14 March 2023

Volvere plc

(the "Group" or "Volvere")

Trading Update and Notice of Final Results

Volvere plc (AIM: VLE), the growth and turnaround investment company, is pleased to provide the following trading update for the financial year ended 31 December 2022.  All data in this announcement is unaudited, although the comparative information for the year ending 31 December 2021 has been extracted from audited data for that year. 

Shire Foods Limited ("Shire"), the Group's 80 per cent. owned frozen pastry products manufacturer, was the Group's principal continuing trading subsidiary during the year and, along with the Group's central activities, represents the Group's continuing operations.  On 8 November 2022, the Group announced the closure of Indulgence Patisserie Limited ("Indulgence"), the Group's frozen desserts business, in view of significant continuing losses.  Indulgence will, therefore, be reported in the Group's final results as "discontinued operations".

Financial Performance

Revenue from continuing operations was approximately £38.03 million (2021: £30.61 million) and an overall profit before tax of £2.33 million (2021: profit before tax of £1.07 million).

Revenue from discontinued operations was approximately £3.53 million (2021: £4.97 million) and an overall loss before tax and Group management charges of £2.57 million (2021: loss of £1.01 million).

The Group expects to report total revenue from continuing and discontinued operations of approximately £41.56 million (2021: £35.58 million) and an overall loss before tax of £0.24 million (2021: profit before tax of £0.07 million).

Operating Businesses

Overview

Given the wider economic environment, Shire's performance was good.  In line with most businesses in the UK, the company faced significant upward pressure in raw material costs and overheads, as well as having to recruit within a challenging labour market.  Similar pressures affected Indulgence, but its smaller scale and less efficient operations meant that its business was, on balance, no longer viable.

Shire Foods - continuing

Shire continued to grow in 2022, with revenues increasing by approximately 24.2% to a new record of £38.03 million (2021: £30.61 million).

Profit before tax, intra-group interest and management charges* was approximately £2.78 million (2021: £2.14 million).  Profit before tax was £2.43 million (2021: £1.89 million) - with the difference being intra-group interest and management charges. During 2022, Shire continued to provide operational and commercial support to Indulgence and this again has resulted in some costs being recharged which would otherwise have been borne by Shire.

Indulgence Patisserie Limited

Manufacturing was suspended in August 2022 and did not recommence given the outlook for the business.  All roles were, regrettably, made redundant.  The result for Indulgence reflects the trading losses in the year along with the inevitable write-downs of stock, plant and equipment whose value was impaired following the decision to cease trading. 

The loss before tax, intra-group interest and management charges* was approximately £2.57 million (2021: loss £1.01 million), stated after impairment charges and other asset write-downs associated with closure of approximately £0.48 million (2021: Nil).  The loss before tax was £2.68 million (2021: loss £1.10 million) - with the difference being intra-group interest and management charges.

Since the year end, the Group has sold one of the Indulgence properties at a modest premium to its book value and is actively marketing the other. The value of the sold property has been reflected in the year end valuation, with the remaining property stated at the last independent valuation.

Whilst there may be some limited costs associated with Indulgence in 2023, the Group does not expect these to be material.

Group Net Assets per Share and Net Assets

The Group expects to report year-end consolidated net assets per share (excluding non-controlling interests) of approximately £13.82 (31 December 2021: £13.49) and Group net assets of approximately £35.58 million (31 December 2021: £37.05 million).

Of the Group net assets, cash and marketable securities represented approximately £20.78 million (31 December 2021: £21.87 million).

The reduction in the Group's cash and net assets reflects the purchases of treasury shares amounting to £2.09 million during the year.

Current Trading

The past year has been, without doubt, one of the Group's most challenging. The decision to close Indulgence was unfortunate but necessary given the circumstances.

Since the year-end, labour market challenges and raw material price pressures have shown some signs of abating.  Early indications are that the focus on margins in Shire has ensured that we have commenced 2023 with appropriate customer pricing. 

In the wider economy, we are seeing an increasing number of investment opportunities across multiple sectors as businesses grapple with higher energy, raw material, staff and finance costs at a time of flat or reduced demand.  Our strong balance sheet will enable us to capitalise on these opportunities as they arise.   

* profit before intra-group interest and management charges is considered to be a relevant, 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.

Notice of Final Results

Volvere expects to announce its full year results for the year ended 31 December 2022 on or around 26 May 2023.

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

For further information:

Notes to editors:

Volvere plc (AIM: VLE), is a growth and turnaround investment company. The Group's sole current trading activity is food manufacturing. The Group currently employs approximately 250 people.

For further information, please visit www.volvere.co.uk.

Forward-looking statements:

This announcement 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.