TIDMGUS
RNS Number : 6651Y
Gusbourne PLC
19 May 2016
Gusbourne Plc
(London-AIM: GUS) ("Gusbourne", the "Company" or the
"Group")
Results for the year ended 31 December 2015.
The Board of Gusbourne Plc announces the audited results for the
year ended 31 December 2015.
Highlights
-- Sales increased by 9% to GBP473,000 in line with product availability.
-- Another year of success in international awards including
winning the trophy for "English Wine Producer of the Year" from the
International Wine and Spirit Competition ("IWSC"), which is the
second time in three years that Gusbourne has won this award.
-- Investment in a further 75 acres of vineyards planted in Kent
and West Sussex bringing the total acreage under vine to 231
acres.
-- Completion of an expanded winery building to cater for increasing production.
-- A successful harvest in October 2015 both in yield and
quality, including the first grapes from the vines planted on the
Company's West Sussex sites in 2013.
-- The launch of an update to Gusbourne's visual identity and branding
-- Continuing growth in the Company's net asset base with net
assets up by 19.6% to GBP9.4m and net tangible assets up by 22.5 %
to GBP8.4m.
Chairman's statement
I am pleased to report that we have achieved another successful
year of further growth and development for the Group, in line with
our long-term plans. The Gusbourne business was established over
ten years ago in 2004 and has been selling its award winning
English sparkling wines since 2010. Sales have continued to grow
steadily in line with product availability and in 2015 increased by
9 per cent compared with 2014. Gusbourne remains one of England's
premier sparkling wine businesses and is focused at the luxury end
of the market.
We have continued to expand production in line with our
long--term plans. In 2015 we planted an additional 75 acres of
vines across our two sites in Kent and West Sussex and our total
acreage under vine is now 231 acres, most of which is in Kent. We
are firmly committed to producing the highest quality sparkling
wines made exclusively from grapes grown in our own vineyards and
ageing these wines for an extended period in order to fully realise
their potential. We use best practice in establishing our vineyards
and in their day-to-day management. Our winemaking process remains
traditional in every way but one that is open to innovation where
appropriate.
The total assets of the business have increased further in 2015
as a result of capital expenditure on fixed assets and the ongoing
investment in wine stocks. Total assets grew from GBP12,026,000 to
GBP13,481,000 during 2015. We invested in the business through
capital expenditure on vineyard establishment of GBP786,000 (2014:
GBP588,000), vineyard and winery equipment of GBP461,000 (2014:
GBP137,000) and freehold land and buildings of GBP664,000 (2014:
GBP14,000). Our principal working capital investment has been in
wine stocks following the successful 2015 harvest which has added a
further GBP276,000 (2014: GBP125,000) to the carrying value of our
stocks. It is important to note that our stocks are currently
reflected in the balance sheet at the lower of cost and net
realisable value. To the extent that net realisable values are
expected to remain significantly higher than cost, this potential
uplift is of course not reflected in the balance sheet and the
calculation of net tangible assets per share. The anticipated
underlying surplus of net realisable value over cost of these wine
inventories will become an increasingly significant feature of the
Group's asset base as stocks continue to grow until the business
reaches sales maturity.
At 31 December 2015 our net assets per share amounted to 39.6
pence (2014: 43.8 pence). Net tangible assets per share were 35.3
pence (2014: 38.2 pence). As noted above these figures are based on
book values and do not reflect any potential underlying uplift in
the value of our assets, including freehold land, mature vineyards,
wine stocks and the Gusbourne brand itself.
Our operating loss for the year amounted to GBP1,123,000 (2014:
GBP966,000) which included development expenditure on sales and
marketing and brand development.
Highlights of 2015 include:
-- The planting of an additional 50 acres of vineyards, in May
2015 on our 352 acre freehold estate in Kent. This is a proven
location for growing our sparkling wine grapes and with our
existing 102 acres brings our total acreage under vine in Kent to
152 acres.
-- The planting of an additional 25 acres of vineyards on our
long leasehold land in West Sussex which together with our existing
acres brings our total acreage under vine in West Sussex to 79
acres.
-- A successful harvest in October 2015 in terms of both yield
and quality which has added to our wine stocks for future resale.
The harvest included the first fruit from the vines planted on our
West Sussex sites in 2013.
-- The launch, in October 2015, of an update to our visual
identity, marking a new chapter in the Gusbourne story and
reflecting the rapid evolution of the Gusbourne brand. This
includes refreshing all brand elements by bringing our commitment
to making exceptional wines to the fore.
-- Another year of success in international awards. In November
2015 Gusbourne won the trophy for "English Wine Producer of the
Year" from the International Wine and Spirit Competition ("IWSC"),
which is the second time in three years that the Company has won
this award. The IWSC also awarded Gusbourne's sparkling and still
wines with a record two 'gold outstanding', one gold and three
silver medals. The IWSC awards completed a record year at
international competitions for the Company, with Gusbourne having
received 7 gold medals in total.
Finally, I should like to express my sincere thanks for the
dedicated efforts of our employees, our loyal customers and last
but not least the support of our shareholders in helping the
Company achieve another successful year of growth and development
in the business.
Andrew Weeber
Chairman
Chief Executive's review
I am pleased to report that 2015 has been a year of continued
and very pleasing progress for the Group in line with our long term
strategic development plans. We have planted new vineyards and
extended our winemaking facilities. Year on year sales have
increased and we have widened our distribution channels. We have
continued to invest in the Gusbourne brand and in October 2015
launched an update to our visual identity marking a new chapter in
the Gusbourne story and reflecting the rapid progress of the
business.
The Gusbourne sparkling wine products remain at the luxury end
of the English sparkling wines market and we remain committed to
maintaining this premium position. In November 2015 we were
particularly pleased to win the trophy for "English Wine Producer
of the Year" from the International Wine and Spirit
Competition.
Activities and recent developments
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 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 Kent and West Sussex in May 2015 and the Group now has a
total of 231 acres of vineyards.
Gusbourne Wines
Gusbourne is dedicated to the production of premium sparkling
wines from grapes grown exclusively in its own vineyards. Our
processes, both in establishing and maintaining the vineyards and
in making wine, continue to follow the rigorous principles of
careful site selection and attention to detail in all aspects of
viticulture and wine production. An integral part of the Group's
approach is to age its traditional method sparkling wines for as
long as is necessary for the wines to meet optimum maturity. The
average production cycle for the wines is four years from harvest
to sale.
Recent awards
Gusbourne has a history of success at international awards and
2015 was one of the most successful years to date. In November 2015
Gusbourne won the trophy for "English Wine Producer of the Year"
from the International Wine and Spirit Competition ("IWSC"), which
is the second time in three years that the Company has won this
award. The IWSC also awarded Gusbourne's sparkling and still wines
with a record two 'gold outstanding', one gold and three silver
medals. The IWSC awards completed a record year at international
competitions for the Company, with Gusbourne having received 7 gold
medals in total.
Development strategy
Meeting growing customer demand for the Gusbourne wines requires
careful long term planning and key elements of the Group's
development strategy include:
-- Continuing to produce wines of exceptional quality from
grapes grown in our own vineyards;
-- The ongoing development and evolution of the award winning Gusbourne brand;
-- The further development of the Company's distribution
channels, including the promotion of exports as a significant
contributor to sales;
-- The investment in additional plant and machinery to keep pace
with production growth.
2015 Harvest
The 2015 harvest was successfully completed in October. The
quality of the grapes was excellent, with optimum levels of natural
sugar and acidity, both of which met our own exacting quality
standards. The high quality of grapes harvested in the year bodes
well for 2015 becoming another great vintage for Gusbourne. Yield
volumes were good and in line with expectations and the resulting
wine production has added further to our inventory levels for sale
in future years.
Results for the year
Sales for the year amounted to GBP473,000 (2014: GBP434,000).
Whilst these sales continue to reflect limited stock availability
at this time, they do represent a consecutive three year like for
like growth in the sale of Gusbourne wines. Administrative expenses
of GBP1,176,000 (2014: GBP968,000) reflect continuing investment in
the development and growth of the business and the Gusbourne brand
in particular.
The operating loss for the year was GBP1,123,000 (2014:
GBP966,000). The exceptional item of GBP115,000 within finance
expenses reflects a charge to the income statement in respect of
the conversion of bonds into shares on 17 June 2015 due to 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 GBP1,426,000 (2014:
GBP1,151,000) after net finance costs of GBP303,000 (2014:
GBP185,000).
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 year reflect
expenditure on the ongoing investment in, and development of, the
Group's business, net of income from wine sales. This expenditure
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
GBP786,000 (2014: GBP588,000).
In addition, the Group invested in additional plant and
equipment for the vineyards and the winery amounting to GBP461,000
(2014: GBP137,000) and in buildings of GBP664,000 (2014:
GBP14,000). Total assets at 31 December 2015 of GBP13,481,000
(2014: GBP12,026,000) include freehold land and buildings of
GBP5,198,000 (2014: GBP4,578,000), vineyards of GBP2,972,000 (2014:
GBP2,236,000), inventories of wine stocks amounting to GBP1,711,000
(2014: GBP1,435,000), and GBP1,328,000 of cash (2014:
GBP1,842,000). Intangible assets of GBP1,007,000 (2014:
GBP1,007,000) arose on the acquisition of the Gusbourne Estate
business on 27 September 2013.
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 31 December 2015 amount to
GBP8,353,000 (2014: GBP6,817,000) and represent 89% of total equity
(2014: 87%). Net tangible assets per share at 31 December 2015 were
35.3 pence per share (2014: 38.2 pence)
Financing
The Group's activities are financed by shareholders equity,
loans, other borrowings and convertible bonds. Loans, other
borrowings and convertible bonds at 31 December 2015 amount in
total to GBP3,952,000 (2014: GBP3,866,000) and represent 42% of
total equity (2014: 49%).
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 due under
the Convertible Bond as a result of its conversion into equity.
.
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.
Key Performance Indicators
Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
----------------------------------------------- ------------ ------------
Sales 473 434
----------------------------------------------- ------------ ------------
Investment in tangible assets
=============================================== ============ ============
Investment in vineyard establishment 786 588
=============================================== ============ ============
Investment in freehold land and buildings 664 14
=============================================== ============ ============
Investment in plant, machinery, vehicle
and other equipment 473 145
=============================================== ============ ============
Investment in property, plant and equipment 1,923 747
=============================================== ============ ============
Increase in inventories 276 125
=============================================== ============ ============
Total investment in tangible assets 2,199 872
----------------------------------------------- ------------ ------------
As restated
At 31 at 31
December December
2015 2014
GBP'000 GBP'000
----------------------------------------------- ------------ ------------
Net assets
=============================================== ============ ============
Freehold land and buildings 5,198 4,578
=============================================== ============ ============
Vineyards 2,972 2,236
=============================================== ============ ============
Plant, machinery, vehicle and other equipment 1,001 715
=============================================== ============ ============
Total non-current assets 9,171 7,529
=============================================== ============ ============
Inventories 1,711 1,435
=============================================== ============ ============
Net working capital (current receivables
less current payables) 95 (123)
=============================================== ============ ============
Cash 1,328 1,842
=============================================== ============ ============
Net tangible assets before debt 12,305 10,683
=============================================== ============ ============
Bonds, loans and other borrowings (3,952) (3,866)
=============================================== ============ ============
Net tangible assets 8,353 6,817
=============================================== ============ ============
Goodwill 1,007 1,007
=============================================== ============ ============
Net assets and equity 9,360 7,824
----------------------------------------------- ------------ ------------
Key balance sheet indicators
=============================================== ============ ============
Net tangible assets as a percentage of
total equity 89% 87%
=============================================== ============ ============
Gearing (Debt as percentage of equity) 42% 49%
=============================================== ============ ============
Number of shares in issue 23,639,762 17,853,276
=============================================== ============ ============
Net tangible assets per share (pence) 35.3 38.2
----------------------------------------------- ------------ ------------
Ben Walgate
Chief Executive
Annual General Meeting
The Company's annual report and accounts for the year ended 31
December 2015 are being posted to shareholders today, together with
notice of the Annual General Meeting to be held at 12 pm on 20 June
2016 at the offices of Cenkos Securities PLC at 6.7.8 Tokenhouse
Yard, London EC2R 7AS. The annual report and accounts are available
to view on the Company's website at www.gusbourneplc.com
Enquiries:
Gusbourne Plc
Andrew Weeber/Ben Walgate +44 (0)12 3375 8666
Cenkos Securities plc
Nicholas Wells +44 (0)20 7397 8900
Note: This and other press releases are available at the
Company's web site: www.gusbourneplc.com
Consolidated statement of comprehensive income for the year
ended 31 December 2015
As restated
Year ended Year ended
31 December 31 December
2015 2014
Note GBP'000 GBP'000
======================================== ==== ============ ============
Revenue 473 434
======================================== ==== ============ ============
Cost of sales (325) (361)
---------------------------------------- ---- ------------ ------------
Gross profit 148 73
======================================== ==== ============ ============
Fair value movement in biological
produce 13 (95) (71)
---------------------------------------- ---- ------------ ------------
Administrative expenses (1,176) (968)
---------------------------------------- ---- ------------ ------------
Loss from operations 5 (1,123) (966)
======================================== ==== ============ ============
Finance income 8 22 38
---------------------------------------- ---- ------------ ------------
Finance expenses (210) (223)
======================================== ==== ============ ============
Exceptional items (115) -
---------------------------------------- ---- ------------ ------------
Total finance expenses 8 (325) (223)
---------------------------------------- ---- ------------ ------------
Loss before tax (1,426) (1,151)
---------------------------------------- ---- ------------ ------------
Tax expense 9 - 60
---------------------------------------- ---- ------------ ------------
Loss for the year attributable to
owners of the parent (1,426) (1,091)
---------------------------------------- ---- ------------ ------------
Total comprehensive loss attributable
to owners of the parent (1,426) (1,091)
---------------------------------------- ---- ------------ ------------
Loss per share attributable to the
ordinary equity holders of the parent: 10
---------------------------------------- ---- ------------ ------------
Basic and diluted (pence) (6.83) (7.00)
---------------------------------------- ---- ------------ ------------
Consolidated statement of financial position at 31 December
2015
As restated As restated
December December 1 January
2015 2014 2014
Note GBP'000 GBP'000 GBP'000
================================ ==== ======== =========== ===========
Assets
================================ ==== ======== =========== ===========
Non-current assets
================================ ==== ======== =========== ===========
Intangibles 11 1,007 1,007 1,007
================================ ==== ======== =========== ===========
Property, plant and equipment 12 9,171 7,529 6,964
-------------------------------- ---- -------- ----------- -----------
10,178 8,536 7,971
================================ ==== ======== =========== ===========
Current assets
================================ ==== ======== =========== ===========
Biological produce 13 - - -
================================ ==== ======== =========== ===========
Inventories 14 1,711 1,435 1,310
================================ ==== ======== =========== ===========
Trade and other receivables 15 264 213 251
================================ ==== ======== =========== ===========
Cash and cash equivalents 1,328 1,842 1,703
-------------------------------- ---- -------- ----------- -----------
3,303 3,490 3,264
-------------------------------- ---- -------- ----------- -----------
Total assets 13,481 12,026 11,235
-------------------------------- ---- -------- ----------- -----------
Liabilities
================================ ==== ======== =========== ===========
Current liabilities
================================ ==== ======== =========== ===========
Trade and other payables 16 (169) (336) (324)
================================ ==== ======== =========== ===========
Finance leases 18 (41) - -
================================ ==== ======== =========== ===========
Loans and borrowings 17 (34) - -
-------------------------------- ---- -------- ----------- -----------
(244) (336) (324)
================================ ==== ======== =========== ===========
Non-current liabilities
================================ ==== ======== =========== ===========
Loans and borrowings 17 (2,161) (2,025) (2,025)
================================ ==== ======== =========== ===========
Finance leases 18 (133) - -
================================ ==== ======== =========== ===========
Convertible deep discount bonds 19 (1,583) (1,841) (1,695)
================================ ==== ======== =========== ===========
Deferred tax liabilities - - (60)
-------------------------------- ---- -------- ----------- -----------
(3,877) (3,866) (3,780)
-------------------------------- ---- -------- ----------- -----------
