Half-year Report - Correction

Essentially Group PLC

21 October 2024

 

This is a correction to the announcement published at 15:47:54 on 18 September 2024 (RNS number 7506E).

 It incorrectly stated in the second paragraph of the Period Highlights:

''This growth was facilitated by the successful renegotiation of supplier terms and the enhancement of procurement practices, which resulted in a 4% increase in gross profit margins, rising to 55% despite a backdrop of inflationary pressures in the fresh fruit and vegetable sector. Additionally, EJM's EBITDA experienced a remarkable 218% surge from the previous year''.

The corrected statement reads:

 ''This growth was facilitated by the successful renegotiation of supplier terms and the enhancement of procurement practices, which resulted in a 5% increase in gross profit margins, rising to 56% despite a backdrop of inflationary pressures in the fresh fruit and vegetable sector. Additionally, EJM's EBITDA experienced a remarkable 244% surge from the previous year''.

It incorrectly stated in the last paragraph of the Chairman's Interim Report:

'These strategic focuses generate the positive outlook we predict for Q2 2024. With the acquisition of BLF and the successful launch of collaborative products with key local and international partners, we remain confident in our ability to deliver sustained value to our Shareholders and achieve another record year of profitability and market expansion.'

The corrected statement reads:

'These strategic focuses generate the positive outlook we predict for H2 2024. With the acquisition of BLF and the successful launch of collaborative products with key local and international partners, we remain confident in our ability to deliver sustained value to our Shareholders and achieve profitability and market expansion.'

The figures under the heading Group Statement of Comprehensive Income for the six-month period to 30 June 2024 were incorrectly stated in the RNS dated 18/09/24. The corrected figures are stated below.

		Corrected 6-Month Period Ending 30 June 2024 Unaudited:	RNS 18/09/2024 6-Month Period Ending 30 June 2024 Unaudited:
(i)	Cost of Goods Sold	£(427,534)	£(466,756)
(ii)	Gross Profit	£492,130	£452,908
(iii)	Operating Costs	£(476,379)	£(488,531)
(iv)	Profit/(Loss) Before Depreciation, Interest and Taxation	£15,750	£(35,623)
(vi)	Profit/(Loss) before Interest and Taxation	£(116,223)	£(167,596)
(vii)	Interest Expense	£(72,799)	£(68,641)
(viii)	Net Profit/(Loss)	£(189,022)	£(236,237)
(ix)	Earnings Per Share - Basic	(0.34)	(0.43)
(x)	Earnings Per Share - Diluted	(0.34)	(0.43)

The figures under the heading Group Statement of Financial Position for the six-month period to 30 June 2024 were incorrectly stated in the RNS dated 18/09/24. The corrected figures are stated below.

		Corrected 6-Month Period Ending 30 June 2024 Unaudited:	RNS 18/09/2024 6-Month Period Ending 30 June 2024 Unaudited:
(i)	Inventory	£191,085	£151,872
(ii)	Total Current Assets	£1,014,321	£975,109
(iii)	Intangible Assets	£53,815	£50,254
(iv)	Total Non-Current Assets	£3,226,598	£3,223,037
(v)	Total Assets	£4,240,919	£4,198,146
(vi)	Trade & Other Payables	£1,063,739	£1,068,170
(vii)	Total Current Liabilities	£1,063,739	£1,068,170
(viii)	Provision for Gratuity	£52,304	£52,034
(ix)	Accumulated Reserve	£ (1,009,789)	£ (1,056,993)
(x)	Total Equity	£1,784,840	£1,737,636
(xi)	Total Equity and Liabilities	£4,240,919	£4,198,146

The figures under the heading Group Cashflow Statement for the six-month period to 30 June 2024 were incorrectly stated in the RNS dated 18/09/24. The corrected figures are stated below.

