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Share Name Share Symbol Market Type Share ISIN Share Description
Volvere Plc LSE:VLE London Ordinary Share GB0032302688 ORD 0.00001P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 1,490.00 1,450.00 1,530.00 1,490.00 1,490.00 1,490.00 7 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 18.6 -2.4 590.1 2.5 27

Volvere PLC Final Results

29/05/2020 7:00am

UK Regulatory (RNS & others)


Volvere (LSE:VLE)
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TIDMVLE

RNS Number : 2864O

Volvere PLC

29 May 2020

Volvere plc

("Volvere" or the "Company" and, together with its subsidiaries, the "Group")

Final results for the year ended 31 December 2019

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its final results for the year ended 31 December 2019.

Highlights

 
 GBP million except where stated 
                                                                                    Six months 
                                                         Year ended                      ended 
                                                                  31 December          30 June 
                                               31 December               2018      (unaudited) 
                                                      2019      (as restated)             2019 
 
   Group revenue                                     23.04              18.34            10.10 
 
   Group profit/(loss) before tax                     0.14             (2.49)           (0.62) 
   from continuing operations 
 
   Group profit for the period (including             3.18              21.10             2.45 
   discontinued operations) 
 
 
                                                                                         As at 
                                                  As at 31           As at 31     30 June 2019 
                                                  December      December 2018      (unaudited) 
                                                      2019 
 
 Consolidated net assets per share 
  (excluding non-controlling interests)(1)        GBP13.85           GBP12.50         GBP13.56 
 
 Group net assets                                    26.99              40.42            26.36 
 
 Cash and marketable securities                      19.32              34.14            19.65 
 
 

-- Good performance from Shire Foods, the Group's food manufacturing business, which achieved revenue and profit before tax and intra-group management and interest charges(2) of GBP23.04 million (2018: GBP18.34 million) and GBP1.38 million (2018: GBP0.85 million) respectively. Profit before tax for the year was GBP1.18 million (2018: GBP0.65 million).

   --      Positive exit with the disposal of Sira Defence & Security for GBP3 million. 
   --      Share buy-backs undertaken in 2019 returned a total of GBP16.6 million to shareholders. 
   --      Record net assets per share(1) of GBP13.85. 

Forward-looking statements:

This report may contain certain statements about the future outlook for Volvere plc. Although the Directors believe their expectations are based on reasonable assumptions, any statements about future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

Note

1 Based on the net assets attributable to owners of the parent company and the respective period end shares in issue of 1,834,182, 3,118,109 and 1,834,182.

2 Profit before intra-group management and interest charges is considered to be a relevant and useful interpretation of the trading results of the business such that its performance can be understood on a basis which is independent of its ownership by the Group. Further information is included in the Chief Executive's statement and Financial review.

For further information:

 
 Volvere plc 
 Jonathan Lander, CEO           Tel: +44 (0) 20 7634 9707 
                                www.volvere.co.uk 
 Cairn Financial Advisers LLP 
  Sandy Jamieson/James Lewis      Tel: + 44 (0) 20 7213 0880 
 

Hobart Capital Markets LLP

Lee Richardson Tel: +44 (0) 20 7070 5691

Chairman's statement

I am pleased to report on the results for the year ended 31 December 2019.

The Group's performance in 2019 was once again pleasing, with a good trading performance from Shire Foods and a disposal in May 2019 of Sira Defence & Security for GBP3 million. Following the share buy-backs totalling GBP16.6 million in 2019, the Group's net assets per share* increased to GBP13.85 (2018: GBP12.50).

David Buchler

Chairman

28 May 2020

*Net assets attributable to owners of the parent company divided by total number of ordinary shares outstanding at the reporting date (less those held in treasury), see note 19.

Chief Executive's statement

Introduction

The results of 2019 reflect the trading performance of Shire Foods Limited ("Shire") and the gain on the disposal of Sira Defence & Security Limited ("Sira"), which was sold in May 2019. I was once again pleased with Shire's performance for the year and delighted with the positive exit from Sira. I wish the Sira team well in their new home and thank them for their contribution to the Group.

Principal activities

The Company is a holding company that identifies and invests in undervalued and/or distressed businesses and securities as well as businesses that are complementary to existing Group companies. The Company provides management services to those businesses.

The trading subsidiaries' activities during the year were food manufacturing and security software solutions. In light of the disposal of Sira, which formed the security software solutions segment, that company's activities have been classified as discontinued. The financial performance of the remaining segments is summarised below and set out in more detail in the financial review, as well as note 5 to the consolidated financial statements .

The Group acquired the business and certain assets of Indulgence Patisserie Limited ("Indulgence") in February 2020. Indulgence manufactures premium frozen desserts and cakes for the retail and foodservice markets.

Operating review

Food manufacturing

Shire, in which the Group has an 80% stake, was acquired in 2011. The company manufactures frozen pies, pasties and other pastry products for food retailers and foodservice customers.

Revenues grew by approximately 26% to GBP23.04 million (2018: GBP18.34 million) and the company achieved a profit before tax, intra-group interest and management charges of approximately GBP1.38 million (2018: GBP0.85 million). Profit before tax was GBP1.18 million (2018: GBP0.65 million) - with the difference being intra-group interest and management charges. Further commentary on the financial performance is set out in the financial review.

I am pleased with the growth achieved in 2019, which came principally from a deepening of relationships with existing customers, resulting in wider distribution and broader product ranges. Particularly encouraging was the growth in vegan product lines, where we believe we have developed flavours and textures that appeal to a wide consumer audience. Our new product development strategy with respect to vegan products is to make them appealing not only to vegans, but to address the much larger opportunity represented by those consumers wishing to consume less meat.

More generally, our strategy in relation to Shire is continuing to pay dividends - and it did in fact pay a dividend in the period for the first time since we invested of GBP0.5 million, of which the Group retained GBP0.4 million. We strive to provide our customers with the best tasting products in their category and to innovate constantly. We employ people that "go the extra mile" and believe that our flat structure, open communication and direct approach makes Shire a partner supplier of choice. We appreciate that without the loyalty of our customers and staff Shire would not have achieved the success, nor have been able to extend and grow its manufacturing capabilities, in the way that it has. I am very grateful to everyone at Shire for their efforts and to our customers for their support.

We know, however, that we need to remain efficient and productive and are investing further in site capacity in 2020 with a further GBP0.4 million committed to installation of an additional manufacturing line.

The impact of the COVID-19 pandemic is explained below.

Further information about Shire can be found at www.shirefoods.com .

As reported previously, the Group acquired Indulgence in February 2020. Indulgence manufactures a range of premium sweet dessert products for both the retail and foodservice markets. We have been working to integrate that business, streamline its operations and to improve its performance. The impact of COVID-19 pandemic is explained below.

COVID - 19

The Group's trading businesses are both food manufacturers and, as a result, have an important part to play during the current COVID-19 pandemic.

In the first quarter of 2020 there has been an uplift in sales made to our retail customers when compared with the comparable period of 2019. However, it is too early to say whether this will be sustained and ultimately translate into higher sales for the Group for the year overall. In both Shire and Indulgence there are foodservice customers from whom we have seen a downturn in orders.

In the case of Shire, foodservice represented about 12.5% of sales in 2019. We have some reducing debt and stock exposure to those customers but at this time we expect that, once the pandemic restrictions are eased, normal trading will resume over time.

In Indulgence, foodservice previously represented a larger part of sales, but as we are actively rebuilding that business, historical sales are less important. More generally, since the acquisition date, we have been working to improve customer and supplier relationships, increasing teamwork and investing in new systems - and whilst we have been encouraged on a number of fronts, there is still work to be done in making the business more efficient and reducing costs.

Throughout the COVID-19 period to date we have not seen material staff absences from illness and at both companies we have put in place mitigating measures to try to reduce the risk of internal contagion. Whilst those measures are modestly affecting our short-term capacity and resulting in increased labour costs, we are still achieving an encouraging level of output and, for the most part, meeting customer demand. Our staff's welfare is a continual focus.

Irrespective of the current pandemic, the Group is in a strong financial position, with significant cash resources.

Investing and management services

The Group's investing and management services segment comprises central overheads, partially offset by management and interest charges to Group companies and returns from treasury management activities on current asset investments.

Future strategy

We are already seeing increased levels of distressed deal flow due to the COVID-19 pandemic. The length of the economic effects is uncertain, but I fear it is likely to extend well into 2021 and possibly beyond. The anticipated reductions in financial support from state schemes will probably trigger more hardship for individuals and companies.

We will do what we can to rescue those businesses which we believe viable, in all sectors and geographies, in accordance with our investment mandate, but with added focus on building a larger group of food businesses, leveraging our competencies in this area.

Jonathan Lander

Chief Executive

28 May 2020

Financial performance

Detailed information about the Group's segments is set out in note 5 to the consolidated financial statements which should be read in conjunction with this financial review and the Chairman's and Chief Executive's statements.

Overview

The Group's disposal in May 2019 of Sira has resulted in that business's results being treated as discontinued operations and the comparative results for 2018 have been restated accordingly. Group revenue from continuing operations increased by approximately 26% to GBP23.04 million (re-presented 2018: GBP18.34 million), all of which arose in Shire.

The overall profit before tax for the year was GBP3.2 million, including the profit arising from discontinued operations of GBP3.1 million (re-presented 2018: GBP23.2 million). The profit before tax on continuing operations was GBP0.1 million (re-presented 2018: loss GBP2.5 million), which was a small improvement over the underlying result for 2018 (since the loss for that year was stated after incentive payments of approximately GBP2.5 million relating to a further discontinued business sold in 2018).

The trading performance of each of our businesses is outlined in the Chief Executive's statement and set out further in note 5 to the consolidated financial statements and below.

Food manufacturing

This segment reflects the trading of Shire Foods, owned since July 2011.

Shire's revenue increased to GBP23.04 million from GBP18.34 million in 2018 and profit before tax and intra-group management and interest charges increased to GBP1.38 million (2018: GBP0.85 million). Profit before tax for the year was GBP1.18 million (2018: GBP0.65 million) - with the difference being intra-group interest and management charges.

The overall materials margin in Shire increased slightly compared to 2018, principally due to price rises agreed with customers that took effect during the year along with an improved product mix towards vegan products. The effect of these was partially offset by the increase in the National Living Wage and employer pension contributions. In addition to further increases in these in 2020, we also expect to see increasing distribution costs.

Shire had no Group debt outstanding at the start or end of the year but did borrow GBP0.2m for a short period during 2019 (2018: GBPnil) to meet working capital requirements. Group management charges totalled GBP0.2 million in the period (2018: GBP0.2 million). During 2019 Shire invested GBP1.8 million in new plant and equipment (of which GBP1.1 million was funded by external debt). The company paid a dividend of GBP0.5 million, of which GBP0.1 million was paid to third party shareholders.

