Interim Results 2021

Roebuck Food

04/08/2021 07:00

RNS Number : 4650H

Norish PLC

04 August 2021

 

 

Norish plc

Interim Results 2021

Results

 

Norish plc (AIM: NSH), is pleased to announce its interim results for the six months ended 30 June 2021.

 

Financial Highlights

·    Sales increased by 19%, from £15.9m to £18.9m.

·    Operating profit increased by 61%, from £0.94m to £1.51m.

·    Pre-tax profit increased by 73%, from £0.78m to £1.35m.

·    Fully diluted adjusted Eps increased by 74%, from 2.06p to 3.58p.

·    Interest cover stood at 9.9x, at the half year stage.

·    Net debt increased from £8.7m at December 2020 to £9.5m.

 

Divisional Highlights

 

£'m
Cold Store
Sourcing
Dairy
Jun-21
£'000
Jun-20
£'000
% Growth
Jun-21
£'000
Jun-20
£'000
% Growth
Jun-21
£'000
Jun-20
£'000
% Growth
Revenue
7,938
7,083
12%
10,479
8,413
25%
508
399
27%
Operating Profit
1,755
1,374
28%
121
101
20%
32
(143)
Operating Margin
22.1%
19.4%
1.2%
1.2%
6.3%
(36%)


 

 

Cold Stores

 

Sales in the temperature-controlled division increased 12%, (+7% excluding Blast Freezing), from £7.1m to £7.9m. Costs increased by 8%, with power up 10% and employee costs up 3%.

Operating profits increased by 28% from £1.4m to £1.8m and operating margins improved, from 19.4% to 22.1%. EBITDA increased by 21% from £2.25m to £2.72m in the period under review.

 

At an operational level, pallets inbound were ahead by 9%, on the same period in the prior year while blast freezing volumes were ahead 32% on the same period. Occupancy was largely unchanged at 89% (90% in the first half of 2020). Stock turn improved from 8.2 weeks on average in H1 2020 to 7.6 weeks in H1 2021.

 

Sourcing Division

 

Sales at our sourcing division increased by 25%, compared with the same period in 2020, from £8.4m to £10.5m. Operating profit improved from £101,000 to £121,000.

 

Our product sourcing division was impacted by Covid-19 and Brexit in the first quarter of 2021. We have seen a strong recovery in the second quarter with the development of a protein export business to South Africa.

 

 

Dairy Division

Our subsidiary, Grass to Milk Company Ltd, continues to make progress; commercialising A2 protein, grass-fed, dairy products.

 

We are pleased to announce an exciting collaboration with Bright Dairy & Food Co Ltd and New Zealand Focus Group, jointly developing a new ultra-premium, A2-protein, grass-fed, Pure Milk UHT product for China, which will go on sale in the second half of the year.

 

Our operations team completed the development of a robust supply chain and quality system in the first half of 2021, which will act as a future growth platform; we were recently awarded an AA BRC audit score for Grass to Milk Ltd . Management built out a commercial team on the ground in China and are expanding into high growth retail channels such as Social Commerce, E-Commerce and High-End Retail.

 

Cantwellscourt Farm Ltd is providing A2 protein milk supply to Grass to Milk Ltd, in the first instance. Cantwellscourt Farm continues to improve operationally across key operating KPI's. Milk production was 18% ahead year on year. Profits improved substantially from a loss of £143,000 in half one 2020, to a profit of £32,000 in the first half of 2021.

 

Outlook

 

We remain optimistic for continued growth in profitability at Norish Cold Stores for the balance of the year. Group occupancy at this juncture (at 85%) is 9% higher than the same time last year.

 

We are happy with the significant progress made with the development of our A2 protein milk supply via Cantwellscourt Farm. Grass to Milk Company will deliver its first sale in the second half of the year.

 

Our protein sourcing division is expected to have a strong second half to the year as markets continue to normalise.

 

Strategic Review

 

We announced in March 2021 that we would carry out a strategic review of our cold store operations. This process continues and we will provide an update in due course.

 

Dividend

 

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

 

Net Debt

 

Net debt (post IFRS 16) increased to £9.5m at end June 2021, from £8.7m in December 2020. The increase in net debt reflects additional working capital requirements and ongoing investment. Cash generated from operations amounted to £1.3m. Investment of £1.9m was made in assets, comprising £0.7m in Grass to Milk and £1.2m in equipment at the cold store division.

 

 

 

Norish plc
Consolidated income statement
For the six months ended 30 June 2021
Six months
Six months
Year
ended
ended
ended
30 June
30 June
31 December
2021
2020
2020
(Unaudited)
(Unaudited)
(Audited)
£'000
£'000
£'000
Continuing operations
Revenue
18,925
15,895
33,361
Cost of sales
(17,130)
(14,659)
(30,389)
Gross profit
1,795
1,236
2,972
Other income
113
88
182
Administrative expenses
(402)
(388)
(865)
Operating profit from continuing operations
1,506
936
2,289
Finance income - interest receivable
-
-
1
Finance expenses - lease interest
(87)
(94)
(117)
Finance expenses - interest on bank loans
(65)
(63)
(196)
Profit on continuing activities before taxation
1,354
779
1,977
Income taxes - Corporation tax
(277)
(160)
(224)
Income taxes - Deferred tax
-
-
(245)
Profit for the period attributable to owners of the parent from continuing operations
1,077
619
1,508
Loss from discontinued activities
(69)
-
(71)
Profit for the period
1,008
619
1437
Other comprehensive income
(228)
-
162
Total comprehensive income for the year
780
619
1,599
Earnings per share expressed in pence per share:
From continuing operations
- basic
3.58p
2.06p
5.02p
- diluted
3.58p
2.06p
5.02p
From discontinued operations
- basic
(0.23)p
0p
(0.24)p
- diluted
(0.23)p
0p
(0.24)p
Norish plc
Interim balance sheet
As at 30 June 2021
As at
As at
As at
30 June
30 June
31 December
2021
2020
2020
(Unaudited)
(Restated)
(Audited)
£'000
£'000
£'000
ASSETS
Non-current assets
Goodwill
2,338
2,338
2,338
Intangible assets
1,906
807
1,269
Biological assets
856
700
770
Property, plant and equipment
22,960
22,592
22,898
28,060
26,437
27,275
Current assets
Trade and other receivables
8,494
4,838
7,526
Inventories
157
1,025
58
Cash and cash equivalents
843
1,501
1,550
Assets of disposal group classified as held for sale
270
277
381
9,764
7,641
9,515
TOTAL ASSETS
37,824
34,078
36,790
Equity attributable to equity holders of the parent
And non-controlling interest
Share capital
5,640
5,640
5,640
Share premium account
7,321
7,321
7,321
Other reserves
(87)
(21)
141
Retained earnings
6,758
4,932
5,750
TOTAL EQUITY
19,632
17,872
18,852
Non-current liabilities
Borrowings
5,052
5,757
5,514
Deferred tax
1,244
1,002
1,244
6,296
6,759
6,758
Current liabilities
Trade and other payables
6,119
5,526
6,288
Current tax liabilities
450
442
151
Borrowings
5,327
3,479
4,741
11,896
9,447
11,180
TOTAL EQUITY AND LIABILITIES
37,824
34,078
36,790
Norish plc
Consolidated statement of changes in equity
For the six months ended 30 June 2021
Share
Share
Other
Treasury
Retained
capital
premium
Reserves
shares
earnings
Total
£'000
£'000
£'000
£'000
£'000
£'000
At 1 January 2020
5,640
7,321
(21)
-
4,313
17,253
Net profit for the financial period
-
-
-
619
619
Total comprehensive income for the period
-
-
-
-
619
619
Issue of share capital
-
-
-
-
-
-
Equity dividends paid (recognised directly in equity)
-
-
-
-
-
-
Transactions with owners
-
-
-
-
619
619
At 30 June 2020
5,640
7,321
(21)
-
4,932
17,872
Net profit/(loss) for the financial period
-
-
-
818
818
Total comprehensive income for the period
-
-
-
818
818
Issue of share capital
-
-
-
-
-
-
Equity dividends paid (recognised directly in equity)
-
-
-
-
-
Foreign Exchange gain
-
-
162
-
-
162
Transactions with owners
-
-
162
-
818
980
At 31 December 2020
5,640
7,321
141
-
5,750
18,852


 

Net profit for the financial period
-
-
-
-
1,008
1,008
Total comprehensive income for the period
-
-
-
-
1,008
1,008
Issue of share capital
-
-
-
-
-
-
Equity dividends paid (recognised directly in equity)
-
-
-
-
-
-
Foreign Exchange loss
-
-
(228)
-
-
(228)
Transactions with owners
-
-
(228)
-
1,008
780
At 30 June 2021
5,640
7,321
(87)
-
6,758
19,632


 

 

 

 

 

 

Norish plc
Consolidated cash flow statement
For the six months ended 30 June 2021
Six months
Six months
Year
Ended
ended
Ended
30 June
30 June
31 December
2021
2020
2020
(Unaudited)
(Restated)
(Restated)
£'000
£'000
£'000
Profit on continuing activities before taxation
1,354
779
1,977
Gain on biological assets
(113)
(88)
(182)
Foreign exchange loss/(gain)
205
(51)
(55)
Loss on discontinued activities
(69)
-
(71)
Finance expenses
152
157
316
Finance income
-
-
(1)
Depreciation - property, plant and equipment
987
887
1,789
2,516
1,684
3,773
Changes in working capital:
(Increase)/decrease in inventories
(99)
80
1,047
(Increase)/decrease in trade and other receivables
(968)
2,019
(669)
Increase/(decrease) in trade and other receivables for disposal
111
-
(104)
Increase/(decrease) in current liabilities held for sale
-
-
-
Decrease in payables
(169)
(1,038)
(276)
Cash generated from operations
1,391
2,745
3,771
Interest paid
(152)
(157)
(316)
Interest received
-
-
1
Taxation refund/(paid)
22
51
(304)
Net cash from operating activities
1,261
2,639
3,152
Investing activities
Investment in intangible assets
(685)
(243)
(705)
Purchase of biological assets
(10)
(5)
(65)
Sale of biological assets
8
268
346
Purchase of property, plant and equipment
(1,177)
(634)
(1,741)
Net cash used in investing activities
(1,864)
(614)
(2,165)
Financing activities
Dividends paid to shareholders
-
-
-
Invoice finance receipts/ (payments)
475
(1,225)
(150)
Finance lease capital repayments
(623)
(405)
(845)
Finance lease advance
258
215
882
Term loan advance
-
-
-
Term loan repayments
(214)
(163)
(378)
Net cash used in financing activities
(104)
(1,578)
(491)
Net (decrease)/increase in cash and cash equivalents
(707)
447
496
Cash and cash equivalents, at beginning of period
1,550
1,054
1,054
Cash and cash equivalents end of period
843
1,501
1,550

 

Note: The accounting policies applied throughout the period are consistent with those applied for the year ended 31 December 2020, as set out in the 2020 Annual Report.

 

 

 

 

Enquiries:

Norish
Aidan Hughes, Finance Director
Telephone: + 44 1293 862 498
Davy
Anthony Farrell
Telephone: + 353 1 679 6363

 

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