Interim Results Announcement

27 August 2014

Flying Brands Limited (the "Company" or the "Group")

Interim Results Announcement

For the 26 weeks ended 27 June 2014

Flying Brands Limited today announces its interim financial results for the 26 weeks ended 27 June 2014.

Summary Information

About us

The primary focus of the Group since the disposal of its operating divisions in 2012 has been the maximisation of the long-term value of Retreat Farm.

Chairman's statement

During the first six months of this financial year the Group, together with its advisors, continued its discussions with the planning authorities on the development of Retreat Farm. These pre-application discussions have indicated that obtaining planning permission for the development of this property is likely to be more difficult and protracted than the Board had anticipated. Given the Group's limited financial resources and following approaches from parties interested in acquiring the property, the Board has instructed local property agents to explore a possible sale of the property and will make a decision as to how best to proceed when that exercise has been completed. This is expected to be by the end of September.

The Group has agreed in principle a settlement with Jersey Choice Marketing Limited regarding the payment of the outstanding deferred consideration for the Gardening Direct business and Jersey Choice's warranty claim arising out of the same transaction, with no further sum being due to or by either party. As part of that settlement, Jersey Choice has agreed to extend its lease of the greenhouses and despatch centre at Retreat Farm for a further year. The settlement proposals are currently being documented and the Directors anticipate finalising the settlement by the end of September 2014.

Paul DavidsonChairman27 August 2014

For further information please contact:

Smithfield Consultants 020 7360 4900

John Kiely

Responsibility Statement

We confirm that to the best of our knowledge:

a) The condensed set of financial statements, which has been prepared in accordance with IAS34 Interim Financial Reporting as adopted by the EU, gives a true and fair view of the assets, liabilities and financial position as required by DTR 4.2.4R.

b) The interim management report includes a fair review of the information required by DTR 4.2.7R, being an indication of important events that have occurred during the 26 weeks of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties in the remaining 26 weeks of the year.

c) The interim management report includes a fair review of the information required by DTR 4.2.8R, being related party transactions that have taken place in the first 26 weeks of the current financial year and that have materially affected the financial position or performance of the entity during the period and any changes in the related party transactions described in the last annual report that could do so.

By Order of the Board,

S S Cook P Davidson

Chief Executive Officer Chairman

27 August 2014 27 August 2014

Definitions

Business Review

To the members of Flying Brands Limited

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Flying Brands Limited and its subsidiary undertakings when viewed as a whole.

Continuing operations

The continuing operations relate to rental income from the lease of the glasshouses at Retreat Farm.

Overheads have been substantially reduced to a level that will enable the group to operate whilst the options for maximising the value of Retreat Farm continue to be explored.

Long-term strategy and business objectives

In the 2013 Annual Report and Accounts the Group reported that its main objective was to maximise the long term value of its Retreat Farm site.

During the first six months of this financial year the Group, together with its advisors, continued its discussions with the planning authorities on the development of Retreat Farm. These pre-application discussions have indicated that obtaining planning permission for the development of this property is likely to be more difficult and protracted than the Board had anticipated. Given the Group's limited financial resources and following approaches from parties interested in acquiring the property, the Board has instructed local property agents to explore a possible sale of the property and will make a decision as to how best to proceed when that exercise has been completed. This is expected to be by the end of September.

Loss for the period

The Group's loss for the period was £0.3m (26 weeks to 28.06.13: £0.4m).

Results for the first half of 2014

A summary of the key financial results is set out in the table below.

Financial position

The Group's balance sheet as at 27 June 2014 can be summarised as set out in the table below:

Capital structure

The Group has no bank debt (28 June 2013: £nil).

The Group has a £1.0m loan from Acorn Finance that is repayable on 18 January 2015. It has also received working capital loans from West Coast Capital Trading Limited amounting to £0.15m (28 June 2013: £nil).

Cash flow

The net cash outflow for the first 26 weeks relating to operating activities was £0.15m (26 weeks to 28.06.13: £0.4m).

Principal risks and uncertainties

The principal risks are those risks that the Board believes the Group faces at the date of this report. They include certain risks relating to the Retreat Farm property in Jersey.

Going concern basis

The Group continues to meet its day-to-day working capital requirements through its cash reserves and on-going cash flows. The Directors have prepared detailed cash flow forecasts to support the decision to prepare the financial statements on a going concern basis. The working capital projections include the receipt of the rent for Retreat Farm and estimates of the on-going costs of the business.

