TIDMVLE
RNS Number : 3286S
Volvere PLC
16 March 2021
16 March 2021
Volvere plc
(the "Group" or "Volvere")
Trading Update and Notice of Final Results
Volvere plc (AIM: VLE), the growth and turnaround investment
company, is pleased to provide the following trading update for the
financial year ended 31 December 2020. All data in this
announcement is unaudited, although the comparative information for
the year ending 31 December 2019 has been extracted from audited
data for that year.
In February 2020, the Group acquired the business and assets of
Indulgence Patisserie Limited ("Indulgence"), a frozen desserts
manufacturer. This, along with Shire Foods Limited ("Shire"), the
Group's frozen pastry products manufacturer, comprise the Group's
trading operations.
In October 2020, the Group raised approximately GBP9.7 million
through a share placing (net of associated expenses of GBP0.3
million).
Financial Performance
The Group expects to report revenue from continuing operations
of approximately GBP30.81 million (2019: GBP23.04 million) and an
overall loss before tax of GBP0.53 million (2019: profit before tax
of GBP3.18 million, stated after a profit arising from discontinued
operations of GBP3.1 million). The costs of the share placing have
been charged directly to reserves.
Operating Businesses
Shire Foods
Shire, in which Volvere has an 80 per cent. holding, grew
revenues by approximately 18% to GBP27.2 million (2019: GBP23.04
million) and achieved a profit before tax, intra-group interest and
management charges* of approximately GBP1.81 million (2019: GBP1.38
million). Profit before tax was GBP1.61 million (2019: GBP1.18
million) - with the difference being intra-group interest and
management charges.
The performance of Shire was outstanding, achieving record
revenues and profits during our period of ownership. Especially
pleasing was the progress made with the Naughty Vegan brand (for
which we have some sweet products launching in 2021 made by
Indulgence).
COVID-19 restrictions impacted negatively on foodservice sales
but this was more than offset by growth in the retail channel. The
proportion of foodservice sales (net of rebates) to total sales
fell from 12.2% in 2019 to 9.7% in 2020. Foodservice will recover
as the education and hospitality sectors in the UK reopen, however
this may reduce retail sales as fewer people eat at home.
We continue to invest in site capacity and in early 2021
commissioned another manufacturing line to supply future
anticipated revenue growth.
Indulgence Patisserie Limited
The Group acquired Indulgence on 7 February 2020, purchasing the
business and assets following the seller's administration for
approximately GBP1.25 million plus costs of approximately GBP0.10
million. Indulgence manufacturers premium frozen cakes, cheesecakes
and other desserts from its site in Colchester, UK.
For the period 7 February - 31 December 2020 Indulgence
generated revenues of GBP3.62 million and incurred a loss before
tax of GBP1.00 million. The Group has funded the initial purchase,
working capital and trading losses by way of intra-Group loans.
Indulgence had traditionally focussed on supplying the
foodservice sector (mainly outside of the UK), along with some UK
retail business. The pandemic, coupled with uncertainty due to the
administration of the former owner, not surprisingly has impacted
revenues. We have, however, been working hard to increase our
retail offering and to build new relationships with customers in
the UK foodservice sector, through increased innovation and
improved customer engagement. We are also investing in new plant to
increase productivity and the breadth of products we can offer.
The outlook for Indulgence in the short term is dependent
principally on the reopening of foodservice channels in the UK and
Europe. We believe the quality of the company's products and the
work we are doing behind the scenes to improve the customer
experience, will continue to present new opportunities for the
company over time.
Group Net Assets per Share and Net Assets
The Group expects to report year-end consolidated net assets per
share (excluding non-controlling interests) of approximately
GBP13.29 (31 December 2019: GBP13.85; 30 June 2020: GBP13.29) and
Group net assets of approximately GBP36.10 million (31 December
2019: GBP26.99 million; 30 June 2020: GBP26.02 million).
Of the Group net assets, cash represented approximately GBP23.71
million (31 December 2019: GBP19.32 million; 30 June 2020: GBP16.11
million).
The increase in the Group's net assets and corresponding cash
movements reflect the placing in October 2020, the positive trading
in Shire, offset by central costs, capital expenditure in new
plant, the purchase of Indulgence and the associated working
capital movements.
Current Trading and COVID-19
The lockdown in the UK and Europe has continued to impact
materially on foodservice sales in Indulgence. Whilst both Shire
and Indulgence have experienced staff absences due to COVID-19, we
have been able to minimise any impact on customer deliveries by
managing inventory levels proactively.
Revenues in the early part of 2021 for Shire are ahead of the
same period in 2020 and we are hopeful that this will continue. As
noted above, Indulgence stands to benefit from the re-opening of
the hospitality sector and from an expected greater penetration of
the retail market later in 2021.
More generally the number of companies in financial distress has
not been as high as we might have expected. However, we believe
this is due to the continuance of government support schemes -
which may soon be withdrawn. At that point, we expect there will be
a greater focus on balance sheet quality. The strength of the
Group's balance sheet puts it in a position to be able to exploit
the opportunities that we think will arise in the coming months. In
the interim, we seek to continue to deliver growth and increased
profitability in our food businesses.
Our staff have had to adapt to changing working practices in
response to the pandemic and shown much resilience in continuing
working whilst other sectors were closed. We are grateful to them
for their hard work and commitment.
* profit before intra-group interest and management charges is
considered to be a relevant, 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.
Notice of Final Results
Volvere expects to announce its full year results for the year
ended 31 December 2020 on or around 28 May 2021.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
For further information:
Volvere plc
Jonathan Lander, CEO Tel: +44 (0) 1926 335700
www.volvere.co.uk
Cairn Financial Advisers LLP (Nominated Adviser)
Sandy Jamieson/James Lewis Tel: + 44 (0) 207 213 0880
Canaccord Genuity Limited (Joint Broker) Tel: + 44 (0) 207 523 8000
Bobbie Hilliam/Alex Aylen/Georgina McCooke
Hobart Capital Markets LLP (Joint Broker)
Lee Richardson Tel: + 44 (0) 207 070 5691
Notes to editors:
Volvere plc (AIM: VLE), is a growth and turnaround investment
company. The Group's current trading businesses are involved in
food manufacturing. The Group currently employs approximately 270
people.
For further information, please visit www.volvere.co.uk .
Forward-looking statements:
This announcement 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.
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