TIDMTOT
RNS Number : 9188X
Total Produce Plc
03 September 2015
TOTAL PRODUCE PLC
RESULTS TO 30 JUNE 2015
TOTAL PRODUCE ANNOUNCES STRONG GROWTH IN EARNINGS
-- Revenue up 9.2% to EUR1.73 billion
-- Adjusted fully diluted EPS up 11.1% to 5.52 cent
-- Adjusted EBITDA up 11.9% to EUR42.6m
-- Adjusted EBITA up 10.9% to EUR33.5m
-- Adjusted profit before tax up 11.5% to EUR30.3m
-- Interim dividend increased by 15.0% to 0.736 cent
per share
Key performance indicators are defined overleaf
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce has delivered a very strong performance for the
first half of 2015. Total revenue has grown 9.2% with an 11.1%
increase in adjusted earnings per share. A stronger operational
performance and recent acquisitions contributed to this earnings
growth. In February 2015, the Group completed its fourth investment
in North America with a 50% investment in Gambles, a fresh produce
company based in Toronto.
The Group is pleased to announce a 15% increase in the interim
dividend to 0.736 cent per share. The Group is now targeting
increased full year earnings at the top end of the previously
announced range of 9.2 to 10.2 cent per share."
For further information, please contact:
Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030, Mobile:
+353-87-243-6130
TOTAL PRODUCE PLC INTERIM RESULTS FOR THE
SIX MONTHS ENDED 30 JUNE 2015
2015 2014
EUR'million EUR'million % change
Total revenue (1) 1,733 1,588 +9.2%
Group revenue 1,431 1,323 +8.2%
Adjusted EBITDA (1) 42.6 38.1 +11.9%
Adjusted EBITA (1) 33.5 30.2 +10.9%
Operating profit (before exceptional
credits) 27.2 24.5 +10.8%
Adjusted profit before tax (1) 30.3 27.2 +11.5%
Profit before tax 24.2 24.2 -
Euro cent Euro cent % change
Adjusted fully diluted earnings per share
(1) 5.52 4.97* +11.1%
Basic earnings per share 4.69 4.73 (0.8%)
Diluted earnings per share 4.66 4.70 (0.9%)
Interim dividend per share 0.736 0.640 +15.0%
*The calculation of adjusted earnings per share for the comparative
period to 30 June 2014 is restated to ensure conformity with the current
period calculation whereby fair value movements on contingent consideration
are excluded from adjusted earnings. Management believe this presentation
more fairly represents the underlying trading performance of the Group.
(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 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, fair value movements
on contingent consideration, 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.
Overview
Total Produce (the 'Group') has delivered very strong results for the
first half of 2015. Total revenue, adjusted EBITA and adjusted fully
diluted earnings per share grew by 9.2%, 10.9% and 11.1% respectively.
A stronger operational performance, the benefit of recent acquisitions
and to a lesser extent currency translation all contributed to the
earnings growth. The Group continues to be cash generative with operating
cashflows of EUR27.3m (2014: EUR20.6m) for the six months period before
normal seasonal working capital outflows.
The Board is pleased to announce a 15% increase in the interim dividend
to 0.736 (2014: 0.640) cent per share.
Operating review
Total revenue increased 9.2% to EUR1.73 billion (2014: EUR1.59 billion)
with adjusted EBITA up 10.9% to EUR33.5m (2014: EUR30.2m). The results
benefited from a stronger operational performance and recent acquisitions.
There was a net positive impact on translation of the results of foreign
currency denominated operations to Euro primarily due to the strength
of Sterling and the US Dollar. On a like-for-like basis, excluding
the effect of acquisitions, divestments and currency translation, revenue
was c.2% higher on the back of higher average prices.
The table below details a segmental breakdown of the Group's revenue
and adjusted EBITA for the six months ended 30 June 2015. Each of
the operating segments is primarily involved in the procurement,
marketing and distribution of hundreds of lines of fresh produce.
Each segment also includes businesses involved in the marketing and
distribution of healthfoods and consumer products. Segment performance
is evaluated based on revenue and adjusted EBITA.
The information for the comparative period in 2014 has been reclassified
to conform to the current year presentation. The Group previously
reported the results of a number of businesses involved in the marketing
and distribution of healthfoods and consumer products as a separate
operating segment. The combined results of these businesses, with
revenue in the period of EUR72m, are positive and are not considered
to be material, individually or in aggregate. In order to align with
current management reporting, the relevant businesses are now presented
within the Eurozone, Non-Eurozone and International operating segments
as appropriate.
(Unaudited) (Unaudited)
6 months to 30 June 6 months to 30 June
2015 2014*
Total Adjusted Total Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Europe - Eurozone 832,782 12,164 795,427 11,034
Europe - Non-Eurozone 766,892 18,825 727,294 17,381
International 158,006 2,523 90,546 1,804
Inter-segment revenue (24,449) - (25,494) -
----------- ---------- ------------ ---------
Third party revenue and adjusted
EBITA 1,733,231 33,512 1,587,773 30,219
----------- ---------- ------------ ---------
* The information for the period ended 30 June 2014 has been reclassified
to conform to the current year presentation.
Europe - Eurozone
This segment includes the Group's businesses in France, Ireland,
Italy, the Netherlands and Spain. Revenue increased by 4.7% in the
period to EUR833m (2014: EUR795m) with a 10.2% increase in adjusted
EBITA to EUR12.2m (2014: EUR11.0m). The increase was due to the incremental
impact of recent acquisitions, price recovery in some markets and
a stronger operational performance. Excluding the effect of acquisitions,
revenue on a like-for-like basis was up over 2%.
Europe - Non-Eurozone
This segment includes the Group's businesses in the Czech Republic,
Poland, Scandinavia and the UK. Revenue increased by 5.4% to EUR767m
(2014: EUR727m) with adjusted EBITA increasing by 8.3% to EUR18.8m
(2014: EUR17.4m) with stronger operational performances in the UK
and in Northern Europe. There was a net positive benefit on the translation
of the results of foreign currency denominated operations to Euro
due to the strengthening of Sterling in the period offset partially
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by a weakening of the Swedish Krona. On a like-for-like basis excluding
the effect of acquisitions, divestments and currency translation,
revenue was almost 3% ahead of the prior year.
International
This division includes the Group's businesses in North America and
India. Revenue increased to EUR158m (2014: EUR91m) with adjusted
EBITA increasing to EUR2.5m (2014: EUR1.8m) with the positive impact
of recent acquisitions. The results on translation to Euro benefitted
from the strengthening of the US Dollar and the Canadian Dollar in
the period.
Financial Review
Revenue and Adjusted EBITA
An analysis of the factors influencing the changes in revenue and
adjusted EBITA are discussed in the operating review above.
Operating Profit
Operating profit before exceptional items increased by 10.8% to EUR27.2m
(2014: EUR24.5m). In the prior period there was a EUR2.5m exceptional
gain which is explained in further detail below. Inclusive of exceptional
items, operating profit was EUR27.2m (2014: EUR27.0m).
Exceptional Items
There have been no exceptional items in the period. In the prior
period, the Group recognised a fair value gain of EUR2.5m on a 10%
investment in African Blue Limited which arose on reclassification
of this interest from a financial asset to an investment in an associate.
See Note 5 of the accompanying financial information for further
details.
