Brand Architekts : Annual Report 2020

Annual Report 2020

Brand Architekts Group plc Annual Report & Accounts 2020

01	Brand Architekts Group plc Annual Report & Accounts 2020

Highlights

Brand Architekts is a British challenger-brand business operating in the beauty sector, focused on:

- insight-led brand

development

- ethical and efficient

sourcing and

Strategic Report

Highlights	01
Business Overview	02
Investment Case	10
Chairman's Statement	12
CEO's Statement	16
Business Model	20
Market Context	22
Project 50	24
Principal Risks and Uncertainties	26
Our Stakeholders	28
Section 172	30
Financial Review	31
Governance
Board of Directors	33
Corporate Governance Report	34
Directors' Report	37
Financial Statements
Independent Auditor's Report	39
Group Statement of

Financial Highlights

Strategic and Operational Highlights

manufacturing

- omni-channel routes

to market

- creating noise and buzz

- brand invigoration

Comprehensive Income	43
Group Statement of Financial Position	44
Company Statement of
Financial Position	45
Group Statement of Changes in Equity	46
Company Statement of
Changes in Equity	47
Cash Flow Statement	48
Notes to the Accounts	49
Corporate Directory	IBC

Group Revenues

£16.3m

excluding sales from discontinued operations

Underlying Gross

Profit Margin

35.2%

Profit before tax

£2.2m

Disposal of Contract

Manufacturing Business

£35m

leading to creation of a solely owned brands business

Underlying Operating Profit from Continuing Operations

£0.1m

Net Cash Position

£18.0m

• Sale of our manufacturing business successfully completed in August 2019
• Energies and resources now 100% focused on an owned-brand business model
• Senior management team refreshed with highly experienced new CEO, CFO and Commercial Director
• COVID-19had a significant impact on pharmacy and drugstore channels. This high street decline was partially offset by double-digit growth through pure play e-tailers and our own online shops, as well as single digit growth in the grocers. Annual sales decline of 17% year-on-year
• Online growth aided by home beauty demand and trialling during lockdown
• A resilient response to COVID-related operational challenges, with no staff furloughed
• Sustainability Blueprint launched early FY21 with the goal of being a carbon-neutral business
• Project 50 launched to create a business with £50m annualised revenues within five years

See pages 20 to 21

for more information about our business model

Strategic Report	02	Brand Architekts Group plc Annual Report & Accounts 2020

Business Overview

03	Brand Architekts Group plc Annual Report & Accounts 2020

Brand Architekts: who we are

Brand Architekts has more than a dozen brands and multiple products. These are just a few of our flagship assets.

Super Facialist

brings together fragrant natural extracts and high-performance scientific ingredients to create beautiful looking skin. An expert facialist experience, but at home.

Dirty Works

is about good clean fun in the bathroom, and an indulgent antidote to life's stresses and strains.

Brand Architekts plc offers a wide portfolio of challenger brands, sold throughout the UK and in the international beauty space.

Each brand answers the specific needs of the consumer through a unique combination of nature, science and years of experience. Our broad portfolio ranges from skincare, haircare and bodycare to bathing, gifting and accessories.

We offer both omni-channel and UK retailer-exclusive brands that are available on the high street in leading pharmacy and drugstore chains; in national grocery stores; on the platforms of global e-tailers; and through our own e-commerce websites.

We address the needs of both women and men, from Soho-chic and young fashionistas through to lifelong brand loyalists. Alongside our indulgent formulations, we also produce efficacious but affordable products for these cost-conscious times. Our range is a broad church, enabling us to flex with changing consumer behaviour and macroeconomic factors.

In the locked down world of FY20/21 and beyond, we continue to explore all commercial opportunities with the single focus of making our consumers look and feel great.

Dr SALTS+

range creates post-workout, muscle, detox skin and sleep therapies by harnessing the therapeutic benefits of Dead Sea, Himalayan and Epsom salts.

Kind Natured	Fish
the clue is in the name. This fragrant	hails straight from style central
celebration of plant and natural	- Soho, London - in a range
extracts leaves hair, skin and body	of professional-grade, high-
looking beautiful. And all products	performance haircare products.
are vegan-friendly.

Strategic Report	04	Brand Architekts Group plc Annual Report & Accounts 2020	05	Brand Architekts Group plc Annual Report & Accounts 2020

Business Overview continued

Be your own

Super Facialist…

Brand proposition

No one knows more about the individual traits of their skin than consumers themselves; how it looks, feels and changes at different times and in varying conditions. With Super Facialist, they're equipped to be their own facial expert at home.

The brand's range of six science-based regimes for women addresses skin brightening, hydration, anti-blemish,anti-ageing, firming and sensitive skin. There is also a further regime for the particular needs of male skin.

Its mild, yet demonstrably effective, formulation is designed for everyone, of every age. Already a flagship brand for treatments at home, Super Facialist came into its own during lockdown and we see considerable latent potential still to explore.

Distribution

Initially available in Boots, Super Facialist extended its reach during the reporting year into Sainsbury's and Waitrose. It also gained significant traction on Amazon and Feel Unique, in addition to increased sales through its dedicated online store.

The #BeYourOwnSuperFacialist hashtag continues to generate exceptionally strong likes, reviews and endorsements on social media. The brand was also a multiple award-winner at the Beauty Bible Awards 2020.

Instagram followers increased by 140%, Facebook +100%; subscribers +240%.