Total liabilities (4,121) (4,202) (4,104)
-------------------------------- ---- -------- ----------- -----------
Net assets 9,360 7,824 7,131
-------------------------------- ---- -------- ----------- -----------
As restated As restated
December December 1 January
2015 2014 2014
Note GBP'000 GBP'000 GBP'000
=============================== ==== ======== =========== ===========
Issued capital and reserves
attributable to owners of the
parent
=============================== ==== ======== =========== ===========
Share capital 21 11,820 8,927 7,612
=============================== ==== ======== =========== ===========
Share premium 22 815 815 346
=============================== ==== ======== =========== ===========
Merger reserve 22 (13) (13) (13)
=============================== ==== ======== =========== ===========
Convertible bond reserve 22 95 95 95
=============================== ==== ======== =========== ===========
Retained earnings 22 (3,357) (2,000) (909)
------------------------------- ---- -------- ----------- -----------
Total equity 9,360 7,824 7,131
------------------------------- ---- -------- ----------- -----------
Consolidated statement of cash flows for the year ended 31
December 2015
31 December 31 December
2015 2014
Note GBP'000 GBP'000
============================================= ==== =========== ===========
Cash flows from operating activities
============================================= ==== =========== ===========
Loss for the year before tax (1,426) (1,151)
============================================= ==== =========== ===========
Adjustments for:
============================================= ==== =========== ===========
Depreciation of property, plant and
equipment 12 267 180
============================================= ==== =========== ===========
Profit on disposal of property, plant
and equipment - (4)
============================================= ==== =========== ===========
Finance expense 8 325 223
============================================= ==== =========== ===========
Finance income 8 (22) (38)
============================================= ==== =========== ===========
Fair value movement in biological
produce 13 95 71
============================================= ==== =========== ===========
(Increase)/decrease in trade and
other receivables (56) 38
============================================= ==== =========== ===========
Increase in inventories (371) (195)
============================================= ==== =========== ===========
(Decrease)/increase in trade and
other payables (137) 12
--------------------------------------------- ---- ----------- -----------
Cash outflow from operations (1,325) (864)
============================================= ==== =========== ===========
Investing activities
============================================= ==== =========== ===========
Purchases of property, plant and
equipment, excluding vineyard establishment 12 (1,137) (159)
============================================= ==== =========== ===========
Investment in vineyard establishment 12 (786) (588)
============================================= ==== =========== ===========
Sale of property, plant and equipment 14 5
============================================= ==== =========== ===========
Interest received 9 33
--------------------------------------------- ---- ----------- -----------
Net cash from investing activities (1,900) (709)
============================================= ==== =========== ===========
Financing activities
============================================= ==== =========== ===========
Drawdown of bank loan 170 -
============================================= ==== =========== ===========
Finance lease agreements 181 -
============================================= ==== =========== ===========
Repayment of finance leases (24) -
============================================= ==== =========== ===========
Interest paid (74) (72)
============================================= ==== =========== ===========
Issue of ordinary shares 21 2,504 1,788
============================================= ==== =========== ===========
Share issue expenses (46) (4)
--------------------------------------------- ---- ----------- -----------
Net cash from financing activities 2,711 1,712
============================================= ==== =========== ===========
Net increase/(decrease) in cash and
cash equivalents (514) 139
============================================= ==== =========== ===========
Cash and cash equivalents at the
beginning of the year 1,842 1,703
--------------------------------------------- ---- ----------- -----------
Cash and cash equivalents at the
end of the year 1,328 1,842
--------------------------------------------- ---- ----------- -----------
Consolidated statement of changes in equity for the year ended
31 December 2015
Total
attributable
to equity
Share Share Merger Convertible Retained holders
capital premium reserve bond earnings of parent
GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000
========================== ======== ======== ======== =========== ========= =============
1 January 2014 7,612 346 (13) 95 (909) 7,131
========================== ======== ======== ======== =========== ========= =============
Shares issued 1,315 469 - - - 1,784
========================== ======== ======== ======== =========== ========= =============
As restated comprehensive
loss for the year - - - - (1,091) (1,091)
-------------------------- -------- -------- -------- ----------- --------- -------------
Total comprehensive
loss for the
year - - - - (1,091) (1,091)
-------------------------- -------- -------- -------- ----------- --------- -------------
As restated 31
December 2014 8,927 815 (13) 95 (2,000) 7,824
-------------------------- -------- -------- -------- ----------- --------- -------------
1 January 2015 8,927 815 (13) 95 (2,000) 7,824
===================== ====== === ==== ======= =======
Shares issued 2,893 - - - - 2,893
===================== ====== === ==== ======= =======
Shares issued
on conversion
of bond - - - - 115 115
===================== ====== === ==== ======= =======
Share issue expenses - - - - (46) (46)
===================== ====== === ==== ======= =======
Comprehensive
loss for the year - - - - (1,426) (1,426)
--------------------- ------ --- ---- ------- -------
Total comprehensive
loss for the
year - - - - (1,357) (1,357)
--------------------- ------ --- ---- ------- -------
31 December 2015 11,820 815 (13) 95 (3,357) 9,360
--------------------- ------ --- ---- ------- -------
1 Accounting policies
Gusbourne PLC (the "Company") is a company incorporated and
domiciled in the United Kingdom and quoted on the London Stock
Exchange's AIM market. The consolidated financial statements of the
Group for the year ended 31 December 2015 comprise the Company and
its subsidiaries (together referred to as the "Group").
Basis of preparation
The financial information does not constitute the Group's
statutory accounts for either the year ended 31 December 2015 or
the year ended 31 December 2014, but is derived from those
accounts. The Group's statutory accounts for 31 December 2014 have
been delivered to the Registrar of Companies and those for 31
December 2015 will be delivered following the Company's Annual
General Meeting. The Auditor's reports on both the 31 December 2014
and 31 December 2015 accounts were unqualified, did not draw
attention to any matters by way of an emphasis and did not contain
any statement under Section 498 of the Companies Act 2006.
The Group's consolidated financial statements and the Company's
financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted for use in
the EU ("IFRS").
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the Group's financial statements.
The financial statements are presented in pounds sterling. They
have been prepared on the historical cost basis except that
biological produce is stated at fair value.
Going concern
The Directors believe the Group to be a going concern on the
basis that it has sufficient cash to continue operations for at
least 12 months from the date these financial statements were
approved.
The Directors have reviewed the Group's cash flow forecasts and
note that 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,
an average of four years to transform these grapes into the Group's
premium sparkling wine. Additional funding will be sought by the
Group over the coming few years to invest in additional vineyards,
winery capacity, and stocks of wine as well as brand development,
in line with its development strategy. The Directors believe that
future fundraisings will be successful and have therefore prepared
the financial statements on a going concern basis.
New accounting standards and changes to existing accounting
standards
i. New standards and interpretations adopted in the current year:
-- Agriculture: Bearer Plants: Amendments to IAS 16 and IAS 41*
* This has been early adopted
ii. Standards, amendments and interpretations to existing
standards that are not yet effective and have not been early
adopted by the Group:
-- Annual improvements to IFRSs 2010-2012 Cycle
-- Annual improvements to IFRSs 2011-2013 Cycle
-- IFRS 16 Leases
-- IFRS 9 Financial Instruments
-- IFRS 15 Revenue from Contracts with Customers
-- Clarification of Acceptable methods of Depreciation and
Amortisation: Amendments to IAS 16 and IAS 38
-- Equity Method in Separate Financial Statements (Amendments to IAS 27)
-- Sale or contribution of assets between an investor and its
associate or joint venture (Amendments to IFRS 10 and IAS 28)
-- Annual improvements to IFRSs 2012-2014 Cycle
-- Disclosure initiative: Amendments to IAS 1
-- Recognition of deferred tax assets for unrealised losses - Amendments to IAS 12
-- Disclosure initiative: Amendments to IAS 7
The Group is currently assessing the impact of these standards
on the financial statements.
Basis of consolidation
The Group's financial statements consolidate the financial
statements of the Company and its subsidiary undertakings.
Subsidiaries are entities controlled by the Company. Control exists
when the Company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities and the ability to use its power over
the investee to affect the amounts of the Group's returns and which
generally accompanies interest of more than one half of the voting
rights. In assessing control, potential voting rights that
presently are exercisable or convertible are taken into account.
The results of any subsidiaries sold or acquired are included in
the Group income statement up to, or from, the date control passes.
