Half Yearly Report

RNS Number : 6054T

Blavod Wines and Spirits PLC

14 December 2012

 

14 December 2012

Blavod Wines and Spirits PLC

("Blavod" or the "Company")

Interim Results for the six months ended 30 September 2012

Blavod Wines and Spirits plc, the owner of the Blavod Black Vodka brand, and wines and spirits distributor, announces its unaudited interim results for the six months ended 30 September 2012.

Trading

Sales net of duty of £1.99 million (2011: £1.97 million) were slightly ahead of the corresponding period in the prior year. In the six months to 30 September 2012, increases in the revenue contributions from continuing agency brands offset the contributions lost from the portfolio of other  brands which were successfully managed out of the business towards the end of the last financial year. 

Owned brand gross profit margin was in line with 2011, in spite of a reduction in high stock levels in a key export market for Blackwood's Gin. Spend behind our owned brands decreased from £116,000 to £31,000 during the period. This reduction was primarily due to the delay in refinancing and the need to withdraw from certain brand activities whilst the Company managed working capital. These activities are slowly being reinstated now that the Company has been refinanced. 

Other administrative expenses were down by 17% to £468,000 (2011: £565,000) mainly due to reduced overheads at senior management level as well as reduced central office staff costs and expenses.

This resulted in a reduced loss before non-recurring expenses of £191,000 versus a loss of £393,000 in the corresponding period in 2011.

During this first half we embarked upon redirecting and refocusing the business. We have made steady progress but there is still much to do before we have our owned brands performing to their full potential.

Blavod Black Vodka volume sales were up by 5% in the period, benefitting from increased sales through our licensing agreement in continental Europe announced at the half year 2011. Blackwood's Gin sales net of duty were down 15% as we reduced stock inventory in a key export market. Our new brand of spiced rum, RedLeg, is performing well and continues to gather momentum following its test marketing.

Agency brands significantly outperformed the market with all continuing brands showing revenue growth during the period. Combined sales net of duty from continuing agency brands increased by in excess of 40% as brand distribution continued to grow across all key trade sectors.

The Company will continue to be cautious when extending credit.

Financing

On 19 October 2012, the Company was successfully refinanced following the conversion of £400,000 of loan notes (together with accrued, unpaid interest totalling £37,580) into equity and raising £1.2 million (before expenses) by way of a placing of new ordinary shares. The expenses associated with this amounted to £63,000. Prior to this placing the Company had incurred £277,000 of costs related to an aborted transaction which did not come to fruition.

Following on from this refinancing, the Directors believe that the Company has sufficient working capital to implement its strategy.

Outlook

Whilst we had aimed to achieve a result close to break even in the current financial year (before finance costs and non-recurring expenses) the delays in securing the recent refinancing have similarly delayed the implementation of the plan to develop our own brands.

Market conditions remain difficult as many retailers aggressively price promote to secure sales. However, premium brands are performing well in many categories and are showing promising growth. We remain focused on securing quality distribution both domestically and internationally.

Exports continue to offer healthier margins and we plan to sell into two to three new markets in the coming six months.

