TIDMGNC
RNS Number : 5696N
Greencore Group PLC
19 May 2015
GREENCORE GROUP PLC
INTERIM RESULTS
Good performance led by food to go
19 May 2015
Greencore Group plc, a leading international convenience food
business, today issues its interim results for the 26 weeks ended
27 March 2015.
FINANCIAL HIGHLIGHTS
-- Group revenue of GBP639.8m, up 3.2% (as reported) and up 3.9% on a like for like(1) basis
-- Convenience Foods revenue of GBP614.7m, up 4.9% on a like for like(1) basis
-- Group operating profit(2) up 7.8% to GBP40.1m
-- Group operating margin(2) of 6.3%, a 30 bps increase
-- Adjusted EPS(3) up 8.6% to 7.6p
-- Interim dividend of 2.4 pence per share, an increase of 9.1% versus H1 14
-- Replacement of the Group's primary bank facility with a five
year GBP300m Revolving Credit Facility extending the weighted
average maturity of debt to 4.5 years
STRATEGIC DEVELOPMENTS
-- Significant planned increase in capital investment to support customer business wins
-- Phase 1 extension of Northampton facility successfully
completed and second phase well underway
-- Roll out of new product range from extended Jacksonville facility in the US
-- New build in Rhode Island completed to plan in late March and
now shipping product to key customers
SUMMARY FINANCIAL PERFORMANCE
H1 15 H1 14 Change Change
(like for
GBPm GBPm (as reported) like(1) )
Group revenue 639.8 619.8 +3.2% +3.9%
Group operating profit(2) 40.1 37.2 +7.8%
Group operating margin(2) 6.3% 6.0% + 30 bps
Adjusted PBT(3) 33.4 30.6 +9.2%
Adjusted EPS (pence)(3) 7.6 7.0 +8.6%
Interim dividend per
share (pence) 2.4 2.2 +9.1%
Net debt 291.4 257.9
Convenience Foods Division
Revenue 614.7 587.9 +4.6% +4.9%
Operating profit(2) 39.3 35.9 +9.5%
Operating margin(2) 6.4% 6.1% +30 bps
Commenting on the results, Patrick Coveney, Chief Executive
Officer, said:
"The Group delivered good financial and strategic progress in
the first half of the year. Our strategy of deepening our
leadership, capability, capacity footprint and customer
partnerships in the UK and US food to go markets continues to
deliver growth, with like for like revenue in that part of our
business up 8.7%. The Group has stepped up its capital investment
programme in new sites, which will provide a solid platform for
growth in the months and years ahead. We carry good momentum into
the second half and remain confident in our ability to deliver
adjusted EPS growth for the year in line with market
expectations."
____________________________________________________________________________________
(1) References to like for like ("LFL") revenue growth exclude
revenue from Ministry of Cake which was sold in May 2014, revenue
in the Lettieri's business for the period from October 2014 to
February 2015 and are expressed in constant currency.
(2) EBITDA, operating profit and operating margin are stated
before exceptional items and acquisition related amortisation.
These are non-IFRS measures; IFRS measures are from page 8
onwards.
(3) Adjusted PBT and adjusted earnings measures are stated
before exceptional items, pension finance items, acquisition
related amortisation, FX on inter-company and certain external
balances and the movement in the fair value of all derivative
financial instruments and related debt adjustments.
(4) Market / category growth rates are based on Nielsen data for
the 26 weeks to 28 March 2015.
____________________________________________________________________________________
Presentation
A presentation of the results for analysts and institutional
investors will take place at 8.00am today at The Lincoln Centre, 18
Lincoln's Inn Fields, London, WC2A 3ED.
This presentation can be accessed live through the following
channels:
-- Webcast - details on www.greencore.com
-- Conference call:
Ireland number: +353 1 246 5603
UK number: +44 20 3427 1915
Pass code: 3500179#
A replay of the presentation will be available on
www.greencore.com. It will also be available through a conference
call replay facility, which will be available for one week. To
access this replay, please dial:
Ireland replay number: +353 1 486 0902
UK replay number: +44 20 3427 0598
Replay code: 3500179#
For further information, please contact:
Patrick Coveney Chief Executive Tel: +353 (0) 1
Officer 605 1045
Alan Williams Chief Financial Tel: +353 (0) 1
Officer 605 1045
Rob Greening or Lisa Kavanagh Powerscourt Tel: +44 (0) 20
7250 1446
About Greencore
-- A leading manufacturer of convenience food in the UK and the US
-- Strong market positions in the UK convenience food market
across food to go, chilled prepared meals, chilled soups and
sauces, ambient sauces & pickles, cakes & desserts and
Yorkshire Puddings
-- A fast growing food to go business in the US, serving both
the convenience and small store channel and the grocery channel
SUMMARY
Strategic Development(1)
The vision and strategy of Greencore is to be a fast growing
international convenience food leader. The Group is focused on
deepening its leadership of the food to go segments in the UK and
US as this is where we see the most favourable long-term consumer
and channel trends, coupled with attractive economic returns.
Accordingly, the Group has significantly increased capital
investment to support growth in food to go in both the UK and US
markets. During H1 15, an extension of the sandwich facility in
Northampton was successfully commissioned and good progress has
been made on the construction of a new production facility adjacent
to the existing site which is due to open in spring 2016. In the
US, the Group made further progress in scaling up production at the
Jacksonville facility which was extended in Q4 14. The scale of
this ramp-up has been challenging and resulted in some supply chain
disruption in the period. This has now been addressed and weekly
production volumes continue to increase in line with plan. In late
March, the Group completed the construction of a new facility in
Rhode Island. Subsequent to the period end, the Group commenced
shipments from this new facility and completed the closure of the
Newburyport facility in late April as planned. During the summer,
the Group will undertake the transfer of production from the
Brockton facility to Rhode Island to enable its closure later in
the year. Detailed planning is also under way on a new facility to
be built in Washington State to supply a key customer. This project
was announced in November 2014 and is due to complete in spring
2016.
The Group's revenue growth continues to be driven by the food to
go businesses with combined like for like growth in H1 of 8.7%.
While revenue growth has been lower in H1 in the rest of the UK
portfolio, these businesses have market-leading positions in their
respective categories and continue to play a significant role,
offering complementary capabilities to food to go.
Financial and Operating Performance(1,2, 3)
The UK grocery retail environment remains difficult with
profound changes taking place amongst our customers, together with
net price deflation. Our business has continued to trade well
despite these challenges given its focus on convenience offerings
which continue to exhibit volume growth. Reported Group revenue
increased by 3.2% to GBP639.8m, with like for like revenue growth
in Convenience Foods of 4.9%. Operating profit of GBP40.1m
increased by 7.8% versus H1 14 driven by the increase in revenue,
continued operational improvements and focus on cost control.
Adjusted earnings per share were 8.6% higher at 7.6 pence.
As anticipated, net debt increased to GBP291.4m at 27 March
2015. This was driven principally by the increase in capital
expenditure, seasonal working capital outflow and contract
acquisition costs in relation to the new supply agreement in
Washington State.
Interim Dividend
The Board of Directors is announcing an interim dividend of 2.4
pence per share, an increase of 9.1% versus H1 14, in line with the
growth in adjusted EPS. It remains the Board's intention to
increase the total dividend distribution for the financial year in
line with the growth in adjusted earnings per share.
