TIDMTOT
RNS Number : 2038Z
Total Produce Plc
05 March 2013
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
TOTAL PRODUCE CONTINUES EXPANSION WITH STRONG EARNINGS
GROWTH
-- Revenue (1) up 11.2% to EUR2.8 billion
-- Adjusted EBITDA(1) up 17.8% to EUR70.4m
-- Adjusted EBITA (1) up 21.4% to EUR54.6m
-- Adjusted profit before tax (1) up 19.1% to EUR47.3m
-- Adjusted EPS (1) up 12.0% to 8.11 cent
-- Final dividend up 12.0% to 1.512 cent; total 2012 dividend
up 10.0% to 2.079 cent
(1) Key performance indicators are defined overleaf
Commenting on the results, Carl McCann, Chairman, said:
"The Group is very pleased with its performance in 2012 having recorded
strong growth of 12% in adjusted EPS.
Trading conditions since the start of 2013 have been satisfactory.
The Group's activities are well diversified across Europe and, more
recently in North America and Africa. During 2012, Total Produce acquired
shareholdings in a number of companies, including Oppenheimer in North
America, Frankort and Koning in the Netherlands and Capespan in South
Africa. With the benefit of these and other transactions, the Group
is targeting adjusted EPS for 2013 in the range of 8.0 to 8.8 cent
per share. The Group is pleased to report a 12% increase in the final
dividend which together with the interim dividend represents an overall
increase of 10% in the full year dividend. The Group continues to
actively pursue further investment opportunities."
5 March 2013
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 2012
2012 2011
EUR'million EUR'million % change
Revenue, including share of joint
ventures & associates 2,811 2,527 +11.2%
Group revenue 2,432 2,284 +6.4%
Adjusted EBITDA (1) 70.4 59.7 +17.8%
Adjusted EBITA (1) 54.6 45.0 +21.4%
Operating profit 43.5 39.1 +11.2%
Adjusted profit before tax (1) 47.3 39.7 +19.1%
Profit before tax 37.1 34.4 +7.9%
Euro Euro % change
cent cent
Adjusted earnings per share (1) 8.11 7.24 +12.0%
Basic and diluted earnings per share 6.58 7.11 (7.5%)
Total dividend per share 2.079 1.89 +10.0%
(1) Key performance indicators defined
Total revenue includes the Group's share of the revenue of its joint
ventures and associates.
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 its joint ventures and associates.
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 its joint ventures and associates.
Adjusted profit before tax excludes acquisition related intangible
asset amortisation charges, acquisition related costs and exceptional
items. It also excludes the Group's share of these items within
its joint ventures and associates.
Adjusted earnings per share excludes acquisition related intangible
asset amortisation charges, acquisition related costs, exceptional
items and related tax on such items. It also excludes the Group's
share of these items within its joint ventures and associates.
Forward-looking statement
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.
Summary Results
Total Produce (the 'Group') has recorded strong results for the
year ended 31 December 2012 with double digit growth in all its
key performance indicators. Revenue (1) , adjusted EBITA (1) and
adjusted earnings per share (1) grew 11.2%, 21.4% and 12.0% respectively.
The results reflect good trading across all operating divisions
and positive contributions from recent corporate development activity.
Revenue grew 11.2% to EUR2.8 billion (2011: EUR2.5 billion) with
adjusted EBITA up 21.4% to EUR54.6m (2011: EUR45.0m). The strong
growth in the year was assisted by the positive contributions from
acquisitions completed in the past eighteen months. This was offset
in part by the divestment of the Group's 50% interest in Capespan
International Holdings Limited ('Capespan Europe'). Trading conditions
in all operating divisions were improved on 2011 with a strong performance
in both the Fresh Produce Division and the Healthfoods and Consumer
Products Distribution Division. The effect of currency translation
had a marginally positive impact on the reported results due to
the strength of both Sterling and the Swedish Krona in 2012.
Operating profit before exceptional items increased 18.7% to EUR43.2m
(2011: EUR36.4m). The Group recognised an exceptional gain in the
year of EUR0.3m (2011: EUR2.7m) relating to the divestment of the
Group's 50% joint venture in Capespan Europe. An analysis of these
exceptional gains is set out in Note 5 of the accompanying financial
information. Operating profit after these exceptional gains was
EUR43.5m (2011: EUR39.1m), an increase of 11.2%.
Statutory profit before tax in 2012 was EUR37.1m (2011: EUR34.4m).
Excluding exceptional gains and acquisition related intangible asset
amortisation charges and costs, adjusted profit before tax (1) increased
by 19.1% to EUR47.3m (2011: EUR39.7m).
Adjusted earnings per share (1) for the year ended 31 December 2012
of 8.11 cent (2011: 7.24 cent) represented a growth of 12.0%.
The Group continues to generate positive cashflows with both operating
and free cashflows up significantly on prior year due to increased
earnings and working capital inflows. Free cashflow increased to
EUR41.2m (2011: EUR12.9m) resulting in a reduction in the net debt
at 31 December 2012 to EUR53.0m (2011: EUR75.6m) and represents
0.75 times adjusted EBITDA.
The Group was active with corporate development in 2012, investing
almost EUR24m in additional business interests. 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 ('Capespan South Africa'),
the leading South African produce company to 25.3%.
Post year-end, on 7 January 2013, the Group announced the completion
of an agreement to acquire a 65% majority shareholding in the Oppenheimer
group in two stages over five years. This development represents
the Group's first step into the North American market. Founded in
1858, the Oppenheimer group is a leading North American fresh produce
distribution and marketing company with thirteen sales offices,
three in Canada, nine in the USA and one in Chile. The Oppenheimer
group recorded revenue of EUR410m in 2011.
The Board recommends an increase of 12% in the final dividend to
1.512 cent per share (2011: 1.35 cent per share). This together
with the interim dividend of 0.567 cent per share (2011: 0.54 cent
per share), brings the total 2012 dividend to 2.079 cent per share
(2011: 1.89 cent), an increase of 10% on 2011.
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.
2012 2011
Segmental Adjusted Segmental Adjusted
revenue EBITA revenue EBITA*
EUR'000 EUR'000 EUR'000 EUR'000
Eurozone Fresh Produce 1,302,685 20,408 1,205,234 18,421
Northern Europe Fresh Produce 664,655 19,523 595,340 15,742
UK Fresh Produce 515,040 6,378 485,414 5,294
Rest of the World Fresh Produce 261,258 5,020 170,989 4,289
Inter-segment revenue (35,829) - (29,729) -
---------- --------- ---------- ---------
Total Fresh Produce 2,707,809 51,329 2,427,248 43,746
Healthfoods and Consumer Products 102,762 3,235 99,329 1,213
Third party revenue and adjusted
EBITA 2,810,571 54,564 2,526,577 44,959
---------- --------- ---------- ---------
* Comparative balances have been reclassified in the current
year to ensure conformity with the current year presentation.
Fresh Produce Division
The activities of the Group's Fresh Produce division are the growing,
sourcing, importing, packaging, marketing and distribution of hundreds
of lines of fresh fruits, vegetables and flowers. This division
is split into four reporting segments.
This division recorded good growth in 2012 with an 11.6 % increase
in revenue to EUR2,708m (2011: EUR2,427m) and a 17.3% increase in
adjusted EBITA to EUR51.3m (2011: EUR43.7m). Net EBITA margins in
the Fresh Produce division increased in 2012 to 1.9% (2011: 1.8%).
The results were assisted by the positive contribution of acquisitions
completed in the past eighteen months offset in part by the divestment
of the Group's 50% interest in Capespan Europe.
Trading conditions overall in 2012 were stronger with each division
reporting increased revenues and profits. The performance in the
second half of 2012 was particularly good vis-à-vis 2011. The
comparative period in 2011 was affected by more challenging trading
conditions particularly in Continental Europe due primarily to the
EHEC scare which had a negative impact on the European fresh produce
industry from late May 2011 onwards affecting both consumption and
prices. The effect of currency translation had a marginally positive
impact overall on the reported results due to the strength of both
the Swedish Krona and Sterling against the Euro. On a like-for-like
basis, excluding the impact of acquisitions, divestments and currency
translation, revenue increased 4% in 2012 due primarily to volume
increases.
Further information on each reporting segment follows.
Eurozone Fresh Produce
Revenue in the Eurozone Division increased 8.1% to EUR1,303m (2011:
EUR1,205m) with a 10.8% increase in adjusted EBITA to EUR20.4m
(2011: EUR18.4m). The increase was due to improved trading conditions,
the contribution of acquisitions (primarily the Frankort & Koning
acquisition which completed in March 2012) offset by the divestment
of the Continental European division of Capespan Europe in January
2012.
Excluding the effect of acquisitions and divestments, revenue
was up 3% on prior year primarily due to volume increases. Trading
improved in the second half of the year in certain Continental
European locations which had been affected by the EHEC crisis
which negatively impacted the fresh produce industry in the second
half of 2011.
Northern Europe Fresh Produce
Revenue in the Group's Northern European Division increased by
11.6% to EUR665m (2011: EUR595m). Revenue growth was assisted
by increased volumes, the contribution of new product lines and
the strength of the Swedish Krona in the year which led to higher
translated Euro revenue.
Adjusted EBITA increased 24.0% to EUR19.5m (2011: EUR15.7m) due
to increased revenue, lower costs and to a lesser extent the positive
impact of currency translation. In the prior year the Group incurred
reorganisation costs in completing the extension to the state-of
the-art distribution facility in Sweden.
UK Fresh Produce
Revenue in the UK Division increased by 6.1% to EUR515m (2011:
EUR485m). The results reflected the positive impact of bolt-on
acquisitions completed in past eighteen months and the impact
of the strengthening of Sterling in the year which led to higher
Euro revenue on translation. This was offset by the impact of
the divestment of the UK division of Capespan Europe in January
2012. Revenue on a like-for-like basis excluding the effect of
acquisitions, divestments and currency translation was up 4% in
the year due to volume and price increases.
Adjusted EBITA increased by 20.5% to EUR6.4m (2011: EUR5.3m) with
the benefit of currency translation, contributions from bolt-on
acquisitions and lower rationalisation costs year-on-year, offset
in part by the divestment of the UK division of Capespan Europe.
Rest of the World Fresh Produce
The Rest of the World Division includes a number of fresh produce
businesses in Eastern Europe, Asia and South Africa. The Group
increased its shareholding in Capespan South Africa from a 15.6%
to 20.2% interest in the second half of 2011. The Group has accounted
for the 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 25.3% as part of a transaction to divest the Group's
shareholding in Capespan Europe.
Revenue increased 52.8% to EUR261m (2011: EUR171m) and adjusted
EBITA increased 17.0% to EUR5.0m (2011: EUR4.3m) due to the full
year effect of equity accounting for Capespan South Africa offset
in part by lower profits in other jurisdictions.
Healthfoods and Consumer Products Distribution Division
This division is a full service marketing and distribution partner
to the healthfoods, pharmacy, grocery and domestic consumer products
sectors. It distributes to retail and wholesale outlets in Ireland
and the United Kingdom.
Revenue increased 3.5% to EUR103m (2011: EUR99m). The division
recorded an EBITA of EUR3.2m (2011: EUR1.2m). The increase in
profits in the year was due to the full year effect of acquisitions
completed in the second half of 2011.
Financial Review
Net financial expense
Net financial expense for the year was EUR6.4m compared to EUR4.7m
in 2011. Included within finance income in 2011 was EUR0.4m of dividend
income from Capespan South Africa. From July 2011 onwards, as a
result of equity accounting for Capespan South Africa, this dividend
income is no longer recognised as finance income in the Group income
statement. Excluding this finance income, the net financial expense
increased by EUR1.3m primarily due to the higher costs of funds.
In addition the strength of the Swedish Krona and Sterling in the
year 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 EUR0.9m compared to EUR0.5m in 2011. Net interest
cover for the year was 8.5 times based on adjusted EBITA.
Exceptional items
Exceptional items in the year amounted to a net gain before tax
of EUR0.3m (2011: net gain of EUR2.7m). The gain in 2012 related
to the disposal of the Group's 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. The net gain
in 2011 includes 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.
Profit before tax
Statutory profit before tax increased 7.9% in the year to EUR37.1m
due to higher operating profits offset by lower exceptional gains
when compared to 2011. Excluding exceptional items, acquisition
related amortisation charges and costs, adjusted profit before tax
(1) increased by 19.1% to EUR47.3m.
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 EUR12.7m (2011:
EUR10.4m) representing an effective tax rate of 26.8% (2011: 26.2%).
Non-controlling interest
The non-controlling interest's share of after tax profits was EUR7.1m
(2011: EUR4.3m). Included in the 2011 charge was the non-controlling
interests' EUR0.5m share of property impairment charge. Excluding
this exceptional item, the charge has increased EUR2.3m in the year
due to the full year effect of the non-controlling interests' share
of after tax profits of subsidiaries acquired in the second half
of 2011 and higher after tax profits in a number of the Group's
non-wholly owned subsidiaries in Continental Europe.
Adjusted and basic earnings per share
Adjusted earnings per share increased 12.0% to 8.11 cent (2011:
7.24 cent). Management believe that adjusted earnings per share
excluding exceptional items, acquisition related intangible asset
amortisation charges and costs and related tax on these items provides
a fairer reflection of the underlying trading performance of the
Group. Basic earnings per share after these non-trading items amounted
to 6.58 cent (2011: 7.11 cent) with the decrease due to lower exceptional
gains and higher non-cash acquisition related intangible asset amortisation
charges in 2012.
Net debt and cash flow
Net debt at 31 December 2012 was EUR53.0m (2011: EUR75.6m). Net debt
relative to adjusted EBITDA was 0.75 times and interest is covered
8.5 times by adjusted EBITA. At 31 December 2012, the Group had cash
balances (including bank deposits) of EUR109.5m and interest bearing
borrowings (including overdrafts) of EUR162.5m. Post year-end, the
Group had a cash outflow of EUR11.4m representing the payment for
the initial acquisition of the 35% shareholding in the Oppenheimer
Group based in North America.
The Group generated operating cash flows of EUR38.0m in 2012 (2011:
EUR31.2m) before working capital movements with the increase due
to higher profits. There were EUR12.1m of working capital inflows
in the year compared to a net EUR7.7m outflow in 2011. Cash outflows
on routine capital expenditure, net of disposals, were EUR7.9m (2011:
EUR7.5m). Dividend payments to non-controlling interests were EUR3.9m
(2011: EUR4.9m).
Primarily as a result of higher profits and working capital movements,
free cash flow generated by the Group increased to EUR41.2m (2011:
EUR12.9m). Free cash flow is the funds available after outflows relating
to routine capital expenditure and dividends to non-controlling shareholders
but before acquisition expenditure, development capital expenditure
and the payment of dividends to equity shareholders.
Cash outflows on acquisitions and contingent consideration payments
amounted to EUR14.8m (2011: EUR29.2m). Development capital expenditure
of EUR3.8m was down on the EUR7.3m in the comparative period which
primarily related to the construction of the enlarged distribution
facility in Sweden. As highlighted earlier, the Group sold its investment
in Capespan Europe in the year and received cash proceeds of EUR8.5m.
The Group distributed EUR6.3m (2011: EUR5.9m) in dividends to equity
shareholders. There was an adverse net impact on net debt of EUR2.1m
(2011: EUR1.2m) on the translation of foreign currency denominated
net debt to Euro due to the stronger Swedish Krona and Sterling exchange
rates at end of 2012 when compared to end of 2011.
The Group concluded a new US$50m multi-currency facility under which
the Group may issue loan notes over a three year period with a maturity
of up to ten years. In addition the Group has renewed a number of
its term borrowing facilities extending the Group's net debt maturity
profile. This further increases the Group's capacity to finance future
expansion.
2012 2011
EUR'million EUR'million
Adjusted EBITDA 70.4 59.7
Deduct adjusted EBITDA of joint ventures and
associates (11.4) (7.5)
Net interest and tax paid (17.6) (16.5)
Other (3.4) (4.5)
------------- -------------
Operating cash flows before working capital
movements 38.0 31.2
Working capital and other movements 12.1 (7.7)
------------- -------------
Operating cash flows 50.1 23.5
Routine capital expenditure net of disposal
proceeds (7.9) (7.5)
Dividends received from joint ventures and associates 2.9 1.8
Dividends paid to non-controlling interests (3.9) (4.9)
------------- -------------
Free cash flow 41.2 12.9
Disposal of a joint venture interest 8.5 4.2
Acquisition expenditure (including contingent
consideration payments) (14.8) (29.2)
Development capital expenditure (3.8) (7.3)
Dividends paid to equity shareholders (6.3) (5.9)
Other (0.1) (1.2)
Movement in net debt in the year 24.7 (26.5)
Net debt at beginning of year (75.6) (47.9)
Foreign currency translation (2.1) (1.2)
------------- -------------
Net debt at end of year (53.0) (75.6)
============= =============
Defined benefit pension obligations
The net liability in the Group's defined benefit pension schemes
(net of deferred tax) increased to EUR23.7m at 31 December 2012
(2011: EUR14.8m). While assets in the pension scheme increased in
excess of 15% in 2012, there was an increase in pension obligations
as a result of significant decreases in the discount rates underlying
the calculation of the net present value of scheme obligations.
Shareholders' Equity
The balance sheet strengthened in 2012 with shareholders' equity
increasing 6.3% to EUR187.8m (2011: EUR176.7m). The increase was
primarily due to after tax profits in the year of EUR21.7m attributable
to equity shareholders of the parent offset by losses of EUR4.7m
recognised directly in the statement of other comprehensive income
and dividend payments of EUR6.3m to equity shareholders. The EUR4.7m
of losses recognised directly in the statement of other comprehensive
income include actuarial losses on employee defined benefit pension
schemes of EUR10.6m (net of deferred tax) offset by currency translation
gains of EUR4.3m that arose on the translation of foreign currency
denominated assets to Euro and gains of EUR1.6m (net of deferred
tax) on the revaluation of property.
Development activity
During 2012, the Group invested almost EUR24m in a number of business
interests including EUR20m on joint venture and associate interests
and almost EUR4m on subsidiary interests.
On 9 January 2012, the Group announced the completion of a transaction
to sell its 50% shareholding in 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. The transaction increased the Group's
effective interest in its associate interest, 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 outlined
in Note 5 to 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.
The Group invested EUR15.5m in a number of new and existing joint
venture interests in the Fresh Produce Division including EUR5.8m
contingent consideration payable (discounted to net present value)
on the achievement of future profit targets. The main investment
was the acquisition of a 50% shareholding in Frankort & Koning on
13 March 2012. 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 made. The fair value of the contingent consideration recognised
at the date of acquisition of EUR5.6m was arrived at by discounting
the expected amounts payable to present value.
In 2012, the Group invested EUR3.6m including debt acquired and
estimated contingent consideration, payable on achievement of future
profit targets in subsidiary interests. The acquisitions include
a 70% interest in a Fresh Produce company in Europe and a number
of bolt-on acquisitions in both the Fresh Produce Division and the
Healthfoods and Consumer Products Distribution Division which complement
our existing interests.
Post year-end, on 7 January 2013, the Group announced the completion
of an agreement to acquire a 65% majority shareholding in the Oppenheimer
group in two stages over five years. The acquisition of an initial
35% of Oppenheimer's shares was completed on this date for an initial
cash payment of CAD $15.0m (EUR11.4m) with additional consideration
payable on these shares if certain profit targets are met. A further
30% shareholding will be purchased in 2017 for a price to be determined
based on future profits. The total consideration payable for the
65% shareholding is estimated not to exceed CAD $40m (EUR30m) at
completion. The Oppenheimer group is a leading North American fresh
produce marketing and distribution company with thirteen sales offices,
three in Canada, nine in the USA and one in Chile. The group recorded
sales of EUR410m in 2011.
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 the authority
should the appropriate opportunity arise. The Group will seek to
renew this authority at the forthcoming AGM in May 2013.
Dividends
The Board is proposing a 12% increase in the final dividend to
1.512 cent per share (2011: 1.35 cent), subject to the approval
at the forthcoming AGM. If approved, this dividend will be paid
on 23 May 2013 to shareholders on the register at 3 May 2013 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 2012. The total dividend for 2012 will amount to
2.079 cent per share and represents an increase of 10% on 2011.
Summary and Outlook
The Group is very pleased with its performance in 2012 having recorded
strong growth of 12% in adjusted EPS.
Trading conditions since the start of 2013 have been satisfactory.
The Group's activities are well diversified across Europe and,
more recently in North America and Africa. During 2012, Total Produce
acquired shareholdings in a number of companies, including Oppenheimer
in North America, Frankort and Koning in the Netherlands and Capespan
in South Africa. With the benefit of these and other transactions,
the Group is targeting adjusted EPS for 2013 in the range of 8.0
to 8.8 cent per share. The Group is pleased to report a 12% increase
in the final dividend which together with the interim dividend
represents an overall increase of 10% in the full year dividend.
The Group continues to actively pursue further investment opportunities.
Carl McCann, Chairman
On behalf of the Board
5 March 2013
(1) See page two of this announcement for a definition of the
Group's key performance indicators.
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 2012
Note Before Before
Exceptional Exceptional
exceptional items exceptional items
items (Note 5) Total items (Note 5) Total
2012 2012 2012 2011 2011 2011
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue, including Group
share of
joint ventures
and associates 3 2,810,571 - 2,810,571 2,526,577 - 2,526,577
Group revenue 2,431,826 - 2,431,826 2,284,478 - 2,284,478
Cost of sales (2,092,874) - (2,092,874) (1,964,162) - (1,964,162)
------------- ------------ ------------ ------------- ------------ ------------
Gross profit 338,952 - 338,952 320,316 - 320,316
Operating expenses (net) (300,316) 303 (300,013) (287,346) 2,712 (284,634)
Share of profit of joint
ventures
and associates 10 4,572 - 4,572 3,442 - 3,442
Operating profit 43,208 303 43,511 36,412 2,712 39,124
Financial income 1,851 - 1,851 2,097 - 2,097
Financial expense (8,261) - (8,261) (6,845) - (6,845)
------------- ------------ ------------ ------------- ------------ ------------
Profit before tax 36,798 303 37,101 31,664 2,712 34,376
Income tax
(expense)/credit 6 (8,362) 43 (8,319) (7,298) 663 (6,635)
------------- ------------ ------------ ------------- ------------ ------------
Profit for the year 28,436 346 28,782 24,366 3,375 27,741
============= ============ ============ ============= ============ ============
Attributable to:
Equity holders of the
parent 21,697 23,466
Non-controlling
interests 7,085 4,275
------------ ------------
28,782 27,741
============ ============
Earnings per ordinary
share
Basic 7 6.58 cent 7.11 cent
Fully diluted 7 6.58 cent 7.11 cent
Adjusted fully diluted 7 8.11 cent 7.24 cent
------------- ------------ ------------
Total Produce plc
Extract from the Group Statement of Comprehensive Income
for the year ended 31 December 2012
2012 2011
EUR'000 EUR'000
Profit for the year 28,782 27,741
========= ==========
Other comprehensive income:
Foreign currency translation effects:
- foreign currency net investments - subsidiaries 5,282 2,196
- foreign currency net investments - joint ventures
and associates 367 14
* foreign currency losses/(gains) reclassified to the
income statement on disposal of joint venture 1,489 (528)
- foreign currency borrowings (2,606) (1,380)
Revaluation gains on property, plant and equipment,
net 1,771 1,350
Gains on re-measuring available-for-sale financial
assets, net - 2,028
Reclassification of revaluation gains to income
statement upon available-for-sale investment becoming
an associate - (4,055)
Actuarial losses on defined benefit pension schemes (12,258) (10,883)
Effective portion of cash flow hedges, net 2 25
Deferred tax on items taken directly to other comprehensive
income 1,875 1,654
Share of joint ventures' and associates' actuarial
(loss)/gain on defined benefit pension scheme (331) 80
Share of joint ventures' and 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 116 23
--------- ----------
Other comprehensive income for the year, net of
tax (4,293) (9,467)
========= ==========
Total comprehensive income for the year, net of
tax 24,489 18,274
========= ==========
Attributable to:
Equity holders of the parent 17,022 13,926
Non-controlling interests 7,467 4,348
--------- ----------
24,489 18,274
========= ==========
Total Produce plc
Extract from the Group Balance Sheet
as at 31 December 2012
2012 2011
Assets EUR'000 EUR'000
Non-current assets
Property, plant and equipment 138,753 135,644
Investment property 11,067 10,881
Goodwill and intangible assets 152,098 152,493
Investments in joint ventures and associates 62,086 40,212
Other financial assets 636 647
Other receivables 6,505 4,290
Deferred tax assets 9,473 6,903
Total non-current assets 380,618 351,070
---------- ----------
Current assets
Inventories 45,565 39,098
Trade and other receivables 279,263 268,126
Corporation tax receivables 1,971 2,075
Derivative financial instruments - 57
Bank deposits 3,799 -
Cash and cash equivalents 105,692 90,087
---------- ----------
Total current assets (excluding non-current assets
classified as held for sale) 436,290 399,443
---------- ----------
Non-current assets classified as held for sale - 11,064
---------- ----------
Total current assets 436,290 410,507
---------- ----------
Total assets 816,908 761,577
---------- ----------
Equity
Called-up share capital 3,519 3,519
Share premium 252,574 252,574
Other reserves (110,043) (116,460)
Retained earnings 41,752 37,066
---------- ----------
Total equity attributable to equity holders of the
parent 187,802 176,699
Non-controlling interests 64,162 60,041
---------- ----------
Total equity 251,964 236,740
---------- ----------
Liabilities
Non-current
Interest-bearing loans and borrowings 154,797 140,586
Deferred government grants 1,876 1,569
Other payables 1,881 2,582
Provisions 15,336 10,809
Corporation tax payable 7,569 7,754
Deferred tax liabilities 16,100 17,100
Employee benefits 28,324 18,058
---------- ----------
Total non-current liabilities 225,883 198,458
---------- ----------
Current
Interest-bearing loans and borrowings 7,721 25,054
Trade and other payables 326,805 295,728
Provisions 1,785 1,634
Derivative financial instruments 341 309
Corporation tax payable 2,409 3,654
---------- ----------
Total current liabilities 339,061 326,379
---------- ----------
Total liabilities 564,944 524,837
---------- ----------
Total liabilities and equity 816,908 761,577
---------- ----------
Total Produce plc
Extract from the Group Statement of Changes in Equity
for the year ended 31 December 2012
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
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
year - - - - - - - 21,697 21,697 7,085 28,782
Other
comprehensive
income:
Foreign currency
translation
effects - - 4,325 - - - - - 4,325 207 4,532
Revaluation
gains on
property, plant
and equipment,
net - - - 1,422 - - - - 1,422 349 1,771
Actuarial losses
on defined
benefit pension
schemes, net - - - - - - - (12,080) (12,080) (178) (12,258)
Effective
portion of cash
flow hedges,
net - - - - - - 2 - 2 - 2
Deferred tax on
items taken
directly
to other
comprehensive
income - - - 196 - - (1) 1,676 1,871 4 1,875
Share of
associates'
actuarial loss
on
defined benefit
pension scheme - - - - - - - (331) (331) - (331)
Share of
associates'
deferred tax on
items taken
directly to
other
comprehensive
income - - - - - - - 116 116 - 116
Total other
comprehensive
income - - 4,325 1,618 - - 1 (10,619) (4,675) 382 (4,293)
--------- -------- ------------ ------------- ---------- -------- --------- --------- ----------------
Total
comprehensive
income - - 4,325 1,618 - - 1 11,078 17,022 7,467 24,489
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Transactions
with equity
holders of the
parent
Non-controlling
interests
arising on
acquisition - - - - - - - - - 481 481
Acquisition of
non-controlling
interests - - - - - - - (68) (68) - (68)
Contribution by
non-controlling
interests - - - - - - - - - 59 59
Dividends - - - - - - - (6,324) (6,324) (3,886) (10,210)
Share-based
payment
transactions - - - - - - 473 - 473 - 473
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
Total
transactions
with equity
holders
of the parent - - - - - - 473 (6,392) (5,919) (3,346) (9,265)
--------- -------- ------------ ------------- ---------- -------- --------- --------- --------- ---------------- ---------
As at 31
December 2012 3,519 252,574 (1,483) 20,914 (122,521) (8,580) 1,627 41,752 187,802 64,162 251,964
========= ======== ============ ============= ========== ======== ========= ========= ========= ================ =========
Total Produce plc
Extract from the Group Statement of Changes in Equity
for the year ended 31 December 2012 (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
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 Cash Flows
for the year ended 31 December 2012
2012 2011
EUR'000 EUR'000
Cash flows from operating activities before working
capital movements (Note 12) 37,992 31,228
Decrease/(increase) in working capital (Note 12) 12,066 (7,747)
--------- ---------
Net cash flows from operating activities (Note
12) 50,058 23,481
========= =========
Investing activities
Acquisition of subsidiaries, net of cash, cash
equivalents and bank overdrafts acquired (3,307) (7,973)
Acquisition of, and investment in, joint ventures
and associates, including loans (9,648) (6,192)
Acquisition of other financial assets (2) (30)
Payments of contingent consideration (1,855) (14,086)
Acquisition of property, plant and equipment (11,892) (15,531)
Acquisition of computer software (649) -
Proceeds from disposal of property, plant and equipment 874 725
Dividends received from joint ventures and associates 2,909 1,760
Proceeds from disposal of joint ventures and associates 8,456 4,172
Development expenditure capitalised (146) (156)
Government grants received 599 296
--------- ---------
Net cash flows from investing activities (14,661) (37,015)
========= =========
Financing activities
Net (decrease)/increase in borrowings (6,621) 12,784
Increase in bank deposits (3,799) -
Increase in cash held in escrow (11,580) -
Capital element of finance lease repayments (1,135) (274)
Dividends paid to shareholders of the parent (6,324) (5,882)
Acquisition of non-controlling interests (68) (841)
Capital contribution by non-controlling interests 59 -
Dividends paid to non-controlling interests (3,886) (4,880)
--------- ---------
Net cash flows from financing activities (33,354) 907
========= =========
Net increase/(decrease) in cash and cash equivalents,
inc bank overdrafts 2,043 (12,627)
Cash and cash equivalents, including bank overdrafts
at start of year 85,813 97,916
Effect of exchange rate fluctuations on cash held 1,104 524
--------- ---------
Cash and cash equivalents, inc. bank overdrafts
at end of year (Note 13) 88,960 85,813
========= =========
Group Reconciliation of Net Debt
for the year ended 31 December 2012
2012 2011
EUR'000 EUR'000
Net increase/(decrease) in cash and cash equivalents,
inc. bank overdrafts 2,043 (12,627)
Net decrease/(increase) in borrowings 6,621 (12,784)
Increase in bank deposits 3,799 -
Increase in cash held in escrow 11,580 -
Capital element of lease repayments 1,135 274
Other movements on finance leases (535) (1,327)
Foreign exchange movement (2,117) (1,154)
--------- -----------
Movement in net debt 22,526 (27,618)
Net debt at beginning of year (75,553) (47,935)
--------- -----------
Net debt at end of year (53,027) (75,553)
========= ===========
Total Produce plc
Selected explanatory notes for the Preliminary Results for the year
ended 31 December 2012
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 2012 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.
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 4 March 2013. 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 where appropriate.
Changes in accounting policy for year ended 31 December 2012
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 or the financial position of the
Group.
-- 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 year, a number of amendments to existing 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.
Changes in accounting policy from 1 January 2013
A number of new IFRSs and interpretations of the International
Financial Reporting Interpretations Committee become effective for
periods beginning on or after 1 January 2013. The Directors
anticipate that the adoption of these standards will not have a
material impact on the Group's earnings per share with the
exception of the revision to IAS 19 Employee Benefits (IAS 19R)
which would result in an increased charge to the income statement
in respect of the Group's defined benefit arrangements.
IAS 19R is effective for accounting periods beginning on or
after 1 January 2013. The Group have opted not to apply this
standard early. The main impact of applying IAS 19R will be in the
income statement, with the replacement of the expected return on
assets item and unwinding of the discount on the defined benefit
obligation with a single line item calculating the net interest on
the deficit/(surplus). In addition administration expenses of the
scheme will be included as an operating expense of the period and
are no longer included as a deduction from return on plan assets in
the measurement of the defined benefit obligation. The Group's
actuarial advisors have estimated the impact of IAS 19R for the
year ending 31 December 2012 to be an additional income statement
charge of EUR0.7m but no change in the balance sheet position.
2. Translation of foreign currencies
The presentation currency of the Group is Euro which is the functional
currency of the parent. 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 designated as hedges of those
net investments. 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
2012 2011 % change 2012 2011 % change
Pound Sterling 0.8086 0.8757 7.7% 0.8110 0.8353 2.9%
Swedish Krona 8.7277 9.0086 3.1% 8.5763 8.8990 3.6%
Czech Koruna 25.1879 24.7335 (1.8%) 25.0942 25.5018 1.6%
Danish Kroner 7.4438 7.4507 0.1% 7.4606 7.4322 (0.4%)
South African Rand 10.5503 10.0826 (4.6%) 11.1852 10.4802 (6.7%)
-------- -------- --------- -------- -------- ---------
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,
marketing 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, marketing and distribution of fresh produce
in Northern Europe.
- UK Fresh Produce: This operating segment is involved in the
in procurement, marketing and distribution of fresh produce
in the UK.
- Healthfoods and Consumer Products Distribution: This division
is a full service marketing and distribution partner to the
healthfoods, pharmacy, grocery, and domestic consumer products
sectors. This segment distributes to retail and wholesale
outlets in Ireland and in the United Kingdom.
A further three operating segments involved in the procurement,
marketing and distribution of fresh produce have been identified
which are combined under 'Rest of the World Fresh Produce' as they
are not individually material.
Segmental performance is evaluated based on revenue and adjusted
EBITA. Management believes that adjusted EBITA, while not a defined
term under IFRS, provides a fair reflection of the underlying trading
performance of the Group. Adjusted EBITA is earnings before interest,
tax, acquisition related intangible asset amortisation charges and
costs and exceptional items. It also excludes the Group's share
of these items within its joint ventures and associates. Adjusted
EBITA is therefore measured differently from operating profit in
the Group financial statements as explained and reconciled in detail
in the analysis that follows.
Finance costs, finance income and income taxes 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, omitted from the detailed
segmental analysis that follows.
2012 2011
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 1,302,685 1,282,299 20,408 1,205,234 1,189,058 18,421
Northern Europe Fresh
Produce 664,655 651,326 19,523 595,340 584,318 15,742
UK Fresh Produce 515,040 513,023 6,378 485,414 483,411 5,294
Other Fresh Produce 261,258 261,161 5,020 170,989 170,461 4,289
Inter - segment revenue (35,829) - - (29,729) - -
---------- ---------- ----------- ---------- ---------- -----------
Total Fresh Produce 2,707,809 2,707,809 51,329 2,427,248 2,427,248 43,746
Healthfoods and Consumer
Products 102,762 102,762 3,235 99,329 99,329 1,213
Third party revenue
and adjusted EBITA 2,810,571 2,810,571 54,564 2,526,577 2,526,577 44,959
---------- ---------- ---------- ----------
* Comparative balances have been reclassified in the current year
to ensure conformity with current year presentation
All inter-segment revenue transactions are undertaken at arm's length.
Reconciliation of segmental profits to operating profit
Below is a reconciliation of the adjusted EBITA per management reports
to operating profit and profit before tax per the Group income statement.
2012 2011
Note EUR'000 EUR'000
Adjusted EBITA per management reporting 54,564 44,959
Acquisition related intangible asset amortisation
charges within subsidiaries (i) (6,732) (5,501)
Share of joint ventures' and associates'
acquisition relation intangible asset amortisation
charges (i) (1,089) (535)
Acquisition related costs within subsidiaries (ii) (227) (615)
Acquisition related costs within joint (ii) (189) -
ventures and associates
Share of joint ventures' and associates'
interest (iii) (861) (507)
Share of joint ventures' and associates'
tax (iii) (2,258) (1,389)
Operating profit before exceptional items 43,208 36,412
Exceptional items (iv) 303 2,712
---------- ------------
Operating profit after exceptional items 43,511 39,124
Net financial expense (v) (6,410) (4,748)
---------- ------------
Profit before tax 37,101 34,376
========== ============
(i) Acquisition related intangible asset amortisation charges are
not allocated to operating segments in the Group's management
accounts.
(ii) Acquisition related costs which include legal fees and other
professional service fees on completed acquisitions of subsidiaries
are not allocated to operating segments in the Group management
accounts.
(iii) Under IFRS, included within profit before tax is the share of
joint ventures' and associates' profit after tax and interest.
In the Group's management accounts, the Group share of tax and
interest are 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 Group's
management accounts.
4. Adjusted profit before tax, adjusted EBITA and adjusted EBITDA
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.
2012 2011
EUR'000 EUR'000
Profit before tax per the income statement 37,101 34,376
Adjustments
Exceptional items (Note 5) (303) (2,712)
Group share of the tax charge of joint ventures
and associates 2,258 1,389
Acquisition related intangible asset amortisation
charges within subsidiaries 6,732 5,501
Share of joint ventures' and associates' acquisition
related intangible assets amortisation charges 1,089 535
Acquisition related costs within subsidiaries 227 615
Acquisition related costs within joint ventures
and associates 189 -
--------- ---------
Adjusted profit before tax 47,293 39,704
--------- ---------
Exclude
Net financial expense - Group 6,410 4,748
Net financial expense - share of joint ventures
and associates 861 507
--------- ---------
Adjusted EBITA 54,564 44,959
--------- ---------
Exclude
Depreciation - subsidiaries 13,370 13,153
Depreciation - share of joint ventures and associates 2,425 1,626
--------- ---------
Adjusted EBITDA 70,359 59,738
--------- ---------
5. Exceptional items
2012 2011
EUR'000 EUR'000
Gain on the disposal of joint ventures (a) 303 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)
Change in fair value of investment property (e) - (2,550)
Total exceptional items before tax 303 2,712
Tax on exceptional items (f) 43 663
-------- -----------
Total 346 3,375
======== ===========
(a) Gain on the disposal of joint ventures
In January 2012, the Group announced the completion of a transaction
to sell its 50% shareholding in 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.
A profit of EUR303,000 was recognised on this sale comprising
the EUR1,792,000 difference between the sales proceeds and the
joint venture's carrying value of EUR11,238,000 together with
the reclassification of EUR1,489,000 of currency translation
differences from equity to the income statement.
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.
(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 the prospective pension entitlement
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 as an exceptional
gain. 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 gain included in other comprehensive
income, properties where the carrying value exceeded market
value were identified, resulting in an impairment charge of
EUR1,331,000 in the 2011 income statement. No such impairments
were identified in 2012.
(e) Change in fair value of investment property
In 2012, there were no fair value movements arising from the
exercise to fair value investment properties. A net deferred
tax credit of EUR43,000 was recorded in the year as a result
of changes in the underlying tax rates that were previously
applied in calculating deferred tax liabilities on prior year
fair value gains.
In 2011, fair value losses, amounting to EUR2,550,000 were recognised
in the income statement along with a net deferred tax credit
of EUR779,000 as a result of the exercise to fair value investment
properties.
(f) Tax on exceptional items
As outlined in notes above, net deferred tax credits totalling
EUR43,000 (2011: EUR663,000) were recognised in the income statement
in 2012 in respect of exceptional items.
6. Income tax
2012 2011
EUR'000 EUR'000
Income tax expense 8,319 6,635
Group share of tax charge of its joint ventures
and associates netted in profit before tax 2,258 1,389
--------- ---------
Total tax charge 10,577 8,024
Adjustments
Deferred tax on amortisation of intangible assets
- subsidiaries 1,887 1,649
Share of joint ventures' and associates' deferred
tax credit on amortisation of intangible assets 176 55
Net deferred tax on fair value movement on properties
- subsidiaries -43 779
Net deferred tax on pension curtailment - subsidiaries - (116)
Tax charge on underlying activities 12,683 10,391
========= =========
The total tax charge for the year amounted to EUR10.6m (2011: EUR8.0m),
including the Group's share of the tax charge of its joint ventures
and associates of EUR2.3m (2011: 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 EUR12.7m (2011: EUR10.4m), equivalent
to a rate of 26.8% (2011: 26.2%) when applied to the Group's adjusted
profit before tax.
7. Earnings per share
2012 2011
EUR'000 EUR'000
Profit attributable to equity holders
of the parent 21,697 23,466
========= ===========
'000 '000
Shares for basic and adjusted earnings
per share calculation 329,887 329,887
Basic and diluted earnings per share
- EUR cent 6.58 7.11
2012 2011
Adjusted fully diluted earnings per 2012 cent 2011 cent
share EUR'000 per share EUR'000 per share
Profit attributable to equity holders
of the parent 21,697 6.58 23,466 7.11
Adjustments:
Exceptional items - net of tax (Note
5) (346) (0.11) (3,375) (1.02)
Amortisation of acquisition related
intangible asset within subsidiaries 6,732 2.04 5,501 1.67
Group share of joint ventures and
associates acquisition related intangible
asset amortisation charges 1,089 0.33 535 0.16
Acquisition related costs within
subsidiaries 227 0.07 615 0.19
Acquisition related costs within
joint ventures and associates 189 0.06 - -
Tax effect of amortisation charge
of intangible assets (2,063) (0.63) (1,704) (0.52)
Non-controlling interests' share
of exceptional items, acquisition
related costs, acquisition related
intangible asset amortisation charges
and related tax (769) (0.23) (1,148) (0.35)
--------- ----------- --------- -----------
Adjusted fully diluted earnings 26,756 8.11 23,890 7.24
========= =========== ========= ===========
At 31 December 2012 the Group held 22,000,000 (31 December 2011:
22,000,000) of its own shares 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, acquisition related intangible asset amortisation
charges and costs, related tax charges and credits and the impact
of share options with a dilutive effect.
Share options outstanding at the end of 2012 were 7,060,000 (2011:
7,260,000) 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
2012 2011
EUR'000 EUR'000
Net pension liability at beginning of year (18,058) (11,033)
Current/past service cost less net finance
income recognised in income statement (2,829) (1,689)
Curtailment gain recognised in the income statement
(Note 5) - 926
Employer contributions to schemes 5,034 4,842
Actuarial losses recognised in other comprehensive
income (12,258) (10,883)
Foreign exchange movement (213) (221)
---------- ---------
Net pension liability at end of year (28,324) (18,058)
Related deferred tax asset 4,578 3,246
---------- ---------
Net pension liability after tax (23,746) (14,812)
========== =========
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 2012 reflects pension liabilities
of EUR28.3m (2011: EUR18.1m) in respect of schemes in deficit. While
pension scheme assets increased in excess of 15% to EUR132.4m at
31 December 2012 (2011: EUR114.6m), pension obligations increased
to EUR160.7m (2011: 132.7m).
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 at 31 December 2012 was primarily
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. The discount rate used for the schemes in
the Eurozone was 4.15% (2011: 5.30%) and for the schemes in the
UK was 4.30% (2011: 4.80%). This increase in the liability was partly
offset by higher than expected returns on the scheme assets in 2012.
The pension curtailment gain of EUR926,000 in 2011 represents
the net present value of a reduction in the prospective pension
entitlement 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 as an
exceptional gain.
9. Dividends
2012 2011
EUR'000 EUR'000
Dividends paid on Ordinary Euro 1 cent shares
Interim dividend for 2012 of 0.567 cent per
share (2011: 0.54 cent) 1,870 1,781
Final dividend for 2011 of 1.350 cent per share
(2010: 1.243 cent) 4,454 4,101
---------- ---------
Total dividend 6,324 5,882
========== =========
Total dividend per share 1.917 1.783
========== =========
The directors have proposed an increase of 12 % in the final dividend
for 2012, subject to shareholder approval at the AGM, to 1.512 cent
per share. This brings the total dividend in respect of 2012 to
2.079 cent per share, representing an increase of 10% on the total
2011 dividend. This dividend has not been provided for in the balance
sheet at 31 December 2012.
10. Joint ventures and associates
2012 2011
EUR'000 EUR'000
Investment in joint ventures and associates
at beginning of the year 40,212 34,054
Share of profit after tax 4,572 3,442
Share of other comprehensive income, net (215) 112
Investment in year in associates (a) 4,574 3,336
Investment in year in joint ventures - cash
(b) 9,392 2,562
Investment in year in joint ventures - contingent
consideration (b) 5,805 1,124
Loans advanced during the year to joint ventures
(b) 256 294
Dividends received (2,909) (1,760)
Available-for-sale financial asset becoming
an associate (a) - 11,186
Financial asset becoming an associate 32 -
Disposal of joint venture (c) - (3,088)
Joint venture being reclassified as non-current
asset held for sale (a) - (11,064)
Foreign exchange movement 367 14
---------- --------------
Investment in joint ventures and associates
at end of the year 62,086 40,212
========== ==============
(a) Investment in associates
The investments in associates in 2011 and 2012 relate to the Group
undertaking a strategic reorganisation of its investments in Capespan
Group Limited ("Capespan South Africa") and Capespan International
Holdings Limited ("Capespan Europe").
Investments in 2011
At 31 December 2010, the Group held an effective interest of 15.6%
in Capespan South Africa which was classified as an available-for-sale
financial asset. From July 2011 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 was 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 undertaking. 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) was reclassified to the income statement resulting
in an exceptional gain of EUR4,055,000 which was disclosed in the
financial statements as an exceptional item in 2011 (refer to Note
5).
Investments in 2012
On 9 January 2012, the Group announced the completion of a transaction
to sell its 50% shareholding in 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
(valued at EUR4,574,000) and EUR8,456,000 in cash. The transaction
resulted in the Group increasing its effective interest in Capespan
South Africa to 25.3% from 20.2% at 31 December 2011. See Note 5
for the calculation of the gain of EUR303,000 recognised in the
income statement in 2012 on the disposal of the 50% investment in
Capespan Europe.
The Group's 50% shareholding in Capespan Europe with a carrying
value of EUR11,064,000 was reclassified as a non-current asset held
for sale at 31 December 2011 following the agreement to dispose
of this investment.
(b) Investment in joint ventures
Investments in 2012
In 2012, the Group invested EUR15,453,000 in a number of new and
existing joint venture interests in its Fresh Produce Division including
EUR5,805,000 contingent consideration payable (discounted to net
present value) on achievement of future profit targets.
The main acquisition in the year was the completion of the acquisition
of a 50% shareholding in Frankort & Koning Beheer Venlo BV and subsidiaries
('Frankort & Koning') on 13 March 2012. An initial consideration
of EUR6,000,000 was paid on completion with additional consideration
of up to EUR9,000,000 payable in several tranches over the next
number of years if certain profit targets are made. The fair value
of the contingent consideration recognised at the date of acquisition
of EUR5,581,000 was arrived at by discounting the expected payment
to present value.
For all the acquisitions disclosed above, 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 Business combinations.
Investments in 2011
Mainly during the second half of 2011 the Group, in its Fresh Produce
Division, invested EUR3,980,000, including EUR1,124,000 contingent
consideration payable (discounted to net present value) on achievement
of future profit targets. The new investments were in the UK and
Scandinavia along with further investments in certain joint venture
interests.
(c) Disposal of 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 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 was classified as an exceptional item in the Group income
statement for the year ended 31 December 2011.
11. Businesses acquired and other developments in 2012
The Group made the following investments in the business in 2012:
Acquisition of subsidiary interests
During the year, the Group invested EUR3.6m net of cash acquired
and including estimated contingent consideration which is payable
dependant on the achievement of future profits targets. In July
2012, the Group acquired a 70% interest in a fresh produce company
within the Eurozone Fresh Produce Division and also during the year
made a number of bolt-on acquisitions in its Fresh Produce Division
and Healthfoods and Consumer Products Distribution Division. These
acquisitions will complement existing business interests in these
divisions.
The cash spend in the year on these acquisitions amounted to EUR3.3m
net of cash acquired. The estimated contingent consideration payable
on these transactions dependent on the achievement of future profit
targets was EUR0.3m. The purchase method of accounting has been
applied for these acquisitions. The provisional fair value of the
identifiable assets and liabilities acquired amounts to EUR3.5m
inclusive of EUR2.2m in intangible assets. Goodwill of EUR0.1m arose
on these transactions.
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.
Investment in joint ventures and associations
As highlighted in Note 10 the Group invested EUR20m in new and existing
joint venture and associate interests.
Other
During the year, the Group paid EUR1.9m in respect of contingent
consideration payments relating to previous acquisitions. Revisions
of EUR0.3m were made during the year to contingent consideration
amounts payable relating to previous acquisitions as actual performance
in 2012 has exceeded previous expectations.
12. Cash flows generated from operations
2012 2011
EUR'000 EUR'000
Operating activities
Profit before tax 37,101 34,376
Depreciation of property, plant and equipment 13,370 13,153
Impairment of goodwill - 114
Impairment of property, plant and equipment - 1,331
Fair value movement on investment property - 2,550
Revision to contingent consideration (190) (273)
Amortisation of acquisition related intangible
assets with subsidiaries 6,732 5,501
Amortisation of research and development 395 281
Amortisation of computer software 25 -
Amortisation of grants (292) (187)
Movement on provisions (523) (294)
Share based payment expense 473 118
Contributions to defined benefit pension schemes (5,034) (4,842)
Defined benefit pension scheme expense 2,829 1,689
Curtailment gains in respect of defined benefit
pension schemes - (926)
Net gain on disposal of property, plant and
equipment (567) (314)
Net gain on non-hedging derivative financial
instruments (304) (583)
Net interest expense 6,410 4,748
Income from available-for-sale financial assets - 406
Share of profits of joint ventures and associates (4,572) (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)
Income tax paid (11,814) (11,286)
Net interest paid (5,744) (5,225)
--------- ---------
Cash flows from operations before working capital
movements 37,992 31,228
--------- ---------
Movements in working capital:
-Movements in inventories (5,620) 4,977
-Movements in trade and other receivables 2,659 (1,487)
-Movement in trade and other payables 15,027 (11,237)
--------- ---------
Total movements in working capital 12,066 (7,747)
--------- ---------
Cash flows from operating activities 50,058 23,481
--------- ---------
13. Analysis of Net Debt and Cash and Cash Equivalents
Net debt is a non-IFRS measure which comprises bank deposits,
cash and cash equivalents and current and non-current borrowings.
The calculation of net debt at 31 December 2012 and 31 December
2011 is as follows:
2012 2011
EUR'000 EUR'000
Current assets
Bank deposits 3,799 -
Bank balances 88,656 77,471
Call deposits (demand balances) 17,036 12,616
Current liabilities
Bank overdrafts (5,372) (4,274)
Current bank borrowings (1,239) (19,455)
Current finance leases (1,110) (1,325)
Non-current liabilities
Non-current bank borrowing (150,757) (136,358)
Non-current finance leases (4,040) (4,228)
---------- ----------
Net debt at end of year (53,027) (75,553)
---------- ----------
Reconciliation of cash and cash equivalents per balance sheet to
cashflow statement
2012 2011
EUR'000 EUR'000
Bank balances 88,656 77,471
Call deposits (demand balances) 17,036 12,616
--------- --------
Cash and cash equivalents per balance sheet 105,692 90,087
Less bank overdrafts (5,372) (4,274)
Less cash held in escrow (a) (11,360) -
Cash, cash equivalents and bank overdrafts
per cashflow statement 88,960 85,813
--------- --------
(a) On 13 December 2012, the Group drew a Canadian Dollar loan
of CAD$ 14,912,000 (EUR11,580,000), the proceeds of which were
placed in escrow and were payable contingent on the completion of
the acquisition of the initial 35% of the share capital of
Oppenheimer group. At 31 December 2012, the translated Euro value
of the CAD$ 14,912,000 cash balance was EUR11,360,000. The
transaction completed on 7 January 2013 and the proceeds were
remitted to the vendor on this date. In accordance with IAS 7
Statement of Cashflows this falls outside the classification of
cash and cash equivalents and accordingly has been omitted from
cash and cash equivalents in the Group Cashflow Statement.
14. Post balance sheet events
On 7 January 2013, the Group announced the completion of an agreement
to acquire a 65% majority shareholding in Grandview Ventures Limited
('Oppenheimer group') in two stages over five years. The acquisition
of an initial 35% of the Oppenheimer shares was completed on this
date for an initial cash payment of CAD $15.0m (EUR11.4m) with additional
consideration payable on these shares if certain profit targets are
met. A further 30% shareholding will be purchased in 2017 for a price
to be determined based on future profits. The total consideration
payable for the 65% shareholding is estimated not to exceed CAD $40
million (EUR30m) at completion. The Oppenheimer Group is a leading
North American fresh produce distribution and marketing company with
thirteen sales offices, three in Canada, nine in the USA and one in
Chile.
There have been no other material events subsequent to 31 December
2012 which would require disclosure in this report.
15. Related party transactions
There have been no related party transactions or changes to related
party transactions other than those as described in the 2011 Annual
Report that materially affect the financial position or affect the
performance of the Group for the year ended 31 December 2012.
16. Board approval
This announcement was approved by the Board of Directors of Total
Produce plc on 4 March 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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