30th Mar 2007 07:02
Hot Tuna (International) plc30 March 2007 Press Release 30 March 2007 Hot Tuna (International) PLC ("Hot Tuna" or "the Group") Interim Results for the six months ended 31 December 2006 Hot Tuna (International) PLC (AIM:HTT), a lifestyle apparel brand with authenticsurf heritage, announces its interim results for the six months ended 31December 2006. Highlights• Revenue £183,000 (H1 2005: £109,000)• Loss from operations increased to £1,562,000 (H1 2005: £552,000)• Completion of the design, manufacture and production phase for Spring/ Summer 2007 range• Successful completion of the design and sampling phase for the Autumn/ Winter 2008 range• On-going European distribution agreements successfully signed• Strengthened balance sheet following £4.2 million placing in December 2006• £2.5 million equity credit line agreed with Cornell Capital Partners in March 2007• Strengthened board with appointment of Elle Macpherson as Executive Director Commenting on the results, Ranjit Murugason, Chairman of Hot Tuna(International) PLC, said: "Hot Tuna has been exceptionally busy in the firstsix months of 2006. We have secured sales for our Spring/Summer 2007 range andwe are confident the Group will deliver solid revenues in the second half of theyear. We have also designed and are currently sampling our Autumn/Winter 2008range. "The Group's financial position has been much improved with a placing to raise£4.2 million completed in December 2006 and this, in conjunction with theequity-based credit facility agreed with Cornell Capital Partners in March 2007,will ensure that the Group has sufficient financial resources to execute itsstated strategy." - Ends - For further information:Hot Tuna (International) PLCRanjit Murugason, Chairman Tel: +44 (0) 20 7372 [email protected] Seymour Pierce LimitedSarah Wharry / Parimal Kumar Tel: +44 (0) 20 7107 [email protected] www.seymourpierce.com Media enquiries:AbchurchHenry Harrison-Topham / Chris Lane Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com CHAIRMAN'S STATEMENT The Directors of Hot Tuna (International) PLC have pleasure in presenting theconsolidated results for the half year ended 31 December 2006. Hot Tuna (International) PLC and its subsidiaries have had a very exciting andextraordinarily busy half year; designing garments, procuring sales andwelcoming new accounts and customers to enjoy the newly relaunched Hot Tunabrand. Over the last six months we have made significant progress in re-establishingHot Tuna as a leading global surf and youth lifestyle brand. Hot Tuna has justcompleted the design, manufacture and production phase for Spring/Summer 2007,we are currently sampling and presenting Autumn/Winter 2008 garments within theindustry and to our customers; and, under the leadership of Elle Macpherson, wehave launched the design cycle for our Spring/Summer 2008 range which promisesto provide our customers and ultimate consumers more design superlatives. During the past six months, there have been many affirmations of the Company'sgrowing strength and presence in the industry including the addition of fashionentrepreneur and brand management leader, Elle Macpherson, to the Company'sBoard of Directors. Elle Macpherson was featured by the prestigious BBC MoneyProgramme in March 2007 and her considerable contribution to the Company'sre-launch was well documented during the programme and also provided furtherauthentication of the Company's strategy to develop a global surf lifestylebrand. During the last six months of 2006, the Company has made significant strides andsecured the delivery of its products into what the Directors consider to be thebest independent retailers in all of its core markets. Further, during thesecond half of 2006, the Company secured key distribution agreements in someEuropean markets. Currently the Spring/Summer 2007 collection is beingdistributed aggressively in the United States at Jack's Surf Shop in HuntingtonBeach, California, the reigning "Retailer of the Year" as determined by the SurfIndustry Manufacturers Association, and also at Diane Beachwear and Cocoa BeachSurf Company to name a few. In the United Kingdom, the Company's first fullcollection is currently being delivered to leading independent retailersincluding Fluid, Shore Watersports, Cult Clothing and Two Seasons. Hot Tuna hasalso achieved notable success in securing orders for its first collection in theUnited Kingdom in 6 years from the United Kingdom's leading action sportsretailer, Free Spirit. In Australia, Hot Tuna has re-launched itself amongstthe key independents including, amongst others, Glue, Surf Vision and BeachStreet. We believe that the Company is poised to secure very significant ordersfor its swim line from prestigious customers. Hot Tuna also continues to support the sport of surfing through sponsoringathletes, events and grass roots surfing and surf schools. In August 2006, HotTuna was the sponsor of the fifth leg of the prestigious British ProfessionalSurfing Association (''BPSA'') Tour, held at Porthmeor Beach, St. Ives,Cornwall. Also in August 2006, Hot Tuna signed former World No. 11 and X-GamesChampion surfer Shea Lopez to its roster as lead team rider. Under the Hot