REG - Ukrproduct Group Ltd - Final Results and Notice of AGM
30/05/2025 09:00
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RNS Number : 7804K Ukrproduct Group Ltd 30 May 2025
30 May 2025
UKRPRODUCT GROUP LIMITED
("Ukrproduct", the "Company" or, together with its subsidiaries, the "Group")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
NOTICE OF AGM
Ukrproduct Group Limited (AIM: UKR), one of the leading Ukrainian producers
and distributors of branded dairy foods and beverages (kvass), today announces
its audited results for the year ended 31 December 2024.
The full 2024 Annual Report and Accounts ("2024 Annual Report") has been
posted to shareholders and is available on the Company's website
at www.ukrproduct.com. (http://www.ukrproduct.com/) A notice of Annual
General Meeting ("AGM") and Proxy Form, will be shortly posted too.
It should be noted that the results and auditor's report set out below
reference notes contained in the 2024 Annual Report, which can be read in
full on the Company's website.
The AGM will be held at the 6th floor, office 36, 8 Sikorsky Street, Kyiv,
Ukraine, 04112 at 4:00 p.m. (Kyiv time) / 2:00 p.m. (London time) on 7
August 2025.
For further information contact:
Ukrproduct Group Ltd Tel: +380 67 322 52 04
Rinat Abdrasilov, Non-Executive Chairman
Sergey Evlanchik, Executive Director
Strand Hanson Limited Tel: +44 20 7409 3494
Nominated Adviser and Broker
Rory Murphy, Richard Johnson, Imogen Ellis www.strandhanson.co.uk (http://www.strandhanson.co.uk/)
Chairman Statement
The past year tested our people, our values, and our purpose like never
before. As one of Ukraine's leading food producers, Ukrproduct operates not
only as a business, but as part of the country's national infrastructure. We
support food security, rural employment, and Ukraine's export potential. Even
under the shadow of war, this purpose guided our actions.
Tragically, the year also brought personal loss. We mourn the members of our
team and their families who were lost to the war. We extend our heartfelt
condolences to every employee who has suffered loss. Their courage and
resilience continue to inspire us, and we honour their memory through our
ongoing commitment to one another and to our mission.
Throughout the financial year ended 31 December 2024 ("FY 2024"), our teams
kept our production sites operational, often under missile strikes, blackouts,
and disrupted supply chains. Our factories continued to process milk from
thousands of small farmers who depend on us. Our distribution adapted quickly,
finding new routes and workarounds to ensure supply continuity. Our employees
regularly attended survival training and adapted their routines to ensure
business continuity and personal safety. The courage, discipline, and
dedication of our people has been nothing short of heroic.
From the beginning of the full-scale invasion, we made clear that our first
responsibility was to our employees and their families. In 2024, we continued
to focus on safety, job preservation, and operational resilience. We invested
in emergency preparedness, staff wellbeing initiatives, and secure logistics
solutions. Despite these pressures, we upheld international standards of
hygiene and food safety, maintained our certification regime, and progressed
with our digitalisation and process automation journey to build long-term
efficiencies.
In times of war, survival is strategy. The economic realities of 2024,
including currency instability, supply chain disruptions, and declining
consumer confidence forced us to make tough decisions. We reduced price
promotions, prioritised margin stability, and carefully managed liquidity. As
a result, while local currency revenues grew 13%, our reported GBP revenue
remained broadly stable at £37.1 million. EBITDA declined 29% to £1.7
million, reflecting the strategic decision to preserve business capacity,
protect employment, and maintain critical production.
While profitability declined, our essential position in Ukraine's dairy supply
chain has only grown. We launched new products, adapted our spreads and butter
lines to market realities, and drove 31% growth in beverages, particularly
kombucha and kvass. Our new sandwich spreads category demonstrated profitable
growth, validating our innovation agenda.
We continue to face significant financial pressure, including ongoing breach
of loan covenants with the European Bank for Reconstruction and Development
(EBRD). The Group has been in long-running discussions to restructure the loan
and accrued interest. In December 2024, the EBRD retrospectively applied
deferred fees dating back to 2016, bringing the total obligation to over
€9.7 million (£8.1 million). These charges, together with currency-related
and impairment costs, contributed to a net loss of £2.0 million for FY2024.
