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KOOV Koovs Plc

2.90
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Koovs Plc LSE:KOOV London Ordinary Share GB00BHB22S55 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 2.90 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Koovs PLC Half-year Report (7168Z)

19/12/2017 7:00am

UK Regulatory


Koovs (LSE:KOOV)
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TIDMKOOV

RNS Number : 7168Z

Koovs PLC

19 December 2017

19 December 2017

Interim Results for the six months ended 30 September 2017

Koovs plc ("Koovs" or the "Company")

Focus on high quality sales delivering continued margin improvement

Koovs plc (AIM: KOOV), ("Koovs" or the "Company") the fashion-forward business focused on the young Indian e-commerce market, today announces its interim results for the six months to 30 September 2017.

Business Highlights

-- Gross Sales* at GBP7.9m for the period (H1 FY17: GBP7.9m); in line with India's ecommerce market which was flat, impacted by Demonetisation, the introduction of the Goods and Services Tax, and heavy discounting and marketing expenditure by sector peers

-- Quality of sales improved with markdown sales reduced to 20% of Sales (H1 FY17: 29%) in a market driven by high discounting

   --      Trading Margin increased significantly to 18% (H1 FY17: 2%) 
   --      Average Order Value increased by 21% GBP17.00 (H1 FY17: GBP14.70) 
   --      Brand awareness increased to 21% (March 2017: 15%) 
   --      Sales and increase in brand awareness with significantly reduced marketing spend 
   --      International distribution agreements with Souq.com in Middle East and Simply Be in UK 

-- Recent Forrester survey for customer experience ranked KOOVS.COM No.1 for "Best Customer Experience" among online-only retailers in India

   --      Social media presence grew by 29% to 2.2 million followers (H1 FY17: 1.7m) 

Financial Overview

   --      Group Revenues at GBP3.9m for the period (H1 FY17: GBP4.0m) 
   --      Group gross margin improved from -20% to 0% (H1 FY17: -20%) 
   --      Operating costs reduced by 9% to GBP7.7m (H1 FY17: GBP8.4m) 
   --      Loss for the period reduced by 15% to GBP7.8m (H1 FY17: GBP9.1m) 

-- Cash utilised in the period reduced by 44% to GBP6.8m (H1 FY17: GBP12.2m - included a GBP3.2m media prepayment)

   --      Funding of GBP8.9m received in the period through the issuance of 6% convertible loan notes 

* Gross Sales (Gross Order Value) order value placed through the KOOVS.COM website including taxes

Trading Update & Outlook

With modest additional marketing spend, the important month of November delivered a significant year on year improvement across key metrics, with Sales up by 17% to GBP1.7m and website traffic up 43%. However, marketing expenditure is currently significantly down due to the ongoing funding requirements of the Group, which the Company expects to affect FY18 sales overall. Additional marketing expenditure is conditional upon the timing of closure of the funding programme announced in July 2017, which the Company continues to expect to close shortly.

Koovs remains well placed to maximise the future growth of the Indian ecommerce market and expects the market to return to growth in the next financial year.

Mary Turner, CEO, said:

"I am pleased with the progress we have made in our business fundamentals. Year on year Trading Margin has been improved from 2% to 18% and Brand Awareness is up from 15% to 21%. In addition, Koovs is now ranked No1 for customer experience by Forrester Research and has the highest Net Promotor Score in the fashion vertical (RedSeer) ahead of Amazon and Flipkart.

"It has been a challenging year generally for the market, however with these strong business fundamentals, Koovs is well positioned to capitalise further on the growth opportunity."

Definitions

Sales (Gross order value): Total value of orders placed by consumers on the KOOVS.COM website for products supplied by the Group.

   Performance marketing:        Pay per click marketing e.g. Google, Facebook 

Trading margin: Implied retail gross margin that would be reported in the companies accounts if Koovs India were able to ship products directly to the end consumer

Notes:

Gross Order Value is the value of the orders placed on KOOVS.COM. Group Revenues are after returns, tax and the discount paid to Marble E-Retail Pvt Ltd. to cover delivery, warehousing and customer care. Marble is used by Koovs in compliance with India's foreign direct investment rules to deliver and provide customer support for the goods purchased on KOOVS.COM.