Net Financial Expense
Net financial expense for the period increased to EUR3.0m (2014:
EUR2.8m) due to higher average net debt in the period from the funding
of acquisitions and contingent consideration payments. The Group's
share of the net interest expense of joint ventures and associates
in the period was EUR0.1m (2014: EUR0.2m). Net interest cover for
the period was 11.0 times based on adjusted EBITA.
Profit Before Tax
Excluding exceptional items, fair value movements on contingent consideration
and acquisition related intangible asset amortisation charges and
costs, the adjusted profit before tax increased by 11.5% to EUR30.3m
(2014: EUR27.2m). Statutory profit before tax in the period was EUR24.2m
(2014: EUR24.2m) with the comparative period benefitting from the
exceptional gain of EUR2.5m.
Non-Controlling Interests
The non-controlling interests' share of after tax profits in the
period was EUR3.9m (2014: EUR3.8m). Included in the charge was the
non-controlling interests' share of amortisation charges and acquisition
related costs of EUR0.7m (2014: EUR0.4m). Excluding these non-trading
items, the non-controlling interests' share of after tax profits
increased by EUR0.4m. The increase in the period was due to the higher
share of 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 11.1% to 5.52 cent per share
(2014: 4.97 cent) in the six month period. Management believe that
adjusted earnings per share, which excludes exceptional items, acquisition
related intangible asset amortisation charges and costs, fair value
movements on contingent consideration 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 4.69 cent per share (2014: 4.73 cent)
and 4.66 cent per share (2014: 4.70 cent) respectively with the comparative
period benefitting from the EUR2.5m exceptional gain.
Cash Flow and Net Debt
Net debt at 30 June 2015 was EUR83.9m compared to EUR69.1m at 30 June
2014 and EUR16.8m at 31 December 2014. The increase compared to 31 December
2014 is due to normal seasonal working capital outflows at 30 June 2015
and higher sales. Net debt to annualised adjusted EBITDA is 1.1 times
and interest is covered 11.0 times by adjusted EBITA.
The Group generated EUR27.3m (2014: EUR20.6m) in operating cash flows
in the first six months of 2015 before seasonal working capital outflows
of EUR67.1m (2014: EUR52.5m) which increased due to higher sales and
the effect of currency translation. Cash outflows on routine capital
expenditure, net of disposals, were EUR7.5m (2014: EUR5.9m). Dividends
received from joint ventures and associates in the period increased
to EUR7.3m (2014: EUR4.3m) while dividends paid to non-controlling interests
were EUR1.1m (2014: EUR3.7m).
Cash outflows on acquisitions and contingent consideration payments
relating to prior period acquisitions amounted to EUR17.3m (2014: EUR5.1m).
The final 2014 dividend of EUR5.9m (2014: EUR5.5m) was paid in the period.
There was an adverse movement of EUR3.5m on the translation of foreign
currency debt into Euro at 30 June 2015 due primarily to the stronger
Sterling, Swedish Krona and US Dollar exchange rates at period end compared
to those prevailing at 31 December 2014.
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2015 30 June 2014 31 Dec 2014
EUR'million EUR'million EUR'million
Adjusted EBITDA 42.6 38.1 73.0
Deduct adjusted EBITDA of joint ventures
and associates (8.9) (6.0) (12.5)
Net financial expense and tax paid (6.0) (9.1) (18.6)
Other (0.4) (2.4) (4.2)
--------------- -------------- ---------------
Operating cash flows before working
capital movements 27.3 20.6 37.7
Working capital movements (67.1) (52.5) 11.7
--------------- -------------- ---------------
Operating cash flows (39.8) (31.9) 49.4
Routine capital expenditure net of disposal
proceeds (7.5) (5.9) (12.0)
Dividends received from joint ventures
and associates 7.3 4.3 4.6
Dividends paid to non-controlling interests (1.1) (3.7) (6.5)
--------------- -------------- ---------------
Free cash flow (41.1) (37.2) 35.5
Acquisition expenditure (including deferred
and contingent consideration) (17.3) (5.1) (22.7)
Net debt assumed on acquisition of subsidiaries - (10.8) (10.1)
Dividends paid to equity shareholders (5.9) (5.5) (7.6)
Proceeds from shares issued on exercise
of share options 0.6 0.6 1.0
Other 0.1 (0.2) (0.6)
--------------- -------------- ---------------
Total net debt movement in period (63.6) (58.2) (4.5)
Net debt at beginning of period (16.8) (11.0) (11.0)
Foreign currency translation (3.5) 0.1 (1.3)
Net debt at end of period (83.9) (69.1) (16.8)
=============== ============== ===============
Defined Benefit Pension Obligations
The net liability of the Group's defined benefit pension schemes
(net of deferred tax) decreased to EUR13.0m at 30 June 2015 from
EUR23.6m at 31 December 2014. The decrease in the liability is primarily
due to an increase in the discount rates underlying the calculations
of the present value of the scheme obligations and positive returns
on pension scheme assets. Further details are outlined in Note 7
of the accompanying financial information.
Shareholders' Equity
Shareholders' equity has increased by EUR27.3m to EUR244.4m in the
six month period to 30 June 2015. Profit after tax in the period
of EUR15.6m attributable to equity shareholders, remeasurement gains
of EUR10.1m (net of deferred tax) on employee defined benefit pension
schemes and a EUR6.5m gain on the retranslation of the net assets
of foreign currency denominated operations were offset by the payment
of the final 2014 dividend of EUR5.9m to equity shareholders of the
Company.
Development Activity
The Group has invested more than EUR13m in the period including deferred
consideration and contingent consideration payable on the achievement
of future profit targets. The principal acquisition was the agreement
completed in February 2015 to acquire a 50% shareholding in the Gambles
Group, a North American fresh produce company based in Toronto, Canada.
Gambles is one of Eastern Canada's premier fresh produce companies
with 2014 sales of CAD$170m and employing over 280 staff, serving
the retail, wholesale and food-service sectors. This is the fourth
acquisition by Total Produce in North America since 2013. Further
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details on development activity in the period are provided in Note
9 of the accompanying financial information. The Group continues
to actively pursue further investment opportunities in both new and
existing markets.
Share Buyback
As previously stated the Group will purchase Total Produce shares
in the market as appropriate. Under the authority granted at the
AGM in 2015, the Group is permitted to purchase up to 10% of its
issued share capital in the market if the opportunity arises.
Dividends
The Board has declared an interim dividend of 0.736 (2014: 0.640)
cent per share, which represents a 15.0% increase on the comparative
period. This dividend will be paid on the 16 October 2015 to shareholders
on the register at 18 September 2015 and is subject to dividend withholding
tax. In accordance with company law and IFRS, this dividend has not
been provided for in the balance sheet at 30 June 2015.
Outlook
Total Produce has delivered a very strong performance for the first
half of 2015. Total revenue has grown 9.2% with an 11.1% increase
in adjusted earnings per share. A stronger operational performance
and recent acquisitions contributed to this earnings growth. In February
2015, the Group completed its fourth investment in North America
with a 50% investment in Gambles, a fresh produce company based in
Toronto.
The Group is pleased to announce a 15% increase in the interim dividend
to 0.736 cent per share. The Group is now targeting increased full
year earnings at the top end of the previously announced range of
9.2 to 10.2 cent per share.
