Preliminary Results, 2018

Mon, 8th April 2019


Norish plc (AIM: NSH), is pleased to announce its preliminary results for the year ended 31 December 2018.

Financial Highlights

• Profit before tax increased by 17.6% to £1.94m (2017 : £1.65m)

• Diluted adjusted Eps increased by 22% to 5p (2017 : 4.1p)

• Group revenue decreased by 12.4% to £36.8m (2017: £42.0m)

• Dividend increased by 9% to 1.80 €cent (2017: 1.65 €cent)

• Net debt was reduced from Stg£5.4m at start of year to Stg£4.9m at year end.

• Interest cover has increased to 11.4 times (2017: 8.7 times)


Cold Store Division

Cold stores are our largest business activity, accounting for circa 75% of the non-current assets in the business. Sales were down 4%, from £14.3m to £13.7m in 2018, due mainly to a reduction in blast freezing activity. Sales excluding blast freezing were £11.3m, down marginally from £11.7m from the prior year. Divisional profits grew by 17%, from Stg £2.3m to Stg £2.7m. Divisional margins improved from 16.0% to 19.7%.

2018 was characterised by lower intake, lower stock turn and higher storage revenues, when compared with the prior year. Occupancy was up two percentage points to 94%.

Costs at site level were reduced by 7%, to more than compensate for the reduction in revenue. Labour, our largest cost, was down 5%, year on year, while power (our second largest cost) was reduced by 10%, against the prior year. Labour and power combined were lowered by 7% or Stg £0.46m. Power units consumed were lower by 11%, year on year. This reflects the aforementioned reduction in blast freezing activity, together with benefits coming through from the implementation of energy saving initiatives.

Sourcing Division

Market conditions resulted in a reduction in protein supply during the year under review. However, while sales fell by 17% from £27.2m to £22.5m, contribution declined by just 3% from £0.68m to £0.64m. Townview Foods sources protein products mainly beef, pork, lamb and chicken. Sales from pork and chicken decreased by £3.2m during the year, while sales from beef and lamb decreased by £2.1m.

Townview Foods, the largest business within the Sourcing Division has repaid its investment, in full, within 5 years of its acquisition. A new structure has been put in place, with management, to continue to develop the business, for an additional 5 year period.

During the year the Group decided to discontinue trading in the sale of juice to the ready to drinks market. This activity was conducted via Foro International Connections Limited (“Foro”). Foro continues to source non protein products for the Irish market.


The dairy division delivered some underlying progress in 2018 despite challenging weather conditions in the Spring/Summer period. Milk deliveries were up 18% year-on-year reflecting a more mature herd profile whilst underlying costs ex-feed were marginally lower. A cold Spring and subsequent Summer drought resulted in lower pasture production and higher feed costs - this also impacted milk production to some extent. Mark-to-market stock values also declined year-on-year reflecting similar conditions across the industry.


During the year the group decided to exit the Juice business for the ready to drinks market, which is part of Foro International Connections. A loss of £0.38m was incurred, compared to £0.1m last year.

In 2016, the Group exited the FMCG market and recorded a loss of £nil during 2018 (2017: £0.1m).


During the period we invested £1.16m (2017: £1.82m), £0.33m in the dairy farm in Kilkenny and £0.83m in routine capital expenditure in the cold store division.


We anticipate another year of strong profit growth for the group in 2019.

In our cold store division, the year has got off to a strong start in the first two months of the year. Management continues to focus on maximising both sales mix and pricing, in a market that is currently more favorable to cold storage businesses, than it has been at any time in the most recent past. Focus on underlying cost improvement will continue. We look forward to further improving returns in this division during the current year.

The UK frozen food sector is currently the fastest growing retail category, growing at 4% per annum. A combination of factors is driving this growth including growth in online shopping, premiumisation of the category as well as providing a solution to food waste. This growth comes against a background of a cold store market which has seen a lack of significant investment over an extended number of years.

Despite the current volatility in its underlying markets, our protein sourcing division is well placed to deliver in line with expectation on the back of its low risk operating model.

Our dairy farming division is now performing strongly. Work in relation to our major dairy project is ongoing at pace. We have assembled a very experienced team, to drive this initiative, to achieve the market position we have set for this development over a two to four year time frame.

Financial Review

Total equity at 31 December 2018 stood at £16.7m (2017: £16.0m). Net debt at 31 December 2018 was £4.9m compared to £5.4m at 31 December 2017.


The board recommends the payment of a final dividend of 1.80 Eurocent per share. This will be paid on 18 October 2019 to those shareholders on the register on the 27 September 2019. It will bring the total dividend in respect of the financial year to 1.80 €cent per share, against 1.65 €cent per share last year, an increase of 9%.


The United Kingdom is due to leave the EU on the 29 March 2019. It is difficult to pin point any direct impacts from the ongoing Brexit discussions other than to say they are hardly positive for business generally. However, our balance sheet is in excellent shape and leaves us well positioned to benefit from any disruption and consequent opportunity which may arise.

On behalf of the board, I would like to thank the management team and staff for their commitment and contribution in 2018.

Ted O’Neill



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