Brand Architekts Group plc announces its final results for the 52 weeks ended 27 June 2020.
Overview of Results:
Underlying operating (loss) / profit 1
(Loss) / Profit before taxation
Net cash / (debt)
1 Underlying operating profit is calculated before exceptional items, share based payments, and amortisation of acquisition-related intangibles
· Revenues for the 52 weeks of £16.3m (excluding sales from discontinued operations), a decline of 17% on the prior year.
· UK sales declined by 16%, driven by low consumer confidence and pressure within the retail environment, and the impact of store closures as a result of the outbreak of COVID-19.
· International sales declined by 24% following the heavy impact of currency devaluation in Turkey, the effect of increased tariffs on cosmetic goods shipped from China to USA and the impact of COVID-19 across several of our markets.
· Underlying Gross Profit Margin, excluding exceptional inventory provisions and write offs made at the year end of £2.5m, was 35.2%. Gross profit margin including these items declined to 19.6% (2019: 35.6%).
· Continuing operations made an underlying operating profit of £0.1m, while the Group made an underlying operating loss of £0.8m (2019: underlying operating profit £4.4m).
· Group Profit before tax decreased to £2.2m (2019: profit before tax £4.1m).
· Net cash position at the year ended June 2020 was £18.0m (2019: net debt £7.2m).
· Creation of a solely Owned Brands business following the disposal of the Contract Manufacturing Business for £35 million.
· Operational transition now complete.
· Appointment of new Executive team to build scale and deliver further profitable growth.
· Detailed review of operations undertaken including full review of brand portfolio.
Quentin Higham, Chief Executive, commented:
"Since joining in May, I have been impressed with the depth of our product portfolio and the professionalism of the team, who have endured the most difficult of trading conditions with great resilience and determination. Following a detailed review of all operations, I believe we now have the right strategy to deliver sustainable, profitable growth over the coming years."
Roger McDowell, incoming Non-Executive Chairman, commented:
"Having already been involved with the business for a number of years as a Senior Independent Director, I am very excited to be working with the new management team. I have no doubt that we have the model and depth of resources to position us for success over the next few years.
I would like to thank Brendan Hynes for his stewardship, as he has overseen the transformation of the Group to a fully focused branded business with a very strong balance sheet.
I look forward to working with the rest of the Board as we seek to deliver growth organically, through transformational investment and focus on DTC (direct to consumer) and through targeted acquisitions."