RNS Number:7040M
Greencore Group PLC
25 May 2005
GREENCORE GROUP PLC
CONTACT: MS C M BERGIN TELEPHONE: +353 1 6051029
FAX: +353 1 6051104
INTERIM STATEMENT FOR THE HALF YEAR ENDED 25 MARCH 2005
FINANCIAL HIGHLIGHTS
- 2% like-for-like sales growth, with 8% in the Convenience Food division
- 2% like-for-like operating profit growth, with 23% in the Convenience Food
division
- Interest charge down 15% to EUR14.8 million
- Profit before tax* up 8% to EUR32.6 million
- Headline EPS* up 6% to 14.2 cent
- Net debt down EUR44.3 million from March 2004
* before exceptional item and goodwill amortisation
BUSINESS HIGHLIGHTS
- Strong performance from Convenience Food division
- Continued execution of low cost leadership and customer strategies
- Consolidation of sugar processing at one facility commenced
- Two smaller maltings closed, with a third closure announced
- Excellent sugar processing campaign, with record daily throughput achieved
COMMENTING ON THE RESULTS, GREENCORE GROUP CHIEF EXECUTIVE, DAVID DILGER, SAID:
"These results are evidence of the strong strategic, commercial and financial
progress which the Group has made in the first six months of the financial year."
WEDNESDAY, 25 May 2005
FOR FURTHER INFORMATION, PLEASE CONTACT:
David Dilger, Chief Executive Tel: +353 1 605 1002
Billy Murphy/Trish Morrissey, Drury Communications Tel: +353 1 260 5000
Mark Garraway/Kate Pope, College Hill Tel: +44 7771 860 938
=======================================================================
INTRODUCTION
Greencore has made good strategic, commercial and financial progress in the
first six months of this financial year.
The inherent challenges in our industry continue to be more than offset by the
quality of our market positions, the strong cash generative nature of our
portfolio and successful execution of our key strategic initiatives, most
particularly:
- our low cost leadership strategy
- our customer strategy, with a balanced exposure to food retailers and
increasing penetration into alternative channels
As a result, our financial performance in the first half was strong across a
range of fronts:
- Like-for-like sales growth of 8% was achieved in our Convenience Food
division.
- Operating profit grew by 2% on a like-for-like basis, with a strong
performance from the Convenience Food division which grew like-for-like
profits by 23%.
- Our interest charge declined by a further EUR2.5 million, or 15%,
reflecting continued reductions in the amount and cost of the Group's
indebtedness.
- Profit before tax* grew by 8%.
- Headline earnings per share* grew by 6%.
- Net debt at the end of March 2005 was EUR417 million, EUR44 million below
the level of March 2004.
* before exceptional item and goodwill amortisation
REVIEW OF OPERATIONS
CONVENIENCE FOOD
The Convenience Food division had a successful first half of the year. Like-
for-like sales grew by 8% and operating margins increased from 5.7% to 6.6%,
resulting in like-for-like operating profit growth of 23%.
Profitability in the comparative period in 2004 was impacted by a lag in
recovering raw material inflation which amounted to EUR4.7 million, which was
offset by price increases and therefore did not recur in the first half of this
year. Input costs were broadly unchanged in the period, although energy costs
were close to EUR2 million higher than in the comparative period.
This division operates in a competitive marketplace. Customer consolidation is
ongoing, price competitiveness is a key measure by which many of our customers
seek to differentiate themselves and their quality requirements are continuously
increasing. Furthermore, increasing branded promotional activity is noticeable
in those categories which have branded alternatives.
Evidence of the impact of these issues on our categories include:
- The customer bases in sandwiches and more particularly pizza, although
varied, are under-performing the market overall.
- Retail price points on a standard quiche have again been reduced in the
last two months, and are now some 20% below their level of four years ago.
- Product presentation standards in sandwiches have increased markedly in
the last twelve months, adversely impacting productivity.
- Leading mineral water brands were on promotion for much of last winter in
the UK.
Against this backdrop, our initiatives ensured that the division increased its
operating profit by some EUR5.4 million in the first half of the year.
