TIDMTOT
RNS Number : 4069L
Total Produce Plc
04 September 2012
TOTAL PRODUCE PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012
TOTAL PRODUCE RECORDS STRONG PERFORMANCE IN FIRST HALF OF
2012
-- Revenue * up 5.0% to EUR1.4 billon
-- Adjusted EBITDA * up 10.0% to EUR36.7m
-- Adjusted EBITA * up 10.7% to EUR29.0m
-- Adjusted profit before tax * up 6.2% to EUR25.1m
-- Adjusted earnings per share * up 6.7% to 4.48 cent
-- Interim dividend increased by 5.0% to 0.567 cent per share
* As defined overleaf
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce has delivered a strong performance for the first
half of 2012 with a 6.7% increase in adjusted earnings per share
to 4.48 cent assisted by the positive contribution of acquisitions
in the past 12 months.
We are pleased to report that the Group has concluded over EUR20m
of investments in the first half of 2012. The largest investment
was the acquisition of 50% of Frankort & Koning in the Netherlands.
The Group has increased its shareholding in Capespan Group Limited,
the leading South African produce company to 25.3%. We continue
to actively pursue further investment opportunities.
The Group is raising the interim dividend by 5.0% to 0.567 cent
per share and we are pleased to announce that we are increasing
our full year earnings per share target towards the upper end of
the range between 7.0 and 8.0 cent per share."
4 September 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 INTERIM RESULTS FOR THE
SIX MONTHS ENDED 30 JUNE 2012
2012 2011
EUR'million EUR'million % change
Total revenue (i) 1,399 1,333 +5.0%
Group revenue 1,214 1,211 + 0.2%
Adjusted EBITDA (ii) 36.7 33.4 * +10.0%
Adjusted EBITA (iii) 29.0 26.2 +10.7%
Operating profit 23.8 23.8 -
Adjusted profit before tax (iv) 25.1 23.7 +6.2%
Profit before tax 20.4 21.7 (6.0%)
Euro cent Euro cent % change
Adjusted earnings per share (v) 4.48 4.20 + 6.7%
Basic and diluted earnings per share 3.73 4.12 (9.5%)
Interim dividend per share 0.567 0.540 +5.0%
(i) Total revenue includes the Group's share of revenue of
joint ventures & associates.
(ii) Adjusted EBITDA is earnings before interest, tax, depreciation,
acquisition related intangible asset amortisation charges,
acquisition related costs and exceptional items. It also
excludes the Group's share of these items within joint
ventures and associates.
(iii) Adjusted EBITA is earnings before interest, tax, acquisition
related intangible asset amortisation charges, acquisition
related costs and exceptional items. It also excludes
the Group's share of these items within joint ventures
and associates.
(iv) Adjusted profit before tax excludes acquisition related
intangible amortisation charges, acquisition related
costs and exceptional items. It also excludes the Group's
share of these items within joint ventures and associates.
(v) Adjusted earnings per share excludes acquisition related
intangible asset amortisation charges, acquisition related
costs, exceptional items and related tax. It also excludes
the Group's share of these items within joint ventures
and associates.
* 2011 interim adjusted EBITDA restated to treat the Group's
share of joint ventures & associates depreciation within the
calculation
Summary of Results
Total Produce (the 'Group') has recorded adjusted earnings per share
(1) growth for the six month period ended 30 June 2012 of 6.7% to
4.48 cent (2011: 4.20 cent) which reflects a positive start to the
year.
Revenue (2) grew 5.0% to EUR1.40 billion (2011: EUR1.33 billion)
with adjusted EBITA (3) up 10.7% to EUR29.0m (2011: EUR26.2m). The
results were assisted by the contribution of acquisitions completed
in the past twelve months partially offset by the divestment of the
Group's 50% interest in Capespan International Holdings Limited ('Capespan
Europe'). The effect of currency translation had a marginally positive
impact on the reported results due to the strength of Sterling against
the Euro in the period. The overall result reflects the strength
and broad base of the Group's operations despite weaker conditions
in certain Eurozone locations.
Operating profit before exceptional items increased 5.6% to EUR23.5m
(2011: EUR22.2m). The Group recognised an exceptional profit of EUR0.3m
in the period relating to the profit on the divestment of the Group's
50% joint venture investment in Capespan Europe. This compares to
a profit on disposal of EUR1.6m in the comparative period following
the disposal of the Group's South African Farm investments. The result
including these exceptional items was an operating profit of EUR23.8m
similar to the comparative period in 2011.
Statutory profit before tax in the period was EUR20.4m (2011: EUR21.7m)
with the decrease due primarily to lower exceptional gains and higher
acquisition related intangible asset amortisation in the period.
Excluding these items, adjusted profit before tax (4) increased by
6.2% to EUR25.1m (2011: EUR23.7m).
The Group continues to be very cash generative, with operating cashflows
of EUR20.6m for the six month period (2011: EUR19.9m) before seasonal
working capital outflows.
The Group has concluded a number of investments in the first half
of 2012 for a total consideration of over EUR20m. The primary investment
was the acquisition of a 50% interest in Frankort & Koning Beheer
Venlo BV and subsidiaries ('Frankort & Koning'), a leading European
Fresh Produce distributor with principal operations in the Netherlands,
Germany and Poland. As part of the Group's divestment of its 50%
interest in Capespan Europe, the Group has increased its effective
shareholding in Capespan Group Limited, the leading South African
Produce Company, to 25.3%. Further details on these investments are
outlined below within development activity.
The Group is pleased to report a 5.0% increase in its interim dividend
to 0.567 cent per share (2011: 0.540 cent per share).
Operating Review
The table below details a segmental breakdown of the Group's revenue
and adjusted EBITA for the six months ended 30 June 2012. Segment
performance is evaluated based on revenue and adjusted EBITA.
(Unaudited) (Unaudited)
6 months to 30 June 6 months to 30 June
2012 2011
Segmental Adjusted Segmental Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Eurozone Fresh Produce 652,668 10,410 658,510 13,022
Northern Europe Fresh Produce 327,364 10,755 319,854 8,962
UK Fresh Produce 252,917 3,969 256,422 3,529
Rest of World Fresh Produce 137,200 3,510 79,982 2,230
Inter-segment revenue (22,739) - (21,167) -
------------ --------- ------------ ---------
Total Fresh Produce Distribution 1,347,410 28,644 1,293,601 27,743
Healthfoods & Consumer Products
Distribution 52,054 1,819 39,479 (134)
Unallocated costs - (1,505) - (1,447)
------------ --------- ------------ ---------
Third party revenue and adjusted
EBITA 1,399,464 28,958 1,333,080 26,162
------------ --------- ------------ ---------
Fresh Produce Division
The Group's core Fresh Produce Division is involved in the growing,
sourcing, 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 the division increased by 4.2% in the period to EUR1,347m
(2011: EUR1,294m) with adjusted EBITA increasing 3.2% to EUR28.6m
(2011: EUR27.7m). Net EBITA margins in the Fresh Produce Division
at 2.13% were in line with comparative period. The results were assisted
by acquisitions in the past twelve months offset to a certain extent
by the divestment of the Group's 50% interest in Capespan Europe.
