Latest Results
The Company announces the interim results for the six months ended 31 December 2007.
Chief Executive Officer's statement
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Statement of changes in equity
Notes
Chief Executive Officer's statement
The Directors of Hot Tuna (International) PLC present the consolidated results for the half year ending 31 December 2007.
An extremely challenging trading environment coupled with restructuring of the Group's supply chain, slow brand recognition in the USA and adverse trading conditions have impacted trading results.
An unseasonably wet summer affected Spring/Summer 2007 sales and also forced many of our independent retail customers to reduce volumes for subsequent orders. This and the slowdown of the economy triggered higher than budgeted bad debts for the half year ending 31 December 2007. We have also been forced to dispose of inventory which accumulated under previous management who had entered into speculative production.
These circumstances have contributed to an operating loss for the half year of £1.5m. Although these difficult trading conditions were forecast we did not anticipate the full effect of the lack of brand recognition in the USA, which has resulted in lower than forecast sales revenue.
As mentioned in our strategic review, released in August of last year, we have been working to restructure the company and create an effective and efficient operating platform from which the company can springboard into the coming seasons. Whilst this process is still underway, most of the foundations are now in place.
In November we moved all of the brand's manufacturing to China, managed from our new sourcing office in Shanghai. The aim is to generate a lower cost base and stronger relationships with suppliers which will also ensure timely production of quality garments and generate additional savings in freight and logistics. We have also cut our overhead cost base in the UK and the USA, which will contribute to the profitability of our new operating model.
Improvements have also been made to the designs and we are asserting the brand position in our markets. During recent trade shows in the USA and in Europe, Hot Tuna has received excellent reviews from the press and fashion media. Hence, in addition to improved product, we are engaging with better retailers, reducing our cost of sales and repositioning the brand to create a more profitable business model.
Of our three core markets, Australia is performing very strongly. The launch of our Hot Tuna girls and boys clothing ranges into Myer department stores has exceeded expectations with a sell-through reaching 10%. This places Hot Tuna amongst the strongest performing brands in the department store and has allowed our expansion into David Jones department stores nationally.
The United States office was relocated to the Cooper Design Space in downtown Los Angeles. The new office offers a studio, office and showroom facilities all in one location and furthermore allows us direct access to the large department store buyers. Despite the fact we have secured some lucrative orders at recent trade shows, sales are still not meeting forecasts due to the lack of brand recognition, intense competition and consumer uncertainty.
In the United Kingdom, sales have been strong and the product has been well received in independent retail stores and department stores alike however margins have been affected by costly logistics. Spring/Summer 2008 promises to be a great success for the European business.
Finally, our online store is now fully operational across all three regions. The online store features both "basic collections" as well as product from recent seasons. In addition to team news and growing media coverage, the opportunity to purchase items online complements our much improved website.
Subsequent to the half year end, we have appointed Mr David Lenigas as our new Non Executive Chairman. David will replace Mr Ranjit Murugason, who having recently taken on the full time position at an international group, believes he can no longer devote the required time to the Chairmanship role. We wish Ranjit every success in the future and thank him for his dedication over the past two years. On behalf of the team I would like to welcome David to the Board, he brings a vast wealth of highly relevant experience and I am confident he will bring exceptional value to the Company as we continue to grow. I am also pleased to announce that this week we have also successfully raised £585,000 (before expenses) in an equity placing. The placing will enable the Company to continue and provide the necessary working capital for its growing order book.
Thank you to our committed and hard working employees who have worked tirelessly through this very difficult period and we would also thank our investors and shareholders for their continued support.
