REG - Chill Brands Group - Company Update

Chill BrandsAnnouncement

09/12/2024 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241209:nRSI3030Pa&default-theme=true

RNS Number : 3030P  Chill Brands Group PLC  09 December 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

 

9 December 2024

Chill Brands Group plc

("Chill Brands" or the "Company")

 

Company Update

Chill Brands Group, the consumer packaged-goods distribution company, provides
the following update regarding its trading activities, ongoing legal
proceedings, and efforts to complete its audit for the 2024 financial year.

Share Suspension and Audit

Further to the suspension in trading of its ordinary shares on 3 June 2024,
the Company has lodged a request for the continuation of the suspension of its
shares with the Financial Conduct Authority (FCA).

The publication of the Company's audited 2024 annual report is a prerequisite
for the lifting of the suspension of its shares. The Company continues to work
diligently on its audit for the 2024 financial year and is collaborating
closely with its statutory auditors to progress this process. The Company
anticipates completing its audit and publishing its 2024 financial report
during the first quarter of 2025, at which point it is also expected to
publish its unaudited half-yearly financial statements to 30 September 2024.

Legal Proceedings

As announced on 25 July 2024, the Company has initiated legal proceedings to
recover key assets including the chill.com website domain. A scheduling and
planning hearing, at which a timeline for future milestones in this litigation
will be established, is scheduled for 19 December 2024.

The Company remains committed to resolving these matters expeditiously and in
the best interests of its shareholders. Discussions between the parties are
ongoing. The Board of Directors is considering all options available to the
Company and will provide further updates as matters progress.

Trading and Product Development

Vaping Product Strategy and Launch of E-Liquid Range

In anticipation of the UK's ban on single-use vapes effective 1 June 2025, the
Company continues to collaborate with manufacturing partners to develop and
launch compliant rechargeable, reuseable pod-based vape products.

In light of the UK government's Tobacco and Vapes Bill, the appetite among
retailers to stock single-use vape devices has diminished, leading to a
decline in the Company's UK domestic sales. While the Company has continued to
sell its existing products, it does not anticipate a significant resurgence in
ongoing demand for these single-use products in the UK. Despite these
pressures, the Company remains committed to serving international markets,
where its existing range of single-use devices remain compliant and in demand.
The Company is actively engaged in discussions with potential distribution
partners to expand the global reach of its product range.

In addition to vaping devices, the Company will expand its range of vaping
products by launching a line of nicotine-free e-liquids. The Company's first
e-liquids are currently in production and are expected to launch in early
2025. This range consists of e-liquid 'shortfills' in 10 flavours, designed
for use with refillable vape devices. Shortfill e-liquids are larger bottles
of the fluids used to produce vapour with space to add nicotine shots if
desired, providing flexibility for users while complying with regulatory
restrictions.

In line with the continued progress of new legislation including the Tobacco
and Vapes Bill, the Company recognises the potential for future marketing
regulations in the vaping sector. As such, the Company has developed a
deliberately minimalistic brand design that will be applied to its new range
of vaping products. The revised branding strategy features clean, simplified
visual aesthetics and predominantly neutral colour palettes in preparation for
compliance with any future restrictions.

Distribution Partnerships

Recognising the strategic value of its retailer network and internal sales
capabilities, Chill Brands has established a new business division that is
dedicated to supporting third-party brand partners seeking exposure to new
retail venues in the UK and Europe. This physical extension of its e-commerce
marketplace strategy involves partnering with brands in emerging industries
and utilising Chill's established retail connections to facilitate
multi-channel growth in convenience stores, pharmacies and other specialist
outlets.

The Company has secured its first partnership agreement to represent an
international brand offering oral nicotine pouches and natural energy drinks.
This partnership will provide a monthly revenue stream and potential sales
commission upside. Additional brand partnership discussions are currently in
progress.

This new distribution concept allows Chill Brands to leverage its existing
infrastructure, sales team, and market connections. By acting as an in-market
partner for third-party brands, the Company can generate revenue and potential
upside while minimising the financial risks associated with new product
development, manufacturing, and initial market entry. The approach will allow
the Company to rapidly pivot to opportunities in new high-growth product
categories without being constrained by traditional product development
cycles.

Callum Sommerton, Chief Executive Officer of Chill Brands, said: "While the
delay in completing the Company's audit is frustrating for investors and all
involved, we are working hard and making progress with the relevant parties to
complete and publish our accounts as soon as possible. In the meantime, we
have been making headway with new product development and have established a
new business stream to support our growth ambitions.

Having launched and grown our own brand in the UK within a nascent category we
know what it takes to persist and prosper as a product-led business in this
complex market.

By partnering with emerging brands and utilising our established sales and
marketing infrastructure, we are transforming our previous limitations into a
unique opportunity. This model allows us to diversify our commercial
interests, generate new revenue streams, and put our accumulated market
knowledge and sales resources to productive use.

We are delighted to have commenced our first partnership and are working to
expand our roster of brands across a variety of product categories. I am
committed to delivering growth for these partners and for Chill as we seek to
resolve legacy issues and provide a clean platform from which to move
forward."

 

-ENDS-

 

Media enquiries:

 Chill Brands Group plc                                      +44 (0)20 4582 3500

 Harry Chathli, Chairman
 Allenby Capital Limited (Financial Adviser and Broker)      +44 (0) 20 3328 5656
 Nick Harriss/Nick Naylor/Lauren Wright (Corporate Finance)

Kelly Gardiner (Equity Sales)

 

About Chill Brands Group

Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is an international consumer
packaged goods company focused on the development, marketing and distribution
of wellness and recreational products. The Company's proprietary nicotine-free
vapour products cater to the rapidly growing market for tobacco alternatives
and are distributed by some of leading retail stores in the US and UK. Chill
Brands also operates the chill.com e-commerce website, on which it is building
a marketplace of products from third-party brands.

 

Publication on website

A copy of this announcement is also available on the Group's website at
(http://www.chillbrandsgroup.com/) http://www.chillbrandsgroup.com
(http://www.chillbrandsgroup.com/)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDQKFBKBBDBCBK