REG - Volvere PLC - Trading Update and Notice of Final Results

VolvereAnnouncement

14/03/2023 07:00

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RNS Number : 8128S  Volvere PLC  14 March 2023

14 March 2023

 

Volvere plc

(the "Group" or "Volvere")

Trading Update and Notice of Final Results

Volvere plc (AIM: VLE), the growth and turnaround investment company, is
pleased to provide the following trading update for the financial year ended
31 December 2022.  All data in this announcement is unaudited, although the
comparative information for the year ending 31 December 2021 has been
extracted from audited data for that year.

Shire Foods Limited ("Shire"), the Group's 80 per cent. owned frozen pastry
products manufacturer, was the Group's principal continuing trading subsidiary
during the year and, along with the Group's central activities, represents the
Group's continuing operations.  On 8 November 2022, the Group announced the
closure of Indulgence Patisserie Limited ("Indulgence"), the Group's frozen
desserts business, in view of significant continuing losses.  Indulgence
will, therefore, be reported in the Group's final results as "discontinued
operations".

Financial Performance

Revenue from continuing operations was approximately £38.03 million (2021:
£30.61 million) and an overall profit before tax of £2.33 million (2021:
profit before tax of £1.07 million).

Revenue from discontinued operations was approximately £3.53 million (2021:
£4.97 million) and an overall loss before tax and Group management charges of
£2.57 million (2021: loss of £1.01 million).

The Group expects to report total revenue from continuing and discontinued
operations of approximately £41.56 million (2021: £35.58 million) and an
overall loss before tax of £0.24 million (2021: profit before tax of £0.07
million).

Operating Businesses

Overview

Given the wider economic environment, Shire's performance was good.  In line
with most businesses in the UK, the company faced significant upward pressure
in raw material costs and overheads, as well as having to recruit within a
challenging labour market.  Similar pressures affected Indulgence, but its
smaller scale and less efficient operations meant that its business was, on
balance, no longer viable.

Shire Foods - continuing

Shire continued to grow in 2022, with revenues increasing by approximately
24.2% to a new record of £38.03 million (2021: £30.61 million).

Profit before tax, intra-group interest and management charges* was
approximately £2.78 million (2021: £2.14 million).  Profit before tax was
£2.43 million (2021: £1.89 million) - with the difference being intra-group
interest and management charges. During 2022, Shire continued to provide
operational and commercial support to Indulgence and this again has resulted
in some costs being recharged which would otherwise have been borne by Shire.

Indulgence Patisserie Limited

Manufacturing was suspended in August 2022 and did not recommence given the
outlook for the business.  All roles were, regrettably, made redundant.  The
result for Indulgence reflects the trading losses in the year along with the
inevitable write-downs of stock, plant and equipment whose value was impaired
following the decision to cease trading.

The loss before tax, intra-group interest and management charges* was
approximately £2.57 million (2021: loss £1.01 million), stated after
impairment charges and other asset write-downs associated with closure of
approximately £0.48 million (2021: Nil).  The loss before tax was £2.68
million (2021: loss £1.10 million) - with the difference being intra-group
interest and management charges.

Since the year end, the Group has sold one of the Indulgence properties at a
modest premium to its book value and is actively marketing the other. The
value of the sold property has been reflected in the year end valuation, with
the remaining property stated at the last independent valuation.

Whilst there may be some limited costs associated with Indulgence in 2023, the
Group does not expect these to be material.

Group Net Assets per Share and Net Assets

The Group expects to report year-end consolidated net assets per share
(excluding non-controlling interests) of approximately £13.82 (31 December
2021: £13.49) and Group net assets of approximately £35.58 million (31
December 2021: £37.05 million).

Of the Group net assets, cash and marketable securities represented
approximately £20.78 million (31 December 2021: £21.87 million).

The reduction in the Group's cash and net assets reflects the purchases of
treasury shares amounting to £2.09 million during the year.

Current Trading

The past year has been, without doubt, one of the Group's most challenging.
The decision to close Indulgence was unfortunate but necessary given the
circumstances.

Since the year-end, labour market challenges and raw material price pressures
have shown some signs of abating.  Early indications are that the focus on
margins in Shire has ensured that we have commenced 2023 with appropriate
customer pricing.

In the wider economy, we are seeing an increasing number of investment
opportunities across multiple sectors as businesses grapple with higher
energy, raw material, staff and finance costs at a time of flat or reduced
demand.  Our strong balance sheet will enable us to capitalise on these
opportunities as they arise.

 

* profit before intra-group interest and management charges is considered to
be a relevant, useful interpretation of the trading results of the business
such that its performance can be understood on a basis which is independent of
its ownership by the Group.

Notice of Final Results

Volvere expects to announce its full year results for the year ended 31
December 2022 on or around 26 May 2023.

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.

 

For further information:

 

 Volvere plc

 Jonathan Lander, CEO                               Tel: +44 (0) 1926 335700

 www.volvere.co.uk

 Cairn Financial Advisers LLP (Nominated Adviser)   Tel: + 44 (0) 207 213 0880

 Sandy Jamieson, James Caithie

 Canaccord Genuity Limited (Joint Broker)           Tel: + 44 (0) 207 523 8000

 Bobbie Hilliam/Alex Aylen/Georgina McCooke

 Hobart Capital Markets LLP (Joint Broker)          Tel: + 44 (0) 207 070 5691

 Lee Richardson

 

 

Notes to editors:

Volvere plc (AIM: VLE), is a growth and turnaround investment company. The
Group's sole current trading activity is food manufacturing. The Group
currently employs approximately 250 people.

For further information, please visit www.volvere.co.uk
(http://www.volvere.co.uk) .

 

Forward-looking statements:

This announcement may contain certain statements about the future outlook for
Volvere plc. Although the directors believe their expectations are based on
reasonable assumptions, any statements about future outlook may be influenced
by factors that could cause actual outcomes and results to be materially
different.

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