TIDMGUS
RNS Number : 0699B
Gusbourne PLC
29 September 2022
29 September 2022
Gusbourne Plc
("Gusbourne" or the "Company")
Interim Results to 30 June 2022
Gusbourne Plc, the English sparkling wine producer, is pleased
to announce its unaudited interim results for the six months ended
30 June 2022.
Continuing strong growth in net revenue in the first half with
net revenue up 108% at GBP3.014m, and Adjusted EBITDA loss narrowed
to GBP0.697m.
H1 2022 H1 2021 Change FY 2021
GBP'000 GBP'000 % GBP'000
NET REVENUE AND ADJUSTED EBITDA
Net revenue (1) 3,014 1,448 108% 4,191
Gross profit 1,806 829 118% 2,344
Adjusted EBITDA (2) (697) (945) (1,452)
Gross profit % 60% 57% 56%
STATUTORY RESULTS
Net revenue (1) 3,014 1,448 108% 4,191
Gross profit 1,806 829 118% 2,344
Fair value movement in biological
produce (216) (217) (704)
Sales and marketing expenses (1,801) (1,153) (2,460)
Administrative expenses (702) (621) (1,336)
Depreciation (293) (310) (600)
Profit/(loss) on disposal 28 - -
Total Administrative expenses (2,768) (2,084) (4,396)
Operating profit/(loss) (1,178) (1,472) (2,756)
RECONCILIATION OF OPERATING
PROFIT/(LOSS)
TO ADJUSTED EBITDA
Operating profit/(Loss) (1,178) (1,472) (2,756)
Add back;
Depreciation 293 310 600
Profit/(loss) on disposal (28) - -
Fair value movement in biological
produce/asset 216 217 704
Adjusted EBITDA (2) (697) (945) (1,452)
(1) Net revenue is revenue reported by the Company after excise
duties payable
(2) Adjusted EBITDA means profit/(loss)from operations before
fair value movement in biological produce, interest, tax,
depreciation and amortisation.
Highlights
-- Net revenue (1) up by 108% to GBP3.014m (30 June 2021: GBP1.448m)
-- Gross profit up by 118% to GBP1.806m (30 June 2021: GBP0.829m)
-- Adjusted EBITDA (2) loss narrowed to GBP0.697m (H1 2021:
GBP0.945m loss). Includes increased investment in sales and
marketing to support sales growth but demonstrates a 26% reduction
in the loss compared to the prior period, as the Company
increasingly works towards a positive Adjusted EBITDA.
-- UK Trade sales up by 126% at GBP1.346m (H1 2021 GBP0.596m) as
UK Trade continued to recover from the prior year effects of
COVID-19.
-- Direct to consumer (DTC) wine sales, together with tour,
tasting events and related income increased to GBP0.833m a 66%
increase from the prior year (H1 2021: GBP0.502m) driven by online
sales and cellar door operations in Kent.
-- International sales at GBP0.798m (H1 2021: GBP0.309m) were up
by 158% with Norway, USA and Japan constituting our largest
overseas markets
-- 2022 has been our most successful awards season to date in
both international and UK wine competitions, with a total of 53
medals awarded, including seventeen gold medals and six trophies.
Particular highlights include winning the Judges Selection trophy
at the prestigious Texsom awards in the United States in May for
the third consecutive year and trophies for 'Best Chardonnay',
'Best Pinot Noir' and back-to-back 'Winery of the Year' at the
WineGB awards in September for the second year running.
-- Our new prestige cuvee, Fifty One Degrees North, was launched
in September 2022. Gusbourne's most exclusive offering, this wine
has been designed to represent the definitive expression of modern
English winemaking. This exciting new release is a seminal moment
in the ongoing development and elevation of the Gusbourne brand and
has been widely met with critical acclaim.
Charlie Holland, Chief Winemaker and Chief Executive Officer,
commented :
"I am delighted to report strong sales growth for the first six
months of 2022, with net revenue more than double the same period
in 2021. We continue to enjoy strong demand for Gusbourne wines
driven by the continued expansion of our customer base, both in the
UK and internationally. It also reflects the luxury appeal and
reputation of the Gusbourne brand, the dynamic growth of the
English wine sector and the increasing demand for English
wines.
I am also delighted to report the increase of GBP6m in our
asset-based financing facilities from PNC which will provide
combined lending facilities of GBP16.5m for a further 5 years and
provide valued long term support for the Company's further growth
plans.
