DJ Samarkand Group plc: Interim Results
Samarkand Group plc (SMK)
Samarkand Group plc: Interim Results
11-Dec-2023 / 07:00 GMT/BST
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11 December 2023
Samarkand Group plc
("Samarkand", the "Company" or together with its subsidiaries the "Group")
Interim Results
Samarkand Group plc, the cross-border eCommerce technology, services and consumer brand group, announces its unaudited
interim results for the half year ending 30 September 2023 ("H1 2024").
Financial Highlights
-- Revenues have decreased by 1% to GBP8.1m (H1 2023: GBP8.3m)
-- Brand Ownership revenues are up 18% to GBP3.6m (H1 2023: GBP3.1m)
-- Nomad Technology enabled revenue decreased by 11% to GBP2.4m (H1 2023: GBP2.7m)
-- Distribution revenues decreased by 22% to GBP1.8m (H1 2023: GBP2.3m)
-- Gross margin increased 11% to GBP4.9m (H1 2023: GBP4.4m)
-- Adjusted EBITDA loss reduced by 47% to GBP0.7m (H1 2023: GBP1.4m)
Operational Highlights
-- Napiers the Herbalist, generated high levels of revenue growth propelled by successful launch on Amazon
and expanded channel partnership in China
-- Zita West UK revenue grew strongly in the period driven by significant success on Amazon and the launch
of single nutrient products
-- Improved operating efficiency across the business and strong progress in reducing inventory levels and
improving stock turns
-- Recruited new local senior leader for China operations to lead our team in Shanghai
-- Decision to cease supporting the Checkout website plugin product for the foreseeable future
David Hampstead, Chief Executive Officer of Samarkand Group, commented: "The forecast recovery of the Chinese market
has not yet materialised, impacting our growth in China in FY 2024. Achieving profitability remains our top priority
and as such, we have taken another significant step towards achieving this goal. The Board is confident that we
continue to make strong progress towards profitability albeit behind our planned timetable. We are demonstrating that
we are able to acquire and grow a portfolio of owned brands and are establishing a successful scaleup platform for
niche brands. We acknowledge that the current share price does not reflect the value of the business, as is the case
with many listed companies in the micro-cap arena. We are focused on delivering on our strategy and expect that as we
make progress, this will ultimately be reflected in the market value of the Company."
For more information, please contact:
Samarkand Group plc Via Alma PR
David Hampstead, Chief Executive Officer
http://samarkand.global/
Eva Hang, Chief Financial Officer
VSA Capital - AQSE Corporate Adviser and Broker +44(0)20 3005 5000
Andrew Raca, Alex Cabral (Corporate Finance)
IPO@vsacapital.com
Andrew Monk, David Scriven (Corporate Broking)
Alma Strategic Communications +44(0)20 3405 0213
Josh Royston
Robyn Fisher samarkand@almastrategic.com
Joe Pederzolli
Notes to Editors
Samarkand is a cross-border eCommerce technology and retail group focusing on connecting International Brands with China, the world's largest eCommerce market. The Group has developed a proprietary software platform, the Nomad technology platform, which is integrated across all necessary touchpoints required for eCommerce in China including eCommerce platforms, payments, logistics, social media and customs. The Group owns a portfolio of niche UK health and beauty brands that it develops in China and international markets.
Founded in 2016, Samarkand is headquartered in London, UK with an office in Shanghai.
For further information please visit https://www.samarkand.global/
CEO Review
The first half of this financial year has brought some challenges, particularly in the core Chinese market, causing a slowdown in our topline growth. Despite the setback, I'm pleased to report significant year on year reductions in our losses, although the weaker first half has delayed our overall progress towards profitability within this financial year.
In the period, sales decreased 1% against the prior period (H1 2023: GBP8.3m) however gross profit increased 11% to GBP4.9m (H1 2023: GBP4.4m) which demonstrates our ability to create a more profitable mix. June, which is traditionally a peak shopping period for Chinese consumers fell short of our initial expectations broadly in line with market trends as Chinese consumer behaviour shifts away from peak shopping festivals. Excluding June, Group sales grew on average 7% compared to the previous year which is a positive trend albeit a lower overall growth rate than forecast at the beginning of the year.
Adjusted EBITDA losses reduced to GBP0.7m from GBP1.4m, a 47% reduction from the same period last year. We continue to make strong progress towards profitability.
UK based sales of our owned brands grew 11% versus last year due to channel expansion, new product launches and effective customer engagement. We are pleased with the momentum on our owned brands and expect this to be maintained as we see the benefit of improvements made to them. Throughout the first half, excluding China, UK and rest of the world sales of owned brands and our distribution activities accounted for 41 % of Group revenues and grew 13% compared to the prior year creating a better balance between China and UK based activities across the Group.
China based sales decreased 9% compared to last year and have, as yet, not matched our expectations following the end of lockdowns. The main contributing factors to this shortfall has been the slower than forecast performance in June and the introduction of new brands to our portfolio taking longer to convert to material sales. This is against the backdrop of a cautious Chinese consumer environment and increased competition in the form of higher levels of discounting across sales channels.
On my recent visit to China, I was able to work closely with our local team and our channel partners. This visit has already begun to yield new sales opportunities which started to materialise in H2 2024. Additionally, we have appointed a new senior leader for our China operations, who brings extensive experience in China's eCommerce landscape and a proven track record of operating as a senior executive for multinational consumer goods companies in China.
We have taken further selective cost action in the period and are working on additional structural cost actions to be implemented in H2.
Following a review of the commercial impact and the future prospects of our Checkout website plugin product, we have decided to stop supporting this specific product. The decision aligns with the Group's commitment to its strategic objective to move towards profitability. As a result we have recognised a non-cash impairment expense of GBP1.49m for the carrying value of the intangible asset. Whilst the adoption of our Checkout website plugin product has not met our expectations, our Nomad technology platform remains integral to our core cross-border eCommerce transactions.
Our cash position at the end of September was GBP1.65m, down from GBP2.0m at the end of March 2023.
Outlook
Q3 is off to a positive start with revenues in October 2023 19% ahead of last year and losses 63% lower than last year. November is historically our peak trading month, however in line with industry trends, November 2023 has traded behind the prior year in China. Our owned brands in the UK have traded well ahead of prior year.
We are confident in the continued growth of our owned brands in FY 2024 and are establishing a successful scaleup platform for niche brands. With the wider economic challenges in China and a fast-changing eCommerce landscape it is difficult to give a definitive forecast on Q4 trading at this stage. We expect Group revenues to be broadly in line with prior year.
While we are likely to miss our full year EBITDA target due to lower than planned revenue, the combined effect of our cost actions on an annualised basis put the business in a strong position to reach profitability in the following year. As a result of actions taken throughout FY 2024, we expect to enter FY 2025 in a materially better position than FY 2024 on a run rate basis.
The Company is exploring options to accelerate the growing parts of the business which may include new strategic partners and the disposal and/or restructuring of non-core assets.
David Hampstead
Chief Executive Officer
FINANCIAL REVIEW
Overview
During the period the Group's revenues decreased by 1% to GBP8.1m (H1 2023: GBP8.3m). Gross profit increased by 11% to GBP4.9m (H1 2023: GBP4.4m) with gross margin increasing to 61% (H1 2023: 54%).
Brand ownership is up 18% to GBP3.6m (H1 2023: GBP3.1m), Nomad technology is down 11% to GBP2.4m (H1 2023: GBP2.7m) with revenues from our distribution business decreasing 22% to GBP1.8m (H1 2023: GBP2.3m). Revenue growth in China was dampened by a weaker June month caused by a combined effect of changing shopper behaviour, lower consumer confidence and cancellation of planned channel activities.
The Group's gross profit increased in H1 2023 from GBP4.4m to GBP4.9m and gross margin has increased in H1 2023 from 54% to 61% and improved overall from those levels achieved in FY 2023. The change in gross margin is a result of changes in our product mix and sales channels.
Adjusted EBITDA loss improved by 47% from GBP1.4m to GBP0.7m.
