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GUS Gusbourne Plc

65.00
0.00 (0.00%)
18 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Gusbourne Plc LSE:GUS London Ordinary Share GB00B8TS4M09 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 65.00 63.00 67.00 65.00 65.00 65.00 80 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Wine,brandy & Brandy Spirits 6.86M -2.53M -0.0415 -15.66 39.55M

Gusbourne PLC Half-year Report (5599Z)

21/09/2020 8:00am

UK Regulatory


Gusbourne (LSE:GUS)
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TIDMGUS

RNS Number : 5599Z

Gusbourne PLC

21 September 2020

21 September 2020

Gusbourne Plc

("Gusbourne" or the "Company")

Half Yearly Report

Gusbourne Plc, the English sparkling wine producer, is today pleased to announce its unaudited interim results for the six months ended 30 June 2020.

Highlights

   --    Net revenue (1) up by 24% to GBP890,000 (30 June 2019: GBP716,000) 
   --    Gross profit (2) up by 23% to GBP518,000 (30 June 2019: GBP421,000) 
   --    Adjusted EBITDA (3) loss of GBP603,000 (30 June 2019: GBP609,000) 

-- Completion of a GBP10.5 million asset-based lending facility with PNC Financial Services UK Ltd ("PNC")

-- Significant growth in sales from direct to consumer and export channels offsetting our traditional channels following the impact of COVID-19 on our traditional UK trade channels.

-- Ongoing success in international wine competitions with a total of 32 medals awarded to date in 2020, including twelve gold medals, two trophies, and the Judges Selection Medal in the prestigious Texsom awards in the United States in February.

Charlie Holland, Chief Winemaker and Chief Executive Officer commented:

"We are delighted to report year on year revenue growth of 24% over the last six months, despite the challenges presented by COVID-19. We intend to continue to produce and sell a range of vintage wines of exceptional quality from grapes grown in our own vineyards, and to further grow and develop the business in a manner which remains consistent with the aspirations for the Gusbourne brand.

Warm spring weather led to an early and successful flowering indicative of good yield potential. Less intensity of warmth as we entered the ripening period will slightly lengthen the time to harvest allowing for the complexities of flavour to mature. The prospects for the quality of the grapes, which are due to be harvested shortly, remain high as in previous years.

Current trading reflects continuing sales growth combined with the careful management of costs and liquidity. We remain confident about the long term prospects of the business."

(1) Net revenue is revenue reported by the Company after excise duties payable and grants received.

(2) Gross profit is reported by the Company after excise duties payable and grants received.

(3) Adjusted EBITDA means profit from operations/(loss from operations) before fair value movement in biological produce, interest, tax, depreciation and amortisation.

For further information contact:

Gusbourne Plc

Charlie Holland +44 (0)1233 758 666

Canaccord Genuity Limited

Bobbie Hilliam +44 (0)20 7523 8000

Georgina McCooke

Note: This announcement and other press releases are available to view at the Company's website: www.gusbourneplc.com

Note to Editors

Gusbourne PLC ("the Company") is engaged, through its wholly owned subsidiary Gusbourne Estate Limited (together the "Group"), in the production and distribution of a range of high quality and award winning English sparkling wines from grapes grown in its own vineyards in Kent and West Sussex. The majority of the Group's mature vineyards are located at its freehold estate at Appledore in Kent where the winery is also based.

Financials

Results for the six months ended 30 June 2020

Net revenue for the period amounted to GBP890,000 (2019: GBP716,000), an increase of 24% on the corresponding period last year.

Operating expenses of GBP1,529,000 (2019: GBP1,377,000), included depreciation of GBP336,000 (2019: GBP347,000) and also included planned increased expenditure on sales and marketing costs reflecting continuing investment in the development and future growth of the business and its sales beyond the current financial year. This increased investment is expected to drive future revenue growth in future periods and also reflects the confidence the directors have in the Gusbourne brand.

