Freyherr Intnl Group - Half-year Report
RNS Number : 2473O
Freyherr International Group PLC
01 October 2019
 

 FREYHERR INTERNATIONAL GROUP PLC

INTERIM RESULTS

for the period ending 30 June 2019

 

Freyherr International Group plc ("Freyherr International" or "the Company"), the NEX Growth Market medicinal cannabis and CBD company is pleased to announce its interim results for the six months ending 30 June 2019.

The period being reported on has been a busy half year for the Company as it consolidated its operations into the current trading group as follows:

·      Freyherr d.o.o. acquired all the issued share capital of Patron d.o.o. on 6 February 2019;

·      Freyherr International acquired all the issued share capital of Freyherr d.o.o. on 20 February 2019;

·    Freyherr d.o.o. acquired the remaining 30% minority interest in Freyherr Pharma on 9 April 2019 making it a wholly owned subsidiary;

In addition to the above transactions the Company was busy preparing for its admission to trading on the NEX Exchange Growth Market, which it achieved on 13 August. Despite these demands on management time and Company resources, the Group has traded strongly during the period.

Financial highlights

·      Group Sales for the six months increased to £1.17m;

·      Gross profit increased to £550,000;

·      Group on target to exceed £2m sales in the current financial year;

Operational highlights

·      Application to upgrade the current GMP certificate held by Freyherr Pharma initiated;

·      Development of Freyherr own branded products continued to complement white label production of homeopathic products at Freyherr Pharma;

·      Anticipated release of a further range of new Freyherr branded products to be launched in Q4 2019;

Chairman's Statement

I'm delighted with the progress the Group has made since the beginning of the year and all companies in the group continue to improve performance. Our focus is on the research, development and production of high-quality medicinal cannabis and CBD products. Our Slovenian pharmaceutical facility has GMP (good manufacturing practice) and GDP (good distribution practice) certifications for the production of homeopathic products and Freyherr has started the process to extend these certificates to cannabis based medicinal products in 2020.

Freyherr's primary goal in the development of its products is to extract, separate and purify cannabinoids and other pharmacologically active components from cannabis plants. The extracts are formulated into appropriate dosage forms or sold in bulk. The Company is focused on cannabinoid research and development from plant cultivation to end product, including improving extraction, production, and the supply of cannabinoid products to the medicinal, cosmetics, and edibles sectors. Freyherr's experience and industry contacts mean that it is able to source or produce individual components for production of the highest quality products in the shortest possible time.

The Company has invested in developing its own compliance, quality assurance requirements and operating procedures based on extensive in-house research, thus ensuring all elements of production adhere to industry leading quality standards. This includes the design planning and execution of the refurbishment of a large hybrid glasshouse facility upgrade in North Macedonia, where Freyherr's knowledge and experience has enabled the successful growth and harvest of medical cannabis flower.

Current main revenue streams are the production of food grade products for customers around the world. The largest customers at the moment are based in Slovenia, Austria, Spain, UK, Ireland and the Netherlands. Freyherr is also expanding into new worldwide markets, including Brazil, New Zealand, Australia and South Africa. Freyherr products are already sold under the Freyherr brand, in markets where they can be registered as medicinal products, and are as such sold in 700+ pharmacies in North Macedonia, with an aggressive plan to expand to other markets.

Growth in the remainder of 2019 and in 2020 will be accelerated by the expansion of the Freyherr product range. In addition to selling the current Freyherr medicinal products and white label products, the range will be broadened with the launch of a range of branded products in the cosmetics, food and medicinal sectors.

All new products will be offered in existing and emerging markets, making use of established distribution channels and existing partners and offering all permissible products in each market in accordance with local legislation. Freyherr is introducing 3 cosmetic products, 6 food grade products and 2 medical (GMP) products - all under the Freyherr brand.

The anticipated upgrade of Freyherr Pharma's current GMP certification of our pharmaceutical facility will additionally allow the sale of medical cannabis APIs (Active Pharmaceutical Ingredients).

Tony Burke

Chairman

 

The following information has not been reviewed by the Company's auditor.

               

Unaudited Pro Forma Consolidated Income Statement

for the 6 month period ending 30 June 2019 (see Notes)

 

 

 

 6 months to

30 June 2019

12 months to

31 December 2018

 

£

 £

 

 

 

Sales

1,167,074

1,322,320

Cost of sales

617,399

746,361

 

                 

                 

Gross profit

549,675

575,959

 

 

 

Distribution costs

16,695

15,100

Administrative expenses

471,563

490,841

 

 

 

Other operating income

340

3,311

 

                 

                 

Operating profit

61,757

73,329

 

 

 

Finance costs (net)

58,435

8,563

 

 

 

Profit before tax

3,322

64,766

 

 

 

Taxation

-  

9,503

 

                 

                 

Profit for the period

       3,322

    55,263

 

 

 

 

 

 

Unaudited consolidated statement of financial position

 

 

as at 30 June 2019

 

 

£

 

 

NON-CURRENT ASSETS

 

Intangible Assets

628,889

Fixed Assets

1,220,467

Investments

179,310

Long-term operating receivables

      59,164

TOTAL NON-CURRENT ASSETS

2,087,830

 

 

CURRENT ASSETS

 

Inventories

861,681

Trade and other receivables

813,083

Cash and cash Equivalents

15,675

Short term investments, including given loans

689,591

Short-term deferred costs and accrued revenue

    180,666

TOTAL CURRENT ASSETS

2,560,696

 

 

NON CURRENT LIABILITIES

 

Provisions

4,707

Loans and borrowings

302,223

Long-term payables

  45,499

TOTAL NON-CURRENT LIABILITIES

352,429

 

