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
Anthony Burt
|
investors@eastimperial.com
|
|
Allenby
Capital Limited (Broker)
Guy McDougall / Matt Butlin (Sales and
Corporate Broking)
Jeremy Porter / Piers Shimwell (Corporate
Finance)
|
+44 (0)20 3328 5656
|
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/