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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ukrproduct Group Limited | LSE:UKR | London | Ordinary Share | GB00B03HK741 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.00 | 2.00 | 4.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Dry,condensd,evap Dairy Pds | 39.11M | -804k | -0.0203 | -1.48 | 1.19M |
From Apr 2019 to Apr 2024
TIDMUKR
RNS Number : 8117S
Ukrproduct Group Ltd
27 June 2018
27 June 2018
UKRPRODUCT GROUP LIMITED
("Ukrproduct", the "Company" or, together with its subsidiaries, the "Group")
FINAL RESULTS
ANNUAL REPORT FOR THE YEARED 31 DECEMBER 2017
NOTICE OF AGM
Ukrproduct Group Limited (AIM: UKR), one of the leading Ukrainian producers and distributors of branded dairy foods and beverages (kvass) today announces its audited results for the year ended 31 December 2017.
Copies of the Group's annual report and accounts, incorporating the 2017 Audited Financial Statements, have today been posted to shareholders and will be available on the Company's website at www.ukrproduct.com. Copies will also be available from the Company's head office, 10th Floor, 39-14 Shota Rustaveli St., Kiev 01033, Ukraine.
The Board of Ukrproduct is also pleased to announce that the Notice of Annual General Meeting ("AGM"), along with a Proxy Form, has also been posted to shareholders.
The AGM will be held at the head office of the Company, 10th Floor, 39-41 Shota Rustaveli Street, 01033 Kyiv, Ukraine at 6 pm (Kyiv time) on Thursday, 3 August 2018. Copies of the Notice of AGM and Proxy Form will be available for download on the Company's website at www.ukrproduct.com, as well as by request at the following address: Bedell Secretaries Limited, Secretary, 26 New Street St. Helier, Jersey JE2 3RA Channel Islands.
For further information contact:
Ukrproduct Group Ltd Jack Rowell, Non-Executive Chairman Tel: +380 44 232 9602 Alexander Slipchuk, Chief Executive Officer www.ukrproduct.com Strand Hanson Limited Nominated Adviser and Broker Tel: +44 20 7409 3494 Rory Murphy, James Dance, Jack Botros www.strandhanson.co.uk
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Ukrproduct Group Ltd is one of the leading Ukrainian producers and distributors of branded dairy products and kvass, a traditional fermented beverage. The Group's current product portfolio includes processed and hard cheese, packaged butter, skimmed milk powder (SMP) and kvass. Ukrproduct has built a range of recognisable product brands ("Our Dairyman", "People's Product", "Creamy Valley", "Molendam", "Farmer's") that are well known and highly regarded by consumers. Ukrproduct's securities are traded under the symbol "UKR" on AIM, a market operated by the London Stock Exchange.
Chairman and Chief Executive's Statement
Trading
During the year ended 31 December 2017 ("FY2017"), the Ukrainian economy showed encouraging growth in GDP, with increased wages leading to an improvement in consumer confidence. As a result, whilst the operating environment remains competitive, the Group's trading conditions have improved domestically. In addition, the weakening of the hryvna has provided the Group with additional business development opportunities in its export markets. Ukrproduct's strategy has been to continue to focus on cash generation, ensure that its product offerings and service levels remain competitive, exploit export opportunities and to seek further cost efficiencies.
For FY2017 the Group reports improved revenue of UAH 1.0 billion (approximately GBP30.5 million) as well as a stronger gross margin, with the Group increasing sales of branded products in its key segments of packaged butter and processed cheese. The Group has also pursued several export opportunities resulting in the doubling of export revenues in FY2017, primarily as a result of increased sales in packaged butter. Private label sales were lower in FY2017 as the Company pursued stronger margin revenue streams. The Group also reports increased kvass beverage sales as new products were introduced to the market in FY2017.
Growth in sales of butter led to more skimmed milk powder being produced as a related product. Whilst the sale of skimmed milk powder itself is lossmaking due to the global market price imposed, the overall milk processing business is profitable.
Ukrproduct's spray drying facility at its Starokonstantyniv plant, which produces powdered milk, afforded the opportunity to enhance profits, by providing a service for drying milk requested by other manufacturers of dairy products, thereby enhancing the Group's profits.
As a result, the Group reports an operating profit of UAH 16.2 million (approximately GBP0.5 million) in FY2017, compared with an operating loss of UAH 7.4 million (approximately GBP0.2 million) for the full year ended 31 December 2016 ("FY2016"). The operating profit for FY2017 included lower finance charges related to the outstanding debt with EBRD.
