TIDMPIL

RNS Number : 8244D

Produce Investments PLC

12 October 2018

12 October 2018

PRODUCE INVESTMENTS PLC

("Produce," "Company" or the "Group")

FINAL RESULTS

Produce Investments plc, (AIM:PIL) ("Produce," "Company" or the "Group"), a leading operator in the fresh potato and daffodil sectors, is pleased to announce its final results for the 52 weeks ended 30 June 2018.

Key Operational Highlights:

   -      Operating Profit in line with boards expectations 
   -      Solid performance in the Core Fresh business in an oversupplied market 
   -      Poor spring weather adversely impacting the seasonal business of Rowe Farming and Jersey 

- Significant investment in the development of new app-based field technology improving planning and forecasting

- Board changes: Billy Keane, formerly Finance Director and Group Managing Director of Robert Wiseman Dairies, and currently Chairman of Dairy UK and a Director of Grahams The Family Dairy, appointed to the board as a Non-Executive Director, and Chair of Audit Committee

- Confirmation of impending offer from Promethean Investments LLP to buy Produce Investments PLC

Key Financial Points:

- Operating profit for the year in line with the boards expectations GBP6.1m (2017: GBP7.8m restated)

   -      EBITDA at GBP12m 
   -      Exceptional Costs of GBP14.7m and prior period adjustments of GBP1.4m 
   -      Reduction in net debt to GBP25.75m at year end (2017: GBP28.0m) 

- Decision on a final dividend delayed until the outcome of the impending purchase by Promethean Investments is known

Angus Armstrong, Chief Executive, commented:

"In a difficult year impacted by the adverse spring weather we have seen business gains and improved operational efficiencies in our core fresh segment helping sustain our performance in a tough retail environment and I am pleased to say that we have delivered operating profit in line with the board's revised expectations.

Rowe Farming and Jersey both suffered due to the long periods of cold and unseasonal spring weather and our Swancote facility continued to struggle in a fragmented and competitive market sector.

We have invested heavily in our Restrain business and consolidated our development and manufacturing to one location, and the Linwood crops business is now well established and performing well.

As a Group we remain cash generative, reflected in our net debt reduction to GBP25.8m, driven by better cash management and the increasing diversity of the business.

"Looking forward, we will be increasing our presence in the daffodil market, continuing our growth with Restrain through a healthy demand for its tomato ripening and potato storage solutions and we will continue to expanding the Linwood Crops business.

Whilst we were disappointed to announce a three year wind down of one key customer contract, we are confident that we are well positioned to pick up new opportunities in the market, and we will continue to review the cost base of the company.

We are also working through the fair and reasonable offer from Promethean Investments LLP and regardless of the outcome I remain confident that management and staff will continue to grow and develop the business."

- End -

For further information contact:

 
 Produce Investments plc 
 Jonathan Lamont                       01733 372515 
 
 Shore Capital & Corporate Limited 
  (Nomad) 
 Stephane Auton / Patrick Castle      020 7408 4090 
 
 Powerscourt 
 Nick Dibden / Jana Tsiligiannis 
  produce@powerscourt-group.com        020 7250 146 
 

CHAIRMAN'S STATEMENT

Continued strong cash generation demonstrates the fundamental resilience of our business model, in a year when we have faced and overcome the considerable challenges of both oversupply in our core UK potato business, and shortages resulting from extreme weather impacts on our seasonal operations.

Results

As we advised in our trading update of 22 May 2018, the year's results were affected by the unexpected impact of extremely adverse spring weather on our seasonal businesses in Jersey and Cornwall. This added to the pressures imposed by the exceptionally large 2017 UK potato crop on margins and seed volumes in our core UK fresh potato operations. The Group's reduced operating profit before exceptional items of GBP6.1m (2017: GBP7.8m restated) was in line with our rebased expectations. We are also pleased to report that strong cash inflows in the final quarter enabled us to reduce our net debt to GBP25.8m at the year-end, compared with GBP28.0m in 2017.

Exceptional items and prior period adjustments

As indicated in May, in the light of this performance, we have recorded a number of exceptional items totalling GBP14.7m (2017: GBP1.5m restated), resulting in a loss before tax of GBP(9.5m) (2017: GBP5.5m profit restated). These exceptional items, which are detailed in note 6 of the financial statements, comprise asset impairment provisions for Swancote Foods GBP(4.6m) and Rowe Farming GBP(6.8m), downward adjustment to the valuation of daffodil bulb biological assets GBP(2.2m), and other write-offs of GBP(1.1m). We have also recorded prior period adjustments of GBP(1.1m) in respect of accounting issues identified relating to the year ending 1 July 2017 (as detailed in note 30).

Dividend

The Board have decided to delay any future dividend decisions until the outcome of the intended offer announced by Promethean Investments (discussed below). An interim dividend in respect of 2.49 pence per share was announced on 22 March 2018 and was paid on 12 July 2018 (2017: 2.44 pence), an increase of 2%.

The Board

As announced in last year's annual report, Neil Davidson (Chairman), Sean Christie (Non-Executive Director) and Sir David Naish (Senior Independent Non-Executive Director) retired from the Board at our AGM in November 2017 and I resumed the role of Chairman. We were delighted to be able to strengthen the Board in June 2018 with the appointment of Billy Keane as an additional Non-Executive Director. Billy brings to us more than 30 years' experience of the UK food industry, having served as Finance Director and later Group Managing Director of Robert Wiseman Dairies prior to its acquisition by Muller Group in 2012; he is also the former Chairman of Dairy UK and a Director of Grahams The Family Dairy. We are already feeling the benefit of his immense knowledge and understanding of our sector.

Strategy

We continue to pursue a long term strategy focused on organic growth, inward investment that will deliver a more robust business model for the future, and the acquisition of complementary businesses that will deliver increased diversity in both product mix and income.

Corporate governance

We have worked during the year to make the QCA Corporate Governance Code a key part of our corporate culture, in order to ensure that the Group is managed in the best interests of all its stakeholders.

People

In meeting the significant challenges of the last year, our employees have once again demonstrated their commitment to the business and their determination to always deliver the best possible products and service to our customers.

On behalf of the Board, I thank all of them for everything they have done to help us achieve the best possible results in a most demanding physical and trading environment.

Outlook

We remain confident in our strategy, the long term prospects for the business based upon it, and our ability to continue generating cash to pay down debt. The hot, dry summer of 2018 has had a significant impact on growing conditions for potatoes in the UK and across much of northern Europe, and we therefore anticipate that the year ahead will be characterised by crop shortfalls in certain sectors, creating a highly inflationary marketplace.

The diversity of the Group mitigates the inflationary risk to the core UK potato business through other operations and seasonal businesses that have not been impacted by this summer's growing conditions. We will continue to seek opportunities to widen both our product range and customer base so as to create an even more diverse business model for the future.

On the 11(th) September Promethean Investments LLP announced its intention to make an offer to buy the entire issued share capital of Produce Investments plc (PI) and take PI private. An independent committee of the PI Board, which has been advised by Shore Capital (Rule 3 advisors), considers the terms of the offer to be fair and reasonable. Whatever the outcome of this bid I remain very confident that management and staff will continue to develop and grow the business for the benefit of all stakeholders, and I feel very privileged to have been associated with PI since 2006, and irrespective of recently announced movements in our retail customer base, I have every confidence in the future prospects for the business.

Barrie Clapham

Chairman

CHIEF EXECUTIVE'S REPORT

New business gains and improved operational efficiencies have been key to sustaining the performance of our UK retail potato business in a deflationary environment, in a year which has also demonstrated the value of our established strategy of investment and diversification.

Fresh

Our core Greenvale potato business, accounting for circa 79% of Group revenues during the year (2017: circa 78%), has performed in line with expectations even though it faced the challenges created by an exceptionally large 2017 UK potato crop of 6.04m tonnes (2016: 5.22m tonnes). With supply increasing by 15.2%, and exceeding demand by some 0.5m tonnes, the inevitable result was a deflationary market in which potato prices fell to their lowest level for several years.

Business gains secured last year delivered increased sales volume to an established major retail customer, and we also benefited from a first full year of business with another major retailer. Although higher volumes were partially offset by lower prices, the more collaborative relationship model we have developed with our retailer partners meant that our core retail potato business grew year-on-year and performed in line with our expectations.

Elsewhere, intense competition in an oversupplied market put pressure on sales values to the foodservice and general trading sectors, resulting in a reduction in trading margins.

After a very slow start to the year, as oversupply reduced growers' appetite for investment in the following year's crop, sales of seed potatoes recovered well in the second half, though total sales for the year were still some 15% below those of the previous season.

Greenvale's own potato growing enterprise was similarly impacted by the market conditions, with the non-contracted element of the crop realising sales values significantly below our budget. However, the company continues to fund its successful varietal breeding programme, and has a number of exciting and flavoursome new potato varieties nearing launch into the market.

We have also made a significant investment in the development of new, app-based field technology that will greatly improve the company's forecasting abilities and therefore its planning capability for the future.

In our packing facilities we have continued to fund a programme of investment in further automation that will reduce the labour requirements of the business in the future; this is a particularly important initiative in the light of continuing uncertainty over labour availability post-Brexit.

Our new Linwood Crops joint venture, established in 2016, has continued to develop well and had an excellent year, delivering a performance ahead of expectations.

As noted in our trading statement of 22 May 2018, our Rowe Farming business was significantly impacted by the poor winter and spring weather in Cornwall. This limited our ability to harvest flowers in March, and as a result some volumes were lost in the field. However, we achieved 100% availability with all our key customers in the UK retail sector, with the shortfall being felt in our traditional export and trading markets, where volumes were considerably lower than in the prior year. More encouragingly, the daffodil bulb market is starting to show signs of recovery, and bulb sales in 2018 are showing significant increases in both volume and value.

Rowe Farming's Cornish potato business was similarly impacted by adverse weather, with extremes of wet and cold in January, February and March, leading to a delay in planting until April and May, when the crop was then affected by drought. As a result the overall yield of Cornish potatoes this year will be significantly lower than in 2017. Following the annual impairment review, the Board took the decision to write down the asset base by GBP(6.8m), and to take a further charge with a valuation adjustment of daffodil bulb biological assets of GBP(2.2m).

The Jersey Royals potato business faced the same climatic challenges as our operation in Cornwall, with the island experiencing the most extreme weather conditions for some 40 years. Rainfall in the four months to March 2018 was 46% higher than the long term average, leading to severe delays in planting, and unseasonably cold weather in February and March then delayed the development of the crop. Overall, purely as a result of these lower yields, sales were c. 19% lower than in the prior year, although the business continued to achieve a profit.

Processing

Our Swancote Foods potato processing business had another challenging year financially. Our team is running the business well but the facility requires additional volumes to optimise its performance, and we are working hard with both new and existing customers to deliver these. Following the annual impairment review the Board took the decision to take write downs totalling GBP(4.6m).

Other

The Restrain storage and ripening technology business had a good year, completing a significant programme of investment and consolidation as we brought in-house all the equipment development and manufacturing capabilities we require to exploit the potential of its next generation technology.

Finances

The business remains strongly cash generative, reflected in the reduction in net debt to GBP25.8m (2017: GBP28.0m) at the year-end. The impact of lower potato values during the year was largely offset by increased volumes with key retail customers as a result of new business gains, and we have also benefited from the diversity of businesses within the Group.

Prospects

The recent announcement of the loss of one of our major customer contracts for the supply of packaged fresh potatoes is clearly a disappointment although the exit will be phased over the next three years. With this phased reduction there are opportunities to formalise the supply of raw material to this customer on an ongoing basis, and the relationship between the customer and other parts of the Produce Investments Group is not impacted. The movement of retail own label business is not uncommon in this sector and management will now focus on mitigating any impact from the contract loss by targeting new business opportunities and also reviewing the cost base of the company, making savings where appropriate.

The latest AHDB forecasts are indicating a total planted area of potatoes in the UK in 2018 c. 3% smaller than last year at 119,000 hectares. Following delayed spring planting, a summer of extreme temperatures and drought has adversely affected crop volumes in the UK and across much of northern Europe. As a result, the current year will feature a marketplace in which demand exceeds supply with inevitable inflation in raw material costs.

In this environment we benefit from the diversity of seasonal businesses within the Group. We will be increasing our presence in the daffodil market this year, and focus more on this side of our Rowe Farming business in Cornwall with a view to reducing our potato enterprise in that area. Significant new business wins have already been secured as well as supply agreements with third party growers. We also remain very confident that the Jersey Royal business will deliver a stronger performance than last season with the sales plan looking strong. Likewise the Restrain business which is experiencing healthy demand for its tomato ripening and potato storage solutions with the successful transition to in-house equipment manufacturing now completed. The Linwood crops business has started the year where it finished last with strong sales and margins.

Angus Armstrong

Chief Executive Officer

CONSOLIDATED INCOME STATEMENT

For the 12 months ended 30 June 2018

 
                        Before exceptional    Exceptional       Total         Before    Exceptional          Total 
                                     items    items (note        2018    exceptional    items (note           2017 
                                   GBP'000             6)                      items             6) 
                                                              GBP'000        GBP'000                       GBP'000 
                                                  GBP'000                                   GBP'000    As restated 
 CONTINUING 
 OPERATIONS 
 Revenue                           188,174              -     188,174        200,130              -        200,130 
 Cost of sales                   (113,657)        (3,426)   (117,083)      (129,100)          (497)      (129,597) 
                       -------------------  -------------  ----------  -------------  -------------  ------------- 
 Gross profit                       74,517        (3,426)      71,091         71,030          (497)         70,533 
 
 Administrative and 
  other operating 
  expenses                        (68,466)       (11,257)    (79,723)       (63,239)        (1,007)       (64,246) 
                       -------------------  ------------- 
 
 Operating (loss) / 
  profit                             6,051       (14,683)     (8,632)          7,791        (1,504)          6,287 
 
 Finance costs                                                  (878)                                        (867) 
 Finance income                                                    28                                           17 
 Share of (loss) / 
  profit of associate 
  & investments                                                   (6)                                           62 
 
 (Loss) / profit 
  before tax                                                  (9,488)                                        5,499 
 
 Income tax credit / 
  (expense)                                                       186                                        (270) 
                                                           ----------                                ------------- 
 
 (Loss) / profit for 
  the period                                                  (9,302)                                        5,229 
                                                           ----------                                ------------- 
 
 Attributable to: 
 Equity holders of 
  the parent                                                  (9,741)                                        5,180 
 Non-controlling 
  interests                                                       439                                           49 
                                                              (9,302)                                        5,229 
                                                           ----------                                ------------- 
 Earnings per share 
 attributable 
 to owners of the 
 parent during the 
 year: 
 Basic earnings per 
  share (pence)                                               (35.73)                                        19.22 
 Diluted earnings per 
  share (pence)                                               (35.73)                                        18.35 
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 12 months ended 30 June 2018

 
                                               2018           2017 
                                            GBP'000        GBP'000 
                                                       As restated 
--------------------------------------    ---------  ------------- 
 
 (Loss) / profit for the period             (9,302)          5,229 
                                          =========  ============= 
 
