Volvere Regulatory News (VLE)

Volvere plc

("Volvere" or the "Group")

Interim Results for the six months ended 30 June 2015

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its Interim Results for the six months ended 30 June 2015.

Highlights

Note

1 Based on the net assets attributable to owners of the parent company and the respective period end shares in issue of 4,085,958, 4,155,958 and 4,145,958

· JMP delivered a good performance, with revenue and underlying profit before tax and group interest of £6.39 million and £0.33 million respectively (June 2014: £5.61 million and £0.35 million before a share-based payment charge of £0.16 million; December 2014: £11.76 million and £0.61 million before a share-based payment charge of £0.16 million)

· Shire Foods generated a profit before tax of £0.31 million on increased revenue of £6.49 million (June 2014: revenue £4.07 million and loss before tax of £0.18 million; December 2014 revenue £12.13 million and profit before tax and exceptional credit £0.8 million)

· Impetus Automotive, acquired in March 2015 performed satisfactorily with revenue of £3.9 million and a loss before tax and group interest of £0.04 million

· Balance sheet remains strong with high liquidity

For further information:

Chairman's Statement

I am delighted to report that the Group continued to make progress in the first half of 2015. Our net assets per share were £4.32*, in line with the end of 2014 (£4.31). Impetus Automotive, our automotive consultancy, has been successfully integrated into the Group and we are pleased with both its performance and prospects. JMP performed in line with expectations and Shire achieved a record performance. Despite the acquisition of a new subsidiary, the operating result was very strong and was an excellent start to the year.

David Buchler

Chairman

28 September 2015

*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 11

Chief Executive's Statement

I am pleased to report an encouraging set of results achieved for the first half of 2015. The performance of each of the Group's segments is set out below.

Transport planning and engineering consultancy

This segment comprises JMP Consultants Limited ("JMP"), the Group's transport planning and engineering consultancy, which serves both the public and private sectors.

JMP has been successful in securing appointment to the Merseytravel framework and some new framework contracts for Transport for London. An office was opened in Reading at the start of July and this, alongside additional strategic recruitment, strengthens JMP's client offering in the Thames Valley.

Revenue for the first half of 2015 was £6.39 million, compared to £5.61 million last year (31 December 2014: £11.76 million). The profit before tax and Group interest charges was in line with expectations at £0.33 million (30 June 2014: £0.35 million, 31 December 2014: £0.61 million both stated before a share-based payment charge of £0.16 million). JMP made further loan repayments in the first half of 2015 totalling £0.62 million, which means we have now recovered our acquisition cost plus a further £0.45 million since the investment two years ago.

We continue to be delighted by JMP's contribution to the Group, which is driven by the quality of our staff and client relationships throughout the UK. This progress gives us every reason to think that JMP will continue to flourish in a sector which remains buoyant.

Security solutions

Sira Defence and Security Limited ("SDS"), our security solutions business delivered a steady performance, with revenue of £0.14 million (30 June 2014: £0.15 million, 31 December 2014: £0.25 million). Profit before interest and tax was £0.05 million (30 June 2014: £0.06 million, 31 December 2014: £0.08 million). We are pleased with the penetration and potential for our digital CCTV viewer, SiraView, which continues to be used widely in UK law enforcement. We are seeing the opportunity to integrate with other evidence management systems, with Siraview the "standard" interface for viewing evidential footage.

Food manufacturing

This segment comprises Shire Foods Limited ("Shire"), the Group's 80%-owned frozen pie and pasty manufacturing business, which was acquired during 2011.

We are delighted to report that Shire was profitable in the period. This is the first time Shire has been profitable in the first half of a year, and is particularly pleasing since Shire's revenues are traditionally weighted towards the colder winter months. This reflects the full impact of new customer accounts won in 2014. Revenue and profit before tax for the period were £6.49 million and £0.31 million respectively (30 June 2014: £4.07 million, loss £0.18 million, 31 December 2014 £12.13 million, profit before exceptional credit, £0.8 million).

During the period we have commenced further investment in Shire's facilities and remain focused on ensuring we have a leading manufacturing site, whilst innovating in partnership with our customers.

Automotive Consulting

We acquired Impetus Automotive Limited ("Impetus") towards the end of March 2015 and have spent much of the time since then integrating Impetus into the Group. Impetus provides a range of services to automotive manufacturers around the world. Clients include the Volkswagen Group, BMW, Toyota and Jaguar Land Rover amongst many others. Impetus' services are principally focused on improving the effectiveness of vehicle manufacturers' sales and after-sales networks. The company employs more than 200 people.

In the 3 months to 30 June the company's revenues were £3.88 million and the company made a small loss before tax of £0.04 million. Since the period end, we have been pleased with the company's financial performance and remain positive about the contribution that Impetus can make to the Group.

Further information is set out in the financial review below and in note 2, segmental information.

Purchase of own shares

During the period the Group acquired further shares for treasury for a total consideration of £0.18 million. This brings the aggregate value of shares purchased as of 30 June 2015 to £5.94 million.

Acquisitions and future strategy

We remain focussed on maximising the potential of our existing businesses, whilst evaluating new opportunities as they arise. Volvere's track record and reputation in our sector as well as our strong balance sheet are fundamental to our continued success.

Jonathan Lander

Chief Executive

28 September 2015

Financial Review

This financial review covers the Group's performance during the period ended 30 June 2015. It should be read in conjunction with the Chairman's and Chief Executive's Statements.

Revenue and operating performance

The Group's revenue for the period was £16.90 million, an increase of £7.07 million over the prior period (30 June 2014: £9.83 million; 31 December 2014: £24.15 million). Shire Foods Limited ("Shire") saw revenues increase by £2.42 million compared to the first half of 2014 and the inclusion of Impetus Automotive Limited ("Impetus") for the first time accounted for revenue growth of £3.88 million.

This growth in revenue resulted in an overall operating profit for the period of £0.35 million (30 June 2014: operating loss £0.29 million stated after a one-off share-based payment expense of £0.16 million; 31 December 2014: operating profit £0.70 million, stated after a one-off share-based payment expense of £0.16 million). The improvement in profitability is principally a result of the improved trading performance in Shire. Further comment on each segment is set out below and detailed information about the Group's segments is set out in note 2 to these interim results and which should be read in conjunction with this financial review.

Transport planning and engineering consultancy

JMP has been a member of the Group since May 2013. A summary of JMP's recent financial performance is set out in Table A below.

Whilst broadly in line with the prior period in absolute terms, JMP's profitability was impacted negatively by the unavoidable costs of occupying two properties during an office move for an overlapping period. In addition, in response to a contract over-spend on one particular piece of work, the company has been accruing a provision pending the contract's completion, which is expected in the second half of 2015.

In spite of these, however, the company's performance as a whole was good and it was able to make further loan repayments totalling £0.62 million in 2015. At the period end the Group had no working capital loans outstanding from JMP (30 June 2014: £0.98 million; 31 December 2014: £0.63 million). JMP's unaudited net assets at the period end were £1.40 million (30 June 2014: £1.94 million; 31 December 2014: £1.71 million, both stated before deduction of Group loans), which principally reflects the lower cash in JMP following the Group loan repayments.

Security solutions

SDS' performance was in line with the prior period, with revenue of £0.14 million (30 June 2014: £0.15 million, 31 December 2014: £0.25 million). The profit before tax was £0.05 million (30 June 2014: £0.06 million, 31 December 2014: £0.08 million). Group loans outstanding at the period end totalled £0.03 million (30 June 2014: £0.88 million, 31 December 2014: nil). Development work won in the first half is expected to positively impact profitability in the second half of the year.

Food manufacturing

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

Shire's revenue has traditionally increased in the second half of a year, with the onset of colder weather, and profitability is therefore weighted to that half as product volumes increase. As a result of products that were launched in Q2 of 2014 being available for the entire first half of 2015, Shire was able to generate a maiden profit in the period, an improvement of £0.49 million compared to the first half of 2014.

In February 2015, Shire negotiated a bank term loan of £1.70 million which was used to repay other third party debt of £0.83 million and intra-Group debt of £0.76 million. At 30 June 2015 the Group's loans outstanding (excluding interest) were £1.00 million (30 June 2014: £1.91 million, 31 December 2014: £1.76 million) which with the equity and related intellectual property investments made of £0.53 million and £0.44 million respectively, brings the Group's total amount invested to £1.97 million.

The creditors' voluntary arrangement ("CVA") which Shire entered into in January 2012 completed in early 2015. This reduced unsecured liabilities by £0.85 million as at 31 December 2014.

Shire's unaudited net assets, stated before deducting the Group loans referred to above, amounted to £5.29 million (30 June 2014: £4.08 million after deducting the CVA creditor; 31 December 2014: £5.75 million), of which 20% is attributable to non-controlling interests. Since the period end the Group has made further, seasonal, working capital loans to Shire.

Automotive Consulting

Impetus Automotive Limited ("Impetus") was acquired on 26 March 2015. The acquisition was structured as a purchase of the share capital of Impetus and certain related intellectual property ("IPR") from Impetus's former parent company. As part of the transaction, Impetus was required to settle a former Impetus group company's bank debt, which was funded by the acquisition proceeds.

The total consideration payable, including the funds applied to repay bank debt and the purchase of IPR, was £1.25 million. The estimated fair value of the entity net assets acquired (excluding cash and related IPR) was £0.64 million, which net of cash acquired gave rise to goodwill of £0.31 million. Further information about the acquisition is set out in note 9.

