THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) 596/2014 WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY UK MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

S-Ventures PLC

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

Proposed Fundraise and Trading Update

S-Ventures (AQSE: SVEN), the company investing in brands across the natural, wellness and food-tech categories, has commenced a fundraising process intended to raise no less than £2.5m (before expenses) (the "Minimum Amount") and provides an update on trading. As indicated in previous announcements, the Group requires supplementary external funding to support business operations. The fundraise would be used to support £1.25m of working capital requirements to accelerate progress, consolidate costs, and deliver efficiencies. A further £1.25m is required for the payment of deferred consideration, principally relating to the acquisition of Juvela.

Background to Proposed Fundraise

As published on 1 July 2023 in the Group's 2022 annual report and consolidated financial statements, a combination of factors including inflationary headwinds, higher interest costs and losses from Lizza Gmbh necessitated that additional funds would be required for working capital purposes. This need persisted, notwithstanding significant corporate actions taken to drive profitability including the restructuring of Pulsin and the closure of Lizza GmbH.

As further announced on 5 July 2023, S-Ventures stated that it was trading on monthly positive EBITDA but expected to consider further capital raising.

Since 5 July 2023, the Group has continued to focus on potential efficiency savings and has appointed a new CFO, Stephen Argent, who is overseeing the management of accounting and financial controls, including the consolidation of central overheads and the integration of specific functions within the Group. 

Accordingly, the Board today announces that it is launching a fundraise of a minimum of £2.5m and reviewing a range of sources of capital (both debt and equity) to support the fundraise. It has taken the decision to announce this ahead of the completion of the fundraise to garner maximum attention due to the liquidity for small-cap equities such as S-Ventures being exceptionally low.

By announcing the proposed fundraising in this announcement, this information is now available to the public, providing the Group with a simpler and quicker way to approach potential investors. Any primary issuance of shares will be made by way of a placing in addition to a potential broker offer to facilitate the participation of existing shareholders and other qualified investors with an opportunity to participate on the same basis as the investors in the placing. If an equity raise is undertaken, certain members of the Board have indicated their intention to participate in the raising of equity capital.

S-Ventures' existing market capitalisation presents several challenges, particularly in the current market environment. These issues include limited liquidity in the trading of shares, which can lead to higher price volatility and difficulty attracting institutional investors.  S-Ventures has also had difficulty accessing capital markets for financing, making it challenging to fund existing operations and growth . Additionally, compliance with regulatory requirements can also be disproportionately burdensome, consuming resources that the Board believes could be better allocated elsewhere.

Trading Update

Ahead of the announcement of its 2023 results ("FY23 Estimate"), scheduled for release in February 2024, S-Ventures provides the following unaudited trading update (the "Trading Update"):

·      Total gross revenues for the year ended 30 September 2023 are expected to be at least £16.9m (2022: £8.6m) after Juvela's contribution of £6.9m which was acquired in December 2022

·      Net debt as at 30 September 2023 is expected to be approximately £6.8m including a Director's loan of £0.6m.

Subject to audit, early indications are that EBITDA, excluding the closed German subsidiary losses, should be in excess of £500,000.  This represents a considerable turnaround from the losses of our first 2 years' trading. The final audited figures will include an impairment review.

To further enhance profitability and cash generation, we are strategically focusing on streamlining our operations. This involves consolidating central overheads and integrating specific functions within both Pulsin and Juvela. By combining these key operational elements, we aim to realise significant cost savings, thereby strengthening our financial position. This approach underscores our commitment to delivering sustainable growth whilst maintaining the highest standards of product quality and customer service.

 Turning to the performance of our four core businesses:

Juvela

Manufacturer of gluten-free and free-from products from its factory in Pontypool, Wales. Juvela has been manufacturing gluten-free food for people diagnosed with coeliac disease for over 25 years.

·      Revenue of £6.9m in FY23 since acquisition in December 2022

Pulsin

Plant-based nutrition company in plant-based nutrition technology, manufacturing and sales, with a focus on healthy protein bars, nutritional snacks and keto bars.

·      Revenue of £7.4m in FY23

·      Revenue flat year on year.

Purely

A healthy snacking brand, offering a premium plantain crisp product, Purely Plantain Chips, in the UK and certain international markets.

·      Revenue of £0.4m in FY23

·      Revenue growth of c.1% since FY22

Market Rocket
D2C Agency specialising in Amazon, TikTok Shop and own website. Proprietary tech platform/set of processes that connect multiple marketplaces over API.

·      Revenue of £2.7m in FY23

·      Annualised revenue growth of c.200% since FY22

For further information, please contact:

Appendix

Basis of preparation

The FY23 Estimate has been prepared on a basis consistent with the Group's accounting policies which are in accordance with IFRS. These policies are consistent with those applied in the preparation of the Group's annual results for the year ended 30 September 2022.

Assumptions

The FY23 Trading Update is based on the assumptions listed below:

·      There will be no material changes to existing prevailing macroeconomic, regulatory or political conditions in the markets and regions in which the Group operates.

·      There will be no material adverse events (internal or external to the Group) that will have a significant impact on the Group's financial performance.

·      There will be no material impact on stakeholder relationships arising from the Strategic Review.

·      There will be no material change in the Group's market share or conversion rates as a result of the recently introduced price increase, or other market factors.

Directors' confirmation

The Directors have considered the FY23 Trading Update and confirm that it has been properly compiled on the basis of the assumptions set out above and the basis of the accounting used is consistent with the Group's accounting policies.

Disclaimer

This Trading Update is for information only and shall not constitute an offer or solicitation of an offer to buy or sell securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

It is solely for use at a Trading Update and is provided as information only. This Trading Update has been produced by S-Ventures Plc in order to provide general information on the business of the Group and may be subject to material updates, revision and further amendment.

This Trading Update does not constitute, or form part of, a prospectus relating to the Group, nor does it constitute or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in the Group or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis of or be relied on in any connection with any contract or commitment whatsoever.