20 October 2010
MARLWOOD PLC
("Marlwood" or "the Group")
UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE
2010
Marlwood PLC (CSX: MARL KY), a group specialising in the licensed goods business, is pleased to
announce its unaudited consolidated interim results for the six month period ended 30 June 2010.
Key features:

Revenue for the period £2,418,977 – continuing operations £1,669,591, discontinuing
operations £749,386.

Net profit for the period £1,303,153;
-

Profit per share £0.10.
-

operating loss from continuing operations £813,858
profit on disposal of discontinued operations £2,050,109
operating profit from discounted operations £66,902
loss on share from continuing operations £0.08
profit on share from discontinued operations £0.01
profit on share from disposal of discontinued operations £0.17
Successful disposal of Clearance division during the period.
Current Trading Position
The Group continues to trade at a level which is much lower than had previously been anticipated
due to a lack of working capital. There is a requirement for the Group to raise further funds in
order to improve trading conditions during the last quarter of 2010 and fund new business
development with major UK retailers. Discussions with current lenders continue and proposals for
an improved asset finance package are expected in late October.
The directors continue to manage the Group as effectively as possible given the current financial
position.
CHAIRMAN'S STATEMENT
On behalf of the Board of Directors of Marlwood plc, I have pleasure in presenting an update on
the Group's activities for the six month period ended 30 June 2010.
Marlwood PLC (“the Company”) was established as an investment holding vehicle for businesses
that operate in the licensing or branded goods market segments.
The Company is the 100% shareholder of four subsidiary undertakings, The Licence Factory
Limited (formerley New BAI International Limited), The New Licence Factory Limited, IdealDeal
Limited and The Licence Factory (Hong Kong) Limited.
On 24 June 2010 the Group completed the disposal of the clearance division of The Licence
Factory Limited and the trading operations of the Group now comprise the sourcing, marketing
and distribution of licensed branded goods.
On 9 March 2010 IdealDeal Limited (a dormant subsidiary undertaking) was dissolved.
Results
The results for the six month period ending 30 June 2010 report the following:
Revenues
Profit/(loss)
before tax
Earnings/(loss)
per share
Discontinued
operations
Continued
operations
Total
£
Sale of
discontinued
operations
£
£
749,386
66,902
1,669,591
(813,858)
2,050,109
2,418,977
1,303,153
£0.01
(£0.08)
£0.17
£0.10
£
The profit before tax is primarily attributable to the profit generated on the sale of the clearance
business as approved by the shareholders on 24 June 2010.
The board is disappointed with the overall result mainly as Q1 was in line with expectations and
indications were that the Q1 trend should continue. The net profit shortfall against the original
forecasts for the period as disclosed within the CSX Listing Document dated 16 September 2009
in Q2, and therefore the first half, was mainly the result of a number of events negatively
affecting the gross margin.





UK retailers placing orders later than usual leading to air freighting of goods to meet in
take dates
The strengthening of the US Dollar
Increases in raw material costs in China
A lack of labour in China leading to higher cost of goods
Shortage in working capital leading to discounting of goods for sale
Overall the margin shortfall was 17%. (£366,949) against that forecast within the CSX Listing
Document dated 16 September 2009.
Working capital has been restricted during Q2 due to delays in agreeing a new business finance
agreement with current lenders and the lack of new equity investment of £1m originally forecast
to be introduced in March 2010 (as disclosed within the CSX Listing Document dated 16
September 2009). The lack of cash resources has meant a reduction in the amount of stock
purchased for resale and therefore a reduction in revenues generated from sales of stocks from
our UK warehouse to smaller UK retailers.
Dividend
The board is not recommending a dividend as all funds are required for the development of the
business.
Events during the first half of 2010
Product development and distribution within our core competency of fashion accessories
continues under the brands of Elle, Head, RAC, Morgan, Cosmopolitan with range development
mainly in cosmetic bags, luggage and umbrellas with styling to meet ever changing fashion
trends.