I am very pleased the Company has been able to acquire the
additional freehold land in Kent, which, will form a key part of
our production expansion plans over the coming years".
Enquiries:
Gusbourne Plc
Charlie Holland +44 (0)12 3375 8666
Panmure Gordon (UK) Limited (Nomad and Sole Broker)
Oliver Cardigan + 44 (0)20 7886 2500
Hugh Rich
Note: This and other press releases are available at the
Company's website: www.gusbourneplc.com
Note to Editors
Gusbourne produces and distributes a range of high quality and
award winning vintage English sparkling wines from grapes grown in
its own vineyards in Kent and West Sussex.
The Gusbourne business was founded by Andrew Weeber in 2004 with
the first vineyard plantings at Appledore in Kent. The first wines
were released in 2010 to critical acclaim. Following additional
vineyard plantings in 2013 and 2015 in both Kent and West Sussex,
Gusbourne now has 231 acres of mature vineyards. The NEST visitor
centre was opened next to the winery in Appledore in 2017,
providing tours, tastings and a direct outlet for our wines.
Right from the beginning, Gusbourne's intention has always been
to produce the finest English sparkling wines. Starting with
carefully chosen sites, we use best practice in establishing and
maintaining the vineyards and conduct green harvests to ensure we
achieve the highest quality grapes for each vintage. A quest for
excellence is at the heart of everything we do. We blind taste
hundreds of samples before finalising our blends and even after the
wines are bottled, they spend extended time on their lees to add
depth and flavour. Once disgorged, extra cork ageing further
enhances complexity. Our winemaking process remains traditional,
but one that is open to innovation where appropriate. It takes four
years to bring a vineyard into full production and a further four
years to transform those grapes into Gusbourne's premium sparkling
wine.
We are one of England's most awarded wine producers. Highlights
include:
-- Three times winner of the International Wine & Spirits
Challenge (IWSC) English Wine Producer of the Year, having won the
award in 2013, 2015 and 2017- a unique achievement
-- Back-to-back winner of 'Winery of the Year' at the WineGB Competition in 2021 and 2022
-- Trophies for 'Best English Still Red Wine', 'Best English
Still White Wine' and 'Best English Still Wine' at Wine GB awards
2022
-- Trophy for 'Best Vintage English Sparkling Wine' at the 2022 International Wine Challenge
-- Shortlisted for 'Best Sparkling Wine Producer' at the 2022
International Wine and Spirits Competition
-- Awarded 'Judges Selection' trophy at the Texsom 2020-2022
Gusbourne's luxury brand enjoys premium price positioning and is
distributed in the finest establishments both in the UK and abroad.
Our wines can be found in leading luxury retailers, restaurants,
hotels and stockists, always being aware that where we are says a
lot about who we are .
OPERATIONS AND FINANCIAL REVIEW
Results
Net revenue for the period amounted to GBP3.014m (H1 2021:
GBP1.448m), an increase of 108% on the corresponding period last
year.
Net revenue by distribution channel is shown in the table
below.
NET REVENUE BY DISTRIBUTION
CHANNEL
H1 2022 H1 2021 Change FY 2021
GBP'000 GBP'000 % GBP'000
Direct to Consumer (DTC Wine
Sales) 536 381 41% 1,080
UK Trade 1,346 596 126% 1,934
International 798 309 158% 781
Net wine sales 2,680 1,286 108% 3,795
Other income * 334 162 106% 396
Total net revenue 3,014 1,448 108% 4,191
*Other income
Tour, tasting events and related
income 297 121 145% 309
Other 37 41 (10%) 87
Total other income 334 162 106% 396
DTC wine sales together with
tour,
tasting events and related
income (DTC
net revenue) 833 502 66% 1,389
PERCENTAGES OF NET REVENUE
Direct to Consumer (DTC) 27.6% 34.7% 33.1%
UK Trade 44.7% 41.2% 46.2%
International 26.5% 21.3% 18.6%
Other 1.2% 2.8% 2.1%
100.0% 100.0% 100.0%
Operating expenses for the six months, excluding depreciation,
amounted to GBP2.503m (H1 2021: GBP1.774m), included planned
increased expenditure on sales and marketing costs of GBP1.801m (H1
2021: GBP1.153m) reflecting continuing investment in the growth of
the business and its sales beyond the current financial period.
