TIDMEISB
RNS Number : 4276K
East Imperial PLC
05 May 2022
5 May 2022
East Imperial PLC
("East Imperial" or the "Company" or the "Group")
EAST IMPERIAL AUDITED FULL-YEAR RESULTS FOR THE YEARED 31
DECEMBER 2021
East Imperial, the global purveyor of ultra-premium beverages,
today announces audited full-year results for the year ended 2021
and a strong start to 2022 in line with the Company's expansion
plans.
Summary
-- Admission to trading on the London Stock Exchange on 19 July
2021, raising GBP3m to fund the expansion of the Company and
capitalise on the increasing demand across the ultra-premium
beverage market.
-- Sales up 62% over the year to GBP2.8 million driven by the
lifting of Covid-19 restrictions in the second half of 2021 across
key markets as well as growth in off-trade and Direct to Consumer
(DTC).
-- Strong balance sheet and cash to fund further expansion
through 2022. Net cash of GBP 0.3 million as of 31 December 2021
and GBP2.2 million as of 31 March 2022 following GBP3.4m placing in
January 2022.
Strategic Highlights
-- Significant new distribution agreements signed including SUTL
Group in Singapore and the wider Indochina region, Leung Yick in
Hong Kong and Republic National Distribution Company (RNDC) in the
US (signed post period end).
-- New supply agreements reached across Australia and New
Zealand including 245 Dan Murphy's stores, one of Australia's
largest and most-respected alcoholic beverage retailers, Woolworths
New Zealand and Foodstuffs, New Zealand's largest supermarket
chain.
-- Successful new product launches including a popular can
format as well as the release of Coffee and Tonic, the Company's
first entry into the rapidly growing cold brew coffee market.
-- Further progress attracting top industry talent including the
appointment of a new Head of Sales in the US.
GBPm 2021 2020 Change
------------------------- ------ ------
Revenue 2.79 1.72 62%
Gross Profit 0.53 0.48 11%
Operating Profit/(loss) (2.2) (1.0) (121%)
Net Cash 0.27 0.24 12%
------------------------- ------ ------
Tony Burt, Founder and CEO, said:
"I'm delighted with the progress that we made last year and in
particular the popularity of our premium product range among
existing and new customers.
"Clearly the pandemic created some exceptional challenges with
much of the on-trade market still shut for large parts of last
year. However, we experienced strong growth in the off-trade
market, benefitting from a number of new supply agreements with
major retailers, and as the on-trade market began to open up, we've
been very encouraged by the level of sales.
"We raised a further GBP3.4m at the start of this year to
increase the pace of expansion, particularly in the US where we see
the fastest growth opportunity. Our recent distribution agreement
with RNDC, a major US distributor, was a huge step forward in our
US strategy and we're excited about the opportunity to make a
step-change in sales as a result.
"We have been encouraged by trading so far this year and the
progress we are making against our strategy. Like every company in
our industry, we are having to manage supply chain headwinds which
are impacting costs. However, we do expect to mitigate this impact
through greater operational efficiency this year.
"Today, the demand for 'premiumisation' by consumers continues
unabated and underpins our strategy and the long-term opportunity
for East Imperial. I am confident we have the platform, the team
and the resources to become the most admired premium band of mixers
and create a highly valued company for our shareholders."
For more information on East Imperial, please visit
https://investors.eastimperial.com/
Enquiries:
MHP Communications
Peter Hewer +44 (0)20 3128 8100 / +44 (0) 770 9326 261
Catherine Chapman +44 (0)20 3128 8100
eastimperial@mhpc.com
Chairman's Statement
I am pleased to present the first financial results for the East
Imperial Group as a listed company.
The Company's performance in 2021 was pleasing as we saw
significant growth demonstrating its recovery from the COVID
impacted 2021 year, reporting revenues of GBP2.8m up by 62%.