The development of new products under new Brands continues to progress well ready for launch
at the businesses main trade fair at the NEC in September. New brands being launched are:

Bang on the Door

Marilyn Monroe

Gotcha
As highlighted in the disposal circular developments with other brands continued to be explored
by the Group. We are pleased to report that license agreements have been reached with RAC,
Pineapple and Lipsy with product being available across a wide number of categories including
cosmetic bags, luggage and gift products all available for sale in quarter one 2011. Discussions
continue with Kangol and Fila with no agreements being reached so far.
The licence with Alan Titchmarsh was terminated due to lower than expected revenues as a result
of Titchmarsh’s association with B & Q which has led to a fall in desire to list products by other
retailers.
Completion of the sale of the clearance business to Brennan Atkinson was confirmed on 24th June
2010. The focus of the trading entities will now be purely licensed business.
Events since the Balance sheet Date
On the 2nd of July the main trading entity of the Group, New BAI International Limited, changed
its name to The Licence Factory Limited.
Future Outlook
Difficult conditions discussed above are expected to continue throughout the remainder of 2010
despite efforts by the Board to improve funding available to the business. The current economic
climate seems to make it impossible to attract additional finance outside of the current facilities.
It is however likely that current lenders may look to increase the level of funding available to the
business during Q4 however this will be too late to have any serious positive impact on 2010
revenues. Following the initial placing in September 2009 there was the potential for further
investment in the sum of £1m which was indicated would be available to the Group in or around
March 2010. This investment has been delayed due entirely to matters outside the control of the
Group. There are positive signs that the funds will be invested but there is no certainty as to
timing or indeed that the investment will complete.
The board is delighted to report the success of new business development with Tesco Stores plc.
Initial orders for luggage and back to school products under the Elle and Head Brands have been
received with deliveries scheduled to start from November 2010 and continue through 2011, the
board is confident that business generated for 2011 will be material relative to the current
turnover of the business. New and additional business has also been generated with Avon which
will add to Brand exposure and revenues from Q4.
During Q2 cost savings have been implemented which will impact the business from Q3 through
to 2011. The result of these cost savings and the revenues expected to be generated from the
order book as at 31st August should provide the business with the foundation for growth in 2011
providing the business finance facilities with the current lender are improved in Q4.
With the current level of funding the business is not capable of producing the level of revenues
previously forecast for 2010 of £8.6m, based on the revenues generated to date, the value of the
sales order book and current weekly order intake rate the Board is confident of achieving
revenues in excess of £5m however this is dependant on current lenders improve their funding
levels early in quarter four. The cost base of the business has been reduced in line with the
expected reduction in turnover.
As a result of the aforementioned cost saving measures the directors are of the opinion that
provided the additional lending is obtained the company can continue to trade and settle all its
liabilities as and when they fall due. However for future investment or development, or if trade
declines for any reason the company, would need to attract additional equity investment.
The directors continue to identify opportunities to enhance the product offering with minimum
investment whilst fulfilling the ever demanding needs of the retailer.
Management and Employees
The Board would like to thank the management and employees who continue to react positively
in a challenging and changing environment.
V Bloom
Chairman
20 October 2010
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Note
Unaudited six
months ended
30 June 2010
£
Audited period
from 16
September to 31
December 2009
£
2,016,972
(1,414,957)
________
602,015
Continuing operations
Revenue
Cost of Sales
4
Gross Profit
4
1,669,591
(1,192,189)
________
477,402
Operating loss – continuing operations
4
(35,988)
(1,185,309)
________
(743,895)
(62,492)
(940,988)
________
(401,465)
Profit on disposal of discontinued operations
6
2,050,109
________
1,306,214
________
(401,465)
(69,973)
10
________
1,236,251
(32,294)
2,822
________
(430,937)
(326,351)
________
909,900
3,637
________
(427,300)
66,902
________
976,802
________
474,418
________
47,118
________
0.100
0.100
0.010
0.010
Distribution costs
Administrative expenses
Finance cost
Finance income
Profit/(loss) before taxation
Taxation
Profit/(loss) for the period
Profit for the year from discontinued
operations
Earnings Per Share (Pence)
- Basic earnings per share
- Diluted earnings per share
6
9
9
The consolidated income statement should be read in conjunction with the accompanying notes.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2010
Note
ASSETS
Non current assets
Property, plant and equipment
Goodwill
Intangible assets
Deferred income tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
10
Non current assets and disposal groups held for sale
Total Assets
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Income tax payable
Non current liabilities
Interest bearing loans and borrowings
Provisions for other liabilities and charges
Deferred tax liabilities
Total liabilities
Equity
Called up share capital
Share premium
Reverse acquisition reserve
Retained earnings
Total equity
Total equity and liabilities
11
11
Unaudited
six months
ended 30
June 2010
£
Audited period
ended 31
December
2009
£
270,425
4,877,470
1,850,000
39,387
________
7,037,282
303,058
4,877,470
1,850,000
39,387
________
7,069,915
250,397
1,231,275
70,118
________
1,551,790
________
8,589,072
________
359,105
2,722,664
50,559
________
3,132,239
789,576
________
10,991,819
________
1,975,560
1,006,194
326,351
________
3,308,105
2,368,045
1,362,879
1,112,500
167,386
35,750
________
1,315,636
________
4,623,741
4,069,230
167,386
35,750
________
4,272,366
________
8,003,290
970,900
7,143,909
(5,413,008)
1,263,530
________
3,965,331
________
8,589,072
________
970,900
7,143,909
(5,413,008)
286,728
________
2,988,529
________
10,991,819
________
________
3,730,924
The consolidated balance sheet statement should be read in conjunction with the accompanying
notes.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30
JUNE 2010
For the period from 19 August 2008 to 31 December 2009
Balance at 19 August
2008
Issue of share capital
Profit for the period
Reverse acquisition
Foreign exchange
movements
Balance at 30 June
2010
Share
Capital
Share
premium
Retained
Earnings
Total
£
Reverse
acquisition
reserve
£
£
£
£
2
-
-
-
2
970,898
-
7,143,909
-
(5,413,008)
47,118
239,756
8,114,807
47,118
5,173,252
________
________
________
(146)
________
(146)
________
970,900
________
7,143,909
________
(5,413,008)
________
286,728
________
2,988,529
________
Retained
Earnings
Total
£
£
For the six months ended 30 June 2010
Balance at 1 January
2010
Issue of share capital
Profit for the period
Balance at 30 June
2010
Share
Capital
Share
premium
£
£
Reverse
acquisition
reserve
£
970,900
7,143,909
(5,413,008)
286,728
2,988,529
________
________
________
976,802
________
976,802
________
970,900
________
7,143,909
________
(5,413,008)
________
1,263,530
________
3,965,331
________
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal
value of the respective shares net of directly attributable share issue expenses.
Retained earnings represent the cumulative earnings of the company attributable to equity
shareholders.
The consolidated statement of changes in equity should be red in conjunction with the
accompanying notes.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2010
Note
Cash flows from operating activities
Cash generated from operations
Interest paid
12
Net cash used in operating activities
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired
Cost directly attributable to acquisition
Purchase of property, plant and equipment (PPE)
Proceeds from sale of PPE
Interest received
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Proceeds from issuance of ordinary shares
Proceeds from borrowings
Repayment of borrowings
Loan amounts received from related parties
Repayment of amounts received from related parties
Net cash (outflow)/inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
10
Unaudited
six months
ended 30
June 2010
£
Audited period
ended 31
December
2009
£
945,328
(112,363)
________
832,965
________
(2,085,911)
(52,557)
________
(2,138,468)
________
10
________
10
________
16,136
(945,499)
(12,350)
4,295
2,822
________
(933,532)
________
(564,068)
(249,348)
________
(813,416)
________
19,559
2,185,000
405,133
(23,118)
555,544
________
3,122,559
________
50,559
50,559
________
70,118
________
________
50,559
________
The consolidated cash flow statement should be read in conjunction with the accompanying
notes.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
1. General information
Marlwood plc is a public limited liability company incorporated in England and Wales on 19
August 2008 under the Companies Act 2006 with the registration number 06676987 and
quoted on the Cayman Islands Stock Exchange. The address of the registered office is Unit 38
Newby Road, Hazel Grove, Stockport, Cheshire SK7 5AS.