Operating expenses
Selling and distribution expenses increased to 34% (H1 2023: 28%) of revenue, as a result of a change in sales mix and increasing distribution and inflationary costs seen in the last six months.
Administrative expenses, excluding one-off costs such share-based payment expense, acquisition and restructuring related costs, decreased to 34% (H1 2023: 42%) of revenue as a result of tighter controls over other administrative costs. The number of employees at 30 September 2023 was 85 (30 September 2022: 117), down from 158 at 31 March 2022.
Earnings per share
Basic and diluted loss per share was 5.19p (H1 2023: 3.8p per share).
Net cash/(debt)
Sep-23 Sep-22 Mar-23 Cash and cash equivalents 1,658,643 3,054,184 2,017,150 Right-of-use lease liabilities (418,101) (590,164) (573,785) Borrowings (1,459,278) (1,451,113) (1,453,298) Net cash/(debt) (218,736) 1,012,907 (9,933)
At the period end, the Group's net debt position was GBP0.2m (H1 2023: net cash GBP1.0m), excluding the IFRS 16 lease liabilities, net cash was GBP0.2m (H1 2023: GBP1.6m). The Group's reduction in staff and operational costs has resulted in 99% improvement in operating cashflow from negative GBP2.0m to GBP7,802.
Inventories
The Group reduced gross inventories from GBP3.4m to GBP3.0m. Improvements in inventory management and ordering process 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 GBP0.2m and GBP0.4m respectively (H1 2023: GBP0.2m and GBP0.3m). The Group reduced its investment in its Nomad Technology platform and a result development cost capitalised during the period reduced to GBP0.1m (H1 2023: GBP0.6m).
Adjusted EBITDA loss
Adjusted EBITDA loss improved by 47% from GBP1.4m to GBP0.7m. The improvements in adjusted EBITDA loss is driven principally by the decrease in staff cost and operating costs.
Condensed Consolidated Statement of Comprehensive Income
For the six-month period ended 30 September 2023
Year ended
Period ended 30 Period ended 30
September 2023 September 2022 31 March
2023
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
Revenue 3 8,132,309 8,254,207 17,476,825
Cost of sales 3 (3,208,355) (3,814,675) (7,814,362)
Gross profit 4,923,954 4,439,532 9,662,463
Selling and distribution expenses (2,805,574) (2,325,694) (5,381,270)
Administrative expenses 4 (4,450,721) (3,776,853) (7,728,517)
Adjusted EBITDA (664,195) (1,392,232) (2,227,968)
Restructuring costs 5 (77,292) (157,031) (507,085)
Impairment on intangible assets 5 (1,489,580) - -
Share-based payment and related expenses 5 (101,274) (113,752) (712,271)
EBITDA (2,332,341) (1,663,015) (3,447,324)
Depreciation and amortisation (627,085) (521,189) (1,140,524)
Operating loss (2,959,426) (2,184,204) (4,587,848)
Finance income 2,051 64,539 20
Finance costs (106,084) (59,529) (162,502)
Loss before taxation (3,063,459) (2,179,194) (4,750,330)
Taxation 13,627 13,271 129,465
Loss after taxation (3,049,832) (2,165,923) (4,620,865)
Other comprehensive income:
Exchange differences on translation of foreign
operations
(6,034) (3,333) (47,859)
Items that may be reclassified to profit and loss
in subsequent periods
(6,034) (3,333) (47,859)
Total comprehensive loss for the period (3,055,866) (2,169,256) (4,668,724)
Loss attributable to:
Equity holders of the Company (3,029,365) (2,122,404) (4,571,494)
Non-controlling interests (20,467) (43,519) (49,371)
(3,049,832) (2,165,923) (4,620,865)
Loss per share (basic and diluted) 6 (0.0519) (0.0387) (0.0778)
Comprehensive loss attributable to:
Equity holders of the Company (3,035,399) (2,125,737) (4,619,353)
Non-controlling interests (20,467) (43,519) (49,371)
(3,055,866) (2,169,256) (4,668,724)
Condensed Consolidated Statement of Financial Position
For the six-month ended 30 September 2023
30 September 2023 30 September 2022 31 March 2023
(Unaudited) (Unaudited) (Audited)
Notes GBP GBP GBP
ASSETS
Intangible assets 7 5,551,141 7,265,902 7,338,884
Property, plant and equipment 160,291 236,470 203,417
Right-of-use assets 352,661 492,649 489,890
Non-current assets 6,064,093 7,995,021 8,032,191
Inventories 8 2,572,847 2,618,636 2,212,227