		Corrected 6-Month Period Ending 30 June 2024 Unaudited:	RNS 18/09/2024 6-Month Period Ending 30 June 2024 Unaudited:
(i)	Cashflow from Operating Activities/Loss	£(189,022)	£(236,237)
(ii)	Operating Loss Before Working Capital Changes	£(17,337)	£(64,553)
(iii)	(Increase)/Decrease in Inventory	£(27,159)	£12,053
(iv)	Increase/(Decrease) in Trade Payable and Other Payables	£(94,797)	£(90,366)
(v)	Cash Generated From/(Used In) Operating Activities	£(166,197)	£(169,770)
(vi)	Net Cash Generated From/(Used In) Operating Activities	£(196,994)	£(200,567)
(vii)	Property, Plant & Equipment	£(56,112)	£(53,197)
(viii)	Net Cash Generated From/(Used In) Investing Activities	£(56,112)	£(53,197)
(ix)	Net Increase/(Decrease) in Cash & Equivalent	£(235,810)	£(236,468)
(x)	Effects of Exchange Rates on Cash	£(3,493)	£(4,090)

The full corrected announcement is included below.  

18^th September 2024

Essentially Group PLC

                                                                         ("Essentially" or the "Company")

Unaudited Interim Report For The Six Months Ended 30 June 2024

Essentially Group PLC (AQSE: ESSN), announces its interim results for the half year ending 30 June 2024.

The following commentary relates to the Company and its operating subsidiaries, namely Essentially Juices Manufacturing L.L.C ("EJM") and Best of Latin Foodstuff Trading L.L.C ("BLF"), collectively the "Group".

Period Highlights

Cold Pressed Beverages

During the first six months of 2024, EJM witnessed strong growth in reoccurring revenues, increasing by 12.7% compared to the corresponding period in 2023.

This growth was facilitated by the successful renegotiation of supplier terms and the enhancement of procurement practices, which resulted in a 5% increase in gross profit margins, rising to 56% despite a backdrop of inflationary pressures in the fresh fruit and vegetable sector. Additionally, EJM's EBITDA experienced a remarkable 244% surge from the previous year.

Our expanding relationship with key distribution partners yielded favourable results, as the number of stores offering EJM's products expanded from 477 to 701, representing a 47% increase. In the first half of 2024, EJM produced 81,630 litres of cold pressed juices, bolstered by the launch of 8 new beverages, which extended our range to 25 flavours.

The new product launches included a noteworthy strategic collaboration with Sacred Glow Co., a leading supplement company also based in the UAE. This partnership has led to the successful launch of a groundbreaking range of co-branded collagen drinks, now available at premium retailers such as Waitrose and Spinneys in the UAE, which we are proud to be entering for the first time. The introduction of these innovative collagen drinks has already garnered exceptional feedback.

Further in line with our innovative approach, EJM also introduced 3 seasonal beverages for the holy month of Ramadan, which were well-received. EJM plans to relaunch them in Ramadan in 2025 following further refinement of the recipes.

Notably, EJM's commitment to quality had been recognised with the award of an "A Grade" from the Dubai Municipalities Food Safety Department.

HPP Tolling Services

EJM's high pressure processing (HPP) tolling services experienced exceptional growth, with revenues up 142% and the client base doubling year-on-year.

The products processed using HPP now include a diverse range including cold pressed juice, soups, cold brew coffee and ready-to-eat oats. The future pipeline looks promising, with an additional 5 clients exploring the use of HPP for products such as Mexican salsas, QSR condiments, clean-label ice creams and baby foods.

This expansion of interest for HPP covering a broader range of products reflects the growing demand for health-focused, "better for you" products, with further growth expected as existing clients scale their operations across the UAE and begin exporting to regional markets such as the Kingdom of Saudi Arabia.

Best of Latin Acquisition

Following the acquisition of BLF in May 2024, the integration of their operations into EJM's Dubai headquarters has been completed, marking the initial steps towards realising cost synergies through economies of scale. For instance, a consolidated sales team from both BLF and EJM have begun cross-selling their respective products, which has proven critical in driving further market penetration.

Although the initial savings have been modest, we expect further benefits to materialise over the coming months as we consolidate certain activities between the two operating subsidiaries (such as the corporate finance function, distribution and deliveries, etc.).

The respective EJM and BLF teams have already commenced testing of new ready-to-eat, clean label products, leveraging BLF's ability to source products directly from farms and EJM's expertise in the clean label food and beverage retail and hospitality sectors.