Revenue improvement has come as a result of widening our channel
extension strategy in New Zealand and seeing the Company extend its
presence in retail. We have also seen our key customers in the US
market return to more normalised trading patterns, which is
encouraging. This in combination with the recent signing of a
national distribution agreement with the Republic National
Distributing Company (RNDC) highlights the importance of this
market for us as part of our growth in 2022.
2021 was a transformational year for the Company as it listed on
the London Stock Exchange and put in place the foundations for
growth. The executive management has had to face some unprecedented
headwinds due to the ongoing challenges and the effects of a global
pandemic on both the demand and supply sides. But Tony Burt and the
team have adapted brilliantly which is a testament to the strong
culture of flexibility and innovation he has created and leads.
In January 2022 the Group raised GBP3.4m via a placement of new
shares, largely to existing shareholders and we thank them for
their ongoing support of the business, our people and our strategy.
The funds raised will be used to cover the Group's working capital
and general corporate needs as well as to finance ongoing growth
initiatives.
The Board went through some changes at the end of 2021. I joined
as Chairman and Colin Henry as independent Non- Executive Director.
We are both excited about the opportunity ahead of us and are happy
to report that we have joined a highly effective board with
executive directors who hold the capabilities to ensure this
business achieves its ambitions.
The Board is encouraged by a good start to the year and expects
to make continued progress in the delivery of its growth
strategies. The long-term growth drivers and in particular the
premiumisation of the drinking experience globally remain strong.
This sits positively with our vision of providing our end customers
with exceptional drinking experiences.
Alistair McGeorge
Non-Executive Chairman
CEO Review
2021 was a transformative year for East Imperial in so many
ways; it was the second year of managing our sales and operations
through a global pandemic and with it the well-publicised travel
and industry restrictions.
The Company successfully listed on the London Stock Exchange on
the 19th of July 2021. At the same time, we raised GBP3m to fund
the expansion of the Company and capitalise on the increasing
demand across the premium beverage market.
With funding secured we had five clear months left in 2021 to
make up the year and execute our plans; new products, new
distribution, new people, and ways of working in a PLC environment.
Of course, this has become more challenging with the backdrop of
global supply chain challenges that all importers and exporters
continue to experience, leading to delays and inflationary cost
pressures.
Adding to this, 2021 was another year of disruption caused by
COVID. Historically, our key markets have been New Zealand,
Singapore, Hong Kong, China and the US, and our growth can be
widely attributed to our focus and success in the luxury, quality,
and high-end on-premise channel. COVID clearly disrupted our
original plans for 2020 and this rolled into 2021. It meant we
re-prioritised some of our key projects to adapt to new consumer
behavior and opportunities, such as eCommerce, and off-premise
activities. We made a number of key hires to reflect the shifting
priorities of the business adding a Global Head of Supply Chain and
a Global Head of Digital.
Our approach through the disruption has been to quickly adapt,
and this informed our strategy for a more multi-channel approach
across all regions we operate in. That said, I was pleased to see
2021 as a strong year of recovery for East Imperial. Sales were up
65% YoY in 2021, highlighting the Group's resilience and our
ability to navigate the challenges presented to us and the scale of
the opportunity ahead of us.
Strategic Highlights
-- The Asia Pacific region is the cornerstone of the East
Imperial brand story. We are a fiercely proud Asian Pacific brand,
and it remains a tremendous asset for us globally. Through 2021.
China, Singapore and Hong Kong sales have all continued to be
affected, with our distributor partner challenged in adapting their
own business model. This resulted in the appointment of our new
distribution partner in Singapore and the wider Indochina region,
SUTL Group. Also, the appointment of Leung Yick as our new
distribution partner for Hong Kong. These are both important
appointments for the Company and align with our strategy as we
continue to go wider and deeper in the region.
-- In August 2021, we achieved a significant step forward as we
looked to accelerate our retail offering, a core element of our
growth strategy. It was pleasing to announce a series of
significant new supply agreements across Australia and New Zealand.