NIELS ANDERS JUUL
CHIEF EXECUTIVE OFFICER
6 March 2008
Consolidated Income Statement
For the period from 1 July 2007 to 31st December 2007
| Half Year to 31.12.2007 (Un-audited) | Half Year to 31.12.2006 (Un-audited) | 12 Months Ended 30.6.2007 (Audited) | ||
| £000 | £000 | £000 | ||
| Notes | ||||
| Continuing operations | ||||
| Revenue | 445 | 183 | 619 | |
| Cost of sales | (472) | (119) | (482) | |
| Gross (Loss)/Profit | (27) | 64 | 137 | |
| Other operating income | - | 22 | 5 | |
| Selling and marketing expense | (382) | (153) | (596) | |
| General and administrative expenses | (1,216) | (1,475) | (3,210) | |
| Depreciation and amortisation | (28) | (20) | (40) | |
| Loss from operations | (1,653) | (1,562) | (3,704) | |
| Exceptional share-based payment charge | 120 | (1,237) | (1,689) | |
| Investment income | 32 | 19 | 71 | |
| Loss on disposal of property, plant and equipment | (2) | (1) | (4) | |
| Finance costs | (20) | (3) | (7) | |
| Loss before tax | (1,523) | (2,784) | (5,333) | |
| Taxation | 2 | - | - | - |
| Loss for the period | (1,523) | (2,784) | (5,333) | |
| Attributable to: | ||||
| Equity holders | (1,523) | (2,755) | (5,333) | |
| Minority interest | - | (29) | - | |
| (1,523) | (2,784) | (5,333) | ||
| LOSS PER SHARE | ||||
| Basic and diluted | 4 | (0.02 pence) | (5.14 pence) | (0.08 pence) |
Consolidated Balance Sheet
At 31st December 2007
| Half Year to 31.12.2007 (Un-audited) | Half Year to 31.12.2006 (Un-audited) | 12 Months Ended 30.6.2007 (Audited) | ||
| £000 | £000 | £000 | ||
| Assets | ||||
| Non-current assets | ||||
| Other intangible assets | 5,238 | 5,251 | 5,238 | |
| Goodwill | 207 | 187 | 207 | |
| Property, plant & equipment | 156 | 127 | 124 | |
| 5,601 | 5,565 | 5,569 | ||
| Current Assets | ||||
| Inventories | 436 | 96 | 399 | |
| Trade and other receivables | 497 | 614 | 524 | |
| Cash and cash equivalents | 464 | 3,524 | 1,892 | |
| 1,397 | 4,234 | 2,815 | ||
| Total Assets | 6,998 | 9,799 | 8,384 | |
| Liabilities | ||||
| Current Liabilities | ||||
| Bank loans and overdraft | - | 4 | - | |
| Trade and other payables | 460 | 286 | 496 | |
| Convertible loan note | 47 | - | 106 | |
| 507 | 290 | 602 | ||
| Non-current Liabilities | ||||
| Convertible loan note | 111 | - | 111 | |
| 111 | - | 111 | ||
| Total Liabilities | 618 | 290 | 713 | |
| Net Assets | 6,380 | 9,509 | 7,671 | |
| Equity and other liabilities | ||||
| Capital and reserves | ||||
| Share capital | 828 | 769 | 774 | |
| Share-based payment reserve | 2,147 | 1,814 | 2,267 | |
| Share premium reserve | 9,881 | 9,544 | 9,612 | |
| Merger reserve | 1,474 | 1,474 | 1,474 | |
| Warrant reserve | 800 | 772 | 800 | |
| Foreign exchange reserve | 82 | 10 | 53 | |
| Retained loss | (8,832) | (4,731) | (7,309) | |
| Equity attributable to equity holders of parent | 6,380 | 9,652 | 7,671 | |
| Minority interest | - | (143) | - | |
| Total Equity | 6,380 | 9,509 | 7,671 |
Consolidated Cash Flow Statement
For the period from 1 July 2007 to 31st December 2007
| Half Year to 31.12.2007 (Un-audited) | Half Year to 31.12.2006 (Un-audited) | 12 Months Ended 30.6.2007 (Audited) | ||
| £000 | £000 | £000 | ||
| Notes | ||||
| Net Cash Flow from Operating Activities | 5 | (1,667) | (1,935) | (3,921) |
| Investing Activities | ||||
| Interest received | 32 | 19 | 71 | |
| Purchase of property, plant and equipment | (57) | (77) | (94) | |
| Net Cash Flow from Investing Activities | (25) | (58) | (23) | |
| Financing Activities | ||||
| Proceeds on issue/(repayment) of convertible notes | (59) | - | 218 | |
| Proceeds from issue of share capital | 323 | 3,993 | 4,094 | |
| Net Cash Flow from Financing Activities | 264 | 3,993 | 4,312 | |
| Net (decrease)/increase in cash and cash equivalents | (1,428) | 2,000 | 368 | |
| Cash and cash equivalents at the beginning of the year | 1,892 | 1,524 | 1,524 | |
| Cash and cash equivalents at the end of the year | 464 | 3,524 | 1,892 | |
| Movement in Bank & Cash | (1,428) | 2,000 | 368 |
Statement of changes in equity
For the period from 1 July 2007 to 31st December 2007
|
Share capital |
Share premium account | Share- based payment reserve |
Other reserves |
Warrant reserve |
Retained profit/ (loss) |
Total equity |
Minority interest |
Total Equity |
|
| For the half year ended 31 December 2007 | |||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | £ | |
| Balance at 1 July 2007 | 774 | 9,612 | 2,267 | 1,527 | 800 | (7,309) | 7,671 | - | 7,671 |
| Net loss for the period | - | - | - | - | - | (1,523) | (1,523) | - | (1,523) |
| Exchange differences arising on translation of overseas operations | - | - | - | 29 | - | - | 29 | - | 29 |
| Total recognised income and expense for period | - | - | - | 29 | - | (1,523) | (1,494) | - | (1,494) |
| Share conversion and issue | 54 | 269 | - | - | - | - | 323 | - | 323 |
| Employee share option scheme | - | - | (120) | - | - | - | (120) | - | (120) |
|
Balance at 31 December 2007 |
828 | 9,881 | 2,147 | 1,556 | 800 | (8,832) | 6,380 | - | 6,380 |
|
For the year ended 30 June 2007 |
|||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | £ | |
| Balance at 1 July 2006 | 488 | 6,092 | 577 | 1,495 | 487 | (1,976) | 7,163 | (114) | 7,049 |
| Net loss for the period | - | - | - | - | - | (5,333) | (5,333) | 114 | (5,219) |
| Exchange differences arising on translation of overseas operations | - | - | - | 58 | - | - | 58 | - | 58 |
| Total recognised income and expense for the period | - | - | - | 58 | - | (5,333) | (5,275) | 114 | (5,161) |
| Share conversion and issue | 286 | 3,520 | - | (26) | - | - | 3,780 | - | 3,780 |
| Warrants Subscribed | - | - | - | - | 313 | - | 313 | - | 313 |
| Employee share option scheme | - | - | 1,690 | - | - | - | 1,690 | - | 1,690 |
|
Balance at 30 June 2007 |
774 | 9,612 | 2,267 | 1,527 | 800 | (7,309) | 7,671 | - | 7,671 |
| For the half year ended 31 December 2006 |
Share capital |
Share premium account |
Share-based payment reserve |
Other reserves |
Warrant reserve |
Retained profit/ (loss) |
Total equity |
Minority interest |
Total Equity |
| £ | £ | £ | £ | £ | £ | £ | £ | £ | |
| Balance at 1 July 2006 | 488 | 6,092 | 577 | 1,495 | 487 | (1,976) | 7,163 | (114) | 7,049 |
| Net loss for the period | - | - | - | - | - | (2,755) | (2,755) | (29) | (2,784) |
| Exchange differences arising on translation of overseas operations | - | - | - | (11) | - | - | (11) | - | (11) |
| Total recognised income and expense for the period | - | - | - | (11) | - | (2,755) | (2,766) | (29) | (2,795) |
| Share conversion and issue | 281 | 3,452 | - | - | 285 | - | 4,018 | - | 4,018 |
| Employee share option scheme | - | - | 1,237 | - | - | - | 1,237 | - | 1,237 |
|
Balance at 31 December 2006 |
769 | 9,544 | 1,814 | 1,484 | 772 | (4,731) | 9,652 | (143) | 9,509 |
Notes to the unaudited Interim Report
For the period ending 31st December 2007
The notes to the consolidated financial statements are available in the PDF download
Page last up-dated: 7 March 2008