Interim unaudited results
28/03/2024 10:54
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RNS Number : 7249I S-Ventures PLC 28 March 2024
28 March 2024
S-Ventures PLC
("S-Ventures", "Group" or the "Company")
Company Number: 12723377
Interim unaudited results for the six months ended 30 September 2023
The Directors of S-Ventures PLC are pleased to report on the second interim
period for the six months ended 30 September 2023. These accounts are
unaudited and have not been reviewed by an auditor.
The Directors have decided to change the accounting reference date for the
Group to 31 December 2023. This will bring the accounts into line with our
largest subsidiary, Juvela Limited. Accordingly, these results represent a
second half year.
Financial highlights:-
Six Months ended 30 September 2023 Six months ended 31 March 2023 Year ended 30 September 2022
Gross Revenues from continuing operations £9.6m £8.4m £7.8m
EBITDA £0.8m (£0.8m) (£1.7m)
Profit (Loss) from continuing operations (£1.5m) (£1.3 m) (£3.2m)
Cash £0.3m £0.4 m £1.8m
LPS (in pence per share) (1.14p) (1.98p) (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
period are:
· Gross Sales for the six months of £9.7m (prior period £8.4 m) made
up as follows:-
Continuing Operations Discontinued Operations Total six months ended 30 September 2023 Six months ended 31 March 2023 12 months ended 30 September 2022
Gross Sales £9.6 m £0.0 m £9.7 m £8.4 m £8.6m
Trade discounts, listing fees etc £0.9 m - £0.9 m £0.8 m £0.8 m
Net Sales £8.7 m £0.0 m £8.7 m £7.6 m £7.8 m
· The results for our business segments analysis is:
Plant-based Nutrition * Bakery Technical Services Admin- Total
istration
Net Sales Revenues £3.2m £3.8m £1.7m £0.1m £8.7m
Operating Profit/(Loss) before Tax (£0.7m) £0.7m £0.0m (£1.4m) (£1.4m)
* The Plant-based Nutrition division includes the discontinued Ohso Chocolate
business
· The Loss after tax is stated after closure and impairment costs of in
respect of Lizza GmbH, Ohso Chocolate Limited and Vegan Punk Ventures.
· This half year is the first full period of Juvela's contribution.
The Lizza business was placed into liquidation at the end of the previous half
year.
· As previously reported, the Group has obtained bridging finance loans
totalling £3m. Certain of these loans include conversion rights in the
event that the proposed transaction, discussed below, occurs.
· In addition to the debt funding, the Company is in discussions with
Riverfort Global Opportunities plc ("RGO") with respect to a potential sale of
its operating subsidiaries and the novation of SVEN's liabilities, (the
"Business") to RGO (the "Proposed Transaction").
Under the Proposed Transaction, RGO would acquire 100% of the Business in
exchange for new shares in RGO issued to SVEN. The Proposed Transaction, if
finalised, would be a reverse takeover for RGO, requiring, among other things,
the publication of an AIM Admission Document in respect of the enlarged group
and the approval of both RGO and SVEN shareholders.
Scott Livingston, CEO of S-Ventures, comments: -
I am pleased to present our interims for the second 6-month period ended
September 2023.
The business has evolved significantly in the period and steered through a
large number of challenges. As previously reported Juvela Limited, acquired in
December 2022, has been performing strongly since our acquisition with gross
sales of £4.3m for the six months to 30 September 2023 (six months to 31
March 2023 - £2.6m).
Our primary trading focus has been on restructuring Pulsin, which has resulted
in very significant cost reductions post the period end. The business has
been hampered by rising ingredient prices and sourcing difficulties. I am
now pleased to report that we have significantly restructured the business in
the period since these accounts and reduced its overheads by some 34%. The
team is now actively gearing up for new product launches later in 2024.
Gross 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.
Our tech team at Market Rocket has continued to grow with increased revenues
on its Marketverse Amazon platform coming mainly from third party businesses.
We have had to discontinue operations with Ohso due to rising cocoa prices
making the product uneconomic in current market conditions.
The environment remains fragile and uncertain but we move forward with a
strengthened portfolio and a clear idea of the markets best suited to our
product ranges.