Firstly, 245 Dan Murphy's stores, one of Australia's largest and
most-respected alcoholic beverage retailers as well as an agreement
with Woolworths New Zealand, where we have our range in Countdown
stores across 110 locations in New Zealand. In a separate
agreement, Foodstuffs, New Zealand's largest supermarket chain,
also agreed to stock East Imperial's beverages in all of its New
World supermarkets across New Zealand's South Island, in addition
to the outlets already supplied on the North Island. Both these
agreements provided a step-change in East Imperial's off-trade
offering and took the total number of retailers supplied across the
region to over 1,000 outlets.
-- In the US, a number of notable luxury on-trade accounts
started reopening their doors back in June 2021, albeit with
tighter restrictions meaning depletions were naturally lower than
normal. Sales improved in the second half of the year as
restrictions eased and consumer confidence returned. It was
pleasing to see depletions in the key cities of Los Angeles and
Miami return and exceed pre-COIVD levels in Q4, in doing so
providing positive momentum into 2022.
With funding secured in July 2021, the Company hired the Head of
Sales for the US, Mark Zonghetti, who officially started in
November 2021. Perhaps the biggest and most important development
in the US was the recent announcement of a national distribution
deal with the US's second-largest distributor, Republic National
Distribution Company (RNDC). This agreement initially provides us
with distribution into 11 states and is an exciting first step for
us, aligning with our strategic focus for growth in the US, a
region we see as a major contributor over the coming years.
-- Direct to Consumer (DTC) continues to make a meaningful
contribution to overall numbers, with East Imperial stores now
present and operational in New Zealand, Australia and the US.
Amazon US and Australia both went live in late November 2021.
Operationally, 2021 has seen us continue to refine and develop
the relationship with our new New Zealand based bottler whom we
started with in December 2020. Together we have introduced our core
range, a new format in cans and equipment into their business and
we are now one of their top 2 volume customers. In anticipation of
the continued global logistics challenges, combined with the
strategic importance of the US, we are now working to bring
bottling to the US in 2022. This will allow us to control costs
more effectively and become more proactive to the demands of this
market.
The team have done an incredible job operating in such a
challenging environment to successfully bring to the market a
number of new products. Leading with the can format is an important
prerequisite for our DTC and off-premise strategy. Added to this,
Coffee & Tonic has now been successfully canned and launched in
the New Zealand and Australian market, with other regions earmarked
for Q2 2022. All of which reaffirm East Imperial's reputation as an
innovator within the market and the team's ability to deliver under
the restraints of the current operational environment.
We enter 2022 with a strong balance sheet and cash to fund
further expansion throughout the year.
Sustainability
Ingredient sourcing, manufacturing, packaging and distribution
all affect people, communities and environments. Our vision is to
build a sustainable global beverage business, delivering ethically
manufactured products with a minimal negative impact on the
environment.
We are committed to creating products that are as sustainable as
possible without compromise. We remain committed to our journey to
continue to reduce our greenhouse gas emissions and operational
waste through:
-- Evaluating all operational decisions against the carbon footprint they create.
-- Commitment to produce our products closer to our key markets.
-- Optimise distribution networks and utilisation across our operations.
In no way have we arrived at our final destination, but we have
already taken a number of positive decisions and steps to protect
the environments we operate within. These include:
-- We have never, nor do we plan to ever use PET bottles.
-- We only use 100% recyclable cans and bottles.
-- Reduction in packaging requirements for our direct to consumer orders and deliveries.
-- We use no plastic in any of our primary packaging. Our
cardboard packaging is 100% recyclable, and we will continue to
increase the proportion of recycled material across all our
packaging solutions.
-- Water conservation and quality are pivotal to the East
Imperial brand story and as such we only source our water from
springs that are sustainably managed.
People
Our people and our team are our most important assets. We remain
committed to attracting and retaining the very best people while
ensuring a diverse, sustainable, and high performing workforce.
We are committed to creating the next generation of industry
leaders who will in turn support their own communities and help
them thrive. As we grow our team, we will also continue to provide
them with the following:
-- Opportunities for training and career progression.
