Norish plc Interim results 2017

Thursday, 14th September 2017


Norish plc (AIM: NSH), is pleased to announce its interim results for the six months ended 30 June 2017.

Financial Highlights

  • Total revenue increased by 31% to £20.5m (H1 2016: £15.6m)
  • Revenue from the Cold Store division increased by 11.8% to £7.045m (H1 2016: £6.3m)
  • Revenue from the Protein Trading business increased by 34% to £11.5m (H1 2016: £8.6m)
  • Operating profit increased by 55% to £0.76m (H1 2016: £0.49m)
  • Profit before tax increased by 85% to £0.65m (HI 2016 : £0.35m)
  • Diluted adjusted Eps increased by 70% to 1.7p ( HI 2016 : 1p)
  • Net debt was higher at £5.4m (H1 2016: £3.3m)

Operational Highlights

  • Cold stores comprise, by far, the greatest proportion of our Plant, Property and equipment, in excess of 91% at end June 2017. This division recorded sales growth of 11.8%, when compared with the same period in the prior year. Contribution increased by 65% on the same period in the prior year.
  • The growth in sales and contribution was relatively evenly spread across both the North West and South East cold store divisions. Costs increased by 6% in the period under review, reflecting growth in energy and labour costs. These costs are constantly under review.
  • The contribution of the protein trading business, Town View Foods, was also ahead of the comparable period in the prior year, with sales growth of 33% and contribution ahead by 13%.
  • Our start-up businesses, including dairy and Foro International Connections Limited generated a loss of £0.2m in the first half. We expect these losses to be significantly reduced by year end and these businesses to be profitable in 2018.


Cold Store Division

The North West cold store division which comprises the freehold sites at Wrexham and Birmingham performed well in the first half of 2017, reflecting a combination of increased intakes, greater blast freezing volumes, improved pricing and tight control on costs. Sales increased by 9.9% year on year.

The South East division, which comprises the sites at Bury St. Edmunds (freehold), Braintree (leasehold), Gillingham (long term leasehold at a peppercorn rent) and East Kent (leasehold) performed substantially ahead of the same period last year. There was an increase in profitability at the Bury site, compared to last year, which helped overall divisional performance. Sales in the South East increased by 11.9%, reflecting higher intakes and greater blast freezing volumes.

Protein Trading
Our protein trading division which consists of Town View Foods Limited accounted for sales of £11.5m, against £8.6m last year. It contributed £0.32m for the period, up from £0.29m for the same period last year.
Town View Foods trades in protein products mainly beef, pork, lamb and chicken. Sales from pork and chicken increased by £1.9m during the period, while sales from beef and lamb increased by £1m.


The dairy division continues to make progress as we near the end of the capital investment phase in the business - we now have a high quality leased asset which should deliver attractive returns on capital. We run a low-cost grass-based system based on seasonal block calving, and as such our costs are heavily weighted toward the first half of the year. This impacts on first half/second half profitability split, with revenues more evenly spread throughout the year. We also incurred some once off start-up costs during the commissioning phase of our facilities but we are now operating more efficiently. Our asset utilization and operational efficiency will continue to improve as we build our dairy herd at Cantwellscourt Farm, through 2018.


During the period we invested £1.2m (2016: £0.3m), £1m in the dairy farm in Kilkenny and £0.2m in routine capital expenditure in the temperature controlled division.


Trading since July 1st continues to be robust for the group as a whole.

Within the British Cold Store industry, three new licences for store product destined for China have been issued in recent weeks to other companies operating in our sector. This may result in the loss of a customer (s) but we are satisfied that any vacated space will be filled quickly, with other remunerative work. As has been the case in the UK Food Manufacturing sector, investment in new cold store capacity is rare and when it happens tends to be dedicated to a specific customer, with a long term contract in place. While it is difficult to assess overall industry capacity, anecdotal evidence suggests cold store capacity is declining as older assets become obsolete. Our assets are well invested and should benefit from any further capacity reductions in that part of the supply chain, relevant to our business.

Town View Foods continues to deliver strong results, from a more diversified products mix.

Demand for dairy products continues to grow globally. Ireland is exceptionally well placed to benefit from this growth. Our major exporting competitors, with the exception of the US are unlikely to increase dairy output much in the next few years. Ireland’s milk suppliers are very competitive when compared with other suppliers globally and expansion continues apace. We believe our milk business will see opportunities for growth in dairy technology, dairy breeding as well as dairy production in the years ahead.

The guidance for 2017 is increased from the previous range of 2.75p to 3p to a new range of 3.2p to 3.5p (fully diluted adjusted eps).


The board does not recommend the payment of an interim dividend, unchanged from last year.

Please download the PDF to view the whole report.


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