OUTLOOK
The Group has performed well in H1 15 despite high levels of
change in its core UK grocery retail market. The Group benefits
from its exposure to growing convenience food categories and
remains focused on delivering exceptional standards for its
customers. Financial performance has remained strong as the Group
continues to focus on operational efficiency and tight cost
management.
The Group has significantly increased capital expenditure in
FY15 to deliver new capacity to support committed customer
initiatives. Delivery to plan of these major investments remains a
key area of focus. Notwithstanding a net deflationary environment
and the level of change in the UK grocery market, the Group expects
to deliver good revenue growth in H2 15 and we remain confident in
our ability to deliver adjusted EPS growth for the year in line
with market expectations.
OPERATING REVIEW(1,2,3,4)
Convenience Foods
Revenue and Operating Profit
H1 15 H1 14 Change Change
GBPm GBPm (As reported) (Like for like)
------------------ ------ ------ --------------- -----------------
Revenue 614.7 587.9 +4.6% +4.9%
------------------ ------ ------ --------------- -----------------
Operating profit 39.3 35.9 +9.5%
------------------ ------ ------ --------------- -----------------
Operating margin 6.4% 6.1% +30 bps
------------------ ------ ------ --------------- -----------------
Reported revenue in the Convenience Foods division increased by
4.6% to GBP614.7m. On a like for like basis, revenue was 4.9% ahead
with the UK up by 3.6% and the US (despite product exits) up by
14.8%. Growth in both the UK and US was driven by food to go
activity. Operating profit increased by 9.5% to GBP39.3m driven by
the increase in revenue, continued operational improvements and
focus on cost control.
UK Convenience Foods
Food to Go
The UK Food to Go business represents over 40% of Group revenue
and comprises sandwiches, sushi and salads.
The retail food to go market continues to exhibit strong growth
albeit a little lower than in the prior year. The sandwich category
grew by 4.9% during the period while the broader food to go market
(sandwiches, snack salads and sushi) grew by 6.0%. Market growth
continues to be driven by the convenience store formats of the
major retailers.
The Food to Go business grew by 7.0% in the period. This
outperformance of the market was driven principally by the addition
of new product lines for the principal customer of the Northampton
facility. These products are being manufactured in the extension to
an existing production facility which was opened as planned during
the period. Construction of a new production facility in
Northampton adjacent to the existing site is advancing as planned
and is due to be commissioned in the spring of 2016.
Prepared Meals
The Prepared Meals business comprises chilled ready meals,
quiche, chilled soup and chilled sauces and represents
approximately 20% of Group revenue.
The chilled ready meals market grew by 2.5% in the period whilst
our principal sub-category, Italian chilled ready meals,
experienced robust growth of 8.9%. The quiche market grew at 0.4%
in the period whilst the chilled soup market grew by 3.2%.
The Prepared Meals business grew by 2.4% in the period. Our
ready meals activity performed well in the period, ahead of the
overall ready meals market due to customer specific activity in
Italian meals. Soup also outperformed its market following new
product launches. However, quiche sales were lower year on year as
one customer moved the manufacture of some lines in house during
2014.
Grocery
The Grocery business groups together our other activities in the
UK market. It provides meal components such as cooking sauces,
table sauces, pickles and Yorkshire Puddings as well as cakes and
chilled desserts. It operates from four facilities and represents
approximately 20% of Group revenue.
During the period, the own label cooking sauce market declined
by 4.0% although unit volumes were higher. The frozen Yorkshire
Pudding market declined by 0.9% while our largest cakes and
desserts sub-category, celebration cakes, grew by 3.6%.
Like for like revenue (excluding the Ministry of Cake
foodservice desserts business which was sold in May 2014) in the
Grocery business declined by 1.2%. The decline was driven by lower
year on year cake revenue following the loss of some seasonal
lines. The cooking sauces business outperformed its market growing
both revenue and unit volumes.
US Convenience Foods
The US business is focused on food to go products supplied
predominantly to the faster growing convenience and small store
channels, including the coffee shop market. It represents
approximately 15% of Group revenue.
During the period, revenues grew by 30.6% on a reported basis
and by 14.8% on a like for like basis (excluding Lettieri's for the
period October 2014 to February 2015 and in constant currency).
Product exits, principally in potato salads and sushi, are
estimated to have reduced the like for like sales growth rate by
around eight percentage points. Underlying growth was driven
principally by the roll out of new breakfast sandwich products with
a key customer.
Following the completion of the extension of the Jacksonville
facility in Q4 FY14, the business commenced a stock build period.
In late Q1 and early Q2 FY15, orders ramped up significantly
resulting in supply chain disruption. Customer orders were reduced
during the rest of the period in order to re-establish sufficient
stock levels. The business has now been stabilised with weekly
production levels increasing in line with plan.
The construction of the new facility in Quonset, Rhode Island,
was completed during the period and line trials commenced in late
March. Subsequent to the period end, production was successfully
transferred from Newburyport and the site was closed. Product
transfers from Brockton will commence during the summer to enable
the site's closure later in the year.
In November 2014, the Group announced that it was acquiring the
rights to a supply contract with a key customer in Washington
State. The contract will be fulfilled from a new facility which
will open in H2 FY16. Planning of the facility, which will provide
both production capacity and a product development centre, is being
undertaken with its principal customer and is now well
advanced.
Ingredients & Property
H1 15 H1 14 Change Change Constant
GBPm GBPm Actual Currency Currency
------------------ ------ ------ ----------------- ----------------
Revenue 25.1 31.9 -21.3% -14.1%
------------------ ------ ------ ----------------- ----------------
Operating profit 0.8 1.3 -38.5%
------------------ ------ ------ ----------------- ----------------
The Ingredients and Property division represents less than 5% of
Group revenue. Constant currency revenue in the period was 14.1%
lower than the prior period. The performance was impacted by lower
commodity prices for edible oils and lower milk drying negatively
impacting demand for oils, together with reduced feed demand
following a milder winter. Operating profit was GBP0.5m lower
impacted by the strengthening of sterling against the euro and
higher costs related to legacy pension scheme administration.
FINANCIAL REVIEW(2,3)
Revenue and Operating Profit
Revenue in the period was GBP639.8m, an increase of 3.2% versus
H1 14. Group operating profit of GBP40.1m was 7.8% ahead of the
prior year. Operating margin of 6.3% was 30 basis points higher
than in H1 14.
The net impact of currency movements in the period was not
material.
Interest Payable
The Group's bank interest payable in H1 15 was GBP7.6m compared
to GBP7.0m in H1 14. This increase was driven principally by higher
average net debt in the period and a stronger US dollar versus
sterling, together with a higher effective cost of debt on non-bank
borrowings. The composition of the charge was GBP6.7m of interest
payable, commitment fees for undrawn facilities of GBP0.5m and an
amortisation charge of GBP0.4m in respect of facility fees.
Non-Cash Finance Charges/Credit
The Group's net non-cash finance charge in H1 15 was GBP1.5m
(GBP2.1m charge in H1 14). The change in the fair value of
derivatives and related debt adjustments was a non-cash credit of
GBP0.8m (GBP0.9m credit in H1 14). The Group recognised a credit of
GBP0.2m in respect of the unwind of discount on deferred
consideration receivable (H1 14: GBP0.1m charge). The non-cash
pension financing charge of GBP2.5m was GBP0.4m lower than the
charge in H1 14.