-- Personal development and continuous improvement.
-- Financial reward is based upon personal and company performance.
-- Help in achieving the ideal work/life balance.
-- Always provide them with a safe workplace where everyone is treated with respect.
We actively promote diversity within our team and wholly support
equal opportunities in employment. We know that diversity can only
be achieved through a team made up of differing backgrounds and
perspectives and that this is the prerequisite to creating a more
dynamic and inclusive environment.
We are already an incredibly diverse bunch, from our executive
team, operational team to our board of directors. We walk the walk
and are staunch advocates of diversity that reflect the communities
in which we operate.
Strategy and Outlook
Sharing Our Brand With More of the World
COVID and the knock-on effect of extended lockdowns on both the
on-premise channel and global supply chains disrupted our original
plans for 2021, but the Company and team remained agile in adapting
in the face of global headwinds and seeking out new opportunities
for growth. It meant we re-prioritised some of our key projects to
adapt to new consumer behaviour and opportunities, such as
eCommerce, and off-premise activities.
As the overall global premium mixer category continues to grow,
so does the placement of our competitor's product in channels
traditionally reserved for budget brands. It is this continued
shift we are seeing in the market, we believe, that is allowing
East Imperial to fill the demand for a more discerning consumer at
the upper-end of the market.
The Directors believe that East Imperial's positioning as the
ultra-premium choice, combined with a notable shift in consumer
consumption and behaviour continues to present the unique
opportunity to grow market share in key strategic territories. In
the new COVID-19 world it means we will continue to serve our
traditional luxury and high-end on-premise accounts as they come
back online, whilst pulling forward our plans for a multi-channel
approach, including off-premise (specialty food and liquor stores)
and direct to consumer, both with a deep digital customer
acquisition focus.
Through investing in marketing, collaborations, new products,
technology, and people, it is our intent to continue to focus on
growing our leadership position in the Asia Pacific, whilst
continuing to pursue strong multi-channel growth in the US. We have
been encouraged by trading so far this year and the progress we are
making against our strategy. Like every company in our industry, we
are having to manage supply chain headwinds which are impacting
costs. However, we do expect to mitigate this impact through
greater operational efficiency this year and are excited for the
growth opportunities ahead of us.
________________________________________________________________________________________________________
Financial Review
The Group's performance in 2021 was pleasing as we saw
significant growth demonstrating its recovery from the COVID
impacted 2020 reporting revenues of GBP2.8m up by 62%. Revenue
improvement has come as a result of widening our channel extension
strategy in New Zealand and seeing the Company extend its presence
in retail. This is an important element of de-risking the business
from its on-premise channel reliance of the past. We have also seen
our key customers in the US market return to more normalised
trading patterns, which will become a key element of our 2022
growth.
The 2021 gross margin of 21.4% reflects a drop compared to 29.4%
in 2020. Both years reflect the industry-wide challenges of the
supply chain through this period. Continued issues with shipping
availability, in addition to the escalating costs, meant we had to
move and hold additional product in the US market so to ensure
supply continuity. This added additional costs due to the elevated
warehousing capacity required.
The pressures on margins will be addressed as volume grows and
as we move to bottle products closer to key markets in 2022. In
anticipation of the continued global logistics challenges, combined
with the strategic importance of the US, we are now working to
bring bottling to the US in 2022. This will allow us to control
costs more effectively and become more proactive to the demands of
this market. We remain focused on margin improvement opportunities
in the medium term while also focusing on driving significant
top-line growth.
Emerging from the impacts of COVID, we have remained focused on
the significant opportunity ahead for the Group. We have continued
to invest in the brand, our people and our ability to execute on
growth. This led to underlying operating expenses increasing by
64.4% to GBP2.45m (2020: GBP1.49m). As a percentage of the Group's
revenue, this has remained steady at 88% for 2021 compared to 87%
for 2020.
