TIDMLBB
RNS Number : 6229A
Litebulb Group Limited
30 September 2015
30 September 2015
LiteBulb Group Limited
("LiteBulb" or the "Company" or the "Group")
Half Yearly Report
LiteBulb (AIM: LBB), the branded product developer, announces
unaudited results for the six months ended 30 June 2015 in line
with management expectations.
Financial highlights
-- Revenue up 98% to GBP7.9m (H1 2014: GBP4.0m), with a
confirmed order pipeline for delivery in H2 of over GBP19.4m,
equating to committed revenues of 80% of anticipated full year
sales target for 2015
-- Gross profit up 75% to GBP2.7m (H1 2014: GBP1.5m)
-- Gross margin in line with expectation but lower than 2014 at
34%, due to the effect of the acquisition of Concept
Merchandise
-- Adjusted loss before tax* of GBP2.1m (H1 2014: GBP2.2m)
*before finance costs, taxation, depreciation, amortisation and
exceptional administrative expenses
Operational highlights
-- Defined focus on organic growth and completion of integration of acquisitions
-- Significant sales growth with Tesco and Underground Toys during the period
-- Secured group wide banking services and GBP7.5m working
capital lines from HSBC Bank plc, consolidating the individual
financing arrangements of each acquired subsidiary
Howard Partington, Interim Chief Executive of LiteBulb,
commented:
"As set out in our announcement in July the Company has
established a solid platform and excellent relationships with a
number of retailers. The Group's focus is now on organic growth and
economies of scale and I look forward to reporting a satisfactory
outcome to the year."
For further information, please contact:
LiteBulb Group Limited www.litebulbgroup.com
Howard Partington, Interim Tel: 020 3384 7100
Chief Executive
Guy Pettigrew, Group Finance
Director
finnCap (NOMAD & Broker) Tel: 020 7220 0500
Stuart Andrews/Scott Mathieson
(Corporate Finance)
Joanna Scott (nee Weaving)
(Corporate Broking)
Walbrook PR Limited Tel: 020 7933 8780 or
litebulb@walbrookpr.com
Paul McManus Mob: 07980 541 893
About LiteBulb Group
LiteBulb Group designs, manufactures and distributes innovative
brands and products to the global retail market.
LiteBulb Products, our wide range of products are sold in over
30 countries through blue chip retailers including: Tesco, M&S,
John Lewis Partnership, Sainsbury's, Debenhams, Wilkinson's, Next,
Boots, WH Smiths, Amazon, Target and Costco.
LiteBulb Creative is a creative agency with global reach,
delivering compelling and agile brand extension programmes to the
entertainment industry. LiteBulb Creative has designed products and
campaigns for clients around the world, including Disney, Hasbro
and Miramax.
Chairman's Statement
I am pleased to write to you with my report as Chairman of your
company for the six month period to 30 June 2015.
Introduction
There has been much change in 2015, as well as much to be
pleased about.
The Group has now achieved significant scale in terms of
customer reach and product category offering and therefore, as
previously announced, the Board has agreed on a strategy of
focussing on developing these strengths organically, utilising the
extensive retail experience of the existing operational management
team.
There are significant challenges ahead, but the Group is well
placed to meet them.
Financial Results
Revenues from continuing operations for the six months increased
by 98% to GBP7.9m (H1 2014: GBP4.0m), with an increase in gross
profit of 75% to GBP2.7m (H1 2014: GBP1.5m).
The revenue by division is shown in the table below:
Reported LiteBulb 6m to
(GBP) Bluw Meld Go Entertain Concept Studios Other 30/6/15
=========== =========== =========== ============== =========== ========== ========== ===========
2015 2,231,849 900,137 1,918,384 2,200,976 607,255 3,797 7,862,398
----------- ----------- ----------- -------------- ----------- ---------- ---------- -----------
2014 898,253 1,021,484 1,474,109 - 526,217 58,108 3,978,171
----------- ----------- ----------- -------------- ----------- ---------- ---------- -----------
Variance 1,333,596 (121,347) 444,275 2,200,976 81,038 (54,311) 3,884,227
----------- ----------- ----------- -------------- ----------- ---------- ---------- -----------
Variance
(%) 148% -12% 30% n/a 15% -93% 98%
----------- ----------- ----------- -------------- ----------- ---------- ---------- -----------
We are pleased with the excellent H1 performance of Bluw, which
has been derived from the strong demand of its Star Wars range, but
also note that the shortfall of Meld is mainly due to the later
timing of sales of Mary Berry product against 2014.
Gross margin has reduced to 34% (H1 2014: 39%), due to the lower
margin business that Concept brings to the overall group offering
and, as such, is however in line with management expectation.