Trading conditions overall were satisfactory with a strong performance
in Northern Europe offset by weaker conditions in certain Eurozone
locations. The effect of currency translation had a marginally positive
impact on the reported results in the period due to the strength
of the average Sterling to Euro rate with the average Swedish Krona
to Euro rate in line with the comparative period. On a like-for-like
basis excluding impact of acquisitions, divestments and currency
translation, volumes were marginally up but were held back by average
price decreases leading to a marginal drop in revenue.
Further information on each reporting segment follows.
Eurozone Fresh Produce
Revenue in the Eurozone division decreased marginally by 0.9% in
the period to EUR653m (2011: EUR659m). Increased revenue as a result
of the completion of the Frankort & Koning acquisition in March 2012
was offset by the effect of the divestment of the Continental European
division of Capespan Europe in January 2012. Excluding the effect
of acquisitions and divestments, volume increases were held back
by average price decreases leading to a marginal drop in revenue
on a like-for-like basis. Adjusted EBITA decreased 20.1% to EUR10.4m
(2011: EUR13.0m) due to weaker trading conditions in certain Eurozone
locations.
Northern Europe Fresh Produce
Reported revenue in the Group's Northern European business increased
by 2% to EUR327m (2011: EUR320m). Adjusted EBITA increased by 20.0%
to EUR10.8m (2011: EUR9.0m). In the prior period, reorganisation
costs were incurred in completing the move to the new state-of-the-art
distribution facility in Sweden.
UK Fresh Produce
Reported revenue in the Group's UK division has decreased by 1.4%
in the period to EUR253m (2011: EUR256m). The results have been impacted
by the divestment of the UK division of Capespan Europe in January
2012. This has been largely offset by the contribution of bolt-on
acquisitions in the second half of 2011 and the positive impact on
the reported results of the strengthening of Sterling in the period.
Revenue on a like-for-like basis excluding the effect of acquisitions,
divestments and currency translation was down 2.0% due to a decline
in average prices with volumes stable.
Adjusted EBITA has increased by EUR0.5m to EUR4.0m (2011: EUR3.5m)
with the contribution of bolt-on acquisitions in the second half
of 2011, lower rationalisation costs in the period and the benefit
of currency translation partly offset by the divestment of the UK
division of Capespan Europe.
Rest of World Fresh Produce
This segment includes a number of fresh produce businesses in Eastern
Europe, Asia and South Africa. The Group increased its investment
in Capespan South Africa from 15.6% to 20.2% in the second half of
2011 and accordingly has accounted for its investment as an associate
from July 2011 onwards, recording its share of revenues and after
tax profits. As outlined earlier, in January 2012 the Group increased
its investment in Capespan South Africa to an effective interest
of 25.3% relating to the Group's divestment of its shareholding in
Capespan Europe.
Primarily as a result of the Capespan South Africa transaction, reported
revenue increased from EUR80m to EUR137m in the six months ended
30 June 2012 with adjusted EBITA increasing from EUR2.2m to EUR3.5m.
Healthfoods & Consumer Products Distribution Division
This division is a full service distribution and marketing partner
to the healthfoods, pharmacy, grocery and domestic consumer products
sectors. This segment distributes to retail and wholesale outlets
in Ireland and the United Kingdom.
Revenue in this division increased by 32% in the period to EUR52.1m
(2011: EUR39.5m), with a net adjusted EBITA of EUR1.8m (2011: loss
of EUR0.1m). The results were assisted by the positive contribution
from acquisitions completed in the second half of 2011.
Financial Review
Exceptional Items
On 9 January 2012, the Group sold its 50% shareholding in the European
fruit distribution business of Capespan Europe to Capespan South
Africa for a total consideration of EUR13.0m satisfied by 20 million
additional shares in Capespan South Africa (valued at EUR4.5m) and
EUR8.5m in cash. A profit of EUR0.3m was recognised on the disposal
of this investment. In the comparative period in 2011, there was
an exceptional gain of EUR1.6m relating to the sale of the Group's
joint venture interest in Rapiprop, a South African farming operation.
See Note 5 of the accompanying financial information for further
details of both items.
Net Financial Expense
Net financial expense for the period was EUR3.3m (2011: EUR2.1m).
Included within finance income in the comparative period was EUR0.4m
of dividend income from Capespan South Africa. From July 2011 onwards,
as a result of equity accounting for Capespan Group Limited, this
dividend income is no longer recognised as finance income in the
Group income statement. Excluding this finance income, the net finance
expense increased by EUR0.8m in the period due to higher average
debt in the period as a result of significant acquisition expenditure
in the previous twelve months and higher cost of funds on Group facilities.
The Group's share of the net interest expense of joint ventures and
associates in the period was EUR0.5m (2011: EUR0.4m). Net interest
cover for the period was 8.6 times based on adjusted EBITA.
Profit Before Tax
Statutory profit before tax in the period was EUR20.4m (2011: EUR21.7m)
with the decrease due primarily to lower exceptional gains and higher
acquisition related intangible asset amortisation in the period.
Excluding exceptional items, acquisition related intangible asset
amortisation and acquisition related costs, adjusted profit before
tax (4) increased by 6.2% to EUR25.1m (2011: 23.7m).
Non-Controlling Interests
The non-controlling interests' share of after tax profits in the
period was EUR3.3m (2011: EUR3.1m). The increase on prior period
was due to the non-controlling interests' share of after tax profits
of acquisitions made in the second half of 2011 offset by lower after
tax profits on a number of the Group's non-wholly owned subsidiaries
in the Eurozone.
Adjusted and Basic Earnings per Share
Adjusted earnings per share for the six months ended 30 June 2012
increased 6.7% to 4.48 cent per share (2011: 4.20 cent). Management
believe that adjusted earnings per share excluding exceptional items,
amortisation of acquisition related intangible assets, acquisition
related costs and related tax on these items gives a fair reflection
of the underlying trading performance of the Group. Basic earnings
per share after these non-trading items amounted to 3.73 cent (2011:
4.12 cent).
Cash Flow
Net debt at 30 June 2012 was EUR94.6m compared to EUR65.6m at 30
June 2011 and EUR75.6m at 31 December 2011. At 30 June 2012, the
Group had available cash balances of EUR78.1m and interest bearing
borrowings (including overdrafts) of EUR172.7m. Net debt to annualised
adjusted EBITDA is 1.5 times and interest is covered 8.6 times by
adjusted EBITA.
