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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Real Good Food Plc | LSE:RGD | London | Ordinary Share | GB0033572867 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.45 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2022 to Apr 2024
TIDMRGD
RNS Number : 9045J
Real Good Food PLC
16 December 2022
16 December 2022
Real Good Food plc
("RGF" or "the Company")
Half year results for six months ended 30 September 2022
Real Good Food plc, (AIM: RGD) the diversified food business, today announces its half year results for the six months ended 30 September 2022.
Financial highlights:
-- Revenue decreased by 20.1% to GBP15.9 million (2021: GBP19.9 million) due to macroeconomic headwinds.
-- EBTIDA loss of GBP2.0 million (2021: EBITDA of GBP0.7m). -- Loss before tax for was GBP3.8m (2021: loss of GBP1.2 million (continuing operations)).
-- Additional GBP2.5m revolving credit facility secured in November 2022 to support the Group's radical reform programme.
Operational highlights:
-- Reduced volumes and the lag effect of passing cost increases through to customers reduced gross margins to 34% (2021: 43%).
-- Ongoing availability of key ingredients has also negatively impacted performance, albeit this has eased in recent weeks.
-- A radical reform programme has been launched to return the business to profitability.
-- Evidence based rebranding of Renshaw fondant to "Just roll with it" launched in September to make products more inclusive.
Current trading and outlook:
-- Market conditions are expected to remain challenging in the near-term.
-- The reform programme is well underway and is expected to deliver sustainable EBITDA of between GBP2 million and GBP4 million for the year to 31 March 2024. Further details will be announced in early 2023.
Mike Holt, Executive Chairman, said:
"Market conditions have been very challenging over the last twelve months, and show no sign of easing in the near-term, due to a perfect storm of rising costs and lower revenues. The Group is not just hunkering down, it has put into effect a radical programme of reform to return it to profitability and to ensure that profits will be sustainable. New funding has been secured to provide the headroom to make these transformational changes. The Board is confident that the right actions are being taken and that they will deliver positive returns. The simple truth, a crisis was needed to enable the required changes to be possible."
Enquiries:
Real Good Food plc Tel: 0151 541 3790 Mik e Holt, Executive Chairman finnCap Limited (Nomad and Broker) Tel: 020 7220 0500 Carl Holmes / James Thompson (Corporate Finance) MHP Communications (Financial PR) Tel: 020 3128 8100 Reg Hoare / Katie Hunt rgf@mhpc.com About Real Good Food Real Good Food plc is a food manufacturing business serving several market sectors including retail (branded and private label), manufacturing and export. The Group has two businesses that make up the Cake Decoration division, Renshaw, and Rainbow Dust Colours, with leading brands in their chosen markets. http://www.realgoodfoodplc.com
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Chairman's Statement
As previously reported, trading conditions over the last twelve calendar months have been very challenging and are unlikely to improve much in the near-term. The war in Ukraine, continuing cross border trading issues with Europe (post Brexit) and hyper cost inflation have increased costs, impacted the availability of key ingredients and services and reduced demand for our products this year.
For the six months to 30 September 2022, volumes were 29% lower than the first six months of last year and about 14% lower than our pre-covid benchmark (H1/FY20). The Group has been able to pass through cost increases to customers resulting in revenues 20% lower than last year and broadly the same as H1/FY20, albeit on lower volumes. The cost of sugar has doubled, and costs overall are about 30% higher. The overall effect of lagging price uplifts and lower volumes produced a loss of GBP2.0 million at EBITDA level for H1 and consequent cash constraints.
Clearly this situation was not sustainable. As reported in our trading update on 30 September 2022, the Board has put into effect a well-defined plan to radically reform the Group. The recovery plan includes significant price re-sets with customers across all sectors (to address market distortions), circa GBP3.0 million of overhead cost savings and additional manufacturing efficiency gains. Successful implementation of the transformation plan is expected to return between GBP2.0 million and GBP4.0 million in EBITDA under current market conditions.
To date, the Group has secured significant price re-sets with most of its UK Retailer customers which will have some benefit in H2 but mainly repositions next year, given the seasonality of our business. The cost reduction components are progressing well, and we expect to make further announcements on these in early 2023. Several Kaizen events are being planned and the first starts next week. An external manufacturing consultant will be assisting with the changes within manufacturing operations starting next month.
