Results for the six months ended 31 March 2022
30/06/2022 16:01
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RNS Number : 8925Q S-Ventures PLC 30 June 2022
30 June 2022
S-Ventures PLC
("S-Ventures", "Group" or the "Company")
Interim unaudited results for the six months ended 31 March 2022
The Directors of S-Ventures PLC are pleased to report on the half-year ended
31 March 2022. These accounts are unaudited and have not been reviewed by an
auditor.
Financial highlights:-
Six months ended 31 March 2022 16 months ended 30 September 2021
Revenue £4.1m £1.5m
Profit (Loss) from operations (£0.8m) (£1.0m)
Profit / (Loss) after tax (£0.8m) (£0.8m)
Cash £0.6 m £0.2m
EPS / LPS (in pence per share) (0.67) (0.76)
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:
· Sales for the six months of £4.1m.
· S-Ventures raised £3m in new shares by way of subscription at 70 p
in December 2021
· Acquisition of the business and assets of Livia's from the
administrators in a pre-pack sale
· The main focus for the past few months has been bedding in Pulsin
Limited which was acquired in July 2021
· Businesses restructured resulting in all the trading for Ohso
Chocolate and We Love Purely is now continued at the main Pulsin logistics
centre in Brockworth which became fully operational in January 2022
· Centralised group Headquarters in London for our group HQ in the Old
Bailey, London.
· In April, acquisition of 100% of the issued share capital of Market
Rocket Limited
· Coldpress Foods Limited have repaid in full the loans made to them;
S-Ventures retain a small equity stake
· In June, revised terms agreed with the vendors of Pulsin for the
settlement of the loan notes issued as part of the acquisition, strengthening
the Company's balance sheet.
Scott Livingston, CEO of S-Ventures, comments:-
We are pleased to report solid revenue growth as a Group for our half-year,
reflecting a few months of ownership of our recent acquisitions.
The headwinds of the market have provided some challenges with regards to
labour supply, labour costs, ingredients and sourcing. The business is moving
towards an even keel and in these numbers we have exceptional legal and
infrastructure investment costs to support our building of a combined platform
and hub for future growth. In addition, higher costs are reflected due to
many of these investments having been brought forward ahead of plan.
We are pleased to report that we have integrated the brands that we have
acquired into one central location and one centralised team of expertise
across logistics, sales, marketing and finance. Our tech team Market Rocket
and its impact on D2C has been extremely encouraging following the 100%
acquisition in April 2022. Our purchase of 100% of Livia's in March 2022 has
also been successfully integrated and has shown revenue growth. So far, we are
happy with the M&A activity to date. It is important to recognise we are
in the very early stages of building the business being only 21 months old.
We remain confident and aligned to our overall plan. We do expect the
fundraising environment to remain a challenge and for the headwinds of supply
chain and inflationary pressure to remain for the foreseeable future. These
challenges are offset by incredible opportunities to make new and exciting
acquisitions with very favourable terms.
We are also delighted to report that the £2m (plus coupon payments) in loan
notes owed by the Company have been settled in full in part cash of £400,000
and the remainder in 2.6m SVEN shares. This has left the business with very
little debt and a much stronger balance sheet and footing to move forward.
The Board has experience across a multitude of industries and has encountered
similar challenging periods in the past and remain calm and focused on
ultimately delivering results.
The outlook going forward, in view of the issues mentioned in this report,
mean there is a material change in the revenue outlook for the full year.
Obtaining stock and ingredients has remained a serious challenge although
becoming more stable. Sadly this has led to demand not being fulfilled across
some products within the group. We estimate to be within 15% of revenue
targets which clearly affects the bottom line.
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 / Pascal Wiese (Corporate Finance)
Andrew Monk (Corporate Broking)
+44 (0) 20 3005 5000
IFC Advisory Limited
Financial PR and IR
Tim Metcalfe
Graham Herring
+44 (0) 20 3934 6630
Interim management report
Overview
We present the S-Ventures unaudited Interim Results for the period ended 31
March 2022.
We have continued to explore opportunities for acquisitions and arranged for
an injection of new equity in December 2021 of £3m. Since the period end,
we have completed the acquisition of Market Rocket Limited, a tech team of
Amazon and D2C experts with household names as clients.