People costs increased by 36.3%, while sales and
marketing-related expenses increased by 61.2%, both reflecting the
investment in growth opportunities. We will continue to invest in
the building of our team in 2022, with a particular focus on the
building of capability and growth capacity in the US. We remain a
lean operating organisation but will invest in people where there
are significant growth opportunities.
The Group generated an operating loss before exceptional costs
of GBP2.2m (2020: GBP1.0m) was in line with expectations reflecting
the ongoing investment in growth.
The Group generated an NPAT loss of GBP5.37m (2020: GBP0.97m)
which included exceptional costs of GBP3.06m.
Exceptional costs represent one-off costs incurred by the Group
in connection with the listing on the London Stock Exchange on 19
July 2021. The amount of GBP2,536,000 represents the deemed cost of
listing in the period, being the excess fair value of the shares
deemed to have been issued to acquire Bermele Plc over its net
assets acquired.
2021 2020
GBP000 GBP000
------- -------
Listing costs - transaction and 520 -
advisor fees
------- -------
Listing costs - reverse acquisition 2,536 -
expense
------- -------
3,056 -
------- -------
Tax
On 31 December 2021 the company had unutilised tax losses of
GBP6,766,000 (31 December 2020: GBP5,412,000). A deferred tax asset
of GBP1,345,000 (31 December 2020: GBP1,081,000) has not been
recognised due to the uncertainty around the timing of the
availability of taxable income to utilise the losses
Cash Position
At the year-end, the Group had cash balances of GBP266,000
(2020: GBP244,000) and net current assets of GBP1,211,000 (2020:
net current liabilities GBP710,000). The company raised a further
GBP3,400,000 as part of a private placement of new share issuance
in January 2022, which is to be used to cover working capital, and
to finance ongoing growth initiatives.
Going Concern
The financial statements have been prepared on a going concern
basis. The Directors have carefully assessed the Group's ability to
continue trading and have a reasonable expectation that the Group
and Company have adequate resources to continue in operational
existence for at least twelve months from the date of approval of
these financial statements and for the foreseeable future.
In the annual report, the Group's activities and an outline of
the developments taking place in relation to its products, services
and marketplace are considered in the Chief Executive's review. The
principal risks and uncertainties and mitigations are included in
the strategic report. The Directors have assessed the strategic
plan and forecasts prepared for the next three years. An assessment
of cash flows for the next three financial years has indicated an
expected level of cash generation in combination with the capital
raised in January 2022 would be sufficient to allow the Group to
fully satisfy its working capital requirements and cover all
principal areas of expenditure.
The preparation of financial statements in accordance with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the year. Although these estimates are based on
management's best knowledge of the amount, events or actions, the
actual results may ultimately differ from those estimates.
Having assessed the principal risks and the other matters
discussed over a three-year period to December 2024, the Directors
consider it appropriate to adopt the going concern basis of
accounting in preparing its consolidated financial statements.
