Half Yearly Report

22 December 2014

MBL GROUP PLC

(AIM: MUBL)

("MBL" or "the Group")

Unaudited Interim Results for the Six Months Ended 30 September 2014

The Board of MBL Group plc announces its interim results for the six months ended 30 September 2014.

Key Points

Continued operations only:

· Group revenue £5.9m (2013: £5.6m)

· Group loss before tax of £0.4m (2013: loss £0.2m)

· Loss per share for the period of 2.2p (2013: 0.8p)

Including discontinued operations:

· Group revenue decreased to £6.0m (2013: £6.1m)

· Group loss before tax £0.5m (2013: £0.6m)

· Loss per share for the period of 3.0p (2013: loss 3.2p)

Tony Johnson, Chairman of MBL, commented:

"The Group has delivered a satisfactory first six months performance. The Home Entertainment division has experienced challenging trading conditions and the Group has continued to invest in the Garden and Leisure division to develop future revenue streams. Group revenue increased by 5% and, as a result of trading conditions and continued investment, generated an operating loss for the six months to 30 September 2014.

The Board has been reviewing the future strategy for the Group and continues to evaluate means to return value to shareholders."

--ENDS--

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

The Group has delivered a satisfactory first six months performance. The Home Entertainment division has experienced challenging trading conditions and the Group has continued to invest in the Garden and Leisure division to develop future revenue streams. Group revenue increased by 5% and, as a result of trading conditions and continued investment, generated an operating loss for the six months to 30 September 2014.

Summary of Group Performance

CONTINUING OPERATIONS

Home Entertainment

During the period the Group's home entertainment sales fell by £420k to £4,001k (2013: £4,421k). The division, which is predominantly an exporter, experienced a challenging market being adversely affected by exchange rate movements within one of its key markets. An operating profit of £57k has been delivered during the period (2013: £41k) with reductions in overhead expenses compensating for the reduction in sales revenue.

Garden and Leisure

The Group continued its investment in the garden bird and wildlife market which yielded increases in both revenue and customer acquisition. The division has also entered the aquatics market with the purchase of the Warehouse Aquatics brand name. The last six months of the financial year historically have the greatest demand for the division's products and it is expected that the investment in customer acquisition will result in continued increased revenues to the year end.

During the year the division has discontinued its activities under the Garden Centre Online brand due to the level of additional investment considered necessary to improve its trading performance within a highly competitive market. 

The wildlife business generated sales of £1,832k (2013: £1,105k) and a marginally improved operating loss of £55k (2013: loss £73k).

Overheads

Overhead costs within both divisions have been managed in line with the size of the operations and the relocation of the Lancashire business and head office to smaller premises at the end of the last financial year has had a positive effect. However, central costs increased overall as a result of costs incurred relating to Board changes and strategic advice.

DISCONTINUED OPERATIONS

As discussed within the section on the Garden and Leisure section above, the activities of Garden Centre Online were discontinued within the period.

For the purposes of the Interim Announcement this business has been classified as discontinued. As a consequence, only the reported loss after tax of discontinued operations is disclosed within the Interim Announcement.

FUNDING POSITION

At 30 September 2014, the Group had positive cash balances of £1.8m (31 March 2014: £2.7m) and remained without bank loan or overdraft facilities.

The Group continues to face the challenge of a lack of available supplier credit, particularly in the home entertainment sector, but the director's believe that the Group remains in a strong position to fund its existing operations for the foreseeable future.

GROUP STRATEGY AND OUTLOOK

The Group operates within the two distinct divisions of Home Entertainment and Garden and Leisure products. The overall performance during the first half of the year remained in line with management's expectations and the second half has continued in the same manner. 

The Home Entertainment division continues to perform solidly and the Board continually monitors the longer term outlook for this market. The Board believes that the investments being made into the Garden and Leisure division, both in terms of growing the customer base and recent relocation of the operations, have placed the division in a solid position to deliver future profitability to the Group.