Tunabanner, Lopez shot to the top of the 2007 Association of Surfing Professionals(ASP) ratings and as of the date of press, he was the No. 2 surfer on the ASPWorld Qualifying Series (WQS) tour. In the United Kingdom., BPSA champion MicahLester and BPSA-ranked No. 7 Toby Atkins were retained by Hot Tuna, ensuring asteady stream of national media play at the core of their sport, and top-flightrepresentation at the highest levels of European and Australian competition. Thewhole Hot Tuna surf team converged this month on Hot Tuna's birthplace inAustralia in support of the Company's crown-jewel event of the year, the ASP4-star-rated Hot Tuna Central Coast Pro Surfing Championship, held at SoldiersBeach, NSW. The event was regarded as a major success and has done wonders todraw attention globally for the re-launch of Hot Tuna. From sponsorship ofworld-class talent and championship, to support of local and regional athletesand events, Hot Tuna retains its global stature as a surfer's surfing brand trueto the sport and spirit of authentic surf culture. Results Summary The Group operating loss for the period of £1.6m included employee costs of£0.7m, production and manufacturing costs of £0.1m and marketing costs £0.1m.The high cash expenditure reflects the Group's commitment to commissioning theright management and personnel to drive the Group into the next phase of itsstrategy. This includes building the designs, sample lines and infrastructurerequired to enter our target markets with a full premiere range of men's,juniors and juniors swim for Spring/Summer 2007 and Autumn/Winter 2008. Hot Tuna's first global range, Spring/Summer 2007, which has been successfullyreceived, is currently being invoiced to our customers and as budgeted, thesesales will only be recognised in the second half of the financial year.Furthermore, the Group has now completed the design and sampling phase for theAutumn/Winter 2008 range which is currently being marketed to our customers.Hence, the half year up to 31 December 2006 reflects all expenses incurred inestablishing the Spring/Summer 2007 and the Autumn/Winter 2008 range without thebenefit of the corresponding sales, resulting in a £1.6m loss from operationsfor the half year. Hot Tuna has incurred approximately £1.3m of non-cash expenses up to 31 December2006 including; £0.1m bad debt and inventory write offs and £1.2m of exceptionalshare-based payment charges incurred in accordance with IFRS2 requirements. Theshare-based payments, which have been charged as an "exceptional item", wereincurred in order to appoint key personnel to the Hot Tuna team during theperiod. This charge does not affect the ability of the Company to pay dividendsgoing forward nor does it affect the net assets of the Group. It is strictly acharge to reserves in accordance with current accounting standards. During the period Hot Tuna (International) PLC underwent a capital raisingexercise generating approximately £4.2 million (before expenses) via a placingof 28,024,994 new ordinary shares of nominal value 1 pence each, at 15 pence pershare. These shares were issued together with warrants, in the ratio of onewarrant for every two placing shares. Subsequent to the half year end, theGroup also agreed a maximum £2.5m equity-based credit facility with CornellCapital Partners LP. Cornell will also subscribe to convertible loan notes worthUS$450,000. The six months leading up to December 2006, has been a period in which we haveworked hard to progress our corporate strategy. The Group's focus during 2007is, quite simply, product and sales: to take advantage of our consolidatedbusiness operations in Australia, the United Kingdom and the United States, andthe successful delivery of our Spring/Summer 2007 collection into the stores ofour customers and ensuring that the Autumn/Winter 2008 collection is wellreceived amongst our customers. On behalf of the Board I wish to thank my fellow directors, our employees,manufacturing partners, and all those who have assisted Hot Tuna (International)PLC in its endeavours during the year. The Board of Hot Tuna continues to bestrong believers in the growth prospects of the Company and we all believe thatHot Tuna has an exciting future and with its wealth of extremely talented staffacross the globe, we are now in the best position from which to build long termvalue for all shareholders. RANJIT MURUGASONCHAIRMAN30 March 2007 Consolidated Income StatementFor the period from 1 July 2006 to 31st December 2006 Half Year to Half Year to 18 Months Ended 31.12.2006 31.12.2005 30.6.2006 (Un-audited) (Un-audited) (Audited) £000 £000 £000 NotesContinuing operationsRevenue 183 109 368Cost of sales (119) (9) (205) Gross Profit 64 100 163 Other operating income 22 1 5Selling and marketing expense (153) (80) (383)General and administrative expenses (1,475) (573) (1,742)Depreciation and amortisation (20) - (3) Loss from operations (1,562) (552) (1,960) Exceptional share-based payment charge (1,237) - (91)Investment income 19 8 39Profit/loss on disposal of property, plant and equipment (1) - (1)Finance costs (3) (1) (5) Loss before tax (2,784) (545) (2,018) Taxation 2 - - - Loss for the period (2,784) (545) (2,018) Attributable to:Equity