Sales and marketing costs, which are largely discretionary,
continue to represent a relatively high proportion of net revenues
during this planned growth phase of the business but are now
declining as a percentage of net revenue from a peak of 84% in FY
2019 to 59% in FY 2021. Sales and marketing costs represented 59.8%
of H1 2022 net revenue (H1 2021 79.6%).
Adjusted EBITDA for the six months was a loss of GBP0.697m (H1
2021: GBP0.945m). The operating loss for the period after
depreciation and amortisation was GBP1.178m (H1 2021: GBP1.472m
loss). The loss before tax was GBP1.374m (H1 2021: GBP1.922m loss)
after net finance costs of GBP0.196m (H1 2021: GBP0.450m). Finance
costs have reduced in 2022 following the restructuring of the
balance sheet in 2021. These adjusted EBITDA losses continue to be
in line with expectations and the long-term growth strategy of the
Group is intended for adjusted EBITDA to become positive within the
coming years.
Balance Sheet
The Group's balance sheet reflects the long-term nature of the
sparkling wine industry. The production of premium quality wine
from new vineyards is, by its very nature, a long-term project of
at least ten years. It takes around two years to select and prepare
optimal vineyard sites and order the appropriate vines for
planting. It takes a further four years from planting to bring a
vineyard into full production and a further four years to transform
these grapes into Gusbourne's premium sparkling wine. This requires
capital expenditure on vineyards and related property, plant and
equipment as well as significant working capital to support
inventories over the long production cycle.
The total assets employed in the business at 30 June 2022 was
GBP26.893m (H1 2021: GBP23.586m) represented by:
-- 362 acres of Freehold land and buildings of GBP6.178m (H1
2021: GBP6.199m) - with buildings at cost less depreciation.
-- 231 acres of mature vineyards of GBP2.785m (H1 2021:
GBP2.931m) - at cost less depreciation
-- Plant, machinery and other equipment of GBP1.481m (H1 2021:
GBP1.411m) - at cost less depreciation
-- Right of use assets (under IFRS 16) of GBP1.953m (H1 2021: GBP1.999m).
-- Biological assets of GBP0.756m (H1 2021: GBP0.541m).
-- Inventories at 31 December 2021 at the lower of cost and net
realisable value amounted to GBP10.423m (H1 2021: GBP9.533m). These
inventories represent wine in its various stages of production from
wine in tank from the last harvest to the finished products which
take around four years to produce from the time of harvest. These
additional four years reflect the time it takes to transform our
high-quality grapes into Gusbourne's premium sparkling wine. An
important point to note is that these wine inventories already
include the wine (at its various stages of production) to support
sales planned for the next four years. The anticipated underlying
surplus of net realisable value over the cost of these wine
inventories, which is not reflected in these accounts, will become
an increasingly significant factor of the Group's asset base as
these inventories continue to grow.
-- Other working capital (representing trade and other
receivables less trade and other payables) of GBP0.542m (H1 2021:
negative GBP0.225m)
-- Cash of GBP1.768m (H1 2021: GBP0.190m)
-- Intangible assets of GBP1.007m (H1 2021: GBP1.007m) arose on
the acquisition of the Gusbourne Estate business on 27 September
2013. Intangible assets, which includes the Gusbourne brand itself,
remain unimpaired at their historical amount and in accordance with
the relevant accounting standards. No account has been taken with
regards to any potential fair value uplift that may be
appropriate.
Financing
At 30 June 2022 the Group's total assets of GBP26.893m (H1 2021:
GBP23.586m) were financed by:
-- Shareholder's equity of GBP14.529m (H1 2021: GBP7.209m)
-- Long term secured debt from PNC of GBP10.294m (H1 2021:
GBP8.305m). As at 30 June 2022 the PNC facilities were provided on
a revolving basis over a minimum period of 5 years from June 2020
and allowed flexible drawdown and repayments in line with the
Company's working capital requirements. The interest rate was at
the annual rate of 2.75 per cent (H1 2021: 2.75 per cent) over the
Bank of England Base Rate.
