TIDMGUS
RNS Number : 6104A
Gusbourne PLC
30 September 2015
Gusbourne Plc
(the "Company")
Half Yearly Report
Gusbourne Plc, the English sparkling wine producer, today
announces its unaudited interim results for the six months ended 30
June 2015.
Highlights
-- Construction of new winery building underway to provide
increased winemaking capacity to cater for increasing
production;
-- Awarded two Gold Outstanding medals from the International
Wine and Spirit Competition for Gusbourne Blanc de Blancs 2010 and
Gusbourne Blanc de Blancs 2007 Late Disgorged in May 2015. A
further four gold medals were awarded to Gusbourne wines in other
major international competitions during the period;
-- An additional 76 acres of vineyards planted in May 2015
which, together with the Group's existing vineyards in Kent and
West Sussex, bring the total acreage under vine to 232 acres;
and
-- Net loss for the period of GBP726,000 (H1 2014 - GBP501,000)
in line with expectations and the Company's long term development
plan.
Ben Walgate, CEO, commented:
"I am delighted with the continued progress of the Company in
line with our long term development plan, including operational
expansion and the continued development of the Gusbourne brand.
In May this year we were honoured with the award of two 'Gold
Outstanding' medals by the International Wine and Spirit
Competition ("IWSC"). In addition we were also awarded one gold and
three silver medals by the IWSC. A further four gold medals were
awarded at other prestigious international competitions (Decanter
World Wine Awards, International Wine Competition and The Champagne
and Sparkling Wine World Championships), which means that 2015 has
been our most successful year to date at international wine
competitions.
Our plans for further vineyard expansion were implemented in May
this year with the planting of a further 76 acres of vineyards. The
bottling of the 2014 harvest, in April, has added considerably to
our stocks for sale in future years.
The production of premium quality wine from new vineyards is, by
its very nature, a long-term proposition. With the rigorous
standards that we employ it is an eight year cycle from planting a
vine to selling the finished product.
I would like to take this opportunity to thank our customers,
our dedicated and passionate staff and our supportive shareholders,
all of whom make it possible for us to continue producing some of
the world's finest sparkling wines."
Financials
Gusbourne PLC ("the Company") is engaged, through its wholly
owned subsidiary Gusbourne Estate Limited (together the "Group"),
in the production and distribution of a range of high quality and
award winning English sparkling and still wines from grapes grown
in its own vineyards in Kent and West Sussex. The majority of the
Group's mature vineyards are located at its freehold estate at
Appledore in Kent where the winery is also based. Additional
vineyards were planted in both Kent and West Sussex in 2013, 2014
and 2015.
Results for the six months ended 30 June 2015
Sales for the period amounted to GBP190,000 (H1 2014 -
GBP194,000). These sales, which are broadly unchanged from the
comparative period in 2014, reflect the limited stock availability
of earlier year vintages. Cost of sales remains higher than the
Group's anticipated longer term run rates. This is due to the
continuing impact of fair valuing initial stocks of wine which were
acquired as part of the acquisition of the Gusbourne Estate
business in September 2013. This impact will diminish over time.
Gross profit in the period was GBP61,000 (H1 2014 - GBP26,000). The
increase is largely due to a reduced cost of sales as a result of
the diminishing impact of the fair value stocks acquired in
September 2013. Gross profit margin in the period was 32% (H1 2014
- 13 %). This margin is expected to continue to increase over time
as a result of economies of scale arising from increased
production. Administrative expenses for the period of GBP574,000
(H1 2014 - GBP450,000) reflect continuing investment in the
development and growth of the business and the Gusbourne brand in
particular. The operating loss for the period was GBP513,000 (H1
2014 - GBP424,000). The exceptional item of GBP115,000 reflects a
charge to the income statement in respect of the amendment to the
terms of the Convertible Bonds on 27 May 2015. This charge is a
non-cash adjustment and does not affect the net assets of the Group
as the corresponding entry is a credit to retained earnings. The
loss before tax was GBP726,000 (H1 2014 - GBP516,000) after net
finance costs of GBP98,000 (H1 2014 - GBP92,000). These planned
losses continue to be in line with expectations and the long-term
development strategy of the Group.
