Source - RNS
RNS Number : 2623L
Norish PLC
30 September 2016
 

 

 

Norish plc

Interim results 2016

 

Results

 

Norish plc (AIM: NSH), is pleased to announce its interim results for the six months ended 30 June 2016.

 

Financial Highlights

 

·     Total revenue increased to £15.6m (H1 2015: £11.8m).

 

·     Revenue from commodity trading increased to £9.3m (H1 2015: £6.1m).

 

·     Revenue from our continuing temperature controlled divisions increased to £6.3m (H1 2015: £5.7m)

 

·     Gross profit increased to £0.8m (H1 2015: £0.6m).

 

·     Operating profit increased to £0.49m (H1 2015: £0.38m).

 

·     Net assets increased to £15.6m (H1 2015: £10.5m).

 

·     Net debt reduced by £3.8m to £3.3m (H1 2015: £7.1m)

 

 

Operational Highlights

 

·     The performance of the cold store division, overall, was ahead in the first half of 2016.

 

·     The contribution of the commodity division, overall, was ahead in the first half of 2016.

 

·     We invested £0.6m of the funds raised in December 2015 by the end of June 2016. We continue to invest in projects which provide short term payback and in the build out of our dairy business.

 

·     During the period, we invested £0.3m in our temperature controlled division and another £0.3m in assembling the dairy herd. Within the cold store division, £0.1m was invested in increasing blast freezing capacity at Wrexham, with an additional £0.1m on a number of customer IT integrations.

 

·     We have invested £0.3m in a 500 maiden heifer herd. We have signed two 17 year leases for a 355 acre dairy farming project in Kilkenny.

 

Operations

 

North West Division

 

The North West cold store division which comprises the freehold sites at Wrexham and Birmingham performed well in the first half of 2016. This was mainly as a result of growth in exports of pig meat to China.

 

China is the UK's biggest export market for fifth quarter pig meat. The current high priced pig meat market in China adds substantially to the value of a pig carcass. Exports of pig meat to China have increased more than fourfold since the UK started to export there in 2011. There are only three cold stores in the UK licensed for the export of pig meat to China. Norish plc owns two of them, located at Wrexham and Birmingham (Brierley Hill).

South East Division

 

The South East division, which comprises the sites at Bury St. Edmunds (freehold), Braintree (leasehold), Gillingham (long term leasehold at a peppercorn rent) and East Kent (leasehold) performed below the same period last year, reflecting the short term costs of preparing for a new longer term contracted customer. We also had a slow start to the year at our Bury site.

 

We are pursuing initiatives to improve both revenue and margin mix in this division. While it is early days, the sales initiatives undertaken, to date, look promising for 2017. In the short term, contribution in this division will be impacted by an ongoing refurbishment programme at the Bury St Edmunds site, which we expect to complete by November 2016.

 

Commodity Trading

 

Our commodity trading division which consists of Townview Foods Limited and Foro International Connections Limited contributed £0.2m for the period, up from £0.1m for the same period last year.

 

Town View Foods trades in protein products mainly beef, pork, lamb and chicken. Sales from pork and chicken increased by £2m during the period, while sales from beef and lamb increased by £1.2m. Townview Foods Limited generated a contribution of £0.3m for the period, against £0.1m for the same period last year, and sales of £8.7m, against £5.4m for the same period last year.

 

Foro International Connections accounted for £0.6m of the sales, unchanged from 2015. It incurred losses of £0.1m against a breakeven last year. Foro trades mainly in fish, dairy and FMCG.

 

We are continually investing in people to grow this division.

 

Dairy

 

We are currently converting two leased farms to our dairy farm subsidiary, Cantwellscourt Farm Ltd. Roadways are being installed, water has been laid on and fencing is being completed. Of the 500 maiden heifers assembled earlier in the year, 469 have been scanned in calf. We expect first milk in February 2017.

 

 

Discontinued

 

During 2015 the Group agreed the sale of the Leeds site for £0.4m net. The sale completed in March 2016. This site was not part of the future plans for the business. Losses in respect of this property are included in discontinued activities.

 

Financial Review

 

The Group has strengthened its balance sheet following the equity fund raising of £4.9m (net) in December 2015. Total equity at 30 June 2016 stood at £15.6m (H1 2015: £10.3m). The funds will be used to execute a number of investment opportunities. Net debt at 30 June 16 was £3.3m compared to £7.1 m at 30 June 2015.

 

Dividend

 

The board does not recommend the payment of an interim dividend, unchanged from last year.

 

 

Brexit

 

The United Kingdom voted to leave the EU on the 23rd of June, this year. As of now we have not seen any appreciable change to our business, as a result of that vote.

 

Outlook

 

Cold Storage Divisions

 

Since the beginning of the third quarter trading at one of our six sites was impacted by temporary difficulties at one of our main customer's processing plants. This issue was resolved during the second week of September and business volumes from this particular site have been returning to normal. The final quarter will see the benefit of the resolution of these difficulties. Overall, we are pursuing initiative to grow sales in 2017 (revenue and margin mix), while simultaneously focussing on our key cost overheads. We are cautiously optimistic for growth in 2017 in this division.

