Interim Results

RNS Number:1248R
Conival plc
31 March 2008


                                 31 March 2008

                                  Conival plc
                          ("Conival" or the "Company")


                           Unaudited Interim Results
                for the six month period ended 31 December 2007


Chief Executive's Statement


I am pleased to announce the unaudited interim results for Conival plc 
("Conival" or "the Company" AIM: CVL), for the six months ended 31 December
2007.


During the period, we launched the Blenheim Palace Provisions ("Blenheim") range
of desserts, however, lower than anticipated level of sales of both the Sparky
and Blenheim products and higher development costs, resulted in a loss before
taxation of £1,240,000  (2006: £337,000). The interim financial information has,
for the first time, been prepared in accordance with International Financial
Reporting Standards.


In order to achieve longer term profitability, the Board has decided to focus
upon the strategy of utilising its portfolio of celebrity chefs to endorse a
range of products under the Glorious! label.  On 30 January 2008 Conival
announced the successful launch of the Glorious! range of soups endorsed by
Marco Pierre White and earlier this month announced the forthcoming launch of a
range of desserts under the Glorious! label, again endorsed by Marco Pierre
White.  Management has negotiated improved selling prices on these new products
which should result in substantially higher gross margins.


In addition to reduce costs Conival has sub-contracted the manufacture and
supply to order for the supermarkets of the Glorious! range of soups to an
established chilled food producer..


PRODUCT RANGES


Prior to the Glorious! Launch of soups, Conival relied on sales from its two
existing brands - Blenheim Palace Provisions and Sparky Brands. However, in the
competitive chilled food market the creation of a successful brand requires
product differentiation, marketing and advertising spend, a recognised brand
name to encourage spontaneous purchasing, and a price point that encourages
weekly repurchase whilst delivering an acceptable level of gross profit.



SPARKY BRANDS ("Sparky")

Sparky Superfruits offered consumers a unique range of juices and health bars
enriched with superfruits and Omega 3. Market research had indicated that such
functional foods offered an exciting opportunity however this has not been
translated into sufficient sales for Conival to maintain the brand.


BLENHEIM PALACE PROVISIONS ("Blenheim")

Blenheim, a premium priced range of desserts and beverages was launched
exclusively to Sainsbury's in April 2007.


Despite initial strong sales ongoing development costs together with in-store
promotional activity, has resulted in only a very small gross margin, falling
well short of the contribution needed to cover Conival's cost base, and the
Blenheim product will be withdrawn from stores on 15 April 2008.


FINANCIALS

Turnover achieved in during the half year ended 31 December 2007 was £351,000
(period ended 31 December 2006: £441,000) and a loss before taxation of
£1,240,000 (period ended 31 December 2006: £337,000). The loss was due to
investments in new brands, product development, low gross margins on existing
products and also included costs of £668,000 relating to the conversion of
loans to shares. The loss per share was 0.36p (period ended 31 Dec 2006: 0.13p).


OUTLOOK


The Board is encouraged by the sales of the Glorious! Marco Pierre White brand
and has decided to focus entirely on this brand in the immediate future, as the
celebrity chef endorsement has enabled the management team to negotiate improved
selling prices and together with steps taken to reduce costs should result in
higher gross margins.



The Glorious! Marco Pierre White range of soups was exclusively launched to all
375 Morrison stores on 30 January 2008, following the airing on ITV of Hells
Kitchen in September 2007 with Marco Pierre White as head chef.  Sales of the
soup have been strong and, with 244,000 units being sold in the first 4 weeks,
substantially exceeded Morrison's and management expectations.  The Glorious!
range is now off promotion with sales in the current month continuing to be
encouraging.


On 12 March 2008 we announced that a Glorious! range of desserts, endorsed by
Marco Pierre White, will be launched in 300 Sainsbury's stores from 30 April.
The launch will be followed by a 12 week "2 for £2.50" promotion from 1 June
2008 that will co-incide with further TV exposure for Marco Pierre White.