Sterling equivalent of Indian Rupee values at exchange rates ruling in the relevant period or on the relevant date.

The information presented in this report has not been audited by the Company's auditors.

Notes to Editors

The Company is headquartered in London, where the majority of its design and buying team is based, with all other operational functions based in India.

 
 For further information, 
  please contact: 
 Koovs plc                    Tel: +44 (0) 20 7151 
  Mary Turner/Rob Pursell      0170 
 Peel Hunt LLP 
 Dan Webster / George         Tel: +44 (0) 20 7418 
  Sellar /                     8900 
  Jock Maxwell Macdonald 
  (ECM) 
 Media Enquiries - Headland 
 Lucy Legh / Rob Walker       Tel: +44 (0) 20 3805 
  / Charlie Twigg              4822 
 

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

CHAIRMAN'S STATEMENT FOR THE SIX MONTHS TO 30 SEPTEMBER 2017

Koovs occupies a market leading position within India's e-commerce market, which is forecast to grow five-fold to $3.5 billion over the next few years.

While the short-term disruption created by demonetisation and the introduction of India's Goods and Services Tax caused the Indian online fashion market to remain flat in the current financial year, I am more excited than ever about the company's long-term growth prospects.

Koovs is in the right place at the right time, underlined by the fundamental demographic and macroeconomic progress India will make over the coming years and the remarkable digital transformation it is undergoing.

In the six months to 30 September 2017 we have continued to build on the key strengths of the business in its brand, products and customer service. It is a credit to the team that in a flat market with high levels of discounting we have been able to increase our brand awareness and customer satisfaction at the same time as substantially increasing our margins.

Koovs remains well placed to maximise the future growth of the Indian ecommerce market and deliver its strategic objectives set out in the Annual report dated March 2017.

Fund raising

During the period GBP8.9m out of a total possible GBP18.9m of convertible loan notes has been raised as part of the funding programme announced in July 2017.

The Company remains in advanced negotiations and expects to announce the successful conclusion of this additional funding in due course.

Outlook

We expect the market to return to growth in the next financial year. As such we intend to remain resolutely focused on our strategy in order to capitalise on the opportunity represented by the ecommerce market in India.

Waheed Alli

Chairman

19 December 2017

INTERIM REVIEW

Strategy

Koovs' commercial strategy and goal to become India's number one international fashion destination is aimed at rapidly building scale in the business. We will do this by following the strategic objectives detailed in the latest annual report for the year to March 2017 and listed below.

Ø Expand product range

Ø Engage customer though content

Ø Amplify the brand

Ø Extend territories

We will provide the most engaging customer experience through fashion and lifestyle related content and develop a seamless experience across web, mobile and tablet.

Further, we will become the undisputed brand for affordable international style for the fashion lover in India by amplifying our voice to become "famous for fashion" through extensive and targeted marketing campaigns across multiple channels in India's major cities.

Trading performance [and KPIs]

Sales generated on the KOOVS.COM website during the six months to 30 September 2017 were in line with H1 FY17 at GBP7.9m (INR 651.7m). An improved product offering with more efficient buying has increased full price and promotional sales by 11% to GBP6.3m (INR 522.2m), and reduced markdown sales by 31% to GBP1.6m (INR 129.5m).

With more focus on profitable sales the trading margin (for sales generated on Koovs.com) for the six months to 30 September 2017 was 18.4%, an increase from 1.6% in H1 FY16. Allowing for the discount on wholesale sales to Marble, to cover delivery and warehousing costs, the gross margin for the Group for the six months to 30 September 2017 was -0.3%, a significant improvement from -20.1% in H1 FY16

Marketing activities in the period delivered strong results:

-- With a limited increase in costs (GBP0.3m) brand marketing programs lifted Koovs' brand awareness from 13% at the end of last financial year to 21% by 30 September 2017.

-- Performance marketing (pay per click) efficiency also improved. With improved bidding strategies, and supported by the increased brand awareness, average cost per order reduced by 36%.

Other costs in the period were in line with last year. During the six months to 30 September 2017 a number of cost saving initiatives were introduced. Key amongst these were the full outsourcing of warehouse operations as well as a restructuring which reduced staff numbers by 21%. The full financial impact of these initiatives will be seen in the second half of the year.

Customer satisfaction has continued to improve with two surveys published in November showing Koovs has the highest customer satisfaction ratings in the online fashion sector. A widely reported survey by Forrester had Koovs rated higher than all competitors including Amazon and Flipkart. This was also corroborated by a separate survey conducted by Redseer consulting on behalf of the Company.

Over the period, compared with the previous period, we have achieved the following:

 
                     H1 FY18   H1 FY17    % 
------------------  --------  --------  ----- 
 Visits to 
  Koovs.com 
  site                32.1m     38.0m    -15% 
------------------  --------  --------  ----- 
 Active customers    446,000   431,000   +4% 
------------------  --------  --------  ----- 
 Social Followers     2.2m      1.7m     +29% 
------------------  --------  --------  ----- 
 

Financial results, cash flow and funds

Revenue in the period, representing the wholesale price of products sold was GBP3.94m / INR 328.7m (Six months to 30 September 2016: GBP3.99m / INR 366.7m). Gross loss in the period was GBP0.012m / INR 1.1m (Six months to September 2016: GBP0.80m / INR 73.7m). Gross loss % in the period was -0.3% (Six months to September 2016 -20.1%).

After cost of sales and overhead costs, the net loss before tax in the period was in line with expectations at GBP7.77m / INR 647.4m (Six months to 30 September 2016: GBP9.09m / INR 835.2m). The reduction in net loss resulted from the improvement in gross loss together with reduced operating expenses due to increased efficiencies in marketing spend.

At 1 April 2017, including both short- and long-term deposits, the business had access to GBP7.47m / INR 606.0m (2016: GBP2.54m / INR 241.5m) for the purposes of funding the business.

During the period, GBP6.77m / INR 564.4m (Six months to 30 September 2016: GBP12.16m / INR 1,118.2m) was utilised in funding losses and additional working capital. GBP8.90m (GBP9.3m in cashflow due to movement in exchange rates) / INR 779.6m of additional funds was raised in the period through the issuance of convertible loan notes.

At 30 September 2017, including both short- and long-term deposits, the business had access to INR 802.9m / GBP9.16m (30 September 2016: INR 667.9m /GBP7.74m) for the purposes of funding the business. The funds are held in term deposits or current accounts, mainly in India. Additionally, GBP5.90m (INR 516.8m) of marketing funds have been prepaid to secure significantly reduced media rates, and been recorded in the Statement of Financial Position under "Trade receivables, other receivables, prepayments and other assets".

Principal risks and uncertainties

The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report published in the annual report for the period ended 31 March 2017.

The board considers the principal risks and uncertainties facing the Group to be unchanged from those set out in the Annual Report and Accounts for the period ended 31 March 2017, summarised as follows:

-- Funding risk, including the ability of the Board to secure the funding required to implement its plans - see note 1.2 below;

   --      Market and economic risks, including the economic climate and competition in India; 
   --      Financial risks, including interest rate and currency risk; 
   --      Technological risk; 
   --      Warehouse disruption; and 
   --      Reliance on key personnel. 

These are set out in detail in the Group's Annual Report and Accounts for the period ended 31 March 2017, a copy of which is available on the Group's website.

Capital Raising

In July 2017 the Board announced its intention to raise up to GBP18.9m in convertible loan notes. As at the date of this report GBP8.9m has been raised (Note 7) and the Company remains in advanced negotiations and expects to announce the successful conclusion of additional funding in due course.

