Samarkand Group plc (SMK) Samarkand Group plc : Interim Results
15-Dec-2022 / 07:00 GMT/BST Dissemination of a Regulatory
Announcement, transmitted by EQS Group. The issuer is solely
responsible for the content of this announcement.
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15 December 2022
Samarkand Group plc
("Samarkand", the "Company" or together with its subsidiaries
the "Group")
Interim Results for the half-year ending 30 September 2022
Samarkand Group plc, the cross-border eCommerce technology,
services and consumer brand group, announces its unaudited interim
results for the half year ending 30 September 2022 ("H1 2023").
David Hampstead, Chief Executive Officer of Samarkand Group,
commented: "The first half of this financial year has included some
of the most turbulent months in China since the outbreak of the
pandemic with continued lockdowns across much of the country and
restrictions on the flow of goods. As I described in our last full
year results, we adapted quickly to the situation and I'm pleased
that at the half-year point our revenues are up against prior year
by 15%. Our key objective is to return to profitability and in that
regard, we have also made strong progress. Adjusted EBITDA losses
reduced by 48% from GBP2.6m in H1 2022 to GBP1.3m in H1 2023. We
continue to drive further cost efficiencies and improvements in
operational leverage across the business whilst maintaining good
strategic progress across our other objectives and expect to finish
the year within guidance.
Our open offer announced in September, received strong support
and a further GBP1.9m of net proceeds was committed from existing
shareholders and I thank them for their continued support. The
opportunity in front of us remains compelling despite the
challenging backdrop we are faced with in the immediate-term, and
we continue to make progress towards our strategic goals.
Our cross-border eCommerce technology is being adopted by more
merchants and from an increasingly diverse base in terms of
geography and product category. Our core eCommerce Acceleration
business is where we have experienced the most challenges related
to supply chain disruption in China yet despite these headwinds, we
have achieved revenue growth of 2% and made a material improvement
in contribution margins and evolved the portfolio of brands we work
with.
We release these interims shortly after a peak trading period
for the Group known as "Singles Day". This is a major shopping
festival in China that takes place on 11th November. It took place
this year during a period of heightened COVID disruption with
bonded warehouses used by the Group in lockdown for two weeks in
the run-up to the event. The leading eCommerce marketplaces have
not released figures on 11/11 however industry analyst have
reported that the beauty and skincare category is down on last
year. Given the challenges we faced and the direction of industry
trends, we are pleased with the performance of our portfolio over
the singles day period, which performed in line with our
expectations."
Chief Executive's Review
Overview
The disruption to supply chains, consumer habits and the economy
in China as a result of the pandemic has been widely reported.
Prevention measures remain in place and major cities can undergo
mass testing and lockdown at short notice. It is likely this will
continue for the remainder of the current financial year and
possibly beyond, although we remain optimistic about a slowly
improving picture.
We have adapted well to new ways of working and altered some of
our sales channel mix to navigate the ongoing situation. In the
first half of this financial year, we have been able to increase
revenue and reduce losses. Adoption of our technology has grown
through the partnerships we have formed with large international
logistics companies and through our own marketing initiatives. Our
brand acquisitions performed ahead of acquisition economics and
have the added benefit of reducing the Group's exposure to some of
the disruption encountered in China. There will undoubtedly be
further challenges to overcome in China but it unquestionably
remains a highly attractive market for international brands.
Our Market
The period in review saw an eight-week lockdown for Shanghai,
the Group's base of operations and which represents a significant
customer base. The COVID situation in China continues to make
headlines in Western media with widespread testing and lockdowns.
That said, the situation in China has steadily been improving with
the loosening of restrictions on transport and travel leading to a
reduction in logistical issues when compared to the peak earlier in
the year. Although the overall situation remains fluid and
difficult to predict, we remain positive in the long-term outlook
for cross-border eCommerce in the world's second largest economy
and largest eCommerce market. It is frustrating that factors beyond
our control are impacting performance, although the resilience of
the business has come to the fore and we retain a strong degree of
confidence in our medium-term prospects.