Trade receivables 1,343,409 2,125,136 1,722,637
Corporation tax recoverable 126,616 120,251 227,946
Other receivables and prepayments 540,997 785,409 706,513
Cash and cash equivalents 1,658,643 3,054,184 2,017,150
Current assets 6,242,512 8,703,616 6,886,473
Total assets 12,306,605 16,698,637 14,918,664
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 (15,829,992) (10,555,318) (12,901,901)
Currency translation reserve (85,394) (7,766) (79,360)
Total equity attributable to parent 5,558,795 10,911,097 8,492,920
Non-controlling interest (159,709) (133,390) (139,242)
Total equity 5,399,086 10,777,707 8,353,678
Right-of-use lease liabilities 107,066 323,341 260,779
Borrowings 1,403,516 1,394,412 1,398,787
Deferred tax liability 334,257 356,963 347,884
Accrued liabilities 512,441 512,441 512,441
Total non-current liabilities 2,357,280 2,587,157 2,519,891
Trade and other payables 2,298,133 1,709,326 2,088,101
Accrued liabilities 1,223,087 976,484 1,261,043
Deferred revenue 662,222 324,439 328,434
Borrowings 55,762 56,701 54,511
Right-of-use lease liabilities 311,035 266,823 313,006
Total current liabilities 4,550,239 3,333,773 4,045,095
Total liabilities 6,907,519 5,920,930 6,564,986
Total liabilities and equity 12,306,605 16,698,637 14,918,664
Condensed Consolidated Statement of Changes in Equity
For the six-month period ended 30 September 2023
Share Currency
Merger relief Non-controlling
Capital Share reserve Translation Accumulated Total
Premium reserve loss interests equity
GBP GBP GBP GBP GBP GBP GBP
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 - - - (6,034) (3,029,365) (20,467) (3,055,866)
period
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
Balance at 1 April 2022 547,148 21,022,958 (2,063,814) (31,501) (8,546,753) (89,871) 10,838,167
Loss after taxation - - - - (2,122,404) (43,519) (2,165,923)
Other comprehensive income/ - - - 23,735 - - 23,735
(loss)
Total comprehensive income/ - - - 23,735 (2,122,404) (43,519) (2,142,188)
(loss) for the period
Shares issued on acquisition net 458 29,042 - - - - 29,500
of fees
Shares issued on open offer net 35,976 1,902,413 - - - - 1,938,389
of fees
Share based payments - - - - 113,839 - 113,839
36,434 1,931,455 - - 113,839 - 2,081,728
Balance at 30 September 2022 583,582 22,954,413 (2,063,814) (7,766) (10,555,318) (133,390) 10,777,707
Condensed Consolidated Statement of Cash Flows
For the six-month period ended 30 September 2023
30 September 2023 30 September 2022 31 March 2023
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Cash flows from operating activities
Loss after taxation (3,049,832) (2,165,923) (4,620,865)
Cash flow from operations reconciliation:
Depreciation and amortisation 627,086 521,189 1,140,524
Impairment on intangible assets 1,489,580 - -
Finance costs 48,445 59,529 20,630
Finance income (2,051) (64,539) (20)
Net exchange differences - 64,531 -
Share option expense 101,274 113,752 216,346
Income tax credit (13,627) (13,271) (129,465)
Working capital adjustments:
Inventories (360,620) 1,101,612 1,508,021
Trade and other receivables 521,999 (385,470) 131,918
Trade and other payables 629,941 (1,257,504) (626,169)
Cash generated (used in) operating activities (7,805) (2,026,094) (2,359,080)
Interest paid - (11,243) -
Corporation tax paid - (6,897) (7,477)
Net cash generated (used in) operating activities (7,805) (2,044,234) (8,047,840)
Cash flows from investing activities
Purchase of property, plant and equipment (1,654) (44,218) (67,602)
Disposal of property, plant and equipment 1,565 1,925 9,336
Payment of intangible assets (147,929) (609,214) (1,095,564)
Payment of deferred consideration - (80,000) (80,000)
Interest received 2,051 8 20
Net cash (used in) investing activities (145,967) (731,499) (1,233,810)
Cash flows from financing activities
Proceeds from issue of share capital (net of fees) - 1,937,889 1,937,889
Repayment of right-of-use lease liabilities (164,888) (142,180) (329,001)
Interest paid (9,883) - (24,671)
Repayment of borrowings (30,324) (37,315) (71,131)
