Interim Results
Embargoed: 07:00hrs 15th August 2005
International Brand Licensing PLC
('IBL' or the 'Company')
Interim Results for the 6 month period ended 30 June 2005
Chairman's Statement
I am pleased to present my first statement as Chairman of a company that I have
taken great interest in since its admission to AIM in 2002.
For the six months ending 30 June 2005 turnover increased by £130,000 to £
1,456,000 (2004: £1,326,000) and profits on ordinary activities before tax
increased by £50,000 to £101,000 (2004: profit of £51,000); in addition, an
exceptional gain before tax of £534,000 was generated on the disposal of the
Mountain Equipment trademarks.
The 9.8% increase in turnover is almost all attributable to exceptional sales
of the Admiral England cricket replica kit in advance of, and during, the long
summer programme against Australia. With England well positioned in the current
Ashes Series that continues through to the middle of September, Admiral cricket
sales in 2005 will achieve a record level for the second successive year.
The media coverage of England cricket this year has reached unprecedented
levels, as has the visibility of the Admiral brand both on television and
through the press. This widespread exposure of the Admiral logo, together with
that achieved through the number of Admiral cricket replica shirts sold and
worn, has significantly raised the profile of the brand, adding further value
for the future.
Other than the cricket replicas, Admiral sales at ASDA during the first half of
the year were below the levels of 2004 which themselves were boosted by the
Euro 2004 Football Championship. However, with new products being launched
during the second half of the year, we are confident that overall sales at ASDA
in 2005 will show a strong increase on 2004 despite the difficult trading
conditions of the UK retail sector.
In February we entered into a new long term license agreement with IPGI Inc for
Admiral in Japan. Admiral has been present in the traditional Japanese
sportswear market for over twenty years, but this new representation will drive
Admiral into the huge and lucrative Japanese sports fashion sector for the
first time.
The company is presently involved in negotiations with potential Admiral
licensee partners in several other major international markets, and if
successfully concluded these new alliances will generate valuable additional
revenue streams in the years to come.
On 28th April we announced the sale of the Mountain Equipment trademarks to
Swiss Cutlery for a cash consideration of £3,000,000. The proceeds were used to
pay off the balance of the company's term loan, and to invest in additional
Admiral cricket inventory to service the demand this season. In terms of the
royalties received since its acquisition in 1999 together with the sale
proceeds, this represented an excellent transaction for the company.
On 21st April we announced the appointment of Gordon Hall as non executive
director, and further Board changes were announced on 28th June with the
resignation of Mark Kirkland as Finance Director, and the appointment of his
successor, Paul Foulger. My transition from non executive director to non
executive Chairman was also announced on the same day. The Board would like to
thank Mark for his contribution to the company and at the same time welcome
Paul who brings with him extensive experience of public company operations.
The current year finds the company in a much stronger and healthier position
than at any time since its foundation. Having eliminated its debt and
strengthened the balance sheet, the company can now focus on driving forward
its major asset, Admiral, where the opportunities are extensive. The Board is
very confident that future prospects are significant, and that 2005 will
represent the start of a strong period of growth.
Adam Reynolds
Chairman
15th August 2005
Group Profit and Loss Account
For the period ended 30 June 2005
6 month 6 month Year ended
period ended period ended 31 December
30 June 30 June 2004
2005 2004
(unaudited) (unaudited) (audited)
Notes £000 £000 £000
Turnover 1,456 1,326 2,235
Cost of sales (521) (322) (561)
_________ __________ __________
Gross Profit 935 1,004 1,674
Administrative expenses (770) (864) (1,963)
_________ __________ __________
Operating Profit/(Loss) 165 140 (289)
Exceptional profit on sale of 534 - -
intangible fixed asset
Interest payable and similar (64) (89) (216)
charges
_________ __________ __________
Profit/(Loss) on ordinary 635 51 (505)
activities before tax
Tax on ordinary activities
-current year (36) (63) (84)
-prior year - (70) ï¼
-on Exceptional item (153) - -
__________ __________ __________
(189) (133) (84)
Profit/(Loss) on ordinary 446 (82) (589)
activities after tax
Ordinary dividend on equity - - -
shares __________ _________ __________
Retained Profit/(Loss) for the 446 (82) (589)
period ========== ========= ==========
Earnings/(Loss) per ordinary
share
- basic 3 1.3p (0.3p) (1.9p)
- diluted 3 1.3p (0.3p) (1.9p)
Group Statement of Total Recognised Gains and Losses
For the period ended 30 June 2005
6 month 6 month Year ended
period ended period ended 31 December
30 June 30 June 2004
2005 2004
(unaudited) (unaudited) (audited)
£000 £000 £000
Profit/(Loss) for the period 446 (82) (589)
Exchange differences (276) (145) 28
--------- ---------- ----------
Total recognised gains or 170 (227) (561)
losses relating to the period
========= ========== ==========
Group Balance Sheet
For the period ended 30 June 2005
30 June 2005 30 June 2004 31 December
2004
(unaudited) (unaudited) (audited)
Notes £000 £000 £000
Fixed assets
Intangible assets 3,391 5,659 5,952
Tangible assets 12 18 15
---------- ---------- ----------
3,403 5,677 5,967
---------- ---------- ----------
Current assets
Stock 329 271 217
Debtors 1,612 944 364
Cash at bank and in hand 63 9 109
---------- ---------- ----------
2,004 1,224 690
