Interim Results
Blavod Extreme Spirits PLC
20 December 2007
Blavod Extreme Spirits plc
20 December 2007
Interim results
Company Statement
The Company announces the half year results to the end of September, 2007.
Blavod Extreme Spirits PLC made a loss of £1.321million which includes a loss of
£1.244million by the US division. The division has been sold subsequently.
The UK operating company, which owns the Blavod brand and valuable agency
distribution agreements in the UK, made a profit of £56.8k compared to a loss in
the same period last year of £203k.
Earlier this week the company announced that it has raised £354k, after expenses
of £5k, in a placing of ordinary shares at 2.75p, representing a 5% premium to
the share price at the time of the placing. The Directors subscribed for £96.5k
of the total
Current sales of all the major brands continue to show positive trends.
Condensed consolidated interim income statement
6 months to 6 months to Year to
30 September 30 September 31 March
2007 2006 2007
Note £'000 £'000 £'000
(unaudited) (unaudited) (audited and
restated)
Revenue 1,815 1,451 3,251
Cost of sales (1,340) (1,072) (2,415)
---------- ---------- ----------
Gross profit 475 379 836
Administrative costs (558) (898) (1,504)
---------- ---------- ----------
Operating loss (83) (519) (668)
Finance income 6 37 19
---------- ---------- ----------
Net finance income 6 37 19
---------- ---------- ----------
Loss before tax and loss
for the period from
continuing operations (77) (482) (649)
Discontinued operations
Loss for the period from
discontinued operations (1,244) (1,201) (5,878)
---------- ---------- ----------
Loss for the period (1,321) (1,683) (6,527)
========== ========== ==========
Earnings per share:
From continuing operations
Basic (pence per share) 3 (0.11) (0.68) (0.90)
========== ========== ==========
Diluted (pence per share) 3 (0.11) (0.68) (0.90)
========== ========== ==========
Condensed consolidated interim balance sheet
30 September 30 September 31 March
2007 2006 2007
Note £'000 £'000 £'000
(unaudited) (unaudited) (audited and
restated)
ASSETS
Non-current assets
Property, plant and equipment 1 35 33
Goodwill - 3,022 -
Other intangible assets 641 757 682
Investments in associates - 266 255
---------- ---------- ----------
Total non-current assets 642 4,080 970
---------- ---------- ----------
Current assets
Inventories 230 1,309 1,032
Trade and other receivables 881 1,972 1,313
Cash and cash equivalents 247 372 401
---------- ---------- ----------
1,358 3,653 2,746
Non-current assets
classified as held for
sale 1,306 - -
---------- ---------- ----------
Total current assets 2,664 3,653 2,746
---------- ---------- ----------
Total assets 3,306 7,733 3,716
========== ========== ==========
LIABILITIES
Current liabilities
Trade and other
payables (1,079) (2,366) (1,496)
Liabilities directly
associated with
non-current assets (2,923) - -
classified as held
for sale
---------- ---------- ----------
Total current liabilities (4,002) (2,366) (1,496)
---------- ---------- ----------
Non-current liabilities
Long-term borrowings - (1,009) (1,664)
---------- ---------- ----------
Total non-current
liabilities - (1,009) (1,664)
---------- ---------- ----------
Total liabilities (4,002) (3,375) (3,160)
---------- ---------- ----------
Net
(liabilities)/assets (696) 4,358 556
========== ========== ==========
EQUITY
Equity attributable to equity holders
of the parent
Share capital 732 713 732
Share premium account 18,240 18,002 18,240
Shares to be issued 1,105 1,077 1,093
Other reserve 26 266 255
Profit and loss
account (21,442) (16,201) (20,359)
Translation reserve 643 501 595
---------- ---------- ----------
Total equity (696) 4,358 556
========== ========== ==========
Condensed consolidated interim statement of recognised income and expense
6 months to 6 months to Year to
30
30 September September 31 March
2007 2006 2007
Note £'000 £'000 £'000
(unaudited) (unaudited) (audited
and
restated)
Exchange differences on
translation of foreign
operations 48 501 595
Exchange differences on
translation of associate (6) - (42)
Share of additional
capital contribution
to associate - - 156
---------- ---------- ----------
Net income recognised
directly in equity 42 501 709
Loss for the period (1,321) (1,683) (6,527)
---------- ---------- ----------
Total recognised income and
expense for the period (1,279) (1,182) (5,818)
========== ========== ==========
Condensed consolidated interim cash flow statement
6 months to 6 months to Year to
30 31 March
30 September September 2007
2007 2006 £'000
Note £'000 £'000 (audited
(unaudited) (unaudited) and restated)