On 15 August 2022 Gusbourne announced that its wholly owned
subsidiary, Gusbourne Estate Limited, had entered into an amended
and restated agreement with PNC Financial Services UK Limited
("PNC") to increase its existing GBP10.5 million 5-year asset-based
lending facilities by an additional GBP6 million to provide the
Company with a total GBP16.5 million asset-based lending facilities
at a competitive rate (the "New PNC Facilities"). The New PNC
facilities have been made available to the Company for a minimum
period of 5 years to 12 August 2027. The interest rate will be at
the annual rate of 2.50 per cent over the Bank of England Base
Rate. Further details are shown in notes 8 and 10.
-- Lease liabilities under IFRS 16 of GBP2.070m (H1 2021: GBP2.101m).
-- Short term secured debt of GBPnil (H1 2021: GBP5.971m). On 29
October 2021 the Company's short-term debt was repaid or converted
into equity. Further details of this are shown in note 8.
Current trading and outlook
Current trading continues to reflect year on year net revenue
growth although at lower growth rates than H1, with H1 performance
having benefited from a strong recovery from the prior year adverse
effects of COVID-19 on trading.
We look forward to significant further business development and
growth in the coming years based on our luxury market positioning,
an increasing new product range, further development of our DTC
cellar door operations and increased supply over the longer term
with planned new plantings.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months Six months Year ended
to to
30 June 30 June 31 December
Notes 2022 2021 2021
GBP'000 GBP'000 GBP'000
Revenue 2 3,290 1,598 4,613
Excise duties (276) (150) (422)
Net revenue 3,014 1,448 4,191
Cost of sales (1,208) (619) (1,847)
Gross profit 1,806 829 2,344
Fair value movement in biological
assets 6 (216) (217) -
Fair movement in biological
produce 6 - - (704)
Administrative expenses (2,768) (2,084) (4,396)
Loss from operations (1,178) (1,472) (2,756)
Finance expense 4 (196) (450) (817)
Loss before tax (1,374) (1,922) (3,573)
Tax expense - - -
Loss and total comprehensive
loss for the period attributable
to
period attributable to owners
of the parent (1,374) (1,922) (3,573)
Loss per share attributable
to
the ordinary equity holders
of the parent:
Basic and diluted (2.26p)) (4.14p) (7.29p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2022
Unaudited Unaudited Audited
30 June 30 June 31 December
Notes 2022 2021 2021
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Intangibles 1,007 1,007 1,007
Property, plant and equipment 5 12,397 12,540 12,343
Other receivables 25 35 32
13,429 13,582 13,382
--------- --------- -----------
Current assets
Biological assets 6 756 541 -
Inventories 7 10,423 9,533 10,638
Trade and other receivables 1,826 1,095 1,275
Cash and cash equivalents 1,768 190 3,128
--------- --------- -----------
14,773 11,359 15,041
--------- --------- -----------
Total assets 28,202 24,941 28,423
--------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (1,309) (1,355) (1,118)
Loans and borrowings 8 - (5,971) -
Lease liabilities (100) (100) (89)
(1,409) (7,426) (1,207)
--------- --------- -----------
Non-current liabilities
Loans and borrowings 8 (10,294) (8,305) (9,326)
Lease liabilities (1,970) (2,001) (2,005)
(12,264) (10,306) (11,331)
Total liabilities (13,673) (17,732) (12,538)
NET ASSETS 14,529 7,209 15,885
--------- --------- -----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
At 30 June 2022
Issued capital and reserves attributable
to
owners of the parent
Share capital 9 12,190 12,048 12,190
Share premium 21,121 10,918 21,103
Merger reserve (13) (13) (13)
Retained earnings (18,769) (15,744) (17,395)
-------- -------- --------
TOTAL EQUITY 14,529 7,209 15,885
-------- -------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months to months to Six months to Year ended
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Cashflows from operating
activities
Loss for the year/period before tax (1,374) (1,922) (3,573)
Adjustments for:
Depreciation of property, plant and
equipment 293 310 599
Finance expense 196 450 817
Profit on disposal of fixed assets (28) - -
Fair value movement in biological
asset 216 217 -
Fair value movement in biological
produce - - 704
----------------------- ------------- ----------
Operating cash flow before changes
in working capital (697) (945) (1,453)
(Increase) in trade and other
receivables (544) (223) (318)
(Increase)/decrease in inventories 257 (178) . (1,886)
(Increase) in biological assets (972) (758) -
Increase in trade and other payables 191 586 349
----------------------- ------------- ----------
Cash outflow from operations (1,765) (1,518) (3,308)
Investing activities
Purchases of property, plant and
equipment,
excluding vineyard establishment (348) (57) (195)
Sale of property, plant and equipment 28 - -
Net cash from investing activities (320) (57) (195)
----------------------- ------------- ----------
Financing activities
Capital loan repayments (2,235) - (2,944)
New loans issued 3,182 1,689 5,584
Loan issue costs - (20) (20)
Repayment of lease liabilities (66) (50) (99)
Interest paid (174) (119) (289)
Issue of ordinary shares 18 3 5,715
Share issue expense - - (359)
Repayment of deep discount bonds - - (1,219)