Although the soup selling season declines during May - September management will
use the intervening months to promote the dessert range and secure new listings
for the Autumn/Winter season. This period will co-incide with the next series of
Hells Kitchen, scheduled for Autumn 2008 which will again feature Marco Pierre
White and we remain confident that his increased profile will accelerate sales
growth and increase channels to market.


Jeremy Schwartz

Chief Executive

28 March 2008


CONIVAL PLC

CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD ENDED 30 SEPTEMBER 2007




                                                   Note       Unaudited six   Unaudited six   Unaudited year
                                                            months ended 31 months ended 31            ended
                                                              December 2007   December 2006    30 June  2007
                                                                      £'000           £'000            £'000


Sales revenue                                                           351             441            1,001

Cost of sales                                                         (449)           (419)          (1,178)

Gross (loss)/profit                                                    (98)              22            (177)

Administrative expenses                                               (474)           (365)          (1,157)

Loss from operations                                                  (572)           (343)          (1,334)

Finance costs                                                         (668)               6            (242)

Loss for the period before taxation                                 (1,240)           (337)          (1,576)

Taxation expense                                                          -               -                -

Loss for the period                                                 (1,240)           (337)          (1,576)

Basic and diluted loss per ordinary share            5              (0.36)p         (0.13)p          (0.60)p


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 DECEMBER 2007


                                                            Share               Retained       Total
                                                 Share    options               earnings      equity
                                     Share     premium    reserve      Other
                                   capital                          reserves
                                    £'000        £'000      £'000      £'000       £'000       £'000

At 1 July 2006                        838          990        121        471     (1,704)         716
Issue of share capital                255          505          -          -           -         760
Share issue costs                       -         (61)          -          -           -        (61)
On conversion of loan                 250            -          -          -           -         250
Loss for the period                     -            -          -          -       (337)       (337)
At 31 December 2006                 1,343        1,434        121        471     (2,041)       1,328

Cost of issue of share capital          -            3          -          -           -           3
Share-based payment expense             -            -        169          -           -         169
Loss for the period                     -            -          -          -     (1,239)     (1,239)
On conversion of loan                 200            -          -        248           -         448
At 30 June 2007                     1,543        1,437        290        719     (3,280)         709

Share-based payment expense             -            -         26          -           -          26
Loss for the period                     -            -          -          -     (1,240)     (1,240)
On conversion of loan                 300            -          -        668           -         968
At 31 December 2007                 1,843        1,437        316      1,387     (4,520)         463



CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2007

                                                                 Unaudited         Unaudited     Unaudited
                                                          31 December 2007  31 December 2006  30 June 2007
                                                                     £'000             £'000         £'000

ASSETS

Non-current assets
Intangible assets                                                    1,336             1,347         1,336

Current assets
Inventories                                                             85                79            34
Trade and other receivables                                            342               316           228
Cash and cash equivalents                                                                203
                                                                        68                              71
Total current assets                                                   495                             333
                                                                                         598


Total assets                                                         1,831             1,945         1,669

EQUITY AND LIABILITIES

Current liabilities
Trade and other payables                                               648               617           610
Total current liabilities                                              648               617           610

Non-current liabilities
Other payables
Financial liabilities at fair value through the                        720                 -           350
profit and loss
Total non-current liabilities                                          720                             350
                                                                                           -

Total liabilities                                                    1,368               617           960


Equity
Share capital                                                        1,843             1,343         1,543
Share premium                                                        1,437             1,434         1,437
Share options reserve                                                  316               121           290
Other reserves                                                       1,387               471           719
Retained earnings
                                                                   (4,520)           (2,041)       (3,280)
Total equity attributable to equity holders                            463             1,328           709

Total equity and liabilities                                         1,831             1,945         1,669




CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD 31 DECEMBER 2007

                                                           Unaudited six     Unaudited six       Unaudited
                                                            months ended      months ended      year ended
                                                             31 December       31 December    30 June 2007
                                                                    2007              2006
                                                                   £'000             £'000           £'000

