AQUABELLA GROUP PLC ("Aquabella" or the "Company")
INTERIM RESULTS FOR 6 MONTHS ENDED 30 SEPTEMBER 2006
Aquabella, an aquaculture company involved in the indoor farming of Barramundi
producing high quality, farmed fish from a sustainable and controlled
environment announces continued progress during the 6 months to 30 September
2006.
The Interim Results to 30 September 2006 are the first for the Group following
admission to AIM on 5 September 2006.
30 September 30 September 31 March
2006 2005 2006
Turnover 188,195 815 1,308
Gross (loss)/profit (116,849) 815 (91,583)
Operating loss (792,333) (205,651) (1,192,007)
Retained (loss)/profit (810,670) (146,793) (1,175,821)
before and after tax
Highlights:
* Selling to Waitrose, Morrisons & Sainsbury's;
* Exciting new retail prospects for 2007 in UK & Europe;
* International orders placed; and
* Initial retail feedback very positive
CHAIRMAN'S STATEMENT
The Business
Aquabella was established to develop and operate through its subsidiary,
International Aqua Farms Ltd (IAF), an indoor fish farm located in Lymington,
Hampshire - The New Forest. With increased public concern about the declining
wild fish stocks and risks associated with outdoor fish farm techniques, the
Company believes that a market opportunity exists in producing high quality
farmed fish from sustainable stock in a controlled environment. The Company is
growing Barramundi, a white-fleshed Australian native fish, which it chose
because of its success in Australia and South East Asia where it has a high
reputation for consistently fine flavour and texture.
Operational Highlights
Development of the farm was completed in April 2006 with a limited number of
fish lifted for sale to retail and wholesale customers during that and
subsequent months. However, understanding the importance of quality of product
to the consumer, since April 2006, we have continued to focus on developing the
taste and texture the Company believes is desirable to the Western European
palate through improvement in the production process and in particular water
quality. Since April 2006, enhanced commissioning of the plant has included
construction of a new de-nitrification plant, together with an improved sludge
management process and a proprietary ozone injection system.
Continued improvements in the production facility, particularly the standard of
the water brought about by the above actions, has culminated in improved
standards in fish production and taste. The company is moving towards in-house
gutting and filleting as marketing trials for both filleted and smoked
Barramundi have demonstrated that the Company will benefit from this broadening
of our product range.
Results
This six month period includes the improvements to facilities, de-nitrification
and sludge management as set out above.
Turnover in this period amounted to �188,195, with an operating loss arising of
�792,333 (2005: �205,651). Costs of sales in the 6 months were �305,044,
significantly higher than sales because of costs associated with marketing and
production. Margins are expected to improve in the second quarter of 2007.
No dividend will be paid for the period. As at 30 September 2006 the Company
had net cash resources of �484,826 (excluding finance lease debt).
Working Capital
In the period the Company raised �1.716 million, net of expenses in a private
placement of six million shares of 4p each at a price of 100 pence per share.
Since flotation, additional expenditure has been incurred as indicated above
resulting in net cash balances being lower than planned but nonetheless
adequate for our present requirements.
Current Trading
We are delighted to have the continued support of Waitrose since our product
launch in April 2006. Other retailers have since followed including Morrisons
in August 2006 and Sainsbury's in October 2006. Additional sales are being made
to wholesalers such as M&J Seafood and Costco. There have also been new orders
placed by customers from France.
Turnover has increased to approximately �50,000 per month in the period under
review, and sales by weight increased to approximately 2,500 kilos per week.
Our average selling price has been maintained and although seasonal variations
(notably Christmas when sales of fish tend to be lower) and the need to provide
promotional incentives may affect this in the short term, we believe prices
will be sustained at current levels for the our targeted markets going forward.
As indicated above working capital was underpinned by the equity placing at
admission to AIM and part of these proceeds were applied to unplanned capital
costs associated with technical improvements and bolstering sales to our new
retail partners.