The loss before finance costs, taxation, depreciation,
amortisation and exceptionals, and excluding discontinued
operations, remained in line with 2014 at GBP2.1m (H1 2014:
GBP2.2m). Although Concept is not as Q4 weighted as the rest of the
product businesses within the Group, the overall seasonal profile
of the Group remains in line with 2014 with H1 being a loss making
period. On a like-for-like basis, the EBITDA performance is broadly
the same as 2014, and we anticipate that the efficiency savings
from our recent strategic review will deliver an improvement as the
Group becomes fully integrated.
Net Cash at Bank at 30 June 2015 was GBP0.4m, (30 June 2014:
GBP0.9m, 31 December 2014: GBP4.2m), with the decrease since year
end resulting from the funding of losses for the period and the
increase in stock to GBP4.2m in advance of the key trading
period.
The Group uses invoice finance and import loan facilities to
manage its working capital, which are secured against the
receivable balances of each subsidiary. We are pleased that HSBC
Bank plc has provided a very attractive offer to extend its
services and facilities of GBP7.5m around the Group, and we are now
in the process of expanding this relationship. We believe this puts
the Group in a firm position in respect of the funding of its
trading cycle.
The longer term debt of GBP6.3m remains in line with 31 December
2014. This debt comprises three rounds of secured convertible
bonds, with the first round of GBP0.8m due for repayment in
February 2016, the second of GBP2.0m in April 2017 and the final
round of GBP3.5m in December 2017. All bonds carry a 10% per annum
interest coupon with a 10% per annum redemption premium in the
event that the loans are not converted.
Current trading
Post period end trading remains in line with expectations.
At 28 September 2015, the Group's contracted revenues were
GBP27.3m, equating to 80% of the 2015 target of GBP34m. Revenues
are largely derived from the UK (at 72% for H1 2015), with our
customer base representing the most well-known brands on the high
street, such as Tesco, M&S, Sainsbury's, JLP, Debenhams, Boots,
Next and WH Smiths.
Review of operations
As announced on 6 July 2015, we have been conducting a full
review of the Group to determine how best to improve performance
and results. We are pursuing four key objectives: 1) to put the
Group on a solid platform to deliver the anticipated growth
potential; 2) to eliminate any unnecessary duplication; 3) to adopt
best practices across all companies within the group; and 4) to
deliver a strong top and bottom line performance in 2016 and
beyond. In the short term, we are completely focused on integrating
the existing businesses to achieve efficiency savings and
delivering organic growth.
So far we have identified a number of areas which should deliver
material savings to the Group overhead. The areas being addressed
are: group-wide headcount, which we plan to reduce by 15% with
annualised savings of GBP500k; consolidating our two London offices
into our head office in Battersea by utilising the existing space
more efficiently, delivering savings of GBP65k per annum;
elimination of peripheral, start-up divisions; implementing our
proven Group best practice product development process, to
streamline operations and mitigate historic overspends; focus on
fewer, but more valuable licenses and product ranges; and reviewing
all service providers to determine the appropriate value of the
service we are receiving.
Furthermore we believe we can deliver significant revenue growth
by focusing on using our existing customer relationships more
widely around the Group, developing bespoke branded product with
our tier 1 retailers, growing our online offering and working in a
more integrated manner when acquiring licences.
Finally Howard Partington remains committed to his role as
interim CEO, which the Board believes is best for the Group at the
present time, although the Board continues to consider future
candidates for this role in conjunction with the review referred to
above.
Outlook
The actions being taken by the new management team should put
the Group in a good position to deliver substantial organic growth
and allow us to consider further acquisitions in the medium term
that both meet our selection criteria and will enhance
profitability following integration.
On a final note, I'd like to thank Simon McGivern and James
Phillips for their contribution to building your Group and handing
the reins over to the new management team to take Litebulb into the
next chapter of its evolution. I wish Simon and James the best for
the future with their new opportunities.