BLF itself has demonstrated strong growth in 2024, with sales volumes reaching 166,500kg between January and August, a 19% increase from the same period in 2023.

BLF's client base grew significantly with the addition of 18 new clients, including Aldar Properties and restaurants from the Rikas Group, as well as key upscale venues in the hospitality industry, further establishing BLF as a key regional supplier of avocados and other Latin American products. This expansion brings BLF's total number of clients to 160, reflecting a broad market presence.

This growth is complemented by BLF's efforts in sustainability, achieving a 61% reduction in fresh produce waste, a testament to its commitment to efficient supply chain management and environmental stewardship.

Post Period Highlights

In the post-period, EJM launched 4 new single-origin cold pressed juices in 1-litre formats, targeted at the modern trade sector, particularly appealing to the weekly family shopper demographic.

Additionally, EJM appointed a full-time Marketing Manager with qualifications and experience in nutrition. With several marketing functions internalised, both EJM and BLF will benefit from specialised and industry-tested marketing initiatives which should propel newly developed products.

Another major milestone was achieved with a private label agreement secured with Fresh To Home, one of India's largest food distribution companies which has previously been financed by Amazon and the US Government. This agreement has facilitated Fresh To Home's expansion into the UAE market.

Chairman's Interim Report

I am very pleased to present to the shareholders (the "Shareholders") of Essentially Group PLC the unaudited interim report of the Company and its subsidiaries for the six months ended 30 June 2024 (the "Reporting Period").

The first half of 2024 has been marked by a productive operating environment within the UAE. The regional food and beverage (F&B) market continues to present significant opportunities, driven by rising consumer demand for premium, health-focused products, alongside an evolving emphasis on sustainability and self-sufficiency within the sector.

The UAE, already the second-largest F&B market in the GCC, remains a focal point for international trade and innovation. Despite some consumer consumption slowdowns observed in recent years, key segments, including health-focused beverages and functional foods, are experiencing notable growth. This shift is supported by strong domestic demand and robust government-backed initiatives aimed at enhancing food security and sustainability.

At the macro level, the UAE's economy continues to show resilience. Within the 3.4% GDP growth observed in Q1 2024, non-oil sector growth remains stable, driven by tourism and hospitality, which have experienced a remarkable resurgence. Tourist arrivals surged by 9% during the Reporting Period, which has been a key factor in reinforcing the demand for high-quality F&B offerings, particularly within premium hospitality venues. With hotel occupancy rates exceeding 75% across all types of accommodations, the industry has shown sustained recovery since the COVID-19 pandemic and subsequent periods, which bodes well for consumer demand in F&B.

Within this context, the Company is well-positioned to leverage these trends, particularly as health-conscious consumers increasingly prioritise clean-label, additive-free products. The global shift toward functional beverages and products that contribute to health and wellbeing has been especially pronounced in the UAE, where a generally affluent and diverse population, along with a substantial expatriate community, seeks premium products that align with their lifestyles.

EJM's cold-pressed juices and functional beverages are uniquely suited to capitalise on these trends. The Group's commitment to quality, transparency and innovation continues to resonate with both local consumers and international visitors.

In parallel, sustainability has become a cornerstone of the UAE's F&B industry. This focus aligns well with the Group's operational strategy, particularly with the integration of BLF, which brings expertise in sourcing fresh produce directly from Latin America. BLF's supply chain capabilities are not only improving operational efficiencies but also supporting our commitment and initiatives to sustainability, reducing waste and enhancing the quality of products that we offer to our clients.

Looking ahead, the UAE's food market is projected to grow at a compound annual growth rate (CAGR) of almost 5% over the next five years, potentially reaching USD 40.07 billion by the end of 2024. This growth, along with continued government investments in agri-tech and sustainable food production, provides a constructive landscape for the Company's growth.

With a subsidiary and product portfolio that emphasises health, nutrition and sustainability, Essentially is well-positioned to capture significant market share across both retail and hospitality channels.

Within this first half of 2024, the Company achieved significant revenue growth, driven by both strong consumer demand for our premium cold-pressed beverages and the expansion of our HPP services. Generally, our sustained emphasis on ensuring profitability while maintaining high standards of product quality and customer satisfaction has proven effective, resulting in an enhancement of the Company's market awareness and customer satisfaction.

Overall, our ability to optimise supply chains, enhance product offerings and leverage key partnerships resulted in a 244% increase in EJM's EBITDA compared to the same period in 2023.

As we move into the second half of the year, we remain focused on continuing with this trajectory, which we aim to achieve with the continued integration of BLF, the development of further product lines and the completion of agreements with additional growth in distribution channels. These strategic focuses generate the positive outlook we predict for Q2 2024. With the acquisition of BLF and the successful launch of collaborative products with key local and international partners, we remain confident in our ability to deliver sustained value to our Shareholders and achieve profitability and market expansion.

ESSENTIALLY GROUP PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD TO 30 JUNE 2024

	6-Month Period Ending 30 June 2024 Unaudited	6-Month Period Ending 30 June 2023 Unaudited	16-Month Period Ending 31 December 2023 Audited
	£	£	£
Revenue	919,663	593,164	1,592,664
Cost of Goods Sold	(427,534)	(285,683)	(810,494)
Gross Profit	492,130	307,481	782,170
IPO Cost	-	-	(339,465)
Operating Costs	(476,379)	(529,850)	(940,115)
Profit/(Loss) Before Depreciation, Interest and Taxation	15,750	(222,369)	(497,410)
Depreciation	(131,973)	(124,264)	(330,677)
Profit/(Loss) Before Interest and Taxation	(116,223)	(346,633)	(828,087)
Interest Expense	(72,799)	(53,542)	(131,641)
Tax Expense	-	-	-
Net Profit/(Loss)	(189,022)	(400,175)	(959,728)
Earnings Per Share - Basic - Pence	(0.34)	(0.78)	(2.00)
Earnings Per Share - Diluted - Pence	(0.34)	(0.78)	(2.00)

ESSENTIALLY GROUP PLC                                                                                                                                 

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2023

	6-Month Period Ending 30 June 2024 Unaudited	6-Month Period Ending 30 June 2023 Unaudited	16-Month Period Ending 31 December 2023 Audited
	£	£	£
Assets
Current Assets
Cash & Cash Equivalent	103,041	89,027	300,915
Trade Receivable & Other Receivables	720,195	793,967	377,185
Inventory	191,085	22,651	32,216
Total Current Assets	1,014,321	905,645	710,316
Non-Current Asset
Property, Plant & Equipment	724,970	835,598	770,636
Intangible Asset	53,815	28	9,519
Goodwill	2,322,301	-	-
Right of Use Asset	125,512	95,035	47,417
Total Non-Current Assets	3,226,598	930,661	827,572
Total Assets	4,240,919	1,836,306	1,537,888
Liabilities & Equity
Current Liabilities
Trade & Other Payables	1,063,739	449,212	614,276
Total Current Liabilities	1,063,739	449,212	614,276
Non-Current Liabilities
Bank Loan	516,088	59,465	168,119
Other Borrowings	700,000	700,000	700,000
Provision for Gratuity	52,304	19,547	19,010
Lease Liability	123,948	104,872	-
Total Non-Current Liabilities	1,392,340	883,884	887,129
Equity
Share Capital	55,005	51,300	51,300
Share Premium	637,700	648,700	637,700
Merger Relief Reserve	1,941,295	-	-
Share Based Payment Reserve	17,664	-	17,644
Accumulated Reserve	(1,009,789)	(2,313,663)	(2,651,590)
Capital Contribution	142,965	2,116,873	1,981,409
Total Equity	1,784,840	503,210	36,483
Total Equity and Liabilities	4,240,919	1,836,306	1,537,888

ESSENTIALLY GROUP PLC

GROUP CASHFLOW STATEMENT

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

	6-Month Period Ending 30 June 2024 Unaudited	6-Month Period Ending 30 June 2023 Unaudited	16-Month Period Ending 31 December 2023 Audited
	£	£	£
Cash Flow From Operating Activities
Loss For The Period	(189,022)	(400,175)	(959,728)
Adjustments for :
Provision for Employees' End of Service	5,977	5,444	13,784
Depreciation for Property, Plant and Equipment	76,745	75,493	191,143
Depreciation for Right of Use Asset	55,228	48,771	127,674
Finance Cost	33,734	87,873	117,878
Non-Cash IPO and Legal Fees	-	50,000	232,663
Share Based Payment Reserve	-	-	17,644
Operating Loss Before Working Capital Changes	(17,337)	(132,594)	(258,942)
(Increase) / Decrease in Trade and Other Receivables	(26,904)	(450,810)	(11,236)
(Increase) / Decrease in Inventory	(27,159)	(542)	(8,921)
Increase / (Decrease) in Trade Payables and Other Payables	(94,797)	50,997	137,075
Cash Generated From / (Used In) Operating Activities	(166,197)	(532,949)	(142,072)
Finance Cost Paid	(30,797)	(18,819)	(45,848)
Net Cash Generated From / (Used In) Operating Activities	(196,994)	(551,768)	(187,920)
Cash Flow From Investing Activities
Property, Plant & Equipment	(56,112)	(10,016)	(132,939)
Net Cash Generated From / (Used In) Investing Activities	(56,112)	(10,016)	(132,939)
Cash Flows From Financing Activities
Net Movement in Interest Bearing Loan & Borrowings	83,799	(17,458)	184,162
Share Capital	-	801	784
Share Premium	-	599,199	374,071
Capital Contribution	-	47,250	(99,194)
Lease payments	(66,504)	(57,187)	(142,663)
Net Cash Generated From Financing Activities	17,295	572,605	317,160
Net Increase/(Decrease) in Cash & Cash Equivalent	(235,810)	10,821	(3,651)
Effects of Exchange Rates on Cash	(3,493)	377	(37,969)
Cash and Cash Equivalent at Beginning of Period	335,359	77,829	342,535
Cash and Cash Equivalent at the End of Period	103,041	89,027	300,915

ESSENTIALLY GROUP PLC

NOTES TO THE FINANCIAL STATEMENTS

SIX-MONTH PERIOD TO 30 JUNE 2024

1.   General Information

Essentially Group PLC is a listed public limited company (Aquis: ESSN) incorporated in the UK and registered in England and Wales (Company Number 14299324). The Company's registered office is at Eastcastle House, 27 - 28 Eastcastle Street, London W1W 8DH.

2.   Basis of Preparation

The interim consolidated financial statements of Essentially Group PLC are unaudited condensed financial statements for the six months ended 30th June 2024 (the "Interim Statements"). The Interim Statements do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.

 A copy of the audited financial statements for the period ended 31st December 2023 for Essentially Juices Manufacturing LLC and Best of Latin Foodstuff Trading LLC, the principal operating companies of the Group is available in which the auditor's opinion on those financial statements was unqualified and did not draw attention to any matters by way of an emphasis of matter paragraph. These Interim Statements have been prepared based on the accounting policies and the accrual basis of accounting and expected to apply for the financial year to 31st December 2024 based on the recognition and measurement principles adopted International Financial Reporting Standards (IFRS), in accordance with the provisions of the Companies Act 2006, applicable to companies reporting under IFRS.

The Interim Statements have been prepared under the historical cost convention. The Group's presentation and functional currency is £ Sterling. The Interim Statements do not include all of the information required for full annual financial statements and do not comply with all the disclosures in IAS 34 'Interim Financial Reporting. Accordingly, whilst the Interim Statements have been prepared in accordance with IFRS, they cannot be construed as being in full compliance with IFRS. The preparation of financial statements in conformity with United Kingdom adopted IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the period ended 31st December 2023.

3.   Basis of Consolidation

The Interim Statements incorporate the assets and liabilities of Essentially Group PLC as at 30th June 2024 and the result of all subsidiaries for the period then ended, save that the results of BLF are only included for the period commencing from the date of acquisition,10 May 2024. Essentially Group PLC and its subsidiaries together are referred to in these financial statements as the "Group". For the Reporting Period, BLF's contribution to the revenue was £267,052 and to the net profit was £2,605.

Subsidiaries are all those entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. Intercompany transactions, as well as balances and unrealised gains stemming from transactions among entities within the Group are removed. Where required, the accounting policies of subsidiaries have been adjusted to align with the policies adopted by the Group to maintain consistency.

 

END