Cash flows from operating activities
Profit after taxation (1,321) (1,683) (6,527)
Adjustments for:
Depreciation 33 29 37
Amortisation 41 - 44
Impairment of goodwill - - 3,022
Share-based payment 12 25 41
Share of losses in associates 223 198 323
Net foreign exchange (gain)/loss 43 (50) 611
Net finance costs 112 (13) 72
---------- ---------- ----------
(857) (1,494) (2,377)
Movements in working capital
Decrease/(increase) in inventories 91 (220) 57
Decrease/(increase) in trade
receivables 164 (567) 92
Increase/(decrease) in trade payables 516 636 (234)
---------- ---------- ----------
Cash used by operations (86) (1,645) (2,462)
Interest paid (91) (24) (91)
---------- ---------- ----------
Net cash used by operating activities (177) (1,669) (2,553)
---------- ---------- ----------
Cash flows from investing activities
Interest received 6 37 19
Purchase of property, plant and
equipment (38) (9) (23)
Proceeds from sale of property, plant
and equipment - - 8
Expenditure relating to the
registration of trademarks - (51) (20)
---------- ---------- ----------
Net cash used in investing activities (32) (23) (16)
---------- ---------- ----------
Cash flows from financing activities
Proceeds from issue of share capital - - 257
Proceeds from long-term borrowings 66 1,009 1,664
Repayment of finance lease - (5) (5)
---------- ---------- ----------
Net cash from financing activities 66 1,004 1,916
---------- ---------- ----------
Net decrease in cash and cash
equivalents (143) (688) (653)
Cash and cash equivalents at beginning
of period 401 1,070 1,070
Effects of exchange rate changes on the
balance of cash held in foreign
currencies (2) (10) (16)
---------- ---------- ----------
Cash and cash equivalents at end of
period 4 256 372 401
========== ========== ==========
Notes to the condensed consolidated interim financial statements
1 General information
Blavod Extreme Spirits plc is incorporated and domiciled in Great Britain.
Blavod Extreme Spirits plc's registered address is 202 Fulham Road, London, SW10
9PJ. Its shares are listed on the AIM Market of the London Stock Exchange.
These condensed consolidated interim financial statements of Blavod Extreme
Spirits plc ('the Parent Company') and its subsidiaries (together 'the Group')
have been approved for issue by the Board of Directors on 20 December 2007.
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
Group's statutory financial statements for the year ended 31 March 2007,
prepared under UK GAAP, have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under Sections 237(2) and (3) of the Companies Act 1985.
Copies of these statements are available from the company's registered office.
2 Basis of preparation
These condensed consolidated interim financial statements are for the six months
ended 30 September 2007. They have been prepared in accordance with the
requirements of IFRS 1 'First-time Adoption of International Financial Reporting
Standards' relevant to interim reports, because they relate to part of the
period covered by the Group's first IFRS financial statements for the year ended
31 March 2008. They do not include all of the information required for full
annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 31 March 2007.
These financial statements have been prepared under the historical cost
convention and are presented in Pounds Sterling (£), which is also the
functional currency of the Parent Company.
They have been prepared in accordance with accounting policies based on the
recognition and measurement principles of IFRS, which are in issue as adopted by
the European Union (EU) and are effective at 31 March 2008, or which are
expected to be adopted and effective at 31 March 2008, the first annual
reporting date at which the Group is required to use IFRS accounting standards
adopted by the EU.
Blavod Extreme Spirits plc's consolidated financial statements were prepared in
accordance with United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) until 31 March 2007. The date of transition to
IFRS was 1 April 2006. The comparative figures in respect of the year to 31
March 2007 and interim period to 30 September 2006 have been restated to reflect
changes in accounting policies as a result of adoption of IFRS. The disclosures
required by IFRS 1 concerning the transition from UK GAAP to IFRS are given in
the reconciliation schedules, presented and explained in note 7.
The accounting policies have been applied consistently throughout the Group for
the purposes of preparation of these condensed consolidated interim financial
statements.
3 Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.
