RNS Number:4623U
Greencore Group PLC
22 November 2005
PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005
Greencore, a major manufacturer of convenience foods and ingredients, announces
a strong performance during the year ended 30 September 2005
FINANCIAL HIGHLIGHTS
- Profit before tax* up 6.4% to Euro77.7m
- Headline EPS* up 4.3% to 33.8 cent
- Like-for-like sales growth of 7.5% in Convenience Foods
- Like-for-like operating profit growth of 16.4% in Convenience Foods
- Net interest down 6.5% to Euro30.4m
- Exceptional charges - Euro65.4m for the fundamental restructuring of Greencore
Sugar; Euro40.0m provision for Pizza disposal
- Net debt at Euro398m, with a strong underlying trajectory of debt reduction
* before exceptional items and amortisation
BUSINESS HIGHLIGHTS
- High levels of product innovation and close customer relationships delivered
strong like-for-like sales growth in Convenience Foods
- Aggressive pursuit of 'Total Lowest Cost' contributed to healthy margin
performance in Convenience Foods
- Further broadening of channel exposure; a third of Convenience Foods sales
now made in 'alternative channels' - acquisition of Oldfields' sandwich
business allows for further growth in these channels
- Disposal of UK Pizza will remove a loss making business from Convenience
Foods
- Successful consolidation of sugar processing operations into a single plant
at Mallow positioned the Group to respond to impending EU sugar reform
- Strong operational performance and cash generation achieved by Ingredients
and Agribusiness division in a difficult and uncertain environment
- Favourable consumer trends position Convenience Foods for further growth in
2006 and beyond
Commenting on the results, Greencore Group Chief Executive David Dilger said:
"These results demonstrate solid underlying performance. We have taken hard
decisions in 2005 and this coming year may well require further decisions,
particularly given impending EU sugar regime reform.
"We are especially pleased with progress in Convenience Foods, where we now have
high performing businesses right across the range of our operations, and believe
that the extensive restructuring required since our acquisition of Hazlewood is
now complete. This division has the strategic and operational model to succeed
in the convenience food market and I am confident that we will make further
progress in the coming year."
Tuesday, 22 November 2005
For further information, please contact:
David Dilger, Chief Executive Tel: +353 1 605 1045
Patrick Coveney, Chief Financial Officer Tel: +353 1 605 1018
Billy Murphy/Joe Carmody, Drury Communications Tel: +353 1 260 5000
Mark Garraway/Anthony Parker, College Hill Tel: +44 20 7457 2020
Brian Rafferty/David Leeney, Taylor Rafferty Tel: +1 212 889 4350
SUMMARY
Greencore made significant progress in 2005. Profits before tax, amortisation
and exceptionals grew by 6.4% and headline earnings per share grew by 4.3%.
In addition, both divisions delivered significant change and are now better
positioned to capitalise on changing market circumstances.
The Convenience Foods division has performed strongly, with like-for-like
profits up 16.4% to Euro67.7m. The Group competes in attractive categories, and
the strategy of aggressive product innovation, broadening channel exposure and
commitment to 'Total Lowest Cost' has driven like-for-like sales growth of 7.5%
and sustained healthy margin performance. This represents excellent progress,
with the division now accounting for 62% of Group continuing operating profit,
up from 56% in 2004.
The Ingredients and Agribusiness division faced a particularly challenging
market environment in 2005. The uncertainty surrounding EU sugar regime and
significant over-capacity in EU malt markets led to a reduction in divisional
operating profits of 11.2% to Euro41.4m. However, the division continues to
achieve excellent operational performance and generates significant cash for
Greencore. The Group's associate businesses performed solidly this year, with
the share of profits (net of interest) up 5.2% to Euro4.1m.
The Group incurred exceptional charges totalling Euro103.6m (net of tax) in this
period. The largest component (Euro65.4m) relates to the cost of restructuring
Greencore Sugar and consolidating the full processing operation at Mallow - a
critical project which generates significant annual savings, positions the Group
in the top-quartile of European sugar processors and gives the Group the
operational strength to respond to the impending EU sugar regime reform. This
project was delivered with little disruption to Greencore Sugar's processing
business. The Group also took a charge of Euro40.0m to provide for costs
associated with disposing of the loss-making Pizza business in the UK in
October 2005, thereby removing a business that had been a drag on the
performance of Convenience Foods.
Once again, the Group demonstrated its strong cash generative characteristics.