Trading performance since the acquisition has been encouraging. In the period to 30 June the company's revenue was £3.88 million and the loss before group interest charges was £0.04 million. This reflects the timing of client work programmes, which in respect of some activities are weighted towards the second half of the year. Since the period end we have seen Impetus's performance strengthen in line with activity.

The Group continues to fund working capital requirements and the total amount invested at the period end (which includes the funding for the acquisition to enable debt repayment) totalled £1.95 million.

Investment revenues and other gains and losses

During the first half of 2015 the Group held available-for-sale investments which generated investment income of £0.07 million (30 June 2014: £0.04 million; 31 December 2014: £0.07 million). Investments disposed of in the period realised gains on sale of £0.43 million (of which £0.32 million was reclassified to profit).

Statement of financial position

Cash and cash equivalents

Cash at the period end was £7.13 million (30 June 2014: £11.13 million, 31 December 2014: £12.22 million). The decrease in cash compared to the end of 2014 reflects the purchase of available-for-sale investments in the first half of 2015 (see below) along with the acquisition of Impetus. Details of cash movements are shown in the consolidated statement of cash flows.

Available-for-sale investments

At the period end the Group had available-for-sale investments with a market value of £4.56 million (30 June 2014: £1.04 million, 31 December 2014: £0.92 million); the base cost of these investments was £4.93 million (30 June 2014: £0.69 million; 31 December 2014: £0.61 million).

In line with the Group's treasury management policies and pending investment in other acquisitions, the Group continues to consider short term investments where there is the opportunity for attractive yields.

Earnings per share and share capital

Basic and diluted earnings per ordinary share from continuing operations were 15.91 pence (30 June 2014: basic and diluted losses per ordinary share from continuing operations 8.09 pence; 31 December 2014: basic and diluted earnings per ordinary share from continuing operations 29.84 pence). Total basic and diluted earnings per ordinary share were 15.91 pence (30 June 2014: total basic and diluted losses per ordinary share 12.30 pence; 31 December 2014: total basic and diluted earnings per share 25.60 pence).

During the period the Group purchased a further 60,000 Ordinary Shares of £0.0000001 each, which were subsequently held in treasury, for a total consideration including costs of £0.18 million, representing an average price per Ordinary Share of 300 pence.

Hedging

It is not the Group's policy to enter into derivative instruments to hedge interest rate risk.

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 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 security solutions, transport planning and engineering and automotive consulting businesses are principally engaged in the provision of 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. The food manufacturing segment is exposed to raw material and commodity cost increases and is dependent on the availability of credit facilities on appropriate terms from lenders and suppliers as well as being dependent on the reliability and performance of the plant and equipment used in the business. Failure or unreliability of key plant or equipment could be material in terms of lost production output or other losses arising from non-supply of products and there is the risk that any or all of the costs, timescales or the non-availability of funding required to enable rectification, would render the segment unviable, with a material effect on the Group.

Key performance indicators ("KPIs")

The Group uses key performance indicators suitable for the nature and size of the Group's businesses.

The key financial performance indicators are revenue and profit before tax. The performance of the Group and the individual trading businesses against these KPIs, is outlined above and disclosed in note 2.

Internally, management uses a variety of non-financial KPIs as follows: in respect of the food manufacturing segment order intake, manufacturing output and sales are monitored weekly and reported monthly; in the transport planning & engineering segment staff utilisation, amounts billed to clients and cash collected are closely monitored; order intake is reported monthly in respect of the security solutions segment; revenue, amounts billed to clients and cash collected are monitored in the Automotive Consulting segment.

Nick Lander

Chief Financial & Operating Officer

28 September 2015

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of changes in equity

Consolidated statement of financial position

Consolidated statement of cash flows

Volvere plc

Notes forming part of the unaudited interim results for the period ended 30 June 2015

1 Financial information

The financial information for the period ended 30 June 2015 and the comparative figures for the period ended 30 June 2014 have not been reviewed or audited by the Group's auditors and have been prepared on the basis of the accounting policies adopted by the Group under IFRS. The same accounting policies and methods of computation are followed in the interim financial report as published by the company on 28 May 2015 in its annual financial statements, which are available on the Company's website at www.volvere.co.uk.

The comparative figures for the year ended 31 December 2014 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 2014 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: 27-32 Old Jewry, London EC2R 8DQ and on its website www.volvere.co.uk.

2 Operating segments

Analysis by business segment (excluding intra-group management and interest charges and balances):

Note (b) The profit before tax in respect of the Transport planning and engineering segment is stated after a share-based payment expense of £158,000, which is explained further in Note 3 below. The result for the food manufacturing segment includes an exceptional credit of £852,000 as set out in Note 7 below.