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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hardy Amies | LSE:HRD | London | Ordinary Share | GB0002931458 | 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% | 1.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:9929B
Hardy Amies PLC
26 April 2006
IMMEDIATE RELEASE 26th April 2006
HARDY AMIES PLC
STRATEGIC ACQUISITION AND RESULTS
"#3m strategic acquisition and retail sales up 63%"
Hardy Amies plc, designers and retailers of haute couture and ready-to-wear
garments and accessories for the Hardy Amies brand is pleased to announce a
major strategic acquisition and results for the year ended 31 December 2005.
Highlights
Retail sales increased by 63% to GBP366k (2004: GBP225k).
Turnover increased by 23% to GBP1.1m (2004: GBP896k).
Group loss GBP1.19m (2004: GBP665k) due to significant investment in brand.
Acquisition of BDCU from Arev Brands bringing in net #2.8 million of working
capital to finance next stage of growth.
Hardy Amies ready-to-wear menswear to be stocked by Harvey Nichols from July
2006.
Positive talks with new licensees for both Hardy Amies and Norman Hartnell
products development and distribution.
Catwalk show today at V&A Museum to mark 60th anniversary of the brand.
Chief Executive, Tim Maltin commented:
"I am delighted that our significant investment in the Hardy Amies brand has
delivered such strong growth in our 60th year of trading and look forward to
concluding the acquisition of Brand Development Capital Unlimited, which will
provide the Group with approximately #3m of working capital to fund the next
stage of our brand development."
For further information please contact:
Tim Maltin, Chief Executive: 020 7734 2436
Guy Peters, Shore Capital: 020 7408 4090
26 April 2006
Hardy Amies PLC ("Hardy Amies" or the "Company")
#3m strategic acquisition and results for the year ended 31 December 2005
Acquisition of Brand Development Capital Unlimited ("BDCU")
Hardy Amies announces that it has conditionally agreed to acquire the entire
issued share capital of BDCU from Arev Brands Limited ("ABL") ABL is a wholly
owned subsidiary of Arev Limited ("Arev") which, together with its subsidiaries
is an investor in retail businesses. Recent transactions completed by Arev
include investments in the Jones Bootmaker and Ghost retail brands.
The consideration under the acquisition agreement is the issue to ABL of
103,787,551 new ordinary shares in Hardy Amies which will represent 49.9 per
cent of the enlarged share capital. BDCU is a recently incorporated wholly owned
subsidiary of ABL, established for the purposes of investing in fashion brands.
BDCU has #3 million of cash and, after settling costs associated with raising
funds, approximately #2.8 million will be available for use by Hardy Amies
following completion of the acquisition.
Results for the Year ended 31 December 2005
Substantial progress has been made in the development of the Company, resulting
in a 63% increase in retail sales for the year ended 31 December 2005 and
considerable investment in the future of the brand. As a consequence of this
investment, the loss for the year to 31 December 2005 has increased to #1.19m
through increased advertising and marketing expansion, including the production
of Hardy Amies' comprehensive customer Look Books, which have proved to be so
successful for both Spring/Summer and Autumn/Winter collections.
Women's ready to wear sales increased by 96% during the year. This relatively
large increase is the direct result of an improved communication strategy with
customers and the fashion press. Couture womenswear achieved a 39% increase in
the year, which was particularly heartening given the high unit costs of these
items. Menswear sales, which consist mainly of bespoke suits, increased by 20%
during the year.
The board is currently in discussions with a number of new potential licensees
for both Hardy Amies and Norman Hartnell products; and is also in discussion
with one of the world's largest homewares distributors in respect of a roll-out
of Hardy Amies branded homewares.
Additionally, Hardy Amies' menswear licensee, BMB, has enjoyed a promising first
season of wholesale sales, including a significant order from Harvey Nichols,
which will be stocking Hardy Amies ready-to-wear menswear from July this year.
Nevertheless, the costs of rebuilding the Hardy Amies brand to create
significant future shareholder value have been and are expected to continue to
be substantial and are not currently covered by operating cashflows. The Company
is now in a position where significant further funds are required to continue
the investment in expansion of the business and the brand. Consequently the
Company is pleased to announce today the acquisition of BDCU, which has net
funds of approximately #2.8 million, which will provide the necessary working
capital to undertake the next stage of our growth strategy.