The diluted loss per share is identical to the basic loss per share as the
exercise of warrants and options would have the effect of reducing the loss per
share and therefore is not dilutive under IAS 33.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
6 months to 6 months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited) (audited and
restated)
Continuing operations
Loss attributable to ordinary
shareholders (£'000) (77) (482) (649)
Weighted average number of shares (used
for basic earnings per share) 73,246,608 71,379,700 71,891,182
---------- ---------- ----------
Basic and diluted loss per share
(pence) (0.11) (0.68) (0.90)
========== ========== ==========
Discontinued operations
Loss attributable to ordinary
shareholders (£'000) (1,244) (1,201) (5,878)
Weighted average number of shares (used
for basic earnings per share) 73,246,608 71,379,700 71,891,182
---------- ---------- ----------
Basic and diluted loss per share
(pence) (1.70) (1.68) (8.18)
========== ========== ==========
Total operations
Loss attributable to ordinary
shareholders (£'000) (1,321) (1,683) (6,527)
Weighted average number of shares (used
for basic earnings per share) 73,246,608 71,379,700 71,891,182
---------- ---------- ----------
Basic and diluted loss per share
(pence) (1.80) (2.36) (9.08)
========== ========== ==========
4 Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents at the
end of the period as shown in the cash flow statement can be reconciled to the
related items in the balance sheet as follows:
30 30 31 March
September September
2007 2006 2007
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Cash and cash
equivalents 247 372 401
Cash and cash
equivalents included
in a disposal group
held for sale 9 - -
---------- ---------- ----------
256 372 401
========== ========== ==========
5 Dividends
The directors do not propose the payment of a dividend for the period.
6 Events after the balance sheet date
On 5 October 2007, the group sold all the assets and liabilities except
intercompany balances of one of its subsidiaries, Blavod Extreme Spirits USA
Inc. ('BES') to Black Diamond Spirits LLC, a company owned by J.S. Hopmayer. As
part of the sale, intercompany balances due from BES to group companies of
£7,413,000 were waived, and Blavod Extreme Spirits plc received cash of $725,000
and was released from 'with debt reduction options' issued to Laurus Master Fund
Ltd.
7 Explanation of transition to IFRS
As stated in the Basis of Preparation, these are the Group's first condensed
consolidated interim financial statements prepared under IFRS, and relate to
part of the period covered by the first annual consolidated financial statements
which will be prepared in accordance with IFRS.
An explanation of how the transition from UK GAAP to IFRS has affected the
Group's reported financial position, financial performance and cash flows is set
out below.
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. These
interim financial statements have been prepared on the basis of taking the
following exemptions:
• Business combinations prior to 1 April 2006, the Group's date of transition
to IFRS, have not been restated to comply with IFRS 3 'Business
Combinations'. The carrying amount of goodwill at 1 April 2006 under UK
GAAP of £3,022,000 has been treated as its deemed cost.
• Cumulative translation differences on foreign operations are deemed to be
nil at 1 April 2006. Any gains and losses recognised in the consolidated
income statement on subsequent disposal of foreign operations will exclude
translation differences arising prior to the transition date; and
• The entity has elected not to apply IAS 21 'The Effects of Changes in
Foreign Exchange Rates' retrospectively to goodwill and fair value
adjustments arising on business combinations before the Group's date of
transition to IFRS. Such goodwill and fair value adjustments are not
treated as foreign currency assets and so are not retranslated at each
reporting date.
Reconciliation of equity at 1 April 2006
UK GAAP a b c d e f IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Property, plant and
equipment 55 - - - - - - 55
Goodwill 3,022 - - - - - - 3,022
Other intangible
assets 706 - - - - - - 706
Investments in
associates 464 - - - - - - 464
Current assets
Inventories 1,089 - - - - - - 1,089
Trade and other
receivables 1,405 - - - - - - 1,405
Cash and cash
equivalents 1,070 - - - - - - 1,070
Current liabilities
Trade and
other payables (1,716) (14) - - - - - (1,730)
Non-current liabilities
Long-term borrowings - - - - - - - -
Other non-current
liabilities (5) - - - - - - (5)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets 6,090 (14) - - - - - 6,076
========== ========== ========== ========== ========== ========== ========== ==========
Equity
Share capital 713 - - - - - - 713
Share premium
account 18,002 - - - - - - 18,002
Shares to be
issued 1,052 - - - - - - 1,052
Other reserve 464 - - - - - - 464
Profit and
loss account (14,141) (14) - - - - - (14,155)
Translation reserve - - - - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total equity 6,090 (14) - - - - - 6,076
========== ========== ========== ========== ========== ========== ========== ==========
Reconciliation of equity at 30 September 2006
UK GAAP a b c d e f IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Property, plant and
equipment 35 - - - - - - 35
Goodwill 3,022 - - - - - - 3,022
Other intangible
assets 757 - - - - - - 757
Investments in
associates 266 - - - - - - 266
Current assets
Inventories 1,309 - - - - - - 1,309
Trade and other
receivables 1,972 - - - - - - 1,972
Cash and cash
equivalents 372 - - - - - - 372
Current liabilities
Trade and
other payables (3,361) (14) - - - 1,009 - (2,366)
Non-current liabilities
Long-term