The challenges of the recent period have 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 the last 12 months.
As set out in our recent trading update, we are changing our year end to 31
December. Our revenue for the 15 months to the new year end of 31 December
2023 is approximately £21.6m.
We will update the market with progress on the potential reversal of our
businesses into AIM quoted Riverfort Global Opportunities PLC, as appropriate.
We continue to consider alternative capital raising to optimise funding,
should that prove necessary, 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.
Enquiries
S-Ventures PLC VSA Capital Limited
Scott Livingston, Chief Executive Officer Broker and Financial Advisor
Stephen Argent, Chief Financial Officer Andrew Raca (Corporate Finance)
+44 (0) 20 475 0230 +44 (0) 20 3005 5000
Second Interim management report
Overview
We present the S-Ventures unaudited second interim results for the six months
ended 30 September 2023. We have decided to amend our accounting date to 31
December to bring it in to line with that of our major subsidiary, Juvela
Limited.
We are reporting gross revenue of £9.7m for the six months to 30 September
2023. Together with gross revenue of £8.4m for the six months to 31 March
2023, the total for the 12 months to 30 September 2023 of £18.1m is slightly
above the expectations of £16.9m disclosed in our trading update of 18
October 2023 and is above the run rate of the previous period, representing
significant growth for the Group. This resulted in an EBITDA profit of
£0.8m (first half year loss £1.3m) on continuing operations and an overall
pre-tax trading loss of £1.5m for the period (first half year loss £2.5m).
The overall loss includes debt costs of £0.5m, an increase of £0.2m, arising
from our funding of the Juvela acquisition. Also included are impairment
costs of £1m arising from the closure of Lizza GmbH, Ohso Chocolate and Vegan
Punk Ventures.
Whilst group sales continue to be ahead of last year, in common with other
businesses, we have been affected by supply chain issues, exchange rate
fluctuations as well as the general economic backdrop.
Overall progress:
The core brands continue to sell well and we are very focused on product
development using food tech ideas and innovation. We have been seeking
distribution across new channels and territories. We plan to launch a new
range of Juvela and Pulsin products in the Autumn and refresh parts of the
Pulsin range.
We are looking at ways to consolidate and streamline our production facilities
and we have closed the distribution centre at Brockworth, Gloucester and
amalgamated it back into the main Pulsin production site.
As reported recently, we are planning to progress a transaction with RGO which
will provide the SVEN businesses with access to further capital to fund their
investment and growth.
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.
Provided the planned transaction with RGO completes, the group will be in a
strong position to add to its portfolio and further develop its existing
brands through the new undertaking.
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 and develop its business.
Foreign exchange
The Group does not hedge its foreign exchange exposures. We Love Purely buys
most of its stock in US Dollars. 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.
Ukraine/Russian War
Initially the outbreak of war caused a temporary delay in supplies and also
increased prices. This has now receded but the recent developments and the
breach of the dam on the Dnieper could cause further market disruption.
Accordingly, we continue to be aware of the potential impact of overseas
events and look for alternative sources of materials.
Significant customers
The Group is not overly dependent on any one customer. However, Juvela does
have a significant market presence in the supply of Coeliac related products
which are sold on prescription and are processed through a single distributor.
Other
All our businesses carry appropriate insurance covers for product liability
and other risks.
Post Balance Sheet events
1. The Company has secured 3 loans each of £1m; each is secured by a
debenture over the Company's assets. The first was received in November 2023
for a 6-month period but has now been extended to November 2024. Interest of
2% per month is payable and the lender can convert into equity if the proposed
RGO transaction proceeds.
2. On 22 March 2024, a shareholder has lent £1m repayable in March
2025. Interest of 15% and a commission of 5% on the maturity of the loan.
The lender can convert into equity if the proposed RGO transaction proceeds.
3. On 22 March 2024, RGO PLC lent £1m repayable in March 2025.
Interest of 15% and a commission of 5% is payable on the maturity of the loan.