It is planned to extend the farm to increase annual production subject to the
financial resources being available.
Prospects
Sales in the period since 30 September 2006 indicate that, if this trend
continues the second half of the year will show an improvement in sales overall
compared with the first half of 2006.
Pre-Christmas customer tastings in a number of Waitrose stores have received
positive customer feedback. We are targeting restaurant sales in London and
locally in the New Forest commencing in January 2007. A series of tastings with
top chefs is planned early in the New Year.
With the significant improvements to the production process completed and the
quality of product established, the board believes the Company is well
positioned to develop the footholds it has established in the retail and
wholesale markets, to feels confident to launch New Forest Barramundi into
France and the restaurant trade.
Pieter Tott�
Chairman
Tel. 020 7234 0570
AQUABELLA GROUP PLC
Consolidated Profit and Loss Account
Six months ended 30 September 2006
Unaudited Unaudited Audited
Notes 6 months to 6 months to 10 months to
30 September 30 September 31 March
2006 2005 2006
TURNOVER 188,195 815 1,308
Cost of sales (305,044) - (92,891)
GROSS (LOSS)/PROFIT (116,849) 815 (91,583)
Selling & distribution costs (75,915) (1,180) (19,528)
Administrative expenses (599,569) (205,286) (1,080,896)
OPERATING LOSS (792,333) (205,651) (1,192,007)
Profit on ordinary activities (792,333) (205,651) (1,192,007)
before interest and taxation
Interest receivable 6,883 58,939 29,369
Interest payable (25,220) (81) (13,183)
LOSS ON ORDINARY ACTIVITIES (810,670) (146,793) (1,175,821)
BEFORE TAXATION
Tax on loss on Ordinary - - -
Activities
PROFIT/(LOSS) ON ORDINARY (810,670) (146,793) (1,175,821)
ACTIVITIES BEFORE TAXATION
Dividends - - -
Retained profit for the period (810,670) (146,793) (1,175,821)
Basic and diluted losses per 3
share
- basic (5.0)p (1.1)p (7.9)p
- diluted (4.9)p (1.0)p (7.9)p
All amounts relate to continuing activities.
There are no recognised gains and losses other than those reported in the
profit and loss account.
AQUABELLA GROUP PLC
Consolidated Balance Sheet
As at 30 September 2006
Unaudited Unaudited Audited
Notes As at As at As at
30 September 30 September 31 March
2006 2005 2006
Fixed Assets
Intangible 42,993 44,905 -
Tangible 2 4,753,802 2,705,521 4,609,065
4,796,795 2,750,426 4,609,065
Debtors: due after more than 153,000 325,000 325,000
one year
Current assets
Stocks 302,897 - 77,058
Debtors 199,360 161,889 65,390
Cash at bank and in hand 484,826 143,948 186,658
987,083 305,837 329,106
Creditors: amounts falling due (686,526) (576,481) (717,151)
within one year
Net current assets 300,557 (270,644) (388,045)
Total assets less current 5,250,352 2,804,782 4,546,020
liabilities
Creditors : amounts falling (362,746) - (500,000)
due after more than one year
Net assets 4,887,606 2,804,782 4,046,020
Capital and reserves
Called up share capital 730,394 562,270 638,279
Share premium 6,070,649 2,840,074 4,562,329
Shares to be issues under - - 255,000
share based payment schemes
Profit and loss account (1,913,437) (597,562) (1,409,588)
Total equity shareholders' 4,887,606 2,804,782 4,046,020
funds
AQUABELLA GROUP PLC
Consolidated Cash Flow Statement
Six months ended 30 September 2006
Unaudited Unaudited Audited
Notes 6 months to 6 months to 10 months to
30 September 30 September 31 March
2006 2005 2006
(i) Reconciliation of
operating loss to net cash
flow from operating activities
Operating loss (810,670) (146,794) (1,192,007)
Share based payments charged - - 255,000
against operating profit
Amortisation charges 1,102 - -
Depreciation 239,401 - 999
Movements in working capital:
Decrease/(increase) in stocks (225,840) - (77,057)
Decrease/(increase) in debtors (63,787) (55,375) 133,415
Increase/(decrease) in (235,618) 486,756 (388,385)
creditors
Net cash inflow from operating (1,095,412) 284,587 (1,268,035)
activities
Cash Flow Statement
Net cash inflow from operating (i) (1,095,412) 284,587 (1,268,035)
activities
