RNS Number:6776J
Hardy Amies PLC
29 September 2006
Interim results for the six months ended 30 June 2006
It is a huge honour to represent Hardy Amies plc as its Chairman, a business
with a wonderful heritage and great potential on a truly global scale. The half
year period covered by this statement included some pleasing milestones.
* Retail sales from the House at 14 Savile Row continue to grow, up 66% on
the corresponding period in 2005.
* In April, Ian Garlant and his team presented a wonderful 60th anniversary
collection at the Victoria and Albert museum which highlighted both the
heritage and contemporary nature of the Hardy Amies brand. The show
received wide media attention, perhaps summed up by Vogue's editorial that
Hardy Amies "is the last remaining Couture House in the UK." This has
further raised awareness of the brand and its potential, on which we must
now capitalise.
* BMB, our UK menswear license partner, started selling its autumn and winter
2006 collection. You can now see product in stores such as Harvey Nichols
and early indications of sell through are encouraging.
The injection of cash into the business from the acquisition of Brand
Development Capital Unlimited has given the business financial stability. Cash
in hand at 30 June 2006 totalled #1,663,915.
However, losses for the first half of 2006 increased compared with last year.
An operating loss before exceptional items of #898,068 for the half year ended
30 June 2006, compared with #420,279 for the corresponding period in 2005. The
increase in cost of sales is due to a more prudent view being taken on the
realisable value of stock. Apart from the increase in cost of sales, the level
of the overall loss for the period was partly due to expenditure surrounding the
brand's 60th year celebrations, as well as an increased level of advertising and
a more prudent view being taken on the debtors and liabilities of the company.
Since my appointment in May 2006 we have taken the following action to set the
future strategy of the business and ensure that the business improves its
profitability.
* As mentioned in the circular to shareholders in May, we plan to launch a
ready to wear collection, starting in the autumn of 2007 and to develop
retail sales outlets, beginning with the UK. With this in mind we have
made two key appointments. I am delighted to announce that Nigel Brunning
joins the Board as Chief Operating Officer to develop the retail sales
channels and that Vesna Milinkovic will join us from BMB as Head of Ready
to Wear to develop the ranges for sale.
* Hardy Amies has agreed with BMB Clothing that as of 1 October 2006, the
menswear licence will be brought back in house. This will allow Hardy
Amies to benefit from the sales which are expected to be made from this
range in 2007 and later years, as well as giving Hardy Amies full control
over its menswear product in the UK. Consideration to BMB is to be made by
way of #160,000 in cash and the issue of 2,500,000 new shares with an issue
price of 3 pence. Application will be made to AIM for the Consideration
Shares to be admitted to AIM
* A thriving retail business will enable us to grow our license revenues on a
global scale. With this objective in mind, Tim Maltin is stepping down as
Chief Executive Officer and will become our Licensing Director. This will
enable him to focus his attention on exploiting license opportunities for
Hardy Amies. I will act as Chief Executive Officer and Chairman in the
short term and a new Chief Executive will be appointed once the business
starts to achieve scale.
* We have carried out an extensive exercise to review all costs to ensure
they are appropriate and necessary for the business going forward. This
will ensure that losses in the second half of 2006 should be markedly lower
than the first half of the year.
The actions we have taken now will only start to bear fruit in the later part
of 2007 and 2008; therefore the business is likely to incur further operating
losses in 2007. As a consequence of the ongoing operating losses and the capital
costs associated with a retail rollout, a further fundraising is likely to be
necessary in 2007. However, I am very confident that we now have the right team
in place to fully exploit the wonderful potential of Hardy Amies over the medium
term.
Andrew Manders
Chairman
29 September 2006
INDEPENDENT REVIEW REPORT TO HARDY AMIES plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 4 to 8 and we have read the other information in the interim
statement and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim statement and for no other purpose. We
do not, therefore, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
Directors' responsibilities
The interim statement, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim Statement in accordance with the AIM
Market Rules which require that the accounting policies and presentation applied
to the interim figures must be consistent with those that will be adopted in the
company's annual accounts.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom, as if that
Bulletin applied. A review consists principally of making enquiries of group
management and applying analytical procedures to the financial information and
underlying financial data and based thereon, assessing whether the disclosed
accounting policies have been consistently applied unless otherwise disclosed.
A review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit and therefore provides a lower level of assurance. Accordingly, we do not
express an audit opinion on the financial information
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.
