Volvere Regulatory News (VLE)

Volvere plc

("Volvere" or the "Group")

Interim Results for the six months ended 30 June 2012

Volvere plc (AIM:VLE) the growth and turnaround investment company, announces its Interim Results for the six months ended 30 June 2012.

Highlights

For further information:

Chairman's Statement

We have continued to grow the net assets per share in the period, which is pleasing. As the Chief Executive has noted in his statement, I too remain cautious on the prospects for a return to meaningful growth in the UK.

We continue to seek investments appropriate to both our investment strategy and the outlook for the economy.

David Buchler

Chairman

21 September 2012

Chief Executive's Statement

I am pleased that net assets per share grew once again in the first half of 2012, to a new high of £3.71 a share. Our principal focus during the last six months has been on improving the performance of Shire Foods. The performance of each of the Group's segments is set out below.

Online marketing and data services

Interactive Prospect Targeting Limited ("IPT"), our online marketing and data services company, which is 45.5% owned by Volvere, performed satisfactorily. In the period to 30 June 2012, revenue was £4.24 million which resulted in a small loss before interest and tax of £0.08 million (6 months ended 30 June 2011: revenue £4.37 million and profit £0.26 million).

The reduction in profitability was mainly due to the continuing investment in Quizfactor. The site is now operational and the amount of traffic is increasing through marketing and a number of partnering programs. I expect that we will see the first revenues for Quizfactor next year.

IPT has also invested further in its main site, MyOffers.co.uk, implementing improved data quality production systems and overhauling the site rewards program.

Security solutions

The security solutions business, Sira Defence and Security Limited ("SDS") suffered from weak order intake, particularly in the solutions development part of its business, as a result of funding not being available for follow-on projects undertaken previously. Consequently, revenues fell to £0.12 million (30 June 2011: £0.28 million, Year ended 31 December 2011: £0.56 million). Although steps have been taken to reduce costs, the reduced revenues resulted in a loss before interest and tax of £0.05 million for the period (30 June 2011: profit £0.04 million, Year ended 31 December 2011: profit £0.10 million). Prospects in relation to SiraView, the digital CCTV-viewer, continue to benefit from the seeking of efficiencies in relation to crime investigation but clearly the conversion of opportunities is dependent on funding being available. We will continue to monitor SDS and seek ways of maximising value from the technology and installed customer base.

Food manufacturing

This segment comprises Shire Foods Limited ("Shire"), the Group's 80%-owned frozen pie and pasty manufacturing business, which was acquired on 29 July 2011. As we reported in the full year results for 2011, we have implemented a range of changes at Shire with a view to improving both its products and profitability and strengthening its balance sheet. The results for the period were encouraging, with revenue of £2.5 million and a loss before interest and tax of £0.16 million. This compares to revenue of £3.3 million for the five-month period from acquisition to the prior year end in which the loss before interest and tax was £0.6m. Overall, I am pleased with the achievements made, albeit that there are certain aspects of the business that can be further enhanced, not least the dependency on a small number of large customers. The team at Shire are working hard to address some of these issues, and the fruits of their efforts may be seen in the last quarter of this year.

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 £0.66 million. This brings the aggregate value of shares purchased as of 30 June 2012 to £3.69 million.

Acquisitions and future strategy

The number of good opportunities that we received in the period was lower than we would have expected, particularly from UK banks. Part of this is driven, we believe, by the wish for banks not to recognise balance sheet losses too quickly.

We estimate that the return to normalised economic growth in the UK is still 2-3 years away. As a result we continue to seek investment opportunities that have identifiable problems that we can fix but that are not dependent on general economic recovery.

We have taken advantage of market strength to sell most of our treasury investments, at good profits, during the period. We have used some of the cash generated to increase the level of share buybacks.

The level of our share price continues to be well below our net asset value per share which we believe does not reflect fairly the company's prospects. As a result we intend to write to shareholders shortly to seek approval for a renewal and extension of our share buyback authority. The granting of this authority will also be conditional on the Takeover Panel permitting a waiver of certain potential obligations under Rule 9 of the Takeover Code.

Jonathan Lander

Chief Executive

21 September 2012

Financial Review

This financial review covers the Group's performance during the period ended 30 June 2012. It should be read in conjunction with the Chairman's and Chief Executive's Statements.

Revenue and operating performance

Detailed information about the Group's segments is set out in note 2 to these interim results and should be read in conjunction with this financial review.

Online marketing and data services

IPT's revenue decreased by 2.9% to £4.24 million for the period (30 June 2011: £4.37 million, Year ended 31 December 2011: £8.29 million); it was, however, up by 8% compared with the second half of 2011. The fall in revenue compared to the comparable prior year period, combined with continuing investment in the Quizfactor website, meant that the business reported a loss before interest and tax of £0.08 million (30 June 2011: profit £0.26 million; 31 December 2011: profit £0.15 million). The Quizfactor-specific costs were £0.41 million in the period (30 June 2011: £0.16 million, Year ended 31 December 2011: £0.57 million), which largely explains the change in overall profitability beyond that arising from reduced revenues. In view of the continuing investment required for Quizfactor, IPT did not declare a dividend during the period (2011: £0.55 million, of which non-controlling interests received £0.3 million and Volvere £0.25 million).

Security solutions

The reduction in spending as a result of budgetary constraints by public sector customers led to significantly reduced workload and resulted in a fall in security solutions revenue to £0.12 million (6 months ended 30 June 2011: £0.28 million; Year ended 31 December 2011: £0.56 million). Overheads have been reduced to reflect the current work in hand and efforts are focused on increasing penetration of the SiraView digital viewer. The extent to which success is achieved, and the resulting timescale, will reflect the commitment to achieving operating efficiencies and increasing synergies between the judiciary and the organisations that interact with it. The reduced revenue in the period resulted in a loss before interest and tax of £0.05 million for the period (30 June 2011: profit £0.04 million, Year ended 31 December 2011: profit £0.10 million).

