TIDMGUS
RNS Number : 7874S
Gusbourne PLC
29 September 2014
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 2014
Key Highlights
-- An additional 50 acres of vineyards planted in May 2014 on
the Company's freehold estate in Kent, bringing the total acreage
under vine to 155 acres.
-- Bottling of the 2013 vintage in May and June 2014, following
the successful October 2013 harvest which has added significantly
to our stocks for sale in future years.
-- Prospects for another excellent harvest this year with
optimum weather conditions throughout the growing season.
-- International Wine Challenge gold medal for Gusbourne Brut
Reserve 2009 in May 2014. Finalist in the "Best Drinks Producer"
category of the 2014 BBC Food and Farming awards.
-- Sales of GBP194,000 (H1 2013 - GBPnil) for the period in line
with stock availability of prior year vintages.
-- Net loss for the period of GBP501,000 (H1 2013 - GBP202,000)
for the period in line with expectations at this stage of the
Company's development reflecting ongoing investment in the
Company's long term strategic plan.
Andrew Weeber, Chairman, commented:
"I am pleased to report further steady progress towards the
achievement of our long term goals. We have expanded our vineyards
with the additional planting of 50 acres in Kent and we have
continued to develop our trade partnerships and the Gusbourne
brand. A larger than expected harvest last year has added
significantly to our stock levels for sale in future years and
there are good prospects for a similar excellent harvest this
year.
We are proud to produce some of the best English sparkling wines
available and were delighted at the end of last year to win the
trophy for "English Wine Producer of the Year" as well as "Best
Bottle Fermented Sparkling Wine" from the International Wine and
Spirit Competition (IWSC). In May this year we were delighted to
receive an International Wine Challenge gold medal for Gusbourne
Brut Reserve 2009.
The production of premium quality wine from new vineyards is, by
its very nature, a long term, and generational business. It takes
four years to bring a vineyard into full production and a further
four years to transform these grapes into an exquisite sparkling
wine.
The Company benefits from a strong asset backing including
freehold land, vineyards and wine stocks. The Company also benefits
from the well regarded and internationally recognised Gusbourne
brand. Our long term plan includes additional investment in new
vineyards, increased winemaking capacity, wine stocks and most
importantly, brand development. We appreciate the support our
shareholders provide to us and we are proud to be the only English
vineyard to be quoted on AIM".
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 West Sussex in May 2013 and in Kent in
May 2014. Further plantings are planned in both Kent and West
Sussex.
Results for the six months ended 30 June 2014
Sales for the period amounted to GBP194,000 (H1 2013 - GBPnil).
Whilst these sales reflect the limited stock availability of prior
year vintages, they were however approximately 143 per cent higher
than those made by the Gusbourne Estate business for the same
period in 2013 under its previous ownership and reflect a
continuing like for like growth in the sale of Gusbourne wines.
Cost of sales remain higher than normal due to the impact of fair
valuing of the initial stocks of wine which were acquired as part
of the acquisition of the Gusbourne Estate business in September
2013. Administrative expenses for the period of GBP450,000 (H1 2013
- GBP238,000) reflect the growth in the business following the
acquisition of the Gusbourne Estate business and additional staff.
The operating loss for the period was GBP424,000 (H1 2013 -
GBP238,000). The loss before tax was GBP516,000 (H1 2013 -
GBP202,000) after net finance costs of GBP82,000 (H1 2013 - net
finance income of GBP36,000). These expected losses reflect the
long term development strategy of the business.
Balance Sheet
The changes to the Group's balance sheet during the period to 30
June 2014 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 in Kent and including the
ongoing costs associated with the vineyards established in West
Sussex in May 2013 at a cost of GBP345,000 (H1 2013 - GBP374,000),
the purchase of additional plant and equipment for the vineyards
and the winery amounting to GBP62,000 (H1 2013 - GBP108,000) and
the planned ongoing development of the business which is reflected
in the net loss for the period of GBP501,000 (H1 2013 -
GBP202,000).