Takeover Code Whitewash
The acquisition is conditional upon, inter alia, shareholder approval. As ABL is
a wholly owned subsidiary of Arev, the directors of Arev are deemed to be a
concert party together with ABL for the purposes of Rule 9 of the City Code. The
Company is consequently seeking a waiver of Rule 9 of the City Code, which would
otherwise require the concert party to offer to acquire those Hardy Amies
ordinary shares that they do not own following completion of the acquisition. A
proposal seeking shareholder approval for such a waiver is, therefore, being
sought at an Extraordinary General Meeting of the Company ("EGM") convened for
17 May 2006.
Business & Strategy
Since the Company's admission to AIM in January 2005, the Company has invested
in a successful marketing campaign to rebuild brand awareness. However,
investment is now required to drive turnover growth through increasing the scale
of the Company's operations.
The purchase of BDCU will give Hardy Amies access to the necessary working
capital to undertake the next stage of its growth strategy and will also allow
the Company to exploit Arev's wide contacts in retailing, to enter into
strategic alliances with other Arev fashion retail investments and to benefit
from the experience of the proposed new directors, who will provide hands on
assistance to me as the Company's Chief Executive. The funds which will be
available to the Company following completion of the acquisition will be used to
continue developing the Company's ready-to-wear clothing ranges and new retail
sales channels. Growth is expected to come from further international licensing
deals, wholesaling the ready-to-wear clothing ranges and the opening of key
concessions. To support this, the Company's current successful advertising and
media campaign will be maintained to continue to build the international
presence of the Company's brand.
Directors and Proposed Directors
Upon completion of the acquisition, James Benson and Jonathan Roberts will
resign from the Board and Andrew Manders, David Beech and Peter Phillips will be
appointed to the Board as non-executive directors. Andrew Manders will become
Non-executive Chairman of the Company and I will remain Chief Executive.
Consequently, following the acquisition, the Board will comprise of Andrew Craig
Manders (Chairman), myself (Chief Executive), David Beech (Non-executive
director), Peter Phillips (Non-executive director) and Chiaki Kawasaki
(director).
Peter Phillips will bring with him to the board a wealth of retail and
manufacturing experience and contacts which will assist with the roll out of
Hardy Amies products.
Significant Shareholder
Following completion of the acquisition, ABL will own 49.9% of the enlarged
share capital of the Company. ABL is wholly owned by Arev. ABL has agreed with
the Company and Shore Capital that with effect from Admission, ABL will not
dispose of any interests in the securities of the Company within the 12 month
period following completion of the acquisition, other than where there is an
intervening court order or in respect of an acceptance of a takeover offer for
the Company which is open to all shareholders or the giving of an irrevocable
undertaking to accept a takeover offer for the Company which is open to all
shareholders. Thereafter, ABL has agreed that it will be subject to orderly
marketing arrangements whereby any disposals of securities in the Company must
be made through the brokers to the Company other than accepting a takeover offer
for the Company which is open to all shareholders or the giving of an
irrevocable undertaking to accept a takeover offer for the Company which is open
to all shareholders or in other limited situations.
Irrevocable undertakings
Irrevocable undertakings to vote in favour of all of the resolutions at the EGM
have been given by Directors and certain shareholders in respect of 11,023,834
ordinary shares (representing 11.29 per cent of the ordinary shares in issue).
Circular
A Circular is being posted to shareholders setting out full details of the
proposed acquisition and calling an EGM for 17th May 2006 at which the necessary
Resolutions approving the transaction will be presented.
