REG - Huddled Group PLC - Interim Results & Trading Update
30/09/2024 07:00
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RNS Number : 1106G Huddled Group PLC 30 September 2024
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.
30 September 2024
Huddled Group plc
("Huddled", the "Company" or the "Group")
Interim Results & Trading Update
Huddled Group plc (AIM:HUD), the circular economy e-commerce business, is
pleased to announce its unaudited interim results for the six months to 30
June 2024, along with an update on trading for Q3 2024 to date.
Highlights
Group
H1 Highlights
● H1 2024 revenue £5,274,000, an increase of 123.4% compared with H2 2023 (H2
2023: £2,361,000)
● 44.5k new customers in period
● Completion of the acquisition of Food Circle Supermarket Limited on 11 April
2024 (since rebranded Nutricircle)
Q3 Highlights to date
● Q3 revenue expected to exceed £3.5m, an increase of circa 13% compared to Q2
2024
● Investment in production of TV advertisement for Discount Dragon - aired on
ITV1 regionally in July 2024 and nationally at the end of September 2024
● Cash on hand of circa £2.0m, following circa £0.5m further investment in
stock in anticipation of the Q4 period. Total stock on hand is circa £1.8m.
(inclusive of Let's Explore stock).
● Acquisition of 75% controlling stake of Boop Beauty Limited on 5 July 2024,
post-period end
Discount Dragon
H1 Highlights
● H1 2024 revenue up 61.3% to £4,903,000 (H2 2023: £3,039,000)
● H1 2024 orders placed up 54.0% to 137.8k (H2 2023: 89.5k)
● Average order value (AOV) up 3.8% to £34.99 (H2 2023: £33.70)
● New customers added in the period up 70.6% to 41.5k (H2 2023: 24.3k)
Q3 Highlights to date
● Q3 2024 revenue expected to exceed Q2 2024
● Removal of £30 minimum spend threshold in August 2024
● Q3 2024 AOV expected to exceed £39, an increase of circa 11% compared with Q2
2024. AOV increased month-on-month during the quarter with September 2024 AOV
expected to exceed £41
● Q3 2024 new customers expected to be circa 16k
Nutricircle
H1 Highlights (12 April - 30 June 2024)
● Revenue of £349,000 in the period
● 9.8k orders in the period
● AOV of £35.83 in the period
● 3.0k new customers in the period
Q3 Highlights to date
● Q3 2024 revenue expected to exceed £550,000 an increase of 58% compared to
the Q2 2024 post-acquisition period
● AOV for Q3 2024 expected to exceed £36.50
● New customers expected to exceed 6,000, an increase of 100% on H1
● Expected to generate a modest operating profit contribution in September
Boop Beauty
● Site successfully relaunched on 12 September 2024 with enhanced range
● Winner of Marie Claire Magazine Sustainability Award 2024
● Encouraging website traffic and sales expected to be circa £25,000 from
relaunch to the end of September
Martin Higginson, Chief Executive Officer of Huddled, commented:
"H1 2024 was all about investment and growth, expanding our offering and
solidifying the foundations of the business. Alongside this, we were pleased
to deliver continued growth in revenues exceeding £5m. The acquisition of
Food Circle Supermarket, now rebranded Nutricircle, followed by Boop Beauty in
Q3 have strengthened the Group's e-commerce portfolio, and underpinned our
commitment to saving surplus stock from going to waste. We have demonstrated
to manufacturers and suppliers alike that there is an alternative, allowing
customers to save money on some of their favourite brands, from coffee to
cosmetics, perfumes to protein shakes. The positive comments we receive on
TrustPilot, as well as the thousands of customers that come back month after
month is testament to our strategy.
"H2 2024 is now about continued growth, while also driving efficiencies from
shared Group operations and expertise, all of which we believe will deliver a
profitable and sustainable business model."
Enquiries:
For further information please visit www.huddled.com/investors, or contact:
Huddled Group plc
investors@huddled.com
Martin
Higginson
David Marks
Daniel Wortley
Zeus (Nominated Adviser and Sole Broker)
Tel + 44 (0) 203
829 5000
Nick Cowles, James Hornigold, Alex Campbell-Harris (Investment Banking)
Dominic King (Corporate Broking)
Alma Strategic Communications (Financial PR)
huddled@almastrategic.com
Rebecca Sanders-Hewett
Sam Modlin
Kieran Breheny
Chairman's statement
Group revenue continues to grow strongly, as well as improving the key
performance indicators of average order value (AOV) and basket margin. This
successful formula will, we believe, drive the operating businesses forward
towards monthly profitability.
The team continues to deliver growth as demonstrated by the performance in Q3
2024. We believe the decision to remove the minimum order value on Discount
Dragon has proven to be the correct one, resulting in AOV and basket margin
(revenue less cost of goods, packaging and processing fees) improving
significantly. This has allowed customers the choice of placing smaller orders
and paying for postage, or spending over £30 to get free postage.
The acquisition of both Nutricircle (formerly Food Circle Supermarket) and
Boop Beauty have been excellent additions alongside Discount Dragon, and fit
perfectly into our strategy of saving surplus products from waste, whilst
providing customers with great deals. Early signs following the rebranding of
Nutricircle are encouraging and suggest further growth for Q4. We also look
forward to seeing the impact of our initial improvements, including a new
website, and a much broader range, on the Boop Beauty business over the
balance of the current financial year.
Overall, the team has delivered a period of good progress in the year to date.
Now with a portfolio of complementary e-commerce businesses utilising shared
fulfilment, marketing and finance resources, the team is focused on growing
revenue in Q4 and reaching the tipping point for profitability in the three
core trading businesses.
Chief Executive's review
Group
With a focus very much on top line growth we saw Group revenues for H1 2024
grow to £5,274,000. Bolstered by the Nutricircle acquisition, trading in Q2
2024 saw solid progress delivering £3,130,000 of revenue for the period, an
increase of circa 46% vs £2,144,000 in Q1 2024.
The Group reported an expected adjusted EBITDA loss of £1,550,000 for the
period (net of £602,000 PLC costs), as we invested in the building blocks for
future growth. We have grown the e-commerce and marketing teams, invested in
the production of a TV advert, further developed and rebranded our websites,
as well as strengthening the warehouse operations along with increased
marketing spend. In the period we attracted over 44,000 new customers helping
us drive revenue to over £5m.
During the period we continued to invest in stock, strengthening selected
categories such as alcohol and homeware for Discount Dragon, and deepening the
stock for Nutricircle.
At the half year stock levels had increased to some £1.3m for the Group (31
December 2023: £0.7m). Our ability to be able to react to stock opportunities
quickly and efficiently has enabled us to establish deeper relationships with
key suppliers, and to open new sources of supply, and take steps in developing
direct relationships with manufacturers. We believe our approach to surplus
stock resonates with suppliers and brands as they look to reduce waste and
improve their ESG footprint.
We are pleased with the progress we have made in the H1 2024, and look forward
to driving further operational synergies over the coming months. We have
continued to invest across all areas in Q3 2024, fuelling further growth in
revenues to circa £3.5m, which would represent an increase of circa 13%,
against Q2 2024. Nutricircle has moved into operational profitability, Boop
Beauty has relaunched successfully, and the losses at Discount Dragon have
reduced significantly as we move towards operational profitability.
Discount Dragon
Discount Dragon's revenue increased 61.3% to £4,903,000 in the period (H2
2023: £3,039,000). This was driven by a 53.9% increase in the number of
orders to 137.8k (H2 2023: 89.5k) and a 3.8% increase in AOV to £34.99 (H2
2023: £33.70)(1). The business added 41.5k new customers in the period, an
increase of 70.6% from the prior period.
In what was a period of heavy investment in operational capabilities, the
division made an adjusted EBITDA loss of £731,000. As demonstrated by the
table below, divisional basket margin was £953,000, with strong
quarter-on-quarter growth in both revenue and margin per cent.
As Nutricircle and Boop Beauty are integrated into the Group's central
operations, both marketing and warehouse personnel costs will be shared across
the three brands and the current cost of Nutricircle's warehouse and related
personnel will be saved.
Q1 2024 Q2 2024 H1 2024
£'000 £'000 £'000
Revenue 2,133 2,770 4,903
Product, postage & packaging and payment processing costs (1,760) (2,190) (3,950)
Basket margin 373 580 953
17.5% 20.9% 19.4%
Advertising expenses (199) (223) (422)
Warehouse personnel (244) (393) (637)
Gross loss (70) (36) (106)
(3.3%) (1.3%) (2.2%)
Warehouse personnel costs increased significantly in Q2 2024, predominantly
due to additional shifts to be able to service increased levels of demand. A
substantial element of the warehouse personnel costs are fixed meaning that
additional picking and packing capacity can be added to existing shifts
incrementally as needed and costs do not grow pro-rata to order levels, such
that the overall warehouse staff costs per order should fall with increasing
volume. With effect from its relaunch earlier this month, Boop Beauty's orders
are being fulfilled from Discount Dragon's Leigh warehouse and Nutricircle's
warehousing is expected to be absorbed into the same operation in October
2024. Fulfilment capacity across the Group will increase substantially as of
February 2025, following the doubling of the operational space and related
fit-out at the current facility.
In July 2024 we produced and ran a regional trial of a TV advertisement on
ITV1 in Granada and Yorkshire and a trial on Heart and LBC radio, the results
were encouraging, with some important data points coming out of the trial. On
the back of this we decided to remove the minimum £30 spend threshold, and
invest in improvements to the website, making the User Experience (UX) easier
to navigate, as well as easier to checkout. We reduced advertising spend in
August and early September whilst these changes were made. The TV and Radio
advertising campaign was resumed as of 23 September 2024.
Following the removal of the £30 minimum order threshold, allowing customers
to purchase as little or as much as they need, along with the UX improvements,
we have seen improved customer satisfaction, and a steady increase in AOV with
September 2024 AOV expected to exceed £41. In addition, we have seen a steady
increase in basket margin, along with returning customer numbers - 74% of
August 2024 orders came from returning customers.
Having successfully driven up the AOV and basket margin in Q3, we will now
look to scale marketing to drive further growth and harness the efficiencies
which will flow from running three businesses from the one location.
(1) As previously reported, AOV in Q1 2024 was negatively impacted by
incentives given to new customers. Q2 2024 AOV was £36.87 and Q3 2024 is
trending above that.
Nutricircle
We have been pleased with Nutricircle's progress following the completion of
its acquisition on 11 April 2024.
The business generated £349,000 revenue and delivered gross profit of
£53,000 in the period from its acquisition to 30 June 2024.
In late August 2024 the rebrand to Nutricircle was completed. This has been
extremely well received with September 2024 revenue not only exceeding
expectations but delivering the brand's best performance to date, and driving
this operational business into profitability. September 2024 revenue is
expected to be circa £225,000 allowing the business to deliver a modest
profit contribution, and paving the way for further growth and synergies over
the coming months.
As noted above, we expect fulfilment of all Nutricircle orders will be
absorbed into our centralised warehouse in Leigh during October 2024 which
should result in significant net cost savings. The move will also allow us
to migrate the postage to a single Royal Mail contract, which we expect to
yield future volume discounts, as well as allowing Nutricircle to join
Discount Dragon and Boop Beauty in being able to deliver to any location in
the UK, including Northern Ireland, the Highlands of Scotland and the Channel
Islands, all of which are currently charged a significant premium on the
delivery charges. This combination should not only aid sales growth but also
reduce overall delivery costs.
With Nutricircle already turning a modest profit contribution we look forward
to building on this and driving further synergies as we continue to exploit
the benefits of Group fulfilment, marketing and website user experience
knowledge.
Boop Beauty
On 5 July 2024, Huddled acquired a controlling stake of 75% of the share
capital in Boop Beauty Limited, an e-commerce business specialising in surplus
beauty and cosmetic products. Boop Beauty was founded by Yasmine Amr,
formerly a L'Oreal in-house lawyer, who remains with the business in an
advisory role. Since the acquisition, we have introduced a new website,
improving the stock offering, and preparing for launch. The business was
officially relaunched on 12 September 2024.
Whilst still early days, we are pleased with the initial sales performance
which has exceeded our expectations. The range being offered to consumers is
impressive with products from many well known brands such as Sol de Janeiro,
Drunk Elephant, L'Oreal, ESPA and many more at substantial discounts to high
street prices.
With over £3 billion of cosmetics going to waste each year it was clear to us
there was a need for a business like Boop Beauty, helping cosmetic companies
solve their waste challenges, as well as allowing customers to purchase
products, some of which they would sample for the first time, often at a huge
discount to their retail price.
The strategy of the business was further endorsed recently when Boop Beauty
was awarded the Marie Claire 2024 Sustainability Award in the category of
Small Business: Best Multi-Brand Retailer for beauty, health & wellness.
Let's Explore
On 10 May 2024, the Group entered into a strategic partnership with Wicked
Vision Limited. Under the terms of the agreement, Wicked Vision initially
acquired a 25% stake in the business, with Huddled retaining 75% ownership.
The agreement allows Wicked Vision to increase its stake to 50% once Huddled
has received a net inflow of circa £400,000, being the value of the working
capital in the business at the time the deal was completed. Wicked Vision has
taken charge of the day-to-day operations of the Let's Explore business and we
have already started to observe encouraging signs of progress.
Post-period end, in July 2024, an updated Vodiac Pro product, which includes a
new and improved headset and 100 VR experiences, was launched on QVC USA. The
new product was received well with all 6,000 units ordered selling out across
two airings. QVC USA has since ordered a further 15,000 units to be delivered
in November, and QVC UK some 6,000 units.
