24 April 2015 Tricolor Sport plc Trading statement & future outlook Tricolor Sport plc the distributor of high end and niche ski wear today issues a trading statement for the year ending 31st March 2015. The full-year results are scheduled to be announced by the end of July 2015. Overall The last year has been a very difficult one for Tricolor Sport plc ("Tricolor") and the year to 31 March 2015 will show a loss in excess of €2m. Our problems largely relate to the non-delivery of stock for the 2014/15 ski season which is nearly at an end and the resultant loss of turnover. We have financed the business with a mixture of equity funds and short term loans and we continue to re-negotiate with our creditors in order to find the right solution for all concerned. The underlying issue relates to our association with Brands and More in Italy, its failure during 2014 and more recently the failure of its sole manufacturer Sonoma in Romania. In January 2014 we signed a distribution agreement for Vuarnet skiwear with Brands and More ("B&M") in Italy (the head licence holder for Vuarnet in Europe) at a cost of €150,000. Undisclosed to Tricolor B&M were already experiencing financial difficulties at the time and, indeed, in May 2014 B&M filed for bankruptcy protection by the Court of Bergamo. Tricolor had already secured orders for €2.5m skiwear both professional and retail in France and as a result had paid deposits to B&M on behalf of the professionals of approximately €210,000 and we also spent €250,000 on fabric for retailers. Both B&M and Sonoma have been obstructive in the whole process and we are still considering our options with regard to legal action however are mindful of the ability to recover any money from these businesses should that action be won. To date we have invested a total of €1,361,000 and have guaranteed a total of €2,714,000 through letters of credit. This has put the business under severe cash flow pressure which we continue to manage on a day to day basis. We now plan to strengthen the board with further appointments suited to not only the skiwear business but also to tighten up management controls of process. This is important to allow the existing management to concentrate on sales and the existing client base. We are in discussions with several parties and we will make further announcements in due course. Looking to the future, the Vuarnet brand still remains in strong demand despite the fact that deliveries over the last few years have been sporadic and this year non-existent. Our problems have not been around customer demand, but around supplying that demand. Whilst we have several obstacles to overcome over the next few months - including negotiations with creditors - we would highlight some of the positive aspects of our business: * In January this year we concluded a sale of Vuarnet skiwear with Vente Privee and we have another sale scheduled for April with down jackets which has now been delivered and the remaining stock from January will be sold later in the year. * Neo Investment Partners (the new owner of the Vuarnet brand) has indicated that it will discuss a new distribution and manufacturing licence with Tricolor. * Meribel ESF have signed an order and paid a deposit for product delivery for the end of 2015 for approximately 400 instructors. * The clothing for all the ski schools that should have been made by Sonoma is now being manufactured by a new manufacturer in Bulgaria and we expect this to be delivered before the end of July. * We have developed a new Vuarnet collection with our own in-house designers the samples for which should have been available this season. The samples, once ready, will be deployed for the 2016/17 season. * Tricolor/Vuarnet were represented at both ISPO in Munich and Sport Achat in Lyon this year * There is pressure on cash flow however the directors should be able to more clearly define the future strategy of the business over the next few months. * Neo Investment Partners is prepared in principle for Tricolor to continue manufacturing Vuarnet ski wear on an ad hoc basis with a different manufacturer until such time as a new licence is settled. Summary Against an extremely difficult backdrop the board has worked tirelessly to maintain Tricolor's position and the fact that all of the ski schools wish to continue with their orders, and the vast majority of the retailers also want to continue with their orders, continues to give tremendous encouragement and is an endorsement of the strength of the Vuarnet brand. With a change of manufacturer we should be able to move forward. Tricolor Sport plc Tricolor Sport plc, founded by a team of successful ski professionals, distributes high end and niche ski wear in Europe. The Company distributes the iconic brand Vuarnet and operates mainly in Europe. Tricolor Sport plc is listed on the GXG Official List (Primary listing), a Regulated Market operated under the European Markets in Financial Instruments Directive (MiFID), the Open Market of the Frankfurt Stock Exchange and XETRA, and is directly regulated by Finanstilsynet, the Danish Financial Supervisory Authority. GXG: TRSP. Frankfurt 2T5 and with WKN A1XBUV. Contact Tricolor Sport plc Pascal Blanc - Director- pascalblanc@tricolorsport.fr Tel - +44 (0) 20 8705 2000 Keswick Global, Corporate Adviser Tim Curle - info@keswickglobal.com Tel - +43 (1) 740 408 045
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THIS STATEMENT