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| 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 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMKOOV
RNS Number : 0469Q
Koovs PLC
07 September 2017
07.00 7 September 2017
Koovs plc ("Koovs" or the "Company")
Preliminary Results for the year ended 31 March 2017
Sustained growth and market outperformance
Koovs plc (AIM:KOOV), the fashion-forward business focused on the young Indian e-commerce market, today announces its preliminary results for the year to 31 March 2017.
Financial highlights:
-- Strong gross sales order value growth* at KOOVS.COM up 65% / 87% to INR1,616m / GBP18.6m (2016: INR981m / GBP10.0m)
-- Positive trading margin* at +4% (2016: -6%) driven by improved intake margin and managing the markdown
-- Pre-tax loss stable* at INR 1,691.3m / GBP19.3m (2016: INR1,650.4m / GBP16.7m) reflecting implementation of capital discipline and cost control measures
-- Koovs plc revenue* up by 49% at INR761m / GBP8.7m (2016: INR512.4m / GBP5.2m)
* Explanation of these metrics are noted in the trading performance and KPIs section within the Operating Review
Operational highlights:
-- Website traffic up by 79% to 78.5m -- Brand awareness growth to 15% (2016: 8%) driven by targeted and efficient marketing -- 100% increase in both units shipped and repeat customers -- 40% of sales generated by the Koovs private label brand
-- Signed first international distribution agreement to launch Koovs private label brand Summer 2017 in the Middle East on SOUQ.com, the region's leading e-commerce platform
-- Four successful standout designer capsule collections launched during the year, from Manish Arora, Hattie Stewart, Gauri & Nainika and Masaba
-- Social media audience grew to over two million followers and industry leading engagement over 3x the nearest category competitor
-- Leader in our peer group for customer satisfaction with highest average Net Promoter Score (RedSeer)
Post Balance Sheet event
On 14 August 2017, the shareholders approved the issue of up to GBP18.9m of convertible loan notes in order to provide funding for the Group's business plan, of which GBP8.9m has been secured to date.
Mary Turner, CEO, said:
"We are pleased to have delivered strong sales growth, significantly outperforming India's e-commerce market by over five times during the challenging period of demonetisation, which affected the whole economy in India.
"Our highly distinctive and targeted brand marketing has further established Koovs fashion authority among our core market of India's 18 to 34-year-olds.
"The focus for FY18 is to build on these foundations for sustainable growth towards profitability in FY20 and to further capitalise on the unique growth prospects of India's fashion e-commerce market, for the benefit of our shareholders."
Notes to Editors
Koovs is focused on building KOOVS.COM into the leading fashion destination in India. 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:
Hot Features
Premium
Koovs plc
Mary Turner/Robert Tel: +44 (0)20 7151 0170
Pursell
Peel Hunt LLP
Dan Webster /
George Sellar Tel: +44 (0) 20 7418 8900
Jock Maxwell Macdonald
(ECM)
Media enquiries:
Headland
Lucy Legh / Rob Tel: +44 (0)20 3805 4822
Walker / Charlie
Twigg
CHAIRMAN'S STATEMENT FOR THE YEAR TO 31 MARCH 2017
Dear Shareholders,
I am pleased to report that the financial year ended 31st March 2017 has been a year of significant growth and continued strategic progress towards our goals.
FY17 has delivered gross order value growth of 87% to INR1616 million (GBP18.6m) and a year-on-year increase of 100% in both units shipped and repeat customers. This growth is also underlined by a continued and consistent improvement in our gross margin position.
Importantly, we have delivered these strong results during a challenging period in the Indian market following demonetisation, announced on 8th November 2016. This impacted the whole Indian economy including e-commerce and Koovs rapid response and proactive approach to mitigate the initial impact of demonetisation, along with a strong Christmas trading period, has meant that the Company has been able to deliver growth significantly above (more than 5x) the Indian e-commerce market as a whole.
The market for online western fashion is forecast to grow rapidly to $3.5 billion by 2020 and with the continued growth of India's digitally connected, aspirational middle class, Koovs is extremely well positioned to benefit from this impetus.
In FY17 Koovs successfully raised capital of GBP39.1 million and added two new strategic investors, The Times of India Group and The Hindustan Times, two of the largest media Groups in India.
This funding has enabled Koovs to continue to build the brand efficiently through hyper-targeted marketing that is connecting and resonating with the young, urban and style-conscious customer and has established Koovs as the leading brand in its category for customer engagement across social media. Furthermore, our continued focus on customer operations has also delivered rewards, with Koovs now independently rated as number one for customer satisfaction in our sector (Redseer Net Promoter Score). In addition, we have completed the deployment of a new microservices technology platform which is spearheading our 'mobile first' strategy and is already providing innovative operational benefits, enabling the business to tap into new technology tools such as automated visual merchandising and promotions engine.
This has been a year of significant progress towards our objectives to increase our share of the youth fashion market in India from 4% to over 10% and to build Koovs into India's number one Western fashion destination by 2020.
I am extremely excited about the Group's prospects for the new financial year, remaining resolutely focused on our strategic objectives. We recognise that our growth must be sustainable, and have set targets for continued improvement in gross margin and a reduction in operational costs in FY18, leading to our goal of profitability and positive cash flow in FY20.
I would like to take this opportunity to thank all our colleagues in the UK and India for their continuing hard work, dedication and enthusiasm.
Waheed Alli
Chairman
6 September 2017
OPERATING REVIEW
Koovs is the leading online western fashion destination for 20-somethings in India, the world's fastest-growing major economy.
The Market
India - the right place at the right time
Demographic Dividend
With a 1.3bn population and 65% under the age of 35, India's demographics position is compelling.
A growing middle class with spending power and the increasing concentration in urban areas are fuelling a forecast growth in GDP of 6-7% a year.
Digital Investment
India is undergoing a digital transformation with $3bn government investment in fibre and $32bn in 4G mobile networks. In addition, the $16bn Digital India programme will transform the economy, with the aim to create a digital identity for every citizen.
India is also adopting technology at a significant pace with 385 million people connected on broadband and over 250 million smartphone users in 2016 and predicted to rise by 40% and 60% respectively by 2020.
E-Commerce
With this as a backdrop, e-commerce, lifestyle and online western fashion are sectors that are gathering significant pace with e-tail forecast to grow 300% to $60bn by 2020, online Lifestyle up 400% to $15bn and Online Western Fashion up 500% to $3bn in the same time frame.
Koovs Customers
For KOOVS customers this means providing affordable and aspirational, design-led online western fashion, curated for the style-conscious 18-34 Indian customer from an authentic fashion authority they respect, with extensive credentials in the western and global fashion markets.
Objectives & Strategy
KOOVS strategy is focused on four pillars to achieve scalable growth. During FY17 we have already attained significant milestones against these objectives:
Expand Product Range
Ø 40% of sales is currently Koovs Private Label and together with selected edits from famous brands that are exclusive to Koovs, 70% of lines are now unique to Koovs across site.
Ø Koovs continues to demonstrate our fashion credentials and leadership with high-profile designer collaborations. Four exclusive collections were launched during FY17 with Manish Arora, Hattie Stewart, Gauri & Nainika and Masaba. These highly successful, standout collections have further amplified Koovs clear position as the affordable fashion authority in India.
Engage Content
Ø Content browsing sessions are 25% more likely to convert to sales, and KOOVS.COM now generates approximately 1.5 million content browsing sessions a year. Our exclusive reports from the top fashion catwalks, street style picks from key cities and global events, how to wear videos, celebrity 'in the style of' guides and user generated content, have established Koovs as the leading brand in our peer group for social customer engagement with over two million followers and over one million logging in to participate in a single campaign.
Ø Investment in the customer experience and care means Koovs is now rated No.1 for customer satisfaction in our peer group, with the leading average Net Promoter Score in our category (RedSeer).
Amplify Brand
Ø Koovs brand awareness among its core 18 to 34-year-olds in India has increased from less than 1%. in 2015 to 15% in FY17. In March 2017 phase three of the 'Step Into Koovs' brand campaign commenced, lifting web traffic by 50% and peaking for the first time at two million in a single week.
Ø KOOVS.COM was also named 'The Most Popular Fashion Portal with Youth' by the Global Youth Marketing Forum in February 2017
Ø Koovs now has over two million social followers, including 400,000 on Instagram and industry-leading engagement of more than 3x the nearest competitor in our category. We are innovating and leading in the use of social media, such as Koovs pioneering use of platforms like Facebook Live.
Extend Territories
Ø Our focus remains on the considerable growth opportunity in our home market India. However, we have identified a number of territories with significant growth potential and these include the Middle East and Asia-Pacific. Koovs will be piloting projects to cost-effectively enter these markets leveraging local partners and expertise. The first international distribution agreement is with Amazon-owned SOUQ.com to launch the Koovs Private Label Collection in the Middle East during the Summer 2017.
Product
Koovs provides affordable, design-led and exclusive western fashion for the young, aspirational, style-conscious Indian consumer. Underpinning this product promise is our fashion authority and depth of experience in the design and buying team gained from world famous fashion brands such as Topshop, Asos, River Island, Miss Selfridge, Puma, Arcadia, Tommy Hilfiger and Misguided.
Our product architecture is a successful blend of 40% Koovs Private Label and 60% brands and we are now achieving intake margins of 54% and 46% respectively. Our strategy is to continue to improve intake margins, with targets to reach 70% for Private Label and 50% on brands.
Technology
Koovs target youth market in India is technology savvy and avid smartphone users - living life on the go. Over 75% of Koovs traffic and transactions are delivered via our app and mobile site, so delivering a Mobile First approach is a key cornerstone of our technology strategy.
Over the last 12 months, the Company has focused on rebuilding our technology platform, adopting the latest modular microservices architecture. The new platform, which has already delivered Koovs new high-performance App for iOS and Android, will enable the Company to deliver scalable performance, rapid technology development and innovation throughout the business, including fast, flexible and cost-effective operational tools such as Automated Visual Merchandising for product and a Promotions Engine for marketing.