Cash flows from operating activities
Loss before taxation                                             (1,240)             (337)          (1,576)
Amortisation of intangibles                                            -                 -               12
Share-based payment expense                                           26                 -              169
Finance costs                                                        668               (6)              242
Change in inventories                                               (51)                13               32
Change in trade and other receivables                              (114)             (141)             (53)
Change in trade and other payables                                    38              (97)               85
Net cash (outflow)/inflow from operating                           (673)             (568)          (1,089)
activities

Cash flows from investing activities
Finance costs                                                          -                 -                6
Net cash inflow from investing activities                              -                 -                6

Cash flows from financing activities
Proceeds from issue of share capital                                   -               760              760
Share issue costs                                                      -              (61)             (58)
New loans                                                            670                 -              380
Net cash inflow/(outflow) from financing                             670               699            1,082
activities

Net change in cash and cash equivalents                              (3)               131              (1)

Cash and cash equivalents at beginning of period                      71                72               72

Cash and cash equivalents at end of period                            68               203               71



NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 31 DECEMBER 2007



1                     GENERAL INFORMATION



The information for the period ended 31 December 2007 does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985.  The
figures for the year ended 30 June 2007 have been extracted from the 2006
statutory financial statements prepared under UK GAAP and adjusted where
necessary in order to comply with International Financial Reporting Standards as
adopted by the EU (IFRS) as shown in Note 3.  The auditors' report on those
accounts was unqualified and did not contain a statement under section 237(2) of
the Companies Act 1985, however readers should note that an emphasis of matter
was in their report by the auditors, as follows:



"Emphasis of matter  -  Going concern



In forming our opinion, which is not qualified, we have considered the adequacy
of the disclosure made in the principal accounting policies of the financial
statements for the year ended 30 June 2007 concerning the Company's ability to
continue as a going concern.  The Company incurred a net loss of £1,864,000
during the year ended 30 June 2007 and, at that date, the Company's current
liabilities exceeded its current assets by £277,000.  These conditions, along
with the other matters explained in the accounting policies, indicate the
existence of a material uncertainty which may cast significant doubt about the
Company's ability to continue as a going concern.  The financial statements do
not include the adjustments that would result if the Company was unable to
continues as a going concern."





2                     ACCOUNTING POLICIES



BASIS OF PREPARATION



This interim financial report has been prepared under the historical cost
convention and in accordance with International Accounting Standard 34 "Interim
Financial Reporting" and the requirements of International Financial Reporting
Standard 1 "First Time Adoption of International Reporting Standards" relevant
to interim reports.



The transition to IFRS reporting has resulted in a number of changes in the
reported financial statements, notes thereto and accounting policies compared to
the previous annual report. Note 3 provides further details on the transition
from UK GAAP to IFRS.



The principal accounting policies of the Company are set out below.



GOING CONCERN



The directors have prepared cash flow forecasts for the period ending 31 March
2009 which make several assumptions concerning the successful roll out of new
products and the number of product listings which will be secured.



The forecasts also assume that Corvus Capital Inc. (Corvus), a shareholder in
the Company, will not seek repayment of the £1,075,000 loan, which has today
been re-designated as a convertible loan.



The cash flow forecasts indicate a maximum funding requirement of approximately
£275,000 in June 2008 and show a positive cash flow situation from September
2008 with the start of the new soup season and ITV coverage for Marco Pierre
White.



Corvus has also confirmed that it will provide further facilities to cover the
maximum funding requirement after 31st March 2008 subject to certain conditions
being met in relation to trading and once it has converted its loan into shares
and sold those shares.



In addition, the company will shortly be announcing  an EGM to authorise the
issue of shares to cover the convertible loan together with any additional
equity capital.



Therefore, the financial information has been prepared on a going concern basis.
The financial information does not include any adjustments that would result
if the assumptions detailed above are not met.



BASIS OF CONSOLIDATION



The Company financial statements consolidate those of the Company and its
subsidiary undertaking drawn up to the balance sheet date.  Subsidiaries are
entities over which the Company has the power to control the financial and
operating policies so as to obtain benefits from their activities.  The Company
obtains and exercises control through voting rights.



Unrealised gains on transactions between the Company and its subsidiary are
eliminated.  Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred.  Amounts reported
in the financial statements of the subsidiary company have been adjusted where
necessary to ensure consistency with the accounting policies adopted by the
Company.