The Group generated EUR20.6m (2011: EUR19.9m) in operating cash flows
in the first six months of 2012 before seasonal working capital outflows
of EUR28.0m (2011: EUR24.5m). Cash outflows on maintenance capital
expenditure, net of disposals, were EUR3.8m (2011: EUR3.5m). Dividends
received from joint ventures & associates increased to EUR2.5m (2011:
EUR1.5m).
Cash outflows on acquisitions of subsidiaries, investment in joint
ventures and associates and acquisitions of non-controlling interests
was EUR7.8m in the period. Expenditure (including leases) on development
capital expenditure of EUR0.6m was down on expenditure of EUR7.7m
in the comparative period which primarily related to the construction
of an enlarged distribution facility in Sweden. As highlighted earlier,
the Group sold its investment in Capespan Europe and received cash
proceeds of EUR8.5m in the period. The final 2012 dividend of EUR4.5m
(2011: EUR4.1m) was paid in the period.
There was a negative impact of EUR2.1m on translation of foreign
currency net debt into Euro at 30 June 2012 due primarily to the
stronger Sterling and Swedish Krona exchange rates at the period
end compared to the rates prevailing at 31 December 2011.
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec
2012 2011 2011
EUR'million EUR'million EUR'million
Adjusted EBITDA 36.7 33.4* 59.7
Deduct adjusted EBITDA of joint ventures
& associates (5.4) (4.0) (7.5)
Net interest and tax paid (8.4) (7.6) (16.5)
Other (2.3) (1.9) (4.5)
------------- ------------- -------------
Operating cash flows before working capital
movements 20.6 19.9 31.2
Working capital movements (28.0) (24.5) (7.7)
------------- ------------- -------------
Operating cash flows (7.4) (4.6) 23.5
Maintenance capital expenditure net of
disposal proceeds (3.8) (3.5) (7.5)
Dividends received from joint ventures
& associates 2.5 1.5 1.8
Dividends paid to non-controlling interests (3.3) (3.1) (4.9)
------------- ------------- -------------
Free cash flow (12.0) (9.7) 12.9
Disposal of a joint venture interest 8.5 4.2 4.2
Acquisition payments (subsidiaries, joint
ventures & associates, non-controlling
interests) (7.8) (1.3) (15.1)
Deferred consideration payments and other (0.5) (0.5) (14.0)
Development capital expenditure (including
finance leases) (0.6) (7.7) (8.6)
Dividends paid to equity shareholders (4.5) (4.1) (5.9)
Total net debt movement in period (16.9) (19.1) (26.5)
Net debt at beginning of period (75.6) (47.9) (47.9)
Foreign currency translation (2.1) 1.4 (1.2)
------------- ------------- -------------
Net debt at end of period (94.6) (65.6) (75.6)
============= ============= =============
* 2011 interim adjusted EBITDA restated to treat the Group's
share of joint ventures and associates depreciation within the
calculation
Defined Benefit Pension Obligations
The net liability of the Group's defined benefit pension schemes
(net of deferred tax) increased to EUR20.1m at 30 June 2012 from
EUR14.8m at 31 December 2011. The increase in the liability is due
to a significant decrease in the discount rates underlying the calculations
of the present value of scheme obligations partially offset by increased
return on pension scheme assets and a decrease in the long term inflation
assumption.
Shareholders' Equity
The balance sheet has further strengthened in the six month period
ended 30 June 2012 with shareholders' equity increasing by EUR5.4m
to EUR182.1m. The increase was due to earnings in the period of EUR12.3m
attributable to equity shareholders and gains on the retranslation
of the net assets of foreign currency denominated operations offset
by actuarial losses on employee defined benefit pension schemes and
the payment of the final 2011 dividend to equity shareholders of
the Company.
Development Activity
In the six month period ended 30 June 2012, the Group invested over
EUR20m in the business, including estimated deferred consideration
of up to EUR9.0m payable on the achievement of future profit targets.
On 9 January 2012, the Group completed the divestment of its 50%
joint venture interest in Capespan Europe to Capespan South Africa
for EUR13.0m satisfied by an exchange of 20 million additional shares
in Capespan South Africa (valued at EUR4.5m) and EUR8.5m in cash.
This transaction increased the Group's effective interest in Capespan
South Africa to 25.3% from 20.2% at 31 December 2011. Capespan South
Africa and Total Produce previously owned 50% each of Capespan Europe.
As noted in Note 5 of the accompanying financial information a profit
of EUR0.3m was recognised on the sale of Capespan Europe and disclosed
as an exceptional item in the income statement in the period.
On 13 March 2012, the Group completed the acquisition of a 50% shareholding
in Frankort & Koning Beheer Venlo BV and subsidiaries ('Frankort
& Koning'). Headquartered in Venlo, the Netherlands, Frankort & Koning
have operations principally in the Netherlands, Germany and Poland.
An initial consideration of EUR6.0m was paid on completion with additional
consideration of up to EUR9.0m payable in several tranches over the
next number of years contingent on meeting future profit targets.
In addition to the activity detailed above, the Group invested in
a number of other subsidiary business interests and new and existing
joint ventures in the period. 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 2012, 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.
Dividends
The Board has declared an interim dividend of 0.567 cent per share,
representing a 5.0% increase on the 2011 interim dividend of 0.540
cent per share. This dividend will be paid on the 19 October 2012
to shareholders on the register at 21 September 2012 and is subject
to dividend withholding tax. In accordance with company law and IFRS,
this dividend has not been provided for in the balance sheet at 30
June 2012.
Outlook
Total Produce has delivered a strong performance for the first half
of 2012 with a 6.7% increase in adjusted earnings per share to 4.48
cent assisted by the positive contribution of acquisitions in the
past 12 months.
We are pleased to report that the Group has concluded over EUR20m
of investments in the first half of 2012. The largest investment
was the acquisition of 50% of Frankort & Koning in the Netherlands.
The Group has increased its shareholding in Capespan Group Limited,
the leading South African produce company to 25.3%. We continue to
actively pursue further investment opportunities.
The Group is raising the interim dividend by 5.0% to 0.567 cent per
share and we are pleased to announce that we are increasing our full
year earnings per share target towards the upper end of the range
of between 7.0 and 8.0 cent per share.
Carl McCann, Chairman
On behalf of the Board
4 September 2012
(1) Adjusted earnings per share excludes acquisition related intangible
asset amortisation, acquisition related costs, exceptional items
and related tax. It also excludes the Group's share of these items
within joint ventures & associates. This calculation is set out
in Note 6 of the accompanying financial information.
(2) Revenue including Group's share of revenue of joint ventures &
associates.
(3) Adjusted EBITA is earnings before interest, tax, acquisition related
intangible asset amortisation, acquisition related costs and exceptional
items. It also excludes the Group's share of these items within
joint ventures & associates. This calculation is set out in Note
4 of the accompanying financial information.
