29th Mar 2006 07:02
Hot Tuna (International) plc29 March 2006 29th March 2006 Hot Tuna (International) PLC ("Hot Tuna" or "The Company") Interim Group Results for the period 3rd March to 31st December 2005 The Directors of Hot Tuna (International) PLC have pleasure in presenting theCompany's interim report for the period ending 31st December 2005. Highlights • AIM admission - September 2005 - £1.9million raised • Acquisition of 51% of USA joint venture company, Hot Tuna International Inc. - November 2005 • Appointment of Marcus Gracey (ex- Quicksilver) as Managing Director - November 2005 • Acquisition of 75 per cent interest in Map Print Ltd ("Map"), a UK street wear brand - December 2005 Post interim period events • February 2006 £2.5 million raised • Successfully opened the Hot Tuna Core Store within the world's largest surf complex at Coco Beach, Florida • January 2006 - sponsorship of first ASP sanctioned surf competition since listing on AIM, the 'Hot Tuna Summer Classic' held in Australia Ranjit Murugason, Chairman of Hot Tuna (International) PLC, commented: "SinceListing the Company has been re-establishing itself as a significantinternational surf lifestyle brand, focusing its sales and marketing drive inits three core and strategic markets: the United States, Australia and theUnited Kingdom. The company intends to benefit from the significant economiesof scale available to it in relation to design, marketing and production andwill focus on product quality and design to drive sales in its key markets. Welook forward to a rewarding future for all our stakeholders." Hot Tuna International Plc Nabarro Wells Parkgreen CommunicationsRanjit Murugason, Chairman Hugh Oram Justine Howarth / Victoria Thomas+44 20 7016 5100 +44 20 7710 7400 +44 20 7493 [email protected] [email protected] Hot Tuna (International) Plc Interim Report for the period ending 31st December 2005 Chairman's Statement Operational Review Since listing on AIM in September 2005, Hot Tuna International Plc (the "Company") has been re-establishing itself as a significant international surf lifestylebrand. The Company has been focusing its sales and marketing drive in its threecore and strategic markets, namely, United States, Australia and the UnitedKingdom. In November 2005, the Company exercised its option to acquire a 51 per centcontrolling interest in the Company's licensee business for the USA. As part ofthis transaction, the parties activated a new joint venture company, Hot TunaInternational Inc., of which the Company now owns 51%. The development of theCompany's business in the United States is a priority and taking control in thismarket provides the Company with the opportunity to enjoy greater returns in thelargest surf lifestyle market in the world. In March 2006, Hot Tunasuccessfully opened the Hot Tuna Core Store, a concept retail store at CocoBeach, Florida. The Core Store is located within the world's largest surfcomplex which is owned and operated by the Coco Beach Surf Company. In December 2005, the company completed the acquisition of a 75 per centinterest in Map Print Ltd ("Map"), a UK street wear brand. In addition to theopportunities associated with growing the MAP brand within the UK andinternationally, Map's infrastructure, current account base and strongpositioning as a youth street wear brand has allowed Hot Tuna to fast track itspenetration in the United Kingdom market. The acquisition of Map gives theCompany access to significant design and marketing intellectual capital relevantto both the Map and Hot Tuna businesses in the United Kingdom and Europe. On 30 November, 2005, the Company also welcomed Marcus Gracey as ManagingDirector. Marcus brings a wealth of experience to Hot Tuna having previouslybeen a senior executive with surf lifestyle giant Quiksilver in Australia & AsiaPacific. Marcus's extensive international corporate and operational experiencein the surf lifestyle market has been a significant addition to the board andthe operations of the Company. Consistent with the Company's roots as a core surf lifestyle brand, Hot Tuna iscontinuing to support the sport of surfing through sponsoring athletes, eventsand grass roots surfing and surf schools. The Company, in January 2006,sponsored its first ASP sanctioned surf competition since listing