borrowings - - - - - (1,009) - (1,009)
Other non-current - - - - - - - -
liabilities
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets 4,372 (14) - - - - - 4,358
========== ========== ========== ========== ========== ========== ========== ==========
Equity
Share capital 713 - - - - - - 713
Share premium
account 18,002 - - - - - - 18,002
Shares to be
issued 1,077 - - - - - - 1,077
Other reserve 266 - - - - - - 266
Profit and
loss account (15,686) (14) - - - - (501) (16,201)
Translation
reserve - - - - - - 501 501
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total equity 4,372 (14) - - - - - 4,358
========== ========== ========== ========== ========== ========== ========== ==========
Reconciliation of equity at 31 March 2007
UK GAAP a b c d e f IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Property, plant and
equipment 33 - - - - - - 33
Goodwill - - - - - - - -
Other intangible
assets 682 - - - - - - 682
Investments in
associates 255 - - - - - - 255
Current assets
Inventories 1,032 - - - - - - 1,032
Trade and other
receivables 1,313 - - - - - - 1,313
Cash and cash
equivalents 401 - - - - - - 401
Current liabilities
Trade and
other payables (1,482) (14) - - - - - (1,496)
Non-current liabilities
Long-term
borrowings (1,664) - - - - - - (1,664)
Other non-current - - - - - - - -
liabilities
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets 570 (14) - - - - - 556
========== ========== ========== ========== ========== ========== ========== ==========
Equity
Share capital 732 - - - - - - 732
Share premium
account 18,240 - - - - - - 18,240
Shares to be
issued 1,093 - - - - - - 1,093
Other reserve 255 - - - - - - 255
Profit and
loss account (19,750) (14) - - - - (595) (20,359)
Translation
reserve - - - - - - 595 595
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total equity 570 (14) - - - - - 556
========== ========== ========== ========== ========== ========== ========== ==========
Reconciliation of loss for 6 months ended 30 September 2006
UK GAAP a b c d e f IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 3,540 - (2,089) - - - - 1,451
Cost of sales (2,554) - 1,482 - - - - (1,072)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit 986 - (607) - - - - 379
Administrative
costs (2,484) - 1,586 - - - - (898)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
administrative
costs (2,484) - 1,586 - - - - (898)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating loss (1,498) - 979 - - - - (519)
Finance income 13 - - 24 - - - 37
Finance costs - - 24 (24) - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net finance
income 13 - 24 - - - - 37
Share of
(loss) of
associate (198) - 198 - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss)/profit
before tax (1,683) - 1,201 - - - - (482)
Income tax expense - - - - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Loss for the
period from
continuing
operations (1,683) - 1,201 - - - - (482)
Loss for the
period from
discontinued
operations - - (1,201) - - - - (1,201)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Loss for the
period (1,683) - - - - - - (1,683)
========== ========== ========== ========== ========== ========== ========== ==========
Reconciliation of loss for the year to 31 March 2007
UK GAAP a b c d e f IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 6,899 - (3,648) - - - - 3,251
Cost of sales (5,105) - 2,690 - - - - (2,415)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit 1,794 - (958) - - - - 836
Administrative
costs (5,063) - 3,400 - 159 - - (1,504)
Impairment of
goodwill (2,863) - 3,022 - (159) - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
administrative
costs (7.926) - 6,422 - - - - (1,504)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating loss (6,132) - 5,464 - - - - (668)
Finance income - - - 19 - - - 19
Finance costs (72) - 91 (19) - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net finance
(cost)/income (72) - 91 - - - - 19
Share of loss
of associate (323) - 323 - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Loss before tax (6,527) - 5,878 - - - - (649)
Income tax expense - - - - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Loss for the
period from
continuing
operations (6,527) - 5,878 - - - - (649)
Loss for the
period from
discontinued
operations - - (5,878) - - - - (5,878)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Loss for the
period (6,527) - - - - - - (6,527)
========== ========== ========== ========== ========== ========== ========== ==========
Notes to the reconciliations
a) In accordance with IAS 19, Blavod is required to accrue its holiday pay.
b) At 30 September 2007, Blavod's US operations were held for sale. The sale
was completed in October 2007. In accordance with IFRS 5, this constitutes
a major geographical area. As such, the non-current assets must be
classified as held for sale and the operations must be reclassified to
discontinued.
c) Gross up of interest income from net interest costs.
d) Reclassification of the amortisation on goodwill to impairment of
goodwill as goodwill was completely impaired.
e) Reclassify long-term note from current liabilities.
f) Reclassify the foreign exchange reserve from the profit and loss account.
Application of IFRS has resulted in reclassification of certain items in the
cash flow statement as follows:
(i) Under UK GAAP, payments to acquire property, plant and equipment were
classified as part of 'Capital expenditure and financial investment'.
Under IFRS, payments to acquire property, plant and equipment have been
classified as part of 'Investing activities'.
There are no other material differences between the cash flow statement
presented under IFRS and the cash flow statement presented under UK GAAP.
ENDS
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