REG - East Imperial PLC - Year-End Trading Update

East ImperialAnnouncement

22/02/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240222:nRSV0038Ea&default-theme=true

RNS Number : 0038E  East Imperial PLC  22 February 2024

 

22 February 2024

East Imperial plc

("East Imperial" or the "Company")

 Year-End Trading Update

East Imperial plc, the global purveyor of super-premium beverages, is pleased
to provide an update on trading for the year ended 31 December 2023.

Highlights

●     Revenue of £2.35m for FY2023 (unaudited), as expected behind the
£3.17m recorded in FY 2022 given the operating constraints experienced in Q2
and Q3

●     Post resolution of operational issues, sales recovery in Q4 2023
with momentum maintained in Q1 2024

●     Margin improvement programme implemented in Q4 2023, which
included cost reduction initiatives and selective price rises, led to a 15%
margin expansion in Q4 2023 and improvement maintained into 2024

●     Implementing initiatives to improve working capital cycle
including the moving of overseas customers to FOB shipping terms and trade
financing

●     Ongoing discussions with potential debt funders to provide
additional working capital to help support ongoing expansion

●     Expectation that cashflow breakeven will be achieved in Q4 2024

 

As previously announced, 2023 was a challenging year for the business, as a
shortage of working capital in Q2 and Q3 affected operations and revenue until
the Convertible Loan Note facility from INL was agreed upon and then drawn
down in August and November 2023.

 

Significant progress has been made to restructure the business since the
inflow of the loan proceeds with a focus on cost reductions, margin
improvement and Tier 1 and Tier 2 customer wins. In Q4 2023, these efforts
began to gain traction as the on-premises and off-premises channels recovered
in the New Zealand market, with over 44,000 cases shipped, representing
approximately £533,000 in revenue from New Zealand alone. Overall, the
revenue for the year was £2.35m (2022: £3.17m), reflecting the five-month
working capital constraints and the loss of capacity in Q2 and Q3.

 

The Company has now established an experienced US sales team in key strategic
regions - initially in Florida, California and Texas, which is driving sales
growth in 2024.

Singapore remains an important regional gateway in Asia, and the Company's
regional distribution partner strengthens market access to ASEAN markets here
and in Hong Kong.

In mainland China, sales growth in 2023 had been slower than expected. The
Company has been working closely with its distributor to roll out a targeted
development plan for this market for 2024. With the significant Tier 1
addition of Galaxy Entertainment Group in Macau and with approximately 6,000
cases expected to be shipped in Q1 2024, progress is being made.

Continued Tier 1 client wins in Europe, the Netherlands and the Czech Republic
demonstrate the Company's ability to 'land and expand' its product range and
compete with larger brands.

In addition to sales growth, increasing margins is important to accelerating
the Company's path to breakeven. The margin improvement programme implemented
in Q4 2023 includes a range of initiatives, including moving overseas
customers to FOB shipping terms, reducing logistical touchpoints, and putting
in place trade financing, in addition to cost reduction initiatives and
selective price rises. In Q4, margins showed a 15% increase from Q3, and this
improvement has been maintained in January 2024.

Overall, the direction in terms of sales and margins is positive and the Board
remains confident in the team's ability to continue to deliver further Tier 1
and Tier 2 listings, drive growth, and deliver the case sales required in 2024
and beyond.  The Company is in discussions with potential debt funders to
provide additional working capital to support this growth.

The Company expects to announce its results for the year ended 31 December
2023 in April 2024.

Anthony Burt, CEO & Executive Chairman of East Imperial plc, commented:

 

"East Imperial made significant operational improvements and commercial
advances during 2023 despite the challenging operational issues earlier in the
year. We know that we must drive sales, margin enhancement and cash generation
as we target customers in our chosen markets who demand quality and a sense of
individuality. Our brand's strength and growth potential are unquestionable
and are demonstrated by our recent and ongoing client wins."

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

For further information, please contact:

 East Imperial plc                                           investors@eastimperial.com (mailto:investors@eastimperial.com)

 Anthony Burt

 Allenby Capital Limited (Broker)                            +44 (0)20 3328 5656

 Guy McDougall / Matt Butlin (Sales and Corporate Broking)

 Jeremy Porter / Piers Shimwell (Corporate Finance)

 

About East Imperial

 

Founded in New Zealand and Singapore in 2012, East Imperial produces a range
of super-premium mixers that sell throughout APAC, the US and EMEA. Guided by
a clear strategy to capitalise on the growing demand for premiumisation across
the beverage industry, East Imperial has sold over 33 million bottles in over
20 countries since its founding, with popular products including Old World
Tonic Water, Grapefruit Tonic Water, Yuzu Tonic Water and Mombasa Ginger Beer.
In 2023, East Imperial won 8 medals at the coveted Tonic & Mixers Masters
Competition in London.

 

The Company was founded on the philosophy of creating exquisite products
defined by heritage, tradition, and authenticity. All products are made from
the highest quality, all-natural ingredients, reflecting East Imperial's
commitment to providing a sustainable product and minimising environmental
impacts at every stage of the manufacturing process. For more information
about East Imperial and its ultra-premium mixers.

 

Visit https://www.eastimperial.com/ (https://www.eastimperial.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  TSTTBMPTMTBTBMI