Intra-Group sales and profits are eliminated fully on
consolidation.
On acquisition of a subsidiary, all of the subsidiary's
separable, identifiable assets and liabilities existing at the date
of acquisition are recorded at their fair values reflecting their
condition at that date. On disposal of a subsidiary, the
consideration received is compared with the carrying cost at the
date of disposal and the gain or loss is recognised in the income
statement. The excess of the cost of acquisition over the fair
value of the Group's share of the identifiable net assets is
recorded as goodwill. Intercompany transactions, balances and
unrealised gains on transactions between group companies are
eliminated. Subsidiaries' results are amended where necessary to
ensure consistency with the policies adopted by the Group.
Revenue
Revenue from the sales of goods is recognised when the Group has
transferred the significant risks and rewards of ownership to the
buyer and it is probable that the Group will receive the previously
agreed upon payment.
These criteria are considered to be met when the goods are
delivered to the buyer. Where the buyer has a right of return,
revenue is recognised in the year where the goods are delivered
less an appropriate provision for returns based on past
experience.
Financial assets
Loans and receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise principally through the provision of goods to customers (e.g.
trade receivables), but also incorporate other types of contractual
monetary asset. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision for
impairment.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable. For trade receivables, which are reported net, such
provisions are recorded in a separate allowance account with the
loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation
that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated
provision.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, other short term highly liquid investments with
original maturities of three months or less.
Financial liabilities
Borrowings
Borrowings are initially recognised at fair value net of any
transaction costs directly attributable to the loan. They are
subsequently measured at amortised cost with interest charged to
the statement of comprehensive income based on the effective
interest rate of the borrowings.
Convertible deep discount bonds
Convertible deep discount bonds are redeemable at their nominal
price at maturity. The bonds may be converted into the Company's
shares at the holders' option and are therefore classified as
compound financial instruments in accordance with the requirements
of IAS 32. The debt element is calculated as the present value of
future cash flows assuming the bonds are redeemed on the redemption
date, discounted at the market rate for an equivalent debt
instrument with no option to convert to equity. The difference
between the cash payable on maturity and the present value of the
debt element is recognised within equity. The discount is charged
over the life of the bond to the statement of comprehensive income
and included within finance expenses.
Trade and other payables
Comprises trade payables and other short-term monetary
liabilities, which are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
method.
Share capital
Financial instruments issued by the Group are classified as
equity only to the extent that they do not meet the definition of a
financial liability.
The Group's ordinary shares are classified as equity
instruments.
Deferred taxation
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the consolidated
statement of financial position differs from its tax base, except
for differences arising on:
-- the initial recognition of goodwill;
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit;
and
-- investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-- the same taxable group company; or
-- different group entities which intend either to settle
current tax assets and liabilities on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax assets
or liabilities are expected to be settled or recovered.
Intangible Assets
Goodwill
Goodwill arises where a business is acquired and a higher amount
is paid for that business than the fair value of the assets and
liabilities acquired. Transaction costs attributable to
acquisitions are expensed to the income statement.
Goodwill is recognised as an asset in the statement of financial
position and is not amortised but is subject to an annual
impairment review. Impairment occurs when the carrying value of
goodwill is greater than the recoverable amount which is the higher
of the value in use and fair value less disposal costs. The present
value of the estimated future cash flows from the separately
identifiable assets, termed a 'cash generating unit' is used to
determine the fair value less cost of disposal to calculate the
recoverable amount. The Group prepares and approves formal long
term business plans for its operations which are used in these
calculations.
Brand
Brand names acquired as part of acquisitions of businesses are
capitalised separately from goodwill as intangible assets if their
value can be measured reliably on initial recognition and it is
probable that the expected future economic benefits that are
attributable to the asset will flow to the Group.
Brand names have been assessed as having an indefinite life and
are not amortised but are subject to an annual impairment review.
Impairment occurs when the carrying value of the brand name is
greater than the present value of the estimated future cash
flows.
Property, plant and equipment
Items of property, plant and equipment are initially recognised
at cost. As well as the purchase price, cost includes directly
attributable costs.
Freehold land is not depreciated.
Vineyard establishment represents the expenditure incurred to
plant and maintain new vineyards until the vines reach
productivity. Once the vineyards are productive the accumulated
cost is transferred to mature vineyards and depreciated over the
expected useful economic life of the vineyard. Vineyard
establishment is not depreciated.
Depreciation is provided on all other items of property, plant
and equipment so as to write off their carrying value over their
expected useful economic lives. It is provided at the following
rates:
4% per annum straight
line
5-20% per annum
Freehold buildings straight line
Plant, machinery and 33% per annum straight
motor vehicles line
Computer equipment 4% per annum straight
Mature vineyards line
===================== =======================
The carrying value of property, plant and equipment is reviewed
for impairment when events or changes in circumstances indicate
that the carrying value may not be recoverable.
Biological assets and produce
Following the early adoption of Agriculture: Bearer Plants
(Amendments to IAS 16 and IAS 41) the financial statements have
been restated to reflect that bearer plants such as grape vines are
no longer included within the classification of biological assets
under IAS 41 Agriculture. In accordance with the amendments
biological assets held by the Group are now accounted for under IAS
16 PPE and held at cost. The biological assets have been
transferred to plant, property and equipment as at 1 January 2014
at deemed cost, being their fair value less costs to sell at that
date. This is in line with the transitional guidance which permits
the transfer to be at the deemed cost of the historic fair value
under the old IAS 41.
The impact of this early adoption is shown in note 24.
Harvesting of the grape crop is ordinarily carried out in
October. Prior to harvest the costs of growing the grapes are
carried forward in inventory. Upon harvest the grapes become
agricultural produce and are therefore measured at fair value less
costs to sell in accordance with IAS 41 with any fair value gain or
loss shown in the consolidated statement of comprehensive income.
The fair value of grapes is determined by reference to estimated
market prices at the time of harvest. This measurement of fair
value less costs to sell is the deemed cost of the grapes that is
transferred into inventory upon harvest.
Under IAS 41, the agricultural produce is also valued at the end
of each reporting period.
Inventories
Inventories are initially recognised at cost, and subsequently
at the lower of cost and net realisable value. Cost comprises all
costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Grapes grown in the Group's vineyards are included in inventory at
fair value less costs to sell at the point of harvest which is the
deemed cost for the grapes.
Weighted average cost is used to determine the cost of
ordinarily interchangeable items.
Leased assets
Where substantially all of the risks and rewards incidental to
ownership of a leased asset have been transferred to the Group (a
"finance lease"), the asset is treated as if it had been purchased
outright. The amount initially recognised as an asset is the lower
of the fair value of the leased property and the present value of
the minimum lease payments payable over the term of the lease. The
corresponding lease commitment is shown as a liability. Lease
payments are analysed between capital and interest. The interest
element is charged to the consolidated statement of comprehensive
income over the period of the lease and is calculated so that it
represents a constant proportion of the lease liability. The
capital element reduces the balance owed to the lessor.
Where substantially all of the risks and rewards incidental to
ownership are not transferred to the Group (an "operating lease"),
the total rentals payable under the lease are charged to the
consolidated statement of comprehensive income on a straight-line
basis over the lease term. The aggregate benefit of lease
incentives is recognised as a reduction of the rental expense over
the lease term on a straight-line basis.
2 Critical accounting estimates and judgements
The Group makes certain estimates and judgements regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates. The estimates and judgements that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
relate are set out below.
Fair value of biological produce
The Group's biological produce is measured at fair value less
costs to sell at the point of harvest. The fair value of grapes is
determined by reference to estimated market prices at the time of
harvest. Generally there is no readily obtainable market price for
the Group's grapes because they are not sold on the open market,
therefore management set the values based on their experience and
knowledge of the sector including past purchase transactions.
Impairment reviews
The Group is required to test annually whether goodwill and
brand names have suffered any impairment. The recoverable amount is
determined based on fair value less costs of disposal calculations,
which requires the estimation of the value and timing of future
cash flows and the determination of a discount rate to calculate
the present value of the cash flows. Further information is set out
in note 11.
Useful lives of plant, property and equipment
The charge in respect of depreciation is calculated based on
management's estimate of an asset's useful economic life and its
residual value at the end of that life. An increase in the useful
life or residual value would result in a decreased depreciation
charge in the statement of consolidated income.
