This story was originally intended to be published on
3/6/2012.
TIDMTOT
RNS Number : 7349Y
Total Produce Plc
06 March 2012
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011
TOTAL PRODUCE INCREASES 2011 EARNINGS BY 5.8%
-- Revenue at EUR2.53 billion (i) down 2.8% on prior year
-- Profit before tax of EUR34.4m is up 2.3% on prior year
-- Adjusted EPS (ii) up 5.8% to 7.24 cent per share
-- Adjusted EBITDA (iii) down 4.2% to EUR59.7m
-- Final dividend of 1.35 cent; total 2011 dividend of 1.89
cent up 6.0%
(i), (ii) as defined overleaf
and (iii)
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce has delivered a solid performance in 2011 with
a 5.8% increase in adjusted earnings per share to 7.24 cent per
share. The Group has performed satisfactorily despite challenging
conditions in certain markets due to the prolonged impact of
the EHEC scare in May 2011.
The Group was active in concluding a number of new acquisitions
primarily in the second half of the year for a total investment
of almost EUR20m including increasing its shareholding in Capespan
Group Limited, the leading South African fresh produce company.
The Group is also pleased to propose an increase of 8.6% in its
final dividend to 1.35 cent per share. This brings the full year
dividend for 2011 to 1.89 cent per share, representing an increase
of 6% on 2010. With the continued benefit of a good geographic
spread of activities across Europe and the full year impact of
acquisitions completed in second half of 2011, the Group is targeting
adjusted EPS for 2012 in the range of 7.0 to 8.0 cent per share".
6 March 2012
Any forward-looking statements made in this press release have
been made in good faith based on the information available as
of the date of this press release and are not guarantees of future
performance. Actual results or developments may differ materially
from the expectations expressed or implied in these statements,
and the company undertakes no obligation to update any such statements
whether as a result of new information, future events, or otherwise.
Total Produce's Annual Report contains and identifies important
factors that could cause these developments or the company's
actual results to differ materially from those expressed or implied
in these forward-looking statements.
For further information, please contact:
Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030
TOTAL PRODUCE PLC PRELIMINARY RESULTS FOR THE
YEAR ENDED 31 DECEMBER 2011
2011 2010
EUR'million EUR'million % change
Revenue, including share of joint
ventures and associates 2,527 2,600 -2.8%
Group revenue 2,284 2,343 -2.5%
Adjusted EBITDA (iii) 59.7 62.4 * -4.2%
Adjusted EBITA (iii) 45.0 47.8 -6.0%
Operating profit 39.1 37.0 +5.6%
Profit before tax 34.4 33.6 +2.3%
Euro Euro % change
cent cent
Adjusted earnings per share (ii) 7.24 6.84 +5.8%
Basic and diluted earnings per share 7.11 5.25 +35.4%
Total dividend per share 1.89 1.783 +6.0%
(i) includes the Group's share of revenue of joint ventures and
associates
(ii) excludes exceptional items, acquisition related costs, amortisation
of intangible assets and related tax
(iii) excludes exceptional items, acquisition related costs and
amortisation of intangible assets
* 2010 re-presented to treat the Group's share of joint ventures'
and associates' depreciation within the adjusted EBITDA calculation
Summary Results
Total Produce (the 'Group') announces adjusted earnings per share
(1) growth of 5.8% to 7.24 cent for the year ended 31 December
2011.
Revenue of EUR2.53 billion represents a 2.8% decrease on the prior
year. Adjusted EBITA (2) for the year was EUR45.0m, which represented
a 6.0% decrease on the EUR47.8m recorded in 2010. The result for
the year was satisfactory allowing for the impact of the unusual
trading conditions for the Group's Fresh Produce division particularly
in Continental and Eastern Europe from late May onwards due to
the e-coli ('EHEC') scare. The effects lasted longer than anticipated
with the market slow to recover. The Group has benefited from currency
translation and the positive contribution of acquisitions made
in the second half of the year.
Exceptional items in the year amounted to a net gain of EUR2.7m
before tax (2010: net charge of EUR2.3m), including gains on the
disposal of a joint venture, pension curtailments and revaluation
gains reclassified to the income statement arising on the reclassification
of an available-for-sale financial asset to an associate investment.
These gains were partly offset by property revaluation charges.
An analysis of these items is set out in Note 5 of the accompanying
financial information.
Operating profit for 2011 after exceptional items amounted to EUR39.1m
an increase of 5.6% on 2010, with profit before tax increasing
2.3% to EUR34.4m.
The Group invested almost EUR20m mainly in the second half of the
year in additional business interests. The Group has increased
its effective shareholding in Capespan Group Limited ("Capespan
South Africa"), the leading South African fresh produce company
from 15.6% to 20.2% and accordingly has equity accounted for the
investment in this company as an associate from July 2011 onwards.
In its Fresh Produce Division, the Group has invested in two new
joint venture interests along with a number of bolt-on acquisitions.
In the Consumer Goods and Healthfoods Distribution division, two
new business interests were acquired.
In May 2011, the Group sold its 40% joint venture investment in
a South African farm investment company to Capespan South Africa
for cash proceeds of EUR4.2m (refer to Note 5 of the accompanying
financial information).
Net debt at 31 December 2011 was EUR75.6m (2010: EUR47.9m) and
represents 1.3 times adjusted EBITDA.
The Board recommends an increase of 8.6% in the final dividend
to 1.35 cent per share which together with the interim dividend
of 0.54 cent per share, brings the total dividend to 1.89 cent
per share, an increase of 6.0% on 2010.
Operating Review
The table below details a segmental breakdown of the Group's revenue
and adjusted EBITA for the year. Segment performance is evaluated
based on revenue and adjusted EBITA.
2011 2010
Segmental Adjusted Segmental Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Eurozone Fresh Produce 1,205,234 19,826 1,282,367 27,947
Scandinavian Fresh Produce 595,340 16,441 602,360 16,384
UK Fresh Produce 485,414 5,871 508,261 3,960
Other Fresh Produce 170,989 4,489 158,979 3,256
Inter-segment revenue (29,729) - (33,416) -
---------------------- --------- ---------------------- ----------------------
Total Fresh Produce 2,427,248 46,627 2,518,551 51,547
Consumer Goods and Healthfoods
Distribution 99,329 1,213 81,909 (598)*
Unallocated costs - (2,881) - (3,118)
Third party revenue and
adjusted EBITA 2,526,577 44,959 2,600,460 47,831
---------------------- --------- ---------------------- ----------------------
* Includes rationalisation costs of EUR0.5m.
Fresh Produce Division
The Group's Fresh Produce division is involved in the growing,
sourcing, transporting, importing, packaging, marketing and distribution
of hundreds of lines of fresh fruits, vegetables and flowers.
This division is split into four distinct reporting segments.
Revenue in this division decreased by 3.6% in 2011 to EUR2,427m
with low single digit percentage decreases in both volumes and
average prices. Adjusted EBITA in the division is down 9.5% from
EUR51.5m to EUR46.6m. Net adjusted EBITA margins of 1.92% were
down from prior year margins of 2.05%.
The results for the year were impacted by difficult trading conditions
particularly in Continental and Eastern Europe. This was due primarily
to the EHEC scare which had a negative impact on the European
fresh produce industry from late May onwards. The German authorities
incorrectly implicated certain salad lines as the source of EHEC
causing a significant adverse effect on both consumption and prices
of salads and fresh produce in general. The effects lasted longer
than anticipated with the market slow to recover. This had a negative
impact on the Group's fresh produce business and a lowering of
general average prices.
On a positive note, the additional investment in the second half
of the year in Capespan South Africa and the resulting treatment
of this investment as an associate company from July 2011 onwards
positively contributed to the result of the Fresh Produce division.
In addition, the reported results in 2011 benefited from the strength
of the average Swedish Krona and Czech Koruna exchange rates against
the Euro, although this was partly offset by the weaker average
Sterling rate.
The overall outturn of the Fresh Produce division was satisfactory
having regard to the exceptional trading conditions in the year
with the Group benefiting from its broad base of operations.
Eurozone Fresh Produce
Revenue in this division decreased by 6% to EUR1,205m mainly due
to volumes decreases. Strong average price increases in the first
half of the year were offset by a sharp decrease in average prices
in the second half of the year in Continental Europe. Adjusted
EBITA decreased EUR8.1m to EUR19.8m reflected in the lowering
of margin from 2.18% to 1.64%. The performance of the division
in 2011 was impacted by difficult trading conditions particularly
due to the aforementioned EHEC issue. By comparison, the results
in 2010 benefited from the particularly strong market conditions
for salad lines in the Netherlands.
Scandinavian Fresh Produce
Reported revenue in the Scandinavian division decreased by just
over 1% to EUR595m. The reported revenue was assisted by the strengthening
of the Swedish Krona against the Euro in 2011 but was offset by
low single digit percentage decreases in both volume and average
prices. Adjusted EBITA is flat year on year with the reorganisational
costs incurred in completing the move to the new state-of-the-art
distribution facility in Sweden offset to a large extent by the
benefit of currency translation. Net adjusted EBITA margins of
2.76% are slightly up on the margins of 2.72% in 2010.
UK Fresh Produce
Reported revenue in the UK Division decreased by 4.5% to EUR485m.
The reported results have been adversely impacted by the weakening
of the average Sterling rate in the year. Volumes were in line
with prior year with a marginal decrease in average prices. Adjusted
EBITA for the division is up EUR1.9m to EUR5.9m in 2011 due to
improved trading conditions and lower rationalisation costs year-on-year.
Trading in 2010 was challenging with unusual and heavy snowfalls
affecting trading conditions. As a result net EBITA margins of
1.2% are up from the margin of 0.8% in 2010.
Other Fresh Produce
This division comprises a number of fresh produce businesses in
Eastern Europe, India and South Africa. The Group has increased
its shareholding in Capespan South Africa from a 15.6% interest
to 20.2% and accordingly has accounted for its investment as an
associate from July 2011 onwards recording its share of revenue
and after tax profits. In addition, the result for the year includes
the contribution of the South African farm activities up to the
date of its disposal in May 2011.
Revenue in this division has increased by 8% to EUR171m with adjusted
EBITA increasing EUR1.2m to EUR4.5m mainly due to the first time
contribution of Capespan South Africa, partly offset by a decrease
in revenue in Eastern Europe due to decreased volumes and prices.
The temporary closure of the Russian borders to imports from Europe
as a consequence of EHEC exasperated the oversupply and lowering
of average prices of fresh produce in Eastern Europe.
Consumer Goods and Healthfoods Distribution Division
The Consumer Goods and Healthfoods division is a full service
distribution and marketing partner to the grocery, pharmacy, optical,
healthfoods (including vitamins, minerals and supplements) and
other sectors. This segment distributes to retail and wholesale
outlets in Ireland and the United Kingdom.
Revenue in this division was up 21% to EUR99m. The division recorded
an EBITA of EUR1.2m compared to a loss of EUR0.6m in 2010. Included
in the 2010 results were rationalisation costs of EUR0.5m. The
results for the year were assisted by the effect year-on-year
of rationalisation costs, some new business and by the positive
contribution of acquisitions made in this division in the second
half of 2011.
Financial Review
Net financial expense
Net financial expense for the year was EUR4.7m compared to EUR3.4m
in 2010. The average interest rate paid by the Group on its borrowings
has increased due to higher average net debt in the year, higher
margins on Group facilities and increases in central bank rates,
particularly the Swedish central bank rate. In addition, the strength
of the Swedish Krona led to higher reported interest costs on
translation to Euro. The Group's share of the net financial expense
in its joint ventures and associates was EUR0.5m compared to EUR1.2m
in 2010. Net interest cover for the year was 9.5 times based on
adjusted EBITA.
Profit before tax
Profit before tax increased 2.3% in the year to EUR34.4m. Excluding
exceptional items and amortisation, adjusted profit before tax
(3) decreased by 8.1% to EUR39.7m.
Taxation
The tax charge for the year including share of joint ventures'
and associates' tax and before non-trading items, as set out in
Note 6 of the accompanying financial information, was EUR10.4m
(2010: EUR11.8m) representing an effective tax rate of 26.2% (2010:
27.4%).
Exceptional items
Exceptional items in the year amounted to a net gain before tax
of EUR2.7m (2010: net charge of EUR2.3m). These include gains
on the disposal of a joint venture, pension curtailments and revaluation
gains reclassified to the income statement arising on the reclassification
of a financial asset to an associate investment. These gains were
partly offset by property revaluation charges. An analysis of
these items is set out in Note 5 of the accompanying financial
information.
Non-controlling interest
The non-controlling interest's share of after tax profits was
EUR4.3m (2010: EUR6.9m). The decrease on prior year is due to
lower after tax profits in a number of the Group's non-wholly
owned subsidiaries in Continental and Eastern Europe.
Adjusted and basic earnings per share
Adjusted earnings per share of 7.24 cent in 2011 represents an
increase of 5.8% on 2010. Basic earnings per share amounted to
7.11 cent (2010: 5.25 cent). The growth in earnings per share
was assisted by the buyback of 22 million shares in November 2010
which reduced the number of shares in issue to 330 million in
2011 compared to an average of 350 million in 2010.
Net debt and cash flow
Net debt during the year increased from EUR47.9m to EUR75.6m.
Net debt to adjusted EBITDA is 1.3 times and interest is covered
9.5 times by adjusted EBITA. At 31 December 2011, the Group had
available cash balances of EUR90.1m and interest bearing borrowings
(including overdrafts) of EUR165.7m. Post year-end, on 9 January
2012, the Group received EUR8.5m in cash as part of the consideration
from the disposal of a 50% interest in Capespan International
Holdings Limited. More detail is provided below.
The Group generated operating cash flows of EUR31.2m in 2011 (2010:
EUR39.4m) before working capital movements. The decrease on prior
year was due to lower profits and higher interest and tax payments.
There were EUR7.7m of working capital and other outflows in the
year. By comparison in 2010, there were higher than normal inflows
of EUR7.0m in working capital. Cash outflows on maintenance capital
expenditure, net of disposals, were EUR7.5m (2010: EUR6.1m). Dividend
payments to non-controlling interests were EUR4.9m (2010: EUR5.0m).
Primarily as a result of lower profits, working capital movements
and higher capital expenditure, free cash flow generated by the
Group decreased from EUR37.2m in 2010 to EUR12.9m in 2011. Free
cash flow is the funds available after outflows relating to maintenance
capital expenditure and dividends to non-controlling shareholders
but before acquisition expenditure, development capital expenditure,
share buy-backs and the payment of dividends to equity shareholders.
Cash outflows on acquisitions and deferred consideration payments
amounted to EUR29.1m (2010: EUR7.4m). The Group made payments
of EUR7.3m (2010: EUR4.6m) relating to development capital expenditure
which was primarily related to the construction of an enlarged
distribution facility in Sweden. The Group received EUR4.2m in
cash proceeds from the sale of its South African farm investment
company. The Group distributed EUR5.9m (2010: EUR5.9m) in dividends
to equity shareholders. There was an adverse net impact on net
debt of EUR1.2m (2010: EUR4.0m) on translation of foreign currency
denominated net debt to Euro.
During the year, the Group has renewed a number of its term borrowing
facilities extending the Group's net debt maturity profile which
further increases the Group's capacity to finance future expansion.