 Other comprehensive income: 
 Actuarial gain / (loss) in respect 
  of pension scheme                           3,627        (2,011) 
 Deferred tax movement on actuarial 
  gain / (loss)                               (617)            180 
 Current income tax (charge) / credit 
  on actuarial gain / (loss)                   (53)             64 
 Deferred tax movement on share based 
  payments                                    (145)            357 
 
 Other comprehensive income for the 
  period                                      2,812        (1,410) 
 
 Total comprehensive income for the 
  period                                    (6,490)          3,819 
                                          =========  ============= 
 
 Attributable to: 
 Equity holders of the parent               (6,929)          3,770 
 Non-controlling interests                      439             49 
                                          ---------  ------------- 
                                            (6,490)          3,819 
                                          =========  ============= 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION Company Reg No: 05624995

At 30 June 2018

 
                                                 2018           2017           2016 
                                              GBP'000        GBP'000        GBP'000 
                                                         As restated    As restated 
-----------------------------------------   ---------  -------------  ------------- 
 ASSETS 
 Non-current assets: 
 Property, plant and equipment                 37,522         39,902         34,084 
 Intangible assets                              5,937         15,589         16,136 
 Investment in associates                         213            190            172 
 Other investments                                 93            122            529 
                                               43,765         55,803         50,921 
                                            ---------  -------------  ------------- 
 Current assets: 
 Inventories                                   10,005          9,025          8,528 
 Biological assets                             18,973         21,006         19,792 
 Trade and other receivables                   32,706         33,947         30,413 
 Prepayments                                    2,930          2,355          1,640 
 Cash and short-term deposits                   6,409          7,749            742 
                                            ---------  -------------  ------------- 
                                               71,023         74,082         61,115 
                                            ---------  -------------  ------------- 
 Assets held for sale                               -          1,250          1,250 
 
 Total assets                                 114,788        131,135        113,286 
                                            ---------  -------------  ------------- 
 
 EQUITY AND LIABILITIES 
 Equity: 
 Issued capital                                   274            271            268 
 Share premium                                 22,098         21,842         21,670 
 Other capital reserves                        10,228         10,228         10,228 
 Retained earnings                             11,546         20,126         18,202 
                                            ---------  -------------  ------------- 
 Equity attributable to equity holders 
  of the parent                                44,146         52,467         50,368 
 Non-controlling interests                      1,139            719            530 
                                            ---------  -------------  ------------- 
 Total equity                                  45,285         53,186         50,898 
                                            ---------  -------------  ------------- 
 
   Non-current liabilities: 
 Interest-bearing loans and borrowings         14,000         16,875              - 
 Other non-current financial liabilities          312            544            849 
 Deferred revenue                                  35             47             70 
 Pensions and other post-employment 
  benefit obligations                           5,014          8,954          7,268 
 Deferred tax liability (net)                   2,117          1,977          2,838 
                                               21,478         28,397         11,025 
                                            ---------  -------------  ------------- 
 Current liabilities: 
 Trade and other payables                      29,602         29,900         31,075 
 Interest-bearing loans and borrowings         18,166         18,912         18,871 
 Deferred revenue                                  36             53             88 
 Income tax payable                               221       687           1,329 
                                               48,025         49,552         51,363 
                                            ---------  -------------  ------------- 
 
 Total liabilities                             69,503         77,949         62,388 
                                            ---------  -------------  ------------- 
 Total equity and liabilities                 114,788        131,135        113,286 
                                            =========  =============  ============= 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the 12 months ended 30 June 2018

 
                                                     Other 
                             Issued      Share     capital    Retained             Non-controlling     Total 
                            Capital    premium    reserves    earnings     Total          interest    Equity 
                              (Note      (Note       (Note 
                                19)        19)         20) 
-----------------------   ---------  ---------  ----------  ----------  --------  ----------------  -------- 
                            GBP'000    GBP'000     GBP'000     GBP'000   GBP'000           GBP'000   GBP'000 
 
 As at 25 June 
  2016 as originally 
  presented                     268     21,670      10,228      18,559    50,725               530    51,255 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 Restatement 
  in respect of 
  prior period                    -          -           -       (357)     (357)                 -     (357) 
 As at 25 June 
  2016 as restated              268     21,670      10,228      18,202    50,368               530    50,898 
 Profit for the 
  period (restated)               -                              5,180     5,180                49     5,229 
 Actuarial loss 
  in respect of 
  pension scheme                  -          -           -     (2,011)   (2,011)                 -   (2,011) 
 Deferred tax 
  on actuarial 
  loss                            -          -           -         180       180                 -       180 
 Current income 
  tax credit on 
  actuarial loss                  -          -           -          64        64                 -        64 
 Deferred tax 
  movement on 
  share based 
  payments                        -          -           -         357       357                 -       357 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 Total comprehensive 
  income                          -          -           -       3,770     3,770                49     3,819 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 New shares issued 
  during period                   3        172           -           -       175                 -       175 
 Minority interest 
  acquisition                     -          -           -       (155)     (155)               155         - 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 Share-based 
  payment transactions            -          -           -         280       280                 -       280 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 Equity dividends 
  paid                            -          -           -     (1,971)   (1,971)              (15)   (1,986) 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 As at 1 July 
  2017                          271     21,842      10,228      20,126    52,467               719    53,186 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 Profit for the 
  period                          -          -           -     (9,741)   (9,741)               439   (9,302) 
 Actuarial loss 
  in respect of 
  pension scheme                  -          -           -       3,627     3,627                 -     3,627 
 Deferred tax 
  movement on 
  actuarial loss                  -          -           -       (617)     (617)                 -     (617) 
 Current income 
  tax credit on 
  actuarial loss                  -          -           -        (53)      (53)                 -      (53) 
 Deferred tax 
  movement on 
  share based 
  payments                        -          -           -       (145)     (145)                 -     (145) 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 Total comprehensive 
  income                          -          -           -     (6,929)   (6,929)               439   (6,490) 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 New shares issued 
  during period                   3        256           -           -       259                 -       259 
 Share-based 
  payment transactions            -          -           -       (280)     (280)                 -     (280) 
 Equity dividends 
  paid                            -          -           -     (1,371)   (1,371)              (19)   (1,390) 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 As at 30 June 
  2018                          274     22,098      10,228      11,546    44,146             1,139    45,285 
                          ---------  ---------  ----------  ----------  --------  ----------------  -------- 
 

CONSOLIDATED CASH FLOW STATEMENT

For the 12 months ended 30 June 2018

 
                                                              2018           2017 
                                                           GBP'000        GBP'000 
                                                                      As restated 
------------------------------------------  ----  ----  ----------  ------------- 
 
 OPERATING ACTIVITIES 
 Loss / profit before tax from continuing 
  operations                                               (9,488)          5,499 
                                                        ----------  ------------- 
 
 Adjustments to reconcile profit 
  before tax for the year to net cash 
  inflow from operating activities: 
 
 Depreciation and amortisation of 
  assets                                                     5,951          5,628 
 Exceptional impairment of goodwill                          9,080              - 
  and intangible assets 
 Exceptional impairment of property,                         2,344              - 
  plant and equipment 
 Exceptional adjustment on biological                        2,213              - 
  assets 
 Other exceptional adjustments                               1,046          1,044 
 Share-based payment transaction 
  (credit) / expense                                         (280)            280 
 (Gain) on disposal of property, 
  plant and equipment                                        (190)          (389) 
 Finance costs                                                 639            640 
 Finance income                                               (28)           (17) 
 Share of net profit of associates 
  and investments                                                6           (62) 
 Difference between pension contributions 
  paid and amounts recognised in the 
  income statement                                           (313)          (325) 
 Working capital adjustments: 
 Decrease / (increase) in trade and 
  other receivables and prepayments                            284        (4,746) 
 (Increase) in inventories and biological 
  assets                                                   (1,800)        (1,711) 
 (Decrease) in trade and other payables                      (235)         (1208) 
 (Decrease) in deferred revenue                               (29)           (58) 
 Income tax paid                                             (994)        (1,168) 
                                                        ----------  ------------- 
 Net cash flows from operating activities                    8,206          3,407 
                                                        ----------  ------------- 
 
