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Samarkand Group PLC on Monday reported weaker full-year financial performance with loss widening as sales stall in China.
The Shanghai and London-based consumer brand owner and e-commerce distribution services company said pretax loss widened to £4.9 million in the year ending March 31 from £4.8 million the previous year.
Revenue declined 3.2% to £16.9 million from £17.5 million, as cost of sales fell 14% to £6.7 million from £7.8 million.
Administrative expenses rose 5.3% to £8.1 million from £7.7 million while selling & distribution expenses increased 6.2% to £5.7 million from £5.4 million.
The net debt position stood at £1.3 million, up from £9,933 last year.
Weaker revenue performance was attributed to challenging trading conditions in China with sales of third-party brands declining 18% year-on-year.
Revenue from Brand Ownership grew 16% to £7.7 million, Distribution rose 13% to £740,000, whereas Brand Acceleration declined 18% to £8.2 million.
In June, Samarkand sold its Probio7 brand for £1.3 million to focus resources towards faster growing brands in the company’s portfolio and to support the £1.3 million acquisition of health company Optimised Energetics Ltd as announced in May.
As a result of growing operating costs in China and less favourable returns, Samarkand has revised its strategy going forward.
Chief Executive Officer David Hampstead said: ‘I am pleased with the progress being made in shifting the business towards profitability and in defining the future direction of the group as a scale up platform for high potential, meaningfully different, health and healing brands, anchored in fast growing consumer segments, with the ability to introduce those brands to the Chinese consumer.
‘Once our goal of moving the group into profit is secure we will focus on increasing investment behind the scaling of our owned brands and to selectively add to the portfolio in the future through acquisition.’
Samarkand shares were flat at 4.00 pence each on the Aquis exchange in London on Monday morning.
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