Despite this, we retained the confidence of our suppliers, employees, and
customers. Our net assets stand at £2.0 million. Importantly, the EBRD has
not sought to accelerate repayment, and our dialogue continues. The EBRD has
on numerous occasions reiterated its commitment to supporting Ukraine's
recovery, preserving jobs, enhancing food security, and restoring the
country's export potential. We hope these guiding principles will be reflected
in our ongoing negotiations, and that the long-term role of Ukrproduct as a
pillar of national resilience will be recognised in any restructuring outcome.
In 2025, the operating environment is expected to remain fragile, but we are
better prepared. We will pursue a cautious capital allocation strategy,
continue engaging with international partners and lenders, and remain
laser-focused on liquidity, resilience, and performance. We will continue to
innovate, modernise, and invest where it matters most, in our people, our
customers, and our future.
Our goal is to emerge from this war a stronger, leaner, and more resilient
business, one that continues to serve the country with pride and purpose. We
pay tribute to our employees, who risk their safety daily to ensure production
continues, exports flow, and Ukrainian families are fed. We thank our
shareholders, who continue to place their trust in us despite extraordinary
volatility. We express deep appreciation to our international partners and
stakeholders, particularly the EBRD, for their continued engagement and
openness to dialogue, even in these most difficult circumstances.
Above all, we acknowledge the courage of those defending Ukraine on the front
line, whose bravery allows business, life, and hope to endure. We are united
in our mission and unwavering in our purpose. Ukrproduct will stand, for our
people, our partners, and for Ukraine.
Rinat Abdrasilov
Non-Executive Chairman
Chief Executive Officer Statement
Ukrproduct Group Limited ("Ukrproduct", the "Company" or, together with its
subsidiaries, the "Group") is one of the leading Ukrainian producers and
distributors of branded dairy foods and beverages (kvass).
In the financial year ended 31 December 2024 ("FY2024"), Ukrproduct once again
managed to increase its revenue by 13% in local currency and thus developed
significantly better than the market. However, due to currency translation
effects, reported revenue remained broadly stable at £37.1 million, compared
to £37.0 million in the previous year.
The processed cheese segment delivered £21.2 million in revenue in FY2024, a
15% year-over-year decline, largely impacted by reduction of price promotions
at the national level due to the rapid growth in cost prices caused by sharp
fluctuations in the dairy raw material market and the risks of loss-making
sales.
The butter segment achieved revenue of £5.2 million in FY2024 compared to the
prior year £3.1 million. Revenue growth for butter of 70% was primarily
driven by increased production after a period of slight stagnation, the market
has become receptive to the higher supply.
Sales of spreads experienced a 12% decline in FY2024 and amounted to £4.0
million, reflecting heightened market competition and evolving consumer
preferences.
Ukrproduct expanded its sustainable product portfolio with a new sandwich
spreads category in the fourth quarter of FY 2023 that showed profitable
growth, sales which amounted to £1.2 million in FY2024.
Sales generated from skimmed milk powder increased by 8% on a nominal basis to
£1.4 million, compared with £1.3 million in the previous year. In terms of
volume, skimmed milk powder sales decreased by 23% following the continued
decline in the previous period. Prices for skimmed milk powder only had
limited scope for upward movement in FY2024 and the Group minimised its output
of this product for sale in favor of utilising semi-processed milk protein as
an ingredient in the production of processed cheese.
Kvass and other beverages sales rose by 31% year-over-year, reaching £2.3
million in revenue in FY2024. The growth in sales was driven by positive
market dynamics of kombucha sales, supported by new product launches and
strong brand positioning.
Administrative and selling expenses in FY2024 increased by 4% year-over-year,
reaching £4.2 million in FY2024. This increase was mainly attributable to
higher payroll and payroll-related costs, as well as an increase in insurance
and consulting services. The changes in other types of expenses were mainly
driven by sales dynamics and regular business activities throughout FY2024.