As a Mobile First operation, Koovs has already integrated with the leading digital and m-commerce payment gateways, and new strategic technology milestones underway, including Augmented Reality, Voice Control and Automated Personalisation, are designed to improve customer engagement and conversion.
Trading Performance and KPIs
The business achieved strong growth during the financial year, supported by cost efficient marketing and improved operational efficiency.
Our overall aim is to increase our share of the youth fashion market from 4% to over 10% by 2020 and to do this we will continue to invest in strong, targeted and efficient marketing campaigns.
-- Registered customer base is now up to 1.8m
-- Total active customers (those who have purchased in the last 12 months) has increased to 0.5m
-- Repeat customers and web traffic have both increased by c.100%.
Over the past year, compared with the previous year, we have achieved the following:
Definition Year ended Year ended Growth
March 2017 March 2016
------------- ----------------
Gross order Value of INR1,616m INR981m +65% /
value* orders placed / GBP18.6m / GBP10.0m +87%
Gross order
value less
returns, INR1,086m INR687m +58% /
Net sales* less tax / GBP12.5m / GBP7.0m +78%
Visits
to the Website
site* traffic 78.5m 44.8m +79%
------------- ---------------- ------------ ------------------- -------
% of website
visits that
place an
Conversion* order 1.6% 1.5% +7%
Trading See note INR43m / (INR40m)/(GBP0.4m) -
margin below GBP0.5m
*
Trading
margin as
Trading % of net
margin%* sales 4% -6% +167%
Wholesale
revenue
of Koovs
Revenue plc INR761m INR512.4m +49%
Loss before Reported
tax loss INR1691.3m INR1,650.4m +2%
*in relation to the KOOVS.COM website
Note: The group gross margin reported in these financial statements is the margin generated on sales of product to Marble E-retail Private Limited, the operator of the KOOVS.COM website. Due to foreign direct investment rules Koovs India cannot currently ship directly to the end consumer. Trading margin is the implied gross margin that would be reported in the companies accounts if Koovs India were able to ship products directly to the end consumer, and is a key performance indicator of the Company
Structure
The Group supplies branded fashion garments and accessories for exclusive distribution through the KOOVS.COM website including international fashion brands, iconic British high street brands and Koovs own-label product designed by a talented team based in London.
We monitor the Group's performance in a number of ways including assessing the performance of KOOVS.COM, which, although it is operated by Marble, an independently owned and managed company, reflects the performance of the products and marketing managed by the Group.
Outlook
In FY18 the focus will remain on delivering positive Trading Margin to improve the profitability of the Company. We will continue to cost effectively build the Koovs brand and distinctive product range through our own exclusive Private Label and collaborations that set us apart from the discounting and marketplace players in the Indian market.
We will build on the deployment of the new microservices technology platform with the roll-out of a new ERP system, which will reduce operational costs and increase efficiency and we will further extend our distribution strategy following deployment with SOUQ.COM.
Funding will still be a requirement in FY18 with the company announcing a GBP15m requirement in May 2017, of which GBP8.9m has already been secured though the issue of convertible loan notes and we will be seeking to complete the capital raise in due course.
Combined, we expect that these progressive steps will provide the foundation for profitable growth and positive cash flows by FY20.
Finance Review
The financial results of the Koovs plc Group in this report cover the year ended 31 March 2017.
The Group's principal activity is that of supplying branded fashion garments and accessories for sale by a third party through a branded website principally in the Republic of India.
Financial results
The Group achieved revenue of INR760.9m/GBP8,680k (2016: INR512.4m/GBP5,198k) during the year from the wholesale of fashion garments and accessories to its sole customer for onward sale to consumers. In these early days of development and relatively low volumes, together with the impact of demonetisation on the market, gross margins are low and therefore the Group generated a gross loss of INR294.0m/ GBP3,354k (2016: INR235.0m/GBP2,383k).
Overhead costs comprise the costs of the design and merchandising team in the UK, the creative, content, marketing and IT teams in India, infrastructure costs, marketing expenditure and corporate costs. Altogether this amounted to INR1,425.3m/GBP16,258k (2016: INR1,452.8m/GBP14,738k) during the year to give an operating loss of INR1,719.3m/GBP19,612k (2016: INR1,687.8m/GBP17,121k).
Interest income arising mainly in India, net of finance expenses, amounted to INR28.0m/GBP319k (2016: INR37.4m/GBP380k) to give a loss before tax of INR1,691.3m/GBP19,293k (2016: INR1,650.4m/GBP16,741k).
Taxation
Due to the losses generated in the year, and the likelihood that it will be some time before tax losses can be utilised, no deferred tax has been accounted for and therefore there is no tax charge or credit in the current or prior year.
Loss for the year
The loss for the year was INR1,691.3m/GBP19,293k (2016: INR1,650.4m/GBP16,741k). The Indian e-commerce market is still in a nascent stage with only 18m out of 430m internet users regularly purchasing online. The current scale of the business means that minimum order quantities for manufactures are in excess of what is required. This together with the impact of demonetisation led to high levels of discounting creating a gross margin loss. Operating costs include INR730.9m/GBP8,338k of marketing expenses, which increased Koovs brand awareness from 8% to 15% during the financial year.
