Samarkand Group PLC - Interim Results

Announcement provided by

Samarkand Group plc · SMK

04/11/2024 07:00

RNS Number : 7172K

Samarkand Group PLC

04 November 2024

4th November 2024

Samarkand Group plc

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

Interim Results

Shift in Strategy to Owned Brands Progressing Well

Samarkand Group plc, (AQSE:SMK), the consumer brand owner and cross border eCommerce distribution services group announces its unaudited interim results for the half year ending 30 September 2024 ("H1 2025").

As stated in our annual results FY24, our future is as a scale up platform for meaningfully different, high potential, niche brands in the health and healing space, targeted at specific consumer segments with long term growth potential, specifically natural herbal health and beauty and fertility and reproductive health.

The Group has made strong progress in shifting its strategy to focus on growing our portfolio of owned brands (Napiers the Herbalists, Zita West, Nature's Greatest Secret and Benatural) and in restructuring our China distribution operations. This is reflected in our first half performance with owned brands growing strongly year over year, particularly in the UK, and China related revenues declining as we focus on a smaller portfolio of third-party brands.

Financial Highlights

· Revenues decreased by 22% to £6.3m (H1 2024: £8.1m)

o Brand Ownership revenues up 14% to £4.1m (H1 2024: £3.6m)

o Brand Acceleration revenues of third party brands decreased by 57% to £1.8m (H1 2024: £4.1m)

o Distribution revenues remained flat at £0.4m (H1 2024: £0.4m)

· Gross margin decreased 22% to £3.8m (H1 2024: £4.9 m) in line with reduction in revenues

· Adjusted EBITDA loss* reduced by 10% to £0.6m (H1 2024: £0.7m)

· Cash and cash equivalents were £0.68m (H1 2024: £1.66m)

*adjusted for restructuring costs, impairment on intangible assets, profit on disposal of Brand Asset and share based payments.

Operational Highlights

· Strong growth in owned brand revenues with H1 sales for our portfolio of owned brands Napiers the Herbalists, Zita West, Nature's Greatest Secret and Benatural up 64% in the UK over prior year on a like for like basis

· Napiers the Herbalists revenue grew over 100% in the UK vs prior year as a result of product innovation, social commerce activities and expansion in the independent sales channel

· Zita West revenues grew 22% in the UK as a result of new product introductions, upgraded packaging and ongoing investment in education and provision of a high-touch customer experience

· Performance of recently acquired Optimised Energetics Ltd running ahead of expectations with owned brands Natures Greatest Secret and Benatural growing at over 100% and the flexible manufacturing capacity which is now part of the Group improving our speed to market and ability to respond to fast moving consumer trends

· Restructuring of China distribution activities and associated costs in the period as we focus on a far smaller portfolio of third-party brands

· Reduction in Group's adjusted EBITDA losses by 10% vs prior year and good progress made towards goal of monthly breakeven

David Hampstead, Chief Executive Officer of Samarkand Group, commented: "Our strategic shift to focus on growing our owned, proprietary brands and taking a more selective approach to distributing 3^rd party brands gathered pace in the first half. We are delighted with the growth momentum behind our owned brands and the acquisition of Optimised Energetics has strengthened our portfolio of meaningfully different premium health and healing brands and improved our competitive position with the addition of flexible manufacturing services.

Reaching monthly profitability remains our top priority and I'm pleased to report this strategy is bearing fruit with September bringing a profit of c.£40k at adjusted EBITDA level, a material improvement on previous months. This, together with the significant improvement in our owned brands and ongoing restructuring of our China operations, is moving us closer to that goal. I am confident in the future potential of our brands."

For more information, please contact:

Samarkand Group plc
David Hampstead, Chief Executive Officer Eva Hang, Chief Financial Officer	http://samarkand.global/ info@samarkand.global

Guild Financial Advisory Limited
Ross Andrews Tomas Klaassen	+44 (0) 7973839767 +44 (0) 7834458095

Notes to Editors

Samarkand is a consumer brand owner and distributor operating a scale up platform for niche, premium, multichannel, health and healing brands. Core owned brands include Napiers the Herbalists, Scotland's oldest natural herbal apothecary and Zita West, a leading specialist supplement line for fertility and reproductive health. Platform services include marketing, sales and channel development with a focus on social commerce, China market entry, international expansion and manufacturing. In addition, the group works as the exclusive China market partner for a select portfolio of niche luxury skin care brands and connects these brands to the Chinese consumer via cross border eCommerce.

