Volvere Regulatory News (VLE)

Volvere plc

("Volvere" or the "Group")

Interim Results for the six months ended 30 June 2016

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its unaudited Interim Results for the six months ended 30 June 2016.

Highlights

Note

1 Based on the net assets attributable to owners of the parent company and the respective period end shares in issue (which was 4,085,958 for all periods).

2 The results for the six months ended 30 June 2015 have been re-presented to remove the results of JMP Consultants Limited, which was sold in December 2015 and has been treated as discontinued operations.

· Further growth achieved in net assets per share

· Shire Foods' performance was satisfactory

· Impetus Automotive, acquired in March 2015, delivered an encouraging performance

· Balance sheet remains strong with high liquidity

· Continued close management of existing businesses to seek to maximise performance; increased deal-flow in recent months is presenting additional opportunities for the Group which continues its policy of selective investment.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information:

Chairman's Statement

Once again I am delighted to be able to report a pleasing performance in the first half of the year. Net assets per share have risen again, to £5.76 (31 December 2015: £5.69), reflecting satisfactory trading in all our businesses. Following its acquisition in 2015, Impetus Automotive has made a positive contribution to the Group.

We are looking forward to continued progress in 2016.

David Buchler

Chairman

20 September 2016

*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 10.

Chief Executive's Statement

I am pleased to report a positive set of results for the first half of 2016. Having sold JMP Consultants, our transport planning and engineering business, in December 2015, this period's results include only Impetus Automotive, Shire Foods and SDS. The performance of each of the Group's segments is set out below.

Food manufacturing

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

We reported in our preliminary results in June that we expected profits would be lower in 2016 and that was the case in the period. However, in spite of lower volumes with one customer, Shire achieved impressive first-half revenues of £6.19 million and a profit before tax and intra-Group management and interest charges of £0.13 million (30 June 2015: £6.49 million and £0.31 million; 31 December 2015 £15.48 million, £1.59 million). Shire's revenues are weighted towards the colder winter months and this also affects the timing of profitability.

The weakening of Sterling post the Brexit vote has caused raw material prices to rise and this will undoubtedly reduce margins at least in the short term. We continue to adopt a partnership approach with our customers and believe that by offering innovative products at fair prices we will continue to build a long-term, stable platform upon which to grow. We remain positive about Shire's contribution to the Group and its prospects.

Automotive Consulting

We acquired Impetus Automotive Limited ("Impetus") in March 2015. Impetus provides a range of services and software solutions to automotive manufacturers around the world with a particular focus on improving the effectiveness of vehicle manufacturers' sales and after-sales networks as well as providing research-based industry insight. The company employs more than 200 people and is now 79%-owned by the Group.

For the 6 months to 30 June 2016 revenues and profit before tax and intra-Group interest and management charges were £8.16 million and £0.52 million respectively (3 months to 30 June 2015: £3.88 million, loss before tax £0.04 million; 9 months to 31 December 2015: £12.08 million, profit before tax £0.58 million).

With new car sales at an all-time high in the UK and elsewhere, we believe Impetus's after-sales products and services will remain a requirement for manufacturers for some time to come. Impetus has won several significant pieces of business in the period of our ownership. This is testament to the dedication, skill and knowledge of our staff for which we are grateful.

Security solutions

Sira Defence and Security Limited ("SDS"), our security solutions business once again delivered a good performance, with revenue of £0.17 million (30 June 2015: £0.14 million, 31 December 2015: £0.31 million). Profit before tax and intra-Group management and interest charges was £0.06 million (30 June 2015: £0.05 million, 31 December 2015: £0.12 million). Encouragingly, SDS sold its first network licence to a foreign police force in the period.

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

Purchase of own shares

During the period the Group did not acquire any further shares for treasury. The aggregate cost of shares purchased as of 30 June 2016 totals £5.94 million.

Acquisitions and future strategy

We continue to manage our existing businesses closely with a view to ensuring their performance is maximised. We have seen an increase in deal-flow in recent months and the economic uncertainty created by the impending withdrawal of the UK from the European Union may well present further opportunities.

Jonathan Lander

Chief Executive

20 September 2016

Financial Review

This financial review covers the Group's performance during the period ended 30 June 2016. It should be read in conjunction with the Chairman's and Chief Executive's Statements.

Overview

The Group's revenue from continuing operations for the period was £14.54 million compared to £10.51 million for the period to 30 June 2015. The increase in the first half of 2016 is due to the inclusion of Impetus Automotive Limited ("Impetus") for the entire period; the 2015 comparative period only included Impetus for approximately 3 months after its acquisition in March. The 2015 results of JMP Consultants Limited, which was sold in December 2015, have been reclassified as discontinued operations.

Group profit before tax from continuing operations was £0.25 million (30 June 2015: £0.46 million, 31 December 2015: £1.34 million). The reduction compared to the same period last year principally reflects lower realised gains on treasury investments (a reduction of £0.43 million) offset partly by a full period contribution this year from Impetus. Encouragingly, Group operating profit was higher than the prior year at £0.19 million (30 June 2015: £0.02 million, 31 December 2015: £0.87 million), again reflecting the contribution from Impetus.

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, which should be read in conjunction with this financial review.

Automotive Consulting

Impetus has been a member of the Group since March 2015. A summary of its recent financial performance is set out in Table A below.

(1) Reflects the period from acquisition on 25 March 2015 to 30 June 2015

(2) Reflects the period from acquisition on 25 March 2015 to 31 December 2015

A clearer management structure has been created in Impetus to ensure that client programme delivery is visible throughout the business, with greater accountability for performance. We have continued to monitor overhead costs whilst investing in internal business systems and client-facing IT solutions. This will deliver both operational benefits for our in-field staff and our clients.

During the period the Group charged Impetus £132,000 for management services and interest of £57,000 on Group loans. At the period end loans outstanding to the Group (which include the funding at the time of the original acquisition to enable a £1.08 million bank debt repayment) amounted to £1.27 million (30 June 2015: £1.79 million, 31 December 2015: £1.1 million). At the date of this report, loans outstanding to the Group were £1.09 million.

Security solutions

The performance of SDS was broadly in line with the prior comparable period, with revenue up slightly at £0.17 million (30 June 2015: £0.14 million, 31 December 2015: £0.31 million). Profit before tax was £0.06 million (30 June 2015: £0.05 million, 31 December 2015: £0.12 million). No Group loans were outstanding at the period end (30 June 2015: £0.03 million, 31 December 2015: nil).

Food manufacturing

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

Shire's revenue and profitability were lower than 2015 due to one retail customer bringing manufacturing in-house. In spite of this, Shire's underlying profit was satisfactory for the period. The loss on tangible fixed assets reflects the disposal of refrigeration plant that was replaced with a more efficient and reliable system.

At 30 June 2016 Shire's remaining Group loans had all been repaid. This compares with 30 June 2015 and 31 December 2015 when £1 million was outstanding at each date. Since the period end, the Group has made further loans to Shire to meet its seasonal stock-build for the winter period. At the date of this report £0.3 million remains outstanding. The equity investment and related intellectual property investments made of £0.53 million and £0.44 million respectively, brings the Group's total amount invested (excluding loans) to £0.97 million.

Shire's unaudited net assets at the period end, stated before deducting the Group loans referred to above, amounted to £4.97 million (30 June 2015: £5.29 million; 31 December 2015: £5.88 million), of which 20% is attributable to non-controlling interests.

Investment revenues and other gains and losses

The Group held available-for-sale investments during the period as part of its treasury management policy, which generated investment income of £0.1 million (30 June 2015: £0.07 million; 31 December 2015: £0.16 million). No investments were disposed of in the period; in the comparable period to 30 June 2015 (and similarly to 31 December 2015), the sale of investments realised gains on sale of £0.43 million (of which £0.32 million was reclassified to profit).

Statement of financial position

Cash

Cash at the period end was £13.99 million (30 June 2015: £7.13 million, 31 December 2015: £11.97 million). The increase in cash compared to the end of 2015 principally reflects a seasonal reduction in trade debtors in Shire Foods. 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 £4.50 million (30 June 2015: £4.56 million, 31 December 2015: £4.31 million); the base cost of these investments was £4.92 million (30 June 2015: £4.92 million; 31 December 2015: £4.92 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 returns.

Earnings per share and share capital

Basic and diluted earnings per ordinary share from continuing operations were 2.4 pence (30 June 2015: 9.8 pence; 31 December 2015: 20.3 pence). Total basic and diluted earnings per ordinary share were 2.4 pence (30 June 2015: 15.9 pence; 31 December 2015: 158.8 pence). Total earnings per share in 2015 reflect the profits arising from the sale of JMP Consultants in December 2015.

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 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. Also, in the automotive consulting and food manufacturing segments, there is a dependency on a small number of customers and a reduction in the volume or range of products or services supplied to those customers or the loss of any one of them could impact the Group materially.

In addition, 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; order intake is reported monthly in respect of the security solutions segment; revenue and contribution by business area are monitored in the Automotive Consulting segment.

Nick Lander

Chief Financial & Operating Officer

20 September 2016

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 2016

1 Financial information

The financial information for the period ended 30 June 2016 and the comparative figures for the period ended 30 June 2015 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 26 May 2016 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 2015 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 2015 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: Warnford Court, 29 Throgmorton Street, London EC2N 2AT and on its website www.volvere.co.uk.

2 Operating segments

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

Analysis by business segment: