- Part 2: For the preceding part double click ID:nRSU3575Ra
June 2017Revenue
External sales 1,747 6,064 - 7,811
Inter-segment sales - 855 (855) -
Total revenue 1,747 6,919 (855) 7,811
Results
Operating (loss)/profit before exceptional items and excluding central administrative costs (248) 959 - 711
Brands Development and Manufacturing Eliminations Consolidated Group
£'000 £'000 £'000 £'000
Six months to 30 June 2016Revenue
External sales 1,234 4,887 - 6,121
Inter-segment sales - 192 (192) -
Total revenue 1,234 5,079 (192) 6,121
Results
Operating (loss)/profit before exceptional items and excluding central administrative costs (106) 679 - 573
Brands Development and Manufacturing Eliminations Consolidated Group
Year to 31 December 2016 £'000 £'000 £'000 £'000
RevenueExternal sales 3,764 10,516 - 14,280
Inter-segment sales - 826 (826) -
Total revenue 3,764 11,342 (826) 14,280
Results
Operating (loss)/profit before exceptional items and excluding central administrative costs (139) 1,665 - 1,526
The reconciliation of segmental operating loss to the Group's operating loss
before exceptional items excluding central administrative costs is as
follows:
Six months ended Six months ended Year ended
30 June 2017 (Unaudited) 30 June 2016(Unaudited) 31 December 2016(Audited)
£'000 £'000 £'000
Operating profit before exceptional items and excluding central administrative costs 711 573 1,526
Central administrative costs (1,044) (964) (1,811)
Exceptional expenses - (142) (180)
Operating loss (333) (533) (465)
Net finance cost (240) (321) (644)
Loss before tax (573) (854) (1,109)
5. Amortisation of intangible assets
Six months ended Six months ended Year ended
30 June 2017(Unaudited) 30 June 2016(Unaudited) 31 December 2016(Audited)
Amortisation of: £'000 £'000 £'000
Acquired intangible assets (a) (284) (284) (568)
Acquired intangible assets (b) (80) (53) (133)
Patents, trademarks and other intangible assets (35) (37) (71)
Capitalised development costs (47) (35) (90)
(446) (409) (862)
(a) Customer relationship and product formulation intangible assets acquired
as part of the acquisition of Biokosmes Srl in March 2014. These intangible
assets are being amortised over five years to 31 March 2019.
(b) Customer relationships, patents and trademark intangible assets acquired
as part of the acquisition of Periproducts Limited in March 2016. The customer
relationships and trademark intangible assets are being amortised over five
years to 28 February 2021. The patent intangible assets are being amortised
over ten years to 28 February 2026.
6. Exceptional items
Six months ended Six months ended Year ended
30 June 2017(Unaudited) 30 June 2016(Unaudited) 31 December 2016(Audited)
£'000 £'000 £'000
Costs incurred in acquisitions - (142) (180)
Total exceptional items - (142) (180)
During the year to 31 December 2016 the Group incurred legal and professional
fees in relation to the Periproducts acquisition, as well as certain
restructuring costs.
7. Taxation
The Group calculates the income tax expense for the period using the tax rate
that would be applicable to the expected total annual earnings. The major
components of income tax expense in the Interim Condensed Statement of
Comprehensive Income are as follows:
Six months ended Six months ended Year ended
30 June 2017(Unaudited) 30 June 2016(Unaudited) 31 December 2016(Audited)
£'000 £'000 £'000
Current income tax 279 222 455
Adjustment in respect of earlier periods - - (21)
Deferred income tax expense related to origination and reversal of timing differences (136) (67) (174)
Income tax expense recognised in statement of comprehensive income 143 155 260
The current income tax expense is based on the profits of the Development and
Manufacturing business based in Italy. The UK based businesses on a combined
basis are currently loss making and so there are no UK income tax charges due
in respect of trading for the first six months to 30 June 2017.
The Group has not recognised the deferred tax asset on losses made by the UK
based businesses on a combined basis as although management are expecting the
UK based businesses on a combined basis to become profitable, it is not
currently certain when there will be sufficient taxable profits against which
to offset such losses.
At the period end the estimated tax losses amounted to £8,352,000 (30 June
2016: £6,690,000; 31 December 2016: £7,195,000).
8. Other comprehensive income/(expense)
Other comprehensive income/(expense) represents the foreign exchange
difference on the translation of the assets, liabilities and reserves of
Biokosmes which has a functional currency of Euros. The movement is shown in
the foreign currency translation reserve between the date of acquisition of
Biokosmes, when the GBP/EUR rate was 1.193 and the balance sheet date rate at
30 June 2017 of 1.137 (at 31 December 2016 of 1.167 and at 30 June 2016 of
1.209), and is an amount that may subsequently be reclassified to profit and
loss.
9. Loss per share
Six months ended30 June 2017 Six months ended 30 June 2016 Year ended30 December2016
(Unaudited) (Unaudited) (Audited)
Weighted average number of ordinary shares in issue 36,837,106 35,968,571 36,409,340
Loss attributable to equity holders of the Company (£'000) (716) (1,009) (1,369)
Basic and diluted loss per share (pence) (1.94) (2.81) (3.76)
Adjusted loss per share (pence) (0.31) (0.80) (1.28)
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for basic earnings per share. This
is because the exercise of share options would have the effect of reducing the
loss per ordinary share and is therefore not dilutive under the terms of IAS
33.
10. Dividends
Amounts recognised as distributions to equity holders in the period:
Six months Six months ended 30 June 2016(Unaudited) Year ended 31 December 2016(Audited)
ended30 June 2017(Unaudited)
£'000 £'000 £'000
Final dividend 15 14 14
11. Intangible assets
The intangible assets of the group of £16.1 million (31 December 2016: £16.3m)
include goodwill, development costs, patents and trademarks and customer
relationships.
At the reporting date goodwill generated from the acquisitions of Biokosmes
Srl in March 2014 and Periproducts Limited in March 2016 accounted for £13.1
million of the intangible assets of the Group (£13.1 million at 31 December
2016). There were no movements in goodwill during the period (increase in
goodwill of £3.3 million in the 6 months to June 2016), nor have there been
any impairment of goodwill during this time (6 months to June 2016: Nil
million).
12. Share capital and share premium
Ordinary shares of 0.3p each OrdinaryShares Share premium Merger reserve
No. £'000 £'000 £'000
Audited at 1 January 2016 34,403,534 103 11,826 7,656
Share issue 2,428,572 7 1,463 -
Unaudited at 30 June 2016 36,832,106 110 13,289 7,656
Share issue 5,000 - - -
Audited at 31 December 2016 36,837,106 110 13,289 7,656
Unaudited at 30 June 2017 36,837,106 110 13,289 7,656
There were no movements in share capital or share premium between 31 December
2016 and 30 June 2017.
13. Related party transactions
The following transactions with related parties are considered by the
Directors to be significant for the interpretation of the Interim Condensed
Financial Statements for the six month period to 30 June 2017 and the balances
with related parties at 30 June 2017 and 31 December 2016:
In March 2014 the Company issued 3% convertible loan notes with a nominal
amount of E2,000,000 to the vendors of Biokosmes including Gianluca Braguti, a
Director of the Company. Interest accrued on the loan notes was increased from
3% to 4% per year effective 1 August 2017 and is paid in October and April
each year.
Under the terms of the Share Purchase Agreement dated 28 November 2013 and
signed between the Company and the vendors of Biokosmes, one of whom was
Gianluca Braguti, the vendors agreed to indemnify the Company in full for any
net liability arising from certain litigation cases which had not settled at
the time of completion of the acquisition on 27 March 2014. At the period end
the amount due to the Company under the indemnity totalled E250,935, of which
Gianluca Braguti's liability is E248,426. Settlement of this liability will be
made when the final outstanding case is concluded.
Key transactions with other related parties
Braguts' Real Estate Srl (formally known as Biokosmes Immobiliare Srl), a
company 100% owned by Gianluca Braguti, a director and shareholder of the
Group provided property lease services to the Development and Manufacturing
business totalling E230,000 in the six months to 30 June 2017 (E230,000 in the
six months to 30 June 2016). At 30 June 2017, the Group owed Braguts' Real
Estate Srl E622,000 (E692,000 at 31 December 2016).
14. Financial instruments
Set out below is an overview of financial instruments held by the Group as
at:
30 June 2017 30 June 2016 31 December 2016
Loans and receivables Total financial assets Loans and receivables Total financial assets Loans and receivables Total financial assets
£'000 £'000 £'000 £'000 £'000 £'000
Financial assets:
Trade and other receivables (a) 4,888 4,888 4,290 4,290 4,564 4,564
Cash and cash equivalents 1,323 1,323 1,583 1,583 1,998 1,998
Total 6,211 6,211 5,873 5,873 6,562 6,562
30 June 2017 30 June 2016 31 December 2016
Liabilities (amortised cost) Total financial liabilities Liabilities (amortised cost) Total financial liabilities Liabilities (amortised cost) Total financial liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Financial liabilities:
Trade and other payables (b) 4,363 4,363 4,534 4,534 4,434 4,434
Convertible bond 1,758 1,758 1,677 1,677 1,717 1,717
Vendor loan notes 1,805 1,805 1,612 1,612 1,754 1,754
Interest bearing debt 3,797 3,797 3,014 3,014 3,673 3,673
Total 11,723 11,723 10,837 10,837 11,578 11,578
(a) Trade and other receivables excludes prepayments
(b) Trade and other payables excludes deferred revenue
15. Post balance sheet events
There were no post balance sheet events.
This information is provided by RNS
The company news service from the London Stock Exchange