Interim Results
International Brand Licensing PLC
26 September 2002
On behalf of: International Brand Licensing Plc
Date: 25th September 2002
Preliminary Interim results for 2002
Chairman's Statement
International Brand Licensing
International Brand Licensing Plc (IBL), the AdmiralTM and Mountain EquipmentTM
brand ownership and licensing business, was successfully demerged from Hay &
Robertson plc on 5 June 2002. The strategy of this new company is to continue
to develop and grow the licensing income generated by the AdmiralTM and Mountain
EquipmentTM brands and to further build a portfolio of brands through a series
of acquisitions and representation agreements.
As the demerged business has operated as a subsidiary within Hay & Robertson plc
for some years, we are reporting for the six months ended 30 June 2002, along
with comparisons of trading from the same six month period last year, and for
the twelve months to 31 December 2001. In the first half of 2002 turnover more
than doubled to £820,000 from £395,000 with pre-tax profits before exceptional
items rising to £412,000 from £45,000.
During the period, we appointed a new AdmiralTM master licensee in Japan with
terms agreed with new licensee partners in Benelux, Germany, Italy, Australia,
the Caribbean and the Middle East. Our UK teamwear licensee entered into a new
four-year sponsorship agreement with Wolverhampton Wanderers F.C. and our joint
venture partners in Asia completed a five-year apparel sponsorship of the
Minardi F1 Racing Team. These attachments, along with the kit sponsorships
already in place with the England, South African and West Indies cricket teams
will continue to ensure significant market presence for the brand.
Mountain EquipmentTM products continue to receive prestigious consumer awards
and, subsequent to the appointment of our new licensee partner in Japan, product
is now available in Japanese stores for the first time.
As stated at the time of our flotation, it is our firm intention to add to our
portfolio of brands. We are currently in talks with several brand owners and
will report the outcome of these discussions in due course.
A first agreement has been reached with Cherokee Inc., the Nasdaq quoted, US
brand ownership and licensing business. IBL will assist Cherokee in the
identification and appointment of licensee partners in Europe. We hope to
extend this relationship over the coming months to cover additional Cherokee
represented brands in addition to Cherokee identifying and consulting IBL in
relation to the appointment of retail licensee partners in the USA and Canada
for brands either owned or represented by IBL. Both companies will receive an
agreed percentage of the royalty income received from the licensee partners
introduced by the other party. We believe this association will prove to be
extremely important as we grow our portfolio of brands, giving us an excellent
entre into the highly lucrative North American market.
Your Board looks forward to the future in a buoyant mood and are confident of
building a business that will create value for all our shareholders'; not only
through the income our brands will generate, but also through the inherent
growth in their value as our income streams grow.
Ends
For further information, please contact:
Lance Yates
International Brand Licensing Plc 0207 691 2200
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
6 MONTHS ENDED 30 JUNE 2002
Notes 6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
£000 £000 £000
TURNOVER 820 395 1,096
Administrative expenses (519) (267) (626)
TOTAL OPERATING PROFIT 301 128 470
Interest payable (40) (83) (167)
261 45 303
PROFIT ON ORDINARY ACTIVITIES BEFORE TAX
- before exceptional items 412 45 303
- operating exceptional items 2 (151) 0 0
261 45 303
Tax on ordinary activities (88) (20) (9)
PROFIT ON ORDINARY ACTIVITIES AFTER TAX 173 25 294
Ordinary dividend on equity shares 0 0 (252)
RETAINED PROFIT FOR THE PERIOD 173 25 42
EARNINGS PER ORDINARY SHARE
- before exceptional items
- basic 4 1.4 p 0.1 p 0.2 p
- diluted 4 1.4 p 0.1 p 0.2 p
- after exceptional items
- basic 4 0.8 p 0.1 p 0.2 P
- diluted 4 0.8 p 0.1 p 0.2 P
STATEMENT OF TOTAL RECOGNISED GAINS AND
LOSSES
Profit for the period 173 25 42
Exchange differences 56 (10) (3)
Total recognised gains and losses relating to 229 15 39
the period
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2002
30 June 2002 30 June 2001 31 December 2001
£000 £000 £000 £000 £000 £000
FIXED ASSETS
Intangible assets 5,559 4,797 5,223
Tangible assets 19 4 20
5,578 4,801 5,243
CURRENT ASSETS
Debtors 334 259 190
Cash at bank and in hand 452 12 15
786 271 205
CREDITORS
Creditors: amounts falling due within one year (3,555) (2,695) (3,393)
NET CURRENT LIABILITIES (2,769) (2,424) (3,188)
TOTAL ASSETS LESS CURRENT LIABILITIES 2,809 2,377 2,055
CREDITORS
Creditors: amounts falling due after one year 0 (2,186) (1,841)
NET ASSETS 2,809 191 214
SHARE CAPITAL AND RESERVES
Share capital 276 213 213
Share premium 1,887 0 0
Merger reserve 244 (172) (172)
Profit and loss account 402 150 173
SHAREHOLDERS' FUNDS 2,809 191 214
THE FINANCIAL STATEMENTS WERE APPROVED BY THE BOARD ON 25 SEPTEMBER 2002
G M SHEPHERD
INTERNATIONAL BRAND LICENSING PLC
CONSOLIDATED CASH FLOW STATEMENT
6 MONTHS ENDED 30 JUNE 2002
Notes 6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
£000 £000 £000 £000 £000 £000
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 5 184 (47) 187
TAX
Foreign taxes paid (96) (45) (45)
(96) (45) (45)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of intangible fixed assets 0 0 (210)
Purchase of tangible fixed assets 0 (4) (29)
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND 0 (4) (239)
FINANCIAL INVESTMENT
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 88 (96) (97)
FINANCING
Repayment of inter-company balances to Hay & Robertson (1,600)
plc on demerger
Issue of ordinary shares 2,500 0 0
Less expenses of issue (550) 0 0
NET CASH INFLOW FROM FINANCING 350 0 0
INCREASE/(DECREASE) IN CASH IN THE PERIOD 6 438 (96) (97)
INTERNATIONAL BRAND LICENSING PLC
NOTES TO THE INTERIM REPORT
6 MONTHS ENDED 30 JUNE 2002
1. BASIS OF PREPARATION AND ABRIDGED ACCOUNTS
International Brand Licensing Plc (the Group) came into existence on 5 June 2002
following the demerger of International Brand Holdings Ltd and its subsidiary
Hay & Robertson International Licensing AG from Hay & Robertson plc. Of the
£4.6 million of former inter-company balances repayable to Hay & Robertson plc
under the terms of the demerger agreement, £1.6 million was repaid during the
period. £3 million remains outstanding and is recorded in creditors in less
than the one year.
