Half-year Results

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its unaudited Interim Results for the six months ended 30 June 2024.

Highlights

• Excellent first half performance, underpinned by record trading at Shire Foods, the Group's savoury products manufacturer
• Improved performance from treasury investments
• Share buybacks in period totalling £1.29 million
• High liquidity and strong balance sheet

Note

1 Based on the net assets attributable to owners of the parent company and the respective period end shares in issue (excluding treasury shares), which were 2,223,922 at 30 June 2024, 2,343,422 at 30 June 2023, and 2,327,922 at 31 December 2023.

I am pleased to report strong results for the six months to 30 June 2024, which saw Group revenue and profit before tax from continuing operations of £22.20 million and £2.17 million respectively (30 June 2023: revenue £19.09 million, profit before tax £0.44 million; 31 December 2023: revenue £42.95 million, profit before tax £3.64 million).

The Group's financial position remains strong with total net assets of £38.57 million (30 June 2023: £35.33 million, 31 December 2023: £37.51 million). Cash and available-for-sale investments were £24.31 million (30 June 2023: £21.41 million, 31 December 2023: £23.74 million).

Net assets per share(1) increased to £15.85 (30 June 2023: £14.00, 31 December 2023: £14.83). Further treasury share purchases totalling £1.29 million were made in the period (30 June 2023: £0.25 million; 31 December 2023: £0.43 million). The Board continues to be conscious of the Group's share price being below net assets per share and remains committed to purchasing its own shares for treasury where appropriate.

The focus continues on the performance of the Group's trading subsidiary, Shire Foods, whilst seeking further investment opportunities.

David Buchler

Chairman

Note 1: Net assets attributable to owners of the parent company divided by total number of ordinary shares outstanding at the reporting date (less those held in treasury) - see note 7.

Executive Management Statement

Overview

I am delighted to report on the first half of 2024, which has again delivered improved like-for-like performance compared to the first half of 2023.

Shire Foods' results, as our only subsidiary, impacts significantly on how the Group performs and its strong trading has been encouraging, reflecting the commitment of our management and staff.

Group revenues for the period (which relate solely to Shire Foods) were up by £3.11 million to £22.20 million, an increase of more than 16% compared to the comparable period in 2023 (30 June 2023: £19.09 million, 31 December 2023: £42.95 million).

The Group's profit before tax from continuing operations for the period was £2.17 million (30 June 2023: £0.44 million, 31 December 2023: £3.64 million). The Group's overall profit after tax (including discontinued operations) was £1.78 million (30 June 2023: £0.44 million, year to 31 December 2023: £2.73 million), reflecting the growth in Shire Foods and increased yields from cash deposits.

Group net assets at the period end increased to £38.57 million (30 June 2023: £35.33 million, 31 December 2023: £37.51 million) in spite of the Group's treasury share purchases. Net assets per share increased to £15.85 in the period (30 June 2023: £14.00, 31 December 2023: £14.83).

Financial performance

Food manufacturing segment - Shire Foods

Shire Foods' revenues reached an all-time high of £22.20 million (30 June 2023: £19.09 million, 31 December 2023: £42.95 million). Our strong relationships and the quality of our products has enabled us to continue to grow, albeit that our growth is inherently affected by our customers' own market and category performance and their product strategies.

Profit before tax and intra-Group management and interest charges(2) increased to £2.09 million (30 June 2023: £0.75 million, 31 December 2023: profit £3.86 million).

A summary of Shire's recent financial performance is set out in Table A below.

Note 2: Profit before intra-Group interest and management charges is considered to be a relevant and useful interpretation of the trading results of the business such that its performance can be understood on a basis which is independent of its ownership by the Group.

As reported previously, Shire has seen raw material costs remaining largely stable, with labour and energy costs increasing in 2024, though the effect of the latter will be effective from the fourth quarter of 2024. The materials margin in the period increased by 3% compared to the whole of 2023, which reflects the need to continue to fund labour and overhead increases, much of which are outside of the company's control. We remain focused on margins and efficiency measures to mitigate cost increases wherever possible through appropriate investment.

Stock levels have risen in the period in preparation for the second half of the year, when sales volumes are traditionally higher as the colder weather sets in. In preparation for 2025, we have invested £0.51 million in the site during the period (30 June 2023: £0.38 million, 31 December 2023: £0.79 million), with capital already committed to increase our production capacity further.

There continued to be no Group loans outstanding at 30 June 2024 (30 June 2023: nil, 31 December 2023: nil).

Investing and management services segment

This segment represents our central functions covering Group management, treasury, finance and IT services. The segment result is the net of the underlying costs of these Group activities, offset by investment revenues and other gains and losses. The profit before tax and intra-Group management and interest charges(2) for the period was £0.09 million (30 June 2023: loss £0.30 million, 31 December 2023: loss £0.23 million).

The improved result in this period reflects lower central costs as well as increased returns on cash deposits. Further information on investment returns is shown in note 4.

Earnings per share

Basic and diluted profit per ordinary share from continuing operations was 64.05p (30 June 2023: 13.45p, 31 December 2023: 80.69p). Basic and diluted loss per ordinary share from discontinued operations was (0.17)p (30 June 2023: (0.17)p, 31 December 2023: profit 9.60)p). Total basic and diluted profit per ordinary share was 63.88p (30 June 2023: 13.28p, 31 December 2023: 90.29p).

