11 April 2022

S-Ventures PLC

("S-Ventures", "Group" or the "Company")

S-Ventures, the Company investing in and growing exciting brands across the natural, wellness and food-tech category, will hold its Annual General Meeting ("AGM") today at 11am at its headquarters in London; 5 Old Bailey, London EC4M 7BA.

Ahead of the meeting S-Ventures would like to share the following update which David Mitchell, the Company's Non-Executive Chairman will read at the AGM today:

AGM Statement

S-Ventures has made considerable progress developing its business.  Over the past six months, the Group has completed the acquisition of Livia's Health Foods Limited business ("Livia's") and Market Rocket Limited ("Market Rocket") together with the accelerated investment in a new logistics centre at Brockworth. This new centre has allowed the Company to streamline the Ohso and We Love Purely businesses by merging their operations into this new centre which became operational in January 2022.

In common with many businesses in the food sector, the Company has been affected by headwinds in the economy which has impacted sales plans. However, our brands are well positioned to benefit from the structural change in the food market addressing present trends which deal with concerns for obesity/health and the composition of foods.  As such we continue to invest in food technology to develop and bring forward new brands. 

On a like for like basis our sales for the first half year are 10% ahead of last year, with considerable further growth anticipated. The Board is pleased to report that Market Rocket, which completed on Friday 8 April 2022, has already impacted the Amazon revenue very positively, with growth of 45% in the last quarter over the previous quarter, before they were acquired.

We Love Purely, the plantain crisp business, continues to grow well and is expected to double its last year revenues by the end of September. Margins are slightly lower due to freight costs and packaging costs. The growth includes recently awarded new contracts with Holland & Barrett and Co-op.

Ohso, the probiotic chocolate company, has had a recent re-brand and management is very excited about its repositioning. This should provide an impetus to its trade sales but has necessarily taken a little time to arrange. As a consequence, in the current year, Ohso's performance is below our internal expectations.

Pulsin, which formulates and produces high quality plant-based products, has been impacted by a period of investment and reorganisation but despite this, sales in H1 grew by 10% (year-on-year) and are expected to be significantly ahead of last year on a full year basis (c.£9m v £6.4m). The Board is pleased with this strong growth although this has been less than previously expected. Sales price rises are now being implemented across our Pulsin product range.

We now have a portfolio of brands that are strongly positioned to address the market opportunities.

As noted above, the Group has had a number of cost increases beyond its control - freight rates and packaging costs, for instance, and more recently, as has been widely reported, a doubling in whey prices. In addition, some of the unit costs have been impacted by labour shortages and operational inefficiencies, but these have been mitigated by the commissioning of our new warehouse.

Management is addressing these cost issues in a variety of ways. Firstly, the merger of the operations of Ohso and Purely into Pulsin's premises is beginning to bear fruit. Secondly, the Board has reviewed the cost structure that it inherited at Pulsin and have undertaken an investment programme which will remove not only c.£0.3m of operating costs per annum but also enable us to accelerate growth. Some selling costs have been increased to gain more product and brand awareness.

 
Livia's: the Board is pleased to report that the Livia's business, which was acquired in February 2022, has been absorbed well into the Pulsin operation and will generate positive EBITDA for the coming period.  The Company has been able to retain all the trade customers of the business. The costs of integration have been lower than expected and the alliance with Pulsin has allowed it to reconfigure the range over these two brands.

Other overheads have remained under control despite incurring acquisition costs for Livia's and Market Rocket.

The investment in Vegan Punk Ventures Limited, a 50% start-up joint venture focussed on plant-based foods, is expected to show a small profit in the current half year before considerable growth next year after promising trials and tasting so far this year.

The Group remains well-resourced after its £3m fund raise last December. Further acquisitions will largely be satisfied by share issues, together with specific loans required to finance any balance of consideration and working capital needs.

Overall, the Directors are pleased with the progress to date and are anticipating a significant increase in sales for the full year on a year-on-year basis - although below the market forecast. Consequently, Group losses for the current year are expected to be reduced significantly. The steps that have been taken and those being implemented at present will lay firm foundations for next year where the Group plans to deliver considerable growth. 

We look forward to updating shareholders on progress in due course.

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About S-Ventures

S-Ventures is listed on UK AQUIS Exchange (Ticker Code "SVEN"). The Company seeks to identify investment opportunities in the health & wellness, organic food and wellbeing sectors within the UK and Europe, adding value by providing capital and expertise to the target companies. The experience and operational skills of the Board led by Scott Livingston (CEO) are intended to act as an accelerator to smaller brands that have a solid foundation and platform but may lack the skills and capital. The main objectives are to cross-fertilise opportunities between the target companies and scale the individual entities and look for exit opportunities and/or synergistic collaborations through scaling we seek to create significant value for all stakeholders. Since listing on AQSE in September 2020, the Company has acquired significant interests in seven companies.