Adjusted EBITDA for the year was a loss of GBP603,000 (2019: GBP609,000). The operating loss for the year after depreciation and amortisation was GBP1,116,000 (2019: GBP967,000). The loss before tax was GBP1,568,000 (2019: GBP1,137,000) after net finance costs of GBP452,000 (2019: GBP170,000).

These losses were in line with the directors expectations and the long-term development strategy of the Group which is based on continuing sales growth of the Gusbourne wines, supported by increasing wine stocks. The Group is focused on achieving a positive cashflow during the course of the next few years.

Balance Sheet

The changes in the Group's balance sheet during the year reflect ongoing investment in, and development of, the Group's business, net of income from wine sales. The Group invested in plant and equipment for the vineyards and the winery amounting to GBP167,000 (2019: GBP197,000).

Total assets at 30 June 2020 of GBP23,899,000 (2019: GBP21,523,000) include freehold land and buildings of GBP6,319,000 (2019: GBP6,433,000), vineyards of GBP3,076,000 (2019: GBP3,222,000), right of use assets of GBP2,045,000 (2019: GBP1,471,000), biological assets (grapes) of GBP660,000 (2019: GBP707,000), inventories of wine stocks amounting to GBP7,669,000 (2019: GBP5,752,000), and cash of GBP473,000 (2018: GBP481,000). Intangible assets of GBP1,007,000 (2019: GBP1,007,000) arose on the acquisition of the Gusbourne Estate business on 27 September 2013.

As noted above, our main operating assets continue to grow, which provides further asset backing for our investors as well as support for our planned future sales growth.

Intangible assets, which includes the Gusbourne brand itself, remain unimpaired at their historical amount and in accordance with the relevant accounting standards. No account has been taken with regards to any potential fair value uplift that may be appropriate.

The Group's net tangible assets at 30 June 2020 amount to GBP9,619,000 (2019: GBP12,166,000) and represent 91% of total equity (2019: 92%). Net tangible assets per share at 30 June 2020 was 20.7 pence (2019: 26.6 pence). It is important to note that these net tangible assets figures do not necessarily reflect underlying asset values, in particular in respect of the Group's inventories, which are reported at the lower of cost and net realisable value. These inventories are expected to continue growing until approximately four years after vineyard maturity. These additional four years reflect the time it takes to transform our high-quality grapes into Gusbourne's premium sparkling wine. The anticipated underlying surplus of net realisable value over cost of these wine inventories, which is not reflected in these accounts and in the net tangible assets per share quoted above, will become an increasingly significant factor of the Group's asset base as the inventories continue to grow.

Financing

The Group's activities are financed by shareholder's equity and debt which comprises loans, lease liabilities, other borrowings and deep discount bonds. At 30 June 2020 debt amounted to GBP12,133,000 (2019: GBP7,250,000) and represents 114% of total equity (2019: 55%).

On 1 June 2020, Gusbourne announced that its subsidiary Gusbourne Estate Limited has entered into an agreement with PNC Business Credit, a trading style of PNC Financial Services UK Ltd, for up to GBP10.5m of asset-based lending facilities. (the "PNC Facilities"). The PNC Facilities will primarily be used to provide working capital for the Group. It will also be used to refinance certain existing loan facilities.

The PNC Facilities will be provided on a revolving basis over a minimum period of 5 years and allow flexible drawdown and repayments in line with the Company's working capital requirements. The interest rate will be at the annual rate of 3 per cent over the Bank of England Base Rate. The facilities will be secured by way of first priority charges over the Company's inventory, receivables and freehold property as well as an all assets debenture.

On completion approximately GBP4.6m of the PNC Facilities was drawn down by Gusbourne Estate Limited with approximately GBP2.1m being used to repay the existing secured Barclays bank facilities in full and GBP1.3m used to part repay existing short term loans.. The balance of GBP1.2m was drawn down for working capital purposes. Further drawdowns will be made from time to time in line with the needs of the business.

Of the GBP1.3m drawdown at completion to part repay existing short-term loans, GBP0.8m was used to part repay a short-term loan of GBP1.25m received on 23 December 2019 from Franove Holdings Limited. GBP0.5m was used to part repay a short-term loan of GBP2.0m received on 31 May 2019 from a company controlled by Lord Ashcroft.

Following these repayments Franove Holdings Limited has agreed to extend the repayment date of its outstanding loan of GBP0.5m to 15 August 2021, at the same 15% rate of interest, with the loan becoming secured behind PNC at the same ranking as the existing outstanding deep discount bonds issued by the Company. Gusbourne Estate Limited has also agreed with Franove that in the event it seeks to repay its loans (excluding its PNC facilities) further, the repayment of the Franove Holdings Limited loan will take priority.

The remaining Lord Ashcroft loan of GBP1.7m has been refinanced, by a company controlled by him, with a new deep discount bond maturing on 15 August 2021 and with a coupon of 15% per annum rolled quarterly and secured behind PNC at the same ranking as the existing outstanding bonds issued by the Company.

The Board have assessed the ability of the Group to repay its existing deep discount bonds and a short-term loan which are due for maturity in August 2021. The Board believe that the Group will be able to raise further equity and/or debt funds to repay or refinance these amounts as and when they fall due. Additional funding will continue to be sought by the Company over the coming few years to fund ongoing growth in the Company's operations and asset base, in line with its development strategy.

Recent awards

We have continued our success in major wine competitions winning 32 medals (to date) at national and international competitions, where we are judged against some of the finest wines from around the world. Awards received during the year include:

-- 4 gold medals and trophies for 'Best still red wine' and 'Best still rosé wine' at the UK based Wine GB Awards in August 2020.

-- A Platinum medal and 'Judges Selection Medal' awarded the prestigious Texsom based in the US held in February 2020

   --    2 gold medals at the Japan Wine Awards in Tokyo held in February 2020 
   --    A gold medal at the Asian Sparkling Masters in Hong Kong held in June 2020 
   --    A gold medal at the Global Sparkling Wine Masters held in London during June 2020 
   --    A gold medal at the Global Rosé Masters held in London during June 
   --    A gold medal at the Global Pinot Noir Masters held in London during May 2020 

Current trading and outlook

Warm spring weather led to an early and successful flowering indicative of good yield potential. Less intensity of warmth as we entered the ripening period will slightly lengthen the time to harvest allowing for the complexities of flavour to mature. The prospects for the quality of the grapes, which are due to be harvested shortly, remain high as in previous years. The vines will remain subject to the normal seasonal climatic and disease risks throughout the remaining part of the growing season. Excellent yields from the 2019 harvest have allowed us to increase our wine stocks for future sales.

The Company experienced a strong start to trading in the first three months of the year with revenue performance ahead of directors' expectations. However, since the end of March 2020, the Company's distribution channels have been impacted by COVID-19. The Company has engaged in a number of new sales initiatives to mitigate this impact and the directors are pleased to report increasing demand for wine in some channels, especially online. With the vast majority of our on-trade customer base now reopened for business we are optimistic about further sales growth in the second half of the year.

On the production side, both vineyard and winery operations have continued to work through the lockdown with appropriate safety protocols put in place. The Company furloughed a number of staff members, particularly in the sales function and took various steps to reduce costs at during the national lockdown period. As normal trading resumes, we are delighted to report that the vast majority of staff have now returned from furlough.

Whilst the immediate outlook for sales still remains uncertain due to COVID-19, the directors remain confident about the Group's long term prospects.

We are delighted to have secured significant asset-based financing facilities from PNC and which aligns with the working capital requirements of the business. We are pleased to welcome PNC as a key stakeholder and look forward to working with them as we continue to develop our business over the coming years.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2020

 
                                                  Unaudited        Unaudited            Audited 
                                                 Six months       Six months         Year ended 
                                                         to               to 
                                                    30 June          30 June        31 December 
                                    Notes              2020             2019               2019 
                                                    GBP'000          GBP'000            GBP'000 
 
Revenue                               2               1,021              794              1,845 
Excise duties                                          (59)             (78)              (192) 
Net revenue                                             962              716              1,653 
 
Cost of sales                                         (372)            (295)              (735) 
 
