TIDMTOT
RNS Number : 4172B
Total Produce Plc
04 March 2014
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013
TOTAL PRODUCE INCREASES EARNINGS BY 10.5%
-- Total revenue (1) up 13.0% to EUR3.2 billion
-- Adjusted EBITDA(1) up 6.7% to EUR74.1m
-- Adjusted EBITA(1) up 9.4% to EUR58.7m
-- Adjusted profit before tax (1) up 12.5% to EUR52.9m
-- Adjusted fully diluted EPS (1) up 10.5% to 8.77 cent
-- Final dividend up 10.0% to 1.66 cent
(1) Key performance indicators are defined overleaf
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce has recorded a strong performance in 2013 with total
revenue increasing by 13.0% to EUR3.2 billion and adjusted earnings
per share increasing by 10.5% to 8.77 cent per share. The Group's
growth is primarily driven by successful acquisitions completed in
recent years including the investment in Oppenheimer in North America.
We are also pleased to announce a 10% increase in the final dividend
to 1.66 cent per share. The Group actively continues to pursue further
investment opportunities and is targeting adjusted earnings per share
for 2014 in the range of 8.4 cent to 9.4 cent per share".
4 March 2014
For further information, please contact:
Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030, Mob
+353-87-243-6130
TOTAL PRODUCE PLC PRELIMINARY RESULTS FOR THE
YEAR ENDED 31 DECEMBER 2013
Restated
2013 2012*
EUR'million EUR'million % change
Total revenue (1) , including share of
joint ventures & associates 3,175 2,811 +13.0%
Group revenue 2,638 2,432 +8.5%
Adjusted EBITDA (1) 74.1 69.5 +6.7%
Adjusted EBITA (1) 58.7 53.7 +9.4%
Operating profit (before exceptional
items) 46.9 41.8 +12.1%
Adjusted profit before tax (1) 52.9 47.0 +12.5%
Profit before tax 48.2 36.4 +32.6%
Euro Euro
cent cent % change
Adjusted fully diluted earnings per share
(1) 8.77 7.94 +10.5%
Basic earnings per share 9.38 6.40 +46.6%
Diluted earnings per share 9.36 6.40 +46.3%
Total dividend per share 2.27 2.08 +9.3%
* All 2012 numbers presented in this report for comparative purposes
have been restated to reflect the impact of IAS 19 Employee Benefits
(2011) and to reflect the reclassification of fair value movements
on contingent consideration. See Note 1 of the accompanying financial
information for further details.
(1) Key performance indicators defined
Total revenue includes the Group's share of the revenue of joint ventures
and associates.
Adjusted EBITDA is earnings before interest, tax, depreciation, acquisition
related intangible asset amortisation charges and costs, fair value
movements on contingent consideration and exceptional items. It also
excludes the Group's share of these items within joint ventures and
associates.
Adjusted EBITA is earnings before interest, tax, acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration and exceptional items. It also excludes
the Group's share of these items within joint ventures and associates.
Adjusted profit before tax excludes acquisition related intangible
asset amortisation charges and costs, fair value movements on contingent
consideration and exceptional items. It also excludes the Group's
share of these items within joint ventures and associates.
Adjusted fully diluted earnings per share excludes acquisition related
intangible asset amortisation charges and costs, exceptional items
and related tax on such items. It also excludes the Group's share
of these items within 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 a strong performance in
2013 with positive contributions from acquisitions completed in
recent years and organic growth. Revenue (1) , adjusted EBITA (1)
and adjusted earnings per share (1) grew by 13.0%, 9.4% and 10.5%
respectively.
Revenue grew by 13.0% to EUR3.2 billion (2012: EUR2.8 billion) with
adjusted EBITA up 9.4% to EUR58.7m (2012: EUR53.7m). The strong
growth in the year was assisted by the positive contributions from
acquisitions completed in recent years offset in part by the divestment
of the Group's 25% interest in Capespan Group Limited ('Capespan
South Africa'). The results were marginally affected by currency
translation in the year primarily due to the weakening of Sterling.
The trading results in all of the operating divisions within the
Group's core Fresh Produce Division were improved on 2012. On a
like-for-like basis, excluding the impact of acquisitions, divestments
and currency translation, total revenue increased by c.8% in 2013.
Operating profit before exceptional items increased 12.1% to EUR46.9m
(2012: EUR41.8m). The Group recognised net exceptional credits in
the year of EUR6.5m (2012: EUR0.3m) due primarily to a credit arising
on modifications to the structure of the Group's defined benefit
arrangements offset by fair value losses on the revaluation of properties.
A full analysis of these exceptional items is set out in Note 5
of the accompanying financial information. Operating profit after
these net exceptional credits was EUR53.4m (2012: EUR42.1m), an
increase of 26.7%.
Statutory profit before tax in 2013 was EUR48.2m (2012: EUR36.4m).
Adjusted profit before tax (1) increased by 12.5% to EUR52.9m (2012:
EUR47.0m).
Adjusted earnings per share (1) for the year ended 31 December 2013
of 8.77 cent (2012: 7.94 cent) represented a growth of 10.5%.
The Group continues to generate positive cashflows with both operating
and free cashflows up on prior year due to increased earnings and
working capital inflows. Free cashflow increased to EUR45.1m (2012:
EUR41.2m) resulting in a reduction in the net debt at 31 December
2013 to EUR11.0m (2012: EUR53.0m) and represents 0.15 times adjusted
EBITDA.
The Group successfully concluded a number of acquisitions in 2013
with a total investment of over EUR23m. This included EUR5m payable
contingent on the achievement of future profit targets. The most
significant investment being the acquisition of an initial 35% interest
in the Oppenheimer Group on 7 January 2013, with a further 30% to
be acquired in 2017. This development represents the Group's first
investment in the North American market where the Oppenheimer Group
is a leading distribution and marketing company with thirteen locations,
of which nine are in the USA, three are in Canada and one in Chile.
In addition, on 13 December 2013, the Group completed the acquisition
of a further 41% shareholding in Provenance Partners Limited taking
the Group's interest to 50%. Provenance primarily sources exotic
vegetables from Africa and it expands the Group's product offering
to major retailers, food service and wholesale customers in the
UK.
Post year-end the Group completed an agreement (subject to regulatory
approval) to acquire the second 50% shareholding in All Seasons
Fruit ('ASF') in Holland in three stages. An initial 20% shareholding
will be acquired on completion with the balance to be acquired in
subsequent years. ASF specialises in the soft fruit category.
The Board recommends an increase of 10.0% in the final dividend
to 1.66 cent per share (2012: 1.51cent per share). This together
with the interim dividend of 0.61 cent per share (2012: 0.57 cent
per share), brings the total 2013 dividend to 2.27 cent per share
(2012: 2.08 cent), an increase of 9.3% on 2012.
Operating Review
The table below details a segmental breakdown of the Group's total
revenue and adjusted EBITA for the year. Segment performance is evaluated
based on revenue and adjusted EBITA.
Restated *
2013 2012
Segmental Adjusted Segmental Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Fresh Produce
* Eurozone Fresh Produce 1,493,567 22,962 1,328,042 21,023
* Northern Europe Fresh Produce 900,413 23,431 802,837 22,033
* UK Fresh Produce 480,769 6,596 489,686 5,103
* International Fresh Produce 226,862 3,128 123,076 2,511
Inter-segment revenue (40,689) - (35,832) -
---------- --------- ---------- ---------
Total Fresh Produce 3,060,922 56,117 2,707,809 50,670
Healthfoods and Consumer Products 113,906 2,588 102,762 2,989
Third party revenue and adjusted
EBITA 3,174,828 58,705 2,810,571 53,659
---------- --------- ---------- ---------
* 2012 comparatives have been restated in accordance with IAS 19
Employee Benefits (2011) and to reflect the reclassification of fair
value movements to contingent consideration. In addition, certain
information has been reclassified to conform to the current year
presentation.
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 this division increased 13.0% in the period to EUR3,061m
(2012: EUR2,708m) with adjusted EBITA increasing 10.7% to EUR56.1m
(2012: EUR50.7m). Net EBITA margins in the Fresh Produce division
of 1.83% (2012: 1.87%) were slightly lower compared to the prior
year. The results were assisted by the positive contribution of acquisitions
completed in recent years and organic growth offset in part by the
divestment of the Group's 25% interest in Capespan South Africa in
April 2013.
Trading conditions overall in 2013 were improved on 2012 with performance
increasing in each of the operating segment in the Fresh Produce
Division. The effect of currency did not have a material impact on
the reported results in the year. On a like-for-like basis, excluding
the impact of acquisitions, divestments and currency translation,
revenue increased c.8% in 2013 with a mix of both volume and average
price increases.
Further information on each reporting segment follows.
Eurozone Fresh Produce
Revenue in the Eurozone Division increased 12.5% to EUR1,494m (2012:
EUR1,328m) with a 9.2% increase in adjusted EBITA to EUR23.0m (2012:
EUR21.0m). The increase was primarily due to the full year effect
of acquisitions completed in 2012 and improved trading conditions
in certain Continental European locations. Excluding the effect of
acquisitions, revenue on a like-for-like basis was up c. 8% due to
both volume and price increases.
Northern Europe Fresh Produce
Revenue in the Group's Northern European Division increased by 12.2%
to EUR900m (2012: EUR803m) with adjusted EBITA increasing by 6.3%
to EUR23.4m (2012: EUR22.0m). The increase in revenue was due to
new customers, new product lines and average price growth. Currency
translation did not have a material impact on the reported results
year-on-year.
UK Fresh Produce
Reported revenue in the Group's UK division decreased by 1.8% to
EUR481m (2012: EUR490m) with adjusted EBITA increasing by 29.3% to
EUR6.6m (2012: EUR5.1m). The results were negatively impacted by
the 5.2% weakening of Sterling in 2013. On a constant currency basis,
revenue was up 2.4%. The results reflect a strong second half of
the year particularly in the wholesale sector after a relatively
poor start to the year due to a late spring which impacted the first
half results.
International Fresh Produce
Reported revenue in the Group's international business increased
to EUR227m (2012: EUR123m) with adjusted EBITA increasing by 24.6%
to EUR3.1m (2012: EUR2.5m). The results benefitted from the acquisition
of Oppenheimer in January 2013 offset by the impact of the divestment
of Capespan South Africa in April 2013.
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 markets and distributes to retail and wholesale outlets
in Ireland and the United Kingdom.
Revenue increased 10.8% to EUR114m (2012: EUR103m) due to the positive
contributions of bolt-on acquisitions completed in the previous 18
months. The division recorded an EBITA of EUR2.6m (2012: EUR3.0m)
with the decrease due to lower margins primarily due to changes in
the product mix.
Financial Review
Net financial expense
Net financial expense in the year decreased to EUR5.2m (2012: EUR5.8m)
due to lower average debt in the year. The Group's share of the net
financial expense in its joint ventures and associates was EUR0.6m
compared to EUR0.9m in 2012. Net interest cover for the year was
11.3 times based on adjusted EBITA.
Exceptional items
Exceptional items in the year amounted to a net credit before tax
of EUR6.5m (2012: net credit of EUR0.3m) due primarily to a credit
arising on modifications to the structure of the Group's defined
benefit arrangements offset by fair value losses on the revaluation
of properties. A full analysis of these exceptional items is set
out in Note 5 of the accompanying financial information.
Statutory profit before tax
Statutory profit before tax increased 32.6% in the year to EUR48.2m
due to higher operating profits and higher net exceptional credits
in 2013. Excluding the exceptional items, acquisition related amortisation
charges and costs, and fair value movements on contingent consideration,
adjusted profit before tax (1) increased by 12.5% to EUR52.9m.
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 EUR14.0m (2012: EUR12.5m)
representing an effective tax rate of 26.4% (2012: 26.7%) when applied
to the Group's adjusted profit before tax.
Non-controlling interest
The non-controlling interest's share of after tax profits was EUR7.3m
(2012: EUR7.1m). Included in the 2013 charge was the non-controlling
interest's share of EUR1.8m (2012: EUR0.8m) of exceptional items
and acquisition related charges and costs. Excluding these non-trading
items, the non-controlling interests share of after tax profits increased
by EUR1.2m in 2013 due to the full year effect of the non-controlling
interests' share of after tax profits of subsidiaries acquired in
the second half of 2012 and higher after tax profits in a number
of the Group's non-wholly owned subsidiaries in Continental Europe.
Earnings per share
Adjusted fully diluted earnings per share increased 10.5% to 8.77
cent (2012: 7.94 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 and diluted earnings per share after these
non-trading items amounted to 9.38 cent (2012: 6.40 cent) and 9.36
cent (2012: 6.40 cent) respectively with the increase due higher
operating profits and net exceptional credits in 2013.
Note 7 of the accompanying financial information provides details
on the calculation of the respective earnings per share amounts.
Net debt and cash flow
Net debt at 31 December 2013 was EUR11.0m (2012: EUR53.0m). At 31
December 2013, the Group had cash balances (including bank deposits)
of EUR108.2m and interest bearing borrowings (including overdrafts)
of EUR119.2m. Net debt relative to adjusted EBITDA was 0.15 times
and interest is covered 11.3 times by adjusted EBITA.
The Group generated operating cash flows of EUR45.0m in 2013 (2012:
EUR38.0m) before working capital movements with the increase due
to higher profits. There were EUR14.5m (2012: EUR12.1m) of working
capital inflows in the year assisted by an incremental EUR12.4m
inflow from additional trade receivables financing. Cash outflows
on routine capital expenditure, net of disposals, were EUR12.9m
(2012: EUR7.9m). Dividends received from joint ventures and associates
increased to EUR4.1m (EUR2012: EUR2.9m) with dividend payments to
non-controlling interests increasing to EUR5.6m (2012: EUR3.9m).
Free cash flow generated by the Group increased to EUR45.1m (2012:
EUR41.2m). 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 EUR17.6m (2012: EUR14.8m). Development capital expenditure
of EUR1.2m (2012: EUR3.8m) was down on the prior year. As highlighted
earlier, the Group sold its investment in Capespan South Africa
and received cash proceeds of EUR21.7m in 2013. The Group distributed
EUR7.0m (2012: EUR6.3m) in dividends to equity shareholders in 2013.
There was a positive impact of EUR2.2m on translation of foreign
currency net debt into Euro at 31 December 2013 primarily due to
the weaker Czech Koruna, Sterling, Swedish Krona and US Dollar exchange
rates at year end compared to the rates prevailing at 31 December
2012.
Restated
2013 2012
EUR'million EUR'million
Adjusted EBITDA 74.1 69.5
Deduct adjusted EBITDA of joint ventures and associates (11.7) (11.4)
Net interest and tax paid (16.2) (17.6)
Other (1.2) (2.5)
-------------- -------------
Operating cash flows before working capital movements 45.0 38.0
Working capital and other movements 14.5 12.1
-------------- -------------
Operating cash flows 59.5 50.1
Routine capital expenditure net of disposal proceeds (12.9) (7.9)
Dividends received from joint ventures and associates 4.1 2.9
Dividends paid to non-controlling interests (5.6) (3.9)
-------------- -------------
Free cash flow 45.1 41.2
Disposal of a joint venture interest 21.7 8.5
Acquisition expenditure (including contingent
consideration payments) (17.6) (14.8)
Development capital expenditure (1.2) (3.8)
Dividends paid to equity shareholders (7.0) (6.3)
Other (1.2) (0.1)
Movement in net debt in the year 39.8 24.7
Net debt at beginning of year (53.0) (75.6)
Foreign currency translation 2.2 (2.1)
-------------- -------------
Net debt at end of year (11.0) (53.0)
-------------- -------------
Defined benefit pension obligations
The net liability in the Group's defined benefit pension schemes
(net of deferred tax) decreased to EUR3.9m (2012: EUR23.7m). As
explained in further detail in Note 8 of the accompanying financial
information the decrease in liability is due primarily to strong
returns on pension scheme assets and a credit arising on modification
to the structure of the Group's defined benefit pension arrangements.
Shareholders' Equity
The balance sheet strengthened in 2013 with shareholders' equity
increasing 15.7% to EUR217.4m (2012: EUR187.8m). The increase was
primarily due to after tax profits in the year of EUR30.9m attributable
to equity shareholders of the parent and gains of EUR5.2m recognised
directly in the statement of other comprehensive income. This was
offset by dividend payments of EUR7.0m to equity shareholders in
2013. The EUR5.2m of gains recognised directly in the statement
of other comprehensive income include remeasurement gains on employee
defined benefit pension schemes of EUR9.7m (net of deferred tax)
offset by currency translation losses of EUR3.8m that arose on the
translation of foreign currency denominated assets to Euro and net
fair value losses of EUR0.6m (net of deferred tax) on the revaluation
of property.
Development activity
During 2013, the Group invested EUR23.3m including deferred consideration
and contingent consideration amounts of EUR5.9m payable contingent
of the achievement of future profit targets.
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 the Oppenheimer shares was completed on this date in January
for an initial cash payment of CAD$14.9m (EUR11.4m) with additional
consideration payable on these shares if certain profit targets
are met. The fair value of the contingent consideration recognised
at the date of acquisition of EUR2.6m was calculated using an expected
present value technique. 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 was estimated
not to exceed CAD$40.0m (EUR30.0m) at completion.
On 13 December 2013, the Group completed the acquisition of a further
41% shareholding in Provenance Partners Limited taking the Group's
interest to 50%. Provenance primarily sources exotic vegetables
from Africa for sale to major retailers, food service and wholesale
customers in the UK.
In addition to the activity detailed above, the Group made a number
of other bolt-on acquisitions and invested in new and existing joint
ventures in 2013.
Post year end, the Group completed an agreement (subject to regulatory
approval) to acquire the second 50% shareholding in All Seasons
Fruit ('ASF') in the Netherlands in three stages. An initial 20%
shareholding will be acquired on completion with the balance to
be acquired in subsequent years. ASF specialises in the soft fruit
category.
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 2013, 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 2014.
Dividends
The Board is proposing a 10.0% increase in the final dividend to
1.66 cent per share (2012: 1.51 cent), subject to the approval
at the forthcoming AGM. If approved, this dividend will be paid
on 27 May 2014 to shareholders on the register at 2 May 2014 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 2013. The total dividend for 2013 will amount to
2.27 (2012: 2.08) cent per share and represents an increase of
9.3% on 2012.
Summary and Outlook
Total Produce has recorded a strong performance in 2013 with total
revenue increasing by 13.0% to EUR3.2 billion and adjusted earnings
per share increasing by 10.5% to 8.77 cent per share. The Group's
growth is primarily driven by successful acquisitions completed
in recent years including the investment in Oppenheimer in North
America.
We are also pleased to announce a 10% increase in the final dividend
to 1.66 cent per share. The Group actively continues to pursue
further investment opportunities and is targeting adjusted earnings
per share for 2014 in the range of 8.4 cent to 9.4 cent per share.
Carl McCann, Chairman
On behalf of the Board
4 March 2014
(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 2013
Note Restated
Before Before
Exceptional Exceptional
exceptional items exceptional items Restated
items (Note 5) Total items (Note 5) Total
2013 2013 2013 2012* 2012* 2012*
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue, including
Group share of
joint ventures
and associates 3 3,174,828 - 3,174,828 2,810,571 - 2,810,571
Group revenue 2,637,693 - 2,637,693 2,431,826 - 2,431,826
Cost of sales (2,274,977) - (2,274,977) (2,092,874) - (2,092,874)
-------------- ------------ ------------ ------------- ------------ ------------
Gross profit 362,716 - 362,716 338,952 - 338,952
Operating expenses
(net) (321,055) 6,751 (314,304) (301,686) 303 (301,383)
Share of profit of
joint ventures
and associates 10 5,260 (259) 5,001 4,572 - 4,572
Operating profit 46,921 6,492 53,413 41,838 303 42,141
Financial income 2,123 - 2,123 1,851 - 1,851
Financial expense (7,301) - (7,301) (7,606) - (7,606)
-------------- ------------ ------------ ------------- ------------ ------------
Profit before tax 41,743 6,492 48,235 36,083 303 36,386
Income tax expense 6 (9,716) (324) (10,040) (8,222) 43 (8,179)
-------------- ------------ ------------ ------------- ------------ ------------
Profit for the year 32,027 6,168 38,195 27,861 346 28,207
============== ============ ============ ============= ============ ============
Attributable to:
Equity holders of the
parent 30,936 21,127
Non-controlling
interests 7,259 7,080
------------ ------------
38,195 28,207
============ ============
Earnings per ordinary
share
Basic 7 9.38 Cent 6.40 cent
Fully diluted 7 9.36 Cent 6.40 cent
Adjusted fully diluted 7 8.77 Cent 7.94 cent
-------------- ------------ ------------
Total Produce plc
Extract from the Group Statement of Comprehensive Income
for the year ended 31 December 2013
Restated
2013 2012
EUR'000 EUR'000
Profit for the year 38,195 28,207
========== =========
Other comprehensive income:
Items that may be reclassified subsequently to
profit or loss:
Foreign currency translation effects:
- foreign currency net investments - subsidiaries (6,302) 5,282
- foreign currency net investments - joint ventures
and associates (2,469) 367
* foreign currency losses reclassified to the income
statement on disposal of joint venture and associate
investments 1,044 1,489
* foreign currency borrowings designated as net
investment hedges 3,428 (2,606)
Effective portion of cash flow hedges, net (165) 2
Deferred tax on items taken directly to other comprehensive
income 41 (1)
Share of joint ventures & associate fair value
adjustment on AFS equity investments (15) -
Items that will not be reclassified to profit or
loss:
Remeasurement gains/(losses) on defined benefit
pension schemes 12,164 (11,543)
Revaluation (losses)/gains on property, plant and
equipment, net (1,630) 1,771
Deferred tax on items taken directly to other comprehensive
income (1,181) 1,736
Share of joint ventures and associates remeasurement
losses on defined benefit pension schemes (40) (331)
Share of joint ventures and associates deferred
tax on items taken directly to other comprehensive
income 10 116
Other comprehensive income for the year, net of
tax 4,885 (3,718)
========== =========
Total comprehensive income for the year, net of
tax 43,080 24,489
========== =========
Attributable to:
Equity holders of the parent 36,159 17,022
Non-controlling interests 6,921 7,467
---------- ---------
43,080 24,489
========== =========
Total Produce plc
Extract from the Group Balance Sheet
as at 31 December 2013
2013 2012
Assets EUR'000 EUR'000
Non-current
Property, plant and equipment 133,948 138,753
Investment property 7,150 11,067
Goodwill and intangible assets 157,643 152,098
Investments in joint ventures and associates 54,761 62,086
Other financial assets 649 636
Other receivables 5,090 6,505
Deferred tax assets 6,801 9,473
Employee Benefits 3,282 -
Total non-current assets 369,324 380,618
---------- ----------
Current
Inventories 48,142 45,565
Trade and other receivables 279,095 279,263
Corporation tax receivables 201 1,971
Derivative financial instruments 20 -
Bank deposits 4,740 3,799
Cash and cash equivalents 103,463 105,692
---------- ----------
Total current assets 435,661 436,290
---------- ----------
Total assets 804,985 816,908
---------- ----------
Equity
Share capital 3,519 3,519
Share premium 252,574 252,574
Other reserves (114,096) (110,043)
Retained earnings 75,369 41,752
---------- ----------
Total equity attributable to equity holders of the
parent 217,366 187,802
Non-controlling interests 68,524 64,162
---------- ----------
Total equity 285,890 251,964
---------- ----------
Liabilities
Non-current
Interest-bearing loans and borrowings 114,311 154,797
Deferred government grants 1,681 1,876
Other payables 1,775 1,881
Provisions 17,535 15,336
Corporation tax payable 6,973 7,569
Deferred tax liabilities 13,621 16,100
Employee benefits 7,940 28,324
---------- ----------
Total non-current liabilities 163,836 225,883
---------- ----------
Current
Interest-bearing loans and borrowings 4,879 7,721
Trade and other payables 340,406 326,805
Provisions 6,435 1,785
Derivative financial instruments 645 341
Corporation tax payable 2,894 2,409
---------- ----------
Total current liabilities 355,259 339,061
---------- ----------
Total liabilities 519,095 564,944
---------- ----------
Total liabilities and equity 804,985 816,908
---------- ----------
Total Produce plc
Extract from the Group Statement of Changes in Equity
for the year ended 31 December 2013
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 2013 3,519 252,574 (1,483) 20,914 (122,521) (8,580) 1,627 41,752 187,802 64,162 251,964
--------- -------- ------------ ------------- ---------- -------- --------- --------- -------------- ---------------- -----------
Comprehensive income
Profit for the year - - - - - - - 30,936 30,936 7,259 38,195
Other comprehensive income:
Items that may be reclassified
subsequently
to profit or loss:
Foreign currency translation
effects,
net - - (3,790) - - - - - (3,790) (509) (4,299)
Effective portion of cash flow
hedges,
net - - - - - - (94) - (94) (71) (165)
Deferred tax on items taken
directly
to other comprehensive income - - - - - - 23 - 23 18 41
Share of joint ventures and
associates
fair value adjustments of AFS
equity
investment - - - - - - - (15) (15) - (15)
Items that will not be
reclassified subsequently
to profit or loss:
Revaluation losses on property,
plant
and equipment, net - - - (1,663) - - - - (1,663) 33 (1,630)
Remeasurement gains on defined
benefit
pension schemes - - - - - - - 12,019 12,019 145 12,164
Deferred tax on items taken
directly
to other comprehensive income - - - 1,068 - - - (2,295) (1,227) 46 (1,181)
Share of joint ventures and
associates
remeasurement losses on
defined benefit
pension schemes - - - - - - - (40) (40) - (40)
Share of joint ventures and
associates
deferred tax on remeasurement
losses
on defined benefit pension
schemes - - - - - - - 10 10 - 10
Total other comprehensive
income - - (3,790) (595) - - (71) 9,679 5,223 (338) 4,885
--------- -------- ------------ ------------- ---------- -------- --------- --------- -------------- ---------------- -----------
Total comprehensive income - - (3,790) (595) - - (71) 40,615 36,159 6,921 43,080
--------- -------- ------------ ------------- ---------- -------- --------- --------- -------------- ---------------- -----------
Transactions with equity
holders of the
parent
Non-controlling interests
arising on
acquisition - - - - - - - - - 3,428 3,428
Acquisition of non-controlling
interest - - - - - - - 1 1 (423) (422)
Contribution by non-controlling
interests - - - - - - - - - 15 15
Dividends paid - - - - - - - (6,999) (6,999) (5,579) (12,578)
Share-based payment
transactions - - - - - - 403 - 403 - 403
--------- -------- ------------ ------------- ---------- -------- --------- --------- -------------- ---------------- -----------
Total transactions with equity
holders
of the parent - - - - - - 403 (6,998) (6,595) (2,559) (9,154)
--------- -------- ------------ ------------- ---------- -------- --------- --------- -------------- ---------------- -----------
As at 31 December 2013 3,519 252,574 (5,273) 20,319 (122,521) (8,580) 1,959 75,369 217,366 68,524 285,890
========= ======== ============ ============= ========== ======== ========= ========= ============== ================ ===========
Total Produce plc
Extract from the Group Statement of Changes in Equity
for the year ended 31 December 2013 (continued)
Restated Restated
------------------------------------------------------------------------------------------------------------
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 - - - - - - - 21,127 21,127 7,080 28,207
Other comprehensive income:
Items that may be reclassified
subsequently
to profit or loss
Foreign currency translation
effects,
net - - 4,325 - - - - - 4,325 207 4,532
Effective portion of cash flow
hedges,
net - - - - - - 2 - 2 - 2
Deferred tax on items taken
directly
to other comprehensive income - - - - - - (1) - (1) - (1)
Items that will not be
reclassified subsequently
to profit or loss:
Revaluation gains on property,
plant
and equipment, net - - - 1,422 - - - - 1,422 349 1,771
Remeasurement losses on defined
benefit
pension schemes - - - - - - - (11,371) (11,371) (172) (11,543)
Deferred tax on items taken
directly
to other comprehensive income - - - 196 - - - 1,537 1,733 3 1,736
Share of joint ventures and
associates
Remeasurement losses on
defined benefit
pension schemes - - - - - - - (331) (331) - (331)
Share of joint ventures and
associates
deferred tax on items taken
directly
to other comprehensive income - - - - - - - 116 116 - 116
Total other comprehensive
income - - 4,325 1,618 - - 1 (10,049) (4,105) 387 (3,718)
--------- -------- ------------ ------------- ---------- -------- --------- --------- -------------- ---------------- -----------
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 paid - - - - - - - (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 Cash Flows
for the year ended 31 December 2013
Restated
2013 2012
EUR'000 EUR'000
Net cash flows from operating activities before
working
capital movements (Note 12) 45,031 37,992
Movements in working capital (Note 12) 14,444 12,066
---------- ------------
Net cash flows from operating activities (Note
12) 59,475 50,058
========== ============
Investing activities
Acquisition of subsidiaries, net of cash acquired (2,472) (3,307)
Acquisition of, and investment in joint ventures
and associates (12,148) (9,392)
Loans advanced to joint ventures and associates (210) (256)
Dividends received from joint ventures and associates 4,056 2,909
Payments of contingent consideration (2,296) (1,855)
Acquisition of property, plant and equipment (13,392) (11,892)
Acquisition of intangible assets -computer software (1,265) (649)
Research and development expenditure capitalised (165) (146)
Proceeds from disposal of property, plant and equipment 609 874
Proceeds from disposal of joint ventures and associates 21,677 8,456
Acquisition of other financial assets (28) (2)
Government grants received 153 599
---------- ------------
Net cash flows from investing activities (5,481) (14,661)
========== ============
Financing activities
Drawdown of borrowings 11,048 32,647
Repayment of borrowings (47,577) (39,268)
Increase in bank deposits (941) (3,799)
Decrease/(increase) in cash held in escrow 11,360 (11,580)
Capital element of finance lease repayments (1,315) (1,135)
Acquisition of non-controlling interests (422) (68)
Capital contribution by non-controlling interests 15 59
Dividends paid to non-controlling interests (5,579) (3,886)
Dividends paid to equity holders of the parent (6,999) (6,324)
Net cash flows from financing activities (40,410) (33,354)
========== ============
Net increase in cash, cash equivalents, and bank
overdrafts 13,584 2,043
Net foreign exchange difference (1,366) 1,104
Cash, cash equivalent and bank overdrafts at 1
January 88,960 85,813
Cash, cash equivalents and bank overdrafts at 31
December (Note 13) 101,178 88,960
========== ============
Group Reconciliation of Net Debt
for the year ended 31 December 2013 2013 2012
EUR'000 EUR'000
Net increase in cash, cash equivalents and bank
overdrafts 13,584 2,043
Drawdown of borrowings (11,048) (32,647)
Repayment of borrowings 47,577 39,268
Increase in bank deposits 941 3,799
(Decrease)/increase in cash held in escrow (11,360) 11,580
Capital element of lease repayments 1,315 1,135
Other movements on finance leases (1,187) (535)
Foreign exchange movement 2,218 (2,117)
--------- ---------
Movement in net debt 42,040 22,526
Net debt at 1 January (53,027) (75,553)
--------- ---------
Net debt at 31 December (10,987) (53,027)
========= =========
Total Produce plc
Selected explanatory notes for the Preliminary Results for the year
ended 31 December 2013
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 2013 and is prepared based on the accounting
policies set out therein, which are consistent with those applied
in the prior year with the exception of the effect of the new accounting
standards including IAS 19 Employee Benefits (2011) and IFRS 13
Fair Value Measurement as explained in further detail below. 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 3 March 2014. 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 and disclosures
The accounting policies adopted are consistent with those of the
previous year except for the following new and amended IFRS and
IFRIC interpretations adopted by the Group and Company as of 1 January
2013:
* IFRS 7 Financial Instruments: Disclosures (Amended)
* IFRS 13 Fair Value Measurement
* IAS 1 Presentation of Financial Statements (Amended)
* IAS 12 Income Taxes (Amended)
* IAS 16 Property, Plant and Equipment (Amended)
* IAS 19 Employee Benefits (2011)
* IAS 32 Financial Instruments: Presentation (Amended)
* IAS 34 Interim Financial Reporting (Amended)
* IAS 36 Impairment of Assets (Amended), Early Adopted
The following new standards had an impact on the results and financial
position of the Group for the year ended 31 December 2013.
IAS 19 Employee Benefits (2011)
As a result of IAS 19 Employee Benefits (2011), the Group has changed
its accounting policy with respect to the basis for determining
the income or expense related to defined benefit schemes. The main
impact of applying IAS 19 (2011) is in the income statement, with
the replacement of the expected return on plan assets item and unwinding
of discount on the defined benefit obligation with a single line
item calculating the net interest on the (deficit)/surplus.
The impact on the Group's comparative 2012 income statement, cash
flows statement and balance sheet was as follows:
* an additional pension cost in Group Income Statement
of EUR715,000 for the year ended 31 December 2012,
due to the increase in the net interest cost, with a
corresponding decrease in remeasurement losses on
defined benefit pension schemes recognised in the
Group Statement of Comprehensive Income
* this resulted in a reduction in the income tax charge
in the Group Income Statement of EUR140,000 for the
year ended 31 December 2012 with a corresponding
decrease in deferred tax credit on items recognised
directly in reserves in the Group Statement of
Comprehensive Income
* a reduction in the non-controlling interests charge
in the Group Income Statement of EUR5,000 for the
year ended 31 December 2012 with a corresponding
reduction in the non-controlling interest share of
items recognised in the Group Statement of
Comprehensive Income.
* there was no impact on the employee defined benefit
pension net deficit in the Condensed Group Balance
Sheet
* a reduction in the Group's basic earnings per share
and diluted earnings per share of EUR0.18 cent and a
reduction in the Group's adjusted fully diluted
earnings per share of EUR0.17 cent.
* A decrease of EUR715,000 in the profit before tax in
the Group Cashflow statement and an increase in the
defined benefit pension scheme expense of EUR715,000
with no effect on cashflows for operating activities.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single framework for measuring fair value
and making disclosures about fair value measurements when such measurements
are required or permitted by other IFRSs. It unifies the definition
of fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. It replaces and expands
the disclosure requirements in other IFRSs, including IFRS 7. As
a result the Group has included additional disclosures in this regard
in its 2013 Annual Report.
In accordance with the transitional provisions of IFRS 13, the Group
has applied the new fair value measurement guidance prospectively
and has not provided any comparative information for new disclosures
with the exception of a reclassification of the presentation of
fair value movements on contingent consideration. Notwithstanding
the above, the change had no significant impact on the measurements
of the Group's assets and liabilities.
As a result of application of IFRS 13, the Group has amended the
presentation and classification of fair value movements on contingent
consideration. Under the provisions of IFRS 13, all fair value movements
on items measured at fair value must be presented as a single line
item on the Group income statement. The Group has elected to present
fair value movements on the remeasurement of contingent consideration
within other operating income/(expense). In 2012, the Group presented
interest charges on unwinding the net present value of contingent
consideration within financial expense and revisions to contingent
consideration estimates within other operating income/(expense).
The Group has restated the comparative 2012 income statement to
ensure conformity of presentation with current year.
The impact on the Group's 2012 income statement was as follows:
* other operating income decreases by EUR190,000
* other operating expenses increases by EUR465,000
* finance expense decreases by EUR655,000
There is no effect on the Group's profit before tax or any of the
Group's earnings per share measures.
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 to the extent they are effective. 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
2013 2012 % change 2013 2012 % change
Canadian Dollar 1.3685 - - 1.4641 1.3127 (11.5%)
Czech Koruna 26.3221 25.1879 (4.5%) 27.3718 25.0942 (9.1%)
Danish Kroner 7.4580 7.4438 (0.2%) 7.4601 7.4606 0.0%
Indian Rupee 77.2560 68.3410 (13.0%) 85.2304 72.2313 (18.0%)
Polish Zloty 4.1875 4.1754 (0.3%) 4.1578 4.0800 (1.9%)
Pound Sterling 0.8510 0.8086 (5.2%) 0.8319 0.8110 (2.6%)
South African Rand 12.8226 10.5503 (21.5%) 14.4319 11.1852 (29.0%)
Swedish Krona 8.6418 8.7277 1.0% 8.8498 8.5763 (3.2%)
US Dollar 1.3285 - - 1.3780 1.2698 (8.5%)
-------- -------- --------- -------- -------- ---------
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.
- International Fresh Produce: This segment is an aggregation of
operating segments outside Europe involved in the procurement,
marketing and distribution of fresh produce.
- 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 markets and distributes to retail and wholesale outlets
in Ireland and in the United Kingdom.
Following recent corporate finance activities, as detailed in Notes
10 and 11, the Directors re-assessed how performance was monitored
throughout the Group and as a result the Group's reportable segments
have been realigned in the current year. As a result operating segments
for 2012 has been restated.
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, fair value movements on contingent consideration and exceptional
items. It also excludes the Group's share of these items within 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 primarily 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.
2013 2012 (Restated)
----------------------------------- -----------------------------------
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
Fresh Produce
* Eurozone 1,493,567 1,476,503 22,962 1,328,042 1,307,654 21,023
* Northern Europe 900,413 884,186 23,431 802,837 789,508 22,033
* UK 480,769 473,371 6,596 489,686 487,669 5,103
* International 226,862 226,862 3,128 123,076 122,978 2,511
Inter - segment revenue (40,689) - - (35,832) - -
---------- ---------- ----------- ---------- ---------- -----------
Total Fresh Produce 3,060,922 3,060,922 56,117 2,707,809 2,707,809 50,670
Healthfoods and Consumer
Products 113,906 113,906 2,588 102,762 102,762 2,989
Third party revenue
and adjusted EBITA 3,174,828 3,174,828 58,705 2,810,571 2,810,571 53,659
---------- ---------- ----------- ---------- ---------- -----------
* 2012 comparative balances have been re-stated in accordance with
IAS 19 Employee Benefits (2011) and to reflect the reclassification
of fair value movements on contingent consideration. Also segment
information has been restated to ensure conformity with current year
presentation as explained above.
All inter-segment revenue transactions are undertaken at arm's length.
Reconciliation of segmental profits to operating profit
Below is a reconciliation of adjusted EBITA per management reports
to operating profit and profit before tax per the Group income statement.
Restated
Note 2013 2012
EUR'000 EUR'000
Adjusted EBITA per management reporting 58,705 53,659
Acquisition related intangible asset amortisation
in subsidiaries (i) (6,369) (6,732)
Share of joint ventures and associates
acquisition related intangible asset amortisation (i) (1,593) (1,089)
Fair value movement on contingent consideration (ii) (901) (465)
Acquisition related costs within subsidiaries (iii) (87) (227)
Acquisition related costs within joint
ventures and associates (iii) - (189)
Share of joint ventures and associates
net financial expense (iv) (594) (861)
Share of joint ventures and associates
income tax (iv) (2,240) (2,258)
Operating profit before exceptional items 46,921 41,838
Exceptional items (Note 5) (v) 6,492 303
---------- -------------
Operating profit after exceptional items 53,413 42,141
Net financial expense (vi) (5,178) (5,755)
---------- -------------
Profit before tax 48,235 36,386
========== =============
(i) Acquisition related intangible asset amortisation charges are
not allocated to operating segments in the Group's management
reports.
(ii) Fair value movements on contingent consideration are not allocated
to operating segments in the Group's management reports.
(iii) Acquisition related costs are transaction costs directly related
to acquisitions of subsidiaries completed and are not allocated
to operating segments in the Group's management reports
(iv) Under IFRS, included within profit before tax is the Group's
share of joint ventures and associates profit after acquisition
related intangible asset amortisation charges, tax and interest.
In the Group's management reports these items are excluded from
the adjusted EBITA calculation.
(v) Exceptional items (Note 5) are not allocated to operating segments
in the management reports.
(vi) Financial income and expense is primarily managed at Group level
and is therefore not allocated to operating segments in the
Group's management reports.
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.
Restated
2013 2012
EUR'000 EUR'000
Profit before tax per the income statement 48,235 36,386
Adjustments
Exceptional items before group share of joint
ventures and associates tax on exceptional items
(Note 5) (6,309) (303)
Group share of the tax charge of joint ventures
and associates 2,057 2,258
Acquisition related intangible asset amortisation
charges within subsidiaries 6,369 6,732
Share of joint ventures and associates acquisition
related intangible assets amortisation charges 1,593 1,089
Remeasurement to fair value of contingent consideration
estimates 901 465
Acquisition related costs within subsidiaries 87 227
Acquisition related costs within joint ventures
and associates - 189
---------- ---------
Adjusted profit before tax 52,933 47,043
---------- ---------
Exclude
Net financial expense - Group 5,178 5,755
Net financial expense - share of joint ventures
and associates 594 861
---------- ---------
Adjusted EBITA 58,705 53,659
---------- ---------
Exclude
Amortisation of software costs 261 25
Depreciation - subsidiaries 13,170 13,371
Depreciation - share of joint ventures and associates 1,990 2,425
---------- ---------
Adjusted EBITDA 74,126 69,480
---------- ---------
5. Exceptional items
2013 2012
EUR'000 EUR'000
Credit from modification to Group's defined benefit 10,317 -
pension arrangements (a)
Remeasurement to fair value of pre-existing interest 702 -
in acquiree (b)
Profit on the disposal of joint venture and associate
investments (c) 234 303
Change in fair value of investment property within (3,694) -
subsidiaries (d)
Impairment of property, plant and equipment (e) (808) -
Share of joint ventures fair value movement on (442) -
investment property (f)
Total exceptional items (after share of joint
ventures and associates tax) 6,309 303
Share of joint ventures tax on fair value movements 183 -
on investment property (f)
--------- ---------
Exceptional items within operating profit 6,492 303
--------- ---------
Net tax credit on exceptional items (a) & (d) (324) 43
--------- ---------
Total 6,168 346
========= =========
(a) Credit arising from modification to Group's defined benefit
pension arrangements
The modification to the structure of the Group's defined benefit
pension arrangements resulted in a credit of EUR10,317,000 to the
income statement. The deferred tax charge on this exceptional credit
amounts to EUR1,290,000.
(b) Remeasurement to fair value of a pre-existing interest in acquiree
In December 2013, the Group acquired a controlling interest in a
company in which it had a previously held an associate interest.
In accordance with the provisions of IFRS, the previously held shareholding
was remeasured at this date to fair value resulting in a remeasurement
gain of EUR702,000 which was recognised in the income statement.
(c) Profit on disposal of joint venture and associate investments
In April 2013, the Group announced the completion of a transaction
to sell its 25% shareholding in the South African fruit distribution
business Capespan Group Limited ('Capespan South Africa') for a
total consideration of EUR21,677,000. A profit of EUR234,000 was
recognised on disposal of this investment comprising the EUR1,278,000
difference between the sales proceeds and the associate's carrying
value of EUR20,399,000 offset by the reclassification of EUR1,044,000
of currency translation losses from equity to the income statement.
In January 2012, the Group sold its 50% shareholding in Capespan
International Holdings Limited ('Capespan Europe') to Capespan South
Africa for a total consideration of EUR13,030,000 satisfied by the
exchange of an additional 20 million shares in Capespan South Africa
(valued at EUR4,574,000) and EUR8,456,000 in cash. 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.
(d) Fair value movements on investment property
Fair value losses, amounting to EUR3,694,000 (2012: EURnil) were
recognised in the income statement in relation to investment property.
A deferred tax credit of EUR966,000 (2012: EURNil) was recognised
in the income statement as a result of this fair value movement.
(e) Impairment of property, plant and equipment
On revaluation of the Group's properties, two properties were identified
in the UK and Ireland where the carrying value exceeded the fair
value, resulting in an impairment charge of EUR808,000 (2012: EURNil)
to the income statement.
(f) Share of joint ventures fair value movement on investment property
The Group's share of the fair value movements on investment property
within joint ventures of EUR259,000 (2012: EURNil), net of deferred
tax was recognised in the income statement.
6. Income tax
Restated
2013 2012
EUR'000 EUR'000
Income tax expense 10,040 8,179
Group share of tax charge of its joint ventures
and associates netted in profit before tax 2,057 2,258
--------- ----------
Total tax charge 12,097 10,437
Adjustments
Deferred tax on amortisation of intangible assets
- subsidiaries 1,578 1,887
Share of joint ventures and associates deferred
tax credit on amortisation of intangible assets 429 176
Net deferred tax credit on fair value movements
on investment properties - subsidiaries 966 -43
Net deferred tax credit on fair value movements
on investment properties - share of joint ventures 183 -
Tax impact of other exceptional items (1,290) -
--------- ----------
Tax charge on underlying activities 13,963 12,543
========= ==========
The total tax charge for the year amounted to EUR12.1m (2012: EUR10.4m),
including the Group's share of the tax charge of its joint ventures
and associates of EUR2.1m (2012: EUR2.3m), 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 EUR14.0m (2012: EUR12.5m), equivalent
to a rate of 26.4% (2012: 26.7%) when applied to the Group's adjusted
profit before tax.
7. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for
the year attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during
the year, excluding shares purchased by the company which are held
as treasury shares.
Restated
2013 2012
EUR'000 EUR'000
Profit attributable to equity holders of the
parent 30,936 21,127
--------- ---------
'000 '000
Shares in issue at beginning of year ('000) 351,887 351,887
Effect of treasury shares held ('000) (22,000) (22,000)
--------- ---------
Weighted average number of shares at end of year
('000) 329,887 329,887
--------- ---------
Basic earnings per share - cent 9.38 6.40
========= =========
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit
per share attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding after adjustment for
the effects of all ordinary shares and options with a dilutive effect.
Restated
2013 2012
EUR'000 EUR'000
Profit attributable to equity holders of the
parent 30,936 21,127
'000 '000
Weighted average number of shares at end of year 329,887 329,887
Effect of share options with a dilutive effect 460 -
--------- ---------
Weighted average number of shares at end of year
(diluted) 330,347 329,887
--------- ---------
Diluted earnings per share - EUR cent 9.36 6.40
========= =========
Adjusted fully diluted earnings per share
Management believe that adjusted fully diluted earnings per share
as set out below provides a fair reflection of the underlying trading
performance of the Group after eliminating the impact of acquisition
related intangible asset amortisation charges and costs, property
revaluations and exceptional items and the related tax on these
items.
Restated
2013 2012
EUR'000 EUR'000
Profit attributable to equity holders of the
parent 30,936 21,127
Adjustments:
Exceptional items - net of tax (Note 5) (6,168) (346)
Amortisation of acquisition related intangible
assets within subsidiaries 6,369 6,732
Group share of joint ventures and associates
acquisition related intangible asset amortisation
charges 1,593 1,089
Acquisition related costs within subsidiaries 87 227
Acquisition related costs within joint ventures
and associates - 189
Tax effect of amortisation of intangible assets (2,007) (2,063)
Non-controlling interests share of exceptional
items, acquisition related intangible asset amortisation
charges and costs and related tax (1,835) (769)
--------- ---------
Adjusted fully diluted earnings 28,975 26,186
--------- ---------
'000 '000
Weighted average number of shares at end of year
(diluted) 330,347 329,887
Adjusted fully diluted earnings per share - cent 8.77 7.94
========= =========
8. Employee benefits
Restated
2013 2012*
EUR'000 EUR'000
Net pension liability at beginning of year (28,324) (18,058)
Net interest expense and current service cost
recognised in the income statement (4,053) (3,544)
Past service credit arising on modification
to Group's defined benefit pension arrangements
recognised in the income statement 10,317 -
Employer contributions to schemes 4,819 5,034
Remeasurement gains/(losses) recognised in
other comprehensive income 12,164 (11,543)
Foreign exchange movement 419 (213)
------------ -----------
Net pension liability at end of year (4,658) (28,324)
Net related deferred tax asset 715 4,578
------------ -----------
Net pension liability after tax (3,943) (23,746)
============ ===========
*2012 comparatives have been restated in accordance with the amendments
in IAS 19 Employee Benefits (2011). See Note 1 for further details.
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 2013
reflects pension scheme assets of EUR3.3m (2012: EURNil) in respect
of schemes in surplus and pension liabilities of EUR7.9m (2012:
EUR28.3m) in respect of schemes in deficit. Pension scheme assets
increased 9.6% to EUR145.1m (2012: EUR132.4m) while pension scheme
obligations decreased 6.8% to EUR149.8m (2012: EUR160.7m).
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, inflation rates and mortality rates.
The decrease in the pension liability in 2013 was mainly due to
the following;
* credit arising from modifications of the structure of
the Group's defined benefit arrangements which
resulted in a EUR10.3m reduction in obligations in
the Group's defined benefit schemes
* strong returns on pension scheme assets in 2013
The movement in discount rates did not have a material impact on
the pension obligation in the period with the decrease in the Eurozone
discount rate to 3.90% (2012: 4.15%) largely offset by the increase
in the UK discount rate to 4.60% (2012: 4.30%).
Share Based Payment Schemes
At 31 December 2013, the performance condition for the share options
issued in 2007 and 2008 was satisfied. Details of share options
awarded and the performance condition are outlined in Note 28 of
the 2012 Annual Report.
9. Dividends
2013 2012
EUR'000 EUR'000
Dividends paid on Ordinary Euro 1 cent shares
Final dividend for 2012 of 1.512 cent per share
(2011: 1.350 cent) 4,988 4,453
Interim dividend for 2013 of 0.6095 cent per
share (2012: 0.567 cent) 2,011 1,871
Total dividend 6,999 6,324
========== =========
Total dividend per share 2.1215 1.917
========== =========
The directors have proposed an increase of 10.0% in the final dividend
for 2013, subject to shareholder approval at the AGM, to 1.6632
cent per share. This brings the total dividend in respect of 2013
to 2.2727 cent per share, representing an increase of 9.3% on the
total 2012 dividend. This dividend has not been provided for in
the balance sheet at 31 December 2013.
10. Joint ventures and associates
2013 2012
EUR'000 EUR'000
Investment in joint ventures and associates
at beginning of the year 62,086 40,212
Share of profit after tax 5,001 4,572
Share of other comprehensive income, net (45) (215)
Investment in year in associates (a) 11,928 4,574
Investment in associates - contingent consideration
(a) 2,610 -
Investment in year in joint ventures - cash
(b) 220 9,392
Investment in year in joint ventures - contingent
consideration - 5,805
Loans advanced during the year to joint ventures
(b) 210 256
Disposal of associate (c) (20,399) -
Dividends received (4,056) (2,909)
Fair value uplift on step acquisition of associate
(d) 702 -
Associate becoming a subsidiary (d) (953) -
Financial asset becoming an associate - 32
Foreign exchange movement (2,469) 367
Revision to goodwill (74) -
--------- --------------
Investment in joint ventures and associates
at end of the year 54,761 62,086
========= ==============
(a) Investments in associates *
Investments in 2013
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 the Oppenheimer shares was completed on this date for an initial
cash payment of EUR11,928,000, including transaction costs with
estimated additional contingent consideration payable on these shares
if certain profit targets are met. The fair value of the contingent
consideration recognised at the date of acquisition of EUR2,610,000
was calculated by using the expected present value technique.
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 was estimated not to exceed CAD$40,000,000
(EUR30,000,000) at completion.
Investments in 2012
Investments in 2012 are described in the 2012 Annual Report.
(b) Investment in joint ventures *
Investments in 2013
In 2013, the Group invested EUR430,000 in a number of new and existing
joint venture interests in its Fresh Produce Division.
Investments in 2012
Details of the Group's investments in 2012 are disclosed in the
2012 Annual Report.
* For the aforementioned 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 Business combinations.
(c) Disposal of associate
In April 2013, the Group announced the completion of a transaction
to sell its 25.3% shareholding in Capespan South Africa for a total
consideration of EUR21,677,000. A profit of EUR234,000 was recognised
on disposal of this investment comprising the EUR1,278,000 difference
between the sales proceeds and the associate's carrying value of
EUR20,399,000 offset by the reclassification of EUR1,044,000 of
currency translation losses from equity to the income statement.
This was disclosed as an exceptional gain (Refer to Note 5).
(d) Remeasurement of associate investment to fair value
The Group increased its investment in Provenance from a 9% interest
to a controlling interest of 50% on 13 December 2013. Under the
provisions of IFRS, the previously held 9% interest was remeasured
to fair value which was determined to be EUR953,000. The equity
accounted carrying value of the original 9% investment was EUR251,000
and the fair value adjustment of EUR702,000 was recognised in the
Group income statement in 2013 within other operating income and
was disclosed as an exceptional gain in accordance with the Group
accounting policy.
11. Businesses acquired and other developments in 2013
The Group made the following investments in the business in 2013:
Acquisition of subsidiary interests
During the year, the Group invested EUR7.8m on new subsidiary interests.
The cash spend in the year was EUR2.5m (net of cash and cash equivalents
acquired of EUR2.1m) with a further EUR0.8m due in deferred consideration
in early 2014, and estimated contingent consideration of EUR2.4m
payable contingent on the achievement of future profit targets.
In December 2013, the Group increased its investment in Provenance
Partners Limited ('Provenance') from 9% to 50%. Provenance primarily
sources exotic vegetables from Africa for sale to major retailers
and food service and wholesale customers in the UK. Prior to this
acquisition, the Group treated its original 9% shareholding as an
investment in associate as under the provisions of IAS 28 Investments
in Associates, Total Produce was deemed to have significant influence.
Also during the year the Group made a number of bolt-on acquisitions
in Fresh Produce Division across Europe and a small bolt-on acquisition
in the Healthfoods and Consumer Products Division. These acquisitions
will complement existing business interests in these divisions.
As the investment in Provenance occurred in mid-December 2013, the
acquisition did not contribute materially to results in 2013. As
the remaining investments were bolt-on acquisitions that were amalgamated
into existing business interests in the Group, it is not practical
to quantify the post-acquisition contribution of these acquisitions
to Group revenue and profits in 2013.
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. Further details
will be provided in the 2013 Annual Report.
Investment in joint ventures and associations
As highlighted in Note 10 the Group invested EUR15.0m in new and
existing joint venture and associate interests.
Other
During the year, the Group paid EUR0.4m to acquire shares from non-controlling
interests and also paid EUR2.3m in respect of contingent consideration
relating to previous acquisitions on achievement of agreed profit
targets.
12. Cash flows generated from operations
Restated
2013 2012
EUR'000 EUR'000
Operating activities
Profit for the year 38,195 28,207
Non-cash adjustments to reconcile profit to
net cash flows
Income tax expense 10,040 8,179
Income tax paid (10,829) (11,814)
Depreciation of property, plant and equipment 13,170 13,370
Fair value movement on investment property 3,694 -
Impairment of property, plant and equipment 808 -
Fair value movement on contingent consideration
estimates 901 465
Remeasurement to fair value of pre-existing
interest in acquiree (702) -
Amortisation of intangible assets - acquisition
related 6,369 6,732
Amortisation of intangible assets - development
costs capitalised 413 395
Amortisation of intangible assets - computer
software 261 25
Amortisation of government grants (348) (292)
Movement on other provisions - (523)
Defined benefit pension scheme expense 4,053 3,544
Defined benefit pension scheme - gain on modification
to accruing benefits (10,317) -
Contributions to defined benefit pension schemes (4,819) (5,034)
Share based payment expense 403 473
Net gain on disposal of property, plant and
equipment (299) (567)
Financial income (2,123) (1,851)
Financial expense 7,301 7,606
Financial income received 2,191 1,642
Financial expense paid (7,530) (7,386)
Gains on non-hedging derivative financial instruments (566) (304)
Gain on disposal of joint venture and associates (234) (303)
Share of profit of joint ventures (2,546) (2,553)
Share of profit of associates (2,455) (2,019)
Cash flows from operations before working capital
movements 45,031 37,992
--------- ---------
Movements in working capital:
-Movements in inventories (2,733) (5,620)
-Movements in trade and other receivables 3,581 2,659
-Movement in trade and other payables 13,596 15,027
--------- ---------
Total movements in working capital 14,444 12,066
--------- ---------
Cash flows from operating activities 59,475 50,058
--------- ---------
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 2013 and 31 December
2012 is as follows:
2013 2012
EUR'000 EUR'000
Current assets
Bank deposits 4,740 3,799
Bank balances 77,799 88,656
Call deposits (demand balances) 25,664 17,036
Current liabilities
Bank overdrafts (2,285) (5,372)
Current bank borrowings (1,268) (1,239)
Current finance leases (1,326) (1,110)
Non-current liabilities
Non-current bank borrowing (110,772) (150,757)
Non-current finance leases (3,539) (4,040)
---------- ----------
Net debt at end of year (10,987) (53,027)
---------- ----------
Reconciliation of cash and cash equivalents per balance sheet to
cashflow statement
2013 2012
EUR'000 EUR'000
Bank balances 77,799 88,656
Call deposits (demand balances) 25,664 17,036
---------- -----------
Cash and cash equivalents per balance sheet 103,463 105,692
Less bank overdrafts (2,285) (5,372)
Less cash held in escrow (a) - (11,360)
Cash, cash equivalents and bank overdrafts per
cashflow statement 101,178 88,960
---------- -----------
(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
was omitted from cash and cash equivalents in the Group Cashflow
Statement.
14. Post balance sheet events
Post year-end, the Group completed an agreement (subject to regulatory
approval) to acquire the second 50% shareholding in All Seasons
Fruit ('ASF') in Holland in three stages. An initial 20% shareholding
will be acquired on completion with the balance to be acquired in
subsequent years. Other than this acquisition there have been no
other material events subsequent to 31 December 2013 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 2012 Annual
Report that materially affect the financial position or affect the
performance of the Group for the year ended 31 December 2013.
16. Board approval
This announcement was approved by the Board of Directors of Total
Produce plc on 3 March 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JJMLTMBTMBFI
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