Other operating expenses increased to £1.8 million in FY2024, compared to
£1.1 million in the previous year. Due to anticipated deterioration in the
business outlook and increasing future risks for the business, the Group
recognised £1.1 million in net impairment losses on financial assets,
reflecting provisions made for accounts receivable and prepayments to
suppliers. Additionally, this line includes £0.1 million write-off of goods
and £0.4 million provision for blocked VAT invoices.
Subsequently, EBITDA declined by 29% year-over-year, to £1.7 million in
FY2024.
Finance expenses in FY2024 increased by 253% year-over-year, totaling £2.8
million (2023: £0.8 million), driven by substantial loan deferral fee charges
from the EBRD, retrospectively applied for the period from October 2016 to
December 2024. In December 2024, notwithstanding the challenging operating
environment due to the war in Ukraine, the EBRD decided to exercise its right
under the loan agreement and charged loan deferred fees retrospectively from
the period from 24 October 2016 to 2 December 2024.
As a result, the net loss after tax amounted to £2.0 million, a decline of
£2.4 million compared to a profit of £0.4 million in FY2023. The
deterioration was mainly attributable to increased finance costs and lower
operating profit.
Financial Position
As of 31 December 2024, Ukrproduct reported net assets of £2.0 million, down
from £4.5 million a year earlier, with cash balances reduced to £0.1 million
(FY2023: £0.4 million).
For the year ended 31 December 2024, the Group continued to be in breach of
several provisions of the loan agreement with the EBRD. The Group failed to
repay Tranches A and B before the maturity dates and has missed interest
payments since 1 March 2022. In January 2025, EBRD notified the Group on a
further €2.4 million (£2.0 million), principally relating to loan deferral
fee charges for the period from October 2016 to December 2024. This brings the
aggregate balance owed to the EBRD to over €9.7 million (£8.1 million),
inclusive of principal, interest and fees as at 31 December 2024.
The Group has been in dialogue with the EBRD since 2021 to potentially
restructure the loan and accrued interest and charges, and discussions
continue. At present, the EBRD has taken no action to accelerate repayment of
the accumulated loan.
In January 2024, the Group signed a new facility of UAH 70.0 million (£1.4
million) with Ukrainian bank, for general working capital purposes. The new
facility has a significantly lower interest rate of 9% (against 20% on the
previous facility).
Outlook
In 2025, the Company expects the business environment to remain fragile,
exacerbated by the ongoing war in Ukraine and financial pressures. The Group
will continue to follow a cautious capital allocation policy, prioritise
liquidity preservation, seek new financing opportunities, and focus on
fulfilling its existing obligations. We will also continue to strengthen our
digital systems, automate operations, and safeguard hygiene standards across
all our production sites, a key part of preserving our export potential.
Oleksandr Slipchuk
Chief Executive Officer
Independent Auditor's Report to the MEMBERS of UKRPRODUCT GROUP LIMITED
Opinion
We have audited the consolidated financial statements of Ukrproduct Group
Limited and its subsidiaries
(the "Group") for the year ended 31 December 2024 which comprise the
consolidated statement of comprehensive income, the consolidated statement of
financial position as at 31 December 2024, the consolidated statement of
changes in equity, consolidated statement of cash flows and notes to the
financial statements including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and UK adopted International Accounting Standards.
In our opinion, the consolidated financial statements:
· give a true and fair view, of the state of the Group's affairs as at
31 December 2024 and of its results for the year then ended;
· have been properly prepared in accordance with UK adopted
International Accounting Standards; and
· have been prepared in accordance with the requirements of the
Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the consolidated financial statements section of our report. We are
independent of the Group in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Jersey,
including the FRC's Ethical Standard as applied to listed entities, and we
have fulfilled our ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
An overview of the scope of our audit
During our audit planning, we determined materiality and assessed the risks of
material misstatement in the consolidated financial statements including the
consideration of where Directors made subjective judgements, for example, in
respect of the assumptions that underlie significant accounting estimates and
their assessment of future events that are inherently uncertain. We tailored
the scope of our audit in order to perform sufficient work to enable us to
provide an opinion on the consolidated financial statements as a whole taking
into account the Group, its accounting processes and controls and the industry
in which it operates.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the consolidated financial statements of
the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the matter was addressed in the audit
Going Concern
The consolidated financial statements have been prepared on a going concern Key Observations
basis as discussed in note 2. The Group is in a net current liability position
of financial position amounted to £4.92 million as of
31 December 2024. We included the going concern assumption as a key audit
matter given the continuing net current liability position, absence of a Our work performed and our conclusions in respect of going concern have been
formal debt restructuring agreement with EBRD and the ongoing Russian military detailed in 'Material uncertainty related to going concern section' of our
action in Ukraine (Refer note 2.1 (b) to the consolidated financial audit report.
statements).
Risk of fraud in revenue recognition
Revenue is material and an important determinant of the Group's performance
and profitability. This gives rise to inherent risk that revenue recognised is
overstated in order to present more profitable results for the year. The
Group's revenue from local and export sales of milk, dairy foods and beverages
amounted to £37.08 million, excluding the charge of bonuses. Given the
magnitude of the amount and the inherent risk of revenue overstatement, we
consider revenue recognition to be a key audit matter (Refer to notes 2.2.10
and 8).
Our main audit procedures in respect of revenue recognition were as follows:
§ We obtained an understanding of the policies and procedures applied to
revenue recognition, as well as compliance therewith, including an analysis of
the effectiveness of the design and implementation of controls related to
revenue recognition employed by the Group;
Risk of Management Override of Controls § We performed sample based tests of details over the accuracy and occurrence
of sales during the year specially responsive to the risk of fraud in revenue
occurrence;
Management is in unique position to perpetrate fraud because of management's § We performed analytical procedures, including gross profit margin analysis
ability to manipulate accounting records and prepare fraudulent financial and obtained explanations for significant variances as compared to the
statements by overriding controls that otherwise appear to be operating previous year;
effectively. Although the level of risk of management override of controls
will vary from entity to entity, the risk is nevertheless present in all § We tested a sample of journal entries relating to income recognition by
entities. Due to the unpredictable way in which such override could occur, it reference to supporting documents;
is a risk of material misstatements due to fraud and thus a significant risk.
Also, the Group has voluminous transactions and requires complex calculations. § We performed sales cut-off procedures for a sample of revenue transactions
at the year end in order to conclude on whether they were recognized in the
correct accounting period; and,
§ We reviewed the disclosures related to revenue included in the notes to the
consolidated financial statements.
Risk of Non-compliance with loan covenants
Key Observations
We did not note any material issues arising from the procedures performed in
The Group has loans from European Bank for Reconstruction and Development this area.
(EBRD) and there is a risk that the Group doesn't meet the covenants as stated
in the loan agreement. Violation of the Group's loan covenants could have a
potential material unfavourable impact to the Group.
During the review of loan agreements, we noted that there is non-compliance
with certain covenant contained within those agreements, particularly on the
missed payments of principal and interests (Refer to Note 24 to the
consolidated financial statements).
Our main audit procedures in respect of Management Override of Controls were
as follows:
§ We have obtained understanding of the financial reporting process.
§ We have reviewed opening balances and completeness of journals.
§ We have reviewed high-risk journals as part of our testing.
Risk of Subsequent Events
§ We have reviewed accounting estimates and potential management bias.
Due to the ongoing Russian invasion of Ukraine, there is a risk that future
escalation of military actions and their duration could have a material impact Key Observations
to the Group.
We did not note any material issues arising from the procedures performed in
this area.
Our main audit procedures in respect of non-compliance with loan covenants
were as follows:
§ We have recalculated the loan covenant and confirmed that they are
according to the terms of the loan.
§ We have reviewed the correspondences with EBRD.
§ We have checked the contract with EBRD in relation to their view and
actions on the breach of terms of the loan agreement (loan covenants) and
failure to pay interest and capital repayments.
Key Observations
We have noted a material issue arising from the procedures performed in this
area. The specific instance identified by our audit was: missed principal and
interest payments and ratio of debt to EBITDA of 3.61 (requirement: <=3).
Our main audit procedures in respect of Subsequent events were as follows:
§ We have obtained understanding of the procedures management has established
to ensure that subsequent events are identified.
§ We enquired of management whether any subsequent events have occurred which
might affect the financial statements.
§ We have read the minutes of all relevant meetings since the end of the
reporting period to identify any relevant subsequent events, to include where
applicable:
1. general meetings;
2. management meetings;
3. board meetings.
§ We read all management and interim financial statements produced since the
end of the reporting period.
Key Observations
We did not note any material issues arising from the procedures performed in
this area.
Material uncertainty related to going concern
We draw attention to note 2.1 (b), in the consolidated financial statements,
which indicates the absence of a formal debt restructuring agreement with the
European Bank for Reconstruction and Development (EBRD), potential impact of
the ongoing war in Ukraine, and the limited cash resources of the Group and
reliance on successful implementation of its business plans and financing
strategy. These events have continued after the year end. These events and
conditions, along with other matters as set in note 2.1 (b) to the
consolidated financial statements, indicate that a material uncertainty exists
that may cast significant doubt on the Group's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the consolidated financial statements, we have concluded that the
use of the going concern basis of accounting in the preparation of the
consolidated financial statements is appropriate. In assessing the
appropriateness of the going concern assumption used in preparing the
consolidated financial statements, our procedures included, amongst others:
§ Assessing the cash flow requirements of the Group over 12 months from
expected signoff of these consolidated financial statements;
§ Understanding what forecast expenditure is committed and what could be
considered discretionary;
§ Assessing the liquidity of existing assets on the consolidated statement of
financial position that can be used to repay the Group's obligations;
§ Considering the terms of the EBRD and other bank loan and trade finance
facilities and the amount available for drawdown as well as the probability of
EBRD agreeing to restructure the facilities;
§ Considering the impact of the ongoing military conflict in Ukraine to the
Group's operations and the Group's business continuity plan, if any; and,
§ Considering potential downside scenarios and the resultant impact on
available funds.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
We define materiality as the magnitude of misstatements in the consolidated
financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced. We use
materiality to determine the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate the results of that work.
Materiality was determined as follows:
Consolidated financial statements as a whole:
Materiality was calculated at £556,000 which is approximately 1.5% of Total
Revenue. This benchmark is considered the most appropriate because, based on
our professional judgement, we considered that this is the primary measure
used by the users of the consolidated financial statements in assessing the
performance of the Group.
Communication of misstatements to the Board:
We agreed with the Directors that any misstatement above £27,800 identified
during our audit will be reported, together with any misstatement below that
threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information
comprises the information included in the annual report set out on page 3 to
20 other than the consolidated financial statements and our auditor's report
thereon. Our opinion on the consolidated financial statements does not cover
the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audits of the consolidated financial statements, our
responsibility is to read the other information identified above when it
becomes available and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements, or our
knowledge obtained in the audits or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement of the consolidated financial statements or a material
misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or
· returns adequate for our audit have not been received from
branches not visited by us; or
· the financial statements are not in agreement with the accounting
records and returns; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors for the consolidated financial statements
As explained more fully in the Statement of Directors' Responsibilities on
page 20, the Directors are responsible for the preparation of the consolidated
financial statements which give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements are free from material misstatement, whether due to fraud or error,
and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
The objectives of our audit, in respect to fraud, are; to identify and assess
the risks of material misstatement of the financial statements due to fraud;
to obtain sufficient appropriate audit evidence regarding the assessed risks
of material misstatement due to fraud, through designing and implementing
appropriate responses; and to respond appropriately to fraud or suspected
fraud identified during the audit. However, the primary responsibility for the
prevention and detection of fraud rests with both those charged with
governance of the entity and management.
Our approach was as follows:
· We obtained an understanding of the legal and regulatory frameworks
that are applicable to the Group and determined that the most significant
are those that relate to the Companies (Jersey) Law 1991 and the AIM Rules for
Companies. We also reviewed the laws and regulations applicable to the Group
that have an indirect impact on the financial statements.
· We gained an understanding of how the Group is complying with
Companies (Jersey) Law 1991 and the AIM Rules for Companies by making
inquiries of management. We corroborated our inquiries through our review of
minutes of Board of Directors meetings and the review of various
correspondence examined in the context of our audit and noted that there was
no contradictory evidence.
