TIDMEBTM
RNS Number : 5647M
EBTM PLC
30 January 2009
EBTM Plc
("EBTM" or the "Company")
Interim results for the six months ended 31 October 2008
EBTM plc, the vertically integrated online retailer of music inspired fashion,
today announces half year results for the six month period to 31 October 2008.
Operating review
Introduction
The half year to 31 October 2008 was a challenging period for the EBTM group.
Trading was weak during the period and revenues were substantially down year on
year. The group has suffered from substantial non-recurring costs during the
period against the backdrop of a very difficult economic and credit environment.
During October, the board finalised the implementation of a substantial
restructuring of the cost base which is expected to lead to annualised cost
benefits of approximately GBP600,000 and disposed of the Lowlife brand. In
November 2008, the Company concluded a placing which significantly strengthened
the balance sheet.
Results for the period
Group revenue for the period was GBP1,842,420 (2007: GBP3,586,578). This is a
49% decrease from the equivalent prior year period. This decrease is primarily
driven by weakness in the wholesale market, predominantly in the UK and Spain,
and in particular the absence of a substantial wholesale order such as the
GBP800,000 special order received and delivered in October 2007.
Gross margin for the group has decreased to 44% (2007: 47%). Whilst gross margin
in wholesale has been put under pressure, this has been partly compensated for
by the increased proportion of own brand goods sold in the online retail
business and the increased proportion of the sales mix from online. Own brand
sales grew to 52% of online sales in October 2008 from 37% at April 2008.
Adjusted operating loss in the period (before interest, taxation, depreciation,
amortisation and the IFRS 2 credit relating to share based incentives and
separately disclosed items) was GBP435,352 (2007: profit of GBP237,274).
Intellectual property rights are now being amortised by equal annual amounts
over their expected useful life of twenty years. The expected useful life has
been extended from ten years previously as the directors consider this to be
more appropriate for the brands.
The following items have been separately disclosed in the income statement:-
* Reorganisation costs GBP270,758
The reorganisation cost for the six months to 31 October 2008 comprises charges
for integration, reorganisation and restructuring following the acquisition of
the Core Brands Group Limited and Twenty Four Seven Trading Limited in May 2007.
These costs include expenses relating to the restructuring of these businesses
to fully integrate them within EBTM. These costs include salary and compensation
costs for staff who are no longer with the group because their roles became
redundant as the acquired businesses were restructured to operate more
efficiently utilising our economies of scale.
* Loss on sale of intellectual property GBP24,718
As part of the restructuring of the businesses and with a view to focussing on
core business, the rights to the Lowlife brand were sold during the period for a
cash consideration of GBP200,000 and a potential further GBP100,000 based on
performance. The GBP100,000 is not recognised in these accounts. The sale
generated a loss once assets no longer relevant going forward were written off
against the initial receipt.
* Other non-recurring GBP138,068
The group's recent performance has placed pressure on working capital
facilities. In order to maximise the facilities available, the group has had to
pay a significant premium above normal commercial interest rates, and in
addition, has incurred other incidental costs. In addition we have incurred
one-off fees of GBP22,000 relating to a legal dispute.
After separately disclosed items the group has posted a half year operating loss
of GBP856,554 (2007: profit of GBP162,418).
Net debt at 31st October 2008 was GBP1,096,973 (2007: GBP657,994). The debt
within the group has significantly reduced since the period end with net debt at
31 December 2008 being GBP208,297 following a placing in November 2008.
Cost Restructuring
The sale of the Lowlife brand was part of a restructuring of the business to
improve efficiency, enhance margins, reduce debt and focus on core activities.
Following the acquisitions in 2007, the workforce was consolidated and an
ongoing review of the businesses was undertaken. A substantial restructuring
program then began in May 2008 and was concluded in October 2008. The reduction
in overhead, partly resulting from the sale of the Lowlife brand, will result in
annualised total savings of approximately GBP600,000. These savings result
primarily from a reduction in headcount of approximately 23%.