(4) Adjusted profit before tax excludes acquisition related intangible
asset amortisation, acquisition related costs, exceptional items
and related tax. It also excludes the Group's share of these items
with joint ventures & associates. This calculation is set out in
Note 4 of the accompanying 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
Condensed Group Income Statement
for the half year ended 30 June 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
6 months 6 months 6 months 6 months 6 months 6 months (Audited) (Audited) (Audited)
to to to to to to Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 31 Dec 31 Dec 31 Dec
2012 2012 2012 2011 2011 2011 2011 2011 2011
Pre- Exceptional Pre- Exceptional Pre- Exceptional
exceptional items Total exceptional items Total exceptional items Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue,
including Group
share of joint
ventures
& associates 1,399,464 - 1,399,464 1,333,080 - 1,333,080 2,526,577 - 2,526,577
Group revenue 1,213,604 - 1,213,604 1,211,449 - 1,211,449 2,284,478 - 2,284,478
Cost of sales (1,052,111) - (1,052,111) (1,052,994) - (1,052,994) (1,964,162) - (1,964,162)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Gross profit 161,493 - 161,493 158,455 - 158,455 320,316 - 320,316
Operating
expenses (140,239) 303 (139,936) (138,021) 1,612 (136,409) (287,346) 2,712 (284,634)
Share of profit
of joint
ventures and
associates 2,209 - 2,209 1,775 - 1,775 3,442 - 3,442
Operating profit 23,463 303 23,766 22,209 1,612 23,821 36,412 2,712 39,124
Net financial
expense (3,348) - (3,348) (2,098) - (2,098) (4,748) - (4,748)
------------ ------------ ------------ ------------
Profit before tax 20,115 303 20,418 20,111 1,612 21,723 31,664 2,712 34,376
Income tax
(expense)/credit (4,787) - (4,787) (5,012) - (5,012) (7,298) 663 (6,635)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit for the
period 15,328 303 15,631 15,099 1,612 16,711 24,366 3,375 27,741
============ ============ ============ ============ ============ ============ ============ ============ ============
Attributable to:
Equity holders of
the
parent 12,317 13,607 23,466
Non-controlling
interests 3,314 3,104 4,275
------------ ------------ ------------
15,631 16,711 27,741
============ ============ ============
Earnings per
ordinary
share
Basic 3.73 cent 4.12 cent 7.11 cent
Fully diluted 3.73 cent 4.12 cent 7.11 cent
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Produce plc
Condensed Group Statement of Comprehensive Income
for the half year ended 30 June 2012
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2011
2012 2011
EUR'000 EUR'000 EUR'000
Profit for the period 15,631 16,711 27,741
============= ============= ==============
Other comprehensive income:
Foreign currency translation effects:
-foreign currency net investments
- subsidiaries 3,515 (2,497) 2,196
-foreign currency net investments
- joint ventures & associates 268 (899) 14
-foreign currency borrowings designated
as net investment hedges (1,584) 1,323 (1,380)
-foreign currency losses/(gains)
reclassified to income statement
on disposal of joint venture investment 1,489 (528) (528)
Revaluation gains on property, plant
and equipment, net - - 1,350
(Losses)/gains on re-measuring available-for-sale
financial assets, net - (27) 2,028
Reclassification of revaluation gains
to income statement upon available-for-sale
investment becoming an associate - - (4,055)
Actuarial (losses)/gains on defined
benefit pension schemes (7,216) 865 (10,883)
Effective portion of cash flow hedges,
net (18) 13 25
Deferred tax on items taken directly
to other comprehensive income 958 (568) 1,654
Share of joint ventures & and associates
actuarial gains on defined benefit
pension scheme - - 80
Share of joint ventures & associates
effective portion of cash flow hedges,
net - - 9
Share of joint ventures & and associates
deferred tax on items taken directly
to other comprehensive income - - 23
------------- ------------- --------------
Other comprehensive income for the
period (2,588) (2,318) (9,467)
============= ============= ==============
Total comprehensive income for the
period 13,043 14,393 18,274
============= ============= ==============
Attributable to:
Equity holders of the parent 9,740 11,296 13,926
Non-controlling interests 3,303 3,097 4,348
------------- ------------- --------------
13,043 14,393 18,274
============= ============= ==============
Total Produce plc
Condensed Group Balance Sheet
as at 30 June 2012
(Unaudited) (Unaudited) (Audited)
30 June 2012 30 June 2011 31 Dec 2011
EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Property, plant and equipment 134,829 134,945 135,644
Investment property 11,084 12,880 10,881
Goodwill and intangible assets 152,091 136,585 152,493
Investments in joint ventures and
associates 59,045 30,831 40,212
Other financial assets 637 9,651 647
Other receivables 5,563 3,286 4,290
Deferred tax assets 7,488 5,359 6,903
Employee benefits - 2,769 -
-------------- -------------- -------------
Total non-current assets 370,737 336,306 351,070
-------------- -------------- -------------
Current assets
Inventories 44,217 42,550 39,098
Trade and other receivables 326,783 295,855 268,126
Corporation tax receivable 966 562 2,075
Derivative financial instruments 873 211 57
Cash and cash equivalents 78,103 89,596 90,087
-------------- -------------- -------------
Total current assets (excluding non-current
assets classified as held for sale) 450,942 428,774 399,443
Non-current assets classified as
held for sale - - 11,064
-------------- -------------- -------------
Total current assets 450,942 428,774 410,507
-------------- -------------- -------------
Total assets 821,679 765,080 761,577
-------------- -------------- -------------
Equity
Share capital 3,519 3,519 3,519
Share premium 252,574 252,574 252,574
Other reserves (112,748) (118,554) (116,460)
Retained earnings 38,776 38,415 37,066
-------------- -------------- -------------
Total equity attributable to equity
holders of the parent 182,121 175,954 176,699
Non-controlling interests 60,117 58,130 60,041
-------------- -------------- -------------
Total equity 242,238 234,084 236,740
============== ============== =============
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 146,840 95,637 140,586
Deferred government grants 1,444 1,372 1,569
Other payables 2,580 2,857 2,582
Provisions 15,872 4,495 10,809
Corporation tax payable 7,754 8,110 7,754
Deferred tax liabilities 16,433 17,203 17,100
Employee benefits 24,080 10,625 18,058
-------------- -------------- -------------
Total non-current liabilities 215,003 140,299 198,458
-------------- -------------- -------------
Current liabilities
Interest-bearing loans and borrowings 25,857 59,590 25,054
Trade and other payables 332,107 312,740 295,728
Provisions 3,396 14,737 1,634
Derivative financial instruments 691 290 309
Corporation tax payable 2,387 3,340 3,654
-------------- -------------- -------------
Total current liabilities 364,438 390,697 326,379
-------------- -------------- -------------
Total liabilities 579,441 530,996 524,837
-------------- -------------- -------------
Total liabilities and equity 821,679 765,080 761,577
============== ============== =============
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half year ended 30 June 2012
Attributable to equity holders of the parent
------------------------------------------------------------------------------------------------------
Currency Own Other Non-
Share Share translation Reval-uation De-merger shares equity Retained controlling Total
capital premium reserve reserve Reserve reserve reserves earnings Total interest equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
For the half
year ended 30
June 2012
(Unaudited)
As at 1 January
2012 3,519 252,574 (5,808) 19,296 (122,521) (8,580) 1,153 37,066 176,699 60,041 236,740
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Comprehensive
income
Profit for the