The 5-year financial performance of Shire is summarised in the table below:

 
                           Year ended 31           Year ended 31     Year ended 31     Year ended 31     Year ended 31 
                                December                December          December          December          December 
                                    2019                    2018              2017              2016              2015 
                                 GBP'000                 GBP'000           GBP'000           GBP'000           GBP'000 
 
 Revenue                          23,036                  18,344            15,869            15,190            15,476 
 
 Underlying 
  profit before 
  tax, 
  intra-group 
  management and 
  interest 
  charges                          1,384                     854               635             1,149             1,588 
 
   Intra-group 
   management 
   and interest 
   charges                         (200)                   (200)             (200)             (240)             (423) 
                                ________                ________          ________          ________          ________ 
 
   Profit before 
   tax                             1,184                     654               435               909             1,165 
 
 

Investment revenues, other gains and losses and finance income and expense

Whilst continuing to review and assess further investments in trading activities, the Group had significant cash on hand. This was held on deposit at a UK bank but prevailing low interest rates meant very low investment revenues (GBPnil) were achieved (2018: GBP0.12 million). In the previous year, active treasury management resulted in other gains of GBP0.37 million (2019: nil).

The Group's net finance income was GBP0.06 million (2018: GBP0.06 million). Despite the Group's significant cash balances, individual Group trading companies utilise leverage where appropriate, and without recourse to the remainder of the Group.

Profit from discontinued business

The Group sold Sira in May 2019 for a total consideration of GBP3 million. The gain on sale arising, before management and staff incentives associated with the disposal (which are included in continuing business overheads), was GBP3.08 million. Of the sale proceeds, GBP0.24 million is held in escrow, as is customary in such transactions, for a period of 18 months from the date of sale.

Statement of financial position

Overall position

Group net assets were GBP27.0 million at the year end (2018: GBP40.4 million). The decrease year-on-year was due principally to treasury share purchases, as explained further below.

Cash and current investments

Year-end cash totalled GBP19.3 million (2018: GBP34.1 million).

The principal movements in the cash during the year arose from the disposal of Sira, offset by purchases of the Group's own shares. The final consideration receivable by the Group on the sale of Sira was GBP3 million (GBP0.24m of which is in escrow, as explained above). The share purchases resulted in outflows of GBP16.6 million, bringing share purchases to date to approximately GBP32 million.

Dividends

In accordance with the policy set out at the time of admission to AIM, the Board is not recommending the payment of a dividend at this time and prefers to retain such profits as they arise for investment in future opportunities, or to purchase its own shares for treasury where that is considered to be in the best interests of shareholders. As noted above, Shire paid a dividend of which third party shareholders received GBP0.1 million.

Purchase of own shares

During the year the Company purchased 1,283,927 (2018: 550,254) of its own shares, which are held in treasury, at a cost of GBP16.6 million (2018: GBP6.1 million).

Earnings per share

Basic and diluted loss per ordinary share from continuing operations was (5.7)p (2018: (63.3)p). The basic and diluted profit per ordinary share from discontinued operations was 127.9p (2018: 649.5p). Total basic and diluted earnings per ordinary share were 122.2p (2018: 586.2p).

Investing strategy

The Company's investing strategy is to invest in, or acquire: quoted companies where, in the Directors' opinion, the market capitalisation does not reflect the value of the assets; any company that is in distress but offers the possibility of a turnaround; and any company that fits strategically with an existing portfolio investment.

The Company may also invest in quoted or unquoted start-up, early or development-stage companies in sectors where the Directors have experience of investing or where they have identified management teams with experience in those areas.

The Company may invest in any company (or similar structure) or third-party fund on a short or long-term basis, where the Directors have experience of investing, especially where such investment is similar or complementary to an existing or past investment of the Company.

The Company may also create and invest in fund vehicles owned, managed or controlled by the Company, including where there is the possibility of raising third party investment; and invest in third party funds where the investment strategy of those funds is in the Directors' opinion similar to that of the Company, and specifically including funds that invest in distressed debt and equity, or that invest in derivative securities of distressed debt or equity.

The Company has a preference for active rather than passive investing and for holding a small number of investments, including a single investment, and does not necessarily seek to diversify risk across a wide range of investments, unless this can be achieved without affecting the Company's active investment style. The Company's preference is to make investments in the UK and Continental Europe.

Where the Company makes a direct investment, investment decisions will be made by the Directors, who collectively have many years of experience in selecting and managing investments. Investments made by fund vehicles, if owned, managed or controlled by the Company, will be made by the executives of the investment manager of the fund vehicle, which will include representatives of the Board. Investments made by fund vehicles owned, managed or controlled by third parties, will normally be made by the fund investment manager which may or may not include the involvement of Company executives.

Screening and due diligence of potential investments (including any initial investment in a fund vehicle) will be carried out by the executive management of the Company. Any decision on whether to proceed will be made by the unanimous decision of the Board.

Outside consultants and professional advisers will be used where appropriate but the Company will endeavour to keep this to a minimum in order to control expenses.

The Board seeks shareholder approval for the investing strategy on an annual basis. The Directors expect to be able to find suitable investment or acquisition candidates within the next 12 months, however there is no time limit and if no suitable acquisition or investment has been identified before the Company's next annual general meeting, the Directors may review the Company's investing strategy at that time.

Key performance indicators (KPIs)

The Group uses key performance indicators suitable for the nature and size of the Group's businesses. The key financial performance indicators are revenue and profit before tax. The performance of the Group and the individual trading businesses against these KPIs is outlined above, in the Chief Executive's statement and disclosed in note 5 to the consolidated financial statements.

Internally, management uses a variety of non-financial KPIs as follows: in respect of the food manufacturing sector order intake, manufacturing output and sales are monitored weekly and reported monthly and order intake is monitored monthly in respect of the security solutions segment.

Principal risk factors

The Company and Group face a number of specific business risks that could affect the Company's or Group's success. The Company and Group invests in distressed businesses and securities, which by their nature often carry a higher degree of risk than those that are not distressed. The Group's businesses are principally engaged in the provision of goods and services that are dependent on the continued employment of the Group's employees and availability of suitable, profitable workload. In the food manufacturing segment, there is a dependency on a small number of customers and a reduction in the volume or range of products supplied to those customers or the loss of any one of them could impact the Group materially. The current COVID-19 pandemic could impact on the Group's employees, customers, suppliers and financial position but has not had a material effect to date.

These risks are managed by the Board in conjunction with the management of the Group's businesses.

More information on the Group's financial risks is disclosed in note 16 to the consolidated financial statements.

Statement by the Directors relating to their statutory duties under s172(1) Companies Act 2006

The Board of Directors considers, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of the members as a whole (having regard to the stakeholders and the matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 December 2019.

The Company is a holding company for which the investing strategy is approved by members annually at the Company's Annual General Meeting. The Company's success in following this investing strategy is measurable ultimately in terms of the value arising - both from operating results and upon any final exit - from the investments undertaken.

There is an inherent and probable interdependency between the Company's success and the success of its underlying investments. Those investments are monitored by the Board on a regular basis and the success of those investments is key to the success of the Company over time. However, it is possible that actions taken, or not taken, from time to time by the Board in relation to the underlying investments could be perceived as, or be, in conflict with stakeholder interests within those investments themselves.

Notwithstanding this:

-- The Board assesses risk in the application of capital when making investment decisions both at the time of initial investment and subsequently thereafter. The long-term potential outcome of an investment opportunity is inherently uncertain, but the Board seeks to minimise downside risk and achieve investment success.

-- The Company and its subsidiaries are dependent upon the loyalty and hard work of their employees and seeks to reward those employees fairly whilst creating an environment that is both safe, secure and rewarding with responsive and trusted leadership.

-- The Company's subsidiaries are encouraged to maintain regular and honest contact with customers and suppliers, to understand their needs and to build a partnering approach to business generally for the long term.

-- The Company's subsidiaries consider the impact of their operations on their local communities with charitable activities encouraged and supported.

-- The Company and its subsidiaries consider the impact of their operations on the environment, with travel minimised and recyclable packaging materials employed where possible.

-- The Board's intention, for itself and for its subsidiaries, is to operate responsibly within a governance culture and framework that is appropriate to nature and size.

-- The Board, through its Annual General Meeting and ad hoc Stock Market announcements, communicates with members fairly and equally by providing clear and informative information about the Company's business and its investments.

Nick Lander

Chief Financial & Operating Officer

28 May 2020

Corporate governance report

All members of the Board believe in the value and importance of good corporate governance and in our accountability to all the Group's stakeholders, including shareholders, staff, clients and suppliers. In the statement below, we explain our approach to governance, and how the Board and its committees operate.

The corporate governance framework which the Group operates, including Board leadership and effectiveness, Board remuneration, and internal control is based upon practices which the Board believes are proportionate to the size, risks, complexity and operations of the business and is reflective of the Group's values. We have partially adopted and partially comply with the Quoted Companies Alliance's ("QCA") Corporate Governance Code for small and mid-size quoted companies (revised in April 2018 to meet the requirements of AIM Rule 26).

The QCA Code is constructed around ten broad principles and a set of disclosures. We have considered how we apply each principle to the extent that the Board judges these to be appropriate in the circumstances, and below we provide an explanation of the approach taken in relation to each. Except as set out below, the Board considers that it does not depart from any of the principles of the QCA Code. The information below was last updated on 11 May 2020.

The following paragraphs set out the Group's compliance (or otherwise) with the ten principles of the QCA Code.

   1.   Establish a strategy and business model which promote long-term value for shareholders 

Explanation

The Company's strategy is to identify and invest in undervalued and/or distressed businesses and securities as well as businesses that are complementary to existing Group companies. The Company provides management services to those businesses.

Since 2002 the Company's shares have been traded on the Alternative Investment Market ("AIM") of the London Stock Exchange (ticker VLE).

In order to execute the Company's strategy successfully, the following key issues are addressed:

Investment Identification - the Company's executive directors are responsible for identifying potential investments. This is done through maintaining relationships with intermediaries and through personal networks.

Investment Assessment - the Company's executive directors are responsible for assessing potential investments as a basis for delivering long-term shareholder value. This is done principally by undertaking due diligence on such investments, such work being done largely by the executive directors themselves. Where considered necessary, cost-effective and practicable, external advisers may be used.

Investment Structuring - the Company's executive directors are responsible for determining the initial investment structure relating to potential investments. Investments have individual management teams and risk and reward profiles and the Company puts in place an investment structure that seeks to balance the risks and potential rewards for all such stakeholders.

Investment Performance Improvement - the Company's executive directors are responsible for implementing a strategy that improves the performance of investments (where such investments are not simply held for treasury purposes). This will typically involve board leadership and an appropriate level of operational involvement to ensure that financial and operational risks are minimised through increased profitability and cash generation. This is typically done by improving customer service and quality, clearer financial reporting and control, increasing management responsibility and target setting.

Investment Exit - the Board is responsible for assessing the optimum time to exit from an investment. This is determined based on a range of factors, including the potential divestment valuation, the nature of any potential acquirer, the external environment and other stakeholder intentions.

Compliance Departure and Reason - None.

   2.   Seek to understand and meet shareholder needs and expectations 

Explanation

Responsibility for investor relations rests with the CEO, supported by the CFO. The Company communicates in different ways with its shareholders to ensure that shareholder needs and expectations are clearly understood.

Communication with shareholders is principally through the Annual Report and Accounts, full-year and half-year announcements, trading updates and the annual general meeting ("AGM"). A range of corporate information (including all Company announcements) is also available to shareholders, investors and the public on our website. The AGM is the principal opportunity for dialogue with private shareholders, and all Board members seek to attend it and answer shareholder questions. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. In addition, the CEO attends potential investor shows in order to increase the Company's profile.

Compliance Departure and Reason - None.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

Explanation

The Group's ability to deliver on its strategy is dependent partly upon its effective engagement with stakeholders and a wider recognition of the social implications of its operations. In all businesses, the typical key stakeholders are shareholders, customers, staff and suppliers.

Customers - in all businesses the Group seeks to provide clients with products and services that are differentiated from competitors. This is done through meeting clients to understand their needs and through understanding competitors' offerings.

Staff - the Group's staff are critical to delivering client satisfaction over the longer term. All Group companies have in place staff communication forums and flat management structures, which aid communication. Group management is accessible to company staff. In situations where individual subsidiary decisions would impact on staff security or morale, the relevant company will seek to minimise the impact on staff.

Suppliers - to varying degrees the Group is dependent upon the reliable and efficient service of its supply chain. In the case of significant suppliers, each Group company will meet periodically with them to review and determine future trading arrangements and to share the relevant company's requirements of that supplier.

Compliance Departure and Reason - None.

4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

Explanation

Recognising and managing business risks is key to ensuring the delivery of strategy and the creation of long-term shareholder value.

As part of the Group's annual reporting to shareholders, specific financial risks are evaluated, including those related to foreign currency, interest rates, liquidity and credit. The Group's key risks are set out in the Annual Report & Accounts.

The nature of the Group's operations is such that individual companies are organised independently and operate business and IT systems that are appropriate to their individual businesses. The Audit Committee reviews the findings of the Group's auditors and considers whether there are remedial actions necessary to improve the control environment in each company.

The Group has in place and Anti-Bribery Policy and a Share Dealing Code that apply to staff.

Compliance Departure and Reason - None.

   5.   Maintain the board as a well-functioning, balanced team led by the chair 

Explanation

Board members have a collective responsibility and legal obligation to promote the interests of the Company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the Board.

The Board consists of three directors of which two are executive and one (the Chairman) is non-executive. The Chairman is considered independent and independent directors will stand for re-election on an annual basis in the event of having more than 10 years continuous board service. The QCA Code requires that the Company has two non-executive directors.

The board is supported by both Audit and Remuneration committees, the member of each of which is the Chairman.

The Board meets formally on a regular basis (typically 4-6 times per annum), with interim meetings convened on an as-required basis. The Audit committee undertakes an annual review and the Remuneration committee undertakes reviews on an as-required basis. All directors commit the required time to meet the needs of the Group from time-to-time.

Compliance Departure and Reason - As currently constituted the Board includes only one non-executive director. The Board considers that the size of the Group does not merit the appointment of an additional non-executive director but will continue to review this over time.

6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

Explanation

The Company's directors are David Buchler (Chairman), Jonathan Lander (CEO) and Nicholas Lander (COO/CFO). All members of the Board have experience relevant to delivering the Company's strategy.

The Board believes that, as currently constituted, it has a blend of relevant experience, skills and personal qualities to enable it to successfully execute its strategy.

The Directors' biographies are in the Annual Report and Accounts and incorporated here by reference.

Compliance Departure and Reason - The QCA Code requires, inter alia, that the Company describes the relevant experience, skills, personal qualities and capabilities that each director brings to the Board. The Board believes the individual's biography as noted above, coupled with their successful service to date with the Company, is sufficiently objective evidence that the Board has the necessary requirements to fulfil their roles individually and collectively.

7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

Explanation

The Board does not formally review the effectiveness of itself as a unit nor of the Remuneration and Audit committees. The small size of the Board means that individual directors' contributions are transparent. Where the Company identifies potential Board members, these are noted for any possible future vacancies as part of succession planning or to bring in additional skills or capabilities.

Compliance Departure and Reason - Where the need for Board changes has become evident in the past, the necessary changes have been implemented. It is not considered necessary to formally review performance given this embedded approach, whereby review of effectiveness is continuous.

8. Promote a corporate culture that is based on ethical values and behaviours

Explanation

The nature of the Group's businesses are diverse and, by their nature, may have different cultures and values relevant to their sector. However, there are some core values that the Group adopts throughout all its businesses, irrespective of their nature and size.

These values are: honesty, integrity, openness and respect. The Board leads by example, demonstrating through its collective actions and individually as directors through theirs, to local management teams and staff. The Company has an Anti-bribery Policy and makes an annual Modern Slavery statement.

Compliance Departure and Reason - None.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

Explanation

The Board provides strategic leadership for the Group and operates within the scope of a robust corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the Group's businesses as well as defining its strategic goals. The Board has approved terms of reference for its Audit and Remuneration committees to which certain responsibilities are delegated.

The individual roles and responsibilities of the Board, the Board members and the Audit and Remuneration Committees are set out below.

 
  Role and Responsibilities of Chairman   The Chairman is independent and from an external perspective, engages with 
                                          shareholders at 
                                          the Company's Annual General Meeting to reinforce the fact that the Board is 
                                          being run with 
                                          the appropriate level of engagement and time commitment. From an internal 
                                          perspective, he 
                                          ensures that the information which flows within the board and its sub 
                                          committees is accurate, 
                                          relevant and timely and that meetings concentrate on key operational and 
                                          financial issues 
                                          which have a strategic bias, together with monitoring implementation plans 
                                          surrounding commercial 
                                          objectives. 
                                          In relation to corporate governance, his responsibility is to lead the board 
                                          effectively and 
                                          to oversee the adoption, delivery and communication of the Company's 
                                          corporate governance 
                                          model. He also aims to foster a positive governance culture throughout the 
                                          Company working 
                                          through the CEO and COO/CFO. 
  Roles and Responsibilities of CEO       The CEO is responsible for recommending and ensuring effective delivery of 
                                          the Group's strategy 
                                          and achieving financial performance commensurate with that strategy. 
                                          The CEO works with the Chairman and COO/CFO in an open and transparent way 
                                          and keeps them 
                                          up-to-date with matters of importance and relevance to delivering the 
                                          strategy. 
                                         ----------------------------------------------------------------------------- 
  Roles and Responsibilities of COO/CFO   The COO/CFO is responsible for the operational aspects of the Group's 
                                          businesses and for maintaining 
                                          a robust financial control and reporting environment throughout. 
                                         ----------------------------------------------------------------------------- 
  Role of the Board                       The Board of a company is responsible for setting the vision and strategy 
                                          for the Company 
                                          to deliver value to its shareholders by effectively putting in place its 
                                          business model. The 
                                          Board members are collectively responsible for defining corporate governance 
                                          arrangements 
                                          to achieve this purpose, under clear leadership by the Chairman. 
                                         ----------------------------------------------------------------------------- 
 
 
  Role of the Board (continued)         The Board is authorised to manage the business of the Company on behalf of its 
                                        shareholders 
                                        and in accordance with the Company's Articles of Association. The Board is 
                                        responsible for 
                                        overseeing the management of the business and for ensuring high standards of 
                                        corporate governance 
                                        are maintained throughout the Group. 
                                        The Board meets several times a year and at other times as necessary, to 
                                        discuss a formal 
                                        schedule of matters specifically reserved for its decision. 
                                        These matters routinely include: 
                                         *    Group strategy and associated risks 
 
 
                                         *    Financial performance of the Group's businesses and 
                                              approval of annual budgets, the half year results, 
                                              annual report and accounts and dividends 
 
 
                                         *    Changes relating to the Group's capital structure or 
                                              share buy-backs 
 
 
                                         *    Appointments to and removal from the Board and 
                                              Committees of the Board given the absence of a 
                                              separate nomination committee 
 
 
                                         *    Acquisitions, disposals and other material 
                                              transactions 
 
 
                                         *    Actual or potential conflicts of interest relating to 
                                              any Director are routinely identified at all Board 
                                              discussions 
  Role of Audit Committee          The Audit Committee provides confidence to shareholders on the integrity of the 
                                   financial 
                                   results of the Company expressed in the Annual Report and Accounts and other 
                                   relevant public 
                                   announcements of the company. The Audit Committee challenges both the external 
                                   auditors and 
                                   the management of the Company. It keeps the need for internal audit under review. 
                                   It is responsible 
                                   for the assessing recommendations to the Board on the engagement of auditors 
                                   including tendering 
                                   and the approval of non-audit services, for reviewing the conduct and control of 
                                   the annual 
                                   audit and for reviewing the operation of the internal financial controls. 
                                   It also has responsibility for reviewing financial statements prior to publication 
                                   and reporting 
                                   to the Board on any significant reporting issues, estimates and judgements made in 
                                   connection 
                                   with the preparation of the Company's financial statements. 
                                   The Audit Committee, in conjunction with the rest of the Board, also has a key role 
                                   in the 
                                   oversight of the effectiveness of the risk management and internal control systems 
                                   of the 
                                   Company. 
                                   Members: David Buchler 
                                  ------------------------------------------------------------------------------------ 
  Role of Remuneration Committee   It is the role of the Remuneration Committee to ensure that remuneration 
                                   arrangements are 
                                   aligned to support the implementation of Company strategy and effective risk 
                                   management for 
                                   the medium to long-term, and to take into account the views of shareholders. 
                                   The Company's remuneration policy has been designed to ensure that it encourages 
                                   and rewards 
                                   the right behaviours, values and culture. 
                                   The Remuneration Committee reviews the performance of the executive directors, sets 
                                   the scale 
                                   and structure of their remuneration and the basis of their service agreements with 
                                   due regard 
                                   to the interests of shareholders and reviews and approves any proposed bonus 
                                   entitlement. 
                                   It also determines the allocation of share options to employees. 
                                   Members: David Buchler 
                                  ------------------------------------------------------------------------------------ 
 

The Board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this code on an annual basis and revise its governance framework as appropriate as the Group evolves. The Board is satisfied that the current framework will evolve in line with the current growth plans of the Group.

Compliance Departure and Reason - None.

10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Explanation

A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the Company. In particular, appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base. This will assist:

   --      the communication of shareholders' views to the Board; and 

-- the shareholders' understanding of the unique circumstances and constraints faced by the Company. It should be clear where these communication practices are described (annual report or website).

The Group's Annual Report and Accounts and other governance-related material, along with notices of all general meetings over the last five years (as a minimum) are accessible via the Company's website.

Audit Committee Report - the Audit Committee's annual meeting is minuted. All matters raised by the Group's auditors are carefully considered and actions implemented where considered appropriate. The approach and role of the Audit Committee is noted in section 9 above.

Remuneration Committee Report - the Remuneration Committee's meetings are minuted. The remuneration of the Board is set out in the Annual Report and Accounts. The approach and role of the Remuneration Committee is noted in section 9 above.

Compliance Departure and Reason - The Audit Committee and Remuneration Committee have not prepared formal reports as required by the Code. Given the small size of the Board, such formal reporting is not considered necessary.

Consolidated income statement

 
                                               Note             2019              2018 
                                                                         (as restated) 
                                                             GBP'000           GBP'000 
 Continuing operations 
 Revenue                                          5           23,036            18,344 
 Cost of sales                                              (19,454)          (15,700) 
 
 Gross profit                                                  3,582             2,644 
 
 Distribution costs                                          (1,225)           (1,095) 
 Administrative expenses                                     (2,281)           (4,589) 
 
 Operating profit/(loss)                          2               76           (3,040) 
 
 Investment revenues                              7                -               115 
 Other gains and losses                           7                -               374 
 Finance expense                                  7            (118)              (47) 
 Finance income                                   7              179               106 
 
 Profit/(Loss) before tax                                        137           (2,492) 
 Income tax (expense)/credit                      8             (31)               370 
 
 Profit/(Loss) for the year from continuing 
  operations                                                     106           (2,122) 
 
 Profit for the year from discontinued 
  operations                                      6            3,078            23,218 
 
 Profit for the year                                           3,184            21,096 
 
 Attributable to: 
 - Equity holders of the parent                                2,942            20,956 
 - Non-controlling interests                                     242               140 
 
                                                               3,184            21,096 
 
 Earnings per share                               9 
 
 Basic 
  - from continuing operations                                (5.7)p           (63.3)p 
  - from discontinued operations                              127.9p            649.5p 
 
 Total                                                        122.2p            586.2p 
 
 Diluted 
 - from continuing operations                                 (5.7)p           (63.3)p 
 - from discontinued operations                               127.9p            649.5p 
 
 Total                                                        122.2p            586.2p 
 
 

Consolidated statement of comprehensive income

 
                                                  2019       2018 
                                               GBP'000    GBP'000 
 
 Profit for the year                             3,184     21,096 
 
 
 
 Other comprehensive income                          -          - 
 
 
 Total comprehensive income for the year         3,184     21,096 
 
 Attributable to: 
 - Equity holders of the parent                  2,942     20,956 
 - Non-controlling interests                       242        140 
 
                                                 3,184     21,096 
 
 
 

Consolidated statement of changes in equity

 
 
                               Share     Share    Revaluation   Retained             Non-controlling 
                             capital   premium        reserve   earnings     Total         interests     Total 
                             GBP'000   GBP'000        GBP'000    GBP'000   GBP'000           GBP'000   GBP'000 
 
2019 
Other comprehensive 
 income                            -         -              -          -         -                 -         - 
 
Profit for the year                -         -              -      2,942     2,942               242     3,184 
 
Total comprehensive 
 income for the year               -         -              -      2,942     2,942               242     3,184 
 
 Balance at 1 January             50     3,640            100     35,180    38,970             1,447    40,417 
 
Transactions with 
 owners: 
 
Purchase of own 
 shares                            -         -              -   (16,512)  (16,512)                 -  (16,512) 
 
Dividend paid to 
 non-controlling interests         -         -              -          -         -             (100)     (100) 
 
Total transactions 
 with owners                       -         -              -   (16,512)  (16,512)             (100)  (16,612) 
 
 
Balance at 31 December            50     3,640            100     21,610    25,400             1,589    26,989 
 
 
 
 
                           Share     Share    Revaluation   Retained             Non-controlling 
                         capital   premium       reserves   earnings     Total         interests     Total 
                         GBP'000   GBP'000        GBP'000    GBP'000   GBP'000           GBP'000   GBP'000 
2018 
Other comprehensive 
 income                        -         -              -          -         -                 -         - 
 
Profit for the year            -         -              -     20,956    20,956               140    21,096 
 
Total comprehensive 
 income for the year           -         -              -     20,956    20,956               140    21,096 
 
 Balance at 1 January         50     3,640            177     20.319    24,186             1,958    26,144 
 
 
  Transactions with 
  owners: 
Purchase of own 
 shares                        -         -              -    (6,095)   (6,095)                 -   (6,095) 
 
Share based payments           -         -              -          -         -                 -         - 
 
Total transactions 
 with owners                   -         -              -    (6,095)   (6,095)                 -   (6,095) 
 
Eliminated on disposal         -         -           (77)          -      (77)             (651)     (728) 
 
 
Balance at 31 December        50     3,640            100     35,180    38,970             1,447    40,417 
 
 

Consolidated statement of financial position

Company number 04478674

 
                                                2019      2018 
                                      Note   GBP'000   GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment          11     7,331     6,062 
 
 Total non-current assets                      7,331     6,062 
 
 Current assets 
 Inventories                            12     2,204     1,774 
 Trade and other receivables            13     4,816     4,447 
 Cash and cash equivalents              14    19,317    34,137 
 
 Total current assets                         26,337    40,358 
 
 Total assets                                 33,668    46,420 
 
 Liabilities 
 Current liabilities 
 Loans and other borrowings             17   (1,154)     (708) 
 Leases                                 17     (466)     (314) 
 Trade and other payables               15   (2,408)   (2,776) 
 
 Total current liabilities                   (4,028)   (3,798) 
 
 Non-current liabilities 
 Loans and other borrowings             17   (1,151)   (1,254) 
 Leases                                 17   (1,334)     (816) 
 
 
 Total non-current liabilities               (2,485)   (2,070) 
 
 Total liabilities                           (6,513)   (5,868) 
 
 Provisions - deferred tax              18     (166)     (135) 
 
 Net assets                                   26,989    40,417 
 
 Equity 
 Share capital                          19        50        50 
 Share premium account                  20     3,640     3,640 
 Revaluation reserves                   20       100       100 
 Retained earnings                            21,610    35,180 
 
 Capital and reserves attributable 
  to equity holders of the Company            25,400    38,970 
 Non-controlling interests              23     1,589     1,447 
 
 Total equity                                 26,989    40,417 
 
 
 

Consolidated statement of cash flows

 
                                                       2019       2019             2018             2018 
                                            Note                                GBP'000          GBP'000 
                                                    GBP'000    GBP'000    (as restated)    (as restated) 
 
 Profit for the year                                             3,184                            21,096 
 
   Adjustments for: 
 Investment revenues                         7            -                       (115) 
 Other gains and losses                      7            -                       (374) 
 Finance expense                             7          118                          47 
 Finance income                              7        (179)                       (106) 
 Profit from discontinued operations         6      (3,078)                    (23,218) 
           Depreciation                      11         633                         458 
           Income tax (credit)/expense       8           31                       (370) 
 
                                                               (2,475)                          (23,678) 
 
 Operating cash flows before movements 
  in working capital                                               709                           (2,582) 
 
 Increase in trade and other receivables                         (349)                             (350) 
 (Decrease)/Increase in trade and 
  other payables                                                  (18)                             1,109 
 (Decrease) in inventories                                       (430)                             (308) 
 Tax paid                                                         (50)                             (100) 
 
 Cash (used by)/generated from 
  continuing operations                                          (138)                           (2,231) 
 
 Operating cash flows from discontinued 
  operations                                                     (315)                             1,838 
                                                              ________                          ________ 
 Net cash used by/generated from 
  operating activities                                           (453)                             (393) 
 
 Investing activities 
 Proceeds from sale of discontinued 
  operations net of cash sold                         3,138                      22,537 
 Proceeds from disposal of available 
  for sale investments                                    -                       6,632 
 Purchase of property, plant and 
  equipment                                           (916)                       (429) 
 Interest received                           7          179                         106 
 Income from investments                     7            -                         115 
 
 Net cash generated from/used by 
  investing activities                                           2,401                            28,961 
 
 Financing activities 
 Interest paid                               7        (118)                        (47) 
 Purchase of own shares (treasury 
  shares)                                    19    (16,575)                     (6,094) 
 Net increase/(repayment) of borrowings                  25                       (375) 
 Dividend paid by subsidiary to 
  external shareholders                               (100)                        (49) 
 
 Net cash used by financing activities                        (16,768)                           (6,565) 
 
 Net (decrease)/increase in cash                              (14,820)                            22,003 
 Cash at beginning of year                                      34,137                            12,119 
 Foreign exchange movement                                           -                                15 
 
 Cash at end of year                                            19,317                            34,137 
 
 

Notes forming part of the preliminary announcement

The financial information set out above, which was approved by the Board on 28 May 2020, is derived from the full Group accounts for the year ended 31 December 2019 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2019, will be delivered to the Registrar of Companies in due course. Copies of the Company's Annual Report and Financial Statements are expected to be sent to shareholders on 3 June 2020 and will be available online at www.volvere.co.uk.

   1      Accounting policies 

Basis of accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC interpretations) as adopted by the European Union ("adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under adopted IFRS.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. In addition, note 16 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Group has considerable financial resources and, as a consequence, the directors believe that the Group is well placed to manage the business risks inherent in its activities despite the current uncertain economic outlook.

The directors have a reasonable expectation that the Group has adequate resources to enable it to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The following principal accounting policies have been applied consistently, in all material respects, in the preparation of these financial statements:

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All subsidiaries have a reporting date of 31 December.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.

The results and net assets of subsidiaries whose accounts are denominated in foreign currencies are retranslated into Sterling at average and year-end rates respectively.

Business combinations

The Group applies the acquisition method of accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of the fair value of consideration transferred, the recognised amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately.

The purchase of a non-controlling interest is not a business combination within the scope of IFRS 3, since the acquiree is already controlled by its parent. Such transactions are accounted for as equity transactions, as they are transactions with equity holders acting in their capacity as such. No change in goodwill is recognised and no gain or loss is recognised in profit or loss.

Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. See above for information on how goodwill is initially determined. Goodwill is carried at cost less accumulated impairment losses and is reviewed annually for impairment.

Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the group expects to be entitled in exchange for those goods or services net of discounts, VAT and other sales-related taxes. The group concludes that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer. Payment is typically due within 60 days. Contracts with customers do not contain a financing component or any element of variable consideration. The group does not offer an option to purchase a warranty.

Revenue from the sale of goods is recognised at the point in time when control of the asset is transferred to the customer, generally when the customer has taken undisputed delivery of the goods. There are no service obligations attached to the sale of goods. Customer rebates are deducted from revenue.

Revenue earned on time and materials contracts is recognised as costs are incurred. Income from fixed price contracts is recognised in proportion to the stage of completion, determined on the basis of work done, of the relevant contract.

Revenue from consulting services is recognised when the services are provided by reference to the contract's stage of completion at the reporting date. When the outcome can be assessed reliably, contract revenue and associated costs are recognised by reference to the stage of completion of the contract activity at the reporting date. When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs that have been incurred and are recoverable. Contract costs are recognised in the period in which they are incurred or, where recoverable from clients, are included in work-in-progress.

Revenue from consulting services relating to fixed price contracts is recognised in relation to the delivery of the performance obligations specified in the contract. Penalties for non-performance against specific terms of the contract are provided for when there is a probable outflow of resources under the contract terms and the amount can be reliably estimated. Such adjustments are deducted from revenue.

Revenue from software licences is recognised either upfront (where the grant of the licence is at inception of a contract and where maintenance is provided as a separate service) or periodically in line with the time for which the licence is provided (where such provision is part of an ongoing managed service).

If it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately in profit or loss.

The gross amount due from customers for contract work is presented within trade and other receivables for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. The gross amount due to customers for contract work is presented within other liabilities for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses).