On 24 June 2010 the Group completed the disposal of the clearance division of The Licence
Factory Limited. On 9 March 2010 IdealDeal Limited (a dormant subsidiary undertaking of the
Group) was dissolved.
Marlwood plc (“the Company”) and its subsidiaries (together “the Group) specialise in the
sourcing, marketing and distribution of licensed branded goods. The Group operates from the
registered office with the sourcing and distribution agency in Hong Kong, and sells mainly in
countries within the UK and Europe.
This condensed consolidated interim financial information was approved for issue on []
September 2010. This consolidated financial information has been reviewed, not audited.
2. Basis of preparation
The unaudited interim financial statements comprise the consolidated income statement,
consolidated balance sheet, consolidated cashflow statement and consolidated changes in
equity and the related explanatory notes for the six month period ended 30 June 2010.
The unaudited interim financial statements have been prepared in accordance with
International Accounting Standard 34 ‘Interim Financial Reporting’ (‘IAS 34’) and International
Financial Reporting Interpretations Committee (‘IFRIC’) interpretations as adopted by the
European Union (‘EU’).
Under IFRS 3 ‘Business combinations’ the New BAI International Limited and The New Licence
Factory Limited share exchanges have been accounted for as a reverse acquisition.
Although these consolidated financial statements have been issued in the name of the legal
parent, the Companies it represents in substance are a continuation of the financial
information of the legal subsidiaries, New BAI International Limited and The New Licence
Factory Limited, both of which were newly incorporated in 2008 and 2009 respectively and did
not begin trading until they purchased their respective businesses on the date of admission to
CSX, 16th September 2009. Therefore the income and expenses included within these results
relate to the period from 1 January 2010 to 30 June 2010 and there are no directly
comparative results. The results for the period ended 31 December 2009 cover the reporting
period from 16th September 2009 to 31st December 2009.
Marlwood plc is an existing preparer of IFRS consolidated financial statements; IFRS 1 “Firsttime adoption of International Financial Reporting Standards” is not applicable. Marlwood plc
is an issuer of shares and does not have listed debt.
The accounting policies used are consistent with those adopted in the annual financial
statements for the period ending 31 December 2009, subject to any changes to IFRS that may
be implemented in the mean time. These interim financial statements should be read in
conjunction with the consolidated financial statements for the period ended 31 December 2009
as they provide an update of previously reported information.
The preparation of the interim financial statements required management to make estimates
and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities
and disclosure of contingent liabilities at the date of the interim financial statements. If in the
future such estimates and assumptions, which are based upon the management’s best
judgement at the date of the interim financial statements, deviate from the actual
circumstances, the original estimates and assumptions will be modified as appropriate in the
period in which the circumstances change.
The interim report covers the period from 1 January 2010 to 30 June 2010.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
3. Accounting policies
The accounting policies are consistent with those of the annual financial statements for the
year ended 31 December 2009, except as described below.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable
to expected total annual earnings
(a) New and amended standards adopted by the Group
The following new standards and amendments to standards are mandatory for the first time
for the financial year beginning 1 January 2010.
IFRS 3 (revised), ‘Business combinations’, and consequential amendments to IAS 27,
‘Consolidated and separate financial statements’, IAS 28, ‘Investments in associates’, and IAS
31, ‘Interests in joint ventures’, are effective prospectively to business combinations for which
the acquisition date is on or after the beginning of the first annual reporting period beginning
on or after 1 July 2009.