Following the Group's increase in gross profit, the Group recorded an improved EBITDA margin of 3.5%, however, an overall loss GBP1.1 million for the year is recorded, due to the negative impact of exchange rate differences.
Financial Position
As at 31 December 2017, the Group reports total liabilities of UAH 428.0 million (approximately GBP11.3 million), with cash balances of UAH 18.7 million (approximately GBP0.5 million). However, post year end, the Group's financial position was improved following the UAH 65.0 million (approximately GBP1.7 million) new loan agreement with PJSC Creditwest Bank ("Creditwest") and the subsequent repayment, in full, of the OTP Bank Loan, and, in March 2018 and June 2018, Ukrproduct made scheduled repayments of EUR177,175 and EUR176,529 to EBRD respectively.
Outlook
Ukrproduct will continue to work to enhance its operating profitability and cash flow generation and continue to seek to improve its competitive position in the markets in which it operates. The year 2018 is showing a continued improvement in financial performance.
Hot Features
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Ukrproduct Group
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2017
(in thousand GBP, unless otherwise stated)
=========================================================================
year year ended
ended
31 31 December
December 2016
2017
GBP '000 GBP '000
---------- ------------
Revenue 30 525 20 190
Cost of sales (27 267) (18 071)
---------- ------------
GROSS PROFIT 3 258 2 119
Administrative expenses (1 031) (930)
Selling and distribution expenses (1 561) (1 367)
Other operating expenses (156) (17)
---------- ------------
PROFIT/(LOSS) FROM OPERATIONS 510 (195)
Net finance expenses (437) (623)
Foreign exchange loss, net (1 250) (743)
---------- ------------
LOSS BEFORE TAXATION (1 177) (1 561)
Income tax expenses 62 77
========== ============
LOSS FOR THE YEAR (1 115) (1 484)
Attributable to:
Owners of the Parent (1 115) (1 484)
Non-controlling interests - -
Earnings per share (p):
Basic (2,81) (3,74)
Diluted (2,81) (3,74)
OTHER COMPREHENSIVE INCOME:
Items that may be subsequently reclassified
to profit or loss
Currency translation differences (113) 513
---------- ------------
Items that will not be reclassified to
profit or loss
Gain on revaluation of property, plant and
equipment - -
Income tax in respect of revaluation
reserve - -
OTHER COMPREHENSIVE INCOME, NET OF TAX (113) 513
---------- ------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1 228) (971)
========== ============
Attributable to:
Owners of the Parent (1 228) (971)
Non-controlling interests - -
Ukrproduct Group
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 December 2017
(in thousand GBP, unless otherwise stated)
=============================================================================================================
As at As at
31 December 2017 31 December 2016
GBP '000 GBP '000
----------------------------- -----------------------------
ASSETS
Non-current assets
Property, plant and equipment 6 288 7 511
Intangible assets 543 656
Deferred tax assets - -
6 831 8 167
----------------------------- -----------------------------
Current assets
Inventories 2 426 1 855
Trade and other receivables 2 171 2 507
Current taxes 271 230
Other financial assets 30 18
Cash and cash equivalents 496 175
5 394 4 785
----------------------------- -----------------------------
TOTAL ASSETS 12 225 12 952
============================= =============================
EQUITY AND LIABILITIES
Equity attributable to owners of
the parent
Share capital 3 967 3 967
Share premium 4 562 4 562
Translation reserve (14 894) (14 781)
Revaluation reserve 3 769 3 935
Retained earnings 3 478 4 427
882 2110
Non-controlling interests - -
TOTAL EQUITY 882 2110
----------------------------- -----------------------------
Non-Current Liabilities
Bank loans 5 716 -
Long-term payables 459 441
Deferred tax liabilities 262 363
6 437 804
----------------------------- -----------------------------
Current liabilities
Bank loans 1 318 7 162
Trade and other payables 3 565 2 854
Current income tax liabilities - 10
Other taxes payable 23 12
4 906 10 038
----------------------------- -----------------------------
TOTAL LIABILITIES 11 343 10 842
----------------------------- -----------------------------
TOTAL EQUITY AND LIABILITIES 12 225 12 952
============================= =============================
Ukrproduct Group
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 December 2017
(in thousand GBP, unless otherwise stated)
========================================================================================== ========= ===========================
Attributable to owners of the parent Non-controlling Total
interests Equity
Share Share Revaluation Retained Translation Total
