Interim Results

RNS Number : 8299I
Blavod Extreme Spirits PLC
25 November 2008
 



Blavod Extreme Spirits PLC ('Blavod' or 'the Group')

Interim Results for the six months to 30 September 2008


Blavod Extreme Spirits PLC (AIM: BES), the owner and licencee of a number of spirits brands including Blavod Black Vodka and Blackwood's Gin and Vodka worldwide, and a distributor of a number of branded spirits and wines in the UK, announces its interim results for the six months to 30 September 2008.


Chairman's Statement


Blavod announces that sales increased 36% to £2.47 million in the first six months of the financial year ending 30th September 2008.  The Group made an interim profit before tax for the first time of £43k (2007: loss £1.321 million).  Stripping out discontinued operations from the comparative period last year, this shows an improvement of some £120k.


Sales grew across all brands in both 
UK and export markets.  Blavod Black Vodka grew by 11%. While the export business flourished, UK volumes were held back because the brand was absent temporarily from the shelves of one major customer. 


Blackwoods Gin and Vodka, which the Group began to sell in the summer, took time to reach full production. However, distribution was achieved in many of the targeted up-scale outlets and sales were encouraging.  Our first export sales were made in the period and there is continued high level of interest in the brand.


Gross margin is an important measure of performance.  Reported revenue includes excise tax on sales to some UK customers: the Group makes no margin on this activity as a tax-collector. .Gross margin on sales net of excise tax was 28%, the comparative figure in 2007 was 29.7%.  Commission income, which is included in revenue and gross profit, rose only marginally in the period, and this accounts for the slight decline in the overall rate of gross margin. 


Administrative costs increased by 4%, due to higher promotional expenditure behind Blavod Black Vodka and the recruitment of an additional salesperson.  In total, other administration costs were reduced.

Finances, already bolstered by raising £400k of new capital in December 2007, were further strengthened by arranging an invoice discounting facility in the spring.

Prospects

A strong level of forward orders and customer forecasts has encouraged the increase of promotional budgets and allows the Board to be confident of a strong performance over the Christmas season.  Furthermorehigher margin export interest in the brands is increasing, particularly in Russia and in the bellwether Duty Free markets.


Whilst these factors are encouraging, it would however be rash to forecast that current economic conditions will not affect levels of demand or put pressure on margins in due course. 


The performance, in what is traditionally the weaker half of the year would, in more congenial economic times, justify the recruitment of people to develop our potential and substantially increased investment in advertising and promotion. However, given the current environment we believe it is more appropriate for the Group to continue to maintain a cautious approach and strict control of all costs. We shall thus be well-placed for faster expansion when the economic climate improves. 


Finally the Directors have decided, after a review of the audit services provided to the Group, to propose the appointment of Grant Thornton LLP in place of Nexia Smith & Williamson Audit Limited as the Group's auditor.



Colin Campbell


Non-executive Chairman


For further information, please contact: 

Blavod Extreme Spirits plc 

Richard Ambler (Managing Director) 0207 352 2096 

Brewin Dolphin (Nominated Adviser) 

Neil Baldwin/Alison Barrow 0845 270 8600

Condensed consolidated interim income statement


 
 
Six months ended
30 September
2008
Six months ended
 30 September
2007
Year ended
31 March
2008
 
 
Un-audited
Un-audited
Audited
 
 
 
 
 
 
 
£’000
£’000
£’000
 
 
 
 
 
Revenue
 
2,473
1,815
4,092
 
 
 
 
 
Cost of sales
 
(1,837)
(1,340)
(3,091)
 
 
 
 
 
Gross profit
 
636
475
1,001
 
 
 
 
 
Administrative costs
 
(583)
(558)
(1,166)
 
 
 
 
 
Operating profit/(loss)
 
53
(83)
(165)
 
 
 
 
 
Finance (expense)/income
 
(10)
6
10
 
 
 
 
 
Net finance (cost)/income
 
(10)
6
10
 
 
 
 
 
Profit/(loss) before tax from
        continuing operations
 
 
43
 
(77)
 
(155)
 
 
 
 
 
Discontinued operations
 
 
 
 
(Loss)/profit for the period from discontinued operations
 
 
-
 
(1,244)
 
1,238
 
 
 
 
 
Profit/(loss) for the period
 
43
(1,321)
1,083
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
From continuing operations
 
 
 
 
 
 
 
 
 
Basic (pence per share)
 
0.05
(0.11)
(0.20)
 
 
 
 
 