Gross profit                                            590              421                918 
 
Fair value movement in biological 
 assets                               6               (177)             (11)                  - 
Fair movement in biological 
 produce                              6                   -                -              (172) 
 
Administrative expenses                             (1,529)          (1,377)            (2,902) 
 
 
Loss from operations                                (1,116)            (967)            (2,156) 
 
 
Finance expense                       4               (452)            (170)              (445) 
 
Loss before tax                                     (1,568)          (1,137)            (2,601) 
 
Tax expense                                               -                -                  - 
 
Loss for the period attributable 
 to 
owners of the parent                                (1,568)          (1,137)            (2,601) 
 
Loss per share attributable 
 to 
the ordinary equity holders 
 of the parent: 
Basic and diluted                                  (3.37p))          (2.49p)  (3.2      (5.67p) 
 
 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2020

 
                                       Unaudited  Unaudited      Audited 
                                         30 June    30 June  31 December 
                                Notes       2020       2019         2019 
Assets                                   GBP'000    GBP'000      GBP'000 
 
Non-current assets 
Intangibles                                1,007      1,007        1,007 
Property, plant and equipment     5       13,062     12,845       13,231 
Other receivables                             40          -           90 
                                          14,109     13,852       14,328 
                                       ---------  ---------  ----------- 
 
Current assets 
Biological assets                 6          660        707            - 
Inventories                       7        7,669      5,752        7,463 
Trade and other receivables               988           731          707 
Cash and cash equivalents                    473        481        1,009 
                                       ---------  ---------  ----------- 
                                           9,790      7,671        9,179 
                                       ---------  ---------  ----------- 
 
Total assets                              23,899     21,523       23,507 
                                       ---------  ---------  ----------- 
 
Liabilities 
 
Current liabilities 
Trade and other payables                 (1,140)    (1,100)        (752) 
Finance leases                                 -       (43)            - 
Lease liabilities                          (123)       (68)        (123) 
Loans and borrowings              8            -      (787)      (3,379) 
                                       ---------  ---------  ----------- 
                                         (1,263)    (1,998)      (4,254) 
                                       ---------  ---------  ----------- 
 
Non-current liabilities 
Loans and borrowings              8     (10,017)    (4,923)      (5,026) 
Lease liabilities                        (1,993)    (1,415)      (2,033) 
Finance leases                                 -       (14)            - 
                                        (12,010)    (6,352)      (7,059) 
 
Total liabilities                       (13,273)    (8,350)     (11,313) 
 
NET ASSETS                                10,626     13,173       12,194 
                                       ---------  ---------  ----------- 
 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

At 30 June 2020

 
Issued capital and reserves attributable 
 to 
owners of the parent 
Share capital                                  12,048   12,040    12,048 
Share premium                                  10,915   10,438    10,915 
Merger reserve                                   (13)     (13)      (13) 
Retained earnings                            (12,324)  (9,292)  (10,756) 
                                             --------  -------  -------- 
 
TOTAL EQUITY                                   10,626   13,173    12,194 
                                             --------  -------  -------- 
 
 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2020

 
                                                       Unaudited       Unaudited                       Audited 
                                         Six months to months to   Six months to                    Year ended 
                                                         30 June         30 June                   31 December 
                                                            2020            2019                          2019 
                                                         GBP'000         GBP'000                       GBP'000 
 
Cashflows from operating 
activities 
Loss for the year/period before tax                      (1,568)         (1,137)                       (2,601) 
Adjustments for: 
Depreciation of property, plant and 
 equipment                                                   336             347                           699 
Finance expense                                              452             170                           445 
Movement in biological assets                              (660)           (695)                             - 
Fair value movement in biological 
 asset                                                         -               -                           172 
(Increase) in trade and other 
 receivables                                               (120)           (138)                         (209) 
Increase in inventories                                    (163)           (470)                 .     (2,220) 
Increase in trade and other payables                         388             617                           269 
                                         -----------------------   -------------                    ---------- 
Cash outflow from operations                             (1,335)         (1,306)                       (3,445) 
 
Investing activities 
Purchases of property, plant and 
equipment, 
excluding vineyard establishment                           (167)           (197)                         (339) 
Sale of property, plant and equipment                          -              10                            11 
Net cash from investing activities                         (167)           (187)                         (328) 
                                         -----------------------   -------------                    ---------- 
 
Financing activities 
Loan repayments                                          (3,253)            (17)                          (34) 
New loans issued                                           4,638             750                         3,250 
Loan issue costs                                           (124)               -                          (15) 
Repayment of lease liabilities                              (83)            (23)                         (125) 
Interest paid                                              (212)            (47)                          (90) 
Issue of ordinary shares                                       -               -                           485 
Net cash from financing activities                           966             663                         3,471 
                                         -----------------------   -------------                    ---------- 
 
 
 

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

For the six months ended 30 June 2020

 
                                                                 Unaudited       Unaudited        Audited 
                                               Six months to Six months to   Six months to      Period to 
                                                                   30 June         30 June    31 December 
                                                                      2020            2019           2019 
                                                                   GBP'000         GBP'000        GBP'000 
 
 
Net increase/(decrease) in cash and cash 
 equivalents                                                         (536)           (830)          (302) 
 
Cash and cash equivalents at beginning of 
 period                                                              1,009           1,311          1,311 
                                              ----------------------------   -------------   ------------ 
 
Cash and cash equivalents at end of period                             473             481          1,009 
                                              ============================   =============   ============ 
 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2020

 
                                                                         Total 
                                                                  attributable 
                                                                     to equity 
                                                                       holders 
                       Share      Share     Merger    Retained              of 
 Audited:            capital    premium    reserve    earnings          parent 
                     GBP'000    GBP'000    GBP'000     GBP'000         GBP'000 
 
 31 December 
  2018                12,040     10,438       (13)     (8,155)          14,310 
 
 Share issue               -          -          -           -               - 
 
   Share issue 
   expenses                -          -          -           -               - 
 
   Comprehensive 
   loss for the 
   period                  -          -          -     (1,137)         (1,137) 
                      ______     ______     ______       _____          ______ 
 
 30 June 2019         12,040     10,438       (13)     (9,292)          13,173 
                      ______     ______     ______      ______          ______ 
 
 Share issue           8         477         -           -            485 
 
   Comprehensive 
   loss for the 
   period                  -          -          -     (1,464)         (1,464) 
                      ______     ______     ______       _____          ______ 
 
 31 December 
  2019                12,048     10,915       (13)    (10,756)          12,194 
 
 
 Unaudited: 
 
   Comprehensive 
   loss for 
   the period            -        -        -    (1,568)   (1,568) 
                    ______   ______   ______      _____    ______ 
 
 30 June 2020       12,048   10,915     (13)   (12,324)    10,626 
                    ______   ______   ______     ______    ______ 
 

NOTES TO THE ACCOUNTS

For the six months ended 30 June 2020

   1      Statement of accounting policies 

The interim financial statements have been prepared in accordance with the recognition and measurement principles as adopted by the EU, applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2019 and are consistent with the accounting policies expected to apply in its financial statements for the year ended 31 December 2020.

The financial information for the six months ended 30 June 2020 has not been subject to an audit nor a review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board. The comparative financial information presented herein for the year ended 31 December 2019 does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group's annual report and accounts for the year ended 31 December 2019 have been delivered to the Registrar of Companies. The Group's independent auditor's report was unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006.

Basis of preparation

The Board of the Company continually assesses and monitors the key risks of the business. These risks have not significantly changed from those set out in the Company's Annual Report for the period ended 31 December 2019.

Going concern

The Directors believe the Group to be a going concern on the basis that it has sufficient cash available from committed facilities to continue operations for at least 12 months from the date these financial statements were approved and in addition will not breach any of its key covenants during this period.