The restructuring of the wholesale division was designed and implemented to
maintain the expected profitability of the group in anticipation of a
challenging trading environment.
Disposal of Lowlife brand
In October 2008, the company completed the sale of the Lowlife brand to Plus
Brands Ltd. The company received a cash consideration of GBP200,000 from the
sale. Furthermore, Plus Brands will pay additional deferred consideration up to
a cap of GBP100,000 dependant on meeting certain performance targets. This has
not been recognised in the accounts for the six months ended 31 October 2008.
The Company retained the UK wholesale distribution rights for the brand.
EBTM had purchased the Lowlife brand as part of the acquisition in May 2007 of
Lowlife Corporation Ltd, the wholesaler of music inspired clothing and
accessories. No specific valuation had been placed on the brand previously as
the revenue contribution from Lowlife branded sales was not material in group
terms.
Plus Brands Ltd is owned by Dale Masters, Lowlife Corporation's founder, a
former director of EBTM and a significant shareholder of EBTM. As part of the
agreement, Mr & Mrs Masters' shareholding of 21,898,696 shares are subject to
lock-in arrangements for a year.
Placings
In July 2008 the company raised GBP675,000 before expenses through the placing
of 19,285,715 new ordinary shares ("Placing Shares") with institutional
investors at a price of 3.5p per share.
Since the period end the company has raised a further GBP850,000 before expenses
through the placing of 85,000,000 new ordinary shares ("Placing Shares") with
institutional investors at a price of 1p per share the ("Placing"). These funds
were used to improve working capital and further reduce bank debt, to make
further small investments in IT and to enhance online stock and marketing spend
over the Christmas period.
Wholesale Division
External sales in the wholesale business fell by 60% in the six month period
ended 31 October 2008.
This decrease is primarily driven by weakness in the high street retail market,
particularly in the UK and Spain (where the group has a trading subsidiary), and
the absence of a substantial wholesale order such as the
GBP800,000 special order received in October 2007.
Wholesale trading has continued to be very challenging beyond the period end and
looks set to remain so throughout 2009.
Online Retail Division
The online division had continued to show sales growth with gross sales up 27%
for the first 20 weeks of the financial year. As previously announced the board
had believed the online division to be well placed as it entered the key
Christmas trading period.
KPIs for the half year ended 31 October 2008:-
+--------------------+--------------------+--------------------+--------------------+
| | 6 months to | 6 months to | Growth |
| | October 08 | October 07 | |
+--------------------+--------------------+--------------------+--------------------+
| Unique Visitors | 1,399,507 | 1,412,400 | -1% |
+--------------------+--------------------+--------------------+--------------------+
| Average Conversion | 1.85% | 1.41% | +31% |
| Rate | | | |
+--------------------+--------------------+--------------------+--------------------+
| Average Basket | GBP33 | GBP37 | -11% |
| (inc VAT) | | | |
+--------------------+--------------------+--------------------+--------------------+
Improvements in the web platform and product range have helped online conversion
rates rise by 31% year on year to an average of 1.85% (2007: 1.41%). In line
with our strategy, EBTM has also continued to grow the percentage of online
sales of product designed and manufactured internally with sales of own brands
running at 52% of online sales in October 2008 (April 2008 - 37%). By increasing
own brand sales, margins are enhanced and importantly, uniqueness and
exclusivity are created for the retail offering.
However, online trading has been negatively impacted by the unprecedented
prevailing economic conditions in the later part of the calendar year and
Christmas sales were substantially behind management expectations with traffic
and average basket values down 36% and 21% respectively. The reduction in
average transaction value was driven primarily by price promotions online. As
previously announced net sales during the key month of December 2008 were down
33% year on year.
The board believes this decline is a short term problem caused by the overriding
macroeconomic environment and that online retailing remains an attractive sector
in the UK market. With continued focus and review of the EBTM proposition and
product offering, the board believes the online business can return to positive
growth.