On the back of this radical programme of reform, and the progress being made, the Group was able to secure additional funding of GBP2.5 million as announced on 21 November 2022. The new funding is being provided by Hilco Private Capital for a term of twelve months and supplements the GBP6.3 million facility with Leumi ABL. This new funding provides the headroom required to fund the changes being made and enables the Group to function normally.
With the demise of a key competitor in the Autumn, the Group is well positioned post these changes to return to profitability and be the first-choice supplier for all markets served by the Group. New product development, a key feature of recent years, continues but the focus in the near-term is to reduce manufacturing complexity and cost.
The Board continues to believe that a listing on AIM is not in the best interests of the Company or its shareholders, given the Company's size, capital structure and limited traded volumes of shares. The estimated cost of maintaining the listing is around GBP0.25 million per annum.
Overview
Results
Revenue for the first six months of the year was GBP15.9 million (2021: GBP19.9 million). Underlying demand for products has weakened during a period of significant economic turbulence and concern. The Group managed to pass through cost increases, albeit with a lag effect and continued to place new products in the market working closely with its customers.
The loss before tax was GBP3.8 million (2021: loss of GBP1.2 million; 2020: loss of GBP4.1 million). Whilst most cost increases have been passed through to customers, albeit with a lag, they have lowered margins and reduced demand. Volumes were 29% lower than the same period last year and this has been adjusted for by a voluntary redundancy programme which takes effect next week. As noted above, further cost savings of circa GBP3.0 million (25%) are being targeted for FY24.
Based on our review at the half year, there has been no impairment to the Group. The Directors are confident that the business can be restored to profitability over the coming trading periods, even if market conditions do not materially improve.
Hot Features
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6 months ended 30 Sept 2022 6 months ended 30 Sept 2021 6 months ended 30 Sept 2020
GBP000's GBP000's GBP000's
------------------------------- --------------------------- --------------------------- ---------------------------
Loss before tax from continuing
operations (3,751) (1,214) (4,699)
Depreciation of property, plant
and equipment 614 667 848
Amortisation of intangibles - 7 23
Significant items 303 75 361
Finance costs 851 1,044 2,547
Other finance costs - 75 91
------------------------------- --------------------------- --------------------------- ---------------------------
Underlying adjusted EBITDA from
continuing operations (1,983) 654 (829)
------------------------------- --------------------------- --------------------------- ---------------------------
Outlook and Current Trading
Overall, the Board expects that macroeconomic headwinds and their impact on trading conditions will not improve much in the near-term. The radical reform programme which was launched at the end of September 2022 is progressing well and the Board is confident that the Group can deliver EBITDA of between GBP2.0 million and GBP4.0 million next year. It is expected that further losses will be incurred during H2 of the current financial year, albeit some benefit from the price resets will dampen losses. Most of the cost savings will begin at the end of March 2023.
Finance Review
Results of continuing 6 months ended 30 Sept 2022 6 months ended 30 Sept 2021 6 months ended 30 Sept 2020 operations: GBP000's GBP000's GBP000's ------------------------------- --------------------------- --------------------------- --------------------------- External Revenue 15,877 19,949 15,354 Gross profit 5,467 8,655 5,690 Underlying adjusted EBITDA (1,983) 654 (829) Operating loss (2,900) (95) (2,061) Operating loss % (18.26)% (0.5)% (13.4)% Loss before tax (3,751) (1,214) (4,699)
Group revenue for the six months ended 30 September 2022 was GBP15.9 million (2021: GBP19.9 million), GBP4.1 million (20.1%) behind September 2021, and slightly ahead of September 2020. At EBITDA level, the Group made a loss of GBP2.0 million compared to a profit of GBP0.7 million for the first six months a year ago; lower volumes, supply chain problems and higher costs impacted profitability hard. Loss before tax for the six months ended 30 September 2022 was GBP3.8 million.
Dividend
No dividend is proposed for the six months ended 30 September 2022 (2021: nil).