Principal Risk
The Group maintains a risk register and monitors risks
associated with the business including finance, legal, personnel,
and macro and micro environmental factors. Risks are assessed and
discussed at the management and Board level on a regular basis,
assessing the impact, likelihood and mitigation strategies are
carefully considered. East Imperial's principal risks and
uncertainties can be found in the annual report.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
2021 2020
GBP000 GBP000
Continuing operations
Revenue 2,779 1,719
Cost of sales (2,243) (1,236)
-------------------------------- ------------------------------
Gross Profit 536 483
Administrative Expenses (2,449) (1,490)
Exceptional costs (3,056) -
Other Operating Income - 32
Share Based Payments (248) -
Operating (loss) (5,217) (976)
Finance income/(expense) (153) 4
(Loss) before tax (5,370) (972)
Income tax - -
(Loss) for the year (5,370) (972)
-------------------------------- ------------------------------
Other Comprehensive Income
Items that may be subsequently reclassified
to profit or loss:
Foreign exchange differences
on consolidation 139 (91)
Total Comprehensive (Loss)
for the Year (5,231) (1,063)
-------------------------------- ------------------------------
Loss attributable to :
Owners of the company (5,231) (1,063)
-------------------------------- ------------------------------
Earnings per share (EPS) Pence Pence
Basic EPS (0.0199) (0.0040)
Diluted EPS (0.0199) (0.0040)
Consolidated Statement of Financial Position as at 31 December
2021
As at 31 December 2021
2021 2020
Assets GBP000 GBP000
Non - Current Assets
Intangible assets 2,228 2,256
Property, Plant and
Equipment 45 35
Right of Use Assets 62 -
Total Non-Current
Assets 2,335 2,291
----------------------------------------- ----------------------------------------
Current Assets
Cash and Cash Equivalents 266 245
Trade and Other Receivables 566 412
Inventories 1,849 596
Total Current Assets 2,681 1,253
----------------------------------------- ----------------------------------------
Total Assets 5,016 3,544
----------------------------------------- ----------------------------------------
Current Liabilities
Trade and Other Payables 1,535 2,114
Lease Liability 37 -
----------------------------------------- ----------------------------------------
Total Current Liabilities 1,572 2,114
----------------------------------------- ----------------------------------------
Net Current Assets/(Liabilities) 1,109 (861)
----------------------------------------- ----------------------------------------
Non-Current Liabilities
Lease liability 24 -
Total Non-Current
Liabilities 24 -
----------------------------------------- ----------------------------------------
Net Assets 3,420 1,430
----------------------------------------- ----------------------------------------
Equity attributable to owners of
the parent
Share Capital 3,057 222
Share premium 4,033 1,098
Share option reserve 248 -
Reverse acquisition
reserve 5,040 3,837
Foreign exchange
reserve 48 (91)
Retained Earnings
/ (Losses) (9,006) (3,636)
Total Equity 3,420 1,430
----------------------------------------- ----------------------------------------
Consolidated Statement of Cash Flows for the Year Ended 31
December 2021
For the year ended 31 December 2021
2021 2020
GBP000 GBP000
Cashflows from operating activities
(Loss) for the year (5,370) (972)
Adjusted for:
Depreciation, amortisation
and impairments 55 34
Deemed cost of listing in reverse
acquisition 2,536 -
Share based payments 248 -
------------------------------------ -----------------------------------
(2,531) (938)
Decrease/(increase) in trade
and other receivables 154 703
Increase/(decrease) in trade
and other payables 491 159
(Increase)/decrease in inventories (1,253) (151)
------------------------------------ -----------------------------------
Cashflows from operations (3,139) (227)
Cashflows from investing activities
Acquisition of property, plant
and equipment (19) (16)
------------------------------------ -----------------------------------
Net cash flows from investing
activities (19) (16)
------------------------------------ -----------------------------------
Cashflows from financing activities
Lease payments (38) -
Proceeds from issue of ordinary
shares 3,082 -
------------------------------------ -----------------------------------
Net cashflows from financing
activities 3,044 -
Net increase/(decrease) in
cash and cash equivalents (114) (243)
Foreign exchange differences to cash and
cash equivalents
on consolidation (2) (3)
Cash and cash equivalents at
1 January 245 84
------------------------------------ -----------------------------------
Cash and cash equivalents 266 245
Overdraft (137) (407)
Cash and cash equivalents at
31 December 129 (162)
------------------------------------ -----------------------------------
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2021
For the year ended 31 December
2021
Reverse
Share
Share Share Option Forex Acquisition Retained Total
Capital Premium Reserve Reserve Reserve Earnings Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2020 222 1,098 - - 3,837 (2,665) 2,493
Loss for the
year - - - - - (972) (972)
Forex
retranslation
difference - - - (91) (91)