Group Profit and Loss Account
for the year ended 31 December 2005
2005 2004
Notes # #
Turnover 2 1,098,379 896,445
Cost of sales (461,688) (334,097)
-------- --------
Gross profit 636,691 562,348
Other Operating Income 9,600 -
Administrative expenses:
AIM flotation costs - (81,393)
Other administrative
expenses (1,775,607) (1,058,885)
-------- --------
(1,775,607) (1,140,278)
-------- --------
Group operating loss (1,129,316) (577,930)
Interest receivable 11,966 -
Interest payable and similar
charges (18,739) (27,307)
-------- --------
Loss on ordinary
activities before taxation (1,136,089) (605,237)
Tax on loss on
ordinary activities 3 (55,133) (60,199)
-------- --------
Loss for the group for the
financial year (1,191,222) (665,436)
Accumulated loss brought forward (6,009,852) (5,344,416)
-------- --------
Accumulated loss carried forward (7,201,074) (6,009,852)
======== ========
Loss per ordinary share 4 (1.31)p (1.50)p
======== ========
Fully diluted loss per share 4 (1.31)p
========
Group Balance Sheet
as at 31 December 2005
2005 2004
# # # #
Fixed assets
Intangible assets 621,795 665,127
Tangible assets 277,023 148,802
-------- --------
898,818 813,929
Current assets
Stocks 197,041 58,712
Debtors 381,024 363,518
Cash at bank and in hand 22,820 1,394,978
-------- --------
600,885 1,817,208
Creditors: amounts falling
due within one year (799,748) (345,011)
-------- --------
Net current assets (198,863) 1,472,197
-------- --------
Total assets less current
liabilities 699,955 2,286,126
Creditors: amounts falling due
after more than one year - (206,041)
Accruals and deferred income (811,528) (1,275,257)
-------- --------
Net (liabilities)/assets (111,573) 804,828
======== ========
Capital and reserves
Called up share capital 967,250 2,729,325
Share premium account 5,088,844 4,885,353
Other reserves 1,033,407 (799,998)
Profit and loss account (7,201,074) (6,009,852)
-------- --------
Shareholders' (deficit)/funds (111,573) 804,828
======== ========
Equity interests (111,573) (1,028,577)
Non-equity interests - 1,833,405
--------- ---------
(111,573) 804,828
========= =========
Group Cash Flow Statement
for the year ended 31 December 2005
2005 2004
Notes # #
Reconciliation of operating loss to net
cash outflow from operating activities
Operating loss (1,129,316) (577,930)
Depreciation 85,516 91,889
Movement in stocks (138,329) (36,007)
Movement in debtors (17,506) 199,488
Movement in creditors 195,051 (251,990)
Movement in accruals and deferred income (463,729) (363,692)
-------- --------
Net cash outflow from operating activities (1,468,313) (938,242)
======== ========
CASH FLOW STATEMENT
Net cash outflow from operating activities (1,468,313) (938,242)
Returns on investments and servicing of finance 5 (6,773) (27,307)
Taxation 5 (55,133) (60,199)
Capital expenditure 5 (170,405) (21,505)
-------- --------
(1,700,624) (1,047,253)
Financing 5 328,466 2,214,941
-------- --------
(Decrease)/increase in cash in the year (1,372,158) 1,167,688
======== ========
Reconciliation of net cash flow to movement
in net funds
(Decrease)/increase in cash in the year (1,372,158) 1,167,688
Cash outflow from decrease in debts and
loan financing (53,645) (11,022)
-------- --------
Change in net funds resulting from cash flows (1,425,803) 1,156,666
Net funds at 1 January 2005 1,164,937 8,271
-------- --------
Net (deficit)/funds at 31 December 2005 (260,866) 1,164,937
======== ========
1.1 Basis of preparation
The financial information set out in the announcement does not
constitute the statutory accounts for the year ended 31 December
2005 or the year ended 31 December 2004.
The financial information for the year ended 31 December 2004 is derived
from the statutory accounts for that period which have been delivered to
the Registrar of Companies. The auditors reported on those accounts;
their report was unqualified and did not contain a statement under
s237(2) or (3) Companies Act 1985. The statutory accounts for the year
ended 31 December 2005 will be delivered to the Registrar of Companies
following the Company's annual general meeting.
1.2 Basis of consolidation
The group financial statements consolidate the accounts of Hardy Amies plc
and all its subsidiary undertakings made up to 31 December each year. The
combination with Royal Parks Enterprises Limited has been recorded under
the principles of merger accounting and the combination with all other
subsidiary undertakings has been recorded under the principles of
acquisition accounting.