Net debt at the end of September 2005 was Euro398m, Euro11m above the level of
September 2004. However, this increase was driven by approximately Euro50m of
one-off items associated principally with the Sugar restructuring and the
acquisition of the Oldfields' sandwich business. The underlying trajectory of
debt reduction remains firmly in place.
DIVIDEND
A final dividend of 7.58c is recommended by the directors. If approved by
shareholders, this will make a total for the year of 12.63c, which is in line
with last year's level.
Shareholders will be offered the option of receiving dividends in the form of
cash or shares.
STRATEGY
Greencore's value creation strategy is centred on the twin pillars of business
development and cash generation. Central to this strategy is the Convenience
Foods division, which now accounts for almost two thirds of the Group's
operating profits and which continues to grow strongly. Development at that
division is shaped by careful selection of the markets in which to compete:
- markets where we can achieve a leading or number two position
- markets where ownership is concentrated and demand is broadly in balance with
supply
- markets with higher than average growth rates
- markets that generate higher than average profitability for its customers
In addition, the Group applies consistent parameters on how to compete in each
of these markets. Each business:
- relentlessly pursues the 'Total Lowest Cost' agenda - the Group aspires to
THE lowest cost position
- constantly renews its product range to ensure best value for customers
- broadens the range of channels it serves so as to bring increased diversity
to its customer base
- seeks out new premium positions to capture emerging consumer tastes
- continuously invests in the scale and quality of its asset base
- behaves as a 'true owner', rather than simply an operational or commercial
manager
The success of the Convenience Foods division in 2005 is a testament to this
approach. The Group remains confident about the prospects for market growth,
underpinned by a continuation of the demographic factors that have driven the
increased demand for quality convenience food in the last decade. Furthermore,
Greencore is well positioned to capitalise on the continuing shift
of brand equity in the food industry, from manufacturers to retailers.
Whilst the Ingredients and Agribusiness division is no longer the mainstay of
the Group, it remains a significant cash generator. Greencore is the No.1 sugar
producer in Ireland, the No.1 malt company in each of Ireland, the UK and
Belgium, and the No.1 agri-chemicals and molasses distributor in Ireland.
In anticipation of reform of the EU's sugar regime, Greencore has restructured
its sugar processing capacity into one plant. This has not only delivered
significant economic benefits, moving the division into the top quartile of
European processors in terms of processing efficiency, but has also given
Greencore valuable leverage in determining the optimum strategy to compete in a
post EU sugar regime reform environment.
OPERATIONAL REVIEW - CONVENIENCE FOODS DIVISION
2005 2004 Like-for-Like
Eurom Eurom Change**
Turnover (Continuing Operations) 846.4 796.7 +7.5%
Operating Profit (Continuing Operations)* 67.7 58.9 +16.4%
* before goodwill amortisation and exceptional items
** like-for-like sales and profit calculations (a) use constant exchange
rates for comparisons (the impact of which was modest in the year under
review), and (b) exclude discontinued operations
The Convenience Foods division delivered strong revenue and margin growth in
2005. The results reflect careful choices on where to compete and strong
capability to execute across the businesses.
1. Well-Chosen Categories
The markets and segments where the Group competes offer attractive
opportunities. While the chilled convenience food market remains attractive in
aggregate, with double-digit annual growth through the last decade and 4%
growth last year, the key to success lies increasingly in the specific market,
segment and format choices that the Group has made. For example, in Chilled
Sauces, where Greencore leads the industry with a 44% market share, the market
grew at 10%. In Cakes, where the overall market grew at 5%, the Christmas cake
segment had growth of 12%. Greencore leads this segment with 28% of the market
and grew its business by 38% in 2005.
2. A Commitment to Being THE Lowest Cost Competitor
Greencore is committed to delivering 'Total Lowest Cost' (TLC). The aim is not
simply to be a 'low cost competitor' - it is to be 'THE lowest cost competitor'.
This is as much about culture and leadership as it is about process and
efficiency. In 2005, a significant portion of operating profits can be
directly attributed to the delivery of the TLC agenda. Furthermore, the Group
is finding that the substantial 'de-layering' and simplification that TLC
requires has improved quality standards and broader business performance.
3. Aggressive Innovation, Especially in the Areas of Premium and Health
Innovation is the life-blood of this business. In many categories, an annual
product churn of more than 50% is required to deliver category excitement to
customers and to sustain margins. Examples of successful product churn include a
reconfigured range of chilled soups which grew that business by 16%, the re-
launch of Italian premium ready meals and the award-winning 'Christmas Cake in a
Tin' - a premium range that drove significant growth.