Taxation
The Group's effective tax rate in H1 15 (including the tax
impact associated with pension finance items) was 1%, unchanged
from H1 14.
The Group's effective tax rate continues to benefit from
historic tax losses.
Exceptional Items
The Group recognised an exceptional charge in the period of
GBP0.9m in relation to the start-up of production at the new
facility in Quonset, Rhode Island which enables the exit from the
facilities in Newburyport and Brockton, Massachusetts.
Earnings per Share
Adjusted earnings of GBP30.7m in the period were 9.3% ahead of
the prior year. Adjusted earnings per share of 7.6 pence were 8.6%
ahead of H1 14.
Cash Flow, Net Debt and Refinancing
A net cash outflow from operating activities of GBP7.3m was
recorded compared to an inflow of GBP18.6m in H1 14. The outflow
was primarily due to a greater seasonal working capital outflow
than in H1 14 driven by differences in timing of payments to
suppliers and inventory build in connection with new business wins.
This is expected substantially to reverse in H2.
Capital expenditure of GBP43.7m was incurred in the period
compared to GBP17.2m in H1 14. The increase was primarily due to
the construction of the new production facility in Rhode Island and
the extension of the Northampton site.
Interest costs of GBP7.8m were paid in the period with cash
dividends to equity holders of GBP7.8m.
The Group's net debt at 27 March 2015 was GBP291.4m, an increase
of GBP79.3m from 26 September 2014. This increase was driven
principally by the increase in capital expenditure, seasonal
working capital outflow and contract acquisition costs in relation
to the new supply agreement in Washington State.
During the period, the Group refinanced its GBP280m Revolving
Credit Facility which was due to mature in May 2016 with a new
GBP300m Revolving Credit Facility. The Group remains well financed
with committed facilities at 27 March 2015 of GBP505m and a
weighted average maturity of 4.5 years.
Pensions
The net pension deficit(before related deferred tax) increased
to GBP143.2m at 27 March 2015 from GBP129.5m at 26 September 2014.
The net pension deficit after related deferred tax was GBP113.9m,
an increase of GBP8.3m from 26 September 2014. The increase in net
deficit was driven principally by the continued decline in real
discount rates.
The fair value of total plan assets relating to the Group's
defined benefit pension schemes (excluding associates) increased to
GBP430.5m at 27 March 2015 from GBP395.4m at 26 September 2014. The
present value of the total pension liabilities for these schemes
increased to GBP573.7m from GBP524.9m over the same period.
Notwithstanding the decline in real discount rates, the
principal Irish Defined Benefit scheme is now in surplus on an
IAS19R basis. An asset of GBP9.8m has been recognised in the
balance sheet in connection with the scheme.
All defined benefit pension scheme plans are closed to future
accrual and the Group's pension policy with effect from 1 January
2010 is that future service for current employees and new entrants
is provided under defined contribution pension arrangements.
Related Party Transactions
There were no related party transactions in the period that have
materially affected the financial position or performance of the
Group. In addition, there were no changes in related party
transactions from the last Annual Report that could have had a
material effect on the financial position or performance of the
Group in the first six months.
Principal Risks and Uncertainties
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remainder of the financial year and could cause actual results to
differ materially from expected and historical results. The Board
considers the risks and uncertainties described on pages 14 to 17
of the Annual Report and Accounts for the year ended 26 September
2014 issued on 25 November 2014 to remain applicable. These risks
are as follows:
Strategic risks
-- Competitor activity
-- Growth
Commercial risks
-- Changes in consumer behaviour and demand
-- Key customer relationships and grocery industry structure
-- Input cost inflation
Operational risks
-- Food industry regulations
-- Product contamination
-- Health and Safety
-- Disruption to day to day group operations
-- Recruitment and retention of key personnel
Financial risks
-- Interest rates, foreign exchange rates, liquidity and
credit
-- Employee retirement obligations
Forward-Looking Statements
Certain statements made in this announcement are
forward-looking. These represent expectations for the Group's
business, and involve risks and uncertainties. The Group has based
these forward-looking statements on current expectations and
projections about future events. The Group believes that
expectations and assumptions with respect to these forward-looking
statements are reasonable. However, because they involve known and
unknown risks, uncertainties and other factors, which in some cases
are beyond the Group's control, actual results or performance, may
differ materially from those expressed or implied by such
forward-looking statements.
P.G. Kennedy, Chairman
18 May 2015
GROUP CONDENSED INCOME STATEMENT
for the half year ended 27 March 2015
Half Year Ended 27 March Half Year ended 28 March
2015 2014
(Unaudited) (Unaudited)
Exceptional Exceptional
Notes Pre - exceptional (Note 5) Total Pre - exceptional (Note 5) Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Revenue 3 639.8 - 639.8 619.8 - 619.8
Cost of sales (438.3) - (438.3) (431.8) - (431.8)
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Gross profit 201.5 - 201.5 188.0 - 188.0
Operating costs,
net (161.4) (0.9) (162.3) (150.8) (16.9) (167.7)
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Group operating
profit before acquisition
related amortisation 3 40.1 (0.9) 39.2 37.2 (16.9) 20.3
Amortisation of
acquisition
related intangibles (4.4) - (4.4) (3.6) - (3.6)
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Group operating
profit 3 35.7 (0.9) 34.8 33.6 (16.9) 16.7
Finance income 11 0.2 - 0.2 - - -
Finance costs 11 (9.3) - (9.3) (9.1) - (9.1)
Share of profit
of associates
after tax 0.6 - 0.6 0.4 - 0.4
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Profit before taxation 27.2 (0.9) 26.3 24.9 (16.9) 8.0
Taxation 6 (0.3) - (0.3) (0.2) 4.4 4.2
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Profit for the financial
period 26.9 (0.9) 26.0 24.7 (12.5) 12.2
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Attributable to:
Equity shareholders 26.3 (0.9) 25.4 24.0 (12.5) 11.5
Non-controlling
interests 0.6 - 0.6 0.7 - 0.7
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
26.9 (0.9) 26.0 24.7 (12.5) 12.2
--------------------------- ----- ----------------- ----------- ------- ----------------- ----------- -------
Earnings per share (pence)
Basic earnings per
share 86.3 2.9
----------------------- --- ---
Diluted basic earnings
per share 86.1 2.8
----------------------- --- ---
GROUP CONDENSED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the half year ended 27 March 2015
Half Year
Half Year ended
ended
27 March 28 March
2015 2014
(Unaudited) (Unaudited)
Items of income and expense taken directly to GBPm
equity GBPm
Items that will not be reclassified to profit
or loss:
Actuarial (loss)/gain on Group defined benefit
pension schemes (16.0) 6.5
Deferred tax on Group defined benefit pension