period - - - - - - - 12,317 12,317 3,314 15,631
Other
comprehensive
income:
Foreign currency
translation
effects - - 3,585 - - - - - 3,585 103 3,688
Actuarial losses
on defined
benefit
pension
schemes, net - - - - - - - (7,093) (7,093) (123) (7,216)
Effective
portion of cash
flow hedges,
net - - - - - - (13) - (13) (5) (18)
Deferred tax on
items taken
directly
to other
comprehensive
income - - - - - - 4 940 944 14 958
Total other
comprehensive
income - - 3,585 - - - (9) (6,153) (2,577) (11) (2,588)
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Total
comprehensive
income - - 3,585 - - - (9) 6,164 9,740 3,303 13,043
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Transactions
with equity
holders
of the parent :
Contribution by
non-controlling
interests - - - - - - - - - 57 57
Dividends - - - - - - - (4,454) (4,454) (3,284) (7,738)
Share-based
payment
transactions - - - - - - 136 - 136 - 136
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Total
transactions
with equity
holders
of the parent - - - - - - 136 (4,454) (4,318) (3,227) (7,545)
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
As at 30 June
2012 3,519 252,574 (2,223) 19,296 (122,521) (8,580) 1,280 38,776 182,121 60,117 242,238
======== ======== ============ ============= ========== ======== ========= ========= ========= ============ ========
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half year ended 30 June 2012 (Continued)
Attributable to equity holders of the parent
------------------------------------------------------------------------------------------------------
Currency Own Other Non-
Share Share translation Reval-uation De-merger shares equity Retained controlling Total
capital premium reserve reserve Reserve reserve reserves earnings Total interest equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
For the half year
ended 30 June 2011
(Unaudited)
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
period - - - - - - - 13,607 13,607 3,104 16,711
Other comprehensive
income:
Foreign currency
translation
effects - - (2,594) - - - - - (2,594) (7) (2,601)
Losses on
re-measuring
available-for-sale
financial assets,
net - - - - - - (27) - (27) - (27)
Actuarial gains on
defined benefit
pension schemes,
net - - - - - - - 843 843 22 865
Effective portion
of cash flow
hedges,
net - - - - - - 43 - 43 (30) 13
Deferred tax on
items taken
directly
to other
comprehensive
income - - - - - - (20) (556) (576) 8 (568)
Total other
comprehensive
income - - (2,594) - - - (4) 287 (2,311) (7) (2,318)
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Total comprehensive
income - - (2,594) - - - (4) 13,894 11,296 3,097 14,393
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Transactions with
equity holders
of the parent :
Non-controlling
interests arising
on acquisition - - - - - - - - - 130 130
Dividends - - - - - - - (4,100) (4,100) (3,096) (7,196)
Share-based payment
transactions - - - - - - 158 - 158 - 158
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
Total transactions
with equity
holders
of the parent - - - - - - 158 (4,100) (3,942) (2,966) (6,908)
-------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ------------ --------
As at 30 June 2011 3,519 252,574 (8,599) 17,938 (122,521) (8,580) 3,208 38,415 175,954 58,130 234,084
======== ======== ============ ============= ========== ======== ========= ========= ========= ============ ========
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half year ended 30 June 2012 (Continued)
Attributable to equity holders of the parent
--------------------------------------------------------------------------------------------------------
Currency Own Other Non-
Share Share translation Reval-uation De-merger shares equity Retained 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 EUR000 EUR'000
For the year ended
31 December 2011
(Audited)
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 &
associates
actuarial gain on
defined benefit
pension scheme - - - - - - - 80 80 - 80
Share of joint
ventures &
associates
gain on
re-measuring
available-for-sale
financial assets - - - - - - - 9 9 - 9
Share of joint
ventures &
associates
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
Condensed Group Statement of Cash Flows
for the half year ended 30 June 2012
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 30 June 2011 31 Dec 2011
2012
EUR'000 EUR'000 EUR'000
Net cash flows from operating activities
before working capital movements
(Note 10) 20,576 19,889 31,228
Increase in working capital (27,999) (24,490) (7,747)
------------ -------------- ----------------
Net cash flows from operating activities (7,423) (4,601) 23,481
============ ============== ================
Investing activities
Acquisition of subsidiaries, net
of cash acquired (635) (98) (7,973)
Acquisition of, and investment in,
joint ventures & associates including
loans (7,131) (531) (6,192)
Acquisition of other financial assets (2) - (30)
Payments of deferred consideration (311) (281) (14,086)
Acquisition of property, plant &
equipment (4,535) (10,599) (15,531)
Proceeds from disposal of property,
plant & equipment 440 488 725
Dividends received from joint ventures
& associates 2,466 1,549 1,760
Proceeds from disposal of joint venture 8,456 4,172 4,172
Research and development expenditure
capitalised (77) (232) (156)
Software costs capitalised (235) - -
Government grants received 18 - 296
------------ -------------- ----------------
Net cash flows from investing activities (1,546) (5,532) (37,015)
============ ============== ================
Financing activities
Net (repayment)/drawdown of borrowings (14,212) 2,770 12,784
Capital element of finance lease
repayments (577) (137) (274)
Dividends paid to equity holders
of the parent (4,454) (4,100) (5,882)
Acquisition of non-controlling interests - (636) (841)
Capital contribution by non-controlling
interests 57 - -
Dividends paid to non-controlling
interests (3,284) (3,096) (4,880)
------------ -------------- ----------------
Net cash flows from financing activities (22,470) (5,199) 907
============ ============== ================
Net decrease in cash, cash equivalents
& overdrafts (31,439) (15,332) (12,627)
Cash, cash equivalents and & overdrafts
at start of period 85,813 97,916 97,916
Net foreign exchange difference 517 (200) 524
------------ -------------- ----------------
Cash, cash equivalents & overdrafts
at end of period 54,891 82,384 85,813
============ ============== ================
Total Produce plc
Condensed Summary Group Reconciliation of Net Debt
for the half year ended 30 June 2012
(Unaudited) (Unaudited) (Audited)
30 June 2012 30 June 2011 31 Dec 2011
EUR'000 EUR'000 EUR'000
Net decrease in cash, cash equivalents
& overdrafts (31,439) (15,332) (12,627)
Net repayment/(drawdown) of borrowings 14,212 (2,770) (12,784)
Capital element of finance lease
repayments 577 137 274
Other movements on finance leases (327) (1,142) (1,327)
Foreign exchange movement (2,064) 1,411 (1,154)
-------------- -------------- -------------
Movement in net debt (19,041) (17,696) (27,618)
-------------- -------------- -------------
Net debt at beginning of period (75,553) (47,935) (47,935)
-------------- -------------- -------------
Net debt at end of period (94,594) (65,631) (75,553)
============== ============== =============
Total Produce plc
Notes to the Interim Results for the half year ended 30 June 2012
1. Basis of preparation
The condensed consolidated interim financial statements of Total
Produce plc as at and for the six months ended 30 June 2012 have
been prepared in accordance with the recognition and measurement
requirements of IAS 34 Interim Financial Reporting, as adopted by
the EU. The accounting policies and methods of computation adopted
in the preparation of the financial information are consistent with
those set out in the Group's consolidated financial statements for
the year ended 31 December 2011, which were prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the EU.