Pension Scheme
The Group offers a defined contribution scheme for all current employees that is funded monthly. In addition, the Company operates a defined benefit scheme that was closed to new members in 2000. The defined benefit assets decreased by GBP6.0m million to GBP15.4 million during the period (March 2022: GBP21.4m). The plan liabilities are GBP14.7 million compared to GBP19.9 million on 31 March 2022 (see note 6).
Cash Flow
During the six months to 30 September 2022, cash and cash equivalents reduced by GBP2.5 million. At 30 September 2022, net debt was GBP28.3 million (2021: GBP24.9 million), an increase of GBP3.1m since 1 April 2022. Net debt includes the loans and accrued interest from shareholders of GBP7.5 million, convertible loan notes ("CLNs") at fair value of GBP16.9 million, asset financing of GBP0.8 million, leased asset commitments of GBP0.2 million and a revolving credit facility of GBP3.2 million. Cash in the bank stood at GBP0.3 million. Net debt is calculated as total borrowings less cash and cash equivalents (see note 8).
Wavertree property
In April 2022, the Group sold its Wavertree Property. The property was purchased in 2015 and housed the Renshaw Academy until August 2019. Since then, it had been used as the New Product Development Centre and by Renshaw's marketing team. These were relocated onto Renshaw's manufacturing site at Crown Street, Liverpool bringing the Renshaw business together on one site. The sale made a small loss but generated net cash proceeds of GBP0.9 million of which GBP0.3m was spent on creating a new Innovation Centre adjacent to the factory.
Impairment Review
Throughout the last financial year, the Group made a number of operational improvements but felt it necessary book an impairment charge of GBP16.1 million to reflect market conditions and actions already in hand as at 31(st) March 2022. The Company does not require any additional impairments to be reported in the interim period to 30(th) September 2022 and given the radical reform being undertaken, does not expect, to book any further impairment this year.
This report was approved by the Board on 15 December 2022 and is signed on its behalf by:
Mike Holt
Executive Chairman
Consolidated Statement of Comprehensive Income - Continuing operations
unaudited unaudited audited
6 months
Notes 6 months ended ended 12 months ended
30 Sept 2022 30 Sept 2021 31 Mar 2022
GBP000's GBP000's GBP000's
----------------------------------------------------- ----- -------------- ------------ -----------------
Revenue 15,877 19,949 40,431
(10,410)
Cost of sales ) (11,294) (24,301)
----------------------------------------------------- ----- -------------- ------------ -----------------
Gross profit 5,467 8,655 16,130
Furlough Income - 24 -
Other operating income 3 12 56
Distribution expenses (1,932) (2,069) (3,960)
Administrative expenses (6,135) (6,642) (12,902)
Impairment charge on goodwill - - (16,103)
Significant items 7 (303) (75) (310)
----------------------------------------------------- ----- -------------- ------------ -----------------
Operating loss (2,900) (95) (17,089)
Finance costs (851) (1,044) (1,891)
Other finance costs - (75) 2
----------------------------------------------------- ----- -------------- ------------ -----------------
Loss before tax (3,751) (1,214) (18,978)
Income tax (charge)/credit - - (2,384)
----------------------------------------------------- ----- -------------- ------------ -----------------
Loss from continuing operations (3,751) (1,214) (21,362)
Profit from discontinued operations - 20,056 19,986
----------------------------------------------------- ----- -------------- ------------ -----------------
Net profit / (loss) (3,751) 18,842 (1,376)
----------------------------------------------------- ----- -------------- ------------ -----------------
Attributable to:
Owners of the parent (3,751) 18,842 (1,376)
Net profit / (loss) (3,751) 18,842 (1,376)
----------------------------------------------------- ----- -------------- ------------ -----------------
Items that will not be reclassified to profit or loss
Foreign exchange differences on translation of
subsidiaries 37 (10) (25)
Actuarial gain / (loss) on defined benefit plan (768) (77) 501
Pension provision IFRIC 14 - (7,001) -
Tax relating to items which will not be reclassified 177 75 527
----------------------------------------------------- ----- -------------- ------------ -----------------