Founded in 2016, Samarkand is headquartered in Tonbridge, UK with offices in Shanghai.

For further information please visit https://www.samarkand.global/

CEO Review

Our focus in the first half of this financial year has been on implementing our strategic shift to a scale up platform for niche, differentiated health and healing brands. I am pleased to report strong performance of our owned brand portfolio in the period with Napiers the Herbalists revenues in the UK doubling year over year, Zita West growing at 22% and Nature's Greatest Secret and Benatural growing over 100%.

Our owned brand portfolio in the UK is generating profitable growth with gross margins in the range of 70%-80%. The addition of the Nature's Greatest Secret brand to our portfolio has been positive, boosting the overall growth rate of the portfolio.

In parallel we have taken steps to restructure and simplify our China distribution operations to concentrate our efforts on a smaller portfolio of our proprietary and third-party brands. Sales of third-party brands in China declined 57% in the period and we have worked hard to adjust costs accordingly.

As a result of growth in our owned brands and reduction in China sales, the Group is now less dependent on the China market with UK and ROW sales accounting for over 60% (H1 2024: 40%) of revenues in the first half- a material step up from the same period last year.

We have been successful in reducing adjusted EBITDA losses vs prior year by 11%. We have taken restructuring and cost actions in the period as we reconfigure our resources around our owned brands, which we expect to materialise in terms of improved margins in H2.

Losses in H1, on an adjusted basis, have been slightly higher than our initial expectation as a result of restructuring costs and a faster than forecast decline in revenues from the China market as we transition to a smaller portfolio of 3^rd party brands in an increasingly competitive operating environment.

We remain of the view that the value of the Company, in terms of its assets, capabilities and potential, is not currently reflected in the share price, and are focused on improving the underlying performance of the business, reaching profitability and increasing shareholder value.

Outlook

Our immediate focus is to continue to grow our portfolio of owned brands profitably, leveraging our platform resources effectively across all our brands. We are confident in the growth momentum and future potential of our owned brands and will continue to work towards our goal of reaching consistent monthly profitability.

Our overall goal is to establish Samarkand as a scale up platform for niche differentiated premium brands, with a shared playbook for growth acceleration and efficient operations. In the future we may explore opportunities to invest at a higher rate behind our current owned brand portfolio and may consider bolt on acquisitions in our health and healing sweet spot.

David Hampstead

Chief Executive Officer

FINANCIAL REVIEW

Overview

During the period the Group's revenues decreased by 22% to £6.3m (H1 2024: £8.1m) as a result of significant reduction in sales of third-party brands in China. Gross profit decreased by 22% to £3.8m (H1 2024: £4.9m) in line with the decrease in revenue, with gross margin maintaining at 61% (H1 2024: 61%).

Brand ownership revenue is up 14% to £4.1m (H1 2024: £3.6m), with gross margins improving from 63% to 69%. Brand acceleration revenue is down 57% to £1.8m (H1 2024: £4.1m) with gross margins declining from 59% to 38% as the group restructures the way it operates in China. Revenues from our distribution business remained flat at £0.4m (H1 2024: £0.4m).

Adjusted EBITDA loss improved by 10% from £0.7m to £0.6m.

Operating expenses

Selling and distribution expenses decreased to 31% (H1 2024: 34%) of revenue, as a result of a change in sales mix and successful cost minimising actions in the last six months.

Administrative expenses, excluding one-off costs such as a share-based payment expense and restructuring related costs, increased to 39% (H1 2024: 34%) of revenue as a faster than forecast decline in sales of our third-party brands in China. The number of employees at 30 September 2024 was 56 (30 September 2024: 85), down from 87 at 31 March 2024.

Earnings per share

Basic earnings per share was 0.13p (H1 2024: loss 5.19p per share) and diluted earnings per share was 0.12p (H1 2024: loss 5.19p per share).

Net debt

	Sep-24	Sep-23	Mar-24
Cash and cash equivalents	681,688	1,658,643	867,524
Right-of-use lease liabilities	(885,579)	(418,101)	(716,400)
Borrowings	(1,798,291)	(1,459,278)	(1,496,488)
Net debt	(2,002,182)	(218,736)	(1,345,364)

At the period end, the Group's net debt position was £2.0m (H1 2024: £0.2m), excluding the IFRS 16 lease liabilities, net debt was £1.1m (H1 2024: net cash £0.2m).

