City snapshot: British Honey Co calls in administrators

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Listed producer of honey and spirits British Honey Co has announced its intention to appoint administrators following the failure to raise critical funds. 

The UK-based producer of spirits, honey and jams said it had resolved to file notice of its intention to appoint administrators, with a view to appointing partners of FRP Advisory Trading as administrators.

Therefore it has requested a suspension of trading in the company’s ordinary shares on Aquis with effect from 8am today.

The company launched a formal sales process on 13 October to explore the strategic and financing options.

On 14 December 2022 it announced it had secured funding in the form of a loan for £750,000, to support near-term working capital requirements, which concluded the strategic review.

However, at that time the board made clear that further funding would need to be secured early this year, which the company has attempted to identify since this date. It said this additional funding had proved “extremely challenging” with no offer of funding support being forthcoming to date.

Significant costs savings have been made in the business in order to conserve cash.

Notwithstanding these cost savings, BHC will require further funding by end of March 2023, based on current management forecasts, leading to the administration.

A further announcement will be made once administrators are formally appointed by the courts.

Morning update

Ahead of its AGM this morning, agricultural specialist Wynnstay has said trading in the first four months of the new financial year has been broadly in line with management expectations.

The group is now entering the most important period in its first half, with activity seasonally high as farmers purchase inputs for their livestock and arable operations.

As expected, the group’s fertiliser blending activity at Glasson has had to contend with the reversal of the spike in urea and ammonium nitrate prices, which are now close to the pre-exceptional levels of late 2021. While this reversal has affected margins, Glasson has managed the volatile period well and is now replacing its fertiliser raw materials at these more sustainable levels.

Cost management remains a factor for farmers and while input pricing pressures are decreasing, some farmgate prices are also reducing. Wynnstay said its balanced business model would help the group to mitigate the expected variations in performance across the farming sectors.

Tamar Milling, the manufacturer and supplier of blended feed products based in Cornwall and acquired at the start of the new financial year, is integrating well. The business has made a very encouraging first contribution to results and is increasing the group’s profile in the south-west of England.

Despite current uncertainties in the sector, the group said it remained well placed to deliver a good outcome for the year and make further progress with its strategic plans, which will strengthen its position in the sector.

Palm oil producer MP Evans has announced recored gross profits in 2022, driven by soaring palm oil price.

The group achieved a gross profit of $109.2m, higher than the $103.6m recorded in 2021, representing an all-time record.

Average palm oil prices were particularly strong once again in 2022 and these, combined with an increase in production, offset some inflationary cost pressures, most notable in the fertiliser inputs required to maintain healthy and productive palms across its estates.

Average mill-gate price for group crude palm oil up by 5% to $854 per tonne.

Earnings per share were 108.0p, a little lower than the 115.6p in 2021, which benefited from the one-off profit of $13.9 million from the sale of non-core land in Malaysia.

Operating profit was down by 11% to $101.6m.

Total crop processed up 11% to 1.5 million tonnes, with 100% of group and scheme-smallholder crop grown to sustainability standards and 64% of total output currently certified sustainable, up from 55% in 2021.

Peter Hadsley-Chaplin, executive chairman of MP Evans, said: “The group has produced another set of excellent operational and financial results. Crop and production have increased once again and, as we celebrate our 150-year anniversary, we have also reached the milestone of processing 1.5 million tonnes of fresh fruit bunches. The group remains focused on long-term and sustainable growth, and has both acquired further planted hectarage and started production at another group palm-oil mill since the end of the year.

“Profit and cash generation have remained strong, the group has eliminated net debt, and now has net funds in place to support continued investment and shareholder returns. The board is recommending a final dividend of 30p per share, bringing total dividends for the year to 42.5p per share, up more than 20% from the 35p normal dividends paid in respect of the previous year, and a further step forward in the group’s long-standing progressive dividend policy.”

Pernod Ricard USA has announced it has agreed to acquire a majority stake in Skrewball, the world’s first super-premium peanut butter flavoured American whiskey.

Founded in 2018, by Steven and Brittany Yeng, Skrewball has established itself as a consumer favourite in the flavoured whiskey category, with the brand surpassing the symbolic milestone of half-a-million nine-litre cases sold in 2022.

The partnership adds a complementary brand to Pernod Ricard’s comprehensive portfolio of spirits and wine brands and a perfect opportunity to continue building on its long-standing consumer centric and premiumisation strategy.

It comes on the back of the successful launch of Jameson Orange into the flavoured whiskey category last year.

Pernod said flavoured whiskeys appeal to a wide range of consumers, going beyond traditional whiskey lovers. It remains one of the fastest-growing spirits categories in the US, representing a quarter of the overall whiskey sales in the world-leading market.

“Skrewball has proven its uniqueness and success with a large audience, so we are delighted to have this brand as part of our portfolio” said Ann Mukherjee, chairman and CEO of Pernod Ricard North America.

“With a product that brings an iconic American flavour to the spirits world, Steven and Brittany have found a true point of difference in the category. We are looking forward to unlocking the magic of this brand and a successful journey ahead.”

“It’s overwhelming to see how far we’ve come with a ‘screwball’ idea and a dream,” added Steven and Brittany Yeng. “We are very excited to see what the future holds for this brand under Pernod Ricard. The engine behind the company – its strategy, global reach and brand building expertise – will greatly support in taking the brand to new heights and we are excited to see it soar.”

Property investor Supermarket Income REIT has announced it has refinanced its existing loan facilities with Bayerische Landesbank with a new three-year £86.9m term loan.

This secured, interest-only, loan replaces the three existing tranches with BLB totalling £86.9m. The new facility matures in March 2026 and is priced at a margin of 1.65% above SONIA which has been fully hedged for the term of the facility using an interest rate swap to a fixed rate of 4.29%.

The cost of the hedging instrument for the new facility was £2.8m, which was more than fully covered from the £3.3m of proceeds received from the termination of the previous hedging instrument in place for the existing facilities.

Ben Green, Director of Atrato Capital, the investment adviser to Supermarket Income REIT, said:  “We are pleased to continue our relationship with Bayerische Landesbank which has been a key debt funding partner to the company. Refinancing all of the existing facilities with BLB has allowed the company to extend the term to three years and achieve a competitive cost of finance.” 

On the markets this morning, the FTSE 100 has recovered another 1.4% of its losses from the fallout of banking concerns, opening at 7,503pts.

Risers include THG, up 3.4% to 56p, Just Eat Takeaway.com, up 3.1% to 1,589.5p and WH Smith, up 2.8% to 1,466.5p.

Fallers include Wynnstay, down 3% to 460p, Kerry Group, down 1.7% to €90.50 and Science in Sport, down 1.5% to 13.1p.

Yesterday in the City

The FTSE 100 shook off banking worries yesterday, ending the day back up 0.9% to 7,403.85pts after dropping in early trading.

UK food and drink risers included Associated British Foods, up 1.4% to 1,927.5p, B&M European Value Retail, up 1.8% to 466.3p, and Marks & Spencer, up 1.6% to 143.8p, while fallers included Finsbury Food, Virgin Wines UK and AG Barr, down 2.9% to 93.2p, 2.2% to 44p and 1.3% to 539p respectively.