Net cash (used in)/from financing activities (205,095) 1,758,394 1,513,086
Net change in cash and cash equivalents (358,867) (1,017,339) (2,087,282)
Cash and cash equivalents at beginning of period 2,017,150 4,049,118 4,049,118
Effect of FX changes on cash and cash equivalents 360 22,405 55,314
Cash and cash equivalents at end of period 1,658,643 3,054,184 2,017,150
Notes to the Consolidated Financial Statements For the period ended 30 September 2023 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 & 14 Nelson Trading Estate, The Path, Merton, London SW19 3BL. 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 2023. These interim financial statements are not audited nor reviewed by independent auditors, were approved by the board of directors on [8 December 2023].
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 2023 and which will form the basis of the 2023 financial statements.
The financial information for the year ended 31 March 2023 included in these financial statements does not constitute the full statutory accounts for that year. The Annual Report and Financial Statements for 2023 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2023 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 (GBP) which is the currency of the primary economic environment in which the Group operates.
Transactions in foreign currencies are translated into GBP 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 2023, the Group faced another challenging year with ongoing widespread COVID lockdowns in China and China's rapid exit of the zero COVID position in December 2022. The Directors recognise the importance of moving the Group into profitability for the year ending 31 March 2024 and have made significant progress towards this goal. The Group's continued cost actions into H1 2024, have resulted in a 47% reduction in adjusted EBITDA losses from GBP1.4m to GBP0.7m. However, a weaker first half in China has limited the Group's progress.
The Directors continue to actively explore additional funding options to support the Group's operations and long-term viability. In this regard the Group is considering various options, including but not limited to, trade financing, sale of non-core assets and other strategic opportunities. These efforts are ongoing, and the Directors are diligently working towards these goals.
Despite the cost base reduction and ongoing exploration of additional funding, in the event that trading does not proceed as planned, 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. 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, the progress made in exploring various strategic options to raise additional funds and its pre-COVID trading record. The directors believe that these factors, will enable the group to overcome the identified challenges and continue its operations.
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.
The financial statements do not include the adjustments that would result if the Group is unable 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. 3. Segmental analysis
An analysis of the Group's revenue and cost of sales is as follows:
Unaudited Unaudited Audited
30 September 2023 30 September 2022 31 March 2023
Revenue analysed by class of business: GBP GBP GBP
Brand ownership 3,616,189 3,055,517 6,678,067
Nomad technology 2,417,380 2,727,147 6,027,090
Distribution 1,806,886 2,325,534 4,423,676
Other 291,854 146,009 347,992
Total revenue 8,132,309 8,254,207 17,476,825
Cost of sale by business unit: GBP GBP GBP
Brand ownership 1,319,992 1,292,910 2,516,506
Nomad technology 939,732 940,036 2,072,450
Distribution 948,631 1,579,483 3,222,704
Other - 2,246 2,702
Total cost of sale 3,208,355 3,061,619 7,814,362
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 2023 30 September 2022 31 March 2023
Revenue by geographical destination: GBP GBP GBP
UK 3,076,487 2,783,011 5,378,273
China 4,829,173 5,334,955 11,712,321
Rest of the World 226,649 136,241 386,231
Total revenue 8,132,309 8,254,207 17,476,825 4. Expenses by nature
An analysis of the Group's expenses by nature is as follows:
Unaudited Unaudited Audited
31 March
30 September 2023 30 September 2022
2023
Administrative expenses: GBP GBP GBP
Property costs 125,386 194,963 279,992
Staff costs 2,039,593 2,478,415 4,629,379
Professional fees 221,678 303,055 622,188
Other 395,916 529,637 977,602
Restructuring costs (a) 77,292 157,031 507,085
Share based payment charge 101,274 113,752 712,271
Total administrative expenses 2,961,138 3,776,853 7,728,517
(a) Restructuring costs are as a result of corrective actions taken in light of the challenges presented by the disruptions caused by the continued impacts of the pandemic in China. 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
31 March
30 September 2023 30 September 2022
2023
GBP GBP GBP
Restructuring costs 77,292 157,031 507,085
Share based payment charge 101,274 113,752 712,271
Impairment on intangible assets 1,486,580 - -
1,665,146 270,783 1,219,356
6. Loss per share
Unaudited Unaudited Audited
31 March
30 September 2023 30 September 2022
2023
GBP GBP GBP
Basic and diluted loss per share (5.19) pence (3.87) pence (7.78) pence
Earnings
Loss for the purpose of basic and diluted earnings per share (3,029,365) (2,122,404) (4,571,494)
Number of shares
Basic and diluted weighted average number of shares in issue 58,358,201 54,923,137 56,635,964
7. Intangible assets
Development costs Trademarks Brands Goodwill Website Total
GBP GBP GBP GBP GBP GBP
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
Development costs Trademarks Brands Goodwill Website Total
GBP GBP GBP GBP GBP GBP
Cost
At 1 April 2022 2,330,437 99,596 2,484,091 2,829,718 70,198 7,814,040
Additions 598,251 10,180 - - 783 609,214
At 30 September 2022 2,928,688 109,776 2,484,091 2,829,718 70,981 8,423,254
Amortisation
At 1 April 2022 493,548 32,503 271,680 - 5,073 802,804
Amortisation charge 257,229 6,785 80,980 - 9,554 354,548
At 30 September 2022 750,777 39,288 352,660 - 14,627 1,157,352
Net book value
At 31 March 2022 1,836,889 67,093 2,212,411 2,829,718 65,125 7,011,236
At 30 September 2022 2,177,911 70,488 2,131,431 2,829,718 56,354 7,265,902
* During six months period ending 30 September 2023, the Group continued its efforts towards the development and roll out of Nomad Checkout, its website plugin product. Significant progress was made in onboarding new clients, signifying positive trajectory for the product. In October 2023, an anticipated key partner decided not to pursue the integration and rollout of the product, this development necessitated a review of the commercial impact and the future of the Nomad Checkout product. After careful evaluation of the product's progress, and despite the progress made, the Group made the difficult decision to stop supporting the Nomad Checkout product. The decision aligns with the Group's commitment to its strategic objective to move towards profitability. As a result of this decision the Group has recognised a non-cash impairment expense of GBP1,489,580 which represents carrying value of the Nomad Checkout product at 30 September 2023. 8. Inventories
30 September 2023 30 September 2022 31 March 2023
GBP GBP GBP
Finished goods 3,112,475 3,363,195 2,980,627
Provision for obsolescence (539,628) (744,559) (768,400)
Total inventories 2,572,847 2,618,636 2,212,227
Cost of inventory recognised in profit and loss 3,208,355 3,814,675 7,814,364
9. Share capital
Number of shares Share capital
Note No. GBP
At 1 April 2022
51,618,966 516,190
Shares issued on 15 August 2022 45,802 458
Shares issued on 21 September 2022 3,597,616 35,975
At 30 September2022, 31 March 2023 and 30 September 2023 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
GBP GBP GBP GBP
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)
Six-month period ended 30 September 2022
Cash and cash equivalents 4,049,118 (1,017,339) 22,405 3,054,184
Right of use lease liabilities (720,353) 130,189 - (590,164)
Borrowings (1,452,127) 1,014 - (1,451,113)
Totals 1,876,638 (886,136) 22,405 1,012,907
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(END) Dow Jones Newswires
December 11, 2023 02:00 ET (07:00 GMT)