Inventories

The Group reduced gross inventories from £3.1m to £2.1m. Improvements in inventory management and ordering process along with the reduction in inventory held for third party brands has resulted in the Group holding lower inventory levels. To reduce complexity, the Group focused on reducing the breadth of inventory in its UK and bonded warehouses.

Depreciation and amortisation

The total depreciation and amortisation costs were £0.1m and £0.1m respectively (H1 2024: £0.2m and £0.4m, respectively).

Adjusted EBITDA loss

Adjusted EBITDA loss improved by 10% from £0.7m to £0.6m. The improvements in adjusted EBITDA loss is driven principally by the decrease in staff cost and operating costs as the Group restructures its China distribution business.

Condensed Consolidated Statement of Comprehensive Income

For the six-month period ended 30 September 2024

			Period ended 30 September 2024		Period ended 30 September 2023		Year ended 31 March 2024
			(Unaudited)		(Unaudited)		(Audited)
	Notes		£		£		£
Revenue	3		6,323,275		8,132,309		16,922,669
Cost of sales	3		(2,522,939)		(3,208,355)		(6,695,544)
Gross profit			3,800,336		4,923,954		10,227,125
Selling and distribution expenses			(1,953,349)		(2,805,574)		(5,715,219)
Administrative expenses	4		(1,529,367)		(4,450,721)		(8,135,412)
Adjusted EBITDA			(597,700)		(664,195)		(893,366)
Restructuring costs	5		(93,127)		(77,292)		(457,594)
Impairment on intangible assets	5		-		(1,489,580)		(2,080,746)
Profit on disposal of Brand Asset			1,083,127		-		-
Share-based payment and related expenses	5		(75,680)		(101,274)		(191,800)
EBITDA			317,620		(2,332,341)		(3,623,506)
Depreciation and amortisation			(185,941)		(627,085)		(989,208)
Operating profit/ (loss)			131,679		(2,959,426)		(4,612,714)
Finance income			3,801		2,051		6,856
Finance costs			(108,587)		(106,084)		(261,722)
Profit/(loss) before taxation			26,893		(3,063,459)		(4,867,580)
Taxation			21,452		13,627		69,520
Profit/(loss) after taxation			48,345		(3,049,832)		(4,798,060)
Other comprehensive income:
Exchange differences on translation of foreign operations
			(1,349)		(6,034)		(7,227)
Items that may be reclassified to profit and loss in subsequent periods
			(1,349)		(6,034)		(7,227)
Total comprehensive profit/(loss) for the period			46,996		(3,055,866)		(4,805,287)

Profit/(loss) attributable to:
Equity holders of the Company			73,430		(3,029,365)		(4,756,999)
Non-controlling interests			(25,085)		(20,467)		(41,061)
			48,345		(3,049,832)		(4,798,060)

Comprehensive profit/(loss) attributable to:
Equity holders of the Company			72,081		(3,035,399)		(4,764,226)
Non-controlling interests			(25,085)		(20,467)		(41,061)
			46,996		(3,055,866)		(4,805,287)
Earnings/(loss) per share (basic and diluted)
Basic		6		0.0013		(0.0519)		(0.0815)
Diluted		6		0.0012		(0.0519)		(0.0815)

Condensed Consolidated Statement of Financial Position

For the six-month ended 30 September 2024

		30 September 2024	30 September 2023	31 March 2024 Restated
		(Unaudited)	(Unaudited)	(Audited)
	Notes	£	£	£
ASSETS
Intangible assets	7	5,600,129	5,551,141	4,585,661
Property, plant and equipment		247,948	160,291	77,092
Right-of-use assets		798,083	352,661	688,628
Deferred Tax Asset		217,721	-	179,350
Non-current assets		6,863,881	6,064,093	5,530,731
Inventories	8	1,881,136	2,572,847	2,370,941
Trade receivables		1,312,673	1,343,409	1,175,380
Corporation tax recoverable		59,377	126,616	59,376
Other receivables and prepayments		907,466	540,997	625,248
Cash and cash equivalents		681,688	1,658,643	867,524
Held for sale		-	-	216,597
Current assets		4,842,340	6,242,512	5,315,066
Total assets		11,706,221	12,306,605	10,845,797

