RNS Number:0425U
Hot Tuna (International) plc
30 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 authentic
surf heritage, announces its interim results for the six months ended 31
December 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 first
six months of 2006. We have secured sales for our Spring/Summer 2007 range and
we are confident the Group will deliver solid revenues in the second half of the
year. We have also designed and are currently sampling our Autumn/Winter 2008
range.
"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 the
equity-based credit facility agreed with Cornell Capital Partners in March 2007,
will ensure that the Group has sufficient financial resources to execute its
stated strategy."
- Ends -
For further information:
Hot Tuna (International) PLC
Ranjit Murugason, Chairman Tel: +44 (0) 20 7372 9378
ranjit_murugason@hottunaplc.com
Seymour Pierce Limited
Sarah Wharry / Parimal Kumar Tel: +44 (0) 20 7107 8000
parimalkumar@seymourpierce.com www.seymourpierce.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Chris Lane Tel: +44 (0) 20 7398 7700
chris.lane@abchurch-group.com www.abchurch-group.com
CHAIRMAN'S STATEMENT
The Directors of Hot Tuna (International) PLC have pleasure in presenting the
consolidated results for the half year ended 31 December 2006.
Hot Tuna (International) PLC and its subsidiaries have had a very exciting and
extraordinarily busy half year; designing garments, procuring sales and
welcoming new accounts and customers to enjoy the newly relaunched Hot Tuna
brand.
Over the last six months we have made significant progress in re-establishing
Hot Tuna as a leading global surf and youth lifestyle brand. Hot Tuna has just
completed the design, manufacture and production phase for Spring/Summer 2007,
we are currently sampling and presenting Autumn/Winter 2008 garments within the
industry and to our customers; and, under the leadership of Elle Macpherson, we
have launched the design cycle for our Spring/Summer 2008 range which promises
to provide our customers and ultimate consumers more design superlatives.
During the past six months, there have been many affirmations of the Company's
growing strength and presence in the industry including the addition of fashion
entrepreneur and brand management leader, Elle Macpherson, to the Company's
Board of Directors. Elle Macpherson was featured by the prestigious BBC Money
Programme in March 2007 and her considerable contribution to the Company's
re-launch was well documented during the programme and also provided further
authentication of the Company's strategy to develop a global surf lifestyle
brand.
During the last six months of 2006, the Company has made significant strides and
secured the delivery of its products into what the Directors consider to be the
best independent retailers in all of its core markets. Further, during the
second half of 2006, the Company secured key distribution agreements in some
European markets. Currently the Spring/Summer 2007 collection is being
distributed aggressively in the United States at Jack's Surf Shop in Huntington
Beach, California, the reigning "Retailer of the Year" as determined by the Surf
Industry Manufacturers Association, and also at Diane Beachwear and Cocoa Beach
Surf Company to name a few. In the United Kingdom, the Company's first full
collection is currently being delivered to leading independent retailers
including Fluid, Shore Watersports, Cult Clothing and Two Seasons. Hot Tuna has
also achieved notable success in securing orders for its first collection in the
United Kingdom in 6 years from the United Kingdom's leading action sports
retailer, Free Spirit. In Australia, Hot Tuna has re-launched itself amongst
the key independents including, amongst others, Glue, Surf Vision and Beach
Street. We believe that the Company is poised to secure very significant orders
for its swim line from prestigious customers.
Hot Tuna also continues to support the sport of surfing through sponsoring
athletes, events and grass roots surfing and surf schools. In August 2006, Hot
Tuna was the sponsor of the fifth leg of the prestigious British Professional
Surfing Association (''BPSA'') Tour, held at Porthmeor Beach, St. Ives,
Cornwall. Also in August 2006, Hot Tuna signed former World No. 11 and X-Games
Champion surfer Shea Lopez to its roster as lead team rider. Under the Hot Tuna
banner, 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 ASP
World Qualifying Series (WQS) tour. In the United Kingdom., BPSA champion Micah
Lester and BPSA-ranked No. 7 Toby Atkins were retained by Hot Tuna, ensuring a
steady stream of national media play at the core of their sport, and top-flight
representation at the highest levels of European and Australian competition. The
whole Hot Tuna surf team converged this month on Hot Tuna's birthplace in
Australia in support of the Company's crown-jewel event of the year, the ASP
4-star-rated Hot Tuna Central Coast Pro Surfing Championship, held at Soldiers
Beach, NSW. The event was regarded as a major success and has done wonders to
draw attention globally for the re-launch of Hot Tuna. From sponsorship of
world-class talent and championship, to support of local and regional athletes
and events, Hot Tuna retains its global stature as a surfer's surfing brand true
to 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 the
right management and personnel to drive the Group into the next phase of its
strategy. This includes building the designs, sample lines and infrastructure
required 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 successfully
received, is currently being invoiced to our customers and as budgeted, these
sales will only be recognised in the second half of the financial year.