Net cash from financing activities 725 1,503 6,369
----------------------- ------------- ----------
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
For the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months to Six months to Six months to Period to
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Net increase/(decrease) in cash and cash
equivalents (1,360) (72) 2,866
Cash and cash equivalents at beginning of
period 3,128 262 262
--------------------------- ------------- ------------
Cash and cash equivalents at end of period 1,768 190 3,128
=========================== ============= ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Total
attributable
to equity
holders
Share Share Merger Retained of
Audited: capital premium reserve earnings parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December
2020 12,048 10,915 (13) (13,822) 9,128
Share issue - 3 - - 3
Comprehensive
loss for the
period - - - (1,922) (1,922)
______ ______ ______ _____ ______
30 June 2021 12,048 10,918 (13) (15,744) 7,209
______ ______ ______ ______ ______
Share issue 142 10,544 - - 10,686
Share issue
expenses - (359) - - (359)
Comprehensive
loss for the
period - - - (1,651) (1,651)
______ ______ ______ _____ ______
31 December
2021 12,190 21,103 (13) (17,395) 15,885
Unaudited:
Share issue - 18 - - 18
Share issue - - - -
expenses
Comprehensive
loss for
the period - - - (1,374) (1,374)
______ ______ ______ _____ ______
30 June
2022 12,190 21,121 (13) (18,769) 14,529
______ ______ ______ ______ ______
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1 Basis of preparation
Statement of compliance
The interim financial statements in this report have been
prepared in accordance with UK adopted international accounting
standards that were applied in the preparation of the Company's
published consolidated financial statements for the year ended 31
December 2021 and are consistent with the accounting policies
expected to apply in its financial statements for the year ended 31
December 2022. As permitted, this interim report has been prepared
in accordance with the AIM Rules for Companies and does not seek to
comply with IAS 34 "Interim Financial Reporting".
Statutory information
The financial information for the six months ended 30 June 2022
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 year
ended 31 December 2021 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 year ended 31 December
2021 have been delivered to the Registrar of Companies. The Group's
independent auditor's report was unqualified and did not contain a
statement under section 498(2) or 498(3) of the Companies Act
2006.
The consolidated financial statements have been prepared on a
going concern basis in accordance with UK adopted international
accounting standards.
The Board of the Company continually assesses and monitors the
key risks of the business. The Board continues to consider the
Group's profit and cash flow plans for at least the next 12 months
and run forecasts and downside "stress test" scenarios. These risks
have not significantly changed from those set out in the Company's
Annual Report for the period ended 31 December 2021. In addition,
these stress test scenarios do not show a requirement in excess of
the Group's undrawn facilities nor do they show the Group breaching
any of its key covenant tests.
The stress test scenarios also include certain cost mitigation
actions, including but not limited to, operating cost reductions
and reduced capital expenditure.
Under the significant stress test scenarios, we have run, the
Group could withstand a material and prolonged adverse impact on
revenues and continue to operate within the available lending
facilities. Accordingly, the Group and the Company continues to
adopt the going concern basis in preparing its Financial
Statements.
2 Revenue
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Wine sales 2,680 1,286 3,795
Other income 334 162 396
Net revenue 3,014 1,448 4,191
--------- --------- -----------
Excise duties 276 150 422
Total Revenue 3,290 1,598 4,613
--------- --------- -----------
3 Loss from operations
Loss from operations has been arrived at after charging:
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Depreciation of property, plant
and equipment 293 310 600
Profit/loss on disposal (28) - -
Staff costs expensed to consolidated
statement of income 893 695 1,310
Furlough grant income - (31) (45)
4 Finance expense
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Finance expense
Interest payable on borrowings 174 157 325
Amortisation of bank transaction
costs 22 21 42
Interest on lease liabilities - 13 -
Discount expense on deep discount
bonds - 259 450
Total finance expense 196 450 817
--------- --------- -----------
5 Property, plant and equipment
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Freehold land and buildings 6,178 6,199 6,134
Plant, machinery and motor vehicles 1,447 1,381 1,342
Mature vineyards 2,785 2,931 2,858
Computer equipment 34 30 33
Right of use assets 1,953 1,999 1,976
12,397 12,540 12,343
--------- --------- -----------
Right of use assets
Right of use assets comprise land leases on which vines have
been planted and property leases from which vineyard operations are
carried out. These assets have been created under IFRS 16 -
Leases.
