Interim Results

31 March 2011

Hot Tuna (International) PLC (AIM: HTT), a leading surf wear and fashion brand, announces its interim results for the six months ending 31 December 2010.

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Highlights

  • Successfully raised approximately £1.1 million via an equity placing
  • New agreement with Interga SPA to distribute Hot Tuna products in Italy and Austria
  • Appointment of Francis Ball as a Non-Executive Director
  • Autumn Winter 2011 collection well received at recent trade shows
  • Negotiating new distribution agreements in Europe and South East Asia

Interim Review

Sales for the six months to 31 December 2010 were down on the previous year due to challenging retail conditions and poor consumer confidence which affected the lead times and level of orders taken for the period. Whilst sales are anticipated to improve in the second half, revenues for the full year will be lower than the prior year. The company was focused on reducing levels of discounted merchandise and selling full price stock which also impacted sales in the period under review but will ensure better profitability in the long term.  

During the period, the Company realised the efficiencies made last year by moving production from China to Turkey, thereby reducing costs relating to wage increases, manufacturing costs, and transportation costs from the factory in Asia to Europe.  

Consumer confidence is slowly strengthening and forward orders for the coming season have been encouraging. The appointment of distributors and distribution partners will aid sales growth in new regions as the company expands into new markets and continues its programme of appointing these distributors.

Current Trading and Outlook

In Europe, current trading continues to be restrained in UK and European markets; however the launch of the Hot Tuna e-commerce site this summer will provide an additional uplift to sales for 2011 and 2012 and the new distribution agreements in place are also helping drive sales.  The Company has commenced delivery of the Spring Summer 2011 collection to ASOS.com, and continued its partnerships with Amazon.com.  The appointment of Interga as the new Italian and Austrian distributor for the brand has helped increase business.

The Autumn Winter 2011 collections were very well received in January at the Berlin trade show Bread and Butter and secured new retail accounts in Germany.  New working partnerships are now in place in Germany and Denmark for 2011 and 2012.

The US, after a restructure of the operations last year, recommenced business with major partners including Delia's, Karmaloop and Victoria's Secret and has successfully delivered product for the opening season of the US swim catalogues at Victoria's Secret and Delia's for Summer 2011.

In Australia, the Hot Tuna adult ranges were launched last August and were well received. A network of Independent stores have now selected the brand for inclusion in the Southern hemisphere Autumn Winter 2011 ranges. Further orders were secured a Sydney trade show in February 2011.
  
Central costs will increase in the coming year due to additional staffing requirements and ecommerce start up costs.  The recent fundraising will help however expand the brand into new international markets, develop the new transactional website, fund online marketing, product design and development and provide the Company with working capital.

The focus continues to be on a design led offering which differentiates itself from other street and surf apparel brands. We continue to improve the design element of the brand, ensure each garment displays the iconic pink piranha.

The Company continues to talk to new partners and new markets and is confident that these will result in new distribution agreements.   The Company is also seeking to appointment a new Chairman in the near term.

Geoff O'Connell, CEO of Hot Tuna: 

"We remain focused on increasing brand awareness in both new and existing markets and keeping our cost base down. The recent equity placing and new distribution agreements illustrate the ongoing support for the Company. Hot Tuna is an iconic surf heritage brand and we are positive about the continued appeal of the brand internationally."

 


Enquiries:
 
Hot Tuna PLC
Geoff O'Connell - CEO

Tel: 020 7440 0644
Pelham Bell Pottinger
Dan de Belder
Lucy Frankland

Tel: 020 7861 3885
Seymour Pierce Limited
Mark Percy / Catherine Leftley (Nominated Adviser)
Paul Jewell (Corporate Broking)

Tel: 0207 107 8000
Allenby Capital Ltd
Nick Naylor/Alex Davies
Tel: 020 3328 5656

 

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