Preliminary Results
Blavod Extreme Spirits PLC
20 June 2005
20 June 2005
Blavod Extreme Spirits PLC
Preliminary Results
For the twelve months ended 31 March 2005
Trading Highlights
Financial
• Turnover increased 70% to £3.1m (2004: £1.8m)
• Full year case shipments increased by 114%
• Recorded a gross profit of £0.898m (2004: loss of £0.2m)
• Yearend Gross Margin of 29%, current trading gross margin of 33%
• Yearend Cash position of £2.1m
• Total case shipments for the first 2 months of the current fiscal year
are 95% ahead of the same period last year
Brands
• Favourable market trends for Blavod's portfolio of unique spirits brands
• Strong US sales of Blavod Black Vodka
• Added 13 new wine and spirit brand relationships during the year
• Distribution strengthening as portfolio expands
Joint Venture
• Announced LOI agreement in May to form a Joint Venture with leading
beverage producer
Commenting on the results, Chief Executive Officer, Jeff Hopmayer, said:
'Popularity and therefore demand for our core brands, including Blavod Black
Vodka and Players Extreme grew rapidly in fiscal year 2005. Over the year the
company invested significantly in repackaging and repositioning these brands and
it is satisfying to see the benefits from these actions coming through. For
example, through the first two months of the new fiscal year, case shipments of
Players Extreme have more than doubled over last year. While the Group is still
establishing its presence, the significant growth potential of our brands
remains apparent.'
Enquires:
Blavod Extreme Spirits plc
Jeff Hopmayer, Chief Executive
Fred Read, Finance Director
Cardew Group
Tim Robertson 020 7930 0777
Catherine Maitland
Chairman's Statement
This is my first statement to you as Chairman of Blavod Extreme Spirits ('the
Company' or 'Blavod') following my appointment in January 2005. I am therefore
pleased to report that Blavod has performed well, increasing case shipments by
114% driven by demand for key brands Blavod Black Vodka and Players Extreme.
This is an exciting period in the Company's development, as we look to
capitalise on the undoubted growth potential of our unique portfolio of brands.
During the year the Company has made good progress in building the Blavod Black
Vodka and Players Extreme spirit brands in the UK, US and international
markets. We have also successfully added a series of distribution agreements
with well known wine and spirits brands. As a result Blavod now markets 22 wine
and spirit brands.
A key focus at this stage in the Group's development is improving positioning of
Players Extreme. This year we repositioned Players Extreme and introduced new
packaging in September 2004. Blavod Black Vodka was re-launched throughout our
US distribution network.
Financial
Group turnover increased by 70% to £3.1m compared to £1.8m in the previous year.
As anticipated, the company, which is significantly investing in developing its
brands and creating the infrastructure to drive future revenues, recorded a loss
at the pre-tax level of £3.9m. The results were impacted in particular by the
repackaging of Players Extreme.
The Group's gross margin percentage for the year in review was 29%. Measures
have been taken to improve gross margins in the future. Current trading
indicates that our margins have increased to 33% and we anticipate that they
should continue to strengthen. Tight control of working capital has resulted in
a cash balance of £2.1m. The company has sufficient funding to pursue its
commercial objectives.
In line with previous statements no dividend is payable.
Blavod Black Vodka
Shipments of the Blavod Black Vodka in the UK market were up 23%, while
shipments in the critical US market were up 300%. Empirical evidence shows that
case sales through the important UK supermarket chains increased almost 22%.
Blavod Black Vodka continues to expand around the world where we've seen opening
or expansion of markets in Asia, the Middle East and Russia. At the same time,
utilizing our US distribution network, combined with marketing and promotional
efforts around the brand, Blavod Black Vodka has grown in popularity in the US.
Players Extreme
The new packaging of Players Extreme was made with an eye to creating a more
upscale image and becoming more efficient with consolidated production of all
our spirits in the UK. This was completed late summer 2004, with shipments
beginning in September/October, in time for the holiday selling season. Holiday
results were excellent and shipments for the year more than tripled.
Partnerships
As part of our strategy to balance the brand portfolio and improve revenues,
Blavod has formed a number of key partnerships with well respected brands to
distribute their products in the UK and the US. The Company now has 19
distribution relationships, including in the UK: Domaines Barons de Rothschild,
Fernet Branca, Mickey Finns, Molinari Sambuca and Royal Tokaji ; in the US a
line of Italian wines, including: Bruno Rocca, Baroncini, Catina Corbera,
Contadi Constaldi, Campo Bargello, Fersin Davide, Materia Prima, Petra, Tenuta
L'illuminata, Tenuta San Giorgio, Terpin, and Vinae Italiae. These are strong
relationships and all have no capital cost aside from stock purchase.
