Final Results

RNS Number : 5756O

Volvere PLC

29 May 2015

Press Release

29 May 2015

Volvere plc

("Volvere" or the "Group")

Final results for the year ended 31 December 2014

Volvere plc (AIM: VLE), the growth and turnaround investment company, announces its final results for the year ended 31 December 2014.

Highlights

£ million except where stated	As at 31 December 2014	As at 31 December 2013	As at 30 June 2014 (unaudited)

Consolidated net assets per share (excluding non-controlling interests)¹	£4.31	£4.00	£3.93

Group net assets	19.0	17.6	17.1

Cash and marketable securities	13.1	12.2	12.2

	Year ended		Six months ended
	31 December 2014	31 December 2013	30 June 2014
Group revenue from continuing businesses	24.1	16.1	9.8
Group profit/(loss) before tax from continuing operations	1.65	0.51	(0.29)
Group profit/(loss) before tax from continuing operations before one-off share-based payment expense, gain on bargain acquisition and exceptional credit	0.95	0.09	(0.14)

Note

1 Based on the net assets attributable to owners of the parent company and the respective period end shares in issue of 4,145,958, 4,259,958 and 4,155,958.

· JMP's performance continued to be satisfactory with an underlying profit before tax of £0.6 million (excluding a one-off share-based payment charge) on revenue of £11.8 million.

· Shire Foods' performance continued to strengthen with underlying profit before tax of £0.8 million (excluding an exceptional gain of £0.85 million) on increased revenue of £12.1 million.

· Impetus Automotive Limited, acquired in March 2015, being integrated into the Group satisfactorily.

· Balance sheet remains strong with high liquidity.

For further information:

Volvere plc
Jonathan Lander, CEO	Tel: +44 (0) 20 7634 9707
	www.volvere.co.uk
N+1 Singer Aubrey Powell Richard Salmond	Tel: + 44 (0) 20 7496 3000

Chairman's statement

I am pleased to report on the results for the year ended 31 December 2014.

All our businesses performed well in 2014 and this has contributed to the growth in net assets per share, achieving a new record of £4.31*. Our net assets per share have grown on average by approximately 14% per annum since the company's inception in 2002, which is a testament to the validity of our strategy, and of its execution.

We are looking forward to continued progress in 2015.

David Buchler

Chairman

28 May 2015

*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 20

Chief Executive's statement

Introduction

2014 was the best operating result for the Group to date, albeit flattered by an exceptional gain in Shire Foods. In addition, all three of our principal subsidiaries made a positive contribution this year, which is especially pleasing.

Principal activities

The Company is a holding company that identifies and invests in undervalued and distressed businesses and securities as well as businesses that are complementary to existing Group companies. The Company provides management services to those businesses.

The trading subsidiaries' activities during the year were transport planning & engineering, food manufacturing and security solutions and each of these is reported as a separate segment.

Operating review

The financial performance of each segment is summarised below and in the financial review and further detailed in note 5 to this announcement.

Transport planning & engineering

The Group acquired the JMP transport planning & engineering business in May 2013. JMP is a consultancy that supports the transport planning aspects of property and land development, as well as providing a range of design, engineering and travel behaviour services. In January 2014, JMP issued shares to certain members of its management team such that the Group's holding is now 76%.

The second half of 2014 was more profitable than the first as investments in people and systems started to show dividends. JMP was appointed to a number of important new framework agreements as well as winning a good share of project work. Of particular note was the re-appointment of the company in March by Transport Scotland as lead provider for development planning and management advisory and auditor services. Further national successes were achieved through framework team appointments to the Homes and Communities Agency (HCA) multi-disciplinary framework and on Highways England's Collaborative Delivery Framework (CDF), the mechanism for the delivery of the multi-billion pounds investment in strategic road network improvements announced by the Government in Q4 of 2014.

Revenue for the year was £11.76 million (period from acquisition to 31 December 2013: £7.41 million) with a profit before tax and Group interest charges of £0.45 million (2013: £1.11 million including 'one-off' profits of £0.54 million relating to the acquisition). Post year-end the company made further loan repayments totalling £0.40 million, which means we have now recovered our cost plus a further £0.23 million since the investment two years ago.

JMP is a business which is wholly dependent on hiring and retaining good people. We are delighted with the progress made in 2014 and are impressed by, and grateful to, the staff - who have made it happen.

Food manufacturing

Shire, in which the Group has an 80% stake, was acquired in 2011. Shire manufactures frozen pies, pasties and other pastry products for retailers and food service customers. This year was Shire's third full year of trading within the Group and its performance has continued to improve with a significant increase in revenue and profitability.

Shire's revenue for the year was £12.13 million (2013: £8.53 million) and it achieved a profit before tax of £1.65 million (2013: £0.12 million) including exceptional income of £0.85 million, as explained in the financial review below.

Revenue in 2014 was significantly higher than 2013 mainly because of some key account wins. This was the principal driver of the excellent financial result. There were also continued improvements in the quality and efficiency of our production and logistics.

As part of our turnaround strategy, the company entered an arrangement with its creditors (a "CVA") in 2012. In January 2014 Shire made the last of the payments due under the CVA, which means that it is no longer subject to a company voluntary arrangement. This is another milestone in the company's track back to normal trading.

The Shire team has done an outstanding job building on the work of last year, producing a very creditable financial performance. Quality of product has remained high and the Shire factory once again received the British Retail Consortium Grade A status in 2015. Competition between supermarket clients for customers remains intense, however, and this undoubtedly affects Shire. The company is responding with continued innovation and renewed determination to provide quality products at competitive prices on a sustainable basis.

Security solutions

Sira Defence & Security, the Group's digital CCTV viewing software business, had a much improved year with revenue increasing from £0.18 million to £0.25 million and achieving profits of £0.08 million (2013: breakeven). The level of activity in SDS's sector has continued into 2015 and we remain optimistic about SDS's on-going contribution to the Group.

Recent developments

On 25 March 2015, we announced the acquisition of Impetus Automotive Limited ("IAL"). IAL's principal activity is the provision of consulting services to the automotive sector, including vehicle manufacturers, dealerships and national sales companies. The company, which has UK offices in Warwick and Cranfield, employs approximately 200 people serving clients in the UK and a number of other international markets. Further information on the IAL's activities can be found at www.impetusautomotive.com.

Volvere, through a wholly-owned subsidiary, settled certain debt obligations of IAL's parent company and acquired the entire share capital of IAL for a total cash consideration of £1.3 million, satisfied from Volvere's

existing cash resources. Volvere has also made working capital facilities available to IAL. It is expected that Volvere's shareholding in IAL will reduce through the issue of new equity to key stakeholders in due course.

IAL has been in the Group for approximately two months. We have spent most of that time engaging with the company's management, staff and clients to understand what we can do better and help IAL grow. Once again, I am grateful to everyone at IAL for their support during the inevitable uncertainty caused by a change of ownership.

Future strategy

There remain plenty of opportunities for us and I remain confident that we have the resources and skills to analyse and respond to them appropriately for the benefit of all our shareholders.

Jonathan Lander

Chief Executive

28 May 2015

Financial Review

Financial performance

Detailed information about the Group's segments is set out in note 5 to the preliminary announcement which should be read in conjunction with this financial review and the Chairman's and Chief Executive's statements.

Overview

Total revenue from continuing operations increased from £16.14 million to £24.15 million, reflecting growth in the Group's food manufacturing business, Shire Foods Limited, and the inclusion of a first full year of trading of the Group's transport planning & engineering business, JMP Consultants Limited.

Profit after tax from continuing operations (stated after a one-off share-based payment charge of £0.16 million and an exceptional credit of £0.85 million) was £1.65 million (2013: £0.51 million), the improvement in profits mainly being the result of continued growth and improved profitability at Shire Foods Limited.

Transport planning & engineering

The Group's transport planning & engineering segment consists of JMP Consultants Limited ("JMP") which was acquired in May 2013. Revenues for the year ended 31 December 2014 were £11.76 million compared with £7.41 million for the 7 months from the date of acquisition to the end of 2013. Profits for the year were £0.45 million stated after a share-based payment charge of £0.16 million, representing an underlying profit of £0.6 million (2013: £0.54 million (after adjustment for one off items related to the acquisition) for the period from acquisition to 31 December).

There was a share-based payment charge of £0.16 million (2013: £nil) relating to the issue of equity to certain management and staff during the year. This has resulted in the Group's shareholding in JMP being reduced to 76%.

Food manufacturing

Shire Foods' financial performance improved significantly during the year with revenue in 2014 up by 42% to £12.13 million (2013: £8.53 million). The growth reflects the effects of new customer contracts, which had been won but where supply only commenced in the second quarter of the year. The continuing focus on quality with efficiency is now beginning to show through improved profitability with Shire achieving profits (before intra-group interest) of £1.65 million (including exceptional income of £0.85 million), compared to £0.1 million in 2013.

Exceptional income consists of the release of certain liabilities which are no longer payable in accordance with the terms of a Company Voluntary Agreement ("CVA") which Shire entered into in 2011. The CVA has now ended and Shire's net assets have increased by £0.85 million as a result.

Security solutions

Sira Defence & Security achieved revenue growth in 2014 with revenues up from £0.18 million to £0.25 million. Costs remained tightly controlled resulting in the achievement of a modest profit of £0.08 million, following a break-even result last year. The adoption of SiraView, the CCTV viewing software, by the police, has continued to be encouraging. We are forging relationships with the wider supply chain to ensure SiraView's 'gateway' to accessing, viewing and managing video footage remains a robust customer proposition.

Investment revenues, other gains and losses and finance income and expense

Whilst continuing to review and assess further investments in trading activities, the Group had significant cash on hand and has continued with active treasury management in response to prevailing low interest rates. This strategy achieved investment revenues, other gains and losses and net finance income totalling £0.10 million (2013: £0.46 million).

Exceptional items

The consolidated income statement includes exceptional income of £0.85 million as explained above and in note 16.

Statement of financial position

Cash and cash equivalents

Cash at the year end totalled £12.22 million (2013: £11.28 million). As noted below, the Group made purchases during the year of its own shares for treasury for a total consideration of £0.31 million (2013: £1.62 million).

Available for sale investments

At the year end the Group's available for sale investments had a market value of £0.92 million (2013: £0.96 million); the base cost of these investments was £0.6 million (2013: £0.7 million).

In line with the Group's treasury management policies and pending investment in other acquisitions, the Group continues to seek short term investments where there is the opportunity for attractive returns.

Dividends

In accordance with the policy set out at the time of admission to AIM, the Board does not currently intend to recommend payment of a dividend and prefers to retain profits as they arise for investment in future opportunities, or to purchase own shares for treasury where that is considered to be in the best interests of shareholders.

Purchase of own shares

The Group purchased for treasury a total of 114,000 shares (2013: 559,028 shares) for total consideration of £307,000 (2013: £1,616,000) representing an average price of £2.69 per share (2013: £2.89 per share). As of 31 December 2014, the Group's share repurchases total £5.75 million.

Earnings per share

Basic and diluted earnings per ordinary share were 25.60p (2013: basic 15.14p, diluted 15.11p).

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 5.

Internally, management uses a variety of non-financial KPIs as follows: in respect of the food manufacturing sector order intake, manufacturing output and sales are monitored weekly and reported monthly; in the transport planning & engineering segment staff utilisation, amounts billed to clients and cash collected are closely monitored; order intake is monitored weekly and reported monthly in respect of the security solutions segment.

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

These risks are managed by the Board in conjunction with the management of the Group's businesses.

More information on the Group's financial risks is disclosed in note 17.

Directors' interests

The Directors' interests in the share capital of the Company at 31 December are disclosed below:

	Number of Ordinary Shares 31 December 2014	Number of Ordinary Shares 31 December 2013

David Buchler	129,893	129,893
Jonathan Lander	1,023,677	1,023,677
Nick Lander	548,277	548,277

No director held any share options at 31 December 2014 (2013: David Buchler held 31,000 options).

No changes in directors' shareholdings (or options) occurred between 31 December and the date of this announcement.

Nick Lander

Chief Financial & Operating Officer

28 May 2015

Consolidated income statement


	Note	2014	2013
		£'000	£'000
Continuing operations
Revenue	5	24,148	16,137
Cost of sales		(16,418)	(11,497)

Gross profit		7,730	4,640
Distribution costs		(713)	(523)
Administrative expenses:
- Before gain on bargain acquisition and share based payments		(6,164)	(4,486)
- Gain on bargain acquisition - Share based payments	22 24	- (158)	417 -
Administrative expenses		(6,322)	(4,069)

Operating profit	2	695	48

Investment revenues	7	65	261
Other gains and losses	7	142	304
Finance expense	7	(156)	(139)
Finance income	7	50	34
Exceptional items	16	852	-

Profit before tax		1,648	508
Income tax expense	8	-	-

Profit for the year from continuing operations		1,648	508

Discontinued operations
(Loss)/profit for the year from discontinued operations after tax	6	(177)	203

Profit for the year		1,471	711

Attributable to:
- Equity holders of the parent		1,069	689
- Non-controlling interests		402	22

		1,471	711

Earnings/(loss) per share	9

Continuing operations
- Basic		29.84p	10.68p
- Diluted		29.84p	10.66p

Discontinued operations
- Basic		(4.24)p	4.46p
- Diluted		(4.24)p	4.45p

Total
- Basic		25.60p	15.14p
- Diluted		25.60p	15.11p

Consolidated statement of comprehensive income

	2014	2013
	£'000	£'000

Profit for the year	1,471	711

Other comprehensive income (items that will be reclassified to profit or loss)
Fair value gains and losses on available for sale financial assets
- current period gains/(losses) - reclassified to profit and loss	89 (34)	(27) -


Other comprehensive income	55	(27)


Total comprehensive income for the year	1,526	684

Attributable to:
- Equity holders of the parent	1,124	662
- Non-controlling interests	402	22

	1,526	684

Consolidated statement of changes in equity

2013	Share capital £'000	Share premium £'000	Revaluation reserve £'000	Retained earnings £'000	Total £'000	Non-controlling interests £'000	Total £'000

Other comprehensive income	-	-	(27)	-	(27)	-	(27)
Profit for the year			-	689	689	22	711

Total comprehensive income for the year	-	-	(27)	689	662	22	684
Balance at 1 January	50	3,636	284	14,021	17,991	1,477	19,468

Transactions with owners:
Dividends paid to non-controlling interest	-	-	-	-	-	(120)	(120)

Issue of shares	-	4	-	-	4	-	4
Purchase of own shares	-	-	-	(1,616)	(1,616)	-	(1,616)
Disposal of discontinued operations	-	-	-	-	-	(837)	(837)

Total transactions with owners	-	4	-	(1,616)	(1,612)	(957)	(2,569)

Balance at 31 December	50	3,640	257	13,094	17,041	542	17,583

2014 Other comprehensive income	-	-	89	-	89	-	89

Transfer to profit and loss on disposal	-	-	(34)	-	(34)	-	(34)
Profit for the year	-	-	-	1,069	1,069	402	1,471

Total comprehensive income for the year	-	-	55	1,069	1,124	402	1,526
Balance at 1 January	50	3,640	257	13,094	17,041	542	17,583

Transactions with owners:
Increase in non-controlling interest	-	-	-	-	-	197	197

Purchase of own shares	-	-	-	(307)	(307)	-	(307)

Total transactions with owners	-	-	-	(307)	(307)	197	(110)

Balance at 31 December	50	3,640	312	13,856	17,858	1,141	18,999

Consolidated statement of financial position

		2014	2013
	Note	£'000	£'000
Assets
Non-current assets
Goodwill	11	-	-
Other intangible assets	11	-	-
Property, plant and equipment	12	5,361	5,531
Deferred tax asset	19	-	-

Total non-current assets		5,361	5,531

Current assets
Inventories	13	937	688
Trade and other receivables	15	6,610	4,823
Cash and cash equivalents		12,215	11,280
Available for sale investments	14	921	955

Total current assets		20,683	17,746

Total assets		26,044	23,277

Liabilities
Current liabilities
Loans and other borrowings	18	(1,999)	(817)
Finance leases	18	(159)	(121)
Trade and other payables	16	(4,066)	(2,893)

Total current liabilities		(6,224)	(3,831)

Non-current liabilities
Loans and other borrowings	18	(821)	(946)
Finance leases	18	-	(57)
Trade and other payables	16	-	(860)

Total non-current liabilities		(821)	(1,863)

Total liabilities		(7,045)	(5,694)

Net assets		18,999	17,583

Equity
Share capital	20	50	50
Share premium account	21	3,640	3,640
Revaluation reserve	21	312	257
Retained earnings		13,856	13,094

Capital and reserves attributable to equity holders of the Company		17,858	17,041
Non-controlling interests	27	1,141	542

Total equity		18,999	17,583

Consolidated statement of cash flows

		2014	2014	2013	2013
	Note	£'000	£'000	£'000	£'000

Profit for the year from continuing operations			1,648		508
Adjustments for:
Investment revenues	7	(65)		(261)
Other gains and losses	7	(142)		(304)
Finance expense	7	156		139
Finance income	7	(50)		(34)
Depreciation	12	416		344
Amortisation/impairment of intangible assets	11	-		429
Gain on bargain acquisition	22	-		(417)
Share based payments	24	158		-

			473		(104)

Operating cash flows before movements in working capital			2,121		404

Increase in trade and other receivables			(1,787)		(1,858)
Increase in trade and other payables			418		1,157
Increase in inventories			(249)		(317)

Cash generated from/(used by) continuing operations			503		(614)

Net cash used by discontinued operations			(177)		(335)

Net cash generated from/(used by) operations			326		(949)

Investing activities
Proceeds from sale of discontinued operations net of cash sold	6	-		769
Acquisition of business	22	-		(415)
Purchase of available for sale investments		(3,732)		(11,631)
Income from available for sale investments		65		261
Disposal of available for sale investments		3,997		11,934
Purchase of property, plant and equipment	12	(245)		(333)
Interest received	7	50		34

Net cash generated from investing activities			135		619

Financing activities
Interest paid		(156)		(139)
Purchase of own shares (treasury shares)	20	(307)		(1,616)
Net increase in/(repayment of) borrowings		937		(149)
Dividend paid to non-controlling interest		-		(120)
Issue of shares		-		4

Net cash generated from/(used by) financing activities			474		(2,020)

Net increase/(decrease) in cash and cash equivalents			935		(2,350)
Cash and cash equivalents at beginning of year			11,280		13,630

Cash and cash equivalents at end of year			12,215		11,280

Notes forming part of the preliminary announcement

The financial information set out above, which was approved by the Board on 28 May 2015, is derived from the full Group accounts for the year ended 31 December 2014 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2014, will be delivered to the Registrar of Companies in due course.

Copies of the Company's Annual Report and Financial Statements are expected to be sent to shareholders on 3 June 2015 and will be available from the Company's registered office, Abacus House, 33 Gutter Lane, London, EC2V 8AS and website at www.volvere.co.uk.

1 Accounting policies

Basis of accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC interpretations) as adopted by the European Union ("adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under adopted IFRS.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. In addition, note 17 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Group has considerable financial resources and operates in a number of different market sectors. As a consequence, the directors believe that the Group is well placed to manage the business risks inherent in its activities despite the current uncertain economic outlook.

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The following principal accounting policies have been applied consistently, in all material respects, in the preparation of these financial statements:

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All subsidiaries have a reporting date of 31 December.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.

Business combinations

The Group applies the acquisition method of accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of the fair value of consideration transferred, the recognised amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is recognised in profit or loss immediately.

The purchase of a non-controlling interest is not a business combination within the scope of IFRS 3, since the acquiree is already controlled by its parent. Such transactions are accounted for as equity transactions, as they are transactions with equity holders acting in their capacity as such. No change in goodwill is recognised and no gain or loss is recognised in profit or loss.

Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. See above for information on how goodwill is initially determined. Goodwill is carried at cost less accumulated impairment losses and is reviewed annually for impairment.

Other intangible assets

All other intangible assets are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives, which are considered finite. Residual values and useful lives are reviewed at each reporting date and they are subject to impairment testing where indicators of impairment are present. Registered design rights are amortised over the life of the registration.

When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

Sale of goods is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership, generally when the customer has taken undisputed delivery of the goods. There are no service obligations attached to the sale of goods.

Revenue earned on time and materials contracts is recognised as costs are incurred. Income from fixed price contracts is recognised in proportion to the stage of completion, determined on the basis of work done, of the relevant contract.

Revenue from consulting services is recognised when the services are provided by reference to the contract's stage of completion at the reporting date. When the outcome can be assessed reliably, contract revenue and associated costs are recognised by reference to the stage of completion of the contract activity at the reporting date. When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs that have been incurred and are recoverable. Contract costs are recognised in the period in which they are incurred.

If it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately in profit or loss.

The gross amount due from customers for contract work is presented within trade and other receivables for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. The gross amount due to customers for contract work is presented within other liabilities for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses).

Discontinued operations

Discontinued operations represent cash generating units or groups of cash generating units that have either been disposed of or classified as held for sale, and represent a separate major line of business or are part of a single co-ordinated plan to dispose of a separate major line of business. Cash generating units forming part of a single co-ordinated plan to dispose of a separate major line of business are classified within continuing operations until they meet the criteria to be held for sale. The post-tax profit or loss of the discontinued operation is presented as a single line on the face of the consolidated income statement, together with any post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on the disposal of the assets or disposal group constituting the discontinued operation. On changes to the composition of groups of units comprising discontinued operations, the presentation of discontinued operations within prior periods is restated to reflect consistent classification of discontinued operations across all periods presented.

Operating segments

IFRS 8 "Operating Segments" requires the disclosure of segmental information for the Group on the basis of information reported internally to the chief operating decision-maker for decision-making purposes. The Group considers that the role of chief operating decision-maker is performed collectively by the Board of Directors.

Volvere plc is a holding company that identifies and invests principally in undervalued and distressed businesses and securities as well as businesses that are complementary to existing Group companies. Its customers are based primarily in the UK, Europe and the USA.

Financial information (including revenue and operating profits) is reported to the board on a segmental basis. Segment revenue comprises sales to external customers and excludes gains arising on the disposal of assets and finance income. Segment profit reported to the board represents the profit earned by each segment before tax. For the purposes of assessing segment performance and for determining the allocation of resources between segments, the board reviews the non-current assets attributable to each segment as well as the financial resources available. All assets are allocated to reportable segments. Assets that are used jointly by segments are allocated to the individual segments on a basis of revenues earned.

All liabilities are allocated to individual segments. Information is reported to the board of directors on a segmental basis as management believes that each segment exposes the Group to differing levels of risk and rewards due to their varying business life cycles. The segment profit or loss, segment assets and segment liabilities are measured on the same basis as amounts recognised in the financial statements. Each segment is managed separately.

Leasing

Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and the reduction of lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Foreign currencies

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Gains and losses arising on retranslation are included in net profit or loss for the period.

Retirement benefit costs

The Group's subsidiary undertakings operate defined contribution retirement benefit schemes. Payments to these schemes are charged as an expense in the period to which they relate. The assets of the schemes are held separately from those of the relevant company and Group in independently administered funds.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost or valuation of assets, less their residual values, over their estimated useful lives, using the straight line method, on the following bases:

Freehold property - 1.5% per annum

Improvements to short-term leasehold property - Over the life of the lease

Plant and machinery - 20%-33% per annum

Investments

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, including transaction costs. Available for sale current asset investments are carried at fair value with adjustments recognised in other comprehensive income.

Investment income

Income from investments is included in the income statement at the point the Group becomes legally entitled to it. Interest income and expenses are reported on an accruals basis using the effective interest method.

Impairment of property, plant and equipment and intangible assets (including goodwill)

At each reporting date the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and any risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Share-based payments

The Group issues equity-settled share-based payments to certain directors and employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of options that will ultimately vest.

Fair value is measured by use of a Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

In determining the Group's share-based payment charge arising in respect of the shares issued to non-controlling interests (as set out in note 24), the Group has evaluated the enterprise value of JMP. This evaluation has considered the range of possible earnings multiples that could apply on an exit to a business such as JMP, the rights attaching to the shares issued, the proportion of the resulting equity participation and the existence of a single large shareholder with significant influence.

Inventories

Inventories are stated at the lower of cost and net realisable value. Raw materials are valued at purchase price and the costs of ordinarily interchangeable items are assigned using a weighted average cost formula. The cost of finished goods comprises raw materials directly attributable to manufacturing processes based on product specification and packaging cost. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, overnight deposits and treasury deposits. The Group considers all highly liquid investments with original maturity dates of three months or less to be cash equivalents.

Financial assets

The Group classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:

Fair value through profit or loss (FVTPL): This category comprises only in-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Loans and receivables: These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method less any provision for impairment. Receivables are considered for impairment when there is a risk of counterparty default.

Available-for-sale: Non-derivative financial assets not included in the above categories are classified as available-for-sale and comprise the Group's investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. They are carried at fair value with changes in fair value recognised directly in equity (other comprehensive income). Fair value is determined by reference to independent valuation statements provided by the investment manager or broker (as the case may be) through whom such investments are made. Where the underlying investments are exchange-traded, the mid-price of the investment is used.

Impairment: All financial assets except those at FVTPL are reviewed for impairment at each reporting date to identify whether there is any objective evidence that a financial asset or group of assets is impaired. Different methods are used to determine impairment as described above.

Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Group's accounting policy for each category is as follows:

FVTPL: This category comprises only out-of-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement.

Other financial liabilities: Other financial liabilities include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Bank and other borrowings are initially recognised at the fair value of the amount advanced net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense in this context includes initial transaction costs and premia payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Invoice discounting

The Group uses an invoice discounting facility and retains all significant benefits and risks relating to the relevant trade receivables. The gross amounts of the receivables are included within assets and a corresponding liability in respect of proceeds received from the facility is included within liabilities. The interest and charges are recognised as they accrue and are included in the income statement with other interest charges.

Significant management judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The nature of the Group's business is such that there can be unpredictable variation and uncertainty regarding its business. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Significant management judgements

The judgements that have a significant impact on the carrying value of assets and liabilities are discussed below:

Deferred tax asset

The Group recognises a deferred tax asset in respect of temporary differences relating to capital allowances, revenue losses and other short term temporary differences when it considers there is sufficient evidence that the asset will be recovered against future taxable profits.

Current asset investments

Declines in the fair value of current asset investments are considered for indicators of impairment. Where the decline in value is significant or prolonged the asset may be considered to be impaired with the resulting impairment losses recognised in the income statement. Short term and insignificant declines in fair value that are considered to be temporary are reflected in other comprehensive income.

Significant estimates

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

Revenue recognition

Due to the nature of some services provided by certain of the Group's businesses the recoverability of receivables can be subject to management estimates. Whilst the Group has a thorough process for reviewing the requirement for receivables and credit note provisions, this area is inherently subjective.

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain equipment used in the production of food.

Inventories

Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by market-driven changes that may reduce future selling prices.

Consolidation

Management have concluded that is not appropriate to utilise the exemption from consolidation available to investment entities under IFRS10. Accordingly the consolidation includes all entities which the Company controls.

Business combinations

Management uses valuation techniques in determining the fair values of the various elements of a business combination (see note 22).

Fair value measurement

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

New standards and interpretations - in issue but not yet effective

At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Group. Information on those expected to be relevant to the Group's financial statements is provided below.

Management anticipates that all relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or listed below are not expected to have a material impact on the Group's financial statements.

IFRS 9 'Financial Instruments' (2014)

The IASB recently released IFRS 9 'Financial Instruments' (2014), representing the completion of its project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. The new standard introduces extensive changes to IAS 39's guidance on the classification and measurement of financial assets and introduces a new 'expected credit loss' model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting.

The Group's management have yet to assess the impact of IFRS 9 on these consolidated financial statements. The new standard is required to be applied for annual reporting periods beginning on or after 1 January 2018.

IFRS 15 'Revenue from Contracts with Customers'

IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 'Revenue', IAS 11 'Construction Contracts', and several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities.

IFRS 15 is effective for reporting periods beginning on or after 1 January 2017. The Group's management have not yet assessed the impact of IFRS 15 on these consolidated financial statements.

2 Operating profit

Operating profit is stated after charging/(crediting):

	2014 £'000	2013 £'000


Staff costs	9,091	5,773
Depreciation of property, plant and equipment:
- owned assets	394	321
- leased assets	22	23
Amortisation and impairment of intangible assets Gain on bargain acquisition	- -	429 (417)
Operating lease expense	177	436

Audit fees	50	48

The analysis of audit fees is as follows:
- for the audit of the Company's annual accounts	15	12
- for the audit of the Company's subsidiaries' accounts	35	36

	50	48

3 Staff costs

Staff costs comprise:

		2014 £'000	2013 £'000

	Wages and salaries	7,955	5,096
	Employer's National Insurance contributions	767	467
	Defined contribution pension cost	369	210

		9,091	5,773

The average number of employees (including Directors) in the Group was as follows:

	2014 Number	2013 Number

Engineering and production	220	193
Sales and marketing	9	9
Administration and management	31	30

	260	232

4 Directors' remuneration

The remuneration of the directors was as follows:

	Salaries & fees 2014 £'000	Bonus 2014 £'000	Other benefits 2014 £'000	Total 2014 £'000

David Buchler	30	-	-	30
Jonathan Lander	11	-	-	11
Nick Lander	11	-	1	12

	52	-	1	53

	Salaries & fees 2013 £'000	Bonus 2013 £'000	Other benefits 2013 £'000	Total 2013 £'000

David Buchler	30	-	-	30
Jonathan Lander	11	-	-	11
Nick Lander	11	-	1	12

	52	-	1	53

The services of Jonathan Lander and Nick Lander are provided under the terms of a Service Agreement with D2L Partners LLP. The amount due under these agreements, which is in addition to the amounts disclosed above, for the year amounted to £551,000 (2013: £396,000). The amount paid to David Buchler in the year was paid to a third party on an invoice basis. None of the directors were members of the Group's defined contribution pension plan in the year (2013: none).

5 Operating segments

Analysis by business segment:

	Transport planning and engineering 2014 £'000	Security solutions 2014 £'000	Investing and management services 2014 £'000	Food manufacturing 2014 £'000	Total continuing 2014 £'000	Discontinued 2014 £'000	Total 2014 £'000
Revenue	11,761	253	-	12,134	24,148	-	24,148

Profit/(loss) before tax*	450	81	(534)	1,651	1,648	(177)	1,471


	Transport planning and engineering 2013 £'000	Security solutions 2013 £'000	Investing and management services 2013 £'000	Food manufacturing 2013 £'000	Total continuing 2013 £'000	Discontinued 2013 £'000	Total 2013 £'000

Revenue	7,413	176	17	8,531	16,137	7,252	23,389

Profit/(loss) before tax*	1,114	1	(724)	117	508	203	711

*stated before intra-group management and interest charges
	Transport planning and engineering 2014 £'000	Security solutions 2014 £'000	Investing and management services 2014 £'000	Food manufacturing 2014 £'000	Total continuing 2014 £'000	Discontinued 2014 £'000	Total 2014 £'000

Assets	4,526	33	11,932	9,553	26,044	-	26,044
Liabilities	(2,817)	(166)	(256)	(3,806)	(7,045)	-	(7,045)

Net assets	1,709	(133)	11,676	5,747	18,999	-	18,999


	Transport planning and engineering 2013 £'000	Security solutions 2013 £'000	Investing and management services 2013 £'000	Food manufacturing 2013 £'000	Total continuing 2013 £'000	Discontinued 2013 £'000	Total 2013 £'000

Assets	3,378	80	11,562	8,257	23,277	-	23,277
Liabilities	(1,791)	(105)	(295)	(3,503)	(5,694)	-	(5,694)

Net assets	1,587	(25)	11,267	4,754	17,583	-	17,583

	Transport planning and engineering 2014 £'000	Security solutions 2014 £'000	Investing and management services 2014 £'000	Food manufacturing 2014 £'000	Total continuing 2014 £'000	Discontinued 2014 £'000	Total 2014 £'000
Capital spend	163	-	-	82	245	-	245
Depreciation	82	1	7	326	416	-	416
Amortisation/ impairment	-	-	-	-	-	-	-

	Transport planning and engineering 2013 £'000	Security solutions 2013 £'000	Investing and management services 2013 £'000	Food manufacturing 2013 £'000	Total continuing 2013 £'000	Discontinued 2013 £'000	Total 2013 £'000
Capital spend	167	1	2	96	266	67	333
Depreciation	18	2	4	320	344	107	451
Amortisation/ impairment	-	-	-	429	429	-	429

Geographical analysis:

	External revenue by location of customers		Non-current assets (excluding deferred tax) by location of assets
	2014	2013	2014	2013
	£'000	£'000	£'000	£'000

UK	22,795	15,226	5,361	5,531
Rest of Europe	478	399	-	-
Other	875	512	-	-

	24,148	16,137	5,361	5,531

The Group had 3 customers that individually accounted for in excess of 10% of the Group's revenues as follows:
			2014	2013
			£'000	£'000

First customer			3,210	3,109
Second customer			2,775	1,910
Third customer			2,659	-

6 Discontinued operations

The Group's stake in Interactive Prospect Targeting Limited (IPT) was sold on 13 December 2013 for cash consideration amounting to £900,000. In accordance with IFRS 5 the total profits relating to discontinued activities for the year ended 31 December 2013 are presented on a single line on the income statement, and are analysed below. Discontinued operations in 2014 comprise further costs incurred during 2014 in respect of the disposal of IPT.

	2014 £'000	2013 £'000

Revenue	-	7,252
Cost of sales	-	(3,486)
Administrative expenses	(177)	(4,325)

Loss before tax Finance income Income tax expense	(177) - -	(559) - (850)

Loss for the year	(177)	(1,409)
Non-controlling interests' share of losses in period to disposal	-	767

Group share of losses Profit on disposal (see below)	(177) -	(642) 845

(Loss)/profit from discontinued operations	(177)	203


At the date of disposal the carrying amount of IPTs net assets were as follows:		2013 £'000

Goodwill		305
Property plant and equipment		98
Receivables		1,032
Cash and cash equivalents		131
Payables (current)		(1,445)

Net assets		121
Non-controlling interests' share of net assets		(66)

Group share of net assets Profit on disposal		55 845

Consideration		900

7 Investment revenues, other gains and losses and finance income and expense

	2014	2013
	£'000	£'000

Investment revenues	65	261

Other gains and losses	142	304

Finance income
Bank interest receivable	50	34

Finance expense
Bank interest	(64)	(70)
Finance lease interest	(15)	(18)
Other interest and finance charges	(77)	(51)

	(156)	(139)

Investment revenues and other gains and losses represent respectively interest and dividends receivable from, and the gains arising upon disposal of, investments made pursuant to the Group's investing and treasury management policies.

8 Income tax

	2014	2013
	£'000	£'000

Current tax expense	-	-
Deferred tax expense recognised in income statement	-	-

Total tax expense recognised in income statement	-	-
Tax recognised directly in equity	-	-

Total tax recognised (continuing operations)	-	-

The reasons for the difference between the actual tax expense for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

	2014 £'000	2013 £'000


Profit before tax	1,471	508

Expected tax charge based on the prevailing rate of corporation tax in the UK of 21.49% (2013: 23.25%)	316	118
Effects of: Expenses not deductible for tax purposes	75	9
Discontinued activities	-	47
Income/gains not subject to tax	(197)	(342)
Depreciation for period (less than)/in excess of capital allowances	(16)	43
Short term timing differences Losses not utilised	12 4	- 118
Utilisation of previously unrecognised losses	(194)	-
Other differences	-	7

Total tax recognised	-	-

9 Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

Earnings for the purposes of earnings per share:	2014 £'000	2013 £'000
From continuing operations From discontinued operations	1,246 (177)	486 203

Total	1,069	689

EEa Weighted average number of shares for the purposes of earnings per share:	2014 No.	2013 No.
Weighted average number of ordinary shares in issue	4,175,676	4,548,805
Dilutive effect of potential ordinary shares	-	9,899

Weighted average number of ordinary shares for diluted EPS	4,175,676	4,558,704

10 Subsidiaries

The principal subsidiaries of Volvere plc, all of which have been included in these consolidated financial statements, are as follows:

Name	Country of Incorporation	Proportion of ownership interest
Volvere Central Services Limited	England and Wales	100%
NMT Group Limited	Scotland	98.6%
Sira Defence & Security Limited Shire Foods Limited	England and Wales England and Wales	100% 80%
JMP Consultants Limited	England and Wales	76%

11 Goodwill and other intangible assets

	Goodwill £'000	Registered designs £'000	Total £'000
Cost
At 1 January 2013	305	441	746
Disposed in the year	(305)	-	(305)

At 31 December 2013	-	441	441

At 31 December 2014	-	441	441

Amortisation and impairment charges
At 1 January 2013	-	12	12
Amortisation charge for the year	-	24	24
Impairment	-	405	405

At 31 December 2013	-	441	441

At 31 December 2014	-	441	441

Net book value

At 31 December 2014	-	-	-

At 31 December 2013	-	-	-

Goodwill represented that arising from the acquisition of Interactive Prospect Targeting Limited's business and assets on 29 September 2008, being the difference between the fair value of the consideration paid and the fair value of the net assets acquired. IPT was sold on 13 December 2013.

In 2013, a review of the benefits accruing from products relating the registered design rights resulted in an impairment charge in the year and a corresponding reduction in their carrying value in the statement of financial position.

12 Property, plant and equipment

	Short Leasehold Property £'000	Freehold Property £'000	Plant & Machinery £'000	Total £'000
Cost
At 1 January 2013	9	2,430	4,719	7,158
Additions	76	-	167	243
Acquired through business combinations	-	-	21	21
Disposed with discontinued operations	-	-	(1,261)	(1,261)

At 31 December 2013 and 1 January 2014	85	2,430	3,646	6,161
Additions	54	-	191	245
Disposals	(9)	-	(8)	(17)

At 31 December 2014	130	2,430	3,829	6,389

Accumulated depreciation
At 1 January 2013	4	31	1,370	1,405
Disposed with discontinued operations	-	-	(1,119)	(1,119)
Charge for the year	7	22	315	344

At 31 December 2013 and 1 January 2014 Disposals	11 (9)	53 -	566 (9)	630 (18)
Charge for the year	24	22	370	416

At 31 December 2014	26	75	927	1,028

Net book value

At 31 December 2014	104	2,355	2,902	5,361

At 31 December 2013	74	2,377	3,080	5,531

The net book value of property, plant and equipment held on finance leases was £501,000 (2013: £882,000).

13 Inventories

	2014 £'000	2013 £'000
Raw materials Finished products	378 559	266 422

	937	688

14 Financial assets (current)

2014

£'000

2013

£'000

Available-for-sale investments

921

955

During the year the Group invested in a mixture of equity funds and sub-investment grade securities of a UK banks. At the year end the cost of these investments was £603,000 (2013: £692,000).

15 Trade and other receivables

	2014 £'000	2013 £'000

Trade receivables	5,151	3,366
Less: provision for impairment of trade receivables	(75)	(23)

Net trade receivables	5,076	3,343
Other receivables	119	195
Amounts recoverable on contracts	1,078	1,022
Prepayments and accrued income	337	263

	6,610	4,823

The fair value of trade receivables approximates to carrying value at 31 December 2014 and 2013.

The Group is exposed to credit risk with respect to trade receivables due from its customers, primarily in the transport planning & engineering and food manufacturing segments. Both segments have a relatively large number of customers, however there is a significant dependency on a small number of large customers who can and do place significant contracts, particularly in the food manufacturing segment. Provisions for bad and doubtful debts are made based on management's assessment of the risk taking into account the ageing profile, experience and circumstances. There were no significant amounts due from individual customers where the credit risk was considered by the Directors to be significantly higher than the total population.

There is no significant currency risk associated with trade receivables as the vast majority are denominated in Sterling.

The ageing analysis of trade receivables is disclosed below:

	2014 £'000	2013 £'000

Up to 3 months	5,057	3,177
3 to 6 months	64	178
6 to 12 months	27	11
Over 12 months	3	-

	5,151	3,366

16 Trade and other payables

	2014 £'000	2013 £'000
Current:
Trade payables	997	813
Other tax and social security	755	671
Other payables	655	473
Accruals	1,169	721
Deferred income	490	215

	4,066	2,893

Non-current: Trade and other payables subject to CVA (see below)	-	860

One of the Group's subsidiaries, Shire Foods Limited ("Shire"), entered into a company voluntary arrangement ("CVA") in January 2012. Under the terms of the CVA Shire were to pay £350,000 over a maximum 3 year period in satisfaction of unsecured liabilities of approximately £1,200,000.

During 2014 Shire made the final payments due under the CVA and, in so doing, was released from all remaining liabilities that were subject to the CVA. The balances released totalled £852,000 and the associated credit is shown separately in the income statement, under the caption "exceptional income".

The fair value of all other trade and other payables approximates to book value at 31 December 2014.

17 Financial instruments - risk management

The Group's principal financial instruments are:

· Trade receivables

· Cash at bank

· Current asset investments

· Loans and finance leases

· Trade and other payables

The Group is exposed through its operations to one or more of the following financial risks:

· Cash flow interest rate risk

· Foreign currency risk

· Liquidity risk

· Credit risk

· Other market price risk

Policy for managing these risks is set by the Board following recommendations from the Chief Financial & Operating Officer. Certain risks are managed centrally, while others are managed locally following guidelines communicated from the centre. The policy for each of the above risks is described in more detail below.

Interest rate risk

Due to the relatively low level of borrowings, the Directors do not have an explicit policy for managing cash flow interest rate risk. All current and recent borrowing has been on variable terms, with interest rates of between 3% and 4% above base rate, and the Group has cash reserves sufficient to repay all borrowings promptly in the event of a significant increase in market interest rates. All cash is managed centrally and subsidiary operations are not permitted to arrange borrowing independently.

The Group's investments may attract interest at fixed or variable rates, or none at all. The market price of such investments may be impacted positively or negatively by changes in underlying interest rates. It is not considered relevant to provide a sensitivity analysis on the effect of changing interest rates since at the year end, the Group's investments had the following interest profiles which contained no variable rates:

	2014 £'000	2013 £'000

No interest	-	-
Fixed interest	921	955

	921	955

Foreign currency risk

Foreign exchange risk arises when individual Group operations enter into transactions denominated in a currency other than their functional currency (sterling). The Directors monitor and review their foreign currency exposure on a regular basis; they are of the opinion that as the Group's trading exposure is limited to transactions with a small number of customers and suppliers it is not appropriate to actively hedge that element of its foreign currency exposure, nor is its exposure to foreign currency risk considered to be significant.

Liquidity risk

The Group maintains significant cash reserves and therefore does not require facilities with financial institutions to provide working capital. Surplus cash is managed centrally to maximise the returns on deposits.

Credit risk

The Group is mainly exposed to credit risk from credit sales. The Group's policy for managing and exposure to credit risk is disclosed in note 15.

Other market price risk

The Group has generated a significant amount of cash and this has been held partly as cash deposits and partly invested pursuant to the Group's investing strategy. Investments have been held in 2014 in a mixture of equity funds and sub-investment grade securities of a UK bank, which have been made having regard to the Group's need to access capital. Market price movements of these investments could materially affect the value of the Group's assets. The directors believe that the exposure to market price risk from this activity is acceptable in the Group's circumstances.

Capital management

The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade profitably in the foreseeable future. The Group also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital.

The Group manages its capital with regard to the risks inherent in the business and the sector within which it operates by monitoring its gearing ratio on a regular basis.

The Group considers its capital to include share capital, share premium, revaluation reserve and retained earnings. Net debt includes short and long-term borrowings (including lease obligations) and shares classed as financial liabilities, net of cash and cash equivalents. The Group has not made any changes to its capital management during the year. The Group is not subject to any externally imposed capital requirements.

An analysis of what the Group manages as capital is outlined below:

	2014 £'000	2013 £'000

Total debt	2,979	1,941
Less cash and cash equivalents	(12,215)	(11,280)

Net debt/(funds)	(9,236)	(9,339)

Total equity (capital)	18,999	17,583

Net debt/(funds) to capital ratio	(48.6)%	(53.1)%

18 Financial assets and liabilities - numerical disclosures

Analysis of financial assets by category:

	2014 £'000	2013 £'000
Available for sale investments	921	955
Loans and receivables Cash and cash equivalents	6,273 12,215	3,538 11,280

Total financial assets	19,409	15,773

Fair values

The Directors consider the carrying values of all financial assets and liabilities to be a reasonable approximation of their fair values. Investments held at fair value are all listed on a recognised market and hence their valuation is not subject to significant judgement or uncertainty. Such investments are therefore considered to fall under Level 1 in the IFRS 7 fair value hierarchy.

Maturity of financial assets

The maturities and denominations of financial assets at the year end, other than cash and cash equivalents, and loans and receivables (note 15 above) are as follows:

	2014 £'000	2013 £'000
Sterling
No fixed maturity	921	955

Maturity of financial liabilities

The maturity of borrowings (including finance leases) carried at amortised cost is as follows:


	2014 £'000	2013 £'000
Less than six months	2,072	819
Six months to one year One to two years Two to five years More than five years	85 103 164 555	119 175 204 624

	2,979	1,941

The above borrowings are analysed on the balance sheet as follows:

Loans and other borrowings (current) Finance leases (current)Loans and other borrowings (non-current) Finance leases (non-current)	1,999 159 821 -	817 121 946 57

	2,979	1,941

Borrowings are secured on certain assets of the Group, and interest was charged at rates of between 2.5% and 3.2% during the year.

The maturity of other financial liabilities, excluding loans and borrowings, carried at amortised cost is as follows:

	2014 £'000	2013 £'000
Less than six months Six months to one year One to two years	2,407 - -	1,957 - 860

	2,407	2,817

19 Deferred tax

Movements in deferred tax assets are outlined below:

	Accelerated tax depreciation	Other timing differences	Losses	Total
	£'000	£'000	£'000	£'000

At 1 January 2013	58	20	773	851
Derecognised on disposal of discontinued operations in 2013	(58)	(20)	(773)	(851)

At 31 December 2013 and 31 December 2014	-	-	-	-

In addition, there are unrecognised net deferred tax assets as follows:

	2014 £'000	2013 £'000

Tax losses carried forward	600	1,179
Excess of depreciation over capital allowances	7	(321)
Short term temporary differences	11	22

Net unrecognised deferred tax asset	618	880

Deferred tax assets and liabilities have been calculated using the rate of corporation tax expected to apply when the relevant temporary differences reverse. Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.

The unrecognised element of the deferred tax assets have not been recognised because there is insufficient evidence that they will be recovered.

20 Share capital

	Authorised
	2014 Number	2014 £'000	2013 Number	2013 £'000

Ordinary shares of £0.0000001 each	100,100,000	-	100,100,000	-
A shares of £0.49999995 each	50,000	25	50,000	25
B shares of £0.49999995 each	50,000	25	50,000	25
Deferred shares of £0.00000001 each	4,999,999,500,000	50	4,999,999,500,000	50


		100		100

	Issued and fully paid
	2014 Number	2014 £'000	2013 Number	2013 £'000

Ordinary shares of £0.0000001 each	6,207,074	-	6,207,074	-
Deferred shares of £0.00000001 each	4,999,994,534,696	50	4,999,994,534,696	50


		50		50

Shares issued in the year

No shares were issued in the current year.

During 2013, the last remaining 455 A shares and 455 B shares were converted to 3,708 ordinary shares and 45,499,958,388 deferred shares, in accordance with the right attaching to the A and B shares.

In addition, 3,000 ordinary shares were issued for cash consideration of £4,125 on exercise of share options.

Treasury shares

During the year the Company acquired 114,000 (2013: 559,028) of its own Ordinary shares for total consideration of £307,000 (2013: £1,616,000). This brings the total number of Ordinary shares held in treasury to 2,121,116 (2013: 1,947,116) with an aggregate nominal value of less than £1.

Rights attaching to deferred shares

The Deferred shares carry no rights to participate in the profits or assets of the Company and carry no voting rights.

21 Reserves

All movements on reserves are disclosed in the consolidated statement of changes in equity.

The following describes the nature and purpose of each reserve within owners' equity:

Reserve	Nature and purpose

Share premium	Amount subscribed for share capital in excess of nominal value

Revaluation reserve	Cumulative net unrealised gains and losses arising on the revaluation of the Group's available for sale investments

Retained earnings	Cumulative net gains and losses recognised in the consolidated income statement

22 Business combinations (2013)

The Group acquired the business and certain assets of JMP Consultants Limited (a transport planning and consultancy business) on 15 May 2013 for total cash consideration of £415,000. The fair values of assets and liabilities acquired, and resulting gain on bargain acquisition (credited to the income statement), are set out below:

	Book value £'000	Fair value adjustments £'000	Fair values £'000

Property, plant and equipment	28	(7)	21
Trade and other receivables Trade and other payables	1,191 (638)	386 (128)	1,577 (766)

Net assets acquired	581	251	832

Gain on bargain acquisition			(417)

Consideration (settled in cash)			415

A gain on bargain acquisition arose because the business was in financial distress at the time of the acquisition and because of limited visibility of its financial performance. As the acquisition was of a business and not of a separate legal entity it is not possible to reliably disclose the results of the acquired business in the period before the acquisition. The results of the acquired business after the acquisition form the results of the transport planning and engineering segment as disclosed in note 5.

23 Leases

Operating leases - lessee

The Group leases most of its properties. The terms of property leases vary, although they all tend to be tenant repairing with rent reviews every 2 to 5 years; some have break clauses. The total future values of minimum lease payments are due as follows:

	Land and buildings 2014 £'000	Other 2014 £'000	Land and buildings 2013 £'000	Other 2013 £'000

Not later than one year	127	-	66	-
Later than one year and not later than five years	670	-	699	-
Later than five years	14	-	-	-

	811	-	765	-

24 Share-based payments

The Company has operated two share-based payment schemes, an approved EMI equity-settled share-based remuneration scheme for certain employees and an unapproved equity-settled share scheme for certain management. Under the EMI scheme, the options vested on achievement of employee-specific targets subject to a compulsory 2.5 or 3 year vesting period and can be exercised for a further 7.5 or 7 years after vesting. All options issued have now either lapsed or been exercised, such that there are no options in issue as at 31 December 2014 (2013: 31,000).

Options in issue during the year are summarised below:

	Weighted average exercise price 2014	Number 2014	Weighted average exercise price 2013	Number 2013

Outstanding at beginning of the year	187.5p	31,000	183.1p	34,000
Granted during the year	-	-	-	-
Exercised during the year	-	-	137.5p	(3,000)
Lapsed during the year	(187.5)p	(31,000)	-	-

Outstanding at the end of the year	N/A	-	187.5p	31,000

All options in issue were fully vested prior to 1 January 2013, hence there is no share based payment charge in 2014 or 2013, in respect of share options.

The share based payment charge of £158,000 in the income statement for 2014 is in respect of shares issued in JMP Consultants Limited to certain management of that business. In determining the Group's share-based payment charge arising in respect of the shares issued to non-controlling interests (as set out in note 24), the Group has evaluated the enterprise value of JMP. This evaluation has considered the range of possible earnings multiples that could apply on an exit to a business such as JMP, the rights attaching to the shares issued, the proportion of the resulting equity participation and the existence of a single large shareholder with significant influence.

25 Related party transactions

Details of amounts payable to Directors are disclosed in note 4. Other than their remuneration and participation in the Group's share option schemes (note 24), there are no transactions with key members of management.

There were no other material transactions with related parties.

26 Contingent liabilities

The Group had no material contingent liabilities as at the date of these financial statements.

27 Non-controlling interests

The non-controlling interests of £1,141,000 (2013: £542,000 ) relate to the net assets attributable to the shares not held by the Group at 31 December 2014 in the following subsidiary undertakings:

Name of subsidiary undertaking	2014 £'000	2013 £'000

NMT Group Limited	75	76
JMP Consultants Limited	271	-
Shire Foods Limited	795	466

	1,141	542

Summarised financial information (before intra-group eliminations) in respect of those subsidiaries with material non-controlling interests is presented below. Comparative figures for JMP Consultants Limited are not disclosed as there was no non-controlling interest at any point during 2013.

	JMP Consultants Limited	Shire Foods Limited
	2014 £'000	2014 £'000	2013 £'000
Property, plant and equipment Current assets Non-current liabilities Current liabilities	231 4,295 - (3,444)	5,129 4,424 (822) (4,748)	5,373 2,884 (1,864) (4,061)

Net assets (equity)	1,082	3,983	2,332
Attributable to:

Group Non-controlling interests	811 271	3,188 795	1,866 466

	1,082	3,983	2,332

Revenue	11,761	12,133	8,531

Profit for the year (stated after intra-group management and interest charges)	293	1,651	117

Profit for the year attributable to non-controlling interests	73	330	23

28 Events after the balance sheet date

On 25 March 2015, the Group announced the acquisition of Impetus Automotive Limited ("IAL"). IAL's principal activity is the provision of consulting services to the automotive sector, including vehicle manufacturers, dealerships and national sales companies. The company, which has UK offices in Warwick and Cranfield, employs approximately 200 people serving clients in the UK and a number of other international markets. Further information on the IAL's activities can be found at www.impetusautomotive.com.

existing cash resources. It is expected that Volvere's shareholding in IAL will reduce through the issue of new equity to key stakeholders in due course.

Volvere has made working capital facilities available to IAL. For the 10 month period ended 31 January 2015, IAL's unaudited net revenue was £9.7 million with an adjusted loss before tax of £0.1 million. For the 12 month period ended 31 March 2014, being the period representing the last audited annual financial information, IAL reported £15.6 million of revenue and profit before tax of £1.5 million. The reported profit figure excludes any allocation of certain central overhead costs which were previously borne by IAL's parent company.

The provisional fair values of the net assets acquired are as follows:

	Book value £'000	Fair value adjustments £'000	Fair values £'000

Property, plant and equipment	182	-	182
Trade and other receivables Trade and other payables (Note (a))	2,590 (1,702)	- -	2,590 (1,702)

Net assets acquired	1,070	-	1,070

Goodwill			190

Consideration (settled in cash)			1,260

Note (a): the creditors of IAL noted above do not include debt obligations held in another Impetus group company, which Volvere settled as part of the acquisition. The consideration of £1.26 million includes a debt settlement of £1.06 million.

-ENDS-

This information is provided by RNS

The company news service from the London Stock Exchange

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