Furthermore, the Group has now completed the design and sampling phase for the
Autumn/Winter 2008 range which is currently being marketed to our customers.
Hence, the half year up to 31 December 2006 reflects all expenses incurred in
establishing the Spring/Summer 2007 and the Autumn/Winter 2008 range without the
benefit of the corresponding sales, resulting in a #1.6m loss from operations
for the half year.
Hot Tuna has incurred approximately #1.3m of non-cash expenses up to 31 December
2006 including; #0.1m bad debt and inventory write offs and #1.2m of exceptional
share-based payment charges incurred in accordance with IFRS2 requirements. The
share-based payments, which have been charged as an "exceptional item", were
incurred in order to appoint key personnel to the Hot Tuna team during the
period. This charge does not affect the ability of the Company to pay dividends
going forward nor does it affect the net assets of the Group. It is strictly a
charge to reserves in accordance with current accounting standards.
During the period Hot Tuna (International) PLC underwent a capital raising
exercise generating approximately #4.2 million (before expenses) via a placing
of 28,024,994 new ordinary shares of nominal value 1 pence each, at 15 pence per
share. These shares were issued together with warrants, in the ratio of one
warrant for every two placing shares. Subsequent to the half year end, the
Group also agreed a maximum #2.5m equity-based credit facility with Cornell
Capital Partners LP. Cornell will also subscribe to convertible loan notes worth
US$450,000.
The six months leading up to December 2006, has been a period in which we have
worked hard to progress our corporate strategy. The Group's focus during 2007
is, quite simply, product and sales: to take advantage of our consolidated
business operations in Australia, the United Kingdom and the United States, and
the successful delivery of our Spring/Summer 2007 collection into the stores of
our customers and ensuring that the Autumn/Winter 2008 collection is well
received 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 be
strong believers in the growth prospects of the Company and we all believe that
Hot Tuna has an exciting future and with its wealth of extremely talented staff
across the globe, we are now in the best position from which to build long term
value for all shareholders.
RANJIT MURUGASON
CHAIRMAN
30 March 2007
Consolidated Income Statement
For 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
Continuing operations
Revenue 183 109 368
Cost of sales (119) (9) (205)
Gross Profit 64 100 163
Other operating income 22 1 5
Selling 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 39
Profit/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 SHARE
Basic and diluted 4 (5.14 pence) (2.18 pence) (0.06 pence)
Consolidated Balance Sheet
At 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
Assets
Non-current assets
Other intangible assets 5,251 3,233 5,251
Goodwill 187 212 237
Property, plant & equipment 127 8 74
Deferred Tax Assets - 25 -
Loan and advances - 334 -
5,565 3,812 5,562
Current Assets
Inventories 96 100 172
Trade and other receivables 614 190 184
Cash and cash equivalents 3,524 686 1,524
4,234 976 1,880
Total Assets 9,799 4,788 7,442
Liabilities
Current Liabilities
Bank loans and overdraft 4 72 111
Trade and other payables 286 300 282
290 372 393
Net current assets 3,944 604 1,487
Net Assets 9,509 4,416 7,049
Equity and other liabilities
Capital and reserves
Share capital 769 400 488
Share-based payment reserve 1,814 - 577
Share premium reserve 9,544 4,632 6,092
Merger reserve 1,474 - 1,474
Warrant reserve 772 - 487
Foreign exchange reserve 10 - (4)
Shares to be issued - 1 25
Retained 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 Statement
For 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 Activities
Currency revaluation reserve 10 - (4)
Payments for purchase of controlled entity - - (607)
Cash funding on purchase of controlled - - (178)
entities
Interest received 19 8 39
Purchase 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 Activities
Proceeds on issue of shares 3,993 2,208 4,521
Net 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 - -
year
Cash and cash equivalents at the end of the 3,524 686 1,524
year
Movement in Bank & Cash 2,000 686 1,524
Statement of changes in equity
For 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 10,350
Cost of issue (210) (332) (1,298)
Share option charge 1,237 - 91
Net increase in shareholders' equity 2,486 4,492 7,163
Total shareholders' equity brought forward 7,163 - -
Total shareholders' equity earned forward 9,649 4,492 7,163
Notes to the unaudited Interim Report
For 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 the
consolidated financial statements for the 6 months ending 31 December 2006.
The results for the six months ended 31 December 2006 are unaudited. They have
been prepared on accounting bases and policies that will be used in the
preparation of the financial statements of the Group for the year ended 30 June
2007.
The financial information contained in this report does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
results for the year ended 30 June 2006 are based on the audited accounts (which
received an unqualified report). Full accounts have been delivered to the
Registrar 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 FROM
OPERATING ACTIVITIES
#000
Cash outflow from Operating Activities
Loss from operations (1,562)
Adjusted for:
Depreciation of property, plant and equipment 20
Loss on disposal of property, plant and equipment 2
Operating cash flows before movements in working capital (1,580)
Increase in inventories (76)
Increase in receivables (430)
Increase in payables 145
Cash 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 Exchange
END
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