2011 2010
EUR'million EUR'million
Adjusted EBITDA * 59.7 62.4
Deduct adjusted EBITDA of joint ventures and
associates * (7.5) (6.5)
Net interest and tax paid (16.5) (13.2)
Other (4.5) (3.3)
------------- -------------
Operating cash flows before working capital
movements 31.2 39.4
Working capital and other movements (7.7) 7.0
------------- -------------
Operating cash flows 23.5 46.4
Maintenance capital expenditure net of disposal
proceeds (7.5) (6.1)
Dividends received from joint ventures and associates 1.8 1.9
Dividends paid to non-controlling interests (4.9) (5.0)
------------- -------------
Free cash flow 12.9 37.2
Acquisition (subsidiaries, JVs' & associates',
non-controlling interests) (15.1) (2.9)
Deferred consideration payments and other (14.0) (4.5)
Development capital expenditure (7.3) (4.6)
Disposal of a joint venture interest 4.2 -
Dividends paid to equity shareholders (5.9) (5.9)
Purchase of own shares - (8.7)
------------- -------------
Total cash flow (25.2) 10.6
Net debt at beginning of year (47.9) (50.6)
Increase in finance leases (1.3) (3.9)
Foreign currency translation (1.2) (4.0)
------------- -------------
Net debt at end of year (75.6) (47.9)
============= =============
* 2010 re-presented to treat the Group's share of joint
ventures' and associates' depreciation within the adjusted EBITDA
calculation
Shareholders' equity
The balance sheet has strengthened in the year with shareholders'
equity increasing by EUR8.1m to EUR176.7m. The increase was primarily
due to profits in the year of EUR23.5m offset by losses of EUR9.5m
recognised directly in the statement of other comprehensive income
attributable to equity shareholders. These included actuarial
losses on employee defined benefit pension schemes (net of deferred
tax) of EUR9.2m. During 2011, the Group distributed EUR5.9m in
dividends to equity shareholders of the parent.
Defined benefit pension obligations
The net liability in the Group's defined benefit pension schemes
(net of deferred tax) has increased to EUR14.8m at 31 December
2011 from EUR8.8m at 31 December 2010. The increase in the liability
is due primarily to the decrease in the discount rates underlying
the calculation of the present value of scheme obligations and
lower than expected returns on scheme assets. Over the past three
years the Group has modified the accruing benefits under the scheme
in order to limit the exposure of the actuarial valuation of the
liabilities. Post year-end, with the improvement of global equity
markets, scheme assets have improved by approximately EUR5m which
will reduce the pension liability.
Development activity
The Group invested EUR14.8m in capital expenditure including development
expenditure which mainly comprised the expansion of the Group's
state-of-the-art facilities in Sweden. Deferred consideration
payments of EUR14.1m were made during the year in respect of previous
acquisitions on achievement on profit targets. Further, the Group
invested EUR19.9m in new subsidiaries and joint venture and associate
interests.
Primarily during the second half of the year the Group invested
EUR7.3m in new and existing joint venture and associate interests
in its Fresh Produce division. This included the investment from
July onwards which increased the Group's shareholding in Capespan
South Africa to an effective interest of 20.2% at 31 December
2011 (2010: 15.6%). In September and December 2011, the Group
invested in two new joint ventures within its Fresh Produce divisions
in the UK and Scandinavia. During the year the Group also made
further investments in existing joint venture interests.
The Group invested EUR12.6m (net of cash acquired) in a number
of bolt-on acquisitions primarily in the second half of the year
within both its Fresh Produce division and Consumer Goods and
Healthfoods Distribution division. The investments include estimated
deferred consideration of EUR4.7m payable on achievement of future
profit targets. These acquisitions will complement existing business
interests in these divisions.
In May 2011, the Group sold its 40% joint venture interest in
a South African farm investment company to Capespan South Africa
for cash proceeds of EUR4.2m. As noted in Note 5 of the accompanying
financial information a profit of EUR1.6m was recognised on this
sale and disclosed as an exceptional item in the income statement.
On 20 December 2011, the Group announced that it had entered into
an agreement to acquire a 50% shareholding in Frankort & Koning
Beheer Venlo BV and subsidiaries ("Frankort & Koning") for consideration
of up to EUR15.0m. Headquartered in Venlo, the Netherlands, Frankort
& Koning have operations principally in the Netherlands, Germany
and Poland. An initial consideration of EUR6.0m will be paid on
completion with additional consideration of up to EUR9.0m becoming
payable in several tranches over the next number of years if certain
profit targets are met. The transaction was subject to the normal
regulatory clearances which were received on 5 March 2012.
Post year-end, on 9 January 2012, the Group announced the completion
of a deal to sell its 50% joint venture interest in the European
fruit distribution business of Capespan International Holdings
Limited ("Capespan Europe") to Capespan South Africa for a total
consideration of EUR13.0m satisfied by an exchange of an additional
20 million shares in Capespan South Africa and EUR8.5m in cash.
This transaction results in the Group increasing its effective
interest in Capespan South Africa to 25.3% from 20.2% at 31 December
2011. Capespan South Africa and Total Produce both previously
owned 50% each of Capespan Europe. On the Group balance sheet
at 31 December 2011 the carrying value of this investment was
classified as a non-current asset held for sale.
The Group continues to actively pursue further investment opportunities
in both new and existing markets.
Share buyback
Under the authority granted at the AGM in 2011, the Group is permitted
to purchase up to 10% of its issued share capital in the market
if the appropriate opportunity arises at a price which would not
exceed 105% of the average price over the previous five trading
days. The Group continues to consider exercising its authority
should the appropriate opportunity arise. The Group will seek
to renew its authority at the forthcoming AGM in May 2012.
Dividends
The Board is proposing a final dividend of 1.35 cent per share
(2010: 1.243 cent), subject to approval at the forthcoming AGM.
If approved, this dividend will be paid on 24 May 2012 to shareholders
on the register at 27 April 2012 subject to dividend withholding
tax. In accordance with company law and IFRS, this dividend has
not been provided for in the balance sheet at 31 December 2011.
The total dividend for 2011 will amount to 1.89 cent and represents
an increase of 6.0% on the prior year.
Current trading and outlook
Total Produce has delivered a solid performance in 2011 with an
increase of 5.8% in adjusted earnings per share to 7.24 cent per
share. The Group has performed satisfactorily despite challenging
conditions in certain markets due to the prolonged impact of the
EHEC scare in May 2011.
The Group was active in concluding a number of new acquisitions
primarily in the second half of the year for a total investment
of almost EUR20m including increasing its shareholding in Capespan
Group Limited, the leading South African fresh produce company.
The Group is also pleased to propose an increase of 8.6% in its
final dividend to 1.35 cent per share bringing the full year dividend
for 2011 to 1.89 cent per share, representing an increase of 6%
on 2010. With the continued benefit of a good geographic spread
of activities across Europe and the full year impact of acquisitions
completed in second half of 2011, the Group is targeting adjusted
EPS for 2012 in the range of 7.0 to 8.0 cent per share.
Carl McCann, Chairman
On behalf of the Board
6 March 2012
(1) Adjusted earnings per share excludes exceptional items, acquisition
related costs, amortisation of intangible assets and related
tax. This calculation is set out in Note 7 of the accompanying
preliminary financial information
(2) Adjusted EBITA is operating profit excluding exceptional items,
amortisation of intangible assets, acquisition related costs
and excludes interest and tax (including the equivalent share
of joint ventures and associates). This calculation is set
out in Note 4 of the accompanying preliminary financial information
(3) Adjusted profit before tax excludes exceptional items, amortisation
of intangible assets, acquisition related costs and the Group's
share of joint ventures' and associates' tax which, under
IFRS rules, is reflected in profit before tax. This calculation
is set out in Note 4 of the accompanying preliminary financial
information
Copies of this announcement will be available from the Company's
registered office at Charles McCann Building, Rampart Road, Dundalk,
Co. Louth, Ireland and on our website at www.totalproduce.com.
Total Produce plc
Extract from the Group Income Statement
for the year ended 31 December 2011
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
2011 2011 2011 2010 2010 2010
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue, including Group share
of joint
ventures
and associates 2,526,577 - 2,526,577 2,600,460 - 2,600,460
Group revenue 2,284,478 - 2,284,478 2,343,124 - 2,343,124
Cost of sales (1,964,162) - (1,964,162) (2,019,550) - (2,019,550)
------------- ------------ ------------ ------------- ------------ ------------
Gross profit 320,316 - 320,316 323,574 - 323,574
Operating expenses (net) (287,346) 2,712 (284,634) (285,930) (2,119) (288,049)
Share of profit/(loss) of joint
ventures
and associates 3,442 - 3,442 1,743 (231) 1,512
Operating profit 36,412 2,712 39,124 39,387 (2,350) 37,037
Financial income 2,097 - 2,097 1,823 - 1,823
Financial expense (6,845) - (6,845) (5,264) - (5,264)
------------- ------------ ------------ ------------- ------------ ------------
Profit before tax 31,664 2,712 34,376 35,946 (2,350) 33,596
Income tax (expense)/credit (7,298) 663 (6,635) (8,991) 620 (8,371)
------------- ------------ ------------ ------------- ------------ ------------
Profit for the year 24,366 3,375 27,741 26,955 (1,730) 25,225
============= ============ ============ ============= ============ ============
Attributable to:
Equity holders of the parent 23,466 18,337
Non-controlling interests 4,275 6,888
------------ ------------
27,741 25,225
============ ============
Earnings per ordinary share
Basic 7.11 cent 5.25 cent
Fully diluted 7.11 cent 5.25 cent
Adjusted fully diluted 7.24 cent 6.84 cent
------------- ------------ ------------
Total Produce plc
Extract from the Group Statement of Comprehensive Income
for the year ended 31 December 2011
2011 2010
EUR'000 EUR'000
Profit for the year 27,741 25,225
========= =========
Other comprehensive income:
Foreign currency translation effects:
- foreign currency net investments - subsidiaries 2,196 13,382
- foreign currency net investments - joint ventures
and associates 14 1,263
- foreign currency gains reclassified to the income
statement on disposal of joint venture (528) -
- foreign currency borrowings (1,380) (7,168)
Revaluation gains on property, plant and equipment,
net 1,350 436
Gains/(losses) on re-measuring available-for-sale
financial assets, net 2,028 (592)
Reclassification of revaluation gains to income
statement upon available-for-sale investment becoming (4,055) -
an associate
Actuarial losses on defined benefit pension schemes (10,883) (6,857)
Effective portion of cash flow hedges, net 25 (16)
Deferred tax on items taken directly to other
comprehensive income 1,654 1,133
Share of joint ventures' actuarial gain/(loss)
on defined benefit pension scheme 80 (1,009)
Share of joint ventures' loss on re-measuring
available-for-sale financial assets - (8)
Share of joint ventures' effective portion of
cash flow hedges, net 9 30
Share of joint ventures' deferred tax on items
taken directly to other comprehensive income 23 266
--------- ---------
Other comprehensive income for the year, net of
tax (9,467) 860
========= =========
Total comprehensive income for the year, net of
tax 18,274 26,085
========= =========
Attributable to:
Equity holders of the parent 13,926 18,804
Non-controlling interests 4,348 7,281
--------- ---------
18,274 26,085
========= =========
Total Produce plc
Extract from the Group Balance Sheet
as at 31 December 2011
2011 2010
Assets EUR'000 EUR'000
Non-current assets
Property, plant and equipment 135,644 131,965
Investment property 10,881 13,331
Goodwill and intangible assets 152,493 140,641
Investments in joint ventures and associates 40,212 34,054
Other financial assets 647 9,704
Other receivables 4,290 3,590
Deferred tax assets 6,903 5,877
Employee benefits - 1,231
---------- ----------
Total non-current assets 351,070 340,393
---------- ----------
Current assets
Inventories 39,098 41,601
Trade and other receivables 268,126 264,163
Corporation tax receivables 2,075 697
Derivative financial instruments 57 61
Cash and cash equivalents 90,087 104,486
---------- ----------
Total current assets (excluding non-current assets
classified as held for sale) 399,443 411,008
---------- ----------
Non-current assets classified as held for sale 11,064 -
---------- ----------
Total current assets 410,507 411,008
---------- ----------
Total assets 761,577 751,401
---------- ----------
Equity
Called-up share capital 3,519 3,519
Share premium 252,574 252,574
Other reserves (116,460) (116,114)
Retained earnings 37,066 28,621
---------- ----------
Total equity attributable to equity holders of the
parent 176,699 168,600
Non-controlling interests 60,041 57,999
---------- ----------
Total equity 236,740 226,599
---------- ----------
Liabilities
Non-current
Interest-bearing loans and borrowings 140,586 129,326
Deferred government grants 1,569 1,460
Other payables 2,582 3,386
Provisions 10,809 4,469
Corporation tax payable 7,754 8,110
Deferred tax liabilities 17,100 17,577
Employee benefits 18,058 12,264
---------- ----------
Total non-current liabilities 198,458 176,592
---------- ----------
Current
Interest-bearing loans and borrowings 25,054 23,095
Trade and other payables 295,728 306,341
Provisions 1,634 15,059
Derivative financial instruments 309 300
Corporation tax payable 3,654 3,415
---------- ----------
Total current liabilities 326,379 348,210
---------- ----------
Total liabilities 524,837 524,802
---------- ----------
Total liabilities and equity 761,577 751,401
---------- ----------
Total Produce plc
Extract from the Group Statement of Changes in Equity
for the year ended 31 December 2011
Attributable to equity holders of the parent
-------------------------------------------------------------------------------------------------------
Currency Own Other
Share Share translation Reval-uation De-merger shares equity Retained Non-controlling Total
capital premium reserve reserve reserve reserve reserves earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January
2011 3,519 252,574 (6,005) 17,938 (122,521) (8,580) 3,054 28,621 168,600 57,999 226,599
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Comprehensive
income
Profit for the year - - - - - - - 23,466 23,466 4,275 27,741
Other comprehensive
income:
Foreign currency
translation
effects - - 197 - - - - - 197 105 302
Revaluation gains
on property, plant
and
equipment, net - - - 1,398 - - - - 1,398 (48) 1,350
Gains on
re-measuring
available-for-sale
financial assets,
net - - - - - - 2,028 - 2,028 - 2,028
Reclassification of
revaluation gains
to
income statement
upon
available-for-sale
investment
becoming an
associate - - - - - - (4,055) - (4,055) - (4,055)
Actuarial losses on
defined benefit
pension
schemes, net - - - - - - - (10,745) (10,745) (138) (10,883)
Effective portion
of cash flow
hedges,
net - - - - - - 14 - 14 11 25
Deferred tax on
items taken
directly to
other
comprehensive
income - - - (40) - - (6) 1,557 1,511 143 1,654
Share of joint
ventures'
actuarial gain
on defined benefit
pension scheme - - - - - - - 80 80 - 80
Share of joint
ventures' gain on
re-measuring
available-for-sale
financial assets - - - - - - - 9 9 - 9
Share of joint
ventures' deferred
tax on
items taken
directly to other
comprehensive
income - - - - - - - 23 23 - 23
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total other
comprehensive
income - - 197 1,358 - - (2,019) (9,076) (9,540) 73 (9,467)
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total comprehensive
income - - 197 1,358 - - (2,019) 14,390 13,926 4,348 18,274
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Transactions with
equity holders of
the
parent
Non-controlling
interests arising
on acquisition - - - - - - - - - 2,715 2,715
Buyout of
non-controlling
interests arising
on acquisition - - - - - - - (63) (63) (141) (204)
Dividends - - - - - - - (5,882) (5,882) (4,880) (10,762)
Share-based payment
transactions - - - - - - 118 - 118 - 118
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total transactions
with equity
holders
of the parent - - - - - - 118 (5,945) (5,827) (2,306) (8,133)
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
As at 31 December
2011 3,519 252,574 (5,808) 19,296 (122,521) (8,580) 1,153 37,066 176,699 60,041 236,740
========= ======== ============ ============= ========== ======== ========= ========= ========= ================ =========
Total Produce plc
Extract from the Group Statement of Changes in Equity
for the year ended 31 December 2011 (continued)
Attributable to equity holders of the parent
-------------------------------------------------------------------------------------------------------
Currency Own Other
Share Share translation Reval-uation De-merger shares equity Retained Non-controlling Total
capital premium reserve reserve reserve reserve reserves earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January
2010 3,519 252,574 (13,171) 17,797 (122,521) - 3,637 23,353 165,188 55,771 220,959
