Roebuck Food Group plc

Interim results 2022

Results

Roebuck Food Group plc (AIM: RFG), is pleased to announce its interim results for the six months ended 30 June 2022.

Financial Highlights

·    Sales increased by 14%, from £11m to £12.5m.

·    Operating profit from continued operations £0.2m (2021 loss of £0.2m).

·    Net debt of £1m (Dec 21 Net cash £1.4m). This has mainly arisen after settling £1.5m of liabilities in respect of the sale of the cold stores.

·    Milk production increased 8.4%

·    Operating margin at the Sourcing Division increased from 1.2% to 1.9%

·    Operating profit from dairy division increased from breakeven to £0.2m

Divisional Highlights

Sourcing Division

Sales at our sourcing division increased by 12%, compared with the same period in 2021, from £10.5m to £11.8m. Operating profit improved from £121,000 to £225,000.

Our product sourcing division has seen strong half year growth with continuous development of the protein export business to South Africa and South America. The sourcing division has also diversified it's product portfolio to also include Dairy Powders, Ingredients and Plant Based Ingredients.

As part of a strategic alignment with Townview Foods Limited. Foro International Connections Ltd has been rebranded to Townview Sourcing Ltd in May 2022.

Dairy Division

Our primary dairy operation, Cantwellscourt Farm Ltd, continues to perform well. Milk production for half year was up 8.4%, whilst pricing was up 32% year on year. This was partially offset by input cost inflation, particularly in feed and fertiliser; our pasture-based system gives us some protection from rising input prices. Whilst weather was favourable in the first half of the year, we experienced some drought conditions toward the end of summer which will have some impact on feed costs and production in the second half. Overall, we expect a strong performance for the full year, mainly driven by higher dairy prices but also consistent performance across our main operating KPIs for production, pasture and animal health.

Our subsidiary, Grass to Milk Company Ltd, had a difficult first half, it exited the  Chinese market due to ongoing lockdowns, supply chain disruptions and cost inflation. China has proven a difficult market for a majority of Overseas Dairy Companies over the past 24-months. At this juncture, management is assessing commercialisation options for A2 protein ingredients in other export markets, particularly the US, where a shortage of domestic infant formula has created significant opportunities for overseas brands. Commercialisation of these market opportunities is likely to take 12-24 months.  

Discontinued

Our subsidiary Grass to Milk Company produced and shipped A2-protein liquid dairy products for the Chinese market which we exited in the first half of 2022 due to ongoing lockdowns, supply chain disruptions and cost inflation. We have impaired the intangible asset along with costs totalling £1m.

On the 28^th October 2021, we sold the cold store business, resulting in a profit on disposal of £40m. Following the sale, we made a capital return to shareholders of £1.66 per share totaling £49.9m in November 2021. In the first half of the year we paid £1.5m in discharging liabilities in respect of the sale of the business.

Strategic Review

Following the successful sale of its Cold Stores business, Roebuck Food Group PLC (RFG), formerly known as Norish PLC, returned £49.92m to shareholders at the end of 2021. Your board is conducting a strategic review of the group's businesses, with a view to maximising shareholder value and / or liquidity in the company's shares.

Dividend

The board does not recommend the payment of an interim dividend, unchanged from last year.