The Group has, through its past acquisitions, diversified
revenues. Revenues from our core eCommerce Acceleration business,
both through Nomad Technology and our traditional distribution
channels, contributed to 57% of total revenue in H1 2023 vs 65% in
H1 2022. Revenues on our owned brands from the UK and international
markets contributed 28% for total revenues in H1 2023 vs 20% in H1
2022.
We will continue to explore opportunities to leverage our
brands, infrastructure and technology outside of China where there
are compelling and profitable opportunities to do so.
Strategic Progress
Recognising the disruption we have faced in China we continue to
execute well against the priorities identified at the time of our
IPO, with the added imperative of returning to profitability in the
next financial year, towards which we are making good progress.
eCommerce Acceleration
Our eCommerce acceleration business where we operate as the
China market development partner for a number of prestige
international brands was most impacted by supply side disruptions
in China in the first half. We work with a high-quality portfolio
of niche prestige brands targeting high end Chinese consumers and
maintain a strong funnel of new and emerging brand opportunities to
ensure our portfolio remains balanced as our business evolves. Due
to the impact of COVID on logistics into China we shifted some of
our sales from direct-to-consumer to B2B which reduced the revenue
attributable to our Nomad Technology but was necessary to maintain
sales.
Adoption of our cross-border Checkout technology solution
We launched two new enterprise retail merchants in the first
half of the year and expect to add new enterprise merchants in the
second half. Our partnerships with three major logistics companies
(SF Express, FedEx and ECMS) have started to yield client
opportunities in multiple territories including South Korea, Japan,
Hong Kong, Europe and USA. The timelines for the implementation of
these channels have taken longer than anticipated. Sales cycles
have also been extended due to the uncertainty surrounding the
situation in China.
Growth of our owned brands
Zita West Products continues to perform ahead of management
forecasts. Revenue for H1 revenue has increased 81% compared to
prior year. Revenue outside of China, predominantly in the UK, grew
at 24% in the first half. We continued to leverage our
infrastructure to expand the brand in China adding JD Worldwide and
Douyin stores to our existing TMALL Global store and working with
key influencers to raise the profile of the brand in China.
The acquisition of Napiers the Herbalist was completed in
November 2021 and has since been fully integrated into the Group's
eCommerce operations have been consolidated into the Group. The
acquisition of Napiers gives the Group an entry into the
high-margin beauty category in addition to the existing health and
wellbeing portfolio. Since the acquisition of Napiers the Group has
developed 12 new beauty and skincare products. These now make up
more than 50% of the top 20 products sold and will be launching
across the Groups beauty channels in China in the coming
months.
Path to profitability
Moving the business towards profitability is a key objective and
we continued to seek opportunities to improve efficiency and
operating leverage in the first half. Simplifying our
organisational structure as well as reducing our network of offices
and expenses has enabled us to lower our run rate cost base in the
period.
Investment in our Checkout DTC technology remains at a high
level in relation to the income generated from it to date and
expanding the commercialisation of our solution remains a top
priority for the Group.
Outlook
Current indications for the second half are that the underlying
trends from the first half are likely to continue as is the
volatility in the China market. The focus for the remainder of the
financial year and into the next is for the Group to reach a
self-funding situation which we are well on the path towards.
Our acquisitions have diversified our revenues, with revenues
from our eCommerce Acceleration business decreasing and revenues
from our UK and international markets increasing. The Company has
been forged in the world's most advanced, competitive and
innovative eCommerce market that is China. We are committed to
realising the opportunity in China while recognising that we are
well positioned to further exploit emerging opportunities in new
markets through our technology, infrastructure and the partnerships
we've built over the last 5 years.
FINANCIAL REVIEW
Overview
During the period the Group's revenues increased by 15% to
GBP8.3m (H1 2022: GBP7.2m) with gross margin decreasing to 54% (H1
2022: 57%).
Revenues from our core activities, Brand ownership is up 36% to
GBP3.1m (H1 2022: GBP2.2m), Nomad technology is down 10% to GBP2.7m
(H1 2022: GBP3.0m) with revenues from our distribution business
increasing 29% to GBP2.3m (H1 2022: GBP1.8m). The disruption caused
by the widespread COVID lockdowns impacted our ability to fulfil
orders to China from our UK warehouse, which impacted our Nomad
technology revenues, the Group reacted quickly and effectively by
moving inventory to our Bonded Warehouses and increasing sales
through our existing B2B distribution channels which were less
affected by the lockdowns.
The Group's gross margin has decreased from H1 2022 from 57% to
54% but has improved from those levels achieved in FY 2022. The
change in gross margin is a result of changes in our product mix,
sales channels and supply chain pricing pressures not all which
could be passed on to our customers.
Adjusted EBITDA loss improved by 48% from GBP2.6m to
GBP1.4m.
Operating expenses
Selling and distribution expenses decreased to 28% (H1 2022:
46%) of revenue, as a result of more efficient and targeted
advertising spends and product pricing changes to adapt to the
increasing distribution and inflationary costs seen in the last 6
months.
Administrative expenses, excluding one-off costs such
share-based payment expense, acquisition and restructuring related
costs, decreased to 42% (H1 2022: 49%) of revenue as a result of
tighter controls over other administrative costs. Staff costs have
remained the same at GBP2.5m (H1 2022: GBP2.5m) due to the timing
of reductions. The full effect will be of these actions will be
reflected in the full year results. The number of employees at 30
September 2022 was 117 (30 September 2021: 133), down from 158 at
31 March 2022.
Earnings per share
Basic and diluted loss per share was 3.9p and 3.8p per share
respectively (H1 2022: 6.5p per share).
Net cash
Sep-22 Sep-21 Mar-22
Cash and cash equivalents 3,054,184 10,389,765 4,049,118
Right-of-use lease liabilities (590,164) (847,433) (720,353)
Borrowings (1,451,113) (1,607,040) (1,452,127)
Net cash 1,012,907 7,935,292 1,876,638
At the period end, the Group's net cash position was GBP0.9m (H1
2022: GBP7.9m), excluding the IFRS 16 lease liabilities, net cash
was GBP1.6m (H1 2022: GBP8.8m). The Group's reduction in staff and
operational costs has resulted in 51% improvement in operating
cashflow from negative GBP4.3m to GBP2.0m. On the 21 September
2022, the Company raised gross proceeds of GBP2.0m pursuant to a
Placing and Open Offer dated 5 September 2022. Furthermore,
acquisitions in H2 2022 and the payments of deferred consideration
in H1 2023 reduced cash balance by GBP1.5m and GBP0.1m
respectively.
Inventories
The Group reduced gross inventories from GBP4.4m at 31 March
2022 to GBP3.4m at 30 September 2022. Improvements in inventory
management and ordering process has resulted in the Group holding
lower inventory levels. To reduce complexity, the Group focused on
reducing the breath of inventory in its UK and bonded
warehouses.
Depreciation and amortisation
The total depreciation and amortisation costs were GBP0.2m and
GBP0.3m respectively (H1 2022: GBP0.2m and GBP0.2m). The Group
continued to invest in its Nomad Technology platform with a total
of GBP0.6m (H1 2022: GBP0.5m) development costs capitalised during
the period.
Adjusted EBITDA loss
Adjusted EBITDA loss improved by 48% from GBP2.6m to GBP1.4m.
The improvements in adjusted EBITDA loss is driven by the decrease
in staff cost and operating costs.
Condensed Consolidated Statement of Comprehensive Income
For the six-month period ended 30 September 2022
Year ended
Period ended 30 Period ended 30
September 2022 September 2021 31 March
2022
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Revenue 3 8,254,207 7,167,152 16,576,228
Cost of sales 3 (3,814,675) (3,061,619) (8,226,260)
Gross profit 4,439,532 4,105,533 8,349,968
Selling and distribution expenses (2,325,694) (3,262,723) (7,056,415)
Administrative expenses 4 (3,776,853) (3,917,370) (8,183,996)
Adjusted EBITDA (1,392,232) (2,635,916) (6,236,249)
Repayment of share option plan 5 - (315,540) (306,579)
Acquisition and restructuring costs 5 (157,031) (123,104) (347,615)
Share based payment expense (113,752) - -
EBITDA (1,663,015) (3,074,560) (6,890,443)
Depreciation and amortisation (521,189) (362,561) (786,639)
Operating loss (2,184,204) (3,437,121) (7,677,082)
Finance income 64,539 86 86
Finance costs (59,529) (91,757) (171,455)
Loss before taxation (2,179,194) (3,528,792) (7,848,451)
Taxation 13,271 13,149 141,499
Loss after taxation (2,165,923) (3,515,643) (7,706,952)
Other comprehensive income:
Exchange differences on translation of foreign
operations
(3,333) 13,435 (23,234)
Items that may be reclassified to profit and loss
in subsequent periods
(3,333) 13,435 (23,234)
Total comprehensive loss for the period (2,169,256) (3,502,208) (7,730,186)
Loss attributable to:
Equity holders of the Company (2,122,404) (3,506,624) (7,617,081)
Non-controlling interests (43,519) (9,019) (89,871)
(2,165,923) (3,515,643) (7,706,952)
Loss per share (basic) 6 (0.0387) (0.0648) (0.1399)
Loss per share (diluted) 6 (0.0383) (0.0648) (0.1399)
Comprehensive loss attributable to:
Equity holders of the Company (2,125,737) (3,493,189) (7,640,315)
Non-controlling interests (43,519) (9,019) (89,871)
(2,169,256) (3,502,208) (7,730,186) Condensed Consolidated Statement of Financial Position
For the six-month ended 30 September 2022
30 September 2022 30 September 2021 31 March 2022
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
ASSETS
Intangible assets 7 7,265,902 4,246,664 7,011,236
Property, plant and equipment 236,470 233,223 243,417
Right-of-use assets 492,649 724,621 608,635
Non-current assets 7,995,021 5,204,508 7,863,288
Inventories 8 2,618,636 3,547,425 3,720,248
Trade receivables 2,125,136 1,790,874 1,512,702
Corporation tax recoverable 120,251 52,846 113,710
Other receivables and prepayments 785,407 791,160 1,012,371
Cash and cash equivalents 3,054,184 10,389,765 4,049,118
Current assets 8,703,614 16,572,070 10,408,149
Total assets 16,698,635 21,776,578 18,271,437
Trade and other payables 1,709,326 3,308,947 3,597,110
Accrued liabilities 976,484 655,722 566,266
Deferred revenue 324,439 21,618 214,383
Borrowings 56,701 239,896 62,092
Right-of-use lease liabilities 266,823 257,274 262,001
Total current liabilities 3,333,773 4,483,457 4,701,852
Right-of-use lease liabilities 323,341 590,159 458,352
Borrowings 1,394,412 1,367,144 1,390,035
Deferred tax liability 356,963 269,673 370,590
Accrued liabilities 512,441 - 512,441
Total non-current liabilities 2,587,157 2,226,976 2,731,418
Total liabilities 5,920,930 6,710,433 7,433,270
Net assets 10,777,705 15,066,145 10,838,167
EQUITY
Share capital 9 583,581 547,148 547,148
Share premium 22,954,412 21,022,958 21,022,958
Merger relief reserve (2,063,814) (2,063,814) (2,063,814)
Accumulated loss (10,669,157) (4,436,296) (8,546,753)
Currency translation reserve (7,766) 5,168 (31,501)
Share option reserve 113,839 - -
Total equity attributable to parent 10,911,095 15,075,164 10,928,038
Non-controlling interest (133,390) (9,019) (89,871)
Total equity 10,777,705 15,066,145 10,838,167
Condensed Consolidated Statement of Changes in Equity
For the six-month period ended 30 September 2022
Share Currency
Merger Share Non-controlling
Capital Share relief option Translation Accumulated Total
reserve reserve
Premium reserve loss interests equity