capital premium reserve earnings reserve
GBP GBP GBP '000 GBP '000 GBP '001 GBP '000 GBP '000 GBP '000
'000 '000
-------- -------- ------------ --------- ------------ --------- ---------------- ---------
As At 1 January 2016 3 967 4 562 4 192 5 654 (15 294) 3 081 - 3 081
-------- -------- ------------ --------- ------------ --------- ---------------- ---------
Loss for the year - - - (1 484) - (1 484) - (1 484)
Other comprehensive income
Gain on revaluation of - - - - - - -
property, plant and equipment
Currency translation
differences - - - - 513 513 - 513
-------- -------- ------------ --------- ------------ --------- ---------------- ---------
Total comprehensive income - - - (1 484) 513 (971) - (971)
======== ======== ============ ========= ============ ========= ================ =========
Depreciation on revaluation
of property, plant and
equipment - - (248) 248 - - - -
Reduction of revaluation
reserve - - (9) 9 - - - -
As At 31 December 2016 3 967 4 562 3 935 4 427 (14 781) 2 110 - 2 110
======== ======== ============ ========= ============ ========= ================ =========
Loss for the year - - - (1 115) - (1 115) - (1 115)
Other comprehensive income
Currency translation
differences - - - (113) (113) - (113)
Total comprehensive income - - - (1 115) (113) (1 228) - (1 228)
======== ======== ============ ========= ============ ========= ================ =========
Depreciation on revaluation
of property, plant and
equipment - - (166) 166 - - - -
As At 31 December 2017 3 967 4 562 3 769 3 478 (14 894) 882 - 882
======== ======== ============ ========= ============ ========= ================ =========
Ukrproduct Group
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 31 December 2017
(in thousand GBP, unless otherwise stated)
====================================================================================================================
year ended year ended
31 December 2017 31 December 2016
GBP '000 GBP '000
------------------------------ ------------------------------
Cash flows from operating activities
Loss before taxation (1 177) (1 561)
Adjustments for:
Exchange difference 1 250 743
Depreciation and amortisation 553 589
Loss/(Profit) on disposal of non-current
assets 8 25
Write off of receivables/payables (5) 32
Impairment of inventories 82 120
Loss from disposal of subsidiaries (3)
Interest income - (1)
Interest expense on bank loans 437 624
------------------------------ ------------------------------
Operation cash flow before working
capital changes 1 148 568
(Increase) in inventories (653) (472)
(Increase) / decrease in trade and other
receivables 298 (933)
Increase / (decrease) in trade and other
payables 473 1 122
------------------------------ ------------------------------
Changes in working capital 118 (283)
Cash generated from operations 1 266 285
Interest received 1 1
Income tax paid (31) (32)
------------------------------ ------------------------------
Net cash generated by / (used in)
operating activities 1 236 254
Cash flows from investing activities
Purchases of property, plant and
equipment and intangible assets (93) (217)
Proceeds from sale of property, plant and
equipment 1 17
Repayments of loans issued (15) (11)
------------------------------ ------------------------------
Net cash used in investing activities (107) (211)
Cash flows from financing activities
Interest paid (378) (372)
(Decrease) / increase in short term
borrowing - (63)
Repayments of long term borrowing (259) -
Net cash generated by financing
activities (637) (435)
------------------------------ ------------------------------
Net decrease in cash and cash equivalents 492 (392)
Effect of exchange rate changes on cash
and cash equivalents (171) 474
Cash and cash equivalents at the
beginning of the year 175 93
Cash and cash equivalents at the end of
the year 496 175
These consolidated financial statements were approved and authorised for issue by the Board of Directors on 27 June 2018 and were signed on its behalf by Alexander Slipchuk.
Nature of Financial Information
The financial information contained in this announcement does not constitute statutory accounts as defined under section 113 of the Companies (Jersey) Law 1991 but has been extracted from the Group's 2017 statutory financial statements. The auditors have reported on the 2017 financial statements: their report was unqualified but did contain a paragraph that highlighted a material uncertainty related to going concern and non-observance of the terms of the loan agreement with the European Bank of Reconstruction and Development (EBRD). It contained no statement under section 113B of the Companies (Jersey) Law 2011. The financial statements for 2017 will be delivered to the Registrar of Companies after adoption at the Company's Annual General Meeting.