3 Financial instruments - risk management
The Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group's objectives,
policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect
of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure
them from previous periods unless otherwise stated in this
note.
Principal financial instruments
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
Bank loans
Convertible debt
Trade receivables
Cash and cash equivalents
Finance leases
Trade and other payables
In addition, at the Company level: Intercompany loans.
The carrying amounts are a reasonable estimate of fair values
because of the short maturity of such instruments or their interest
bearing nature.
Liquidity risk
The Group closely monitors and manages its liquidity risk. Cash
forecasts are regularly produced and sensitivities run for
different scenarios.
The following table sets out the contractual maturities
(representing undiscounted contractual cash flows) of financial
liabilities:
Between
Up 3 Between Between
to and 1 2 Over
3 12 and and 5
At 31 December months months 2 years 5 years years Total
2014 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ======== ======== ======== ======== ======== ========
Trade and
other payables 269 40 14 - - 323
================ ======== ======== ======== ======== ======== ========
Loans and
borrowings 18 53 71 2,149 - 2,291
================ ======== ======== ======== ======== ======== ========
Convertible
deep discount
bonds - - - 2,338 - 2,338
Total 287 93 85 4,487 - 4,952
---------------- -------- -------- -------- -------- -------- --------
Between
Up 3 Between Between
to and 1 2 Over
3 12 and and 5
At 31 December months months 2 years 5 years years Total
2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ======== ======== ======== ======== ======== ========
Trade and
other payables 88 57 - - - 145
================ ======== ======== ======== ======== ======== ========
Finance leases 11 35 47 105 - 198
================ ======== ======== ======== ======== ======== ========
Loans and
borrowings 27 84 111 2,199 - 2,421
================ ======== ======== ======== ======== ======== ========
Convertible
deep discount
bonds - - 1,880 - - 1,880
Total 126 176 2,038 2,304 - 4,644
---------------- -------- -------- -------- -------- -------- --------
Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares and
increase or decrease debt.
Credit risk
Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions and the risk of default by
these institutions. The Group reviews the creditworthiness of such
financial institutions on a regular basis to satisfy itself that
such risks are mitigated. The Group's exposure to credit risk
arises from default of the counterparty, with a maximum exposure
equal to the carrying amount of the cash and cash equivalents as
shown in the consolidated statement of financial position.
Credit risk also arises from credit exposure to trade customers
included in trade and other receivables. Trade receivable balances
are monitored on an ongoing basis to ensure that the Group's bad
debts are kept to a minimum.
Further disclosures regarding trade and other receivables, which
are neither past due nor impaired, are provided in note 15.
Interest rate risk
The Group's main debt is exposed to interest rate fluctuations.
The Group considers that the risk is not significant in the context
of its business plans. Should there be a 0.5% increase in the
bank's lending rate, the finance charge in the statement of
comprehensive income would increase by GBP10,000.
4 Segmental information
The Directors consider the Group to have only one operating
segment. Details of the sole operating segment are shown in the
consolidated statement of comprehensive income, consolidated
statement of financial position and consolidated statement of cash
flows.
All operations are conducted in the United Kingdom.
The Directors do not consider the Group place's reliance on any
major customers.
5 Loss from operations
Loss from operations has been arrived at after charging:
As restated
Year ended Year ended
December 31 December
2015 2014
GBP'000 GBP'000
=============================== ========== ============
Depreciation of property,
plant and equipment 267 180
=============================== ========== ============
Profit on disposal of
property, plant and equipment - (4)
=============================== ========== ============
Staff costs expensed
to consolidated statement
of income 232 255
=============================== ========== ============
6 Auditor's remuneration
Year
ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
======================= ============= ============
Auditor's remuneration
======================= ============= ============
- Audit: consolidation
and parent 30 26
======================= ============= ============
- Audit: subsidiaries 10 9
----------------------- ------------- ------------
40 35
----------------------- ------------- ------------
7 Staff costs
Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
============================== ============ ============
Staff costs (including
Directors) comprise:
============================== ============ ============
Wages and salaries 480 471
============================== ============ ============
Social security contributions
and similar taxes 46 45
------------------------------ ------------ ------------
526 516
------------------------------ ------------ ------------
The average number of employees of the Group, including
Directors, during the year was 18 (December 2014: 17). Directors'
remuneration was as follows:
Year ended Year ended
31 December 31 December
Salaries Fees 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
=============== ======== ======== ============ ============
Andrew Weeber 50 - 50 50
=============== ======== ======== ============ ============
Ben Walgate 80 - 80 80
=============== ======== ======== ============ ============
Lord Arbuthnot
PC - - - -
=============== ======== ======== ============ ============
Paul Bentham 10 - 10 15
=============== ======== ======== ============ ============
Matthew Clapp - - - -
=============== ======== ======== ============ ============
Ian Robinson - 10 10 15
=============== ======== ======== ============ ============
Andrew Wilson - - - 7
--------------- -------- -------- ------------ ------------
140 10 150 167
--------------- -------- -------- ------------ ------------
Ben Walgate is the highest paid director. Fees in respect of Ian
Robinson and Andrew Wilson (deceased) are payable to Anne Street
Partners Limited under the terms of agreements dated 8 October
2012.
The Directors are considered to be key management.
Year
ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
============================== ============= ============
Key management personnel
costs were as follows:
============================== ============= ============
Short term employment
benefits 150 167
============================== ============= ============
Social security contributions 16 17
------------------------------ ------------- ------------
166 184
------------------------------ ------------- ------------
8 Finance income and expense
Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
================================ ============ ============
Finance income
================================ ============ ============
Amortisation of bank
loan incentive 13 14
================================ ============ ============
Interest received on
bank deposits 9 24
-------------------------------- ------------ ------------
Total finance income 22 38
-------------------------------- ------------ ------------
Finance expense
================================ ============ ============
Interest payable on borrowings 74 72
================================ ============ ============
Amortisation of bank
transaction costs 5 5
================================ ============ ============
Discount expense on convertible
bond 131 146
================================ ============ ============
Exceptional item (note
19) 115 -
-------------------------------- ------------ ------------
Total finance expense 325 223
-------------------------------- ------------ ------------
9 Taxation
Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
=========================== ============ ============
Current tax expense
=========================== ============ ============
Current tax on profits
for the year - -
--------------------------- ------------ ------------
Total current tax - -
--------------------------- ------------ ------------
Deferred tax expense
=========================== ============ ============
Origination and reversal
of temporary differences - (60)
--------------------------- ------------ ------------
Total deferred tax - (60)
--------------------------- ------------ ------------
Total tax (Income)/expense - (60)
--------------------------- ------------ ------------
Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
============================ ============ ============
Loss on ordinary activities
before tax (1,426) (1,151)
---------------------------- ------------ ------------
Loss on ordinary activities
at the standard rate of
corporation tax in the
UK for the year of 20.25%
(December 2014: 21.49%) (289) (247)
============================ ============ ============
Effects of:
============================ ============ ============
Expenses not deductible
for tax purposes 77 29
============================ ============ ============
Unprovided deferred tax
movements on short term
temporary differences (127) (111)
============================ ============ ============
Unrecognised losses carried
forward 318 362
============================ ============ ============
Effect of changes in tax
rate in prior years 21 27
============================ ============ ============
Tax charge/(credit) for
the year - (60)
---------------------------- ------------ ------------
No deferred tax asset has been recognised on unutilised taxable
losses due to the lack of certainty over the taxable profits being
available against which deductible temporary differences can be
utilised. The unutilised tax losses carried forward are
GBP4,049,000 (December 2014: GBP2,340,000)
10 Loss per share
Basic earnings per ordinary share are based on a loss of
GBP1,426,000 (December 2014: GBP1,091,000) and 20,889,716 ordinary
shares (December 2014: 15,592,073) of 50 pence each, being the
weighted average number of shares in issue during the year. There
is no adjustment to be made for diluted earnings per ordinary
share.
