REG - East Imperial PLC - Full Year Results
05/05/2022 07:00
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RNS Number : 4276K East Imperial PLC 05 May 2022
5 May 2022
East Imperial PLC
("East Imperial" or the "Company" or the "Group")
EAST IMPERIAL AUDITED FULL-YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
East Imperial, the global purveyor of ultra-premium beverages, today announces
audited full-year results for the year ended 2021 and a strong start to 2022
in line with the Company's expansion plans.
Summary
● Admission to trading on the London Stock Exchange on 19 July
2021, raising £3m to fund the expansion of the Company and capitalise on the
increasing demand across the ultra-premium beverage market.
● Sales up 62% over the year to £2.8 million driven by the lifting
of Covid-19 restrictions in the second half of 2021 across key markets as well
as growth in off-trade and Direct to Consumer (DTC).
● Strong balance sheet and cash to fund further expansion through
2022. Net cash of £0.3 million as of 31 December 2021 and £2.2 million as of
31 March 2022 following £3.4m placing in January 2022.
Strategic Highlights
● Significant new distribution agreements signed including SUTL
Group in Singapore and the wider Indochina region, Leung Yick in Hong Kong and
Republic National Distribution Company (RNDC) in the US (signed post period
end).
● New supply agreements reached across Australia and New Zealand
including 245 Dan Murphy's stores, one of Australia's largest and
most-respected alcoholic beverage retailers, Woolworths New Zealand and
Foodstuffs, New Zealand's largest supermarket chain.
● Successful new product launches including a popular can format
as well as the release of Coffee and Tonic, the Company's first entry into the
rapidly growing cold brew coffee market.
● Further progress attracting top industry talent including the
appointment of a new Head of Sales in the US.
£m 2021 2020 Change
Revenue 2.79 1.72 62%
Gross Profit 0.53 0.48 11%
Operating Profit/(loss) (2.2) (1.0) (121%)
Net Cash 0.27 0.24 12%
Tony Burt, Founder and CEO, said:
"I'm delighted with the progress that we made last year and in particular the
popularity of our premium product range among existing and new customers.
"Clearly the pandemic created some exceptional challenges with much of the
on-trade market still shut for large parts of last year. However, we
experienced strong growth in the off-trade market, benefitting from a number
of new supply agreements with major retailers, and as the on-trade market
began to open up, we've been very encouraged by the level of sales.
"We raised a further £3.4m at the start of this year to increase the pace of
expansion, particularly in the US where we see the fastest growth opportunity.
Our recent distribution agreement with RNDC, a major US distributor, was a
huge step forward in our US strategy and we're excited about the opportunity
to make a step-change in sales as a result.
"We have been encouraged by trading so far this year and the progress we are
making against our strategy. Like every company in our industry, we are having
to manage supply chain headwinds which are impacting costs. However, we do
expect to mitigate this impact through greater operational efficiency this
year.
"Today, the demand for 'premiumisation' by consumers continues unabated and
underpins our strategy and the long-term opportunity for East Imperial. I am
confident we have the platform, the team and the resources to become the most
admired premium band of mixers and create a highly valued company for our
shareholders."
For more information on East Imperial, please visit
https://investors.eastimperial.com/
Enquiries:
MHP Communications
Peter Hewer +44 (0)20 3128 8100 / +44 (0) 770 9326 261
Catherine Chapman +44 (0)20 3128 8100
eastimperial@mhpc.com
Chairman's Statement
I am pleased to present the first financial results for the East Imperial
Group as a listed company.
The Company's performance in 2021 was pleasing as we saw significant growth
demonstrating its recovery from the COVID impacted 2021 year, reporting
revenues of £2.8m up by 62%. Revenue improvement has come as a result of
widening our channel extension strategy in New Zealand and seeing the Company
extend its presence in retail. We have also seen our key customers in the US
market return to more normalised trading patterns, which is encouraging. This
in combination with the recent signing of a national distribution agreement
with the Republic National Distributing Company (RNDC) highlights the
importance of this market for us as part of our growth in 2022.
2021 was a transformational year for the Company as it listed on the London
Stock Exchange and put in place the foundations for growth. The executive
management has had to face some unprecedented headwinds due to the ongoing
challenges and the effects of a global pandemic on both the demand and supply
sides. But Tony Burt and the team have adapted brilliantly which is a
testament to the strong culture of flexibility and innovation he has created
and leads.
