                                --------------------  -------------  ---------- 
 Total cash flows                                                              (372)        (1,089)       2,478 
                                                                --------------------  -------------  ---------- 
 
 

Note 11 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 Architekts Limited. This has historically resulted in an understatement of goodwill and the deferred tax liability of GBP1,145k. This has been restated in the comparative information. There has been no impact to the previously stated retained earnings, net assets and cash flows.

Note 12 Announcement of results

The Interim Report will be sent to shareholders and is available to members of the public at the Company's Registered Office at 8 Waldegrave Road, Teddington, TW11 8GT and on the Company's website.

Independent review report to Brand Architekts Group plc

Introduction

We have reviewed the accompanying Group Statement of Financial Position of Brand Architekts Group plc as of 11 January 2020 and the Group Statement of Comprehensive Income, Group Statement of Changes in Equity and Group Cash Flow Statement for the 28 week period then ended, and a summary of significant accounting policies and other explanatory notes.

This report is made solely to the Group in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Group those matters we are required to state to it in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group for our review work, for this report, or for the conclusion we have formed.

Management is responsible for the preparation and fair presentation of this interim financial information in accordance with International Accounting Standard 34 as adopted by the European Union. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not give a true and fair view of the financial position of the entity as at 11 January 2020 and of its financial performance and its cash flows for the 28 week period then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

PKF Francis Clark

Statutory Auditor

Centenary House

Peninsula Park

Rydon Lane

Exeter

EX2 7XE

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

IR DDGDXXUGDGGC

(END) Dow Jones Newswires

March 10, 2020 03:00 ET (07:00 GMT)

Su Consulta Reciente
BMV
FIBRAPL14
Fibra Prol..
BMV
AMXL
América Mó..
BMV
ME
IPC México
BMV
ALSEA*
Alsea
FX
USDMXN
United Sta..
Las acciones que ha visto aparecerán en este recuadro, lo que le permite volver fácilmente a las cotizaciones que ha consultado previamente
Registrarse ahora para crear su lista personalizada de acciones en streaming.

Cotizaciones PLUS están en tiempo real. Cotizaciones NYSE y AMEX están con retraso de por lo menos 20 minutos.
El resto de las cotizaciones están con retraso de por lo menos 15 minutos al menos que se indique lo contrario.

Al acceder a los servicios disponibles de ADVFN usted acepta quedar sujerto a los Términos y Condiciones

P: V:mx D:20200702 16:34:20