RNS Number : 9960U
Roebuck Food Group PLC
31 March 2023
 

 

Roebuck Food Group plc (AIM: RFG), is pleased to announce its results for the year ended 31 December 2022.

 

Group Financial Highlights - Continuing Operations

·    Group revenue increased by 29% to £31.4m (2021: £24.3m)

·    Earnings per share of 0.5p on continuing operations (2021 : loss of 3.5p)

·    Profit after tax from continuing operation of £0.2m ( 2021 : loss £1.1m)

·    EBITDA of £0.5m from the Dairy division (2021 : £0.1m)

·    EBITDA of £0.4m from the Sourcing division (2021: £0.3m)

 

Divisional Highlights- Continuing Operations

 

£'000

Sourcing

Dairy


2022

2021

2022

2021

Revenue

29.9

23.3

1.5

1.0

EBITDA

0.4

0.3

0.5

0.1

Operating Profit/(loss)

0.4

0.3

0.3

(0.8)

Operating Margin

1.3%

1.3%

20%

(80%)

 

 

Sourcing Division

 

Sales at our sourcing division increased by 28% in 2022, compared with the same period in 2021, from £23.3m to £29.9m. Operating profit improved from £0.3m to £0.4m.

 

Townview Foods Ltd, continues to execute its commercial strategy which centres on diversification of products and end-markets. Our core animal proteins business continues to deliver consistent revenue and profits with a low-risk trading model and diversification of product sourcing and end-markets. From a standing start in March 2022, we have grown our dairy ingredients trading business into a significant operation both in terms of revenues and profits and we are confident about its prospects in 2023. We are also developing capability in plant-based ingredients which will allow us to offer a full portfolio of ingredient solutions to our customers. Operating margins declined slightly in the period, mainly due to the investment in talent, ICT and marketing. Overall, we are confident that our commercial strategy will continue to deliver profitable growth in 2023.

 

As part of a strategic alignment with Townview Foods Ltd, Foro International Connections Ltd was rebranded to Townview Sourcing Ltd in May 2022.

 

Townview Sourcing sales increased by 57% from £2.1m in 2021 to £3.3m in 2022.

The strategic alignment between Townview Foods Ltd and Townview Sourcing Ltd companies will create cost saving efficiencies and allow Roebuck Food Group Plc to have continuing ease of access to the UK, Republic of Ireland and European markets.

 

Chairman's Statement (Continued)

Dairy Division

Our primary dairy operation, Cantwellscourt Farm Ltd, exceeded expectations in 2022 in revenue and profit terms, driven by record dairy prices and good delivery across its management KPIs. Milk production was down 3% whilst revenue from milk sales was up 43% year on year. This was partially offset by input cost inflation, particularly in feed and fertiliser; our pasture-based system gives us some protection from rising input prices.

We expect the average farmgate milk price in 2023 to weaken versus last year but to remain at a level which delivers above average returns.

Discontinued

Our subsidiary, Grass to Milk Company Ltd, exited the Chinese market in H1 2022 due to ongoing lockdowns, supply chain disruptions and cost inflation. China has proven a difficult market for a majority of overseas dairy companies over the past 24-months with an unprecedented shift toward domestic supply. Opportunities for A2 protein ingredients in other export markets have failed to materialise, due to high dairy commodity prices making it difficult to achieve firm commitments from customers and a lack of interest from processors to dedicate capacity towards A2 during the scale-up phase. At this juncture, we do not have any immediate commercial prospects, so we have reclassified the business as a discontinued activity. Accordingly, we have impaired the intangible asset of £0.7m. The total loss from discontinued operations recogonised during the year is £1.1m.

 

During the year we also incurred an additional amount of £0.3m in respect of the sale of the cold store business that was sold in 2021.

Strategic Review

Following the successful sale of the Cold Stores business, Roebuck Food Group PLC (RFG), formerly known as Norish PLC, returned £49.92m to shareholders at the end of 2021. Overall, we believe our core sourcing and dairy businesses are well placed to deliver profitable growth in 2023, notwithstanding an expected reversal of some pricing tailwinds from 2022. We continue to examine M&A opportunities, which can complement our existing businesses, which fulfil our criteria in terms of growth prospects, margins and returns. We remain focused on delivering shareholder value through efficient capital allocation.

Dividend

The board does not recommend the payment of a dividend.

 

On behalf of the board, I would like to thank the management team and staff for their commitment and contribution in 2022.

Ted Oneil_Signatures.jpg

Ted O'Neill

31 March 2023

 

Sales

 

Total Group revenue from continuing operations increased by 29% to £31.4m (2021: £24.3m). Revenues in the sourcing division increased by 28% to £29.9m (2021: £23.3m). Revenues in the dairy division increased by 50% to £1.5m (2021: £1m)

 

Gross profit

 

Gross profit from continuing activities increased to £571k (2021: £199k).

 

Operating profit/(loss)

 

Operating profit from continuing activities increased to £0.3m (2021: loss £1m), after an impairment charge of £Nil (2021: £0.9m relating to fixed assets).

 

Finance expense (net)

 

Net Finance expense increased to £0.12m (2021: £0.06m).

 

Loss from discontinued operations

 

Loss from discontinued operations £1.4m (2021: profit £39.1m). Current year loss is made up of £0.3m relating to residual cold store sale transaction costs and £1.1m from the discontinued operations of Grass to Milk.

 

 

Earnings per share

 

The basic adjusted earnings per share from continuing operations increased to 0.5p (2021: loss per share 3.5p).

 

 

Net Debt

 

The net debt position is £3.4m (2021: Net cash £1.4m). During the year we discharged £1.5m in respect of liabilities due in respect of the disposal of the cold store division in 2021.

 

 

Dividend

 

The board does not recommend a payment of a dividend.


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, and various items, such as trade receivables, trade payables etc., that arise directly from its operations.  The main purposes 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, liquidity risk, credit risk and foreign exchange 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 there are £0.1m at a floating rate of 5.44%.

 

Liquidity risk

 

The Group is in a net debt position of £3.4m. This is made up of cash of £1.5m, Invoice financing of £3.7m, term loans of £0.1m and leases of £1.1m.

 

Credit risk

 

The Group's policy is to minimise exposure to credit risk by performing the appropriate customer due diligence and monitoring the exposure to credit risk.

 

Foreign exchange risk

 

The Group's policy is to manage foreign exchange risk which arises principally in the product sourcing division. The Group does this by mainly purchasing Euros and US dollars at a fixed rate forward for cross currency transactions and using this rate in establishing a selling price for its goods in order to maintain an acceptable margin.

 

 

 

Gerard Murphy

Finance Director

 

 

Consolidated STATEMENT OF COMPREHENSIVE INCOME

 

for the financial year ended 31 December 2022


 

 

 

 

2022

Restated

2021


 

 

£'000

£'000

 





Continuing operations





Revenue



31,351

24,313

Cost of sales



(30,780)

(24,114)




 


Gross profit



571

199




 


Fair value gain on biological assets



182

161

Administrative expenses



(417)

(502)

Property, plant and equipment impairment



-

(862)




 


Operating profit/(loss)from continuing operations



336

(1,004)

 



 


Interest received



9

-

Finance expenses - lease interest



(28)

(26)

Finance expenses - interest on bank loans



(100)

(36)




 


Profit/(loss) on continuing activities before taxation



217

(1,066)




 


Income taxes - Corporation tax



(40)

(20)

Income taxes - Deferred tax



(21)

33




 


Profit/(loss) for the financial year from continuing operations



156

(1,053)

 



 


(Loss)/profit for the financial year from discontinued operations

 

 


    (1,404)

 

39,120

 



 


(Loss)/profit for the financial year attributable to

owners of the parent



(1,248)

38,067

 



 


Other comprehensive income/(expense)



169

(355)

 

Total comprehensive income for the financial year attributable to owners of the parent



(1,079)

37,712




 


 

 


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME




 


for the financial year ended 31 December 2022 (continued)




 





2022

2021




 


Earnings/(loss) per share expressed in pence per share:



 


From continuing operations

- basic



0.5p

(3.5)p

- diluted



0.5p

(3.5)p




 





 


From discontinued operations

- basic



(4.7)p

130.1p

- diluted



(4.7)p

130.1p




 


 

 


at 31 December 2022


 

 

2022

2021


 

 

£'000

£'000

Non-current assets

 

 

 


Goodwill


 

2,338

2,338

Intangible assets


 

-

665

Property, plant and equipment


 

2,162

2,014

Biological assets


 

884

762



 

5,384

5,779

Current assets


 

 


Trade and other receivables


 

7,223

3,988

Inventories


 

316

97

Cash and cash equivalents


 

1,491

4,543

 


 

9,030

8,628

 


 

 


TOTAL ASSETS


 

14,414

14,407

 


 

 


Equity attributable to owners of the parent


 

 


Share capital


 

564

564

Share premium account


 

-

-

Other reserves


 

(68)

(237)

Retained earnings


 

5,204

6,452

TOTAL EQUITY


 

5,700

6,779

 


 

 


Non-current liabilities


 

 


Borrowings


 

1,016

794

Deferred tax


 

58

35



 

1,074

829

Current liabilities


 

 


Trade and other payables


 

3,427

2,579

Liabilities - discontinued operations


 

298

1,869

Borrowings


 

3,915

2,351



 

7,640

6,799



 

 


TOTAL EQUITY AND LIABILITIES


 

14,414

14,407

 


 

 


 

 

      

 

 

Consolidated Statement of Changes in Equity

 

For the financial year ended 31 December 2022

 


 

 

 

 

 

 


 

 

 

 

 

 

Share

Share

Other

Other

Distributable

Retained

 

 

capital

premium

Reserves

Reserve

Earnings

Total


£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2021

5,640

7,321

141

-

5,750

18,852

Profit for the financial year

 

-

-

-

-

38,067

38,067

Foreign exchange loss

-

-

(355)

-

-

(355)

 

Total comprehensive income for the financial year

-

-

(355)

 

 

-

38,067

37,712

Equity dividends paid

Capital redemption

Gain on capital redemption in JSOP

Reduction in capital

-

-

-

(5,076)

-

-

-

(7,321)

-

-

-

(23)

 

-

(12,420)

-

12,420

(510)

(37,497)

642

-

(510)

 (49,917)

642

-








Transactions with owners

(5,076)

(7,321)

(23)

-

(37,365)

(49,785)

At 31 December 2021

564

-

(237)

-

6,452

6,779

 

 

 

 

 

 

 

Loss  for the financial year

-

-

-

-

(1,248)

(1,248)

Foreign exchange gain

-

-

169

-

-

169

Total comprehensive income for the financial year

-

-

169

-

(1,248)

(1,079)

Equity dividends paid

-

-

-

-

-

-








Transactions with owners

-

-

-

-

-

-

At 31 December 2022

564

-

(68)

-

5,204

5,700

 



Consolidated Cash Flow Statement 

 for the financial year ended 31 December 2022

 

2022

Restated

2021



£'000

£'000

Cash flow from operating activities


 


Profit/(loss) on continuing activities before taxation


217

(1,066)

Gain on biological assets


(182)

(161)

Loss on sale of biological assets


117

-

Foreign exchange gain


(201)

(50)

Loss on discontinued activities


(1,404)

(270)

Finance expenses


128

62

Finance income


(9)

-

Bad debt expense


41

13

Taxation charge


(40)

(5)

Impairment - Intangible asset


665

860

Impairment - property, plant and equipment


-

1,519

Depreciation - property, plant and equipment


191

1,699

Operating cash flows before changes in working capital


(477)

2,601

 


 


Changes in working capital and provisions:


 


(Increase) in inventories


(218)

(39)

(Increase)/ decrease in trade and other receivables


(3,223)

10

Decrease in current assets held for sale


-

381

(Decrease)/ increase in current liabilities held for sale


(1,571)

1,869

Increase/ (decrease) in payables


848

(554)

Taxation paid


(25)

(205)

Net cash (used)/ generated from operating activities


(4,189)

1,462

 

Cash flow from investing activities


 


Investment in intangible assets


-

(986)

Purchase of property, plant and equipment


(62)

(1,840)

Proceeds on disposal of subsidiary


-

55,160

Costs incurred on disposal of subsidiary


-

(3,533)

Cash included in subsidiary disposed


-

(72)

Sale of biological assets


149

127

Purchase of biological assets


-

(9)

Net cash generated from investing activities


87

48,847

 

Cash flows from financing activities

Dividends paid to shareholders

 

 

 

-

(510)

Invoice finance utilised


1,649

1,016

Finance lease capital repayments


(91)

(1,390)

JSOP capital redemption


-

642

Share Capital Redemption


-

(49,917)

Finance Lease advance


-

             616

Term loan repayments


(31)

(374)

Net cash generated/ (used) from financing activities


1,527

(49,917)

 


 


Net (decrease)/ increase in cash and cash equivalents


(3,052)

2,993

 

Cash and cash equivalents beginning of the financial year


4,543

1,550

Cash and cash equivalents end of the financial year


1,491

4,543






 

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