Full Year Results for the Year Ended 31 March 2016

22 August 2016

MBL GROUP PLC

Full Year Results for the Year Ended 31 March 2016

MBL Group plc ("MBL" or the "Group") announces its final audited results for the year ended 31 March 2016. Comparative figures are for the year ended 31 March 2015, which includes discontinued operations. There were no discontinued operations in the current year.

Key points:

· Group revenue increased 14% to £14.8 million (2015: £13.0 million) and 13% compared to prior year revenue including discontinued operations (2015: £13.1 million)

· Operating profit £21,000 (2015: loss £883,000, including a £450,000 exceptional impairment to intangible assets)

· Group profit after tax £75,000 (2015: loss £986,000, including discontinued operations)

· Group profit per share 0.4p (2015: loss 5.7p)

· No dividend is proposed.

* Reference to 'Group' items, includes both continued and discontinued operations.

Commenting on these results, Tony Johnson, Non-Executive Chairman of MBL, said:

"I am pleased to report that during the year the Group achieved a 14% growth in sales, driven by a strong performance in the Garden & Home division, and a return to profitability."

Extracts from the final results appear below and a full version will be available on the Company's website www.mblgroup.co.uk from 23 August 2016.

For further information please contact:

MBL Group plc Tel: 01772 440440

Lisa Clarke, Financial Director

SPARK Advisory Partners Limited Tel: 0203 368 3555

Sean Wyndham-Quin

Mark Brady

SI Capital Limited Tel: 01483 413500

Nick Emerson

Andy Thacker

CHAIRMAN'S STATEMENT

I am pleased to report that during the year the Group achieved a 14% growth in sales, driven by a strong performance in the Garden & Home division.

For the purposes of these statements, the operations of Garden Centre Online Limited were classified as discontinued in the prior year. There were no discontinued operations in the current year. 

Operational Review

Sales within the home entertainment market were encouraging with a 2% increase in sales achieved in a very challenging market.

Home Entertainment

Our Home Entertainment division experienced a satisfying year with an increase in revenue of 2% to £8.9 million (2015: £8.7 million). Exports account for 70% of the division's sales and the strengthening of the pound during the year had a detrimental effect on sales, particularly in the Far East market. Gross profit margins improved marginally to 14.7% from 14.5%. Profitability remained consistent with the prior year at £180,000 (2015: £186,000).

Garden & Home

Our Garden & Home division specialises in the mail order of garden bird food and associated wildlife products.

Sales during the year increased by 37% to £5.9 million (2015: £4.3 million) driven by the performance of garden bird products. The sales increase was driven by continued investment in marketing, new product sourcing and a commitment to providing a good customer experience. The UK market for bird food is highly competitive and this has impacted on gross margins leading to the gross margin mix reducing by 4.2%. The Board continues to look for further mail order and online opportunities to acquire which would complement the brands within this division.

The significant increase in sales and tight controls over costs have resulted in an operating profit of £14,000, the division's first reported profit since it commenced trading in 2012, and a significant improvement upon last year's loss of £304,000.

Financial Review

The Financial Statements have been prepared to separately present the financial performance of the Group's continuing operations and discontinued operations. The Segmental Analysis in the Notes to the Financial Statements presents the Group's consolidated revenue streams.

Overall, Group revenue for the year increased by 13% to £14.8 million (2015: £13.1 million including discontinued operations). Group gross margins remained static at 25% (2015: 25%).

The Group profit for the year after taxation was £75,000 (2015: £986,000 loss, including discontinued operations). There were no discontinued operations in the year (2015: £112,000 loss from discontinued operations).

The Group is a relatively small business and as such it is possible for investment in future performance or operating challenges to have a disproportionate effect on our short term financial performance. We are also sensitive to the costs of maintaining an AIM listing and that these costs have a sizeable impact on the costs of administering the Group.

Cash flow, working capital and borrowing facilities

The Group ended the year with cash balances of £1.9 million (2015: £1.7 million). The net cash inflow from operating activities was £0.2 million (2015: outflow £0.8 million) with £0.1 million invested in capital expenditure. The Group remains debt free.

Dividends

The Board is not recommending the payment of a dividend.

Capital Reduction

During the year the company successfully completed a reduction of the issued share capital and cancellation of the share premium account (together the "capital reduction") announced in last year's Annual Report.

Strategy

We have been committed to diversifying the Group's operations to reduce our reliance on the Home Entertainment market, which has been in long term decline. Our strategy is to manage the Home Entertainment division and to grow our developing Garden & Home brands and to establish new brands when opportunities arise to take advantage of the existing infrastructure. We continue to develop the skills within the Group and ensure that the business is not over committed to any single market.

Current Trading

The year has started well and sales in both divisions are in line with management expectations.

Board Changes

In April we announced the appointment of two additional Non-Executive Directors to the Board. On 27th May 2016, the company received a shareholder request to convene an Extraordinary Meeting ("EGM") to propose resolutions relating to the composition of the Board of Directors. The EGM was held on 14th July 2016 and has been subject to an adjournment to 14th October 2016.

D A Johnson

Non-Executive Chairman

22 August 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2016

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2016

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2016

Notes to the Financial Statements

for the year ended 31 March 2016

1. Source of Information

The preliminary financial statements for the financial year ended 31 March 2016 were approved by the Board of Directors on 18 August 2016. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2016 or 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the registrar of companies, and those for 2016 will be delivered following the Company's Annual General Meeting.

The auditor, Moore & Smalley LLP, has reported on those accounts; their report for 2016 was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.

2. Operating segments

The segments disclosed below reflect the Group's management and internal reporting structure. During the prior financial year, Garden Centre Online Limited ceased trading and has been classified as discontinued operations within these Financial Statements.

Consolidated statement of comprehensive income for year ended 31 March 2016:

Consolidated statement of comprehensive income for year ended 31 March 2015:

3. Profit per Share

The calculation of basic profit per share has been calculated on the profit after tax of £75,000 (2015: loss £986,000) and the weighted average number of shares in issue during the year of 17,296,067 shares of 7.5p each (2015: 17,296,067 shares of 75p each).

The calculation of diluted loss per share is identical to that used for the basic loss per share.

The adjusted loss per share, as disclosed below, was calculated using the loss after tax for the financial year calculated with reference to the basic and diluted weighted average share in issue during the year.

4. Consolidated Statement of Changes in Equity

5. Annual Report

The Annual Report will be posted to shareholders in late August. Copies of the Annual Report will be available on request from the MBL Group plc, Unit 1 Millennium City Park, Millennium Road, Preston, PR2 5BL and will be available to download from the Company's website at www.mblgroup.co.uk.