 INVESTING ACTIVITIES 
 Proceeds from sale of property, 
  plant and equipment                                        1,440            430 
 Purchase of property, plant and 
  equipment                                                (5,351)       (10,953) 
 Purchase of intangible assets                                   -           (41) 
 Cashflows arising from purchase 
  of subsidiary                                                  -          (301) 
 Net cash flows used in investing 
  activities                                               (3,911)       (10,865) 
                                                        ----------  ------------- 
 
 FINANCING ACTIVITIES 
 
  Bank loans repaid during period                          (2,375)          (750) 
   Invoice finance movement during 
    the period                                             (1,246)          9,916 
 New bank loans during period                                    -          7,750 
 Hire Purchase financing                                     (244)              - 
 Interest paid                                               (639)          (640) 
 Dividends paid                                            (1,390)        (1,986) 
 Proceeds from share issues                                    259            175 
 Net cash flows (used in) / generated 
  from financing activities                                (5,635)         14,465 
                                                        ----------  ------------- 
 
 Net (decrease) / increase in cash 
  and cash equivalents                                     (1,340)          7,007 
 Cash and cash equivalents at beginning 
  of period                                                  7,749            742 
                                                        ----------  ------------- 
 Cash and cash equivalents at end 
  of period                                                  6,409          7,749 
                                                        ==========  ============= 
 

Basis of preparation

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as they apply to the financial statements of the Group for the period ended 30 June 2018 and applied in accordance with the Companies Act 2006. The accounting policies which follow set out those policies which apply in preparing the financial statements for the period.

These consolidated financial statements have been prepared on a historical cost basis, except for those assets and liabilities which have been measured at fair value in line with applicable accounting standards. The consolidated financial statements are presented in British pounds sterling (GBP) and all values are rounded to the nearest thousand (GBP'000) except when otherwise indicated.

Earnings per share

 
                                                     2018           2017 
                                                             As restated 
--------------------------------------------  -----------  ------------- 
 (Loss) / profit attributable to equity 
  shareholders (GBP'000)                          (9,741)          5,180 
 Weighted average number of ordinary shares 
  in issue                                     27,265,638     26,946,218 
 Weighted average number of options with 
  dilutive effect                                 592,348      1,281,042 
                                              -----------  ------------- 
 Total number of shares - fully diluted        27,857,986     28,227,260 
 Basic earnings per share - pence                 (35.73)          19.22 
 Diluted earnings per share - pence               (35.73)          18.35 
 
   Adjusted earnings per share 
 Operating (loss) / profit (GBP'000)              (8,632)          6,287 
 Exceptional Items                                 14,683          1,504 
 Finance costs and income (GBP'000)                 (850)          (850) 
 (Expense) / income from associate                    (6)             62 
                                              -----------  ------------- 
 Adjusted profit before tax (GBP'000)               5,195          7,003 
 Tax on adjusted profit at effective rate 
  (GBP'000)                                           102          (343) 
                                              -----------  ------------- 
 
 Adjusted profit after tax (GBP'000)                5,297          6,660 
 Adjusted profit attributable to ordinary 
  shareholders (GBP'000)                            4,858          6,611 
 
 Adjusted basic earnings per share - pence          17.82          24.53 
 Adjusted diluted earnings per share - 
  pence                                             17.44          23.42 
============================================  ===========  ============= 
 
 

Report distribution

Copies of the annual report and financial statements will be sent to shareholders shortly and will be available for a period of one month to the public at the offices of Produce Investments plc, Floods Ferry, Floods Ferry Road, Doddington, March, Cambridge, PE15 OUW, and at the Company's website, www.produceinvestments.co.uk

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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