27 October 2015
SANDAL PLC
FINAL RESULTS FOR THE YEAR TO 31 MAY 2015
The Board of Sandal plc, the designer, developer and manufacturer of electronic products announces its full year results for the year to 31 May 2015.
The year under review has seen a number of significant achievements:
- Admission of the ordinary shares to ISDX Growth Market raising £120,000
- Turnover increased by 14% (full year equivalent) to £3.3m
- Strong surplus cash resources
- Repeating overheads reduced
- Substantially increased spending on R&D and marketing
Commenting on the results, Alan Tadd, CEO said: "Whilst we are disappointed to be reporting a loss, we had budgeted for this as part of our strategic plan for the development of the MiHome range. However, the Company has strong surplus cash resources available to it and the underlying overhead cost base has been reduced. The Company is now poised for continued growth and expansion and we look forward to the future with confidence".
The directors of the issuer accept responsibility for the contents of this announcement.
Enquiries:
Sandal Plc 01279 422022
Alan Tadd, CEO
Oliver Tadd, Director
www.sandal-plc.co.uk
City&Merchant Ltd 020 7101 7676
David Papworth
MB Communications 07860 489571
Maxine Barnes
Note to Editors:
Sandal plc commenced business in 1996 and designs, develops and manufactures consumer electronics products. Its business is divided into two distinct product groups, PowerConnections, a long established wholesaler and reseller of a successful and patented range of converter plugs and power cables, and Energenie, which sells a newer product range that includes energy saving products, portable charging devices and the new MiHome range of products aimed at the "Home Automation" and "Internet of Things" marketplace.
PowerConnections is a supplier to customers, in the UK and abroad, of single-phase electrical connection products. The products are manufactured in three partner factories in the Far East and have distributors worldwide for its range of patented converter plugs. The Company's product portfolio consists of International Power Leads, Rewireable Plugs, Converters and Connectors. These products are stocked in the Far East, Australia and UK.
Energenie offers Eco and electrical, travel and energy saving products for homes and offices, reducing energy usage and the Home Automation sector. It has store listings for its current products with several large retailers including Homebase, Maplin, Amazon, Screwfix, Toolstation and ASDA.
The new range of MiHome home automation products makes the remote operation of everyday household appliances and energy monitoring more accessible to consumers due to better affordability and simplicity of control through smartphone and tablet connectivity.
The following information has been extracted from the Company's audited accounts for the year to 31st May 2015.
Strategic Report
Review of the business
The year under review has seen a number of significant achievements:
- Admission of the ordinary shares to ISDX Growth Market raising £120,000
- Turnover increased by 14% (full year equivalent) to £3.3m
- Strong surplus cash resources
- Repeating overheads reduced
- Substantially increased spending on R&D and marketing
In March 2015, the Company obtained a listing on the ISDX market and raised new share capital as part of this process. We have also used this listing to increase the Company's profile across the UK and elsewhere and in support of this, we have increased our advertising and marketing spend by over 50% and continued to invest in our Energenie product range, in particular the home automation MiHome range at a total cost in excess of £285,000.
The costs associated with the Company's admission, together with the budgeted extra spend on product development and marketing means that the Company has posted a loss for the period of £304,805 (2014 profit for the period £53,311). This loss included £290,000 which was spent on the initial development of the MiHome range and £274,000 which was spent on general marketing activities plus a further £123,500 on Professional and legal fees. This expenditure was fully budgeted and forms part of the Company's strategic plan for the development of the MiHome range.
The Company has strong surplus cash resources available to it and the underlying overhead cost base has been reduced. The Company is now poised for continued growth and expansion.
Since the year end, the Company has signed a distribution agreement with Computers Unlimited who will be a major partner for the launch of the MiHome installation products together with a new launch into the Irish Republic through Harvey Norman and Arnotts. Our products are now available at Amazon, Screw Fix, CPC and Argos among others.
The Company has also introduced a 20% discount scheme for shareholders, details of which can be found on the Company's website at www.sandal-plc.co.uk/reg-info.
As part of the ongoing marketing initiative, the Company showcases its product range at various retail and trade exhibitions throughout the year, details of which can also be found on the Company's website.
Future Developments
The Directors are seeking to expand the Energenie and MiHome turnover as rapidly as resources allow. As new products become available the distribution channels already opened will be receptive to these products as consumer interest in the Internet of Things continues to gather pace.
Strategy
The Directors Strategy is to continue to grow the MiHome and Energenie brands through existing products and new product development and access further markets across the globe.
Risks
The principle risks facing the Company are broadly competition and exchange rate movements.
Competitive Risks
The Company operates in a competitive market with technology changes which are continually reviewed against the Company's product offering and development programme. Where appropriate changes are made to improve the product range.
Exchange Rate Risks
Most of the Company's products are made in the Far East and invoiced in US dollars. The Company seeks to maximise billings in US dollars so as to provide an internal hedge against this exchange rate risk. Where appropriate the Company buys forward to minimise its short term risks.
Dividends
An interim dividend was paid amounting to £Nil (2014 £15,000). The directors do not recommend payment of a final dividend.
Directors
The following directors have held office since 1 June 2014:
Mr A J Tadd
Mr O J Tadd
Mrs S Tadd (Resigned 31 August 2014)
Mr T Rodger (Appointed 2 October 2014)
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.
