Final Results
07/06/2021 07:00
RNS Number : 9472A
Gusbourne PLC
07 June 2021
7 June 2021
Gusbourne Plc
("Gusbourne", the "Company" or the "Group")
Results for the year ended 31 December 2020
The Board of Gusbourne Plc (AIM: GUS) is pleased to announce its audited results for the year ended 31 December 2020.
2020 Highlights:
· Net revenue* up by 28% to £2.11m (2019: £1.65m)
· A five-year CAGR (compound annual growth rate) of 35% in net revenue (2019: 31%)
· Shift in distribution channel performance with Direct-to-Consumer sales (including online sales) representing 30% of net wine revenue, up from 20% in 2019 and International sales representing 33%, up from 19% in 2019. UK Trade sales at 37%, down from 61% in 2019
· Increase in gross profit margin to 58.3% from 55.5% in 2019
· Ongoing success in international wine competitions, receiving a further 40 medals in 2020 including fourteen gold medals, four trophies, and the Judges Selection Medal in the prestigious Texsom awards in the United States
*Net revenue represents Revenue after deducting excise duties
Chairman's statement
It would be impossible to reflect on our performance in 2020 without talking about the tragedy of COVID-19, a pandemic which also brought much of the hospitality industry to its knees and forced so many F&B businesses to face the most challenging trading conditions in modern times.
We were two months into the financial year when it became clear the ramifications of Coronavirus were going to be serious, and barely a month later before every hotel, restaurant and non-essential retailer in the UK had been ordered to close its doors, and we were under the same intense pressure as every other company to contain costs and furlough staff. We responded quickly to focus on Direct to Consumer sales, expanded our reach in the Off-Trade including the placement of our first exclusive product with a premium supermarket chain, and increased our International sales.
Our strategy delivered net revenues for the year of £2.,109,000 (2019: £1,653,000), an increase of 28% (2019: 31%) over the prior year, as we expanded our customer base both at home and overseas, and won over 40 industry awards in national and international competitions against some of the finest wine producers in the world. Other international highlights included significant export success in the Nordics, increased demand and recognition across Asia with plans to invest more into the region, and continued progress in the US which remains one of the largest opportunities ahead of us but where we are garnering increased recognition including winning the Judges Selection Medal in the prestigious Texsom awards.
Mid-year we entered into a £10.5 million asset-based lending facility with PNC Financial Services UK Ltd ("PNC"). The new facility has been used to provide additional liquidity and long-term working capital finance for the Company at a competitive rate. We will continue to work with PNC to ensure the Company makes best use of this facility, particularly as the value of our assets grow in line with expectations after another successful harvest. We expect to maintain our robust investment strategy into our vineyards, property, equipment and of course wine inventory including several new releases, some of which have already been launched to notable critical acclaim.
I am particularly pleased with the way the Company strove to support our On-Trade clients throughout the year, many of whom, like us, engaged with their customers in new ways including enhanced social media campaigns, direct marketing, and valued-added home delivery rather than in a face-to-face environment through which so many of our businesses ordinarily thrive. For Gusbourne, this resulted in a significant increase in Direct to Consumer (DTC) Sales, now representing 30% of net wine revenue compared to 20% in 2019. We plan to maintain our focus on DTC going forward as spending habits continue to reward businesses prepared to invest and innovate in this space.
We also took the opportunity to increase capacity at The Nest - the Company's retail, tour and wine tasting operation at our headquarters in Appledore, Kent - which will continue to be an essential means for us to connect with new visitors and customers post lockdown and thereafter. The Company's Customer Experience team have worked tirelessly to demonstrate the integrity and importance of The Nest as part of our long-term growth, and I am in no doubt that we should strive to replicate this approach at our other vineyards in West Sussex when it is prudent to do so. There's also more we can do to make certain Gusbourne provides the most luxurious visitor experience in the sector, and we will continue to explore ways of expanding the breadth and depth of our cellar door offerings in the years ahead.
As we emerge from a third UK lockdown, the Company is already seeing a return to more normalised trading conditions with DTC sales and future bookings for The Nest currently trading ahead of expectations.
Most importantly, I cannot tell you how proud I am of all our employees, not least Gusbourne's CEO and Chief Winemaker, Charlie Holland, who, along with the Executive Team, faced a testing year with unfailing calm and relentless application to deliver an outstanding set of financial results whilst also developing new products, distribution channels, and existing business revenue lines. My gratitude similarly extends to our loyal shareholders and wider board of directors who stood shoulder-to-shoulder with us throughout the pandemic, and of course to our growing army of customers who remain our most valued ambassadors worldwide.
Jim Ormonde
Chairman
Chief Executive's review
In spite of the challenges and disruption caused by the onset of the COVID-19 pandemic I am pleased to report that 2020 has been another year of successful performance for Gusbourne. Net revenues are up 28% on the prior year (2019: 31%) as we continue to widen our distribution channels and grow the Gusbourne brand both in the UK and overseas. These achievements are a testament to the resilience and tenacity of the Gusbourne team who have demonstrated great agility in adapting to a quickly changing environment.
The continued growth of our Direct to Consumer (DTC) sales has been particularly pleasing, representing 30% (2019: 20%) of the Group's net wine revenue. Online sales grew by c.400% (2019: c.200%) reflecting our ongoing investment in digital marketing through the creation of rich and engaging content, compelling wine offers and new and exciting product releases. We plan to invest further in our online and digital presence in the coming few years.
2020 marked our third full year of operations at The Nest, which provides Gusbourne's cellar door sales facilities, tours and wine tasting operations. Situated amongst our vineyards and winery operations in Kent this facility allows us to fully engage with our customers, encouraging them to enjoy the vineyards, visit the winery and taste our wines in a beautiful setting. We continue to improve and expand our offering, providing visitors with a unique and unforgettable experience.
International sales have continued to flourish representing 33% (2019: 19%) of net wine revenue. Gusbourne is now distributed to 21 countries around the world as we grow our global brand. Continued investment in sales and marketing has enabled us to develop and grow existing markets and expand into exciting new territories with significant growth potential.
Activities
Gusbourne's vintage English sparkling wines are positioned at the top tier of the English sparkling wine market and we are committed to maintaining that premium position, which reflects the quality of our products and their luxury status. We are one of England's most awarded producers and continue to win prestigious awards at some of the world's most discerning wine competitions.
The Gusbourne business was founded in 2004 by Andrew Weeber with the first vineyard plantings at Appledore in Kent. The first wines were released in 2010 to critical acclaim. Following additional vineyard plantings in 2013 and 2015 in both Kent and West Sussex, Gusbourne now has 231 acres of mature vineyards. The NEST visitor centre was opened next to the winery in Appledore in 2017, providing tours, tastings and a direct outlet for our wines.
Right from the beginning, Gusbourne's intention has always been to produce the finest English sparkling wines. Starting with carefully chosen sites, we use best practice in establishing and maintaining the vineyards and conduct green harvests to ensure we achieve the highest quality grapes for each vintage. A quest for excellence is at the heart of everything we do. We blind taste hundreds of samples before finalising our blends and even after the wines are bottled, they spend extended time on their lees to add depth and flavour. Once disgorged, extra cork ageing further enhances complexity. Our winemaking process remains traditional, but one that is open to innovation where appropriate. It takes four years to bring a vineyard into full production and a further four years to transform those grapes into Gusbourne's premium sparkling wine.
We also produce a limited quantity of premium vintage English still wines which have also won a number of prestigious international awards.
Recent awards
We have continued our success in major wine competitions winning over 46 medals at national and international competitions, where we are judged against some of the finest wines from around the world. Awards received during the year include:
· 4 gold medals and trophies for 'Best still red wine' and 'Best still rosé wine' at the UK-based Wine GB Awards in August 2020.
· 2 gold medals and 'Best in Class' at the London-based Champagne and Sparkling Wine World Championships in December 2020
· A Platinum medal and 'Judges Selection Medal' awarded the prestigious Texsom based in the US held in February 2020
· 2 gold medals at the Japan Wine Awards in Tokyo held in February 2020
· A gold medal at the Global Pinot Noir Masters held in London during May 2020
· A gold medal at the Asian Sparkling Masters in Hong Kong held in June 2020
· A gold medal at the Global Sparkling Wine Masters held in London during June 2020
· A gold medal at the Global Rosé Masters held in London during June 2020
Group vision and growth strategy
The Group's vision is to continue to produce premium quality vintage wines from grapes grown in its own vineyards and to promote Gusbourne as a luxury brand which is reflected by the premium quality and premium market positioning of its products.
The Group's growth strategy is to:
· Support the continuing strong growth in DTC sales with online sales and marketing investment, and offline with planned further investment in Gusbourne's cellar door operations in Kent and potential new investment in a West Sussex cellar door operation. These operations enable us to meet our customers in person and showcase our operations and products on site, whilst promoting a closer and more direct relationship with our customers which is a strategic objective of our growth strategy.
· Invest in the further growth of UK Trade and International sales
· Maintain and further develop the Gusbourne's brands luxury status and ensure that the Group's premium quality and premium market positioning of its products are maintained as a key part of this growth strategy.
· Continue to innovate in all areas of the business including planned new product development in respect of Gusbourne's vintage premium wines.
2020 Harvest
The 2020 harvest at Gusbourne has continued the precedent set in recent years, with yet another vintage of outstanding high quality and record quantity. Conditions throughout the growing season were generally good, in particular during flowering in June and the critical ripening months of July and August.
The 2020 harvest started in September and produced near perfect ripeness with excellent balance between natural sugar levels and acidity across all three grape varieties - Chardonnay, Pinot Noir and Meunier.
In accordance with our strict parameters to only produce the best wines, rigorous selection of the best fruit from our self-imposed detailed-focussed techniques in the vineyards, the team began choosing the best quality fruit during the green harvest towards the latter part of the growing season. This was followed by rigorously selecting only the finest fruit from each vine during harvest, which ultimately ensured that all of the grapes, which were chosen for pressing, were suitably rich, ripe and pure. Desired levels of natural sugar and acidity were present across all three of the grape varieties that Gusbourne grow - Chardonnay, Pinot Noir and Pinot Meunier. Despite less favourable weather conditions towards the end of the year the team were able to pick a healthy and ripe crop.
The resulting wine production has added further to our inventory levels for sale in future years. Early indications of the resulting wine quality are high.
Results for the year
Net revenue for the year amounted to £2,109,000 (2019: £1,653,000), an increase of 28% over the prior year. This reflects continuing like for like growth in the sale of Gusbourne wines since 2013 and a 5-year compound annual growth rate of 35%.
Gross profit represents net revenue less cost of sales (cost of wine sold and direct selling costs). Over the last 5 years the gross profit margin has increased from 31% in 2015 to 58% in 2020 (2019: 56%) reflecting economies of scale in respect of the Group's increased production volumes and a shift in distribution mix more recently to DTC sales.
It should be noted that the cost of sales relating to the wine sold in the current year is primarily the cost of wine produced from the 2015 and 2016 harvests when production levels were lower, and the benefit of the production economies of scale at gross margin level will continue for some time to trail current year sales.
Operating expenses of £3,198,000 (2019: £2,902,000), included depreciation of £647,000 (2019: £699,000) as well as planned increased expenditure on sales and marketing costs of £1,478,000 reflecting continuing investment in the growth of the business and its sales beyond the current financial year. Sales and marketing costs, which are largely discretionary, continue to represent a relatively high proportion of net revenues during this planned growth phase of the business.
Adjusted EBITDA (profit from operations/(loss from operations) before fair value movement in biological produce, interest, tax, depreciation and amortisation) for the year was a loss of £1,321,000 (2019: £1,285,000). The operating loss for the year after depreciation and amortisation was £2,189,000 (2019: £2,156,000). The loss before tax was £3,066,000 (2019: £2,601,000) after net finance costs of £877,000 (2019: £445,000).
These losses continue to be in line with expectations and the long-term growth strategy of the Group which is based on continuing sales growth of Gusbourne wines, supported by sales and marketing expenditure and increasing wine stocks whilst maintaining Gusbourne's premium quality and premium market positioning in the market. This is planned to provide a positive cashflow during the course of the next few years.
Balance Sheet
The Group's balance sheet reflects ongoing investment in the growth of the Group's business.
The production of premium quality wine from new vineyards is, by its very nature, a long-term project of at least ten years. It takes around two years to select and prepare optimal vineyard sites and order the appropriate vines for planting. It takes a further four years from planting to bring a vineyard into full production and a further four years to transform these grapes into Gusbourne's premium sparkling wine. This requires capital expenditure on vineyards and related property, plant and equipment as well as significant working capital to support inventories over the long production cycle.
Total assets at 31 December 2020 of £24,294,000 (2019: £23,507,000) include freehold land and buildings of £6,263,000 (2019: £6,383,000), 231 acres of mature vineyards at £3,004,000 (2019: £3,144,000), plant, machinery and motor vehicles of £1,476,000 (2019: £1,604,000) and right of use assets of £2,022,000 (2019: £2,068,000). Note these are carried at cost, less depreciation where applicable, and do not reflect any potential upside from valuation adjustments.
The carrying value of inventories of wine stocks at 31 December 2020 at cost amounted to £9,325,000 (2019: £7,463,000). These inventories represent wine in its various stages of production from wine in tank from the last harvest to the finished products which take around four years to produce from the time of harvest. These additional four years reflect the time it takes to transform our high quality grapes into Gusbourne's premium sparkling wine. An important point to note is that these wine inventories already include the wine (at its various stages of production) to support sales planned for the next four years. The anticipated underlying surplus of net realisable value over the cost of these wine inventories, which is not reflected in these accounts will become an increasingly significant factor of the Group's asset base as these inventories continue to grow.
Intangible assets of £1,007,000 (2019: £1,007,000) arose on the acquisition of the Gusbourne Estate business on 27 September 2013. Intangible assets, which includes the Gusbourne brand itself, remain unimpaired at their historical amount and in accordance with the relevant accounting standards. No account has been taken with regards to any potential fair value uplift that may be appropriate.
Financing
The Group's activities are financed by shareholder's equity and debt which comprises loans, lease liabilities, other borrowings and deep discount bonds. At 31 December 2020 debt amounted to £14,397,000 (2019: £10,561,000). Excluding the impact of IFRS 16 and the resulting right of use asset and lease liability, debt amounted to £12,289,000 (2019: £8,405,000).
On 1 June 2020, Gusbourne announced that its subsidiary Gusbourne Estate Limited entered into an agreement with PNC Business Credit, a trading style of PNC Financial Services UK Ltd, for up to £10.5m of asset-based lending facilities (the "PNC Facilities"). The PNC Facilities are primarily used to finance the Group's working capital, which consists largely of inventories.
The PNC Facilities are provided on a revolving basis over a minimum period of 5 years and allow flexible drawdown and repayments in line with the Company's working capital requirements. The interest rate is at the annual rate of 3 per cent over the Bank of England Base Rate. The facilities are secured by way of first priority charges over the Company's inventory, receivables and freehold property as well as an all assets debenture.
On completion on 1 June 2020, approximately £4.6m of the PNC Facilities was drawn down by Gusbourne Estate Limited with approximately £2.1m being used to repay the existing secured Barclays bank facilities in full, £1.3m was used to part repay the existing short term loans to Franove Holdings Limited and a company controlled by Lord Ashcroft KCMG PC. The balance of £1.2m was used for working capital. Following further drawdowns during the year, the group had £3.7m of unused facilities at 31 December 2020.
Of the £1.3m drawdown at completion to part repay existing short-term loans, £0.8m was used to part repay a short-term loan of £1.25m received on 23 December 2019 from Franove Holdings Limited. £0.5m was used to part repay a short-term loan of £2.0m received on 31 May 2019 from a company controlled by Lord Ashcroft.
Following these repayments Franove Holdings Limited agreed to extend the repayment date of its outstanding loan of £0.5m to 15 August 2021, at the same 15% rate of interest, with the loan becoming secured behind PNC at the same ranking as the existing outstanding deep discount bonds issued by the Company. Gusbourne Estate Limited has also agreed with Franove that in the event it seeks to repay its loans (excluding its PNC facilities) further, the repayment of the Franove Holdings Limited loan will take priority.
The remaining Lord Ashcroft loan of £1.7m was refinanced, by a company controlled by him, with a new deep discount bond maturing on 15 August 2021 and with a coupon of 15% per annum rolled quarterly and secured behind PNC at the same ranking as the existing outstanding bonds issued by the Company.
Going concern
The directors have considered the cash available from committed facilities to continue operations for at least 12 months from the date these financial statements were approved and in addition, whether any of its key covenants may be breached during this period in assessing whether the going concern assumption is appropriate.
In coming to their conclusion, the directors have considered the Group's profit and cash flow plans for the coming period, and in the light of the residual uncertainty due to COVID-19 have run various downside "stress test" scenarios. These scenarios assess the continuing potential impact of COVID-19 on the Group over the next 12 months and in particular on the Group's sales through its key distribution channels. These stress tests indicate the Group can withstand any ongoing adverse impact on revenues and cashflow for at least the next 12 months but only if the short-term loan and deep discounted bonds are refinanced or deferred.
While initial forecasts are based on board-approved budgets, the Group has considered a scenario in which forecast revenues are restricted to those achieved in the year ended 31 December 2020 when the business was impacted by Covid-19 on UK on-trade and off-trade sales channels. Under this scenario the directors have modelled the impact certain cost mitigation actions, in relation to variable and discretionary costs and believe that there are sufficient cost savings which could be achieved from sales and marketing, administrative, winery and vineyard costs to enable the Group to continue as a going concern for the next 12 months.
In these stress test scenarios, the directors assessed the Group's potential cash requirements together with the availability of undrawn funds from the Group's £10.5m asset-based lending facility, of which £2.4m is undrawn on the date on which these financial statements were approved. The stress test scenarios show that the Group does not require more funds than the current undrawn facilities, assuming that the short-term loan and deep discounted bonds will be refinanced or deferred. Furthermore, the scenarios that the Group remains in compliance with its key monthly covenant tests which commenced on 31 December 2020.
Under these significant stress test scenarios, the Group could withstand a material and prolonged adverse impact on revenues, in line with those in 2020 and continue to operate within the available lending facilities. In each of the stress test scenarios, the directors have assumed that the short-term loan and deep discounted bonds will be refinanced or deferred.
The directors have also assessed the ability of the Group to repay its short-term loan and deep discounted bonds (£0.5m and £5.1m respectively at 31 December 2020) which are due for repayment on 15 August 2021. The total amount due on 15 August 2021 to satisfy these obligations will amount to £6.1m. Of this amount £1.5m is due to directors of the Group, £3.8m is due to the major shareholder of the Group and £0.8m due to third parties. The directors believe that the Group will be able to raise further equity and/or debt funds to repay or refinance this short term debt as well as providing additional funds for the further development of the Group. The Group has shown an ability in the past to raise capital and/or debt funds, and it believes that it will be able to raise such funds in the future. Furthermore, those directors and the major shareholder who hold over 85% of this short term debt obligation have confirmed in writing in June 2021 that they do not intend to call their debt should doing so cause the Group to be unable to satisfy its creditors as they fall due.
However, there is no guarantee that the Group will be able to raise further equity and/or debt funds to repay or refinance this short term debt. The Group does not currently have sufficient cash or other financing available to settle this obligation and has no contractual agreement that would enable the Group to refinance or defer payment of the short-term loan and deep discounted bonds.
This condition indicates the existence of a material uncertainty as at the date of approval of these financial statements, which may cast significant doubt on the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate.
Current trading and outlook
The Company experienced a slower than normal start to trading in the first three months of the year as a result of ongoing COVID-19 lockdown restrictions on UK trade sales in particular. However it is pleasing to note that our continuing growth in Direct to Consumer and International sales have continued to mitigate this impact on overall sales. With the gradual reopening of hospitality, the Group remains confident about future sales growth and remains excited about its future prospects as the business continues to focus on its strategic growth plans. The achievement of the Group's long-term growth strategy will depend on the raising of further equity and/or debt funds to achieve those goals.
On the production side, both vineyard and winery operations continued to work through the various lockdowns with appropriate safety protocols. The Group furloughed a number of staff members, particularly in the sales function and various steps were taken to reduce costs. We are pleased to report that all staff have now returned from furlough and are now focussed on delivering the Group's business targets.
Finally, I would like to thank all our dedicated and hard working employees for their outstanding response to the challenges over the past year. Their energy, focus, and creativity has been impressive to witness and provides me with great confidence for the future.
Charlie Holland
Chief Executive
Key Performance Indicators
Net revenue and adjusted EBITDA - 5 year summary
| Years ended 31 December | 2016 £'000 | 2017 £'000 | 2018 £'000 | 2019 £'000 | 2020 £'000 |
| Net revenue* | 640 | 998 | 1,261 | 1,653 | 2,109 |
| Cost of sales | (423) | (381) | (560) | (735) | (879) |
| Gross profit | 217 | 617 | 701 | 918 | 1,230 |
| Sales and marketing expenses | (345) | (560) | (914) | (1,389) | (1,478) |
| Administration expenses ** | (683) | (720) | (694) | (814) | (1,073) |
| Adjusted EBITDA (loss)/profit*** | (811) | (663) | (907) | (1,285) | (1,321) |
| Fair value movement in biological produce | 9 | (27) | 125 | (172) | (221) |
| EBITDA**** | (802) | (690) | (782) | (1,457) | (1,542) |
| Gross profit % | 33.9% | 61.8% | 55.6% | 55.5% | 58.3% |
| Net revenue annual growth % | 35.3% | 55.9% | 26.4% | 31.1% | 27.6% |
| Net revenue 5 year CAGR | 30.7% 34.8% | ||||
| * Net revenue represents Revenue after deducting excise duties ** Excluding depreciation ** Adjusted EBITDA means profit from operations/(loss from operations) before fair value movement in biological produce, interest, tax, depreciation and amortisation **** EBITDA means profit from operations/(loss from operations) before interest, tax, depreciation and amortisation. | |||||
| Net revenue by distribution channel - 5 year summary | |||||
| Years ended 31 December | 2016 £'000 | 2017 £'000 | 2018 £'000 | 2019 £'000 | 2020 £'000 |
| Net revenue in £'000 | |||||
| Direct to Consumer (DTC) | 55 | 74 | 144 | 299 | 586 |
| UK Trade | 498 | 607 | 827 | 934 | 721 |
| International | 87 | 251 | 179 | 292 | 634 |
| Net wine sales | 640 | 932 | 1,150 | 1,525 | 1,941 |
| Other Income | - | 66 | 111 | 128 | 168 |
| Total net revenue | 640 | 998 | 1,261 | 1,653 | 2,109 |
| Percentages of net wine sales | |||||
| Direct to Consumer (DTC) | 8.6% | 7.9% | 12.5% | 19.6% | 30.2% |
| UK Trade | 77.8% | 65.1% | 71.9% | 61.2% | 37.1% |
| International | 13.6% | 26.9% | 15.6% | 19.1% | 32.7% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Balance Sheet assets* - 5 year summary | |||||||
| Years ended 31 December | 2016 £'000 | 2017 £'000 | 2018 £'000 | 2019 £'000 | 2020 £'000 | ||
| Assets | |||||||
| Freehold land and buildings | 5,543 | 6,539 | 6,488 | 6,383 | 6,263 | ||
| Right of use assets** | - | - | - | 2,068 | 2,022 | ||
| Vineyards | 3,256 | 3,260 | 3,289 | 3,144 | 3,004 | ||
| Plant, machinery and other equipment | 1,131 | 1,431 | 1,757 | 1,636 | 1,504 | ||
| Other receivables | 97 | 90 38 | |||||
| Total non current assets | 9,930 | 11,230 | 11,631 | 13,321 | 12,831 | ||
| Inventories | 2,247 | 3,484 | 5,282 | 7,463 | 9,325 | ||
| Trade and other receivables | 314 | 281 | 496 | 707 | 869 | ||
| Trade and other payables | (252) | (358) | (483) | (752) | (769) | ||
| Working capital | 2,309 | 3,407 | 5,295 | 7,418 | 9,425 | ||
| Total operating assets | 12,239 | 14,637 | 16,926 | 20,739 | 22,256 | ||
| Cash | 1,123 | 1,464 | 1,311 | 1,009 | 262 | ||
| Goodwill | 1,007 | 1,007 | 1,007 | 1,007 | 1,007 | ||
| Total assets | 14,369 | 17,108 | 19,244 | 22,755 | 23,525 | ||
| Balance Sheet liabilities and equity* | |||||||
| Years ended 31 December | 2016 £'000 | 2017 £'000 | 2018 £'000 | 2019 £'000 | 2020 £'000 | ||
| Debt | |||||||
| PNC Business Credit (Asset finance facilities) | - - | - | - 6,613 | ||||
| Other bank debt | 2,342 | 2,256 | 2,173 | 2,058 | - | ||
| Deep discount bonds | 4,195 | 2,522 | 2,761 | 3,001 | 5,132 | ||
| Short term debt | - | - | - | 3,379 | 544 | ||
| Lease liabilities** | - | - | - | 2,123 | 2,108 | ||
| Total debt | 6,537 | 4,778 | 4,934 | 10,561 | 14,397 | ||
| Equity | 7,832 | 12,330 | 14,310 | 12,194 | 9,128 | ||
| Total liabilities and equity | 14,369 | 17,108 | 19,244 | 22,755 | 23,525 | ||
| Year ended | Year ended | ||
| 31 December | 31 December | ||
| 2020 | 2019 | ||
| Note | £'000 | £'000 | |
| Revenue | 2,294 | 1,845 | |
| Excise duties | (185) | (192) | |
| Net revenue | 2,109 | 1,653 | |
| Cost of sales | (879) | (735) | |
| Gross profit | 1,230 | 918 | |
| Fair value movement in biological produce | (221) | (172) | |
| Administrative expenses | (3,198) | (2,902) | |
| Loss from operations | (2,189) | (2,156) | |
| Finance expenses | (877) | (445) | |
| Loss before tax | (3,066) | (2,601) | |
| Tax expense | - | - | |
| Loss and total comprehensive for the year attributable to owners of the parent | (3,066) | (2,601) | |
| Loss per share attributable to the ordinary equity holders of the parent: | |||
| Basic (pence) | 4 | (6.60) | (5.67) |
| Diluted (pence) | 4 | (6.60) | (5.67) |
| Note | 31December 2020 £'000 | 31 December 2019 £'000 | |
| Assets | |||
| Non-current assets | |||
| Intangibles | 1,007 | 1,007 | |
| Property, plant and equipment | 5 | 12,793 | 13,231 |
| Other receivables | 38 | 90 | |
| 13,838 | 14,328 | ||
| Current assets | |||
| Biological Produce | 6 | - | - |
| Inventories | 7 | 9,325 | 7,463 |
| Trade and other receivables | 869 | 707 | |
| Cash and cash equivalents | 262 | 1,009 | |
| 10,456 | 9,179 | ||
| Total assets | 24,294 | 23,507 | |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | (769) | (752) | |
| Loans and borrowings | 8 | (5,676) | (3,379) |
| Lease liabilities | 9 | (92) | (123) |
| (6,537) | (4,254) | ||
| Non-current liabilities | |||
| Loans and borrowings | 8 | (6,613) | (5,026) |
| Lease liabilities | 9 | (2,016) | (2,033) |
| (8,629) | (7,059) | ||
| Total liabilities | (15,166) | (11,313) | |
| Net assets | 9,128 | 12,194 |
| Issued capital and reserves attributable to owners of the parent | |||
| Share capital | 10 | 12,048 | 12,048 |
| Share premium | 10,915 | 10,915 | |
| Merger reserve | (13) | (13) | |
| Retained earnings | (13,822) | (10,756) | |
| Total equity | 9,128 | 12,194 | |
| Note | 31 December 2020 £'000 | 31 December 2019 £'000 | |
| Cash flows from operating activities | |||
| Loss for the year before tax | (3,066) | (2,601) | |
| Adjustments for: | |||
| Depreciation of property, plant and equipment | 5 | 647 | 699 |
| Finance expense | 877 | 445 | |
| Fair value movement in biological produce | 6 | 221 | 172 |
| (Increase) in trade and other receivables | (143) | (209) | |
| Increase in inventories | (1,978) | (2,220) | |
| Increase in trade and other payables | 17 | 269 | |
| Cash outflow from operations | (3,425) | (3,445) | |
| Investing activities | |||
| Purchases of property, plant and equipment, excluding vineyard establishment | 5 | (254) | (339) |
| Sale of property, plant and equipment | - | 11 | |
| Net cash from investing activities | (254) | (328) | |
| Financing activities | |||
| Capital loan repayments | (3,253) | (34) | |
| New loans issued | 6,796 | 3,250 | |
| Repayment of lease liabilities | (142) | (125) | |
| Interest paid | (281) | (90) | |
| Loan issue costs | (188) | (15) | |
| Issue of ordinary shares | 10 | - | 485 |
| Net cash from financing activities | 2,932 | 3,471 | |
| Net increase/(decrease) in cash and cash equivalents | (747) | (302) | |
| Cash and cash equivalents at the beginning of the year | 1,009 | 1,311 | |
| Cash and cash equivalents at the end of the year | 262 | 1,009 |
| Share capital £'000 | Share premium £'000 | Merger reserve £'000 | Retained earnings £'000 | Total attributable toequityholdersof parent £'000 | |
| 1 January 2019 | 12,040 | 10,438 | (13) | (8,155) | 14,310 |
| Comprehensive loss for the year | - | - | - | (2,601) | (2,601) |
| Contributions by and distributions to owners: | |||||
| Share issue | 8 | 477 | - | - | 485 |
| Share issue expenses | - | (36) | - | - | (36) |
| 31 December 2019 | 12,048 | 10,915 | (13) | (10,756) | 12,194 |
| 1 January 2020 | 12,048 | 10,915 | (13) | (10,756) | 12,194 |
| Comprehensive loss for the year | - | - | - | (3,066) | (3,066) |
| 31 December 2020 | 12,048 | 10,915 | (13) | (13,822) | 9,128 |
| At 31 December 2019 | Upto3 months £'000 | Between 3and12 months £'000 | Between 1and2years £'000 | Between 2and5years £'000 | Over 5 years £'000 | Total £'000 |
| Trade and other payables | 436 | 250 | - | - | - | 686 |
| Other borrowings | 12 | 15 | 6 | - | 33 | |
| Loans and borrowings | 2,190 | 1,539 | 2,082 | - | - | 5,811 |
| Deep discount bonds | - | - | 3,390 | - | - | 3,390 |
| Lease liabilities | 25 | 75 | 100 | 298 | 4,185 | 4,683 |
| Total | 2,663 | 1,879 | 5,578 | 298 | 4,185 | 14,603 |
| At 31 December 2020 | Upto3 months £'000 | Between 3and12 months £'000 | Between 1and2years £'000 | Between 2and5years £'000 | Over 5 years £'000 | Total £'000 |
| Trade and other payables | 426 | 288 | - | - | - | 714 |
| Loans and borrowings | 51 | 748 | 205 | 7,126 | - | 8,130 |
| Deep discount bonds | - | 5,458 | - | - | - | 5,458 |
| Lease liabilities | 25 | 75 | 101 | 297 | 4,086 | 4,584 |
| Total | 502 | 6,569 | 306 | 7,423 | 4,086 | 18,886 |
| Loss £'000 | Weighted average numberof shares | Loss perOrdinary share pence | |
| Year ended 31 December 2020 | (3,066) | 46,478,619 | (6.60) |
| Year ended 31 December 2019 | (2,601) | 45,848,874 | (5.67) |
| Loss £'000 | Diluted numberof shares | Loss perOrdinary share pence | |
| Year ended 31 December 2020 | (3,066) | 46,478,619 | (6.60) |
| Year ended 31 December 2019 | (2,601) | 45,848,874 | (5.67) |
| Freehold Land and Buildings £'000 | Plant, machinery and motor vehicles £'000 | Right of use asset £'000 | Mature Vineyards £'000 | Computer equipment £'000 | Total £'000 | |
| Cost | ||||||
| At 1 January 2019 | 6,866 | 2,911 | - | 3,637 | 84 | 13,498 |
| Additions - adoption of IFRS 16 | - | - | 1,488 | - | - | 1,488 |
| Additions | 22 | 310 | 626 | - | 7 | 965 |
| Disposals | - | (23) | - | - | (1) | (24) |
| At 31 December 2019 | 6,888 | 3,198 | 2,114 | 3,637 | 90 | 15,927 |
| At 1 January 2020 | 6,888 | 3,198 | 2,114 | 3,637 | 90 | 15,927 |
| Additions | 8 | 234 | - | - | 12 | 254 |
