TIDMRFG
RNS Number : 9960U
Roebuck Food Group PLC
31 March 2023
Chairman's Statement
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 GBP31.4m (2021: GBP24.3m)
-- Earnings per share of 0.5p on continuing operations (2021 : loss of 3.5p)
-- Profit after tax from continuing operation of GBP0.2m ( 2021 : loss GBP1.1m)
-- EBITDA of GBP0.5m from the Dairy division (2021 : GBP0.1m)
-- EBITDA of GBP0.4m from the Sourcing division (2021: GBP0.3m)
Divisional Highlights- Continuing Operations
GBP'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 GBP23.3m to GBP29.9m.
Operating profit improved from GBP0.3m to GBP0.4m.
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 GBP2.1m in 2021 to
GBP3.3m 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
GBP0.7m. The total loss from discontinued operations recogonised
during the year is GBP1.1m.
During the year we also incurred an additional amount of GBP0.3m
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 GBP49.92m 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 O'Neill
31 March 2023
Financial Review
Sales
Total Group revenue from continuing operations increased by 29%
to GBP31.4m (2021: GBP24.3m). Revenues in the sourcing division
increased by 28% to GBP29.9m (2021: GBP23.3m). Revenues in the
dairy division increased by 50% to GBP1.5m (2021: GBP1m)
Gross profit
Gross profit from continuing activities increased to GBP571k
(2021: GBP199k).
Operating profit/(loss)
Operating profit from continuing activities increased to GBP0.3m
(2021: loss GBP1m), after an impairment charge of GBPNil (2021:
GBP0.9m relating to fixed assets).
Finance expense (net )
Net Finance expense increased to GBP0.12m (2021: GBP0.06m).
Loss from discontinued operations
Loss from discontinued operations GBP1.4m (2021: profit
GBP39.1m). Current year loss is made up of GBP0.3m relating to
residual cold store sale transaction costs and GBP1.1m 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 GBP3.4m (2021: Net cash GBP1.4m).
During the year we discharged GBP1.5m in respect of liabilities due
in respect of the disposal of the cold store division in 2021.
Financial Review (Continued)
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 GBP0.1m
at a floating rate of 5.44%.
Liquidity risk
The Group is in a net debt position of GBP3.4m. This is made up
of cash of GBP1.5m, Invoice financing of GBP3.7m, term loans of
GBP0.1m and leases of GBP1.1m.
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
Restated
2022 2021
GBP'000 GBP'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
Consolidated Statement of financial position
at 31 December 2022
2022 2021
GBP'000 GBP'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
Other
Share Share Other Distributable Retained
capital premium Reserves Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 - - - - (510) (510)
Capital redemption - - - (12,420) (37,497) (49,917)
Gain on capital redemption
in JSOP - - - - 642 642
Reduction in capital (5,076) (7,321) (23) 12,420 - -
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 Restated
2022 2022 2021
GBP'000 GBP'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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END
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March 31, 2023 09:13 ET (13:13 GMT)
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