The largest shareholder in Flying Brands Limited, West Coast Capital Trading Limited has agreed to extend some short term loans to help bridge the funding gap identified from the detailed cashflow forecasts and thus the working capital projections include these sums and estimates of the on-going costs of the business.

As referred to in note 9, the loan advanced by Acorn Finance is repayable in January 2015. It is anticipated this will be repaid from proceeds on the sale of Retreat Farm or otherwise the Group will enter into discussions to extend or refinance the loan.

The continued support from West Coast Capital Trading Limited in providing working capital has enabled the business to trade through to this point. However, this support is on a non-binding basis and may be withdrawn at any point. The Board is seeking to dispose of all or part of the Group's interest in Retreat Farm as soon as possible. There is, however, no certainty that a disposal could be achieved in the necessary timeframes. Therefore for the reasons outlined above there is a material uncertainty in relation to going concern.

The Group's forecasts and projections, taking into account the uncertainties above, show that the Group has a reasonable expectation of maintaining sufficient working capital to enable the Group to meet its liabilities as they fall due for the foreseeable future, being a period of not less than 12 months from the date of approval of this report. Thus the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Consolidated income statement

26 weeks ended 27 June 2014

Consolidated statement of comprehensive income

26 weeks ended 27 June 2014

Consolidated balance sheet

Consolidated statement of changes in equity

26 weeks ended 27 June 2014

Consolidated cash flow statement

26 weeks ended 27 June 2014

Notes to the financial statements

1 Accounting policies

1.1 Reporting entity

These Financial Statements are the unaudited Consolidated Interim Financial Statements (hereafter "the Interim Financial Statements") of Flying Brands Limited, a company registered in Jersey, and its subsidiaries (hereafter "the Group") for the 26 weeks ended 27 June 2014.

These Interim Financial Statements have been prepared under IFRS applying the accounting policies published in the Group's IFRS Financial Statements for the 52 weeks ended 27 December 2013, published on 29 April 2014.

1.2 Basis of preparation

The Consolidated Financial Statements for the 52 weeks ended 27 December 2013 (hereafter "the Annual Report and Accounts"), are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this Interim Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

The audit report contained in the Annual Report and Accounts did not include a statement under section 498(2) or (3) of the Companies Act 2006. However, it did contain a modified opinion with an emphasis of matter over going concern.

1.3 Significant accounting policies

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements.

1.4 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An operating segment's operating results, for which discrete financial information is available, is reviewed regularly by the Group's Board to make decisions about resources to be allocated to the segment and assess its performance.

1.5 Going concern

Following consideration of the disclosures in relation to going concern in the Chairman's Statement, the Directors continue to adopt the going concern basis in preparing the Interim Financial Statements.

2 Segmental analysis

3 Taxation

The interim tax charge has been estimated based on a full year forecast tax rate of nil% for underlying tax (2013: nil%).

4 Dividends

No interim dividend (2013: nil) is proposed due to the performance of the Group in the first half of 2014.

5 Earnings per share

Basic and Diluted

Basic earnings per share is calculated by dividing the loss attributable to the equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period, excluding Ordinary Shares purchased by the Company and held as treasury shares. The Company previously had one category of dilutive potential Ordinary Shares: LTIP Awards. These have all lapsed.

6 Related party

The Group has received working capital loans from West Coast Capital Trading Limited amounting to £150,000 (2013: £nil), a company in which the Group's Chairman, Paul Davidson, is also a Director. 

7 Trade and other receivables

8 Trade and other payables

9 Loans

As previously disclosed, the Group entered into a new loan agreement to refinance existing debt with a loan of £1.0m from Acorn Finance. The Facility is secured by a charge over the freehold of Retreat Farm and is repayable in full on 18 January 2015. The loan attracts an annual interest rate of 9.95%.

The Group has received working capital loans from West Coast Capital Trading Limited amounting to £150,000. These loans are repayable on demand.

10 Provision

In 2012 the Group announced it was in a contractual dispute with Flying Flowers Pty Ltd ("FFA"), an Australian company, arising from matters relating to the disposal of the Group's gifts business which FFA allege amounted to breaches of contract by the Group. The Group has settled this dispute and has agreed a payment of £150,000 (2013: £150,000) to be made on the earlier of refinancing the business, disposing of Retreat Farm or 30 April 2015.