TIDMNSH
RNS Number : 3449A
Norish PLC
23 March 2017
Norish plc
Preliminary Results 2016
Results
Norish plc (AIM: NSH), is pleased to announce its preliminary
results for the year ended 31 December 2016.
Financial Highlights
-- Total revenue increased by 27.9% to GBP32.1m (2015: GBP25.1m).
-- Revenue from commodity trading increased by 46.6% to GBP19.5m (2015: GBP13.3m).
-- Revenue from our continuing temperature controlled divisions
increased by 6.8% to GBP12.6m (2015: GBP11.8m).
-- Operating profit increased by 3.6% to GBP0.87m (2015: GBP0.84m).
-- Net assets unchanged at GBP15.3m (2015: GBP15.3m).
-- Net debt increased to GBP5.2m (2015: GBP3.2m).
Operational Highlights
-- The performance of the cold store division was ahead of 2015 by 9.4%
-- The performance of the commodity division was ahead of 2015 by 48%
-- We invested GBP1.7m of the funds raised in December 2015 by
the end of December 2016.We invested GBP0.8m in our temperature
controlled division, GBP0.6m in dairy infrastructure along with
GBP0.3m in the herd for the dairy farm in Kilkenny
-- We continue to invest in projects which provide short term
payback and in the build out of our dairy business.
North West Division
The North West cold store division which comprises the freehold
sites at Wrexham and Birmingham performed well in 2016. This was
mainly as a result of a buoyant market in China for most of
2016.
China is the U.K.'s biggest export market for fifth quarter pig
meat. Exports of pig meat to China have increased more than
fourfold since the UK started to export there in 2011. Two of the
three licensed cold stores in the U.K. are the Norish plc owned
properties at Wrexham, North Wales and Brierley Hill,
Birmingham.
South East Division
The South East division, which comprises the sites at Bury St.
Edmunds (freehold), Braintree (leasehold), Gillingham (long term
leasehold at a peppercorn rent) and East Kent (leasehold) performed
below the same period last year. Contribution was mainly impacted
by a refurbishment programme at the Bury St Edmunds site, which we
completed in December 2016.
Commodity Trading
Our commodity trading division which consists of Townview Foods
Limited and Foro International Connections Limited ("Foro")
contributed GBP0.5m for the period, up from GBP0.4m for the same
period last year.
Townview Foods Limited trades in protein products, mainly beef,
pork, lamb and chicken. Sales from pork increased by GBP3m during
the year, sales from beef increased by GBP1.9m, and sales from lamb
increased by GBP0.6m. Townview Foods Limited generated a
contribution of GBP0.6m for the period, against GBP0.4m for the
same period last year, and sales of GBP18.5m, against GBP12.3m for
the same period last year.
Foro accounted for GBP1m of the sales, unchanged from 2015. Foro
broke even, unchanged from last year. Foro trades mainly in fish,
dairy and its currently developing a product to sell to the ready
to drinks market.
We are continually investing in people to grow this
division.
Dairy
Our low cost grass based dairy farm was successfully converted
from a tillage/suckler farm in the second half of 2016.
Discontinued
During 2015 the Group agreed the sale of the Leeds site for
GBP0.4m net. The sale completed in March 2016. This site was not
part of the future plans for the business. Losses in respect of
this property are included in discontinued activities.
During 2016, Foro discontinued trading in the FMCG market due to
high working capital requirements, currency fluctuations, and
unacceptable margins. The 2015 comparative figures have been
adjusted to reflect the reclassification.
Outlook
2016 was a year of considerable progress for the group.
Commercial decisions made in previous years, combined with a new,
focused, management approach and a strengthening of the Group's
Balance Sheet, has ensured that Norish is now in a position to
develop its business in ways that were previously unavailable to
the group.
We have been very encouraged by the excellent start made in the
first two months of 2017 by our two main Trading Divisions -
Temperature Controlled Storage and Protein Trading (Town View
Foods).
The dairy division is in the early stages of developing its
business model and is putting in place an experienced senior
executive team to manage and grow this business.