Carl McCann, Chairman
On behalf of the Board
3 September 2015
Total Produce plc
Condensed Group Income Statement
for the half-year ended 30 June 2015
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
6 months 6 months 6 months 6 months 6 months 6 months (Audited) (Audited) (Audited)
to to to to to to Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 31 Dec 31 Dec 31 Dec
2015 2015 2015 2014 2014 2014 2014 2014 2014
Pre- Exceptional Total Pre- Exceptional Total Pre- Exceptional Total
Exceptional items Exceptional items Exceptional items
(Note 5) (Note 5) (Note 5)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue,
including Group
share of joint
ventures
and associates 1,733,231 - 1,733,231 1,587,773 - 1,587,773 3,128,838 - 3,128,838
Group revenue 1,430,758 - 1,430,758 1,322,742 - 1,322,742 2,667,014 - 2,667,014
Cost of sales (1,232,995) - (1,232,995) (1,146,359) - (1,146,359) (2,302,369) - (2,302,369)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Gross profit 197,763 - 197,763 176,383 - 176,383 364,645 - 364,645
Operating
expenses (175,433) - (175,433) (155,079) 2,455 (152,624) (324,414) 2,432 (321,982)
Share of profit
of joint
ventures and
associates 4,866 - 4,866 3,231 - 3,231 6,743 - 6,743
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Operating profit 27,196 - 27,196 24,535 2,455 26,990 46,974 2,432 49,406
Net financial
expense (3,040) - (3,040) (2,819) - (2,819) (5,095) - (5,095)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit before
tax 24,156 - 24,156 21,716 2,455 24,171 41,879 2,432 44,311
Income tax
expense (4,678) - (4,678) (4,796) - (4,796) (8,233) (157) (8,390)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit for the
period 19,478 - 19,478 16,920 2,455 19,375 33,646 2,275 35,921
============ ============ ============ ============ ============ ============ ============ ============ ============
Attributable to:
Equity holders
of the
parent 15,552 15,621 29,218
Non-controlling
interests 3,926 3,754 6,703
------------ ------------ ------------
19,478 19,375 35,921
============ ============ ============
Earnings per
ordinary
share
Basic 4.69 4.73 8.83
Fully diluted 4.66 4.70 8.79
Adjusted fully
diluted 5.52 4.97 9.45
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Produce plc
Condensed Group Statement of Comprehensive Income
for the half-year ended 30 June 2015
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2014
2015 2014
EUR'000 EUR'000 EUR'000
Profit for the period 19,478 19,375 35,921
------------- ------------- --------------
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Foreign currency translation effects:
* foreign currency net investments - subsidiaries 10,483 397 (63)
* foreign currency net investments - joint ventures and
associates 2,016 168 2,009
* foreign currency borrowings designated as net
investment hedges (5,217) 113 (590)
Gain on re-measuring available-for-sale
financial asset - 2,455 2,455
Reclassification of revaluation gain
to income statement on available-for-sale
financial asset becoming an associate - (2,455) (2,455)
Effective portion of cash flow hedges,
net (106) 172 326
Deferred tax on items taken directly
to other comprehensive income 34 (43) (87)
------------- ------------- --------------
7,210 807 1,595
------------- ------------- --------------
Items that will not be reclassified
to profit or loss:
Remeasurement gains/(losses) on defined
benefit pension schemes 11,971 (17,508) (28,666)
Revaluation gains on property, plant
and equipment, net - - 1,122
Deferred tax on items taken directly
to other comprehensive income (1,660) 2,767 4,636
Share of joint ventures and associates
remeasurement losses on defined benefit
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pension scheme - - (52)
Share of joint ventures and associates
deferred tax on items taken directly
to other comprehensive income - - 13
------------- ------------- --------------
10,311 (14,741) (22,947)
------------- ------------- --------------
Other comprehensive income for the
period 17,521 (13,934) (21,352)
============= ============= ==============
Total comprehensive income for the
period 36,999 5,441 14,569
============= ============= ==============
Attributable to:
Equity holders of the parent 32,083 1,521 7,536
Non-controlling interests 4,916 3,920 7,033
------------- ------------- --------------
36,999 5,441 14,569
============= ============= ==============
Total Produce plc
Condensed Group Balance Sheet
as at 30 June 2015
(Unaudited) (Unaudited) (Audited)
30 June 2015 30 June 2014 31 Dec 2014
EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Property, plant and equipment 139,313 138,524 137,938
Investment property 7,763 7,292 7,414
Goodwill and intangible assets 167,871 161,061 162,551
Investments in joint ventures and
associates 71,147 55,243 62,917
Other financial assets 752 574 698
Other receivables 2,702 4,162 2,999
Deferred tax assets 8,663 8,223 9,942
Total non-current assets 398,211 375,079 384,459
-------------- -------------- -------------
Current assets
Inventories 69,693 71,001 49,464
Trade and other receivables 381,252 368,044 282,915
Corporation tax receivable 887 280 1,802
Derivative financial instruments 63 303 425
Bank deposits 8,200 4,700 2,000
Cash and cash equivalents 90,644 92,693 113,830
-------------- -------------- -------------
Total current assets 550,739 537,021 450,436
-------------- -------------- -------------
Total assets 948,950 912,100 834,895
============== ============== =============
Equity
Share capital 3,541 3,528 3,533
Share premium 254,190 253,186 253,565
Other reserves (105,385) (113,547) (111,678)
Retained earnings 92,047 69,439 71,628
-------------- -------------- -------------
Total equity attributable to equity
holders of the parent 244,393 212,606 217,048
Non-controlling interests 68,479 68,072 68,341
-------------- -------------- -------------
Total equity 312,872 280,678 285,389
-------------- -------------- -------------
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 129,604 120,575 114,909
Deferred government grants 1,532 1,648 1,683
Other payables 2,389 1,976 1,696
Contingent consideration 12,749 13,282 12,105
Corporation tax payable 6,794 6,953 6,794
Deferred tax liabilities 11,882 13,385 11,991
Employee benefits 15,200 20,647 27,514
-------------- -------------- -------------
Total non-current liabilities 180,150 178,466 176,692
-------------- -------------- -------------
Current liabilities
Interest-bearing loans and borrowings 53,118 45,868 17,769
Trade and other payables 392,734 389,981 343,038
Contingent consideration 7,238 15,621 10,754
Derivative financial instruments 689 97 180
Corporation tax payable 2,149 1,389 1,073
-------------- -------------- -------------
Total current liabilities 455,928 452,956 372,814
-------------- -------------- -------------
Total liabilities 636,078 631,422 549,506
-------------- -------------- -------------
Total liabilities and equity 948,950 912,100 834,895
============== ============== =============
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2015
Attributable to equity holders of the parent
-------------------------------------------------------------------------------------------------------
Currency Own Other Non-
Share Share translation Reval-uation De-merger shares equity Retained controlling Total
capital premium reserve reserve Reserve reserve reserves* earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
For the
half-year ended
30 June 2015
(Unaudited)
As at 1 January
2015 3,533 253,565 (4,483) 21,882 (122,521) (8,580) 2,024 71,628 217,048 68,341 285,389
-------- -------- ------------ ------------- ---------- -------- ---------- --------- --------- ------------ --------
Comprehensive
income
Profit for the
period - - - - - - - 15,552 15,552 3,926 19,478
-------- -------- ------------ ------------- ---------- -------- ---------- --------- --------- ------------ --------
Other
comprehensive
income:
Items that may
be reclassified
subsequently
to profit or
loss:
Foreign currency
translation
effects - - 6,453 - - - - - 6,453 829 7,282
