REG - Norish Plc - Half-year Report <Origin Href="QuoteRef">NSH_u.L</Origin>

Roebuck FoodAnnouncement

14/09/2017 07:08

RNS Number : 6899Q
Norish PLC
14 September 2017
Norish plc
Interim results 2017
Results
Norish plc (AIM: NSH), is pleased to announce its interim results for the six months ended 30 June 2017. 
Financial Highlights
 Total revenue increased by 31% to 20.5m (H1 2016: 15.6m)
 Revenue from the Cold Store division increased by 11.8% to 7.045m (H1 2016: 6.3m)
 Revenue from the Protein Trading business increased by 34% to 11.5m (H1 2016: 8.6m)
 Operating profit increased by 55% to 0.76m (H1 2016: 0.49m)
 Profit before tax increased by 85% to 0.65m (HI 2016 : 0.35m)
 Diluted adjusted Eps increased by 70% to 1.7p ( HI 2016 : 1p)
 Net debt was higher at 5.4m (H1 2016: 3.3m)
Operational Highlights
 Cold stores comprise, by far, the greatest proportion of our Plant, Property and equipment, in excess of 91% at end June 2017. This division recorded sales growth of 11.8%, when compared with the same period in the prior year. Contribution increased by 65% on the same period in the prior year.
 The growth in sales and contribution was relatively evenly spread across both the North West and South East cold store divisions. Costs increased by 6% in the period under review, reflecting growth in energy and labour costs. These costs are constantly under review.
 The contribution of the protein trading business, Town View Foods, was also ahead of the comparable period in the prior year, with sales growth of 33% and contribution ahead by 13%. 
 Our start-up businesses, including dairy and Foro International Connections Limited generated a loss of 0.2m in the first half. We expect these losses to be significantly reduced by year end and these businesses to be profitable in 2018.
Operations
Cold Store Division
The North West cold store division which comprises the freehold sites at Wrexham and Birmingham performed well in the first half of 2017, reflecting a combination of increased intakes, greater blast freezing volumes, improved pricing and tight control on costs. Sales increased by 9.9% year on year.
The South East division, which comprises the sites at Bury St. Edmunds (freehold), Braintree (leasehold), Gillingham (long term leasehold at a peppercorn rent) and East Kent (leasehold) performed substantially ahead of the same period last year. There was an increase in profitability at the Bury site, compared to last year, which helped overall divisional performance. Sales in the South East increased by 11.9%, reflecting higher intakes and greater blast freezing volumes. 
Protein Trading
Our protein trading division which consists of Town View Foods Limited accounted for sales of 11.5m, against 8.6m last year. It contributed 0.32m for the period, up from 0.29m for the same period last year.
Town View Foods trades in protein products mainly beef, pork, lamb and chicken. Sales from pork and chicken increased by 1.9m during the period, while sales from beef and lamb increased by 1m.
Dairy
The dairy division continues to make progress as we near the end of the capital investment phase in the business - we now have a high quality leased asset which should deliver attractive returns on capital. We run a low-cost grass-based system based on seasonal block calving, and as such our costs are heavily weighted toward the first half of the year. This impacts on first half/second half profitability split, with revenues more evenly spread throughout the year. We also incurred some once off start-up costs during the commissioning phase of our facilities but we are now operating more efficiently. Our asset utilization and operational efficiency will continue to improve as we build our dairy herd at Cantwellscourt Farm, through 2018.
Capital 
During the period we invested 1.2m (2016: 0.3m), 1m in the dairy farm in Kilkenny and 0.2m in routine capital expenditure in the temperature controlled division.
Outlook
Trading since July 1st continues to be robust for the group as a whole.
Within the British Cold Store industry, three new licences for store product destined for China have been issued in recent weeks to other companies operating in our sector. This may result in the loss of a customer (s) but we are satisfied that any vacated space will be filled quickly, with other remunerative work. As has been the case in the UK Food Manufacturing sector, investment in new cold store capacity is rare and when it happens tends to be dedicated to a specific customer, with a long term contract in place. While it is difficult to assess overall industry capacity, anecdotal evidence suggests cold store capacity is declining as older assets become obsolete. Our assets are well invested and should benefit from any further capacity reductions in that part of the supply chain, relevant to our business.
Town View Foods continues to deliver strong results, from a more diversified products mix.
Demand for dairy products continues to grow globally. Ireland is exceptionally well placed to benefit from this growth. Our major exporting competitors, with the exception of the US are unlikely to increase dairy output much in the next few years. Ireland's milk suppliers are very competitive when compared with other suppliers globally and expansion continues apace. We believe our milk business will see opportunities for growth in dairy technology, dairy breeding as well as dairy production in the years ahead.
The guidance for 2017 is increased from the previous range of 2.75p to 3p to a new range of 3.2p to 3.5p (fully diluted adjusted eps).
Dividend
The board does not recommend the payment of an interim dividend, unchanged from last year.
Norish plc




Consolidated income statement 




For the six months ended 30 June 2017











Six months
Six months
Year


ended
ended
ended


30 June 
30 June 
31 December 


2017
2016
2016


(Unaudited)
(Unaudited)
(Audited)







'000
'000
'000





Continuing operations




Revenue

20,545
15,555
32,098
Cost of sales

(19,416)
(14,744)
(30,757)





Gross profit

1,129
811
1,341





Other income

49
-
238
Administrative expenses

(414)
(325)
(707)
Operating profit from continuing operations 

764
486
872





Finance income- fair value gain on swaps

10
3
20
Finance income - interest receivable

-
-
10
Finance expenses - interest paid

(113)
(121)
(240)
Finance expenses - notional interest

(12)
(18)
(29)





Profit on continuing activities before taxation

649
350
633





Income taxes - Corporation tax

(141)
(75)
(210)
Income taxes - Deferred tax



18





Profit for the period attributable to owners of the parent from continuing operations

508
275
441





Loss from discontinued activities

(9)
(40)
(161)





Profit for the period

498
235
280





Other comprehensive income

-
-
-





Total comprehensive income for the year

498
235
280
Profit for the period attributable to owners of parent

514
243
291
Loss for the financial year attributable to non-controlling interest

(16)
(8)
(11)
Earnings per share expressed in pence per share:




From continuing operations 
- basic 

1.7p
1.0p
1.5p
- diluted

1.7p
1.0p
1.5p
From discontinued operations 
- basic 

(0)p
(0.2)p
(1.2)p
- diluted

(0)p
(0.2)p
(1.2)p





Norish plc



Interim balance sheet 



As at 30 June 2017




As at 
As at 
As at 

30 June 
30 June 
31 December

2017
2016
2016

(Unaudited)
(Unaudited)
(Audited)





'000
'000
'000
ASSETS



Non-current assets



Goodwill
2,485
2,338
2,403
Biological assets
618
345
540
Property, plant and equipment
17,449
15,847
16,635

20,552
18,530
19,578
Current assets



Trade and other receivables
7,327
5,642
6,264
Inventories
505
227
483
Cash and cash equivalents
1,279
3,196
2,044
Assets of disposal group classified as held for sale
284
125
698

9,395
9,190
9,489




TOTAL ASSETS
29,947
27,720
29,067




Equity attributable to equity holders of the parent
And non-controlling interest



Share capital
5,616
5,616
5,616
Share premium account
7,281
7,281
7,281
Capital conversion reserve fund
23
23
23
Treasury shares
(563)
(563)
(563)
Retained earnings
3,440
3,224
2,926
Equity attributable to equity holders of the parent
15,797
15,581
15,283
Non-controlling Interest
(38) 
(19) 
(22)
TOTAL EQUITY
15,759
15,562
15,261
Non-current liabilities



Borrowings
2,485
3,312
3,006
Financial Liabilities at fair value through profit or loss
-
183
44
Deferred tax
925
945
925

3,410
4,440
3,975




Current liabilities



Trade and other payables
6,067
4,208
5,082
Financial Liabilities at fair value through profit or loss
167
248
255
Current tax liabilities
346
103
205
Borrowings
4,192
3,159
4,282
Liabilities of disposal group classified as held for sale
6
-
7