 

We are continuing to invest in our cold storage assets which we believe will lead to both reduced costs and increased productivity.

 

We expect the demand for cold storage in the UK to grow, post Brexit, as cheaper proteins are imported into the UK, from other countries, further afield.

 

We are happy with both the quality and locations of our assets, and the opportunities we see in the market place to grow the business.

 

Commodity Trading

 

We are very pleased with the growth in the business of Town View Foods in the first half of the year. This momentum has continued into the second half. We see an opportunity to grow this business, both organically and by acquisition, to further enhance the development of this business.

 

Dairy

 

We are satisfied with the progress we have made with this new venture, to date.

 

 

 

 

financial review

 

The improved financial performance in 2016 has come about from both the temperature controlled division and commodity division.

 

Sales

 

Total Group revenue increased by 32% to £15.6m (H1 2015: £11.8m). Temperature controlled revenues increased by 11% to £6.3m (H1 2015: £5.7m).  Revenues were up mainly as a result of an increase in blast freezing volumes. Revenues in the commodity division increased by 52% to £9.3m (H1 2015: £6.1m). Town View Foods mainly accounted for the increased sales.

 

Gross profits

 

Gross profit increased by 33% to £0.8m (H1 2015: £0.6m). The increase in gross profit was generated equally between the two main divisions.

 

Operating profit

 

Operating profit increased by 29% to £0.49m (H1 2015: £0.38m), reflecting the increase in gross profit.

 

Finance expense (net)

 

Finance expense remained unchanged at £0.1m.

 

Loss from discontinued operations

 

As part of the Group's strategy to exit the ambient sector we recorded a trading loss of £0.04m (H1 2015: £0.03m). The loss relates solely to the property at Leeds.

 

Earnings per share

 

The basic earnings per share fell to 1p (H1 2015:1.1p).  Additional shares of 11,427,317 were issued in December 2015 as part of the equity fund raise.

 

Capital

 

During the period we invested £0.3m (H1 2015: £0.3m) in routine capital expenditure in the temperature controlled division.

 

An investment of £0.3m was made in a dairy herd.

 

 

Cash Position

 

Net debt reduced by 54% to £3.3m (H1 2015: £7.1m). Operating activities generated £0.8m (H1 2015:  £0.5m) and financing activities absorbed £1.2m (H1 2015: £0.2m). A net investment in assets was made of £0.6m (H1 2015: £0.3m).

 

Dividend

 

The board does not recommend the payment of an interim dividend, unchanged from last year.

 

 

 

Norish plc





Consolidated income statement





For the six months ended 30 June 2016












Six months

Six months

Year



ended

ended

ended



30 June

30 June

31 December



2016

2015

2015



(Unaudited)

(Unaudited)

(Audited)








£'000

£'000

£'000






Continuing operations





Revenue


15,555

11,814

27,515

Cost of sales


(14,744)

(11,214)

(26,232)






Gross profit


811

600

1,283






Administrative expenses


(325)

(217)

(447)

 

Operating profit from continuing operations


486

383

836






Finance expenses - interest paid


(121)

(132)

(272)

Finance expenses - fair value gain/(loss) swaps/caps


3

18

26

Finance expenses - notional interest


(18)

(24)

(33)






Profit on continuing activities before taxation


350

245

557






Tax on profit on ordinary activities


(75)

(54)

(48)






Profit for the period attributable to owners of the parent from continuing operations


275

191

509






Loss from discontinued activities


(40)

(29)

(220)






Profit for the period


235

162

289






Other comprehensive income


-

-

-






Total comprehensive income for the year


235

162

289

 

Profit for the period attributable to owners of parent


243

164

291

Total comprehensive expense for the period attributable to non-controlling interest


(8)

(2)

(2)

 

Earnings per share expressed in pence per share:





From continuing operations

- basic


1.0p

1.1p

2.8p

- diluted


1.0p

1.1p

2.8p

 

From discontinued operations

- basic


(0.2)p

(0.2)p

(1.2)p

- diluted


(0.2)p

(0.2)p

(1.2)p

Weighted average number of diluted ordinary shares


28,890,514

17,106,376

17,842,013

 

Norish plc




Interim balance sheet




As at 30 June 2016





As at

As at

As at


30 June

30 June

31 December


2016

2015

2015


(Unaudited)

(Unaudited)

(Audited)






£'000

£'000

£'000

ASSETS




Non-current assets




Goodwill

2,338

2,338

2,338

Biological assets

345

-

-

Property, plant and equipment

15,847

16,033

15,885


18,530

18,371

18,223

Current assets




Trade and other receivables

5,642

4,220

5,314

Inventories

227

108

386

Cash and cash equivalents

3,196

129

4,383

Assets of disposal group classified as held for sale

125

659

518


9,190

5,116

10,601





TOTAL ASSETS

27,720

23,487

28,824





Equity attributable to equity holders of the parent

And non-controlling interest




Share capital

5,616

3,280

5,344

Share premium account

7,281

4,198

6,990

Other reserves

(540)