Creditors: amounts falling due (2,122) (2,237) (3,542)
within one year
---------- ---------- ----------
Net current liabilities (118) (1,013) (2,852)
---------- ---------- ----------
Total assets less current 3,285 4,664 3,115
liabilities
Creditors: amounts falling due - (1,937) -
after more than one year
---------- ---------- ----------
Net assets 3,285 2,727 3,115
========== ========== ==========
Capital and reserves
Share capital 333 303 333
Share premium 3,048 2,356 3,048
Merger reserve 244 244 244
Profit and loss account (340) (176) (510)
---------- ---------- ----------
Equity shareholders' funds 3,285 2,727 3,115
========== ========== ==========
The financial statements were approved by the Board on 15th August 2005
Group statement of cash flows
For the period ended 30 June 2005
6 month 6 month Year ended
period ended period ended 31 December
30 June 2005 30 June 2004 2004
(unaudited) (unaudited) (audited)
Notes £000 £000 £000
Net cash inflow/(outflow) from 5(a) 21 (429) (430)
operating activities
Returns on investments and
servicing of finance
Interest paid (67) (89) (224)
Taxation
Tax paid - (9) (198)
Capital expenditure and
financial investment
Purchase of intangible fixed (41) - (82)
assets
Proceeds from sale of 2,639 - -
intangible fixed asset
---------- --------- ----------
Net cash inflow/(outflow) 2,552 (527) (934)
before financing
---------- ---------- ----------
Financing
Repayment of bank borrowings (2,563) - (250)
Issue of ordinary shares - 496 1,329
Less Expenses of issue - - (111)
---------- ---------- ----------
Net cash (outflow)/inflow from (2,563) 496 968
financing
---------- ---------- ----------
(Decrease)/increase in cash in 5(b) (11) (31) 34
the period
========== ========== ==========
Notes to the Interim Report
At 30 June 2005
1. Basis of preparation and abridged accounts
The financial information for the 6 months ended 30 June 2005 is prepared under
the historical cost convention and in accordance with applicable United Kingdom
law and accounting standards and has been prepared on the basis of the
accounting policies set out in the group's statutory accounts for the year
ended 31 December 2004 and is unaudited.
The financial information set out on pages 3 to 6 does not constitute full
financial statements as defined in section 240 of the Companies Act 1985. The
financial information for the full preceding year is based on the statutory
accounts for the financial year ended 31 December 2004. These accounts, upon
which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies.
Intangible assets
Intangible assets represent acquired trademarks and are recorded at historic
cost. No amortisation is charged as they are regarded as having infinite lives.
The results reflect the significant expenditure incurred in the support and
development of these brands. In addition, the trademarks are supported by the
existence of international licensee agreements, which establish obligations as
to guaranteed minimum licence income and marketing arrangements with the view
to maximising long-term growth. The directors believe that the licence
agreements will be renewed at the end of their legal expiry dates and that the
value of the trademarks will be maintained. The carrying values are reviewed
annually in accordance with Financial Reporting Standard No. 11 'Impairment of
fixed assets and goodwill' with a view to write down if impairment arises.
Stock
Stocks are stated at the lower of cost and net realisable value.
2. Tax
The tax charge for the six month period ended 30 June 2005 is calculated on the
basis of the standard corporate tax rate for the full year.
3. Earnings/(Loss) per ordinary share
6 month period 6 month period Year ended 31
ended 30 June ended 30 June December 2004
2005 2004
No. No. No.
Weighted average ordinary shares 33,343,353 29,874,281 30,864,935
in issue during the period
Dilutive effect of share options 329,005 252,197 276,229
------------ ----------- ------------
Diluted weighted average ordinary 33,672,358 30,126,478 31,141,164
shares
============ =========== ============
£000 £000 £000
Net profit/(loss) for the 446 (82) (589)
financial period
============ =========== ============
Pence Pence Pence
Basic earnings/(loss) per 1p 1.3 (0.3) (1.9)
ordinary share
Diluted earnings/(loss) per 1p 1.3 (0.3) (1.9)
ordinary share
4. Notes to the statement of cash flows
(a) Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from
operating activities
6 month 6 month Year ended 31
period ended period ended December 2004
30 June 2005 30 June 2004
£000 £000 £000
Operating profit/(loss) 165 140 (289)
Depreciation 1 4 7
(Increase)/decrease in debtors (1,248) (565) (30)
(Increase)/decrease in stock (112) (201) (147)
Increase/(decrease) in creditors 985 199 60
Gain/(loss) on exchange (304) (6) (31)
Exceptional profit on sale of 534 - -
intangible asset
----------- ----------- -----------
21 (429) (430)
=========== =========== ===========
(b) Reconciliation of net cash flow to movement in net debt
6 month period 6 month period Year ended 31
ended 30 June ended 30 June December 2004
2005 2004
£000 £000 £000
(Decrease)/increase in cash in (11) (31) 34
the period
Decrease in bank borrowings 2,563 - 250
----------- ----------- -----------
Change in net debt arising from 2,552 (31) 284
cash flows
Exchange differences - -
Net debt at beginning of period (2,489) (2,773) (2,773)
----------- ----------- -----------
63 (2,804) (2,489)
=========== =========== ===========
(c) Analysis of net debt
At 1 Cash Exchange At 30
January flows differences June
2005 2005
£000 £000 £000 £000
Cash at bank 74 (11) - 63
Bank borrowings (2,563) (2,563) - -
------- -------- -------- ---------
(2,489) (2,574) - 63
======= ======= ======== =========
For further information please contact:
Adam Reynolds, Chairman
Paul Foulger, Finance Director
International Brand Licensing Plc
+44 (0)20 7245 1100
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