TIDMSVEN
RNS Number : 1971N
S-Ventures PLC
19 January 2023
19 January 2023
S-Ventures PLC
("S-Ventures", the "Group" or "Company")
Trading Update, 2022 Results Date & Business Segment
Reporting
S-Ventures PLC (AQSE: SVEN) (OTCQB: SVTPF), a company investing
in and growing exciting brands across the natural, wellness and
food-tech category, is pleased to issue a trading update in respect
of the financial year ended ("FYE") 30 September 2022 ("FYE 2022"),
the audited results of which, are expected to be published in full
on, or around, 28 February 2023.
S-Ventures was formed to identify investment opportunities
within the natural, wellness, food-tech, organic and vegan snacking
sectors within the UK and Europe that have the potential for
further development through the knowledge and expertise of our
management team. The performance of each brand within the Group
reflects the different phases of growth each has experienced,
however, we continue to make good overall progress throughout our
product range towards achieving greater results.
The Group FYE 2022 performance
Revenues for the FYE 2022 were approximately GBP8.7m, with
revenues recorded in the second half of FYE 2022 being GBP4.6m, an
increase of approximately 12% from that of the first half of FYE
2022 of GBP4.1m. Revenue performance was impacted by significant
headwinds, particularly issues relating to the supply of certain
ingredients, including those supplies from Ukraine in Q2 and Q3 FYE
2022, which resulted in a loss of sales income. The total impact,
an outturn approximately 20% below the Group's initial targets, was
slightly worse than the 15% impact anticipated in our interim
results release of 30 June 2022.
Since 30 September 2022, the impact of ingredient and labour
supplies has abated considerably, although the possibility of
further disruption remains, and recent trading has not been
materially affected. Inflationary and exchange rate pressures
continue and we have passed on some price increases across the
Group to maintain margins. We continue to monitor our financial and
trading performance very closely.
The underlying operating losses before depreciation and
acquisition costs for FYE 2022 were approximately GBP2m, reflecting
the impact of lower than expected sales income, the impact on costs
of lockdown-related labour supply issues, and the general impact of
inflation and exchange rates in Q1 and Q2 FYE 2022. The losses
include re-organisation and redundancy costs of c.GBP0.1m and the
initial losses from the acquisition of Lizza GmbH ("Lizza") of
c.GBP0.2m. Operating losses after depreciation and other costs are
expected to be c.GBP2.6m.
Recent acquisitions
We are delighted to have announced our most recent acquisition
of Juvela, the gluten-free and free-from baked goods brand. This
acquisition is expected to have a significant positive impact on
the shape of our Group, operating profitability and operating
cashflow. The acquisition is also the culmination of a busy year in
terms of corporate actions, which included the following:
1. In March 2022, the acquisition of Livia, an indulgent plant-based nutrition business
2. In April 2022, the acquisition of Market Rocket, a technology and amazon D2C business
3. In August 2022, the acquisition of Lizza, a German factory and free-from brand
4. In December 2022, the acquisition of Juvela, a gluten-free
and free-from bakery and pharma and retail brand
Business segment reporting and highlights
Going forward, given the larger scale of the Group, additional
financial information will be presented based on the following
three separate sub-group business segments:
i. Bakery: Juvela and Lizza (Sales in FYE 2022 - GBP0.1m)
ii. Plant-based nutrition: Pulsin, Livia's, Ohso, and Purely (Sales in FYE 2022 - GBP8.1m)
iii. Technical services: Market Rocket (Sales in FYE 2022 - GBP0.4m).
Bakery
The new Bakery segment came into existence with the acquisition
of Lizza in August 2022. This business focuses on flax seed based
keto products that fit well with our other food brands.
Strategically, Lizza gives us an important market presence in the
EU as a platform to generate income from overseas. Lizza is
currently loss-making and we envisage a turnaround period of 18
months as we reposition its product range and implement group
synergies. Subsequent to the FYE 2022, we have acquired Juvela, a
profitable company that sells a range of gluten-free products
through both the pharma and retail channels in the United Kingdom.
We are exploring opportunities to deploy Lizza's facilities for the
supply of various group products presently outsourced.
Plant-based nutrition
The Plant-based nutrition segment includes: Pulsin protein
powders, sport nutrition bars, keto products and healthy snack
bars; Livia's indulgent free-from treats; Purely plantain crisps;
and, Ohso pro-biotic chocolate. All products are free from gluten,
palm oil and contain no artificial ingredients. In FYE 2022, this
segment faced economic headwinds and several trading challenges. As
a result, we have undertaken an internal restructuring exercise,
which includes the restructuring of leadership and employees'
positions, to enhance cost efficiency and profitability. These
efforts are bearing fruit and the turnover for the first quarter of
FY23 has been encouraging.
Technical services
The technical services segment, that includes Market Rocket
("MRL") which provides a range of marketing and support services to
third parties as well as the Group, is currently performing above
the Group's expectations since its acquisition in April 2022. In
October 2022, the Group invested through MRL in a specialist team
to enable MRL to provide a complete range of search engine
optimization (SEO), public relations (PR) and marketing services
which have resulted in both additional sales to existing customers
and the introduction of new accounts.
Future outlook
O ur Board of Directors ("Board") remains optimistic about the
business and financial performance in the financial year ending 30
September 2023 ("FYE 2023") given the current progress in the
implementation of our corporate strategic plans.
Our Board and management team continue to look for new
acquisition and collaboration opportunities to take advantage of
market conditions. However, the Group's priorities are the
consolidation of existing brands, integration of new brands,
roll-out of new product development, which has been delayed by
supply shortages last year, cost saving opportunities and
synergistic plans to further enhance profitability and top-line
growth of the Group. The Board is also considering a range of
financing options to support the future growth and development of
the Group.
Our Board and management team remain dedicated to creating
improved returns and value for all our stakeholders and to
capitalise on the market conditions as we move into FYE 2023 across
our Bakery, Plant-based nutrition and Technical services
platforms.
For further information, please contact:
The Company
Scott Livingston (Chief Executive
Officer) +44 (0) 1932 400 224
Robert Hewitt (Chief Financial
Officer)
AQSE Corporate Adviser and
Broker:
VSA Capital
Andrew Raca - Corporate Finance
Evon Chan
Tolgahan Kuce +44 (0) 20 3005 5000
IFC Advisory (Financial PR)
Graham Herring
Tim Metcalfe
Florence Chandler +44 (0) 20 3934 6630
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END
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