23

23

Retained earnings

3,224

3,042

2,981

Equity attributable to equity holders of the parent

15,581

10,543

15,338

Non-controlling Interest

(19)

(11)

(11)

TOTAL EQUITY

15,562

10,532

15,327





Non-current liabilities




Borrowings

3,312

4,592

4,123

Financial Liabilities at fair value through profit or loss

183

398

199

Provisions

-

-

-

Deferred tax

945

954

942


4,440

5,944

5,264





Current liabilities




Trade and other payables

4,208

3,967

4,348

Financial Liabilities at fair value through profit or loss

248

181

311

Current tax liabilities

103

133

44

Borrowings

3,159

2,681

3,473

Borrowings of disposal group classified as held for sale

-

-

-

Liabilities of disposal group classified as held for sale

-

49

57


7,718

7,011

8,233





TOTAL EQUITY AND LIABILITIES

27,720

23,487

28,824









 

Norish plc








 

Consolidated statement of changes in equity







 

For the six months ended 30 June 2016







 







Non-


 


Share

Share

Other

Retained


Controlling


 


capital

premium

Reserves

Earnings

Total

Interest


Total


(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)


(Unaudited)


£'000

£'000

£'000

£'000

£'000

£'000


£'000










At 1 January 2015

3,280

4,198

23

2,878

10,379

(9)


10,370










Net profit for the period

-

-

-

164

164

(2)


162

Issue of share capital

-

-

-

-

-

-


-

Share issue costs

-

-

-

-

-

-


-

Equity dividends paid (recognised directly in equity)

-

-

-

-

-

-


-

At 30 June 2015

3,280

4,198

23

3,042

10,543

(11)


10,532










Net loss  for the period

-

-

-

127

127

-


127

Issue of share capital

2,064

3,078

-

-

5,142

-


5,142

Share issue costs

-

(286)

-

-

(286)

-


(286)

Equity dividends paid (recognised directly in equity)

-

-

-

(188)

(188)

-


(188)

At 31 December 2015

5,344

6,990

23

2,981

15,338

(11)


15,327










Net profit for the period

-

-

-

243

243

(8)


235

Issue of share capital

272

291

-

-

563

-


563

Treasury shares

-

-

(563)

-

(563)

-


(563)

Equity dividends paid (recognised directly in equity)

-

-

-

-

-

-


-

At 30 June 2016

5,616

7,281

(540)

3,224

15,581

(19)


15,562



 

Norish plc




Consolidated cash flow statement




For the six months ended 30 June 2016





Six months

Six months

Year


Ended

ended

Ended


30 June

30 June

31 December


2016

2015

2015


(Unaudited)

(Unaudited)

(Audited)


£'000

£'000

£'000

Profit on continuing activities before taxation

350

245

557

Loss on discontinued activities

(40)

(29)

(220)

Finance expenses

139

156

305

Finance income

(3)

(18)

(26)

Depreciation - property, plant and equipment

318

302

615


764

656

1,231

Changes in working capital:




Decrease/(increase)  in inventories

159

(56)

(334)

Decrease/(increase) in trade and other receivables

65

(367)

(1,320)

Decrease in current liabilities held for sale

(57)

(433)

(418)

(Decrease)/increase in payables

(140)

655

1,029

Cash generated from operations

791

455

188





Interest paid - bank loans and overdrafts

(121)

(132)

(272)

Taxation paid

(13)

-

(95)

Net cash from operating activities

657

323

(179)

Investing activities




Purchase of biological assets

(345)

-

-

Purchase of property, plant and equipment

(280)

(337)

(502)

Net cash used in investing activities

(625)

(337)

(502)

Financing activities




Dividends paid to shareholders

-

-

(188)

Deferred consideration payments

(94)

(115)

(185)

Share issue proceeds

-

-

5,142

Share issue costs

-

-

(286)

Invoice finance (payments)/receipts

(64)

336

1,141

Overdraft receipts

-

-

-

Finance lease capital repayments

(66)

(60)

(124)

Term loan repayments

(995)

(403)

(821)

Net cash used in financing activities

(1,219)

(242)

4,679





Net (decrease)/increase in cash and cash equivalents

(1,187)

(256)

3,998





Cash and cash equivalents, at beginning of period

4,383

385

385

Cash and cash equivalents end of period

3,196

129

4,383

 

Note: The accounting policies applied throughout the period are consistent with those applied for the year ended 31 December 2015, as set out in the 2015 Annual Report.

 

Enquiries:

Norish


Aidan Hughes, Finance Director

Telephone: + 44 1293 862 498



Davy


Anthony Farrell

Telephone: + 353 1 679 6363

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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