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Silverwood Brands - Unaudited Interim Results


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Silverwood Brands PLC · SLWD

30/09/2024 14:06

Silverwood Brands - Unaudited Interim Results
RNS Number : 2872G
Silverwood Brands PLC
30 September 2024
 

30 September 2024

 

Silverwood Brands Plc

("Silverwood" or the "Company", together with its subsidiaries, the "Group")

 

Unaudited Interim Results for the six months ended 30 June 2024

 

Silverwood Brands plc (Aquis: SLWD), a holding company established to invest primarily in branded consumer businesses, announces the Group's unaudited interim results in respect of the six months ended 30 June 2024.

 

Chief Executive's Statement

 

During the six months ended 30 June 2024, we have been focused on growth in our brands and getting to know our new colleagues at Cosme Science and Dr Baeltz in Japan. As you may recall, we completed the acquisition of Cosme Science and Dr Baeltz in April 2024.

Growing small brands is never easy so it is comforting to note the grit displayed by our teams in their pursuit of expansion.

 

Balmonds Skincare Ltd

 

Balmonds completed the re-branding of the range to satisfy requests from potential stockists for a new look to our products. The introduction of new packaging and products invariably creates a frustrating period of disruption as the old look is phased out and the new look is phased in.

The team handled this with their usual determined perseverance and we now hope to see an improved response from retailers and customers (feedback so far has been encouraging). As a result, we are planning for year-on-year sales growth for the full year.

 

For the 6 month period

 

Sales £1.082k

Brand Contribution £(147.8)k

 

Nailberry

 

Nailberry has maintained high margins and continues to experiment with new sales channels. Growth in the six months to June 2024 has slowed on the previous run rate, but we are still expecting year on year sales growth this year. Our expansion into the US and Japanese markets is still at an early stage, setting us up well for 2025.

 

For the 6 month period

 

Sales £1,385k

Brand Contribution £345k

 

 Sonotas

 

In the 6 months to June 2024, Sonotas operated 3 brands: Steamcream, Cigarro and Nailberry in Japan.  

 

Steamcream, our main Sonotas brand, experienced steady growth in the 3 existing sales channels to June 2024, being online, wholesale, and short term events or pop-ups. We closed our retail stores in May of 2023 to improve profitability, and we are now working on a new retail concept to launch in late 2025.

 

Cigarro sales, a much smaller brand, have been depressed on a LFL basis as the brand recovers from a series of packaging supply issues.  Work on new product development and improved supply sourcing is expected to drive renewed growth at Cigarro.

 

Nailberry launched in October 2023.  Awareness building through pop-up sales events continues and online sales continue to grow.  A big push is underway to expand wholesale accounts.

 

For the 6 month period

 

Sales £ 2,744 k

Brand Contribution £(72k)

Cosme Science Group

 

Cosme Science and its subsidiary Dr. Baeltz became part of the Sonotas group on March 29.  The business year-end for Cosme Science and Dr. Baeltz is March 31. 

 

Work has begun to cover group manufacturing and distribution needs which will deliver savings starting in the second half of the year.

 

For 3 month period

 

Sales £1,849k

Brand Contribution £(0)k

 

 

New Opportunities

 

We continue to assess new opportunities.

 

Financial Performance

 

The Group's unaudited interim results for the six months ended 30 June 2024, show:

 

·    Sales of                                                                       £7,077,234

 

·    Gross profit of                                                            £4,347,890

 

·    Operating profit/( loss)                                                £772,332

 

·    Profit/ (loss) of                                                            £157,876

 

The impact of acquisition accounting and rules for statutory accounting result in a view which is somewhat different to our management accounting. To provide some clarity we have detailed the trading result below with the non-operating or exceptional costs listed.

 

The reported P&L item "Acquisition costs, acquisition related contingent consideration and earn outs" includes a £668,936 fair value gain on a loan asset acquired as part of the Cosme Science and Dr Baeltz acquisition. Additionally, a cost of £197,809 represents the financing costs of the loan used to fund the acquisition.

 

The group has suffered a non cash loss on the revaluation of the Japanese foreign operations. The decrease in the value of the yen over the course of 2024 is reflected in both the P&L and balance sheet figures. The movement for the six months ended June 2024 is represented by a revaluation charge of £517,484 within total comprehensive income.

 

An adjusted view is below:

 

·    Sales                                                                            £7,077,234

 

·    Gross profit of                                                            £4,347,890

 

·    Operating contribution                                                £(122,903)

 

Non operating items:

 

Gain on acquisition of debt on Cosme Science                      £668,936

Acquisition costs, including loan set up costs                        £(197,809)

Net interest costs & legal fees                                                 £(40,377)

Depreciation expense                                                              £(64,765)

Other expenses & legal costs                                                  £(85,207)

Net exceptional items                                                             £280,778

 

Profit/(loss)                                                                             £157,876

 

Balance Sheet Movements

 

There have been some obvious movements in our Balance Sheet.

 

Lush unwind

As explained in previous reports we chose to unwind the Lush transaction resulting in the large movements to investments.

 

Cosme Science acquisition     

The purchase of Cosme Science in Japan explains the majority of movements in assets, stock and loans.

 



 

Summary

 

Integration of Cosme Science has been positive.

We all remain focused on building our brands.

Our culture of tight cost control endures.

We continue to assess new opportunities.

 

Our brands are growing overall, and with our internal focus on sales execution, expansion across our channels, and work in new markets coming to fruition, we continue to be optimistic about our brands.