The Board has been reviewing the future strategy for the Group and continues to evaluate means to return value to shareholders.

Tony Johnson

Chairman

22 December 2014 

Condensed Consolidated Statement of Total Comprehensive Income

For the period ended 30 September 2014

Condensed Consolidated Statement of Financial Position

As at 30 September 2014

Unaudited Condensed Consolidated Statement of Changes in Equity

For the period ended 30 September 2014

Consolidated Statement of Cash Flows

For the period ended 30 September 2014

Notes

1. Basis of preparation

MBL Group Plc (the 'Company') is a company incorporated and domiciled in the United Kingdom. The half-year financial report for the 6 month period to 30 September 2014 represents that of the Company and its subsidiaries (together referred to as the 'Group').

This half-year financial report is an interim management report as required by Rule 18 of the AIM Rules for Companies and was authorised for issue by the Board of Directors on 22 December 2014.

The half-year financial report is prepared in accordance with the EU endorsed standard IAS 34 'Interim Financial Reporting'. The comparative figures for the year ended 31 March 2014 are not the Group's statutory accounts for that financial year. Those accounts have been reported on by the Group's Auditor and delivered to the Registrar of Companies. The Report of the Auditor was (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 of the Companies Act 2006.

The information contained in the half-year financial report for the 6 month period to 30 September 2014 and 30 September 2013 is unaudited and should be read in conjunction with the annual financial statements for the year ended 31 March 2014, which have been prepared in accordance with the IFRS adopted by the European Union.

As required by AIM Rule 18, the half-year financial report has been prepared and presented in a form consistent with that which will be adopted in the preparation of the Company's annual report and accounts for the year ended 31 March 2015.

The Group's policy is to maintain the ability to continue as a going concern, in order to provide returns to the shareholder and benefits to other stakeholders. Accordingly the going concern basis has been adopted in preparing these interim results.

The consolidated financial statements of the Group for the year ended 31 March 2014 are available upon request from the Company's registered office at MBL Group plc, Unit 1 Millennium City Park, Millennium Road, Preston, Lancashire, PR2 5BL.

2. Going concern

The financial report has been prepared on a going concern basis, which the Directors believe to be appropriate for the following reasons.

The Directors have prepared cash flow forecasts to 31 March 2016 taking account of reasonable possible changes in trading performance. These forecasts show the Group to be cash positive throughout the next 15 months and make a number of assumptions around revenue and profitability of the remaining business activity.

These forecasts demonstrate the Group has appropriate funds which the directors believe are sufficient for the Group to continue to trade for at least the next 12 month period. In addition the Group continues to reflect an overall net assets position and is debt free.

The Group had a cash balance of £1.8m as at 30 September 2014 and currently does not have a bank overdraft or loan facilities.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the financial report.

3. Unaudited segmental analysis

The Group comprises the following main business segments:

Home Entertainment The sale of home entertainment products predominantly to the export market.

Garden and Leisure The sale of garden bird, wildlife and pet related products direct to consumer via mail order and online channels.

Other A combination of revenue streams including the license of film and music rights for manufacture, sale and download.

Discontinued The retail of garden leisure products to the end consumer via the internet and the domestic sale of home entertainment products.

Consolidated statement of comprehensive income for period ended 30 September 2014:

Consolidated statement of comprehensive income for period ended 30 September 2013:

Consolidated statement of comprehensive income for period ended 31 March 2014:

4. Taxation

The income tax charge has been estimated by the Group based on adjustments to tax payable in respect of previous years and the level of losses incurred in the period ending 30 September 2013. 

5. Earnings per share

The calculation of the basic earnings per share is based on the loss after taxation divided by the weighted average number of shares in issue, being 17,296,068 (2013: 17,296,068; year ended 31 March 2014: 17,296,068).

6. Property, plant and equipment

During the period, the Group acquired assets with a cost of £68k (2013: £96k; year ended 31 March 2014: £246k).

7. Provisions

8. Discontinued operations