RNS Number:5821P
Hot Tuna (International) plc
07 March 2008
Hot Tuna (International) PLC
("Hot Tuna" or the "Company")
Interim Report for the period ending 31 December 2007
The Company announces the interim results for the six months ended 31 December
2007.
For further information:
Hot Tuna (International) PLC
Niels Juul Tel: +44 (0) 20 7372 9378
niels_juul@hottunaplc.com www.hottunaplc.com
--------------------
Seymour Pierce Limited
Mark Percy /Parimal Kumar Tel: +44 (0) 20 7107 8000
www.seymourpierce.com
Notes to Editors
Hot Tuna International PLC (AIM: HTT) owns the rights to the Hot Tuna brand, a
progenitor of global youth fashion, born in Australia with a heritage of
authentic surf culture.
Hot Tuna is one of the world's most iconic names in surf lifestyle and can trace
its roots back to 1969 when it was founded by a surfer and his fashion designer
wife. Though the label had not been actively marketed over for the last
decade, it retained an organic cult status among core action sports enthusiasts.
In June 2005, Hot Tuna International PLC purchased the 'Hot Tuna' brand from
Frontier International (Holdings) Pty Ltd, listed on AIM in September 2005, and
has since started to aggressively market the brand and reinvigorate the
business. The Company now owns all intellectual property rights to its name and
related iconography, and has put in place key management drawn from the
executive ranks of Von Dutch, Quiksilver, O'Neill and Ocean Pacific, among
others.
Headquartered in the UK, Hot Tuna operates design, marketing and distribution
hubs in the USA, Australia and the UK. In its core markets, Hot Tuna sells
products, which are directly manufactured in facilities principally in China.
Interim Report for the period ending 31 December 2007
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, the sales order book has 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 Half Year to 12 Months
31.12.2007 31.12.2006 Ended
(Un-audited) (Un-audited) 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 Half Year to 12 Months Ended
31.12.2007 31.12.2006 30.6.2007
(Un-audited) (Un-audited) (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 Half Year 12 Months
to to Ended
31.12.2007 31.12.2006 30.6.2007
(Un-audited) (Un-audited) (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 Share Share-based Other Warrant Retained Total Minority Total
capital premium payment reserves reserve profit/ equity interest Equity
account reserve (loss)
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 Share Share Share-based Other Warrant Retained Total Minority Total
year ended capital premium payment reserves reserve profit/ equity interest Equity
31 December account reserve (loss)
2006
� � � � � � � � �
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
1. PRESENTATION OF INTERIM RESULTS
This interim report has been prepared in accordance with the
accounting policies set out in the Company's Annual Report for the year ended 30
June 2007 and are expected to be used in the Annual Report for the year ended 30
June 2008.
The results for the six months ended 31 December 2007 have not been audited. 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 2007 are based on the audited accounts (which
received an unqualified audit 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 period attributable to equity holders of the parent (1,523,334)
Number of shares
Weighted average number of ordinary shares for the purposes of
basic earnings per share 77,997,734
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
Half Year to Half Year to 12 Months Ended
31.12.2007 31.12.2006 30.6.2007
(Un-audited) (Un-audited) (Audited)
Cash outflow from
Operating
Activities �000 �000 �000
Loss from
operations (1,653) (1,562) (3,704)
Adjusted
for:
Depreciation
of property,
plant and
equipment 28 20 44
---------- ---------- -----------
Operating
cash
flows before
movements in
working
capital (1,625) (1,522) (3,660)
---------- ---------- -----------
Increase in
inventories (37) (76) (227)
Decrease/
(Increase) in
receivables 27 (430) (231)
(Decrease)/
Increase in
payables (12) 97 204
---------- ---------- -----------
Cash used in
operations (1,647) (1,931) (254)
---------- ---------- -----------
Interest (20) (4) (7)
paid ---------- ---------- -----------
Net Cash
outflow from
Operating
Activities (1,667) (1,935) (3,921)
---------- ---------- -----------
6. POST BALANCE SHEET DATE EVENTS
The Company has raised �585,000 gross (�555,000 net of expenses)
by way of a placing of 58,500,000 new ordinary shares of 1 pence each in the
share capital of the Company at 1 pence per share. Participants have
additionally been granted one warrant to subscribe for an additional ordinary
share in Hot Tuna for each two new ordinary shares subscribed for by that
participant in the placing. These warrants are exercisable at 1.5p per share for
a period of five years from the date of admission of the shares to trading on
AIM.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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