Food manufacturing

Shire, of which 54% was acquired at the end of July 2011 (and a further equity investment made in December 2011, which increased the Group's ownership to 80%), improved its financial performance compared to the post-acquisition period in 2011. Revenue in the period was £2.50 million, a fall of 37% on a run-rate basis compared to the revenue of £3.32 million for the 5 months to 31 December 2011. This was a consequence of reducing the number of products supplied and customers served. The effect was to simplify Shire's operations, with a resulting measurable increase in efficiency and therefore profitability. The loss before interest and tax for the period was £0.16 million, stated after a non-recurring credit of £0.06 million, which gives an underlying loss before interest and tax of £0.22 million. In the five month period to 31 December 2011, the underlying loss was £0.5 million (the total loss was £0.60 million, stated after non-recurring restructuring costs of £0.10 million). On a run-rate basis, therefore, losses have reduced by 63%.

In January 2012 Shire entered a creditors' voluntary arrangement ("CVA") whereby approximately £1.20 million of unsecured creditors' balances will be satisfied in return for payments totalling £0.35 million payable over a maximum of 3 years. Until such time as these sums have been paid, the CVA creditor liabilities remain in the statement of financial position.

In view of the losses incurred in Shire, coupled with restricted credit facilities being made available to it following the CVA, the Group has provided further loans to Shire in the period amounting to £0.08 million. The amount outstanding by way of loans at 30 June 2012 was £0.81 million, which with the equity investments made of £0.53 million, brings the Group's total amount invested to £1.34 million. Shire's unaudited net assets, stated after deducting the Group loans referred to above and the CVA creditor, amounted to £2.45 million as at 30 June 2012.

Statement of financial position

Cash and cash equivalents

Cash at the period end was £13.05 million (30 June 2011: £13.08 million, 31 December 2011: £4.34 million). The increase compared to 31 December 2011 was a result principally of the disposal of available for sale investments (£10.44 million), offset by the purchase by the Group of its own shares (£0.66 million), investment in property, plant and equipment (£0.45 million), repayment of Shire debt (£0.24 million), along with working capital movements. Further information is set out in the consolidated statement of cash flows below. The Group's cash includes US dollars ($4.24 million) and the Group has entered into a foreign exchange contract for the sale of $4.25 million for sterling in December 2012 at a rate of $1.5579/£1. The difference between the foreign exchange contract rate and the spot rate has resulted in a credit to the income statement of £0.03 million in the period.

Available for sale investments

At the period end the Group had available for sale investments with a market value of £2.16 million (30 June 2011: £5.36 million, 31 December 2011: £12.04 million). The Group continued active treasury management in view of continuing low interest rates. The investments are in non-investment grade bank fixed income securities.

Loss per share and share capital

The basic and diluted loss per ordinary share from continuing operations was 3.58 pence (6 months ended 30 June 2011: basic and diluted earnings per share 13.35 pence and 13.31 pence respectively; Year ended 31 December 2011: basic and diluted earnings per share 25.21 pence and 25.16 pence respectively).

During the period the Group purchased a further 268,670 of its ordinary shares of £0.0000001 each ("Ordinary Shares"), which were subsequently held in treasury, for a total consideration including costs of £0.66 million, representing an average price per Ordinary Share of 244 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 businesses are engaged in the provision of services that are dependent on the continued employment of the Group's employees and availability of suitable profitable workload. The food manufacturing segment supplies several products to a limited number of customers and is therefore dependent on retaining those product supply contracts and customers. The loss of either could make the segment unviable and impact the Group materially. The online marketing and data services segment is heavily dependent on IT systems and infrastructure, the unavailability of which could impact the Group materially.

Key performance indicators

The Group uses key performance indicators suitable for the nature and size of the Group's businesses. This is primarily monthly reports of profitability, levels of working capital and workload. Order intake and production output is monitored daily in respect of the food manufacturing segment and profitability reported monthly. In the online marketing and data services segment, the Group monitors traffic statistics both in terms of yield and cost as well as overall profitability. The segmental analysis in note 2 to this interim report summarises the financial performance of each segment.

Corporate governance

The Board gives careful consideration to the principles of corporate governance as set out in the UK Corporate Governance Code issued by the Financial Reporting Council in June 2010 (the "Code"). However, the Company is relatively small and it is the opinion of the Directors that not all the provisions of the Code are relevant or desirable for a company of Volvere's size.

The Company has established an Audit Committee and a Remuneration Committee with formal terms of reference and which comprise the Chairman. The Board meets regularly and has ultimate responsibility for the management of the Company.

Dividends

In accordance with the policy set out in the prospectus on admission to AIM, the Board does not currently intend to recommend payment of a dividend and prefers to retain profits as they arise for investment in future opportunities and to make purchases of the Company's own shares where the Directors consider these to represent value for shareholders.

Nick Lander

Chief Financial & Operating Officer

21 September 2012

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 2012

1 Financial information

The financial information for the period ended 30 June 2012 and the comparative figures for the period ended 30 June 2011 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 22 May 2012 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 2011 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 2011 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: York House, 74-82 Queen Victoria Street, London, EC4N 4SJ and on its website www.volvere.co.uk.

2 Segmental information

All revenue arose through services rendered in the principal activities of online marketing and data services, security solutions, food manufacturing and investing and management services.

The Group's primary reporting format for reporting segment information is business segments.

2 Segmental information (continued)

Statement of financial position (excluding inter-segment balances):

2 Segmental information (continued)

Other disclosures: