Regulatory Story
Go to market news section View chart   Print
RNS
Norish PLC  -  NSH   

Preliminary Results

Released 12:23 23-Mar-2017

RNS Number : 3449A
Norish PLC
23 March 2017
 

 

 

Norish plc

Preliminary Results 2016

 

Results

 

Norish plc (AIM: NSH), is pleased to announce its preliminary results for the year ended 31 December 2016.

 

Financial Highlights

 

·     Total revenue increased by 27.9% to £32.1m (2015: £25.1m).

·     Revenue from commodity trading increased by 46.6% to £19.5m (2015: £13.3m).

·     Revenue from our continuing temperature controlled divisions increased by 6.8% to £12.6m (2015: £11.8m).

·     Operating profit increased by 3.6% to £0.87m (2015: £0.84m).

·     Net assets unchanged at £15.3m (2015: £15.3m).

·     Net debt increased to £5.2m (2015: £3.2m).

 

Operational Highlights

 

·     The performance of the cold store division was ahead of 2015 by 9.4%

·     The performance of the commodity division was ahead of 2015 by 48%

·     We invested £1.7m of the funds raised in December 2015 by the end of December 2016.We invested £0.8m in our temperature controlled division, £0.6m in dairy infrastructure along with £0.3m in the herd for the dairy farm in Kilkenny

·     We continue to invest in projects which provide short term payback and in the build out of our dairy business.

 

North West Division

 

The North West cold store division which comprises the freehold sites at Wrexham and Birmingham performed well in 2016. This was mainly as a result of a buoyant market in China for most of 2016.

 

China is the U.K.'s biggest export market for fifth quarter pig meat. Exports of pig meat to China have increased more than fourfold since the UK started to export there in 2011. Two of the three licensed cold stores in the U.K. are the Norish plc owned properties at Wrexham, North Wales and Brierley Hill, Birmingham.

 

South East Division

 

The South East division, which comprises the sites at Bury St. Edmunds (freehold), Braintree (leasehold), Gillingham (long term leasehold at a peppercorn rent) and East Kent (leasehold) performed below the same period last year. Contribution was mainly impacted by a refurbishment programme at the Bury St Edmunds site, which we completed in December 2016.

 

 

Commodity Trading

 

Our commodity trading division which consists of Townview Foods Limited and Foro International Connections Limited ("Foro") contributed £0.5m for the period, up from £0.4m for the same period last year.

 

Townview Foods Limited trades in protein products, mainly beef, pork, lamb and chicken. Sales from pork increased by £3m during the year, sales from beef increased by £1.9m, and sales from lamb increased by £0.6m. Townview Foods Limited generated a contribution of £0.6m for the period, against £0.4m for the same period last year, and sales of £18.5m, against £12.3m for the same period last year.

 

Foro accounted for £1m of the sales, unchanged from 2015. Foro broke even, unchanged from last year. Foro trades mainly in fish, dairy and its currently developing a product to sell to the ready to drinks market.

 

We are continually investing in people to grow this division.

 

Dairy

 

 

Discontinued

 

During 2015 the Group agreed the sale of the Leeds site for £0.4m net. The sale completed in March 2016. This site was not part of the future plans for the business. Losses in respect of this property are included in discontinued activities.

 

During 2016, Foro discontinued trading in the FMCG market due to high working capital requirements, currency fluctuations, and unacceptable margins. The 2015 comparative figures have been adjusted to reflect the reclassification.

 

Outlook

 

2016 was a year of considerable progress for the group. Commercial decisions made in previous years, combined with a new, focused, management approach and a strengthening of the Group's Balance Sheet, has ensured that Norish is now in a position to develop its business in ways that were previously unavailable to the group.

 

We have been very encouraged by the excellent start made in the first two months of 2017 by our two main Trading Divisions - Temperature Controlled Storage and Protein Trading (Town View Foods).

 

The dairy division is in the early stages of developing its business model and is putting in place an experienced senior executive team to manage and grow this business.

 

Through our subsidiary, Foro International Connections Limited, we are developing retail and food service markets, both in Ireland and the U.K. in conjunction with three significant European manufacturers of fruit drinks, health smoothies and RTD (ready to drink) coffee. This development fits in well with our existing U.K. cold store locations.

 

At this juncture, our cold stores comprise the greatest proportion of our property, plant and equipment (97%). The cold store division also represents the most immediate opportunity to improve profitability and returns for the group, something the Board is acutely aware of. Through active management of our cold store division, we are looking at every facet of our cost base, implementing changes and building an ever better, more balanced, more diversified business.

 

At this juncture we consider it appropriate to increase guidance for 2017 to a range of 2.75p to 3p (fully diluted adjusted eps).

 

 

 

 

 

 

 

 

Financial Review

 

Total equity at 31 December 2016 stood at £15.3m (2015: £15.3m). Net debt at 31 December 2016 was £5.2m compared to £3.2m at 31 December 2015.

 

Dividend

 

The board recommends the payment of a final dividend of 1.50 €cent per share. This will be paid on 20 October 2017 to those shareholders on the register on the 29 September 2017. It will bring the total dividend in respect of the financial year to 1.50 €cent per share, unchanged from last year.

 

Brexit

 

The United Kingdom voted to leave the EU on the 23rd of June, last year. As of now we have not seen any appreciable change to our business, as a result of that vote.

 

 

On behalf of the board, I would like to thank the management team and staff for their commitment and

contribution in 2016.

 

 

Ted O'Neill

 

Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Review

The number of pallets handled in increased by 9%, and we handled 18% additional pallets for blast freezing in 2016. This will allow the Group to positively position for future growth. Norish plc is one of only two companies in Britain who can presently provide blast freezing services for pig meat for China.

 

The significant feature of the year is the investment in the dairy farming business in Kilkenny.

 

Sales

 

Total Group revenue increased by 27.9% to £32.1m (2015: £25.1m). Temperature controlled revenues increased by 6.8% to £12.6m (2015: £11.8m).  Revenues were up mainly as a result of an increase in blast freezing volumes. Revenues in the commodity division increased by 46.6% to £19.5m (2015: £13.3m). Townview Foods mainly accounted for the increased sales.

 

Gross profit

 

Gross profit unchanged at £1.3m (2015: £1.3m).

 

Operating profit

 

Operating profit increased to £0.9m (2015: £0.8m).

 

Finance expense (net)

 

Finance expense decreased to £0.27m (2015: £0.30m). The decrease is mainly attributable to the cash generated from the fund raise in December 2015.

 

Loss from discontinued operations

 

As part of the Group's strategy to exit the ambient sector we recorded a loss of £0.1m (2015: £0.3m).

 

In 2016, The Group has exited the FMCG market and recorded a loss of £0.1m (2015: £Nil).

 

Earnings per share

 

The basic earnings per share fell to 1.5p (2015: 2.8p). The earning per share was impacted by the additional shares issued in December 2015.

 

Capital

 

During the year we invested £1.7m (2015: £0.5m), £0.6m in capital outlay along with £0.3m in the herd for the dairy farm in Kilkenny and £0.8m in routine capital expenditure in the temperature controlled division.

 

 

Cash Position

 

Net debt increased to £5.2m (2015: £3.2m). Operating activities generated £0.3m (2015: absorbed £0.2m) and financing activities absorbed £0.9m (2015 generated: £4.7m). Investment in assets was made of £1.7m (2015: £0.5m). Investment of £0.3m was made in the dairy herd.

 

 

 

 

 

 

Dividend

 

The board recommends the payment of a final dividend of 1.50 €cent per share. This will be paid on the 20 October 2017 to those shareholders on the register on the 29 September 2017. It will bring the total dividend in respect of the financial year to 1.50 €cent per share unchanged from last year.

 

Treasury policy and management

The treasury function, which is managed centrally, handles all Group funding, debt, cash, working capital and foreign exchange exposures.  Group treasury policy concentrates on the minimisation of risk in all of the above areas and is overseen and approved by the Board.  Speculative positions are not  taken.

 

Financial risk management

 

The Group's financial instruments comprise borrowings, cash, derivatives, and various items, such as trade receivables, trade payables etc., that arise directly from its operations.  The main purpose of the financial instruments not arising directly from operations is to raise finance for the Group's operations.

 

The Group may enter into derivative transactions such as interest rate swaps, caps or forward foreign currency transactions in order to minimise its risks.  The purpose of such transactions is to manage the interest rate and currency risks arising from the Group's operations and its sources of finance. 

 

The main risks arising from the Group's financial instruments are interest rate risk and, liquidity risk.  The Group's policies for managing each of these risks are summarised below.

 

Interest rate risk

 

The Group finances its operations through a mixture of retained profits, bank and other borrowings at both fixed and floating rates of interest, and working capital.  The Group determines the level of borrowings at fixed rates of interest having regard to current market rates and future trends.  At the year-end, £3.47m term loans of which, £0.9m are at floating base rate plus a bank margin of 1.2% and £0.83m are at floating base rate plus a bank margin of 1.75% and £0.5m are floating at bank base rate plus a bank margin of 2.75% and £1.24m are floating at bank base rate plus a margin of 3%. The Group holds an interest rate swap on £3m at 1.03% against Bank of England base rate which expires in June 2017.

 

Liquidity risk

 

The Group's policy is that, in order to ensure continuity of funding, a significant portion of its borrowings should mature in more than one year.  At the year-end, 59% of the Group's borrowings were due to mature in more than one year. The Group achieves short-term flexibility by means of invoice finance and overdraft facilities. 

 

 

 

Aidan Hughes

 

Finance Director

 

 

 

 

 

 

 

Consolidated STATEMENT OF COMPREHENSIVE INCOME

for the financial year ended 31 December 2016



2016

2015



£'000

£'000

Continuing operations

32,098

25,145

(30,757)

(23,859)


Gross profit

1,341

1,286


238

-

(707)

(447)

Operating profit from continuing operations

872

839



20

26

10

-

(240)

(272)

(29)

(33)


Profit on continuing activities before taxation

633

560


(210)

(60)

18

12


Profit for the financial year from continuing operations

441

512




(161)

(223)




Profit for the financial year

280

289




            -

-

Total comprehensive income for the year

280

289


291

291

(11)

(2)



291

291

(11)

(2)


 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the financial year ended 31 December 2016

2016

2015



Earnings per share expressed in pence per share:



1.5p

2.8p

1.5p

2.8p





(0.6)p

(1.2)p

(0.6)p

(1.2)p



 



 

Consolidated Statement of financial position

at 31 December 2016



2016

2015



£'000

£'000

Non current assets





2,403

2,338


16,635

15,885


540

-


19,578

18,223

Current assets




6,264

4,815


483

386


2,044

4,383


698

1,017



9,489

10,601





TOTAL ASSETS


29,067

28,824





Equity attributable to equity holders of the parent and non-controlling  interest





5,616

5,344


7,281

6,990


23

23


(563)

-


2,926

2,981

Equity attributable to equity holders of the parent


15,283

15,338





(22)

(11)





TOTAL EQUITY


15,261

15,327





Non-current liabilities




3,006

4,123


44

199


925

942


3,975

5,264

Current liabilities




5,082

4,198


255

311


205

44


4,282

3,473


7

207


9,831

8,233



TOTAL EQUITY AND LIABILITIES


29,067

28,824




 

 

 

 

 

 

Consolidated Statement of Changes in Equity

For the financial year ended 31 December 2016

 

 



Capital




Non-



Share

Share

Conversion

Treasury

Retained


Controlling

Total


capital

premium

Reserve

shares

earnings

Total

interest

Equity

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000


At 1 January 2015

3,280

4,198

23

-

2,878

10,379

(9)

10,370

-

-

-


291

291

 

(2)

 

289

Total comprehensive income  for the financial year

-

-

-

-

291

291

(2)

289

2,064

3,078

-

-

-

5,142

-

5,142

-

(286)

-

-

-

(286)

-

(286)

-

-

-

-

(188)

(188)

-

(188)

Transactions with owners

2,064

2,792

-

-

(188)

4,668

-

4,668

At 31 December 2015

5,344

6,990

23

-

2,981

15,338

(11)

15,327










-

-

-


291

291

(11)

280

Total comprehensive income  for the financial year

-

-

-


291

291

(11)

280

272

291

-


-

563

-

563

-

-

-


-

-

-

-

-

-

-


(346)

(346)

-

(346)

-

-

-

(563)

-

(563)

-

(563)

Transactions with owners

272

291

-

(563)

(55)

(55)

(11)

(66)

At 31 December 2016

5,616

7,281

23

 

(563)

2,926

15,283

(22)

15,261

 

 

 



 

Consolidated Cash Flow Statement


For the financial year ended 31 December 2016


2016

2015


£'000

£'000





633

560


(238)

-


(161)

(223)


269

305


(30)

(26)


625

615


1,098

1,231

Changes in working capital and provisions:





(97)

(334)


(1,130)

(1,320)


(200)

(418)


885

1,029

Cash generated from operations


556

188





Interest paid


(240)

(272)


10

-


(49)

(95)

Net cash generated/(used in) from operating activities


277

(179)





Investing activities





(65)

-


(1,375)

(502)


(302)

-

Net cash used in investing activities


(1,742)

(502)

 

Financing activities





(346)

(188)



(220)

(185)


-

5,142


-

(286)


747

1,141


-

-


(152)

(124)


219

-


-

-


(1,122)

(821)

Net cash (used)/ generated from financing activities


(874)

4,679





Net (decrease)/increase in cash and cash equivalents


(2,339)

3,998







4,383

385





2,044

4,383




 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR EAADDAAFXEFF
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Preliminary Results - RNS