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 April 2022 547,148 21,022,958 (2,063,814) - (31,501) (8,546,753) (89,871) 10,838,167
Loss after taxation - - - - - (2,122,404) (43,519) (2,165,923)
Other comprehensive loss - - - - 23,735 - - 23,735
Total comprehensive
income/(loss) for the - - - - 23,735 (2,122,404) (43,519) (2,142,188)
period
Shares issued on 458 29,042 - - - - - 29,500
acquisition net of fees
Shares issued on open 35,975 1,902,412 - - - - - 1,938,387
offer net of fees
Share based payments - - - 113,839 - - - 113,839
36,433 1,931,454 - 113,839 - - - 2,081,726
Balance at 30 September 583,581 22,954,412 (2,063,814) 113,839 (7,766) (10,669,157) (133,390) 10,777,705
2022
Balance at 1 April 2021 516,190 17,412,900 (2,063,814) - (8,267) (929,672) - 14,927,337
Loss after taxation - - - - - (3,506,624) (9,019) (3,515,643)
Other comprehensive loss - - - - 13,435 - - 13,435
Total comprehensive
income/(loss) for the - - - - 13,435 (3,506,624) (9,019) (3,502,208)
period
Shares issued net of 30,958 3,610,058 - - - - - 3,641,016
transaction fees
30,958 3,610,058 - - - - - 3,641,016
Balance at 30 September 547,148 21,022,958 (2,063,814) - 5,168 (4,436,296) (9,019) 15,066,145
2021
Condensed Consolidated Statement of Cash Flows
For the six-month period ended 30 September 2022
30 September 2022 30 September 2021 31 March 2022
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Cash flows from operating activities
Loss after taxation (2,165,923) (3,515,643) (7,706,952)
Cash flow from operations reconciliation:
Depreciation and amortisation 521,189 362,561 786,639
Finance costs 59,529 91,757 60,182
Finance income (64,539) (86) (86)
Net exchange differences 64,531 (31,386) -
Share option expense 113,752 - -
Income tax credit (13,271) - (141,499)
Working capital adjustments:
Inventories 1,101,612 (1,468,921) (1,544,851)
Trade and other receivables (385,470) (1,012,158) (780,763)
Trade and other payables (1,257,504) 1,318,496 1,258,687
Cash generated used in operating activities (2,026,094) (4,255,380) (8,068,643)
Interest paid (11,243) - -
Corporation tax paid (6,897) (42,898) 20,803
Net cash generated used in operating activities (2,044,234) (4,298,278) (8,047,840)
Cash flows from investing activities
Purchase of property, plant and equipment (44,218) (117,661) (175,151)
Proceeds from disposal of property, plant and equipment 1,925 - -
Payment of intangible assets (609,214) (499,253) (1,228,096)
Acquisition of subsidiary, net of cash acquired - (1,829,993) (3,341,477)
Payment of deferred consideration (80,000) - -
Interest received 8 86 86
Net cash used in investing activities (731,499) (2,446,821) (4,744,638)
Cash flows from financing activities
Proceeds from issue of share capital (net of fees) 1,937,890 3,141,016 3,141,016
Repayment of right-of-use lease liabilities (142,181) (142,177) (252,641)
Repayment of borrowings (37,315) (483,505) (630,411)
Net cash from financing activities 1,758,394 2,515,334 2,257,964
Net change in cash and cash equivalents (1,017,339) (4,229,765) (10,534,514)
Cash and cash equivalents at beginning of period 4,049,118 14,606,867 14,606,867
Effect of FX changes on cash and cash equivalents 22,405 12,663 (23,235)
Cash and cash equivalents at end of period 3,054,184 10,389,765 4,049,118
Notes to the Consolidated Financial Statements For the period
ended 30 September 2022 1. General information
Samarkand Group plc was incorporated in England and Wales on 12
January 2021. The address of its registered office is Unit 13 &
14 Nelson Trading Estate, The Path, Merton, London SW19 3BL. 2.
Basis of preparation and measurement
(a) Basis of preparation
The condensed consolidated interim financial statements of
Samarkand Group plc and its subsidiaries (together referred to as
the "Group"), comprises the results of the Group for the 6 months
ended 30 September 2022. These interim financial statements are not
audited nor reviewed by independent auditors, were approved by the
board of directors on 14 December 2022.