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Comprehensive
income
Profit for the year - - - - - - - 18,337 18,337 6,888 25,225
Other comprehensive
income:
Foreign currency
translation
effects - - 7,166 - - - - - 7,166 311 7,477
Revaluation gains
on property, plant
and
equipment, net - - - 283 - - - - 283 153 436
Losses on
re-measuring
available-for-sale
financial assets,
net - - - - - - (592) - (592) - (592)
Actuarial losses on
defined benefit
pension
schemes, net - - - - - - - (6,770) (6,770) (87) (6,857)
Effective portion
of cash flow
hedges,
net - - - - - - (19) - (19) 3 (16)
Deferred tax on
items taken
directly to
other
comprehensive
income - - - (142) - - 6 1,256 1,120 13 1,133
Share of joint
ventures'
actuarial loss
on defined benefit
pension scheme - - - - - - - (1,009) (1,009) - (1,009)
Share of joint
ventures' loss on
re-measuring
available-for-sale
financial assets - - - - - - - (8) (8) - (8)
Share of joint
ventures'
effective portion
of cash flow
hedges, net - - - - - - - 30 30 - 30
Share of joint
ventures' deferred
tax on
items taken
directly to other
comprehensive
income - - - - - - - 266 266 - 266
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total other
comprehensive
income - - 7,166 141 - - (605) (6,235) 467 393 860
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total comprehensive
income - - 7,166 141 - - (605) 12,102 18,804 7,281 26,085
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Transactions with
equity holders of
the
parent
Non-controlling
interests arising
on acquisition - - - - - - - - - 260 260
Buyout of
non-controlling
interests arising
on acquisition - - - - - - - (780) (780) (326) (1,106)
Contribution by
non-controlling
interest - - - - - - - - - 51 51
Dividends - - - - - - - (5,947) (5,947) (5,038) (10,985)
Own shares acquired - - - - - (8,580) - (107) (8,687) - (8,687)
Share-based payment
transactions - - - - - - 22 - 22 - 22
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total transactions
with equity
holders
of the parent - - - - - (8,580) 22 (6,834) (15,392) (5,053) (20,445)
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
As at 31 December
2010 3,519 252,574 (6,005) 17,938 (122,521) (8,580) 3,054 28,621 168,600 57,999 226,599
========= ======== ============ ============= ========== ======== ========= ========= ========= ================ =========
Total Produce plc
Extract from the Group Statement of Cash Flows
for the year ended 31 December 2011
2011 2010
EUR'000 EUR'000
Net cash flows from operating activities before
working capital movements (Note 12) 31,228 39,367
(Increase)/decrease in working capital (7,747) 6,976
--------- ---------
Net cash flows from operating activities 23,481 46,343
========= =========
Investing activities
Acquisition of subsidiaries, net of cash, cash
equivalents and bank overdrafts acquired (7,973) (1,409)
Acquisition of, and investment in, joint ventures
and associates, including loans (6,192) (989)
Acquisition of other financial assets (30) -
Payments of deferred consideration (14,086) (4,807)
Acquisition of property, plant and equipment (15,531) (12,788)
Proceeds from disposal of property, plant and
equipment 725 2,116
Dividends received from joint ventures and associates 1,760 1,948
Proceeds from disposal of joint ventures and
associates 4,172 -
Proceeds from disposal of equity investments - 823
Research and development expenditure capitalised (156) (782)
Government grants received 296 118
--------- ---------
Net cash flows from investing activities (37,015) (15,770)
========= =========
Financing activities
Net increase/(decrease) in borrowings 12,784 (360)
Capital element of finance lease repayments (274) (300)
Purchase of own shares - (8,687)
Dividends paid to shareholders of the parent (5,882) (5,947)
Acquisition of non-controlling interests (841) (470)
Capital contribution by non-controlling interests - 51
Dividends paid to non-controlling interests (4,880) (5,038)
--------- ---------
Net cash flows from financing activities 907 (20,751)
========= =========
Net (decrease)/increase in cash and cash equivalents,
including bank overdrafts (12,627) 9,822
Cash and cash equivalents, including bank overdrafts
at start of year 97,916 84,624
Effect of exchange rate fluctuations on cash
held 524 3,470
--------- ---------
Cash and cash equivalents, including bank overdrafts
at end of year 85,813 97,916
========= =========
Group Reconciliation of Net Debt
for the year ended 31 December 2011
2011 2010
EUR'000 EUR'000
Net (decrease) / increase in cash, cash equivalents,
and bank overdrafts (12,627) 9,822
Net (increase)/decrease in borrowings (12,784) 360
Capital element of lease repayments 274 300
Other movements on finance leases (1,327) (3,879)
Foreign exchange movement (1,154) (3,978)
--------- ----------
Movement in net debt (27,618) 2,625
--------- ----------
Net debt at beginning of year (47,935) (50,560)
--------- ----------
Net debt at end of year (75,553) (47,935)
========= ==========
Total Produce plc
Selected explanatory notes for the Preliminary Results for the year
ended 31 December 2011
1. Basis of preparation
The financial information included in this preliminary results statement
has been extracted from the Group's Financial Statements for the
year ended 31 December 2011 and is prepared based on the accounting
policies set out therein, which are consistent with those applied
in the prior year. As permitted by the European Union (EU) law and
in accordance with AIM/ESM rules, the Group Financial Statements
have been prepared in accordance with International Financial Reporting
Standards (IFRSs) and their interpretations issued by the International
Accounting Standards Board (IASB) as adopted by the EU.
A number of new IFRSs and interpretations of the International
Financial Reporting Interpretations Committee became effective for,
and have been applied in preparing, the Group Financial Statements.
None of these have had any material impact on the Group's financial
statements in 2011.
The financial information prepared in accordance with IFRSs as adopted
by the EU included in this report do not comprise "full group accounts"
within the meaning of Regulation 40(1) of the European Communities
(Companies: Group Accounts) Regulations 1992 of Ireland insofar
as such group accounts would have to comply with the disclosure
and other requirements of those Regulations. The information included
has been derived from the Group Financial Statements which have
been approved by the Board of Directors on 5 March 2012. The Financial
Statements will be filed with the Irish Registrar of Companies and
circulated to shareholders in due course. The financial information
is presented in Euro, rounded to the nearest thousand.
2. Translation of foreign currencies
The reporting currency of the Group is Euro. Results and cashflows
of foreign currency denominated operations have been translated
into Euro at the average exchange rates for the period, and the
related balance sheets have been translated at the rates of exchange
ruling at the balance sheet date. Adjustments arising on the translation
of the results of foreign currency denominated operations at average
rates, and on restatement of the opening net assets at closing rates,
are accounted for within a separate translation reserve within equity,
net of differences on related foreign currency borrowings. All other
translation differences are taken to the income statement. The principal
rates used in the translation of results and balance sheets into
Euro were as follows:
Average rate Closing rate
2011 2010 % change 2011 2010 % change
Pound Sterling 0.8757 0.8434 (3.8%) 0.8353 0.8568 2.5%
Swedish Krona 9.0086 9.5425 5.6% 8.899 9.0186 1.3%
Czech Koruna 24.7335 25.3886 2.6% 25.5018 25.0889 (1.6%)
Danish Kroner 7.4507 7.4471 0.0% 7.4322 7.4518 0.3%
South African Rand 10.0826 9.7165 (3.8%) 10.4802 8.875 (18.1%)
-------- -------- --------- -------- -------- ---------
3. Segmental Analysis
In accordance with IFRS 8 Operating Segments, the Group's reportable
operating segments based on how performance is assessed and resources
are allocated are as follows:
- Eurozone Fresh Produce: This segment is an aggregation of
operating segments in the Eurozone involved in the procurement
and distribution of fresh produce. These operating segments
have been aggregated because they have similar economic characteristics
- Scandinavian Fresh Produce: This operating segment is involved
in the procurement and distribution of fresh produce in Sweden
and Denmark
- UK Fresh Produce: This operating segment includes the Group's
UK business which is involved in the procurement and distribution
of fresh produce
- Consumer Goods and Healthfoods Distribution: This division
is a full service distributor and marketing partner to the
grocery, pharmacy, optical, healthfoods (including vitamins,
minerals and supplements) and other sectors. This segment
distributes to retail and wholesale outlets in Ireland and
in the United Kingdom.