Outlook
The first six months of the year and subsequent trading through the key
Christmas period were very disappointing, resulting in a difficult situation for
the group. The directors had believed that the online business was well
positioned to deliver accelerated growth, however, the general economic
environment adversely impacted on EBTM's sales and gross margins during the key
Christmas trading period. Trading in the online retail division was well below
management expectations with net sales in December down 33% year-on-year.
The retail market in the UK and Europe to which the group is exposed through
both the wholesale and online divisions has gone through a period of rapid
contraction in the second half of 2008 and this will not improve in 2009. The
market conditions in which EBTM operates are forcing wholesalers and retailers
alike into taking drastic action - a position which could hardly have been
envisaged at the beginning of the financial year.
The effect of the shift in consumer habits has been exacerbated by a rapid
contraction in access to credit for both consumers and businesses such as EBTM.
EBTM group's sales and profits are historically biased towards the second half
of its financial year due to the key trading Christmas period. Although the
directors believe that the disappointing level of online sales over the
Christmas period was a short term problem caused by the overriding macroeconomic
environment, this, together with the ongoing challenging conditions in the
wholesale division, has consequently had an impact on the limited financial
resources of the company.
The board is therefore evaluating strategic options to rebuild the financial
resources of the group and long term shareholder value. This may include a
disposal of part, or all, of the group. As such, the company considers that it
is in an offer period as defined under the City Code on Takeovers and Mergers.
However, there can be no assurance that an offer will be received or that any
disposals will be concluded in which case the company may need to seek
alternative short term funding options. Depending on the outcome of these
discussions, and the way that any agreed deal is structured, there may be a
future impairment to the intangible assets which in accordance with IFRS 3 would
require a provision to be made in the financial statements. Any such impairment
cannot at this stage be quantified.
The board remains of the view that the online retail business model adopted by
EBTM, and the market it targets, can deliver long term value to shareholders and
is evaluating its strategic options to deliver this.
Richard Breeden, Chief Executive.
Enquiries:
EBTM plc 020
7819 1950
Richard Breeden, Chief Executive
Biddicks 020
7448 1000
Zoe Biddick/Sophie Lane
Blue Oar Securities 020 7448 4400
Andrew Raca
EBTM Plc
Consolidated Income Statement
For the six months ended 31 October 2008
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | 6 months | | 6 | | Year to |
| | | | | | | to | | months | | |
| | | | | | | | | to | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | 31 | 31 October | 30 |
| | | | | | | October | | April |
+--------------------------+--+------------+--+--------+--+-------------+-------------------+-------------+
| | | Note | | | | 2008 | | 2007 | | 2008 |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | Unaudited | | Unaudited | | Audited |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | GBP | | GBP | | GBP |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Revenue | | | | | | 1,842,420 | | 3,586,578 | | 6,779,775 |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Cost of Sales | | | | | | (1,030,735) | | (1,914,875) | | (3,044,600) |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Gross Profit | | | | | | 811,685 | | 1,671,703 | | 3,735,175 |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Administrative expenses | | 4 | | | | (1,247,037) | | (1,434,429) | | (2,716,613) |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| (Loss) / Profit before amortisation, | | | | (435,352) | | 237,274 | | 1,018,562 |
| depreciation, interest payable, IFRS2 | | | | | | | | |
| and taxation | | | | | | | | |
+------------------------------------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Amortisation and | | | | | | (104,542) | | (74,586) | | (192,519) |
| depreciation | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| IFRS 2 credit / (charge) | | | | | | 116,884 | | - | | 77,230 |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Reorganisation costs | | 5 | | | | (270,758) | | - | | - |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Loss on sale of | | 5 | | | | (24,718) | | - | | - |
| intellectual property | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Other non-recurring | | 5 | | | | (138,068) | | - | | - |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Operating (Loss) / | | | | | | (856,554) | | 162,418 | | 903,273 |
| Profit | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Interest payable and | | | | | | (63,645) | | (13,929) | | (63,442) |
| similar charges | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Interest receivable | | | | | | 284 | | 8,506 | | 9,280 |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| (Loss) / Profit on Ordinary Activities | | | | (919,915) | | 156,995 | | 849,111 |
| Before Taxation | | | | | | | | |
+------------------------------------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Taxation | | | | | | 171,547 | | (20,111) | | (292,046) |
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| (Loss) / Profit on Ordinary Activities | | | | (748,368) | | 136,884 | | 557,065 |
| After Taxation | | | | | | | | |
+------------------------------------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| (Loss) / Earnings per | | | | | | | | | | |
| share | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Basic | | | | | | (0.29)p | | 0.06p | | 0.24p |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| Fully diluted | | | | | | (0.29)p | | 0.06p | | 0.23p |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | |
+--------------------------+--+------------+--+--------+--+-------------+--+-------------+--+-------------+
The above results reflect the IFRS standards and IFRIC interpretations issued
and effective as at the time
of preparing these statements.