Michael Hough
Chairman
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:01 ET (06:01 GMT)
30 September 2015
CONSOLIDATED INCOME STATEMENT
6 months 6 months
to to 12 months
30 June 30 June to 31 December
2015 2014 2014
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Revenue 3 7,862,398 3,978,171 21,868,906
Cost of sales (5,156,716) (2,433,308) (13,958,516)
Gross profit 2,705,682 1,544,863 7,910,390
Administrative expenses (5,058,740) (3,875,456) (8,789,001)
Exceptional administrative
expense - (248,431) (627,604)
Operating loss (2,353,058) (2,579,024) (1,506,215)
Finance costs (527,373) (101,627) (445,650)
Loss before tax (2,880,431) (2,680,651) (1,951,865)
Taxation - - (25,128)
Loss for the period
from continuing operations (2,880,431) (2,680,651) (1,976,993)
Other comprehensive
income
Exchange differences
on translation of
foreign operations (15,987) 26,693 8,526
Total comprehensive
income (2,896,418) (2,653,958) (1,968,467)
------------ ------------ ----------------
Loss per share
Basic and diluted
loss per ordinary
share 4 (0.057) (0.056) (0.040)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBP GBP GBP
Non-current assets
Intangible assets 10,643,485 6,194,747 10,827,209
Property, plant and equipment 779,584 409,496 731,478
Deferred tax assets 163,617 163,617 183,769
Current assets
Inventories 4,234,442 2,736,760 3,686,295
Trade and other receivables 5,763,194 4,105,796 11,418,736
Cash and cash equivalents 398,064 1,256,867 4,155,038
10,395,700 8,099,423 19,260,069
------------- ------------- -------------
Total assets 21,982,386 14,867,283 31,002,525
============= ============= =============
Equity and liabilities
Capital and reserves attributable
to equity shareholders
Issued share capital 31,548,276 28,453,815 31,506,219
Share based payment reserve 102,148 102,148 102,148
Reverse acquisition reserve (13,221,177) (13,221,177) (13,221,177)
Convertible loan notes
issued 1,001,948 284,470 1,001,948
Retained earnings (10,903,952) (8,693,025) (8,007,534)
Total equity 8,527,243 6,926,231 11,381,604
------------- ------------- -------------
Non-current liabilities
Trade and other payables - - 4,324
Interest bearing borrowings 5,298,052 2,515,530 5,298,052
Total equity 5,298,052 2,515,530 5,302,376
------------- ------------- -------------
Current liabilities
Trade and other payables 7,852,460 4,299,521 14,011,777
Interest bearing borrowings 304,631 1,126,001 306,768
8,157,091 5,425,522 14,318,545
------------- ------------- -------------
Total equity and liabilities 21,982,386 14,867,283 31,002,525
============= ============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Reverse based
Share acquisition payment Equity Retained Total
capital reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP
Group
At 31 December
2013 26,135,051 (13,221,177) 102,148 111,861 (6,039,067) 7,088,816
Equity element
of convertible
loan notes - - - 890,087 - 890,087
Shares issued
in period
Cash 57,297 - - - - 57,297
Settlement
of creditors 112,640 - - - - 112,640
Acquisitions 2,070,088 - - - - 2,070,088
Conversion
of loan note 350,000 - - - - 350,000
Shares to be
issued:
Acquisitions 2,781,143 - - - - 2,781,143
Comprehensive
income:
Loss for the
period - - - - (1,968,467) (1,968,467)
At 31 December
2014 31,506,219 (13,221,177) 102,148 1,001,948 (8,007,534) 11,381,604
Shares issued
in period
Settlement
of creditors 42,057 - - - - 42,057
Comprehensive
income:
Loss for the
period - - - - (2,896,418) (2,896,418)
At 30 June
2015 31,548,276 (13,221,177) 102,148 1,001,948 (10,903,952) 8,527,243
=========== ============= ========= ========== ============= ============
CONSOLIDATED STATEMENT OF CASHFLOW
6 months 6 months
to to 12 months
30 June 30 June to 31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBP GBP GBP
Cash flows from operating
activities
Loss after tax (2,896,418) (2,653,958) (1,968,467)
Non-cash adjustments
Amortisation 84,525 29,220 236,744
Depreciation 126,632 92,722 192,254
Share payments 42,057 91,380 112,640
Increase in working capital
(Increase)/decrease in
inventories (458,198) 48,344 502,106
Decrease/(increase) in
trade and other receivables 5,675,694 2,590,977 (1,008,475)
(Decrease)/increase in
trade and other payables (6,163,839) (2,567,856) 4,092,762
Net cash flows from operating
activities (3,589,547) (2,369,171) 2,159,564
------------ ------------ ----------------
Cash flows from investing
activities
Purchase of fixed assets (165,290) (202,841) (473,083)
Product development costs - (35,694) (547,021)
Purchase of subsidiaries
(net of cash and cash
equivalents) - (2,292,155) (6,082,893)
Net cash flows from investing
activities (165,290) (2,530,690) (7,102,997)
------------ ------------ ----------------
Cash flows from financing
activities
Repayment of bank loans (2,137) (328,607) (341,157)
New loans - 2,398,661 5,500,000
Conversion of loan notes - (350,000) (350,000)
Shares issued - 2,227,384 2,477,384
Net cash flows from financing
activities (2,137) 3,947,438 7,286,227
------------ ------------ ----------------
Net (decrease)/increase
in cash and cash equivalents (3,756,974) (952,423) 2,342,794
Opening cash and cash
equivalents 4,155,038 1,812,244 1,812,244
------------ ------------ ----------------
Closing cash and cash
equivalents 398,064 859,821 4,155,038
============ ============ ================
RECONCILIATION OF CASHFLOW TO NET CASH
At 1 January At 30 June
2015 Cashflow 2015
GBP GBP GBP
Cash 4,155,038 (3,756,974) 398,064
Overdraft - - -
(3,756,974)
------------
Debt due within 1 year (306,768) 2,137 (304,631)
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September 30, 2015 02:01 ET (06:01 GMT)
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