EXTRACTS FROM NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated financial statements have been prepared on a historical cost basis, except for property, plant and equipment which have been measured at fair value. The consolidated financial statements are presented in British Pounds Sterling (GBP) and all values are rounded to the nearest thousand (GBP000) except where otherwise indicated.
2. Going concern
These consolidated financial statements have been prepared on the assumption that the Group is able to continue its operations on an going concern basis in the near future.
For the year that ended on 31 December 2017, the cumulative losses amounted to GBP1.115 million (GBP1.484 million - For the year that ended on 31 December 2016). Although as at 31 December 2017 the Group increased its cash flow from operations and met all European Bank for Reconstruction and Development ("EBRD") covenants but one, overall it has continued to breach the EBRD covenant requirements of the loan with that indicates a significant uncertainty with regard to the Group to continue its operations on a going concern basis.
According to Management, the assumption of the Group's ability to continue its operations on going concern basis is sustainable, as:
1. The Group received waivers from EBRD - in respect of the annual financial statements for 2017 and the first quarter of 2018;
2. The Group continues to repay a loan to EBRD according to the agreement and timely settled the last two tranches after the reporting date;
3. The Company increased its cash flow from operations;
4. During 2017, the Group kept prolonging the loan agreements with OTP Bank. In December 2017, the Group received an offer of for 65.0 million UAH (GBP1.723 million) from Creditwest Bank Ukraine to allow both the refinancing of its loan with OTP and increase of its working capital. In February 2018, the Group met all requirements of Creditwest Bank Ukraine, signed a loan agreement and refinanced its loan with OTP moving its entire working capital facility to Creditwest Bank Ukraine.
The Group's current strategy is to further expand its export sales worldwide with a focus on Asia and Africa. CIS markets also remain strategically important for the Group not least Kazakhstan where to the Company increased its export volumes. Ukrproduct is also looking to expand domestic sales in Ukraine driven in part by the introduction of new products and rebranding. The Group continues to boost its dairy processing volumes via close cooperation with local farmers and cooperatives, thereby increasing its capacity utilization.
3. Bank Loans and Overdrafts
As at 31 December 2017 the Group has two loans: a loan from OTP Bank in the amount of 856 thousand GBP (in UAH 32,3 million) and EBRD in the amount of 6,178 thousand GBP (in EUR 6,959 thousand).
During 2017, the Group fulfilled its obligations under the EBRD loan in accordance with the agreement. The Group applied instalments of payments and in accordance with an agreement between all parties; the payment of the tranche in December was postponed to subsequent periods.
Fixed assets with a net book value of GBP 4,829 thousand at 31 December 2017 (2016: GBP 5,366 thousand) were pledged as collateral for both loans:
- assets pledged as security for the EBRD loan include property and land in Starokonstantinov, equipment for dairy production and production of hard cheese, as well as TMs. Fixed assets pledged as security total 3,403 thousand GBP. The intangible assets pledged total 213 thousand GBP;
- assets pledged as security for the for the OTP loan include property and land in Zhitomir and in Krasiliv, together with equipment for the production of processed cheese, and the Company's vehicles. Fixed assets pledged as security total 1,426 thousand GBP. Also, inventories with a net book value of GBP 318 thousand at 31 December 2017 (2016: GBP 360 thousand) were pledged as collateral for the OTP loan.
During 2017, the Group prolonged agreement with OTP Bank three times. The last tranche extension with OTP related to the 6 March 2018 loan repayment. In December, the Group received confirmation of expansion of crediting with Creditwest Bank Ukraine for the amount of 65 million UAH. Funds received would be used to settle the outstanding balance with OTP and to open additional budgeting backed by Zhiviy Kvass equipment. The loan term is 3 years, the interest rate - 18%.
In 2018, the Group fulfilled conditions of the Creditwest Bank Ukraine and in February 2018 the first Tranche from Creditwest Bank Ukraine was received and repayment of the loan balance with OTP Bank was carried out. With the refinancing of OTP Bank the pledge was transferred to Creditwest Bank Ukraine. Non-current assets located in Zhytomyr and transport were pledged as collateral for Creditwest Bank Ukraine. Also, to extend the credit line, the Company has provided equipment for production of Zhiviy Kvass.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR SELFIWFASEDM
(END) Dow Jones Newswires
June 27, 2018 12:00 ET (16:00 GMT)
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