In addition to the QVC sales and a number of smaller B2B sales, we have
commenced our Q4 B2C, and Amazon sales strategy for the Let's Explore range,
including Oceans, Wildlife and Space. In total we hold circa 12,000 units
which we plan to sell in Q4 2024 via Amazon and via our website priced at $99.
HUDDLED GROUP PLC
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2024
Notes Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 December 2023
Continuing operations £'000 £'000 £'000
Revenue 5,274 62 2,423
Cost of sales (5,402) (139) (2,468)
_______ _______ _______
Gross loss (128) (77) (45)
Other income 4 6 129 244
Administrative expenses (1,809) (1,353) (2,813)
_______ _______ _______
Operating loss (1,931) (1,301) (2,614)
Memorandum:
Adjusted EBITDA (1,550) (455) (1,333)
Depreciation (38) (10) (28)
Amortisation (210) (86) (241)
Share based payments - (332) (337)
One-off costs 5 (133) (418) (675)
______ ______ ______
Operating loss (1,931) (1,301) (2,614)
Finance costs (1) (1) (2)
Finance income 92 189 337
______ ______ ______
Loss before taxation (1,840) (1,113) (2,279)
Taxation 81 (4) (8)
______ ______ ______
Loss for the period from continuing operations (1,759) (1,117) (2,287)
operations
Profit after tax from discontinued operations - 15,177 15,268
________ ______ ______
Profit/(loss) for the period (1,759) 14,060 12,981
======== ======== ========
Attributable to:
Equity holders of the company (1,745) 14,060 12,981
Non-controlling interests (14) - -
________ ______ ______
(1,759) 14,060 12,981
======== ======== ========
HUDDLED GROUP PLC
CONSOLIDATED INCOME STATEMENT (CONTINUED)
for the six months ended 30 June 2024
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Other comprehensive income/(expense) for the period
Profit/loss for the period (1,759) 14,060 12,981
Profit/(loss) on translation of subsidiaries 2 (285) (282)
Cumulative translation differences transferred to the income statement on - 155 155
disposal of subsidiaries
________ ______ ______
Total comprehensive income/(expense) for the period (1,757) 13,930 12,854
======== ======== ========
Attributable to:
Equity holders of the company (1,743) 13,930 12,854
Non-controlling interests (14) - -
________ ______ ______
(1,757) 13,930 12,854
======== ======== ========
Notes Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 December 2023
£0.01 £0.01 £0.01
Earnings/(loss) per share
From continuing and discontinued operations
Basic EPS 6 (0.55) 3.50 4.04
Diluted EPS 6 (0.55) 3.50 4.04
From continuing operations
Basic EPS 6 (0.55) (0.28) (0.71)
Diluted EPS 6 (0.55) (0.28) (0.71)
From discontinued operations
Basic EPS 6 - 3.78 4.75
Diluted EPS 6 - 3.78 4.75
HUDDLED GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2024
(Unaudited)
Share Share Foreign exchange reserve Capital redemption reserve Retained (deficit)/ Total
capital premium Merger reserve Equity reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 166 20,556 93 - - - (15,494) 5,321
Profit for the period - - - - - - 14,060 14,060
Currency translation of overseas subsidiary - - (285) - - - - (285)
Cumulative translation differences transferred to the income statement on - - 155 - - - - 155
disposal of subsidiaries
Exercise of share options 19 1,159 - - - - - 1,178
Reduction in share premium - (20,572) - - - - 20,572 -
Buyback and cancellation of shares (109) - - - 109 - (12,527) (12,527)
Equity settled share-based payments - - - - - - 332 332
_____ _____ _____ _____ _____ _____ _____ _____
Balance at 30 June 2023 76 1,143 (37) - 109 - 6,943 8,234
_____ _____ _____ _____ _____ _____ _____ _____
Loss for the period - - - - - - (1,079) (1,079)
Currency translation of overseas subsidiary - - 3 - - - - 3
Buyback and cancellation of shares (1) - - - 1 - (153) (153)
Acquisition of subsidiaries 52 - - 2,823 - 417 - 3,292
Equity settled share-based payments - - - - - - 5 5
_____ _____ _____ _____ _____ _____ _____ _____
Balance at 31 December 2023 127 1,143 (34) 2,823 110 417 5,716 10,302
_____ _____ _____ _____ _____ _____ _____ _____
HUDDLED GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
for the six months ended 30 June 2024
(Unaudited)
Share Share Foreign exchange reserve Capital redemption reserve Retained (deficit)/ Total
capital premium Non-controlling interests earnings equity
Merger reserve Equity reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 127 1,143 (34) 2,823 110 417 - 5,716 10,302
Loss for the period - - - - - - (14) (1,745) (1,759)
Currency translation of overseas subsidiary - - 2 - - - - - 2
Acquisition of subsidiaries 1 - - 53 - 54 - - 108
Partial disposal of subsidiary - - - - - - 28 (28) -
_____ _____ _____ _____ _____ _____ _____ _____ _____
Balance at 30 June 2024 128 1,143 (32) 2,876 110 471 14 3,943 8,653
_____ _____ _____ _____ _____ _____ _____ _____ _____
HUDDLED GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2024
Unaudited Unaudited Audited
Notes 30 June 30 June 31 December 2023
2024 2023
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 8 208 152 209
Right-of-use assets 8 36 - -
Intangible assets 9 4,244 159 3,935
______ ______ ______
Total non-current assets 4,488 311 4,144
Current assets
Inventories 1,312 47 724
Trade and other receivables 10 694 1,594 1,819
Contract assets 11 17 95
Cash and cash equivalents 3,280 6,827 4,268
______ ______ ______
Total current assets 5,297 8,485 6,906
______ ______ ______
Total assets 9,785 8,796 11,050
______ ______ ______
LIABILITIES
Current liabilities
Trade and other payables 11 (995) (529) (580)
Contract liabilities (16) - -
Provisions - - (53)
Loans (20) (10) (10)
IFRS 16 leases (36) - -
______ _______ _______
Total current liabilities (1,067) (539) (643)
Non-current liabilities
Loans (28) (23) (18)
IFRS 16 leases (7)
Deferred tax (30) - (87)
______ _______ _______
Total non-current liabilities (65) (23) (105)
______ ______ ______
Total liabilities (1,132) (562) (748)
______ _______ ______
NET ASSETS 8,653 8,234 10,302
======== ======== ========
CAPITAL AND RESERVES
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share capital 12 128 76 127
Share premium 13 1,143 1,143 1,143
Foreign exchange reserve 13 (32) (37) (34)
Merger reserve 13 2,876 - 2,823
Capital redemption reserve 13 110 109 110
Equity reserve 13 471 - 417
Non-controlling interests 13 14
Retained earnings 13 3,943 6,943 5,716
______ _______ ______
TOTAL EQUITY 8,653 8,234 10,302
======== ======== ========
HUDDLED GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2024
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
OPERATING ACTIVITIES
Loss before tax from continuing operations (1,840) (1,113) (2,279)
Profit before tax from discontinued operations - 15,185 15,276
Adjustments for:
Depreciation 38 183 201
Amortisation 210 125 280
Loss/(gain) on disposal of non-current assets - 3 3
Gain on disposal of subsidiary undertakings - (15,115) (15,206)
Costs relating to the disposal of subsidiaries - (528) (437)
Share based payments - 332 337
Foreign exchange profit/(loss) 2 (285) (282)
Finance costs 1 5 6
Finance income (92) (189) (337)
Tax (paid)/refunded 7 (12) (16)
_____ ____ _ _____
Operating profit/(loss) before changes in working capital and provisions (1,674) (1,409) (2,454)
(Increase)/decrease in inventories (522) 36 (41)
Decrease in trade and other receivables 1,211 400 195
Increase/(decrease) in trade and other payables 98 (427) (901)
_____ _____ _____
Net cash flows from / (used in) operating activities (887) (1,400) (3,201)
_____ _____ _____
INVESTING ACTIVITIES
Purchase of property, plant and equipment (28) (266) (278)
Purchase of intangible assets (61) (100) (157)
Proceeds from sale of subsidiary undertakings - 19,846 19,818
Cash disposed on sale of subsidiary undertakings - (354) (354)
Cash paid to acquire subsidiaries (100) - -
Cash acquired with subsidiaries 9 - 45
_____ _____ _____
Net cash flows from investing activities (180) 19,126 19,074
FINANCING ACTIVITIES
Finance costs (1) (5) (6)
Finance income 92 189 337
Loan and finance lease repayments (12) (63) (763)
Issue of ordinary shares - 1,178 1,178
Share buybacks - (12,527) (12,680)
_____ _____ _____
Net cash flows from financing activities 79 (11,228) (11,934)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (988) 6,498 3,939
_____ _____ _____
Cash and cash equivalents brought forward 4,268 329 329
_____ _____ _____
CASH AND CASH EQUIVALENTS CARRIED FORWARD 3,280 6,827 4,268
_____ _____ _____
HUDDLED GROUP PLC
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 30 June 2024
1 Corporate information
The interim consolidated financial statements of the Group for the period
ended 30 June 2024 were authorised for issue in accordance with a resolution
of the directors on 27 September 2024. Huddled Group plc ("the Company") is a
Public Limited Company quoted on AIM, incorporated in England and Wales. The
interim consolidated financial statements do not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006.
2 Statement of accounting policies
2.1 Basis of preparation
The interim consolidated financial statements of the Group for the six months
ended 30 June 2024 have been prepared in accordance with the UK-adopted
International Accounting Standard 34 Interim Financial Reporting.
The entities consolidated in the interim financial statements of the Group for
the six months to 30 June 2024 comprise the Company and its subsidiaries
(together referred to as "the Group").
The interim consolidated financial statements do not include all the
information and disclosures required in the annual financial statements and
should be read in conjunction with the Group's annual audited consolidated
financial statements for the year ended 31 December 2023.
The directors are satisfied that, at the time of approving the interim
consolidated financial statements, it is appropriate to adopt a going concern
basis in accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS") as adopted by the
European Union.
In reaching this conclusion, the directors considered the financial position
of the Group and prepared forecasts and projections for the next 12 months,
taking into account reasonably possible changes in trading performance and
capital expenditure requirements.
The financial statements do not include any adjustments that would result from
the going concern basis of preparation being inappropriate.
2.2 Accounting policies
The principal accounting policies adopted in the preparation of these interim
statements are consistent with those applied in the preparation of the Group's
annual consolidated financial statements for the year ended 31 December 2023
other than the Group has adopted amended financial standards effective as of 1
January 2024. None of the amendments adopted on 1 January 2024 have had a
material impact on the interim statements of the Group.
The preparation of these consolidated interim financial statements requires
management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates in preparing these consolidated interim financial statements.
3 Segmental information
The Group's primary reporting format for segmental information is business
segments which reflect the management reporting structure in the Group. The
information for discontinued segments is aggregated and shown as a separate
segment.
Six months to 30 June 2024
Discount Let's Head Total
Dragon Nutricircle Explore Office
£'000 £'000 £'000 £'000 £'000
Revenue 4,903 349 22 - 5,274
Cost of sales (5,009) (296) (97) - (5,402)
---------------- ---------------- --------------- --------------- ---------------
Gross profit/(loss) (106) 53 (75) - (128)
Other income - - - 6 6
Admin expenses* (625) (61) (134) (608) (1,428)
---------------- ---------------- --------------- --------------- ---------------
Adjusted EBITDA** (731) (8) (209) (602) (1,550)
Depreciation (18) (7) (1) (12) (38)
Amortisation (154) - (55) (1) (210)
One-off costs (74) - - (59) (133)
Finance costs - (1) - - (1)
Finance income - - - 92 92
Taxation 72 2 7 - 81
---------------- ---------------- ------------- ----------------- ----------------
Loss for the period (905) (14) (258) (582) (1,759)
---------------- ---------------- ------------- ----------------- ----------------
*Administrative expenses exclude depreciation, amortisation and one-off costs.
**Adjusted EBITDA is a non-GAAP metric.
Geographical disclosures
The geographical breakdown of the Group's revenue, assets and net tangible
capital expenditure is as follows.
External revenue by location of customer Location of assets Net tangible capital
expenditure by location
of assets
30 June 30 June 31 Dec 30 June 2024 30 June 2023 31 Dec 2023 30 June 2024 30 June 2023 31 Dec 2023
2024 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 5,260 59 1,934 9,564 8,763 11,301 28 159 173
USA & Canada 14 3 489 221 33 320 - - -
_____ _____ _____ _____ _____ _____ _____ _____ _____
Total 5,274 62 2,423 9,785 8,796 11,621 28 159 173
_____ _____ _____ _____ _____ _____ _____ _____ _____
The Group had no customers representing 10% or more of the Group's total
revenue in the period.
4 Other income
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 Dec 2023
£'000 £'000 £'000
Transitional services provided to disposed subsidiaries 6 129 244
---------------- ---------------- ----------------
5 One-off costs
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 Dec 2023
£'000 £'000 £'000
Business restructuring 83 12 25
Costs of acquiring subsidiaries 40 - 244
Other one-off costs 10 - -
Costs related to the capital reduction and share buybacks - 225 225
Bonuses awarded in relation to the LBE business sale - 181 181
---------------- ---------------- ----------------
133 418 675
---------------- ---------------- ----------------
6 Earnings per share
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 June 2024 30 June 2023 31 Dec 2023
£'000 £'000 £'000
Profit attributable to shareholders
Continuing operations (1,745) (1,117) (2,287)
Discontinued operations - 15,177 15,268
-------------------- -------------------- --------------------
Total profit attributable to shareholders (1,745) 14,060 12,981
-------------------- -------------------- --------------------
Basic weighted average number of shares 319,226,653 401,733,235 321,686,426
Diluted weighted average number of shares 348,424,673 450,865,644 355,153,905
============== ============== ==============
£0.01 £0.01 £0.01
Earnings per share
Basic earnings per share (0.55) 3.50 4.04
Diluted earnings per share (0.55) 3.50 4.04
========= ========= =========
Earnings per share from continuing operations
Basic earnings per share from continuing operations (0.55) (0.28) (0.71)
Diluted earnings per share from continuing operations (0.55) (0.28) (0.71)
========= ========= =========
Earnings per share from discontinued operations
Basic earnings per share from continuing operations - 3.78 4.75
Diluted earnings per share from continuing operations - 3.78 4.75
========= ========= =========
Earnings/(loss) per ordinary share has been calculated using the weighted
average number of shares outstanding during the relevant financial periods. In
accordance with IAS 33, diluted EPS is presented when a company could be
required to issue shares that would decrease earnings per share or increase
the loss per share. However, IAS 33 stipulates that diluted EPS cannot show an
improvement compared to basic EPS. In this case, as the inclusion of potential
ordinary shares would result in an improvement, they have been disregarded in
the calculation of diluted EPS.
7 Business combinations
On 11 April 2024, the Company announced that it had acquired 100% of the
ordinary shares in Nutricircle Limited (formerly Food Circle Supermarket
Limited) for consideration of up to £308,000.
The assets and liabilities of the acquired company were as follows:
Book Fair Value Adjustment Fair Value
Value to Group
£'000 £'000 £'000
Property, plant and equipment 2 - 2
Right-of-use assets 43 - 43
Intangible assets: customer database - 66 66
Cash and cash equivalents 9 - 9
Inventories 65 - 65
Trade and other receivables 7 - 7
Trade and other payables (170) - (170)
Contract liabilities (16) - (16)
Loans (27) - (27)
IFRS 16 lease (47) - (47)
Deferred tax - (17) (17)
------------- ------------- -------------
Net assets on acquisition (134) 49 (85)
Goodwill on acquisition 393
-------------
Total consideration 308
======
Consideration discharged by:
Initial cash consideration 100
Initial equity consideration 54
Deferred equity consideration 54
Contingent cash consideration 100
-------------
308
======
On 11 April 2024, the Company paid £100,000 in satisfaction of the initial
cash consideration.
Also on 11 April 2024, the Company issued 2,096,436 new ordinary shares at a
fair value of 2.6p each in satisfaction of the £54,000 initial equity
consideration.
Subject to any adjustments to the purchase price in the event of warranty
claims against the vendors, the Company will issue a further 2,096,436 new
ordinary shares in satisfaction of the deferred consideration on the first
anniversary of the acquisition. The deferred consideration shares have been
valued at completion date fair value of 2.6p each.
An additional £100,000 in cash will be payable if Nutricircle meets certain
targets during its first 12 months post-acquisition.
A net deferred tax liability of £17,000 has been recognised in relation to
fair value adjustments arising on the business combination.
The goodwill on consolidation of £393,000 includes assets acquired which did
not meet the criteria for separate recognition such as supplier relationships
and employees' 'know-how'.
Costs of £40,000 relating to the acquisition are included within
administrative expenses in the period.
8 Property, plant and equipment
Fixtures, fittings and equipment Motor Right-of-use assets Total
vehicles
£'000 £'000 £'000 £'000
Cost
At 1 January 2024 94 162 - 256
Acquired with subsidiary 11 - 132 143
Additions 28 - - 28
_____ _____ _____ _____
At 30 June 2024 133 162 132 427
_____ _____ _____ _____
Depreciation
At 1 January 2024 25 22 - 47
Acquired with subsidiary 9 - 89 98
Depreciation of owned assets 19 12 - 31
Depreciation of leased assets - - 7 7
_____ _____ _____ _____
At 30 June 2024 53 34 96 183
_____ _____ _____ _____
Net book value
30 June 2024 80 128 36 244
_____ _____ _____ _____
31 December 2023 69 140 - 209
_____ _____ _____ _____
The method of depreciation for each class of depreciable asset is:
Fixtures, fittings and
equipment -
three years on a straight-line basis
Motor
vehicles
- between three and seven years on a straight-line basis
Right-of-use
assets
- over the term of the lease on a straight-line basis
9 Intangible assets
Development costs Goodwill on consolidation Other intangible assets Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2024 570 1,635 2,251 4,456
Acquired with subsidiary - 393 65 458
Additions 57 - 4 61
_____ _____ _____ _____
At 30 June 2024 627 2,028 2,320 4,975
_____ _____ _____ _____
Amortisation
At 1 January 2024 426 - 95 521
Amortisation charge 60 - 150 210
_____ _____ _____ _____
At 30 June 2024 486 - 245 731
_____ _____ _____ _____
Net book value
30 June 2024 141 2,028 2,075 4,244
_____ _____ _____ _____
31 December 2023 144 1,635 2,156 3,935
_____ _____ _____ _____
Development costs are comprised of software, virtual reality and augmented
reality content. Development costs are amortised on a straight-line basis
over 3 years. No amortisation is charged against projects which are still in
development.