In January 2022 the Group raised £3.4m via a placement of new shares, largely
to existing shareholders and we thank them for their ongoing support of the
business, our people and our strategy. The funds raised will be used to cover
the Group's working capital and general corporate needs as well as to finance
ongoing growth initiatives.
The Board went through some changes at the end of 2021. I joined as Chairman
and Colin Henry as independent Non- Executive Director. We are both excited
about the opportunity ahead of us and are happy to report that we have joined
a highly effective board with executive directors who hold the capabilities to
ensure this business achieves its ambitions.
The Board is encouraged by a good start to the year and expects to make
continued progress in the delivery of its growth strategies. The long-term
growth drivers and in particular the premiumisation of the drinking experience
globally remain strong. This sits positively with our vision of providing our
end customers with exceptional drinking experiences.
Alistair McGeorge
Non-Executive Chairman
CEO Review
2021 was a transformative year for East Imperial in so many ways; it was the
second year of managing our sales and operations through a global pandemic and
with it the well-publicised travel and industry restrictions.
The Company successfully listed on the London Stock Exchange on the 19th of
July 2021. At the same time, we raised £3m to fund the expansion of the
Company and capitalise on the increasing demand across the premium beverage
market.
With funding secured we had five clear months left in 2021 to make up the year
and execute our plans; new products, new distribution, new people, and ways of
working in a PLC environment. Of course, this has become more challenging with
the backdrop of global supply chain challenges that all importers and
exporters continue to experience, leading to delays and inflationary cost
pressures.
Adding to this, 2021 was another year of disruption caused by COVID.
Historically, our key markets have been New Zealand, Singapore, Hong Kong,
China and the US, and our growth can be widely attributed to our focus and
success in the luxury, quality, and high-end on-premise channel. COVID
clearly disrupted our original plans for 2020 and this rolled into 2021. It
meant we re-prioritised some of our key projects to adapt to new consumer
behavior and opportunities, such as eCommerce, and off-premise activities. We
made a number of key hires to reflect the shifting priorities of the business
adding a Global Head of Supply Chain and a Global Head of Digital.
Our approach through the disruption has been to quickly adapt, and this
informed our strategy for a more multi-channel approach across all regions we
operate in. That said, I was pleased to see 2021 as a strong year of recovery
for East Imperial. Sales were up 65% YoY in 2021, highlighting the Group's
resilience and our ability to navigate the challenges presented to us and the
scale of the opportunity ahead of us.
Strategic Highlights
● The Asia Pacific region is the cornerstone of the East Imperial
brand story. We are a fiercely proud Asian Pacific brand, and it remains a
tremendous asset for us globally. Through 2021. China, Singapore and Hong Kong
sales have all continued to be affected, with our distributor partner
challenged in adapting their own business model. This resulted in the
appointment of our new distribution partner in Singapore and the wider
Indochina region, SUTL Group. Also, the appointment of Leung Yick as our new
distribution partner for Hong Kong. These are both important appointments for
the Company and align with our strategy as we continue to go wider and deeper
in the region.
● In August 2021, we achieved a significant step forward as we
looked to accelerate our retail offering, a core element of our growth
strategy. It was pleasing to announce a series of significant new supply
agreements across Australia and New Zealand. Firstly, 245 Dan Murphy's stores,
one of Australia's largest and most-respected alcoholic beverage retailers as
well as an agreement with Woolworths New Zealand, where we have our range in
Countdown stores across 110 locations in New Zealand. In a separate agreement,
Foodstuffs, New Zealand's largest supermarket chain, also agreed to stock East
Imperial's beverages in all of its New World supermarkets across New Zealand's
South Island, in addition to the outlets already supplied on the North Island.
Both these agreements provided a step-change in East Imperial's off-trade
offering and took the total number of retailers supplied across the region to
over 1,000 outlets.
● In the US, a number of notable luxury on-trade accounts started
reopening their doors back in June 2021, albeit with tighter restrictions
meaning depletions were naturally lower than normal. Sales improved in the
second half of the year as restrictions eased and consumer confidence
returned. It was pleasing to see depletions in the key cities of Los Angeles
and Miami return and exceed pre-COIVD levels in Q4, in doing so providing
positive momentum into 2022.
With funding secured in July 2021, the Company hired the Head of Sales for the
US, Mark Zonghetti, who officially started in November 2021. Perhaps the
biggest and most important development in the US was the recent announcement
of a national distribution deal with the US's second-largest distributor,
Republic National Distribution Company (RNDC). This agreement initially
provides us with distribution into 11 states and is an exciting first step for
us, aligning with our strategic focus for growth in the US, a region we see as
a major contributor over the coming years.
● Direct to Consumer (DTC) continues to make a meaningful
contribution to overall numbers, with East Imperial stores now present and
operational in New Zealand, Australia and the US. Amazon US and Australia both
went live in late November 2021.
Operationally, 2021 has seen us continue to refine and develop the
relationship with our new New Zealand based bottler whom we started with in
December 2020. Together we have introduced our core range, a new format in
cans and equipment into their business and we are now one of their top 2
volume customers. In anticipation of the continued global logistics
challenges, combined with the strategic importance of the US, we are now
working to bring bottling to the US in 2022. This will allow us to control
costs more effectively and become more proactive to the demands of this
market.
The team have done an incredible job operating in such a challenging
environment to successfully bring to the market a number of new products.
Leading with the can format is an important prerequisite for our DTC and
off-premise strategy. Added to this, Coffee & Tonic has now been
successfully canned and launched in the New Zealand and Australian market,
with other regions earmarked for Q2 2022. All of which reaffirm East
Imperial's reputation as an innovator within the market and the team's ability
to deliver under the restraints of the current operational environment.
We enter 2022 with a strong balance sheet and cash to fund further expansion
throughout the year.
Sustainability
Ingredient sourcing, manufacturing, packaging and distribution all affect
people, communities and environments. Our vision is to build a sustainable
global beverage business, delivering ethically manufactured products with a
minimal negative impact on the environment.
We are committed to creating products that are as sustainable as possible
without compromise. We remain committed to our journey to continue to reduce
our greenhouse gas emissions and operational waste through:
● Evaluating all operational decisions against the carbon
footprint they create.
● Commitment to produce our products closer to our key markets.
● Optimise distribution networks and utilisation across our
operations.
In no way have we arrived at our final destination, but we have already taken
a number of positive decisions and steps to protect the environments we
operate within. These include:
● We have never, nor do we plan to ever use PET bottles.
● We only use 100% recyclable cans and bottles.
● Reduction in packaging requirements for our direct to consumer
orders and deliveries.
● We use no plastic in any of our primary packaging. Our cardboard
packaging is 100% recyclable, and we will continue to increase the proportion
of recycled material across all our packaging solutions.
● Water conservation and quality are pivotal to the East Imperial
brand story and as such we only source our water from springs that are
sustainably managed.
People
Our people and our team are our most important assets. We remain committed to
attracting and retaining the very best people while ensuring a diverse,
sustainable, and high performing workforce.
We are committed to creating the next generation of industry leaders who will
in turn support their own communities and help them thrive. As we grow our
team, we will also continue to provide them with the following:
● Opportunities for training and career progression.
● Personal development and continuous improvement.
● Financial reward is based upon personal and company performance.
● Help in achieving the ideal work/life balance.
● Always provide them with a safe workplace where everyone is
treated with respect.
We actively promote diversity within our team and wholly support equal
opportunities in employment. We know that diversity can only be achieved
through a team made up of differing backgrounds and perspectives and that this
is the prerequisite to creating a more dynamic and inclusive environment.
We are already an incredibly diverse bunch, from our executive team,
operational team to our board of directors. We walk the walk and are staunch
advocates of diversity that reflect the communities in which we operate.
Strategy and Outlook
Sharing Our Brand With More of the World
COVID and the knock-on effect of extended lockdowns on both the on-premise
channel and global supply chains disrupted our original plans for 2021, but
the Company and team remained agile in adapting in the face of global
headwinds and seeking out new opportunities for growth. It meant we
re-prioritised some of our key projects to adapt to new consumer behaviour and
opportunities, such as eCommerce, and off-premise activities.