We have achieved sales of £4.1m, 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 £530k and an overall trading loss
of £815k for the period, parts of the loss have been attributed to
exceptional expenses in regards legal costs of the M&A activity and new
infrastructure investment costs ahead of plan.
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 opening of the new logistics centre at Brockworth, Nr Gloucester has been
a key part of the consolidation process and we have closed three factories in
the UK to centralise the operations across all the brands. We have
centralised operations into one distribution hub and one manufacturing plant,
both within close distance of each other in Gloucester.
We also have a London based HQ group office, at 5 Old Bailey, London. 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. We continue to win new
business and expand each brand sharing resources and connections.
We have centralised into one main sales team and marketing team and have
integrated all brands onto our inhouse SAP system. We now have a broad and
diversified product range across the brands and Group that share commonalities
but each one representing unique growth and scale opportunities. We continue
to seek key strategic acquisitions and build the strength of the platform and
team as we move towards the end of 2022.
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
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. 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.
Key suppliers
Both We Love Purely and Ohso Chocolate are very dependent on key suppliers
- We Love Purely - a single overseas supplier
- Ohso Chocolate - two suppliers; one for the new products and one
for the smaller items.
Significant customers
The Group is not overly dependent on any one customer.
Brexit/COVID-19
Pulsin was affected by Brexit issues associated with importing, exporting and
labelling last year. Since then all members of the Group have seen the impact
of Covid and on both sales channels and also its impact on logistics -
especially the need to book in shipments to customers.
Other
All our businesses carry appropriate insurance covers for product liability
and other risks.
Post Balance Sheet events
· Acquisition of 100% Market Rocket Limited for an aggregate
consideration of £2.25m in a mix of shares and cash. The company was
founded in 2019 and had sales of some £500,000 in its last financial year but
it is growing fast and we anticipate significant growth this year
· As noted above, we have agreed with the vendors of Pulsin Limited, to
compromise the £2m of loan notes for a combination of cash and new shares.
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 2021
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
30 June
2022
30 June 2022
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 2022
Six months ended 31 March 2022 Six months ended 31 January 2021 6 July 20 to 30 September 2021
£ £ £
Continuing operations
Revenue 4,114,567 11,803 1,525,810
Cost of Sales (2,569,065) (8,424) (1,104,952)
1,545,502 3,379 420,858
Other operating income - - 31,376
Selling and Distribution costs (1,118,820) (76,300) (158,962)
Administrative expenses (1,222,669) (63,491) (1,259,905)
Finance costs (39,916) (54,720)
Finance income - interest receivable 20,431 3,468 16,499
Share of loss of associates - (600)
Loss before taxation (815,472) (132,944) (1,005,454)
Income tax - - 156,079
Loss for the period (815,472) (132,944) (849,375)
Loss attributable to Minority Interests (44,835) (501) (64,479)
Loss Attributable to Shareholders (770,637) (132,443) (784,896)
Loss per share
Basic loss per share attributable to the equity shareholders of the parent (0.67) (0.18) (0.76)
(pence)
Consolidated Statement of Financial Position (unaudited)
For the six months ended 31 March 2022
As at 31 March 2022 As at 31 January 2021 As at 30 September 2021
£
ASSETS
NON-CURRENT ASSETS
Tangible assets 2,807,924 4,603 2,913,508
Goodwill and Intangible assets 6,774,060 180,102 6,329,334
Deferred tax - - 198,913
Investments 30,838 30,000 30,238
TOTAL NON-CURRENT ASSETS 9,612,822 214,705 9,471,993
CURRENT ASSETS
Stocks in trade 1,418,747 64,154 1,219,876
Trade and other receivables 3,459,102 167,696 2,149,272
Cash and cash equivalents 574,978 362,816 154,697
TOTAL CURRENT ASSETS 5,452,827 594,666 3,523,845