· We assessed the susceptibility of the Group's financial statements to
material misstatement, including how fraud might occur, by meeting with
management to understand where they considered there was susceptibility to
fraud. We also considered performance targets and their propensity to
influence management to manage earnings and revenue by overriding internal
controls. We performed specific procedures to respond to the fraud risk of
inappropriate revenue recognition. Our procedures also included testing a
risk-based sample of journal entries that may have been posted with the
intention of overriding internal controls to manipulate earnings. These
procedures were designed to provide reasonable assurance that the financial
statements were free from fraud or error.
· Based on this understanding, we designed specific appropriate audit
procedures to identify instances of non-compliance with laws and regulations.
This included making enquiries of management and those charged with governance
and obtaining additional corroborative evidence as required.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at
https://www.frc.org.uk/auditorsresponsibilities.This description forms part of
our auditor's report.
Use of our report
This report is made solely to the Group's shareholders as a body, in
accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit
work has been undertaken so that we might state to the Group's shareholders
those matters we are required to state to them in an auditor's report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Group and the Group's
shareholders as a body, for our audit work, for this report, or for the
opinions we have formed.
Phillip Callow
For and on behalf of Moore Stephens Audit and Assurance (Jersey) Limited
1 Waverley Place
Union Street
St Helier
Jersey
Channel Islands
JE4 8SG
29 May 2025
Ukrproduct Group
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)
Year ended Year ended
31 December 2024 31 December 2023
£ '000 £ '000
37 082 36 992
Revenue
Cost of sales (29 962) (30 140)
GROSS PROFIT 7 120 6 852
Administrative expenses (1 930) (1 569)
Selling and distribution expenses (2 312) (2 507)
Other operating expenses (1 799) (1 074)
PROFIT FROM OPERATIONS 1 079 1 702
Net finance expenses (2 756) (781)
Net foreign exchange loss (219) (435)
(LOSS)/PROFIT BEFORE TAXATION (1 896) 486
Income tax (142) (96)
(LOSS)/PROFIT FOR THE YEAR (2 038) 390
Attributable to:
Owners of the Parent (2 038) 390
Non-controlling interests - -
Earnings per share from continuing and total operations:
Basic (pence) (5.14) 0.98
Diluted (pence) (5.14) 0.98
OTHER COMPREHENSIVE LOSS
Items that may be subsequently reclassified to profit or loss
Currency translation differences (543) (449)
OTHER COMPREHENSIVE LOSS, NET OF TAX (543) (449)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (2 581) (59)
Attributable to:
Owners of the Parent (2 581) (59)
Non-controlling interests - -
Ukrproduct Group
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)
As at As at
31 December 2024 31 December 2023
£ '000 £ '000
ASSETS
Non-current assets
Property, plant and equipment 6 880 7 158
Intangible assets 338 501
7 218 7 659
Current assets
Inventories 3 522 2 783
Trade and other receivables 4 228 5 400
Current taxes 799 471
Other financial assets 28 38
Cash and cash equivalents 120 436
8 697 9 128
TOTAL ASSETS 15 915 16 787
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 4 282 4 282
Treasury (315) (315)
shares
Share premium 4 583 4 562
Translation reserve (16 529) (15 986)
Revaluation reserve 5 628 5 797
Retained earnings 4 324 6 194
TOTAL EQUITY 1 973 4 534
Non-Current Liabilities
Deferred tax liabilities 324 392
324 392
Current liabilities
Bank loans 5 572 5 777
Short-term payables 584 609
Trade and other payables 7 397 5 212
Current income tax liabilities 2 64
Other taxes payable 63 199
13 618 11 861
TOTAL LIABILITIES 13 942 12 253
TOTAL EQUITY AND LIABILITIES 15 915 16 787
These consolidated financial statements were approved and authorised for issue
by the Board of Directors on May 29, 2025 and were signed on its behalf by:
Oleksandr Slipchuk
Chief Executive Officer
Ukrproduct Group
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)
Attributable to owners of the parent
Share capital Treasury shares Share premium Revaluation reserve Retained earnings Translation reserve Total Non-con-trolling interests Total Equity
£ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000
As At 31 December 2022 4 282 (315) 4 562 6 005 5 596 (15 537) 4 593 - 4 593
Profit for the year - - - - 390 - 390 - 390