The income statement has been prepared on the basis that all operations are
continuing operations. Revenue contribution from the Lowlife brand which was
disposed of in October 2008 was not material in group terms.
There are no recognised gains and losses other than those passing through the
profit and loss account.
EBTM Plc
Consolidated Balance Sheet at 31 October 2008
+--------------------+------+--+------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | 31 October 2008 | | 31 October 2007 | | 30 April 2008 |
+--------------------+----------------+-------------------------------+--+------------------------------+--+------------------------------+
| | Note | Unaudited | | Unaudited | | Unaudited | | Unaudited | | Audited | | Audited |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | GBP | | GBP | | GBP | | GBP | | GBP | | GBP |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Non-current assets | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Intangible assets | 6 | | | 9,593,374 | | | | 8,670,818 | | | | 9,602,671 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Tangible assets | | | | 468,782 | | | | 227,617 | | | | 410,615 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Deferred tax asset | | | | - | | | | 85,221 | | | | 32,727 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | 10,062,156 | | | | 8,983,656 | | | | 10,046,013 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Current Assets | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Inventories | | 1,231,883 | | | | 1,211,694 | | | | 1,456,765 | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Trade and other | | 833,837 | | | | 2,407,524 | | | | 1,411,103 | | |
| receivables | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Cash and cash | | 69,278 | | | | 45,130 | | | | 356,462 | | |
| equivalents | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | 2,134,998 | | | | 3,664,348 | | | | 3,224,330 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Total assets | | | | 12,197,154 | | | | 12,648,004 | | | | 13,270,343 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Current | | (2,614,713) | | | | (2,970,726) | | | | (3,119,008) | | |
| liabilities | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net current | | (479,715) | | | | 693,622 | | | | 105,322 | | |
| (liabilities) / | | | | | | | | | | | | |
| assets | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Non-current | | (67,694) | | | | (237,905) | | | | (404,892) | | |
| liabilities | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Total liabilities | | | | (2,682,407) | | | | (3,208,631) | | | | (3,523,900) |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net assets | | | | 9,514,747 | | | | 9,439,373 | | | | 9,746,443 |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Capital and | | | | | | | | | | | | |
| Reserves | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Called up share | | | | 1,345,490 | | | | 1,241,560 | | | | 1,249,061 |
| capital | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Share premium | | | | 9,277,991 | | | | 8,695,864 | | | | 8,740,864 |
| account | | | | | | | | | | | | |
+--------------------+----------------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Deferred compensation reserve | | 0 | | | | 284,069 | | | | 116,884 |
+---------------------------------------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Profit and loss account | | | | (1,108,734) | | | | (782,120) | | | | (360,366) |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Shareholders' Funds | | | | 9,514,747 | | | | 9,439,373 | | | | 9,746,443 |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Approved by the Board on 30 January 2009 | | | | | | | | | | |
+---------------------------------------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| R T Breeden | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Director | | | | | | | | | | | | |
+---------------------------+--+--------------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+--------------------+------+--+------+-------------+---+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
.
