Final Results

Blavod Extreme Spirits PLC 19 June 2006 Blavod Extreme Spirits PLC Preliminary Results For the twelve months ended 31 March 2006 Trading Highlights Financial • Turnover increased 72% to £5.4m (2005: £3.1m) • Full year case shipments increased by 51.4% • Recorded a gross margin of £1.7m (2005: £0.898m) • Year-end gross margin of 31.2% (2005: 28.8%) • Operational results, excluding the JV, improved to a loss of £2.5m (2005: £4.1m) • Sales for first two trading months of FY07 ahead 63% on same period last year Brands • Favourable market trend, particularly in the USA • Strong brand growth of Players Extreme caramel and cherry flavoured vodkas • Blavod Black Vodka continues to grow in major markets • Strong sales growth in the wine portfolio • Significant growth for UK agency brands, Mickey Finn's and Molinari • Global distribution strengthening as portfolio expands Joint Venture • Diamante Spirits, LLC - the joint venture between Blavod Extreme and Suntory International produces the El Diamante del Cielo Tequila products which were introduced in Oct 2005 to selective markets in the US and have made an encouraging start. Commenting on the results, Chief Executive Officer, Jeff Hopmayer, said: 'The popularity of our brands increased rapidly in fiscal year 2006, with sales growing accordingly. Operating results for the company also made significant positive improvements. The organic growth potential of our brands remains apparent; the first two months have started well, with trading up 63%, compared with April and May 2005.' Enquires: Blavod Extreme Spirits plc Jeff Hopmayer, Chief Executive 001 615 771 9111 Tony Murphy, Finance Director 001 615 771 9111 Brewing Dolphin Securities Mark Brady (0)11 3241 0129 Keith Williams (0)11 3241 0186 Cardew Group Tim Robertson (0)20 7930 0777 Chairman's Statement Blavod Extreme Spirits had a good year in 2005/6 with strong sales growth, improved margins, significant reduction in operating loss and continued expansion of our portfolio of brands. Financial Sales grew by 72% to £5.4m compared to £3.1m in the previous year, with gross margins improving to 31.2% in 2005/6, whilst shipments grew by 51.4%. The company continued investing heavily in brand marketing and sales resources in the US and the UK. The result for this fiscal year was an operating loss of £2.5m, compared to £4.1m in 2004/5. The company has sufficient funding in place to continue to grow our business. We do not propose to pay a dividend. Brand Performance Blavod Black Vodka sales continued to grow in the difficult UK market while depletions in the USA were up significantly. As a result of our marketing and promotional efforts popularity of Blavod has grown. The Players Extreme line of products, in particular the cherry and caramel flavoured vodkas, are showing very strong growth. This category of full-flavoured drinks is increasingly attractive to all age groups and Players Extreme is well placed to take advantage of this opportunity. Agency Brands The brands with which we have exclusive agency agreements were also successful, in particular, Mickey Finn's and Molinari in the UK and Baroncini in the US. The company has built strong partnerships with our suppliers whose brands now represent a well-rounded portfolio of high quality wines and spirits. Joint Venture Blavod Extreme and Suntory of Japan have formed a joint venture to produce and market El Diamante del Cielo, tequilas of the highest quality. BES is the distributor in the US and worldwide. The October 2005 launch in selected US cities was very well received. Distribution is currently being expanded to the broader US market and export to international markets will begin soon. We are very optimistic about the future of this joint venture with Suntory. Outlook The prospects for 2006/7 are good. Our brands across the portfolio have performed strongly in the first two months, and the company will also take on the valuable partnership with Cockspur Rum in the UK from July this year. The management team has been strengthened with Tony Murphy joining as Finance Director, while Fred Read has moved to direct operations. With attractive brands, a lively and determined management group and a sales team with proven results, we expect a good year. Colin Campbell Chairman Preliminary Results CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 March 2006 Notes Year to 31 March 2006 2005 £ 000 £ 000 Turnover 1 5,353 3,116 Cost of sales (3,682) (2,218) -------- -------- Gross profit 1,671 898 Marketing and administrative expenses (4,168) (4,998) -------- -------- Operating loss (2,497) (4,100) Share of the operating loss of 2 (470) - Associate -------- -------- (2,967) (4,100) Bank interest receivable Group 48 182 Associate 3 - -------- -------- 51 182 Loss on ordinary activities before (2,916) (3,918) taxation Taxation - - -------- -------- Loss for the year (2,916) (3,918) -------- -------- Loss per share 3 (4.41p) (5.99p) Diluted loss per share (4.41p) (5.99p) -------- -------- STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 31 March, 2006 Notes Year to 31 March Year to 31 March 2006 2005 £ 000 £ 000 Loss for the year (2,916) (3,918) Investment in associate in other reserves 931 - Foreign exchange differences on conversion of net investments (384) (122) --------- -------- Total recognised losses for the year (2,369) (4,040) ========= ======== CONSOLIDATED BALANCE SHEET as at 31 March 2006 As at 31 March As at 31 March 2006 2005 £ 000 £ 000 Fixed assets Intangible assets 3,728 3,946 Tangible assets 55 82 Investment in associate 464 - -------- -------- 4,247 4,028 -------- -------- Current assets Stock 1,089 866 Debtors 1,405 1,113 Cash at bank 1,070 2,142 -------- -------- 3,564 4,121 Creditors: amounts falling due within one year (1,716) (824) -------- -------- Net current assets 1,848 3,297 -------- -------- Total assets less current liabilities 6,095 7,325 Creditors: amounts falling due after one year (5) (11) -------- -------- Net assets 6,090 7,314 ======== ======== Capital and reserves Called up share capital 713 654 Share premium account 18,002 16,916 Other reserve 464 - Profit and loss account (13,089) (10,256) -------- -------- Shareholders' funds 6,090 7,314 ======== ======== CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2006 2006 2005 £ 000 £ 000 Cash outflow from operating activities (2,251) (5,209) -------- -------- Returns on investments Interest received 48 182 -------- -------- Net cash inflow from returns on investments 48 182 -------- -------- Capital expenditure Purchase of tangible fixed assets (2) (77) Expenditure relating to the registration of trademarks (10) (11) -------- -------- Net cash outflow for capital expenditure (12) (88) Acquisition Expenses related to acquisition - (34) -------- -------- Net cash outflow relating to acquisitions - (34) -------- -------- Cash outflow before financing (2,215) (5,149) -------- -------- Financing Issue of ordinary share capital 1,240 - Cost of share issue (95) - Repayment of capital element of finance lease rental (2) (2) -------- -------- Net cash inflow from financing 1,143 (2) ======== ======== (Decrease)/increase of cash in the period (1,072) (5,151) ======== ======== NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2006 1. Basis of preparation The financial information in this statement is prepared under the historical cost convention and in accordance with applicable accounting standards. It does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. 2. Share of the operating loss of Associate This relates to the Group's share of the losses of Diamante Spirits, LLC, accounted for in accordance with FRS 9 'Associates and Joint Ventures' and is a 'non-cash' item. 3. Loss per share The calculations of earnings per share for the year, both basic and diluted, are based on a loss of £2,916,000 (2005: £3,918,000) and 66,074,582 (2005: 65,443,633) shares in issue. 4. Published accounts Copies of the published accounts of the Company will be sent in due course to all shareholders and will be available from the offices of Brewin Dolphin Securities. This information is provided by RNS The company news service from the London Stock Exchange

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