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Disappointing sales performance by surfing brand Hot Tuna
30 Dec '11
5 min read
While struggling to recover from the issues of product recall and losing two major retailers in 2010, Australian turnover disappointed expectations and decreased from £0.29 million in 2010 to £0.06 million in 2011.
In 2012 the Company is focusing on the potential for its recently signed Australian distribution agreement. This agreement is expected to significantly improve revenue from January 2012 with emphasis on the post June 2012 period and the board has begun scaling down operations in Australia in light of this.
US
The US retail sector has suffered the most of all markets, and sales continued to be dominated by the swim range. A successful Miami Swim Show at Salon Allure in July 2010 boosted confidence with good orders placed by traditional customers Victoria Secrets and Delias for deliveries from November 2010 through to March 2011.
The Company had expected these to result in solid repeat orders from January to March, however as the US retail market retreated and the economy softened, accounts pulled back and only minimal orders were received.
The USA market remains potentially the largest market but will require a distribution partner to capitalise on this, as has been successfully achieved in the Australian market.
Similarly to 2010, the modest sales achieved in the US market were driven by our women's swim collection. Total turnover for the US was £0.09 million in 2011 compared to £0.06 million in 2010 which failed to reach our expectations from the prior year.
In light of the US performance, the board has started winding down US operations and expect all trading and overhead expenditure to have ceased by February 2012.
Financial Review
The operational review has highlighted the disappointing sales performance achieved this year, reducing turnover to £0.21 million (2010: £0.46 million). Due to reduced stock ordering, stock write-down was minimised in 2011 and Company posted a gross profit of £0.05 million (2010: loss £0.03 million).
Total other operational expenses were reduced to £0.91 million (2010: £1.37 million), which is attributable to a reduction in both general and administrative expenses and depreciation and amortisation. In 2011, losses from operations decreased to £0.86 million (2010: £1.40 million).
Due to tighter cost control, operational cash outflows decreased to £0.76 million in the 2011 financial year (2010: £1.37 million).
Net cash outflow after changes in working capital and finance costs from operating activities was £0.94 million (2010: £1.68 million), this improvement in 2011 operating cashflows is largely due to a normalisation from the large decrease in payables in the prior year.
Total cash inflow over the period was £0.07 million (2010: £0.62 million) which included the offset by the net proceeds from the placing of £1.01 million resulting in a cash balance at the end of the year of £0.68 million (2010: £0.59 million).
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In 2012 the Company is focusing on the potential for its recently signed Australian distribution agreement. This agreement is expected to significantly improve revenue from January 2012 with emphasis on the post June 2012 period and the board has begun scaling down operations in Australia in light of this.
US
The US retail sector has suffered the most of all markets, and sales continued to be dominated by the swim range. A successful Miami Swim Show at Salon Allure in July 2010 boosted confidence with good orders placed by traditional customers Victoria Secrets and Delias for deliveries from November 2010 through to March 2011.
The Company had expected these to result in solid repeat orders from January to March, however as the US retail market retreated and the economy softened, accounts pulled back and only minimal orders were received.
The USA market remains potentially the largest market but will require a distribution partner to capitalise on this, as has been successfully achieved in the Australian market.
Similarly to 2010, the modest sales achieved in the US market were driven by our women's swim collection. Total turnover for the US was £0.09 million in 2011 compared to £0.06 million in 2010 which failed to reach our expectations from the prior year.
In light of the US performance, the board has started winding down US operations and expect all trading and overhead expenditure to have ceased by February 2012.
Financial Review
The operational review has highlighted the disappointing sales performance achieved this year, reducing turnover to £0.21 million (2010: £0.46 million). Due to reduced stock ordering, stock write-down was minimised in 2011 and Company posted a gross profit of £0.05 million (2010: loss £0.03 million).
Total other operational expenses were reduced to £0.91 million (2010: £1.37 million), which is attributable to a reduction in both general and administrative expenses and depreciation and amortisation. In 2011, losses from operations decreased to £0.86 million (2010: £1.40 million).
Due to tighter cost control, operational cash outflows decreased to £0.76 million in the 2011 financial year (2010: £1.37 million).
Net cash outflow after changes in working capital and finance costs from operating activities was £0.94 million (2010: £1.68 million), this improvement in 2011 operating cashflows is largely due to a normalisation from the large decrease in payables in the prior year.
Total cash inflow over the period was £0.07 million (2010: £0.62 million) which included the offset by the net proceeds from the placing of £1.01 million resulting in a cash balance at the end of the year of £0.68 million (2010: £0.59 million).
Click here to read more details
Hot Tuna (International) PLC
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