The revised standard continues to apply the acquisition method to business combinations but
with some significant changes compared with IFRS 3. For example, all payments to purchase a
business are recorded at fair value at the acquisition date, with contingent payments classified
as debt subsequently re-measured through the income statement. There is a choice on an
acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either
at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net
assets. All acquisition-related costs are expensed.
As the Group has adopted IFRS 3 (revised), it is required to adopt IAS 27 (revised),
‘consolidated and separate financial statements’, at the same time. IAS 27 (revised) requires
the effects of all transactions with non-controlling interests to be recorded in equity if there is
no change in control and these transactions will no longer result in goodwill or gains and
losses. The standard also specifies the accounting when control is lost. Any remaining interest
in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss.
There has been no impact of IAS 27 (revised) on the current period, as none of the noncontrolling interests have a deficit balance. There have been no transactions whereby an
interest in an entity is retained after the loss of control of that entity; there have been no
transactions with non-controlling interests.
(b) Standards, amendments and interpretations to existing standards effective in 2010 but
not relevant to the Group




IFRIC 17, ‘Distributions of non-cash assets to owners’, effective for annual periods
beginning on or after 1 July 2009. This is not currently applicable to the Group, as it has
not made any non-cash distributions.
IFRIC 18, ‘Transfers of assets from customers’, effective for transfer of assets received on
or after 1 July 2009. This is not relevant to the Group, as it has not received any assets
from customers.
‘Additional exemptions for first-time adopters’ (Amendment to IFRS 1) was issued in July
2009. The amendments are required to be applied for annual periods beginning on or
after 1 January 2010. This is not relevant to the Group, as it is an existing IFRS preparer.
Improvements to International Financial Reporting Standards 2009 were issued in April
2009. The effective dates vary standard by standard but most are effective 1 January
2010.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
(c) The following new standards, new interpretations and amendments to standards and
interpretations have been issued but are not effective for the financial year beginning 1
January 2010 and have not been early adopted:






IFRS 9, ‘Financial instruments’, issued in December 2009. This addresses the classification
and measurement of financial assets and is likely to affect the Group’s accounting for its
financial assets. The standard is not applicable until 1 January 2013 but is available for
early adoption. The Group is yet to assess IFRS 9’s full impact. However, initial indications
are that it may affect the Group’s accounting for its available-for-sale financial assets, as
IFRS 9 only permits the recognition of fair value gains and losses in other comprehensive
income if they relate to equity investments that are not held for trading. Fair value gains
and losses on available-for-sale debt investments, for example, will therefore have to be
recognised directly in profit or loss. In the current reporting period, the Group recognised
C5,000 of such gains in other comprehensive income. The Group has not yet decided
when to adopt IFRS 9.
Revised IAS 24, ‘Related party disclosures’, issued in November 2009. It supersedes IAS
24, ‘Related party disclosures’, issued in 2003. The revised IAS 24 is required to be
applied from 1 January 2011. Earlier application, in whole or in part, is permitted.
‘Classification of rights issues’ (Amendment to IAS 32), issued in October 2009. For rights
issues offered for a fixed amount of foreign currency, current practice appears to require
such issues to be accounted for as derivative liabilities. The amendment states that if
such rights are issued pro rata to all the entity’s existing shareholders in the same class
for a fixed amount of currency, they should be classified as equity regardless of the
currency in which the exercise price is denominated. The amendment should be applied
for annual periods beginning on or after 1 February 2010. Earlier application is permitted.
‘Prepayments of a minimum funding requirement’ (Amendments to IFRIC 14), issued in
November 2009. The amendments correct an unintended consequence of IFRIC 14, ‘IAS
19 – The limit on a defined benefit asset, minimum funding requirements and their
interaction’. Without the amendments, entities are not permitted to recognise as an asset
some voluntary prepayments for minimum funding contributions. This was not intended
when IFRIC 14 was issued, and the amendments correct the problem. The amendments
are effective for annual periods beginning 1 January 2011. Earlier application is permitted.
