23 Mar 2010 07:00
| Date: | 23 March 2010 |
| On behalf of: | Finsbury Food Group plc ('Finsbury', 'the Company' or 'the Group') |
| Embargoed until: 0700hrs | |
Finsbury Food Group plc
Interim Results
Finsbury Food Group plc (AIM: FIF), a leading manufacturer of cake, bread and morning goods, is pleased to announce its interim results for the 26 weeks to 2 January 2010.
§ Sustained level of profitability
§ Strong growth in Bread and Free From
§ Continued focus on driving operational efficiencies
§ Continued investment and integration
─ New Scottish Cake Distribution Centre
─ New production facility in Free From supporting successful launch of Genius
─ Goswells fully integrated into Nicholas and Harris improving capacity utilisation and brand offering
─ Investment in marketing, category management and consumer research
§ Strengthened and up-skilled management teams
Commenting on the results, Chief Executive John Duffy said:
"Given our craft bakery and premium product bias, we have worked hard in the current climate to invest in organic growth opportunities for the Group whilst continuing to drive greater operating efficiencies. The change in consumer behaviour may still be some time in coming, but we believe the Group has coped well in delivering a sustained level of profitability in difficult market conditions and will emerge stronger as the economy picks up."
For further information:
| Finsbury Food Group Plc John Duffy
| www.finsburyfoods.co.uk 07901 514390 |
| Panmure Gordon Andrew Potts/Callum Stewart/ Ashton Clanfield
| 020 7459 3600 |
| Redleaf Communications Emma Kane/Rebecca Sanders-Hewett/Anna Dunkin
| finsbury@redleafpr.com 020 7566 6700 |
Publication quality photographs are available via Redleaf Communications
Notes to Editors:
§ Finsbury is the second largest participant in the UK cake industry, a market valued at £1.51bn (TNS, January 2008) and the market leader in the supply of gluten free baked goods to the UK's multiple grocers;
§ The Group's strategy is to generate returns for shareholders by building a crafted bakery group focused on premium, celebration and well being that delivers for customers and consumers. Finsbury continues to develop its licensed brand portfolio to complement its core retailer brand relationships and improve its understanding of and response to changing consumer needs;
§ Whilst the Company sees exciting organic growth opportunities in all its businesses and its short-term focus is on integrating and growing its existing businesses, the aim is to take advantage of the right bolt on acquisitions to drive longer term value as opportunities and circumstance allow.
Overview
Our decision last year to focus on improving internal efficiency by leveraging the acquired Group scale and integrating appropriate functions has proved successful. We are pleased to report that, throughout the period, Finsbury has performed in line with management expectations and we have made significant investments to drive further efficiencies throughout the Group to ensure Finsbury is well positioned for the upturn in the market, when it comes.
As expected, trading for the Group through its first half year period was impacted by consumers seeking better value, typically by trading down and more frequently choosing promotional product offerings. We have been working hard to offset the impact of this trading environment through organic growth elsewhere in the business, improving efficiencies and managing volatile input costs.
Despite these recessionary effects, we were pleased to achieve strong growth in our Bread and Free From division, boosted by the Goswell acquisition and the growth of our Free From offering. Sales of £17.6m from this division represented a like for like increase of 14% on the comparable period last year.
The total cake market has continued to decline over the period and this has impacted our Cake division, particularly given our scale and bias towards premium and healthier cakes. Sales for the Cake division have fallen compared to the corresponding period last year, although some of this was low margin business we chose to exit from. Sales of £65.3m for this division represent a fall of 8% on a like for like basis. Some of our licensed brands in Cake have bucked this trend, however, with sales of Thorntons branded cakes, in particular, growing by 9% year on year.
Our goal remains to improve our business and to exit the recession leaner and better equipped for future growth. To this end, we have continued to invest across the Group, opening a new warehouse, improving key sites and appointing new senior management to strengthen the Group. We believe these measures will succeed in driving the Group forward and enable Finsbury Food Group to emerge stronger from the downturn, capitalising on the expected rebound in premium market sales.
Development of the Group
With a view to driving further efficiencies, Finsbury has invested across the Group's sites including the opening of a new Scottish distribution centre. The Group has moved all of its Cake distribution in Scotland to one central location; the Scottish Cake Distribution Centre based at a new warehouse facility at Eurocentral, Lanarkshire. This shift has cut distribution costs, improved efficiency and is now fully operational.
The Group has also invested in a new production facility to build on Finsbury's market leading position in "Free From". Finsbury's successes within the market include the launch of the fresh Free From bread in conjunction with the Genius brand. The integration of Goswells into our Bread and Free From division has improved capacity utilisation and increased our branded bread offering through licensed brands such as Vogel and Cranks.
Finsbury has invested in detailed consumer research to enable the Group to better understand and identify key trends and consumer demand. This will help to ensure that Finsbury has the competitive edge and remains at the forefront of consumer development. The Group's extensive history and knowledge of the baking industry, teamed with its ability to react quickly to changing consumer demands and innovative strengths, should enable the Group to remain a leader within its markets.
People
As announced on 20 January 2010, Finsbury has appointed Stephen Boyd as Group Finance Director. Stephen brings considerable experience to the Group having previously delivered growth, scale and efficiency for the numerous food companies he has managed. His previous working experience with John Duffy has proved very successful in creating value for those businesses and Finsbury looks forward to benefiting from their proven strategies over the coming months and years.
The appointment of our first Group Technical Director, Frances Swallow, is a key milestone in the structure of the Group. Frances will work with all of our bakery sites as well as our main customers and suppliers to leverage our scale and implement best practice throughout our operations, in order to optimise our product offering and quality.
We have also strengthened our key personnel with the addition of a new marketing team. We believe that this will ensure that Finsbury's products are placed with intelligence and successfully projected to our target audiences.
The above appointments to the management team add a wealth of experience to the Group. Utilising the strengths of these individuals and the existing management, the Board believes the team is well placed to take the Company into its next stages of development.
Trading results
Group revenue for the 26 weeks to 2 January 2010 was £82.9 million (27 weeks to 3 January 2009: £89.1 million), a decrease of £6.2 million (7%) on the corresponding period last year. Like for like sales, excluding the effect of the business acquired during the course of the last financial year (Goswell Enterprises Ltd) and the additional week of trading in the comparative period, decreased by £4.5 million (5.2%).
Profit before tax and significant non-recurring and other items was £1.8 million (2009: £1.8 million). This was achieved after net finance expense of £1.2 million (2009: £1.4 million).
The tax charge for the period is based on the estimated effective tax rate on profits for the full year of 28%. This is higher than the effective rate for the full year ended 30 June 2009 when we benefited from utilisation of prior period losses.
Adjusted earnings per share were 2.3p (2009: 2.4p). The dilutive effect of share options in the period is negligible.
There was a net cash outflow of £1.4 million (2009: £3.0 million) during the period. Net cash generated from operating activities was £3.4 million (2009: £3.9 million). Capital expenditure in the period of £3.0m includes £2.0m investment in a new production facility to facilitate the roll out of Genius fresh "Free From" bread.
Banking facilities
The Group's total net debt as at 2 January 2010 was £40.6 million (3 January 2009: £42.9 million) including net borrowings from HSBC Bank Plc and secured loan notes. The total included an overdraft of £0.1 million (2009: £8.9 million overdraft) against a maximum facility of £2.0 million (2009: £12.5 million).
The key features of the current facilities, totalling £49 million, are as follows:
·; overdraft (£2.0m)
·; confidential invoice discounting facility (up to £16.0m based on debtor level)
·; term loan A repayable over five years (£10.9m)
·; term loan B repayable at the end of five years (£6.6m)
·; mortgage (£8.2m)
·; rolling asset finance facility (£5.4m)
The term loans are linked to LIBOR whilst all other debt is linked to base rate. The effective rate of interest on the debt at 2 January 2010, taking account of interest rate swaps in place and with the base rate at 0.5%, was 5.2%.
Our relationship with HSBC remains strong and they are supportive of our strategy and vision for the Group. This relationship has been built over the past 4-5 years and was reflected in the renegotiation of our facility last March. They continue to work with us to ensure the business is well placed to succeed in the coming years.
Outlook
Trading for the eight weeks since the half year end continues to be in line with management expectations and mirrors that of the first 26 weeks of the year. Over these eight weeks, sales in our Cake division were 11% below the same period last year but growth in our Bread and Free From division has accelerated to 20%, on a like for like basis. Post Christmas is typically a weaker sales period characterised by increased promotional activity to stimulate consumer demand.
Like the prior year, we expect that trading in the second half will be significantly stronger than the first, particularly given Easter product seasonality but also as a result of the continued operational efficiency initiatives and the benefit from the Goswell acquisition. Given the economic climate, whilst the impact of sterling, as well as overall pressures on input prices and consumer behaviour remain difficult to predict, we are confident of continued progress in the second half.
Our craft bakery and premium product bias as a Group has resulted in a tough trading environment over the last 12 months as more customers bought into lower priced products. We have worked hard to invest in our organic growth opportunities to offset the decline in premium cake sales whilst continuing to drive greater operating efficiencies. Whilst we recognise that the desired change in consumer behaviour may still be some time in coming, we believe the Group has coped well in delivering a sustained level of profitability in difficult market conditions and is in a stronger position to emerge from the end of the economic downturn.
Consolidated Income Statement (unaudited)
|
|
|
|
26 weeks ended 2 January 2010 |
| Restated 27 weeks ended 3 January 2009 |
|
53 weeks ended 4 July 2009 |
|
|
|
| Unaudited |
| Unaudited |
| Audited |
|
|
|
| £'000 |
| £'000 |
| £'000 |
|
| Notes |
|
|
|
|
|
|
| Revenue |
|
| 82,866 |
| 89,088 |
| 178,931 |
| Cost of sales |
|
| (60,281) |
| (66,582) |
| (130,180) |
| Gross profit |
|
| 22,585 |
| 22,506 |
| 48,751 |
|
|
|
|
|
|
|
|
|
| Administrative expenses |
|
| (19,570) |
| (19,242) |
| (41,114) |
| Results from operating activities |
|
| 3,015 |
| 3,264 |
| 7,637 |
|
|
|
|
|
|
|
|
|
| Financial income | 4 |
| - |
| - |
| - |
| Financial expenses | 4 |
| (1,201) |
| (1,420) |
| (2,589) |
| Net financing expense |
|
| (1,201) |
| (1,420) |
| (2,589) |
| Profit before taxation |
|
| 1,814 |
| 1,844 |
| 5,048 |
|
|
|
|
|
|
|
|
|
| Taxation |
|
| (508) |
| (483) |
| (1,296) |
|
|
|
|
|
|
|
|
|
| Profit after tax before significant non-recurring and other items |
|
|
1,306 |
|
1,361 |
|
3,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Significant non-recurring and other items: |
|
|
|
|
|
|
|
| Significant non-recurring items |
|
| (96) |
| - |
| (1,069) |
| Share option charge |
|
| (87) |
| (119) |
| (220) |
| Defined benefit pension scheme |
|
| - |
| - |
| 166 |
| Movement in fair value of interest rate swaps |
|
| (177) |
| (1,390) |
| (1,793) |
| Fair value adjustments relating to acquisitions |
|
|
(66) |
|
(129) |
|
(357) |
| Taxation relating to above items |
|
| 95 |
| 425 |
| 916 |
| Total significant non-recurring and other items |
|
|
(331) |
|
(1,213) |
|
(2,357) |
|
|
|
|
|
|
|
|
|
| Profit after taxation |
|
| 975 |
| 148 |
| 1,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit attributable to: |
|
|
|
|
|
|
|
| Equity holders of the parent |
|
| 850 |
| 46 |
| 1,172 |
| Minority interest |
|
| 125 |
| 102 |
| 223 |
| Profit for the financial year |
|
| 975 |
| 148 |
| 1,395 |
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet
|
|
|
Unaudited |
| Restated Unaudited |
|
Audited |
|
|
| 2 January |
| 3 January |
| 4 July |
|
|
| 2010 |
| 2009 |
| 2009 |
|
| Notes | £000 |
| £000 |
| £000 |
|
|
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
|
| Goodwill |
| 62,221 |
| 60,382 |
| 62,221 |
| Property, plant & equipment |
| 26,792 |
| 25,384 |
| 25,237 |
| Other financial assets |
| 25 |
| 25 |
| 25 |
| Pension scheme surplus |
| - |
| 177 |
| - |
|
|
| 89,038 |
| 85,968 |
| 87,483 |
|
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
| Inventories |
| 4,649 |
| 5,056 |
| 4,386 |
| Trade and other receivables |
| 23,095 |
| 26,209 |
| 24,868 |
| Cash and cash equivalents |
| - |
| - |
| 1,273 |
|
|
| 27,744 |
| 31,265 |
| 30,527 |
|
|
|
|
|
|
|
|
| Total assets |
| 116,782 |
| 117,233 |
| 118,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
| Bank overdraft | 6 | (77) |
| (8,947) |
| - |
| Other interest bearing loans and borrowings | 6 | (14,666) |
| (6,844) |
| (15,663) |
| Trade and other payables |
| (26,369) |
| (27,145) |
| (27,007) |
| Provisions |
| (502) |
| (749) |
| (750) |
| Deferred purchase consideration | 7 | (5,644) |
| (815) |
| (1,229) |
| Deferred contingent purchase consideration | 7 | - |
| (2,170) |
| (2,285) |
| Other financial liabilities - interest rate swaps |
| (1,678) |
| (1,098) |
| (1,501) |
| Current tax liabilities |
| (348) |
| (473) |
| (371) |
|
|
| (49,284) |
| (48,241) |
| (48,806) |
|
|
|
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
|
|
| Other interest-bearing loans and borrowings | 6 | (24,920) |
| (26,500) |
| (25,631) |
| Provisions and other liabilities |
| (612) |
| (467) |
| (408) |
| Deferred purchase consideration | 7 | (1,125) |
| (2,727) |
| (3,564) |
| Deferred tax liabilities |
| (441) |
| (1,144) |
| (508) |
| Pension fund liability |
| (1,291) |
| - |
| (1,291) |
|
|
| (28,389) |
| (30,838) |
| (31,402) |
|
|
|
|
|
|
|
|
| Total liabilities |
| (77,673) |
| (79,079) |
| (80,208) |
|
|
|
|
|
|
|
|
| Net assets |
| 39,109 |
| 38,154 |
| 37,802 |
|
|
|
|
|
|
|
|
| Equity attributable to equity holders of the parent | ||||||
| Share capital |
| 717 |
| 514 |
| 514 |
| Share premium account |
| 26,729 |
| 26,680 |
| 26,680 |
| Capital redemption reserve |
| 578 |
| 578 |
| 578 |
| Retained earnings |
| 10,638 |
| 10,095 |
| 9,701 |
| Total shareholders' equity |
| 38,662 |
| 37,867 |
| 37,473 |
| Minority interest |
| 447 |
| 287 |
| 329 |
| Total equity |
| 39,109 |
| 38,154 |
| 37,802 |
Consolidated Cash Flow Statement
|
|
|
| Unaudited 26 weeks ended |
| Unaudited 27 weeks ended |
| Audited 53 weeks ended |
|
|
|
| 2 January 2010 |
| 3 January 2009 |
| 4 July 2009 |
|
| Note |
| £000 |
| £'000 |
| £'000 |
| Cash flows from operating activities |
|
|
|
|
|
|
|
| Profit for the year |
|
| 975 |
| 148 |
| 1,395 |
| Adjustments for: |
|
|
|
|
|
|
|
| Taxation |
|
| 413 |
| 58 |
| 380 |
| Net finance expenses |
|
| 1,444 |
| 2,939 |
| 4,516 |
| Depreciation |
|
| 1,401 |
| 1,407 |
| 2,753 |
| Loss on disposal of plant and equipment |
|
| - |
| 1 |
| 15 |
| Share options charge |
|
| 87 |
| 119 |
| 220 |
| Current service cost element of pension scheme |
|
| 146 |
| 179 |
| 407 |
| Contributions by employer to pension scheme |
|
| (146) |
| (179) |
| (350) |
| Operating profit before changes in working capital |
|
| 4,320 |
| 4,672 |
| 9,336 |
|
|
|
|
|
|
|
|
|
| Changes in working capital |
|
|
|
|
|
|
|
| (Increase)/decrease in inventories |
|
| (263) |
| 53 |
| 723 |
| Decrease/(increase) in trade and other receivables |
|
| 1,774 |
| (735) |
| 356 |
| (Decrease)/increase in trade and other payables |
|
| (686) |
| 1,796 |
| 1,596 |
|
|
|
|
|
|
|
|
|
| Cash generated from operations |
|
| 5,145 |
| 5,786 |
| 12,011 |
|
|
|
|
|
|
|
|
|
| Interest paid |
|
| (1,197) |
| (1,815) |
| (3,024) |
| Income taxes paid |
|
| (504) |
| (111) |
| (751) |
| Net cash generated from operating activities |
|
| 3,444 |
| 3,860 |
| 8,236 |
|
|
|
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
|
|
| Purchase of property, plant & equipment |
|
| (2,956) |
| (2,157) |
| (3,393) |
| Proceeds from sale of property, plant and equipment |
|
| - |
| 6 |
| 30 |
| Purchase of subsidiary companies |
|
| (375) |
| (275) |
| (1,025) |
| Net cash used in investing activities |
|
| (3,331) |
| (2,426) |
| (4,388) |
|
|
|
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
|
|
|
| (Repayment)/drawdown of invoice discounting |
|
| (1,392) |
| - |
| 12,454 |
| Repayment of current bank loans |
|
| (1,077) |
| (2,278) |
| (6,039) |
| Repayment of former bank loans |
|
| - |
| (1,737) |
| (1,737) |
| Repayment of loan notes |
|
| (8) |
| - |
| (50) |
| Drawdown/(repayment) of asset finance facilities |
|
| 769 |
| 254 |
| (60) |
| Issue of ordinary share capital |
|
| 252 |
| - |
| - |
| Equity dividend paid |
|
| - |
| (655) |
| (1,132) |
| Minority interest dividend paid |
|
| (7) |
| - |
| (79) |
| Net cash (used)/generated by financing activities |
|
| (1,463) |
| (4,416) |
| 3,357 |
|
|
|
|
|
|
|
|
|
| Net (decrease)/increase in cash and cash equivalents |
|
| (1,350) |
| (2,982) |
| 7,205 |
| Opening cash and cash equivalents |
|
| 1,273 |
| (5,965) |
| (5,965) |
| Effect of exchange rate fluctuation |
|
| - |
| - |
| 33 |
| Cash and cash equivalents at end of the period |
|
| (77) |
| (8,947) |
| 1,273 |
STATEMENT OF RECOGNISED INCOME AND EXPENSE
|
|
|
Unaudited 26 weeks ended 2 January 2010 |
|
Unaudited 27 weeks ended 3 January 2009 |
|
Audited 53 weeks ended 4 July 2009 |
|
|
| £000 |
| £000 |
| £000 |
| Actuarial losses on defined benefit schemes |
| - |
| - |
| (1,634) |
| Movement in deferred taxation on pension scheme asset |
|
- |
|
- |
|
458 |
| Foreign exchange translation differences |
| - |
| - |
| 33 |
| Net expense recognised directly in equity |
| - |
| - |
| (1,143) |
|
|
|
|
|
|
|
|
| Profit for the period |
| 975 |
| 148 |
| 1,395 |
| Total recognised income for the period |
| 975 |
| 148 |
| 252 |
| Attributable to: |
|
|
|
|
|
|
| Equity holders of the parent |
| 850 |
| 46 |
| 29 |
| Minority interest |
| 125 |
| 102 |
| 223 |
| Total recognised income for the period |
| 975 |
| 148 |
| 252 |
NOTES TO THE FINANCIAL STATEMENTS
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| 1) BASIS OF PREPARATION
The interim report, which is unaudited, does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006. The comparative figures for the financial year ended 4 July 2009 have been extracted from the statutory accounts for that year. Those accounts, which were prepared in accordance with International Financial Reporting Standards as adopted by the EU ("adopted IFRSs"), have been reported on by the company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
It should be noted that current liabilities continue to exceed current assets. Having reviewed the Group's plans the Board has reasonable expectations that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group has strong asset backing and strong debtor book. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements.
There has been a change in presentation for the prior year's comparative revenue, cost of sales and distribution. Sales overriders, which have been previously shown as an administrative expense, are now netted off against revenue. The impact of this in the current period has been to reduce revenue by £2.0m (2009: £2.7m). Licence fees have previously been shown as an administrative expense and these are now as a cost of sale. The impact on cost of sales for current period is an increase of £2.3m (2009: £2.3m). Distribution expenses were previously shown as a separate line in the Income Statement. This expense has been reclassified as a cost of sale with the current period expense being £5.3m (2009: £5.8m). These changes have no impact on the reported results.
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| 2) SHARE BASED PAYMENTS
The Company operates both approved and unapproved share option schemes. Following the adoption of IFRS2 'Share-based payments' charges have been made to the Income Statement to reflect the calculated fair value of employee share options. The fair value is calculated at the date of grant and is charged equally over the vesting period. The corresponding adjustment is made to reserves.
During the 26 weeks to 2 January 2010 1,785,245 options were granted. The fair value of options granted during the period was £251,000. The comparative estimated fair values of options granted for the 27 weeks to 3 January 2009 and for the year ended 4 July 2009 were £50,000 and £64,000.
Administration costs include a charge of £87,000 in relation to the fair value of share options for the 26 weeks ended 2 January 2010. The comparative charges for the 27 weeks to 3 January 2009 and for the year ended 4 July 2008 were £119,000 and £220,000 respectively.
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| 3) SIGNIFICANT NON-RECURRING ITEMS
The Group presents certain items as significant. These relate to items which, in management's judgement, need to be disclosed by virtue of their size or incidence in order to obtain a more meaningful understanding of the financial information.
Reorganisation costs relate to redundancy costs at the Memory Lane Cake bakery. In the year to 4 July 2009 the costs also included the integration of Anthony Alan Foods Ltd and Livwell Ltd., and the exit costs relating to the former Chief Executive Officer, Mr David Brooks.
Administration expenses relates to the provision for future company contributions as a result of a contractual liability for staff pension augmentation relating to the defined benefit scheme.
NOTES TO THE FINANCIAL STATEMENTS continued
4) FINANCE INCOME AND EXPENSES
The Group has entered into four interest rate swap arrangements and one forward starting participating swap arrangement to hedge its risks associated with interest rate fluctuations:
£5.0m for five years from 18 November 2005 (fixed) at 4.7% £5.0m over five years from 18 November 2005 (reducing to nil over 5 years) at 4.8% £11.0m over five years from 23 February 2007 (reducing to £3.5m over 5 years) at 5.8% £5.0m for five years from 1 May 2008 (fixed) at 5.5% £10.0m for four years from 1 June 2010 (fixed) at 4.9%
These arrangements do not meet the conditions necessary for hedge accounting to be applied and, therefore, changes in their fair value are recognised immediately in the income statement resulting in a charge of £177,000 (2009: £1,390,000) as indicated above. This charge represents a movement of 0.1% in the weighted average market rate payable for similar contracts from 3.0% at 3 January 2009 to 2.9% at 2 January 2010.
In October 2007, the Group acquired Anthony Alan Foods Limited and the contingent deferred element of the consideration of £2.3m has been discounted accordingly. The discount charge to the income statement for the 26 weeks to 2 January 2010 was £15,000 (27 weeks to 3 January 2009: £67,000 and 53 weeks to 4 July 2009: £182,000).
In April 2008, the Group acquired the assets of Yorkshire Farm Bakery and A&P Foods and the deferred element of the consideration of £4.0m has been discounted accordingly. The discounting results in a charge to the income statement for the 26 weeks to 2 January 2010 of £22,000 (27 weeks to 3 January 2009: £62,000 and 53 weeks to 4 July 2009: £173,000).
In June 2009, the Group acquired Goswell Enterprises Ltd and the deferred element of the consideration of £1.7m has been discounted accordingly. The discounting results in a charge to the income statement for the 26 weeks to 2 January 2010 of £29,000 (27 weeks to 3 January 2009: £nil and 53 weeks to 4 July 2009: £2,000).
NOTES TO THE FINANCIAL STATEMENTS continued
5) EARNINGS PER ORDINARY SHARE
Basic earnings per share for the period is calculated on the basis of profit for the year after tax, divided by the weighted average number of shares in issue 52,075,279 (3 January 2009: 51,448,466 and 4 July 2009: 51,448,466).
An adjusted earnings per share has also been calculated as, in the opinion of the Board, this will allow shareholders to gain a clearer understanding of the trading performance of the Group. These adjusted earnings per share exclude reorganisation and other exceptional costs, IAS 39 "Financial Instruments: Recognition and Measurement" fair value adjustment relating to the Group's interest rate swaps and IFRS 3 "Business Combinations" discount charge relating to the deferred consideration payable for Livwell Ltd, Anthony Alan Foods Ltd and Yorkshire Farm Bakery and A&P Foods. The effect of taxation at the appropriate rate is shown as a separate adjustment.
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NOTES TO THE FINANCIAL STATEMENTS continued
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| 6) ANALYSIS OF NET DEBT
7) ANALYSIS OF DEFERRED CONSIDERATION
8) SHARE CAPITAL
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| Secretaries | Auditors | |||||||
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| City Group Plc | KPMG Audit Plc | |||||||
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| 30 City Road | Chartered Accountants | |||||||
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| London EC1Y 2AG Tel: 020 7448 8950 | Marlborough House Fitzalan Court Fitzalan Road Cardiff CF24 0TE | |||||||
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Registered Office Maes-y-coed Road Cardiff CF14 4XR |
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| Nominated Adviser & Broker | Registered Number | |||||||
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| Panmure Gordon (UK) limited | 204368 | |||||||
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| Moorgate Hall 155 Moorgate London EC2M 6XB |
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