Currency translation differences - - - - - (449) (449) - (449)
Total comprehensive income - - - - 390 (449) (59) - (59)
Depreciation on revaluation of property, plant and equipment - - - (208) 208 - - - -
As At 31 December 2023 4 282 (315) 4 562 5 797 6 194 (15 986) 4 534 - 4 534
Profit for the year - - - - (2 039) - (2 039) - (2 039)
Currency translation differences - - - - (543) (543) - (543)
Other changes - - 21 - - - 21 - 21
Total comprehensive income - - 21 - (2 039) (543) (2 561) - (2 561)
Depreciation on revaluation of property, plant and equipment - - - (169) 169 - - - -
As At 31 December 2024 4 282 (315) 4 583 5 628 4 324 (16 529) 1 973 - 1 973
Ukrproduct Group
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
(in thousand GBP, unless otherwise stated)
Year ended Year ended
31 December 2024 31 December 2023
£ '000 £ '000
Cash flows from operating activities
(Loss)/Profit before taxation (1 896) 486
Adjustments for:
Exchange differences 219 435
Depreciation and amortization 625 697
Loss on disposal of non-current (2) -
assets
Write off of receivables 1 093 58
Impairment of inventories 106 627
Interest income (3) (6)
Interest expense on bank loans 2 759 787
Operation cash flow before working capital changes 2 901 3 084
(Increase)/decrease in inventories (845) 945
Increase in trade and other receivables (234) (2 245)
Decrease in trade and other payables (539) (366)
Changes in working capital (1 618) (1 666)
Cash generated from operations 1 283 1 418
Interest received 3 6
Income tax paid (239) (106)
Net cash generated from operating activities 1 047 1 318
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets (848) (582)
Proceeds from sale of property, plant and equipment 33 -
Repayments of loans issued 7 (6)
Net cash used in investing activities (808) (588)
Cash flows from financing activities
Interest paid (206) (312)
Net movement of borrowing 123 (4)
Net cash used in financing activities (83) (316)
Net increase in cash and cash equivalents 156 414
Effect of exchange rate changes on cash and cash equivalents (472) (381)
Cash and cash equivalents at the beginning of the year 436 403
Cash and cash equivalents at the end of the year 120 436
EXTRACTS FROM NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated financial statements have been prepared on a historical cost
basis, except for significant items of property, plant and equipment which
have been measured using the fair value model. The consolidated financial
statements are presented in British Pounds Sterling (GBP) and all values are
rounded to the nearest thousand (£000) except where otherwise indicated.
2. Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Group will continue to operate for the foreseeable future and
will be able to realise its assets and discharge its liabilities in the normal
course of business.
At 31 December 2024, net assets stood at £2.0 million, with cash balances of
£0.1 million, reflecting tight liquidity. The Group remained in breach of
several provisions of its EBRD loan agreement and received notification in
December 2024 of additional fee charges, bringing total liabilities to the
EBRD to over €9.7 million (approximately £8.1 million).
While discussions with the EBRD regarding a possible debt restructuring have
been ongoing since 2021, no formal agreement has been reached. At present, the
EBRD has taken no action to accelerate repayment of the accumulated loan.
The Directors acknowledge that a material uncertainty exists, which may cast
significant doubt about the Group's ability to continue as a going concern in
particular relating to:
- the absence of a formal debt restructuring agreement with the EBRD;
- the potential impact of the ongoing war in Ukraine on trading conditions,
supply chains, and market stability;
- the Group's limited cash resources and reliance on successful implementation
of its business plans and financing strategy.
Based on the Group's 2024 results, ongoing mitigating actions, and the current
status of discussions with lenders, the Directors have a reasonable
expectation that the Group will continue to have adequate resources to meet
its obligations as they fall due for the foreseeable future. Accordingly, the
Directors consider it appropriate to prepare the financial statements on a
going concern basis.
3. Bank Loans
As at 31 December 2024 the Group has two loans: the loan from Creditwest Bank
in the amount of GBP 1.322 thousand (in UAH 70.0 million) and the loan from
the EBRD in the amount
of GBP 4.250
thousand (in EUR 5.123 thousand).