Statement of financial position

Cash and available-for-sale investments

Group cash at 30 June was £22.14 (30 June 2023: £19.81 million, 31 December 2023: £22.14 million). The consolidated statement of cash flows sets out the details of cash movements in the period.

Shire Foods' inventory levels grew in the period (as is the seasonal norm for the business, which builds inventory in advance of the higher trading months expected in the second half of the year), although this has been mitigated by increased supplier credit. The principal cash outflows in the period were the advance payment of corporation tax (£0.98 million), the purchase of plant and equipment (£0.51 million) and the purchase of treasury shares (£1.29 million).

At the period end there was an investment in available-for-sale investments with a carrying value of £2.17 million (30 June 2023: £1.59 million, 31 December 2023: £1.60 million). The carrying value of the investment had been below the original cost for some time, but at the period end was showing an unrealised gain of £0.49 million, which has been credited to reserves.

Purchase of own shares

The Company acquired 104,000 Ordinary shares for a total consideration including costs of £1,289,000 during the period (30 June 2023: 21,000 shares for £248,000, 31 December 2023: 36,500 shares for £427,000).

Hedging

Key performance indicators (KPIs)

Internally, management uses a variety of non-financial KPIs in respect of the food manufacturing segment, including order intake, manufacturing output and sales, all of which are monitored weekly and reported monthly.

Principal risk factors

The Company and Group face a number of specific business risks that could affect the Company's or Group's success. The Company and Group invests in distressed businesses and securities, which by their nature often carry a higher degree of risk than those that are not distressed. The Group's businesses are principally engaged in the provision of goods and services that are dependent on the continued employment of the Group's employees and availability of suitable, profitable workload. In the food manufacturing segment, there is a dependency on a small number of customers and a reduction in the volume or range of products supplied to those customers or the loss of any one of them could impact the Group materially. Rising inflation, including increases in raw materials and overhead costs, may not be able to be passed on to customers through increased prices and this could result in reduced profitability. Any pandemic or other such similar event which could affect the consumers, suppliers, customers or staff may limit or inhibit the Group's operations.

These risks are managed by the Board in conjunction with the management of the Group's businesses.

Acquisitions and future strategy

As shareholders know, we are focused on enhancing shareholder value. To that end, we continue to do everything possible to ensure that Shire Foods' trading remains robust. The importance of this is self-evident as it underpins the inherent value of that business.

Whilst we are continuing to review potential investment opportunities, deal flow has been patchy in recent months. This may reflect the summer period, but the reduction in interest rates may be easing pressure on debt servicing and levels of distress. We know our experiences in this regard are not unique but broadly reflect the wider M&A market.

The Group has continued to make significant purchases of its own shares in the market, reflecting the discount that the share price has represented to the net asset value per share. We intend to continue to do this in so far as we are able and when it makes sense to do so in order to provide liquidity for shareholders who wish to reduce their shareholdings.

Nick Lander

Co-founder & Director

Consolidated income statement

Notes forming part of the unaudited interim results for the period ended 30 June 2024

1 Financial information and basis of accounting

These interim financial statements have been prepared using accounting policies consistent with IFRSs as adopted by the European Union.

These interim financial statements should be read in accordance with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2023. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements. AIM-listed companies are not required to comply with IAS 34 Interim Financial Reporting and accordingly the Group has taken advantage of this exemption.

The comparative figures for the year ended 31 December 2023 have been prepared under IFRS. They do not constitute statutory accounts as defined by the Companies Act 2006. The accounts for the 12 months ended 31 December 2023 received an unmodified auditor's report and have been filed with the Registrar of Companies.

Copies of this statement will be available to members of the public at the Company's registered office: Shire House, Tachbrook Road, Leamington Spa CV31 3SF and on its website www.volvere.co.uk.

2 Significant accounting policies

3 Operating segments

An analysis of key financial data by business segment is provided below. The Group's food manufacturing segment is engaged in the production and sale of food products to third party customers, and the investing and management services segment incurs central costs, provides management services and financing to other Group segments and undertakes treasury management on behalf of the Group.

Analysis by business segment:

Notes:

• stated before intra-group interest and management charges
• assets and liabilities stated excluding intra-group balances

4 Investment revenues, other gains and losses and finance income and expense

5 Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

Weighted average number of ordinary shares for the purposes of earnings per share:

There were no share options (or other dilutive instruments) in issue during the period in respect of the parent company's shares (30 June 2023: nil; 31 December 2023: nil).

6 Non-controlling interests

The non-controlling interests of £3.32 million relate to the net assets attributable to the shares not held by the Group at 30 June 2024 in the following subsidiaries:

The Group owns approximately 80% of Shire Foods and 98.6% of NMT.

7 Purchase of own shares

The Company acquired 104,000 Ordinary shares for a total consideration including costs of £1,289,000 during the period (30 June 2023: 21,000 shares for £248,000, 31 December 2023: 36,500 shares for £427,000). This brought the total number of Ordinary shares held in treasury at the period end to 3,983,152 shares (30 June 2023: 3,863,652, 31 December 2023: 3,879,152) with an aggregate nominal value of less than £1.

At the period end, the total number of Ordinary shares outstanding (excluding treasury shares), was 2,223,922 (30 June 2023: 2,343,422, 31 December 2023: 2,327,922).

8 Dividend

The Board is not recommending the payment of an interim dividend for the period ended 30 June 2024.