DJ Freyherr International Group PLC Half-year Report
RNS Number : 2473O
Freyherr International Group PLC
01 October 2019
FREYHERR INTERNATIONAL GROUP PLC
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.
-- Group Sales for the six months increased to GBP1.17m; -- Gross profit increased to GBP550,000; -- Group on target to exceed GBP2m sales in the current financial year;
-- 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;
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).
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 12 months to 30 June 2019 31 December 2018 GBP GBP 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 GBP 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 GBP0.01 each for GBP0.03 per share in exchange for a 99% holding in Freyherr d.o.o., and purchased the remaining 1% subsequently for consideration of GBP870. 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.)
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DJ Freyherr International Group PLC Half-year Report -2-
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 EUR733,740 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 EUR1.584, 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 EUR375,000 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 EUR400,000 by the issue of 252,525 new fully paid Ordinary shares of GBP0.01 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 GBP0.01 each were issued for cash at GBP1.70 each.
The Directors of the Company accept responsibility for the contents of this announcement.
For further information please contact:
FREYHERR INTERNATIONAL GROUP PLC
Toma Frelih 00 386 (41) 444 845
Freyherr International Group plc
No.1 London Bridge
London SE1 9BG
CITY & MERCHANT LIMITED
David Papworth 0207 101 7676
Level 17 Dashwood House firstname.lastname@example.org
69 Old Broad Street
HELFORD CAPITAL PARTNERS LLP
Tony Burke 020 7839 5081
97 Jermyn Street
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;
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