Don Goulding

Executive Chairman

Blavod Wines and Spirits plc - Half Year Results

Consolidated comprehensive interim income statement

	Six months	Six months	Year
	ended	ended	ended
	30 September	30 September	31 March
	2012	2011	2012
		Restated
	Un-audited	Un-audited	Audited
	£,000	£,000	£,000
Profit & Loss
Revenue	1,991	1,968	4,580
Cost of sales	(1,579)	(1,558)	(3,539)
Gross Profit	412	410	1,041
Advertising and promotional costs	(79)	(185)	(317)
Other administrative expenses	(468)	(565)	(1,126)
Non recurring expenses	(340)	-	-
Depreciation & amortisation	(4)	(4)	(9)
Impairment of intangible fixed assets	-	-	(22)
Total administrative expenses	(891)	(754)	(1,474)
Operating loss	(479)	(344)	(433)
Finance income	-	-	47
Finance expense	(52)	(49)	(115)
(Loss)before tax from continuing operations	(531)	(393)	(501)
Income tax	-	-	-
(Loss) for the period	(531)	(393)	(501)
Earnings per share:
From continuing operations
Basic (pence per share)	(0.60)	(0.45)	(0.57)
Diluted (pence per share)	(0.60)	(0.45)	(0.57)
Consolidated interim balance sheet
	As at	As at	As at
	30 September	30 September	31 March
	2012	2011	2012
	Un-audited	Un-audited	Audited
	£,000	£,000	£,000
ASSETS
Non current assets
Property, plant and equipment	22	25	24
Intangible fixed assets	1,410	1,411	1,403
Total non current assets	1,432	1,436	1,427
Current assets
Inventories	196	492	334
Trade and other receivables	1,119	1,335	978
Cash and cash equivalents	-	-	77
Total current assets	1,315	1,827	1,389
Total assets	2,747	3,263	2,816
LIABILITIES
Non current liabilities
Borrowings	(390)	(350)	(375)
Derivative	-	(48)	(1)
Total non current liabilities	(390)	(398)	(376)
Current liabilities
Bank and other borrowings	(19)	(6)
Trade and other payables	(1,221)	(1,052)	(874)
Finance facility liability	(689)	(739)	(607)
Total current liabilities	(1,929)	(1,797)	(1,481)
Total liabilities	(2,319)	(2,195)	(1,857)
Net Assets	428	1,068	959
EQUITY
Equity attributable to equity holders of the parent
Share capital	878	878	878
Shares to be issued	12	57	12
Retained earnings	(462)	133	69
Total Equity	428	1,068	959
Consolidated interim cash flow statement
	Six months	Six months	Year
	ended	End	ended
	30 September	30 September	31 March
	2012	2011	2012
Cashflows	Un-audited	Un-audited	Audited
Cashflows from operating activities	£,000	£,000	£,000
Operating loss	(479)	(344)	(433)
Adjustments for:
Depreciation	4	4	9
Impairment of intangible fixed assets	-	-	22
Profit on sale of intangible fixed assets	-	-	(1)
Loss on disposal of property, plant and equipment	-	-	1
Share based payment	-	6	5
	(475)	(334)	(397)
Movements in working capital
Decrease in inventories	138	91	249
(Increase)/decrease in accounts receivables	(141)	153	510
Increase/(decrease) in trade payables	346	129	(49)
Cash generated by by operations	343	373	710
Net finance expense	(37)	(49)	(90)
Net cash (used in)/ generated by operating activities	(169)	(10)	223
Cashflows from investing activities
Purchase of property, plant  & equipment	(2)	-	(5)
Expenditure relating to the acquisition and registration of licences and trademarks	(7)	(31)	(47)
Proceeds from disposal of licences and trademarks	-	-	3
Net cash (used in) investing activities	(9)	(31)	(49)
Cashflows from financing activities
Net cash received from/ (repaid to) from finance facility	82	(1)	(133)
Net cash received from/(used in) financing activities	82	(1)	(133)
Net (decrease)/increase in cash and cash equivalents	(96)	(42)	41
Cash & cash equivalents at the beginning of the period	77	36	36
Cash & cash equivalents at the end of the period	(19)	(6)	77

Notes:
1. Basis of preparation
This interim report was approved by the Board on 13 December 2012.  These consolidated financial statements are for the six months ended 30 September 2012.   They have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) Interpretations at 30 September 2012, as adopted by the European Union.  They do not include any 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 2012.  This condensed consolidated financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 March 2012 were approved on 4 September 2012.  These accounts, which contained an unqualified audit report under Section 495 of the Companies Act 2006, with an emphasis of matter paragraph on going concern, did not contain any statements under Section 498 of the Companies Act 2006 and have been delivered to the registrar of companies in accordance with Section 441 of the Companies Act 2006.
2. Prior year restatement
In prior years, the Group reported both turnover and cost of sales gross of excise duty.  With effect from 1 April 2011 the Group has presented both revenue and cost of sales net of excise duty as this presentation is considered to more fairly reflect the income and associated expense generated by the Group.  The amount of duty in the six months ended 30 September 2011 was £689,000 and the effect of this prior year restatement is to reduce both turnover and cost of sales by this amount.  The prior year restatement has no impact on the gross profit margin, consolidated balance sheet or the consolidated cashflow. IAS1 (revised) "Presentation of financial statements" requires presentation of comparative balance sheet at the beginning of the first comparative period in some circumstances, including when a change in account policy is applied.  Management considered that this is not necessary as the 2010 balance sheet is the same as that previously published.
3. Non recurring expenses
On 19th October 2012 the Company was successfully refinanced converting £400,000 of loan notes (together with accrued, unpaid interest totalling £37,580) into equity and raising £1.2m (before expenses) by way of a placing of new shares. The expenses associated with this amounted to £63,000. Prior to this placing, the Company had incurred £277,000 of costs related to an abortive transaction which did not come to fruition. The total of these non-recurring expenses (£340,000) is shown separately within our income statement.
4. Availability
Copies of this interim report will be available from the Company's head office at 3rd Floor, Cardinal House, 39/40 Albemarle Street, London, W12 4TE and also on www.blavodwinesandspirits.com.

For further information please contact:

Blavod Wines and Spirits plc
Don Goulding - Executive Chairman	Tel: [phone]
N+1 Singer (NOMAD & Joint Broker)
Richard Lindley Jonny Franklin-Adams	Tel: [phone] Tel: [phone]
Simple Investments (Joint Broker)
Nick Emerson Renato Rufus	Tel: [phone]
Cadogan PR
Alex Walters	Tel: [phone]

 

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