Weighted Loss per
average ordinary
Loss number share
GBP'000 of shares pence
======================== ======== ========== =========
Year ended 31 December
2015 (1,426) 20,889,716 (6.83)
======================== ======== ========== =========
As restated at
year ended 31 December
2014 (1,091) 15,592,073 (7.00)
======================== ======== ========== =========
11 Intangibles
Goodwill Brand Total
GBP'000 GBP'000 GBP'000
====================== ======== ======== ========
Cost
====================== ======== ======== ========
At 1 January 2015
and 31 December 2015 777 230 1,007
====================== ======== ======== ========
Impairment losses
====================== ======== ======== ========
At 1 January 2015
and 31 December 2015 - - -
====================== ======== ======== ========
Net book value
---------------------- -------- -------- --------
At 31 December 2014
and
31 December 2015 777 230 1,007
---------------------- -------- -------- --------
The carrying value of goodwill and the brand is allocated to the
following cash-generating units:
December December
2015 2014
GBP'000 GBP'000
----------------- -------- --------
Gusbourne Estate 1,007 1,007
----------------- -------- --------
The brand value is the fair value of the brand name acquired as
part of the acquisition of Gusbourne Estate in September 2013, and
separately identified as an intangible.
Goodwill is the premium paid to acquire the Gusbourne Estate
business over the fair value of its net assets.
Given the long term nature of vineyard establishment and wine
production the Group's management prepare long term cash flow
forecasts for up to 9 years, and then apply a discount rate to
determine the present value of the future cash flows of the
cash-generating unit to arrive at the fair value less costs of
disposal. Where this amount is lower than the carrying value of the
brand and goodwill allocated to the cash-generating unit an
impairment charge is made. The discount rate used is 17% based on
the Group's estimated weighted cost of capital. A growth rate of 2%
has been applied over the term of the long term cash flow
forecasts. The growth rate used is based on the long term average
growth rate of the UK economy.
12 Property, plant and equipment
Plant,
Freehold machinery
Land and
and motor Vineyard Mature Computer
Buildings vehicles establishment Vineyards equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ========== ========== ============== ========== ========== ========
Cost
================ ========== ========== ============== ========== ========== ========
As restated
at 1 January
2014 4,610 686 458 1,240 19 7,013
================ ========== ========== ============== ========== ========== ========
Additions 14 137 588 - 8 747
================ ========== ========== ============== ========== ========== ========
Disposals - (1) - - - (1)
---------------- ---------- ---------- -------------- ---------- ---------- --------
As restated
at 31 December
2014 4,624 822 1,046 1,240 27 7,759
---------------- ---------- ---------- -------------- ---------- ---------- --------
At 1 January
2015 4,624 822 1,046 1,240 27 7,759
================ ========== ========== ============== ========== ========== ========
Additions 664 461 786 - 12 1,923
================ ========== ========== ============== ========== ========== ========
Disposals - (15) - - - (15)
---------------- ---------- ---------- -------------- ---------- ---------- --------
At 31 December
2015 5,288 1,268 1,832 1,240 39 9,667
---------------- ---------- ---------- -------------- ---------- ---------- --------
Plant,
Freehold Machinery
land and
and motor Vineyard Mature Computer
buildings Vehicles establishment vineyards equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ========== =========== ============== ========== ========== =========
Accumulated
depreciation
================ ========== =========== ============== ========== ========== =========
At 1 January
2014 9 39 - - 2 50
================ ========== =========== ============== ========== ========== =========
As restated
depreciation
charge
for the
year 37 85 - 50 8 180
================ ========== =========== ============== ========== ========== =========
Depreciation
on disposals - - - - - -
---------------- ---------- ----------- -------------- ---------- ---------- ---------
As restated
at 31 December
2014 46 124 - 50 10 230
---------------- ---------- ----------- -------------- ---------- ---------- ---------
At 1 January
2015 46 124 - 50 10 230
================ ========== =========== ============== ========== ========== =========
Depreciation
charge
for the
year 44 163 - 50 10 267
================ ========== =========== ============== ========== ========== =========
Depreciation
on disposals - (1) - - - (1)
---------------- ---------- ----------- -------------- ---------- ---------- ---------
At 31 December
2015 90 286 - 100 20 496
---------------- ---------- ----------- -------------- ---------- ---------- ---------
Net book
value
================ ========== =========== ============== ========== ========== =========
At 31 December
2014 4,578 698 1,046 1,190 17 7,529
---------------- ---------- ----------- -------------- ---------- ---------- ---------
At 31 December
2015 5,198 982 1,832 1,140 19 9,171
---------------- ---------- ----------- -------------- ---------- ---------- ---------
Following the early adoption of "Agriculture: Bearer Plants:
Amendments to IAS 16 and IAS 41" the Group's grape vines are no
longer classified as biological assets. Accordingly the vines have
been transferred to plant, property and equipment as at 1 January
2014 at a deemed cost of GBP1,240,000. The comparative figures for
the year ended 31 December 2014 have been restated to reflect this
change in policy resulting in a net charge to the consolidated
statement of comprehensive income of GBP50,000 representing
depreciation for 2014.
Within property, plant and equipment are assets with a carrying
value of GBP185,000 (2014: GBPnil) held under finance leases.
13 Biological produce
The fair value of biological produce was:
2015 2014
GBP'000 GBP'000
=============================== ======== ========
At 1 January - -
=============================== ======== ========
Crop growing costs 384 281
=============================== ======== ========
Fair value of grapes harvested
and transferred
to inventory (289) (210)
=============================== ======== ========
Fair value movement in
biological produce (95) (71)
=============================== ======== ========
At 31 December - -
------------------------------- -------- --------
The fair value of grapes harvested is determined by reference to
estimated market prices less cost to sell at the time of harvest.
The estimated market price for grapes used in respect of the 2015
harvest is GBP2,000 per tonne (2014: GBP2,000 per tonne).
A 10% increase in the estimated market price of grapes to
GBP2,200 per tonne would result in an increase of GBP29,000 in the
fair value of the grapes harvested in the year. A 10% decrease in
the estimated market price of grapes to GBP1,800 per tonne would
result in a decrease of GBP29,000 in the fair value of the grapes
harvested in the year.
14 Inventories
December December
2015 2014
GBP'000 GBP'000
================== ======== ========
Finished goods 130 126
================== ======== ========
Work in progress 1,581 1,309
------------------ -------- --------
Total inventories 1,711 1,435
------------------ -------- --------
During the year GBP299,000 (December 2014: GBP334,000) was
transferred to cost of sales.
Prior to harvest, the costs of growing the grapes are included
in inventory. Upon harvest, the Group is required to value
agricultural produce at fair value less costs to sell in line with
IAS 41: Agriculture. A fair value loss of GBP95,000 (2014:
GBP71,000 loss) was recorded during the year and included within
the consolidated statement of comprehensive income. This
measurement of fair value less costs to sell is the deemed cost of
the grapes that is transferred into inventory upon harvest.
15 Trade and other receivables
December December
2015 2014
GBP'000 GBP'000
====================== ======== ========
Trade receivables 111 107
====================== ======== ========
Prepayments 79 28
====================== ======== ========
Other receivables 74 78
---------------------- -------- --------
Total trade and other
receivables 264 213
---------------------- -------- --------
Trade and other receivables are due within 1 year apart from
GBP50,000 (December 2014: GBP50,000) included within other
receivables which is due in more than 1 year.
As at 31 December 2015 trade receivables of GBP22,000 (2014:
GBP17,000) were past due but not impaired. They relate to customers
with no default history. The ageing analysis of these receivables
is as follows:
December December
2015 2014
GBP'000 GBP'000
============== ======== ========
< 3 months 13 13
============== ======== ========
3 to 6 months 7 4
============== ======== ========
> 6 months 2 -
-------------- -------- --------
22 17
-------------- -------- --------
16 Trade and other payables
December December
2015 2014
GBP'000 GBP'000
================================ ======== ========
Trade payables 25 192
================================ ======== ========
Accruals 92 72
================================ ======== ========
Other payables 27 59
-------------------------------- -------- --------
Total financial liabilities,
excluding loans and borrowings
classified as financial
liabilities measured
at amortised cost 144 323
================================ ======== ========
Other payables - tax
and social security payments 25 13
-------------------------------- -------- --------
Total trade and other
payables 169 336
-------------------------------- -------- --------
Book values are approximate to fair value at 31 December 2015
and 31 December 2014.