Other intangible assets comprise the Discount Dragon brand, Discount Dragon
and Nutricircle customer databases, website development and trademark costs.
Other intangible assets are amortised over two or three years.
Amortisation is charged to administrative costs in the income statement.
10 Trade and other receivables
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 Dec 2023
£'000 £'000 £'000
Trade receivables 151 81 449
Prepayments 389 103 184
Other receivables 154 1,410 1,186
---------------- ---------------- ----------------
694 1,594 1,819
---------------- ---------------- ----------------
11 Trade and other payables
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 Dec 2023
£'000 £'000 £'000
Trade payables 380 54 233
Accruals 521 173 274
Taxation and social security 74 296 58
Other payables 20 6 15
---------------- ---------------- ----------------
995 529 580
---------------- ---------------- ----------------
12 Share capital
Shares £'000
Ordinary shares of 0.040108663 pence issued and fully paid up
As at 1 January 2024 318,305,143 127
Shares issued as purchase consideration 2,096,436 1
------------------------------- -------------------
As at 30 June 2024 320,401,579 128
------------------------------- -------------------
13 Reserves
Full details of movements in reserves are set out in the consolidated
statement of changes in equity. The following describes the nature and purpose
of each reserve within owners' equity:
Share premium: Amount subscribed for share capital in excess of nominal value.
Merger reserve: Premium above the nominal value of shares issued for equity
consideration.
Capital redemption reserve: Nominal value of the Company's own shares
purchased and cancelled.
Retained deficit: Cumulative net gains and losses recognised in the
consolidated statement of comprehensive income.
Foreign exchange reserve: Reserve arising on translation of the Group's
overseas subsidiaries.
Equity reserve: Deferred equity consideration in relation to the Huddled
Holdings Limited (formerly Huddled Group Limited) acquisition.
Non-controlling interests: The net value of assets and liabilities held on the
Group's balance sheet attributable to third parties holding equity interests
in the Group's subsidiaries.
14 Related party transactions
M J Higginson, a director of Huddled Group plc, is a director and controlling
shareholder of M Capital Investment Properties Limited. Services to the
value of £12,000 (year to 31 December 2023: £24,000) were invoiced in the
period by M Capital Investment Properties Limited to Huddled Group plc. At 30
June 2024, Huddled Group plc owed £Nil (31 December 2023: £Nil) to M Capital
Investment Properties Limited.
R Miller, a director of Huddled Group plc, is a director of Robin Miller
Consultants Ltd. In the period, services totalling £8,000 (year to 31
December 2023: £28,000) were billed to Huddled Group plc from Robin Miller
Consultants Ltd. At 30 June 2024, £1,000 (31 December 2023: £Nil) was owing
from Huddled Group plc to Robin Miller Consultants Ltd.
D Marks, a director of Huddled Group plc, was advanced a loan in a prior
period. Interest is currently charged on the loan at 2% per annum. At 30 June
2024, D Marks owed £17,000 (31 December 2023: £17,000) inclusive of
interest, to the Group.
D F G Wortley, a director of Huddled Group plc, was advanced a loan in a prior
period. Interest is currently charged on the loan at 2% per annum. At 30 June
2024, D F G Wortley owed £5,000 (31 December 2023: £5,000) inclusive of
interest, to the Group.
D Marks, a director of Huddled Group plc, was advanced funds in a prior
period. At 31 December 2023, D Marks owed £9,000 to the Group (31 December
2023: £9,000).
M J Higginson, a director of Huddled Group plc, was advanced funds in a prior
period. At 31 December 2023, M J Higginson owed £10,000 to the Group (31
December 2023: £10,000).
S J Higginson, the son of M J Higginson, a director of the Company, charged
consultancy fees of £45,000 to the company during the period (2023:
£90,000). At the period end the company owed £8,000 to S J Higginson (2023:
£nil).
The key management personnel are considered to be the Board of Directors. The
total amounts paid to key management personnel during the period was
£326,000. The total amounts paid to key management personnel during the year
to 31 December 2023 was £914,000.
15 Post balance sheet events
On 5 July 2024, the Company acquired 75% of the equity in Boop Beauty Limited,
an e-commerce business specialising in surplus beauty and cosmetic products
for consideration of £9,000.
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