| Disposals | - | - | - | - | - | - |
| At 31 December 2020 | 6,896 | 3,432 | 2,114 | 3,637 | 102 | 16,181 |
| Freehold land and buildings £'000 | Plant, Machinery and motor Vehicles £'000 | Right of use asset £'000 | Mature vineyards £'000 | Computer equipment £'000 | Total £'000 | ||
| Accumulated depreciation | |||||||
| At 1 January 2019 | 378 | 1,195 | - | 348 | 43 | 1,964 | |
| Depreciation charge for the year | 127 | 412 | 46 | 145 | 15 | 745 | |
| Depreciation on disposals | - | (13) | - | - | - | (13) | |
| At 31 December 2019 | 505 | 1,594 | 46 | 493 | 58 | 2,696 | |
| At 1 January 2020 | 505 | 1,594 | 46 | 493 | 58 | 2,696 | |
| Depreciation charge for the year | 128 | 362 | 46 | 140 | 16 | 692 | |
| Depreciation on disposals | - | - | - | - | - | - | |
| At 31 December 2020 | 633 | 1,956 | 92 | 633 | 74 | 3,388 | |
| Net book value | |||||||
| At 31 December 2019 | 6,383 | 1,604 | 2,068 | 3,144 | 32 | 13,231 | |
| At 31 December 2020 | 6,263 | 1,476 | 2,022 | 3,004 | 28 | 12,793 | |
| December 2020 £'000 | December 2019 £'000 | |
| At 1 January | - | - |
| Crop growing costs | 1,421 | 1,510 |
| Fair value of grapes harvested and transferred to inventory | (1,200) | (1,338) |
| Fair value movement in biological produce | ) | (172) |
| At 31 December | - | - |
| December 2020 £'000 | December 2019 £'000 | |
| Finished goods | 687 | 440 |
| Work in progress | 8,638 | 7,023 |
| Total inventories | 9,325 | 7,463 |
| December 2020 £'000 | December 2019 £'000 | |
| Current liabilities: | ||
| Bank loans | - | 34 |
| Other loans | 544 | 3,345 |
| Deep Discount Bonds | 5,132 | - |
| 5,676 | 3,379 | |
| Non-current liabilities | ||
| Bank loans | 6,796 | 2,025 |
| Unamortised bank transaction costs | (183) | - |
| Deep Discount Bonds | - | 3,001 |
| Total loans and borrowings | 6,613 | 5,026 |
| December 2020 £'000 | December 2019 £'000 | |
| Bank and other loans: | ||
| Within 1 year | 544 | 3,379 |
| 1-2 years | - | 2,025 |
| 2-5 years | 6,613 | - |
| Deep Discount Bonds: | ||
| Within 1 year | 5,132 | - |
| 1-2 years | - | 3,001 |
| 2-5 years | - | - |
| Land £'000 | Plant, machinery andmotor vehicles £'000 | Total £'000 | |
| Net carrying value - 1 January 2020 | 2,123 | 33 | 2,156 |
| Additions | - | - | - |
| Interest | 85 | 9 | 94 |
| Payments | (100) | (42) | (142) |
| Net carrying value - 31 December 2020 | 2,108 | - | 2,108 |
| December 2020 £'000 | December 2019 £'000 | |
| The lease payments under long term leases liabilities fall due as follows: | ||
| Current lease liabilities | 92 | 123 |
| Non current lease liabilities | 2,016 | 2,033 |
| Total liabilities | 2,108 | 2,156 |
| Deferred shares of 49p each | Ordinary shares of 1p each | |||
| Number | Number | £'000 | ||
| Issued and fully paid | ||||
| At 1 January 2019 | 23,639,762 | 45,671,683 | 12,040 | |
| Issued for cash during the year | - | 806,936 | 8 | |
| At 31 December 2019 | 23,639,762 | 46,478,619 | 12,048 | |
| Issued for cash during the year | - | - | - | |
| At 31 December 2020 | 23,639,762 | 46,478,619 | 12,048 |
| Deep discount bonds | ||||||
| Name | Balance as at 31 December 2018 | Accrued discount to 31 December 2019 | Balance as at 31 December 2019 | Subscription price as at 1 June 2020 | Accrued discount to 31 December 2020 | Balance as at 31 December 2020 |
| Lord Ashcroft KCMG PC | 1,383,306 | 120,037 | 1,503,343 | 1,729,349 | 282,620 | 3,515,312 |
| A Weeber | 751,935 | 65,249 | 817,184 | - | 65,421 | 882,605 |
| 2,135,241 | 185,286 | 2,320,527 | 1,729,349 | 348,041 | 4,397,917 |
| Warrants exercisable at 75 pence each | |||||
| Name | Held as at 31 December 2020 Number | Held as at 31 December 2019 Number | |||
| Lord Ashcroft KCMG PC | 1,311,517 | 1,311,517 | |||
| A Weeber | 300,000 | 300,000 | |||
| I Robinson | 50,000 | 50,000 | |||
| Lord Arbuthnot PC | 5,000 | 5,000 | |||
| M Paul | 5,000 | 5,000 | |||
| M Clapp | 5,000 | 5,000 | |||
| 1,676,517 | 1,676,517 | ||||