on AIM, the 'Hot Tuna Summer Classic' held in Australia's Mornington Peninsula in the stateof Victoria. Results Summary The Company's aggressive global launch and subsequent expansion has resulted inhigh cash expenditures in the period to 31 December 2005. The group loss forthe period was £541,000. Revenues for the period were £109,000. MAP salesaccounted for £16,000 of revenues and licensee revenues receivable contributed£93,300. Employee and consultancy costs during the period were £280,000,reflecting the company's commitment to employing the right people, and buildingthe infrastructure required to enter three markets in 2006 with the launch ofthe Company's premiere full range for the Spring and Summer 2007 seasons.Marketing, events and public relations costs were £81,000 as the companycontinues to seek brand building opportunities, both locally and overseas. In order to streamline the accounting periods of the consolidating entities thecompany is changing its accounting reference date from 31 March 2006 to 30 June2006. Funding On admission to AIM, the Company placed 3,801,000 new Ordinary shares at 50p pershare to raise £1,900,500 (gross). Subsequent to the period end we completed the placing of 5,000,000 new OrdinaryShares at a price of 50p per share to raise £2,500,000 (gross) of new capitalfor the Company. For each two new ordinary shares issued the subscribersreceived one warrant exercisable at 60p over the next 24 months. These shareswere placed with two UK institutional investors, one US institutional investorand one EU institutional investor. Objectives and strategy The Company's short term focus is to integrate and consolidate its businessoperations in Australia, the United Kingdom and North America so that thecompany is able to benefit from the significant economies of scale available toit in relation to design, marketing and production. The Company is alsoestablishing a sourcing operation in Hong Kong and China and is investing inassociated supply chain logistics systems and processes with a view tomanufacturing a majority of its product in China where significant competitiveproduct margins are available. In addition to progressing its licensee programoutside its key operating territories, the Company will be focused on productquality and design and will be driving sales in its key markets throughinvesting in human resources, systems and infrastructure consistent with theCompany's aggressive sales growth strategy. On behalf of the Board I also wish to record the company's appreciation of theefforts of my fellow directors, our employees, contractors and suppliers, whohave assisted Hot Tuna (International) PLC in its endeavors during the year andwe look forward to a rewarding future for all our stakeholders in the Company. RANJIT MURUGASON CHAIRMAN Hot Tuna (International) Plc Interim Report December 2005 Independent Review Report to Hot Tuna (International) plc Introduction We have been instructed by the Company to review the financial information forthe period ended 31st December 2005 which comprises the Consolidated IncomeStatement, Consolidated Balance Sheet, Consolidated Cash Flow Statement,Reconciliation of Movements in Equity Shareholders' Funds and the related notes1 to 6. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for theCompany for the purpose of their interim report and for no other purpose. We donot, therefore, in producing this report, accept or assume responsibility forany other purpose or to any other person to whom this report is shown or intowhose hands it may come save where expressly agreed by our prior consent inwriting. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the Directors. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board as if that Bulletin applied. A reviewconsists principally of making enquiries of the Directors and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an auditopinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the period ended31st December 2005. CHAPMAN DAVIS LLP Chartered Accountants2 Chapel CourtLondon SE1 1HH 23 March 2006 Consolidated Income Statement (Unaudited) For the period from 3rd March 2005 to 31st December 2005 Notes £000 Revenue 109 Other Operating Income 1Raw materials and consumables used (9)Employee and consultancy expense (280)Selling and Marketing expense (80)Other operating expenses (291) Operating Loss (552) Investment Revenues 8Finance Charges (1) Loss before tax (545) Taxation 2 - Loss for the period (545) Attributable to:Equity holders of the parent (541)Minority Interest (4) (545) LOSS PER SHARE 4 (2.18 pence) Consolidated Balance Sheet (Unaudited) At 31st December 2005 Notes £000 Assets Non-current assetsIntangible Assets - Brands 3,233Goodwill 212Property, plant & equipment 8Deferred Tax Assets 25Loan and advances 334 3,812 Current AssetsCash and cash equivalents 686Trade and other receivables 190Inventories 100 976 Total Assets 4,788 Equity and other liabilities Capital and reservesShare Capital 400Share Premium 4,632Shares to be issued 1Retained earnings (541)Equity Attributable to Equity Holders of Parent 4,492 Minority Interest (76) Total Equity 4,416 Current LiabilitiesTrade and other payables 200Deferred considerations 100Bank Loans 72 372 Total equity and liablities 4,788 Consolidated Cash Flow Statement (Unaudited) For the period from 3rd March 2005 to 31st December 2005 Notes £000 Operating ActivitiesCash absorbed by operations (831)Interest Paid (1) Net Cash Flow from Operating Activities 5 (832) Investing Activities Interest Received 8Purchase of Tangible Fixed Assets (2)Purchase of Intangible Fixed Assets (433)Investment in Subsidiaries (246)Bank overdraft acquired with subsidiary (17)Net Cash Flow from Investing Activities (690) Financing ActivitiesProceeds on Issue of shares 2,208 Net Cash Flow from Financing Activities 2,208 Net Increase in cash and cash equivalents 686 Cash and Cash Equivalents at the beginning of the year -Cash and Cash Equivalents at the end of the year 686 Movement in Bank & Cash 686 Notes to the unaudited Interim Report For the period ending 31st December 2005 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 15 months ending 30 June 2006. This interim report was approved by the Directors on 23rd March 2006. Theinterim results have not been audited, but were the subject of an independentreview carried out by the Company's auditors, Chapman Davis LLP. Their reviewconfirmed that the figures were prepared using applicable accounting policiesand practices consistent with those to be adopted in the annual report. The financial information contained in this interim report does not constitutestatutory accounts as defined by Section 240 of the Companies Act 1985. Allshareholders will receive a copy of this interim report, which can also beobtained from the Company's registered office at Level 5, 22 Arlington Street,London SW1A 1RD. 2. TAXATION No taxation has been provided due to losses in the period. 3. DIVIDENDS The Directors do not recommend the payment of a dividend. 4. LOSS PER SHARE Weighted Average Per share Loss Number of Shares £000 million penceBasic Loss for the period (541) 24.85 (2.18) No diluted loss per share is presented as the effect of exercise of outstandingoptions is to decrease the loss per share. 5. RECONCILIATION OF NET OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES £000Cash outflow from Operating ActivitiesLoss before Interest & Tax (552) (increase)/decrease in receivables (298)increase/(decrease) in creditors 19Interest paid (1) Net Cash outflow from Operating Activities (832) 6. RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS Share Share Profit and Share to be Total capital Premium loss account issued £000 £000 £000 £000 £000At 3rd March 2005 - - - - -Loss for the period (541) (541)Issue of shares 400 4940 5340Shares to be issued 24 1 25Share issue expenses (332) (332) At 31December 2005 400 4,632 (541) 1 4,492 DIRECTORS REGISTERED OFFICE NOMINATED ADVISOR Ranjit Murugason (Chairman) 55 Gower Street Nabarro Wells and Co. LimitedMarcus Gracy (MD) London WC1E6QH Saddlers HouseAnthony Oxley (CEO) Gutter LaneDimitrios Podaridis (ED) London, EC2V 6HSKiran Morzaria (Non-ED)Anthony Samaha (Non-ED) SECRETARY AUDITORS REGISTRARS Stephen Ronaldson Chapman Davis LLP Share Registrars Limited55 Gower Street 2 Chapel Court Craven House, West StreetLondon WC1E6QH London SE11HH Farnham, Surrey GU9 7EN BROKER SOLICITORS WH Ireland Ronaldsons24 Martin Lane 55 Gower StreetLondon EC4R 0RD London WC1E6QH This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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