Altitude pleased with US buyout progress, despite pre-tax loss

Altitude Group has reported better annual revenues, and a loss for the year, but said it is pleased with its progress after the $5m acquisition of US promotional products distributor member business, Advertising Industry Mastermind Group.

The Middleton firm, the operator of a leading marketplace for personalised products, unveiled unaudited full year results to December 31, 2018, and an operational update today.

It said revenues for the year rose from £6.1m to £6.6m, but incurred a pre-tax loss of £2.89m, compared with a £100,000 profit the previous year.

An adjusted operating loss of £800,000, compared with a £900,000 profit in 2017, was principally due to pre-revenue operating cost investment in the US and the decline in UK exhibitions and publications contribution.

The group remains debt free and had net cash of £3.8m as of April 30, 2019.

During the year Altitude promoted Nichole Stella to group chief executive in June 2018, following the March appointment of Graeme Couturier as chief financial officer.

It achieved a successful placing to raise £1.5m in March 2018 to accelerate the roll out of AIMPro in strategic partnership with AI Mastermind Group.

Significant progress was achieved in the adoption of AIMpro by AIM members, with sales orders of $19.9m processed in 2018 by 266 AIM members, 78% of whom placed multiple orders.

During 2018 70 AIM-preferred suppliers signed up to pay transaction fees on all orders derived through the AIMPro platform.

Since the end of the reporting period the company has received a cash repayment from HMRC in respect of R&D cash tax credits totalling £400,000.

It also carried out a successful oversubscribed equity placing to raise £9m to fund the transformational acquisition of AIM, and provide the associated working capital required to accelerate the monetisation of the combined business.

The acquisition secured access to the annual $1.9bn aggregate AIM revenue.

The board said it is very pleased with the progress made with AIM since acquisition. It is also considering, following the acquisition, changing the group’s year-end accounting reference date from December 31, to March 31.

It said such a change would bring the group more in line with the US promotional product industry and would provide a better accounting cut-off date for auditable visibility of revenue due from those suppliers on calendar year settlement terms.

Chief executive Nichole Stella said: “We have made substantial progress throughout the year as we developed our relationship with AI Mastermind, providing its members with access to our white labelled AIMPro platform.

“In January 2019 we acquired AIM, the largest promotional product supplier distributor member group in the US, securing ownership of its $1.9bn throughput pipeline, a huge opportunity for us to deliver great services and value to our members, and shareholders alike.”

She added: “This acquisition is strategically significant and transformative and has now become the core focus of our strategy as we look to expand our US team, formalising agreements with key industry suppliers as part of our Preferred Supplier Partner Programme and responding to demand from our AIM members.

“Just four months post the acquisition of AIM, we are very pleased with progress, especially with both supplier and member adoption. We look to the future with confidence.”