EQUITY AND LIABILITIES
Share capital	9	583,582	583,582	583,582
Share premium		22,954,413	22,954,413	22,954,413
Merger relief reserve		(2,063,814)	(2,063,814)	(2,063,814)
Accumulated loss		(16,801,093)	(15,829,992)	(16,950,203)
Currency translation reserve		(87,936)	(85,394)	(86,587)
Total equity attributable to parent		4,585,152	5,558,795	4,437,391
Non-controlling interest		(205,388)	(159,709)	(180,303)
Total equity		4,379,764	5,399,086	4,257,088

Right-of-use lease liabilities		719,478	107,066	617,819
Borrowings		87,176	1,403,516	1,434,895
Deferred tax liability		548,653	334,257	492,787
Accrued liabilities		430,000	512,441	-
Total non-current liabilities		1,785,307	2,357,280	2,545,501

Trade and other payables		3,379,027	3,521,220	3,401,814
Deferred revenue		284,906	662,222	480,220
Borrowings		1,711,116	55,762	61,593
Right-of-use lease liabilities		166,101	311,035	99,581
Total current liabilities		5,541,150	4,550,239	4,043,208
Total liabilities		7,326,457	6,907,519	6,588,709

Total liabilities and equity		11,706,221	12,306,605	10,845,797

Condensed Consolidated Statement of Changes in Equity

For the six-month period ended 30 September 2024

	Share Capital	Share Premium	Merger relief reserve	Currency Translation reserve	Accumulated Loss (Restated)	Non-controlling interests	Total equity
	£	£	£	£	£	£	£


Balance at 1 April 2024 (Restated)	583,582	22,954,413	(2,063,814)	(86,587)	(16,950,203)	(180,303)	4,257,088
Profit/(loss) after taxation	-	-	-	-	73,430	(25,085)	48,345
Other comprehensive loss	-	-	-	(1,349)	-	-	(1,349)
Total comprehensive profit/(loss) for the period	-	-	-	(1,349)	73,430	(25,085)	46,996
Share based payments	-	-	-	-	75,680	-	75,680
	-	-	-	-	75,680	-	75,680
Balance at 30 September 2024	583,582	22,954,413	(2,063,814)	(87,936)	(16,801,093)	(205,388)	4,379,764


Balance at 1 April 2023	583,582	22,954,413	(2,063,814)	(79,360)	(12,901,901)	(139,242)	8,353,678
Loss after taxation	-	-	-	-	(3,029,365)	(20,467)	(3,049,832)
Other comprehensive loss	-	-	-	(6,034)	-	-	(6,034)
Total comprehensive loss for the period	-	-	-	(6,034)	(3,029,365)	(20,467)	(3,055,866)
Share based payments	-	-	-	-	101,274	-	101,274
	-	-	-	-	101,274	-	101,274
Balance at 30 September 2023	583,582	22,954,413	(2,063,814)	(85,394)	(15,829,992)	(159,709)	5,399,086

Condensed Consolidated Statement of Cash Flows

For the six-month period ended 30 September 2024

	30 September 2024	30 September 2023	31 March 2024
	(Unaudited)	(Unaudited)	(Audited)
	£	£	£
Cash flows from operating activities
Profit/(loss) after taxation	48,345	(3,049,832)	(4,798,060)
Cash flow from operations reconciliation:
Depreciation and amortisation	185,941	627,086	989,208
Impairment on intangible assets	-	1,489,580	2,080,746
Profit on disposal of Brand Asset	(1,113,152)
Finance costs	92,149	48,445	113,225
Finance income	(3,801)	(2,051)	(6,856)
Share option expense	75,680	101,274	191,800
Income tax credit	(21,452)	(13,627)	(69,520)
Working capital adjustments:
Inventories	71,623	(360,620)	(158,714)
Trade and other receivables	228,535	521,999	628,522
Trade and other payables	(459,735)	629,941	187,942
Cash generated (used in) operating activities	(895,867)	(7,805)	(841,707)
Corporation tax (paid)/received	(49,706)	-	224,615
Net cash generated (used in) operating activities	(945,573)	(7,805)	(8,047,840)