On behalf of the board
Mr A J Tadd
Director
Date: 27 October 2015
Profit and Loss Account
For the Year Ended 31 May 2015
| Year | Period | ||||||||||||
| ended | ended | ||||||||||||
| 31 May | 31 May | ||||||||||||
| 2015 | 2014 | ||||||||||||
| £ | £ | ||||||||||||
| Turnover | 3,338,526 | 1,462,785 | |||||||||||
| Cost of sales | (1,995,662) | (903,347) | |||||||||||
| Gross profit | 1,342,864 | 559,438 | |||||||||||
| Administrative expenses | (1,661,389) | (526,118) | |||||||||||
| Other operating income | 1,519 | 6,333 | |||||||||||
| Operating (loss)/profit | (317,006) | 39,653 | |||||||||||
| Exceptional - warehouse closure costs | - | 20,000 | |||||||||||
| (Loss)/profit on ordinary activities before interest | (317,006) | 59,653 | |||||||||||
| Other interest receivable and similar income | 899 | 559 | |||||||||||
| Interest payable and similar charges | (11,264) | (5,981) | |||||||||||
| (Loss)/profit on ordinary activities before taxation | (327,371) | 54,231 | |||||||||||
| Tax on (loss)/profit on ordinary activities | 22,566 | (920) | |||||||||||
| (Loss)/profit for the year | (304,805) | 53,311 | |||||||||||
| Currency translation differences on foreign currency net investments | 2,672 | 10,710 | |||||||||||
| Total recognised gains and losses relating to the year | (302,133) | 64,021 | |||||||||||
| The profit and loss account has been prepared on the basis that all operations are continuing operations. | |
| There are no recognised gains and losses other than those passing through the profit and loss account. | |
Balance Sheet
As at 31st may 2015
| 2015 | 2014 | |||||||||||||
| £ | £ | £ | £ | |||||||||||
| Fixed assets | ||||||||||||||
| Intangible assets | 30,258 | 44,258 | ||||||||||||
| Tangible assets | 254,008 | 235,532 | ||||||||||||
| Investments | 101 | 55 | ||||||||||||
| 284,367 | 279,845 | |||||||||||||
| Current assets | ||||||||||||||
| Stocks | 739,948 | 665,352 | ||||||||||||
| Debtors | 703,385 | 483,458 | ||||||||||||
| Cash at bank and in hand | 347,535 | 744,825 | ||||||||||||
| 1,790,868 | 1,893,635 | |||||||||||||
| Creditors: amounts falling due within one year | (944,929) | (832,032) | ||||||||||||
| Net current assets | 845,939 | 1,061,603 | ||||||||||||
| Total assets less current liabilities | 1,130,306 | 1,341,448 | ||||||||||||
| Creditors: amounts falling due after more than one year | (93,421) | (133,846) | ||||||||||||
| Provisions for liabilities | (38,058) | (31,938) | ||||||||||||
| 998,827 | 1,175,664 | |||||||||||||
| Capital and reserves | ||||||||||||||
| Called up share capital | 323,470 | 310,000 | ||||||||||||
| Share premium account | | 111,826 | - | |||||||||||
| Other reserves | (1,403) | (4,075) | ||||||||||||
| Profit and loss account | 564,934 | 869,739 | ||||||||||||
| Shareholders' funds | 998,827 | 1,175,664 | ||||||||||||
| Approved by the Board and authorised for issue on 27 October 2015 | ||||||||||||||
| Mr A J Tadd | ||||||||||||||
| Director | ||||||||||||||
| 1 | Accounting policies | ||
| 1.1 | Accounting convention | ||
| The financial statements are prepared under the historical cost convention. | |||
| The directors confirm that they are satisfied that the company has adequate resources to continue in business for the foreseeable future. This has been determined by a review of the forecast budgets and expected trading performance for a period of at least 12 months from the date of approval of the financial statements. | |||
| 1.2 | Compliance with accounting standards | ||
| The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated). | |||
| 1.3 | Turnover | ||
| Turnover represents amounts receivable for goods and services net of VAT and trade discounts. | |||
| 1.4 | Goodwill | ||
| Acquired goodwill is written off in equal annual instalments over its estimated useful economic life. | |||
| 1.5 | Patents | ||
| Patents are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives. | |||
| 1.6 | Research and development | ||
| Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit. | |||
| 1.7 | Tangible fixed assets and depreciation | ||
| Tangible fixed assets other than freehold land are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows: | |||
| Leasehold improvements | 12.5% on cost | ||
| Tooling | 10% on cost | ||
| Plant and machinery | 10% on cost | ||
| Fixtures, fittings & equipment | 20% on cost | ||
| Motor vehicles | 25% on cost | ||
| 1.8 | Leasing and hire purchase commitments | ||
| Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period. | |||
| Rentals payable under operating leases are charged against income on a straight line basis over the lease term. | |||
| 1.9 | Investments | |
| Fixed asset investments are stated at cost less provision for diminution in value. | ||
| 1.10 | Stock and work in progress | |
| Stock and work in progress are valued at the lower of cost and net realisable value. | ||
| 1.11 | Pensions | |
| The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable. | ||
| 1.12 | Deferred taxation | |
| Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted. | ||
| 1.13 | Foreign currency translation | |
| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into stering at the rate of exchange ruling at the date of transaction. Exchange differences are taken into the profit and loss account for the year. | ||