schemes 5.5 (1.0)
--------------------------------------------------------- ------------ ------------
(10.5) 5.5
--------------------------------------------------------- ------------ ------------
Items that may subsequently be reclassified to
profit or loss:
Currency translation adjustment 9.5 (2.6)
Current tax on currency translation adjustment 0.2 -
Hedge of net investment in foreign currency subsidiaries (11.2) 2.5
Cash flow hedges:
fair value movement taken to equity (8.3) 0.1
transfer to Income Statement for the period 1.3 0.5
deferred tax on transfer to Income Statement
for the period 0.1 (0.1)
--------------------------------------------------------- ------------ ------------
(8.4) 0.4
--------------------------------------------------------- ------------ ------------
Net (loss)/profit recognised directly within equity (18.9) 5.9
Group result for the financial period 26.0 12.2
--------------------------------------------------------- ------------ ------------
Total recognised income and expense for the financial
period 7.1 18.1
--------------------------------------------------------- ------------ ------------
Attributable to:
Equity shareholders 6.7 17.5
Non-controlling interests 0.4 0.6
--------------------------------------------------------- ------------ ------------
Total recognised income and expense for the financial
period 7.1 18.1
--------------------------------------------------------- ------------ ------------
GROUP CONDENSED BALANCE SHEET
at 27 March 2015
March March September
2015 2014 2014
(Unaudited) (Unaudited) (Audited)
Notes As re-presented*
GBPm GBPm GBPm
-------------------------------------------- ----- ------------ ----------------- ----------
ASSETS
Non-current assets
Intangible assets 9 506.0 501.0 499.2
Property, plant and equipment 9 279.3 223.2 247.0
Investment property 9 6.8 29.4 7.0
Investments in associates 1.1 1.2 0.9
Other receivables 12.4 1.0 3.3
Derivative financial instruments 11 - 5.7 5.3
Retirement benefit asset 14 9.8 - -
Deferred tax assets 75.9 67.3 70.2
-------------------------------------------- ----- ------------ ----------------- ----------
Total non-current assets 891.3 828.8 832.9
-------------------------------------------- ----- ------------ ----------------- ----------
Current assets
Inventories 58.5 52.2 53.6
Trade and other receivables 140.2 120.0 127.3
Derivative financial instruments 11 10.0 - -
Cash and cash equivalents 11 3.4 18.8 12.2
Assets held for sale - 15.5 -
-------------------------------------------- ----- ------------ ----------------- ----------
Total current assets 212.1 206.5 193.1
-------------------------------------------- ----- ------------ ----------------- ----------
Total assets 1,103.4 1,035.3 1,026.0
-------------------------------------------- ----- ------------ ----------------- ----------
EQUITY
Capital and reserves attributable to equity
holders of the Company
Share capital 10 4.1 4.0 4.1
Share premium 186.9 180.5 185.7
Reserves 76.8 74.1 90.4
-------------------------------------------- ----- ------------ ----------------- ----------
267.8 258.6 280.2
Non-controlling interests 3.2 4.1 3.4
-------------------------------------------- ----- ------------ ----------------- ----------
Total equity 271.0 262.7 283.6
-------------------------------------------- ----- ------------ ----------------- ----------
LIABILITIES
Non-current liabilities
Borrowings 11 232.5 280.9 229.5
Derivative financial instruments 11 19.4 2.0 6.3
Retirement benefit obligations 14 153.0 127.8 129.5
Other payables 2.3 2.1 2.4
Provisions for liabilities 12 3.3 7.9 3.4
Deferred tax liabilities 21.0 20.6 19.5
Government grants - 0.1 -
-------------------------------------------- ----- ------------ ----------------- ----------
Total non-current liabilities 431.5 441.4 390.6
-------------------------------------------- ----- ------------ ----------------- ----------
Current liabilities
Bank overdraft 11 1.6 0.5 -
Borrowings 11 70.7 - 0.1
Derivative financial instruments 11 0.9 0.2 0.3
Trade and other payables 305.8 296.4 323.6
Consideration payable on acquisitions - 0.4 -
Provisions for liabilities 12 3.6 6.8 7.2
Current taxes payable 18.3 21.4 20.6
Liabilities held for sale - 5.5 -
-------------------------------------------- ----- ------------ ----------------- ----------
Total current liabilities 400.9 331.2 351.8
-------------------------------------------- ----- ------------ ----------------- ----------
Total liabilities 832.4 772.6 742.4
-------------------------------------------- ----- ------------ ----------------- ----------
Total equity and liabilities 1,103.4 1,035.3 1,026.0
-------------------------------------------- ----- ------------ ----------------- ----------
* As re-presented to reflect adjustments to provisional fair
values recognised in business combinations as set out in Note 30 to
the Annual Report for the financial year ended 26 September
2014
GROUP CONDENSED CASH FLOW STATEMENT
for the half year ended 27 March 2015
Half year Half year
ended ended
27 March 28 March
2015 2014
(Unaudited) (Unaudited)
GBPm GBPm
--------------------------------------------------------- ------------- -------------
Profit before taxation 26.3 8.0
Finance income (0.2) -
Finance costs 9.3 9.1
Share of profit of associates (after tax) (0.6) (0.4)
Exceptional items 0.9 16.9
--------------------------------------------------------- ------------- -------------
Operating profit (pre-exceptional) 35.7 33.6
Depreciation 13.1 12.5
Amortisation of intangible assets 5.5 4.4
Employee share based payment expense 1.9 1.4
Difference between pension charge and cash contributions (5.7) (5.1)
Working capital movement (45.4) (14.1)
Other movements 0.4 (0.1)
--------------------------------------------------------- ------------- -------------
Net cash inflow from operating activities before
exceptional items 5.5 32.6
Cash outflow related to exceptional items (4.9) (5.6)
Interest paid (7.8) (8.3)
Tax paid (0.1) (0.1)
Net cash (outflow)/inflow from operating activities (7.3) 18.6
--------------------------------------------------------- ------------- -------------
Cash flow from investing activities
Dividends received from associates 0.4 -
Contract acquisition cost (8.8) -
Purchase of property, plant and equipment (38.5) (14.5)
Purchase of investment property - (0.6)
Purchase of intangible assets (5.2) (2.1)
Acquisition of undertakings - (23.0)
Disposal of undertakings 0.4 -
Net cash outflow from investing activities (51.7) (40.2)
--------------------------------------------------------- ------------- -------------
Cash flow from financing activities
Proceeds from issue of shares 0.1 0.1
Ordinary shares purchased - own shares (9.3) (1.9)
Increase in bank borrowings 66.6 44.6
(Decrease)/increase in finance lease liabilities (0.1) 0.1
Dividends paid to equity holders of the Company (7.8) (4.5)
Dividends paid to non-controlling interests (0.6) -
--------------------------------------------------------- ------------- -------------
Net cash inflow from financing activities 48.9 38.4
--------------------------------------------------------- ------------- -------------
Net (decrease)/increase in cash and cash equivalents (10.1) 16.8
--------------------------------------------------------- ------------- -------------
Reconciliation of opening to closing cash and
cash equivalents
Cash and cash equivalents at beginning of period 12.2 1.8
Translation adjustment (0.3) (0.3)
(Decrease)/increase in cash and cash equivalents (10.1) 16.8
--------------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of period 1.8 18.3
--------------------------------------------------------- ------------- -------------
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
for the half year ended 27 March 2015
Retained Non-controlling
Share capital Share premium Other reserves earnings Total interest Total equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
At 26 September
2014 4.1 185.7 107.9 (17.5) 280.2 3.4 283.6
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
Items of income
and expense
taken
directly to
equity
Currency
translation
adjustment - - 9.7 - 9.7 (0.2) 9.5
Current tax on
currency
translation
adjustment - - - 0.2 0.2 - 0.2
Net investment
hedge - - (11.2) - (11.2) - (11.2)
Actuarial loss
on Group
defined
benefit pension
schemes - - - (16.0) (16.0) - (16.0)
Deferred tax on
Group defined
benefit
pension schemes - - - 5.5 5.5 - 5.5
Cashflow hedges
taken to equity - - (8.3) - (8.3) - (8.3)
Cashflow hedges
transferred to
Income
statement - - 1.3 - 1.3 - 1.3
Deferred tax on
cashflow hedges - - 0.1 - 0.1 - 0.1
Profit for the
financial
period - - - 25.4 25.4 0.6 26.0
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
Total recognised
income and
expense
for the
financial
period - - (8.4) 15.1 6.7 0.4 7.1
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
Employee share
based payment
expense - - 1.9 - 1.9 - 1.9
Deferred tax on
share based
payments - - - 0.3 0.3 - 0.3
Exercise, lapse
or forfeit of
share based
payments - 0.1 (2.4) 2.4 0.1 - 0.1
Shares acquired
by the Employee
Benefit Trust - - (9.4) 0.1 (9.3) - (9.3)
Shares granted
to
beneficiaries
of the Employee
Benefit Trust - - 9.4 (9.4) - - -
Transfer to
retained
earnings on
grant of
shares to
beneficiaries
of the
Employee
Benefit
Trust* - - 10.4 (10.4) - - -
Dividends - 1.1 - (13.2) (12.1) (0.6) (12.7)
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
At 27 March 2015 4.1 186.9 109.4 (32.6) 267.8 3.2 271.0
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
At 27 September
2013 4.0 177.3 107.9 (40.7) 248.5 3.5 252.0
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
Items of income
and expense
taken
directly to
equity
Currency
translation
adjustment - - (2.5) - (2.5) (0.1) (2.6)
Net investment
hedge - - 2.5 - 2.5 - 2.5
Actuarial loss
on Group
defined benefit
pension schemes - - - 6.5 6.5 - 6.5
Deferred tax on
Group defined
benefit
pension schemes - - - (1.0) (1.0) - (1.0)
Cashflow hedges
taken to equity - - 0.1 - 0.1 - 0.1
Cashflow hedges
transferred to
Income
Statement - - 0.5 - 0.5 - 0.5
Deferred tax on
cashflow hedges - - (0.1) - (0.1) - (0.1)
Profit for the
financial
period - - - 11.5 11.5 0.7 12.2
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
Total recognised
income and
expense for the
financial
period - - 0.5 17.0 17.5 0.6 18.1
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
Employee share
based payment
expense - - 2.3 - 2.3 - 2.3
Exercise, lapse
or forfeit of
share based
payments - 0.1 (3.3) 3.3 0.1 - 0.1
Shares acquired
by Employee
Benefit Trust - - (2.0) 0.1 (1.9) - (1.9)
Shares granted
to
beneficiaries
of the Employee
Benefit Trust - - 1.1 (1.1) - - -
Transfer to
retained
earnings on
grant of
shares to
beneficiaries
of the
Employee
Benefit
Trust* - - 7.3 (7.3) - - -
Deferred tax on
share based
payments - - - 0.7 0.7 - 0.7
Dividends - 3.1 - (11.7) (8.6) - (8.6)
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
At 28 March 2014 4.0 180.5 113.8 (39.7) 258.6 4.1 262.7
---------------- ------------- ------------- -------------- --------------- ------ --------------- ------------
* In 2013, the Group converted 3,907,716 treasury shares into
ordinary shares of GBP0.01 each and subsequently transferred these
shares to the Employee Benefit Trust at nominal value. These shares
were previously held in the own share reserve at a value of
GBP17.8m, which represented the cost of acquisition of the shares
on the open market at a price of GBP4.24 per share. As these shares
are granted to the beneficiaries of the Employee Benefit Trust, the
related residual amount in the own shares reserve is transferred to
retained earnings
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
for the half year ended 27 March 2015
Other Reserves
Capital Foreign
Capital conversion currency
Share Own redemption reserve Hedging translation
options shares reserve fund reserve reserve Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- -------- ------- ------------ ----------- -------- ------------ ------
At 26 September 2014 7.1 (15.2) 117.0 0.8 (6.0) 4.2 107.9
-------------------------------- -------- ------- ------------ ----------- -------- ------------ ------
Items of income and
expense taken directly
to equity
Currency translation
adjustment - - - - - 9.7 9.7
Net investment hedge - - - - - (11.2) (11.2)
Cashflow hedges taken
to equity (8.3) - (8.3)
Cashflow hedges transferred
to Income Statement - - - - 1.3 - 1.3
Deferred tax on cashflow
hedges - - - - 0.1 - 0.1
Total recognised income
and
expense for the financial
period - - - - (6.9) (1.5) (8.4)
-------------------------------- -------- ------- ------------ ----------- -------- ------------ ------
Employee share based
payment expense 1.9 - - - - - 1.9
Exercise, lapse or forfeit
of share based payments (2.4) - - - - - (2.4)
Shares acquired by Employee
Benefit Trust - (9.4) - - - - (9.4)
Shares granted to beneficiaries
of Employee Benefit
Trust - 9.4 - - - - 9.4
Transfer to retained
earnings on grant of
shares to beneficiaries
of the Employee Benefit
Trust - 10.4 - - - - 10.4
At 27 March 2015 6.6 (4.8) 117.0 0.8 (12.9) 2.7 109.4
-------------------------------- -------- ------- ------------ ----------- -------- ------------ ------
At 27 September 2013 6.2 (18.8) 117.0 0.8 - 2.7 107.9
-------------------------------- ----- ------ ----- --- ----- ----- -----
Items of income and
expense taken directly
to equity
Currency translation
adjustment - - - - - (2.5) (2.5)
Net investment hedge - - - - - 2.5 2.5
Cashflow hedges taken
to equity - - - - 0.1 - 0.1
Cashflow hedges transferred
to Income Statement - - - - 0.5 - 0.5
Deferred tax on cash
flow
hedges - - - - (0.1) - (0.1)
Total recognised income
and
expense for the financial
period - - - - 0.5 - 0.5
-------------------------------- ----- ------ ----- --- ----- ----- -----
Currency translation -
adjustment - - - - - -
Employee share based
payment expense 2.3 - - - - - 2.3
Exercise, lapse or forfeit
of share based payments (3.3) - - - - - (3.3)
Shares acquired by Employee
Benefit Trust - (2.0) - - - - (2.0)
Shares granted to beneficiaries
of the Employee Benefit
Trust - 1.1 - - - - 1.1
Transfer to Retained
Earnings on grant of
shares to beneficiaries
of the Employee Benefit
Trust - 7.3 - - - - 7.3
At 28 March 2014 5.2 (12.4) 117.0 0.8 0.5 2.7 113.8
-------------------------------- ----- ------ ----- --- ----- ----- -----
NOTES TO THE GROUP CONDENSED FINANCIAL STATEMENTS
1. Basis of Preparation
The Group Condensed Financial Statements, which are presented in
sterling and expressed in millions*, have been prepared in
accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007, the related Transparency Rules of the Central
Bank of Ireland and IAS 34 Interim Financial Reporting as adopted
by the European Union.
These Condensed Financial Statements do not comprise statutory
accounts within the meaning of Section 19 of the Companies
(Amendment) Act 1986. The Group condensed financial information for
the year ended 26 September 2014 represents an abbreviated version
of the Group Financial Statements for that year. Those financial
statements, upon which the auditor issued an unqualified audit
report, have been filed with the Companies Registration Office.
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue
operating for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the Group
Condensed Financial Statements.
* In the current year the Group has presented the financial
statements in millions. The prior year numbers have been
re-presented accordingly.
2. Accounting Policies
The accounting policies and methods of computation adopted in
the preparation of the Group Condensed Financial Statements are
consistent with those applied in the Annual Report for the
financial year ended 26 September 2014 and are as set out in those
financial statements.
The adoption of new standards and interpretations, as set out in
the 2014 Annual Report, that became effective for the Group's
financial statements for the year ended 25 September 2015 did not
have any significant impact on the Group Condensed Financial
Statements.
3. Segment Information
The Group is organised around different product portfolios. The
Group's reportable segments under IFRS 8 are as follows:
Convenience Foods - this reportable segment is the aggregation
of two operating segments, Convenience Foods UK and Convenience
Foods US. This segment derives its revenue from the production and
sale of convenience food.
Ingredients & Property - this segment represents the
aggregation of 'all other segments' as permitted under IFRS 8 (IFRS
8 specifies that, where the external revenue of reportable segments
exceeds 75% of the total Group revenue, it is permissible to
aggregate all other segments into one reportable segment). The
Ingredients & Property reportable segment derives its revenue
from the distribution of edible oils, molasses and the management
of the Group's surplus property assets.
The Chief Operating Decision Maker monitors the operating
results of segments separately in order to allocate resources
between segments and to assess performance. Segment performance is
predominantly evaluated based on operating profit before
exceptional items and acquisition related amortisation. Exceptional
items, net finance costs and income tax are managed on a
centralised basis, therefore, these items are not allocated between
operating segments for the purposes of the information presented to
the Chief Operating Decision Maker and are accordingly omitted from
the segmental information below. Intersegment revenue is not
material.
Convenience Ingredients
Foods & Property Total
Half Half Half Half Half Half
Year year Year year Year year
2015 2014 2015 2014 2015 2014
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 614.7 587.9 25.1 31.9 639.8 619.8
------------------------------------ ------ ----- ------ ----- ----- ------
Group operating profit before
exceptional items and
acquisition related amortisation 39.3 35.9 0.8 1.3 40.1 37.2
Amortisation of acquisition related
intangible assets (4.4) (3.6) - - (4.4) (3.6)
Group operating profit before
exceptional items 34.9 32.3 0.8 1.3 35.7 33.6
Exceptional items (0.9) (16.9)
------------------------------------ ------ ----- ------ ----- ----- ------
Group operating profit 34.8 16.7
Finance income 0.2 -
Finance costs (9.3) (9.1)
Share of profit of associates
after tax 0.6 0.4 0.6 0.4
------------------------------------ ------ ----- ------ ----- ----- ------
Profit before taxation 26.3 8.0
------------------------------------ ------ ----- ------ ----- ----- ------
4. Seasonality
The Group's convenience foods portfolio is second half weighted.
This weighting is primarily driven by weather and seasonal buying
patterns impacting, in particular, the demand for chilled product
categories.
5. Exceptional Items
Half Half
year year
2015 2014
GBPm GBPm
-------------------------------------------- ----- ------ -------
US restructuring charge (a) (0.9) (9.8)
Impairment of investment in Food Service
Desserts business (b) - (5.8)
Transaction and Integration costs relating
to US acquisitions (c) - (1.3)
(0.9) (16.9)
Taxation on exceptional items (d) - 2.1
Exceptional tax credit (d) - 2.3
-------------------------------------------- ----- ------ -------
Total exceptional charge (0.9) (12.5)
--------------------------------------------------- ------ -------
(a) US restructuring charge
The group recognised a GBP0.9m charge in the period in relation
to the start-up of production at the new facility in Quonset, Rhode
Island which enables the exit from its facilities in Newburyport
and Brockton, Massachusetts. During the prior period, the Group
recognised a GBP9.8m charge related to the exit from its
Newburyport and Brockton manufacturing facilities. The charge was
composed of a non-cash impairment of fixed assets (principally
leasehold improvements) of GBP6.1m, a non-cash impairment of
intangible assets of GBP2.5m and a provision for site exit costsand
redundancy and retention costs of GBP1.2m.
(b) Impairment of investment in Food Service Desserts
business
During the prior period, the Group recognised a non-cash
impairment charge of GBP5.8m on the classification as held for sale
of its Food Service Desserts business, Ministry of Cake Limited.
This business was later disposed of on 14 May 2014.
(c) Transaction and Integration costs relating to US
acquisitions
During the prior period, the Group recognised a charge of
GBP1.3m relating to the transaction and integration costs
associated with the acquisition of Lettieri's LLC in the US.
(d) Exceptional tax credit
During the prior period, a tax credit of GBP2.3m was recognised
following on from the final resolution of an overseas tax case and
a tax credit of GBP2.1m was recognised in respect of exceptional
charges.
6. Taxation
Interim period tax is accrued using the tax rate that is
estimated to be applicable to expected total annual earnings based
on tax rates that were enacted or substantively enacted at the half
year end that is the estimated average annual effective income tax
rate based on management's judgement applied to the taxable income
of the interim period.
7. Dividends Paid and Proposed
A dividend of 3.25 pence per share was approved at the Annual
General Meeting on 27 January 2015 as a final dividend in respect
of the year ended 26 September 2014 and a total of GBP9.0m was paid
on 2 April 2015 to those shareholders that did not avail of the
Group scrip dividend scheme.
An interim dividend of 2.4 pence (2014: 2.2 pence) per share is
payable on 2 October 2015 to the shareholders on the Register of
Members as of 5 June 2015. The ordinary shares will be quoted
ex-dividend from 4 June 2015. The dividend will be subject to
dividend withholding tax, although certain classes of shareholders
may qualify for exemption.
The liability in respect of this interim dividend is not
recognised in the Balance Sheet of the Group as at 27 March 2015
because the interim dividend had not been approved at the Balance
Sheet date but was subsequently declared by the Directors of the
Company.
8. Earnings per Ordinary Share
Basic Earnings per Ordinary Share
Basic earnings per ordinary share is calculated by dividing the
profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the
period, excluding ordinary shares purchased by the Company and
shares held in trust in respect of the Group Employee Benefit
Trust. The adjusted figures for basic and diluted earnings per
ordinary share are stated before exceptional items, pension finance
items, acquisition related amortisation, foreign exchange (FX) on
inter-company and certain external balances and the movement in the
fair value of all derivative financial instruments and related debt
adjustments.
Half Half
year year
2015 2014
GBPm GBPm
------------------------------------------------------- ------ ------
Profit attributable to equity holders of the
Company 25.4 11.5
Exceptional items (post tax) 0.9 12.5
Fair value of derivative financial instruments
and related debt adjustments 0.7 (0.6)
FX on inter-company and external balances where
hedge accounting is not applied (1.5) (0.3)
Amortisation of acquisition related intangible
assets 4.4 3.6
Pension financing 2.5 2.9
Tax effect of pension financing and amortisation
of acquisition related intangibles (1.7) (1.5)
------------------------------------------------------- ------ ------
Numerator for adjusted earnings per share calculation 30.7 28.1
------------------------------------------------------- ------ ------
Denominator for earnings per share and adjusted earnings per
share calculation
Half Half
year year
2015 2014
'000 '000
------------------------------------------------ -------- --------
Shares in issue at the beginning of the period 407,109 401,369
Shares held by Employee Benefit Trust (2,922) (4,131)
Effect of shares issued in period 457 2,394
Weighted average number of ordinary shares in
issue during the period 404,644 399,632
------------------------------------------------ -------- --------
Half Half
year year
2015 2014
pence pence
-------------------------------------------- ------ ------
Basic earnings per ordinary share 6.3 2.9
-------------------------------------------- ------ ------
Adjusted basic earnings per ordinary share 7.6 7.0
-------------------------------------------- ------ ------
Diluted Earnings per Ordinary Share
Diluted earnings per ordinary share is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares.
Employee share benefits which are performance based are treated as
contingently issuable shares because their issue is contingent upon
satisfaction of specified performance conditions in addition to the
passage of time. These contingently issuable ordinary shares are
excluded from the computation of diluted earnings per ordinary
share where the conditions governing exercisability have not been
satisfied as at the end of the reporting period. Options over
2,738,837 (2014: 9,451,796) shares were excluded from the diluted
EPS calculation as they were either antidilutive or contingently
issuable ordinary shares which had not satisfied the performance
conditions attaching at the end of the reporting period.
Denominator for diluted earnings per share and adjusted earnings
per share calculation
The reconciliation of the weighted average number of ordinary
shares used for the purpose of calculating the diluted earnings per
share amounts is as follows:
Half year Half
2015 year
2014
'000 '000
--------------------------------------------------- ---------- --------
Weighted average number of ordinary shares in
issue during the period 404,644 399,632
Dilutive effect of share options and contingently
issuable shares 9,184 8,957
--------------------------------------------------- ---------- --------
Weighted average number of ordinary shares for
diluted earnings per share 413,828 408,589
--------------------------------------------------- ---------- --------
9. Intangible Assets, Property, Plant and Equipment, Investment
Property, Capital Expenditure and Commitments
During the six month period to 27 March 2015, the Group made
GBP48.2m (2014: GBP17.1m) of additions to property, plant and
equipment, investment property and intangible assets. The Group
disposed of certain assets with a carrying amount of GBP0.2m (2014:
GBP0.8m) for proceeds of GBP0.2m (2014: GBP0.8m). In the prior
period, the Group recognised a total impairment charge of GBP14.4m
to property, plant & equipment and intangible assets.
At 27 March 2015, the Group had entered into contractual
commitments for the acquisition of property, plant and equipment
amounting to GBP13.6m (2014: GBP13.3m).
10. Equity Share Capital
Issued capital as at 27 March 2015 amounted to GBP4.1m (26
September 2014: GBP4.1m). During the six month period to 27 March
2015, 387,101 shares (2014: 2,387,446) were issued in respect of
the scrip dividend scheme and 149,772 shares (2014: 97,292) were
issued in respect of the Group's Sharesave schemes.
Pursuant to the Deferred Bonus Plan , the Performance Share Plan
and the Executive Share Option Plan, 3,190,579 shares were
purchased by the Trustees of the Plan during the period ended 27
March 2015 (2014: 971,803). In addition, the Trustees utilised
dividend income of GBP0.06m (2014: GBP0.08m) to acquire 20,732
(2014: 62,384) shares in the Group with a nominal value of
GBP0.001m. In the period 5,732,827 (2014: 3,046,238) shares with a
nominal value of GBP0.05m (2014: GBP0.03m) were transferred to
beneficiaries of the Deferred Bonus Plan.
During the period, 1,200,804 (2014: 1,008,148) shares, with a
fair value of GBP3.03 per share (2014: GBP1.86 per share) were
awarded under the Deferred Bonus Plan and 1,537,245 (2014:
1,807,712) conditional share awards, with a fair value of GBP2.83
per share (2014: GBP1.86 per share), were granted under the
Performance Share Plan.
11. Components of Net Debt and Financing
The cash flows from financing activities are set out in the
Group Condensed Cash Flow Statement.
Half year Half year
Net finance costs 2015 2014
GBPm GBPm
---------------------------------------------------- ---------- ----------
Net finance costs on interest bearing cash and
cash equivalents and borrowings (7.5) (6.9)
Net pension financing charge (2.5) (2.9)
Interest on obligations under finance leases (0.1) (0.1)
Change in fair value of derivatives and related
debt adjustments (0.7) 0.6
Foreign exchange on inter-company and external
balances where hedge accounting is not applied 1.5 0.3
Unwind of present value discount on non-current
payables and receivables 0.2 (0.1)
---------------------------------------------------- ---------- ----------
(9.1) (9.1)
---------------------------------------------------- ---------- ----------
Analysed as:
Finance income 0.2 -
Finance costs (9.3) (9.1)
---------------------------------------------------- ---------- ----------
(9.1) (9.1)
---------------------------------------------------- ---------- ----------
March March September
Net debt 2015 2014 2014
GBPm GBPm GBPm
------------------------------------ -------- -------- ----------
Cash and cash equivalents (net of
bank overdraft) 1.8 18.3 12.2
Bank borrowings (136.9) (117.3) (68.1)
Private placement notes (114.1) (104.5) (105.8)
Non-bank borrowings (51.1) (57.9) (54.5)
Finance lease (1.1) (1.2) (1.2)
Cross currency interest rate swaps
- fair value hedges 10.0 4.7 5.3
------------------------------------ -------- -------- ----------
Group net debt (291.4) (257.9) (212.1)
------------------------------------ -------- -------- ----------
Fair value hierarchy - IFRS 13 (level 2 inputs)*
March September
2015 2014
Level 2* Level
GBPm 2*
GBPm
----------------------------------------------------- ---------- ----------
Assets carried at fair value
Cross currency swaps - fair value hedges 10.0 5.3
10.0 5.3
----------------------------------------------------- ---------- ----------
Liabilities carried at fair value
Cross currency swaps - cash flow hedges (18.1) (5.8)
Interest rate swaps - cash flow hedges (0.8) (0.2)
Interest rate swaps - not designated as hedges (1.1) (0.3)
Forward foreign exchange contracts - not designated
as hedges (0.3) (0.3)
----------------------------------------------------- ---------- ----------
(20.3) (6.6)
----------------------------------------------------- ---------- ----------
* For definition of level 2 inputs please refer to the 2014
Annual Report
Fair Value of financial instruments at amortised cost
Except as set out below, it is considered that the carrying
amounts of financial assets and financial liabilities recognised at
amortised cost in the condensed consolidated interim financial
statements approximate their fair values.
March 2015 September 2014
Carrying Fair Carrying Fair
amount value amount value
GBPm GBPm GBPm GBPm
------------------------- --------- -------- --------- --------
Bank borrowings (136.9) (140.7) (68.1) (69.9)
Private placement notes (114.1) (121.1) (105.8) (111.1)
Non-bank borrowings (51.1) (57.4) (54.5) (60.9)
Finance leases (1.1) (1.6) (1.2) (1.6)
------------------------- --------- -------- --------- --------
During the period, the Group refinanced its GBP280m Revolving
Credit Facility which was due to mature in May 2016 with a new
GBP300m Revolving Credit Facility. On the refinancing date, GBP30m
and $88m were drawn down under the new facility and used to repay
the outstanding balance on the old facility.
In the prior period, the Group borrowed EUR70m in non-bank
borrowings and issued $65m in Private Placement Notes maturing in
March 2020 and October 2021 respectively.
12. Provisions for Liabilities
Deferred Remediation Total
contingent and March
consideration Leases closure 2015
GBPm GBPm GBPm GBPm
---------------------------------- --------------- --------- ------------ -------
At beginning of period 1.2 6.5 2.9 10.6
Utilised in period - (2.8) (1.2) (4.0)
Currency translation differences 0.1 0.1 0.1 0.3
---------------------------------- --------------- --------- ------------ -------
At end of period 1.3 3.8 1.8 6.9
March September
2015 2014
Analysed as: GBPm GBPm
-------------------------- ------ ----------
Non-current liabilities 3.3 3.4
Current liabilities 3.6 7.2
---------------------------- ------ ----------
6.9 10.6
-------------------------- ------ ----------
The significant provisions are as follows:
Deferred consideration
Deferred contingent consideration relates to the acquisition of
H.C. Schau in the US.
Leases
Lease provisions consist of: (a) provisions for leasehold
dilapidations in respect of certain leases, relating to the
estimated cost of reinstating leasehold premises to their original
condition at the time of the inception of the lease as provided for
in the lease agreement; and (b) provisions for onerous contractual
obligations for properties held under operating lease. It is
anticipated that these will be payable within six years.
Remediation and closure
Remediation and closure obligations were established to cover
either a statutory, contractual or constructive obligation of the
Group.
Remediation and closure obligations relate to the closure of
Irish Sugar and the exit from sugar processing together with
closure obligations related to the exit from the Newburyport and
Brockton facilities in the US. A portion of the balance is not
contracted and accordingly the timing of payments is subject to a
degree of uncertainty.
13. Contingencies
The Group and certain of its subsidiaries continue to be subject
to various legal proceedings relating to its current and former
activities. Provisions for anticipated settlement costs and
associated expenses arising from legal and other disputes are made
where a reliable estimate can be made of the probable outcome of
the proceedings.
The Group may incur additional remediation and closure costs in
relation to the closure of Irish Sugar and the exit from Sugar
Processing. The Group has not provided for these additional costs
on the basis that a reliable estimate cannot be made of the amount
of the additional obligation.
The Company and certain subsidiaries have given guarantees in
respect of borrowings and other obligations arising in the ordinary
course of the business of the Company and other Group undertakings.
The Company and other Group undertakings consider these guarantees
to be insurance contracts and account for them as such. The Company
treats these guarantee contracts as contingent liabilities until
such time as it becomes probable that a payment will be required
under such guarantees.
The group has provided bank guarantees to third parties for an
amount of GBP2.2m in respect of certain obligations.
14. Retirement Benefit Schemes
In consultation with the independent actuaries to the schemes,
the valuations of the pension obligations have been updated to
reflect current market discount rates, rates of increase in
salaries, pension payments and inflation, current market values of
investments and actual investment returns.
The principal actuarial assumptions are as follows:
March 2015 September 2014
Ireland UK Ireland UK
-------------------------------------- ------------- --------- --------------- -----------
Rate of increase in pension payments 0%* 2.90% 0%* 3.00%
Discount rate 1.40% 3.30% 2.30% 4.10%
Inflation rate 1.50% 2.90% 1.65% 3.20%
-------------------------------------- ------------- --------- --------------- -----------
The financial position of the schemes was as follows:
March 2015 September 2014
Irish UK Irish UK
Schemes Schemes Total Schemes Schemes Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- --------- --------- -------- --------- --------- --------
Total market value of
assets 249.7 180.8 430.5 229.3 166.1 395.4
Present value of scheme
liabilities (244.5) (329.2) (573.7) (237.6) (287.3) (524.9)
------------------------------- --------- --------- -------- --------- --------- --------
Surplus/(deficit) in
schemes 5.2 (148.4) (143.2) (8.3) (121.2) (129.5)
Deferred tax asset - 29.3 29.3 - 23.9 23.9
------------------------------- --------- --------- -------- --------- --------- --------
Net asset/(liability)
at end of the period 5.2 (119.1) (113.9) (8.3) (97.3) (105.6)
------------------------------- --------- --------- -------- --------- --------- --------
Presented as:
Retirement benefit asset** 9.8 - 9.8 - - -
Retirement benefit obligation (4.6) (148.4) (153.0) (8.3) (121.2) (129.5)
------------------------------- --------- --------- -------- --------- --------- --------
* The pension increase rate shown above applies to the majority
of the liability base. However, there are certain categories within
the Group that have an entitlement to pension indexation and this
is allowed for in the calculation.
** The value of a net pension benefit asset is the value of any
amount the Group reasonably expects to recover by way of refund of
surplus from the remaining assets of a plan at the end of the
plan's life.
15. Information
Copies of the Half Yearly Financial Report are available for
download from the Group's website at www.greencore.com.
16. Auditor Review
This half yearly financial report has not been audited or
reviewed by the auditor of the Group pursuant to the Auditing
Practices Board guidance on Review of Interim Financial
Statements.
RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Half Yearly
Financial Report in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007, the related Transparency Rules of
the Irish Financial Services Regulatory Authority and with IAS 34
Interim Financial Reporting as adopted by the European Union.
The Directors confirm that, to the best of their knowledge:
-- The Group Condensed Financial Statements for the half year
ended 27 March 2015 have been prepared in accordance with the
international accounting standard applicable to interim financial
reporting adopted pursuant to the procedure provided for under
Article 6 of the Regulation (EC) No. 1606/2002 of the European
Parliament and of the Council of 19 July 2002;
-- The Interim Management Report includes a fair review of the
important events that have occurred during the first six months of
the financial year and their impact on the Group Condensed
Financial Statements for the half year ended 27 March 2015 and a
description of the principal risks and uncertainties for the
remaining six months; and
-- The Interim Management Report includes a fair review of
related party transactions that have occurred during the first six
months of the current financial year and that have materially
affected the financial position or the performance of the Group
during that period, and any changes in the related parties'
transactions described in the last Annual Report that could have a
material effect on the financial position or performance of the
Group in the first six months of the current financial year.
On behalf of the Board,
P.F. Coveney A.R. Williams
------------------------ ------------------------
Chief Executive Officer Chief Financial Officer
------------------------ ------------------------
18 May 2015 18 May 2015
------------------------ ------------------------
* * *
This information is provided by RNS
The company news service from the London Stock Exchange
END
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