As the overall global premium mixer category continues to grow, so does the
placement of our competitor's product in channels traditionally reserved for
budget brands. It is this continued shift we are seeing in the market, we
believe, that is allowing East Imperial to fill the demand for a more
discerning consumer at the upper-end of the market.
The Directors believe that East Imperial's positioning as the ultra-premium
choice, combined with a notable shift in consumer consumption and behaviour
continues to present the unique opportunity to grow market share in key
strategic territories. In the new COVID-19 world it means we will continue to
serve our traditional luxury and high-end on-premise accounts as they come
back online, whilst pulling forward our plans for a multi-channel approach,
including off-premise (specialty food and liquor stores) and direct to
consumer, both with a deep digital customer acquisition focus.
Through investing in marketing, collaborations, new products, technology, and
people, it is our intent to continue to focus on growing our leadership
position in the Asia Pacific, whilst continuing to pursue strong multi-channel
growth in the US. We have been encouraged by trading so far this year and the
progress we are making against our strategy. Like every company in our
industry, we are having to manage supply chain headwinds which are impacting
costs. However, we do expect to mitigate this impact through greater
operational efficiency this year and are excited for the growth opportunities
ahead of us.
________________________________________________________________________________________________________
Financial Review
The Group's performance in 2021 was pleasing as we saw significant growth
demonstrating its recovery from the COVID impacted 2020 reporting revenues of
£2.8m up by 62%. Revenue improvement has come as a result of widening our
channel extension strategy in New Zealand and seeing the Company extend its
presence in retail. This is an important element of de-risking the business
from its on-premise channel reliance of the past. We have also seen our key
customers in the US market return to more normalised trading patterns, which
will become a key element of our 2022 growth.
The 2021 gross margin of 21.4% reflects a drop compared to 29.4% in 2020. Both
years reflect the industry-wide challenges of the supply chain through this
period. Continued issues with shipping availability, in addition to the
escalating costs, meant we had to move and hold additional product in the US
market so to ensure supply continuity. This added additional costs due to the
elevated warehousing capacity required.
The pressures on margins will be addressed as volume grows and as we move to
bottle products closer to key markets in 2022. In anticipation of the
continued global logistics challenges, combined with the strategic importance
of the US, we are now working to bring bottling to the US in 2022. This will
allow us to control costs more effectively and become more proactive to the
demands of this market. We remain focused on margin improvement opportunities
in the medium term while also focusing on driving significant top-line growth.
Emerging from the impacts of COVID, we have remained focused on the
significant opportunity ahead for the Group. We have continued to invest in
the brand, our people and our ability to execute on growth. This led to
underlying operating expenses increasing by 64.4% to £2.45m (2020: £1.49m).
As a percentage of the Group's revenue, this has remained steady at 88% for
2021 compared to 87% for 2020.
People costs increased by 36.3%, while sales and marketing-related expenses
increased by 61.2%, both reflecting the investment in growth opportunities. We
will continue to invest in the building of our team in 2022, with a particular
focus on the building of capability and growth capacity in the US. We remain a
lean operating organisation but will invest in people where there are
significant growth opportunities.
The Group generated an operating loss before exceptional costs of £2.2m
(2020: £1.0m) was in line with expectations reflecting the ongoing investment
in growth.
The Group generated an NPAT loss of £5.37m (2020: £0.97m) which included
exceptional costs of £3.06m.
Exceptional costs represent one-off costs incurred by the Group in connection
with the listing on the London Stock Exchange on 19 July 2021. The amount of
£2,536,000 represents the deemed cost of listing in the period, being the
excess fair value of the shares deemed to have been issued to acquire Bermele
Plc over its net assets acquired.
2021 2020
£000 £000
Listing costs - transaction and advisor fees 520 -
Listing costs - reverse acquisition expense 2,536 -
3,056 -
Tax
On 31 December 2021 the company had unutilised tax losses of £6,766,000 (31
December 2020: £5,412,000). A deferred tax asset of £1,345,000 (31
December 2020: £1,081,000) has not been recognised due to the uncertainty
around the timing of the availability of taxable income to utilise the losses
Cash Position
At the year-end, the Group had cash balances of £266,000 (2020: £244,000)
and net current assets of £1,211,000 (2020: net current liabilities
£710,000). The company raised a further £3,400,000 as part of a private
placement of new share issuance in January 2022, which is to be used to cover
working capital, and to finance ongoing growth initiatives.