------------------------ ------------------------ ------------------------ ------------------------- ------------------------ ------------------------ -----------------------
Total
comprehensive
income - - - (91) - (972) (1,063)
At 31 December
2020 222 1,098 - (91) 3,837 (3,636) 1,430
------------------------ ------------------------ ------------------------ ------------------------- ------------------------ ------------------------ -----------------------
At 1 January
2021 222 1,098 - (91) 3,837 (3,636) 1,430
Loss for the
year - - - - - (5,370) (5,370)
Forex
retranslation
difference - - - 139 - - 139
------------------------ ------------------------ ------------------------ ------------------------- ------------------------ ------------------------ -----------------------
Total
comprehensive
income - - - 139 - (5,370) (5,231)
Reverse
acquisition 2,467 415 - - 1,203 - 4,085
Issue of
shares 300 2,700 - - - - 3,000
Share issue
costs - (180) - - - - (180)
Exercise of
options 68 - - - - - 68
Share Based
Payments - - 248 - - - 248
At 31 December
2021 3,057 4,033 248 48 5,040 (9,006) 3,420
------------------------ ------------------------ ------------------------ ------------------------- ------------------------ ------------------------ -----------------------
1. General information and basis of preparation
East Imperial plc is a public company limited by shares and
registered in England and Wales with company number 10973102. The
company is domiciled in the United Kingdom and the registered
office is 6thfloor, 60 Gracechurch Street, London, EC3V OHR. The
consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the "Group"). The Company
changed its name from Bermele plc to East Imperial plc on 19 July
2021.
The principal activity of the Group is the sale and distribution
of beverages in Australasia, United States, United Kingdom,
Singapore and Europe.
The annual financial information presented in this preliminary
announcement is based on, and is consistent with, that in the
Group's audited financial statements for the year ended 31 December
2021 which have been prepared in accordance with UK adopted
International Accounting Standards in conformity with the Companies
Act 2006, and consistent with the accounting policies as disclosed
in Part V 'Financial information of East Imperial Group' in the
company's prospectus issued in connection with the readmission of
the company's shares to trading on the Official List on 19 July
2021. The Group's audited financial statements will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting. The independent auditors' report on those financial
statements is unqualified and does not contain any statement under
section 498 (2) or 498 (3) of the Companies Act 2006. The
Independent auditors have drawn attention to a material uncertainty
in relation to going concern arising from management strategies in
place to increase revenue and cash generation still being in their
implementation phase.
Information in this preliminary announcement does not constitute
statutory accounts of the Group within the meaning of section 434
of the Companies Act 2006.
The financial statements of the Group are presented in Pounds
Sterling and all values are rounded to the nearest thousand pounds
(GBP'000) except when otherwise stated.
The Group financial statements consolidate those of the Company
and its subsidiaries' undertakings drawn up to 31 December 2021.
Subsidiaries are entities over which the Group has control. Control
comprises an investor having power over the investee and is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
On 19 July 2021, the Company completed a reverse acquisition of
East Imperial Pte, a company registered in Singapore. Further
information about this transaction is disclosed in note 3.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra- group transactions, are
eliminated. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence
of impairment.
The comparative period for the Group is 1 January 2020 to 31
December 2020 and includes the results of the subsidiaries
only.
2. Reverse Acquisition
On 19 July 2021, the Company acquired through a share for share
exchange the entire shares of East Imperial Pte. Limited whose
principal activity is beverage distribution.
Although the transaction resulted in East Imperial Pte Limited
becoming a wholly-owned subsidiary of the Company, the transaction
constitutes a reverse acquisition as the previous shareholders of
East Imperial Pte Limited own a substantial majority of the
Ordinary Shares of the Company and the executive management of East
Imperial Pte Limited became the executive management of East
Imperial Plc, previously Bermele plc.
In substance, the shareholders of East Imperial Pte Limited
acquired a controlling interest in the Company and the transaction
has therefore been accounted for as a reverse acquisition. As the
Company's activities prior to the acquisition were purely the
maintenance of the LSE Listing, acquiring East Imperial Pte Limited
and raising equity finance to provide the required funding for the
operations of the acquisition it did not meet the definition of a
business in accordance with IFRS 3 for the purpose of these
consolidated financial statements of the Group.
