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Norish Plc (NSH)

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Thursday 14 September, 2017

Norish Plc

Half-year Report

RNS Number : 6899Q
Norish PLC
14 September 2017
 

 

 

Norish plc

Interim results 2017

Results

 

Norish plc (AIM: NSH), is pleased to announce its interim results for the six months ended 30 June 2017.

 

Financial Highlights

·     Total revenue increased by 31% to £20.5m (H1 2016: £15.6m)

·     Revenue from the Cold Store division increased by 11.8% to £7.045m (H1 2016: £6.3m)

·     Revenue from the Protein Trading business increased by 34% to £11.5m (H1 2016: £8.6m)

·     Operating profit increased by 55% to £0.76m (H1 2016: £0.49m)

·     Profit before tax increased by 85% to £0.65m (HI 2016 : £0.35m)

·     Diluted adjusted Eps increased by 70% to 1.7p ( HI 2016 : 1p)

·     Net debt was higher at £5.4m (H1 2016: £3.3m)

 

 

Operational Highlights

 

·     Cold stores comprise, by far, the greatest proportion of our Plant, Property and equipment, in excess of 91% at end June 2017. This division recorded sales growth of 11.8%, when compared with the same period in the prior year. Contribution increased by 65% on the same period in the prior year.

 

·     The growth in sales and contribution was relatively evenly spread across both the North West and South East cold store divisions. Costs increased by 6% in the period under review, reflecting growth in energy and labour costs. These costs are constantly under review.

 

·     The contribution of the protein trading business, Town View Foods, was also ahead of the comparable period in the prior year, with sales growth of 33% and contribution ahead by 13%.

 

·     Our start-up businesses, including dairy and Foro International Connections Limited generated a loss of £0.2m in the first half. We expect these losses to be significantly reduced by year end and these businesses to be profitable in 2018.

 

Operations

 

Cold Store Division

 

The North West cold store division which comprises the freehold sites at Wrexham and Birmingham performed well in the first half of 2017, reflecting a combination of increased intakes, greater blast freezing volumes, improved pricing and tight control on costs. Sales increased by 9.9% year on year.

 

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 substantially ahead of the same period last year. There was an increase in profitability at the Bury site, compared to last year, which helped overall divisional performance. Sales in the South East increased by 11.9%, reflecting higher intakes and greater blast freezing volumes.

 

Protein Trading

 

Our protein trading division which consists of Town View Foods Limited accounted for sales of £11.5m, against £8.6m last year. It contributed £0.32m for the period, up from £0.29m for the same period last year.

Town View Foods trades in protein products mainly beef, pork, lamb and chicken. Sales from pork and chicken increased by £1.9m during the period, while sales from beef and lamb increased by £1m.

 

 

Dairy

 

The dairy division continues to make progress as we near the end of the capital investment phase in the business - we now have a high quality leased asset which should deliver attractive returns on capital. We run a low-cost grass-based system based on seasonal block calving, and as such our costs are heavily weighted toward the first half of the year. This impacts on first half/second half profitability split, with revenues more evenly spread throughout the year. We also incurred some once off start-up costs during the commissioning phase of our facilities but we are now operating more efficiently. Our asset utilization and operational efficiency will continue to improve as we build our dairy herd at Cantwellscourt Farm, through 2018.

 

Capital

 

During the period we invested £1.2m (2016: £0.3m), £1m in the dairy farm in Kilkenny and £0.2m in routine capital expenditure in the temperature controlled division.

 

Outlook

 

Trading since July 1st continues to be robust for the group as a whole.

 

Within the British Cold Store industry, three new licences for store product destined for China have been issued in recent weeks to other companies operating in our sector. This may result in the loss of a customer (s) but we are satisfied that any vacated space will be filled quickly, with other remunerative work. As has been the case in the UK Food Manufacturing sector, investment in new cold store capacity is rare and when it happens tends to be dedicated to a specific customer, with a long term contract in place. While it is difficult to assess overall industry capacity, anecdotal evidence suggests cold store capacity is declining as older assets become obsolete. Our assets are well invested and should benefit from any further capacity reductions in that part of the supply chain, relevant to our business.

 

Town View Foods continues to deliver strong results, from a more diversified products mix.

 

Demand for dairy products continues to grow globally. Ireland is exceptionally well placed to benefit from this growth. Our major exporting competitors, with the exception of the US are unlikely to increase dairy output much in the next few years. Ireland's milk suppliers are very competitive when compared with other suppliers globally and expansion continues apace. We believe our milk business will see opportunities for growth in dairy technology, dairy breeding as well as dairy production in the years ahead.

 

The guidance for 2017 is increased from the previous range of 2.75p to 3p to a new range of 3.2p to 3.5p (fully diluted adjusted eps).

 

Dividend

 

The board does not recommend the payment of an interim dividend, unchanged from last year.

 

 

 

 

 

 

 

 

 

 

 

Norish plc





Consolidated income statement





For the six months ended 30 June 2017












Six months

Six months

Year



ended

ended

ended



30 June

30 June

31 December



2017

2016

2016



(Unaudited)

(Unaudited)

(Audited)








£'000

£'000

£'000






Continuing operations





Revenue


20,545

15,555

32,098

Cost of sales


(19,416)

(14,744)

(30,757)






Gross profit


1,129

811

1,341






Other income


49

-

238

Administrative expenses


(414)

(325)

(707)

 

Operating profit from continuing operations


764

486

872






Finance income- fair value gain on swaps


10

3

20

Finance income - interest receivable


-

-

10

Finance expenses - interest paid


(113)

(121)

(240)

Finance expenses - notional interest


(12)

(18)

(29)






Profit on continuing activities before taxation


649

350

633






Income taxes - Corporation tax


(141)

(75)

(210)

Income taxes - Deferred tax




18






Profit for the period attributable to owners of the parent from continuing operations


508

275

441






Loss from discontinued activities


(9)

(40)

(161)






Profit for the period


498

235

280






Other comprehensive income


-

-

-






Total comprehensive income for the year


498

235

280

 

Profit for the period attributable to owners of parent


514

243

291

Loss for the financial year attributable to non-controlling interest


(16)

(8)

(11)

 

Earnings per share expressed in pence per share:





From continuing operations

- basic


1.7p

1.0p

1.5p

- diluted


1.7p

1.0p

1.5p

 

From discontinued operations

- basic


(0)p

(0.2)p

(1.2)p

- diluted


(0)p

(0.2)p

(1.2)p






 

Norish plc




Interim balance sheet




As at 30 June 2017





As at

As at

As at


30 June

30 June

31 December


2017

2016

2016


(Unaudited)

(Unaudited)

(Audited)






£'000

£'000

£'000

ASSETS




Non-current assets




Goodwill

2,485

2,338

2,403

Biological assets

618

345

540

Property, plant and equipment

17,449

15,847

16,635


20,552

18,530

19,578

Current assets




Trade and other receivables

7,327

5,642

6,264

Inventories

505

227

483

Cash and cash equivalents

1,279

3,196

2,044

Assets of disposal group classified as held for sale

284

125

698


9,395

9,190

9,489





TOTAL ASSETS

29,947

27,720

29,067





Equity attributable to equity holders of the parent

And non-controlling interest




Share capital

5,616

5,616

5,616

Share premium account

7,281

7,281

7,281

Capital conversion reserve fund

23

23

23

Treasury shares

(563)

(563)

(563)

Retained earnings

3,440

3,224

2,926

Equity attributable to equity holders of the parent

15,797

15,581

15,283

Non-controlling Interest

(38)

(19)

(22)

TOTAL EQUITY

15,759

15,562

15,261

Non-current liabilities




Borrowings

2,485

3,312

3,006

Financial Liabilities at fair value through profit or loss

-

183

44

Deferred tax

925

945

925


3,410

4,440

3,975





Current liabilities




Trade and other payables

6,067

4,208

5,082

Financial Liabilities at fair value through profit or loss

167

248

255

Current tax liabilities

346

103

205

Borrowings

4,192

3,159

4,282

Liabilities of disposal group classified as held for sale

6

-

7


10,778

7,718

9,831





TOTAL EQUITY AND LIABILITIES

29,947

27,720

29,067









 

Norish plc








 

Consolidated statement of changes in equity







 

For the six months ended 30 June 2017







 







Non-


 


Share

Share

Other

Retained


Controlling


 


capital

Premium

Reserves

Earnings

Total

Interest


Total


(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)


(Unaudited)


£'000

£'000

£'000

£'000

£'000

£'000


£'000










At 1 January 2016

5,344

6,990

23

2,981

15,338

(11)


15,327










Net profit for the period

-

-

-

243

243

(8)


235

Issue of share capital

272

291

-

-

563

-


563

Share issue costs

-

-

(563)

-

(563)

-


(563)

Equity dividends paid (recognised directly in equity)

-

-

-

-

-

-


-

At 30 June 2016

5,616

7,281

(540)

3,224

15,581

(19)


15,562










Net loss  for the period

-

-

-

48

48

(3)


45

Issue of share capital

-

-

-

-

-

-


-

Share issue costs

-

-

-

-

-

-


-

Equity dividends paid (recognised directly in equity)

-

-

-

(346)

(346)

-


(346)

At 31 December 2016

5,616

7,281

(540)

2,926

15,283

(22)


15,261










Net profit for the period

-

-

-

514

514

(16)


498

Issue of share capital

-

-

-

-

-

-


-

Treasury shares

-

-

-

-

-

-


-

Equity dividends paid (recognised directly in equity)

-

-

-

-

-

-


-

At 30 June 2017

5,616

7,281

(540)

3,440

15,797

(38)


15,759



 

Norish plc




Consolidated cash flow statement




For the six months ended 30 June 2017





Six months

Six months

Year


Ended

ended

Ended


30 June

30 June

31 December


2017

2016

2016


(Unaudited)

(Unaudited)

(Audited)


£'000

£'000

£'000

Profit on continuing activities before taxation

649

350

633

Gain on biological assets

(49)

-

(238)

Loss on discontinued activities

(9)

(40)

(161)

Finance expenses

125

139

269

Finance income

(10)

(3)

(30)

Depreciation - property, plant and equipment

360

318

625


1,066

764

1,098

Changes in working capital:




(Increase)/decrease  in inventories

(22)

159

(97)

(Increase)/decrease in trade and other receivables

(649)

65

(1,130)

Decrease in current liabilities held for sale

(1)

(57)

(200)

Increase/(decrease) in payables

983

(140)

885

Cash generated from operations

1,377

791

556





Interest paid

(113)

(121)

(240)

Interest received

-

-

10

Taxation paid

-

(13)

(49)

Net cash from operating activities

1,264

657

277

Investing activities




Investment in intangible assets

(82)

-

(65)

Purchase of biological assets

(29)

(345)

(302)

Purchase of property, plant and equipment

(1,175)

(280)

(1,375)

Net cash used in investing activities

(1,286)

(625)

(1,742)

Financing activities




Dividends paid to shareholders

-

-

(346)

Deferred consideration payments

(133)

(94)

(220)

Share issue proceeds

-

-

-

Share issue costs

-

-

-

Invoice finance (payments)/receipts

(74)

(64)

747

Overdraft receipts

-

-

-

Finance lease capital repayments

(118)

(66)

(152)

Finance lease advance

-

-

219

Term loan repayments

(418)

(995)

(1,122)

Net cash used in financing activities

(743)

(1,219)

(874)





Net decrease in cash and cash equivalents

(765)

(1,187)

(2,339)





Cash and cash equivalents, at beginning of period

2,044

4,383

4,383

Cash and cash equivalents end of period

1,279

3,196

2,044

 

Note: The accounting policies applied throughout the period are consistent with those applied for the year ended 31 December 2016, as set out in the 2016 Annual Report.

 

 

Enquiries:

Norish


Aidan Hughes, Finance Director

Telephone: + 44 1293 862 498



Davy


Anthony Farrell

Telephone: + 353 1 679 6363

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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