Half Yearly Report

RNS Number : 0621S

Blavod Wines and Spirits PLC

04 November 2013

 

4th November 2013

Blavod Wines & Spirits plc

("Blavod" or the "Company")

Interim Results for the six months ended 30th September 2013

Blavod Wines & Spirits plc (AIM: BES), owner of premium drinks brands including Blavod Black Vodka, Blackwoods Gin and Vodka and RedLeg Spiced Rum, today announces its unaudited interim results for the six months ended 30th September 2013.

Highlights

·     Completion of acquisition of Blackwoods Gin, Blackwoods Vodka, Diva Vodka and Jago's Vanilla Cream Liqueur.

·     Appointment of Hi-Spirits Ltd as UK distributor for Blavod owned brands

·     Selected third party brands' UK distribution agreements ended including Bruichladdich.

·     Redesign and launch of Blackwoods Gin 40% in August 2013.

·     Launch of Blackwoods 60% in October 2013 and Blackwoods Vodka in November 2013.

·     On target to achieve monthly breakeven in the early part of next financial year.

Key Financials - versus same period last year

·     Gross profit from owned brands up by 21%

·     Margins on owned brands rise from 42% to 47%.

·     Financing costs reduced by 68%.

·     Staffing cost reduced by 15%.

·     Total administrative  expenses reduced by 45 %, recurring administrative expenses reduced by 11%.

Don Goulding, Executive Chairman of Blavod, said:

"We remain on target to achieve monthly breakeven in the early part of the next financial year and are now beginning to see the returns from our own brands grow progressively. RedLeg's contribution to profits increases monthly and we are excited about the prospects of the newly launched Blackwoods 40% and 60% Gin and Blackwoods Vodka which is to be launched later this month. This, coupled with a selection of other owned brands to be developed and a strong balance sheet means we are well placed to develop the business further and increase shareholder returns".

Executive Chairman's statement

Results

Gross profits and margins from our owned brands rose significantly in the period as we continue to transform the business model from being focused on achieving turnover and profit from third party agency brands to creating shareholder value through the active development and promotion of our own brands and the building of their sales in the UK and internationally.

Importantly in the period we appointed Hi-Spirits Ltd to distribute our owned brands in the UK and this allowed us to reduce staffing costs significantly as well as simplifying the business. All redundancy costs associated with this have now been completed and are included within the half year results.

Gross margin from our owned brands as a percentage of sales rose moving from 42% to 47% as a result of an improved product mix and our withdrawal from unprofitable deals.

Since the period end we announced that the Group had raised £571,300 (gross) through a placing of 57.13 million New Ordinary Shares with new and existing investors.  These funds will be deployed for working capital, brand marketing and activation and also the development of new brands.

Operations

Market conditions continue to be favourable in the premium brands sector and we remain well placed to develop our own brands both in the UK and internationally. Several of the larger players have recently announced plans to increase their investment in some of the same categories in which we participate such as rum, we believe this may increase consumer interest in these categories, from which we stand to benefit.

Sales of RedLeg Spiced Rum continued to grow both in the UK and overseas with repeat orders being received from Australia, where it is distributed in 450 BWS stores (beer, wines & spirits) and 175 Dan Murphy liquor stores and also domestically where it is now distributed by Hi-Spirits Ltd. In the USA, RedLeg is currently being promoted to distributors in twelve major cities after winning the double gold medal in its category at the San Francisco World Spirits Competition earlier in the year.

During November and December 2013 the pop-up RedLeg Rum Shack will appear in major UK cities including Edinburgh, Glasgow, Manchester, Leeds, Newcastle, London, Bristol and Brighton. 

The RedLeg Rum Shack will be featuring four of RedLeg's most popular cocktails; 'Apple Shack', 'Ginger Mojito', 'Hot Rum Slap' and 'RedLeg Libre'. The promotion will be supported with social media activity.

Following the acquisition of Blackwoods Gin, Blackwoods Vodka, Diva Vodka and Jago's  Vanilla Cream Liqueur announced in May 2013, we reviewed the positioning of these brands and, with the available resources that we have, began the process of re-designing and improving each of them with a view to re-launching progressively over the coming months. First to be re-launched was Blackwoods Gin 40% in August.

In October we re-launched Blackwoods 60% and during November we will be launching a completely new look and reformulated Blackwoods Botanicals Vodka which is five times distilled and then bonificated using Shetland botanicals to produce a smooth tasting 40% ABV vodka which is perfect for cocktails. Blackwoods new-look website will reflect the new packaging designs for the brand and is planned to go live in November.

Blackwoods is currently stocked in a number of on-trade outlets as well as UK grocery multiples.  These include Tesco which in September increased distribution of Blackwoods Gin from 192 stores to 566 nationwide.

Outlook

The considerable reduction in fixed costs and focus on the development of our owned brands has created a more directed and flexible business. We now expect to devote our energies to maximising the success of these brands and developing their growth both in the UK and internationally. Financially the Company is now more robust and, as a result, is in a better position to achieve this.