EBTM Plc
Consolidated Cash Flow Statement
For the six months ended 31 October 2008
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | Six months ended | | Six months ended | | Year ended |
+----------------------+--+----------------------------+--+------------------------------+--+------------------------------+
| | | 31 October 2008 | | 31 October 2007 | | 30 April 2008 |
+----------------------+--+----------------------------+--+------------------------------+--+------------------------------+
| | |Unaudited | | Unaudited | | Unaudited | | Unaudited | | Audited | | Audited |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | GBP | | GBP | | GBP | | GBP | | GBP | | GBP |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net (Outflow) / | | | | (993,562) | | | | (328,915) | | | | 825,852 |
| Inflow from | | | | | | | | | | | | |
| Operating Activities | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Returns on | | | | | | | | | | | | |
| Investments and | | | | | | | | | | | | |
| Servicing of Finance | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Interest paid | | (63,645) | | | | (13,929) | | | | (63,442) | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Interest received | | 284 | | | | 8,506 | | | | 9.280 | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net Outflow from | | | | (63,361) | | | | (5,423) | | | | (54,162) |
| Returns on | | | | | | | | | | | | |
| Investments and | | | | | | | | | | | | |
| Servicing of Finance | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Capital Expenditure | | | | | | | | | | | | |
| and Financial | | | | | | | | | | | | |
| Investment | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of tangible | | (90,440) | | | | (88,749) | | | | (284,410) | | |
| assets | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | (90,440) | | | | (88,749) | | | | (284,410) |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Investing activities | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of | - | | - | | (3,721,726) | | | | (3,721,736) | | |
| subsidiary undertaking | | | | | | | | | | | |
+-------------------------+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Overdraft acquired on | - | | - | | (237,798) | | | | (237,798) | | |
| acquisition | | | | | | | | | | | |
| of subsidiary | | | | | | | | | | | |
| undertaking | | | | | | | | | | | |
+-------------------------+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Purchase of | | (62,972) | | | | (2,137,587) | | | | (2,955,217) | | |
| intangible assets | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net Cash Flow for | | | | (62,972) | | | | (6,097,111) | | | | (6,914,751) |
| Acquisitions and | | | | | | | | | | | | |
| Disposals | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net Cash Outflow | | | | (1,210,335) | | | | (6,520,198) | | | | (6,427,471) |
| before financing | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Financing | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Issue of ordinary | | 633,556 | | | | 5,267,500 | | | | 5,320,000 | | |
| share capital | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Bank and other loans | | (305,002) | | | | (3,368) | | | | (120,777) | | |
| repaid | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Bank and other loans | | 50,000 | | | | 450,000 | | | | 967,000 | | |
| taken out | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Net Cash Inflow from | | | 378,554 | | | | 5,714,132 | | | | 6,166,223 |
| financing | | | | | | | | | | | |
+-------------------------+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| Decrease in Cash | | | | (831,781) | | | | (806,066) | | | | (261,248) |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | | | | | | |
+----------------------+--+-----------+--+-------------+--+-------------+--+-------------+--+-------------+--+-------------+
EBTM Plc
Consolidated Statement of Changes in Equity
For the six months ended 31 October 2008
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | Called | | | | Deferred | | Profit | | |
| | | | | up | | | | | | and | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | Share | | Share | compensation | loss | | |
+----------------------+--+----------+--+-----------+--+-----------+-----------------+-------------+--+-----------+
| | | | | Capital | | Premium | | reserve | | Reserve | | Total |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | GBP | | GBP | | GBP | | GBP | | GBP |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| At 1 May 2007 | | | | 552,500 | | 2,617,425 | | 194,114 | | (917,431) | | 2,446,608 |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| New shares issued | | | | 689,060 | | 6,078,439 | | - | | - | | 6,767,499 |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| Share options | | | | - | | - | | 89,955 | | - | | 89,955 |
| granted | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| Profit for the | | | | - | | - | | - | | 135,311 | | 135,311 |
| period | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| At 31 October 2007 | | | 1,241,560 | | 8,695,864 | | 284,069 | | (782,120) | | 9,439,373 |
+-------------------------+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| At 1 November 2007 | | | | 1,241,560 | | 8,695,864 | | 284,069 | | (782,120) | | 9,439,373 |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| New shares issued | | | | 7,501 | | 45,000 | | - | | - | | 52,501 |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| Share options | | | | - | | - | | (167,185) | | - | | (167,185) |
| granted | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| Profit for the | | | | - | | - | | - | | 421,754 | | 421,754 |
| period | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| At 30 April 2008 | | | 1,249,061 | | 8,740,864 | | 116,884 | | (360,366) | | 9,746,443 |