Top-line growth was assisted by the Group's ongoing strategy of balancing its
leading category positions with multiple food retailers by increasing its
convenience food sales to other customers. Many of the division's categories -
sandwiches, pizza, ambient sauces, frozen desserts and frozen savoury products -
launched new ranges in alternative channels, including to airlines, convenience
stores, food service operators and fast food outlets.
The two most substantial increases in activity in alternative channels in the
period arose in the ambient sauce and sandwich categories. The ambient sauce
category substantially increased its sales to international branded food
manufacturers, underpinned by a short-term contract to supply one customer which
was temporarily unable to produce its own requirements. Sandwiches commenced
deliveries in the period to a national convenience store chain and is now
supplying in excess of 1,400 of its outlets.
The Group's continued focus on operational excellence and low cost leadership
delivered further benefit in the period. Particular initiatives and examples of
success in the period included:
- Focusing on products where we have a particular competitive advantage by
eliminating low volume, low margin lines: our frozen desserts category
discontinued production of 20% of its product lines in the period.
- Simplifying our processes through a reduction in the number of ingredients
and suppliers: our sandwich category reduced its number of separate
ingredients by 10% and its supplier base by close to 20%.
- Focusing on process improvement, particularly in reducing waste and
increasing automation and capacity:
Several categories have achieved significant material waste reductions
via increased training, additional measurement systems, more
collaborative planning with customers and de-listing low selling lines.
The performance of the automated line in our sandwich category
continues to improve, whilst a third state-of-the-art line has been
added at our quiche business.
- Improving purchasing efficiency through increased cross-category
purchasing: benefits have been generated both on ingredient spends and on
non-resale items.
- Focusing on cost reduction, most particularly a reduction in indirect
labour and overheads, with each spend in every category being challenged.
INGREDIENTS AND AGRIBUSINESS
The Ingredients and Agribusiness division had a challenging first half. Like-
for-like sales declined by 8%, operating margins reduced from 8.3% to 6.9% and
operating profit fell from EUR20.0 million to EUR15.3 million.
The decline in sales is not an indicator of underperformance in the period: it
occurred, principally, because of lower 'C' sugar sales in Greencore Sugar and
the closure of uncompetitive capacity in the Group's Malt division.
Nonetheless, the market conditions for both these businesses remain challenging.
As indicated in the Preliminary Announcement last November, both businesses have
substantial fuel requirements; higher costs of oil and other fuels impacted the
division by in excess of EUR2 million in the period.
In Greencore Sugar, the slowdown in demand from certain industrial customers as
their own sales come under pressure has continued. Furthermore, there is an EU-
wide oversupply of sugar this year as a result of the European Commission's
decision last September not to declassify temporarily any sugar quota, due to
its inaccurate forecasting of sugar consumption and stock levels in the EU.
This oversupply has contributed to increased price competition in the domestic
sugar market, and also to a reduction in export prices. Competition has also
increased in advance, and in anticipation, of the impending reform of the
European sugar regime as processors attempt to build market share in European
markets in which they do not have a presence.
This impending regime reform is the most significant market issue facing
Greencore Sugar. The European Commission made indicative proposals for quota
and price reductions in July last year and a revised proposal is expected next
month. The Council of Ministers is expected to have reached agreement on reform
by the end of this year, and it is likely to take effect from July 2006.
In the Group's Malt division, international malt prices have softened
considerably, driven in part by new capacity being introduced, most particularly
in Russia. In addition, the level of decline in international barley prices has
not been reflected in the UK and Ireland.
The long-proven operational and low cost capability of both businesses has
helped counter these market conditions. Greencore Sugar closed its Carlow
manufacturing facility in the period and is consolidating all sugar
manufacturing at its Mallow site. The consolidation is essential to secure the
survival of the Irish sugar processing industry in a more deregulated and
competitive environment, and, to date, has proceeded to expectation, with
agreements having been achieved with both grower and employee representatives
which will underpin future competitiveness. An exceptional cost of EUR65.4
million has been charged in the period to cater for this consolidation.
The Malt division is also consolidating production into its larger, better-
invested maltings. It closed two of its smaller maltings in the UK at the start
of the period and announced the closure of its smaller Irish maltings at
Banagher, which will be implemented by the end of the financial year. These
initiatives will enhance the overall competitiveness of the business.
Once again, Greencore Sugar benefited from an excellent processing campaign.
Although sugar content was below the exceptional levels of the previous year,
both facilities achieved record daily throughput and all processing was
completed just before Christmas.
Following the closure of uncompetitive malt capacity, the Group's Malt division
has focused on domestic and higher grade export markets and withdrawn from lower
contribution export markets. In the first half of 2005, domestic deliveries
accounted for 60% of all deliveries compared to 54% in 2004.
FINANCIAL REVIEW
Like-for-like sales grew by 2%, with an 8% increase in the Convenience Food
division. Overall operating margins remained at last year's level of 6.7% and
continuing operating profit increased by 2% to EUR45.2 million. Share of
continuing profits from associates, net of share of interest, declined by EUR0.3
million, with a decline in profitability at the Group's yeast associate the
largest contributor. Discontinued activities (comprising the Group's former UK
bakery subsidiary and sugar distribution associate), which had been exited from
the Group before the period under review, contributed EUR0.5 million in the
first half of last year.
Net interest declined by EUR2.5 million from EUR17.3 million to EUR14.8 million,
reflecting a reduction in the amount and cost of the Group's indebtedness.
Profit before tax, the exceptional item and goodwill amortisation increased by
8%, or EUR2.5 million, from EUR30.1 million to EUR32.6 million.
The tax charge of EUR4.4 million on ordinary activities compared to EUR3.9
million in the first half of last year, with the effective rate increasing from
12.9% to 13.5%.
Headline earnings per share (adjusted to eliminate the exceptional item and
goodwill amortisation) increased by 6% from 13.4 cent to 14.2 cent. An interim
dividend of 5.05 cent per share will be paid, which is in line with last year's
level. Qualifying shareholders will again be offered the option of receiving
dividends in the form of cash or shares.
An exceptional cost of EUR65.4 million, net of tax, was charged in the period,
arising from the consolidation of all of the Group's sugar production at its
Mallow site. This arose, principally, from asset write-offs, redundancies and
other costs of closing the Carlow processing facility.
Significant capital investment was made in the period. Capital expenditure
amounted to EUR21.0 million, compared to depreciation of EUR20.9 million.
Nonetheless, net debt at the end of the period under review of EUR417.1 million
was more than EUR44 million below the level at the end of March 2004. Net debt
increased by EUR30 million from the level at the end of September 2004,
reflecting the seasonal working capital uplift at Greencore Sugar of EUR36
million, a consequence of the timing of its annual processing campaign, and the
commencement of the spend on redundancies and capital expenditure arising from
the consolidation of the Group's sugar processing activities, which amounted to
EUR13 million in the period.
OUTLOOK
Challenging market conditions persist. However, the Board is confident that the
Group will continue to make good returns as a result of its leading market
positions, the strong cash generative nature of its portfolio and the successful
execution of its chosen strategies.
E F Sullivan
25 May 2005
NOTE
Like-for-like sales and profits are calculated on a constant currency basis from
continuing operations.
=======================================================================
CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
Half year ended 25 March 2005
Half Year to 25 March 2005 Half Year to
25 March
2004
Before Exceptional Total
exceptional item and
item and goodwill
goodwill amortisation
amortisation
Notes EUR'000 EUR'000 EUR'000 EUR'000
Turnover
Continuing operations 2 677,336 - 677,336 669,149
Discontinued operations - - - 44,242
-------------- -------------- -------------- --------------
2 677,336 - 677,336 713,391
-------------- -------------- -------------- --------------
Operating profit before goodwill
amortisation and exceptional item
Continuing operations 2 45,200 - 45,200 44,504
Discontinued operations - - - -456
-------------- -------------- -------------- --------------
2 45,200 - 45,200 44,048
Goodwill amortisation - -10,304 -10,304 -10,701
-------------- -------------- -------------- --------------
Operating profit 45,200 -10,304 34,896 33,347
Share of operating profit of associated
undertakings
Continuing operations 2,301 - 2,301 2,539
Discontinued operations - - - 1,001
-------------- -------------- -------------- --------------
47,501 -10,304 37,197 36,887
Exceptional item
Fundamental reorganisation
of Greencore Sugar 3 - -71,600 -71,600 -
-------------- -------------- -------------- --------------
Profit/(loss) before interest and
taxation 47,501 -81,904 -34,403 36,887
Net interest payable -14,762 - -14,762 -17,295
Amortisation of issue costs of finance
facility - - - -1,266
Share of interest payable - associates -182 - -182 -162
-------------- -------------- -------------- --------------
Profit/(loss) before taxation 32,557 -81,904 -49,347 18,164
Taxation -4,395 6,240 1,845 -3,887
-------------- -------------- -------------- --------------
Profit/(loss) after taxation 28,162 -75,664 -47,502 14,277
Minority interests -943 - -943 -982
-------------- -------------- -------------- --------------
Profit/(loss) attributable to Group
shareholders 27,219 -75,664 -48,445 13,295
Dividends 4 -9,804 - -9,804 -9,630
-------------- -------------- -------------- --------------
Retained profit/(loss) 17,415 -75,664 -58,249 3,665
======= ========= ========= =========
Adjusted earnings per ordinary share 5 14.2c 13.4c
Basic earnings/(loss) per ordinary 5 -25.2c 7.0c
share
Diluted earnings/(loss) per ordinary 5 -25.0c 7.0c
share
Dividend per ordinary share 4 5.05c 5.05c
=======================================================================
CONSOLIDATED BALANCE SHEET
At 25 March 2005
25 March 26 March 24 September
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
EUR'000 EUR'000 EUR'000
Fixed assets
Intangible assets 326,561 359,647 336,865
Tangible assets 494,860 568,527 541,786
Financial assets 11,590 14,517 12,409
------------- ------------- -------------
833,011 942,691 891,060
------------- ------------- -------------
Current assets
Stocks 188,615 200,486 141,279
Debtors 92,909 99,782 130,771
Cash and bank balances 97,492 93,122 86,278
------------- ------------- -------------
379,016 393,390 358,328
Creditors
Amounts falling due within one year 410,649 485,862 410,942
------------- ------------- -------------
Net current liabilities -31,633 -92,472 -52,614
------------- ------------- -------------
Total assets less current liabilities 801,378 850,219 838,446
------------- ------------- -------------
Creditors
Amounts falling due after more than one year 521,651 510,880 493,166
Provisions for liabilities and charges 36,637 39,676 46,142
Development grants 1,741 772 1,634
------------- ------------- -------------
560,029 551,328 540,942
------------- ------------- -------------
Net assets 241,349 298,891 297,504
======= ======= =======
Capital and reserves
Called up share capital 123,841 122,202 123,647
Capital conversion reserve fund 934 934 934
Share premium account 93,149 87,700 92,459
Profit and loss account/other reserves 18,081 82,129 75,945
------------- ------------- -------------
Shareholders' funds - equity interests 236,005 292,965 292,985
Minority interests - equity interests 5,344 5,926 4,519
------------- ------------- -------------
241,349 298,891 297,504
======== ======== ========
=======================================================================
CONSOLIDATED CASH FLOW STATEMENT
Half year ended 25 March 2005
Half Year to Half Year to
25 March 26 March
2005 2004
(Unaudited) (Unaudited)
EUR'000 EUR'000
Operating activities
Operating profit 45,200 44,048
Depreciation (net of grant amortisation) 20,602 21,964
Changes in working capital -45,607 -35,753
Other movements 958 -1,589
Capital expenditure (net) -20,990 -24,194
------------- -------------
Cash flow from operating activities 163 4,476
Dividends from associates 1,835 4,900