Returns on investments and (11,049) 58,857 16,187
servicing of
Finance
Capital expenditure and (292,440) (2,846,841) (2,824,071)
financial investment
Cash outflow before financing (1,398,901) (2,503,397) (4,075,919)
Financing 1,696,869 25,000 2,438,379
Increase/(decrease) in cash in 297,968 (2,478,397) (1,637,540)
the period
Reconciliation of net cash
flow to movement in net debt
Increase/(decrease) in cash in 297,968 (2,478,397) (1,637,540)
the period
Cash decrease/(increase) 19,608 - (500,000)
from change in debt and lease
financing
Change in net (debt)/funds 317,576 (2,478,397) (2,137,540)
Net debt at the beginning of (313,342) - 1,824,198
the period
Net funds/(debt) at period end 4,234 (2,478,397) (313,342)
Notes to the Financial Statements
1. Basis of preparation
The interim results for the six months ended 30 September 2006 are unaudited
and do not constitute accounts within the meaning of section 240 of the
Companies Act 1985. The interim results have been drawn up using accounting
policies and presentation consistent with those applied in the audited accounts
for the period ended 31 March 2006.
The information in respect of the period ended 31 March 2006 has been extracted
from the statutory accounts for the period which has been delivered to the
Registrar of Companies. The report of the auditors on those statutory accounts
was unqualified.
2. Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided at rates calculated to write off the cost of fixed assets, less their
estimated residual value, over their useful life on the following bases:
Land and buildings - 4% straight line
Plant and machinery - 4%-20% straight line
Office equipment - 25% straight line
Leasehold property is being depreciated over the expected useful economic life
of the building.
The company capitalises tangible fixed assets in accordance with Financial
Reporting Standard 15 "Tangible Fixed Assets". Expenditure of a revenue nature
is taken to the profit and loss account when it is incurred.
3. Earnings per share
Basic earnings per share is calculated on the loss on ordinary activities after
taxation of �810,669 (2005 loss, �146,973) and on 16,355,844 (2005:13,441,434)
ordinary shares, being the weighted number in issue during the period.
The calculation of diluted earnings per share is based on the consolidated loss
on ordinary activities after tax for the financial year of �810,669 (2005: �
146,973) and on 16,443,574 (2005: 14,221,873) ordinary shares. This being
16,355,844 (2005: 13,441,434) ordinary shares diluted for the effect of 87,730
(2005: 780,439) ordinary shares being the weighted average number of warrants
and options in issue.
Copies of this report are available to the public at the registered office of
Aquabella Group plc at:
53 Lafone Street
Shad Thames
London SE1 2LX
Independent review report to the Directors of Aquabella Group plc
Horwath Clark Whitehill LLP have been instructed by the company to review the
financial information set out in these interim financial statements and we have
read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report, including the conclusion, has been prepared for and only for the
Company for the purpose of the AIM Rules and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into those hands it may
come save where expressly agreed by our prior consent in writing.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and was approved by the directors on 22 December 2006.
The continuing obligations of the AIM listing rules require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4 issued by the Auditing Practices Board. A review consists principally of
making enquiries of management and applying analytical procedures to the
financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly, we do not express an audit opinion on the
financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
Horwath Clark Whitehill LLP
Chartered Accountants
10 Palace Avenue
Maidstone
Kent
ME15 6NF
Date: 22 December 2006
END
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