TOT.L Regulatory News (TOT)

5 Sep 2007 07:01

Total Produce Plc05 September 2007 TOTAL PRODUCE PLC INTERIM RESULTS FOR 6 MONTHS ENDING 30TH JUNE 2007 • Sales revenue growth (incl. share of JV's) of 33% to €1,220 million • Operating profit* up 14.8% to €23.5 million • EBITDA up 13.9% to €29.8 million • Profit before tax and amortisation up 13.0% to €21.5 million. • Adjusted earnings per share ** up 18.3% to 3.62 cent • Increase of €19.7 million in shareholders funds to €167.1 million * excludes amortisation of intangible assets** excludes amortisation of intangible assets and related tax. Commenting on the results, Carl McCann, Chairman, said: "Total Produce is pleased to report satisfactory results for the first half of2007. Following the successful demerger and listing, the Company has theresources to significantly expand its business" 5 September 2007 For further information, please contact:Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030 TOTAL PRODUCE PLC INTERIM RESULTS FOR6 MONTHS ENDING 30TH JUNE 2007 2007 2006 % Change •million •million Revenue, including share of JV/Assoc 1,220 917 33.0%Group Revenue 1,071 759 41.1%EBITDA 29.8 26.2 13.9%Operating profit before amortisation 23.5 20.5 14.8%Profit before tax and amortisation 21.5 19.0 13.0%Profit before tax 19.4 17.6 10.5% Euro cent Euro centAdjusted earnings per share 3.62 3.06 18.3%Dividend per share 0.5 n/a Financial results and operating review Income Statement Revenue for the period grew by 33% to €1.22 billion, reflecting the acquisitionof Redbridge Holdings Limited and the remaining 50% of Lembcke A/S in September2006. Average prices increased circa 5% although our costs rose similarly and wehad good organic growth in some of our markets. Operating profit Group operating profit, including share of joint ventures but beforeamortisation, increased by 14.8% to €23.5 million on prior year, although netmargins were slightly lower. The Group has incurred expenses of €2.1 million todate on the rationalisation and integration programme to merge the Redbridgeacquisition with our existing operations. Rents payable to BlackrockInternational Land plc were €0.7 million higher than 2006 reflecting the fullsix month lease charge in 2007. Weather conditions were favourable to demand for our produce in Northern Europeparticularly in April and May. Sales were helped by a strong volume throughput,and a number of factors which worked well in this period, particularly incontinental Europe. There is of course no certainty in future years that volumesmight be as strong or market factors always be as positive. The challengeremains to take the long-run, low organic growth rate and add significantattractive acquisitions to meet long-term goals. Net contribution from share of joint ventures and associates was lower thanprior year due to the acquisition of the remaining 50% of Lembcke the results ofwhich are now reflected in group operating profit and not in joint ventures. Inaddition we absorbed our share of first half losses from farming projects inSouth Africa which are expected to contribute a profit for the full year. Thestart-up losses of our most recent joint venture in India with the Tata Groupare as expected. Profit before tax and amortisation was €21.5 million, an increase of 13.0% on2006 and when combined with a lower minority interest charge gives an increaseof 18.3% in adjusted earnings per share to 3.62 cent. FinanceTotal Produce plc was demerged from Fyffes plc with an agreed opening net debtof €10 million. The group has since financed the acquisition of RedbridgeHoldings Limited for €13.0 million in January 2007 and the deferredconsideration payable in respect of Everfresh group of companies of €41.7million in May 2007. This, together with seasonal working capital outflow andconsideration for bolt-on acquisitions, has given a net debt position of €79.6million at the end of June 2007. Net finance expense for the period was €2.0 million resulting in interest coverin excess of fifteen times. Shareholders' funds increased by €19.7 million to €167.1 million. The actuarialgain less deferred tax of €10 million on the group's pension schemes was due tohigher discount rates and improved investment returns. FacilitiesTwo large customised state-of-the-art fresh produce distribution centres havebeen completed this year at Sighthill, Edinburgh and Dunmurry, Belfast at costsof €7.0 million and €9.6 million respectively. These purpose-built facilitiesare designed to maximise operating efficiencies in an environmentally friendlymanner. The operational energy requirement has been minimised by the utilisationof the latest energy-efficient electrical and cooling systems, coupled with theextensive use of high grade 100% recyclable materials. The completion of these two distribution centres is part of the continuingprogramme of investment by Total Produce to expand and develop its business. Acquisitions and DevelopmentsIn January 2007, Redbridge Holdings Limited, the UK fresh produce company, wasacquired for a maximum consideration of €23 million comprising an initial cashpayment of €13 million, deferred payment of €4.5 million and an assumed pensionliability of €5.5 million (net of deferred tax). Redbridge recorded a turnover€352 million in 2006. In February 2007, a joint venture was formed with Tata to create distributionfacilities for fresh produce in India. Our initial investment of €2.25 millionwill be used to establish two state-of-the-art distribution facilities in Indiawith plans to expand across the sub-continent in due course. Wholefoods Wholesale Ltd., the leading distributor of high quality health foodsin Ireland was acquired in July 2007. Its turnover in 2006 was €18 million. These acquisitions, along with future deals will form the basis for futuregrowth in the business. DividendThe board has declared an interim dividend of €0.50 cent per share which will bepaid on 5 November 2007 to shareholders on the register on 12 October 2007 andsubject to Irish withholding tax. Current Trading and OutlookWhile the unusually poor summer weather across northern Europe has reduceddemand for some of our produce, trading since the period end has been in linewith our expectations. However, taking into account our better than expected first half performance, wehave revised upwards our year-end target for 2007 EPS growth from mid to highsingle digit. StrategyOur strategy is to grow our business organically and by acquisition. We have thefinancial resources to grow significantly by medium and larger acquisitions andwill continue to pursue our stated ambition to double turnover over the nextfive years. Carl McCann, Chairmanon behalf of the Board5 September 2007 Copies of this announcement will be posted to shareholders and are alsoavailable from the company's registered office, Charles McCann Building, RampartRoad, Dundalk, Co Louth and on our website at www.totalproduce.com. Total Produce plc Summary Group Income Statementfor the half year ended 30 June 2007 (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Revenue including share of joint ventures and associates 1,220,006 917,070 1,860,892 Group Revenue 1,070,992 758,906 1,577,056 Group operating profits before exceptional items 22,477 18,434 34,729 Share of profit of joint ventures/associates 1,018 2,034 3,381 Operating profit before exceptional items 23,495 20,468 38,110 Amortisation (2,048) (1,437) (3,063)Exceptional items - - (13,199) Operating profit 21,447 19,031 21,848Net financing expense - Group (2,042) (1,477) (2,932) Profit before tax 19,405 17,554 18,916Income tax expense (5,502) (4,086) (5,356) Profit for the period 13,903 13,468 13,560 Attributable as follows:Equity shareholders 11,168 9,740 7,060Minority interest 2,735 3,728 6,500 13,903 13,468 13,560 Earnings per share Basic 3.18 2.78 2.02Fully diluted 3.18 2.75 2.00Adjusted fully diluted 3.62 3.06 5.70 Summary Statement of Recognised Income and Expensefor the half year ended 30 June 2007 (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Movement on translation of net equity investments (1,567) 1,080 3,639Deferred tax impact of movements in revaluation reservesarising on demerger - 489 585Fair value adjustment on investments - - 1,400Effective portion of cash flow hedges (net of deferred - - (52)tax)Actuarial gain recognised on defined benefit pensionschemes 12,374 9,352 6,315Deferred tax movements related to pension schemes (2,295) (1,211) (236)Share of joint ventures actuarial loss recognised ondefined benefit pension schemes (net of deferred tax) - - (460) Net income recognised directly in equity 8,512 9,710 11,191Profit for period 13,903 13,468 13,560 Total recognised income and expense 22,415 23,178 24,751 Attributable as follows:Equity shareholders 19,601 19,288 17,838Minority interest 2,814 3,890 6,913 22,415 23,178 24,751 Summary Statement of Movement in Shareholders' Equityfor the half year ended 30 June 2007 (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Total shareholders' equity at beginning of period 147,437 165,678 165,678 Total recognised income and expense 19,601 19,288 17,838Dividends paid to Fyffes plc and subsidiaries - (1,453) (4,534)Movement in share option expense reserve 18 - -Distribution in specie arising on property demerger - - (39,346)Movement in funding balance with Fyffes - (9,316) 7,801 Total shareholders' equity at end of period 167,056 174,197 147,437 Summary Group Balance Sheetas at 30 June 2007 (Unaudited) (Unaudited) (Audited) 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000AssetsNon-current assetsProperty, plant and equipment 116,045 90,164 112,049Investment property 8,996 2,841 9,009Goodwill and intangible assets 116,209 85,748 95,895Other receivables 1,460 1,105 1,627Investments in joint ventures and associates 31,075 38,840 26,859Equity investments 9,553 16,673 11,011Employee benefits 11,632 4,592 4,502Deferred tax assets 6,680 3,437 3,047 Total non-current assets 301,650 243,400 263,999 Current assetsInventory 34,812 27,394 30,342Trade and other receivables 276,652 210,008 221,351Non trade receivables due from Fyffes plc and subsidiaries - 258,660 -Derivative financial instruments - - 17Cash and cash equivalents 62,818 71,624 87,909 Total current assets 374,282 567,686 339,619 Total assets 675,932 811,086 603,618 EquityCalled-up share capital 3,510 3,510 3,510Share premium 251,998 251,998 251,998Retained earnings and other reserves (88,452) (81,311) (108,071)Total shareholders' equity 167,056 174,197 147,437Minority interest 39,774 46,709 48,501 Total equity and minority 206,830 220,906 195,938 LiabilitiesNon-current liabilitiesInterest-bearing loans and borrowings 99,323 24,224 60,066Deferred government grants 1,936 - 2,081Other payables 636 3,759 538Provisions 10,911 - 4,384Employee benefits 5,770 1,535 3,237Corporation tax payable 7,785 8,085 7,785Deferred tax liabilities 18,779 14,491 15,047 Total non-current liabilities 145,140 52,094 93,138 Current liabilitiesInterest bearing loans and borrowings 43,133 75,494 22,178Debt due to Fyffes plc arising on demerger - - 15,665Trade and other payables 277,653 218,305 227,630Non trade payables to Fyffes plc and subsidiaries - 206,560 -Derivative financial instruments 79 34 3Provisions 2,117 36,314 46,406Corporation tax payable 980 1,379 2,660Total current liabilities 323,962 538,086 314,542 Total liabilities 469,102 590,180 407,680 Total liabilities and equity 675,932 811,086 603,618 Summary Group Cash Flow Statementfor the half year ended 30 June 2007 (Unaudited) (Unaudited) (Audited) 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000Operating activitiesProfit for the period 13,903 13,468 13,560Income tax expense 5,502 4,086 5,356Depreciation of property, plant and equipment 6,302 5,693 12,294Fair value movement on investment properties - - (6,120)Impairments arising from demerger - - 22,749Amortisation of intangible assets 2,048 1,437 3,021Amortisation of grants (179) (188) (323)Contributions to defined benefit pension schemes (2,177) (1,229) (2,760)Defined benefit pension scheme expense 1,022 902 2,642Net loss / (gain) on disposal of plant & equipment 86 (346) (610)Net interest expense 2,042 1,477 2,932Share of profits of joint ventures and associates (after (1,018) (2,034) (3,381)tax)Corporation tax paid (7,136) (10,065) (12,255)Net interest paid (1,201) (781) (2,007) Cash generated from operations before movement in workingcapital 19,194 12,420 35,098(Increase) / decrease in working capital (19,690) 5,128 3,713 Cash flows from operating activities (496) 17,548 38,811 Investing activitiesAcquisition of subsidiaries, net of cash acquired (8,389) (4,216) (10,255)Acquisition of and investment in joint ventures - (623) (2,497)Acquisition of trade investment (36) - (1,991)Payments of deferred consideration (41,651) (3,733) (5,077)Acquisition of property, plant and equipment (7,397) (7,420) (27,477)Proceeds from disposal of property, plant and equipment 467 446 1,480Dividends received from joint ventures/associates 1,956 - 80Proceeds from disposal of minority share - - 100Government grants received 33 90 156Subsidiary becoming a Joint Venture (8,589) - - Cash flows from investing activities (63,606) (15,456) (45,481) Financing activitiesNet increase in borrowings 52,376 17,512 22,635Net cash movement in balances with Fyffes (15,665) (12,060) 34,299Capital element of lease payments (744) (501) (1,084)Dividends paid to equity shareholders - (1,453) (4,534)Capital contribution from minority interest - - 116Dividends to minority interests (3,028) (2,970) (3,620) Cash flows from financing activities 32,939 528 47,812 Net movement in cash and cash equivalents (31,163) 2,620 41,142Cash and cash equivalents, including bank overdrafts atstart of period 85,042 42,882 42,882 Exchange translation adjustment on cash and cash equivalents (781) 338 1,018 Cash and cash equivalents, including bank overdrafts at endof period 53,098 45,840 85,042 Notes supporting interim financial statementsfor the half year ended 30 June 2007 1. Basis of preparation The interim financial information has been prepared in accordance with theaccounting policies set out in the Group's consolidated financial statements forthe year ended 30 December 2006 which were prepared in accordance withInternational Financial Reporting Standards (IFRS) as endorsed by the EUCommission. The comparative information for the period ended 30 June 2006 relates to theTotal Produce plc business transferred from Fyffes plc in December 2006 and wasderived from the consolidated financial information of Fyffes plc for thatperiod. The information has been prepared as if the Total Produce Group hadalways existed separately from Fyffes plc. It consequently reflects; • in the summary group balance sheet the net assets of the businessestransferred to Total Produce plc on 30 December 2006 as they were included inthe consolidated financial information of Fyffes plc at 30 June 2006; • in the summary group income statement, summary group statement ofrecognised income and expenses and summary group cash flow statement, theresults, performance and cashflows of those businesses for the period to 30 June2006 as they were recorded in the consolidated financial information of Fyffesplc 2. Earnings per share (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Profit attributable to equity shareholders 11,168 9,740 7,060 No. of shares No. of shares No. of shares '000 '000 '000 Weighted average number of shares for calculation ofbasic earnings per share 350,972 349,796 349,951Weighted average number of options with dilutive effect - 3,804 3,857 Weighted average number of shares for calculation offully diluted earnings per share 350,972 353,600 353,808 •'cent •'cent •'cent Basic earnings per share 3.18 2.78 2.02 Fully diluted earnings per share 3.18 2.75 2.00 Calculation of adjusted fully diluted earnings per share Profit attributable to equity shareholders 11,168 9,740 7,060AdjustmentsExceptional items - - 13,199Amortisation of intangible assets 2,048 1,437 3,063Tax effect of exceptional items and amortisation (527) (354) (3,417)Minority impact of exceptional items - - 282 Earnings for calculation of adjusted fully dilutedearnings per share 12,689 10,823 20,187 Deferred tax liability release on property - (1,453) -reorganisation Earnings for calculation of adjusted fully dilutedearnings per share excluding deferred tax release on property reorganisation 12,689 9,370 20,187 •'cent •'cent •'cent Adjusted fully diluted earnings per share 3.62 3.06 5.70 Adjusted fully diluted earnings per share excluding 2.65deferred tax release Adjusted fully diluted earnings per share exclude the impact of exceptionalitems, after tax and minority interest and amortisation charges on intangibleassets and related deferred tax credits. The comparative amounts shown for share capital in issue reflects the actualshares in issue in Fyffes plc that ranked for dividend, as on the date ofdemerger each holder of a Fyffes share that ranked for dividend received oneshare in Total Produce plc. Consequently, the weighted average number of sharesin issue used in calculating earnings per share in the six month period ended 30June 2006 reflects the movements that occurred in the share capital of Fyffesplc over that period. Options issued by Total Produce plc in 2007 are notdilutive as at 30 June 2007. 3. Employee post employment benefits (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Deficit at beginning of period (190) (6,623) (6,623)Current/past service cost less finance income recognisedin income statement (1,022) (902) (2,642) Employee employments benefit liability acquired as part ofacquisition of subsidiary (7,474) - -Actuarial gain recognised in statement of recognisedincome and expense 12,374 9,352 6,315 Contributions to schemes 2,177 1,230 2,760Exchange movement (3) - - Asset / (deficit) at end of period 5,862 3,057 (190)Related deferred tax asset 117 (382) 592 Net asset 5,979 2,675 402 This table summarised the movements in the net assets of the Group's variousdefined benefit pension schemes in Ireland, the UK and Continental Europe. TheGroup's balance sheet at 30 June 2007 reflects net pension assets of €11.6m inrespect of schemes in surplus and net pension liabilities of €5.8m in respect ofschemes in deficit, representing the €5.8m net asset before deferred tax above. The current/past service cost is charged in the Income Statement, net of thefinance income on scheme assets. The actuarial gain/(loss) is recognised in theStatement of Recognised Income and Expense, in accordance with the amendment toIAS 19 Actuarial Gains and Losses, Group Plans and Disclosures. The reduction in the scheme deficit during the period arose mainly as a resultof the impact of the increase in long term international interest rates on theschemes liabilities. 4. Businesses acquired During the period, the group completed the acquisition of a number ofbusinesses. The total consideration for these acquisitions amounted to €14.6m(excluding cash acquired). Including cash acquired, the net cash outflow forthose acquisitions amounted to €8.4m. The acquisition method of accounting has been used to consolidate the businessesacquired. The accounting for business acquisitions is provisional. Other thanthe valuation of intangible assets there are no material differences arisingbetween the fair value of assets and liabilities acquired and the acquireescarrying value at acquisition date. If, however, any fair values need to beadjusted, they will be reflected in the acquisition accounting within one yearof acquisition date. The principal acquisition in the period was the acquisition of RedbridgeHoldings in the UK, for initial cash consideration of €13m plus a further cashpayment of up to €4.5m payable in 2010 if certain minimum profit targets arereached during three years ended 31 December 2009. During the period, the groupalso made a number of bolt on acquisitions in the UK and Scandinavia. 5. Dividends The board has approved an interim dividend of €0.50 cent per share. Thisdividend, which will be subject to Irish withholding tax rules, will be paid on5 November 2007 to shareholders on the register at 12 October 2007. In accordance with company law and IFRS, this dividend has not been provided forin the balance sheet at 30 June 2007. 6. Analysis of movement in net debt in the period 1 Jan Cash Flow Acquisitions Subsidiary Non-cash 30 June 2007 •'000 & disposals becoming a •'000 2007 •'000 •'000 JV Translation •'000 •'000 •'000 Bank balances and deposits 87,909 (22,111) 6,383 (8,589) - (774) 62,818Overdrafts (2,867) (6,846) - - - (7) (9,720) Cash and cash equivalents percash flow statement 85,042 (28,957) 6,383 (8,589) - (781) 53,098 Bank loans - current (18,323) (12,196) (2,946) - - 718 (32,747)Bank loans - non current (59,232) (40,180) - - - 886 (98,526)Finance leases (1,822) 744 (410) (32) 57 (1,463) -Total interest bearingborrowings (79,377) (51,632) (3,356) - (32) 1,661 (132,736) Debt due to Fyffes plcarising on demerger (15,665) 15,665 - - - - - Net debt (10,000) (64,924) 3,027 (8,589) (32) 880 (79,638) This information is provided by RNS The company news service from the London Stock Exchange