The financial information in this interim report has been
prepared in accordance with UK adopted international accounting
standards. The accounting policies applied by the Group in this
financial information are the same as those applied by the Group in
its financial statements for the year ended 31 March 2022 and which
will form the basis of the 2022 financial statements.
The financial information for the year ended 31 March 2022
included in these financial statements does not constitute the full
statutory accounts for that year. The Annual Report and Financial
Statements for 2022 have been filed with the Registrar of
Companies. The Independent Auditors' Report on the Annual Report
and Financial Statement for 2022 was (i) unqualified, although
included an emphasis of matter in respect of material uncertainty
around going concern and (ii) did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
Unless otherwise stated, the financial statements are presented
in Pounds Sterling (GBP) which is the currency of the primary
economic environment in which the Group operates.
Transactions in foreign currencies are translated into GBP at
the rate of exchange on the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are
translated at the exchange rate ruling at the reporting date. The
resulting gain or loss is reflected in the "Consolidated Statements
of Comprehensive Income" within either "Finance income" or "Finance
costs".
The financial statements have been prepared under the historical
cost convention except for certain financial instruments that have
been measured at fair value.
The financial statements have been prepared on the going concern
basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of
liabilities in the normal course of business. The directors of
Samarkand Group plc have reviewed the Group's overall position and
outlook and are of the opinion that the Group is sufficiently well
funded to be able to operate as a going concern for at least the
next twelve months from the date of approval of these financial
statements.
Going Concern
For the year ended 31 March 2022, the Group faced difficult
trading conditions, with external factors including widespread
COVID lockdowns in China causing high levels of disruptions to the
Group's operations. These conditions extended through H1 2023 with
lockdowns continuing across much of the country restricting the
flow of goods and people in many areas. The Group's actions in Q4
2022 and its continued cost actions throughout FY 2023, have
resulted in a 48% reduction in adjusted EBITDA losses from GBP2.6m
to GBP1.4m.
On 21 September 2022, the Company raised gross proceeds of
GBP2.0m pursuant to a Placing and Open Offer dated 5 September
2022, which will enable the Group to meet its obligations. The
combined effect of the raise, the realisation of cost actions taken
in Q4 plus additional planned cost actions in FY 2023 have led the
Directors to conclude that the Company will continue to operate for
a period of at least 12 months from the date of approval of these
interim financial statements. It should be noted, that should
market conditions deteriorate again, this could give rise to a
material uncertainty which may cast significant doubt on the
Group's ability to continue as a going concern.
(b) Basis of consolidation
The Consolidated Group financial statements comprises the
financial statements of Samarkand Group plc and its
subsidiaries.
A subsidiary is defined as an entity over which Samarkand Group
plc has control. Samarkand Group plc controls an entity when the
Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control
ceases.
Changes in the Group's interest in a subsidiary that do not
result in a loss of control are accounted for as equity
transactions. The carrying amounts of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiary. Any difference between
the amount by which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is recognised
directly in equity and attributed to owners of the Company.
Intra-group transactions, balances and unrealised gains on
transactions are eliminated; unrealised losses are also eliminated
unless cost cannot be recovered. Where necessary, adjustments are
made to the financial statements of subsidiaries to ensure
consistency of accounting policies with those of the Group.
The total comprehensive income of non-wholly owned subsidiaries
is attributed to owners of the parent and to the non-controlling
interests in proportion to their relative ownership interests. 3.
Segmental analysis
An analysis of the Group's revenue and cost of sales is as
follows:
Unaudited Unaudited Audited
30 September 2022 30 September 2021 31 March 2022
Revenue analysed by class of business: GBP GBP GBP
Brand ownership 3,055,517 2,246,237 4,509,979
Nomad technology 2,727,147 3,035,286 7,480,941
Distribution 2,325,534 1,803,700 4,447,990
Other 146,009 81,929 137,318
Total revenue 8,254,207 7,167,152 16,576,228
Cost of sale by business unit: GBP GBP GBP
Brand ownership 1,292,910 842,751 1,991,401
Nomad technology 940,036 1,024,792 3,240,269
Distribution 1,579,483 1,192,414 2,992,880
Other 2,246 1,662 1,710
Total cost of sale 3,814,675 3,061,619 8,226,260
Segment assets:
The non-current assets of the Group are not measured or reported
internally on a segmental basis as they are not considered to be
attributable to any specific business segment.