Through our subsidiary, Foro International Connections Limited,
we are developing retail and food service markets, both in Ireland
and the U.K. in conjunction with three significant European
manufacturers of fruit drinks, health smoothies and RTD (ready to
drink) coffee. This development fits in well with our existing U.K.
cold store locations.
At this juncture, our cold stores comprise the greatest
proportion of our property, plant and equipment (97%). The cold
store division also represents the most immediate opportunity to
improve profitability and returns for the group, something the
Board is acutely aware of. Through active management of our cold
store division, we are looking at every facet of our cost base,
implementing changes and building an ever better, more balanced,
more diversified business.
At this juncture we consider it appropriate to increase guidance
for 2017 to a range of 2.75p to 3p (fully diluted adjusted
eps).
Financial Review
Total equity at 31 December 2016 stood at GBP15.3m (2015:
GBP15.3m). Net debt at 31 December 2016 was GBP5.2m compared to
GBP3.2m at 31 December 2015.
Dividend
The board recommends the payment of a final dividend of 1.50
EURcent per share. This will be paid on 20 October 2017 to those
shareholders on the register on the 29 September 2017. It will
bring the total dividend in respect of the financial year to 1.50
EURcent per share, unchanged from last year.
Brexit
The United Kingdom voted to leave the EU on the 23rd of June,
last year. As of now we have not seen any appreciable change to our
business, as a result of that vote.
On behalf of the board, I would like to thank the management
team and staff for their commitment and
contribution in 2016.
Ted O'Neill
Chairman
Financial Review
The number of pallets handled in increased by 9%, and we handled
18% additional pallets for blast freezing in 2016. This will allow
the Group to positively position for future growth. Norish plc is
one of only two companies in Britain who can presently provide
blast freezing services for pig meat for China.
The significant feature of the year is the investment in the
dairy farming business in Kilkenny.
Sales
Total Group revenue increased by 27.9% to GBP32.1m (2015:
GBP25.1m). Temperature controlled revenues increased by 6.8% to
GBP12.6m (2015: GBP11.8m). Revenues were up mainly as a result of
an increase in blast freezing volumes. Revenues in the commodity
division increased by 46.6% to GBP19.5m (2015: GBP13.3m). Townview
Foods mainly accounted for the increased sales.
Gross profit
Gross profit unchanged at GBP1.3m (2015: GBP1.3m).
Operating profit
Operating profit increased to GBP0.9m (2015: GBP0.8m).
Finance expense (net)
Finance expense decreased to GBP0.27m (2015: GBP0.30m). The
decrease is mainly attributable to the cash generated from the fund
raise in December 2015.
Loss from discontinued operations
As part of the Group's strategy to exit the ambient sector we
recorded a loss of GBP0.1m (2015: GBP0.3m).
In 2016, The Group has exited the FMCG market and recorded a
loss of GBP0.1m (2015: GBPNil).
Earnings per share
The basic earnings per share fell to 1.5p (2015: 2.8p). The
earning per share was impacted by the additional shares issued in
December 2015.
Capital
During the year we invested GBP1.7m (2015: GBP0.5m), GBP0.6m in
capital outlay along with GBP0.3m in the herd for the dairy farm in
Kilkenny and GBP0.8m in routine capital expenditure in the
temperature controlled division.
Cash Position
Net debt increased to GBP5.2m (2015: GBP3.2m). Operating
activities generated GBP0.3m (2015: absorbed GBP0.2m) and financing
activities absorbed GBP0.9m (2015 generated: GBP4.7m). Investment
in assets was made of GBP1.7m (2015: GBP0.5m). Investment of
GBP0.3m was made in the dairy herd.
Dividend
The board recommends the payment of a final dividend of 1.50
EURcent per share. This will be paid on the 20 October 2017 to
those shareholders on the register on the 29 September 2017. It
will bring the total dividend in respect of the financial year to
1.50 EURcent per share unchanged from last year.
Treasury policy and management
The treasury function, which is managed centrally, handles all
Group funding, debt, cash, working capital and foreign exchange
exposures. Group treasury policy concentrates on the minimisation
of risk in all of the above areas and is overseen and approved by
the Board. Speculative positions are not taken.