On behalf of the board of directors

   Mary Turner                                                      Robert Pursell 
   Director                                                            Director 
   19 December 2017                                            19 December 2017 

Consolidated Income Statement

for the six month period to 30 September 2017

 
                                                         MEMORANDUM 
                    Notes      1 April      1 April   1 April 
                               2017 to      2016 to   2017 to   1 April 
                               30 Sept      30 Sept   30 Sept   2016 to 
                                  2017         2016      2017   30 Sept 
                             Unaudited    Unaudited                2016 
                           INR million  INR million    GBP000    GBP000 
 
Revenue               3          328.7        366.7     3,944     3,989 
Cost of sales                  (329.8)      (440.4)   (3,956)   (4,791) 
                           -----------  -----------  --------  -------- 
 Gross loss                      (1.1)       (73.7)      (12)     (802) 
 
Operating 
 expenses                      (638.8)      (776.7)   (7,664)   (8,449) 
 
Operating 
 loss                          (639.9)      (850.4)   (7,676)   (9,251) 
 
 
Finance income                     9.2         19.1       110       208 
Finance expense                 (16.7)        (3.9)     (200)      (42) 
 
Loss for 
 the period 
 before tax                    (647.4)      (835.2)   (7,767)   (9,085) 
 
Tax expense           4              -            -         -         - 
 
Loss for 
 the period                    (647.4)      (835.2)   (7,767)   (9,085) 
                           -----------  -----------  --------  -------- 
 
Loss attributable 
 to: 
Equity holders 
 of the Company                (647.4)      (806.4)   (7,767)   (8,772) 
Non-controlling 
 interests                           -       (28.8)         -     (313) 
                           -----------  -----------  --------  -------- 
Loss for 
 the period                    (647.4)      (835.2)   (7,767)   (9,085) 
                           -----------  -----------  --------  -------- 
 
Loss per 
 share 
Basic and 
 diluted              5       INR(3.7)     INR(5.7)    (4.4)p    (6.2)p 
 

All results relate to continuing operations.

Consolidated Statement of Comprehensive Income

for the six month period to 30 September 2017

 
                                                            MEMORANDUM 
                             1 April          1 April     1 April   1 April 
                             2017 to          2016 to     2017 to   2016 to 
                             30 Sept          30 Sept     30 Sept   30 Sept 
                                2017             2016        2017      2016 
                           Unaudited        Unaudited 
                         INR million      INR million      GBP000    GBP000 
 
Loss for the 
 period                      (647.4)          (835.2)     (7,767)   (9,085) 
-----------------------  -----------  ---------------  ----------  -------- 
 
  Other comprehensive 
   income 
  Items that 
   may be reclassified 
   to income 
   statement 
   in subsequent 
   periods: 
  Currency translation 
   differences 
   from operations 
   denominated 
   in currencies 
   other than 
   Rupee - equity 
   holders of 
   the parent, 
   net of tax                    1.7           (11.0)          21     (120) 
  Items that 
   will not be 
   reclassified 
   to income 
   statement 
   in subsequent 
   periods: 
  Re-measurement                   -                -           -         - 
   of defined 
   benefits plan, 
   net of tax 
-----------------------  -----------  ---------------  ----------  -------- 
Other comprehensive 
 income, net 
 of tax                          1.7           (11.0)          21     (120) 
                         -----------  ---------------  ----------  -------- 
 
Total comprehensive 
 loss for the 
 period                      (645.7)          (846.2)     (7,747)   (9,205) 
                         -----------  ---------------  ----------  -------- 
 
 
Total comprehensive 
 loss attributable 
 to: 
Equity holders 
 of the Company              (645.7)          (817.4)     (7,747)   (8,892) 
Non-controlling 
 interests                         -           (28.8)           -     (313) 
                         -----------  ---------------  ----------  -------- 
Total loss 
 recognised 
 in the period               (645.7)          (846.2)     (7,747)   (9,205) 
                         -----------  ---------------  ----------  -------- 
 
 
 

All results relate to continuing operations.

Consolidated Statement of Financial Position

at 30 September 2017

 
                                                        MEMORANDUM 
                       30 September     31 March  30 September  31 March 
                               2017         2017          2017      2017 
                          Unaudited      audited 
                        INR million  INR million        GBP000    GBP000 
Non-current 
 assets 
Intangible 
 assets                       627.9        627.5         7,166     7,736 
Property, plant 
 & equipment                   22.2         18.5           254       228 
Non-current 
 financial assets               6.8          8.7            78       107 
                       ------------  ----------- 
Total non-current 
 assets                       657.0        654.7         7,498     8,071 
                       ------------  -----------  ------------  -------- 
 
Current assets 
Inventories                   219.5        187.9         2,505     2,316 
Trade receivables, 
 other receivables, 
 prepayments 
 and other assets             662.2        710.8         7,557     8,762 
Bank deposits                 327.0        445.5         3,732     5,492 
Cash and cash 
 equivalents                  493.0        200.5         5,626     2,472 
                       ------------  -----------  ------------  -------- 
Total current 
 assets                     1,701.6      1,544.7        19,420    19,042 
                       ------------  -----------  ------------  -------- 
 
Total assets                2,358.6      2,199.4        26,918    27,113 
                       ------------  -----------  ------------  -------- 
 
Non-current 
 liabilities 
Loans and Borrowings        (603.2)            -       (6,884) 
 Other Long-term 
  liabilities                (13.5)       (11.7)         (155)     (144) 
                       ------------  ----------- 
Total non-current 
 liabilities                (616.7)       (11.7)       (7,039)     (144) 
                       ------------  -----------  ------------  -------- 
 
Current liabilities 
Bank short-term 
 borrowing                   (23.9)       (48.7)         (273)     (600) 
Trade and other 
 payables                   (337.7)      (310.2)       (3,854)   (3,824) 
                       ------------  ----------- 
Total current 
 liabilities                (361.6)      (358.9)       (4,127)   (4,424) 
                       ------------  -----------  ------------  -------- 
 
Total liabilities           (978.3)      (370.6)      (11,166)   (4,568) 
                       ------------  -----------  ------------  -------- 
 
NET ASSETS                  1,380.2      1,828.8        15,753    22,545 
                       ------------  -----------  ------------  -------- 
 
Capital and 
 reserves 
Equity share 
 capital                      168.0        168.0         1,754     2,071 
Share premium 
 reserve                    6,196.6      6,196.5        64,236    76,388 
Convertible 
 debt option                  170.7            -         2,072         - 
Other reserves                 20.3        (7.8)           231      (97) 
Retained earnings         (5,175.3)    (4,527.9)      (52,540)  (55,817) 
TOTAL EQUITY                1,380.2      1,828.8        15,753    22,545 
                       ------------  -----------  ------------  -------- 
 

All results relate to continuing operations.

Consolidated Statement of Cash Flows

for the six month period to 30 September 2017

 
                                                                                            MEMORANDUM 
                                         1 April                   1 April               1 April               1 April 
                                         2017 to                   2016 to               2016 to               2016 to 
                                         30 Sept                   30 Sept               30 Sept               30 Sept 
                                            2017                      2016                  2017                  2016 
                                       Unaudited                 Unaudited 
                                     INR million               INR million                GBP000                GBP000 
Operating activities 
Loss for the period                      (647.4)                   (835.2)               (7,767)               (9,085) 
Adjustments to 
reconcile 
profit for the period 
to net cash flow 
from operating 
activities 
Depreciation and 
 amortisation                                5.6                       6.8                    67                    73 
Share based payments                        25.1                      12.6                   301                   138 
Other non-cash items                         0.2                       1.1                     3                    12 
Interest income 
 and finance expense                         7.5                    (15.2)                    90                 (166) 
Working capital 
 adjustments: 
  (Increase)/ Decrease 
   in inventories                         (31.5)                       3.0                 (378)                    33 
  Decrease/(Increase) 
   in trade and other 
   receivables                              48.6                   (363.9)                   583               (3,959) 
  Increase in trade 
   and other payables                       27.5                      72.6                   330                   790 
                        ------------------------  ------------------------  --------------------  -------------------- 
Cash flows from 
 operations                              (564.4)                 (1,118.2)               (6,771)              (12,164) 
Income tax paid                                -                         -                     -                     - 
                        ------------------------  ------------------------  --------------------  -------------------- 
Net cash out flow 
 from operating 
 activities                              (564.4)                 (1,118.2)               (6,771)              (12,164) 
                        ------------------------  ------------------------  --------------------  -------------------- 
Investing activities 
Acquisition of 
 remaining 
 shares in Koovs 
 India                                         -                   (869.7)                     -               (9,039) 
Withdrawals: original 
 maturity greater 
 than 12 months                              1.9                         -                    22                     - 
Deposits: original 
 maturity less than 
 12months                                  118.5                   (372.2)                 1,422               (4,049) 
Purchase of plant 
 and equipment                             (4.5)                    (32.8)                  (54)                 (357) 
Purchase of intangible 
 assets                                    (2.8)                     (0.5)                  (34)                   (5) 
Interest income 
 received                                    9.2                      14.4                   110                   157 
                        ------------------------  ------------------------ 
Net cash in/(out) 
 flow from investing 
 activities                                122.3                 (1,260.8)                 1,467              (13,293) 
                        ------------------------  ------------------------  --------------------  -------------------- 
 