The financial information for the six months ended 30 June 2002 has been
prepared on the basis of the current accounting policies of the Group and is
un-audited. The Group will present its accounting policies in its first full
set of financial statements for the year ended 31 December 2002. The figures
for the year ended 31 December 2001 have been prepared from the audited
financial statements of Hay & Robertson International Licensing AG on which a
clean audit opinion was given. The financial information has been prepared
under the historic cost convention and in accordance with applicable United
Kingdom law and accounting standards.
The financial information set out on pages 1 to 4 does not constitute full
financial statements within the meaning of the Companies Act 1985.
Policies applied by the Directors in preparing the accounts are set out below:
- The accounts have been prepared using merger accounting principles, as if the
companies comprising the Group had been part of the Group for the periods
presented.
- Funding provided by Hay & Robertson plc to the Group businesses has been
included in creditors and net debt at 30 June 2002, 31 December 2001 and 30
June 2001. The long-term portion of the balance between the Group and Hay &
Robertson plc had been interest bearing. The Group's net interest charges in
the periods to 30 June and 31 December 2001 and in the current year to 30 June
2002, relate to interest on these inter-company balances.
- Transactions and balances between companies in the Group have been eliminated.
- Administrative expenses for the Group in the period between demerger and 30
June 2002 include recharges made by Hay & Robertson plc in respect of
accountancy, secretarial and other related services.
- Dividends paid during the year ended 31 December 2001, represented amounts
payable to Hay & Robertson plc in accordance with Swiss statutory requirements.
INTANGIBLE ASSETS
Intangible assets represent acquired trademarks and are recorded at historical
cost. No amortisation is charged as they are regarded as having infinite lives.
The annual results reflect the significant expenditure incurred in 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 license income and marketing arrangements with the view to
maximising long-term growth. The Directors believe the license agreements will
be renewed at the end of their legal expiry dates and 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.
2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAX
Exceptional items
For the period to 30 June 2002 exceptional operating costs of £151,000 were
incurred in connection with the demerger transaction and related primarily to
professional services costs.
3. TAXATION
The tax charge for the six months ended 30 June 2002 has been calculated on the
basis of the estimated effective tax rate for the half year. The tax credit on
the operating exceptional items for the full year was £20,000.
4. EARNINGS PER ORDINARY SHARE
6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
No. No. No.
Weighted average ordinary shares in issue during the 22,205,790 21,308,000 21,308,000
period
Dilutive effect of share options 0 0 0
Diluted weighted average ordinary shares 22,205,790 21,308,000 21,308,000
6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
£000 £000 £000
Profit for the period before exceptional items 324 25 42
Exceptional items (151) 0 0
Net profit for the financial period 173 25 42
Pence Pence Pence
Basic earnings per 1p ordinary share
before exceptional items 1.4 0.1 0.2
after exceptional items 0.8 0.1 0.2
Diluted earnings per 1p ordinary share
before exceptional items 1.4 0.1 0.2
after exceptional items 0.8 0.1 0.2
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
6 MONTHS ENDED 30 JUNE 2002
5. Reconciliation of operating profit to net cash flow from operating
activities
6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
£000 £000 £000
Operating profit 301 128 470
Depreciation 1 2 9
Increase in debtors (126) (128) (51)
Increase/(decrease) in creditors 8 (49) (241)
184 (47) 187
6. Reconciliation of net cash flow to movement in net debt:
6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
£000 £000 £000
Increase/(decrease) in cash in the period 438 (96) (97)
Non-cash movements 1,930 401 864
Exchange differences (90) 112 (3)
Net debt at beginning of the period (1,826) (2,590) (2,590)
452 (2,173) (1,826)
7. Analysis of net debt:
At Cash flow Non-cash Exchange At
1 January Movements difference 30 June
2002 2002
Cash at bank 15 438 0 (1) 452
Hay & Robertson loan (1,841) 0 1,930 (89) 0
(1,826) 438 1,930 (90) 452
Non-cash movements reflect the transfer of the Hay & Robertson loan to creditors
due in less than one year. Under the terms of the demerger agreement, the Hay &
Robertson loan and other inter-company lending to the Group became repayable in
full on completion.
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