Balance Sheet
The changes in the Group's balance sheet during the period to 30
June 2015 reflect the ongoing investment in, and development of,
the Group's business, net of income from wine sales. This includes
the investment in additional vineyards planted in Kent and West
Sussex in May 2015 and includes the ongoing investment in the
vineyards established in West Sussex and Kent during 2013 and 2014.
This investment in vineyards is reflected in capital expenditure of
GBP565,000 (H1 2014 - GBP345,000).
In addition the Group invested in additional plant and equipment
for the vineyards and the winery amounting to GBP436,000 (H1 2014 -
GBP62,000). Total assets at 30 June 2015 of GBP14,258,000 (H1 2014
- GBP11,057,000) include freehold land and buildings of
GBP4,615,000 (H1 2014 - GBP4,596,000), inventories of wine stocks
amounting to GBP1,473,000 (H1 2014 - GBP1,260,000), GBP1,391,000 of
biological assets (H1 2014 - GBP1,413,000) and GBP2,885,000 of cash
(H1 2014 - GBP1,074,000). Intangible assets of GBP1,007,000 (H1
2014 - GBP1,007,000) arise from the acquisition of the Gusbourne
Estate business on 27 September 2013. Biological assets reflect the
fair value of grape vines calculated in accordance with
International Accounting Standard 41.
It is worth noting that the Group's inventories are reported at
the lower of cost and net realisable value and that these
inventories are expected to grow significantly until the Group
reaches full production maturity, bearing in mind the long
production cycle in relation to sparkling wine and related vineyard
establishment. The anticipated underlying surplus of net realisable
value over cost of these wine inventories will become an
increasingly significant factor of the Group's asset base.
The Group's net tangible assets at 30 June 2015 amount to
GBP8,778,000 (H1 2014 - GBP5,623,000) and represent 90% of total
equity (H1 2014 - 85%).
Financing
The Group's activities are financed by its own cash resources,
loans, other borrowings and convertible bonds. Loans, other
borrowings and convertible bonds at 30 June 2015 amount in total to
GBP3,679,000 (H1 2014 - GBP3,792,000) and represent 38% of total
equity (H1 2014 - 57%).
On 17 June 2015, the Company completed an open offer to existing
shareholders. The total consideration was GBP2,525,000 of which
gross cash received by the Company was GBP2,136,000. The Company
also benefited from a reduction of GBP389,000 in the debt of due
under the Convertible Bond.
Post period end, on 30 July 2015, the Company completed a
placing of ordinary shares for cash proceeds of GBP368,000.
The cash proceeds of the Open Offer and Placing will be used for
the ongoing investment in new vineyards planted in 2015, an
expansion of the winery capacity and for working capital,
represented primarily by the Group's sparkling wine stocks.
The achievement of the Group's long term development strategy
will depend on the raising of further equity and/or debt funds to
achieve those goals. The production of premium quality wine from
new vineyards is, by its very nature, a long term project. It takes
four years to bring a vineyard into full production and a further
four years to transform these grapes into Gusbourne's premium
sparkling wine. Additional funding will be sought by the Company
over the coming few years to invest in vineyards, winery capacity,
and stocks of wine as well as brand development, in line with its
development strategy.
For further information contact:
Gusbourne Plc
Andrew Weeber/Ben Walgate +44 (0)1233 758 666
Cenkos Securities plc
Nicholas Wells +44 (0)20 7397 8900
Note: This announcement and other press releases are available
to view at the Company's website: www.gusbourneplc.com
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Six months Six months Year
to to ended
30 June 30 June 31 December
Notes 2015 2014 2014
GBP'000 GBP'000 GBP'000
Revenue 190 194 434
Cost of sales (129) (168) (361)
Gross profit 61 26 73
Change in fair value
of biological assets 5 - - (74)
Administrative expenses (574) (450) (918)
---------- --------------- -----------
Total administrative
expenses (574) (450) (918)
Loss from operations (513) (424) (919)
Exceptional item (115) - -
Finance income 2 15 15 38
Finance expense 2 (113) (107) (223)
Loss before tax (726) (516) (1,104)
Tax expense - 15 60
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Loss for the period
attributable to
owners of the parent (726) (501) (1,044)
---------- --------------- -----------
Loss per share attributable
to
the ordinary equity
holders of the parent:
Basic (3.98p) (3.29p) (6.70p)
Diluted (3.98p) (3.29p) (6.70p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
Notes 2015 2014 2014
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Intangibles 3 1,007 1,007 1,007
Property, plant and equipment 4 7,229 6,071 6,339
Biological assets 5 1,391 1,413 1,237
9,627 8,491 8,583
--------- --------- -----------
Current assets
Inventories 6 1,473 1,260 1,435
Trade and other receivables 273 232 213
Cash and cash equivalents 2,885 1,074 1,842
--------- --------- -----------
4,631 2,566 3,490
--------- --------- -----------
Total assets 14,258 11,057 12,073
--------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (794) (590) (336)
Loans and borrowings 7 (29) - -
(823) (590) (336)
--------- --------- -----------
Non-current liabilities
Loans and borrowings 7 (2,126) (2,025) (2,025)
Convertible deep discount
bonds 8 (1,524) (1,767) (1,841)
Deferred tax liabilities - (45) -
(3,650) (3,837) (3,866)
Total liabilities (4,473) (4,427) (4,202)
NET ASSETS 9,785 6,630 7,871
--------- --------- -----------
Issued capital and reserves
attributable to
owners of the parent
Share capital 911,452 7,612 8,927
Share premium 815 346 815
Merger reserve (13) (13) (13)
Convertible bond reserve 95 95 95
Retained earnings (2,564) (1,410) (1,953)
------- ------- -------
TOTAL EQUITY 9,785 6,630 7,871
------- ------- -------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Six months to months to Six months to Period to
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Cashflows from operating
activities
Loss for the year/period before tax (726) (516) (1,104)
Adjustments for:
Exceptional item 115 - -
Depreciation of property, plant and
equipment 96 60 . 130
Profit on disposal of property,
plant
and equipment - - (4)
Finance expense 113 107 223
Finance income (15) (15) (38)
Movement in biological assets (154) (173) 74
Decrease/(increase) in trade and other
receivables (60) 19 38
Decrease/(increase) in inventories (38) 50 . (195)
Increase in trade and other payables 458 266 12
----------------------- ------------- ---------
Cash outflow from operations (211) (202) (864)
Income taxes paid - - -
Net cash out flows from operating
activities (211) (202) (864)
----------------------- ------------- ---------
Investing activities
Purchases of property, plant and
equipment,
excluding vineyard establishment (436) (62) (159)
Investment in vineyard establishment (565) (345) (588)
Sale of property, plant and equipment 15 - 5
Interest received 12 15 33
Net cash from investing activities (974) (392) (709)
----------------------- ------------- ---------
Financing activities
Hire purchase finance 137 - -
Hire purchase repayments (7) - -
Interest paid (38) (35) (72)
Issue of ordinary shares 2,136 - 1,788
Share issue expenses - - (4)
-----------------------
Net cash from financing activities 2,228 (35) 1,712
-----------------------
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
For the six months ended 30 June 2015
Unaudited Unaudited Audited
Six months to Six months to Six months to Period to
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Net increase/(decrease) in cash and cash
equivalents 1,043 (629) 139
Cash and cash equivalents at beginning of
period 1,842 1,703 1,703
---------------------------- ------------- ------------
Cash and cash equivalents at end of period 2,885 1,074 1,842
============================ ============= ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2015
Total
attributable
to equity
Convertible holders
Share Share Merger bond Retained of
Audited: capital premium reserve reserve earnings parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December 2013 7,612 346 (13) 95 (909) 7,131
Shares issued 1,315 469 - - - 1,784
Comprehensive
loss for the
period - - - - (1,044) (1,044)
______ ______ ______ ______ _____ ______
31 December 2014 8,927 815 (13) 95 (1,953) 7,871
______ ______ ______ ______ ______ ______
Total
attributable
to equity
Convertible holders
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Share Share Merger bond Retained of
Unaudited: capital premium reserve reserve earnings parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December 2014 8,927 815 (13) 95 (1,953) 7,871
Share issue 2,525 - - - - 2,525
Shares issued
on conversion
of Bond 115 115
Comprehensive
loss for the
period - - - - (726) (726)
______ ______ ______ ______ _____ ______
30 June 2015 11,452 815 (13) 95 (2,564) 9,785
______ ______ ______ ______ ______ ______
NOTES TO THE ACCOUNTS
For the six months ended 30 June 2015
1 Statement of accounting policies
Basis of preparation
The interim financial statements have been prepared in
accordance International Financial Reporting Standards (IFRSs) as
adopted by the EU, applying the accounting policies and
presentation that were applied in the preparation of the Company's
published consolidated financial statements for the period ended 31
December 2014 and are consistent with the accounting policies
expected to apply in its financial statements for the year ended 31
December 2015.
The financial information for the six months ended 30 June 2015
has not been subject to an audit nor a review in accordance with
International Standard on Review Engagements 2410, Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity, issued by the Auditing Practices Board. The
comparative financial information presented herein for the period
ended 31 December 2014 does not constitute full statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The
Group's annual report and accounts for the period ended 31 December
2014 have been delivered to the Registrar of Companies. The Group's
independent auditor's report was unqualified and did not include
references to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
a statement under section 498(2) or 498(3) of the Companies Act
2006.
The Board of the Company continually assesses and monitors the
key risks of the business. These risks have not significantly
changed from those set out in the Company's Annual Report for the
period ended 31 December 2014. The Board has reviewed forecasts and
remains satisfied with the Company's funding and liquidity
position. On the basis of its forecast and available facilities and
cash balances held on the balance sheet, the Board has concluded
that the going concern basis of preparation continues to be
appropriate.
2 Finance income and expenses
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Finance income
Amortisation of bank loan
incentive 7 - 14
Interest received on bank
deposits 8 15 24
Total finance income 15 15 38
--------- --------- -----------
Finance expense
Interest payable on borrowings 38 35 72
Amortisation of bank transaction
costs 3 - 5
Convertible deep discount
bond charge 72 72 146
--------- --------- -----------
Total finance expense 113 107 223
--------- --------- -----------
3 Intangibles
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Goodwill 777 777 777
Brand 230 230 230
1,007 1,007 1,007
--------- --------- -----------
4 Property, plant and equipment
Freehold Plant,
Land machinery Vineyard
and and motor establishment Computer
Buildings vehicles equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2014 4,610 686 458 19 5,773
Additions 14 137 588 8 747
Disposals - (1) - - (1)
At 31 December 2014 4,624 822 1,046 27 6,519
At 1 January 2015 4,624 822 1,046 27 6,519
Additions 56 371 565 9 1,001
Disposals - (15) - - (15)
At 30 June 2015 4,680 1,178 1,611 36 7,505
Accumulated depreciation
At 1 January 2014 9 39 - 2 50
Depreciation charge for
the year 37 85 - 8 130
Depreciation on disposals - - - - -
At 31 December 2014 46 124 - 10 180
At 1 January 2015 46 124 - 10 180
Depreciation charge for
the year 19 73 - 4 96
Depreciation on disposals - - - - -
At 30 June 2015 65 197 - 14 276
Net book value
At 31 December 2014 4,578 698 1,046 17 6,339
At 30 June 2015 4,615 981 1,611 22 7,229
Vineyard establishment expenditure includes planting expenditure
in relation to vineyards which is carried forward at cost until the
vines reach maturity at which point they are re-measured and
transferred to biological assets.
5 Biological assets
Vines
GBP'000
At 1 January 2014 1,240
Fair value of grapes harvested and
transferred to inventory (210)
Crop growing costs 281
Change in fair value due
to price, yield and maturity (74)
At 31 December 2014 1,237
Crop growing costs 154
At 30 June 2015 1,391
-------
6 Inventories
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Finished goods 98 100 126
Work in progress 1,375 1,160 1,309
1,473 1,260 1,435
--------- --------- -----------
7 Loans and borrowings
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Bank loan 2,025 2,025 2,025
Hire purchase (all payable
within 1- 5 years) 101 - -
2,126 2,025 2,025
--------- --------- -----------
The bank loan of GBP2,025,000 is at an interest rate of 3% over
Barclays Bank plc base rate and is due for repayment in full in
September 2018. It is secured by way of a fixed charge over the
group's land and buildings at Appledore, Kent and a floating charge
over all other property and undertakings.
Hire purchase balances of GBP29,000 payable within one year are
shown within loans and borrowing under current liabilities.
8 Convertible bonds
GBP'000
Present value of debt element
at 1 January 2015 1,841
Discount expense for the
period 72
Converted into shares during
the period (389)
-------
Present value of debt element
at 30 June 2015 1,524
Equity element at 1 January
and 30 June 2015 95
Total carrying value at
30 June 2015 1,619
-------
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