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
Stephen Argent
Chief Executive Officer
Chief
Financial Officer
28 March
2024
28 March 2024
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 30 September 2023
Six months ended 30 September 2023 Six months ended 31 March 2023 12 months ended 30 Sept 2022
Continuing Operations Discontinued Operations Group Group Group
£ £ £ £ £
Gross sales value 9,634,817 34,197 9,669,014 8,448,499 8,635,818
Trade Investment (947,484) 7,750 (939,734) (783,071) (835,192)
Net sales value 8,687,333 41,947 8,729,280 7,665,428 7,800,626
Cost of Goods Sold (4,282,150) (12,780) (4,294,930) (4,549,609) (5,266,715)
Gross profit 4,405,183 29,167 4,434,350 3,115,819 2,533,911
Other income 417,311 - 417,311 - 693,354
Sales and marketing expenses (1,391,328) (6,684) (1,398,012) (867,676) (922,174)
Distribution costs (589,237) (23,956) (613,193) (533,831) (315,906)
Administrative expenses (2,022,830) (11,577) (2,034,407) (2,561,026) (3,663,636)
(4,003,395) (42,217) (4,045,612) (3,962,533) (4,901,716)
EBITDA 819,099 (13,050) 806,049 (846,714) (1,674,451)
Interest and charges (501,201) (648) (501,849) (290,139) (78,827)
Depreciation and amortisation (816,432) (2,875) (819,307) (921,755) (934,667)
Impairment (1,008,399) - (1,008,399) (393,308) (569,176)
(2,326,032) (3,523) (2,329,555) (1,605,202) (1,582,670)
Profit (Loss) before tax (1,506,933) (16,573) (1,523,506) (2,451,916) (3,257,121)
Taxation (179,215) - (179,215) (126,391) (198,913)
Profit (Loss) after tax (1,686,148) (16,573) (1,702,721) (2,578,307) (3,456,034)
Consolidated Statement of Financial Position (unaudited)
For the six months ended 30 September 2023
As at 30 As at 31 As at 30
September 2023 March 2023 September 2022
£ £ £
ASSETS
Non-Current
Goodwill 4,997,054 4,997,054 3,897,628
Owned:
- intangible assets 7,401,443 8,124,998 2,989,722
- Property, Plant & Equipment 1,808,005 2,675,722 2,027,170
Right of Use:
- Property, Plant & Equipment 1,340,365 1,555,791 1,418,576
Investments 30,237 30,237 30,238
Total non-current assets 15,577,104 17,383,802 10,363,334
Current assets
Stocks in trade 2,304,956 2,318,878 1,647,121
Trade and other receivables 3,561,333 3,676,322 2,599,044
Cash and cash equivalents 305,462 423,902 1,781,921
6,171,751 6,419,102 6,028,086
TOTAL ASSETS 21,748,855 23,802,904 16,391,420
EQUITY
Shareholders' Equity
Called Up Share capital 132,216 132,216 125,572
Share premium 14,707,738 14,707,738 13,509,382
Share based payment reserve - - 10,997
Equity component of convertible debt - -
Contingent equity settled consideration for investment 112,131 112,131 112,131
Warrant reserve 8,265 8,265 -
Retained earnings (8,487,798) (6,785,077) (4,227,855)
6,472,552 8,175,273 9,530,227
Non-controlling interests (133,545) (55,570) (34,448)
6,339,007 8,119,703 9,495,779
Consolidated Statement of Financial Position (unaudited) (Cont'd)
For the six months ended 30 September 2023
As at 30 As at 31 As at 30
September 2023 March 2023 September 2022
£ £ £
LIABILITIES
Current Liabilities
Amounts falling due within one year 4,203,190 5,126,300 3,585,375
Financial Liabilities: - Borrowings
- Bank Overdrafts - 22,834 276,079
-Interest bearing loans and borrowings 702,500 2,549,739 1,156,258
4,905,690 7,698,873 5,017,712
Non-current Liabilities
Amounts falling due after more than one year 1,950,001 96,034 -
Loans falling due after more than one year 8,554,157 7,888,294 1,877,929
10,504,158 7,984,328 1,877,929
TOTAL LIABILITIES 15,409,848 15,683,201 6,895,641
NET EQUITY AND LIABILITIES 21,748,855 23,802,904 16,391,420
Consolidated Statement of Changes in Equity (unaudited)
For the six months ended 30 September 2023
Share capital Retained earnings Share premium Share Based Reserve
£ £ £ £
Balance at 31 March 2023 132,216 (6,785,077) 14,707,738 8,265
Total comprehensive loss (1,702,721)
Balance at 30 September 2023 132,216 (8,487,798) 14,707,738 8,265
Contingent Equity settled consideration for investment Total Non Controlling interest Total Equity
£ £ £ £