The amendments should be applied retrospectively to the earliest comparative period
presented.
IFRIC 19, ‘Extinguishing financial liabilities with equity instruments’. This clarifies the
requirements of IFRSs when an entity renegotiates the terms of a financial liability with its
creditor and the creditor agrees to accept the entity’s shares or other equity instruments
to settle the financial liability fully or partially. The interpretation is effective for annual
periods beginning on or after 1 July 2010. Earlier application is permitted.
Improvements to International Financial Reporting Standards 2010 were issued in May
2010. The effective dates vary standard by standard but most are effective 1 January
2010
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
4. Discontinued operations
On the 24 June 2010 the shareholders of Marlwood plc formally approved the disposal of the
stock clearance division to Brennan Atkinson International Limited (a company owned by Mr M
Abramson).
In accordance with IFRS 5 “Non-current assets held-for-sale and discontinued operations” the
clearance division has been reclassified as a discontinued operation and its trading results are
included in the income statement as a single line below profit after taxation from continuing
operations.
The impact of the discontinued operations on the income statement is detailed below:
Group
Period 1 January 2010 to 30 June 2010
Discontinued
Continued
Total
operations
operations
£
£
£
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating loss
Profit on disposal of discontinued
operations
Finance costs
Finance income
Profit before income tax
Income tax
Profit after income tax
749,386
(574,545)
________
174,841
1,669,591
(1,192,189)
________
477,402
2,418,977
(1,766,734)
________
652,243
(18,317)
(47,232)
________
109,292
(35,988)
(1,185,309)
________
(743,895)
(54,305)
(1,232,541)
________
(634,603)
________
109,292
2,050,109
________
1,306,214
2,050,109
________
1,415,506
(42,390)
________
66,902
(69,973)
10
________
1,236,251
(112,363)
10
________
1,303,153
________
66,902
________
(326,351)
________
909,900
________
(326,351)
________
976,802
________
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
5. Segmental information
The financial statements consolidate the trading activities of Marlwood plc, The Licence
Factory Limited (formerly New BAI International Limited) and The New Licence Factory
Limited.
Segmental analysis by subsidiary has not been produced as the only trading companies are
The Licence Factory Limited and The Licence Factory (HK) Limited, with the financial results of
The Licence Factory (HK) Limited being immaterial to the overall results of the group.
The Group is organised on a worldwide basis into two main segments:

design, sourcing, distribution and wholesale of licensed goods: and

sourcing, distribution and wholesale of clearance / end of line closeout stock.
As disclosed in Note 4, the Group has reclassified the clearance division as a discontinued
operation during the period ended 30 June 2010 following the disposal of these activities and
the income statement therefore reflects the results of the licence division and head office only.
The segmental results for the Group for the period ended 30 June 2010 are as follows:
Revenue
EDITDA
Depreciation of
tangible assets
Operating profit/(loss)
Profit on disposal of
discontinued operation
Net finance costs
Profit before income tax
Income tax expense
Profit for the period
Period 1 January 2010 to 30 June 2010
Licensed
Clearance
Unallocated
division
division
£
£
£
1,669,591
749,386
-
Total
£
2,418,977
(489,868)
109,292
(221,394)
(601,970)
(32,633)
________
(522,501)
________
109,292
________
(221,394)
(32,633)
________
(634,603)
2,050,109
(112,353)
_______
1,303,153
(326,351)
_______
976,802
_______
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
5.
Segmental information (continued)
The segmental results for the Group for the period ended 31 December 2009 are as follows:
Period 15.08.08 to 31.12.09
Revenue
EDITDA
Depreciation of
tangible assets
Operating profit/(loss)
Net finance costs
Licensed
division
£
2,016,972
Clearance
division
£
2,290,565
55,309
(18,569)
________
36,740
Unallocated
Total
£
-
£
4,307,537
487,924
-
(418,938)
-
124,295
(18,569)
________
487,924
________
(418,938)
________
105,726
(62,245)
_______
43,481
3,637
_______
47,118
_______
Profit before income tax
Income tax expense
Profit for the period
The segment assets and liabilities at 30 June 2010 are as follows:
Licensed
division
£
Assets
Liabilities
8,549,685
2,266,210
________
Clearance Unallocated
division
£
£
________
39,387
2,357,531
________
Total
£
8,589,072
4,623,741
________
The segment assets and liabilities at 31 December 2009 are as follows:
Licensed
division
£
Assets
Liabilities
10,162,856
3,222,761
________
Clearance Unallocated
division
£
£
789,576
________
39,387
4,780,529
________
Total
£
10,991,819
8,003,290
________
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
6. Profit for the period
Profit for the period includes the following items, which are unusual because of their nature,
size or incidence:
Unaudited
six months
ended 30
June 2010
£
Profit on disposal of discontinued operations
2,050,109
________
Audited
period
ended 31
December
2009
£
________
As disclosed in note 4, the Group disposed of the clearance division on the 24 June 2010 for a
total consideration of £2,500,000 plus the transfer of the stock at cost value. Under the terms
of the disposal agreement the £2,500,000 consideration was satisfied as follows:

the assumption by the Buyer of the obligation to pay the aggregate amount of £965,722
owed by The New Licence Factory Limited to the preference shareholders of Hannah
Martin Holdings Limited, which is currently repayable on demand; and

the assumption by the Buyer of the obligation to pay the sum of £1,534,278 owed by The
Licence Factory Limited to M&K International Limited.
The resulting profit on the disposal of the discontinued operations has been calculated as
follows:
£
Disposal proceeds
M&K International Limited loan note waiver
Preference dividend loan note waiver
£
1,534,278
965,722
________
2,500,000
Less: Goodwill allocated to the clearance division
Profit on disposal
(449,891)
________
2,050,109
________
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
7. Taxation
Current tax
Deferred tax
Total
Unaudited
six months
ended 30
June 2010
£
Audited
period ended
31 December
2009
£
326,351
________
________
3,637
________
3,637
________
The tax position for the period is based on the anticipated effective tax rate for the year to 31
December 2010.
8. Dividend
No interim dividend is proposed.
9. Earnings per share
The calculation of basic earnings per ordinary share of 0.10p each (2009: 0.01p per share) is
based upon the profit after taxation for the period of £976,802 (2009: £47,118) and the
weighted average number of ordinary shares in issue during the period of 970,900,000 (2009:
477,976,355).
10. Cash and cash equivalents
Cash at bank and in hand
At
30 June
2010
£
At 31
December
2009
£
70,118
________
70,118
________
50,599
________
50,599
________
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
11. Share capital
At 19 August 2008
Shares issued in the period
19 August 2008
17 November 2008
8 December 2008
16 September 2009
16 September 2009
11 December 2009
Costs directly attributable to
share issue
At 31 December 2009
At 30 June 2010
Number of
shares
No.
Ordinary
shares
£
Share
premium
£
Total
2
135,999,998
30,000,000
117,900,000
630,000,000
57,000,000
_______
970,900,000
2
135,998
30,000
117,900
630,000
57,000
________
970,900
270,000
1,061,100
5,670,000
513,000
________
7,514,100
2
135,998
300,000
1,179,000
6,300,000
570,000
________
8,485,000
_______
970,900,000
_______
_______
970,900,000
_______
________
970,900
_______
________
970,900
_______
(370,191)
________
7,143,909
_______
________
7,143,909
_______
(370,191)
________
8,114,809
_______
________
8,114,809
_______
£
The total authorised number of ordinary shares is 2,000,000,000 with a par value of 0.01
pence per share. All issued shares are fully paid.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
12. Cash generated from operations
Continuing operations
Operating loss
Depreciation of PPE
Profit on disposal of PPE
Foreign exchange movement
Decrease/(increase) in trade and other
receivables
Decrease/(increase) in inventories
Decrease in trade and other payables
Cash utilised from continued operations
Discontinued operations
Operating (loss)/profit
Decrease/(increase) in inventories
Cash utilised from continued operations
Cash generated/(utilised) from operations
Unaudited six
months ended
30 June
2010
£
Audited
period
ended 31
December
2009
£
(743,895)
32,633
1,491,390
(401,465)
20,629
(1,295)
(156)
(1,321,302)
108,708
(392,484)
________
496,352
________
(223,819)
(476,009)
________
(2,403,417)
________
109,291
339,685
________
448,976
________
507,191
(189,685)
________
317,506
________
945,328
________
(2,085,911)
________
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
13. Related party transactions
The Group is controlled by M Abramson by virtue of his majority shareholding in Hannah
Martin Holdings Limited and BAI International Limited. M Abramson has a controlling
interest in a number of other companies of which the Group undertook transactions and had
balances outstanding with during the period as follows.
The period to 30 June 2010
Sale of
goods
RMS International
UK Limited
M&K
International Ltd
Benjamin David
Holdings Limited
Magenta Group
Bloomoon
Consultants
Purchase
of
services
30.06.10
£
Trade and
other
payables
30.06.10
£
Loans &
borrowings
30.06.10
£
Trade &
other
receivables
30.06.10
£
-
-
50
12,949
-
-
-
48,258
-
715,545
-
-
127,252
-
33,870
-
-
8,813
_______
5,875
_______
_______
_______
30.06.10
£
________
The period to 31 December 2009
Sale of
goods
RMS International
UK Limited
M&K
International Ltd
Magenta Group
Bloomoon
Consultants
Purchase
of
services
31.12.09
£
Trade and
other
payables
31.12.09
£
Loans &
borrowings
31.12.09
£
Trade &
other
receivables
31.12.09
£
313,236
313,236
12,899
12,899
-
203,005
13,208
804,718
485,358
-
2,449,171
-
_______
_______
7,500
_______
_______
31.12.09
£
________
Goods are sold based on the price lists in force and standard terms that would be available
to third parties. Goods and services are acquired on normal commercial terms and
conditions.
M Abramson is a majority shareholder of Hannah Martin Holdings Limited, the ultimate
controlling party of the Group. M Abramson is the majority shareholder in M&K International
Limited and Benjamin David Holdings Limited and a significant shareholder in RMS
International (UK) Limited and the Magenta group of companies.
V Bloom, a director, is a shareholder and director of Bloomoon Consultants Limited, a
company providing consultancy services to the Group.
MARLWOOD PLC
UNAUDITED INTERIM RESULTS
NOTES TO THE UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
2010
13. Related party transactions (continued)
All amounts due to and from related parties are unsecured with the exemption of the M&K
International stock finance facility which grants a legal title over the stock in the event of a
default.
There are no provisions made against amounts receivable from or payable to related parties.
The amounts carry no fixed repayment terms. Balances bear no interest with the exception
of the M&K International loan which bears interest at 6.75%.
14. Directors interests
Details of the directors’ interests in the Company’s ordinary share capital at the 30 June 2010
are disclosed below:
Directors
E Basso*
V Bloom
A Conrad
P Hulme*
As at
30.06.10
Number
10,439,100
52,500,000
10,439,100
Shareholding
%
1.1%
5.4%
1.1%
As at
31.12.09
Number
10,439,100
52,500,000
10,439,100
Shareholding
%
* Elliot Basso and Pamela Hulme are beneficially entitled to 20,878,200 Ordinary Shares
which are owned by Hannah Martin Holdings Limited and BAI International Limited.
There have been no changes in the above interests between 30 June 2010 and the date of
this report.
15. Availability of information
The interim results are being circulated to all shareholders. Further copies can be obtained
from the Registered Office at Unit 38, Newby Road Industrial Estate, Hazel Grove, Stockport,
Cheshire SK7 5AS.
1.1%
5.4%
1.1%