Interim results for six months to 31 March 2023
05/07/2023 10:30
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RNS Number : 0646F S-Ventures PLC 05 July 2023
S-Ventures PLC
("S-Ventures", "Group" or the "Company")
Company Number: 12723377
Interim unaudited results for the six months ended 31 March 2023
The Directors of S-Ventures PLC are pleased to report on the half-year ended
31 March 2023. These accounts are unaudited and have not been reviewed by an
auditor.
Financial highlights:-
Six months ended 31 March 2023 Year ended 30 September 2022
Continuing Operations
Gross Revenues from continuing operations £8.4 m £7.8m
Profit (Loss) from continuing operations (£1.3 m) (£3.2m)
Cash £0.4 m £1.8m
LPS (in pence per share) (1.98) (2.4p)
Operational highlights:-
The business was formed to invest in, acquire and grow businesses in the
natural wellness food tech and organic snacking sector. The key points of this
initial period are:
· Gross Sales for the six months of £8.4 m made up as follows:-
Continuing Operations Discontinued Operations Total 6 mons to 31 March 23 31 March 2022
Gross Sales 7.7 m 0.7 m 8.6 m 4.3 m
Trade discounts, listing fees etc 0.8 m - 0.8 m 0.2 m
Net Sales 6.9 m 0.7 m 7.6 m 4.1 m
· The results for our business segments analysis is:
Segment Analysis
Plant Based Nutrition Bakery * Technical Services Admin-istration Total
Net Sales Revenues 3,659,903 2,982,843 899,754 122,929 7,665,429
Operating Profit / (Loss) before Tax (646,001) (930,800) 47,170 (922,284) (2,451,915)
*The Bakery division includes the discontinued Lizza business
· Acquired 100% of Juvela Limited in December 2022 - a profitable
business providing bakery products to the coeliac community. Since we
acquired, it has contributed gross sales of £2.6 m. The acquisition was
funded by a mix of Shares, Cash and deferred consideration.
· The group has now started to make positive monthly Ebitda
· New products are expected to be released in the Autumn
· S-Ventures raised £0.35m in new shares by way of exercise of
Warrants at 25 ea
· As previously announced, we concluded on 31 March 2023 that it was
no longer commercially viable to continue to support Lizza GmbH. Filing with
German courts for insolvency was made in April and the business closed. The
assets were fully impaired on our recent financial statements for the period
to 30 September 2022. As the formal proceedings did not commence until
after the half year, the results of Lizza GmbH are included in our
consolidated interim results to 31 March 2023.
Scott Livingston, CEO of S-Ventures, comments:-
We are pleased to release our interims for the half year 22/23.
The business has evolved in many ways and has steered through a large number
of challenges. We acquired Juvela Limited in December 2022 and have made
solid progress in rebuilding and restructuring Pulsin and our other
subsidiaries, and we have moved to being Ebitda positive as a group on a
month by month basis.
Revenues as a group, year on year, are more than double the level they were
this time last year as a result of both organic growth and acquisition. Juvela
is performing above plan. We have very exciting new product development in
progress and look forward to providing updates in due course. Pulsin have
achieved further distribution as the brand matures.
Our tech team at Market Rocket have accelerated their sales and launched a
platform called the Marketverse which integrates Amazon with other
distribution platforms and offers an end to end solution for brands and
manufacturers, Market Rocket have also become one of the first TikTok shop
verified partners.
The decision to close Lizza in Germany was a difficult one but in the best
interests of shareholders. The environment remains fragile and uncertain
but we move forward with a strengthened portfolio.
The challenges of the recent period has redoubled our focus on instilling
best practice and diligence in expenditure and cost control. Despite
constraints we are building a strong foundation for future growth. I would
like to thank the team for their hard work throughout.
We expect to consider further capital raising to optimise funding, to
enable us to exploit market opportunities and for working capital purposes.
About S-Ventures
S-Ventures, invests in, acquires and grows businesses in the natural wellness,
food-tech and organic snacking sector.
Further details on the acquisitions and investments are set out in the Interim
management report below. Since the year-end the Board has continued to review
a number of attractive potential opportunities.
Enquiries
S-Ventures PLC
Scott Livingston, Chief Executive Officer
Robert Hewitt, Chief Financial Officer
+44 (0) 1932 400 224
VSA Capital Limited
Broker and Financial Advisor
Andrew Raca (Corporate Finance)
+44 (0) 20 3005 5000
Interim management report
Overview
We present the S-Ventures unaudited Interim Results for the period ended 31
March 2023.
We have continued to explore opportunities for acquisitions and during the
past half year have completed the purchase of Juvela Limited, a supplier of
bakery products mainly for coeliacs.
We report net sales of £7.6m, slightly below expectations but above the run
rate of the previous period representing significant growth for the Group.
This resulted in an EBITDA loss of £0.4 m on continuing operations and an
overall pre-tax trading loss of £2.5 m for the period. The following items
are included in the overall loss:- Lizza Gmbh, a discontinued operation -
£1.1m, acquisition costs - £0.3m and amortisation arising from previous
acquisitions and the recent Juvela acquisition - £0.5m. Debt costs have
increased by £0.2m arising from our funding of the Juvela acquisition.
Whilst group sales continue to be ahead of last year, we have, in common with
other businesses, been affected by issues with suppliers, exchange rates as
well as the general economic backdrop.
Overall progress:
The brands continue to develop strongly and we are very focussed on product
development using food tech ideas and innovation and have been seeking new
distribution across new channels and territories. It is hoped to launch a new
range of Juvela products in the Autumn and refresh part of the Pulsin range.
We are looking at ways to consolidate and streamline our production facilities
in Gloucester and Pontypool although due to the products, there needs to be a
clear division between them.
In view of the problems incurred and reported on in our recent Financial
Statements and these Interim Accounts, we are seeking new capital to underpin
our activities.
Investment strategy and target markets
S-Ventures looks to identify investment opportunities in the heath &
wellness, organic food and wellbeing sectors within the UK and Europe. The
Company plans to add value by the adding capital and expertise to the target
companies. The experience and operational skills of the Board are intended to
act as an accelerator to smaller brands that have a strong foundation and
platform but may lack specific skills and capital. The main objectives will be
to cross fertilise opportunities between the target companies and to scale the
individual entities and look for exit opportunities and or synergistic
collaborations. We believe that scaling can create significant value creation
for all stakeholders.
Principal risks and uncertainties
Credit and Liquidity risks
The group is seeking to raise new capital the lack of which would impact on
the group's ability to acquire goods and services.
Foreign exchange
The Group does not hedge its foreign exchange exposures. We Love Purely buys
most of its stock in US Dollars and Ohso Chocolate has no foreign exchange
exposures. Juvela currently sources a significant part of its ingredients from
overseas and has some limited hedging in Euros. As regards, Pulsin, much of
its risk is naturally hedged by having both EU suppliers and Customers. The
recent falls in the sterling exchange rate have impacted our margins on some
lines.
Ukraine / Russian War:
Initially the outbreak of war caused a temporary delay in supplies and also
increased the prices. This has now receded but the recent developments and the
beach of the dam on the Dnieper could further market disruption as companies
scramble to get supplies for a reduced market. Accordingly, We continue to
be aware and look for alternative sources of materials.
Significant customers
The Group is not overly dependent on any one customer, although Juvela does
have a significant market presence in the Pharma sector for the supply of
Coeliac related products which are sold on prescription and are thus processed
through a single distributor.
Other
All our businesses carry appropriate insurance covers for product liability
and other risks.
Post Balance Sheet events
Regrettably, we have had to close the recently acquired Lizza business as we
found it was not possible to implement the changes to its business model in a
reasonable period of time and as such the business was not viable. The
business assets were fully impaired on our recently Audited accounts. The
group exposure is some £0.9m in loans and unpaid trading balances.
Responsibility statement of the Directors
We confirm that to the best of our knowledge:
· the consolidated financial statements have been prepared in
accordance with IAS34 'Interim Financial Reporting' as adopted by the EU;
· the interim management report includes a fair review of the
information required by DTR 4.2.7R:
o an indication of important events that have occurred during the first six
months of the financial year, and their impact on these set of financial
statements; and
o a description of the principal risks and uncertainties for the remaining
six months of the year
· the interim management report includes a fair review of the
information required by DTR 4.2.8R:
o related party transactions that have taken place in the first six months
of the current financial year and that have materially affected the financial
position or performance of the Group in that period; and
o any changes in the related parties transactions described in the 2022
Annual Report that could have a material effect on the financial position or
performance of the Group in the current period.
By order of the Board
Scott
Livingston
Robert Hewitt
Chief Executive Officer
Chief
Financial Officer
05 July
2023
05 July 2023
Cautionary statement
This report contains forward-looking statements. These have been made by the
directors in good faith based on the information available to them up to the
time of their approval of this report. The directors can give no assurance
that these expectations will prove to have been correct. Due to the inherent
uncertainties, including both economic and business risk factors underlying
such forward looking information, actual results may differ materially from
those expressed or implied by these forward-looking statements. The directors
undertake no obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.
Consolidated Statement of Comprehensive Income (unaudited)
For the six months ended 31 March 2023
Six months ended 31 March 2023 Six months ended 31 March 2022
£ £ £
Continuing operations Discontinued operations Group
Gross Revenue 7,715,418 733,081 8,448,499 4,114,567
Less Trade discounts and Listing costs (783,071) (783,071)
Net Sales Revenues 6,932,347 733,081 7,665,428 4,114,567
Cost of Sales (3,897,521) (652,088) (4,549,609) (2,569,065)
3,034,826 80,993 3,115,819 1,545,502
Selling and Distribution costs (878,285) (523,222) (1,401,507) (1,118,820)
Administrative expenses (3,207,015) (669,073) (3,876,088) (1,222,669)
Finance costs (273,718) (17,079) (290,797) (39,916)
Finance income - interest receivable 658 - 658 20,431
Share of loss of associates -
Loss before taxation (1,323,533) (1,128,381) (2,451,914) (815,472)
Income tax (126,391) - (126,391) -
Loss for the period (1,449,924) (1,128,381) (2,578,305) (815,472)
Loss attributable to Minority Interests (21,082) (21,082) (44,731)
Loss Attributable to Shareholders (1,428,842) (1,128,381) (2,557,223) (770,741)
Loss per share
Basic loss per share attributable to the equity shareholders of the parent (1.98) (0.67)
(pence)
Consolidated Statement of Financial Position (unaudited)
For the six months ended 31 March 2023
As at 31 March 2023 As at 30 September 2022 (Audited)
ASSETS
Goodwill 4,997,054 3,897,628
Owned:
- intangible assets 8,124,998 2,989,722
- Property, Plant & Equipment 2,675,722 2,027,170
Right of Use:
- Property, Plant & Equipment 1,555,791 1,418,576
Investments 30,237 30,238
Deferred Tax -
Total non-current assets 17,383,802 10,363,334
Current assets
Stocks in trade 2,318,878 1,647,121
Trade and other receivables 3,676,322 2,599,044
Cash and cash equivalents 423,902 1,781,921
Total current assets 6,419,102 6,028,086
TOTAL ASSETS 23,802,904 16,391,420
EQUITY
SHAREHOLDERS' Equity
Called Up Share capital 132,216 125,572
Share premium 14,707,738 13,509,382
Share based payment reserve 8,265 10,997
Equity component of convertible debt
Contingent equity settled consideration for investment 112,131 112,131
Retained losses (6,785,077) (4,227,855)
8,175,273 9,530,227
Non controlling interests (55,570) (34,448)
TOTAL EQUITY 8,119,703 9,495,779
LIABILITIES
Current Liabilities
Amounts falling due within one year 6,514,689 3,262,239
Financial Liabilities: - Borrowings
- Bank Overdrafts 22,834 276,079
-Interest bearing loans and borrowings 2,549,739 1,156,258
Tax Payable - 323,136
9,087,262 5,017,712
Non-current Liabilities
Amounts falling due after more than one year 96,034 1,877,929
Loans falling due after more than one year 6,499,905
TOTAL LIABILITIES 15,683,201 6,895,641
NET EQUITY AND LIABILITIES 23,802,904 16,391,420
Consolidated Statement of Changes in Equity (unaudited)
For the six months ended 31 March 2023
Consolidated Share capital Retained earnings Share premium Share Based Reserve
£ £ £ £
Balance at 30 September 2022 125,572 (4,227,855) 13,509,382 10,997
Issue of share capital for Acquisition 5,000 845,000
Total comprehensive loss - (2,557,223)
Warrants exercised 1,644 353,356 (2,732)
Options exercised
Acquisition of non-controlling Interest
Balance at 31 March 2023 132,216 (6,785,078) 14,707,738 8,265
,
Contingent Equity settled consideration for investment Total Non Controlling interest Total Equity
£ £ £ £
Balance at 30 September 2022 112,131 9,530,227 (34,488) 9,495,739
Issue of share capital for Acquisition 850,000 850,000
Total comprehensive loss (2,557,223) (21,081) (2,578,304)
Warrants exercised 352,268 352,268
Options exercised - -
Acquisition of non-controlling Interest - -
- -
Balance at 31 March 2023 112,131 8,175,272 (55,569) 8,119,703
Consolidated cash flow statement (unaudited)
For the six months ended 31 March 2023
As at 6 months to 31 March 2023 Audited P/e 30 September 2022
Reported Trading Loss pre Interest (2,161,775) (3,178,294)
Gain on Settlement of Loan Notes - (645,064)
Impairment of Goodwill 569,175