Effective
portion of cash
flow hedges,
net - - - - - - (63) - (63) (43) (106)
Deferred tax on
items taken
directly
to other
comprehensive
income - - - - - - 20 - 20 14 34
Items that will
not be
reclassified
to profit or
loss:
Remeasurement
gains on
defined
benefit
pension
schemes, net - - - - - - - 11,754 11,754 217 11,971
Deferred tax on
items taken
directly
to other
comprehensive
income - - - - - - - (1,633) (1,633) (27) (1,660)
Total other
comprehensive
income - - 6,453 - - - (43) 10,121 16,531 990 17,521
-------- -------- ------------ ------------- ---------- -------- ---------- --------- --------- ------------ --------
Total
comprehensive
income - - 6,453 - - - (43) 25,673 32,083 4,916 36,999
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-------- -------- ------------ ------------- ---------- -------- ---------- --------- --------- ------------ --------
Transactions
with equity
holders
of the parent
New shares
issued 8 625 - - - - (243) 243 633 - 633
Acquisition of
non-controlling
interests - - - - - - - 353 353 (4,269) (3,916)
Disposal of
shareholding to
non-controlling
interest - - - - - - - - - 598 598
Dividends - - - - - - - (5,850) (5,850) (1,107) (6,957)
Share-based
payment
transactions - - - - - - 126 - 126 - 126
-------- -------- ------------ ------------- ---------- -------- ---------- --------- --------- ------------ --------
Total
transactions
with equity
holders
of the parent 8 625 - - - - (117) (5,254) (4,738) (4,778) (9,516)
-------- -------- ------------ ------------- ---------- -------- ---------- --------- --------- ------------ --------
As at 30 June
2015 3,541 254,190 1,970 21,882 (122,521) (8,580) 1,864 92,047 244,393 68,479 312,872
======== ======== ============ ============= ========== ======== ========== ========= ========= ============ ========
*Other equity reserves comprise the cash flow hedge reserve,
available-for-sale reserve and the share option reserve
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2015 (Continued)
Attributable to equity holders of the parent
--------------------------------------------------------------------------------------------------------
Currency Own Other Non-
Share Share translation Reval-uation De-merger shares equity Retained controlling Total
capital premium reserve reserve Reserve reserve reserves* earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
For the half-year
ended 30 June
2014 (Unaudited)
As at 1 January 2014 3,519 252,574 (5,273) 20,319 (122,521) (8,580) 1,959 75,369 217,366 68,524 285,890
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Comprehensive income
Profit for the
period - - - - - - - 15,621 15,621 3,754 19,375
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Other comprehensive
income:
Items that may be
reclassified
subsequently
to profit or loss:
Foreign currency
translation effects - - 365 - - - - - 365 313 678
Gain on
re-measuring
available-for-sale
financial asset - - - - - - 2,455 - 2,455 - 2,455
Reclassification of
revaluation
gain to income
statement on
available-for-sale
financial asset
becoming an
associate - - - - - - (2,455) - (2,455) - (2,455)
Effective portion of
cash flow hedges,
net - - - - - - 111 - 111 61 172
Deferred tax on
items taken
directly
to other
comprehensive
income - - - - - - (28) - (28) (15) (43)
Items that will not
be reclassified
to profit or loss:
Remeasurement
losses on defined
benefit pension
schemes, net - - - - - - - (17,287) (17,287) (221) (17,508)
Deferred tax on
items taken
directly
to other
comprehensive
income - - - - - - - 2,739 2,739 28 2,767
Total other
comprehensive
income - - 365 - - - 83 (14,548) (14,100) 166 (13,934)
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Total comprehensive
income - - 365 - - - 83 1,073 1,521 3,920 5,441
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Transactions with
equity holders
of the parent
New shares issued 9 612 - - - - - - 621 - 621
Acquisition of
non-controlling
interests - - - - - - - (1,508) (1,508) (722) (2,230)
Contribution by
non-controlling
interest - - - - - - - - - 55 55
Dividends - - - - - - - (5,495) (5,495) (3,705) (9,200)
Share-based payment
transactions - - - - - - 101 - 101 - 101
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Total transactions
with equity holders
of the parent 9 612 - - - - 101 (7,003) (6,281) (4,372) (10,653)
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
As at 30 June 2014 3,528 253,186 (4,908) 20,319 (122,521) (8,580) 2,143 69,439 212,606 68,072 280,678
======== ======== ============ ============= ========== ======== ========== ========= ========== ============ ==========
*Other equity reserves comprise the cash flow hedge reserve,
available-for-sale reserve and the share option reserve
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2015 (Continued)
Attributable to equity holders of the parent
--------------------------------------------------------------------------------------------------------
Currency Own Other Non-
Share Share translation Reval-uation De-merger shares equity Retained controlling Total
capital premium reserve reserve reserve reserve reserves earnings Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR000 EUR'000
For the year ended
31 December 2014
(Audited)
As at 1 January 2014 3,519 252,574 (5,273) 20,319 (122,521) (8,580) 1,959 75,369 217,366 68,524 285,890
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Comprehensive income
Profit for the year - - - - - - - 29,218 29,218 6,703 35,921
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Other comprehensive
income:
Items that may be
reclassified
subsequently
to profit or loss:
Foreign currency
translation effects - - 790 - - - - - 790 566 1,356
Gain on
re-measuring
available-for-sale
financial asset - - - - - - 2,455 - 2,455 - 2,455
Reclassification of
revaluation gain
to
income statement
on
available-for-sale
financial asset
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becoming an
associate - - - - - - (2,455) - (2,455) - (2,455)
Effective portion of
cash flow hedges,
net - - - - - - 207 - 207 119 326
Deferred tax on
items taken
directly to
other
comprehensive
income - - - - - - (55) - (55) (32) (87)
Items that will not
be reclassified to
profit or loss:
Revaluation
gains/(losses) on
property,
plant and
equipment, net - - - 1,212 - - - - 1,212 (90) 1,122
Remeasurement losses
on defined benefit
pension schemes,
net - - - - - - - (28,208) (28,208) (458) (28,666)
Deferred tax on
items taken
directly to
other
comprehensive
income - - - 351 - - - 4,060 4,411 225 4,636
Share of joint
ventures and
associates
remeasurement
losses on defined
benefit
pension scheme - - - - - - - (52) (52) - (52)
Share of joint
ventures and
associates
deferred tax on
items taken
directly to
other
comprehensive
income - - - - - - - 13 13 - 13
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Total other
comprehensive
income - - 790 1,563 - - 152 (24,187) (21,682) 330 (21,352)
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Total comprehensive
income - - 790 1,563 - - 152 5,031 7,536 7,033 14,569
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Transactions with
equity holders of
the
parent
New shares issued 14 991 - - - - (408) 408 1,005 - 1,005
Acquisition of
non-controlling
interests - - - - - - - (1,565) (1,565) (723) (2,288)
NCI disposed on
derecognition of
pre-existing
relationship with
acquiree - - - - - - - - - (327) (327)
Contribution by
non-controlling
interests - - - - - - - - - 375 375
Dividends - - - - - - - (7,615) (7,615) (6,541) (14,156)
Share-based payment
transactions - - - - - - 321 - 321 - 321
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
Total transactions
with equity holders
of the parent 14 991 - - - - (87) (8,772) (7,854) (7,216) (15,070)
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
As at 31 December
2014 3,533 253,565 (4,483) 21,882 (122,521) (8,580) 2,024 71,628 217,048 68,341 285,389
-------- -------- ------------ ------------- ---------- -------- ---------- --------- ---------- ------------ ----------
*Other equity reserves comprise the cash flow hedge reserve,
available-for-sale reserve and the share option reserve
Total Produce plc
Condensed Group Statement of Cash Flows
for the half-year ended 30 June 2015
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2015 30 June 2014 31 Dec 2014
EUR'000 EUR'000 EUR'000
Net cash flows from operating activities
(Note 11) (39,826) (31,878) 49,404
-------------- -------------- ---------------
Investing activities
Acquisition of subsidiaries (57) (1,831) (11,499)
(Bank overdrafts)/cash, assumed on
acquisition of subsidiaries, net - (7,391) (6,746)
Cash derecognised on subsidiary becoming
a joint venture - (97) (97)
Acquisition of, and investment in joint
ventures and associates (7,137) (1,000) (3,581)
Acquisition of other financial assets - - (106)
Payments of contingent consideration (8,467) (412) (5,524)
Payments of deferred consideration (689) (806) (806)
Acquisition of property, plant and
equipment (6,593) (5,508) (11,473)
Acquisition of intangible assets -
computer software (1,797) (720) (1,269)
Development expenditure capitalised (171) (86) (200)
Proceeds from disposal of property,
plant and equipment 887 361 744
Loans advanced to joint ventures and
associates - (101) (180)
Dividends received from joint ventures
and associates 7,265 4,254 4,562
Government grants received - 110 323
-------------- -------------- ---------------
Net cash flows from investing activities (16,759) (13,227) (35,852)
-------------- -------------- ---------------
Financing activities
Drawdown of borrowings 55,974 8,526 26,001
Repayment of borrowings (52,096) (4,153) (16,706)
(Increase)/decrease in bank deposits (6,200) 40 2,740
Capital element of finance lease repayments (949) (713) (1,615)
Proceeds from the issue of share capital 633 621 1,005
Dividends paid to equity holders of
the parent (5,850) (5,495) (7,615)
Acquisition of non-controlling interests (1,000) (981) (981)
Proceeds from disposal of shareholding
to non-controlling interest 598 - -
Capital contribution by non-controlling
interests - 55 375
Dividends paid to non-controlling interests (1,107) (3,705) (6,541)
-------------- -------------- ---------------
Net cash flows from financing activities (9,997) (5,805) (3,337)
-------------- -------------- ---------------
Net (decrease)/increase in cash, cash
equivalents and overdrafts (66,582) (50,910) 10,215
Cash, cash equivalents and overdrafts
at start of period 110,390 101,178 101,178
Net foreign exchange difference 1,820 (179) (1,003)
-------------- -------------- ---------------
Cash, cash equivalents and overdrafts
at end of
the period (Note 12) 45,628 50,089 110,390
============== ============== ===============
Total Produce plc
Condensed Summary Group Reconciliation of Net Debt
for the half-year ended 30 June 2015
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2015 30 June 31 Dec 2014
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2014
EUR'000 EUR'000 EUR'000
Net (decrease)/increase in cash, cash
equivalents and overdrafts (66,582) (50,910) 10,215
Repayment of borrowings 52,096 4,153 16,706
Drawdown of borrowings (55,974) (8,526) (26,001)
Increase/(decrease) in bank deposits 6,200 (40) (2,740)
Interest-bearing loans and borrowings
arising on acquisition - (1,620) (1,618)
Finance leases arising on acquisition - (1,766) (1,766)
Capital element of finance lease repayments 949 713 1,615
Other movements on finance leases (227) (151) (961)
Foreign exchange movement (3,492) 84 (1,311)
-------------- ------------ ---------------
Movement in net debt (67,030) (58,063) (5,861)
Net debt at beginning of the period (16,848) (10,987) (10,987)
-------------- ------------ ---------------
Net debt at end of the period (Note 12) (83,878) (69,050) (16,848)
============== ============ ===============
Total Produce plc
Notes to the Interim Results for the half-year ended 30 June 2015
1. Basis of preparation
The condensed consolidated interim financial statements of Total
Produce plc as at and for the six months ended 30 June 2015 have
been prepared in accordance with IAS 34 Interim Financial Reporting,
as adopted by the EU. The accounting policies and methods of computation
adopted in the preparation of the financial information are consistent
with those set out in the Group's consolidated financial statements
for the year ended 31 December 2014, with the exception of those
disclosed below, which were prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
The interim financial information for both the six months ended
30 June 2015 and the comparative six months ended 30 June 2014 is
unaudited. The financial information for the year ended 31 December
2014 represents an abbreviated version of the Group's statutory
financial statements for that year. Those statutory financial statements
contained an unqualified audit report and have been filed with the
Registrar of Companies.
The preparation of interim financial statements requires management
to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements,
the significant judgments made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those applied to the consolidated financial statements
as at and for the year ended 31 December 2014.
The financial information is presented in Euro, rounded to the nearest
thousand. These condensed consolidated interim financial statements
were approved by the Board of Directors on 2 September 2015.
Changes in accounting policy
The following are the new standards and amendments that are effective
for the Group's financial year ending on 31 December 2015 and that
had no significant impact on the results and financial position
of the Group for the period ended 30 June 2015.
* Annual Improvements to IFRSs 2011-2013 Cycle
2. Translation of foreign currencies
The reporting currency of the Group is Euro. Results and cash
flows of foreign currency denominated operations have been translated
into Euro at the exchange rate at the date of the transaction
or an average exchange rate for the period where appropriate,
and the related balance sheets have been translated at the rates
of exchange ruling at the balance sheet date. Adjustments arising
on the translation of the results of foreign currency denominated
operations at average rates, and on restatement of the opening
net assets at closing rates, are accounted for in a separate translation
reserve within equity, net of differences on related foreign currency
borrowings. All other translation differences are taken to the
income statement. The rates used in the translation of results
and balance sheets into Euro were as follows:
Average rate Closing rate
6 months to
30 June 30 June % change 30 June 31 Dec % change
2015 2014 2015 2014
Canadian Dollar 1.3787 1.5037 8.3% 1.3842 1.4015 1.2%
Czech Koruna 27.4561 27.4414 (0.1%) 27.2530 27.7147 1.7%
Danish Kroner 7.4559 7.4627 0.1% 7.4604 7.4463 (0.2%)
Indian Rupee 70.3084 82.7740 15.1% 71.1633 76.3804 6.8%
Polish Zloty 4.1360 4.1672 0.7% 4.1913 4.2981 2.5%
Pound Sterling 0.7258 0.8170 11.2% 0.7111 0.7760 8.4%
Swedish Krona 9.3387 8.9634 (4.2%) 9.2148 9.4725 2.7%
US Dollar 1.1173 1.3711 18.5% 1.1160 1.2101 7.8%
--------- --------- ---------- --------- -------- ---------
3. Segmental Analysis
The table below details a segmental breakdown of the Group's total
revenue and adjusted EBITA for the six months ended 30 June 2015,
the six months ended 30 June 2014 and the full year ended 31 December
2014. The information for the comparative period to 30 June 2014
and for the full year ended 31 December 2014 have been reclassified
to conform to the current year presentation. The Group previously
reported the results of a number of businesses involved in the marketing
and distribution of healthfoods and consumer products as a separate
operating segment. The combined results of these businesses, with
revenue in the period of EUR72m, are positive and are not considered
to be material, individually or in aggregate. In order to align with
current management reporting, the relevant businesses are now presented
within the Eurozone, Non-Eurozone and International operating segments
as appropriate.
In accordance with IFRS 8, the Group's reportable operating segments
based on how performance is currently assessed and resources are
allocated are as follows:
- Europe - Eurozone: This reportable segment is an aggregation
of twelve operating segments in France, Ireland, Italy, the
Netherlands and Spain primarily involved in the procurement,
marketing and distribution of fresh produce and some healthfoods
and consumer goods products. These operating segments have
been aggregated because they have similar economic characteristics.
- Europe - Non-Eurozone: This operating segment is an aggregation
of six operating segments in Scandinavia, United Kingdom,
Poland and the Czech Republic primarily involved in the procurement,
marketing and distribution of fresh produce and some healthfoods
and consumer goods products. These operating segments have
been aggregated because they have similar economic characteristics.
- International: This segment is an aggregation of five operating
segments in North America and India primarily involved in
the procurement, marketing and distribution of fresh produce
and some healthfoods products.
Segment performance is evaluated based on revenue and adjusted EBITA.
Management believe that adjusted EBITA, while not a defined term
under IFRS, gives a fair reflection of the underlying trading performance
of the Group. Adjusted EBITA represents earnings before interest,
tax, acquisition related intangible asset amortisation charges and
costs, remeasurement to fair value of contingent consideration estimates
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 full detail in the analysis
below.
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 ('CODM') and are accordingly omitted from the detailed segmental
analysis that follows.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
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30 June 2015 30 June 2014* 31 Dec 2014*
Total Adjusted Total Adjusted Total Adjusted
revenue EBITA revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Europe - Eurozone 832,782 12,164 795,427 11,034 1,567,459 20,131
Europe - Non-Eurozone 766,892 18,825 727,294 17,381 1,429,641 33,750
International 158,006 2,523 90,546 1,804 190,983 2,809
Inter-segment revenue (24,449) - (25,494) - (59,245) -
------------ --------- ------------ --------- ---------- ---------
Third party revenue
and adjusted EBITA 1,733,231 33,512 1,587,773 30,219 3,128,838 56,690
----------------------- ------------ --------- ------------ --------- ---------- ---------
All inter-segment revenue transactions are at arm's length.
* 2014 information has been reclassified to conform to the current
year presentation.
Reconciliation of segmental profit to operating profit
Below is a reconciliation of adjusted EBITA per the Group's management
reports to operating profit and profit before tax as presented in
the Group income statement:
Note (Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to 30 June 31 Dec
30 June 2014 2014
2015
EUR'000 EUR'000 EUR'000
Adjusted EBITA per management reporting 33,512 30,219 56,690
Acquisition related intangible asset
amortisation within subsidiaries (i) (2,595) (3,271) (5,969)
Share of joint ventures and associates
acquisition related intangible asset
amortisation (i) (851) (753) (1,456)
Remeasurement to fair value of contingent
consideration estimates (ii) (851) (365) 738
Acquisition related costs within
subsidiaries (iii) (4) (147) (602)
Share of joint ventures and associates
net finance expense (iv) (136) (195) (428)
Share of joint ventures and associates
tax (iv) (1,879) (953) (1,999)
------------ ------------- ---------------
Operating profit before exceptional
items 27,196 24,535 46,974
Exceptional items (Note 5) (v) - 2,455 2,432
------------ ------------- ---------------
Operating profit after exceptional
items 27,196 26,990 49,406
Net financial expense (vi) (3,040) (2,819) (5,095)
------------ ------------- ---------------
Profit before tax 24,156 24,171 44,311
============ ============= ===============
(i) Acquisition related intangible asset amortisation charges are
not allocated to operating segments in the Group's management
reports.
(ii) Remeasurement to fair value of contingent consideration estimates
are not allocated to operating segments in the Group's management
reports.
(iii) Acquisition related costs are transaction costs directly related
to the acquisition of subsidiaries 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 amortisation charges and costs, 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 Group's management reports.
(vi) Financial income and expense is primarily managed at Group level,
and is therefore not allocated to individual 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 EBITDA, adjusted EBITA, adjusted
profit before tax and adjusted earnings per share (Note 6) are the
most appropriate measures of the underlying performance of the Group.
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June 30 June 2014 31 Dec 2014
2015
EUR'000 EUR'000 EUR'000
Profit before tax per income statement 24,156 24,171 44,311
Adjustments
Exceptional items (Note 5) - (2,455) (2,432)
Remeasurement to fair value of contingent
consideration estimates 851 365 (738)
Share of joint ventures and associates
tax 1,879 953 1,999
Acquisition related intangible asset
amortisation within subsidiaries 2,595 3,271 5,969
Share of joint ventures and associates
acquisition related intangible asset
amortisation 851 753 1,456
Acquisition related costs within
subsidiaries 4 147 602
------------- --------------- --------------
Adjusted profit before tax 30,336 27,205 51,167
Exclude
Net financial expense - subsidiaries 3,040 2,819 5,095
Net financial expense - share of
joint ventures and associates 136 195 428
------------- --------------- --------------
Adjusted EBITA 33,512 30,219 56,690
Exclude
Amortisation of software costs 427 234 569
Depreciation - subsidiaries 7,534 6,730 13,851
Depreciation - share of joint ventures
and associates 1,172 913 1,922
------------- --------------- --------------
Adjusted EBITDA 42,645 38,096 73,032
============= =============== ==============
5. Exceptional items
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec
2015 2014 2014
EUR'000 EUR'000 EUR'000
Gain on available-for-sale financial assets
reclassified from other comprehensive income
to income statement (a) - 2,455 2,455
Credit from modification to Group's defined
benefit pension arrangements (b) - - 2,694
Impairment of goodwill and intangible assets
(c) - - (1,684)
Impairment of property, plant and equipment
(d) - - (1,033)
Total exceptional items - 2,455 2,432
Net tax charge on exceptional items (b)
and (c), (e) - - (157)
-------------- ------------- ------------
Total - 2,455 2,275
============== ============= ============
(a) Gain on available-for-sale financial assets reclassified from
other comprehensive income to the income statement
In March 2014, the Group reclassified its 10% interest in African
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September 03, 2015 02:00 ET (06:00 GMT)
Blue Limited ('African Blue') from an available-for-sale financial
asset to an associate investment. African Blue is a blueberry grower
in Morocco. Due to the change in the nature of the Group's involvement
in this entity in early 2014, it was deemed that the Group obtained
significant influence in accordance with the provisions of IAS 28
Investment in Associates and Joint Ventures (2011). In accordance
with IFRS, the Group's 10% interest was fair valued in March resulting
in a fair value uplift of EUR2,455,000. This uplift was reclassified
to the income statement resulting in an exceptional gain of EUR2,455,000
being recognised in the six months ended 30 June 2014 and the twelve
months ended 31 December 2014.
(b) Credit arising from modification to Group's defined benefit pension
arrangements
Modification to the structure of the Group's defined benefit pension
arrangements during 2014 resulted in a credit of EUR2,694,000 to the
income statement in the year ended 31 December 2014. The deferred
tax charge on this exceptional credit amounted to EUR337,000. Further
details are outlined in the Group's 2014 Annual Report.
(c) Impairment of goodwill and intangible assets
At 31 December 2014 the Group recognised a charge of EUR1,684,000
in relation to the impairment of goodwill and intangible assets within
a consumer products distribution business in the Europe-Eurozone division.
A deferred tax credit of EUR39,000 on the impairment of the intangible
assets was recognised in the income statement. No such impairments
were identified at 30 June 2015.
(d) Impairment of property, plant and equipment
On revaluation of the Group's properties at December 2014, a property
was identified in Scandinavia where the carrying value exceeded the
fair value, resulting in an impairment charge of EUR1,033,000 to the
income statement. No such impairments were identified in the six month
period ended 30 June 2015.
(e) Tax charge on exceptional items
In addition to the exceptional tax charge of EUR337,000 and the tax
credit of EUR39,000 outlined in notes (b) and (c) above, a deferred
tax credit of EUR141,000 was recognised due to the recognition of
capital losses on prior year revaluation movements on investment property.
6. 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.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
to 30 June 31 Dec 2014
2014
30 June 2015 EUR'000 EUR'000
EUR'000
Profit attributable to equity holders
of the parent 15,552 15,621 29,218
================ ============= ==============
'000 '000 '000
Shares in issue at beginning of period 353,312 351,887 351,887
New shares issued (weighted average) 370 331 823
Effect of treasury shares held (22,000) (22,000) (22,000)
---------------- ------------- --------------
Weighted average number of shares
at end of period 331,682 330,218 330,710
================ ============= ==============
Basic earnings per share - cent 4.69 4.73 8.83
================ ============= ==============
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.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2015 to 30 June 31 Dec 2014
2014
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 15,552 15,621 29,218
=============== ============== ==============
'000 '000 '000
Weighted average number of shares
at end of period 331,682 330,218 330,710
Effect of share options with a dilutive
effect 1,790 1,889 1,778
--------------- -------------- --------------
Weighted average number of shares
at end of period (diluted) 333,472 332,107 332,488
=============== ============== ==============
Diluted earnings per share - cent 4.66 4.70 8.79
=============== ============== ==============
The average market value of the Company's shares for the purpose of
calculating the dilutive effect of share options was based on the
quoted market prices for the period during which the options were
outstanding.
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, remeasurement
to fair value of contingent consideration estimates, property revaluations
and exceptional items and the related tax on these items.
Adjusted fully diluted earnings per share is calculated by dividing
the adjusted profit attributable to ordinary shareholders (as calculated
below) by the weighted average number of ordinary shares outstanding
after adjustment for the effects of all ordinary shares and options
with a dilutive effect.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2015 to 30 June
2014*
EUR'000 EUR'000 31 Dec 2014
EUR'000
Profit attributable to equity holders
of the parent 15,552 15,621 29,218
Adjustments:
Exceptional items - net of tax (Note
5) - (2,455) (2,275)
Acquisition related intangible asset
amortisation in subsidiaries 2,595 3,271 5,969
Share of joint ventures and associates
acquisition related intangible asset
amortisation 851 753 1,456
Acquisition related costs within
subsidiaries 4 147 602
Remeasurement to fair value of contingent
consideration estimates 851 365 (738)
Tax effect of amortisation of intangible
assets (724) (802) (1,758)
Non-controlling interests share of
items above (710) (406) (1,041)
--------------- ------------- --------------
Adjusted fully diluted earnings 18,419 16,494 31,433
=============== ============= ==============
'000 '000 '000
Weighted average number of shares
at end
of period (diluted) 333,472 332,107 332,488
Adjusted fully diluted earnings per
share - cent 5.52 4.97 9.45
=============== ============= ==============
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*The calculation of adjusted earnings per share for the
comparative period to 30 June 2014 is restated to ensure conformity
with the current period calculation and the calculation for the
year ended 31 December 2014 whereby fair value movements on
contingent consideration are excluded from adjusted earnings.
Management believe this presentation more fairly represents the
underlying trading performance of the Group.
7. Employee benefits
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2014
2015 2014
EUR'000 EUR'000 EUR'000
Net liability at beginning of period (27,514) (4,658) (4,658)
Net interest expense and current
service cost recognised in the
income statement (2,303) (1,315) (1,995)
Past service credit arising on
modification to Group's defined
benefit pension arrangements recognised
in the income statement - - 2,694
Employer contributions to schemes 3,042 2,955 5,257
Remeasurement gains/(losses) recognised
in other comprehensive income 11,971 (17,508) (28,666)
Translation adjustment (396) (121) (146)
------------- ------------- --------------
Net liability at end of period (15,200) (20,647) (27,514)
Net related deferred tax asset 2,230 3,252 3,933
------------- ------------- --------------
Net liability after tax at end
of the period (12,970) (17,395) (23,581)
============= ============= ==============
The table above summarises the movements in the net liability of
the Group's various defined benefit pension schemes in Ireland, the
UK and Continental Europe in accordance with IAS 19 Employee Benefits
(2011).
The Group's balance sheet at 30 June 2015 reflects pension liabilities
of EUR15.2m in respect of schemes in deficit, resulting in a net
deficit of EUR13.0m after deferred tax.
The current and past service costs and the net finance expense on
the net scheme liabilities are charged to the income statement. Remeasurement
gains and losses are recognised in other comprehensive income.
In determining the valuation of pension obligations, consultation
with independent actuaries is required. The estimation of employee
benefit obligations requires the determination of appropriate assumptions
such as discount rates, inflations rates and mortality rates.
The decrease in the net liability during the period was primarily
due to the increase in discount rates which results in a decrease
in the net present value of the obligations of these pension schemes,
and positive returns on the pension scheme assets in six month period.
The discount rate in Ireland and the Eurozone increased to 2.5% (31
December 2014: 2.2% and 30 June 2014: 3.0%) and in the UK increased
to 3.9% (31 December 2014: 3.8% and 30 June 2014: 4.3%).
Modification to the structure of the Group's defined benefit pension
arrangements during the second half of 2014 resulted in a credit
of EUR2,694,000 to the income statement in the year ended 31 December
2014. Further details are outlined in the Group's 2014 Annual Report.
8. Dividends
The Board has approved an interim dividend of 0.736 (2014: 0.640)
cent per share which represents a 15.0% increase on the comparative
period. This dividend, which will be subject to Irish withholding
tax rules, will be paid on 16 October 2015 to shareholders on the
register at 18 September 2015. In accordance with company law and
IFRS, this dividend has not been provided for in the balance sheet
at 30 June 2015. The final dividend for 2014 of EUR5,850,000 was
paid in May 2015.
During the period, the Group paid dividends of EUR1,107,000 (2014:
EUR3,705,000) to non-controlling shareholders in certain of the Group's
non wholly-owned subsidiaries.
9. Businesses acquired and other developments
In the six months to 30 June 2015, the Group made a number of investments
in the business as explained below.
Investment in joint ventures and associates
The Group invested EUR9.3m in new and existing joint ventures and
associates including estimated contingent consideration payable
on investments if certain profit targets are met. The fair value
of the contingent consideration recognised at the date of acquisition
of EUR2.1m was calculated using the expected present value technique.
The principal acquisition in the period was the agreement to acquire
a 50% shareholding in the Gambles Group, the fresh produce company
based in Toronto, Canada.
The initial assignment of fair values to net assets for all investments
has been performed on a provisional basis in respect of these acquisitions
given the timing of the completion of these transactions and will
be finalised within twelve months from the acquisition date, as
permitted by IFRS 3 (Revised) Business Combinations.
Acquisition of non-controlling interests
During the period, the Group invested EUR3.9m in acquiring the remaining
shareholdings in non-wholly owned subsidiaries. The investment included
EUR1.0m of deferred consideration and EUR1.9m estimated contingent
consideration payable if certain profit targets are met. The fair
value of the contingent consideration recognised at the date of
acquisition was calculated using the expected present value technique.
The EUR0.4m difference between the fair value of the consideration
of EUR3.9m and the Group carrying value of the non-controlling interests
acquired of EUR4.3m was accounted for directly in retained earnings
in the period.
Payment of contingent and deferred consideration
During the period, the Group paid EUR8.5m of contingent consideration
and EUR0.7m of deferred consideration relating to prior period acquisitions.
The Group continues to actively pursue further investment opportunities
in both new and existing markets.
10. Financial instruments
The fair values of financial assets and financial liabilities, together
with the carrying amounts in the Condensed Group Balance Sheet at
30 June 2015, 30 June 2014 and 31 December 2014 are as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2015 30 June 2014 31 Dec 2014
Carrying Fair Carrying Fair Carrying Fair
value value value value value value
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Other financial
assets(1) 752 752 574 574 698 698
Trade and other
receivables - current(1)
* 366,087 n/a 354,851 n/a 275,170 n/a
Trade and other
receivables - non-current* 2,702 2,702 4,162 4,162 2,999 2,999
Bank deposits(1) 8,200 n/a 4,700 n/a 2,000 n/a
Cash and cash equivalents(1) 90,644 n/a 92,693 n/a 113,830 n/a
Derivative financial
assets 63 63 303 303 425 425
---------- ---------- ----------
468,448 457,283 395,122
========== ========== ==========
Trade and other
payables - current(1) 392,734 n/a 389,981 n/a 343,038 n/a
Trade and other
payables - non-current 2,389 2,389 1,976 1,976 1,696 1,696
Bank overdrafts(1) 45,016 n/a 42,604 n/a 3,440 n/a
Bank borrowings 132,637 133,072 117,920 117,427 123,543 124,702
Finance lease liabilities(1) 5,069 5,469 5,919 6,333 5,695 6,146
Derivative financial
liabilities 689 689 97 97 180 180
Contingent consideration 19,987 19,987 28,903 28,903 22,859 22,859
---------- ---------- ----------
598,521 587,400 500,451
========== ========== ==========
1. The Group has availed of the exemption under IFRS 7 Financial
Instruments: Disclosure for additional disclosures where fair value
closely approximates carrying value.
* For the purposes of this analysis prepayments have not been
included within other receivables. Carrying value of other
financial assets, trade receivables and other receivables are
stated net of impairment provision where appropriate and
consequently fair value is considered to approximate to carrying
value.
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The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
-- Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
-- Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly;
-- Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
At 30 June 2015, 30 June 2014 and 31 December 2014 the Group
recognised and measured the following instruments at fair
value:
(Unaudited) (Unaudited) (Audited)
30 June 30 June 30 June 30 June 31 Dec 31 Dec
2015 2015 2014 2014 2014 2014
Level Level Level Level Level Level
2 3 2 3 2 3
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Assets measured at fair
value
At fair value through
profit or loss
Foreign exchange contracts 3 - 303 - 332 -
Designated as hedging
instruments
Foreign exchange contracts 60 - - - 93 -
Liabilities measured
at fair value
At fair value through
profit or loss
Foreign exchange contracts (193) - (35) - (21) -
Contingent consideration - (19,987) - (28,903) - (22,859)
Designated as hedging
instruments
Foreign exchange contracts (335) - (56) - - -
Interest rate swaps (161) - (6) - (159) -
------------------------------- --------- ------------ --------- ------------ ---------- -----------
Additional disclosures for Level 3 fair value measurements
Contingent consideration
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2015 30 June 2014 31 Dec 2014
EUR'000 EUR'000 EUR'000
At beginning of period 22,859 23,970 23,970
Paid during the period (8,467) (412) (5,524)
Arising on acquisition of subsidiaries 51 4,314 4,688
Arising on acquisition of joint 2,142 - -
ventures
Arising on acquisition of non-controlling
interests 1,914 638 707
Fair value adjustment to contingent
consideration arising on acquisition
of associate - 417 427
Fair value movement resulting
in an adjustment to goodwill -
subsidiaries --- (625) (1,130)
Foreign exchange movements 637 236 459
Included in the income statement
* Fair value remeasurements 851 365 (738)
At end of period 19,987 28,903 22,859
================= =================== ================
Additional disclosures for level 3 fair value measurements
Contingent consideration
Contingent consideration represents provision for the net present value
of the amounts expected to be payable in respect of acquisitions which
are subject to earn-out arrangements. Contingent consideration for
each individual transaction is valued internally by the Group Finance
team and updated as required at each reporting period.
11. Cash flows generated from operations
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2015 30 June 2014 31 Dec 2014
EUR'000 EUR'000 EUR'000
Operating activities
Profit before tax 24,156 24,171 44,311
Adjustments for non-cash items:
Depreciation of property, plant and
equipment (excl. depreciation within
joint ventures and associates) 7,534 6,730 13,851
Impairment of property, plant and
equipment - - 1,033
Remeasurement to fair value of contingent
consideration estimates 851 365 (738)
Amortisation of intangible assets
- acquisition related 2,595 3,271 5,969
Amortisation of intangible assets
- development costs capitalised 158 227 350
Amortisation of intangible assets
- computer software 427 234 569
Impairment of goodwill and intangible
assets - - 1,684
Amortisation of grants (151) (143) (321)
Share-based payment expense 126 101 321
Contributions to defined benefit
pension schemes (3,042) (2,955) (5,257)
Defined benefit pension scheme expense 2,303 1,315 1,995
Credit on modification to Group's
defined benefit pension arrangements - - (2,694)
Net gain on disposal of property,
plant and equipment (168) (136) (328)
Net interest expense 3,040 2,819 5,095
Net loss/(gain) on non-hedging derivative
financial instruments 329 (575) (358)
Gain reclassified to the income statement
on available-for-sale financial asset
becoming an associate - (2,455) (2,455)
Loss on disposal of joint venture 16 -
investment -
Share of profits of joint ventures
and associates (4,866) (3,231) (6,743)
Income tax paid (3,277) (6,267) (13,610)
Net financial expense paid (2,724) (2,824) (4,959)
-------------- -------------- -------------
Cash flows from operations before
working capital movements 27,307 20,647 37,715
-------------- -------------- -------------
Movements in working capital:
* Movements in inventories (19,086) (20,967) 3,142
* Movements in trade and other receivables (89,316) (59,926) 22,027
* Movement in trade and other payables 41,269 28,368 (13,480)
Total movements in working capital (67,133) (52,525) 11,689
-------------- -------------- -------------
Cash flows from operating activities (39,826) (31,878) 49,404
============== ============== =============
12. 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 interest-bearing
loans and borrowings. The calculation of net debt at 30 June 2015,
30 June 2014 and 31 December 2014 is as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2015 30 June 2014 31 Dec 2014
EUR'000 EUR'000 EUR'000
Current assets
Bank deposits 8,200 4,700 2,000
Cash and cash equivalents 90,644 92,693 113,830
Current liabilities
Bank overdrafts (45,016) (42,604) (3,440)
Current bank borrowings (6,377) (1,848) (12,347)
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