Financial risk management
The Group's financial instruments comprise borrowings, cash,
derivatives, and various items, such as trade receivables, trade
payables etc., that arise directly from its operations. The main
purpose of the financial instruments not arising directly from
operations is to raise finance for the Group's operations.
The Group may enter into derivative transactions such as
interest rate swaps, caps or forward foreign currency transactions
in order to minimise its risks. The purpose of such transactions is
to manage the interest rate and currency risks arising from the
Group's operations and its sources of finance.
The main risks arising from the Group's financial instruments
are interest rate risk and, liquidity risk. The Group's policies
for managing each of these risks are summarised below.
Interest rate risk
The Group finances its operations through a mixture of retained
profits, bank and other borrowings at both fixed and floating rates
of interest, and working capital. The Group determines the level of
borrowings at fixed rates of interest having regard to current
market rates and future trends. At the year-end, GBP3.47m term
loans of which, GBP0.9m are at floating base rate plus a bank
margin of 1.2% and GBP0.83m are at floating base rate plus a bank
margin of 1.75% and GBP0.5m are floating at bank base rate plus a
bank margin of 2.75% and GBP1.24m are floating at bank base rate
plus a margin of 3%. The Group holds an interest rate swap on GBP3m
at 1.03% against Bank of England base rate which expires in June
2017.
Liquidity risk
The Group's policy is that, in order to ensure continuity of
funding, a significant portion of its borrowings should mature in
more than one year. At the year-end, 59% of the Group's borrowings
were due to mature in more than one year. The Group achieves
short-term flexibility by means of invoice finance and overdraft
facilities.
Aidan Hughes
Finance Director
Consolidated STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2016
2016 2015
GBP'000 GBP'000
Continuing operations
Revenue 32,098 25,145
Cost of sales (30,757) (23,859)
Gross profit 1,341 1,286
------------- --------
Other income 238 -
Administrative expenses (707) (447)
Operating profit from continuing
operations 872 839
------------- --------
Finance income - fair value
gain on swaps 20 26
Finance income - interest
receivable 10 -
Finance expenses - interest
paid (240) (272)
Finance expenses - notional
interest (29) (33)
Profit on continuing activities
before taxation 633 560
------------- --------
Income taxes - Corporation
tax (210) (60)
Income taxes - Deferred
tax 18 12
Profit for the financial
year from continuing operations 441 512
Loss from discontinued operations (161) (223)
Profit for the financial
year 280 289
Other comprehensive income - -
Total comprehensive income
for the year 280 289
------------- --------
Profit for the financial
year attributable to owners
of the parent 291 291
Loss for the financial year
attributable to non-controlling
interest (11) (2)
============= ========
Total comprehensive income
for the financial year attributable
to owners of the parent 291 291
Total comprehensive expense
for the financial year attributable
to non-controlling interest (11) (2)
============= ========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2016
-----------------------------------------------------------------
2016 2015
Earnings per share expressed
in pence per share:
From continuing operations
- basic 1.5p 2.8p
- diluted 1.5p 2.8p
From discontinued operations
- basic (0.6)p (1.2)p
- diluted (0.6)p (1.2)p
Consolidated Statement of financial position
at 31 December 2016
2016 2015
GBP'000 GBP'000
Non current assets
Intangible assets 2,403 2,338
Property, plant and equipment 16,635 15,885
Biological assets 540 -
------- -------
19,578 18,223
Current assets
Trade and other receivables 6,264 4,815
Inventories 483 386
Cash and cash equivalents 2,044 4,383
Assets of disposal group classified
as held for sale 698 1,017
------- -------
9,489 10,601
TOTAL ASSETS 29,067 28,824
------- -------
Equity attributable to equity
holders of the parent and
non-controlling interest
Share capital 5,616 5,344
Share premium account 7,281 6,990
Capital conversion reserve
fund 23 23
Treasury shares (563) -
Retained earnings 2,926 2,981
------- -------
Equity attributable to equity
holders of the parent 15,283 15,338
Non controlling interest (22) (11)
TOTAL EQUITY 15,261 15,327
------- -------
Non-current liabilities
Borrowings 3,006 4,123
Financial liabilities at fair
value through profit or loss 44 199
Deferred tax 925 942
------- -------
3,975 5,264
Current liabilities
Trade and other payables 5,082 4,198
Financial liabilities at fair
value through profit or loss 255 311
Current tax liabilities 205 44
Borrowings 4,282 3,473
Liabilities of disposal group
classified as held for sale 7 207
------- -------
9,831 8,233
TOTAL EQUITY AND LIABILITIES 29,067 28,824
------- -------
Consolidated Statement of Changes in Equity
For the financial year ended 31 December 2016
Capital Non-
Share Share Conversion Treasury Retained Controlling Total
capital premium Reserve shares earnings Total interest Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2015 3,280 4,198 23 - 2,878 10,379 (9) 10,370
------- ------- ---------- -------- -------- ------- ----------- -------
Net profit/(loss)
for the financial
year - - - 291 291 (2) 289
------- ------- ---------- -------- -------- ------- ----------- -------
Total comprehensive
income for the
financial year - - - - 291 291 (2) 289
Issue of share
capital 2,064 3,078 - - - 5,142 - 5,142
Share issue costs - (286) - - - (286) - (286)
Equity dividends
paid (recognised
directly in equity) - - - - (188) (188) - (188)
------- ------- ---------- -------- -------- ------- ----------- -------
Transactions
with owners 2,064 2,792 - - (188) 4,668 - 4,668
At 31 December
2015 5,344 6,990 23 - 2,981 15,338 (11) 15,327
------- ------- ---------- -------- -------- ------- ----------- -------
Net profit/(loss)
for the financial
year - - - 291 291 (11) 280
------- ------- ---------- -------- -------- ------- ----------- -------
Total comprehensive
income for the
financial year - - - 291 291 (11) 280
Issue of share
capital 272 291 - - 563 - 563
Share issue costs - - - - - - -
Equity dividends
paid (recognised
directly in equity) - - - (346) (346) - (346)
Treasury shares
acquired - - - (563) - (563) - (563)
Transactions
with owners 272 291 - (563) (55) (55) (11) (66)
At 31 December
2016 5,616 7,281 23 (563) 2,926 15,283 (22) 15,261
======= ======= ========== ======== ======== ======= =========== =======
Consolidated Cash Flow Statement
For the financial year ended 31 December
2016
2016 2015
GBP'000 GBP'000
Profit on continuing activities
before taxation 633 560
Gain on biological assets (238) -
Loss on discontinued activities (161) (223)
Finance expenses 269 305
Finance income (30) (26)
Depreciation - property, plant
and equipment-net 625 615
1,098 1,231
Changes in working capital
and provisions:
Increase in inventories (97) (334)
Increase in trade and other
receivables (1,130) (1,320)
Decrease in current liabilities
held for sale (200) (418)
Increase in payables 885 1,029
Cash generated from operations 556 188
Interest paid (240) (272)
Interest received 10 -
Taxation paid (49) (95)
------- -------
Net cash generated/(used in)
from operating activities 277 (179)
------- -------
Investing activities
Investment in intangible assets (65) -
Purchase of property, plant
and equipment (1,375) (502)
Purchase of biological assets (302) -
------- -------
Net cash used in investing
activities (1,742) (502)
------- -------
Financing activities
Dividends paid to shareholders (346) (188)
Deferred consideration payments (220) (185)
Share issue proceeds - 5,142
Share issue costs - (286)
Invoice finance receipts/(payments) 747 1,141
Overdraft payments - -
Finance lease capital repayments (152) (124)
Finance lease advance 219 -
Term loan advance - -
Term loan repayments (1,122) (821)
------- -------
Net cash (used)/ generated
from financing activities (874) 4,679
------- -------
Net (decrease)/increase in
cash and cash equivalents (2,339) 3,998
------- -------
Cash and cash equivalents
Beginning of period 4,383 385
Cash and cash equivalents
end of period 2,044 4,383
------- -------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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