TOTAL ASSETS 15,065,649 809,371 12,995,838
LIABILITIES
CURRENT LIABILITIES
Amounts falling due within one year 2,308,449 81,877 3,184,799
NON-CURRENT LIABILITIES
Amounts falling due after more than one year 2,781,005 14,893 2,321,945
TOTAL LIABILITIES 5,089,454 96,770 5,506,744
NET ASSETS 9,976,195 712,601 7,489,094
EQUITY ATTRIBUTABLE TO OWNERS
OF THE COMPANY
Share capital 117,660 75,919 111,378
Share premium 9,425,290 762,115 6,107,386
Equity to be issued 18,509 40,024
Equity component of convertible debt 2,057,528 2,057,528
Contingent equity settled consideration for investment 34,484 34,484
Minority Interests (121,645) 7,011 (76,810)
Retained losses (1,555,631) (132,444) (784,896)
TOTAL EQUITY 9,976,195 712,601 7,489,094
Consolidated Statement of Changes in Equity (unaudited)
For the six months ended 31 March 2022
Share capital Retained earnings Share premium Equity to be issued
£ £ £ £
Balance at 30 September 2021 111,378 (784,896) 6,107,386 40,024
Issue of share capital 6,282 3,317,904
Total comprehensive loss - (770,637)
Warrants exercised (14,003)
Options exercised (7,512)
Issue of ordinary in consideration of acquisition
Acquisition of non-controlling Interest
Balance at 31 March 2022 117,660 (1,555,533) 9,425,290 18,509
Equity component of convertible Contingent equity settled consideration Total Non-controlling interests Total equity
£ £ £ £ £
Balance at 30 September 2021 2,057,528 34,484 7,565,904 (76,810) 7,489,094
Issue of share capital 3,324,187 3,324,187
Total comprehensive loss (770,637) (44,835) (815,472)
Warrants exercised (14,003) (14,003)
Options exercised (7,512) - (7,512)
2,057,528 34,484 10,097,939 (121,645) 9,976,294
Balance at 31 March 2022
Consolidated cash flow statement (unaudited)
For the six months ended 31 March 2022
Unaudited 6 Months 31 March 2022 Audited P/e 30 September 2021
Reported Trading Loss pre Interest (755,125) (996,677)
Share based payment 25,000 40,024
Loan written off to subsidiary director - 32,424
Profit on disposal of fixed assets - (3,432)
Add Back Depreciation 266,450 86,334
(463,675) (841,327)
Sources of Funds:
Share issue 3,113,190 3,645,748
Interest received (paid) 20,431 (5,605)
Bank loans 491,860
3,625,480
Application of Funds
Amount withdrawn by directors - (44,879)
Payment of lease liabilities (80,424) 135,445
Sale of tangible fixed assets - 1,669
Acquisition of subsidiaries (net of cash acquired) (130,000) (2,349,131)
Loan repayments (301,566) (62,835)
Purchase of non-current asset investments - (30,838)
Purchase of intangible assets - (5,510)
Purchase of tangible fixed assets (149,445) (110,690)
(661,435)
Changes in Working Capital
Share of loss of associates 600 600
Stocks & Inventories (198,871) (32,301)
Accounts Receivable (1,309,830) (771,521)
Creditors (417,290) 365,103
(1,925,392)
574,978 (106,072)
Note:
The cash and cash equivalents as at the period end in the Consolidated
Statement of Changes of Equity and in the Consolidated Statement of Cash Flows
are exclusive of bank overdrafts amounting to £269,321 (Sept 2021 £260,769)
which were included in the Bank Loans figure.
Notes to the condensed consolidated financial statements (unaudited)
1. General information
The consolidated financial statements for the six months ended 31 March 2022
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 2022
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, the auditors did not draw attention to any matters by way of
emphasis and 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.
These condensed consolidated interim financial statements comprise the
accounts of the parent company and its subsidiary, after elimination of all
material intercompany balances and transactions.
3. Loss per share:
The calculation of the total basic loss per share of 0.67p is based on the
loss attributable to equity owners of the company of £770,637 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:
a. The company completed the purchase of 100% of the share capital of
Market Rocket Limited in April 2022.
b. In June, the Pulsin loan notes of £2.057m were fully satisfied by
the payment of £300,000, a deferred payment of £100,000 and the issue of
2,642,856 new Ordinary shares.
6. Approval of Interim Finance Statements:
These interim financial statements were approved by the Board of Directors on
30 June 2022.
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