25 Mar 2009 07:00
Date: 25 March 2009
On behalf of: Finsbury Food Group plc ('Finsbury', 'the Company', or 'the Group')
Embargoed until: 0700hrs
Finsbury Food Group plc
Interim Results 2009
Finsbury Food Group Plc (AIM: FIF), a leading manufacturer of cake, bread and morning goods, today announces its interim results for the six months to 31 December 2008.
Highlights
| \* These figures have been adjusted to eliminate the impact of the following: | ||
| Income/(expenditure) | ||
| Six months ended 31 December | ||
| 2008 £000 | 2007 £000 | |
| Significant non-recurring items | - | (1,004) |
| Share options charge | (119) | (58) |
| Movement in the fair value of interest rate swaps | (1,390) | (463) |
| Fair value adjustments relating to acquisitions | (129) | (194) |
Commenting on the results, Martin Lightbody, Chief Executive of Finsbury Food Group plc, said:
"It is encouraging to see that sales have remained strong and resilient despite the recessionary environment. We have focussed our investment and attention on further integration of our businesses and improving our facilities. Advancing the quality of our products and raising the standard of the service we provide to our customers is imperative, particularly in the current economic climate. We are also delighted with the continued support we have received from our bankers, HSBC Bank Plc, and our success in securing a more appropriate banking facility going forward.
"As a stronger business, we are well positioned to face the challenges ahead and take advantage of future opportunities."
For further information:
Finsbury Food Group Plc www.finsburyfoods.co.uk
Martin Lightbody (Chief Executive) 07778 230 220
Lisa Morgan (Finance Director) 07771 712 720
Panmure Gordon
Katherine Roe/ Ashton Clanfield 020 7459 3600
Redleaf Communications finsbury@redleafpr.com
Emma Kane/ Rebecca Sanders-Hewett/ Anna Dunkin 020 7566 6700
Publication quality photographs are available via Redleaf Communications
Notes to Editors:
Finsbury Food Group plc (AIM: FIF), is a leading manufacturer of premium and celebration cakes, low fat cake slices and artisan, organic and gluten free bread and morning goods
Finsbury Food Group is the No. 2 player in the UK cake industry; a market valued at £1.51 billion (TNS, January 2008)
Its strategy is to build a significant food group in core areas
Business Review
Overview
The interim results of Finsbury Food Group Plc are for the six months ended 31 December 2008.
This has been an extremely challenging period for Finsbury, although sales revenues remain strong. Despite selling predominantly premium products, the Group has continued to achieve organic growth, demonstrating resilience in a recessionary environment.
Input prices have stabilised over recent months with some key commodities coming back down from their historical peaks but the benefit of this has been offset by increases in the costs of other materials resulting from the weakness of sterling. The Group has experienced higher costs of distribution (£0.5 million) and utilities (£0.7 million) in the period. These further increases were only partially mitigated by increases in selling prices. As a result, and in line with previous guidance, operating margins have declined by 1.9% year on year.
We have responded to our customers' requirements by increasing levels of investment in promotional activity to ensure that we are offering the consumer value for money in a tough economic climate. There has been a significant level of internal investment to improve our bakery facilities and product quality. We are focussed on achieving a more effective integration of our two major cake businesses (Lightbody and Memory Lane Cakes) that will allow us to leverage our scale as an efficient, low cost producer within the cake market.
The trading environment remains uncertain and as a result, together with our desire to continue to invest for the medium and long term benefit of the Group, we proactively sought to renegotiate our existing banking arrangements with HSBC Bank Plc. This process has been successfully completed and has resulted in a more appropriate facility for the ongoing business. More details are provided under the section on Debt and Bank Facilities.
Trading Results
Group revenue for the six months to 31 December 2008 was £92.1 million (2008: £82.8 million), an increase of £9.3 million (11.2%) year on year. Like for like sales from continuing operations, excluding the full year effect of businesses acquired during the course of the last financial year (namely Anthony Alan Foods Ltd and Livwell Ltd) and an additional week's trading, were £84.4 million. This represents an increase of £1.7 million (2.0%) year on year.
Gross margin for the period was 36.5% (2008: 35.6%) representing an increase of 0.9%. This slight improvement is mainly attributable to changes in the sales mix with a higher proportion of Bread and Free From sales and an increase in sales of branded products. Branded products attract a higher gross margin to cover royalty payments which are included in administration costs.
Profit before tax was £0.2 million (2008: £1.6 million). This was achieved after net finance expenses of £2.9 million (2008: £1.9 million). Net financing expenses include a charge of £1.4 million (2008: £0.5 million) in respect of the movement in the fair value of interest rate swaps and a discount charge of £0.1 million (2008: £0.2 million) relating to deferred consideration. Net bank interest payable in the period was £1.4 million (2008: £1.2 million).
The Directors consider adjusted profit before tax to be a more appropriate measure of the underlying performance of the business - this adjusted figure eliminates the impact of significant non-recurring items and other charges associated with the adoption of International Financial Reporting Standards (IFRS). Adjusted profit before tax for the period was £1.8 million (2008: £3.3 million) representing a decrease of 45% on the corresponding period last year.
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 2008 when we benefited from a retrospective claim for research and development tax relief.
Adjusted earnings per share for the period were 2.4p (2008: 4.4p). The dilutive effect of share options is negligible in the period.
There was a net cash outflow of £3.0 million during the period. Net cash generated from operating activities was £3.9 million (2008: net cash used £0.5 million) representing an improvement of £4.3 million on the corresponding period last year. This improvement was due to the benefit of the research and development tax relief and tighter control of working capital. Capital expenditure of £2.2 million in the period reflects continued investment in improving the fabric of our bakeries and increasing capacity within our Bread business.
Cake Division
| Six months ended 31 December | ||
| 2008 | 2007 | |
| £000 | £000 | |
| Sales revenue | 76,329 | 73,415 |
| Adjusted operating profit* *before allocation of head office and other central costs | 3,180 | 4,453 |
Comprising Lightbody Group Ltd, Memory Lane Cakes Ltd and Campbells Cakes Ltd, our Cake division realised 4% growth in sales compared to the corresponding period last year. Anthony Alan Foods Ltd, acquired by the Group in October 2007, is now fully integrated into Lightbody and Memory Lane and no longer trades as a separate entity. The full year effect of this acquisition accounts for 1% of the revenue growth versus last year. The inclusion of an additional week's trading accounts for the remaining 3% growth. On a like for like basis, excluding the impact of acquisitions and the additional week, sales were flat with a decrease in sales of seasonal products and celebration cakes offsetting increases in sales of branded small cakes (particularly WeightWatchers and Thorntons).
The cake market as a whole grew by 3% in terms of value year on year with a corresponding 3% decrease in sales volume (Source: AC Nielsen). Celebration cake accounts for around one third of our Cake division's turnover and sales in this sector of the cake market were flat year on year for the period to 31 December 2008.
As stated previously, we have invested significantly in our customers' promotional activity in order to support their retailer brand offering and drive growth in sales of products under our licensed brands with an increase in investment of £1 million versus the corresponding period last year. Sales of products under the Thorntons and WeightWatchers brands have been particularly strong as a result of new product development and increased store distribution.
The Cake division in particular has been affected by continuing increases in key commodities, such as sugar and chocolate. These increases, together with higher distribution and utilities costs, have been only partially recovered by price increases secured during the period. This has resulted in the continued suppression of both gross margins and operating profits. Furthermore, we have put additional resource towards a more effective integration of the two major businesses within the Cake division, Lightbody and Memory Lane, to allow us to provide an improved service to our customers.
Bread & Free From Division
| Six months ended 31 December | ||
| 2008 | 2007 | |
| £000 | £000 | |
| Sales revenue | 15,723 | 9,340 |
| Adjusted operating profit *before allocation of head office and other central costs | 1,061 | 735 |
Sales in our Bread business increased by 21% compared to the same period last year. Like for like growth was 16% with the balancing 5% attributable to the inclusion of the additional week's trading. Waitrose remains the division's largest customer accounting for around two thirds of the sales in the period. The main driver for the growth in sales is increased trading with other major retailers.
The profitability of the Bread business has been impacted by the increased cost of raw materials with only partial recovery coming from increases in selling prices. This accounts for circa 3% of the reduction in operating profit versus the same period last year.
The operating margin has also been affected by our investment in growth with an increased level of sales and marketing expenditure and initiatives to improve the operating efficiencies within the business. We expect the benefit from these initiatives to show through in the second half of the current financial year.
Sales in our Free From businesses, United Central Bakeries and Livwell Ltd, increased by 135% compared to the corresponding period last year. The full year effect of the acquisition of the trade and assets of Yorkshire Farm Bakeries and A&P Foods in April 2008, to form Livwell Ltd, accounts for the majority of the growth. Like for like sales growth, excluding the additional week's trading and the impact of Livwell, was 23%.
The like for like sales growth has resulted from the launch of new products into the Free From market, including jam doughnuts and crumpets, together with increased distribution of existing products. We have some new product development in the pipeline but expect future growth to come mainly from further increases in distribution of our existing range.
Debt and Bank Facilities
The Group's total net debt as at 31 December 2008 was £42.9 million including net borrowings from HSBC Bank Plc and loan notes. This total included a net bank overdraft of £8.9 million against a maximum overdraft facility of £12.5 million.
In addition to this, the Group also has £6.0 million deferred consideration payable in respect of the acquisitions of Anthony Alan Foods Ltd, Yorkshire Farm Bakeries and A&P Foods.
Having reviewed the Group's existing facility with HSBC Bank Plc in light of their expectations with regard to future trading, the Directors determined that the existing repayment profile and covenant suite was no longer appropriate and we approached HSBC Bank Plc with a view to revising it to something more suitable for the business going forward. This process is now complete and the revised facility will take effect from 26 March 2009.
The key features of the revised facility, totalling £49 million, are as follows:-
There have been some movement in the interest rate margins on this revised facility and the two new term loans are linked to LIBOR. The margins on the remaining items under the facility are linked to the base rate. The impact of these changes on our effective interest rate is to increase it by 1.1%.
The Directors are pleased to have the continued support of HSBC Bank Plc and are confident that this revised facility provides an appropriate level of headroom and flexibility in what remains an uncertain economic environment.
Current Trading and Outlook
Current trading for the first eight weeks since the half year is in line with expectations, with revenue growth of 10% in absolute terms and 5% on a like for like basis, after eliminating the impact of Livwell Ltd. Over these eight weeks, sales have increased by 4% in our Cake division, by 14% in our Free From businesses and by 6% in our Bread business. As anticipated, growth has slowed in our Bread business as a result of the Hot Cross Bun trade and Easter coming later this year than last.
January is always a tough trading month for the Group with cake sales generally slow to pick up after Christmas. During this time we tend to have an increased level of promotional activity to fill capacity gaps where appropriate and this year was no different. The requirement for promotions is ongoing but we are managing our customers' demands to protect our profitability as much as possible.
We anticipate that our profitability in the second half of the year will be better than the first half. We will have the positive impact of the Hot Cross Bun trade within our Bread business and we expect to realise some benefit from our operational efficiency initiatives. The business' expectations for the full year are in line with our previous guidance.
The trading environment remains difficult but we are confident that, through appropriate investment and more effective integration of our subsidiaries, we are becoming a stronger business better able to deal with the challenges we currently face and well set to take advantage of the opportunities that will come along in the future.
Consolidated Income Statement
| Unaudited six months ended 31 December 2008 | Unaudited six months ended 31 December 2007 | Audited year ended 30 June 2008 | |||||
| £'000 | £'000 | £'000 | |||||
| Notes | |||||||
| Revenue | 92,052 | 82,755 | 168,988 | ||||
| Cost of sales | (58,431) | (53,071) | (107,721) | ||||
| Adjusted gross profit | 33,621 | 29,684 | 61,267 | ||||
| Distribution expenses | (5,824) | (4,746) | (10,046) | ||||
| Administrative expenses | (24,533) | (20,396) | (40,770) | ||||
| Other income | 3 | - | |||||
| Reorganisation administration expenses | 3 | - | - | - | |||
| Adjusted results from operating activities | 3,264 | 4,542 | 10,451 | ||||
| Financial income | - | - | - | ||||
| Financial expenses | 4 | (1,420) | (1,216) | (2,717) | |||
| Net financing expense | (1,420) | (1,216) | (2,717) | ||||
| Adjusted profit before taxation | 1,844 | 3,326 | 7,734 | ||||
| Taxation | (483) | (996) | (2,090) | ||||
| Adjusted profit after taxation | 1,361 | 2,330 | 5,644 | ||||
| Significant non-recurring items | 3 | (1,004) | (1,907) | ||||
| Share options charge | 2 | (119) | (58) | (194) | |||
| Defined benefit pension scheme | 6 | - | - | 337 | |||
| Movement in fair value of interest rate swaps | 4 | (1,390) | (463) | (157) | |||
| Fair value adjustments relating to acquisitions | 4 | (129) | (194) | (747) | |||
| Taxation relating to above items | 425 | 501 | 1,061 | ||||
| Net adjustment | (1,213) | (1,218) | (1,607) | ||||
| Profit after taxation | 148 | 1,112 | 4,037 | ||||
| Profit attributable to: | |||||||
| Equity holders of the company | 46 | 1,035 | 3,850 | ||||
| Minority interest | 102 | 77 | 187 | ||||
| 148 | 1,112 | 4,037 | |||||
Consolidated Balance Sheet
| Unaudited | Unaudited | Audited | ||||
| 31 December | 31 December | 30 June | ||||
| 2008 | 2007 | 2008 | ||||
| Notes | £000 | £000 | £000 | |||
| Non-current assets | ||||||
| Goodwill | 60,382 | 54,795 | 60,382 | |||
| Property, plant & equipment | 25,384 | 22,901 | 24,642 | |||
| Other financial assets | 25 | 25 | 25 | |||
| Pension scheme surplus | 6 | 177 | 2,522 | 177 | ||
| 85,968 | 80,243 | 85,226 | ||||
| Current assets | ||||||
| Inventories | 5,056 | 5,569 | 5,110 | |||
| Trade and other receivables | 26,850 | 29,910 | 26,114 | |||
| Other financial assets - interest rate swaps | - | - | 292 | |||
| 31,906 | 35,479 | 31,516 | ||||
| Total assets | 117,874 | 115,722 | 116,742 | |||
| Current liabilities | ||||||
| Bank overdraft | 7 | (8,947) | (7,022) | (5,965) | ||
| Other interest bearing loans and borrowings | 7 | (6,948) | (6,800) | (6,810) | ||
| Trade and other payables | (27,145) | (28,245) | (25,578) | |||
| Provisions | (749) | (843) | (857) | |||
| Deferred purchase consideration | 8 | (815) | - | (705) | ||
| Deferred contingent purchase consideration | 8 | (2,170) | (486) | - | ||
| Other financial liabilities - interest rate swaps | (1,098) | (14) | - | |||
| Current tax liabilities | (473) | (1,064) | (100) | |||
| (48,345) | (44,474) | (40,015) | ||||
| Non-current liabilities | ||||||
| Other interest-bearing loans and borrowings | 7 | (27,037) | (29,278) | (30,937) | ||
| Provisions and other liabilities | (467) | - | (525) | |||
| Deferred purchase consideration | 8 | (2,727) | - | (3,050) | ||
| Deferred contingent purchase consideration | 8 | - | (2,545) | (2,103) | ||
| Deferred tax liabilities | (1,144) | (1,860) | (1,571) | |||
| (31,375) | (33,683) | (38,186) | ||||
| Total liabilities | (79,720) | (78,157) | (78,201) | |||
| Net assets | 38,154 | 37,565 | 38,541 | |||
| Equity attributable to equity holders of the parent | ||||||
| Share capital | 514 | 514 | 514 | |||
| Share premium account | 26,680 | 26,679 | 26,680 | |||
| Capital redemption reserve | 578 | 578 | 578 | |||
| Retained earnings | 10,095 | 9,680 | 10,584 | |||
| Total shareholders' equity | 37,867 | 37,451 | 38,356 | |||
| Minority interest | 287 | 114 | 185 | |||
| Total equity | 38,154 | 37,565 | 38,541 | |||
Consolidated Cash Flow Statement
| Unaudited six months ended | Unaudited six months ended | Audited year ended | |||||
| 31 December 2008 | 31 December 2007 | 30 June 2008 | |||||
| Note | £000 | £'000 | £'000 | ||||
| Cash flows from operating activities | |||||||
| Profit for the year | 148 | 1,112 | 4,037 | ||||
| Adjustments for: | |||||||
| Taxation | 58 | 495 | 1,029 | ||||
| Net finance expenses | 2,939 | 1,873 | 2,890 | ||||
| Depreciation | 1,407 | 1,308 | 2,735 | ||||
| Release of government grant | - | (45) | (64) | ||||
| Profit on disposal of plant and equipment | 1 | - | (182) | ||||
| Reorganisation expenses | - | 460 | 525 | ||||
| Share options charge | 119 | 58 | 194 | ||||
| Current service cost element of pension scheme | 179 | 135 | 355 | ||||
| Contributions to employer by pension scheme | (179) | (135) | (227) | ||||
| Fair value adjustment for inventory revaluation on acquisition of subsidiaries | - | - | 266 | ||||
| Operating profit before changes in working capital | 4,672 | 5,261 | 11,558 | ||||
| Changes in working capital | |||||||
| Decrease/(increase) in inventories | 53 | (1,583) | (606) | ||||
| (Increase)/decrease in trade and other receivables | (735) | (4,969) | 678 | ||||
| Increase/(decrease) in trade and other payables | 1,796 | 2,240 | (1,219) | ||||
| Cash generated from operations | 5,786 | 949 | 10,411 | ||||
| Interest paid | (1,815) | (833) | (2,310) | ||||
| Income taxes paid | (111) | (603) | (2,167) | ||||
| Net cash generated / (used) from operating activities | 3,860 | (487) | 5,934 | ||||
| Cash Flows from investing activities | |||||||
| Purchase of property, plant & equipment | (2,157) | (1,324) | (2,551) | ||||
| Proceeds from sale of property, plant and equipment | 6 | - | - | ||||
| Proceeds of insurance claim on property, plant and equipment | - | - | 185 | ||||
| Purchase of subsidiary companies | (275) | (11,378) | (17,400) | ||||
| Net cash used in investing activities | (2,426) | (12,702) | (19,766) | ||||
| Cash flows from financing activities | |||||||
| Drawdown of bank loans | - | 9,800 | 14,600 | ||||
| Repayment of bank loans | (4,015) | (681) | (2,992) | ||||
| Repayment of loan notes | - | (545) | (819) | ||||
| Drawdown of asset finance facilities | 855 | 2,184 | 2,245 | ||||
| Repayment of asset finance liabilities | (601) | (489) | (1,096) | ||||
| Issue of ordinary share capital | - | 103 | 104 | ||||
| Equity dividend paid | (655) | (1,029) | (1,029) | ||||
| Minority interest dividend paid | - | - | (39) | ||||
| Net cash generated by financing activities | (4,416) | 9,343 | 10,974 | ||||
| Net decrease in cash and cash equivalents | (2,982) | (3,846) | (2,858) | ||||
| Opening cash and cash equivalents | (5,965) | (3,176) | (3,176) | ||||
| Effect of exchange rate fluctuation | - | - | 69 | ||||
| Cash and cash equivalents at end of the period | (8,947) | (7,022) | (5,965) |
Statement of Recognised Income and Expense
| Unaudited six months ended 31 December 2008 | Unaudited six months ended 31 December 2007 | Audited year ended 30 June 2008 | ||||
| £000 | £000 | £000 | ||||
| Actuarial losses on defined benefit schemes | - | - | (2,682) | |||
| Movement in deferred taxation on pension scheme asset | - | - | 801 | |||
| Foreign exchange translation differences | - | - | (35) | |||
| Movement in deferred taxation on share based payments | - | - | (227) | |||
| Net expense recognised directly in equity | - | - | (2,143) | |||
| Profit for the period | 148 | 1,112 | 4,037 | |||
| Total recognised income for the period | 148 | 1,112 | 1,894 |
| Attributable to: | ||||||
| Minority interest | 102 | 77 | 187 | |||
| Profit for the period | 46 | 1,035 | 1,707 | |||
| Total recognised income for the period | 148 | 1,112 | 1,894 |
Notes:
| 1. BASIS OF PREPARATION Finsbury Food Group Plc adopted International Financial Reporting Standards (IFRS) with effect from 1 July 2007. This interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs at 31 December 2008. The interim report, which is unaudited, does not constitute statutory accounts within the meaning of section 240(5) of the Companies Act 1985 (as amended). The comparative figures for the financial year ended 30 June 2008 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 237(2) or (3) of the Companies Act 1985. | |||||||||||||||||||||||||||||
| 2. SHARE BASED PAYMENTS During the six months to 31 December 2008 no options were granted. The comparative estimated fair values of options granted for the six months to 31 December 2007 and for the year ended 30 June 2008 were £388,000 and £581,000 respectively. Administration costs include a charge of £119,000 for the six months to 31 December 2008. The comparative charges for the six months to 31 December 2007 and for the year ended 30 June 2008 were £58,000 and £194,000 respectively. 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 the relocation and integration of the California Cake business, integration of Anthony Alan Foods Ltd and Livwell Ltd. and the operating loss and closure costs associated with the Lightbody Group subsidiary in the Czech Republic. Administration expenses represent the fees payable to KPMG LLP for assistance in submission of a claim to the Inland Revenue for research and development tax relief covering the period 1 July 2002 to 30 June 2007. Other income relates to the difference between the insurance proceeds received and the net book value of the assets destroyed by the fire at United Central Bakeries in October 2006. The insurance proceeds equalled the cost of replacing the assets.
|
| 4. FINANCE INCOME AND EXPENSES
The Group has entered into four interest rate swap arrangements to hedge its risks associated with interest rate fluctuations: £5.0m for five years from 18 November 2005 (fixed) £5.0m over five years from 18 November 2005 (reducing to nil over five years) £11.0m over five years from 23 February 2007 (reducing to £3.5m over five years) £5.0m for five years from 1 May 2008 (fixed) 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 £1,390,000 (2008: £463,000) as indicated above. This charge represents a movement of 2.3% in the weighted average market rate payable for similar contracts from 5.3% at 31 December 2007 to 3.0% at 31 December 2008. In February 2007, the Group acquired the Lightbody Group Limited and the deferred element of the consideration payable of £9.5m was discounted accordingly. This deferred consideration was paid in September 2007. The charge in the six months to 31 December 2007 and to year ended 30 June 2008 was £130,000. In October 2007, the Group acquired Anthony Alan Foods Limited and the deferred element of the consideration of £3.4m was discounted accordingly. The discounted value of this deferred consideration was re-assessed at 31 December 2007 resulting in a reduction of the deferred consideration to £2.3m. The discount charge to the income statement for the six months to 31 December 2008 was £67,000 (December 2007: £64,000 and June 2008: £128,000). 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 six months ended 31 December 2008 of £62,000 (December 2007: nil and June 2008: £223,000). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5. EARNINGS PER ORDINARY SHARE 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 51,448,466 (December 2007: 51,272,520 and June 2008: 51,359,770). Adjusted earnings per share has also been calculated as, in the opinion of the Directors, 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 Anthony Alan Foods Limited 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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| 6. PENSION SCHEMES A number of companies within the Group operate defined contribution pension schemes with one business, Memory Lane Cakes Limited, operating a defined benefit scheme. The amounts in the Financial Statements for the period ended 31 December 2008 relating to this defined benefit pension scheme are based on a full actuarial valuation dated 31 December 2007, which was updated to 30 June 2008. We have not reflected changes in the valuation of the scheme since the update at 30 June 2008 - this is consistent with our approach for previous year's interim results. Indications from actuaries at the 31 December 2008 show an uplift in the surplus relating to the defined benefit scheme. This is because the fall in asset values is more than offset by the fall in the assumed rate of inflation (and corresponding fall in the assumed rate of future salary increases). The assumptions used for this update have been derived on a basis consistent with that used for the disclosures at 30 June 2008. |
| 7. ANALYSIS OF NET DEBT
8. ANALYSIS OF DEFERRED CONSIDERATION
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Advisers
| Secretaries | Auditors | ||||||||
| City Group Plc | KPMG Audit Plc | ||||||||
| 30 City Road | Chartered Accountants | ||||||||
| London EC1Y 2AG Tel: 020 7448 8950 | Marlborough House Fitzalan Court Fitzalan Road Cardiff | ||||||||
| Registered Office Maes-y-coed Road Cardiff CF14 4XR |
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| Registered Number | |||||||||
| 204368 | |||||||||