Accordingly, in these consolidated financial statements, the
reverse acquisition did not constitute a business combination and
was accounted for in accordance with IFRS 2 "Share-based Payments"
and the associated IFRIC guidance. Although the reverse acquisition
is not a business combination, the Company has become a legal
parent and is required to apply IFRS 10 and prepare consolidated
financial statements. The Directors have prepared these
consolidated financial statements using the reverse acquisition
methodology, but rather than recognising goodwill, the difference
between the equity value given up by the East Imperial Pte Limited
shareholders and the share of the fair value of net assets gained
by the East Imperial Pte Limited shareholders is charged to the
statement of comprehensive income as a share-based payment on the
reverse acquisition and represents in substance the cost of
acquiring the main market listing.
In accordance with reverse acquisition accounting principles,
these consolidated financial statements represent a continuation of
the consolidated statements of East Imperial Pte Limited. and
include
-- The assets and liabilities of East Imperial Pte Limited at
their carrying value amount and the results for both years; and
-- The assets and liabilities of the Company as at 18 July 2021
and its results from the date of the reverse acquisition (19 July
2021) to 31 December 2021.
On 19 July 2021, the Company issued 240,702,581 ordinary shares
to acquire the whole of the share capital of East Imperial Pte
Limited. The prospectus dated 30 June 2021 had an issue price of
GBP0.10 per share of the Company's share capital to be issued and
therefore valued the investment in East Imperial Pte Limited at
GBP24,070,258.
Because the legal subsidiary, East Imperial Pte Limited, was
treated on consolidation as the accounting acquirer and the legal
Parent Company, East Imperial Plc, was treated as the accounting
subsidiary, the fair value of the shares deemed to have been issued
by East Imperial Pte Limited was determined to be GBP2,828,805,
being the number of shares in issue of East Imperial Plc of
28,288,054 valued at GBP0.10 share price.
The fair value of the net assets of East Imperial plc at
acquisition was as follows:
GBP'000
Receivables 427
------------------------
Payables (134)
------------------------
Total Net Liabilities 293
------------------------
The difference between the deemed cost (GBP2,828,805) and the
fair value of the net assets acquired per above of GBP292,879
resulted in GBP2,535,927 being recognised as a reverse acquisition
expense within Exceptional Costs in accordance with IFRS 2,
Share-Based Payments, reflecting the economic cost to East Imperial
Pte Limited shareholders of acquiring a quoted entity.
The reverse acquisition reserve which arose from the reverse
takeover is made up as follows:
GBP'000
Pre-acquisition equity 9,929
--------------------------
East Imperial Pte Limited equity at acquisition 6,565
--------------------------
Investment in East Imperial Pte Limited. (24,070)
--------------------------
Reverse acquisition expense 2,536
--------------------------
5,040
--------------------------
3. Segmental Reporting
The Group derives revenue from the sale of beverages. All
entities in the group derive income from these products which, in
all aspects except details of revenue, are reviewed and managed
together within the Group and as such are considered to be the only
segment.
The following information is given about the Group's reportable
segments:
Revenue by Country of
Type % destination %
Beverage distribution 100 New Zealand/Australia 57%
United States 15%
China 8%
Singapore 7%
European Union 10%
Rest of the world 3%
100%
-----
4. Earnings Per Share
2021 2020
GBP 000 GBP 000
Net Loss from continuing operations (5,370,000) (972,000)
Weighted average number of shares (000) 270,295,861 240,702,581
------------------ --------------
Earnings per Share (GBP .00) (0.0199) (0.0040)
------------------ --------------
As at 31 December 2021 there are 9,276,832 options that are
exercisable at dates after 31 December 2021. These options are
anti-dilutive. Diluted earnings per share is therefore equal to
earning per share.
The issue of 32,398,999 shares in January 2022 will have a
dilutionary effect on earnings per share in the next reporting
period.
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END
FR FIFSEEDIEIIF
(END) Dow Jones Newswires
May 05, 2022 02:01 ET (06:01 GMT)
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