Turnover and profits arising on trading between group companies are
excluded
2. Turnover
Turnover represents the net invoiced amount of goods sold and services
provided and excludes value added tax and other sales taxes. Turnover
is attributable to the group's principal activity.
3. Tax on loss on ordinary activities
Analysis of charge in year 2005 2004
# #
Foreign withholding tax 55,133 60,199
-------- --------
Total current tax charge 55,133 60,199
-------- --------
Tax on profit on ordinary activities 55,133 60,199
======== ========
Factors affecting tax charge for year
The tax assessed for the year is higher than the standard rate of
corporation tax in the UK (30 per cent). The differences are explained
below:
2005 2004
# #
Loss on ordinary activities before taxation (1,136,089) (605,237)
======== =======
Loss on ordinary activities multiplied by standard
rate of corporation tax in the UK of 30%
(2004: 30%) (340,827) (181,571)
Effects of:
Expenses not deductible for tax purposes 3,030 15,931
Capital allowances in excess of depreciation for
period 12,126 9,771
Unutilised tax losses carried forward 388,770 223,056
Marginal rate adjustment (7,966) (6,988)
-------- --------
Current tax charge for year 55,133 60,199
======== ========
Factors that may affect future tax charges
No deferred tax asset has been recognised in the accounts for the year
ended 31 December 2005 on the grounds that there is insufficient evidence
that this asset is recoverable. This assumption is based on the financial
projections and the recent performance of the group as a whole. The group
has an unrecognised deferred tax asset of #2,723,009 (2004: #2,372,246)
in this respect.
The deferred tax asset would become recoverable if the group started to
make sufficient taxable profits to allow the brought forward losses to
be utilised.
The deferred tax asset is based upon the unrelieved trading losses of the
group and timing differences that have originated but not reversed by
the balance sheet date.
4. Loss per share
The basic loss per ordinary share is calculated by dividing loss for
the year less non-equity dividends and other appropriations in respect of
non-equity shares by the weighted average number of equity shares
outstanding during the year.
The diluted loss per ordinary share is calculated by dividing loss for
the year less non-equity dividends and other appropriations in respect of
non-equity shares by the weighted average number of equity shares
outstanding during the year (after adjusting both figures for the effect
of dilutive potential ordinary shares).
The calculation of basic and diluted loss per ordinary share is based
upon the following data:
2005 2004
# #
Loss for the purposes of basic earnings per share (1,191,222) (665,436)
-------- --------
Loss for the purposes of diluted earnings
per share (1,191,222) (665,436)
======== ========
Number of shares
2005 2004
No No
Basic weighted average number of shares 90,820,105 44,264,457
Dilutive potential ordinary shares 161,498 -
-------- --------
Weighted average number of shares
for the purposes of diluted loss per share 90,981,603 44,264,457
======== ========
5. Gross cash flows
2005 2004
# #
Returns on investments and servicing of finance
Net Interest paid (6,773) (27,307)
======== ========
Taxation
Foreign tax paid (55,133) (60,199)
======== ========
Capital expenditure
Payments to acquire tangible assets (170,405) (21,505)
======== ========
Financing
Issue of ordinary share capital net of
share issue costs 274,821 2,203,919
New long term bank loan (4,282) 11,022
Increase in convertible loan 57,927 -
-------- --------
328,466 2,214,941
======== ========
6. Analysis of changes in net funds/(debt)
Opening Cash Other Closing
balance flows changes balance
# # # #
Cash at bank
and in hand 1,394,978 (1,372,158) - 22,820
-------- -------- -------- --------
Debt due
within one year (24,000) (53,645) (206,041) (283,686)
-------- -------- -------- --------
1,370,978 (1,425,803) (206,041) (260,866)
-------- -------- -------- --------
Debt due after
one year (206,041) - 206,041 -
-------- -------- -------- --------
Net funds/(debt) 1,164,937 (1,425,803) - (260,866)
======== ======== ======== ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PUUAGCUPQGBA
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