Don Goulding

Blavod Wines and Spirits plc - Half Year Results
Consolidated comprehensive interim income statement
	Six months ended 30 September 2013	Six months ended 30 September 2012	Year ended 31 March 2013
	Un-audited	Un-audited	Audited
	£,000	£,000	£,000
Profit & Loss
Revenue	1,286	1,991	3,785
Cost of sales	(1,009)	(1,579)	(2,908)
Gross Profit	277	412	877
Administrative expenses:
Advertising and promotional costs	(58)	(79)	(177)
Other administrative expenses	(427)	(468)	(1,011)
Non recurring expenses	-	(340)	(299)
Depreciation & amortization	(4)	(4)	(9)
Total administrative expenses	(489)	(891)	(1,496)
Operating loss	(212)	(479)	(619)
Finance expense	(17)	(52)	(119)
(Loss)before tax from continuing operations	(229)	(531)	(738)
Income tax	-	-	-
(Loss) for the period	(229)	(531)	(738)
Earnings per share:
From continuing operations
Basic (pence per share)	(0.07)	(0.60)	(0.40)
Diluted (pence per share)	(0.07)	(0.60)	(0.40)
Consolidated interim balance sheet	As at 30 September 2013	As at 30 September 2012	As at 31 March 2013
	Un-audited	Un-audited	Audited
	£,000	£,000	£,000
ASSETS
Non current assets
Property, plant and equipment	13	22	17
Intangible fixed assets	1,482	1,410	1,418
Total non current assets	1,495	1,432	1,435
Current assets
Inventories	120	196	361
Trade and other receivables	419	1,119	628
Cash and cash equivalents	53	-	60
Total current assets	592	1,315	1,049
Total assets	2,087	2,747	2,484
LIABILITIES
Non current liabilities
Borrowings	-	(390)	-
Total non current liabilities	-	(390)	-
Current liabilities
Bank and other borrowings	-	(19)	-
Trade and other payables	(357)	(1,221)	(428)
Finance facility liability	(162)	(689)	(259)
Total current liabilities	(519)	(1,929)	(687)
Total liabilities	(519)	(2,319)	(687)
Net Assets	1,568	428	1,797
EQUITY
Equity attributable to equity holders of the parent
Share capital	1,096	878	1,096
Share premium	1,358	-	1,358
Shares to be issued	12	12	12
Retained deficit	(898)	(462)	(669)
Total equity	1,568	428	1,797
Consolidated interim cash flow statement
	Six months ended 30 September 2013	Six months ended 30 September 2012	Year ended 31 March 2013
Cashflows	Un-audited	Un-audited	Audited
Cashflows from operating activities	£,000	£,000	£,000
(Loss) before tax	(229)	(531)	(738)
Adjustments for:
Finance expense	17	52	119
Depreciation	4	4	9
	(208)	(475)	(610)
Movements in working capital
Decrease/(Increase) in inventories	241	138	(27)
Decrease/(Increase) in accounts receivables	209	(141)	350
(Decrease)/Increase in trade payables	(71)	346	(446)
Cash generated by/ (used in) operations	379	343	(123)
Net finance expense	(17)	(37)	(58)
Net cash  generated by/(used in) operating activities	154	(169)	(791)
Cashflows from investing activities
Purchase of property plant  & equipment	-	(2)	(2)
Expenditure relating to the acquisition and registration of licences and trademarks	(64)	(7)	(15)
Net cash (used in) investing activities	(64)	(9)	(17)
Cashflows from financing activities
Proceeds from issue of shares	-	-	1,139
Net cash (repaid to)/received from finance facility	(97)	82	(348)
Net cash (used in)/generated by financing activities	(97)	82	791
Net (decrease) in cash and cash equivalents	(7)	(96)	(17)
Cash & cash equivalents at the beginning of the period	60	77	77
Cash & cash equivalents at the end of the period	53	(19)	60

Notes:

1.     Basic of preparation
This interim report was approved by the Board on 1 November 2013.  These consolidated interim unaudited financial statements are for the six months ended 30 September 2013. They have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) Interpretations at 30 September 2013, as adopted by the European Union. They do not include any of the information required for annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2013.  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 2013 were approved on 3 September 2013.  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.     Non recurring expenses
During the year to 31^st March 2013 the Company incurred non recurring expenses which related principally to an abortive transaction which did not come to fruition.  These non recurring expenses are shown separately within the income statement. 

3.   Availability
Copies of the interim report will be available from the Company's head office at 3^rd Floor, Cardinal House, 39/40 Albemarle Street, London, W1S 4TE and also on www.blavodwinesandspirits.com

For further information please contact:

Blavod Wines and Spirits plc
Don Goulding Executive Chairman	Tel: [phone]
SPARK Advisory Partners Limited (NOMAD)
Neil Baldwin  Mark Brady	Tel [phone] /2268
SI Capital (Broker)
Andy Thacker Nick Emerson	Tel [phone]
Cadogan PR
Alex Walters	Tel: [phone]

Investor research on Blavod Wines and Spirits plc can be downloaded from: http://www.progressive-research.com/tearsheet/research/blavod-wines-spirits

 

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