Other comprehensive loss (554) (6,859) 1,033
----------------------------------------------------- ----- -------------- ------------ -----------------
Total comprehensive profit / (loss) for the period (4,305) 11,983 (373)
----------------------------------------------------- ----- -------------- ------------ -----------------
30 Sept 2022 30 Sept 2021 31 Mar 2022
Basic and diluted loss per share - continuing
operations 3 (4.32)p (8.11)p (21.46)p
Basic earnings per share - discontinued operations - 20.14p 20.07p
Diluted earnings per share - discontinued operations - 6.00p 6.23p
-----------------
Consolidated Statement of Financial Position
unaudited unaudited audited
Notes 30 Sept 2022 30 Sept 2021 31 Mar 2022 2021
GBP000's GBP000's GBP000's
------------------------------------------------------ ----- ------------ ------------ ----------------
NON-CURRENT ASSETS
Goodwill 16,619 37,722 16,619
Other intangible assets - 3 -
Tangible fixed assets 7,765 8,084 8,066
Investments - - -
Deferred tax asset 177 1,501 -
------------------------------------------------------ ----- ------------ ------------ ----------------
24,561 42,310 24,685
------------------------------------------------------ ----- ------------ ------------ ----------------
CURRENT ASSETS
Inventories 5,277 4,319 4,024
Trade and other receivables 5,590 7,311 6,572
Retirement benefit asset 750 - 1,497
Current tax assets - - -
Cash collateral 50 50 50
Cash and cash equivalents 315 2,650 2,734
1
------------------------------------------------------ ----- ------------ ------------ ----------------
11,982 14,330 14,877
------------------------------------------------------ ----- ------------ ------------ ----------------
Assets in disposal groups classified as held for sale 9 148 1,148 1,078
------------------------------------------------------ ----- ------------ ------------ ----------------
TOTAL ASSETS 36,691 57,788 40,640
------------------------------------------------------ ----- ------------ ------------ ----------------
CURRENT LIABILITIES
Trade and other payables 6,657 6,548 6,665
Current tax liability 4 4 4
Borrowings 8 3,243 3,907 3,718
Lease liabilities 8 35 43 48
NCI put option - - -
------------------------------------------------------ ----- ------------ ------------ ----------------
9,939 10,502 10,435
------------------------------------------------------ ----- ------------ ------------ ----------------
NON-CURRENT LIABILITIES
Borrowings 8 25,144 23,596 24,293
Lease liabilities 8 155 - 155
Derivative liability - Convertible Loan Notes - - -
Deferred tax liabilities 648 216 647
Retirement benefit obligation 6 - 6,005 -
------------------------------------------------------ ----- ------------ ------------ ----------------
25,947 29,817 25,095
------------------------------------------------------ ----- ------------ ------------ ----------------
TOTAL LIABILITIES 35,886 40,319 35,530
------------------------------------------------------ ----- ------------ ------------ ----------------
NET ASSETS 805 17,469 5,110
------------------------------------------------------ ----- ------------ ------------ ----------------
EQUITY
Share capital 1,991 1,991 1,991
Share premium account 3,294 3,294 3,294
Share option reserve - 3 -
38
Other reserve 540 - 540
Foreign exchange translation reserve (48) (70) (85)
Retained earnings (4,972) 12,251 (630)
------------------------------------------------------ ----- ------------ ------------ ----------------
TOTAL EQUITY 805 17,469 5,110
------------------------------------------------------ ----- ------------ ------------ ----------------
Consolidated Statement of Changes in Equity
For the six Issued Share Share Other Foreign Retained Total Non-Controlling Total
months ended Share Premium Option Reserve Exchange Earnings Interest Equity
30 September Capital Account Reserve Translation
2022 Reserve
(unaudited)
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Balances on 1
April 2022 1,991 3,294 - 540 (85) (630) 5,110 - 5,110
Total
comprehensive
profit/(loss)
for the period
Profit/(loss)
for the
period - - - - - (3,751) (3,751) - (3,751)
Other
comprehensive
loss for the
period - - - - 37 (591) (554) - - (554)
-------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Total
comprehensive
profit/(loss)
for the
period - - - - 37 (4,342) (4,305) - (4,305)
-------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Balances at 30
September
2022 1,991 3,294 - 540 (48) (4,972) 805 - 805
-------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
For the six months Issued Share Share Other Foreign Retained Total Non-Controlling Total
ended 30 September Share Premium Option Reserve Exchange Earnings Interest Equity
2021 (unaudited) Capital Account Reserve Translation
Reserve
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Balances at 1 April
2021 1,991 3,294 3 (4,796) (60) (282) 150 3,198 3,348
Total comprehensive
(loss)/profit for
the period
(Loss)/profit for
the period - - - - - 18,842 18,842 - 18,842
Other comprehensive
loss for the period - - - - (10) (6,849) (6,859) - (6,859)
-------------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Total comprehensive
(loss)/profit for
the period - - - - (10) 11,993 11,983 - 11,983
-------------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Transactions with
owners of the Group,
recognised directly
in equity
Loan Waiver - - - - - 540 540 - 540
Reserves on sale of
Brighter Foods 4,796 - - 4,796 - 4,796
(3,198) (3,198)
-------------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
Total contributions
by and
distributions to
owners of the Group - - - 4,796 - 540 5,336 (3,198) 2,138
--------
Balances at 30
September 2021 1,991 3,294 3 - (70) 12,251 17,469 - 17,469
-------------------- -------- -------- -------- -------- ----------- -------- -------- --------------- --------
For the twelve Issued Share Share Other Foreign Retained Total Non-Controlling Total
months ended Share Premium Option Reserve Exchange Earnings Interest Equity
31 March 2022 Capital Account Reserve Translation
(audited) Reserve
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------- -------- -------- --------- --------- ----------- --------- -------- --------------- ---------
Balances at 1
April 2021 1,991 3,294 3 (4,796) (60) (282) 150 3,198 3,348
Total
comprehensive
loss for the
period
Loss for the
year - - - - - (1,376) (1,376) (3,198) (4,574)
Other
comprehensive
(loss)/gain
for the
period - - - - (25) 1,028 1,003 - 1,003
-------------- -------- -------- --------- --------- ----------- --------- -------- --------------- ---------
Total
comprehensive
loss for the
period - - - (25) (348) (373) (3,198) (3,571)
-------------- -------- -------- --------- --------- ----------- --------- -------- --------------- ---------
Transactions
with owners of
the Group,
recognised
directly in
equity
Release of put
option
reserve - - - 4,796 - - 4,796 - 4,796
Share options
lapsed in
year - - (3) - - - (3) - 3
Waiver of debt
by loan note
holders - - - 540 - - 540 - 540
Total
contributions
by and
distributions
to owners of
the Group - - (3) 5,336 - (348) 5,333 - 5,333
-------------- -------- -------- --------- --------- ----------- --------- -------- --------------- ---------
Balances at 31
March 2022 1,991 3,294 - 540 (85) (630) 5,110 - 5,110
-------------- -------- -------- --------- --------- ----------- --------- -------- --------------- ---------
Consolidated Cashflow Statement
unaudited unaudited audited
6 months ended 6 months ended 12 months ended
Notes 30 Sept 2022 30 Sept 2021 31 Mar 2022
GBP000's GBP000's GBP000's
-------------------------------------------------------------- ----- -------------- -------------- ---------------
CASH FLOW FROM OPERATING ACTIVITIES
Adjusted for:
Profit / (Loss) before taxation (3,751) 18,842 1,008
Finance and other finance costs 852 1,119 1,889
FX movement (1) (17) (3)
Profit on sale of discontinued business - (20,386) (19,986)
Net loss on sale of property 159 - -
Impairment on Asset held for sale - - 70
Impairment of Goodwill - - 16,103
Share option reserve credit - - (3)
Fair value of derivative liability - (17) -
Depreciation of property, plant and equipment 587 746 1,326
Amortisation of intangibles - 7 9
-------------------------------------------------------------- ----- -------------- -------------- ---------------
Operating Cash Flow (2,154) 328 413
(Increase)/decrease in inventories (1,253) (1,222) (915)
Decrease in receivables 983 2,047 2,606
Pension contributions - (8,500) (8,500)
(Decrease)/increase in payables (8) (2,800) (2,518)
Reduction in cash collateral (increase in cash) - -165 165
-------------------------------------------------------------- ----- -------------- -------------- ---------------
Cash (used in) /from operations (2,432) (9,982) (8,749)
Income taxes paid - - -
Interest paid (82) (53) (139)
Interest on lease liabilities (4) (7) -
-------------------------------------------------------------- ----- -------------- -------------- ---------------
Net cash (outflow)/inflow from operating activities (2,518) (10,042) (8,888)
-------------------------------------------------------------- ----- -------------- -------------- ---------------
CASH FLOW FROM INVESTING ACTIVITIES
(Purchase), plant, and equipment (402) (223) (844)
Proceeds from disposal of property 931
Disposal of discontinued business, net of cash disposed of - 32,085 33,153
Cost of disposal of Subsidiary (1,138)
Net cash inflow/(outflow) from investing activities 529 31,862 31,171
-------------------------------------------------------------- ----- -------------- -------------- ---------------
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of lease liabilities 8 (56) (57) (113)
(Repayment)/Interest of Investor Loans 8 - (23,100) (17,790)
Repayment of term loans (387) (433) (865)
Interest paid on investor loans (5,310)
Drawdowns on revolving credit facilities 8 14,203 19,390 36,045
Repayments of revolving credit facilities 8 (14,227) (18,084) (34,571)
Inflow / (repayment) of other loans - 44 -
Net cash (outflow)/ inflow from financing activities (467) (22,240) (22,604)
-------------------------------------------------------------- ----- --------------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,456) (420) (321)
-------------------------------------------------------------- ----- -------------- -------------- ---------------
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period 2,734 3,080 3,080
Effects of currency translation on cash and cash
equivalents 37 (10) (25)
Net movement in cash and cash equivalents (2,456) (420) (321)
-------------------------------------------------------------- ----- -------------- -------------- ---------------
Cash and cash equivalents at end of period 315 2,650 2,734
-------------------------------------------------------------- ----- -------------- -------------- ---------------
Notes to the Interim Statements
1. Preparation of the interim statements
General information
Real Good Food plc is a public limited company incorporated in England and Wales under the Companies Act (registered number 04666282). The Company is domiciled in England and Wales and its registered address is 229 Crown Street, Liverpool L8 7RF. The Company's shares are traded on the Alternative Investment Market (AIM).
The principal activities of the Group are the sourcing, manufacture, marketing and distribution of food and industrial ingredients.
The interim report will be posted on the Company's website and will be released via the Stock Exchange. Further copies of the interim report and Annual Report and Accounts may be obtained from the address above.
Basis of preparation
These condensed consolidated interim statements are compliant with the recognition and measurement principles of United Kingdom adopted International Financial Reporting Standards (IFRS) and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) but does not include all disclosures required by IAS 34. The unaudited financial information for the six months ended 30 September 2022 and 30 September 2021 are not statutory accounts and as such, have not been audited. The comparative financial information for the year ended 31 March 2022 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Accounts for 2022 have been filed with the Registrar of Companies.
Going Concern
With the radical reform project currently ongoing and the company securing additional funding of GBP2.5m form Hilco Capital to support the turnaround of the business on the 18 November 2022, the financial statements have been prepared on a going concern basis which the directors feel is appropriate.
Assets held for sale
Following the sale of the trade and assets of Real Good Food Ingredients Limited, the Group was left with an office building near Bristol, which was no longer required. The property has been advertised for sale with local estate agents since July 2018, and we hope to find a suitable buyer.
As such, the asset is classified as held for sale within the consolidated statement of financial position on 30 September 2022.
2. Segment analysis
Geographical Segments
The Group earns revenue from countries outside the United Kingdom, these represent 31.5% of the total revenue of the Group to 30 September 2022 (6 months to 30 September 2021: 34.4% and 6 months to September 2020: 25.6%).