The interim financial information for both the six months ended
30 June 2012 and the comparative six months ended 30 June 2011 are
unaudited. The financial information for the year ended 31 December
2011 represents an abbreviated version of the Group's statutory
financial statements for that year. Those statutory financial statements
contained an unqualified audit report and have been filed with the
Registrar of Companies.
The preparation of interim financial statements requires management
to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements,
the significant judgments made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those applied to the consolidated financial statements
as at and for the year ended 31 December 2011.
The financial information is presented in Euro, rounded to the nearest
thousand. These condensed consolidated interim financial statements
were approved by the Board of Directors on 3 September 2012.
Changes in accounting policy
The following are new standards that are effective for the Group's
financial year ending on 31 December 2012 and that had no significant
impact on the results of financial position of the Group for the
period ended 30 June 2012:
* Amendment to IFRS 7 - Financial Instruments:
Disclosures - Transfers of Financial Assets
* Amendment to IAS 12 - Deferred Tax: Recovery of
Underlying Assets
Amendments to existing standards
During the period, a number of amendments to accounting standards
became effective. These have been considered by the directors and
have not had a significant impact on the Group's consolidated financial
statements.
2. Translation of foreign currencies
The reporting currency of the Group is Euro. Results and cash
flows of foreign currency denominated operations have been translated
into Euro at the exchange rate at the date of the transaction
or an average exchange rate for the period where appropriate,
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 dealt with 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
6 months to
30 June 30 June % change 30 June 31 Dec % change
2012 2011 2012 2011
Pound Sterling 0.8144 0.8697 6.4% 0.8091 0.8353 3.1%
Swedish Krona 8.8860 8.9399 0.6% 8.7590 8.8990 1.6%
Czech Koruna 25.1382 24.3584 (3.2%) 25.5310 25.5018 (0.1%)
Danish Kroner 7.4352 7.4561 0.3% 7.4339 7.4322 0.0%
South African Rand 10.2972 9.6719 (6.5%) 10.3783 10.4802 1.0%
-------- -------- --------- -------- -------- ---------
3. Segmental Analysis
In accordance with IFRS 8, 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.
- Northern Europe 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 is involved in
the procurement and distribution of fresh produce in the
UK.
- Healthfoods & Consumer Products Distribution: This segment
is a full service distribution and marketing partner to
the healthfoods, pharmacy, grocery and domestic consumer
products sectors. This segment distributes to retail and
wholesale outlets in Ireland and the United Kingdom.
A further three operating segments involved in the fresh produce
business within Eastern Europe, South Africa and Asia have been
identified which are combined below under 'Rest of World 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 represents earnings before
interest, tax, amortisation of acquisition related intangible
assets, acquisition related costs and exceptional items. It also
excludes the Group's share of these items within joint ventures
& associates. Adjusted EBITA is, therefore, measured differently
from operating profit in the Group financial statements as explained
and reconciled in full detail in the analysis that follows.
Financial costs, financial 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 ('CODM') and are,
accordingly, omitted from the detailed segmental analysis that
follows.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2012 30 June 2011 31 Dec 2011
Segmental Adjusted Segmental Adjusted Segmental Adjusted
revenue EBITA revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Eurozone Fresh
Produce 652,668 10,410 658,510 13,022 1,205,234 19,826
Northern
Europe
Fresh Produce 327,364 10,755 319,854 8,962 595,340 16,441
UK Fresh
Produce 252,917 3,969 256,422 3,529 485,414 5,871
Rest of World
Fresh
Produce 137,200 3,510 79,982 2,230 170,989 4,489
Inter-segment
revenue (22,739) - (21,167) - (29,729) -
--------------- ----------------------------------------------------------- --------- ---------- --------- ---------- ---------
Total Fresh
Produce 1,347,410 28,644 1,293,601 27,743 2,427,248 46,627
--------------- ----------------------------------------------------------- --------- ---------- --------- ---------- ---------
Healthfoods &
Consumer
Products 52,054 1,819 39,479 (134) 99,329 1,213
Unallocated
costs - (1,505) - (1,447) - (2,881)
--------------- ----------------------------------------------------------- --------- ---------- --------- ---------- ---------
Third party
revenue
and adjusted
EBITA 1,399,464 28,958 1,333,080 26,162 2,526,577 44,959
--------------- =========================================================== ========= ========== ========= ========== =========
All inter-segment revenue transactions are at arm's length.
Reconciliation of segmental profit to operating profit
Below is a reconciliation of adjusted EBITA per management reporting
to operating profit and profit before tax per the Group income statement.
Note (Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
to 30 June 31 Dec 2011
2011
30 June 2012 EUR'000 EUR'000
EUR'000
Adjusted EBITA per management
reporting 28,958 26,162 44,959
Acquisition related intangible
asset amortisation in subsidiaries (i) (3,256) (2,538) (5,501)
Acquisition related costs (ii) (169) - (615)
Share of joint ventures & associates
acquisition related intangible
asset amortisation (iii) (626) (234) (535)
Share of joint ventures & associates
interest (iii) (490) (414) (507)
Share of joint ventures & associates
tax (iii) (954) (767) (1,389)
-------------- ------------- --------------
Operating profit before exceptional
items 23,463 22,209 36,412
Exceptional items (Note 5) (iv) 303 1,612 2,712
-------------- ------------- --------------
Operating profit after exceptional
items 23,766 23,821 39,124
Financial income/expense, net (v) (3,348) (2,098) (4,748)
-------------- ------------- --------------
Profit before tax 20,418 21,723 34,376
============== ============= ==============
(i) Acquisition related intangible asset amortisation is not allocated
to operating segments in the Group's management reporting.
(ii) Acquisition related costs include legal fees and other professional
service fees on completed acquisitions of subsidiaries which are
not allocated to operating segments in the Group's management
reporting. 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 through the income statement.
(iii) Under IFRS, included within profit before tax is the share of
joint ventures & associates profit after acquisition related intangible
asset amortisation charges, tax and interest. In the Group's management
reporting the Group's 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 reporting.
(v) Financial income and expense is primarily managed at Group level,
and is therefore not allocated to individual operating segments
in the management reporting.
4. Adjusted profit before tax, adjusted EBITA and adjusted EBITDA
For the purpose of assessing the Group's performance, Total Produce
management believes that adjusted EBITA, adjusted profit before tax
and adjusted earnings per share (Note 6) are the most appropriate
measures of the underlying performance of the Group.
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2011
2012 2011
EUR'000 EUR'000 EUR'000
Profit before tax per income statement 20,418 21,723 34,376
Adjustments
Exceptional items (Note 5) (303) (1,612) (2,712)
Group share of tax charge of joint
ventures & associates 954 767 1,389
Acquisition related intangible asset
amortisation including share of joint
ventures & associates 3,882 2,772 6,036
Acquisition related costs 169 - 615
------------- ------------- --------------
Adjusted profit before tax 25,120 23,650 39,704
Exclude;
Financial income/expense, net - Group 3,348 2,098 4,748
Financial income/expense, net - share
of joint ventures & associates 490 414 507
Adjusted EBITA 28,958 26,162 44,959
Exclude;
Depreciation - Group 6,675 6,465 13,153
Depreciation - share of joint ventures
& associates 1,111 768 1,626
------------- ------------- --------------
Adjusted EBITDA 36,744 33,395 59,738
============= ============= ==============
5. Exceptional Items
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2011
2012 2011
EUR'000 EUR'000 EUR'000
Profit on disposal of joint ventures
(a) 303 1,612 1,612
Gains on available-for-sale financial
assets reclassified from other comprehensive
income to income statement (b) - - 4,055
Pension curtailment gain (c) - - 926
Impairment of property, plant and equipment
(d) - - (1,331)
Revaluation of investment property
(e) - - (2,550)
Total exceptional items 303 1,612 2,712
Tax on exceptional items - - 663
------------- ------------- --------------
Total 303 1,612 3,375
============= ============= ==============
(a) Profit on disposal of joint ventures
On 9 January 2012, the Group announced the completion of a transaction
to sell its 50% shareholding in the European fruit distribution
business of Capespan International Holdings Limited ('Capespan
Europe') to Capespan Group Limited ('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 (valued
at EUR4,574,000) and EUR8,456,000 in cash. This transaction resulted
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. A profit of EUR303,000 was recognised on disposal of this
investment comprising the EUR1,792,000 difference between the
sales proceeds and the joint venture's carrying value of EUR11,238,000
offset by the reclassification of EUR1,489,000 of currency translation
losses from equity to the income statement.
In May 2011, the Group disposed of its 40% joint venture interest
in Rapiprop, a South African farms investment group to Capespan
Group Limited for cash proceeds of EUR4,172,000. A profit of EUR1,612,000
was recognised on disposal of this investment 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.
Both of these items have been classified as exceptional to distinguish
them from operating profits of the Group.
(b) 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
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.
(c) Pension curtailment gain
The pension curtailment gain of EUR926,000 represents the net
present value of a reduction in prospective pension entitlements
foregone in respect of a number of employees. The reduction in
the Group scheme obligations was recognised in the Income Statement
for the year ended 31 December 2011. 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 to the income statement.
(e) Revaluation of investment property
Fair value losses, amounting to EUR2,550,000 have been recognised
in the income statement in 2011 in relation to investment property.
A deferred tax credit of EUR779,000 was recognised in the income
statement as a result of these revaluations.
6. Earnings per share
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2012 to 30 June 31 Dec 2011
2011
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 12,317 13,607 23,466
=============== ============= ==============
'000 '000 '000
Shares for basic and diluted adjusted
earnings per share calculation 329,887 329,887 329,887
Basic and diluted earnings per share
- EUR cent 3.73 4.12 7.11
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
to 30 June 31 Dec 2011
2011
30 June 2012 EUR'000 EUR'000
Calculation of adjusted earnings EUR'000
per share
Profit attributable to equity holders
of the parent 12,317 13,607 23,466
Adjustments:
Acquisition related intangible asset
amortisation (including share of
joint ventures & associates) 3,882 2,772 6,036
Exceptional items (Note 5) (303) (1,612) (2,712)
Acquisition related costs 169 - 615
Tax effect of amortisation charges,
acquisition related costs and exceptional
items (890) (678) (2,367)
Non-controlling interests' impact
of amortisation charges, acquisition
related costs, exceptional items
& related tax (390) (228) (1,148)
--------------- ------------- --------------
Adjusted fully diluted earnings 14,785 13,861 23,890
=============== ============= ==============
Adjusted fully diluted earnings per
share 4.48 4.20 7.24
===============
Adjusted fully diluted earnings per share is calculated to adjust
for acquisition related intangible asset amortisation, acquisition
related costs, exceptional items, related tax charges/credits and
the impact of any share options with a dilutive effect.
Share options outstanding at the 30 June 2012 (7,260,000), 30 June
2011 (7,310,000) and 31 December 2011 (7,260,000) were non-dilutive
for all periods. Therefore, the weighted average number of shares
outstanding applied in the calculation of basic and adjusted earnings
per share is the same.
7. Employee benefits
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2011
2012 2011
EUR'000 EUR'000 EUR'000
Net liability at beginning of period (18,058) (11,033) (11,033)
Current/past service cost less net
finance income recognised in income
statement (1,409) (1,079) (1,689)
Curtailment gain recognised in the
income statement - - 926
Employer contributions to schemes 2,838 3,200 4,842
Actuarial (losses)/gains recognised
in other comprehensive income (7,216) 865 (10,883)
Translation adjustment (235) 191 (221)
------------- ------------- --------------
Net liability at end of period (24,080) (7,856) (18,058)
Related deferred tax asset 4,024 1,321 3,246
------------- ------------- --------------
Net liability after tax at the end
of the period (20,056) (6,535) (14,812)
============= ============= ==============
The table above summarises the movements in the net liability of
the Group's various defined benefit pension schemes in Ireland, the
UK and Continental Europe. The Group's balance sheet at 30 June 2012
reflects pension liabilities of EUR24.1m in respect of schemes in
deficit, resulting in a net deficit of EUR20.1m after deferred tax.
The current/past service cost is charged in the income statement,
net of the finance income on scheme assets and liabilities. Actuarial
gains and losses 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.
The increase in the net deficit during the period was due to a significant
increase in the net obligations of the pension schemes offset partly
by positive returns on pension scheme assets. The primary reason
for the increase in the net obligations of the pension scheme was
a decrease in discount rates in the Eurozone and, to a lesser extent,
a marginal decrease in the UK discount rate which led to an increase
in the net present value of the schemes' obligations. This was offset
in part by a decrease in the long term inflation assumption in the
period.