BAKER TILLY
Chartered Accountants
Festival Way
Stoke-on-Trent
Staffordshire
ST1 5BB
29 September 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Notes Six months to Six months to Year ended
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
# # #
Turnover - continuing operations 2 674,940 544,485 1,098,379
Cost of sales 498,756 205,873 461,688
Gross profit 176,184 338,612 636,691
Other operating costs before exceptional
items - continuing operations (1,074,252) (758,891) (1,766,007)
Exceptional items 3 (337,280) - -
Other operating costs 1,411,532 (758,891) 1,766,007
Operating loss before exceptional items -
continuing operations (898,068) (420,279) (1,129,316)
Exceptional items 3 (337,280) - -
Operating loss after exceptional items -
continuing operations (1,235,348) (420,279) (1,129,316)
Interest receivable and similar income 6,553 8,641 11,966
Interest payable and similar charges (37,510) (9,910) (18,739)
Loss on ordinary activities before taxation (1,266,305) (421,548) (1,136,089)
Loss on ordinary activities before
exceptional items and taxation (929,025) (421,548) (1,136,089)
Exceptional items (337,280) - -
Loss on ordinary activities before taxation (1,266,305) (421,548) (1,136,089)
Tax on loss on ordinary activities (31,109) (27,365) (55,133)
Loss for the period (1,297,414) (448,913) 1,191,222
CONSOLIDATED BALANCE SHEET
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
# # #
FIXED ASSETS
Intangible assets 600,129 643,461 621,795
Tangible assets 273,250 214,231 277,023
873,379 857,692 898,818
CURRENT ASSETS
Stocks 96,165 106,670 197,041
Debtors 324,292 371,118 381,024
Cash at bank and in hand 1,663,915 478,967 22,820
2,084,372 956,755 600,885
CREDITORS: Amounts falling due within one year (787,870) (218,563) (799,748)
NET CURRENT ASSETS/(LIABILITIES) 1,296,502 738,192 (198,863)
TOTAL ASSETS LESS CURRENT LIABILITIES 2,169,881 1,595,884 699,955
CREDITORS: Amounts falling due after more than one year - (202,484) -
ACCRUALS AND DEFERRED INCOME (579,663) (1,043,392) (811,528)
NET ASSETS/(LIABILITIES) 1,590,218 350,008 (111,573)
CAPITAL AND RESERVES
Called up share capital 2,079,911 2,729,325 967,249
Share premium account 6,975,388 4,879,446 5,088,845
Other reserves 1,033,407 (799,998) 1,033,407
Profit and loss account (8,498,488) (6,458,765) (7,201,074)
EQUITY SHAREHOLDERS' FUNDS/(DEFICIT) 1,590,218 350,008 (111,573)
CONSOLIDATION CASHFLOW STATEMENT
Notes 30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
# # #
Net cash outflow from operating activities 4 (1,589,267) (792,349) (1,468,313)
Returns on investments and servicing of (12,073) (1,269) (6,773)
finance
Taxation (31,109) (27,365) (55,133)
Capital expenditure (25,661) (85,564) (170,405)
Cash inflow/(outflow) before financing (1,658,110) (906,547) (1,700,624)
Financing
New equity share capital subscribed 1,112,662 (5,907) 71,329
Net share premium on new share capital 1,886,543 - 203,492
Increase/(decrease) in loans 300,000 (3,557) 53,645
Increase/(decrease) in cash in the period 1,641,095 (916,011) (1,372,158)
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS
30 June 30 June 31 December
2006 2005 2005
Unaudited Unaudited Audited
# # #
Increase/(decrease) in cash in the period 1,641,095 (916,011) (1,372,158)
Cash (inflow)/outflow from (decrease)/increase in (16,314) 27,557 (53,645)
liquid resources
Net funds at start of period (260,866) 1,164,937 1,164,937
Net funds at period end 1,363,915 276,480 (260,866)
NOTES TO THE ACCOUNTS
1. Financial information
(a) The interim financial statement has been prepared in accordance with the
accounting policies set out in the Annual Report for the year ended 31 December
2005.
(b) The interim financial statement set out on page 2 to 6 does not
constitute statutory accounts as defined by the Companies Act 1985. Statutory
accounts for the year ended 31 December 2005, including an unqualified audit
report which did not contain statements under Section 237 (2) or (3) of the
Companies Act 1985 have been filed with the Registrar of Companies.
2. Analysis of turnover
6 months to 30 June 6 months to 30 June Year ended 31
2006 2005 December 2005
Unaudited Unaudited Audited
# # #
Licence income 405,735 382,418 731,917
Retail sales 269,205 162,067 366,462
_______ _______ _______
674,940 544,485 1,098,379
_______ _______ _______
3. Exceptional items
During the half year ended 30 June 2006 the group incurred exceptional costs
totalling #337,280 (6 months to 30 June 2006 :#nil, 12 months to 31 December
2005: #nil).
These comprise the following:
#
Settlement of Winterman claim 200,000
Refinancing and acquisition costs 137,280
_______
337,280
_______
4. Reconciliation of operating loss to operating cash flows
6 months to 30 June 6 months to 30 June Year ended 31
2006 Unaudited 2005 December 2005
Unaudited Audited
# # #
Operating loss (1,235,348) (420,270) (1,129,316)
Depreciation and amortisation 51,100 41,801 85,516
Movement in stocks 100,876 (47,958) (138,329)
Movement in debtors 56,732 (7,600) (17,506)
Movement in creditors (310,762) (126,448) 195,051
Movement in accruals and deferred
income (231,865) (231,865) (463,729)
Net cash outflow from continuing
operating activities (1,589,267) (792,349) (1,468,313)
Further copies of the report are available at Hardy Amies plc, 14 Savile Row,
London W1S 3JN
This information is provided by RNS
The company news service from the London Stock Exchange
END
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