Brand Architekts Group plc, a market leader in the development and supply of beauty and personal care brands, announces its interim results for the 6-month period ended 31 December 2020
· New management team fully onboarded with Project 50, a transformational strategy to grow the Company into a £50m revenue business within the next five years.
· The pandemic impacted footfall and consumer behaviour, resulting in a decline in beauty sales within the UK high-street, International markets and led to retailer caution with regards to 2020 Xmas gift sets volumes. This was partially offset by growth in the UK grocers and an overall improvement of 125% in e-tail and direct-to-consumer sales.
· Detailed review of operations undertaken resulting in an improved net cash position; increase in net profitability and an overhaul of the brand portfolio.
· Project 50 plan has been clearly defined and moved into execution phase. The plan has required new thinking, investment and focus across four key pillars: operational efficiency, optimising the portfolio, channel development and being a responsible business.
· Successfully implemented the following aspects of the Project 50 strategy, all of which will start to deliver return on investment (ROI) from next financial year:
o Expected 5-year appointment of Global leading e-Commerce providers, as our new direct-to-consumer (DTC) partner, who will work in creating and launching a new marketplace in July 21
o Capitalising on Super Facialist +50% H1 sales growth, created a transformational and integrated above the line (ATL) campaign to run from May 21- March 22.
o Developed a communication program to effectively market five brand relaunches and NPD program from May onwards.
o 98% of all products will be 100% recyclable; all NPD will utilise a minimum 30% post-consumer recycled plastic (PCR); all UK sourced card and outer packaging will be Forest Stewardship Council (FSC) approved.
· Revenues for the period of £9.0m, a decline of 10% on the prior year (£10.0m on an adjusted basis).
· Underlying Gross Profit Margin improved to 39% (H1 2020: 38%).
· Profit before tax increased to £0.4m (H1 2020: £0.3m).
· Net cash position as at the period end was £19.0m, a £1.0m improvement since the year end.
· Repayment of outstanding term loans (£2.1m) and commercial invoice discounting facility (£1.1m) leaving the Group debt free.
Continuing Operations (excluding discontinued operations)
£m unless otherwise stated
H1 2020 (Restated) 2
Reported results from continuing operations ¹
Underlying operating profit ¹
Adjusted basic earnings per share ¹
Statutory results for the whole group including discontinued operations
Operating profit before exceptional items
Profit on disposal of manufacturing business
Basic earnings per share
Total dividend per share
¹ Underlying operating profit is calculated before LTIP, amortisation of acquisition related intangibles, exceptional items and net borrowing costs. Adjusted earnings per share is calculated using operating profit before exceptional items and amortisation of acquisition related intangibles.
2 H1 2020 was a 28-week period vs 26 weeks in H1 2021. H1 2020 has therefore been restated to 26 weeks for comparative purposes.
Quentin Higham, Chief Executive, commented:
"Since joining in May, we have taken time to get under the skin of the business and have started to build the foundations to deliver sustainable and profitable growth over the coming years.
Despite the ongoing challenges caused by the pandemic, we have made good progress against our strategic priorities, as we work towards our Project 50 goal. As we move into the second half, we will maintain our focus on our four key pillars, in particular the investments we are making into our direct-to-consumer (DTC) channel and Super Facialist marketing campaign.
Whilst the current operating environment remains uncertain, we are confident we are building the right platform to achieve our long-term goals.
I would like to thank our teams, whose dedication and hard work since the onset of the pandemic has been impressive."