Total assets at 30 June 2014 of GBP11,057,000 (2013 -
GBP3,962,000) include freehold land and buildings of GBP4,596,000
(2013 - GBP223,000), inventories of wine stocks amounting to
GBP1,260,000 (2013 - GBP150,000), GBP1,413,000 of biological assets
(2013 - GBP154,000) and GBP1,074,000 of cash (2013 - GBP2,685,000).
Intangible assets of GBP1,007,000 (2013 - GBPnil) 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.
The Group's net tangible assets at 30 June 2014 amount to
GBP5,623,000 (2013 - GBP3,741,000) and represent 85% of total
equity (2013 - 100%).
Financing
The Group's activities are financed by its own cash resources,
bank loans and convertible bonds. Bank loans and convertible bonds
at 30 June 2014 amount in total to GBP3,792,000 (2013 - GBPnil))
and represent 57% of total equity (2013 - 0%).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.
Additional funding will be sought by the Company to invest in
additional 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)12 3375 8666
Cenkos Securities plc
Nicholas Wells +44 (0)20 7397 8900
Broker Profile
Simon Courtenay/Tamsin Shephard +44 (0)20 7448 3244
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 2014
Unaudited Unaudited Audited
Six months Six months Nine months
to to to
30 June 30 June 31 December
Notes 2014 2013 2013
GBP'000 GBP'000 GBP'000
Revenue 194 - 129
Cost of sales (168) - (78)
Gross profit 26 - 51
Change in fair value of biological
assets 5 - - 145
Transactions expenses - stamp
duty land tax - - (211)
Transactions expenses - other - - (187)
Other administrative expenses (450) (238) (434)
---------- ---------- ------------
Total administrative expenses (450) (238) (832)
Loss from operations (424) (238) (636)
Finance income 2 15 36 29
Finance expense 2 (107) - (59)
Loss before tax (516) (202) (666)
Tax credit/(expense) 15 - (60)
Loss for the period attributable
to
owners of the parent (501) (202) (726)
---------- ---------- ------------
Loss per share attributable
to
the ordinary equity holders
of the parent:
Basic (3.29p) (2.53p) (6.88p)
Diluted (3.29p) (2.53p) (6.88p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2014
Unaudited Unaudited Audited
30 June 30 June 31 December
Notes 2014 2013 2013
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Intangibles 3 1,007 - 1,007
Property, plant and equipment 4 6,071 761 5,724
Biological assets 5 1,413 154 1,240
8,491 915 7,971
--------- --------- -----------
Current assets
Inventories 6 1,260 150 1,310
Trade and other receivables 232 212 251
Cash and cash equivalents 1,074 2,685 1,703
--------- --------- -----------
2,566 3,047 3,264
--------- --------- -----------
Total assets 11,057 3,962 11,235
--------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (590) (221) (324)
(590) (221) (324)
--------- --------- -----------
Non-current liabilities
Loans and borrowings 8 (2,025) - (2,025)
Convertible deep discount bonds 9 (1,767) - (1,695)
Deferred tax liabilities (45) - (60)
(3,837) - (3,780)
Total liabilities (4,427) (221) (4,104)
NET ASSETS 6,630 3,741 7,131
--------- --------- -----------
Issued capital and reserves attributable
to
owners of the parent
Share capital 7,612 4,000 7,612
Share premium 346 266 346
Merger reserve (13) (266) (13)
Convertible bond reserve 95 - 95
Retained earnings (1,410) (259) (909)
------- ----- -----
TOTAL EQUITY 6,630 3,741 7,131
------- ----- -----
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2014
Unaudited Unaudited Audited
Six months to months Six months to Nine months
to to
months to
30 June 30 June 31December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Cashflows from operating
activities
Loss for the period before tax (516) (202) (666)
Adjustments for:
Depreciation of property, plant and equipment 60 12 36
Profit on disposal of property,
plant
and equipment - (8) (8)
Finance expense 107 - 59
Finance income (15) (36) (29)
Movement in biological assets (173) (1) (302)
(537) (235) (910)
Decrease/(increase) in trade and other receivables 19 (119) 44
Decrease/(increase) in inventories 50 (4) (17)
Increase in trade and other payables 266 101 130
---------- ---------- -----------
Cash outflow from operations (202) (257) (753)
Income taxes paid - - -
Net cash out flows from operating activities (202) (257) (753)
Investing activities
Purchases of property, plant
and equipment,
excluding vineyard establishment (62) (108) (653)
Investment in vineyard establishment (345) (374) (418)
Purchase of biological assets - -
Acquisition of Gusbourne Estate business - - (4,263)
Sale of property, plant and equipment - 35 35
Interest received 15 36 29
Net cash from investing activities (392) (411) (5,270)
---------- ---------- -----------
Financing activities
Bank loan - - 2,025
Redemption of redeemable preference shares - - (50)
Interest paid (35) - (19)
Issue of ordinary shares - - 2,851
Share issue expenses - - (209)
Net cash from financing activities (35) - 4,598
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
For the six months ended 30 June 2014
Unaudited Unaudited Audited
Six months to Six Six months to Nine months to Six months to
months to
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Net decrease in cash and cash equivalents (629) (668) (1,425)
Cash and cash equivalents at beginning of
period 1,703 3,353 3,128
---------------- ------------- --------------
Cash and cash equivalents at end of period 1,074 2,685 1,703
================ ============= ==============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2014
Total
attributable
to equity
holders
Share Share Merger Convertible Retained of
Audited: capital premium reserve bond reserve earnings parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 March 2013 4,000 266 (266) - (183) 3,817
Shares issued 3,612 80 - - - 3,692
Equity recognised
on issue of
convertible bonds - - - 95 - 95
Excess of fair value
over
nominal value of shares
issued - - 253 - - 253
Comprehensive loss
for the period - - - - (726) (726)
______ ______ ______ ______ ______ ______
Total comprehensive
income for the period 3,612 80 253 95 (726) 3,314
______ ______ ______ ______ ______ ______
31 December 2013 7,612 346 (13) 95 (909) 7,131
______ ______ ______ ______ ______ ______
Total
attributable
to equity
holders
Share Share Merger Convertible Retained of
Unaudited: capital premium reserve bond 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
Comprehensive loss
for the period - - - - (501) (501)
______ ______ ______ ______ ______ ______
Total comprehensive
loss for the period - - - - (501) (501)
______ ______ ______ ______ ______ ______
30 June 2014 7,612 346 (13) 95 (1,410) 6,630
______ ______ ______ ______ ______ ______
NOTES TO THE ACCOUNTS
For the six months ended 30 June 2014
1 Statement of accounting policies
The interim financial statements have been prepared in
accordance with the recognition and measurement principles 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 nine months
ended 31 December 2013.
The financial information for the six months ended 30 June 2014
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 nine
months ended 31 December 2013 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 nine months
ended 31 December 2013 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.
Basis of preparation
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
nine months ended 31 December 2013. 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
2014 2013 2013
GBP'000 GBP'000 GBP'000
Finance income
Interest received on bank deposits 15 36 29
Total finance income 15 36 29
--------- --------- -----------
Finance expense
Interest payable on borrowings 35 - 19
Convertible deep discount bond
charge 72 - 40
--------- --------- -----------
Total finance expense 107 - 59
--------- --------- -----------
NOTES TO THE ACCOUNTS (continued)
For the six months ended 30 June 2014
3 Intangibles
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Goodwill 777 - 777
Brand 230 - 230
1,007 - 1,007
--------- --------- -----------
4 Property, plant and equipment
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Freehold land and buildings 4,596 223 4,601
Plant, machinery and motor vehicles 652 160 647
Vineyard establishment 804 374 458
Computer equipment 19 4 17
--------- --------- -----------
6,071 761 5,723
--------- --------- -----------
Vineyard 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.
NOTES TO THE ACCOUNTS (continued)
For the six months ended 30 June 2014
5 Biological assets
Vines
GBP'000
At 1 April 2013 154
Arising on the acquisition of Gusbourne Estate
business 1,074
Fair value of grapes harvested and transferred
to inventory (290)
Crop growing costs 157
Change in fair value due to price,
yield and maturity 145
At 31 December 2013 1,240
Crop growing costs 173
At 30 June 2014 1,413
-------
6 Inventories
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Raw materials and consumables 41 - 171
Wine 1,219 150 1,139
1,260 150 1,310
--------- --------- -----------
NOTES TO THE ACCOUNTS (continued)
For the six months ended 30 June 2014
7 Loans and borrowings
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Bank loan 2,025 - 2,025
2,025 - 2,025
--------- --------- -----------
The bank loan of GBP2,025,000 incurs interest at a 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.
8 Convertible bonds
GBP'000
Present value of debt element
at 1 January 2014 1,695
Discount expense for the period 72
-------
Carrying value of debt element
at 30 June 2014 1,767
Equity element at 1 January and
30 June 2014 95
Total fair value at 30 June 2014 1,862
-------
Convertible bonds represent the debt element of a deep discount
bond issued to Mr A C V Weeber and Mrs C Weeber as part of the
consideration for the acquisition of the Gusbourne Estate business
on 27 September 2013. The Bond is secured by a fixed charge over
the group's land and buildings at Appledore, Kent. The Bond is
redeemable on 27 September 2017 and attracts a coupon rate of 7.5%
per annum which is rolled up annually. From 27 September 2015 until
the 26 September 2016 the holders of the Bond can convert some or
all of the bonds into Gusbourne PLC ordinary shares at a price of
66 pence per share.
In accordance with the requirements of IAS 32 the Bond is
classified as a compound financial instrument containing an element
of debt and equity. The debt element is calculated as the present
value of future cash flows assuming the Bond is redeemed on the
redemption date, discounted at the market rate for an equivalent
debt instrument with no option to convert to equity. A rate of 9%
has been used. The difference between the cash payable on maturity
and the present value of the debt element is recognised in equity.
The discount is charged over the life of the Bond to the statement
of comprehensive income and included within finance expenses.
NOTES TO THE ACCOUNTS (continued)
For the six months ended 30 June 2014
9 Business combinations
On 27 September 2013 Gusbourne Estate Limited, a wholly owned
subsidiary of the Group, acquired the Gusbourne Estate business and
related freehold property for a total consideration of
GBP7,316,000. The principal reason for this acquisition was to
invest in, and further develop, the Gusbourne Estate business
including, in particular, its award winning Gusbourne brand to take
advantage of further anticipated market growth in this sector of
the wine industry.
Details of the fair value of identifiable assets and liabilities
acquired, purchase consideration and goodwill are as follows:
Fair value
Book value Adjustment Fair value
Net assets at the acquisition GBP'000 GBP'000 GBP'000
date
Property, plant and equipment 4,369 - 4,369
Biological assets 1,074 - 1,074
Inventories 641 225 866
Brand - 230 230
Total net assets 6,084 455 6,539
---------- ---------- ----------
Fair value of consideration paid: GBP'000
Cash 4,263
Shares 1,303
Convertible bond - present value of debt element 1,655
Convertible bond - equity element 95
Total consideration 7,316
-------
Goodwill 777
-------
Transaction costs of GBP187,000 and Stamp Duty Land Tax of
GBP211,000 in connection with the acquisition were recognised in
the statement of comprehensive income in the period ended 31
December 2013.
The fair value of the Group's shares issued in consideration for
the acquisition was based on the acquisition date share price of
GBP0.67 per share. The convertible bond was also fair valued at the
date of acquisition.
The main factors leading to the recognition of goodwill are the
presence of intangible assets, such as the workforce of the
acquired entity, which do not qualify for separate recognition, and
synergies resulting from material cost savings and sharing of
expertise and systems which will enable future growth.
This information is provided by RNS
The company news service from the London Stock Exchange
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