Profit on disposal of fixed assets (2,699)
Add Back Depreciation and Amortisation 921,755 937,365
Changes in Working Capital
Stocks & Inventories (316,419) (636,993)
Accounts Receivable 258,867 (34,352)
Creditors 469,977 597,921
Cash from Operations (827,595) (2,392,941)
Sources of Funds:
Share issue 5,000 5,073,374
Bank loans & leasing agreements 5,932,500 -
New HP contracts 19,112
Amount introduced by directors 496,095 171,635
Application of Funds
Tax Paid (24,000) (126,059)
Net Interest paid (273,060) (101,469)
Payment of lease liabilities (272,667) (308,992)
Payment of deferred consideration (108,334) -
Acquisition of subsidiaries (net of cash acquired) (5,882,442) (100,001)
Loan repayments (127,439) (237,445)
Purchase of tangible fixed assets (41,944) (366,188)
Purchase of Juvela Fixed & intangibles
(1,104,774) 1,611,914
Cash B/f 1,505,842 (106,072)
Cash & Equivalents 401,068 1,505,842
Note:
The cash and cash equivalents balance as at the period end in the Consolidated
Statement of Changes in Equity and in the Consolidated Statement of Cash Flows
are exclusive of bank overdrafts which amounted to £22,834 (2022: £269,321).
Notes to the condensed consolidated financial statements (unaudited)
1. General information
The consolidated financial statements for the six months ended 31 March 2023
are unaudited and were authorised for issue in accordance with a resolution of
the Board of Directors. The information for the period ended 31 March 2023
does not constitute statutory accounts as defined in section 434 of the
Companies Act 2006.
A copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors reported on those accounts: their report
was unqualified, however, the auditors drew attention to Note 2 to the
Statutory accounts relating to the basis of preparation and Going Concern.
The Directors have indicated a need for additional capital for which they are
in discussion with potential parties.
The audit report did not contain a statement under section 498(2) or (3) of
the Companies Act 2006.
2. Basis of preparation
The condensed interim financial statements have been prepared in accordance
with the requirements of the AQSE Growth Market Rules.
The interim financial information set out above does not constitute statutory
accounts. They have been prepared on a consolidated going concern basis in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) as adopted by the European Union. The
directors recognise that additional capital is required to ensure that the
company can continue to discharge its liabilities as they fall due and have
concluded that the funding requirements represents a material uncertainty that
casts significant doubt upon the company's ability to continue as a going
concern. However, the directors are presently engaged in discussions with a
number of parties which they believe will conclude successfully when these
accounts are issued. In the interim a director has made a loan facility
available to the group of £0.5 million to ensure the company can meet its
liabilities as they fall due.
These condensed consolidated interim financial statements comprise the
accounts of the parent company and its subsidiaries, after elimination of all
material intercompany balances and transactions. As Lizza was still under
the group's control as at 31 March, it assets and liabilities net of
impairment processed in the Annual Accounts, have been consolidated in these
accounts.
3. Loss per share:
The calculation of the total basic loss per share of 1.98p is based on the
loss attributable to equity owners of the company of £2,557,233 divided by
the weighted number of shares in issue during the period.
4. Investments:
The acquisition of shares in Coldpress Foods Limited is accounted for at cost.
5. Post Balance Sheet Event:
Lizza Gmbh was placed into a formal German Insolvency procedure on 5 April
2023. Accordingly, this has been treated as a Discontinued Operation in the
Statement of Comprehensive Income.
As at the date of placing the business into Insolvency proceedings, the Group
has advanced £855,000 in cash and goods and services which remain
outstanding. £137,000 of this was provided for in the accounts of
S-Ventures plc as at 30 September.
In the last Financial Statements, we impaired all the physical assets, which
remains the case in these Interim Accounts. Accordingly, at the next year
end, as the liquidation progresses, the net liabilities will fall out of
account and result in an increase in group net assets.
6. Approval of Interim Finance Statements:
These interim financial statements were approved by the Board of Directors on
4 July 2022.
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