Health sits at the core of the division's innovation agenda. For instance, as
part of the move to healthier foods, Greencore has led the industry in removing
undesirable trans-fats from quiche. Such developments bring mainstream lines
into the healthier food sector and, in some areas, have resulted in specialist
'healthy' ranges beginning to contract. An area of specific opportunity is
weight control, where WeightWatchers is the leading brand. This summer, the
Group launched chilled meals under the WeightWatchers brand. Now stocked by
almost all major multiples, the range is already a Euro15m+ brand with considerable
further growth potential.
More broadly, the division has further exploited the use of licensed brands to
seek out premium (and higher margin) consumer occasions across all categories.
For example, the use of licensed 'characters' such as Wallace and Gromit and
King Kong has enabled the Cake's business to not only grow its novelty cake
position by more than 20%, but also to leverage the newly installed automatic
cake line to drive a step-change in efficiency.
4. Balanced Channel Exposure
While the Group has continued to strengthen its ties with the major UK
retailers, considerable emphasis is now being placed on the development of
alternative channels, which account for approximately one third of divisional
sales, and where, in many cases, strong growth is evident. For example, in
Sandwiches, overall market growth was only 3%, but growth in the 'convenience
format' ran at 8%, driven, in large part, by Greencore's own growth in this
format of 17%. A strong and growing presence in convenience channels is a core
objective of Greencore Sandwiches. In August, the Group acquired Oldfields, an
award-winning producer of premium sandwiches and paninis focused on the coffee
bar sector. This business will add more than 20% to Group sandwich sales and
will provide immediate additional capacity to facilitate further growth.
5. A Decentralised Model that Bestows 'True Ownership' to the Businesses
Greencore businesses 'own' their P&L - that is the 'Greencore way'. Ownership
requires that businesses respond quickly to market opportunities. For example,
the Grocery business moved quickly to 'contract supply' a major food
manufacturer following a fire at their premises earlier this year. The ability
to behave as 'owners' and rapidly capture commercial opportunities drives
significant performance across the businesses.
6. Robust Financial Discipline
Rigorous disciplines on fixed and working capital investments are a core feature
of how Greencore operates. This year, divisional capital expenditure accounted
for 112% of depreciation. This expenditure drove both efficiency improvement
projects, such as further automation of the sandwich and chocolate cake lines,
and investment into new product and market sectors, such as portioned cake and
a new range of ethnic sauces.
Where necessary, the Group has exited from under-performing businesses. In
October 2005, the UK pizza business was sold to management. The decision to
exit this category was not taken lightly. Notwithstanding operational
improvements over the past 12 months, the level of operating losses made
disposal essential. An exceptional charge of Euro40m (net of tax), relating
primarily to a provision for the write-down of asset values, is reflected in the
results.
These features drive the strong economic performance of the division. However,
in 2005, the Group also dealt with some exacting challenges.
Food safety and healthy eating concerns: The Sudan 1 and Para Red incidents were
a wake-up call to the food industry and revealed how quickly consumer confidence
can be damaged. The consumer impact of these scares, allied to the media's
sustained healthy eating campaign, has played a major role in reducing the
growth of the ready meals market from 10% to 2%.While Greencore's position in
the ready meal market remained strong, growth fell to 6% in 2005.
Managing input costs, particularly energy: While every effort was made to
improve energy efficiency, the dramatic rise in oil and gas prices increased
overall energy costs in the division by approximately Euro3m.
Overall pricing environment (especially with large multiple customers): Retail
price deflation has become the norm. In this environment, robust market
positions, reliable technical performance and strong customer service are not
enough. The ability to consistently bring excitement to the category, while
simultaneously taking cost out of the system, is also essential. Embedding
these capabilities has enabled Greencore to sustain operating margins in this
pricing environment.
Managing these issues going forward will be an important driver of Group
performance in 2006 and beyond.
OPERATIONAL REVIEW - INGREDIENTS AND AGRIBUSINESS DIVISION
2005 2004 Like-for-Like
Eurom Eurom Change**
Turnover (Continuing Operations) 492.5 526.4 -6.2%
Operating Profit* 41.4 46.6 -11.2%
* before goodwill amortisation and exceptional items
** like-for-like sales and profit calculations (a) use constant exchange
rates for comparisons (the impact of which was modest in the year under
review), and (b) exclude discontinued operations
The Ingredients and Agribusiness division had a difficult year, characterised by
uncertainty and oversupply in the European sugar market, and by the malt
industry moving towards a low point in its cycle. Despite some very significant
operational achievements within the division, these marketplace conditions
contributed to an 11.2% fall in operating profits to Euro41.4m. However, the
division remained a strong cash generator for the Group.
1. Strong Performance in an Uncertain Sugar Environment
In the interim results' statement in May, the Group outlined the rationale
behind the decision to consolidate sugar processing at Mallow and to close the
Carlow factory. Executing this strategy was a major undertaking, requiring the
Group to reconfigure the Mallow facility in a very short time frame so it could
process the entire Irish sugar quota. The Group is pleased that this project
has been achieved with little disruption to the business, and is already
delivering most of the economic benefits in terms of processing efficiency and
reduced overheads that the Group had anticipated. This consolidation has moved
Greencore Sugar to the top quartile of European processors in terms of
processing efficiency. Furthermore, the new operational footprint gives
Greencore leverage in assessing how best to respond in a post EU sugar regime
reform environment. The Group took an exceptional charge (net of tax) of Euro65.4m
to cater for this restructuring.
However, while the anticipated efficiency and cost benefits have come through,
the uncertainty surrounding the future of the EU sugar regime significantly
impacted the trading environment in 2005:
- Doubts over the future of processing in Ireland have led many of Greencore
Sugar's major customers to establish secondary lines of supply with other
European processors.
- The EU Commission's decision not to declassify in September 2004 led to
significant oversupply across the marketplace.
- Consumer concerns with health and obesity have led to reduced demand for
confectionary and soft drinks, two of Greencore Sugar's core market segments.
These factors reduced sales and pricing levels in 2005.
2. A Retrenchment in Malt Reflecting Overcapacity and Price Pressure in Europe
International malt prices are approaching a low point in the cycle, driven, in
large part, by over-capacity in the industry. The pricing impact, along with
significant increases in input costs and, in particular, energy increases of
more than 30%, had a negative impact on the profitability of the Group's malt
business. Greencore Malt has responded by closing three of its smaller less
efficient maltings - Ipswich, Carnoustie and Banagher. Other maltsters are now
starting to follow but the required rebalancing of industry capacity will not
happen overnight. Greencore Malt's initiatives in the UK and Ireland, allied to
strong operational performance, leave the Group well-positioned to benefit from
an upturn in the malt cycle.
The economic performance of the other agribusinesses was broadly similar to that
achieved in 2004.
ASSOCIATES
The share of the profits from associates, net of interest, increased by 5.2% to
Euro4.1m. Odlums, the largest of Greencore's associates, enjoyed record sales in
2005. Sales of oatmeal increased by almost 30%, driven by excellent performance
from the market leading McCann's brand in the US and by widespread publicity
about the benefits of increased consumption of wholegrains for human health.
Exports now account for over 60% of our oatmeal business.
FINANCIAL REVIEW
Net debt at 30 September 2005 was Euro398m, a reduction of Euro19m from the March 2005
figure, but Euro11m higher than at September 2004. However, this year-end debt
level reflects approximately Euro50m of one-off items, principally comprising the
cash costs associated with the fundamental restructuring of Greencore Sugar and
the acquisition of Oldfields. The underlying trajectory of debt reduction
remains strong.
Net interest fell by Euro2.1m (6.5%) to Euro30.4m, reflecting an interest margin
reduction achieved in the June refinancing and improved LIBOR/EURIBOR movements.
The Group incurred exceptional charges (net of tax) of Euro103.6m in 2005. This
figure comprises three separate items:
- Costs associated with the fundamental restructuring of Greencore Sugar - net
charge of Euro65.4m (a gross charge of Euro71.6m, less a tax credit of Euro6.2m).
- Costs associated with providing for the sale of Pizza - net charge of Euro40.0m
(a gross charge of Euro51.2m, less a tax credit of Euro11.2m).
- Net gain of Euro1.8m on the disposal of Feldhues.
Capital expenditure of Euro57.4m was incurred in the period, driven, in large part,
by the capital expenditure required to deliver the fundamental restructuring at
Greencore Sugar. Capital expenditure excluding the fundamental restructuring of
Greencore Sugar was Euro40.0m. The depreciation charge for the year was Euro41.2m.
The tax charge on ordinary activities of Euro10.9m equates to an effective tax rate
of 14%.
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
IFRS will apply to the Group's financial statements in 2006. Interim results
for the first half of 2006 will be presented in accordance with IFRS, which will
include the restatement of the 2005 half and full year primary financial
statements as comparatives.