Acquisitions of subsidiaries are dealt with by the purchase method. The purchase
method involves the recognition at fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary, at the
acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition.  On initial
recognition, the assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are also used as the
bases for subsequent measurement in accordance with the Company accounting
policies.  Goodwill is stated after separating out identifiable intangible
assets.  Goodwill represents the excess of acquisition cost over the fair value
of the Company's share of the identifiable net assets of the acquired subsidiary
at the date of acquisition.



REVENUE



The Company follows the principles of IAS18, Revenue, in determining the
appropriate revenue recognition policies. In principle, therefore revenue is
recognised to the extent that the Company has transferred the significant risks
and rewards of ownership of the goods sold to the buyer.



Revenue comprises revenue arising from the supply of goods, excluding VAT and is
recognised on delivery of the product to the customer.



GOODWILL



Goodwill arising on acquisition prior to 1 July 2005



Goodwill arising on acquisition of a subsidiary for which the agreement date is
before 1 July 2005 represents the excess of the cost of acquisition over the
Company's interest in fair value of the identifiable assets and liabilities of
the relevant subsidiary at the date of acquisition.



Such goodwill is stated after any accumulated amortisation and impairment.
Under the transitional provisions in IFRS 3 "Business Combinations", the
goodwill can only be amortised up to 30 June 2005 and the accumulated
amortisation and impairment as at 1 July 2006 has been eliminated with a
corresponding decrease in the cost of respective goodwill and, since then, any
carrying amount of the goodwill is tested at each balance sheet date for
impairment as well as when there are indications of impairment.



INTANGIBLE ASSETS



Trademarks and Licence agreements



Trademarks and Licence agreements are included at fair value.  Cost less
estimated residual amount is amortised on a straight line basis over the useful
economic life of the trademarks of 10 years.



TAXATION



Current income tax assets and/or liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting
period, that are unpaid at the balance sheet date. They are calculated according
to the tax rates and tax laws applicable to the fiscal periods to which they
relate, based on the taxable result for the year. All changes to current tax
assets or liabilities are recognised as a component of tax expense in the income
statement.



Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets and
liabilities in the consolidated financial statements with their respective tax
bases.  In addition, tax losses available to be carried forward as well as other
income tax credits to the Company are assessed for recognition as deferred tax
assets.



Deferred tax liabilities are always provided for in full. Deferred tax assets
are recognised to the extent that it is probable that they will be able to be
offset against future taxable income. Deferred tax assets and liabilities are
calculated, without discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.



Most changes in deferred tax assets or liabilities are recognised as a component
of tax expense in the income statement. Only changes in deferred tax assets or
liabilities that relate to a change in value of assets or liabilities that is
charged directly to equity are charged or credited directly to equity.



IMPAIRMENT TESTING OF GOODWILL AND OTHER INTANGIBLE ASSETS



For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units).  As a result, some assets are tested individually for impairment and
some are tested at cash-generating unit level.  Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the Company at which
management monitors the related cash flows.



Goodwill, other individual assets or cash-generating units that include
goodwill, other intangible assets with an indefinite useful life, and those
intangible assets not yet available for use are tested for impairment at least
annually.  All other individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.



An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount.  The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation.  Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill.  Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit.  With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.



FINANCIAL ASSETS



The Company's financial assets include trade and other receivables.



All financial assets are recognised on their settlement date. All financial
assets are initially recognised at fair value, plus transaction costs.
Non-compounding interest and other cash flows resulting from holding financial
assets are recognised in profit or loss when received, regardless of how the
related carrying amount of financial assets is measured.



Trade and other receivables are provided against when objective evidence is
received that the Company will not be able to collect all amounts due to it in
accordance with the original terms of the receivables. The amount of the
write-down is determined as the difference between the asset's carrying amount
and the present value of estimated future cash flows.



CASH AND CASH EQUIVALENTS



Cash and cash equivalents comprise cash at bank and in hand, bank deposits
repayable on demand and other short-term highly liquid investments with original
maturities of three months or less.