Returns on investments and servicing of finance -15,696 -21,105
Rationalisation costs at Greencore Sugar -11,567 -
Taxation -123 2,122
Proceeds on issue of share capital 212 111
Equity dividends paid -8,925 -9,219
------------- -------------
Net cash flow -34,101 -18,715
Translation differences 4,403 -12,644
------------- -------------
Movement in net debt in period -29,698 -31,359
Net debt at start of period -387,390 -430,049
------------- -------------
Net debt at end of period -417,088 -461,408
========== ==========
=======================================================================
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year ended 25 March 2005
Half Year to Half Year to Full Year to
25 March 26 March 24 September
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
EUR'000 EUR'000 EUR'000
Profit/(loss) for period attributable to Group -48,445 13,295 -16,858
shareholders
Exchange adjustments 385 -4,620 -6,229
------------- ------------- -------------
Total recognised gain/(loss) for the period -48,060 8,675 -23,087
======== ======== ========
=======================================================================
NOTES
Half year ended 25 March 2005
1. BASIS OF PREPARATION
The interim statement for the six months to 25 March 2005 is unaudited and was
approved by the Board on 24 May 2005. The information has been prepared on the
basis of the accounting policies set out in the Group's annual report for the
year ended 24 September 2004. The balance sheet information for 24 September
2004 represents the audited balance sheet from the Group's full accounts for
that year on which the Auditors issued an unqualified audit report and which
have been filed with the Registrar of Companies.
2. ANALYSIS OF RESULTS BY ACTIVITY
Turnover Operating Profit*
Half Year Half Year
2005 2004 2005 2004
EUR'000 EUR'000 EUR'000 EUR'000
Total Group
Convenience Food 455,339 470,021 29,868 24,009
Ingredients and Agribusiness 221,997 243,370 15,332 20,039
-------------
------------- ------------- -------------
677,336 713,391 45,200 44,048
-------------
------------- ------------- -------------
Continuing Activities
Convenience Food 455,339 426,933 29,868 24,465
Ingredients and Agribusiness 221,997 242,216 15,332 20,039
-------------
------------- ------------- -------------
677,336 669,149 45,200 44,504
-------------
------------- ------------- -------------
*Pre goodwill amortisation and exceptional item
3. EXCEPTIONAL ITEM
Following a strategic review of Greencore Sugar in anticipation of pending
reform of the EU sugar regime and the increasingly competitive nature of its
markets, a decision was made in January 2005 to consolidate all sugar
manufacturing at Mallow and to close the Carlow facility.
The current year exceptional loss represents the costs associated with this
decision. A net tax credit of EUR6.24 million was recorded on the exceptional
item.
There were no exceptional items in the prior period.
4. DIVIDENDS
The interim dividend of 5.05 cent (2004: 5.05 cent) per share is payable on 4
October 2005 to shareholders on the Register of Members as at 3 June 2005. The
ordinary shares will be quoted ex-dividend from 1 June 2005. The dividend will
be subject to dividend withholding tax, although certain classes of shareholders
may qualify for exemption.
5. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share is based on a loss of EUR48.4
million (2004: a profit of EUR13.3 million) and on 192.3 million ordinary shares
(2004: 189.0 million), being the weighted average number of ordinary shares in
issue in the period. The calculation of adjusted earnings per ordinary share is
after adjusting for the exceptional item and goodwill amortisation. The diluted
earnings per ordinary share has been calculated on the basis of 193.4 million
ordinary shares (2004: 191.1 million). The calculation of earnings per ordinary
share excludes 4.2 million treasury shares (2004: 4.9 million) arising from the
share repurchase programme.
6. INFORMATION
The interim statement is being sent to registered shareholders by post or
electronically to those who have elected for the Electronic Shareholder
Communications option.
Copies are also available from the Company's registered office at St. Stephen's
Green House, Earlsfort Terrace, Dublin 2, Ireland, and from its registrar,
Computershare Investor Services (Ireland) Limited, Heron House, Corrig Road,
Sandyford Industrial Estate, Dublin 18, Ireland. The statement will also be
available on the Company's website at www.greencore.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFSREIISFIE
Greencore (LSE:GNC)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Greencore (LSE:GNC)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024