Cash flows from investing activities
Purchase of property, plant and equipment	(100,369)	(1,654)	(37,484)
Disposal of property, plant and equipment	1,076	1,565	84,206
Disposal of right of use asset	-	-	(47,813)
Disposal of intangible asset	5,629	-	16,435
Payment of intangible assets	(5,724)	(147,929)	(220,734)
Disposal of Brand Asset	1,279,337	-	-
Acquistion of Subsidiary, net of cash acquired	(576,692)	-	-
Interest received	3,801	2,051	6,856
Net cash (used in) investing activities	607,058	(145,967)	(198,534)

Cash flows from financing activities
Repayment of right-of-use lease liabilities	(55,601)	(164,888)	(283,218)
Proceeds from other loans	297,181	-	31,363
Interest paid	(14,253)	(9,883)	(21,717)
Repayment of borrowings	(72,796)	(30,324)	(54,857)
Net cash (used in)/from financing activities	154,531	(205,095)	(328,429)

Net change in cash and cash equivalents	(183,984)	(358,867)	(1,144,055)
Cash and cash equivalents at beginning of period	867,524	2,017,150	2,017,150
Effect of FX changes on cash and cash equivalents	(1,852)	360	(5,571)
Cash and cash equivalents at end of period	681,688	1,658,643	867,524

Notes to the Consolidated Financial Statements
For the period ended 30 September 2024

1. General information

Samarkand Group plc was incorporated in England and Wales on 12 January 2021. The address of its registered office is Unit 13 Tonbridge Trade Park, Ingot Way, TN9 1GN.

2. Basis of preparation and measurement

(a) Basis of preparation

The condensed consolidated interim financial statements of Samarkand Group plc and its subsidiaries (together referred to as the "Group"), comprises the results of the Group for the 6 months ended 30 September 2024. These interim financial statements are not audited nor reviewed by independent auditors, were approved by the board of directors on 1 November 2024.

The financial information in this interim report has been prepared in accordance with UK adopted international accounting standards. The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 March 2024 and which will form the basis of the 2024 financial statements.

The financial information for the year ended 31 March 2024 included in these financial statements does not constitute the full statutory accounts for that year. The Annual Report and Financial Statements for 2024 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2024 was (i) unqualified, although included an emphasis of matter in respect of material uncertainty around going concern and (ii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Unless otherwise stated, the financial statements are presented in Pounds Sterling (£) which is the currency of the primary economic environment in which the Group operates.

Transactions in foreign currencies are translated into £ at the rate of exchange on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date. The resulting gain or loss is reflected in the "Consolidated Statements of Comprehensive Income" within either "Finance income" or "Finance costs".

The financial statements have been prepared under the historical cost convention except for certain financial instruments that have been measured at fair value.

The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. The directors of Samarkand Group plc have reviewed the Group's overall position and outlook and are of the opinion that the Group is sufficiently well funded to be able to operate as a going concern for at least the next twelve months from the date of approval of these financial statements.

Going Concern

For the year ended 31 March 2024, the Group continued to face challenging market conditions in China with revenues generated from third-party consumer brands in China falling year on year as a result of increasingly competitive market conditions and higher levels of price and promotional intensity. This has continued into H1 2025, with the revenues from sale of third-party brands in China declining faster than forecasted. As such, the Group continues to reconfigure and restructure by focusing on fewer third-party brands which have the potential for long term success. This will enable greater attention and focus on development of our own brands in China.

The Group's owned brands have performed ahead of expectations in the period, with strong revenue growth and profitable contribution from Napiers, Zita West and newly acquired Natures Greatest Secret and Benatural in the UK.

The Directors recognise the importance of moving the Group into profitability and have made significant progress towards this goal, with the month of September generating adjusted EBITDA profit of c£40k.

In addition, the Directors are actively exploring additional funding options including trade financing and other strategic opportunities to support the Group's operations and long-term viability. In June 2024, the Group completed the disposal of its Probio7 brand. The proceeds of the disposal have enabled the Group to acquire Optimised Energetics, a premium skincare manufacturer to secure its manufacturing services to Napiers, improving the overall Group's margins and profitability. Proceeds from the disposal will also allow the Group to increase resources to support the growing working capital requirements of Napiers and Zita West.