17 Loans and borrowings
December December
2015 2014
GBP'000 GBP'000
=========================== ======== ========
Current liabilities:
=========================== ======== ========
Bank loans 34 -
--------------------------- -------- --------
34 -
--------------------------- -------- --------
Non current liabilities
=========================== ======== ========
Bank loans 2,161 2,025
--------------------------- -------- --------
Total loans and borrowings 2,195 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, shown at a cost of
GBP4,976,000 (2014: GBP4,356,000) within property, plant and
equipment and a floating charge over all other property and
undertakings.
Other bank loans of GBP170,000 are at a fixed interest rate of
6% secured against certain items of plant and equipment. This loan
is repayable via monthly instalments over 5 years.
18 Finance Leases
December December
2015 2014
GBP'000 GBP'000
=========================== ======== ========
The minimum lease payments
under finance leases
fall due as follows:
=========================== ======== ========
Within 1 year 46 -
=========================== ======== ========
2-5 years 152 -
=========================== ======== ========
More than 5 years - -
--------------------------- -------- --------
198 -
--------------------------- -------- --------
Future value of finance
lease payments (24) -
--------------------------- -------- --------
Present value of finance
lease liabilities 174 -
--------------------------- -------- --------
Of which:
=========================== ======== ========
Within 1 year 41 -
=========================== ======== ========
2-5 years 133 -
=========================== ======== ========
More than 5 years - -
--------------------------- -------- --------
174 -
--------------------------- -------- --------
Finance leases comprise hire purchase agreements which the Group
has used to purchase various items of plant, machinery and motor
vehicles. The carrying value of the assets acquired held under
these finance leases amounts to GBP185,000 (2014: GBPnil) and are
shown within property, plant and equipment (note 12).
19 Convertible bonds
2015 2014
GBP'000 GBP'000
======================== ======== ========
Present value of debt
element at 1 January 1,841 1,695
======================== ======== ========
Converted into shares
during the year (389) -
======================== ======== ========
Discount expense for
the year 131 146
------------------------ -------- --------
Present value of debt
element at 31 December 1,583 1,841
======================== ======== ========
Equity element at 31
December 95 95
------------------------ -------- --------
Total carrying value
at 31 December 1,678 1,936
------------------------ -------- --------
Convertible bonds represent the debt element of a deep discount
convertible 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 bond into Gusbourne PLC ordinary shares
at a price of 66 pence per share.
On 27th May 2015 the Company, Mr A C V Weeber and Mrs C Weeber
entered into a variation of the Bond. The variation of the Bond
allows for the conversion to take place as part of an Open Offer of
Gusbourne PLC at the issue price of the Open Offer. On 17 June
2015, as part of the Open Offer announced by the Company on 28th
May 2015, GBP339,846 of the bonds plus accrued discount of
GBP49,043 were converted into 777,778 50 pence ordinary shares at a
price of 50 pence per share. As a result of the amendment to the
terms of the Convertible Bonds on 27 May 2015, this conversion of
bonds into shares resulted in a charge to the consolidated
statement of income of GBP115,000 and is shown within finance costs
as an exceptional item. This charge is a non-cash adjustment and
does not affect the net assets of the Group as the corresponding
entry is to retained earnings.
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.
20 Operating lease commitments
The future aggregate minimum lease payments under
non-cancellable operating leases are as follows:
December December
2015 2014
GBP'000 GBP'000
========================= ======== ========
Operating leases which
expire:
========================= ======== ========
Within one year 61 47
========================= ======== ========
Within two to five years 283 189
========================= ======== ========
More than five years 3,140 2,015
------------------------- -------- --------
3,484 2,251
------------------------- -------- --------
The Group has entered into a number of long term leases in
respect of land and buildings in West Sussex. The Group has planted
vineyards on the leased land.
The leases have lives of 47 years (2014: 48 years) and include
various terms including regular break clauses at the Group's
option.
21 Share capital
Ordinary shares
of 50p each
=========================== ===================
Number GBP'000
=========================== ========== =======
Issued and fully paid
=========================== ========== =======
At 1 January 2014 15,224,814 7,612
=========================== ========== =======
Issued for cash during
the year 2,628,462 1,315
=========================== ========== =======
At 31 December 2014 17,853,276 8,927
=========================== ========== =======
Bond converted into shares
during the period 777,778 389
=========================== ========== =======
Issued for cash during
the year 5,008,708 2,504
--------------------------- ---------- -------
At 31 December 2015 23,639,762 11,820
--------------------------- ---------- -------
On 17 June 2015 Gusbourne PLC issued 5,050,738 ordinary shares
of 50 pence each at a price of 50 pence per share. 4,272,960 of
these shares were issued for cash and 777,778 shares were
subscribed for by way of the conversion of Bonds into shares.
On 30 July 2015 Gusbourne PLC issued, for cash, 735,748 ordinary
shares of 50 pence each at a price of 50 pence per share.
The shares were fully subscribed and paid up.
22 Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
================= ============================
Share Premium The share premium account
arose on the issue of
shares by the Company
at a premium to their
nominal value. Expenses
of share issues are charged
to this account.
================= ============================
Merger reserve The merger reserve arose
on the business combination
and is the difference
between the nominal value
of the shares issued and
the market value of the
shares acquired.
================= ============================
Convertible The convertible bond reserve
bond reserve is the equity element
of the bonds as disclosed
in note 19.
================= ============================
Retained earnings The retained earnings
represent cumulative net
gains and losses recognised
in the Group's statement
of consolidated income.
================= ============================
23 Related party transactions
At 31 December 2015 GBPnil (31 December 2014 - GBP1,493,000) of
cash and cash equivalents were held on deposit at British Caribbean
Bank Limited ('BCBL'), a related party. BCBL is a wholly owned
subsidiary of Waterloo Investment Holdings Limited ('WIHL'). Lord
Ashcroft, KCMG PC, is a controlling shareholder in both the Company
and WIHL.
SUSD Limited ("SUSD") provided architectural and project
management services to the Group during the year amounting to
GBP63,615. There was no balance due to SUSD as at 31 December 2015.
Lord Ashcroft, KCMG PC the Company's controlling shareholder, is
also the controlling shareholder of SUSD through his interest in
SUSD Asset Management (Holdings) Limited, SUSD's ultimate parent
company.
Anne Street Partners Limited is considered a related party by
virtue of the fact that Ian Robinson, a director of Gusbourne PLC,
is also a director of Anne Street Partners Limited. During the year
Anne Street Partners Limited charged the Company in total GBP70,000
(December 2014 - GBP62,473). Of this, GBP10,000 was in relation to
directors fees (December 2014 - GBP22,473) and GBP60,000 relates to
management services (December 2014 - GBP40,000). At 31 December
2015 an amount of GBPnil inclusive of VAT (December 2014 -
GBP77,000) was due to Anne Street Partners Limited. The amount due
to Anne Street Partners Limited as at 31 December 2014 was shown
within trade and other payables.
On 27th May 2015 the Group, Mr Andrew Weeber, Non-Executive
Chairman, and Mrs C Weeber entered into a variation of the Bond.
The variation of the Bond allows for the conversion to take place
as part of an Open Offer of Gusbourne PLC at the issue price of the
Open Offer. On 17 June 2015, as part of the Open Offer announced by
the Company on 28th May 2015, GBP339,846 of the bonds plus accrued
discount of GBP49,043 were converted into 777,778 50 pence ordinary
shares at a price of 50 pence per share. As a result of the
amendment to the terms of the Convertible Bonds on 27 May 2015,
this conversion of bonds into shares resulted in a charge to the
consolidated statement of income of GBP115,000 and is shown within
finance costs as an exceptional item. This charge is a non-cash
adjustment and does not affect the net assets of the Group as the
corresponding entry is to retained earnings.
Included within other payables at 31 December 2015 is an amount
of GBP1,862 due from Andrew Weeber, Non-Executive Chairman
(December 2014 - GBP431 due to Andrew Weeber). The amount of
GBP1,862 has been received by the Group since 31 December 2015.
24 Early adoption of Agriculture: Bearer Plants:
Amendments to IAS 16 and IAS 41
Following the early adoption of Agriculture: Bearer Plants
(Amendments to IAS 16 and IAS 41) the financial statements have
been restated to reflect that bearer plants such as grape vines are
no longer included within the classification of biological assets
under IAS 41 Agriculture. In accordance with the amendments
biological assets held by the Group are now accounted for under IAS
16 PPE and held at cost.
The tables below presents a summary of the qualitative effects
of the above change in accounting policy.