holders (2,755) (541) (1,976)Minority interest (29) (4) (42) (2,784) (545) (2,018) LOSS PER SHAREBasic and diluted 4 (5.14 pence) (2.18 pence) (0.06 pence) Consolidated Balance SheetAt 31st December 2006 Half Year to Half Year to 18 Months Ended 31.12.2006 31.12.2005 30.6.2006 (Un-audited) (Un-audited) (Audited) £000 £000 £000 NotesAssetsNon-current assetsOther intangible assets 5,251 3,233 5,251Goodwill 187 212 237Property, plant & equipment 127 8 74Deferred Tax Assets - 25 -Loan and advances - 334 - 5,565 3,812 5,562Current AssetsInventories 96 100 172Trade and other receivables 614 190 184Cash and cash equivalents 3,524 686 1,524 4,234 976 1,880Total Assets 9,799 4,788 7,442LiabilitiesCurrent LiabilitiesBank loans and overdraft 4 72 111Trade and other payables 286 300 282 290 372 393Net current assets 3,944 604 1,487Net Assets 9,509 4,416 7,049 Equity and other liabilitiesCapital and reservesShare capital 769 400 488Share-based payment reserve 1,814 - 577Share premium reserve 9,544 4,632 6,092Merger reserve 1,474 - 1,474Warrant reserve 772 - 487Foreign exchange reserve 10 - (4)Shares to be issued - 1 25Retained loss (4,731) (541) (1,976)Equity attributable to equity holders of parent 9,652 4,492 7,163 Minority interest (143) (76) (114)Total Equity 9,509 4,416 7,049 Consolidated Cash Flow StatementFor the period from 1 July 2006 to 31st December 2006 Half Year to Half Year to 18 Months Ended 31.12.2006 31.12.2005 30.6.2006 (Un-audited) (Un-audited) (Audited) £000 £000 £000 Notes Net Cash Flow from Operating Activities 5 (1,945) (832) (1,925) Investing ActivitiesCurrency revaluation reserve 10 - (4)Payments for purchase of controlled entity - - (607)Cash funding on purchase of controlled - - (178)entitiesInterest received 19 8 39Purchase of property, plant and equipment (77) (2) (38)Payments for intangible assets - (433) (283)Investment in subsidiaries - (246) -Bank overdraft acquired with subsidiary - (17) -Net Cash Flow from Investing Activities (48) (690) (1,071) Financing ActivitiesProceeds on issue of shares 3,993 2,208 4,521Net Cash Flow from Financing Activities 3,993 2,208 4,521 Net increase in cash and cash equivalents 2,000 686 1,524 Cash and cash equivalents at the beginning of the 1,524 - -yearCash and cash equivalents at the end of the 3,524 686 1,524year Movement in Bank & Cash 2,000 686 1,524 Statement of changes in equityFor the period from 1 July 2006 to 31st December 2006 Half Year Ended Half Year Ended 18 Months Ended 31 December 31 December 30 June 2006 2005 2006 Notes £000 £000 £000 Net Loss for the period (2,755) (541) (1,976)Currency Translation 14 - (4)Total recognised income and expenses for the year (2,741) (541) (1,980) Share issue 4,203 5,365 10,350Cost of issue (210) (332) (1,298)Share option charge 1,237 - 91Net increase in shareholders' equity 2,486 4,492 7,163Total shareholders' equity brought forward 7,163 - -Total shareholders' equity earned forward 9,649 4,492 7,163 Notes to the unaudited Interim ReportFor the period ending 31st December 2006 1. PRESENTATION OF INTERIM RESULTS This interim report has been prepared in accordance with (International)Financial Reporting Standards (IFRS) that are expected to be applicable to theconsolidated financial statements for the 6 months ending 31 December 2006. The results for the six months ended 31 December 2006 are unaudited. They havebeen prepared on accounting bases and policies that will be used in thepreparation of the financial statements of the Group for the year ended 30 June2007. The financial information contained in this report does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Theresults for the year ended 30 June 2006 are based on the audited accounts (whichreceived an unqualified report). Full accounts have been delivered to theRegistrar of Companies and are available on request. 2. TAXATION No taxation has been provided due to losses in the period. 3. DIVIDENDS The Directors have not declared a dividend for the period. 4. LOSS PER SHARE The calculation of the basic and diluted earnings per share is based on the following data: Earnings Earnings for the purposes of basic earnings per share net loss for the (2,830) period attributable to equity holders of the parent Number of shares Weighted average number of ordinary shares for the purposes of basic 53,595 earnings per share The denominator for the purpose of calculating the basic earnings per share has been adjusted to reflect all capital raisings. Due to the loss incurred in the period, there is no dilutive effect resulting from the issue of share options, warrants and shares to be issued. 5. RECONCILIATION OF NET OPERATING LOSS TO NET CASH OUTFLOW FROMOPERATING ACTIVITIES £000Cash outflow from Operating Activities Loss from operations (1,562)Adjusted for:Depreciation of property, plant and equipment 20Loss on disposal of property, plant and equipment 2Operating cash flows before movements in working capital (1,580)Increase in inventories (76)Increase in receivables (430)Increase in payables 145Cash used in operations (1,941)Interest (paid) (4)Net Cash outflow from Operating Activities (1,945) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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