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DJ Sandal plc Final Results For The Year Ended 31 May 2018

 
TIDMSAND 
 
 
   SANDAL PLC ("SANDAL" or "THE COMPANY") 
 
   FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2018 
 
   11 OCTOBER 2018 
 
   The Board of Sandal Plc, the designer, developer and manufacturer of 
electronic products, announces its full year results for the year to 31 
May 2018. 
 
   Highlights 
 
 
   -- Energenie MiHome sales increased by 71% to GBP1,014,649 
 
   -- Gross margin increased to 40.6% (2017: 37.0%) 
 
   -- Energenie MiHome completed its range of lighting products as well as 
      launching its thermostat and a unique click universal switch controller 
 
   -- Average number of devices attached to each Energenie MiHome Gateway Hub 
      at the year end of 4.33 (2017: 3.67) 
 
   -- Energenie MiHome completed integration with Google Assistant 
 
   -- Pitacs (a leading distributor to the independent plumbing merchant 
      market) was appointed as an Energenie MiHome distributor. 
 
 
   Alan Tadd, CEO commented: "The smart home sector is rapidly moving 
beyond the "early adopter" phase and into the mainstream, driven 
substantially by the Google and Amazon platforms.  We believe that the 
enlarged Energenie MiHome product range allows Sandal to take advantage 
of this market growth potential through our existing B2C distribution 
channels and the new B2B channels which we are continuing to grow in the 
current financial year." 
 
   Enquiries: 
 
   Sandal Plc                                                  01279 422022 
 
 
   Alan Tadd, CEO 
 
   Oliver Tadd, Director 
 
   www.sandal-plc.co.uk 
 
   Cairn Financial Advisers LLP 
 
   David Coffman/Jo Turner                          020 7213 0880 
 
   MB Communications 
 
   Maxine Barnes                                          07860 489571 
 
   Fair Review of the business 
 
   Energenie MiHome achieved turnover growth of 71% taking this division 
past GBP1m annual turnover for the first time and positioning it to 
become the future core of Sandal. Since the year end there has been 
continued growth in the number of gateways and devices attached against 
the same period last year, in what is traditionally a quiet period. 
 
   The Energenie MiHome range continued to achieve new listings in retail 
with Target Components, Wickes, Grahams Plumbers Merchants and Robert 
Dyas amongst these. The Company maintained its investment in marketing 
of Energenie MiHome continuing its focus on the installer/wholesaler in 
readiness of the launch of its installation service in the current 
financial year. 
 
   The Energenie MiHome product range was enhanced by the launch of its two 
gang and dimmer light switches, thermostat and unique clicker switch. 
This now gives a complete product range suitable for the installation 
market which is well positioned to take advantage of the growth as the 
market moves from a DIY early adopter market to the "done for me" 
market. The network of stockists in the electrical wholesale and 
plumber's merchant markets is being extended to make Energenie MiHone 
products readily available to installers. The appointment of Pitacs to 
distribute to the independent plumbers merchants is an important part of 
increasing distribution and further distributors for these channels are 
actively being sought so that the stockist network can be expanded as 
quickly as possible. Since the year end the Company has set up its fixed 
price installation service which will be managed by Icon Heating 
Solutions Limited using a network of registered installers. 
 
   During the year there has been a 144% increase in the number of 
Energenie MiHome Gateway Hubs in the market whilst the number of devices 
attached to these Gateway Hubs has grown by nearly 194%. At the year end 
this stood at 4.33 devices per system up from 3.67 in May 2017. This 
continues to demonstrate that consumers are adding devices to their Hub 
after their initial purchase and reinforces the strategy of selling 
entry level bundles as an initial route to market. The Directors are 
confident that there is significant sales potential from both new and 
existing customers particularly as the market moves from an early 
adopter stage to a "done for me" installer market. 
 
   The Directors see the continual integration with market leading voice 
systems like Amazon and Google as a major driver to the growth of the 
market so development with these partners is a key part of the strategy 
and Sandal has been invited by both companies to development 
conferences. 
 
   There was a small decrease in turnover of 3.3% in the year mainly as a 
result of the sales decrease in the PowerConnections division against 
the previous year's abnormally high divisional turnover. The Company 
reduced its operating loss to GBP84,181 (2017 GBP108,692) despite the 
slightly reduced turnover and an exceptional stock impairment charge of 
GBP72,219. These negative aspects were offset by increase in gross 
margin to 40.6% (2017 37.0%). There was a less than 1% increase in 
administration overheads which included GBP232,072 (2017 GBP218,408) of 
general marketing activities, non-capitalised development costs of 
GBP20,584 (2017 GBP15,585) and depreciation and amortisation costs of 
GBP188,434 (2017 GBP92,111). 
 
   Development expenditure continued to focus on new products, technology 
and integrations with major platforms like Amazon and Google whose voice 
assistant products are growing the market for smart home. The heating 
range is being developed to meet the new Boiler Plus regulations for the 
coming heating season whilst a focus on reducing unit costs is aimed at 
attracting a greater share of the increasing Smart Home market. 
 