Going Concern
The financial statements have been prepared on a going concern basis. The
Directors have carefully assessed the Group's ability to continue trading and
have a reasonable expectation that the Group and Company have adequate
resources to continue in operational existence for at least twelve months from
the date of approval of these financial statements and for the foreseeable
future.
In the annual report, the Group's activities and an outline of the
developments taking place in relation to its products, services and
marketplace are considered in the Chief Executive's review. The principal
risks and uncertainties and mitigations are included in the strategic report.
The Directors have assessed the strategic plan and forecasts prepared for the
next three years. An assessment of cash flows for the next three financial
years has indicated an expected level of cash generation in combination with
the capital raised in January 2022 would be sufficient to allow the Group to
fully satisfy its working capital requirements and cover all principal areas
of expenditure.
The preparation of financial statements in accordance with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the year. Although these estimates are
based on management's best knowledge of the amount, events or actions, the
actual results may ultimately differ from those estimates.
Having assessed the principal risks and the other matters discussed over a
three-year period to December 2024, the Directors consider it appropriate to
adopt the going concern basis of accounting in preparing its consolidated
financial statements.
Principal Risk
The Group maintains a risk register and monitors risks associated with the
business including finance, legal, personnel, and macro and micro
environmental factors. Risks are assessed and discussed at the management and
Board level on a regular basis, assessing the impact, likelihood and
mitigation strategies are carefully considered. East Imperial's principal
risks and uncertainties can be found in the annual report.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
2021 2020
£000 £000
Continuing operations
Revenue 2,779 1,719
Cost of sales (2,243) (1,236)
Gross Profit 536 483
Administrative Expenses (2,449) (1,490)
Exceptional costs (3,056) -
Other Operating Income - 32
Share Based Payments (248) -
Operating (loss) (5,217) (976)
Finance income/(expense) (153) 4
(Loss) before tax (5,370) (972)
Income tax - -
(Loss) for the year (5,370) (972)
Other Comprehensive Income
Items that may be subsequently reclassified to profit or loss:
Foreign exchange differences on consolidation 139 (91)
Total Comprehensive (Loss) for the Year (5,231) (1,063)
Loss attributable to :
Owners of the company (5,231) (1,063)
Earnings per share (EPS) Pence Pence
Basic EPS (0.0199) (0.0040)
Diluted EPS (0.0199) (0.0040)
Consolidated Statement of Financial Position as at 31 December 2021
As at 31 December 2021
2021 2020
Assets £000 £000
Non - Current Assets
Intangible assets 2,228 2,256
Property, Plant and Equipment
45 35
Right of Use Assets
62 -
Total Non-Current Assets 2,335 2,291
Current Assets
Cash and Cash Equivalents
266 245
Trade and Other Receivables
566 412
Inventories 1,849
596
Total Current Assets 2,681 1,253
Total Assets 5,016 3,544
Current Liabilities
Trade and Other Payables 1,535 2,114
Lease Liability
37 -
Total Current Liabilities 1,572 2,114
Net Current Assets/(Liabilities) 1,109 (861)
Non-Current Liabilities
Lease liability
24 -
Total Non-Current Liabilities
24 -
Net Assets 3,420 1,430
Equity attributable to owners of the parent
Share Capital 3,057 222
Share premium 4,033 1,098
Share option reserve 248
-
Reverse acquisition reserve 5,040 3,837
Foreign exchange reserve
48 (91)
Retained Earnings / (Losses) (9,006) (3,636)
Total Equity 3,420 1,430
Consolidated Statement of Cash Flows for the Year Ended 31 December 2021
For the year ended 31 December 2021
2021 2020
£000 £000
Cashflows from operating activities
(5,370) (972)
(Loss) for the year
Adjusted for:
Depreciation, amortisation and impairments 55 34
Deemed cost of listing in reverse acquisition 2,536 -
Share based payments 248 -
(2,531) (938)
Decrease/(increase) in trade and other receivables 154 703
Increase/(decrease) in trade and other payables 491 159
(Increase)/decrease in inventories (1,253) (151)
Cashflows from operations (3,139) (227)
Cashflows from investing activities
(19) (16)
Acquisition of property, plant and equipment
Net cash flows from investing activities (19) (16)
Cashflows from financing activities
(38) -
Lease payments
Proceeds from issue of ordinary shares 3,082 -
Net cashflows from financing activities 3,044 -
(114) (243)