Financing activities 
Proceeds from issue 
 of shares                                     -                   2,534.0                     -                26,200 
Costs of share issues                          -                    (53.3)                     -                 (581) 
Proceeds from 
 Convertible 
 Loan                                      773.9                         -                 9,284                     - 
Repayment of 
 short-term 
 borrowings                               (24.8)                    (29.9)                 (297)                 (325) 
Interest and finance 
 expense                                   (1.0)                     (3.2)                  (11)                  (35) 
Net cash in flow 
 from financing 
 activities                                748.1                   2,447.6                 8,976                25,259 
                        ------------------------  ------------------------  --------------------  -------------------- 
 
Net change in cash 
 and cash equivalents                      306.1                      68.6                 3,672                 (198) 
Cash and cash 
 equivalents 
 at start of period                        151.8                     127.6                 1,821                 1,340 
Exchange differences                        11.2                    (14.3)                   134                   966 
                        ------------------------  ------------------------  --------------------  -------------------- 
Cash and cash 
 equivalents 
 at end of period                          469.1                     181.9                 5,628               (2,108) 
                        ------------------------  ------------------------  --------------------  -------------------- 
 

Notes

   1.    Basis of preparation and accounting policies 
   1.1.       Basis of preparation 

These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31st March 2017 Annual Report. The financial information for the half years ended 30th September 2017 and 30th September 2016 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.

The annual financial statements of Koovs plc are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31st March 2017 included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31st March 2017 was unqualified, but did include a reference to the uncertainty surrounding going concern, to which the auditors drew attention by way of emphasis and did not contain a statement under 498(2) - (3) of the Companies Act 2006.

Going Concern for the six-month period to 30th September 2017 is considered in note 1.2.

The same accounting policies, presentation and methods of computation are followed in these interim consolidated financial statements as were applied in the Group's 31st March 2017 annual audited financial statements. In addition, the IASB have issued a number of IFRS and IFRIC amendments or interpretations since the last Annual Report was published. The directors have not yet considered whether any of these will have a material impact on the Group. The Board of Directors approved this interim report on 22nd December 2017.

   1.2.       Going concern 

This Interim Report has been prepared on the assumption that the business is a going concern.

The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report set out in the Annual Report for the year ended 31 March 2017.

In May 2017 the Board announced its intention to raise up to GBP18.9m in convertible loan notes. As at the date of this report GBP8.9m has been raised (Note 7) and the Company remains in advanced negotiations and expects to announce the successful conclusion of this additional funding in due course.

The directors have concluded that as the additional funding has not been contractually secured at the date of this report, there exists a material uncertainly which may cast doubt as to the Groups ability to continue as a going concern.

However, given the existing negotiations and the Company's track record of raising funding when required, the directors believe the Group will to continue as a going concern for the foreseeable future. The interim financial statements do not include the adjustments that would be required if the Group were unable to continue as a going concern.

   1.3.       Reporting currency 

To assist UK-based readers of the accounts, translations into Sterling have be supplied on a memorandum basis to allow a clear understanding of the results and financial position of the business. The memorandum information does not form part of the financial reporting of the Group representing, as they do, simple translations of the Rupee information. The exchange rates used are shown in the table below.

 
                          6 Months     6 months    Year to 
                        to 30 Sept        to 30     31 Mar 
                              2017    Sept 2016       2017 
                           INR/GBP      INR/GBP    INR/GBP 
 Balance Sheet                87.6         86.3       81.1 
 Trading statements           83.4         91.9       87.7 
 
   2.    Revenue 

All of the Group's revenue is generated by the Group's subsidiary in India through its operations as a supplier of branded fashion products. The chief operating decision maker is the Chief Executive Officer who makes resource allocation decisions based on Group management accounts and operating reports for the entire Group. The Group therefore represents a single cash generating unit and a single operating segment.

All of the Group's revenue in both periods was generated in the Republic of India.

   3.    Taxation 

No income tax liability arose during the six months to 30 September 2017 and 2016, or the year ended 31 March 2017. There is no tax charge or credit relating to items charged or credited to other comprehensive income.

   4.    Earnings Per Share 

Basic earnings per share is calculated by dividing the earnings attributable to the owners of the Parent Company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by amending the weighted average number of ordinary shares in issue during the period for the effect of dilutive share options in issue.

 
                                                      6 months                  6 months 
                                                            to                        to 
                                                       30 Sept                   30 Sept 
                                                          2017                      2016 
                                                     Unaudited                 Unaudited 
Weighted average shares in 
 issue for basic earnings per 
 share                                             175,383,691               142,630,139 
Effect of convertible loan 
 notes                                              22,250,000                         - 
                                      ------------------------  ------------------------ 
Weighted average shares in 
 issue for diluted earnings 
 per share                                         197,633,691               142,630,139 
                                      ------------------------  ------------------------ 
 
Earnings attributable to the 
 owners of the Parent (INR million)                    (647.4)                   (806.4) 
                                      ------------------------  ------------------------ 
 
Basic loss per share (Rupees)                            (3.7)                     (5.7) 
 
  Memorandum basic loss per share 
   (pence)                                               (4.4)                     (6.2) 
 
 

The effect of the share options in issue and the convertible loan notes are anti-dilutive and therefore no adjustment has been made to the weighted average shares in issue when calculating diluted earnings per share.

   6.    Cash and bank deposits 
 
 Cash and bank deposits                                MEMORANDUM 
                              30 Sept      30 Sept       30       30 
                                 2017         2016     Sept     Sept 
                            Unaudited    Unaudited     2017     2016 
                                 INRm         INRm   GBP000   GBP000 
 Current assets: 
 Bank deposits with 
  an original maturity 
  of more than 12 
  months                          1.0            -       11        - 
 Bank deposits with 
  an original maturity 
  of not more than 
  12 months                     326.0        477.3    3,721    5,532 
 Cash at bank and 
  in hand                       493.0        204.7    5,626    2,373 
                          -----------  -----------  -------  ------- 
                                820.0        682.0    9,358    7,905 
 
 Non-current assets: 
 Security deposits                6.8          8.7       78      100 
 
 Bank overdrafts               (23.9)       (22.8)    (273)    (265) 
                          -----------  -----------  -------  ------- 
 Total net cash 
  and bank deposits             802.9        667.9    9,164    7,740 
                          -----------  -----------  -------  ------- 
 
 
                                                          MEMORANDUM 
                                 30 Sept      30 Sept       30       30 
                                    2017         2016     Sept     Sept 
                               Unaudited    Unaudited     2017     2016 
                                    INRm         INRm   GBP000   GBP000 
 Cash and cash equivalents 
 Cash at bank and 
  in hand                          493.0        204.7    5,626    2,373 
 Bank overdrafts                  (23.9)       (22.8)    (273)    (265) 
                             -----------  -----------  -------  ------- 
 Total cash and 
  cash equivalents                 469.1        181.9    5,353    2,108 
                             -----------  -----------  -------  ------- 
 

Cash and cash equivalents comprise cash in hand and cash held in bank accounts from which deposits can be drawn without any substantial delay and which have not been deposited under any agreement for a fixed term, net of any bank overdrafts which are utilised for operational cash flow purposes.