A further three operating segments involved in the fresh produce
business, have been identified which are combined below under 'Other
Fresh Produce' as they are not individually material.
Segment performance is evaluated based on revenue and adjusted EBITA.
Management believes that adjusted EBITA, while not a defined term
under IFRS, gives a fair reflection of the underlying trading performance
of the Group. Adjusted EBITA excludes exceptional items, amortisation
of intangible assets, acquisition related costs, share of joint
ventures' and associates' tax and finance expense, and is therefore
measured differently from operating profit in the Group financial
statements as explained and reconciled in detail below.
Finance costs, finance income, income taxes and certain corporate
costs are managed on a centralised basis. These items are not allocated
between operating segments for the purpose of the information presented
to the Chief Operating Decision Maker and are accordingly not included
in the detailed segmental analysis below.
2011 2010
---------------------------------- ----------------------------------
Third Third
Segmental party Adjusted Segmental party Adjusted
revenue revenue EBITA revenue revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Eurozone Fresh Produce 1,205,234 1,189,058 19,826 1,282,367 1,263,580 27,947
Scandinavian Fresh
Produce 595,340 584,318 16,441 602,360 593,716 16,384
UK Fresh Produce 485,414 483,411 5,871 508,261 505,782 3,960
Other Fresh Produce 170,989 170,461 4,489 158,979 155,473 3,256
Inter - segment revenue (29,729) - - (33,416) - -
--------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Total Fresh Produce 2,427,248 2,427,248 46,627 2,518,551 2,518,551 51,547
--------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Consumer Goods and
Healthfoods Distribution 99,329 99,329 1,213 81,909 81,909 (598)
Unallocated costs - - (2,881) - - (3,118)
--------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Third party revenue
and adjusted EBITA 2,526,577 2,526,577 44,959 2,600,460 2,600,460 47,831
--------------------------- ---------- ---------- ---------- ---------- ---------- ----------
All inter-segment revenue transactions are transacted at arm's length.
Reconciliation of segmental profits to operating profit
Below is a reconciliation of adjusted EBITA per management reports
to operating profit and profit before tax per the Group income statement.
Note 2011 2010
EUR'000 EUR'000
Adjusted EBITA per management reporting 44,959 47,831
Amortisation of intangible assets within
subsidiaries (i) (5,501) (5,252)
Acquisition related costs (ii) (615) -
Share of joint ventures' and associates'
amortisation (iii) (535) (489)
Share of joint ventures' and associates'
interest (iii) (507) (1,181)
Share of joint ventures' and associates'
tax (iii) (1,389) (1,522)
Operating profit before exceptional items 36,412 39,387
Exceptional items (iv) 2,712 (2,350)
---------- ---------
Operating profit after exceptional items 39,124 37,037
Net financial expense (v) (4,748) (3,441)
---------- ---------
Profit before tax 34,376 33,596
========== =========
(i) Intangible asset amortisation is not allocated to operating segments
in the Group management accounts.
(ii) Acquisition related costs include legal fees and other professional
service fees on completed acquisitions of subsidiaries. From
1 January 2010, upon adoption of IFRS 3 Business Combinations
(2008) these costs no longer form part of the acquisition cost
and are expensed though the income statement.
(iii) Under IFRS, included within profit before tax is the share of
joint ventures' and associates' profit after intangible assets
amortisation charges, tax and interest. In the Group's management
accounts, the Group share of these items is excluded from the
adjusted EBITA calculation.
(iv) Exceptional items (Note 5) are not allocated to operating segments
in the management reports.
(v) Financial income and expense is primarily managed at Group level
and not allocated to individual operating segments in the management
reports.
4. Adjusted profit before tax and adjusted EBITA
For the purpose of assessing the Group's performance, Total Produce
management believe that adjusted EBITA, adjusted profit before tax
and adjusted earnings per share (Note 7) are the most appropriate
measures of the underlying performance of the Group.
2011 2010
EUR'000 EUR'000
Profit before tax per the income statement 34,376 33,596
Adjustments
Exceptional items before share of joint venture's
tax (Note 5) (2,712) 2,455
Group share of the tax charge of joint ventures
and associates 1,389 1,417
Amortisation of intangibles (including the Group's
share of joint ventures and associates) 6,036 5,741
Acquisition related costs 615 -
--------- ---------
Adjusted profit before tax 39,704 43,209
Exclude
Net financial expense - Group 4,748 3,441
Net financial expense - share of joint ventures
and associates 507 1,181
--------- ---------
Adjusted EBITA 44,959 47,831
========= =========
5. Exceptional items
2011 2010
EUR'000 EUR'000
Gains on available-for-sale financial assets
reclassified from other
comprehensive income to income statement (a) 4,055
Gain on the disposal of a joint venture (b) 1,612 -
Pension curtailment gain (c) 926 -
Impairment of property, plant and equipment (d) (1,331) -
Change in fair value of investment property (e) (2,550) (2,119)
Share of joint ventures' and associates' changes
in the fair value of investment property (f) - (336)
Total exceptional items (before joint ventures'
and associates' tax) 2,712 (2,455)
Share of joint ventures' and associates' tax
on fair value losses on property - 105
--------- ---------
Total exceptional items (after share of joint
ventures' and associates' tax) 2,712 (2,350)
Tax on exceptional items 663 620
--------- ---------
Total 3,375 (1,730)
========= =========
(a) Gains on available-for-sale financial assets reclassified from
other comprehensive income to the income statement
In July 2011, as a result of increasing its shareholding, the
Group commenced equity accounting for its investment in Capespan
Group Limited ("Capespan South Africa"). As part of this exercise,
the previously held shareholding was fair valued at this date
resulting in an uplift of EUR2,028,000. This uplift, together
with previously recognised fair value gains in the available-for-sale
reserve of EUR2,027,000 relating to Capespan South Africa, were
reclassified to the income statement resulting in an exceptional
gain of EUR4,055,000. Refer to Note 10 for further details.
(b) Gain on the disposal of a joint venture
In May 2011, the Group sold its 40% joint venture interest in
a South African farm investment company to Capespan South Africa
for cash proceeds of EUR4,172,000. A profit of EUR1,612,000
was recognised on this sale comprising the EUR1,084,000 difference
between the sales proceeds and the joint venture's carrying
value of EUR3,088,000 together with the reclassification of
EUR528,000 of currency translation differences from equity to
the income statement.
(c) Pension curtailment gain
An exceptional gain of EUR926,000 arose during the year as a
result of payments no longer being made by the Group for a number
of employees who have reached the pension cap. The deferred
tax charge on this exceptional gain amounted to EUR116,000.
(d) Impairment of property, plant and equipment
On revaluation of the Group's properties in 2011, in addition
to the net revaluation gains of EUR1,350,000 included in other
comprehensive income, properties where the carrying value exceeded
market value were identified, resulting in an impairment charge
of EUR1,331,000 (2010: EUR Nil) to the income statement.
(e) Revaluation of investment property
Fair value losses, amounting to EUR2,550,000 (2010: EUR2,119,000)
have been recognised in the income statement in relation to
investment property. A deferred tax credit of EUR779,000 (2010:
credit of EUR620,000) was recognised in the income statement
as a result of these revaluations.
Share of joint ventures' and associates' fair value losses on
(f) investment property
In 2010, the Group's share of changes in fair value of joint
ventures' and associates' investment property of EUR336,000
was recognised in the income statement. A deferred tax credit
of EUR105,000 was recognised in the income statement as a result.
No such fair value movements were identified in 2011.
6. Income tax
2011 2010
EUR'000 EUR'000
Income tax expense 6,635 8,371
Group share of tax charge of its joint ventures
and associates netted in profit before tax 1,389 1,417
--------- ---------
Total tax charge 8,024 9,788
Adjustments
Deferred tax on amortisation of intangible assets
- subsidiaries 1,649 1,264
Share of joint ventures' and associates' deferred
tax credit on amortisation of intangible assets 55 48
Net deferred tax on fair value movement on properties
- subsidiaries 779 620
Net deferred tax on pension curtailment - subsidiaries (116) -
Share of net deferred tax on fair value movements
on properties within joint ventures and associates - 105
Tax charge on underlying activities 10,391 11,825
--------- ---------
The total tax charge for the year amounted to EUR8.0m (2010: EUR9.8m),
including the Group's share of the tax charge of its joint ventures
and associates amounting to EUR1.4m (2010: EUR1.4m), which is netted
in profit before tax in accordance with IFRS.
Excluding the impact of deferred tax credits related to the amortisation
of intangibles and the tax effect of exceptional items, the underlying
tax charge for the year was EUR10.4m (2010: EUR11.8m), equivalent
to a rate of 26.2% (2010: 27.4%) when applied to the Group's adjusted
profit before tax.
7. Earnings per share
2011 2010
EUR'000 EUR'000
Profit attributable to equity holders
of the parent 23,466 18,337
============= ===========
'000 '000
Issued ordinary shares at start of
the year 329,887 351,887
Effect of own shares held - Note
(a) - (2,351)
------------- -----------
Weighted average number of shares
for basic and adjusted earnings per
share calculation 329,887 349,536
Basic and diluted earnings per share
- EUR cent 7.11 5.25
2011 2010
Adjusted fully diluted earnings per 2011 cent 2010 cent
share EUR'000 per share EUR'000 per share
Profit attributable to equity holders
of the parent 23,466 7.11 18,337 5.25
Adjustments:
Exceptional items (Note 5) (2,712) (0.82) 2,350 0.67
Amortisation of intangible assets
(including share of joint ventures
and associates) 6,036 1.83 5,741 1.64
Acquisition related costs 615 0.19
Tax effect of exceptional items and
amortisation charges (2,366) (0.72) (1,932) (0.55)
Non-controlling interests' impact
of exceptional items, acquisition
related costs, intangible asset amortisation
charges and related tax (1,148) (0.35) (594) (0.17)
--------- ----------- ------------- -----------
Adjusted fully diluted earnings 23,891 7.24 23,902 6.84
========= =========== ============= ===========
Note (a)
On 23 November 2010, the Group purchased 22,000,000 of its own shares
to be held as treasury shares. In respect of these treasury shares,
all rights (including voting and dividend rights) are suspended until
the shares are reissued and therefore they are not included in the
earnings per share calculations.
Adjusted fully diluted earnings per share is calculated to adjust
for exceptional items, intangible asset amortisation, acquisition
related costs, related tax charges and credits and the impact of
share options with a dilutive effect.
Share options outstanding at the end of 2011 were 7,260,000 (2010:
7,310,000) and were anti-dilutive in both years. Therefore the weighted
average number of shares outstanding applied in the calculation of
basic and adjusted earnings per share is the same.
8. Employee benefits
2011 2010
EUR'000 EUR'000
Net pension liability at beginning of year (11,033) (7,931)
Current/past service cost less net finance
income recognised in income statement (1,689) (1,642)
Curtailment gain recognised in the income statement 926 -
Contributions to schemes 4,842 5,527
Actuarial losses recognised in other comprehensive
income (10,883) (6,857)
Foreign exchange movement (221) (130)
--------- --------------------
Net pension liability at end of year (18,058) (11,033)
Related deferred tax asset, net 3,246 2,268
--------- --------------------
Net pension liability after tax (14,812) (8,765)
========= ====================
The table summarises the movements in the net liability on the Group's
various defined benefit pension schemes in Ireland, the UK and Continental
Europe. The balance sheet at 31 December 2011 reflects pension assets
of EURNil (2010: EUR1.2m) in respect of schemes in surplus and pension
liabilities of EUR18.1m (2010: EUR12.2m) in respect of schemes in
deficit. Post year-end, with the improvement of global equity markets,
scheme assets have improved by approximately EUR5m which will reduce
the pension liability.
The current/past service cost is charged in the income statement,
net of the finance income on scheme assets and liabilities. Actuarial
(losses)/gains are recognised in other comprehensive income.
In determining the valuation of pension obligations, consultation
with independent actuaries is required. The estimation of employee
benefit obligations requires the determination of appropriate assumptions
such as discount rates and expected future rates of return on assets.
The increase in the net liability during the year was due to the
decrease in the discount rates in the Irish and UK pension schemes
which led to an increase in the net present value of the schemes'
obligations and lower than expected returns on the scheme assets
in 2011. This increase in the liability was partly offset by a decrease
in the UK inflation rate and a curtailment gain which arose on the
Irish pension scheme as a result of payments no longer being made
by the Group for a number of employees who have reached the relevant
pension cap.
9. Dividends
2011 2010
EUR'000 EUR'000
Dividends paid on Ordinary Euro 1 cent shares
Interim dividend for 2011 of 0.54 cent per
share (2010: 0.54 cent) 1,900 1,900
Final dividend for 2010 of 1.243 cent per share
(2009: 1.15 cent) 3,982 4,047
---------- ---------
Total dividend 5,882 5,947
========== =========
Total dividend per share 1.783 1.69
========== =========
The directors have proposed an increase of 8.6% in the final dividend
for 2011, subject to shareholder approval at the AGM, of 1.35 cent
per share. This brings the total dividend in respect of 2011 to
1.89 cent per share, representing an increase of 6.0% on the total
2010 dividend. This dividend has not been provided for in the balance
sheet at 31 December 2011.
10. Joint ventures and associates
2011 2010
EUR'000 EUR'000
Investment in joint ventures and associates
at beginning of the year 34,054 32,959
Share of profit after tax:
- before exceptional items 3,442 1,743
- exceptional item arising on fair value losses
on investment property - (231)
Share of other comprehensive income, net 112 (721)
Increased investment during the year - cash 5,898 433
Increased investment during the year - deferred
consideration 1,124 -
Loans advanced during the year, net 294 556
Dividends received (1,760) (1,948)
Available-for-sale financial asset becoming
an associate 11,186 -
Disposal of joint venture (3,088) -
Joint venture being reclassified as non-current
asset held for sale (11,064) -
Foreign exchange movement 14 1,263
----------- ----------
Investment in joint ventures and associates
at end of the year 40,212 34,054
----------- ----------
Investments in the period
Primarily during the second half of the year the Group invested
EUR7,316,000 in new and existing joint venture and associate interests.
Investment in associates
At 31 December 2010, the Group held an effective interest of 15.6%
in Capespan Group Limited ("Capespan South Africa") which was classified
as an available-for-sale financial asset. From July onwards the
Group invested EUR3,336,000 which increased the Group's shareholding
in Capespan South Africa to an effective interest of 20.2% at 31
December 2011. From July 2011 onwards, the investment in Capespan
South Africa has been treated as an associate undertaking of the
Group in accordance with IAS 28 Investment in Associates. At this
date the Group's existing 15.6% effective interest in Capespan South
Africa was fair valued to EUR11,186,000 and reclassified from an
available-for-sale financial asset to an investment in an associate.
The total fair value gain of EUR4,055,000 (which included the reclassification
of EUR2,027,000 of previously recognised fair value gains in the
fair value reserve within equity) were reclassified to the income
statement resulting in an exceptional gain of EUR4,055,000 which
has been disclosed in the financial statements as an exceptional
item (refer to Note 5).
Investment in joint ventures
Mainly during the second half of the year the Group invested EUR3,980,000,
including EUR1,124,000 deferred consideration payable on achievement
of future profit targets in new and existing joint venture and associate
interests within its Fresh Produce Division. In September and December
2011, the Group invested in two new joint ventures within its Fresh
Produce Divisions in the UK and Scandinavia. During the year the
Group also made further investments in existing joint venture interests.
Disposal of joint venture
As disclosed in Note 5, in May 2011, the Group sold its 40% joint
venture interest in a South African farm investment company to Capespan
South Africa for cash consideration of EUR4,172,000. A profit of
EUR1,612,000 was recognised on this sale comprising the EUR1,084,000
difference between the sales proceeds and the joint venture's carrying
value of EUR3,088,000 together with the reclassification of EUR528,000
of currency translation differences from equity to the income statement.
This profit on disposal has been classified as an exceptional item
in the Group income statement for the year ended 31 December 2011.
Joint venture reclassified as held for sale
On 9 January 2012, the Group announced the completion of a transaction
to sell its 50% shareholding in the European fruit distribution
business Capespan International Holdings Limited ("Capespan Europe")
to Capespan South Africa for a total consideration of EUR13,030,000
satisfied by the exchange of an additional 20 million shares in
Capespan South Africa and EUR8,456,000 in cash. This transaction
results in the Group increasing its effective interest in Capespan
South Africa to 25.3% from 20.2% at 31 December 2011. Capespan South
Africa and Total Produce both previously owned 50% each of Capespan
Europe. This investment was classified as a non-current asset held
for sale following the agreement to dispose of this investment in
December 2011.
11. Businesses acquired and other developments
In the year, the Group made the following investments in the business.
Acquisition of subsidiary interests
The Group invested EUR12.6m (net of cash acquired) in a number of
bolt-on acquisitions primarily in the second half of the year within
both its Fresh Produce division and Consumer Goods and Healthfoods
Distribution division. The investment includes estimated deferred
consideration of EUR4.7m payable on achievement of future profit
targets. These acquisitions will complement existing business interests
in these divisions.
The purchase method of accounting has been applied for these acquisitions.
The provisional fair value of the identifiable assets and liabilities
acquired amounts to EUR7.0m inclusive of EUR8.9m of intangible assets.
Goodwill of EUR5.7m arose on these transactions. Transaction costs
related to these acquisitions of EUR0.6m were expensed to the income
statement in 2011.
Investment in joint ventures and associations
As highlighted in Note 10 the Group invested EUR7.3m in new and
existing joint venture and associate interests in its Fresh Produce
division. For all acquisitions, the purchase method of accounting
has been applied. The initial assignment of fair values to net assets
has been performed on a provisional basis in respect of these acquisitions
given the timing of the completion of these transactions and will
be finalised within twelve months from the acquisition date, as
permitted by IFRS 3 (Revised) Business Combinations.
Acquisition of non-controlling interests
During the year, the Group acquired additional shares in subsidiaries
for cash consideration of EUR0.2m. These changes in the Group's
ownership interest in existing subsidiaries were accounted for as
equity transactions. The difference of EUR0.1m between the fair
value of consideration, EUR0.2m, and the book value of the non-controlling
interest acquired, EUR0.1m, was accounted for directly in retained
earnings. Also the Group paid EUR0.6m in respect of the acquisition
of a non-controlling interest in a subsidiary that was completed
in late 2010.
Other
During the year, the Group paid EUR14.1m in respect of deferred
consideration payments relating to previous acquisitions. Revisions
of EUR1.1m were also made during the year to deferred consideration
amounts payable relating to previous acquisitions as actual performance
in 2011 has exceeded previous expectations.
The Group continues to actively pursue further investment opportunities
in both new and existing markets.
12. Cash flows generated from operations
2011 2010
EUR'000 EUR'000
Operating activities
Profit before tax 34,376 33,596
Depreciation of property, plant and equipment
(excluding joint ventures and associates) 13,154 13,066
Goodwill impairment 114 -
Impairment of property, plant and equipment 1,331 -
Fair value movement on investment property 2,550 2,119
(Gain)/loss on disposal of equity investment (273) 65
Amortisation of intangible assets (excluding
joint ventures and associates) 5,501 5,252
Amortisation of research and development 281 227
Amortisation of grants (187) (441)
Movement on provisions (294) 798
Share based payment expense 118 22
Contributions to defined benefit pension schemes (4,842) (5,527)
Defined benefit pension scheme expense 1,689 1,642
Curtailment gains in respect of defined benefit
pension schemes (926) -
Net gain on disposal of property, plant and
equipment (314) (679)
Net (gain)/loss on non-hedging derivative financial
instruments (583) 129
Net interest expense 4,748 3,441
Income from available-for-sale financial assets 406 411
Share of profits of joint ventures and associates (3,442) (1,512)
Gain reclassified to income statement on available-for-sale
financial asset becoming an associate (4,055) -
Gain on disposal of joint venture (1,612) -
Income tax paid (11,286) (9,847)
Net interest paid (5,226) (3,395)
--------- ---------
Cash flows from operations before working capital
movements 31,228 39,367
--------- ---------
(Increase)/decrease in working capital (7,747) 6,976
--------- ---------
Cash flows from operating activities 23,481 46,343
--------- ---------
13. Analysis of movement in net debt in the year
1 Jan Cash 31 Dec
2011 flow Non-cash Acquisitions Translation 2011
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Bank balances and
deposits 104,486 (16,165) - 1,245 521 90,087
Overdrafts (6,570) 2,293 - - 3 (4,274)
---------- --------- --------- ------------- ------------ --------------
Cash, cash equivalents
and bank overdrafts
per cash flow statement 97,916 (13,872) - 1,245 524 85,813
Bank loans - non
current (125,155) (8,523) (1,470) - (1,210) (136,358)
Bank loans - current (16,266) (4,261) 1,470 - (398) (19,455)
Finance leases (4,430) 274 (1,327) - (70) (5,553)
---------- --------- --------- ------------- ------------ --------------
Total interest bearing
borrowings (145,851) (12,510) (1,327) - (1,678) (161,366)
---------- --------- --------- ------------- ------------ --------------
Net debt (47,935) (26,382) (1,327) 1,245 (1,154) (75,553)
---------- --------- --------- ------------- ------------ --------------
1 Jan Cash 31 Dec
2010 flow Non-cash Acquisitions Translation 2010
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Bank balances and
deposits 88,961 11,608 - 414 3,503 104,486
Overdrafts (4,337) (2,200) - - (33) (6,570)
---------- --------- --------- ------------- ------------ --------------
Cash, cash equivalents
and bank overdrafts
per cash flow statement 84,624 9,408 - 414 3,470 97,916
Bank loans - non
current (122,418) (583) 4,453 - (6,607) (125,155)
Bank loans - current (12,191) 943 (4,453) - (565) (16,266)
Finance leases (575) 300 (3,774) (105) (276) (4,430)
---------- --------- --------- ------------- ------------ --------------
Total interest bearing
borrowings (135,184) 660 (3,774) (105) (7,448) (145,851)
---------- --------- --------- ------------- ------------ --------------
Net debt (50,560) 10,068 (3,774) 309 (3,978) (47,935)
---------- --------- --------- ------------- ------------ --------------
14. Post balance sheet events
Other than the disposal of Capespan International Holdings on 9 January
2012 as disclosed in Note 10 there have been no material events subsequent
to 31 December 2011 which would require disclosure in this report.
15. Related party transactions
There have been no changes to related parties, other than those set
out in Note 11, from those described in the 2010 Annual Report that
materially affect the financial position or affect the performance
of the Group for the twelve month period ended 31 December 2011.
16. Board approval
This announcement was approved by the Board of Directors of Total
Produce plc on 5 March 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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