The effect on earnings per share was immaterial and is therefore
not presented.
Effects on consolidated statement of financial position
1 January 2014
Restated
Previously financial
Notes reported Adjustments position
===================== ====== ========== =========== ==========
Assets
===================== ====== ========== =========== ==========
Non-current
assets
===================== ====== ========== =========== ==========
Intangibles 1,007 - 1,007
============================= ========== =========== ==========
Property, plant
and equipment a. 5,724 1,240 6,964
===================== ====== ========== =========== ==========
Biological assets a. 1,240 (1,240) -
--------------------- ------ ---------- ----------- ----------
7,971 - 7,971
---------------------------- ---------- ----------- ----------
Current assets
===================== ====== ========== =========== ==========
Biological produce - - -
===================== ====== ========== =========== ==========
Inventories 1,310 - 1,310
============================= ========== =========== ==========
Trade and other
receivables 251 - 251
============================= ========== =========== ==========
Cash and cash
equivalents 1,703 - 1,703
----------------------------- ---------- ----------- ----------
3,264 - 3,264
---------------------------- ---------- ----------- ----------
Total assets 11,235 - 11,235
----------------------------- ---------- ----------- ----------
Liabilities
===================== ====== ========== =========== ==========
Current liabilities
===================== ====== ========== =========== ==========
Trade and other
payables (324) - (324)
============================= ========== =========== ==========
Finance leases - - -
===================== ====== ========== =========== ==========
Loans and borrowings - - -
--------------------- ------ ---------- ----------- ----------
(324) - (324)
---------------------------- ---------- ----------- ----------
1 January 2014
(continued)
===================== ====== ========== =========== ==========
Restated
Previously financial
Notes reported Adjustments position
===================== ====== ========== =========== ==========
Non-current
liabilities
===================== ====== ========== =========== ==========
Loans and borrowings (2,025) - (2,025)
============================= ========== =========== ==========
Finance leases - - -
===================== ====== ========== =========== ==========
Convertible
deep discount
bonds (1,695) - (1,695)
============================= ========== =========== ==========
Deferred tax
liabilities (60) - (60)
----------------------------- ---------- ----------- ----------
(3,780) - (3,780)
---------------------------- ---------- ----------- ----------
Total liabilities (4,104) - (4,104)
----------------------------- ---------- ----------- ----------
Net Assets 7,131 - 7,131
----------------------------- ---------- ----------- ----------
Issued capital and reserves attributable
to owners of the parent
==================================================================
Share capital 7,612 - 7,612
============================= ========== =========== ==========
Share premium 346 - 346
============================= ========== =========== ==========
Merger reserve (13) - (13)
============================= ========== =========== ==========
Convertible
bond reserve 95 - 95
============================= ========== =========== ==========
Retained earnings (909) - (909)
----------------------------- ---------- ----------- ----------
Total equity 7,131 - 7,131
----------------------------- ---------- ----------- ----------
Effects on consolidated statement of financial position
31 December 2014
Restated
Previously financial
Notes reported Adjustments position
================== ====== ========== =========== ==========
Assets
================== ====== ========== =========== ==========
Non-current
assets
================== ====== ========== =========== ==========
Intangibles 1,007 - 1,007
========================== ========== =========== ==========
Property, plant a,
and equipment b 6,339 1,190 7,529
================== ====== ========== =========== ==========
Biological assets c 1,237 (1,237) -
------------------ ------ ---------- ----------- ----------
8,583 (47) 8,536
------------------------- ---------- ----------- ----------
31 December
2014 (continued)
===================== ====== ========== =========== ==========
Restated
Previously financial
Notes reported Adjustments position
===================== ====== ========== =========== ==========
Current assets
===================== ====== ========== =========== ==========
Biological produce - - -
===================== ====== ========== =========== ==========
Inventories 1,435 - 1,435
============================= ========== =========== ==========
Trade and other
receivables 213 - 213
============================= ========== =========== ==========
Cash and cash
equivalents 1,842 - 1,842
----------------------------- ---------- ----------- ----------
3,490 - 3,490
---------------------------- ---------- ----------- ----------
Total assets 12,073 (47) 12,026
----------------------------- ---------- ----------- ----------
Liabilities
===================== ====== ========== =========== ==========
Current liabilities
===================== ====== ========== =========== ==========
Trade and other
payables (336) - (336)
============================= ========== =========== ==========
Finance leases - - -
===================== ====== ========== =========== ==========
Loans and borrowings - - -
--------------------- ------ ---------- ----------- ----------
(336) - (336)
---------------------------- ---------- ----------- ----------
Non-current
liabilities
===================== ====== ========== =========== ==========
Loans and borrowings (2,025) - (2,025)
============================= ========== =========== ==========
Finance leases - - -
===================== ====== ========== =========== ==========
Convertible
deep discount
bonds (1,841) - (1,841)
============================= ========== =========== ==========
Deferred tax
liabilities - - -
--------------------- ------ ---------- ----------- ----------
(3,866) - (3,866)
---------------------------- ---------- ----------- ----------
Total liabilities (4,202) - (4,202)
----------------------------- ---------- ----------- ----------
Net Assets 7,871 (47) 7,824
----------------------------- ---------- ----------- ----------
Issued capital and reserves attributable
to owners of the parent
==================================================================
Share capital 8,927 - 8,927
============================= ========== =========== ==========
Share premium 815 - 815
============================= ========== =========== ==========
Merger reserve (13) - (13)
============================= ========== =========== ==========
Convertible
bond reserve 95 - 95
============================= ========== =========== ==========
Retained earnings (1,953) (47) (2,000)
----------------------------- ---------- ----------- ----------
Total equity 7,871 (47) 7,824
----------------------------- ---------- ----------- ----------
Effects on consolidated statement of comprehensive income
31 December 2014
Restated
Previously financial
Notes reported Adjustments position
===================== ====== ========== =========== ==========
Revenue 434 - 434
============================= ========== =========== ==========
Cost of sales (361) - (361)
============================= ========== =========== ==========
Gross profit 73 - 73
============================= ========== =========== ==========
Change in fair
value of biological
assets d (74) 74 -
===================== ====== ========== =========== ==========
Fair value movement
in biological
produce d - (71) (71)
===================== ====== ========== =========== ==========
Administrative
expenses b (918) (50) (968)
===================== ====== ========== =========== ==========
Loss from operations (919) (47) (966)
============================= ========== =========== ==========
Finance income 38 - 38
============================= ========== =========== ==========
Finance expense (223) - (223)
============================= ========== =========== ==========
Loss before
tax (1,104) (47) (1,151)
============================= ========== =========== ==========
Tax expense 60 - 60
============================= ========== =========== ==========
Loss for the
year attributable
to owners of
the parent (1,044) (47) (1,091)
----------------------------- ---------- ----------- ----------
Total comprehensive
loss attributable
to owners of
the parent (1,044) (47) (1,091)
----------------------------- ---------- ----------- ----------
Effects on consolidated statement of cashflows
31 December 2014
Restated
Previously financial
reported Adjustments position
========================== ========== =========== ==========
Cash outflow from
operations (864) - (864)
========================== ========== =========== ==========
Net cash from investing
activities (709) - (709)
========================== ========== =========== ==========
Net cash from financing
activities 1,712 - 1,712
========================== ========== =========== ==========
Net increase/(decrease)
in cash and cash
equivalents 139 - 139
========================== ========== =========== ==========
Cash and cash equivalents
at the beginning
of the year 1,703 - 1,703
========================== ========== =========== ==========
Cash and cash equivalents
at the end of the
year 1,842 - 1,842
========================== ========== =========== ==========
Explanation of changes to previously reported loss attributable
to owners of the parent
a. Transfer of Biological Assets (Vines) to property, plant and
equipment as at 1 January 2014.
b. Depreciation of GBP50,000 for the year ending 31 December
2014.
c. As a. above and net of fair value adjustments per d.
below.
d. Reversal of "Change in fair value of biological assets" of
GBP74,000 and inclusion of "fair value movement in biological
produce" of GBP71,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BRGDUSSBBGLI
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May 19, 2016 02:01 ET (06:01 GMT)
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