Discontinued operations

Discontinued operations represent cash generating units or groups of cash generating units that have either been disposed of or classified as held for sale, and represent a separate major line of business or are part of a single co-ordinated plan to dispose of a separate major line of business. Cash generating units forming part of a single co-ordinated plan to dispose of a separate major line of business are classified within continuing operations until they meet the criteria to be held for sale. The post-tax profit or loss of the discontinued operation is presented as a single line on the face of the consolidated income statement, together with any post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on the disposal of the assets or disposal group constituting the discontinued operation. On changes to the composition of groups of units comprising discontinued operations, the presentation of discontinued operations within prior periods is restated to reflect consistent classification of discontinued operations across all periods presented.

Operating segments

IFRS 8 "Operating Segments" requires the disclosure of segmental information for the Group on the basis of information reported internally to the chief operating decision-maker for decision-making purposes. The Group considers that the role of chief operating decision-maker is performed collectively by the Board of Directors.

Volvere plc is a holding company that identifies and invests principally in undervalued and distressed businesses and securities as well as businesses that are complementary to existing Group companies. Its customers are based primarily in the UK.

Financial information (including revenue and profit before tax and intra-group charges) is reported to the board on a segmental basis. Segment revenue comprises sales to external customers and excludes gains arising on the disposal of assets and finance income. Segment profit reported to the board represents the profit earned by each segment before tax and intra-group charges. For the purposes of assessing segment performance and for determining the allocation of resources between segments, the board reviews the non-current assets attributable to each segment as well as the financial resources available. All assets are allocated to reportable segments. Assets that are used jointly by segments are allocated to the individual segments on a basis of revenues earned.

All liabilities are allocated to individual segments. Information is reported to the Board of Directors on a segmental basis as management believes that each segment exposes the Group to differing levels of risk and rewards due to their varying business life cycles. The segment profit or loss, segment assets and segment liabilities are measured on the same basis as amounts recognised in the financial statements. Each segment is managed separately.

Leasing

The company applies IFRS 16 Leases. Accordingly leases are all accounted for in the same manner:

- A right-of-use asset and lease liability is recognised on the statement of financial position, initially measured at the present value of future lease payments;

- Depreciation of right-of-use assets and interest on lease liabilities are recognised in the statement of comprehensive income;

- The total amount of cash paid is recognised in the statement of cash flows, split between payments of principal (within financing activities) and interest (also within financing activities)

The initial measurement of the right-of-use asset and lease liability takes into account the value of lease incentives such as rent free periods.

The costs of leases of low value items and those with a short term at inception are recognised as incurred.

Foreign currencies

Transactions in currencies other than sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Gains and losses arising on retranslation are included in net profit or loss for the period.

Retirement benefit costs

The Group's subsidiary undertakings operate defined contribution retirement benefit schemes. Payments to these schemes are charged as an expense in the period to which they relate. The assets of the schemes are held separately from those of the relevant company and Group in independently administered funds.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Freehold property is revalued on a periodic basis. Depreciation is charged so as to write off the cost or valuation of assets, less their residual values, over their estimated useful lives, using the straight line method, on the following bases:

Freehold property - 1.5% per annum

   Improvements to short-term leasehold property              -           Over the life of the lease 

Plant and machinery - 4%-33% per annum

Investments

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, including transaction costs. Available for sale current asset investments are carried at fair value with adjustments recognised in other comprehensive income.

Investment income

Income from investments is included in the income statement at the point the Group becomes legally entitled to it. Interest income and expenses are reported on an accruals basis using the effective interest method.

Impairment of property, plant and equipment and intangible assets (including goodwill)

At each reporting date the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and any risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Share-based payments

The Group issues equity-settled share-based payments to certain directors and employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of options that will ultimately vest.

Fair value is measured by use of a Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Inventories

Inventories are stated at the lower of cost and net realisable value. Raw materials are valued at purchase price and the costs of ordinarily interchangeable items are assigned using a weighted average cost formula. The cost of finished goods comprises raw materials directly attributable to manufacturing processes based on product specification and packaging cost. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, overnight deposits and treasury deposits. The Group considers all highly liquid investments with original maturity dates of three months or less to be cash equivalents.

Financial assets

Recognition and derecognition

Financial assets and financial instruments are recognised when the Group becomes a party to the contractual provisions of the financial asset.

Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire, or when the financial asset and substantially all of the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and initial recognition of financial assets

Except for trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

Financial asset, other than those designated and effective as hedging instruments are classified into the following categories:

   -       Amortised cost 
   -       Fair value through profit or loss (FVTPL) 
   -       Fair value through other comprehensive income (FVOCI) 

The classification is determined by both:

   -       The entity's business model for managing the financial asset 
   -       The contractual cash flow characteristics of the financial asset 

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within administrative expenses.

Subsequent measurement of financial assets

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

- They are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows

- The contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where its effect is immaterial. The Group's cash and cash equivalents, trade and most other receivables fall into this category. This category also includes investments in equity instruments.

Financial assets which are designated as FVTPL are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined with reference to active market transactions or using a valuation technique where no active market exists.

Financial assets classified as available for sale (AFS) under IAS 39 (comparative periods)

AFS financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets (FVTPL or held to maturity and loans and receivables). The Group's AFS financial assets include listed equity securities.

All AFS financial assets were measured at fair value. Gains and losses were recognised in other comprehensive income and reported within the AFS reserve within equity, except for interest and dividend income, impairment losses and foreign exchange differences on monetary assets which are recognised in profit or loss. When the asset was disposed of or was determined to be impaired, the cumulative gain or loss recognised in other comprehensive income was reclassified from the equity reserve to profit or loss. Interest calculated using the effective interest method and dividends were recognised in profit or loss within finance income.

Impairment of financial assets

IFRS 9's impairment requirements use forward looking information to recognise expected credit losses - the 'expected credit loss (ECL) method'. Recognition of credit losses is no longer dependent on first identifying a credit loss event, but considers a broader range of information in assessing credit risk and credit losses including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward looking approach, a distinction is made between:

- Financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk ('stage 1') and

- Financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low ('stage 2').

Stage 3 would cover financial assets that have objective evidence of impairment at the reporting date.

12 month expected credit losses are recognised for the first category while lifetime expected credit losses are recognised for the second category. Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial asset.

Trade and other receivables and contract assets

The group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The Group assesses impairment of trade receivables on a collective basis, as they possess shared credit risk characteristics, they have been grouped based on the days past due.

Classification and measurement of financial liabilities

FVTPL: This category comprises only out-of-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement.

Other financial liabilities: Other financial liabilities include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Bank and other borrowings are initially recognised at the fair value of the amount advanced net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense in this context includes initial transaction costs and premia payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Invoice discounting

The Group uses an invoice discounting facility and retains all significant benefits and risks relating to the relevant trade receivables. The gross amounts of the receivables are included within assets and a corresponding liability in respect of proceeds received from the facility is included within liabilities. The interest and charges are recognised as they accrue and are included in the income statement with other interest charges.

Significant management judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The nature of the Group's business is such that there can be unpredictable variation and uncertainty regarding its business. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Significant management judgements (other than estimates)

The judgements that have a significant impact on the carrying value of assets and liabilities are discussed below:

Consolidation

Management have concluded that it is not appropriate to utilise the exemption from consolidation available to investment entities under IFRS 10 as the company is not considered to meet all of the essential elements of the definition of an investment entity as performance is not measured or evaluated on a fair value basis. Accordingly the consolidation includes all entities which the Company controls.

Revenue recognition

Management makes judgements against the terms of fixed price contracts and whether they could result in penalties relating to non-performance against specific terms. This relates to GBPnil revenue in 2019 (2018: GBPnil).

Deferred tax asset

The Group recognises a deferred tax asset in respect of temporary differences relating to capital allowances, revenue losses and other short term temporary differences when it considers there is sufficient evidence that the asset will be recovered against future taxable profits.

This requires management to make decisions on such deferred tax assets based on future forecasts of taxable profits. If these forecast profits do not materialise, or there is a change in the tax rates or to the period over which temporary timing differences might be recognised, the value of the deferred tax asset will need to be revised in a future period.

The most sensitive area of estimation risk is with respect to losses. The Group has losses for which no value has been recognised for deferred tax purposes in these financial statements, as future economic benefit of these temporary differences is not probable. If appropriate profits are earned in the future, recognition of the benefit of these losses may result in a reduced tax charge in a future period.

Significant estimates

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

Useful lives of depreciable assets

The depreciation charge for an asset is derived using estimates of its expected useful life and expected residual value, which are reviewed annually. Increasing an asset's expected life or residual value would result in a reduced depreciation charge in the consolidated income statement.

Management determines the useful lives and residual values for assets when they are acquired, based on experience with similar assets and taking into account other relevant factors such as any expected changes in technology or regulations.

Inventories

In determining the cost of inventories management have to make estimates to arrive at cost and net realisable value.

Furthermore, determining the net realisable value of the wider range of products held requires judgement to be applied to determine the saleability of the product and estimations of the potential price that can be achieved. In arriving at any provisions for net realisable value management take into account the age, condition and quality of the product stocked and the recent sales trend. The future realisation of these inventories may be affected by market-driven changes that may reduce future selling prices.

Fair value measurement

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

New and revised standards and interpretations applied

The following new and revised Standards and Interpretations have been issued and are effective for the current financial year of the Group:

IFRS 16 was adopted on 1 January 2019 without restatement of comparative figures. No transitional adjustments were required upon adoption.

All leases are accounted for in the same manner:

- A right of use asset and lease liability is recognised on the statement of financial position, initially measured at the present value of future lease payments;

- Depreciation of right-of-use assets and interest on lease liabilities are recognised in the statement of comprehensive income;

- The total amount of cash paid is recognised in the statement of cash flows, split between payments of principal (within financing activities) and interest (also within financing activities).

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs, less any lease incentives received.

The right-of-use asset is subsequently depreciated in accordance with the company's depreciation policies. The estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The following Adopted IFRSs have been issued but have not been applied by the Group in these financial statements, all of which are effective for the accounting period commencing 1 January 2020. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated:

   -      Amendments to References to the Conceptual Framework in IFRS Standards 
   -      Amendments to IFRS 3: Definition of a Business 
   -      Amendments to IAS 1 and IAS 8: Definition of Material 
   2          Operating (loss)/profit 

Operating (loss)/profit is stated after charging:

 
                                                         2019             2018 
                                                      GBP'000          GBP'000 
                                                                 (as restated) 
 
 Staff costs                                            4,646            5,770 
 Depreciation of property, plant and equipment            633              458 
 Operating lease expense                                   12               14 
 Exchange loss                                              2                6 
 Auditor's fees - audit services                           31               29 
 
 The analysis of audit fees is as follows: 
 - for the audit of the Company's annual accounts           8                8 
 - for the audit of the Company's subsidiaries' 
  accounts                                                 23               21 
 
                                                           31               29 
 
 
   3      Staff costs 

Staff costs comprise:

 
                                                    2019             2018 
                                                 GBP'000          GBP'000 
                                                            (as restated) 
 
 Wages and salaries                                4,229            5,183 
 Employer's National Insurance contributions         315              530 
 Defined contribution pension cost                   102               57 
 
                                                   4,646            5,770 
 
 

The average number of employees (including Directors) in the Group was as follows:

 
                                                2019      2018 
                                              Number    Number 
 
 Engineering, production and professional        146       106 
 Sales and marketing                               7         6 
 Administration and management                    31        25 
 
                                                 184       137 
 
 
   4      Directors' remuneration 

The remuneration of the directors was as follows:

 
                    Salaries       Other 
                      & fees    benefits       Total 
                        2019        2019        2019 
                     GBP'000     GBP'000     GBP'000 
 
 David Buchler            34           -          34 
 Jonathan Lander         143           -         143 
 Nick Lander             143           1         144 
 
                         320           1         321 
 
 
 
                    Salaries       Other 
                      & fees    benefits       Total 
                        2018        2018        2018 
                     GBP'000     GBP'000     GBP'000 
 
 David Buchler            45           -          45 
 Jonathan Lander       1,083           -       1,083 
 Nick Lander           1,083           1       1,084 
 
                       2,211           1       2,212 
 
 

The services of Jonathan Lander and Nick Lander are provided under the terms of a Service Agreement with D2L Partners LLP. The amount due under these agreements, which is in addition to the amounts disclosed above, for the year amounted to GBP528,000 (2018: GBP861,000). Amounts owed to D2L Partners LLP at the year end totalled GBPnil (2018: GBP333,000).

The amount paid to David Buchler in the year was paid to DB Consultants Limited (which is controlled by him and is therefore a related party) and the amount outstanding at the year end was GBP11,250 (2018: GBP11,250). N one of the directors were members of the Group's defined contribution pension plan in the year (2018: none).

   5      Operating segments 

Analysis by business segment:

An analysis of key financial data by business segment is provided below. The Group's food manufacturing segment is engaged in the production and sale of food products to third party customers, and the investing and management services segment incurs central costs, provides management services and financing to other Group segments and undertakes treasury management on behalf of the Group. A more detailed description of the activities of each segment is given in the Strategic Report.

During the year, the security solutions segment was sold and therefore the results of this segment are now included within Profit in the year from discontinued operations and have been excluded from the following analysis:

 
 
                                                         Investing and management services 
                                  Food manufacturing                                  2019 
                                                2019                               GBP'000         Total 
                                             GBP'000                                                2019 
                                                                                                 GBP'000 
 
   Revenue                                    23,036                                     -        23,036 
 
 Profit/(loss) before tax(1)                   1,384                               (1,247)           137 
 
 
                                                         Investing and management services         Total 
                                  Food manufacturing                                  2018          2018 
                                                2018                               GBP'000           (as 
                                             GBP'000                                           restated) 
                                                                                                 GBP'000 
 
 
   Revenue                                    18,344                                     -        18,344 
 
 Profit/(loss) before tax(1)                     854                               (3,346)       (2,492) 
 
 
 
 
                                                                                  Investing and management 
                             Security solutions     Food manufacturing                            services 
                                           2019                   2019                                2019       Total 
                                        GBP'000                GBP'000                             GBP'000        2019 
                                                                                                               GBP'000 
 
 Assets                                       -                 14,336                              19,332      33,668 
 Liabilities/provisions                       -                (6,732)                                  51     (6,681) 
 
 Net assets(2)                                -                  7,604                              19,383      26,987 
 
 
                                                                                  Investing and management 
                             Security solutions     Food manufacturing                            services 
                                           2018                   2018                                2018       Total 
                                        GBP'000                GBP'000                             GBP'000        2018 
                                                                                                               GBP'000 
 
 Assets                                     419                 12,311                              33,690      46,420 
 Liabilities/provisions                   (359)                (5,427)                               (217)     (6,003) 
 
 Net assets(2)                               60                  6,884                              33,473      40,417 
 
 
   (1)   stated before intra-group management and interest charges 
   (2)   assets and liabilities stated excluding intra-group balances 
 
 
                                                                         Investing and management services 
                             Security solutions    Food manufacturing                                 2019 
                                           2019                  2019                              GBP'000             Total 
                                        GBP'000               GBP'000                                                   2019 
                                                                                                                     GBP'000 
 
 Capital spend                                -                 1,904                                    -             1,904 
 Depreciation                                 -                   632                                    1               633 
 Interest income 
  (non-Group)                                 -                     -                                  179               179 
 Interest expense 
  (non-Group)                                 -                   118                                    -               118 
 Tax expense                                  -                    38                                 (69)              (31) 
 
 
                                                                         Investing and management services 
                             Security solutions    Food manufacturing                                 2018             Total 
                                           2018                  2018                              GBP'000              2018 
                                        GBP'000               GBP'000                                          (as restated) 
                                                                                                                     GBP'000 
 
 Capital spend                                -                 1,253                                    -             1,253 
 Depreciation                                 2                   458                                    -              46 0 
 Amortisation/impairment                      -                     -                                    -                 - 
 Interest income 
  (non-Group)                                 -                     -                                  106               106 
 Interest expense 
  (non-Group)                                 -                    47                                    -                47 
 Tax expense                               (32)                  (52)                                (318)             (402) 
 
 

Geographical analysis:

 
                              External revenue           Non-current assets 
                                     by                           by 
                            location of customers         location of assets 
                            2019                 2018         2019       2018 
                         GBP'000              GBP'000      GBP'000    GBP'000 
                                        (as restated) 
 
 UK                       22,522               17,746        7,331      6,062 
 Rest of Europe              514                  598            -          - 
 
                          23,036               18,344        7,331      6,062 
 
 The Group had 3 (2018: 4) customers (all in the food manufacturing 
  segment) that individually accounted for in excess of 10% of the 
  Group's continuing revenues as follows: 
 
 
                        2019       2018 
                     GBP'000    GBP'000 
 
 First customer        8,761      7,207 
 Second customer       8,119      4,901 
 Third customer        3,037      2,763 
 Fourth customer           -      2,437 
 
 

There is minimal uncertainty over the timing and amount of revenue recognition in respect of continuing operations. The Group has no material balances which arise from contracts with customers save for trade receivables as set out in note 13.

   6      Discontinued operations 

On 23 May 2019 the Group disposed of its subsidiary undertaking, Sira Defence and Security Limited for a total of GBP3.0 million in cash, resulting in a gain of GBP3.4 million before tax.

The profit of Sira Defence and Security Limited until the date of disposal and the gain on disposal are summarised below. The discontinued operations in 2018 include the results of the Group's former subsidiary, Impetus Automotive Limited, which was sold in that year.

 
                                                                              2018 
                                                                     (as restated) 
                                                             2019 
                                                          GBP'000          GBP'000 
 
 Revenue                                                      154           22,460 
 Cost of sales                                                 45         (16,654) 
 
 Gross profit                                                 199            5,806 
 Administrative expenses                                    (578)          (3,137) 
 
 Operating loss/profit                                      (379)            2,669 
 
 Finance expense                                                -             (36) 
 
 (Loss)/profit from discontinued operations before tax      (379)            2,633 
 Income tax expense                                            27            (506) 
 
 (Loss)/profit for the period                               (352)            2,127 
 
 Total gain on disposal                                     3,430           21,091 
 
 Profit for the year from discontinued operations           3,078           23,218 
 
 

All of the assets and liabilities have been disposed of in this transaction.

Cash flows generated by Sira Defence and Security Limited for the reporting periods under review until its disposal are summarised below. The discontinued operations in 2018 include the results of the Group's former subsidiary, Impetus Automotive Limited, which was sold in that year.

 
                                                                  2018 
                                                         (as restated) 
                                                 2019          GBP'000 
                                              GBP'000 
 Operating activities                           (315)            1,838 
  Investing activities                          3,138           22,537 
 
 Cash flows from discontinued operations        2,823           24,375 
 
 

Cash flows from investing activities relate solely to the proceeds from the sale of Sira Defence and Security Limited which was received in cash in 2019, of which GBP240,000 was held on escrow. At the date of disposal, the carrying amounts of Sira Defence and Security Limited's net assets were as follows:

 
                                                   GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment                           2 
 
 Total non-current assets                                2 
 
 Current assets 
 Trade and other receivables                           112 
 Cash and cash equivalents                              26 
 
 Total current assets                                  138 
 
   Liabilities 
 Current liabilities 
 Trade and other payables                            (432) 
 
 Total liabilities                                   (432) 
 
   Provisions                                            - 
 
 Net liabilities                                     (292) 
 
 Net liabilities disposed                            (292) 
 
 Intra-group charges                                 (134) 
 
 Total net consideration received in cash            3,004 
 
 
 Gain on disposal                                    3,430 
 
 
 
   7     Investment revenues, other gains and losses and finance income and expense 
 
                                          2019      2018 
                                       GBP'000   GBP'000 
 
 Investment revenues                         -       115 
 
 Other gains and losses                      -       374 
 
 Finance income 
 Bank interest receivable                  179       106 
 
 Finance expense 
 Bank interest                              14        21 
 Lease interest                           (86)      (22) 
 Other interest and finance charges       (46)      (46) 
 
                                         (118)      (47) 
 
 

Investment revenues and other gains and losses represent respectively interest and dividends receivable from, and the gains arising upon disposal of, investments made pursuant to the Group's investing and treasury management policies.

   8      Income tax 
 
                                                                                  2018 
                                                                         (as restated) 
                                                                 2019 
                                                              GBP'000          GBP'000 
 
 Current tax expense - current year 
  Current tax credit - adjustments in respect of prior              -                - 
  years                                                             -             (23) 
 
 Deferred tax (credit)/expense recognised in income 
  statement - current year                                         31            (343) 
  Deferred tax credit recognised in income statement 
   - adjustments in respect of prior years                          -              (4) 
 
 Total tax (credit)/expense recognised in income statement         31            (370) 
 Tax recognised directly in equity                                  -                - 
 
 Total tax recognised                                              31            (370) 
 
 

The reasons for the difference between the actual tax expense for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

 
 
                                                                               2018 
                                                                      (as restated) 
                                                             2019           GBP'000 
                                                          GBP'000 
 
 Profit before tax                                            137           (2,428) 
 
 Expected tax charge based on the prevailing rate of 
  corporation tax in the UK of 19%                             26             (461) 
 
   Effects of: 
 
   Expenses not deductible for tax purposes                    24                25 
 Income/gains not subject to tax                              (3)              (93) 
 Deferred tax not recognised                                 (37)                84 
 Other adjustments                                             23                58 
 Effect of changes in rate of tax                             (2)                44 
 Adjustments in respect of prior years                          -              (27) 
 
 Total tax recognised in income statement                      31             (370) 
 
 

Deferred tax assets and liabilities are recognised at rates of tax substantively enacted as at the balance sheet date. Deferred tax assets are recognised to the extent that they are considered recoverable. See also note 18.

   9      Earnings per share 

The calculation of the basic and diluted earnings per share is based on the following data:

 
 Earnings for the purposes of earnings per share:                             2018 
                                                             2019    (as restated) 
                                                          GBP'000          GBP'000 
 (Loss)/profit attributable to equity holders of the 
  parent company: 
  From continuing operations                                (136)          (2,262) 
  From discontinued operations                              3,078           23,218 
 
 
 
 EEa 
  Weighted average number of shares for the purposes            2019        2018 
  of earnings per share:                                         No.         No. 
 Weighted average number of ordinary shares in issue       2,405,768   3,574,895 
 Dilutive effect of potential ordinary shares                      -           - 
 
 Weighted average number of ordinary shares for diluted 
  EPS                                                      2,405,768   3,574,895 
 
 

There were no share options (or other dilutive instruments) in issue during the year or the previous year.

   10    Subsidiaries 

The subsidiaries of Volvere plc, all of which have been included in these consolidated financial statements, are as follows:

 
                                                                                  Proportion 
                               Registered address      Principal                of ownership 
   Name                                                Activity                     interest 
                                                                                 in ordinary 
                                                                                   shares at 
                                                                                 31 December 
                                                                                        2019 
 Volvere Central Services 
  Limited                    Note 1                  Group support services             100% 
 NMT Group Limited           Note 2                  Investment                        98.6% 
 Sira Defence & Security     Note 1                  Software publishing              Note 3 
  Limited 
  Shire Foods Limited         Note 1                  Food manufacturing                 80% 
 Impetus Automotive 
  Solutions Limited          Note 1                  Dormant                            100% 
 New Medical Technology      Note 2                  Dormant                           98.6% 
  Limited 
  Zero-Stik Limited           Note 2                  Dormant                          98.6% 
 

Note 1 - Registered at Shire House, Tachbrook Road, Leamington Spa, Warwickshire, CV31 3SF, England.

Note 2 - Registered at c/o Wright, Johnston & Mackenzie LLP, 302 St Vincent St, Glasgow, G2 5RZ, Scotland.

Note 3 - The Group owned 100% of the ordinary shares of Sira Defence & Security Limited. On 23(rd) May 2019, the Group sold the entirety of its shareholding.

   11         Property, plant and equipment 
 
                                      Short Leasehold 
                                             Property     Freehold       Plant & 
                                              GBP'000     Property     Machinery       Total 
                                                           GBP'000       GBP'000     GBP'000 
 Cost or valuation 
 At 1 January 2018                                180        2,550         4,889       7,619 
 Additions                                          -            -         1,253       1,253 
 Revaluations                                       -            -             -           - 
 Disposals                                      (180)            -         (281)       (461) 
 
 At 31 December 2018 and 1 January 
  2019                                              -        2,550         5,861       8,411 
 
   Additions                                        -            -         1,906       1,906 
 Revaluation                                        -            -             -           - 
 Disposals                                          -            -          (16)        (16) 
 
 
 At 31 December 2019                                -        2,550         7,751      10,301 
 
 Accumulated depreciation 
 At 1 January 2018                                 87            -         2,108       2,195 
 Disposals                                       (87)            -         (219)       (306) 
 Charge for the year                                -           38           422         460 
 
 At 31 December 2018 and 1 January 
  2019                                              -           38         2,311       2,349 
 
  Disposals                                         -            -          (12)        (12) 
 Charge for the year                                -           38           595         633 
 
 At 31 December 2019                                -           76         2,894       2,970 
 
 Net book value 
 
 At 31 December 2019                                -        2,474         4,857       7,331 
 
 At 31 December 2018                                -        2,512         3,550       6,062 
 
 

Freehold property was revalued by an independent valuation specialist to GBP2,550,000 as at 5 December 2017.

Under the cost model, the carrying value of freehold property would be GBP2,290,000. All other property, plant and equipment is carried at cost less accumulated depreciation.

Management consider there to be no indicators to suggest that any items of property, plant and equipment are impaired. Property, plant and equipment (which is all held within subsidiaries) with a net book value of GBP7.33 million is pledged as collateral for Group borrowings (all of which are within subsidiaries).

Right-of-use asset

The Group leases certain plant and equipment. The average remaining lease term across all leases is 3.8 years. There are no options to purchase at the end of the lease lives. In all cases, the lease obligations are secured by the lessor's title to the leased assets. The right-of-use assets included in the statement of financial position are as follows:

 
                                         2019       2018 
                                      GBP'000    GBP'000 
 Net values                             2,388      1,533 
 Depreciation charge for the year         231        131 
 
 

Amounts recognised in profit and loss

 
                                              2019       2018 
                                           GBP'000    GBP'000 
 Interest expense on lease liabilities          86         22 
 Expense relating to short-term leases          12         14 
 
 

The aggregate undiscounted commitments for short-term and low value leases at the year end was GBP7,000.

   12    Inventories 
 
                           2019       2018 
                        GBP'000    GBP'000 
 Raw materials              782        603 
  Finished products       1,422      1,171 
 
                          2,204      1,774 
 
 

The total amount of inventories consumed in the year and charged to cost of sales was GBP14.31 million (2018 restated: GBP11.86 million).

   13    Trade and other receivables 
 
                                                            2019       2018 
                                                         GBP'000    GBP'000 
 
 Trade receivables                                         4,349      4,024 
 Less: provision for impairment of trade receivables           -          - 
 
 Net trade receivables                                     4,349      4,024 
 Other receivables                                           153        170 
 Amounts recoverable on contracts                              -          - 
 Prepayments and accrued income                              314        253 
 
                                                           4,816      4,447 
 
 

Certain of the Group's subsidiaries have invoice discounting arrangements for their trade receivables which are pledged as collateral. Under these arrangements it is considered that the subsidiaries remain exposed to the risks and rewards of ownership, principally in the form of credit risk, and so the assets continue to be recognised. The associated liabilities arising restrict the subsidiaries' use of the assets.

The carrying amount of the assets and associated liabilities is as follows:

 
                          2019       2018 
                       GBP'000    GBP'000 
 
 Trade receivables       4,349      3,952 
 Borrowings            (1,051)      (609) 
 
                         3,298      3,343 
 
 

Because of the normal credit periods offered by the subsidiaries, it is considered that the fair value matches the carrying value for the assets and associated liabilities.

The Group is exposed to credit risk with respect to trade receivables due from its customers, primarily in the automotive consulting and food manufacturing segments. Both segments have a relatively large number of customers, however there is a significant dependency on a small number of large customers who can and do place significant contracts. Provisions for bad and doubtful debts are made based on management's assessment of the risk taking into account the ageing profile, experience and circumstances. There were no

significant amounts due from individual customers where the credit risk was considered by the Directors to be significantly higher than the total population.

There is no significant currency risk associated with trade receivables as the vast majority are denominated in Sterling.

The ageing analysis of trade receivables is disclosed below:

 
                       2019       2018 
                    GBP'000    GBP'000 
 
 Up to 3 months       4,097      3,985 
 3 to 6 months          252         39 
 6 to 12 months           -          - 
 Over 12 months           -          - 
 
                      4,349      4,024 
 
 
   14    Cash and cash equivalents 
 
                                 2019       2018 
                              GBP'000    GBP'000 
 
 Cash at bank and in hand      19,317     34,137 
 
 

Included within cash at bank and in hand is an amount of GBP2,627,000 held in escrow. This is held to satisfy, in the first instance, any warranty or similar claims arising following the sales of Impetus Automotive Limited ("Impetus") and Sira Defence and Security Limited. The escrow retention period is 18 months from the date of sale. Subsequent to the year end, the full amount relating to Impetus of GBP2,387,000 was released from escrow.

   15    Trade and other payables (current) 
 
                                      2019         2018 
                                   GBP'000      GBP'000 
 
 Trade payables                      1,250        1,335 
 Other tax and social security         107          111 
 Other payables                         34           43 
 Accruals                            1,017        1,040 
 Deferred income                         -          247 
 
                                     2,408        2,776 
 
 

The fair value of all trade and other payables approximates to book value at 31 December 2019 and at 31 December 2018.

   16    Financial instruments - risk management 

The Group's principal financial instruments are:

   --      Trade receivables 
   --      Cash at bank 
   --      Current asset investments 
   --      Loans and right of use leases 
   --      Trade and other payables 

The Group is exposed through its operations to the following financial risks:

   --      Cash flow interest rate risk 
   --      Foreign currency risk 
   --      Liquidity risk 
   --      Credit risk 
   --      Other market price risk 

Policy for managing these risks is set by the Board following recommendations from the Chief Financial & Operating Officer. Certain risks are managed centrally, while others are managed locally following guidelines communicated from the centre. The policy for each of the above risks is described in more detail below.

Interest rate risk

Due to the relatively low level of borrowings, the Directors do not have an explicit policy for managing cash flow interest rate risk. All current and recent borrowing has been on variable terms, with interest rates of between 3% and 4% above base rate, and the Group has cash reserves sufficient to repay all borrowings promptly in the event of a significant increase in market interest rates. All cash is managed centrally and subsidiary operations are not permitted to arrange borrowing independently.

The Group's investments may attract interest at fixed or variable rates, or none at all. The market price of such investments may be impacted positively or negatively by changes in underlying interest rates. It is not considered relevant to provide a sensitivity analysis on the effect of changing interest rates since, at the year end, none of the Group's investments were interest bearing.

Foreign currency risk

Foreign exchange risk arises when individual Group operations enter into transactions denominated in a currency other than their functional currency (sterling). The Directors monitor and review their foreign currency exposure on a regular basis. The Directors are of the opinion that the exposure to foreign currency risk is not significant.

Liquidity risk

The Group maintains significant cash reserves and therefore does not require facilities with financial institutions to provide working capital. Surplus cash is managed centrally to maximise the returns on deposits.

Credit risk

The Group is mainly exposed to credit risk from credit sales. The Group's policy for managing and exposure to credit risk is disclosed in note 13.

Other market price risk

The Group has generated a significant amount of cash and this has been held partly as cash deposits and partly invested pursuant to the Group's investing strategy.

Capital management

The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade profitably in the foreseeable future. The Group also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital.

The Group manages its capital with regard to the risks inherent in the business and the sector within which it operates by monitoring its gearing ratio on a regular basis.

The Group considers its capital to include share capital, share premium, fair value reserve and retained earnings. Net debt includes short and long-term borrowings (including lease obligations) and shares classed as financial liabilities, net of cash and cash equivalents. The Group has not made any changes to its capital management during the year. The Group is not subject to any externally imposed capital requirements.

An analysis of what the Group manages as capital is outlined below:

 
                                   2019       2018 
                                GBP'000    GBP'000 
 
 Total debt                     (4,105)    (3,092) 
 Cash and cash equivalents       19,317     34,137 
 
 Net funds                       15,212     31,045 
 
 Total equity (capital)          26,987     40,417 
 
 Net funds to capital ratio       56.4%      76.8% 
 
 

Reconciliation of movement in net cash

 
                                Net cash                                                 Net cash 
                                    at 1                                  Other    at 31 December 
                                 January                    Repayment      non-              2019 
                                    2019       Cash     of borrowings      cash 
                                               flow                       items 
                                 GBP'000    GBP'000           GBP'000   GBP'000           GBP'000 
 
 Cash at bank and in hand         34,137   (14,820)                 -         -            19,317 
 Borrowings                      (3,092)          -              (25)     (988)           (4,105) 
 
 Total financial liabilities      31,045   (14,820)              (25)     (988)            15,212 
 
 

Non-cash items of GBP988,000 relate to the increase in lease finance arising on the purchase of fixed asset additions.

   17         Financial assets and liabilities - numerical disclosures 

Analysis of financial assets by category:

 
 31 December 2019               Amortised     FVTPL     Total 
                                     cost 
                                  GBP'000   GBP'000   GBP'000 
 Financial assets 
 Trade and other receivables        4,816         -     4,816 
 Cash and cash equivalents         19,317         -    19,317 
 
 Total assets                      24,133         -    24,133 
 
 Financial liabilities 
 Non-current borrowings             3,054         -     3,054 
 Current borrowings                 1,051         -     1,051 
 Trade and other payables           2,408         -     2,408 
 
 Total liabilities                  6,513         -     6,513 
 
 
 
 31 December 2018               Amortised     FVTPL     Total 
                                     cost 
                                  GBP'000   GBP'000   GBP'000 
 Financial assets 
 Trade and other receivables        4,447         -     4,447 
 Cash and cash equivalents         34,137         -    34,137 
 
 Total assets                      38,584         -    38,584 
 
 Financial liabilities 
 Non-current borrowings             2,483         -     2,483 
 Current borrowings                   609         -       609 
 Trade and other payables           2,776         -     2,776 
 
 Total liabilities                  5,868         -     5,868 
 
 

Fair values

Assets held at fair value fall into three categories, depending on the valuation techniques used, as follows:

   Level 1:   quoted prices (unadjusted) in active markets for identical assets or liabilities; 

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices);

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Directors consider the carrying values of all financial assets and liabilities to be a reasonable approximation of their fair values.

Available for sale investments fall under Level 1 in the IFRS 7 fair value hierarchy.

All other assets, and all liabilities are carried at amortised cost.

Maturity of financial assets

The maturities and denominations of financial assets at the year end, other than cash and cash equivalents, and loans and receivables (note 13 above) are as follows:

 
                         2019       2018 
                      GBP'000    GBP'000 
 Sterling 
 No fixed maturity          -          - 
 
 
   17    Financial assets and liabilities - numerical disclosures (continued) 

Maturity of financial liabilities

The maturity of borrowings (including right of use leases) carried at amortised cost is as follows:

 
                               2019       2018 
                            GBP'000    GBP'000 
 
 Less than six months         1,339        818 
 Six months to one year         281        204 
 One to two years               438        368 
 Two to five years            1,273        720 
 More than five years           774        982 
 
                              4,105      3,092 
 
 

The above borrowings are analysed on the balance sheet as follows:

 
                                                 2019         2018 
                                              GBP'000      GBP'000 
 
 Loans and other borrowings (current)           1,154          708 
 Leases (current)                                 466          314 
 Loans and other borrowings (non-current)       1,151        1,254 
 Leases (non-current)                           1,334          816 
 
                                                4,105        3,092 
 
 

Borrowings are secured on certain assets of the Group, and interest was charged at rates of between 2.5% and 3.2% during the year. Including interest that is expected to be paid, the maturity of borrowings (including leases) is as follows:

 
                               2019         2018 
                            GBP'000      GBP'000 
 
 Less than six months         1,387          863 
 Six months to one year         326          244 
 One to two years               522          435 
 Two to five years            1,492          888 
 More than five years           858        1,110 
 
                              4,585        3,540 
 
 

The above borrowings including interest that is expected to be paid are analysed as follows:

 
                                                 2019       2018 
                                              GBP'000    GBP'000 
 
 Loans and other borrowings (current)           1,202        760 
 Leases (current)                                 511        347 
 Loans and other borrowings (non-current)       1,367      1,516 
 Leases (non-current)                           1,505        917 
 
                                                4,585      3,540 
 
 

The maturity of other financial liabilities, excluding loans and borrowings, carried at amortised cost is as follows:

 
                             2019       2018 
                          GBP'000    GBP'000 
 Less than six months       1,357      1,446 
 
 
   18    Deferred tax 

Movements in deferred tax provisions are outlined below:

 
                                       Accelerated          Other 
                                  tax depreciation         timing     Re-valuations 
                                                      differences                       Losses     Total 
                                           GBP'000        GBP'000           GBP'000    GBP'000   GBP'000 
 
 At 1 January 2019                           (319)              -             (135)        319     (135) 
 Recognised in P&L during the 
  year                                           4             44                 -       (79)      (31) 
 
 At 31 December 2019                         (315)             44             (135)        240     (166) 
 
 

Previous year movements were as follows:

 
                                       Accelerated          Other 
                                  tax depreciation         timing     Re-valuations 
                                                      differences                       Losses     Total 
                                           GBP'000        GBP'000           GBP'000    GBP'000   GBP'000 
 
 At 1 January 2018                           (386)              7             (135)          -     (514) 
 Recognised in P&L during the 
  year                                          67            (7)                 -        319       379 
 
 At 31 December 2018                         (319)              -             (135)        319     (135) 
 
 

In addition, there are unrecognised net deferred tax assets as follows:

 
                                                       2019       2018 
                                                    GBP'000    GBP'000 
 
 Tax losses carried forward                             573        675 
 Excess of depreciation over capital allowances           -          5 
 Short term temporary differences                         -         15 
 
 Net unrecognised deferred tax asset                    573        695 
 
 

Deferred tax assets and liabilities have been calculated using the rate of corporation tax expected to apply when the relevant temporary differences reverse. Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.

The unrecognised elements of the deferred tax assets have not been recognised because there is insufficient evidence that they will be recovered because such losses are within entities that are not expected to yield future profits and cannot be used to offset against profits in other entities.

   19    Share capital 
 
                                                             Authorised 
                                                  2019       2019                2018       2018 
                                                Number    GBP'000              Number    GBP'000 
 
 Ordinary shares of GBP0.0000001 
  each                                     100,100,000          -         100,100,000          - 
 A shares of GBP0.49999995 
  each                                          50,000         25              50,000         25 
 B shares of GBP0.49999995 
  each                                          50,000         25              50,000         25 
 Deferred shares of GBP0.00000001 
  each                               4,999,999,500,000         50   4,999,999,500,000         50 
 
 
                                                              100                            100 
 
 
 
                                                        Issued and fully paid 
                                                  2019       2019                2018       2018 
                                                Number    GBP'000              Number    GBP'000 
 
 Ordinary shares of GBP0.0000001 
  each                                       6,207,074          -           6,207,074          - 
 Deferred shares of GBP0.00000001 
  each                               4,999,994,534,696         50   4,999,994,534,696         50 
 
 
                                                               50                             50 
 
 

Treasury shares

During the year the Company acquired 1,283,927 (2018: 550,254) of its own Ordinary shares for total consideration of GBP16,512,000 (2018: GBP6,094,000). This brought the total number of Ordinary shares held in treasury to 4,372,892 with an aggregate nominal value of less than GBP1. At the year end the total number of Ordinary shares outstanding (excluding treasury shares) was 1,834,182 (2018: 3,118,109 ).

Rights attaching to deferred shares & A and B shares

The Deferred shares carry no rights to participate in the profits of the Company and carry no voting rights. After the distribution of the first GBP10 billion in assets in the event of a return of capital (other than a purchase by the Company of its own shares), the Deferred shares are entitled to an amount equal to their nominal value.

The Company has no A and B shares in issue. These shares have conversion rights allowing them to convert into Ordinary shares on a pre-determined formula. All A and B shares previously in issue have been converted into Ordinary shares.

   20    Reserves 

All movements on reserves are disclosed in the consolidated statement of changes in equity.

The following describes the nature and purpose of each reserve within owners' equity:

 
 Reserve                Nature and purpose 
 
 Share premium          Amount subscribed for share capital in excess 
                         of nominal value 
 
 Revaluation reserves   Cumulative net unrealised gains and short-term 
                         losses arising on the revaluation of the Group's 
                         available for sale investments and freehold 
                         property 
 
 Retained earnings      Cumulative net gains and losses recognised 
                         in the statement of comprehensive income, 
                         other than those included in revaluation reserves. 
 
   21    Related party transactions 

Details of amounts payable to Directors, and parties related to the directors, are disclosed in note 4. There were no other transactions with key members of management, and no other transactions with related parties.

   22    Contingent liabilities 

The Group had no material contingent liabilities as at the date of these financial statements.

   23    Non-controlling interests 

The non-controlling interests of GBP1,589,000 (2018: GBP1,434,000 ) relate to the net assets attributable to the shares not held by the Group at 31 December 2019 in the following subsidiaries:

 
                                   2019       2018 
   Name of subsidiary           GBP'000    GBP'000 
 
 NMT Group Limited                   70         71 
 Impetus Automotive Limited           -          - 
 Shire Foods Limited              1,519      1,376 
 
                                  1,589      1,447 
 
 

Summarised financial information (before intra-group eliminations) in respect of those subsidiaries with material non-controlling interests is presented below.

 
                                Impetus Automotive 
                                      Limited               Shire Foods 
                                                              Limited 
                                    2019        2018       2019       2018 
                                 GBP'000     GBP'000    GBP'000    GBP'000 
 Non-current assets                    -           -      7,330      6,060 
  Current assets                       -           -      7,006      6,252 
  Non-current liabilities              -           -    (2,485)    (2,070) 
  Current liabilities                  -           -    (3,830)    (2,903) 
 Provisions                            -           -      (416)      (454) 
 
 Net assets (equity)                   -           -       7605      6,885 
 
 Attributable to: 
 Group                                 -           -      6,086      5,509 
 Non-controlling interests             -           -      1,519      1,376 
 
           -                                       -      7,605      6,885 
 
 
 
 Revenue                                     -         -    23,036   18,344 
 
 Profit for the year after tax (stated 
  after intra-group management 
  and interest charges)                      -     2,035     1,221      706 
 
 Profit for the year attributable to 
  non-controlling interests                  -       342       244      141 
 
 
   24    Events after the balance sheet date 

24(a) Acquisition of Indulgence Patisserie Limited

On 7 February 2020, the Group acquired the trade and assets of Indulgence Patisserie Limited ("Indulgence"), a business engaged in the manufacture of premium desserts for the retail and foodservice markets for a cash consideration of GBP1.25m. There is no deferred or contingent consideration. Directly attributable acquisition costs currently amount to GBP107,000 and will be included in administrative expenses in the period ended 31 December 2020.

The provisionally determined fair values of the assets and liabilities of Indulgence as at the date of acquisition are as follows:

 
                             GBP'000 
 
 Property                      1,000 
 Plant and equipment             335 
 Inventories                     120 
 Current liabilities            (40) 
 
 Net assets acquired           1,415 
 
 Consideration - cash          1,250 
 
 Negative goodwill arising     (165) 
 
 
 

24(b) Other events

The impact of COVID-19 since the balance sheet date is set out in the Strategic Report.

There have been no other significant events warranting disclosure in these financial statements.

-S -

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 FLFIDERITFII

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May 29, 2020 02:00 ET (06:00 GMT)

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