Source - LSE Regulatory
RNS Number : 0763M
Volvere PLC
17 September 2021
 

 

 

 

17 September 2021

 

 

 

Volvere plc

 

("Volvere" or the "Group")

 

Interim Results for the six months ended 30 June 2021

 

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its unaudited Interim Results for the six months ended 30 June 2021.

 

Highlights

 

£ million except where stated

Six months ended

Year ended

 

30 June

2021

30 June

2020

31 December

2020

Group revenue

15.72

12.95

30.81

 

Group loss before tax

 

(0.29)

 

(0.97)

 

(0.55)

 

 

 

 

 

 

 

 

 

As at
30 June 2021

As at
30 June 2020

As at 31
December 2020

Consolidated net assets per share
(excluding non-controlling interests)(1)

 

£13.50

 

£13.29

 

£13.65

 

 

 

 

Group net assets

36.89

26.02

37.18

 

 

 

 

Cash and marketable securities

23.13

16.11

23.71

 

 

 

 

 

·      Positive underlying performance from Shire Foods, the Group's frozen savoury products manufacturer in spite of margin pressure

·      Reduced losses at Indulgence Patisserie, the Group's frozen desserts manufacturer

·      Continuing strong financial position with high liquidity

 

Forward-looking statements:

This report may contain certain statements about the future outlook for Volvere plc.  Although the directors believe their expectations are based on reasonable assumptions, any statements about future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

 

Notes

 

1      Based on the net assets attributable to owners of the parent company and the respective period end shares in issue (excluding treasury shares), which were 2,571,922 at 30 June 2021, 1,834,182 at 30 June 2020, and 2,571,922 at 31 December 2020.

 

2      Profit before intra-group management and interest charges is considered to be a relevant and useful interpretation of the trading results of the business such that its performance can be understood on a basis which is independent of its ownership by the Group.  Further information is included in the Chief Executive's statement and Financial Review.

 

For further information:

Volvere plc

 

Jonathan Lander, CEO

Tel: +44 (0) 20 7634 9707

 

www.volvere.co.uk

 

 

 

Cairn Financial Advisers LLP (Nominated Adviser)

Sandy Jamieson/James Lewis

 

 

 

Tel: + 44 (0) 20 7213 0880

Canaccord Genuity Limited (Joint Broker)

Bobbie Hilliam/Alex Aylen/Georgina McCooke

 

Hobart Capital Markets LLP (Joint Broker)

Lee Richardson

 

Tel: + 44 (0) 207 523 8000

 

 

 

 

Tel: +44 (0) 20 7070 5691

 

Chairman's Statement

 

I am pleased to report on the results for the six months to 30 June 2021.  The Group again delivered a good performance, with both Shire Foods and Indulgence Patisserie showing continued progress.

 

Net assets per share have fallen slightly to £13.50 in the period due to the trading losses at Indulgence (30 June 2019: £13.29, 31 December 2020: £13.65).

 

The Group remains in a strong financial position with significant cash reserves and is poised to take advantage of any investment opportunities arising from reducing levels of UK government support schemes.

 

 

David Buchler

Chairman

 

17 September 2021

 

*Net assets attributable to owners of the parent company divided by total number of ordinary shares outstanding at the reporting date

(less those held in treasury) - see note 8.

 

 

Chief Executive's Statement

 

Shire Foods performed well, with an improved performance over the comparable 2020 period.  Indulgence Patisserie's losses are reducing and work is ongoing to drive further improvement.

 

As with most businesses in the UK, the COVID-19 pandemic has continued to affect the Group.  Our staff have had to adopt new working practices but nonetheless continued to work throughout most of the last 18 months.  We are enormously grateful to them for their efforts. We continue to put their health and wellbeing centre-stage in how we operate.

 

Investment opportunities in the first half of 2021 have been more limited than we expected when we raised capital in October 2020. As I have said before, we believe this is because of the availability of UK government support schemes. Those that have been considered did not meet the criteria we set for investment that has driven our returns to date.

 

In what is traditionally the weaker half of the year, overall Group revenue rose to £15.72 million for the period (30 June 2020: £12.95 million, 31 December 2020: £30.81 million).  The Group's loss before tax was £0.29 million, a reduction of £0.68 million compared to the comparable period in 2020 (30 June 2020: loss £0.97 million, year to 31 December 2020: loss £0.55 million).

 

The performance of each of the Group's segments is set out below and discussed further in the Financial Review.

 

Food manufacturing

 

This segment comprises Shire Foods, the Group's 80%-owned frozen pie and pasty manufacturing business which was acquired in 2011, and Indulgence Patisserie, a premium frozen desserts and cakes manufacturer, which was acquired in February 2020.

 

Revenues for the segment as a whole were £15.72 million (30 June 2020: £12.95 million, 31 December 2020: £30.81 million) and the profit before tax and intra-group management and interest charges was £0.24 million (30 June 2020: loss £0.25 million, 31 December 2020: profit £0.79 million).  The overall improvement reflects reduced losses at Indulgence, with an improved performance at Shire.

 

Detailed financial information relating to the two businesses is included in the Financial Review below.

 

Shire Foods

 

Revenue grew by 15.2% to reach £13.85 million (30 June 2020: £12.02 million).  Profit before tax and intra-Group management and interest charges** was £0.60 million, compared to £0.35 million for the six months to 30 June 2020 (31 December 2020: profit £1.81 million).

 

The performance of Shire Foods was pleasing given the circumstances arising from the COVID-19 pandemic.  With the reopening of schools, food service sales have once again increased. Our vegan brand, Naughty Vegan, continues to make progress whilst we seek further listings for our three savoury pastry ranges and two cheesecakes (made by Indulgence).  However, the increasing range of new products for vegans and vegetarians is making the battle for retail shelf space more challenging.

 

As noted in the Group's 2020 report, there is continuing pressure on raw material costs and we have seen sporadic logistics issues arising from driver shortages.  Labour costs also continue to rise but the greater challenge in more recent months has been attracting and retaining staff in sufficient numbers to allow us to maintain planned capacity, in spite of increasing rates of pay.  We do not see any short-term relief from these challenges whilst the country continues to weigh under the effects of the pandemic and Brexit. Some of these factors may have a modest impact in the second half but we remain positive that we will deliver year-on-year growth nonetheless.

 

Indulgence Patisserie

 

Following the acquisition of Indulgence in February 2020, we have been working to grow the company's revenue in both retail and foodservice channels.  The latter has been particularly difficult due to the COVID-19 pandemic but encouraging engagement is being achieved on a number of fronts now that restaurants are progressively reopening.

 

Revenue for the period was £1.87 million (30 June 2020: £0.92 million, 31 December 2020: £3.62 million) and the company made a loss before tax and intra-Group management and interest charges** of £0.36 million (30 June 2020: loss £0.60 million, 31 December 2020: loss £1.02 million).

 

Whilst we continue to focus on premium products, we are increasingly being asked to tender for "mid-tier" ranges. These afford a higher volume but are traditionally sold at lower margins and necessitate investment in equipment to increase efficiency.  To that end, we have recently commissioned an automatic cartoning machine to increase packing throughput and on-shelf box quality.  Further investments will be required as we extend our product range and depth, which are actively in development.

 

Local management is being supported by staff from across the Group to enable best practice and process improvements to be implemented in key areas. There remains work to be done to bring Indulgence up to the standard to which we aspire in a number of areas but we are actively strengthening our leadership where necessary to achieve that.

 

Investing and management services

 

This segment represents our central functions covering Group management, finance and IT services.  The loss before tax and intra-Group management and interest charges** for the period was £0.53 million (30 June 2020: loss £0.73 million, 31 December 2020: loss £1.34 million). The prior comparable period included an amount of £0.29 million for final bonuses paid in relation to a business sold in 2018.

 

Further segmental information is set out in the financial review below and in note 3.

 

Acquisitions and future strategy

 

The Coronavirus Job Retention Scheme ends this month and the ban on commercial evictions ends in March 2022.  Although there is a continuing backdrop of COVID-19 UK government support schemes, we believe that the debt burden and cashflow impact of a return to normality will prove too great for many businesses. This should increase investment opportunities - for which we have the resources ready to invest.  There are already early signs of an increase in the amount of opportunities and we expect that to continue.

 

 

 

Jonathan Lander

Chief Executive

 

17 September 2021

 

**Profit before intra-Group management and interest charges is considered to be a relevant and useful interpretation of the trading results of the business such that its performance can be understood on a basis which is independent of its ownership by the Group.

 

 

 

Financial Review

 

This financial review covers the Group's performance during the period ended 30 June 2021.  It should be read in conjunction with the Chairman's and Chief Executive's Statements.

 

Overview

 

Overall Group revenue for the period increased by £2.77 million to £15.72 million (30 June 2020: £12.95 million, 31 December 2020: £30.81 million). Of this increase, £1.83 million related to Shire Foods, with the balance of £0.94 million relating to Indulgence.

 

In comparison to the six-month period ended 30 June 2020, the Group's loss before tax reduced by £0.68 million to £0.29 million (30 June 2020: loss £0.97 million, year to 31 December 2020: loss £0.55 million). Of this reduction, £0.29 million relates to one-off incentive costs incurred in 2020 in respect of the sale of a former subsidiary.  The remainder of the reduction in losses is due principally to improved trading in Shire Foods and Indulgence.

 

Further comment on each segment is set out below and detailed information about the Group's segments is set out in note 3 to these interim results, which should be read in conjunction with this financial review.

 

Food manufacturing

 

The food manufacturing segment includes two businesses, Shire Foods and Indulgence Patisserie.  The results of both businesses are shown in the tables below.

 

Shire Foods

 

A summary of Shire's recent financial performance is set out in Table A below.

 

Table A

 

6 months to

30 June

2021

£'000

 

6 months to

30 June

2020

£'000

Year ended 31 December

2020

£'000

Year ended 31 December

2019

£'000

Year ended 31 December

2018

£'000

 

 

 

 

 

 

Revenue

13,850

12,018

27,189

23,036

18,344

 

 

 

 

 

 

 

 

 

 

 

 

Underlying profit before tax, intra-group management and interest charges

 

599

 

352

 

1,813

 

1,384

 

854

 

Intra-group management and interest charges

 

(75)

 

(75)

 

(200)

 

(200)

               

(200)

 

 

 

 

 

 

 

Profit/(loss) before tax

 

524

 

277

 

1,613

 

1,184

 

654

 

 

 

 

 

 

 

Although the underlying materials margin for the period increased by around 1.3% compared to the comparable period, it was 2.1% lower than the margin achieved for 2020 as a whole.  This reflects the inflationary external environment, which we are continuing to feel the effects of in 2021.  In addition, distribution and warehousing costs were approximately 24% (£0.17 million) above the comparable period, which is not explained simply by the growth in volumes.  Direct labour costs were £0.16 million higher this year compared to the period to 30 June 2020, an increase of approximately 8%.  We expect these cost pressures to continue for the foreseeable future and are endeavouring to reflect them in tender pricing whenever possible.

 

Continued investment in plant and machinery amounted to £0.18 million in Shire. Shire continues to be largely self-funding, utilising 3rd party working capital and debt facilities where necessary, and there were no Group loans outstanding at 30 June 2021 (30 June 2020: nil, 31 December 2020: nil).

 

Shire's unaudited net assets at the period end amounted to £10.54 million (30 June 2020: £7.88 million; 31 December 2020: £10.11 million), of which 20% is attributable to non-controlling interests. Approximately £1.3 million of the increase over the prior comparable period is explained by the 2020 year end revaluation of Shire's land and buildings, with the balance due to trading profits arising.

 

Indulgence Patisserie

 

The acquisition of the business and assets of Indulgence Patisserie was effected through two wholly-owned subsidiaries, with the properties and certain plant assets held in a separate company from the trading operations.  The results below reflect the totality of the Indulgence operations as they are operated as one business.

 

 

 

A summary of Indulgence's recent financial performance is set out in Table B below.

 

Table B

 

6 months to

30 June

2021

£'000

 

7 February to

30 June

2020

£'000

 

7 February to

31 December

2020

£'000

 

 

 

 

Revenue

1,867

923

3,620

 

 

 

 

 

 

 

 

Underlying loss before tax, intra-group management and interest charges

 

(360)

 

(601)

 

(1,018)

 

Intra-group management and interest charges

 

-

 

-

 

-

 

 

 

 

 

Loss before tax

 

(360)

 

(601)

 

(1,018)

 

 

 

 

The reduction in losses has been encouraging, reflecting the growth in retail volumes achieved, offset somewhat by continuing low volumes in the foodservice sector.  The latter is gradually increasing, but it is clear that the UK hospitality sector is in recovery mode, with recruiting new supply partners not a top priority at this time.

 

For one month during the period, a number of staff were placed on furlough. The business continued manufacturing, however, using a skeleton staff. Lower volumes have reduced the dependency on agency staff and this has allowed some proactive capacity planning in order to increase efficiency.  However, the availability of materials including packaging, as well as the reliability of transport partners due to driver shortages, has required a flexible approach to manufacturing planning.

 

Inventory build has continued throughout the period, with £0.80 million on hand at the period end (30 June 2020: £0.61 million, 31 December 2020: £0.74 million).  Credit from suppliers continues to be very low given the early stage of development of the company and the Group continues to provide loans to both finance losses and for working capital.

 

Group loans outstanding at the period end (including the original acquisition price and incidental costs) amounted to £4.71 million (30 June 2020: £2.84 million, 31 December 2020: £4.24 million).

 

Indulgence's combined unaudited net assets, excluding the Group loan noted above, amounted to £3.40 million at the period end (30 June 2020: £2.24 million, 31 December 2020: £3.25 million).

 

Finance income and expense

 

The Group's net finance expense was £0.06 million in the period, reflecting low interest rates on cash deposits offset by debt servicing costs (30 June 2020: net expense £nil, 31 December 2020: net expense £0.07 million).  In line with previous years, individual Group trading companies utilise leverage wherever appropriate and possible, and without recourse to the remainder of the Group. In the period in question, only Shire Foods borrowed externally, with Indulgence funded from Group resources.

 

Statement of financial position

 

Cash

 

Cash at the period end was £23.13 million (30 June 2020: £16.11 million, 31 December 2020: £23.71 million).  The increase in cash compared to June 2020 reflects the placing in October 2020, which raised £9.70 million net of expenses, offset by trading losses.

 

Full details of cash movements are shown in the consolidated statement of cash flows.  As is usual for the Group's food businesses, the movements in working capital reflect their lower sales volumes in the earlier part of the year, coupled with lower requirements for working capital loans.

 

Earnings per share and share capital

 

Total basic and diluted loss per ordinary share were (15.2) pence (30 June 2020: loss (56.1) pence; year ended 31 December 2020: loss (40.4) pence).

 

Purchase of own shares

 

The Company did not acquire any of its own ordinary shares during the period (30 June 2020: nil, 31 December 2020: 3,000 shares for £0.04 million).

 

 

 

Hedging

 

It is not the Group's policy to enter into derivative instruments to hedge interest rate or foreign exchange risk.

 

Key performance indicators (KPIs)

 

The Group uses key performance indicators suitable for the nature and size of the Group's businesses.  The key financial performance indicators are revenue and profit before tax.  The performance of the Group and the individual trading businesses against these KPIs is outlined above, in the Chief Executive's statement and disclosed in note 3.

 

Internally, management uses a variety of non-financial KPIs in respect of the food manufacturing segment, including order intake, manufacturing output and sales, all of which are monitored weekly and reported monthly.

 

Principal risk factors

 

The Company and Group face a number of specific business risks that could affect the Company's or Group's success.  The Company and Group invests in distressed businesses and securities, which by their nature often carry a higher degree of risk than those that are not distressed.  The Group's businesses are principally engaged in the provision of goods and services that are dependent on the continued employment of the Group's employees and availability of suitable, profitable workload.  In the food manufacturing segment, there is a dependency on a small number of customers and a reduction in the volume or range of products supplied to those customers or the loss of any one of them could impact the Group materially.  The current COVID-19 pandemic or a similar such event could impact on the Group's employees, customers, suppliers and financial position.

 

These risks are managed by the Board in conjunction with the management of the Group's businesses.

 

 

 

Nick Lander

Chief Financial & Operating Officer

 

17 September 2021

 

 

 

 

Consolidated income statement

 

 

 

 

 

 

 

Note

6 months to

30 June

2021

6 months to

30 June

2020

Year ended

31

December

2020

 

 

£'000

£'000

£'000

Continuing operations

 

 

 

 

Revenue

3

15,718

 

12,952

30,809

Cost of sales

 

(13,359)

(11,230)

(25,803)

 

 

 

 

 

Gross profit

 

2,359

1,722

5,006

 

 

 

 

 

Distribution costs

 

(991)

(770)

(1,857)

Administrative expenses

 

(1,591)

(1,923)

(3,624)

 

 

 

 

 

Operating loss

 

(223)

(971)

(475)

 

 

 

 

 

Finance expense

4

(63)

(69)

(152)

Finance income

4

-

66

80

 

 

 

 

 

Loss before tax

 

(286)

(974)

(547)

Income tax credit

 

-

-

29

 

 

 

 

 

Loss for the period

 

(286)

(974)

(518)

 

 

 

 

 

Attributable to:

 

 

 

 

- Equity holders of the parent

 

(390)

(1,029)

(792)

- Non-controlling interests

7

104

55

274

 

 

(286)

(974)

(518)

 

 

 

 

 

Earnings per share

5

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

- loss from continuing operations

 

(15.2)p

(56.1)p

(40.4)p

- earnings from discontinued operations

 

-

-

-

Total

 

(15.2)p

(56.1)p

(40.4)p

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of comprehensive income

 

 

 

6 months to

30 June

2021

6 months to

30 June

2020

Year ended

31

December

2020

 

 

£'000

£'000

£'000

 

 

 

 

 

Loss for the period

 

(286)

(974)

(518)

 

 

 

 

 

Other comprehensive income

Revaluation of freehold land and buildings

 

 

-

 

-

 

1,065

 

 

 

 

 

 

Total comprehensive income for the period

 

(286)

(974)

547

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

(390)

(1,029)

60

Non-controlling interests

 

104

55

487

 

 

(286)

(974)

547

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

 

 

 

Share

capital

£'000

Share

premium

£'000

 

Revaluation

reserve

£'000

Retained

earnings

£'000

Total

£'000


Non-controlling interests
£'000

Total

£'000

 

 

 

 

 

 

 

 

Six months to 30 June 2021

 

 

 

 

 

 

 

Loss for the period

-

-

-

(390)

(390)

104

(286)

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

-

(390)

(390)

104

(286)


Balance at 1 January

50

7,885

939

26,229

35,103

2,076

37,179

 

 

 

 

 

 

 

 

Transactions with owners:

 

 

 

 

 

 

 

 

Sale of own treasury shares

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

Purchase of own treasury shares

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions with owners

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June

50

7,885

939

25,839

34,713

2,180

36,893

 

 

 

 

 

 

 

 

 

 

 

Share

capital

£'000

Share

premium

£'000

 

Revaluation

reserve

£'000

Retained

earnings

£'000

Total

£'000


Non-controlling interests
£'000

Total

£'000

 

 

 

 

 

 

 

 

Six months to 30 June 2020

 

 

 

 

 

 

 

Loss for the period

-

-

-

(1,029)

(1,029)

55

(974)

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

-

(1,029)

(1,029)

55

(974)


Balance at 1 January

 

50

3,640

100

21,610

25,400

1,589

26,989

 

 

 

 

 

 

 

 

Transactions with owners:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of own treasury shares

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

Purchase of own treasury shares

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions with owners

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June

50

3,640

100

20,581

24,371

1,644

26,015

 

 

 

 

 

 

 

 

 

 

 

Share

capital

£'000

Share

premium

£'000

 

Revaluation

reserve

£'000

Retained

earnings

£'000

Total

£'000


Non-controlling interests
£'000

Total

£'000

 

 

 

 

 

 

 

 

Year ended 31 December 2020

 

 

 

 

 

 

 

Loss for the year

-

-

(13)

(779)

(792)

274

(518)

 

 

 

 

 

 

 

 

Revaluation of property

-

-

852

-

852

213

1,065

 

 

 

 

 

 

 

 

Total comprehensive income for the year

-

-

839

(779)

60

487

547


Balance at 1 January

 

50

3,640

100

21,610

25,400

1,589

26,989

 

 

 

 

 

 

 

 

Transactions with owners:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of own treasury shares

-

4,245

-

5,437

9,682

-

9,682

 

 

 

 

 

 

 

 

Purchase of own treasury shares

-

-

-

(39)

(39)

-

(39)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions with owners

-

4,245

-

5,398

9,643

-

9,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December

50

7,885

939

26,229

35,103

2,076

37,179

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of financial position

 

 

 

 

30 June

2021

30 June

2020

31 December

2020

 

Note

£'000

£'000

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant & equipment

 

9,670

8,328

9,956

 

 

 

 

 

Total non-current assets

 

9,670

8,328

9,956

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

5,830

4,316

4,020

Trade and other receivables

 

5,453

4,280

7,185

Cash and cash equivalents

 

23,130

16,105

23,711

 

 

 

 

 

Total current assets

 

34,413

24,701

34,916

 

 

 

 

 

Total assets

 

44,083

33,029

44,872

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

Loans and other borrowings

 

(483)

(459)

(1,452)

Finance leases

 

(377)

(466)

(388)

Trade and other payables

 

(4,065)

(3,723)

(3,333)

 

 

 

 

 

Total current liabilities

 

(4,925)

(4,648)

(5,173)

 

 

 

 

 

Non-current liabilities

 

 

 

 

Loans and other borrowings

 

(988)

(1,100)

(1,044)

Finance leases

 

(888)

(1,098)

(1,087)

 

 

 

 

 

Total non-current liabilities

 

(1,876)

(2,198)

(2,131)

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

(6,801)

(6,846)

(7,304)

 

 

 

 

 

Provisions - deferred tax

 

(389)

(168)

(389)

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

36,893

26,015

37,179

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

50

50

50

Share premium account

 

7,885

3,640

7,885

Revaluation reserves

 

939

100

939

Retained earnings

 

25,839

20,581

26,229

 

 

 

 

 

Capital and reserves attributable to equity holders of the Company

 

34,713

24,371

35,103

Non-controlling interests

7

2,180

1,644

2,076

 

 

 

 

 

TOTAL EQUITY

 

36,893

26,015

37,179

 

 

 

 

 

 

 

 

 

Consolidated statement of cash flows

 

 

6 months to 30 June 2021

6 months to 30 June 2021

6 months to 30 June 2020

6 months to 30 June 2020

Year ended 31 December 2020

Year ended 31 December 2020

 

Note

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Loss for the period

 

 

(286)

 

(974)

 

(518)

Adjustments for:

 

 

 

 

 

 

 

Finance expense

4

63

 

69

 

152

 

Finance income

4

-

 

(66)

 

(80)

 

Depreciation

 

559

 

436

 

979

 

Operating lease rentals

 

(50)

 

 

 

(59)

 

Income tax credit

 

-

 

-

 

(29)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

572

 

439

 

963

 

 

 

 

 

 

 

 

Operating cash flows before movements in working capital

 

 

286

 

(535)

 

445

 

 

 

 

 

 

 

 

Decrease/(increase) in trade and other receivables

 

 

1,732

 

537

 

(2,369)

Increase in trade and other payables

 

 

719

 

1,323

 

928

Increase in inventories

 

 

(1,939)

 

(2,018)

 

(1,723)

Tax paid

 

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash generated from/(used by) operating activities

 

 

798

 

(693)

 

(2,719)

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

(273)

 

(300)

 

(957)

 

Acquisition of business and assets

 

-

 

(1,234)

 

(1,234)

 

Interest received

 

-

 

66

 

80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used by investing activities

 

 

(273)

 

(1,468)

 

(2,111)

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

Interest paid

 

(59)

 

(69)

 

(144)

 

Purchase of own shares (treasury shares)

8

-

 

-

 

(39)

 

Sale of own shares (treasury shares)

 

-

 

-

 

9,682

 

Net repayment of borrowings

 

(1,047)

 

(982)

 

(275)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used by financing activities

 

 

(1,106)

 

(1,051)

 

9,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (decrease)/ increase in cash

 

 

(581)

 

(3,212)

 

4,394

 

Cash at beginning of period

 

 

23,711

 

19,317

 

19,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash at end of period

 

 

23,130

 

16,105

 

23,711

 

 

 

 

 

 

 

 

 

 

Volvere plc

 

Notes forming part of the unaudited interim results for the period ended 30 June 2021

 

1          Financial information and basis of accounting

 

These interim financial statements have been prepared using accounting policies consistent with IFRSs as adopted by the European Union.

 

These interim financial statements should be read in accordance with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2020.  They do not include all the information required for a complete set of IFRS financial statements.  However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.  AIM-listed companies are not required to comply with IAS 34 Interim Financial Reporting and accordingly the Group has taken advantage of this exemption.

 

The comparative figures for the year ended 31 December 2020 have been prepared under IFRS.  They do not constitute statutory accounts as defined by the Companies Act 2006.  The accounts for the 12 months ended 31 December 2020 received an unmodified auditor's report and have been filed with the Registrar of Companies.

 

Copies of this statement will be available to members of the public at the Company's registered office: Shire House, Tachbrook Road, Leamington Spa CV31 3SF and on its website www.volvere.co.uk.

 

2          Significant accounting policies

 

The accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2020.

 

3          Operating segments

 

An analysis of key financial data by business segment (excluding intra-Group interest and management charges and balances) is provided below.  The Group's food manufacturing segment, which is an aggregation of the separate segments of savoury pastry and cake and desserts manufacturing, is engaged in the production and sale of food products to third party customers, and the investing and management services segment incurs central costs, provides management services and financing to other Group segments and undertakes treasury management on behalf of the Group.

 

Analysis by business segment:

 

 

 

 

 

 

 

Period ended 30 June 2021

 

 

 

Food

manufacturing

£'000

Investing and

 Management

 services

£'000

 

 

Total

£'000

 

 

 

 

 

 

Revenue

 

 

15,718

-

15,718

 

 

 

 

 

 

Profit/(loss) before tax(1)

 

 

239

(525)

(286)

 

 

 

 

 

 

 

 

 

 

 

 

Period ended 30 June 2020

 

 

 

Food

manufacturing

£'000

Investing and

Management

 services

£'000

 

 

Total

£'000

 

 

 

 

 

 

Revenue

 

 

12,952

-

12,952

 

 

 

 

 

 

Loss before tax (1)

 

 

(249)

(725)

(974)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 31 December 2020

 

 

 

Food

manufacturing

£'000

Investing and management services

£'000

 

 

Total

£'000

 

 

 

 

 

 

Revenue

 

 

30,809

-

30,809

 

 

 

 

 

 

Profit/(loss) before tax(1)

 

 

794

(1,341)

(547)

 

 

 

 

 

 

 

As at 30 June 2021

 

 

 

 

 

 

 

 

 

Food manufacturing

£'000

Investing and

management

services

£'000

 

 

Total

£'000

Assets

 

 

 

 

 

Liabilities/provisions

 

 

21,440

22,643

44,083

 

 

 

(7,500)

310

(7,190)

Net assets(2)

 

 

 

13,940

 

22,953

 

36,893

 

 

 

 

 

 

 

 

 

 

 

 

As at 30 June 2020

 

 

 

Food manufacturing

£'000

Investing and

management

services

£'000

 

 

Total

£'000

 

 

 

 

 

 

Assets

 

 

17,178

15,851

33,029

Liabilities/provisions

 

 

(7,041)

27

(7,014)

 

 

 

 

 

 

Net assets(2)

 

 

10,137

15,878

26,015

 

 

 

 

 

 

 

 

 

 

 

 

As at 31 December 2020

 

 

 

Food manufacturing

£'000

Investing and

management

services

£'000

 

 

Total

£'000

 

 

 

 

 

 

Assets

 

 

21,320

23,552

44,872

Liabilities/provisions

 

 

(7,963)

270

(7,693)

 

 

 

 

 

 

Net assets(2)

 

 

13,357

23,822

37,179

 

 

 

 

 

 

 

 

 

 

 

 

Six months to 30 June 2021

 

 

 

Food manufacturing

£'000

Investing and management services

£'000

 

 

Total

£'000

Capital spend

 

 

273

-

273

Depreciation

 

 

559

-

559

Interest income (non-Group)

 

 

-

-

-

Interest expense (non-Group)

 

 

(63)

-

(63)

Tax (credit)/expense

 

 

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

Six months to 30 June 2020

 

 

 

Food manufacturing

£'000

Investing and management services

£'000

Total

(as restated)

£'000

Capital spend

 

 

300

-

300

Depreciation

 

 

436

-

436

Interest income (non-Group)

 

 

-

66

66

Interest expense (non-Group)

 

 

(69)

-

(69)

Tax (credit)/expense

 

 

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 31 December 2020

 

 

 

Food manufacturing

£'000

Investing and management services

£'000

 

 

Total

£'000

Capital spend

 

 

1,147

2

1,149

Depreciation

 

 

978

1

979

Interest income (non-Group)

 

 

-

80

80

Interest expense (non-Group)

 

 

152

-

152

Tax (credit)/expense

 

 

207

(236)

(29)

 

 

 

 

 

 

 

 

 

Geographical analysis:

 

External revenue by location of customers

 

Non-current assets by location of assets

 

6 months to

30 June

2021

6 months to

30 June

2020

Year ended

31 December 2020

 

30 June

2021

 

30 June

2020

 

31 December 2020

 

£'000

£'000

£'000

£'000

£'000

 

£'000

 

 

 

 

 

 

 

UK

15,010

12,632

29,355

9,670

8,328

8,641

Rest of Europe

708

320

1,454

-

-

-

Other

-

-

-

-

-

-

 

 

 

 

 

 

 

 

15,718

12,952

30,809

9,670

8,328

8,641

 

Notes:

(1)     stated before intra-group management and interest charges

(2)     assets and liabilities stated excluding intra-group balances

 

4          Finance income and expense

 

Finance income represents bank interest receivable.  Finance expense relates to bank interest, lease interest and other interest payable arising from the Group's investing and treasury management policies.

 

5          Earnings per share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

6 months to

30 June

2021

£'000

6 months to

30 June

2020

£'000

Year ended

31 December

2020

£'000

Earnings for the purposes of earnings per share:

 

 

 

 

Loss attributable to equity holders of the parent company

 

(390)

 

(1,029)

 

(792)

 

 

 

 

 

No.

No.

No.

Weighted average number of ordinary shares for the purposes of earnings per share:

 

 

 

Weighted average number of ordinary shares in issue

2,571,922

1,834,182

1,959,290

Dilutive effect of potential ordinary shares

-

-

-

 

Weighted average number of ordinary shares for diluted EPS

 

2,571,922

 

1,834,182

 

1,959,290

 

 

 

 

There were no share options (or other dilutive instruments) in issue during the period in respect of the parent company's shares (30 June 2020: nil; 31 December 2020: nil).

 

6          Acquisition of business and assets in comparative period

 

On 7 February 2020 the Group acquired the business and assets of a premium frozen desserts manufacturer, Indulgence Patisserie Limited, which was in administration following a period of losses.  The results of this business have been included in note 3 as part of the food manufacturing segment.  The Group has acquired the land and buildings used by the business in a separate entity from the trading business, which continues to trade as Indulgence Patisserie Limited.  The property and certain plant items are owned by Indulgence Foods Limited.  Where appropriate, the term "Indulgence" refers to the combined performance of both companies.  Information about the trading performance of Indulgence is included in the Chief Executive's Statement and the Financial Review.

 

7          Non-controlling interests

 

The non-controlling interests of £2.18 million relate to the net assets attributable to the shares not held by the Group at 30 June 2021 in the following subsidiaries:

 

 

30 June

2021

£'000

30 June

2020

£'000

31 December 2020

£'000

 

 

 

 

NMT Group Limited

68

69

69

Shire Foods Limited

2,112

1,575

2,007

 

2,180

1,644

2,076

 

The Group owns approximately 80% of Shire Foods and 98.6% of NMT.

 

8          Purchase of own shares

 

The Company did not acquire any of its own shares in the period (30 June 2020: nil, 31 December 2020: 3,000 ordinary shares for a total consideration including costs of £39,000).  For reference, the total number of ordinary shares held in treasury is 3,635,152 and the number of shares in issue, excluding treasury shares, at the period end was 2,571,922 (30 June 2020: 1,834,182, 31 December 2020: 2,571,922).

 

9          Dividend

 

The Board is not recommending the payment of an interim dividend for the period ended 30 June 2021.

 

 

 

- Ends -

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