Net increase/(decrease) in cash and cash equivalents
Foreign exchange differences to cash and cash equivalents
on consolidation (2) (3)
Cash and cash equivalents at 1 January 245 84
266 245
Cash and cash equivalents
Overdraft (137) (407)
129 (162)
Cash and cash equivalents at 31 December
Consolidated Statement of Changes in Equity for the Year Ended 31 December
2021
For the year ended 31 December 2021
Reverse
Share Share Share Option Forex Acquisition Retained Total
Capital Premium Reserve Reserve Reserve Earnings Equity
£000 £000 £000 £000 £000 £000 £000
At 1 January 2020 222 1,098 - - 3,837 (2,665) 2,493
Loss for the year - - - - - (972) (972)
Forex retranslation difference - - - (91) (91)
Total comprehensive income - - - (91) - (972) (1,063)
At 31 December 2020 222 1,098 - (91) 3,837 (3,636) 1,430
At 1 January 2021 222 1,098 - (91) 3,837 (3,636) 1,430
Loss for the year - - - - - (5,370) (5,370)
Forex retranslation difference - - - 139 - - 139
Total comprehensive income - - - 139 - (5,370) (5,231)
Reverse acquisition 2,467 415 - - 1,203 - 4,085
Issue of shares 300 2,700 - - - - 3,000
Share issue costs - (180) - - - - (180)
Exercise of options 68 - - - - - 68
Share Based Payments - - 248 - - - 248
At 31 December 2021 3,057 4,033 248 48 5,040 (9,006) 3,420
1. General information and basis of preparation
East Imperial plc is a public company limited by shares and registered in
England and Wales with company number 10973102. The company is domiciled in
the United Kingdom and the registered office is 6thfloor, 60 Gracechurch
Street, London, EC3V OHR. The consolidated financial statements comprise the
Company and its subsidiaries (together referred to as the "Group"). The
Company changed its name from Bermele plc to East Imperial plc on 19 July
2021.
The principal activity of the Group is the sale and distribution of beverages
in Australasia, United States, United Kingdom, Singapore and Europe.
The annual financial information presented in this preliminary announcement is
based on, and is consistent with, that in the Group's audited financial
statements for the year ended 31 December 2021 which have been prepared in
accordance with UK adopted International Accounting Standards in conformity
with the Companies Act 2006, and consistent with the accounting policies as
disclosed in Part V 'Financial information of East Imperial Group' in the
company's prospectus issued in connection with the readmission of the
company's shares to trading on the Official List on 19 July 2021. The
Group's audited financial statements will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The independent
auditors' report on those financial statements is unqualified and does not
contain any statement under section 498 (2) or 498 (3) of the Companies Act
2006. The Independent auditors have drawn attention to a material uncertainty
in relation to going concern arising from management strategies in place to
increase revenue and cash generation still being in their implementation
phase.
Information in this preliminary announcement does not constitute statutory
accounts of the Group within the meaning of section 434 of the Companies Act
2006.
The financial statements of the Group are presented in Pounds Sterling and all
values are rounded to the nearest thousand pounds (£'000) except when
otherwise stated.
The Group financial statements consolidate those of the Company and its
subsidiaries' undertakings drawn up to 31 December 2021. Subsidiaries are
entities over which the Group has control. Control comprises an investor
having power over the investee and is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
On 19 July 2021, the Company completed a reverse acquisition of East Imperial
Pte, a company registered in Singapore. Further information about this
transaction is disclosed in note 3.
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra- group transactions, are eliminated. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.
The comparative period for the Group is 1 January 2020 to 31 December 2020 and
includes the results of the subsidiaries only.
2. Reverse Acquisition
On 19 July 2021, the Company acquired through a share for share exchange the
entire shares of East Imperial Pte. Limited whose principal activity is
beverage distribution.
Although the transaction resulted in East Imperial Pte Limited becoming a
wholly-owned subsidiary of the Company, the transaction constitutes a reverse
acquisition as the previous shareholders of East Imperial Pte Limited own a
substantial majority of the Ordinary Shares of the Company and the executive
management of East Imperial Pte Limited became the executive management of
East Imperial Plc, previously Bermele plc.