Unaudited Unaudited Audited
30 September 2022 30 September 2021 31 March 2022
Revenue by geographical destination: GBP GBP GBP
UK 3,861,056 2,380,437 4,917,082
China 4,256,910 4,743,191 11,606,545
Rest of the World 136,241 43,524 52,601
Total revenue 8,254,207 7,167,152 16,576,228 4. Expenses by nature
An analysis of the Group's expenses by nature is as follows:
Unaudited Unaudited Audited
30 September 2022 30 September 2021 31 March 2022
Administrative expenses: GBP GBP GBP
Property costs 194,963 181,083 393,714
Staff costs 2,478,415 2,451,513 5,330,434
Professional fees 303,055 313,547 714,495
Other 529,637 532,583 1,091,159
Repayment of share option plan (a) - 315,540 306,579
Acquisition and restructuring costs (b) 157,031 123,104 347,615
Share based payment charge 113,752 - -
Total administrative expenses 3,776,853 3,917,370 8,183,996 a. (a) Recompense of Share option plan b. (b) Acquisition costs relate to the costs incurred in relation to the acquisitions in the period andrestructuring costs are as a result of corrective actions taken in light of the challenges presented by thedisruptions 5. Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP measures and exclude
exceptional items, depreciation, and amortisation. Exceptional
items are those items the Group considers to be non-recurring or
material in nature that may distort an understanding of financial
performance or impair comparability.
Adjusted EBITDA is stated before exceptional items as
follows:
Unaudited Unaudited Audited
30 September 2022 30 September 2021 31 March 2022
GBP GBP GBP
Repayment of share option plan - 315,540 306,579
Acquisition and restructuring costs 157,031 123,104 347,615
Share based payment charge 113,752 - -
270,783 438,644 654,194
6. Loss per share
Unaudited Unaudited Audited
31 March
30 September 2022 30 September 2021
2022
GBP GBP GBP
Basic loss per share (3.87) pence (6.48) pence (13.99) pence
Diluted loss per share (3.83) pence (6.48) pence (13.99) pence
Earnings
Loss for the purpose of basic and diluted earnings per share (2,122,404) (3,506,624) (7,617,081)
Number of shares
Basic weighted average number of shares in issue 54,923,137 54,140,377 54,419,885
Potentially dilutive share options 641,345 - -
Dilutive weighted average number of shares in issue 55,564,482 54,140,377 54,419,885 7. Intangible assets
Development costs Trademarks Brands Goodwill Website Total
GBP GBP GBP GBP GBP GBP
Cost
At 1 April 2022 2,330,437 99,596 2,484,091 2,829,718 70,198 7,814,040
Additions 598,251 10,180 - - 783 609,214
At 30 September 2022 2,928,688 109,776 2,484,091 2,829,718 70,981 8,423,254
Amortisation
At 1 April 2022 493,548 32,503 271,680 - 5,073 802,804
Amortisation charge 257,229 6,785 80,980 - 9,554 354,548
At 30 September 2022 750,777 39,288 352,660 - 14,627 1,157,352
Net book value
At 31 March 2022 1,836,889 67,093 2,212,411 2,829,718 65,125 7,011,236
At 30 September 2022 2,177,911 70,488 2,131,431 2,829,718 56,354 7,265,902
Development costs Trademarks Brands Goodwill Website Total
GBP GBP GBP GBP GBP GBP
Cost
At 1 April 2021 1,190,555 70,372 459,916 68,042 - 1,788,885
Acquired through business combinations - 8,857 1,133,915 1,358,497 - 2,501,269
Additions 491,057 8,196 - - - 499,253
At 30 September 2021 1,681,612 87,425 1,593,831 1,426,539 - 4,789,407
Amortisation
At 1 April 2021 163,067 13,345 149,492 - - 325,904
Acquired through business combinations - 7,661 - - - 7,661
Charge for the year 137,964 5,341 65,873 - - 209,178
At 30 September 2021 301,031 26,347 215,365 - - 542,743
Net book value