 

 



 

Consolidated Profit and Loss and Other Comprehensive Income



For the Six Months ended 30 June 2024

 

 

Unaudited

Unaudited

Audited


Six Months to
30 June 2024

Six Months to
30 June 2023

Year ended
31 December 2023






£

£

£

Revenue

                  7,077,234

                  5,847,148

                11,202,566





Cost of Sales

(2,729,343)

(1,407,009)

(3,062,983)

Gross Profit

                  4,347,890

                  4,440,139

                  8,139,583





Other Operating Income

-

-

                  26,799





Administrative Expenses

(3,997,743)

(4,225,481)

(10,122,332)





Acquisition costs, acquisition related contingent consideration and earn outs

422,185

-

(3,842,615)





Profit/(Loss) from Operations

772,332

214,658

(5,798,565)





Finance Income

                  68,036

                  37,645

                  41,649





Finance Expense

(162,376)

(441,535)

(805,786)





Profit/(Loss) before tax

677,992

(189,232)

(6,562,702)





Tax expense

(2,633)

(15,508)

471,528





Profit/(Loss) for the period

675,360

(204,740)

(6,091,174)





Items that are or may be reclassified subsequently to profit or loss.

 



Exchange loss arising on translation on foreign operations

(517,484)

-

(421,716)





Total comprehensive income

157,876

(204,740)

(6,512,890)

 



 

Consolidated Statement of Financial Position




For the Six Months ended 30 June 2024

 

 

Unaudited

Unaudited

Audited


Six Months to
30 June 2024

Six Months to
30 June 2023

Year ended
31 December 2023


£

£

£





Non-current assets

 



Property, plant and equipment

3,598,266

110,947

199,306

Intangible assets

26,331,297

20,214,673

23,594,130

Investments

80

216,802,081

80

Trade and other receivables

-

-

101,943


29,929,642

237,127,701

23,895,459

 




Current Assets

 



Inventories

2,763,139

1,797,117

1,727,768

Trade and other receivables

8,038,486

7,323,074

3,293,618

Cash and cash equivalents

3,434,830

3,785,124

2,799,380


14,236,455

12,905,315

7,820,766

 




Total Assets

44,166,097

250,033,016

31,716,225

 




Non-current liabilities

 



Trade and other liabilities

4,068,859

354,991

1,996,367

Loans and borrowings

9,398,159

12,199,699

1,264,449

Deferred tax

1,799,442

657,298

1,799,191


15,266,460

13,211,988

5,060,007

 




Current liabilities

 



Trade and other liabilities

5,050,185

1,487,971

6,099,082

Loans and borrowings

-

173,133

5,368,149

Provisions

161,282

 

286,282


5,211,468

1,661,104

11,753,513

 




Total Liabilities

20,477,928

14,873,092

16,813,520

 




Net Assets

23,688,169

235,159,924

14,902,705

 

 

 

 

 



 



 

 

Equity

 



Share Capital

4,250,018

26,071,281

3,250,018

Share Premium

27,195,826

216,776,564

22,795,826

Shares to be issued

831,450

831,450

831,450

Reverse takeover reserve

(4,797,432)

(4,797,432)

(4,797,432)

Share based payment reserve

6,110,807

3,257,875

6,110,807

Foreign exchange reserve

(939,200)

 

(421,716)

Retained earnings

(8,912,588)

(6,979,814)

(12,815,536)

Non-controlling interest

(50,712)

 

(50,712)

Total Equity

23,688,169

235,159,924

14,902,705

 

 

 


Consolidated Statement of Changes in Equity
For the Six Months ended 30 June 2024

 










Share Capital

Share Premium

Shares to be issued

Reverse takeover reserve

Share based payment reserve

Foreign Exchange Reserve

Retained earnings

Non-Controlling interest

Total Equity

 


£

£

£

£

£

£ 

£

£

£

At 1 January 2024

3,250,018

22,795,826

831,450

(4,797,432)

6,110,807

(421,716)

(12,815,536)

(50,712)

14,902,705

 










Comprehensive income for the period

 









Profit for the period

-

-

-

-

-

-

675,359

-

675,359

Exchange Loss arising on translation of foreign operations

-

-

-

-

-

(517,484)

-

-

(517,484)

Total comprehensive income for the period

-

-

-

-

-

(517,484)

675,359

-

157,875

 










Issue of share capital

1,000,000

4,400,000

-

-

-

-

-

-

5,400,000

Gain on bargain purchase

-

-

-

-

-

-

3,227,589

-

3,227,589

 










At 30 June 2024

4,250,018

27,195,826

831,450

(4,797,432)

6,110,807

(939,200)

(8,912,588)

(50,712)

23,688,169

 

  

Notes to the Consolidated Interim Statements for the six months ended 30 June 2024

 

These consolidated interim financial statements have been prepared in accordance with the Aquis rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have been prepared in accordance with UK adopted International Accounting Standards. 

The interim financial information set out above does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006.  It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of the UK adopted International Accounting Standards.

These consolidated interim financial statements have not been audited or reviewed by the Company's auditor.

 

--Ends--

 

Silverwood Brands Plc

Andrew Gerrie

Paul Hodgins

 

info@silverwoodbrands.com

Peterhouse Capital Limited (Aquis Corporate Adviser)

Mark Anwyl

Narisha Ragoonanthun

Brefo Gyasi

+44 (0)20 7469 0930

 

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation EU 596/2014 as it forms part of retained EU law (as defined in the European Union (Withdrawal) Act 2018).

The Directors of the Company accept responsibility for the contents of this announcement.

 

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