+-------------------------+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| At 1 May 2008 | | | | 1,249,061 | | 8,740,864 | | 116,884 | | (360,366) | | 9,746,443 |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| New shares issued | | | | 96,429 | | 537,127 | | - | | - | | 633,556 |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| Release of reserve | | | | - | | - | | (116,884) | | - | | (116,884) |
| relating to | | | | | | | | | | | | |
| share options | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| (Loss) for the | | | | - | | - | | - | | (748,368) | | (748,368) |
| period | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| At 31 October 2008 | | | 1,345,490 | | 9,277,991 | | - | | (1,108,734) | | 9,514,747 |
+-------------------------+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
| | | | | | | | | | | | | |
+----------------------+--+----------+--+-----------+--+-----------+--+-----------+--+-------------+--+-----------+
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| Notes to the Consolidated Cash Flow Statement |
+-----------------------------------------------------------------------------------------------+
| For the six months ended 31 October 2008 |
+-----------------------------------------------------------------------------------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | 6 months | | 6 months | | Year |
| | | | | to | | to | | to |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | 31 October | | 31 | | 30 |
| | | | | | | October | | April |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | 2008 | | 2007 | | 2008 |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | Unaudited | | Unaudited | | Audited |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | GBP | | GBP | | GBP |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| 1 | Reconciliation of Operating | | | | | | | |
| | (Loss) / Profit to Operating | | | | | | | |
| | cash flow | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Operating (loss) / profit | | | (856,554) | | 162,418 | | 903,273 |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Depreciation | | | 32,273 | | 12,277 | | 24,940 |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Amortisation | | | 72,269 | | 62,579 | | 167,579 |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Share options | | | (116,884) | | 89,955 | | (77,230) |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Decrease / (increase) in | | | 577,266 | | (1,639,640) | | (670,058) |
| | debtors | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Decrease / (increase) in | | | 224,882 | | (321,604) | | (631,588) |
| | stock | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | (Decrease) / increase in | | | (926,814) | | 1,305,100 | | 1,108,936 |
| | creditors | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Operating cash flow | | | (993,562) | | (328,915) | | 825,852 |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| 2 | Reconciliation of Net Cash | | | | | | | |
| | Flow to Movement in Net Debt | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Decrease in cash in the | | | (831,781) | | (806,066) | | (261,248) |
| | period | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Cash inflow from bank loans | | | (50,000) | | (450,000) | | (967,000) |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Cash outflow from bank loans | | | 305,002 | | 3,368 | | 120,777 |
| | repaid | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Exchange movement | | | (7,427) | | - | | - |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Movement in net debt in the | | | (584,206) | | (1,252,698) | | (1,107,471) |
| | period | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Net debt brought forward | | | (512,767) | | 594,704 | | 594,704 |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | Net debt carried forward | | | (1,096,973) | | (657,994) | | (512,767) |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
| | | | | | | | | |
+---+-------------------------------+--+--+-------------+--+-------------+--+-------------------+
+---+----------------------+----+-----------+-----+-----+-----+--+-----+-----------+-------+-----+
|3 | Analysis of Changes in | | | | | |
| | Net Debt | | | | | |
+---+---------------------------+-----------+-----------+--------------+-----------+-------------+
| | | | | | | | |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | | | At 1 May | Cash | Exchange | Other | At 31 |
| | | | | | | | October |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | | | 2008 | Flow | Movement | Movement | 2008 |
| | | | | | | | |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | | | GBP | GBP | GBP | GBP | GBP |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | Cash at bank and in | | 356,462 | (279,757) | (7,427) | - | 69,278 |
| | hand | | | | | | |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | Overdraft | | (220,374) | (552,024) | - | - | (772,398) |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | Debt due within one | | (243,963) | 255,002 | - | (337,198) | (326,159) |
| | year | | | | | | |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | Debt due after one | | (404,892) | - | - | 337,198 | (67,694) |
| | year | | | | | | |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | | | | | | | |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | Total | | (512,767) | (576,779) | (7,427) | - | (1,096,973) |
+---+----------------------+----+-----------+-----------+--------------+-----------+-------------+
| | | | | | | | |
+---+----------------------+----+-----------+-----+-----+-----+--+-----+-----------+-------+-----+
Notes to the Financial Statements
For the six months ended 31 October 2008
1. General information
EBTM plc ('the company') and its subsidiaries (together 'EBTM plc' or 'the
group') is a manufacturer and on line and wholesale seller of fashion and
fashion related products..