   7.    Convertible Loan Note 

On the 18(th) August 2017, the Company issued a 6% convertible loan note at a nominal value of GBP8.9m.

The value of the liability component and the equity conversion component were determined at the date the instrument was issued. The fair value of the liability, including non-current borrowings, at inception was calculated using an assumed market interest rate of 22.5% for an instrument without a conversion option.

A Summary of the key terms of the loan notes is as follows

 
 Term               24 months from completion of the 
                     issue of the Convertible Loan Notes 
-----------------  ------------------------------------------------------------------ 
 Conversion         The Convertible Loan Notes can be 
  Price              converted into Koovs Ordinary Shares 
                     at a conversion price of GBP0.40 
                     per share 
-----------------  ------------------------------------------------------------------ 
 Redemption              The Convertible Loan Notes can be 
                          redeemed: 
                           *    at the election of the noteholders following a 
                                material breach by the Company of the terms of the 
                                Convertible Loan Note instrument; 
 
 
                           *    automatically on the occurrence of certain insolvency 
                                events; and 
 
 
                           *    otherwise, automatically at the end of the two year 
                                term 
-----------------  ------------------------------------------------------------------ 
 Conversion         The Convertible Loan Notes can be 
  Rights             fully converted at any time by the 
                     debenture holder giving to the Company 
                     3 months' prior written notice 
-----------------  ------------------------------------------------------------------ 
 Security           All amounts falling due under the 
                     Convertible Loan Notes will be secured 
                     by a debenture constituting a first-ranking 
                     fixed and floating charge over all 
                     the assets of the Company (the "Debenture") 
-----------------  ------------------------------------------------------------------ 
 Coupon & Payment   3-month sterling LIBOR + 6% per 
                     annum, calculated monthly and rolled 
                     up (but not compounded) with payment 
                     at the end of the Term unless previously 
                     converted, in which case accrued 
                     interest is paid in kind in Ordinary 
                     Shares at the Conversion Price or 
                     at the point of conversion. 
-----------------  ------------------------------------------------------------------ 
 Conversion              The Company will have the right 
  by the Company          to require the holder to convert 
                          the Convertible Loan Notes into 
                          equity at the Conversion Price if: 
                          a) During the Term the 3-month volume 
                          weighted average price of Koovs 
                          Ordinary Shares is equal to, or 
                          in excess of, GBP0.75; or 
                          b) At the end of the Term if the 
                          5-day volume weighted average price 
                          of Koovs Ordinary Shares is equal 
                          to, or in excess of, GBP0.45. 
-----------------  ------------------------------------------------------------------ 
 "Most Favoured     Following the issue of the Convertible 
  Nation" basis      Loan Notes, if the Company proposes 
                     to issue any convertible debt securities 
                     or instruments ("New Convertibles") 
                     on terms as to either the Coupon 
                     or the Conversion Price that are 
                     more favourable to subscribers of 
                     the New Convertibles than to the 
                     holders of the Convertible Loan 
                     Notes, the holders of the Convertible 
                     Loan Notes shall have the right 
                     to require the Company to amend 
                     the terms of the Convertible Loan 
                     Notes so as to be at least equivalent 
                     in those aspects to the New Convertibles 
                     subject in all cases to all requisite 
                     approvals from shareholders and 
                     regulatory authorities. 
-----------------  ------------------------------------------------------------------ 
 
   8.    Cautionary statement 

This document contains certain forward-looking statements relating to Koovs plc ('the Company'). The Company considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the Company to differ materially from those contained in any forward-looking statement. These statements are made by the directors in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR BVLLFDLFBFBF

(END) Dow Jones Newswires

December 19, 2017 02:00 ET (07:00 GMT)

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