In substance, the shareholders of East Imperial Pte Limited acquired a
controlling interest in the Company and the transaction has therefore been
accounted for as a reverse acquisition. As the Company's activities prior to
the acquisition were purely the maintenance of the LSE Listing, acquiring East
Imperial Pte Limited and raising equity finance to provide the required
funding for the operations of the acquisition it did not meet the definition
of a business in accordance with IFRS 3 for the purpose of these consolidated
financial statements of the Group.
Accordingly, in these consolidated financial statements, the reverse
acquisition did not constitute a business combination and was accounted for in
accordance with IFRS 2 "Share-based Payments" and the associated IFRIC
guidance. Although the reverse acquisition is not a business combination, the
Company has become a legal parent and is required to apply IFRS 10 and prepare
consolidated financial statements. The Directors have prepared these
consolidated financial statements using the reverse acquisition methodology,
but rather than recognising goodwill, the difference between the equity value
given up by the East Imperial Pte Limited shareholders and the share of the
fair value of net assets gained by the East Imperial Pte Limited shareholders
is charged to the statement of comprehensive income as a share-based payment
on the reverse acquisition and represents in substance the cost of acquiring
the main market listing.
In accordance with reverse acquisition accounting principles, these
consolidated financial statements represent a continuation of the consolidated
statements of East Imperial Pte Limited. and include
▪ The assets and liabilities of East Imperial Pte Limited at their
carrying value amount and the results for both years; and
▪ The assets and liabilities of the Company as at 18 July 2021 and
its results from the date of the reverse acquisition (19 July 2021) to 31
December 2021.
On 19 July 2021, the Company issued 240,702,581 ordinary shares to acquire the
whole of the share capital of East Imperial Pte Limited. The prospectus
dated 30 June 2021 had an issue price of £0.10 per share of the Company's
share capital to be issued and therefore valued the investment in East
Imperial Pte Limited at £24,070,258.
Because the legal subsidiary, East Imperial Pte Limited, was treated on
consolidation as the accounting acquirer and the legal Parent Company, East
Imperial Plc, was treated as the accounting subsidiary, the fair value of the
shares deemed to have been issued by East Imperial Pte Limited was
determined to be £2,828,805, being the number of shares in issue of East
Imperial Plc of 28,288,054 valued at £0.10 share price.
The fair value of the net assets of East Imperial plc at acquisition was as
follows:
£'000
Receivables
427
Payables (134)
Total Net Liabilities 293
The difference between the deemed cost (£2,828,805) and the fair value of the
net assets acquired per above of £292,879 resulted in £2,535,927 being
recognised as a reverse acquisition expense within Exceptional Costs in
accordance with IFRS 2, Share-Based Payments, reflecting the economic cost to
East Imperial Pte Limited shareholders of acquiring a quoted entity.
The reverse acquisition reserve which arose from the reverse takeover is made
up as follows:
£'000
Pre-acquisition equity 9,929
East Imperial Pte Limited equity at acquisition 6,565
Investment in East Imperial Pte Limited. (24,070)
Reverse acquisition expense 2,536
5,040
3. Segmental Reporting
The Group derives revenue from the sale of beverages. All entities in the
group derive income from these products which, in all aspects except details
of revenue, are reviewed and managed together within the Group and as such are
considered to be the only segment.
The following information is given about the Group's reportable segments:
Type % Revenue by Country of destination %
Beverage distribution 100 New Zealand/Australia 57%
United States 15%
China 8%
Singapore 7%
European Union 10%
Rest of the world 3%
100%
4. Earnings Per Share
2021 2020
£ 000 £ 000
Net Loss from continuing operations (5,370,000) (972,000)
Weighted average number of shares (000) 270,295,861 240,702,581
Earnings per Share (£ .00) (0.0199) (0.0040)
As at 31 December 2021 there are 9,276,832 options that are exercisable at
dates after 31 December 2021. These options are anti-dilutive. Diluted
earnings per share is therefore equal to earning per share.
The issue of 32,398,999 shares in January 2022 will have a dilutionary effect
on earnings per share in the next reporting period.
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. END FR FIFSEEDIEIIFRecent news on East Imperial
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