Balance at 31 March 2023 112,131 8,175,273 (55,570) 8,119,703
Total comprehensive loss (1,702,721) (77,975) (1,780,696)
Balance at 30 September 2023 112,131 6,472,552 (133,545) 6,339,007
Consolidated cash flow statement (unaudited)
For the six months ended 30 September 2023
6 months to 30 September 2023 6 months to 31 March 2023 12 months to 30 September 2022
£ £ £
Reported Trading Loss Pre-Interest (1,021,657) (2,161,775) (3,178,294)
Add Back Depreciation and Amortisation 819,307 921,755 934,667
Changes in Working Capital
Stocks & Inventories (13,922) (316,419) (636,993)
Trade and other receivables (132,651) 258,867 (98,944)
Creditors 1,016,868 469,977 585,623
Cash from Operations 667,945 (827,595) (2,393,941)
Sources of Funds
Share issue - 5,000 5,073,374
Bank loans & leasing agreements 243,222 5,932,500 -
Shareholder loan 250,000 -
New HP contracts - 19,112 -
Amount introduced by directors 89,193 496,095 171,635
582,415 6,452,707 5,245,009
Application of Funds
Tax Paid - (24,000) (126,059)
Net Interest paid (501,849) (273,060) (100,469)
Payment of lease liabilities (125,567) (272,667) (308,992)
Payment of deferred consideration (357,000) (108,334) -
Acquisition of subsidiaries (net of cash acquired) - (5,882,442) (100,001)
Bank loan repayments (299,248) (127,439) (237,445)
Purchase of tangible fixed assets (62,302) (41,944) (366,188)
(1,345,966) (6,729,886) (1,239,154)
Net Cashfow Movement (95,606) (1,104,774) 1,611,914
Cash Brought forward 401,068 1,505,842 (106,072)
Cash & Equivalents 305,462 401,068 1,505,842
Notes to the condensed consolidated financial statements (unaudited)
1. General information
The consolidated financial statements for the six months ended 30 September
2023 are unaudited and were authorised for issue in accordance with a
resolution of the Board of Directors. The information for the period ended 30
September 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, since the period end, the directors have additional funding;
a director has made a loan facility available to the group of £0.5 million
and as noted in Note 5, further convertible loans of £3m have been received
post the date of these accounts 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, were processed in our first half
year accounts but these provisions have been released in these accounts.
3. Loss per share:
The calculation of the total basic loss per share of 1.14p (first 6 months -
1.98p loss) is based on the loss attributable to equity owners of the company
of £2,451,916, divided by the weighted number of shares in issue during the
period.
4. Taxation
The Statement of Comprehensive Income includes a provision for a net
Corporation Tax liability. This is based on the individual tax positions of
each subsidiary in the group. However, it is anticipated that group loss
relief will be applicable, when the accounts for the 15 months to 31 December
2023 are submitted, enabling the charge to be extinguished.
5. Investments:
The acquisition of shares in Coldpress Foods Limited is accounted for at cost.
6. Post Balance Sheet Events:
a. The Company has secured 3 loans each of £1m; each is secured by a
debenture over the Company's assets. The first was received in November 2023
for a 6 month period but has now been extended to November 2024. Interest of
2% per month is payable and the lender can convert into equity if the proposed
RGO transaction proceeds.
b. On 22 March 2024, a shareholder has lent £1m repayable in March
25. Interest of 15% and a commission of 5% on the maturity of the loan.
The lender can convert into equity if the proposed RGO transaction proceeds.
c. On 22 March 2024, RGO PLC lent £1m repayable in March 25.
Interest of 15% and a commission of 5% is payable on the maturity of the
loan. If the proposed transaction with RGO proceeds this will become an
intercompany loan.
7. Approval of Interim Finance Statements:
These interim financial statements were approved by the Board of Directors on
27 March 2024.
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