 

CURRENT LIABILITIES

 

Trade and other payables

1,231,222

Loans and borrowings

1,267,242

Short-term accrued costs and deferred revenue

        9,025

TOTAL CURRENT LIABILITIES

2,507,489

 

 

NET ASSETS

1,788,608

 

 

Share capital

252,525

Share premium

837,779

Merger Reserve

500,000

Profit and loss account

3,322

Other reserves

    194,982

 

1,788,949

 

 

 

 

NOTES TO THE UNAUDITED AND CONDENSED CONSOLIDATED INTERIM ACCOUNTS

FOR THE SIX MONTHS ENDED 30 JUNE 2019

These interim statements have been prepared on a basis consistent with International Financial Reporting Standards (IFRS). They do not contain all of the information required for full financial statements.  These interim financial statements do not constitute statutory accounts within the meaning of the Companies Act. 

The figures above have not been reviewed by the company's auditors, Moore Kingston Smith LLP.

1. Basis of preparation

The group came into being on 20 February 2019 following the transaction set out in 2(i) below. The 6 month period and 12 month comparative period financials are unaudited pro forma Consolidated Income Statements of the Group for the year to 31 December 2018 and for the six months to 30 June 2019 (the "Pro Forma Financial Information"). The Pro Forma Financial Information has been prepared for illustrative purposes only and includes the results of the group as if it had existed throughout 2018 and the first six months of 2019. Because of its nature, the Pro Forma Financial Information addresses a hypothetical situation and, therefore, does not represent the Group's actual financial position.

 

2. Significant events during the period

i.             Acquisition of Freyherr d.o.o.

On 20 February 2019, the company acquired 100 per cent of the issued share capital of Freyherr d.o.o., a company incorporated and registered in Slovenia. This occurred through a share for share exchange whereby the company issued 24,999,989 new ordinary shares of £0.01 each for £0.03 per share in exchange for a 99% holding in Freyherr d.o.o., and purchased the remaining 1% subsequently for consideration of £870. This combination has been merger accounted, resulting in the merger reserve and other reserve.

 

ii.            Acquisition of minority interest of Freyherr Pharma d.o.o. (formerly INAM d.o.o.)

On 9 April 2019, Freyherr d.o.o., a wholly owned subsidiary of the company, entered into a share purchase agreement to purchase the remaining 30 per cent. minority interest of Freyherr Pharma d.o.o., a company incorporated and registered in Slovenia, and satisfaction of a loan from Olium d.o.o.. The consideration was payable on admission of the Ordinary shares of Freyherr International Group plc to trading on the NEX Exchange Growth Market and has been satisfied by:

a)        the issue of 397,799 new Ordinary shares in the Company being the number of shares which equals the sum of €733,740 divided by the price per Ordinary share as at admission;

b)        the grant of share options in respect of 236,743 Ordinary shares at an exercise price per share equal to €1.584, subject to certain vesting terms, and;

c)          the grant of share options in respect of 203,307 Ordinary shares being the number of Ordinary shares as shall be equal to the sum of €375,000 divided by the price per Ordinary share as at admission, subject to certain vesting terms.

The share options are also subject to certain terms regarding the continuous service of key personnel. 

 

iii.           Loan conversion. 

On 10 April 2019, Freyherr d.o.o., a wholly owned subsidiary of the company, converted a loan of €400,000 by the issue of 252,525 new fully paid Ordinary shares of £0.01 each in the capital of Freyherr International Group plc.

 

 

3. Events after the balance sheet date

 

On 12 August 2019, immediately prior to admission to NEX Growth Market on 13 August, 511,363 Ordinary shares of £0.01 each were issued for cash at £1.70 each.

 

 

 

               

The Directors of the Company accept responsibility for the contents of this announcement.

For further information please contact:

FREYHERR INTERNATIONAL GROUP PLC

Tomaž Frelih                                                                                                                                00 386 (41) 444 845

Freyherr International Group plc

No.1 London Bridge

London SE1 9BG

CITY & MERCHANT LIMITED

Corporate Advisor

David Papworth                                                                                                                                   0207 101 7676

Level 17 Dashwood House                                                                                       info@cityandmerchant.co.uk

69 Old Broad Street

London

EC2M 1QS

HELFORD CAPITAL PARTNERS LLP

Investor Relations

Tony Burke                                                                                                                                             020 7839 5081

97 Jermyn Street

London

SW1Y 6JE

 

 

 

 

Notes for Editors:

Freyherr International Group plc is the UK parent company of a group engaged in the production and sale of medicinal cannabis, cannabis cultivation and the production of cannabis dosing and dispensing packaging. Operations are centred in Slovenia and the Group principally operates within the EU.

The Group currently consists of 3 operating companies:

Freyherr d.o.o. has expertise in the cultivation and harvesting of cannabis as well as the formulation, marketing and distribution of cannabis and cannabis derived concentrates and extracts. It is currently growing cannabis in Slovenia and has invested in various cannabis production facilities in other jurisdictions.es for Editir

Patron d.o.o. is the dosing and dispensing arm which has been trading since 2015 it markets products suitable for dispensing concentrates and extracts of all sorts of nutritional and pharmaceutical products.  The company also offers Cannabinoid analysis to identify the THC, CBD, or CBN levels in a given extract, concentrate or plant;

Freyherr Pharma d.o.o. is the analytics and pharmaceutical arm of the Group and holds an EU GMP certificate. It operates from its own certified building and manufactures CBD products for the Group and produces white label CBD products supplying them to various EU countries;

 


This information is provided by RNS, the news service of the . RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
NEXKMGFLFGGGLZZ ]]>