TOT.L Regulatory News (TOT)

•

Revenue at €2.53 billion (i) down 2.8% on prior year

•

Profit before tax of €34.4m is up 2.3% on prior year

•

Adjusted EPS (ii) up 5.8% to 7.24 cent per share

•

Adjusted EBITDA (iii) down 4.2% to €59.7m

•

Final dividend of 1.35 cent; total 2011 dividend of 1.89 cent up 6.0%

(i), (ii) and (iii)

as defined overleaf

"Total Produce has delivered a solid performance in 2011 with a 5.8% increase in adjusted earnings per share to 7.24 cent per share. The Group has performed satisfactorily despite challenging conditions in certain markets due to the prolonged impact of the EHEC scare in May 2011.

The Group was active in concluding a number of new acquisitions primarily in the second half of the year for a total investment of almost €20m including increasing its shareholding in Capespan Group Limited, the leading South African fresh produce company.

The Group is also pleased to propose an increase of 8.6% in its final dividend to 1.35 cent per share. This brings the full year dividend for 2011 to 1.89 cent per share, representing an increase of 6% on 2010. With the continued benefit of a good geographic spread of activities across Europe and the full year impact of acquisitions completed in second half of 2011, the Group is targeting adjusted EPS for 2012 in the range of 7.0 to 8.0 cent per share".

6 March 2012

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.

TOTAL PRODUCE PLC PRELIMINARY RESULTS FOR THE

 YEAR ENDED 31 DECEMBER 2011

2011

€'million

2010

€'million

% change

Revenue, including share of joint ventures and associates

2,527

2,600

-2.8%

Group revenue

2,284

2,343

-2.5%

Adjusted EBITDA (iii)  

59.7

62.4 *

-4.2%

Adjusted EBITA (iii)

45.0

47.8

-6.0%

Operating profit

39.1

37.0

+5.6%

Profit before tax

34.4

33.6

+2.3%

Euro

cent

Euro

cent

% change

Adjusted earnings per share (ii)  

7.24

6.84

+5.8%

Basic and diluted earnings per share

7.11

5.25

+35.4%

Total dividend per share

1.89

1.783

+6.0%

(i)

includes the Group's share of revenue of joint ventures and associates

(ii)

excludes exceptional items, acquisition related costs, amortisation of intangible assets and related tax

(iii)

excludes exceptional items, acquisition related costs and amortisation of intangible assets

*

2010 re-presented to treat the Group's share of joint ventures' and associates' depreciation within the adjusted EBITDA calculation

Summary Results

Total Produce (the 'Group') announces adjusted earnings per share (1) growth of 5.8% to 7.24 cent for the year ended 31 December 2011.

Revenue of €2.53 billion represents a 2.8% decrease on the prior year. Adjusted EBITA (2) for the year was €45.0m, which represented a 6.0% decrease on the €47.8m recorded in 2010. The result for the year was satisfactory allowing for the impact of the unusual trading conditions for the Group's Fresh Produce division particularly in Continental and Eastern Europe from late May onwards due to the e-coli ('EHEC') scare. The effects lasted longer than anticipated with the market slow to recover. The Group has benefited from currency translation and the positive contribution of acquisitions made in the second half of the year.

Exceptional items in the year amounted to a net gain of €2.7m before tax (2010: net charge of €2.3m), including gains on the disposal of a joint venture, pension curtailments and revaluation gains reclassified to the income statement arising on the reclassification of an available-for-sale financial asset to an associate investment. These gains were partly offset by property revaluation charges. An analysis of these items is set out in Note 5 of the accompanying financial information.

Operating profit for 2011 after exceptional items amounted to €39.1m an increase of 5.6% on 2010, with profit before tax increasing 2.3% to €34.4m.

The Group invested almost €20m mainly in the second half of the year in additional business interests. The Group has increased its effective shareholding in Capespan Group Limited ("Capespan South Africa"), the leading South African fresh produce company from 15.6% to 20.2% and accordingly has equity accounted for the investment in this company as an associate from July 2011 onwards. In its Fresh Produce Division, the Group has invested in two new joint venture interests along with a number of bolt-on acquisitions. In the Consumer Goods and Healthfoods Distribution division, two new business interests were acquired.

In May 2011, the Group sold its 40% joint venture investment in a South African farm investment company to Capespan South Africa for cash proceeds of €4.2m (refer to Note 5 of the accompanying financial information).

Net debt at 31 December 2011 was €75.6m (2010: €47.9m) and represents 1.3 times adjusted EBITDA.

The Board recommends an increase of 8.6% in the final dividend to 1.35 cent per share which together with the interim dividend of 0.54 cent per share, brings the total dividend to 1.89 cent per share, an increase of 6.0% on 2010.

Operating Review

The table below details a segmental breakdown of the Group's revenue and adjusted EBITA for the year. Segment performance is evaluated based on revenue and adjusted EBITA.

2011

 2010

Segmental revenue

€'000

Adjusted EBITA

€'000

Segmental revenue

€'000

Adjusted EBITA

€'000

Eurozone Fresh Produce

1,205,234

19,826

1,282,367

27,947

Scandinavian Fresh Produce

595,340

16,441

602,360

16,384

UK Fresh Produce

485,414

5,871

508,261

3,960

Other Fresh Produce

170,989

4,489

158,979

3,256

Inter-segment revenue

(29,729)

-

(33,416)

-

Total Fresh Produce

2,427,248

46,627

2,518,551

51,547

Consumer Goods and Healthfoods Distribution

99,329

1,213

81,909

(598)*

Unallocated costs

-

(2,881)

-

(3,118)

Third party revenue and adjusted EBITA

2,526,577

44,959

2,600,460

47,831

Fresh Produce Division

The Group's Fresh Produce division is involved in the growing, sourcing, transporting, importing, packaging, marketing and distribution of hundreds of lines of fresh fruits, vegetables and flowers. This division is split into four distinct reporting segments.

Revenue in this division decreased by 3.6% in 2011 to €2,427m with low single digit percentage decreases in both volumes and average prices. Adjusted EBITA in the division is down 9.5% from €51.5m to €46.6m. Net adjusted EBITA margins of 1.92% were down from prior year margins of 2.05%.

The results for the year were impacted by difficult trading conditions particularly in Continental and Eastern Europe. This was due primarily to the EHEC scare which had a negative impact on the European fresh produce industry from late May onwards. The German authorities incorrectly implicated certain salad lines as the source of EHEC causing a significant adverse effect on both consumption and prices of salads and fresh produce in general. The effects lasted longer than anticipated with the market slow to recover. This had a negative impact on the Group's fresh produce business and a lowering of general average prices.

On a positive note, the additional investment in the second half of the year in Capespan South Africa and the resulting treatment of this investment as an associate company from July 2011 onwards positively contributed to the result of the Fresh Produce division. In addition, the reported results in 2011 benefited from the strength of the average Swedish Krona and Czech Koruna exchange rates against the Euro, although this was partly offset by the weaker average Sterling rate.

The overall outturn of the Fresh Produce division was satisfactory having regard to the exceptional trading conditions in the year with the Group benefiting from its broad base of operations.

Eurozone Fresh Produce

Revenue in this division decreased by 6% to €1,205m mainly due to volumes decreases. Strong average price increases in the first half of the year were offset by a sharp decrease in average prices in the second half of the year in Continental Europe. Adjusted EBITA decreased €8.1m to €19.8m reflected in the lowering of margin from 2.18% to 1.64%. The performance of the division in 2011 was impacted by difficult trading conditions particularly due to the aforementioned EHEC issue. By comparison, the results in 2010 benefited from the particularly strong market conditions for salad lines in the Netherlands.

Scandinavian Fresh Produce

Reported revenue in the Scandinavian division decreased by just over 1% to €595m. The reported revenue was assisted by the strengthening of the Swedish Krona against the Euro in 2011 but was offset by low single digit percentage decreases in both volume and average prices. Adjusted EBITA is flat year on year with the reorganisational costs incurred in completing the move to the new state-of-the-art distribution facility in Sweden offset to a large extent by the benefit of currency translation. Net adjusted EBITA margins of 2.76% are slightly up on the margins of 2.72% in 2010.

UK Fresh Produce

Reported revenue in the UK Division decreased by 4.5% to €485m. The reported results have been adversely impacted by the weakening of the average Sterling rate in the year. Volumes were in line with prior year with a marginal decrease in average prices. Adjusted EBITA for the division is up €1.9m to €5.9m in 2011 due to improved trading conditions and lower rationalisation costs year-on-year. Trading in 2010 was challenging with unusual and heavy snowfalls affecting trading conditions. As a result net EBITA margins of 1.2% are up from the margin of 0.8% in 2010.

Other Fresh Produce

This division comprises a number of fresh produce businesses in Eastern Europe, India and South Africa. The Group has increased its shareholding in Capespan South Africa from a 15.6% interest to 20.2% and accordingly has accounted for its investment as an associate from July 2011 onwards recording its share of revenue and after tax profits. In addition, the result for the year includes the contribution of the South African farm activities up to the date of its disposal in May 2011.

Revenue in this division has increased by 8% to €171m with adjusted EBITA increasing €1.2m to €4.5m mainly due to the first time contribution of Capespan South Africa, partly offset by a decrease in revenue in Eastern Europe due to decreased volumes and prices. The temporary closure of the Russian borders to imports from Europe as a consequence of EHEC exasperated the oversupply and lowering of average prices of fresh produce in Eastern Europe.

Consumer Goods and Healthfoods Distribution Division

The Consumer Goods and Healthfoods division is a full service distribution and marketing partner to the grocery, pharmacy, optical, healthfoods (including vitamins, minerals and supplements) and other sectors. This segment distributes to retail and wholesale outlets in Ireland and the United Kingdom.

Revenue in this division was up 21% to €99m. The division recorded an EBITA of €1.2m compared to a loss of €0.6m in 2010. Included in the 2010 results were rationalisation costs of €0.5m. The results for the year were assisted by the effect year-on-year of rationalisation costs, some new business and by the positive contribution of acquisitions made in this division in the second half of 2011.

Financial Review

Net financial expense

Net financial expense for the year was €4.7m compared to €3.4m in 2010. The average interest rate paid by the Group on its borrowings has increased due to higher average net debt in the year, higher margins on Group facilities and increases in central bank rates, particularly the Swedish central bank rate. In addition, the strength of the Swedish Krona led to higher reported interest costs on translation to Euro. The Group's share of the net financial expense in its joint ventures and associates was €0.5m compared to €1.2m in 2010. Net interest cover for the year was 9.5 times based on adjusted EBITA.

Profit before tax

Profit before tax increased 2.3% in the year to €34.4m. Excluding exceptional items and amortisation, adjusted profit before tax (3) decreased by 8.1% to €39.7m.

Taxation

The tax charge for the year including share of joint ventures' and associates' tax and before non-trading items, as set out in Note 6 of the accompanying financial information, was €10.4m (2010: €11.8m) representing an effective tax rate of 26.2% (2010: 27.4%).

Exceptional items

Exceptional items in the year amounted to a net gain before tax of €2.7m (2010: net charge of €2.3m). These include gains on the disposal of a joint venture, pension curtailments and revaluation gains reclassified to the income statement arising on the reclassification of a financial asset to an associate investment. These gains were partly offset by property revaluation charges. An analysis of these items is set out in Note 5 of the accompanying financial information.

Non-controlling interest

The non-controlling interest's share of after tax profits was €4.3m (2010: €6.9m). The decrease on prior year is due to lower after tax profits in a number of the Group's non-wholly owned subsidiaries in Continental and Eastern Europe.

Adjusted and basic earnings per share

Adjusted earnings per share of 7.24 cent in 2011 represents an increase of 5.8% on 2010. Basic earnings per share amounted to 7.11 cent (2010: 5.25 cent). The growth in earnings per share was assisted by the buyback of 22 million shares in November 2010 which reduced the number of shares in issue to 330 million in 2011 compared to an average of 350 million in 2010.

Net debt and cash flow

Net debt during the year increased from €47.9m to €75.6m. Net debt to adjusted EBITDA is 1.3 times and interest is covered 9.5 times by adjusted EBITA. At 31 December 2011, the Group had available cash balances of €90.1m and interest bearing borrowings (including overdrafts) of €165.7m. Post year-end, on 9 January 2012, the Group received €8.5m in cash as part of the consideration from the disposal of a 50% interest in Capespan International Holdings Limited. More detail is provided below.

The Group generated operating cash flows of €31.2m in 2011 (2010: €39.4m) before working capital movements. The decrease on prior year was due to lower profits and higher interest and tax payments. There were €7.7m of working capital and other outflows in the year. By comparison in 2010, there were higher than normal inflows of €7.0m in working capital. Cash outflows on maintenance capital expenditure, net of disposals, were €7.5m (2010: €6.1m). Dividend payments to non-controlling interests were €4.9m (2010: €5.0m).

Primarily as a result of lower profits, working capital movements and higher capital expenditure, free cash flow generated by the Group decreased from €37.2m in 2010 to €12.9m in 2011. Free cash flow is the funds available after outflows relating to maintenance capital expenditure and dividends to non-controlling shareholders but before acquisition expenditure, development capital expenditure, share buy-backs and the payment of dividends to equity shareholders.

Cash outflows on acquisitions and deferred consideration payments amounted to €29.1m (2010: €7.4m). The Group made payments of €7.3m (2010: €4.6m) relating to development capital expenditure which was primarily related to the construction of an enlarged distribution facility in Sweden. The Group received €4.2m in cash proceeds from the sale of its South African farm investment company. The Group distributed €5.9m (2010: €5.9m) in dividends to equity shareholders. There was an adverse net impact on net debt of €1.2m (2010: €4.0m) on translation of foreign currency denominated net debt to Euro.

During the year, the Group has renewed a number of its term borrowing facilities extending the Group's net debt maturity profile which further increases the Group's capacity to finance future expansion.

2011

€'million

2010

€'million

Adjusted EBITDA *

59.7

62.4

Deduct adjusted EBITDA of joint ventures and associates *

(7.5)

(6.5)

Net interest and tax paid

(16.5)

(13.2)

Other

(4.5)

(3.3)

Operating cash flows before working capital movements

31.2

39.4

Working capital and other movements

(7.7)

7.0

Operating cash flows

23.5

46.4

Maintenance capital expenditure net of disposal proceeds

(7.5)

(6.1)

Dividends received from joint ventures and associates

1.8

1.9

Dividends paid to non-controlling interests

(4.9)

(5.0)

Free cash flow

12.9

37.2

Acquisition (subsidiaries, JVs' & associates', non-controlling interests)

(15.1)

(2.9)

Deferred consideration payments and other

(14.0)

(4.5)

Development capital expenditure

(7.3)

(4.6)

Disposal of a joint venture interest

4.2

-

Dividends paid to equity shareholders

(5.9)

(5.9)

Purchase of own shares

-

(8.7)

Total cash flow

(25.2)

10.6

Net debt at beginning of year

(47.9)

(50.6)

Increase in finance leases

(1.3)

(3.9)

Foreign currency translation

(1.2)

(4.0)

Net debt at end of year

(75.6)

(47.9)

Shareholders' equity

The balance sheet has strengthened in the year with shareholders' equity increasing by €8.1m to €176.7m. The increase was primarily due to profits in the year of €23.5m offset by losses of €9.5m recognised directly in the statement of other comprehensive income attributable to equity shareholders. These included actuarial losses on employee defined benefit pension schemes (net of deferred tax) of €9.2m. During 2011, the Group distributed €5.9m in dividends to equity shareholders of the parent.

Defined benefit pension obligations

The net liability in the Group's defined benefit pension schemes (net of deferred tax) has increased to €14.8m at 31 December 2011 from €8.8m at 31 December 2010. The increase in the liability is due primarily to the decrease in the discount rates underlying the calculation of the present value of scheme obligations and lower than expected returns on scheme assets. Over the past three years the Group has modified the accruing benefits under the scheme in order to limit the exposure of the actuarial valuation of the liabilities. Post year-end, with the improvement of global equity markets, scheme assets have improved by approximately €5m which will reduce the pension liability.

Development activity

The Group invested €14.8m in capital expenditure including development expenditure which mainly comprised the expansion of the Group's state-of-the-art facilities in Sweden. Deferred consideration payments of €14.1m were made during the year in respect of previous acquisitions on achievement on profit targets. Further, the Group invested €19.9m in new subsidiaries and joint venture and associate interests.

Primarily during the second half of the year the Group invested €7.3m in new and existing joint venture and associate interests in its Fresh Produce division. This included the investment from July onwards which increased the Group's shareholding in Capespan South Africa to an effective interest of 20.2% at 31 December 2011 (2010: 15.6%). In September and December 2011, the Group invested in two new joint ventures within its Fresh Produce divisions in the UK and Scandinavia. During the year the Group also made further investments in existing joint venture interests.

The Group invested €12.6m (net of cash acquired) in a number of bolt-on acquisitions primarily in the second half of the year within both its Fresh Produce division and Consumer Goods and Healthfoods Distribution division. The investments include estimated deferred consideration of €4.7m payable on achievement of future profit targets. These acquisitions will complement existing business interests in these divisions.

In May 2011, the Group sold its 40% joint venture interest in a South African farm investment company to Capespan South Africa for cash proceeds of €4.2m. As noted in Note 5 of the accompanying financial information a profit of €1.6m was recognised on this sale and disclosed as an exceptional item in the income statement.

On 20 December 2011, the Group announced that it had entered into an agreement to acquire a 50% shareholding in Frankort & Koning Beheer Venlo BV and subsidiaries ("Frankort & Koning") for consideration of up to €15.0m. Headquartered in Venlo, the Netherlands, Frankort & Koning have operations principally in the Netherlands, Germany and Poland. An initial consideration of €6.0m will be paid on completion with additional consideration of up to €9.0m becoming payable in several tranches over the next number of years if certain profit targets are met. The transaction was subject to the normal regulatory clearances which were received on 5 March 2012.

Post year-end, on 9 January 2012, the Group announced the completion of a deal to sell its 50% joint venture interest in the European fruit distribution business of Capespan International Holdings Limited ("Capespan Europe") to Capespan South Africa for a total consideration of €13.0m satisfied by an exchange of an additional 20 million shares in Capespan South Africa and €8.5m in cash. This transaction results in the Group increasing its effective interest in Capespan South Africa to 25.3% from 20.2% at 31 December 2011. Capespan South Africa and Total Produce both previously owned 50% each of Capespan Europe. On the Group balance sheet at 31 December 2011 the carrying value of this investment was classified as a non-current asset held for sale.

The Group continues to actively pursue further investment opportunities in both new and existing markets.

Share buyback

Under the authority granted at the AGM in 2011, the Group is permitted to purchase up to 10% of its issued share capital in the market if the appropriate opportunity arises at a price which would not exceed 105% of the average price over the previous five trading days. The Group continues to consider exercising its authority should the appropriate opportunity arise. The Group will seek to renew its authority at the forthcoming AGM in May 2012.

Dividends

The Board is proposing a final dividend of 1.35 cent per share (2010: 1.243 cent), subject to approval at the forthcoming AGM. If approved, this dividend will be paid on 24 May 2012 to shareholders on the register at 27 April 2012 subject to dividend withholding tax. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 31 December 2011. The total dividend for 2011 will amount to 1.89 cent and represents an increase of 6.0% on the prior year.

Current trading and outlook

Total Produce has delivered a solid performance in 2011 with an increase of 5.8% in adjusted earnings per share to 7.24 cent per share. The Group has performed satisfactorily despite challenging conditions in certain markets due to the prolonged impact of the EHEC scare in May 2011.

The Group was active in concluding a number of new acquisitions primarily in the second half of the year for a total investment of almost €20m including increasing its shareholding in Capespan Group Limited, the leading South African fresh produce company.

The Group is also pleased to propose an increase of 8.6% in its final dividend to 1.35 cent per share bringing the full year dividend for 2011 to 1.89 cent per share, representing an increase of 6% on 2010. With the continued benefit of a good geographic spread of activities across Europe and the full year impact of acquisitions completed in second half of 2011, the Group is targeting adjusted EPS for 2012 in the range of 7.0 to 8.0 cent per share.

Carl McCann, Chairman

On behalf of the Board

6 March 2012

(1)

Adjusted earnings per share excludes exceptional items, acquisition related costs, amortisation of intangible assets and related tax. This calculation is set out in Note 7 of the accompanying preliminary financial information

(2)

Adjusted EBITA is operating profit excluding exceptional items, amortisation of intangible assets, acquisition related costs and excludes interest and tax (including the equivalent share of joint ventures and associates). This calculation is set out in Note 4 of the accompanying preliminary financial information

(3)

Adjusted profit before tax excludes exceptional items, amortisation of intangible assets, acquisition related costs and the Group's share of joint ventures' and associates' tax which, under IFRS rules, is reflected in profit before tax. This calculation is set out in Note 4 of the accompanying preliminary financial information

Copies of this announcement will be available from the Company's registered office at Charles McCann Building, Rampart Road, Dundalk, Co. Louth, Ireland and on our website at www.totalproduce.com.

Total Produce plc

Extract from the Group Income Statement

for the year ended 31 December 2011

Before

exceptional

items

2011

€'000

Exceptional items

2011

€'000

Total

2011

€'000

Before

exceptional

items

2010

€'000

Exceptional items

2010

€'000

Total

2010

€'000

Revenue, including Group share of joint ventures

and associates

2,526,577

-

2,526,577

2,600,460

-

2,600,460

Group revenue

2,284,478

-

2,284,478

2,343,124

-

2,343,124

Cost of sales

(1,964,162)

-

(1,964,162)

(2,019,550)

-

(2,019,550)

Gross profit

320,316

-

320,316

323,574

-

323,574

Operating expenses (net)

(287,346)

2,712

(284,634)

(285,930)

(2,119)

(288,049)

Share of profit/(loss) of joint ventures and associates

3,442

-

3,442

1,743

(231)

1,512

Operating profit

36,412

2,712

39,124

39,387

(2,350)

37,037

Financial income

2,097

-

2,097

1,823

-

1,823

Financial expense

(6,845)

-

(6,845)

(5,264)

-

(5,264)

Profit before tax

31,664

2,712

34,376

35,946

(2,350)

33,596

Income tax (expense)/credit

(7,298)

663

(6,635)

(8,991)

620

(8,371)

Profit for the year

24,366

3,375

27,741

26,955

(1,730)

25,225

Attributable to:

Equity holders of the parent

23,466

18,337

Non-controlling interests

4,275

6,888

27,741

25,225

Earnings per ordinary share

Basic

7.11 cent

5.25 cent

Fully diluted

7.11 cent

5.25 cent

Adjusted fully diluted

7.24 cent

6.84 cent

Total Produce plc

Extract from the Group Statement of Comprehensive Income

for the year ended 31 December 2011

2011

€'000

2010

€'000

Profit for the year

27,741

25,225

Other comprehensive income:

Foreign currency translation effects:

- foreign currency net investments - subsidiaries

2,196

13,382

- foreign currency net investments - joint ventures and associates

14

1,263

- foreign currency gains reclassified to the income statement on disposal of joint venture

(528)

-

- foreign currency borrowings

(1,380)

(7,168)

Revaluation gains on property, plant and equipment, net

1,350

436

Gains/(losses) on re-measuring available-for-sale financial assets, net

2,028

(592)

Reclassification of revaluation gains to income statement upon available-for-sale investment becoming an associate

(4,055)

-

Actuarial losses on defined benefit pension schemes

(10,883)

(6,857)

Effective portion of cash flow hedges, net

25

(16)

Deferred tax on items taken directly to other comprehensive income

1,654

1,133

Share of joint ventures' actuarial gain/(loss) on defined benefit pension scheme

80

(1,009)

Share of joint ventures' loss on re-measuring available-for-sale financial assets

-

(8)

Share of joint ventures' effective portion of cash flow hedges, net

9

30

Share of joint ventures' deferred tax on items taken directly to other comprehensive income

23

266

Other comprehensive income for the year, net of tax

(9,467)

860

Total comprehensive income for the year, net of tax

18,274

26,085

Attributable to:

Equity holders of the parent

13,926

18,804

Non-controlling interests

4,348

7,281

18,274

26,085

Total Produce plc

Extract from the Group Balance Sheet

as at 31 December 2011

Assets

2011

€'000

2010

€'000

Non-current assets

Property, plant and equipment

135,644

131,965

Investment property

10,881

13,331

Goodwill and intangible assets

152,493

140,641

Investments in joint ventures and associates

40,212

34,054

Other financial assets

647

9,704

Other receivables

4,290

3,590

Deferred tax assets

6,903

5,877

Employee benefits

-

1,231

Total non-current assets

351,070

340,393

Current assets

Inventories

39,098

41,601

Trade and other receivables

268,126

264,163

Corporation tax receivables

2,075

697

Derivative financial instruments

57

61

Cash and cash equivalents

90,087

104,486

Total current assets (excluding non-current assets classified as held for sale)

399,443

411,008

Non-current assets classified as held for sale

11,064

-

Total current assets

410,507

411,008

Total assets

761,577

751,401

Equity

Called-up share capital

3,519

3,519

Share premium

252,574

252,574

Other reserves

(116,460)

(116,114)

Retained earnings

37,066

28,621

Total equity attributable to equity holders of the parent

176,699

168,600

Non-controlling interests

60,041

57,999

Total equity

236,740

226,599

Liabilities

Non-current

Interest-bearing loans and borrowings

140,586

129,326

Deferred government grants

1,569

1,460

Other payables

2,582

3,386

Provisions

10,809

4,469

Corporation tax payable

7,754

8,110

Deferred tax liabilities

17,100

17,577

Employee benefits

18,058

12,264

Total non-current liabilities

198,458

176,592

Current

Interest-bearing loans and borrowings

25,054

23,095

Trade and other payables

295,728

306,341

Provisions

1,634

15,059

Derivative financial instruments

309

300

Corporation tax payable

3,654

3,415

Total current liabilities

326,379

348,210

Total liabilities

524,837

524,802

Total liabilities and equity

761,577

751,401

Total Produce plc

Extract from the Group Statement of Changes in Equity

for the year ended 31 December 2011

Attributable to equity holders of the parent

Non-controlling

interests

€'000

Total

equity

€'000

 Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Own shares

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

As at 1 January 2011

3,519

252,574

(6,005)

17,938

(122,521)

(8,580)

3,054

28,621

168,600

57,999

226,599

Comprehensive income

Profit for the year

-

-

-

-

-

-

-

23,466

23,466

4,275

27,741

Other comprehensive income:

Foreign currency translation effects

-

-

197

-

-

-

-

-

197

105

302

Revaluation gains on property, plant and equipment, net

-

-

-

1,398

-

-

-

-

1,398

(48)

1,350

Gains on re-measuring available-for-sale financial assets, net

-

-

-

-

-

-

2,028

-

2,028

-

2,028

Reclassification of revaluation gains to income statement upon available-for-sale investment becoming an associate

-

-

-

-

-

-

(4,055)

-

(4,055)

-

(4,055)

Actuarial losses on defined benefit pension schemes, net

-

-

-

-

-

-

-

(10,745)

(10,745)

(138)

(10,883)

Effective portion of cash flow hedges, net

-

-

-

-

-

-

14

-

14

11

25

Deferred tax on items taken directly to other comprehensive income

-

-

-

(40)

-

-

(6)

1,557

1,511

143

1,654

Share of joint ventures' actuarial gain on defined benefit pension scheme

-

-

-

-

-

-

-

80

80

-

80

Share of joint ventures' gain on re-measuring available-for-sale financial assets

-

-

-

-

-

-

-

9

9

-

9

Share of joint ventures' deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

-

23

23

-

23

Total other comprehensive income

-

-

197

1,358

-

-

(2,019)

(9,076)

(9,540)

73

(9,467)

Total comprehensive income

-

-

197

1,358

-

-

(2,019)

14,390

13,926

4,348

18,274

Transactions with equity holders of the parent

Non-controlling interests arising on acquisition

-

-

-

-

-

-

-

-

-

2,715

2,715

Buyout of non-controlling interests arising on acquisition

-

-

-

-

-

-

-

(63)

(63)

(141)

(204)

Dividends

-

-

-

-

-

-

-

(5,882)

(5,882)

(4,880)

(10,762)

Share-based payment transactions

-

-

-

-

-

-

118

-

118

-

118

Total transactions with equity holders of the parent

-

-

-

-

-

-

118

(5,945)

(5,827)

(2,306)

(8,133)

As at 31 December 2011

3,519

252,574

(5,808)

19,296

(122,521)

(8,580)

1,153

37,066

176,699

60,041

236,740

Total Produce plc

Extract from the Group Statement of Changes in Equity

for the year ended 31 December 2011 (continued)

Attributable to equity holders of the parent

Non-controlling

interests

€'000

Total

equity

€'000

 Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Own shares

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

As at 1 January 2010

3,519

252,574

(13,171)

17,797

(122,521)

-

3,637

23,353

165,188

55,771

220,959

Comprehensive income

Profit for the year

-

-

-

-

-

-

-

18,337

18,337

6,888

25,225

Other comprehensive income:

Foreign currency translation effects

-

-

7,166

-

-

-

-

-

7,166

311

7,477

Revaluation gains on property, plant and equipment, net

-

-

-

283

-

-

-

-

283

153

436

Losses on re-measuring available-for-sale financial assets, net

-

-

-

-

-

-

(592)

-

(592)

-

(592)

Actuarial losses on defined benefit pension schemes, net

-

-

-

-

-

-

-

(6,770)

(6,770)

(87)

(6,857)

Effective portion of cash flow hedges, net

-

-

-

-

-

-

(19)

-

(19)

3

(16)

Deferred tax on items taken directly to other comprehensive income

-

-

-

(142)

-

-

6

1,256

1,120

13

1,133

Share of joint ventures' actuarial loss on defined benefit pension scheme

-

-

-

-

-

-

-

(1,009)

(1,009)

-

(1,009)

Share of joint ventures' loss on re-measuring available-for-sale financial assets

-

-

-

-

-

-

-

(8)

(8)

-

(8)

Share of joint ventures' effective portion of cash flow hedges, net

-

-

-

-

-

-

-

30

30

-

30

Share of joint ventures' deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

-

266

266

-

266

Total other comprehensive income

-

-

7,166

141

-

-

(605)

(6,235)

467

393

860

Total comprehensive income

-

-

7,166

141

-

-

(605)

12,102

18,804

7,281

26,085

Transactions with equity holders of the parent

Non-controlling interests arising on acquisition

-

-

-

-

-

-

-

-

-

260

260

Buyout of non-controlling interests arising on acquisition

-

-

-

-

-

-

-

(780)

(780)

(326)

(1,106)

Contribution by non-controlling interest

-

-

-

-

-

-

-

-

-

51

51

Dividends

-

-

-

-

-

-

-

(5,947)

(5,947)

(5,038)

(10,985)

Own shares acquired

-

-

-

-

-

(8,580)

-

(107)

(8,687)

-

(8,687)

Share-based payment transactions

-

-

-

-

-

-

22

-

22

-

22

Total transactions with equity holders of the parent

-

-

-

-

-

(8,580)

22

(6,834)

(15,392)

(5,053)

(20,445)

As at 31 December 2010

3,519

252,574

(6,005)

17,938

(122,521)

(8,580)

3,054

28,621

168,600

57,999

226,599

Total Produce plc

Extract from the Group Statement of Cash Flows

for the year ended 31 December 2011

2011

€'000

2010

€'000

Net cash flows from operating activities before working capital movements (Note 12)

31,228

39,367

(Increase)/decrease in working capital

(7,747)

6,976

Net cash flows from operating activities

23,481

46,343

Investing activities

Acquisition of subsidiaries, net of cash, cash equivalents and bank overdrafts acquired

(7,973)

(1,409)

Acquisition of, and investment in, joint ventures and associates, including loans

(6,192)

(989)

Acquisition of other financial assets

(30)

-

Payments of deferred consideration

(14,086)

(4,807)

Acquisition of property, plant and equipment

(15,531)

(12,788)

Proceeds from disposal of property, plant and equipment

725

2,116

Dividends received from joint ventures and associates

1,760

1,948

Proceeds from disposal of joint ventures and associates

4,172

-

Proceeds from disposal of equity investments

-

823

Research and development expenditure capitalised

(156)

(782)

Government grants received

296

118

Net cash flows from investing activities

(37,015)

(15,770)

Financing activities

Net increase/(decrease) in borrowings

12,784

(360)

Capital element of finance lease repayments

(274)

(300)

Purchase of own shares

-

(8,687)

Dividends paid to shareholders of the parent

(5,882)

(5,947)

Acquisition of non-controlling interests

(841)

(470)

Capital contribution by non-controlling interests

-

51

Dividends paid to non-controlling interests

(4,880)

(5,038)

Net cash flows from financing activities

907

(20,751)

Net (decrease)/increase in cash and cash equivalents, including bank overdrafts

(12,627)

9,822

Cash and cash equivalents, including bank overdrafts at start of year

97,916

84,624

Effect of exchange rate fluctuations on cash held

524

3,470

Cash and cash equivalents, including bank overdrafts at end of year

85,813

97,916

Group Reconciliation of Net Debt

for the year ended 31 December 2011

2011

€'000

2010

€'000

Net (decrease) / increase in cash, cash equivalents, and bank overdrafts

(12,627)

9,822

Net (increase)/decrease in borrowings

(12,784)

360

Capital element of lease repayments

274

300

Other movements on finance leases

(1,327)

(3,879)

Foreign exchange movement

(1,154)

(3,978)

Movement in net debt

(27,618)

2,625

Net debt at beginning of year

(47,935)

(50,560)

Net debt at end of year

(75,553)

(47,935)

Total Produce plc

Selected explanatory notes for the Preliminary Results for the year ended 31 December 2011

1.

Basis of preparation

The financial information included in this preliminary results statement has been extracted from the Group's Financial Statements for the year ended 31 December 2011 and is prepared based on the accounting policies set out therein, which are consistent with those applied in the prior year. As permitted by the European Union (EU) law and in accordance with AIM/ESM rules, the Group Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU.A number of new IFRSs and interpretations of the International Financial Reporting Interpretations Committee became effective for, and have been applied in preparing, the Group Financial Statements. None of these have had any material impact on the Group's financial statements in 2011.

The financial information prepared in accordance with IFRSs as adopted by the EU included in this report do not comprise "full group accounts" within the meaning of Regulation 40(1) of the European Communities (Companies: Group Accounts) Regulations 1992 of Ireland insofar as such group accounts would have to comply with the disclosure and other requirements of those Regulations. The information included has been derived from the Group Financial Statements which have been approved by the Board of Directors on 5 March 2012. The Financial Statements will be filed with the Irish Registrar of Companies and circulated to shareholders in due course. The financial information is presented in Euro, rounded to the nearest thousand.

2.

Translation of foreign currencies

The reporting currency of the Group is Euro. Results and cashflows of foreign currency denominated operations have been translated into Euro at the average exchange rates for the period, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date. Adjustments arising on the translation of the results of foreign currency denominated operations at average rates, and on restatement of the opening net assets at closing rates, are accounted for within a separate translation reserve within equity, net of differences on related foreign currency borrowings. All other translation differences are taken to the income statement. The principal rates used in the translation of results and balance sheets into Euro were as follows:

Average rate

Closing rate

2011

2010

% change

2011

2010

% change

Pound Sterling

0.8757

0.8434

(3.8%)

0.8353

0.8568

2.5%

Swedish Krona

9.0086

9.5425

5.6%

8.899

9.0186

1.3%

Czech Koruna

24.7335

25.3886

2.6%

25.5018

25.0889

(1.6%)

Danish Kroner

7.4507

7.4471

0.0%

7.4322

7.4518

0.3%

South African Rand

10.0826

9.7165

(3.8%)

10.4802

8.875

(18.1%)

3.

Segmental Analysis

In accordance with IFRS 8 Operating Segments, the Group's reportable operating segments based on how performance is assessed and resources are allocated are as follows:

-

Eurozone Fresh Produce: This segment is an aggregation of operating segments in the Eurozone involved in the procurement and distribution of fresh produce. These operating segments have been aggregated because they have similar economic characteristics

-

Scandinavian Fresh Produce: This operating segment is involved in the procurement and distribution of fresh produce in Sweden and Denmark

-

UK Fresh Produce: This operating segment includes the Group's UK business which is involved in the procurement and distribution of fresh produce

-

Consumer Goods and Healthfoods Distribution: This division is a full service distributor and marketing partner to the grocery, pharmacy, optical, healthfoods (including vitamins, minerals and supplements) and other sectors. This segment distributes to retail and wholesale outlets in Ireland and in the United Kingdom.

A further three operating segments involved in the fresh produce business, have been identified which are combined below under 'Other Fresh Produce' as they are not individually material.

Segment performance is evaluated based on revenue and adjusted EBITA. Management believes that adjusted EBITA, while not a defined term under IFRS, gives a fair reflection of the underlying trading performance of the Group. Adjusted EBITA excludes exceptional items, amortisation of intangible assets, acquisition related costs, share of joint ventures' and associates' tax and finance expense, and is therefore measured differently from operating profit in the Group financial statements as explained and reconciled in detail below.

Finance costs, finance income, income taxes and certain corporate costs are managed on a centralised basis. These items are not allocated between operating segments for the purpose of the information presented to the Chief Operating Decision Maker and are accordingly not included in the detailed segmental analysis below.

2011

2010

Segmental

revenue

€'000

Third

party

revenue

€'000

Adjusted

EBITA

€'000

Segmental

revenue

€'000

Third

party

revenue

€'000

Adjusted

EBITA

€'000

Eurozone Fresh Produce

1,205,234

1,189,058

19,826

1,282,367

1,263,580

27,947

Scandinavian Fresh Produce

595,340

584,318

16,441

602,360

593,716

16,384

UK Fresh Produce

485,414

483,411

5,871

508,261

505,782

3,960

Other Fresh Produce

170,989

170,461

4,489

158,979

155,473

3,256

Inter - segment revenue

(29,729)

-

-

(33,416)

-

-

Total Fresh Produce

2,427,248

2,427,248

46,627

2,518,551

2,518,551

51,547

Consumer Goods and Healthfoods Distribution

99,329

99,329

1,213

81,909

81,909

(598)

Unallocated costs

-

-

(2,881)

-

-

(3,118)

Third party revenue and adjusted EBITA

2,526,577

2,526,577

44,959

2,600,460

2,600,460

47,831

All inter-segment revenue transactions are transacted at arm's length.

Reconciliation of segmental profits to operating profit

Below is a reconciliation of adjusted EBITA per management reports to operating profit and profit before tax per the Group income statement.

Note

 2011

€'000

2010

€'000

Adjusted EBITA per management reporting

44,959

47,831

Amortisation of intangible assets within subsidiaries

(i)

(5,501)

(5,252)

Acquisition related costs

(ii)

(615)

-

Share of joint ventures' and associates' amortisation

(iii)

(535)

(489)

Share of joint ventures' and associates' interest

(iii)

(507)

(1,181)

Share of joint ventures' and associates' tax

(iii)

(1,389)

(1,522)

Operating profit before exceptional items

36,412

39,387

Exceptional items

(iv)

2,712

(2,350)

Operating profit after exceptional items

39,124

37,037

Net financial expense

(v)

(4,748)

(3,441)

Profit before tax

34,376

33,596

(i)

Intangible asset amortisation is not allocated to operating segments in the Group management accounts.

(ii)

Acquisition related costs include legal fees and other professional service fees on completed acquisitions of subsidiaries. From 1 January 2010, upon adoption of IFRS 3 Business Combinations (2008) these costs no longer form part of the acquisition cost and are expensed though the income statement.

(iii)

Under IFRS, included within profit before tax is the share of joint ventures' and associates' profit after intangible assets amortisation charges, tax and interest. In the Group's management accounts, the Group share of these items is excluded from the adjusted EBITA calculation.

(iv)

Exceptional items (Note 5) are not allocated to operating segments in the management reports.

(v)

Financial income and expense is primarily managed at Group level and not allocated to individual operating segments in the management reports.

4.

Adjusted profit before tax and adjusted EBITA

For the purpose of assessing the Group's performance, Total Produce management believe that adjusted EBITA, adjusted profit before tax and adjusted earnings per share (Note 7) are the most appropriate measures of the underlying performance of the Group.

2011

€'000

2010

€'000

Profit before tax per the income statement

34,376

33,596

Adjustments

Exceptional items before share of joint venture's tax (Note 5)

(2,712)

2,455

Group share of the tax charge of joint ventures and associates

1,389

1,417

Amortisation of intangibles (including the Group's share of joint ventures and associates)

6,036

5,741

Acquisition related costs

615

-

Adjusted profit before tax

39,704

43,209

Exclude

Net financial expense - Group

4,748

3,441

Net financial expense - share of joint ventures and associates

507

1,181

Adjusted EBITA

44,959

47,831

5.

Exceptional items

2011

€'000

2010

€'000

Gains on available-for-sale financial assets reclassified from other

comprehensive income to income statement (a)

4,055

Gain on the disposal of a joint venture (b)

1,612

-

Pension curtailment gain (c)

926

-

Impairment of property, plant and equipment (d)

(1,331)

-

Change in fair value of investment property (e)

(2,550)

(2,119)

Share of joint ventures' and associates' changes in the fair value of investment property (f)

-

(336)

Total exceptional items (before joint ventures' and associates' tax)

2,712

(2,455)

Share of joint ventures' and associates' tax on fair value losses on property

-

105

Total exceptional items (after share of joint ventures' and associates' tax)

2,712

(2,350)

Tax on exceptional items

663

620

Total

3,375

(1,730)

(a)

Gains on available-for-sale financial assets reclassified from other comprehensive income to the income statement

In July 2011, as a result of increasing its shareholding, the Group commenced equity accounting for its investment in Capespan Group Limited ("Capespan South Africa"). As part of this exercise, the previously held shareholding was fair valued at this date resulting in an uplift of €2,028,000. This uplift, together with previously recognised fair value gains in the available-for-sale reserve of €2,027,000 relating to Capespan South Africa, were reclassified to the income statement resulting in an exceptional gain of €4,055,000. Refer to Note 10 for further details.

(b)

Gain on the disposal of a joint venture

In May 2011, the Group sold its 40% joint venture interest in a South African farm investment company to Capespan South Africa for cash proceeds of €4,172,000. A profit of €1,612,000 was recognised on this sale comprising the €1,084,000 difference between the sales proceeds and the joint venture's carrying value of €3,088,000 together with the reclassification of €528,000 of currency translation differences from equity to the income statement.

(c)

Pension curtailment gain

An exceptional gain of €926,000 arose during the year as a result of payments no longer being made by the Group for a number of employees who have reached the pension cap. The deferred tax charge on this exceptional gain amounted to €116,000.

(d)

Impairment of property, plant and equipment

On revaluation of the Group's properties in 2011, in addition to the net revaluation gains of €1,350,000 included in other comprehensive income, properties where the carrying value exceeded market value were identified, resulting in an impairment charge of €1,331,000 (2010: € Nil) to the income statement.

(e)

Revaluation of investment property

Fair value losses, amounting to €2,550,000 (2010: €2,119,000) have been recognised in the income statement in relation to investment property. A deferred tax credit of €779,000 (2010: credit of €620,000) was recognised in the income statement as a result of these revaluations.

(f)

Share of joint ventures' and associates' fair value losses on investment property

In 2010, the Group's share of changes in fair value of joint ventures' and associates' investment property of €336,000 was recognised in the income statement. A deferred tax credit of €105,000 was recognised in the income statement as a result. No such fair value movements were identified in 2011.

6.

Income tax

2011

€'000

2010

€'000

Income tax expense

6,635

8,371

Group share of tax charge of its joint ventures and associates netted in profit before tax

1,389

1,417

Total tax charge

8,024

9,788

Adjustments

Deferred tax on amortisation of intangible assets - subsidiaries

1,649

1,264

Share of joint ventures' and associates' deferred tax credit on amortisation of intangible assets

55

48

Net deferred tax on fair value movement on properties - subsidiaries

779

620

Net deferred tax on pension curtailment - subsidiaries

(116)

-

Share of net deferred tax on fair value movements on properties within joint ventures and associates

-

105

Tax charge on underlying activities

10,391

11,825

The total tax charge for the year amounted to €8.0m (2010: €9.8m), including the Group's share of the tax charge of its joint ventures and associates amounting to €1.4m (2010: €1.4m), which is netted in profit before tax in accordance with IFRS.

Excluding the impact of deferred tax credits related to the amortisation of intangibles and the tax effect of exceptional items, the underlying tax charge for the year was €10.4m (2010: €11.8m), equivalent to a rate of 26.2% (2010: 27.4%) when applied to the Group's adjusted profit before tax.

7.

Earnings per share

2011

€'000

2010

€'000

Profit attributable to equity holders of the parent

23,466

18,337

'000

'000

Issued ordinary shares at start of the year

329,887

351,887

Effect of own shares held - Note (a)

-

(2,351)

Weighted average number of shares for basic and adjusted earnings per share calculation

329,887

349,536

Basic and diluted earnings per share - € cent

7.11

5.25

Adjusted fully diluted earnings per share

2011

€'000

2011

 cent

per share

2010

€'000

2010

 cent

per share

Profit attributable to equity holders of the parent

23,466

7.11

18,337

5.25

Adjustments:

Exceptional items (Note 5)

(2,712)

(0.82)

2,350

0.67

Amortisation of intangible assets (including share of joint ventures and associates)

6,036

1.83

5,741

1.64

Acquisition related costs

615

0.19

Tax effect of exceptional items and amortisation charges

(2,366)

(0.72)

(1,932)

(0.55)

Non-controlling interests' impact of exceptional items, acquisition related costs, intangible asset amortisation charges and related tax

(1,148)

(0.35)

(594)

(0.17)

Adjusted fully diluted earnings

23,891

7.24

23,902

6.84

Note (a)

On 23 November 2010, the Group purchased 22,000,000 of its own shares to be held as treasury shares. In respect of these treasury shares, all rights (including voting and dividend rights) are suspended until the shares are reissued and therefore they are not included in the earnings per share calculations.

Adjusted fully diluted earnings per share is calculated to adjust for exceptional items, intangible asset amortisation, acquisition related costs, related tax charges and credits and the impact of share options with a dilutive effect.

Share options outstanding at the end of 2011 were 7,260,000 (2010: 7,310,000) and were anti-dilutive in both years. Therefore the weighted average number of shares outstanding applied in the calculation of basic and adjusted earnings per share is the same.

8.

Employee benefits

2011

€'000

2010

€'000

Net pension liability at beginning of year

(11,033)

(7,931)

Current/past service cost less net finance income recognised in income statement

(1,689)

(1,642)

Curtailment gain recognised in the income statement

926

-

Contributions to schemes

4,842

5,527

Actuarial losses recognised in other comprehensive income

(10,883)