Our agency brands in the UK responded with sales increases of almost 82%
year-on-year. We believe these positive trends will continue in the future as
we work with our distributor and retail partners.
We also believe the recently announced signing of a letter of intent to form a
joint venture with a leading beverage producer is another important step forward
in our strategy to continue enhancing our performance.
Outlook
Current trading data for the new fiscal year is encouraging, and we are
significantly ahead of the same period last year. Our employees and partners
are great ambassadors of our products and brands, showing the kind of passion
every day that makes this company exciting.
The board believes that we are on course to continue developing our brands, to
increase market penetration and grow consumer awareness of our brands.
Colin Campbell
Chairman
Blavod Extreme Spirits plc
Consolidated Profit and Loss Account
For the year ended 31 March 2005
2005 2004
£'000 £'000
Turnover 3,116 1,825
Cost of sales (2,218) (1,178)
Exceptional cost of sales - stock re-packaging
provision - (869)
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Total cost of sales (2,218) (2,047)
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Gross profit/(loss) 898 (222)
Marketing and administrative expenses (4,998) (2,164)
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Operating loss (4,100) (2,386)
Bank interest receivable 182 54
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Loss on ordinary activities before taxation (3,918) (2,332)
Taxation - -
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Retained loss for the financial year (3,918) (2,332)
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Basic loss per share (5.99p) (8.50p)
Diluted loss per share (5.99p) (8.50p)
All of the group's activities are classed as
continuing.
Blavod Extreme Spirits plc
Statement of Total Recognised Gains and Losses
For the year ended 31 March 2005
2005 2004
£'000 £'000
Loss for the financial year (3,918) (2,332)
Foreign exchange differences on conversion of net
investments (122) -
------- -------
Total recognised losses for the year (4,040) (2,332)
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Blavod Extreme Spirits plc
Consolidated Balance Sheet
As at 31 March 2005
2005 2004
£'000 £'000
Fixed Assets
Intangible assets 3,946 4,161
Tangible assets 82 41
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4,028 4,202
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Current assets
Stock 866 249
Debtors 1,113 921
Cash at bank 2,142 7,293
------- -------
4,121 8,463
Creditors: amounts falling due within one year (824) (1,277)
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Net current assets 3,297 7,186
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Total assets less current liabilities 7,325 11,388
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Creditors: amounts falling due after one year (11) -
------- -------
Net assets 7,314 11,388
======== ========
Capital and reserves
Called up share capital 654 654
Share premium account 16,916 16,950
Profit and loss account (10,256) (6,216)
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Equity shareholders' funds 7,314 11,388
======= =======
Blavod Extreme Spirits plc
Consolidated Cash Flow Statement
For the year ended 31 March 2005
2005 2004
£'000 £'000
Cash outflow from operating activities (5,209) (2,287)
------- -------
Returns on investments
Interest received 182 54
------- -------
Net cash inflow from returns on investments 182 54
------- -------
Capital expenditure
Purchase of tangible fixed assets (77) (10)
Expenditure relating to the registration of
trademarks (11) (16)
------- -------
Net cash outflow for capital expenditure (88) (26)
------- -------
Acquisition
Expenses related to acquisition (34) (546)
Cash acquired with subsidiary - 2
------- -------
Net cash outflow relating to acquisitions (34) (544)
------- -------
Cash outflow before financing (5,149) (2,803)
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Financing
Issue of ordinary share capital - 10,000
Cost of share issue - (926)
Repayment of capital element of finance lease
rental (2) -
------- -------
Net cash (outflow)/inflow from financing (2) 9,074
------- -------
(Decrease)/increase of cash in the year (5,151) 6,271
======== ========
Blavod Extreme Spirits plc
NOTES for the year ended 31 MARCH 2005
1. Turnover
Turnover relates to the company's principal activity.
2005 2004
£000 £ 000
United Kingdom 1,400 965
Europe - EU 7 18
USA 1,409 512
Duty Free 127 184
Rest of World 173 146
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3,116 1,825
2. Loss per share
The loss per share is based upon a loss of £3,918,000 (2004: loss of
£2,332,000) and the weighted average number of shares ranking for
dividend during the year of 65,443,633 (2004: 27,443,139).
The fully-diluted loss per share is based upon the loss as disclosed
above and the weighted average number of shares ranking for dividend
during the year of 65,443,633 (2004: 27,443,139) adjusted for the effects
of all dilutive potential shares.
3. Basis of preparation
The financial information set out in this document does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act
1985. The statutory accounts for the year ended 31 March 2005, on which
the auditors gave an unqualified audit report, will be delivered to the
Registrar of Companies in due course.
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
Evolution Securities Limited at 100 Wood Street, London, EC2V 7AN.
This information is provided by RNS
The company news service from the London Stock Exchange