At 31 March 2021 1,027,488 57,027 310,424 68,042 - 1,462,981
At 30 September 2021 1,380,581 61,078 1,378,466 1,426,539 - 4,246,664
8. Inventories
30 September 2022 30 September 2021 31 March 2022
GBP GBP GBP
Finished goods 3,363,195 3,664,533 4,394,080
Provision for obsolescence (744,559) (117,108) (673,832)
Total inventories 2,618,636 3,547,425 3,720,248
Cost of inventory recognised in profit and loss 3,814,675 3,061,619 8,226,260
9. Share capital
Number of shares Share capital
Note No. GBP
At 1 April 2021
51,618,966 516,190
Shares issued on 4 May 2021 357,977 3,580
Shares issued on 10 May 2021 2,737,840 27,378
At 30 September2021 and 31 March 2022 54,714,783 547,148
Shares issued on 15 August 2022 (a) 45,802 458
Shares issued on 21 September 2022 (b) 3,597,616 35,975
At 30 September 2022 58,358,201 583,581
The following table summarises the share capital of Samarkand
Group plc for the periods presented: a. On 15 August 2022,
Samarkand Group plc issued 45,802 new ordinary shares of GBP0.01
each as part of thedeferred consideration paid, for the acquisition
of The Edinburgh Herbal Dispensary Limited. b. On 21 September
2022, Samarkand Group plc issued 3,597,616 new ordinary shares of
GBP0.01 each raisinggross proceeds of GBP1,978,688 pursuant to the
Open Offer set out on the 5 September 2022. 10. Notes to the
statements of cash flows
Net debt reconciliation:
Opening balances Cash flows Foreign exchange movements Closing balances
GBP GBP GBP GBP
Six-month period ended 30 September 2022
Cash and cash equivalents 4,049,118 (1,017,339) 22,405 3,054,184
Right of use lease liabilities (720,353) 130,189 - (590,164)
Borrowings (1,452,127) 1,014 - (1,451,113)
Totals 1,876,638 (886,136) 22,405 1,012,907
Six-month period ended 30 September 2021
Cash and cash equivalents 14,606,867 (4,229,765) 12,663 10,389,765
Right of use lease liabilities (972,994) 125,561 - (847,433)
Borrowings (2,082,538) 475,498 - (1,607,040)
Totals 11,551,335 (3,628,706) 12,663 7,952,670
For more information, please contact:
Samarkand Group plc Via Alma PR
David Hampstead, Chief Executive Officer
http://samarkand.global/
Eva Hang, Chief Financial Officer
VSA Capital - AQSE Corporate Adviser and Broker +44(0)20 3005 5000
Andrew Raca, Pascal Wiese (Corporate Finance)
IPO@vsacapital.com
Andrew Monk, David Scriven (Corporate Broking)
Alma PR +44(0)20 3405 0213
Josh Royston
Lily Soares Smith samarkand@almapr.co.uk
Joe Pederzolli
Notes to Editors
Samarkand is a cross-border eCommerce technology and retail
group focusing on connecting International Brands with China, the
world's largest eCommerce market. The Group has developed a
proprietary software platform, the Nomad platform, which is
integrated across all necessary touchpoints required for eCommerce
in China including eCommerce platforms, payments, logistics, social
media and customs. The Nomad platform is the foundation on which
the Group's Nomad technology and service solutions are built. The
core products include Nomad Checkout, Nomad Storefront and Nomad
Distribution.
Founded in 2016, Samarkand is headquartered in London, UK with
offices in Shanghai.
For further information please visit
https://www.samarkand.global/
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ISIN: GB00BLH1QT30
Category Code: MSCM
TIDM: SMK
Sequence No.: 208720
EQS News ID: 1513379
End of Announcement EQS News Service
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(END) Dow Jones Newswires
December 15, 2022 02:00 ET (07:00 GMT)
Samarkand (AQSE:SMK)
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