Basic and diluted earnings per share
Earnings per share amounted to a loss of 11.2 rupees/ 12.8 pence per share based on the loss attributable to equity holders of INR1,662.5m/GBP18,965k and weighted shares in issue of 148,479,033. The loss per share in the previous year was 36.7 rupees/37.2 pence based on the weighted shares in issue of 28,482,540.
Cash flow and funds
During the year to 31 March 2017 the Group utilised INR2,232.6m/GBP25,468k (2016: INR1,537.2m/GBP15,594k) in operations mainly funding the operating losses of INR1,691.3m/GBP19,293k, and prepaying marketing expenses of INR558.2/GBP6,881km, which will be utilised over the next three years.
Investing activities utilised INR1,183.7m/GBP13,503k mainly due to the INR869.8m/GBP9,921k acquisition of shares in Koovs India, increasing Koovs plc ownership from 60.2% to 100%, and INR340.3m/GBP3,882k of funds put on interest bearing deposits.
Operating and investing activities utilised a total of INR3,416.3m/GBP38,971k.
Financing activities in the year, primarily through the issue of new equity shares, raised INR3,467.9m/ GBP39,559k.
As a result of these movements, the net increase in cash and cash equivalents was INR51.6m/GBP794k (2016: net increase of INR191.8m/GBP1,962k). The closing net cash and cash equivalents was INR151.8m/GBP1,732k (2016: INR127.6m/GBP1,340k).
Taken along with the bank deposits the Group had access to INR606.0m/GBP7,471k (2016: INR241.5m/ GBP2,536k) at the end of the financial year.
Financial position
At the end of the financial year the net assets of the Group amounted to INR1,828.8m/GBP22,545k (2016: INR844.2m/GBP8,865k). This included INR621.2m/GBP7,658k of goodwill relating to Koovs India, and INR710.8m/ GBP8,762k (2016: INR62.5m/GBP656k) in trade receivables, other receivables, prepayments and other assets. The increase in trade receivables, other receivables, prepayments and other assets is due to a prepayment for media expenses of INR558m/GBP6,880k (2016: INR0m/GBP0k). The prepayment is to secure future advertising services from HT Media Group and Times of India Group on favourable terms. Further information on the funding position of the Group is given in the Directors' Report and in the next section of this report.
Principal risks and uncertainties
There are a number of market and business risks that could affect the Company and the Group. We set out below the Group's view of the main risks which, should any materialise, could materially adversely affect the Group's business, financial condition and returns to shareholders. Further risks and uncertainties which are not presently known to the Directors at the date of this document, or that the Directors currently deem less significant, may also have an adverse effect on the business, financial condition or results of the Group.
Funding
The Group's business plan envisages a year of investment in marketing and product in order to grow the business to significant scale over the next three years and through to profitability.
In April, June and July 2016, INR2,534.0m/GBP26,200k was raised, including a INR290.2m/GBP3,000k strategic investment from Hindustan Times Media Limited. Of this, INR869.8m/GBP9,039k was utilised in May 2016 to acquire the remaining portion of Koovs India not already owned by the Company. In November 2016 a further INR1,090.0m/GBP12,850k was raised, including a INR325.4m/GBP3,850k strategic investment from the Times of India Group
The capital raising process in the year has therefore secured a total of INR3,624.0m/GBP39,050k for the funding of the business. In May 2017, the Board announced a requirement for an additional GBP15m of funding. By the date of this report GBP8.9m has been secured in convertible loan notes (see note 33) of which GBP7.4m was subscribed by Waheed Alli. The Board is confident that additional funding will be secured in due course.
Market and Economic Risks
Economic outlook
The Group's revenue is dependent on the sales by Koovs India to Marble which, in turn, is dependent on the retail sales Marble achieves, so the Group is sensitive to the impacts of the general economic climate in India and on the population's propensity to spend on fashion clothing and accessories. Global economic factors may impact the costs of inputs such as cotton and fuel and the Group's ability to pass on such cost increases may be limited. The Board monitors projections for the Indian economy on a regular basis and amends plans based on the expected growth.
Market and competition
The retail fashion industry and market is subject to changing customer tastes. The Group's performance is dependent upon effectively predicting and quickly responding to changing consumer demands and translating market trends into saleable merchandise. Internet fashion retailing is global and highly competitive. Any failure by KOOVS.COM to compete effectively with bricks and mortar retailers and other internet retailers may affect the Group's revenue. The Group uses third parties to provide assessments of the developments of fashion in the global markets and designers attend international trade shows to provide direction and inspiration.
Suppliers
The Group makes arrangements with manufacturers for the supply of products designed by the Group. The ability to source products promptly at competitive prices and at appropriate quality is key to the success of the business and while there is a broad range of potential suppliers and well-developed competition in the market, the Group is dependent on being able to find appropriate manufacturing capability for its products in order to meet delivery, quality and price expectations. The Group uses a broad range of suppliers within the Indian market and also internationally and ensures that there is no concentration of supply. The employment of experienced sourcing experts ensures access to a broad range of manufacturing capability.