EQUITY



Share capital is determined using the nominal value of shares that have been
issued.



The share premium account represents premiums received on the initial issuing of
the share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits.



The share options reserve represents equity-settled share based-payment
arrangements.



Retained earnings include all current and prior period results as disclosed in
the income statement.



Other reserves include the cost of conversion of the convertible loans and the
difference between the fair value and the nominal value of shares issued as
consideration for the acquisition of subsidiary undertakings where the Company
has taken advantage of section 131 of the Companies Act 1985..



SHARE BASED PAYMENTS



All shared-based payment arrangements granted after 7 November 2002 but which
had not vested by 1 July 2006, are recognised in the financial statements.



All goods and services received in exchange for the grant of any share-based
payment are measured at their fair values.  Where employees are rewarded using
share-based payments, the fair values of employees' services are determined
indirectly by reference to the fair value of the instrument granted to the
employee.  This fair value is appraised at the grant date and excludes the
impact of non-market vesting conditions (for example, profitability and sales
growth targets).



All equity-settled share-based payments are ultimately recognised as an expense
in the income statement with a corresponding credit to the "share options
reserve".



If vesting periods or other non-market vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the
number of share options expected to vest.  Estimates are revised subsequently if
there is any indication that the number of share options expected to vest
differs from previous estimates.  Any cumulative adjustment prior to vesting is
recognised in the current period.  no adjustment is made to any expense
recognised in prior periods if share options that have vested are not exercised.



Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital, and where appropriate share
premium.



FINANCIAL LIABILITIES



The Company's financial liabilities include trade and other payables and
financial liabilities at fair value through profit or loss.



Financial liabilities are recognised when the Company becomes a party to the
contractual agreements of the instrument. All interest related charges are
recognised as an expense in "finance cost" in the income statement.



Trade payables are recognised initially at their nominal value and subsequently
measured at amortised cost less settlement payments.



Financial liabilities at fair value through profit or loss include embedded
derivatives which have been separated from their host contracts and financial
liabilities that are designated by the Company to be carried at fair value
through profit or loss upon initial recognition.



Where a contract contains one or more embedded derivatives, the entire hybrid
contract may be designated as a financial liability at fair value through profit
or loss, except where the embedded derivative does not significantly modify the
cash flows or it is clear that separation of the embedded derivative is
prohibited.



Financial liabilities may be designated at initial recognition as at fair value
through profit or loss if the following criteria are met:



*         the designation eliminates or significantly reduces the inconsistent
treatment that would otherwise arise from measuring the liabilities or
recognising gains or losses on them on a different basis; or

*         the liabilities are part of a group of financial liabilities which are
managed and their performance evaluated on a fair value basis, in accordance
with a documented risk management strategy; or

*         the financial liability contains an embedded derivative that would
need to be separately recorded.



Subsequent to initial recognition, the financial liabilities included in this
category are measured at fair value with changes in fair value recognised in the
income statement.  Financial liabilities originally designated as financial
liabilities at fair value through profit or loss may not subsequently be
reclassified.



Dividend distributions to shareholders are included in 'other short term
financial liabilities' when the dividends are approved by the shareholders'
meeting.



OTHER PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS



Other provisions are recognised when present obligations will probably lead to
an outflow of economic resources from the Company and they can be estimated
reliably. Timing or amount of the outflow may still be uncertain. A present
obligation arises from the presence of a legal or constructive commitment that
has resulted from past events, for example, legal disputes or onerous contracts.



Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the balance
sheet date, including the risks and uncertainties associated with the present
obligation. Any reimbursement expected to be received in the course of
settlement of the present obligation is recognised, if virtually certain as a
separate asset, not exceeding the amount of the related provision. Where there
are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as
a whole. In addition, long term provisions are discounted to their present
values, where time value of money is material.

All provisions are reviewed at each balance sheet date and adjusted to reflect
the current best estimate.

In those cases where the possible outflow of economic resource as a result of
present obligations is considered improbable or remote, or the amount to be
provided for cannot be measured reliably, no liability is recognised in the
balance sheet.



Probable inflows of economic benefits to the Company that do not yet meet the
recognition criteria of an asset are considered contingent assets.



SEGMENTAL REPORTING



A segment is a distinguishable component of the Company that is engaged either
in a particular business (business segment) or conducting business in a
particular geographical area (geographical segment), which is subject to risks
and rewards that are different from those of other segments.



CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS



Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.



Critical accounting estimates and assumptions

The Company makes estimates and assumptions concerning the future.  The
resulting accounting estimates will, by definition, seldom equal the related
actual results.  The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities
within the next accounting period are discussed below.

Impairment of assets

The Company conducts impairment reviews of assets when events or changes in
circumstances indicate that their carrying amounts may not be recoverable
annually, or in accordance with the relevant accounting standards.  An
impairment loss is recognised when the carrying amount of an asset is lower than
the greater of its net selling price or the value in use.  In determining the
value in use, management assesses the present value of the estimated future cash
flows expected to arise from the continuing use of the asset and from its
disposal at the end of its useful life.  Estimates and judgments are applied in
determining these future cash flows and the discount rate.  The carrying value
of goodwill and intangible assets has been considered by the directors in
relation to their value in use and they have formed the view no further
impairment provision is required at 31 December 2007.

Critical judgements in applying the Company's accounting policies

The directors in applying the accounting policies, which are described above,
consider that the most significant judgement they have had to make is the fair
value of the convertible loan and whether any impairment provision is required
against the goodwill.



3                     TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS



The transition from UK GAAP to IFRS has been made in accordance with IFRS 1,
"First-time Adoption of International Financial Reporting Standards". The
Company's interim report for the six months ended 31 December 2007 and the
comparatives presented for the periods ended 31 December 2006 and 30 June 2007
comply with all presentation recognition and measurement requirements of IFRS
applicable for accounting periods commencing on or after 1 July 2007.



The following reconciliations and explanatory notes thereto describe the effects
of the transition at 1 July 2006, 31 December 2006 and 30 June 2007 and on the
periods then ended. All explanations should be read in conjunction with the IFRS
accounting policies of Conival plc.



The only differences between the profit and loss reported under UK GAAP and the
income statement reported under IFRS is that the amortisation of goodwill
charged has been reversed which has reduced the loss for the period ended  31
December 2006 by £75,000 and the year ended 30 June 2007 by £288,000. The
retained losses at those period ends have also been reduced by the same amounts.



The following reclassifications have been made as a consequence of the adoption
of IFRS:



*         the convertible loan of £300,000 at 30 June 2007 has been redesignated
as a financial liability at fair value through profit or loss.  The directors do
not consider the fair value of this convertible loan to be significantly
different to its cost at 30 June 2007.

*         the transfer from other reserves to retained earnings in respect of
the amortisation of goodwill in the year ended 30 June 2007 of £273,000 has been
reversed.



IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period.  These
interim financial statements have been prepared on the basis of taking the
following exemption: business combinations prior to 30 June 2006 have not been
restated to comply with IFRS 3 "Business Combinations".  Goodwill arising from
these business combinations has not been restated.



4                     SEGMENTAL REPORTING



(a) By business segment (Primary segment)

As defined under International Accounting Standard 14 (IAS 14) the only material
business segment the Company has is that of the manufacture and supply of
healthy branded food products.



(b) By Geographical Segment (Secondary segment)

Under the definitions contained in IAS 14 the only material geographic segment
the Company operates in is the United Kingdom.



5                     LOSS PER SHARE



The calculation of the basic loss per share is based on the loss attributable to
ordinary shareholders divided by the weighted average number of shares in issue
during the period.




                                                        Unaudited six    Unaudited six        Unaudited
                                                         months ended     months ended       year ended
                                                          31 December      31 December          30 June
                                                                 2007             2006             2007

Loss for the period (£'000)                                   (1,240)            (337)          (1,576)

Weighted average number of 1p ordinary shares             348,172,174      253,701,326      261,503,622

Loss per share - basic and diluted                            (0.36)p          (0.13)p          (0.60)p
                                                              
                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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