6 Biological assets
Biological assets represent grapes growing on the Group's vines.
Once the grapes are harvested, they are deemed to be biological
produce and transferred to inventories.
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Crop growing costs 972 758 1,609
Fair value of grapes harvested and
transferred
to inventories - - (905)
Fair value movement in biological
assets (216) (217) -
Fair value movement in biological
produce - - (704)
--------- --------- -----------
Fair value of biological assets
at the reporting date 756 541 -
--------- --------- -----------
The fair value of biological assets at the reporting date is
determined by reference to estimated market prices less costs to
sell. The estimated market price for grapes used in respect of 2022
is GBP2,500 (2021: GBP2,500) per tonne. The fair value is subject
to a discount factor of 55% (2021: 55%) due to the grapes, as at
the reporting date, being approximately 3 months away from being
ready for harvest.
A 10% increase in the estimated market price of grapes to
GBP2,750 per tonne would result in an increase of GBP76,000 in the
fair value of biological assets at the reporting date. A 10%
decrease in the estimated market price of grapes to GBP2,250 per
tonne would result in a decrease of GBP75,000 in the fair value of
biological assets at the reporting date.
7 Inventories
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Finished goods 998 88 985
Work in progress 9,425 9,445 9,653
10,423 9,533 10,638
--------- --------- -----------
8 Loans and borrowings
Unaudited Unaudited Audited
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Current liabilities
Bank loans - - -
Other loans - 580 -
Deep Discount Bonds - 5,391 -
- 5,971 -
--------- --------- -----------
Non-current liabilities
Bank loans 10,415 8,468 9,468
Unamortised bank transaction costs (121) (163) (142)
Other loans - - -
Deep Discount Bonds - - -
--------- --------- -----------
Total loans and borrowings 10,294 8,305 9,326
--------- --------- -----------
The bank loans of GBP10,294,000 with PNC Financial Services UK
Limited ("PNC") shown above is net of transaction costs of
GBP121,000 which are being amortised over the life of the loan.
On 15 August 2022 Gusbourne announced that its wholly owned
subsidiary, Gusbourne Estate Limited, had entered into an amended
and restated agreement with PNC to increase its existing GBP10.5
million 5-year asset-based lending facilities by an additional GBP6
million to provide the Company with a total GBP16.5 million
asset-based lending facilities at a competitive rate (the "New PNC
Facilities"). The New PNC facilities have been made available to
the Company for a minimum period of 5 years to 12 August 2027.
The New PNC Facilities are being provided on a revolving basis
and will be used to provide further working capital for the Company
covering inventory and accounts receivables, to support its growth
plans and allow flexible drawdown and repayments in line with the
Company's working capital requirements. The interest rate will be
at the annual rate of 2.50 per cent (2021: 2.75 per cent) over the
Bank of England Base Rate. The facilities will be secured by way of
first priority charges over the Company's inventory, receivables
and freehold property as well as an all-assets debenture and
contain financial and general covenants and customary events of
default. The financial covenants include cash burn, fixed charge
cover, capital expenditure restrictions and minimum headroom
levels, and are tested monthly.
On 29 October 2021 Belize Finance Limited ("BFL") converted its
interest in the company's Deep Discount Bonds into Ordinary Shares
at 75p per Ordinary Share. BFL has converted its DDBs into
2,838,765 Ordinary Shares at 75p per Ordinary Share in respect of
money owed for the 2020 DDB, amounting to GBP2,129,074, and
2,306,314 Ordinary Shares at 75p per Ordinary Share in respect of
money owed for the 2016 DDB, amounting to GBP1,729,735.
On 29 October 2021 the sole holder of the short-term loan
Franove, a related party of Paul Bentham, a director of the
Company, converted its short-term loan amounting to GBP610,445 into
813,926 Ordinary Shares at 75p per Ordinary Share on 29 October
2021.
On 29 October 2021, following an invitation to all other holders
of DDBs to convert amounts owed to them by the Company via the DDBs
into Ordinary Shares, other holders of DDBs amounting to GBP373,177
converted their DDBs into 497,568 Ordinary Shares at 75p per
Ordinary Share and used GBP131,250 of DDB proceeds to exercise
175,000 Warrants. The remaining DDBs amounting to GBP1,218,573 have
been repaid, and all short-term debt on the Company's balance sheet
has therefore now been eliminated.
The total Ordinary Shares issued pursuant to the BFL Conversion,
the Franove Conversion and the Other DDBs Conversion amounts to
6,456,573 Ordinary Shares.
The Company did not receive any cash proceeds from the DDBs and
Franove Conversion.
9 Share capital
Deferred Ordinary
shares of shares
49p each of 1p each
Number Number GBP'000
Issued and fully paid
At 1 January 2021 23,639,762 46,478,619 12,048
------------------------ ----------- ------------ --------
Issued in the year - 14,253,086 142
------------------------ ----------- ------------ --------
At 31 December 2021 23,639,762 60,731,705 12,190
------------------------ ----------- ------------ --------
Issued in the period - 24,615 -
----------------------- ----------- ------------ --------
At 30 June 2022 23,639,762 60,756,320 12,190
------------------------ ----------- ------------ --------
On 2 March 2022 the Company issued 23,970 new ordinary shares of
1p each pursuant to an exercise of Warrants. All Warrants were
exercised at 75p per share.
On 29 March 2022 the Company issued 226 new ordinary shares of
1p each pursuant to an exercise of Warrants. All Warrants were
exercised at 75p per share.
On 3 May 2022 the Company issued 419 new ordinary shares of 1p
each pursuant to an exercise of Warrants. All Warrants were
exercised at 75p per share.
Unexercised Warrants as at 30 June 2022 amount to 3,977,644
Ordinary Shares of 1 pence each. These Warrants are excisable at a
price of 75 pence per share and have a final exercise date of 16
December 2022.
10 Post balance sheet events
Increase of GBP6m in existing PNC asset-based lending
facilities
On 15 August 2022 Gusbourne announced that its wholly owned
subsidiary, Gusbourne Estate Limited, had entered into an amended
and restated agreement with PNC Financial Services UK Limited
("PNC") to increase its existing GBP10.5 million 5-year asset-based
lending facilities by an additional GBP6 million to provide the
Company with a total GBP16.5 million asset-based lending facilities
at a competitive rate (the "New PNC Facilities"). The New PNC
facilities have been made available to the Company for a minimum
period of 5 years to 12 August 2027.
The New PNC Facilities are being provided on a revolving basis
and will be used to provide further working capital for the Company
covering inventory and accounts receivables, to support its growth
plans and allow flexible drawdown and repayments in line with the
Company's working capital requirements. The interest rate will be
at the annual rate of 2.50 per cent over the Bank of England Base
Rate. The facilities will be secured by way of first priority
charges over the Company's inventory, receivables and freehold
property as well as an all-assets debenture and contain financial
and general covenants and customary events of default. The
financial covenants include cash burn, fixed charge cover, capital
expenditure restrictions and minimum headroom levels, and are
tested monthly.
Purchase of Additional Freehold Land in Kent from a Related
Party
On 15 August 2022 Gusbourne announced that it had exchanged
contracts with Andrew Weeber, Non-Executive Director and a
shareholder of the Company, and his spouse, to purchase 137 acres
of freehold agricultural land located in Appledore, Ashford in Kent
(the "Land Purchase"). The Land Purchase completed on 24 August
2022. The property is adjacent to and contiguous with the Company's
existing freehold estate in Kent, where the majority of the
Company's existing mature vineyards are planted.
This will bring the total freehold acreage of land in Kent owned
by the Company to 489 acres. The purchase price for the Land
Purchase is GBP1.6 million in cash from existing cash resources
plus related acquisition costs. There are no profits attributable
to the land being acquired.
The Company has previously established the suitability of this
additional land for vines and intends to plant the majority of this
acreage with vines in May 2024, which will provide the required
lead time to order the appropriate vines and prepare the land for
planting. The additional wine production from grapes grown on these
new vineyards will help support the longer-term growth plans of the
Company.
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END
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