For the year ended December 31, 2024, the Group did not fulfill its
obligations under the loan agreement with the EBRD. The Group failed to repay
Tranche A (aggregate €2.1 million principal, equivalent to £1.7 million)
and Tranche B (aggregate €3.3 million principal, equivalent to £2.7
million) before the maturity date of 1 December 2024. The Group has missed
interest payments since 1 March 2022. In December 2024 EBRD notified the Group
on a further €2.4 million (£2.0 million), principally relating to loan
deferral fee charges for the period from 24 October 2016 to 2 December 2024.
The Group has been in dialogue with the EBRD since 2021 to potentially
restructure the loan, and accrued interest and charges, and discussions
continue. At present, the EBRD has taken no action to accelerate repayment of
the accumulated loan.
Fixed assets with a net book value of GBP 5.491 thousand at 31 December 2024
(2023: GBP 5.880 thousand) were pledged as collateral for loan.
Assets pledged as security for the EBRD loan include property and land in
Starokonstantinov, equipment for dairy production and production of hard
cheese, as well as trademarks.
Bank Currency Type Opening date Termination date Interest rate Limit As At 31 December 2024 As at 31 December 2023
£ '000 £ '000 £ '000
EBRD EUR Loan 31.03.2011 01.12.2024 1% - 10.975% 6 886 4 250 4 463
Creditwest Bank UAH Credit line 05.02.2018 05.02.2024 20% 1 341 - 1 314
Creditwest Bank UAH Credit line 11.01.2014 11.07.2027 UIRD (3 month) + 9% 1 322 1 322 -
Total 5 572 5 777
The average interest rate as at 31 December 2024 was 11.7% (2023: 13.6%).
Future interest payments
Year ended Year ended
31 December 2024 31 December 2023
£ '000 £ '000
In less than 1 year 1 672 1 250
In more than 1 year - -
Total 1 672 1 250
Maturity of financial liabilities
Year ended Year ended
31 December 2024 31 December 2023
£ '000 £ '000
Overdue 4 250 1 627
In less than 1 year 1 322 4 150
In more than 1 year - -
Total 5 572 5 777
Interest rate profile of financial liabilities
Floating rate Fixed rate As at As at
31 December 2024 31 December 2023
£ '000 £ '000 £ '000 £ '000
Overdue 4 250 - 4 250 1 627
Expiry within 1 year 1 322 - 1 322 4 150
Expiry in more than 1 year - - - -
Total 5 572 - 5 572 5 777
The currency profile of the Group's financial liabilities is as follows:
Floating rate liabilities Fixed rate liabilities Total as at 31 December 2024 Total as at 31 December 2023
£ '000 £ '000 £ '000 £ '000
UAH 1 322 - 1 322 1 314
EUR 4 250 - 4 250 4 463
Total 5 572 - 5 572 5 777
The book value and fair value of financial liabilities are as follows:
Book value as at 31 December 2024 Fair value as at 31 December 2024 Book value as at 31 December 2023 Fair value as at 31 December 2023
£ '000 £ '000 £ '000 £ '000
Bank loans 5 572 5 572 5 777 5 777
Total 5 572 5 572 5 777 5 777
Reconciliation of liabilities arising from financing activities
As at 31 December 2023 Financing cash flows Accrual of interest Foreign Effect from translation to presentation currency As at 31 December 2024
exchange
move- Other changes
ment
£ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000
Bearing loans and borrowings 5 777 123 - 195 (28) (495) 5 572
Interest 835 (206) 674 36 - (85) 1 254
Interest-bearing loans and borrowings 6 612 (83) 674 231 (28) (580) 6 826
4. Subsequent Events
At the time of publication of the annual report the war between Ukraine and
Russia is ongoing. The Group continues to operate. The management of the Group
controls all its operations.
Olena Telychko was appointed as a new CFO of Ukrproduct Group in April 2025.
As of the date of approval of these consolidated financial statements, the
Group remains in active negotiations with the EBRD regarding the restructuring
of its outstanding loan obligations. While no formal agreement has been
reached as of the reporting date, the EBRD has not taken steps to accelerate
repayment of the accumulated loan.
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