Diluted (pence per share)
 
0.05
(0.11)
(0.20)



Condensed consolidated interim balance sheet


 
 
As at
 30 September
2008
As at
 30 September
2007
As at
31 March
2008
 
 
Un-audited
Un-audited
Audited
 
 
 
 
 
 
 
£’000
£’000
£’000
 
 
 
 
 
ASSETS
 
 
 
 
Non current assets
 
 
 
 
Property, plant and equipment
 
6
1
1
Intangible assets
 
1,066
641
615
 
 
 
 
 
Total non-current assets
 
1,072
642
616
 
 
 
 
 
Current assets
 
 
 
 
Inventories
 
288
230
220
Trade and other receivables
 
1,396
881
1,057
Cash and cash equivalents
 
63
247
502
 
 
1,747
1,358
1,779
Non current assets classified as held for sale
 
-
1,306
-
 
 
 
 
 
Total current assets
 
1,747
2,664
1,779
Total assets
 
2,819
3,306
2,395
 
 
 
 
 
LIABILITIES
 
 
 
 
Current liabilities
 
 
 
 
Trade and other payables
 
(1,310)
(1,079)
(929)
Liabilities directly associated with non-current
   assets classified as held for sale
 
 
-
 
(2,923)
 
-
 
 
 
 
 
Total current liabilities
 
(1,310)
(4,002)
(929)
 
Total liabilities
 
 
(1,310)
(4,002)
 
(929)
 
 
 
 
 
Net assets/(liabilities)
 
1,509
(696)
1,466
 
 
 
 
 
EQUITY
 
 
 
 
Equity attributable to equity holders of the
   parent
 
 
 
 
Share capital
 
878
732
878
Share premium account
 
18,489
18,240
18,489
Shares to be issued
 
96
1,105
682
Other reserve
 
-
26
-
Profit and loss account
 
(17,954)
(21,442)
(18,583)
Translation reserve
 
-
643
-
 
 
 
 
 
 
 
 
 
 
Total equity
 
1,509
(696)
1,466


Condensed consolidated interim cash flow statement


 
 
 
Six months ended
30 September
2008
 
Six months ended
30 September
2007
 
Year ended
31 March
2008
 
 
Un-audited
Un-audited
Audited
 
 
 
 
 
 
 
£’000
£’000
£’000
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
Profit/(loss) before taxation
 
43
(1,321)
1,083
Adjustments for:
 
 
 
 
        Depreciation
 
-
33
32
        Amortisation
 
27
41
54
        Share-based payment
 
-
12
27
        Share of losses in associates
 
-
223
-
        Net foreign exchange (gain)/loss
 
9
43
(66)
        Net finance costs/(income)
 
-
112
(10)
        Disposal of US operations
 
-
-
(2,274)
 
 
 
 
 
 
 
79
(857)
(1,154)
Movements in working capital
 
 
 
 
         (Increase)/decrease in inventories
 
(68)
91
1,523
         (Increase)/decrease in trade receivables
 
(339)
164
524
         Increase/(decrease) in trade payables
 
381
516
(1,335)
 
 
 
 
 
Cash gained from/(used by) operations
 
53
(86)
(442)
Interest paid
 
(12)
(91)
(79)
 
 
 
 
 
Net cash used in operating activities
 
41
(177)
(521)
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
Interest received
 
2
6
10
Purchase of property, plant and equipment
 
(5)
(38)
-
Proceeds from the sale of subsidiary and associate
 
-
-
220
Expenditure relating to the registration of trademarks
 
(478)
-
(3)
 
 
 
 
 
Net cash used in investing activities
 
(481)
(32)
227
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
Proceeds from the issue of share capital
 
-
-
395
Proceeds from long term borrowings
 
-
66
-
 
 
 
 
 
Net cash from financing activities
 
-
66
395
 
 
 
 
 
Net (decrease)/increase in cash and cash equivalents
 
(440)
(143)
101
Cash and cash equivalents at beginning of period
 
502
401
401
Effects of exchange rate changes on balance of cash held in foreign currencies
 
 
1
 
(2)
 
-
 
 
 
 
 
Cash and cash equivalents at end of period
 
63
256
502

 


N
otes:


1. Basis of preparation: un-audited, but in accordance with the Group's accounting policies as declared as at 31 March 2008


2. Availability of interim statement


Copies of this interim statement will be available from the Group's head office at 202 Fulham RoadLondonSW10 9PJ

In addition they are available on the Group's website: www.blavodextreme.com 




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