10,778
7,718
9,831




TOTAL EQUITY AND LIABILITIES
29,947
27,720
29,067








Norish plc







Consolidated statement of changes in equity






For the six months ended 30 June 2017












Non-


Share
Share 
Other
Retained 

Controlling


capital
Premium
Reserves
Earnings
Total
Interest

Total

(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)

(Unaudited)

'000
'000
'000
'000
'000
'000

'000









At 1 January 2016
5,344
6,990
23
2,981
15,338
(11)

15,327









Net profit for the period
-
-
-
243
243
(8)

235
Issue of share capital
272
291
-
-
563
-

563
Share issue costs
-
-
(563)
-
(563)
-

(563)
Equity dividends paid (recognised directly in equity)
-
-
-
-
-
-

-
At 30 June 2016
5,616
7,281
(540)
3,224
15,581
(19)

15,562









Net loss for the period
-
-
-
48
48
(3)

45
Issue of share capital
-
-
-
-
-
-

-
Share issue costs
-
-
-
-
-
-

-
Equity dividends paid (recognised directly in equity)
-
-
-
(346)
(346)
-

(346)
At 31 December 2016
5,616
7,281
(540)
2,926
15,283
(22)

15,261









Net profit for the period
-
-
-
514
514
(16)

498
Issue of share capital
-
-
-
-
-
-

-
Treasury shares
-
-
-
-
-
-

-
Equity dividends paid (recognised directly in equity)
-
-
-
-
-
-

-
At 30 June 2017
5,616
7,281
(540)
3,440
15,797
(38)

15,759


Norish plc



Consolidated cash flow statement



For the six months ended 30 June 2017




Six months
Six months
Year

Ended
ended
Ended

30 June 
30 June 
31 December 

2017
2016
2016

(Unaudited)
(Unaudited)
(Audited)

'000
'000
'000
Profit on continuing activities before taxation
649
350
633
Gain on biological assets
(49)
-
(238)
Loss on discontinued activities
(9)
(40)
(161)
Finance expenses
125
139
269
Finance income
(10)
(3)
(30)
Depreciation - property, plant and equipment
360
318
625

1,066
764
1,098
Changes in working capital:



(Increase)/decrease in inventories
(22)
159
(97)
(Increase)/decrease in trade and other receivables
(649)
65
(1,130)
Decrease in current liabilities held for sale
(1)
(57)
(200)
Increase/(decrease) in payables
983
(140)
885
Cash generated from operations
1,377
791
556




Interest paid 
(113)
(121)
(240)
Interest received
-
-
10
Taxation paid
-
(13)
(49)
Net cash from operating activities
1,264
657
277
Investing activities



Investment in intangible assets
(82)
-
(65)
Purchase of biological assets
(29)
(345)
(302)
Purchase of property, plant and equipment
(1,175)
(280)
(1,375)
Net cash used in investing activities
(1,286)
(625)
(1,742)
Financing activities



Dividends paid to shareholders
-
-
(346)
Deferred consideration payments
(133)
(94)
(220)
Share issue proceeds
-
-
-
Share issue costs
-
-
-
Invoice finance (payments)/receipts
(74)
(64)
747
Overdraft receipts
-
-
-
Finance lease capital repayments
(118)
(66)
(152)
Finance lease advance
-
-
219
Term loan repayments
(418)
(995)
(1,122)
Net cash used in financing activities
(743)
(1,219)
(874)




Net decrease in cash and cash equivalents
(765)
(1,187)
(2,339)




Cash and cash equivalents, at beginning of period
2,044
4,383
4,383
Cash and cash equivalents end of period 
1,279
3,196
2,044
Note: The accounting policies applied throughout the period are consistent with those applied for the year ended 31 December 2016, as set out in the 2016 Annual Report.
Enquiries:
Norish

Aidan Hughes, Finance Director
Telephone: + 44 1293 862 498


Davy

Anthony Farrell 
Telephone: + 353 1 679 6363

This information is provided by RNS
The company news service from the London Stock Exchange
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