Despite the cost base reduction and ongoing exploration of additional funding, in the event that trading does not proceed as planned and in conjunction with the loan with Global Smollan Holdings becoming due in September 2025, the Group's financial performance and cash flow projections indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. Global Smollan Holdings, our largest strategic shareholder has expressed ongoing support for the business and have indicated their willingness to re-negotiate the loan when it falls due.

Although there are material uncertainties, several mitigating factors have been considered by the Directors in their assessment of the going concern assumption. These include the steps taken to further reduce costs and the progress made in exploring various strategic options to raise additional funds. The Directors believe that these factors, will enable the Group to overcome the identified challenges and continue its operations.

To address the material uncertainties, the Directors will continue to closely monitor the Group's financial performance, cash flow projections, and market conditions. They will continue to proactively manage the Group's cost base, seeking further efficiencies where possible.

The Directors are confident in the Group's ability to mitigate the identified risks and uncertainties. As a result, the financial statements have been prepared on a going concern basis, acknowledging the material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern.

(b) Basis of consolidation

The Consolidated Group financial statements comprises the financial statements of Samarkand Group plc and its subsidiaries.

A subsidiary is defined as an entity over which Samarkand Group plc has control. Samarkand Group plc controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

Intra-group transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests.

During the period the Group reviewed the classification and presentation of the accruals made in relation to the Bonus Scheme for the financial year ending 31 March 2023. It was determined that following this review, the accrual was made in error, although the Financial and Non-Financial Performance Targets were met, the vesting conditions associated with nominal cost options were not. The opening balances for the year ending 31 March 2024 has therefore been restated, as a result, the Consolidated statement of financial position as at 31 March 2024 has been restated as follows:

	As reported 31 March 2024	Impact of Restatement	Restated 31 March 2024
Consolidated statement of financial position	£	£	£

Trade and other payables	(3,897,739)	495,925	(3,401,814)
Accumulated loss	(17,446,128)	495,925	(16,950,203)

3. Segmental analysis

An analysis of the Group's revenue and cost of sales is as follows:

	Unaudited	Unaudited	Audited
	30 September 2024	30 September 2023	31 March 2024
Revenue analysed by class of business:	£	£	£

Brand ownership	4,130,094	3,615,063	7,748,048
Brand acceleration	1,770,107	4,081,351	8,204,409
Distribution	360,463	355,635	740,999
Nomad Checkout	48,203	69,157	149,337
Other	14,408	11,103	79,876
Total revenue	6,323,275	8,132,309	16,922,669

Cost of sale by business unit:	£	£	£

Brand ownership	1,272,027	1,323,972	2,772,796
Brand acceleration	1,101,391	1,680,524	3,539,317
Distribution	149,520	183,627	351,413
Nomad Checkout	-	20,231	31,707
Other	-	-	311
Total cost of sale	2,522,939	3,208,355	6,695,544

Segment assets:

The non-current assets of the Group are not measured or reported internally on a segmental basis as they are not considered to be attributable to any specific business segment.

	Unaudited	Unaudited	Audited
	30 September 2024	30 September 2023	31 March 2024
Revenue by geographical destination:	£	£	£

UK	3,625,447	3,076,487	6,529,226
China	2,473,549	4,829,173	9,764,724
Rest of the World	224,279	226,649	628,719

Total revenue	6,323,275	8,132,309	16,922,669

4. Expenses by nature

An analysis of the Group's expenses by nature is as follows:

	Unaudited	Unaudited	Audited
	30 September 2024	30 September 2023	31 March 2024
Administrative expenses:	£	£	£
Property costs	102,142	125,386	246,956
Staff costs	1,747,184	2,039,593	3,932,703
Professional fees	275,405	221,678	476,932
Other	318,956	395,918	748,681
Impairment on intangible assets	-	1,489,580	2,080,746
Restructuring costs	93,127	77,292	457,594
Share based payment charge	75,680	101,274	191,800
Profit on disposal of Brand Asset	(1,083,127)	-	-
Total administrative expenses	1,529,367	4,450,721	8,135,412

5. Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP measures and exclude exceptional items, depreciation, and amortisation. Exceptional items are those items the Group considers to be non-recurring or material in nature that may distort an understanding of financial performance or impair comparability.