   Strategy and Future Developments 
 
   The Company's strategy is to continue to grow Energenie MiHome into what 
is an expanding smart home space. This will be with new and existing 
products both into the UK and whilst also looking to expand into Europe 
using the distribution network of Exertis, Energenie MiHome's 
distribution partner. 
 
   Product development focus will be on selected new products to broaden 
the Energenie MiHome range creating greater use with Amazon and Google 
products both in the UK and abroad.  In addition, the launch of a 
monthly subscription service which is expected to generate a recurring 
revenue stream is being actively explored.  The Company will also pursue 
other strategic partnerships in addition to those already in trial 
stages with Howz /EDF and Samsung. 
 
   This strategy is likely to require additional capital to enable the 
Energenie MiHome brand to reach what the Directors believe is its full 
potential in this market sector. Accordingly the Board will continue to 
review available options for raising both equity and debt to enable its 
execution. 
 
   Principle Risks and Uncertainties 
 
   Risks 
 
   Competitive Risks 
 
   The Company operates in a competitive market with changing technologies. 
The Directors are always reviewing our product and technology offering 
in our development programme. The Integration with major systems 
providers is seen as a counter balance to this risk. 
 
   Exchange Rate Risks 
 
   The Company seeks to internal hedge this risk by buying and selling in 
US Dollars wherever possible. 
 
   Profit and Loss Account 
 
   For the year ended 31 May 2018 
 
 
 
 
                                           2018          2017 
                                           GBP           GBP 
 
Turnover                                     3,620,565     3,745,780 
Cost of sales                              (2,149,221)     (2,360,757) 
 
 
 
Gross profit                                 1,471,344     1,385,023 
 
Administrative expenses                    (1,502,257)     (1,493,715) 
Other operating income                          18,951             - 
Profit/(loss) on disposal 
 of operations                                (72,219)             - 
 
 
 
Operating loss                                (84,181)       (108,692) 
 
Interest receivable 
 and similar income                                 41           133 
Interest payable and 
 similar expenses                             (58,593)        (26,662) 
 
 
 
Loss before taxation                         (142,733)       (135,221) 
 
Tax on loss                                     29,539       143,059 
 
 
 
(Loss)/profit for the 
 financial year                              (113,194)         7,838 
 
 
 
The Profit And Loss Account has been prepared on 
 the basis that all operations are continuing operations. 
 The notes on pages 15 to 34 form part of these financial 
 statements. 
 
 
 
   Statement of Comprehensive Income 
 
   For the year ended 31 May 2018 
 
 
 
 
                                   2018      2017 
                                    GBP      GBP 
 
(Loss)/profit for the year       (113,194)   7,838 
 
Other comprehensive income 
Revaluation of tangible fixed 
 assets                            202,255       - 
 
 
 
Total comprehensive income 
 for the year                       89,061   7,838 
 
 
 
 
 
 
 
 
   Balance Sheet 
 
   As at 31 May 2018 
 
 
 
 
                                           2018                    2017 
                                  GBP      GBP        GBP          GBP 
 Fixed assets 
 Goodwill                                      7,500                  10,500 
 Other intangible 
  assets                                     571,857                 194,593 
 
 
 
 Total intangible 
  assets                                     579,357                 205,093 
 Tangible assets                             357,870                 195,406 
 Investments                                     101                     101 
 
 
 
                                             937,328                 400,600 
 Current assets 
 Stocks                           768,752                 915,367 
 Debtors - deferred 
  tax                               9,259                  23,357 
 Debtors - other                  750,901                 932,148 
 Cash at bank and 
  in hand                          50,761                 162,442 
 
 
 

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DJ Sandal plc Final Results For The Year Ended 31 -2-

                                1,579,673               2,033,314 
 Creditors: amounts 
  falling due within 
  one year                    (1,045,429)             (1,272,716) 
 
 
 
 Net current assets                          534,244                 760,598 
 
 
 
 Total assets less current 
  liabilities                              1,471,572               1,161,198 
 
 Creditors: amounts 
  falling due after 
  more than one year                       (579,683)                  (139,566) 
 
 Provisions for liabilities                 (59,693)                   (27,246) 
 
 
 
 Net assets                                  832,196                 994,386 
 
 
 
 Capital and reserves 
 Called up share capital                     312,737                 329,978 
 Share premium account                       161,609                 162,860 
 Revaluation reserve                         202,255                       - 
 Capital redemption 
  reserve                                     17,241                       - 
 Profit and loss reserves                    138,354                 501,548 
 
 
 
 Total equity                                832,196                 994,386 
 
 
 
The financial statements were approved by the board 
 of directors and authorised for issue on 10 October 
 2018 and are signed on its behalf by: 
 
Mr A J Tadd 
Director 
 
 
 
 
 
 
   Statement of Changes in Equity 
 
   For the year ended 31 May 2018 
 
 
 
 
                                             Share                    Capital      Profit 
                                  Share     premium   Revaluation   redemption    and loss 
                                 capital    account   reserve         reserve     reserves      Total 
                                   GBP        GBP     GBP               GBP         GBP          GBP 
 
Balance at 1 June 2016            324,660    121,938             -            -     493,710      940,308 
 
