Preliminary Results

27 September 2013

Produce Investments plc

Final results for 52 weeks ended 29 June 2013

Produce Investments plc ("Produce Investments" or the "Group") (AIM:PIL), a leading operator in the fresh potato sector with vertically integrated activities covering seed production, own growing, processing and packing and supply to the major retailers, is pleased to announce its results for the 52 weeks ended 29 June 2013.

(1) Excluding fair value adjustment on biological assets.

Operational Highlights

· Strong performance despite challenging conditions

· Wet weather in 2012 impacted UK crop, resulting in supply shortages and higher prices

· Increased like-for-like turnover as a result of the high priced season and necessity to cover additional procurement costs

· Inclusion of Rowe Farming from 2 October 2012, with integration on plan and trading ahead of expectations

· Own brand - Greenvale Farm Fresh continues to perform well

· Improvement in earnings per share

· Increase in dividend per share

For further information contact:

Note to Editors

The Group is a vertically integrated company supplying blue chip customers such as Tesco, Sainsbury, Bakkavor and Marks & Spencer with fresh and processed potatoes and daffodils.

Website: www.produceinvestments.co.uk

CHAIRMAN'S STATEMENT

I am very pleased to report to shareholders that the Group has performed well in the year ended 29 June 2013, in what can only be described as very challenging conditions. The well documented adverse wet weather throughout most parts of the UK in 2012 had a significant impact on the potato crop, resulting in the lowest yielding and poorest quality crop since 1976 at 4.5m tonnes. As a consequence of the low yielding and high waste levels in the crop, free buy prices for potatoes have been exceptionally high throughout the year. This has placed considerable strain on procurement but the management team have worked well to secure both additional imported tonnage and UK crop in order to fulfil and meet customer requirements throughout the year.

The inevitable delay in securing the necessary price increases to cover the additional procurement costs resulted in a loss in the first half of the year. However the Group continued to push for increased selling prices across the whole customer base and I am pleased to report a significant and necessary improvement in the results for the second half of the year.

The results for the year include nine months from Rowe Farming Limited which was acquired on the 2nd October 2012. I am pleased to report that integration plans are on schedule and that there has been a positive reaction to the acquisition from our customers and suppliers. Results for the nine months trading were ahead of expectations.

As a result of the high priced season and the additional revenue from Rowe Farming, total turnover for the Group increased by 33.9% to £206.0m. Operating profit before fair value adjustments was £7.53m (2012: £7.00m).

Looking ahead, due to the late spring, estimates for the current year's crop would indicate average yields at best, but with an improvement in quality compared to last season. As a result of this and the need to provide the growers with a commensurate and sustainable return, procurement prices are likely to remain strong. The Group's procurement model which fixes a large element of crop in advance of the season will partly mitigate any increase in the free buy price of potatoes.

The Directors are confident about the Group's prospects for the coming year and are pleased to announce an increase in the final dividend to 3.64 pence per share (2012:1.82 pence), which combined with the interim dividend of 1.82 pence per share (2012:1.82 pence) results in a total dividend for the year of 5.46 pence per share (2012:3.64 pence per share). The final dividend will be paid on 30 October 2013 to ordinary shareholders on the register at close of business on 11 October 2013.

The acquisition of Rowe Farming takes the Company into new sectors and we are both excited and confident about the future earnings potential. This underpins our long term strategy of growing the business through acquisition and diversifying its earnings profile, both in terms of its customer base and its product offering. The Directors will continue to seek similarly attractive acquisitions and remain confident in our ability to grow the business substantially over the next few years.

Given the difficult and very challenging season I would especially like to express my sincere thanks to all employees of the Group who have helped to contribute to these excellent results for the year.

Barrie Clapham

Non-Executive Chairman

The growing season of 2012 was one of the worst ever recorded with many areas of the UK recording record rainfall figures. The impact these conditions had on the potato crop was extreme and as a result the UK potato crop was the lowest yielding and poorest quality for nearly 40 years. The total crop was approximately 4.5m tonnes against an estimated UK requirement of c5.7m tonnes. This shortage of crop inflated the raw material market both quickly and significantly, in the UK and overseas, and the Group had to import greater quantities of crop to fulfil its sales obligations. This resulted in additional procurement costs which impacted results in the year, particularly in the first half, due to the inevitable delay in achieving increased selling prices. Turnover in the year increased by £52.1m, from £153.9m to £206.0m, and I am pleased to report a significant and necessary improvement in performance for the second half year. With the improvement in the underlying profit in the second half year, the full year operating profit was £7.53m (2012:£7.00m).

Earnings per share amounted to 28.60 pence per share, a 15.6% gain on the prior year (24.75 pence).

In October 2012 the Group acquired Rowe Farming Limited, which grows and supplies daffodils and daffodil bulbs for both the domestic and export markets, as well as growing and supplying specialist new and salad potatoes from its base in Cornwall. I am pleased to report that the integration has gone according to plan with a positive reaction from our customers and suppliers. Current trading is ahead of our initial expectations and we remain confident about the future prospects of the business.

Greenvale Farm Fresh, our first branded potato, which was launched more than one year ago continues to gain momentum. The brand brings together a unique packaging concept and great tasting variety, which attracts new customers into the category. We have successfully gained retail distribution and we are committed and excited about building this unique branded proposition in the years ahead.

Operations remain cash generative, allowing for short term volatility in necessary stock holdings, and at the year end total net debt stood at £17.3m compared with £4.3m last year, with the increase being due to the acquisition of Rowe Farming along with the higher stock values at the year end as a consequence of the high priced season. Net debt has improved from the half year where it amounted to £26.0m.

As the Chairman noted, the late spring in the current season will most likely impact the level of crop production in the UK. The area planted in the UK remains at a similar level to last year but crop development has remained slow due to the late spring in the UK and across Europe. The recent improvement in the weather would indicate a better quality crop although it is difficult to predict anything other than average yields at best. As a consequence we would expect prices of potatoes to remain strong for the foreseeable future. The Group's procurement model which fixes an element of crop in advance of the season will partly mitigate against high free buy prices.

The Board remains confident that Produce Investments is well positioned to both grow organically and to take advantage of any acquisition opportunities.

Angus Armstrong

Chief Executive Officer

CONSOLIDATED INCOME STATEMENT

For the 52 weeks ended 29 June 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 52 weeks ended 29 June 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 29 June 2013

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the 52 weeks ended 29 June 2013

CONSOLIDATED CASH FLOW STATEMENT

For the 52 weeks ended 29 June 2013

Notes

1. Statement of compliance

The Group's financial statement have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as they apply to the financial statements of the Group for the period ended 29 June 2013 and applied in accordance with the Companies Act 2006. The financial information set out above does not constitute the Company's statutory report and accounts for the years ended 29 June 2013 or the year ended 30 June 2012, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the registrar of companies, and those for 2013 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The annual report and accounts for the year ended 29 June 2013 will be posted to shareholders on 1 October 2013. The results for the year ended 29 June 2013 were approved by the Board of Directors on 25 September 2013 and are audited.

The information contained in this preliminary announcement has been approved by the Board of Directors.

2. Basis of preparation

The financial statements have been prepared on a historical cost basis, except for derivative financial instruments and biological assets, which have both been measured at fair value in line with applicable accounting standards.

3. Earnings Per Share

Adjusted earnings per share is included to enable earnings to be produced on a directly comparable basis. To achieve this comparison, the operating profit for the 52 weeks to 29 June 2013 is reflected as if the fair value adjustment had not been included in the income statement. This decreased underlying profit by £965k, being the fair value adjustment in relation to potato stocks for Rowe Farming at the year end. An underlying effective tax rate of 19.2% has then been applied to the adjusted profit.

4. Report distribution

Copies of the annual report and financial statements will be sent to shareholders shortly and will be available for a period of one month to the public at the offices of Produce Investments plc, Floods Ferry, Floods Ferry Road, Doddington, March, Cambridge, PE15 OUW, and at the Company's website.