The company is a public limited company incorporated and domiciled in the United
Kingdom. The address of its registered office is Unit G10.2, Battersea Studios,
80 Silverthorne Road, London. SW8 3HE.
The company has its primary listing on the Alternative Investment Market
("AIM").
These consolidated interim financial statements have been approved for issue by
the board of directors on 30 January 2009.
2. Accounting policies
The accounting policies adopted by the group are in accordance with the
accounting policies updated at the prior year end except as amended below.
(a) Accounting basis and standards
The financial statements have been prepared in accordance with those IFRS
standards and IFRIC interpretations issued and effective as at the time of
preparing these statements (January 2009).
(b) Basis of consolidation
The group profit and loss account and balance sheet consist of the financial
statements of the parent company and its subsidiary undertakings. The results of
subsidiaries sold or acquired are included in the profit and loss account up to
or from the date control passes. Intra-group sales and profits are eliminated
fully on consolidation.
(c) Intangible non-current assets
Purchased intellectual property rights relating to clothing brands are
capitalised at cost as intangible fixed assets. Intellectual property rights are
amortised by equal annual amounts over their expected useful life of twenty
years. The expected useful life has been extended from ten years previously as
the directors consider this to be more appropriate for the brands.
Goodwill arising on acquisitions is capitalised in accordance with the
requirements of IFRS 3. Goodwill impairment is assessed by comparing the
carrying value of goodwill to the net present value of future cash flows derived
from the operating performance underpinned by each cash generating units'
three-year forecast. After this period, growth rates equivalent to nominal GDP
are generally assumed. In accordance with IFRS 3 the carrying value of goodwill
will continue to be reviewed for impairment on the basis stipulated and adjusted
should this be required. Impairment is recognised in the income statement and is
not subsequently reversed. The individual circumstances of each future
acquisition will be assessed to determine the appropriate treatment of any
related goodwill.
(d) Depreciation of other non-current assets
Other non-current assets are stated at historical cost.
Depreciation on other non-current assets is provided at rates estimated to write
off the cost or revalued amounts, less estimated residual value, of each asset
evenly over its expected useful life as follows:
Plant and machinery 3 years straight line
e-commerce software 3 years straight line
Fixtures, fittings and equipment 3 years straight line
ERP system 10 years straight line
(e) Revenue
Revenue represents the value of goods despatched from the warehouse less returns
net of value added tax.
(f) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
includes all direct costs incurred in bringing the stocks
to their present
location and condition, including where appropriate, a proportion of
manufacturing overheads.
(g) Investments
Fixed asset investments are stated at historical cost less any provision for
diminution in value
(h) Deferred taxation
In accordance with IAS 12, deferred tax is recognised as a liability or asset if
transactions or events that give the company the obligation to pay more tax in
future or a right to pay less tax in future have occurred by the balance sheet
date.