In coming to their conclusion, the Directors have considered the Group's profit and cash flow plans for the coming period, and in the light of the outbreak of COVID-19 have run various downside "stress test" scenarios. These scenarios assess the impact of COVID-19 on the Group over the next 12 months and in particular on the Group's sales through its key distribution channels. These stress tests indicate the Group can withstand any ongoing adverse impact on revenues for at least the next 12 months.

In addition, these stress test scenarios assess the Group's potential debt requirements against the Group's GBP10.5m asset-based lending facility, of which c. GBP5.9m was undrawn on 30 June 2020. The stress test scenarios do not show a requirement in excess of the Group's undrawn facilities nor do they show the Group breaching any of its key covenant tests on the monthly testing points which start from 31 December 2020.

The stress test scenarios also include certain cost mitigation actions, including but not limited to furloughing of certain staff, operating cost reductions and reduced capital expenditure.

Under the significant stress test scenarios, we have run, the Group could withstand a material and prolonged adverse impact on revenues and continue to operate within the available lending facilities. Accordingly, the Group and the Company continues to adopt the going concern basis in preparing its Financial Statements.

The Board have also assessed the ability of the Group to repay its existing deep discount bonds and a short-term loan which are due for maturity in August 2021. The Board believe that the Group will be able to raise further equity and/or debt funds to repay or refinance these amounts as and when they fall due as well as providing additional funds for further development of the Group.

The financial statements do not include any adjustments should the going concern basis of preparation be inappropriate.

   2      Revenue 
 
                 Unaudited  Unaudited      Audited 
                   30 June    30 June  31 December 
                      2020       2019         2019 
                   GBP'000    GBP'000      GBP'000 
 
Wine sales             895        746        1,717 
Other income            54         48          128 
Grants                  72          -            - 
Total Revenue        1,021        794        1,845 
                 ---------  ---------  ----------- 
 
   3      Loss from operations 

Loss from operations has been arrived at after charging:

 
                                        Unaudited  Unaudited      Audited 
                                          30 June    30 June  31 December 
                                             2020       2019         2019 
                                          GBP'000    GBP'000      GBP'000 
Depreciation of property, plant 
 and equipment                                336        347          699 
Staff costs expensed to consolidated 
statement of income                           443        389          835 
 
   4      Finance expense 
 
                                     Unaudited  Unaudited      Audited 
                                       30 June    30 June  31 December 
                                          2020       2019         2019 
                                       GBP'000    GBP'000      GBP'000 
Finance expense 
Interest payable on borrowings             296         47          200 
Amortisation of bank transaction 
 costs                                      13          3            5 
Discount expense on deep discount 
 bonds                                     143        120          240 
Total finance expense                      452        170          445 
                                     ---------  ---------  ----------- 
 
   5      Property, plant and equipment 
 
                                       Unaudited  Unaudited      Audited 
                                         30 June    30 June  31 December 
                                            2020       2019         2019 
                                         GBP'000    GBP'000      GBP'000 
 
Freehold land and buildings                6,319      6,433        6,383 
Plant, machinery and motor vehicles        1,592      1,682        1,604 
Mature vineyards                           3,076      3,222        3,144 
Computer equipment                            30         37           32 
Right of use assets                        2,045      1,471        2,068 
                                          13,062     12,845       13,231 
                                       ---------  ---------  ----------- 
 

Right of use assets

Right of use assets comprise land leases on which vines have been planted and property leases from which vineyard operations are carried out from.

   6      Biological assets 

Biological assets represent grapes growing on the Group's vines. Once the grapes are harvested they are deemed to be Biological produce and transferred to inventories.

 
                                      Unaudited  Unaudited      Audited 
                                        30 June    30 June  31 December 
                                           2020       2019         2019 
                                        GBP'000    GBP'000      GBP'000 
 
Crop growing costs                          837        718        1,510 
Fair value of grapes harvested and 
 transferred 
to inventories                                -          -      (1,338) 
Fair value movement in biological 
 assets                                   (177)       (11)            - 
Fair value movement in biological 
 produce                                      -          -        (172) 
                                      ---------  ---------  ----------- 
 
Fair value of biological assets at 
 the reporting date                         660        707            - 
                                      ---------  ---------  ----------- 
 

The fair value of biological assets at the reporting date is determined by reference to estimated market prices less costs to sell. The estimated market price for grapes used in respect of 2020 is GBP2,300 (2019: GBP2,300) per tonne. The fair value is subject to a discount factor of 55% (2019: 50%) due to the grapes, as at the reporting date, being approximately 3 months away from being ready for harvest.

A 10% increase in the estimated market price of grapes to GBP2,530 per tonne would result in an increase of GBP72,000 in the fair value of biological assets at the reporting date. A 10% decrease in the estimated market price of grapes to GBP2,070 per tonne would result in a decrease of GBP71,000 in the fair value of biological assets at the reporting date.

   7      Inventories 
 
                    Unaudited  Unaudited      Audited 
                      30 June    30 June  31 December 
                         2020       2019         2019 
                      GBP'000    GBP'000      GBP'000 
 
Finished goods            140        139      440 
Work in progress        7,529      5,613        7,023 
 
                        7,669      5,752        7,463 
                    ---------  ---------  ----------- 
 
   8      Loans and borrowings 
 
                              Unaudited  Unaudited      Audited 
                                30 June    30 June  31 December 
                                   2020       2019         2019 
                                GBP'000    GBP'000      GBP'000 
 
Current liabilities 
Bank loans                            -         34           34 
Other loans                           -        753        3,345 
                                      -        787        3,379 
                              ---------  ---------  ----------- 
Non-current liabilities 
Bank loans                        4,638      2,042        2,025 
Other loans                         506          -            - 
Deep Discount Bonds               4,873      2,881        3,001 
                              ---------  ---------  ----------- 
Total loans and borrowings       10,017      4,923        5,026 
                              ---------  ---------  ----------- 
 

On 1 June 2020, Gusbourne announced that its subsidiary Gusbourne Estate Limited has entered into an agreement with PNC Business Credit, a trading style of PNC Financial Services UK Ltd, for up to GBP10.5m of asset-based lending facilities. (the "PNC Facilities"). The PNC Facilities will primarily be used to provide working capital for the Group. It will also be used to refinance certain existing loan facilities.

The PNC Facilities will be provided on a revolving basis over a minimum period of 5 years and allow flexible drawdown and repayments in line with the Company's working capital requirements. The interest rate will be at the annual rate of 3 per cent over the Bank of England Base Rate. The facilities will be secured by way of first priority charges over the Company's inventory, receivables and freehold property as well as an all assets debenture.

On completion approximately GBP4.6m of the PNC Facilities was drawn down by Gusbourne Estate Limited with approximately GBP2.1m being used to repay the existing secured Barclays bank facilities in full, GBP1.3m used to part repay the existing short term loans to Franove Holdings Limited and a company controlled by Lord Ashcroft KCMG PC. The balance of GBP1.2m was drawn down for working capital purposes. Further drawdowns will be made from time to time in line with the needs of the business.

Of the GBP1.3m drawdown at completion to part repay existing short-term loans, GBP0.8m was used to part repay a short-term loan of GBP1.25m received on 23 December 2019 from Franove Holdings Limited. GBP0.5m was used to part repay a short-term loan of GBP2.0m received on 31 May 2019 from a company controlled by Lord Ashcroft.

Following these repayments Franove Holdings Limited has agreed to extend the repayment date of its outstanding loan of GBP0.5m to 15 August 2021, at the same 15% rate of interest, with the loan becoming secured behind PNC at the same ranking as the existing outstanding deep discount bonds issued by the Company. Gusbourne Estate Limited has also agreed with Franove that in the event it seeks to repay its loans (excluding its PNC facilities) further, the repayment of the Franove Holdings Limited loan will take priority.

The remaining Lord Ashcroft loan of GBP1.7m has been refinanced, by a company controlled by him, with a new deep discount bond maturing on 15 August 2021 and with a coupon of 15% per annum rolled quarterly and secured behind PNC at the same ranking as the existing outstanding bonds issued by the Company.

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September 21, 2020 03:00 ET (07:00 GMT)

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