Year ended 31 May 2017: 
Profit and total comprehensive 
 income for the year                    -          -             -            -       7,838        7,838 
Issue of share capital              5,318     40,922             -            -           -       46,240 
 
 
 
Balance at 31 May 2017            329,978    162,860             -            -     501,548      994,386 
 
 
 
Year ended 31 May 2018: 
Loss for the year                       -          -             -            -   (113,194)      (113,194) 
Other comprehensive income: 
Revaluation of tangible 
 fixed assets                           -          -       202,255            -           -      202,255 
 
 
 
Total comprehensive income 
 for the year                           -          -       202,255            -   (113,194)       89,061 
Own shares acquired                     -          -             -            -   (250,000)      (250,000) 
Redemption of shares             (17,241)          -             -       17,241           -            - 
Other                                   -    (1,251)             -            -           -        (1,251) 
 
 
 
Balance at 31 May 2018            312,737    161,609       202,255       17,241     138,354      832,196 
 
 
 
 
 
 
 
 
   Statement of Cash Flows 
 
   For the year ended 31 May 2018 
 
 
 
 
                                             2018                  2017 
                                    GBP      GBP        GBP        GBP 
 
Cash flows from operating 
 activities 
 
Cash generated from/(absorbed 
 by) operations                                294,061               (192,657) 
Interest paid                                 (58,593)                (26,662) 
Income taxes refunded                          107,116               178,719 
 
 
 
Net cash inflow/(outflow) 
 from operating activities                     342,584                (40,600) 
 
Investing activities 
Purchase of intangible 
 assets                           (504,361)             (128,630) 
Purchase of tangible fixed 
 assets                            (18,548)              (49,669) 
Proceeds from other 
 investments and loans                 (71)                 1,012 
Interest received                        41                   133 
 
 
 
Net cash used in investing 
 activities                                  (522,939)               (177,154) 
 
Financing activities 
Proceeds from issue of 
 shares                                   -                46,241 
Redemption of shares                (1,250)                     - 
Purchase of company shares        (250,000)                     - 
Repayment of borrowings               3,136                     - 
Proceeds of new loans               500,000                     - 
Repayment of loans                 (83,930)              (76,949) 
Payment of finance 
 leases obligations                (11,700)              (19,881) 
 
 
 
Net cash generated 
 from/(used in) financing 
 activities                                    156,256                (50,589) 
 
 
 
Net decrease in cash and 
 cash equivalents                             (24,099)               (268,343) 
 
Cash and cash equivalents 
 at beginning of year                           74,860               343,203 
 
 
 
Cash and cash equivalents 
 at end of year                                 50,761                74,860 
 
 
 
Relating to: 
Cash at bank and in 
 hand                                           50,761               162,442 
Bank overdrafts included 
 in creditors payable 
 within one year                                     -                (87,582) 
 
 
 
 
 
   Notes 
 
 
   1. Basis of Preparation 
 
 
 
 
These financial statements have been prepared 
 in accordance with FRS 102 "The Financial Reporting 
 Standard applicable in the UK and Republic of 
 Ireland" ("FRS 102") and the requirements of the 
 Companies Act 2006. 
The financial statements are prepared in sterling, 
 which is the functional currency of the company. 
 Monetary amounts in these financial statements 
 are rounded to the nearest pound (GBP). 
 
The financial statements have been prepared under 
 the historical cost convention, modified to include 
 the revaluation of freehold properties and to 
 include investment properties and certain financial 
 instruments at fair value. The principal accounting 
 policies adopted are set out below. 
 
 
   The financial information set out above does not constitute the 
Company's statutory accounts for the year ended 31 December 2016 but is 
derived from those accounts which contained an unqualified audit report. 
 
 
   1. Earnings per share 
 
 
 
 
                                         2018        2017 
                                         Number      Number 
 Weighted average number of ordinary 
  shares for basic earnings per share    15,636,833  16,498,901 
 
 - Weighted average number outstanding 
  share options                           2,050,635   1,950,635 
 
 
 
 Weighted average number of ordinary 
  shares for diluted earnings per 
  share                                  17,687,468  18,449,536 
 
 
 
 
 
   1. Availability of Report and Accounts 
 
 
   Copies of the Annual Report and Accounts will be available on the 
Company's website. 
 
   Notes to editors: 
 
   Sandal plc commenced business in 1996 and joined NEX in March 2015. The 
Company 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 Energenie MiHome range 
of products aimed at the "Home Automation" and "Internet of Things" 
marketplace. 
 
   The range of Energenie MiHome home automation products makes the remote 
operation of everyday household appliances and energy monitoring more 
accessible through integration with smartphone and tablet connectivity. 
The Energenie MiHome range is also integrated with the major players in 
the home automation market including Google Nest and Amazon Echo. 
Energenie MiHome products are available through a number of mainstream 
retailers including Amazon, Argos and Sainsbury's. In addition Energenie 
also 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. 
 
   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. 
 
   Attachment 
 
 
   -- 2018 Final Results announcement_FINAL 
      https://prlibrary-eu.nasdaq.com/Resource/Download/7383b63f-dd9d-49e2-a7c3-115fbec36d23 
 
 
 
 
 

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