(i) Foreign currencies
Transactions denominated in foreign currencies are translated into sterling at
the rate of exchange ruling at the date of the transaction. Assets and
liabilities in foreign currencies are translated into sterling at rates of
exchange ruling at the end of the financial year. Exchange differences arising
from the translation of foreign investments, subsidiaries or associates are
taken directly to reserves. All other exchange differences are dealt with in the
profit and loss account.
(j) Leasing commitments
Rentals paid under operating leases are charged to income on a straight line
basis over the lease term.
(k) Share based payments
Certain employees and directors of the company received equity settled
remuneration in the form of company share options. The cost is charged to the
profit and loss account on the straight line basis over the vesting period and a
corresponding amount is reflected in the profit and loss reserves in
shareholders' equity adjusted at each balance sheet date to take into account
actual and expected levels of vesting. The charge is calculated as being the
fair value of the shares or the right to the shares on the date of grant,
reduced by any consideration payable by the employee. Fair value is measured
using a modified Black- Scholes option pricing model and is based on a
reasonable expectation of the extent to which performance criteria will be met.
3. Basis of preparation and statutory information
The 31 October 2008 interim consolidated financial statements of EBTM plc are
for the six month period ended 31 October 2008. These interim financial
statements have been prepared in accordance with those IFRS standards and IFRIC
interpretations issued and effective as at the time of preparing these
statements (January 2009) and IAS 34 'Interim Financial Reporting'.
The interim financial information for the six months ended 31 October 2008 and
31 October 2007 has not been audited and does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985.
The information for the year ended 30 April 2008 does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985. A copy of the
statutory accounts, which were prepared under IAS, has been filed with the
Registrar of Companies. The auditors' report on those accounts was not qualified
and did not contain statements under section 237(2) or (3) of the Companies Act
1985.
4. IFRS 2
Included in administrative expenses in the prior period to 31 October 2007 was
an IFRS 2 charge of GBP61,414 relating to share options which at the time was
not separately disclosed
5. Operating Loss
Operating Loss is stated after providing the following:-
Reorganisation costs
The reorganisation cost for the six months comprises charges for integration,
reorganisation and restructuring following the acquisition of the Core Brands
Group Limited and Twenty Four Seven Trading Limited in May 2007. These costs
include expenses relating to the restructuring of these businesses to fully
integrate them within EBTM PLC. These costs include salary and compensation
costs for staff who are no longer with the group because their roles became
redundant as the acquired businesses were restructured to operate more
efficiently utilising our economies of scale.
Loss on sale of intellectual property
As part of the restructuring of the businesses and with a view to focussing on
core business, the rights to the Lowlife brand were sold during the period for a
cash consideration of GBP200,000 plus an additional GBP100,000 of performance
based contingent consideration. The GBP100,000 is not recognised in these
accounts. The sale generated a loss once assets no longer relevant going forward
were written off against the initial receipt.
Other non-recurring
The group's recent performance has placed pressure on working capital
facilities. In order to maximise the facilities available, the group has had to
pay a significant premium above normal commercial interest rates, and in
addition, has incurred other incidental costs. In addition we have incurred
one-off fees of GBP22,000 relating to a legal dispute.
6. Impairment of intangible assets
The board is currently evaluating strategic options to rebuild the financial
resources of the group and long term shareholder value. This may include a
disposal of part, or all, of the group. As such, the company considers that it
is in an offer period as defined under the City Code on Takeovers and Mergers.
However, there can be no assurance that an offer will be received or that any
disposals will be concluded in which case the company may need to seek
alternative short term funding options. Depending on the outcome of these
discussions, and the way that any agreed deal is structured, there may be a
future impairment to the intangible assets which in accordance with IFRS 3 would
require a provision to be made in the financial statements. Any such impairment
cannot at this stage be quantified.
7. Post Balance Sheet event
In November EBTM plc raised GBP850,000 before expenses through the placing of
85,000,000 new ordinary shares of 1p per share. This considerably strengthened
the balance sheet and provided additional working capital in addition to
reducing debt with net debt lowered significantly from GBP1,096,973 at 31
October 2008 to GBP208,297 at 31 December 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BUGDBRBXGGCG
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