Adjusted EBITDA is stated before exceptional items as follows:

	Unaudited	Unaudited	Audited
	30 September 2024	30 September 2023	31 March 2024
	£	£	£

Restructuring costs	(93,127)	(77,292)	(457,594)
Share based payment charge	(75,680)	(101,274)	(191,800)
Profit on disposal of Brand Asset	1,083,127
Impairment on intangible assets	-	(1,486,580)	(2,080,746)
	914,320	(1,665,146)	(2,730,140)

6. Earnings per share

	Unaudited	Unaudited	Audited
	30 September 2024	30 September 2023	31 March 2024
	£	£	£

Basic earnings/(loss) per share	0.13 pence	(5.19) pence	(8.15) pence
Diluted earnings/(loss) per share	0.12 pence	(5.19) pence	(8.15) pence

Earnings
Profit/(loss) for the purpose of basic and diluted earnings per share	73,430	(3,029,365)	(4,756,999)

Number of shares
Basic and diluted weighted average number of shares in issue	58,358,201	58,358,201	58,358,201

7. Intangible assets

	Development costs	Trademarks	Brands	Goodwill	Website	Total
	£	£	£	£	£	£
Cost
At 1 April 2024	3,587,428	64,988	2,024,175	2,813,283	69,350	8,559,224
Additions	-	1,503	-	-	-	1,503
Disposal	-	(6,454)	-	-	-	(6,454)
Acquisitions	-	-	249,832	840,221	-	1,090,053
At 30 September 2024	3,587,428	60,037	2,274,007	3,653,504	69,350	9,644,326
Amortisation
At 1 April 2024	3,587,428	28,225	308,130	10,236	39,544	3,973,563
Amortisation charge	-	3,379	66,312	-	5,486	75,176
Disposal	-	(4,543)	-	-	-	(4,543)
At 30 September 2024	3,587,428	27,061	374,442	10,236	45,030	4,044,197

Net book value
At 31 March 2024	-	36,763	1,716,045	2,803,047	29,806	4,585,661
At 30 September 2024	-	32,975	1,899,565	3,643,268	24,320	5,600,129

	Development costs	Trademarks	Brands	Goodwill	Website	Total
	£	£	£	£	£	£
Cost
At 1 April 2023	3,406,596	118,220	2,484,091	2,829,718	70,980	8,909,605
Additions	142,897	5,032	-	-	-	147,929
At 30 September 2023	3,549,493	123,252	2,484,091	2,829,718	70,980	9,057,534

Amortisation
At 1 April 2023	1,066,292	46,611	433,640	-	24,178	1,570,721
Amortisation charge	347,406	8,153	80,980	-	9,553	446,092
Impairment*	1,489,580	-	-	-	-	1,489,580
At 30 September 2023	2,903,278	54,764	514,620	-	33,731	3,506,393

Net book value
At 31 March 2023	2,340,304	71,609	2,050,451	2,829,718	46,802	7,338,884
At 30 September 2023	646,215	68,488	1,969,471	2,829,718	37,249	5,551,141

8. Inventories


	30 September 2024	30 September 2023	31 March 2024
	£	£	£

Finished goods	2,148,220	3,112,475	2,770,112
Provision for obsolescence	(267,084)	(539,628)	(399,171)
Total inventories	1,881,136	2,572,847	2,370,941

Cost of inventory recognised in profit and loss	2,522,939	3,208,355	6,695,544

9. Share capital

	Number of shares	Share capital
	No.	£
At 30 September 2023, 31 March 2024 and 30 September 2024	58,358,201	583,581

10. Notes to the statements of cash flows

Net debt reconciliation:

	Opening balances	Cash flows	Non-cash movements	Closing balances
	£	£	£	£
Six-month period ended 30 September 2024
Cash and cash equivalents	867,524	(183,983)	(1,853)	681,688
Right of use lease liabilities	(716,400)	55,601	(224,780)	(885,579)
Borrowings	(1,496,488)	(224,385)	(77,418)	(1,798,291)
Totals	(1,345,364)	(352,767)	(304,051)	(2,002,182)

Six-month period ended 30 September 2023
Cash and cash equivalents	2,017,150	(358,867)	360	1,658,643
Right of use lease liabilities	(573,785)	164,888	(9,204)	(418,101)
Borrowings	(1,453,298)	30,324	(36,304)	(1,459,278)
Totals	(9,933)	(163,655)	(45,148)	(218,736)

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