Foreign country and political risk
Most of the Group's personnel, operations and other assets including Koovs India's warehouse, all inventory and computer servers are located in India and, consequently, the Group is subject to changes in regulations or market conditions in that country. With the majority of operations located in India, local management maintain close monitoring of local developments and amend plans as necessary.
Financial risks
Interest rate risk
The Group's exposure to interest rate risk arises from the fluctuations in the rate of interest income or charges on cash and cash equivalent balances. In the year under review, the Group has operated in a net cash position. UK interest rates continue to be very low and therefore the potential adverse interest rate risk in the UK is very low. Interest rates in India are in the region of 6.0% and the majority of the Group's cash is held in Indian Rupees in India. There is therefore a potential adverse interest rate risk affecting the interest income generated in India. No interest rate hedging is in place. The bank deposits are made for a variety of tenures to balance liquidity and security of interest generation.
Currency risk
The Group operates in the United Kingdom and India. Following the acquisition of Koovs India, all revenues and the majority of costs are denominated in Indian Rupees. However, around 25% of the Group's overheads are incurred in Sterling and therefore the Group results are susceptible to fluctuations as a result of changes in exchange rates. No foreign currency hedging is in place to mitigate this risk.
Credit and customer risk
The Group's revenues arise predominately from invoices for goods to a single customer. As Marble is currently the only channel through which Koovs India's products are sold to consumers, the Group's revenue is dependent upon the relationship with Marble and upon the success of Marble in servicing its customers, delivering products as promised, recovering payment from its customers and maintaining high levels of customer service. The Group has considered the credit risk associated with the customer and has assessed the credit worthiness of the customer to be good. The Group minimises the risk through a requirement for prompt, monthly payment of invoices issued to which the customer is committed and has demonstrated consistent adherence.
Liquidity risk
Liquidity risk is managed through the assessment of short, medium and long-term cash flow forecasts to ensure the adequacy of funding in order to meet the Group's working capital requirements. Where a shortfall in funding is identified the Company will look to meet this shortfall though a variety of funding options including but not limited to the issuing of new equity.
Other risks
Technological risks
The Group is dependent on its IT infrastructure and any system performance issues (for example system or infrastructure failure, damage or denial of access) could seriously affect our ability to trade. The infrastructure has been designed specifically for robustness, flexibility and scalability and these objectives form a core part of the IT development strategy.
Warehouse disruption
Any disruption to the Group's warehousing facility due to physical property damage, breakdown in warehouse systems, capacity shortages or poor logistics management could lead to significant operational difficulties in order fulfilment, which may have a consequent adverse effect on the Group's business. The Group has recruited an experienced logistics manager to oversee these operations.
Intellectual property and content liability
The business of the Group carries with it the risk of intellectual property right infringement. The Group may need to engage in litigation to enforce its intellectual property rights, or to protect itself from third party claims. Our designers are professionally trained to ensure that intellectual property rights are appropriately handled. Competitors' products are regularly monitored and any infringement brought to managements' attention.
Key personnel
The Group depends on the services of its key technical, marketing and management personnel. The Group personnel structure is being developed as the business grows to provide appropriate quality, depth of experience and succession planning.
On behalf of the Board of Directors
Mary Turner Robert Pursell Director Director 6 September 2017 6 September 2017
Consolidated Income Statement for the year to 31 March 2017
MEMORANDUM
Notes Year to Year to Year to Year to
31 March 31 March 31 March 31 March
2017 2016 2017 2016
INR million INR million GBP000 GBP000
Revenue 3 760.9 512.4 8,680 5,198
Cost of sales (1,054.9) (747.4) (12,034) (7,581)
-------------- ------------ --------------- ---------
Gross loss (294.0) (235.0) (3,354) (2,383)
Operating expenses (1,425.3) (1,452.8) (16,258) (14,738)
Operating loss 4 (1,719.3) (1,687.8) (19,612) (17,121)
Finance income 34.5 47.8 394 485
Finance expense (6.5) (10.4) (75) (105)
Loss for the year
before tax (1,691.3) (1,650.4) (19,293) (16,741)
Tax expense - - - -
Loss for the year (1,691.3) (1,650.4) (19,293) (16,741)
-------------- ------------ --------------- ---------
Loss attributable
to:
Equity holders
of the Company (1,662.5) (1,045.2) (18,965) (10,602)
Non-controlling
interests (28.8) (605.2) (328) (6,139)
-------------- ------------ --------------- ---------
Loss for the year (1,691.3) (1,650.4) (19,293) (16,741)
-------------- ------------ --------------- ---------
Loss per share
Basic and diluted
loss per share 5 INR(11.2) INR(36.7) (12.8)p (37.2)p
--------------- ---------
All results relate to continuing operations.
Consolidated Statement of Comprehensive Income for the year to 31 March 2017
MEMORANDUM
Year to Year to Year to Year to
31 March 31 March 31 March 31 March
2017 2016 2017 2016
INR million INR million GBP000 GBP000
Loss for the year (1,691.3) (1,650.4) (19,293) (16,741)
-------------------------------------- ----------- ----------- --------- ---------
Other comprehensive income/(loss)
Items that may be reclassified
to Income Statement in subsequent
years:
Currency translation differences
from operations denominated
in currencies other than Rupee
- equity holders of the parent,
net of tax (38.3) 3.5 (437) 35
Items that will not be reclassified
to Income Statement in subsequent
years:
Re-measurement of defined benefits
plan, net of tax 0.7 2.1 8 21
-------------------------------------- ----------- ----------- --------- ---------
Other comprehensive (loss)/
income, net of tax (37.6) 5.6 (429) 56
----------- ----------- --------- ---------
Total comprehensive loss for
the year (1,728.9) (1,644.8) (19,722) (16,685)
----------- ----------- --------- ---------
Total comprehensive loss attributable
to:
Equity holders of the Company (1,700.2) (1,040.5) (19,394) (10,555)
Non-controlling interests (28.8) (604.3) (328) (6,130)
----------- ----------- --------- ---------
Total income and expense recognised
in the year (1,728.9) (1,644.8) (19,722) (16,685)
----------- ----------- --------- ---------
All results relate to continuing operations.
Consolidated Statement of Financial Position at 31 March 2017
MEMORANDUM
31 March 31 March 31 March 31 March
2017 2016 2017 2016
INR million INR million GBP000 GBP000
Non-current assets
Intangible assets 627.5 623.0 7,736 6,543
Property, plant
and equipment 18.5 25.2 228 265
Non-current financial
assets 8.7 8.7 107 91
----------- -----------
Total non-current
assets 654.7 656.9 8,071 6,899
----------- ----------- -------------- --------
Current assets
Inventories 187.9 275.4 2,316 2,891
Trade receivables,
other receivables,
prepayments and
other assets 710.8 62.5 8,762 656
Bank deposits 445.5 105.2 5,492 1,105
Cash and cash equivalents 200.5 188.9 2,472 1,984
----------- ----------- -------------- --------
Total current assets 1,544.7 632.0 19,042 6,636
----------- ----------- -------------- --------
Total assets 2,199.4 1,288.9 27,113 13,535
----------- ----------- -------------- --------
Non-current liabilities
Long-term liabilities (11.7) (11.0) (144) (116)
----------- -----------
Total non-current
liabilities (11.7) (11.0) (144) (116)
----------- ----------- -------------- --------
Current liabilities
Bank short-term
borrowing (48.7) (125.5) (600) (1,318)
Trade and other
payables (310.2) (308.2) (3,824) (3,236)
----------- -----------
Total current liabilities (358.9) (433.7) (4,424) (4,554)
----------- ----------- -------------- --------
Total liabilities (370.6) (444.7) (4,568) (4,670)
----------- ----------- -------------- --------
NET ASSETS 1,828.8 844.2 1 22,545 8,865
----------- ----------- -------------- --------
Capital and reserves
Equity share capital 168.0 44.9 2,071 471
Share premium reserve 6,196.5 2,768.4 76,388 29,071
Other reserves (7.8) (1.6) (97) (16)
Retained earnings (4,527.9) (1,978.0) (55,817) (20,771)
Non-controlling
interest - 10.5 - 110
----------- ----------- -------------- --------
TOTAL EQUITY 1,828.8 844.2 22,545 8,865
----------- ----------- -------------- --------
Consolidated Statement of Change in Equity for Year to 31 March 2017
Attributable to the equity holders
of the parent
-----------------------------------------------------------------------------------------------------------
Share
Equity Share based Currency Total Non-controlling
share premium payment translation other Retained interests Total
capital reserve reserve reserve reserves earnings Total Equity
INRm INRm INRm INRm INRm INRm INRm INRm INRm
------------------
At 31 March
2015 24.5 2,271.1 3.1 (12.2) (9.1) (857.7) 1,428.8 538.5 1,967.3
------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ----------
Loss for
the year - - - - - (1,045.2) (1,045.2) (605.2) (1,650.4)
Other
comprehensive
(loss)/income - - - 3.5 3.5 1.2 4.7 0.9 5.6 ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ---------- Total comprehensive (loss)/income - - - 3.5 3.5 (1,044.0) (1,040.5) (604.3) (1,644.8) Equity issue 20.4 524.9 - - - - 545.3 - 545.3 Costs of equity issue - (27.6) - - - - (27.6) - (27.6) Change in non-controlling interest - - - - - (76.3) (76.3) 76.3 - Share based payments reserve - - 4.0 - 4.0 - 4.0 - 4.0 ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ---------- At 31 March 2016 44.9 2,768.4 7.1 (8.7) (1.6) (1,978.0) 833.7 10.5 844.2 ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ---------- Loss for the year - - - - - (1,662.5) (1,662.5) (28.8) (1,691.3) Other comprehensive (loss)/income - - - (38.3) (38.3) 0.7 (37.6) (37.6) ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ---------- Total comprehensive (loss)/income - - - (38.3) (38.3) (1,661.8) (1,700.1) (28.8) (1,728.9) Equity issue 123.2 3,500.8 - - - - 3,624.0 - 3,624.0 Costs of equity issue - (72.7) - - - - (72.7) - (72.7) Change in non-controlling interest - -- - - - (888.0) (888.0) 18.3 (869.7) Share based payments reserve - - 31.8 0.2 32.0 - 32.0 - 32.0 ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ---------- At 31 March 2017 168.0 6,196.5 38.9 (46.8) (7.9) (4,527.8) 1,828.8 0.0 1,828.8 ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ---------- Memorandum GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 At 31 March 2017 2,071 76,388 480 (577) (97) (55,817) 22,545 0 22,545 ------------------ -------------- ---------------- --------------- -------------- ---------------- ---------- ---------- ---------------- ----------
Consolidated statement of Cash Flows for the year to 31 March 2017
MEMORANDUM
Year to Year to Year to Year to
31 March 31 March 31 March 31 March
2017 2016 2017 2016
INR million INR million GBP000 GBP000
Operating activities
Loss for the year (1,691.3) (1,650.4) (19,293) (16,741)
Adjustments to reconcile
loss for the year
to net cash flow
from operating activities
Depreciation and
amortisation 11.8 11.2 135 116
Share based payment 34.4 4.0 392 40
Other non-cash items (0.7) 9.1 (8) 91
Interest income
and finance expense (28.0) (37.4) (320) (381)
Working capital
adjustments:
Decrease/(Increase)
in inventories 87.5 (80.0) 998 (812)
(Increase)/Decrease
in trade and other
receivables (648.3) 83.6 (7,395) 848
Increase in trade
and other payables 2.0 122.7 23 1,245
--------------- ----------- --------- ---------
Net cash flow from
operating activities (2,232.6) (1,537.2) (25,468) (15,594)
--------------- ----------- --------- ---------
Investing activities
Acquisition of shares
in subsidiary (869.8) - (9,921) -
Withdrawal: original
maturity greater
than 12m 1.5 1,229.2 15 12,469
Deposits: original
maturity less than
12m (340.3) (106.3) (3,882) (1,078)
Purchase of non-current
assets (9.6) (13.5) (109) (137)
Interest income
received 34.5 47.8 394 484
--------------- -----------
Net cash flow from
investing activities (1,183.7) 1,157.2 (13,503) 11,738
--------------- ----------- --------- ---------
Financing activities
Proceeds from issue
of shares 3,624.0 545.3 41,340 5,550
Costs of share issues (72.7) (27.6) (830) (280)
Proceeds from short-term
borrowings - 65.0 - 659
Repayment of short-term
borrowings (76.9) (2.8) (877) (29)
Interest and finance
expense (6.5) (8.1) (75) (82)
---------
Net cash flow from
financing activities 3,467.9 571.8 39,558 5,818
--------------- ----------- --------- ---------
Net increase in
cash and cash equivalents 51.6 191.8 794.9 1,962
Cash and cash equivalents
at start of year 127.6 (54.7) 1,456 (592)
Exchange differences (27.4) (9.5) (312) (30)
--------------- ----------- --------- ---------
Cash and cash equivalents
at end of year 151.8 127.6 1,938.9 1,340
--------------- ----------- --------- ---------
NOTES
1. Basis of preparation
The financial information for the year ended 31 March 2017 and the year ended 31 March 2016 contained in these preliminary results does not constitute the company's statutory accounts for those years. Statutory accounts for the year ended 31 March 2016 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 March 2017 will be delivered to the Registrar of Companies in due course and will be available from the Company's registered office at 23 Kingsway, London, WC2B 6UJ and from the Company's website www.koovs.com/corporate
The auditors' reports on the accounts for 31 March 2017 and the year ended 31 March 2016 were unqualified, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006 but for both year ends drew attention to an emphasis of matter due to the uncertainty over going concern. Further details on Going Concern are included in note 2 below.
The financial statements of the Group are presented in the Indian Rupee (INR), and all values are rounded to the nearest 100,000 Rupees (INR 0.1 million) except when otherwise indicated. The Financial Statements of the Company are presented in Pounds Sterling (GBP/GBP) the functional currency of the Company and are rounded to the nearest thousand pounds (GBP000). To assist UK-based readers of the financial statements, translations into Pounds 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 has not been audited and does not form part of the financial reporting of the Group representing, as they do, simple translations of the Indian Rupee information.
The financial information contained in these preliminary results has been prepared using the recognition and measurement requirements of International Financial Reporting Standards (IFRSs) as adopted by the EU. The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the financial statements for the year ended 31 March 2016. New standards, amendments and interpretations to existing standards, which have been adopted by the Group for the year ended 31 March 2017, have not been listed since they have no material impact on the financial information.
2. Going concern
These financial statements have been prepared on the going concern basis. The directors have reviewed the Group's going concern position taking account of its current business activities, budgeted performance and the factors likely to affect its future development, are set out in the strategic report, and include the Group's objectives, policies and processes for managing its capital, its financial risk management objectives and its exposure to credit and liquidity risks.
The Board have identified that approximately INR 1,320 million / GBP15million of additional funding would be required over the next two years. Furthermore, the sales forecast for the year ended 31 March 2018 are low value and high volume in nature, which are factors that constrain the ability to accurately predict revenue performance and investment in sales and marketing remains a key strategic focus and requirement to winning customers, and thus both are an important function of the forecasts too. The Board and its advisers have therefore been engaged in a staged capital raising process which, by the date of this report, has secured additional funding through convertible loan notes amounting to INR 780 million / GBP8.9million, with strong interest indicated for a further INR 658 million / GBP7.5million. The success of the recently completed fund raising and the on-going interest and support from new and existing shareholders give the board confidence that further funding will be secured in due course.
The directors have concluded that the circumstances set forth above indicate the existence of a material uncertainty which may cast significant doubt about the group and company's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, they believe that taken as a whole, the factors described above enable the group and the company to continue as a going concern for the foreseeable future. The financial statements do not include the adjustments that would result if the group and company were unable to continue as a going concern.
3. Revenue
Revenue recognised in the Income Statement is analysed as follows:
MEMORANDUM
2017 2016 2017 2016
INRm INRm GBP000 GBP000
Sale of fashion
garments, India 760.9 512.4 8,680 5,198
The Group's sole operation was that of supplying fashion garments at wholesale to third parties. All of the revenue was generated in the Republic of India, based on the location of the customers.
Operating segment
All of the Group's revenue is generated by Koovs India through its operations as a supplier of branded fashion products. The chief operating decision maker is the Chief Executive Office who makes resource allocation decisions based on financial statements and operating reports for the entire Group. The Group therefore represents a single cash generating unit and a single operating segment.
Information about major customers
All of the revenue arising from the sale of fashion garments arises from Marble Pvt. Ltd.
4. Operating loss
Operating loss is stated after charging:
MEMORANDUM
2017 2016 2017 2016
INR m INR m GBP000 GBP000
Auditor's remuneration 12.1 15.1 137 154
Operating lease payments 70.6 49.4 806 501
Depreciation expense 10.4 9.5 5 119 99
Amortisation expense 1.4 1.7 16 17
Staff costs 387.5 380.7 4,420 3,863
Net foreign currency exchange
loss 0.3 1.7 4 17
----- ----- ------ ------
All operating expenses are administrative by nature.
5. 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 year.
2017 2016
Weighted average shares in
issue for basic earnings per
share 148,479,033 28,482,540
Effect of dilutive options - -
------------ ----------
Weighted average shares in
issue for diluted earnings
per share 148,479,033 28,482,540
------------ ----------
Earnings attributable to the
owners of the Parent (INR
m) (1,662.5) (1,045.2)
------------ ----------
Basic and diluted loss per
share - Rupees (11.2) (36.7)
Basic and diluted loss per
share - Pence (12.8) (37.2)
------------------------------- ------------ ----------
Diluted 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 year, adjusted for the effects of potentially dilutive share options. The effect of the share options in issue is anti-dilutive and therefore no adjustment has been made to the weighted average shares in issue for diluted earnings per share.
6. Cash and bank deposits
MEMORANDUM
Group 2017 2016 2017 2016
INRm INRm GBP000 GBP000
Current assets:
Bank deposits with
an original maturity
of more than 12 months 1.0 1.0 12 11
Bank deposits with
an original maturity
of not more than 12
months 444.5 104.2 5,480 1,094
Cash at bank and in
hand 200.5 188.9 2,472 1,984
------- ------- ------- -------
Total 646.0 294.1 7,964 3,089
Non-current assets:
Security deposits 8.7 8.7 107 91
------- ------- ------- -------
Bank overdrafts (48.7) (61.3) (600) (644)
Total cash and bank
deposits 606.0 241.5 7,471 2,536
------- ------- ------- -------
2017 2016 2017 2016
Cash and cash equivalents INRm INRm GBP000 GBP000
Cash at bank and in
hand 200.5 188.9 2,472 1,984
Bank overdrafts (Note
20) (48.7) (61.3) (600) (644)
------- ------- ------- -------
Total 151.8 127.6 1,871 1,340
------- ------- ------- -------
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. Events after the reporting date
At a General Meeting of the Company held on 14 August 2017, the shareholders approved the issue of up to GBP18.9m of convertible loan notes in order to provide funding for the Group's business plan. Binding commitments for GBP8.9m have been received to date.
8. Cautionary Statement
Koovs plc has made forward-looking statements in this press release, including statements about the market for and benefits of its products and services; financial results; product development plans; the potential benefits of business relationships with third parties and business strategies. These statements about future events are subject to risks and uncertainties that could cause Koovs plc's actual results to differ materially from those that might be inferred from the forward-looking statements, Koovs plc can make no assurance that any forward-looking statements will prove correct.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFFLIASIRIID
(END) Dow Jones Newswires
September 07, 2017 02:01 ET (06:01 GMT)
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