3. Earnings per ordinary share
Basic earnings per share
Basic earnings per share is calculated based on the loss attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares in issue at the end of the period.
unaudited unaudited unaudited audited audited
6 months 6 months ended 6 months ended 12 months ended 12 months
ended ended
30 Sept 2022
30 Sept 30 Sept 31 March 2022 31 March
2021 2021 2022
Continuing Continuing Discontinued Continuing Operations Discontinued
Operations Operations Operations Operations
Loss/profit after tax
attributable to ordinary
shareholders (GBP'000s) (4,32) (8,073) (20,056) (21,362) 19,986
Weighted average number of
shares in issue for basic
EPS ('000s) 99,564 99,564 99,564 99,564 99,564
Employee share options &
Convertible loan notes
(CLNs) ('000s) 239,408 234,434 234,434 220,980 220,980
Weighted average number of
shares in issue for
diluted EPS ('000s) 338,973 333,998 333,998 320,544 320,544
Basic (loss)/profit per
share - pence (4.32)p (8.11)p 20.14p (21.46)p 20.07p
Diluted (loss)/profit per
share - pence (4.32)p (8.11)p 6.00p (21.46)p 6.23p
The total basic loss per share at 30 September 2022 was (4.32)p for continuing operations (at 30 September 202 continuing operations basic loss per share: (8.11)p).
For the six months to 30 September 2022, the weighted average number of shares in issue was 99,564,430. There were also 8,806,571 convertible loan notes outstanding, of which the weighted average was 239,408,452. Therefore, the weighted average number of dilutive potential ordinary shares is 338,972,882
Diluted earnings per share
As at Sep 2022 there were no outstanding share options available to exercise. The comparative years included share options and the diluted earnings per share above assume es that these would have been exercised . For continuing operations, the potential ordinary shares are considered anti-dilutive as they decrease the loss per share. Therefore, diluted EPS is the same as basic EPS for continuing operations. For the discontinued operations, however, the earnings per share can be diluted. In the comparative, If all the shares had been exercised before the end of the period, the loss per share would then have been (8.11)p on the continuing operations and there would have been an earnings per share of 6.00p on discontinued operations (2020: earnings of 0.73p on continuing and 0.23p on discontinued operations).
4. Dividends
The Directors are not recommending an interim dividend (2021: nil).
5. Taxation
The charge for taxation is based on the results for the period and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.
Provision is made in full for taxation deferred in respect of timing differences that have originated but not reversed by the balance sheet date, except for gains on disposal of fixed assets which will be rolled over into replacement assets. No provision is made for taxation on permanent differences. Deferred tax is not discounted.
6. Pension arrangements
The Group operates a defined contribution scheme for all employees, including provision to comply with auto-enrolment requirements laid down by law.
In addition, the Group operates a defined benefit scheme, the Napier Brown Retirement Benefits Scheme, which closed to new members in 2000. The assets of the scheme are held separately from those of the Group in an independently administered fund. Following the sale of Brighter Foods, the Group injected GBP8.5 million into the scheme to eliminate the pension scheme deficit on an ongoing funded basis at that time. Contributions in the first six months of last year were GBP249,999.
On 8 November 2022 the Company entered into a funding agreement with the Trustee and agreed to pay GBP50,000 each month with effect from 1 January 2023 to repair the pension deficit of GBP1,523,000 based on the agreed actuarial valuation as at 31 March 2021. As this agreement was not in place last year, under IFRIC14 accounting rules a liability of GBP6.0 million was recognised at 30 September 2021 being the value of contributions which were due under the old contribution schedule. As the valuation of the pension assets at 30 September 2022 exceeded the present value of liabilities at that date, an asset of GBP751,000 is on the balance sheet.
Assumptions
The assets of the scheme have been included at market value and the liabilities have been calculated using the following principal actuarial assumptions:
unaudited Unaudited audited
30 Sept 2022 30 Sept 2021 31 Mar 2022
% per annum % per annum % per annum
--------------------------------------- ------------ ------------ -----------
Rate of increase in pension payment 3.60 34 3.70
Discount rate 5.20 2.00 2.80
Inflation assumption 3.70 3.60 3.80
Revaluation rate for deferred pensions 3.20 2.90 3.30
-----------
Scheme deficit
The fair value of the assets in the scheme and the present value of the liabilities in the scheme are:
unaudited unaudited audited
30 Sept 2022 30 Sept 2021 31 Mar 2022
GBP'000s GBP'000s GBP'000s
------------------------------------ ------------ ------------ -----------
Total fair value of assets 15,482 23,388 21,426
Present value of scheme liabilities (14,731) (22,186) (19,929)
------------------------------------ ------------ ------------ -----------
Effect of IFRIC14 - (7,207) -
------------------------------------ ------------ ------------ -----------
Surplus/(Deficit) in the scheme 751 (6,005)) 1,497
------------------------------------ ------------ ------------ -----------
The scheme is a closed scheme and therefore under the projected unit method the current service cost would be expected to increase as the members of the scheme approach retirement.
The present value of contributions payable exceeds the net liability and in accordance with IFRIC14, we have recognized this additional liability.
7. Significant Items and Impairments
The Group's underlying profit figure excludes several items which are material or non-recurring and are detailed separately to ensure the underlying operating performance of the business is clearly visible, without the distortion of these costs. The significant costs incurred by the Group, are summarised below:
unaudited unaudited audited
30 Sept 2022 30 Sept 2021 31 Mar 2022
GBP000's GBP000's GBP000's
--------------------------------------------------- ------------ ------------ -----------
Professional fees in relation to Liverpool factory (41) - -
Professional fees in relation to refinancing costs - - (62)
Loss on disposal of Wavertree property (159) - (90)
Other legal Costs - (75)
Closure of Renshaw US warehouse - - (15)
Management restructuring (103) - (143)
Total significant items and impairments (303) (75) (310)
--------------------------------------------------- ------------ ------------ -----------
8. Borrowings
The table below shows the movement on the Borrowings over the past 12 months.
unaudited unaudited audited
30 Sept 2022 30 Sept 2021 31 Mar 2022
GBP000's GBP000's GBP000's
------------------------------------------- ------------ ------------ -----------
Revolving credit facility 3,243 3,100 3,267
Investor loans 7,491 7,022 7,256
Other loans - - -
Convertible loan notes 16,856 15,763 16,303
Asset finance 798 1,618 1,185
Lease liabilities (IFRS 16) 190 43 203
Government grants - - -
Total Borrowings 28,577 27,546 28,214
------------------------------------------- ------------ ------------ -----------
Amount due for settlement within 12 months 3,243 3,950 3,766
Amount due for settlement after 12 months 25,334 23,596 24,448
------------------------------------------- ------------ ------------ -----------
Convertible Loan Notes
The Company had issued loan notes with a conversion price of 5 pence to its major shareholders, NB. Ingredients Limited ("Napier Brown"), Omnicane International Investors Limited ("Omnicane") and funds managed by Downing LLP ("Downing") totalling GBP8.8 million during 2018. The loans are due to be repaid on 19 May 2024.
Investor Loans
The repayment date of the investor loans was amended on the 18 November 2022. All loans, including the Convertible Loan Notes, are now repayable in full on 19 May 2024.
9. Assets classed as held for sale
The group owns an office building near Bristol, previously used by a business sold in the year to 31 March 2019. The building has been put up for sale and is classed as held for sale within the consolidated statement of financial position as of 30 September 2022.
The property in Wavertree, Liverpool has now been sold. The asset was held within the Head office operating segment. The asset is classified as held for sale within the consolidated statement of financial position as of 30 September 2021 and 31 March 2022.
unaudited unaudited audited
30 Sept 2021 30 Sept 2021 31 Mar 2022
GBP000's GBP000's GBP000's
-------------------------------------- ------------ -------------- -------------
Property near Bristol 148 148 148
Property in Wavertree, Liverpool - 1,000 930
-
Assets held for sale 148 1,148 1,078
-------------------------------------- ------------ -------------- -------------
10. Contingent Liability
The Group carries a wide range of insurance cover, and no separate disclosure is made of the detail of claims, or the costs covered by insurance. There have been no further claims raised since the publication of the FY22 Annual Accounts.
11. Post period end
On 18 November 2022 the Company secured additional funding of GBP2.5m to support the company's programme of radical reform. The new funding is being provided by Hilco Private Capital for a term of twelve months and supplements the existing GBP6.3m facility with Leumi ABL.
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END
IR FLFERFELELIF
(END) Dow Jones Newswires
December 16, 2022 02:00 ET (07:00 GMT)
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