8. Dividends
The Board has approved an interim dividend of 0.567 cent per share
which represents a 5.0% increase on the 2011 interim dividend of
0.540 cent per share. This dividend, which will be subject to Irish
withholding tax rules, will be paid on 19 October 2012 to shareholders
on the register at 21 September 2012. In accordance with company
law and IFRS, this dividend has not been provided for in the balance
sheet at 30 June 2012. The final dividend for 2011 of EUR4,454,000
was paid in May 2012.
Also during the period, the Group paid dividends of EUR3,284,000
(2011: EUR3,096,000) to non-controlling shareholders in certain of
the Group's non wholly-owned subsidiaries.
9. Businesses acquired and other developments
In the six months to 30 June 2012, the Group made the following investments
in the business.
Investment in joint ventures and associates
The Group invested over EUR20m including fees and up to EUR9.0m deferred
consideration payable on achievement of profit targets in a number
of new and existing joint ventures & associates.
On 13 March 2012 the Group completed the acquisition of a 50% shareholding
in Frankort & Koning Beheer Venlo BV and subsidiaries ('Frankort
& Koning'). Headquartered in Venlo, The Netherlands, Frankort & Koning
have operations principally in the Netherlands, Germany and Poland.
An initial consideration, of EUR6.0m was paid on completion with
additional consideration of up to EUR9.0m payable in several tranches
over the next number of years if certain profit targets are met.
The fair value of the contingent consideration recognised at the
date of acquisition of EUR7.1m was arrived at by discounting the
expected payment to present value.
On 9 January 2012, the Group announced the completion of a transaction
to sell its 50% shareholding in the European fruit distribution business
Capespan Europe to Capespan South Africa for a total consideration
of EUR13.0m satisfied by the exchange of an additional 20 million
shares in Capespan South Africa (valued at EUR4.5m) and EUR8.5m in
cash. This transaction resulted 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.
Also during the period the Group invested in a number of new and
existing joint venture interests in its Fresh Produce division.
The initial assignment of fair values to net assets for all investments
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 subsidiary interests
The Group invested EUR0.6m (net of cash acquired) in a number of
bolt-on acquisitions within both its Fresh Produce division and Healthfoods
& Consumer Products Distribution division. 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 EUR0.6m primarily relating to intangible assets.
No goodwill arose on these transactions. The fair value of identifiable
net assets acquired will be finalised within twelve months from the
acquisition date, as permitted by IFRS 3 (Revised) Business Combinations.
Transaction expenses of EUR0.2m relating to the transactions were
expensed to the Group's income statement in the period.
Other
During the period, the Group paid EUR0.3m in respect of deferred
consideration payments relating to previous acquisitions.
There have been no significant changes in the possible outcome of
deferred consideration recognised on acquisitions completed in 2011.
The Group continues to actively pursue further investment opportunities
in both new and existing markets.
10. Cash flows generated from operations
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2012 30 June 2011 31 Dec 2011
EUR'000 EUR'000 EUR'000
Operating activities
Profit before tax 20,418 21,723 34,376
Adjustments for non cash items:
Depreciation of property, plant and
equipment (excl. depreciation within
joint ventures & associates) 6,675 6,465 13,153
Goodwill impairment - - 114
Impairment of property, plant and
equipment - - 1,331
Fair value movement on investment
property - - 2,550
Revision to deferred consideration
estimates - - (273)
Amortisation of acquisition related
intangible assets (excl. amortisation
within joint ventures & associates) 3,256 2,538 5,501
Amortisation of research and development 190 216 281
Amortisation of grants (142) (88) (187)
Movement on provisions (432) (109) (294)
Share-based payment expense 136 158 118
Contributions to defined benefit
pension schemes (2,838) (3,200) (4,842)
Curtailment gains in respect of defined
benefit pension schemes - - (926)
Defined benefit pension scheme expense 1,409 1,079 1,689
Net gain on disposal of property,
plant & equipment (277) (254) (314)
Net gain on non-hedging derivative
financial instruments (298) (160) (583)
Net interest expense 3,348 2,098 4,748
Income from available-for-sale financial
assets - 406 406
Share of profits of joint ventures
& associates (2,209) (1,775) (3,442)
Gain reclassified to income statement
on available-for-sale financial asset
becoming an associate - - (4,055)
Gain on disposal of joint venture (303) (1,612) (1,612)
Income tax paid (5,357) (5,349) (11,286)
Net interest paid (3,000) (2,247) (5,225)
-------------- -------------- ---------------
Cash flows from operations before
working capital movements 20,576 19,889 31,228
-------------- -------------- ---------------
Increase in working capital (27,999) (24,490) (7,747)
-------------- -------------- ---------------
Cash flows from operating activities (7,423) (4,601) 23,481
============== ============== ===============
11. Analysis of movement in net debt in the period
(Unaudited) 1 Jan Cash 30 June
30 June 2012 2012 flow Non-cash Acquisitions Translation 2012
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Bank balances and deposits 90,087 (12,518) - 14 520 78,103
Overdrafts (4,274) (18,935) - - (3) (23,212)
---------- --------- --------- -------------- ------------ ----------
Cash, cash equivalents
and bank overdrafts per
cash flow statement 85,813 (31,453) - 14 517 54,891
Bank loans - non-current (136,358) 9,951 (13,699) - (2,496) (142,602)
Bank loans - current (19,455) 4,261 13,699 - - (1,495)
Finance leases (5,553) 577 (327) - (85) (5,388)
---------- --------- --------- -------------- ------------ ----------
Total interest bearing
borrowings (161,366) 14,789 (327) - (2,581) (149,485)
---------- --------- --------- -------------- ------------ ----------
Net debt (75,553) (16,664) (327) 14 (2,064) (94,594)
========== ========= ========= ============== ============ ==========
(Unaudited) 1 Jan Cash 30 June
30 June 2011 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 (14,682) - - (208) 89,596
Overdrafts (6,570) (650) - - 8 (7,212)
---------- --------- --------- -------------- ------------ ----------
Cash, cash equivalents
and bank overdrafts per
cash flow statement 97,916 (15,332) - - (200) 82,384
Bank loans - non-current (125,155) 220 32,612 - 1,795 (90,528)
Bank loans - current (16,266) (2,990) (32,612) - (270) (52,138)
Finance leases (4,430) 137 (1,142) - 86 (5,349)
---------- --------- --------- -------------- ------------ ----------
Total interest bearing
borrowings (145,851) (2,633) (1,142) - 1,611 (148,015)
---------- --------- --------- -------------- ------------ ----------
Net debt (47,935) (17,965) (1,142) - 1,411 (65,631)
========== ========= ========= ============== ============ ==========
12. Post balance sheet events
There have been no material events subsequent to 30 June 2012 which would
require disclosure in this report.
13. Related party transactions balance sheet events
There have been no related party transactions or changes to related party
transactions other from those as described in the 2011 Annual Report that
materially affect the financial position or affect the performance of
the Group for the six month period ended 30 June 2012.
14. Board approval
This interim results statement was approved by the Board of Directors
of Total Produce plc on 3 September 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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