27 Jun Corporate update on Subsidiary Insolvency
(“S-Ventures” or the “Company”)
S-Ventures plc (AQSE: SVEN) (OTCQB: SVTPF), the company growing exciting brands across the natural, wellness and food-tech categories announces that on 31 March 2023, the Board determined that it was no longer commercially viable to continue supporting Lizza, a-100% subsidiary of S-Ventures. Accordingly, the Board has filed for insolvency of Lizza in the German court this week.
Lizza was acquired by S-Ventures in September 2022 for €1. Lizza was already a loss-making company at the time of acquisition.
For the 5-month period ended 28 February 2023, Lizza made a net loss of c.€1.00 million on a turnover of c.€0.60 million, representing c.6% of the Group’s consolidated revenue during the same period.
A mix of issues has affected its business and financial performance acutely, including increasing ingredient costs, labour costs and a lack of consumer demand which have led to a significant drop in sales and a huge upsurge has arisen in costs that was unforeseen. The losses are unsustainable, and the brand and costs associated with production and distribution are not commercially viable. We and the team at Lizza have exerted every effort to turn around the business. However, due to the losses and tough business environment, the Board decided that it had no alternative but to seek liquidation.
The Board is of the view that the liquidation of Lizza will not significantly impact the other businesses within S-Ventures. However, the Group intends to find alternatives for European distribution which has become ever more complex but is still a very small amount of the Group’s business (c.2%).
As a result of this liquidation, the Group will incur a write-off of approximately €1.00 million from the loans owed to it from Lizza.
For further information, please contact:
Robert Hewitt (Chief Financial Officer)
Scott Livingston (Chief Executive Officer)
+44 (0) 1932 400 224
AQSE Corporate Adviser and Broker:
VSA Capital Limited
+44 (0) 20 3005 5000