OUTLOOK
Greencore expects to hear, within a matter of days, the conclusions of the EU's
review of the sugar regime. The Group will then carefully evaluate the
competitive consequences for Ireland's sugar growing and sugar processing
sectors prior to determining the best possible route forward for the industry
and its key stakeholders. The consolidation of Greencore Sugar's processing in
Mallow and its continued strong operational performance provides the Group with
a highly competitive manufacturing cost base. This, together with access to a
competitive and sustainable supply of sugar beet will be an essential
precondition for profitability and, ultimately, for the very survival of
Greencore Sugar in any new sugar regime.
In the Malt business, having taken out significant capacity and with other
players now following suit, Greencore is better positioned than most to manage
through what is expected to be a challenging year.
The Convenience Foods division is well positioned to deliver further sales and
profit growth in the coming year. The division has a strategy, a capability to
execute and a culture that has enabled it to sustain strong market positions and
deliver value growth to its shareholders. In addition, the disposal of UK Pizza
has removed a drag on business performance. The Convenience Foods division,
which already accounts for almost two thirds of Group sales and profits, will
become even more important to Greencore going forward. The board of directors
is confident that the division has the strategic and operational model required
to succeed in the convenience food market and anticipates further progress in
2006 and beyond.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 30 September 2005
2005 2004
Notes Before Exceptional Total Total
exceptional items and (Restated
items and amortisation Note 1)
amortisation
Euro'000 Euro'000 Euro'000 Euro'000
Turnover
Continuing operations 1 1,338,865 - 1,338,865 1,323,112
Discontinued operations 1 76,095 - 76,095 123,379
_________ _________ _________ _________
1,414,960 - 1,414,960 1,446,491
_________ _________ _________ _________
Operating profit before goodwill
amortisation
Continuing operations 1 109,102 - 109,102 105,586
Discontinued operations 1 (5,064) - (5,064) (5,695)
_________ _________ _________ _________
104,038 - 104,038 99,891
_________ _________ _________ _________
Goodwill amortisation - (20,718) (20,718) (20,994)
Operating profit
Continuing operations 109,102 (20,718) 88,384 85,024
Discontinued operations (5,064) - (5,064) (6,127)
_________ _________ _________ _________
104,038 (20,718) 83,320 78,897
Share of operating profit of associated 4,446 - 4,446 6,016
undertakings
_________ _________ _________ _________
108,484 (20,718) 87,766 84,913
_________ _________ _________ _________
Exceptional items 2
Fundamental reorganisation of Greencore
Sugar - (71,627) (71,627) -
Provision for loss on termination of
operations - (51,171) (51,171) -
Disposal of interest in subsidiaries and
associate - 1,909 1,909 (51,957)
_________ _________ _________ _________
- (120,889) (120,889) (51,957)
_________ _________ _________ _________
Profit/(loss) on ordinary activities
before interest and taxation 108,484 (141,607) (33,123) 32,956
Net interest payable (30,412) - (30,412) (32,540)
Amortisation of issue costs of finance
facility - - - (5,909)
Share of interest payable - associates (386) - (386) (384)
_________ _________ _________ _________
Profit/(loss) on ordinary activities
before taxation 77,686 (141,607) (63,921) (5,877)
Taxation (10,875) 17,273 6,398 (9,383)
_________ _________ _________ _________
Profit/(loss) on ordinary activities
after taxation 66,811 (124,334) (57,523) (15,260)
Minority interests (1,540) - (1,540) (1,598)
_________ _________ _________ _________
Profit/(loss) attributable to Group
shareholders 65,271 (124,334) (59,063) (16,858)
Dividends 3 (24,657) - (24,657) (24,204)
_________ _________ _________ _________
Retained profit/(loss) 40,614 (124,334) (83,720) (41,062)
======== ======== ======== ========
Adjusted earnings per ordinary share 4 33.8c 32.4c
Basic loss per ordinary share 4 (30.5c) (8.9c)
Diluted loss per ordinary share 4 (30.3c) (8.8c)
CONSOLIDATED BALANCE SHEET
30 September 2005
2005 2004
Euro'000 Euro'000
Fixed assets
Intangible assets 330,563 336,865
Tangible assets 487,492 541,786
Financial assets 10,614 12,409
_________ _________
828,669 891,060
_________ _________
Current assets
Stocks 133,556 141,279
Debtors 135,495 130,771
Cash and bank balances 74,102 86,278
_________ _________
343,153 358,328
_________ _________
Creditors
Amounts falling due within one year
- Bank debt 325 363
- Other 412,328 410,579
_________ _________
412,653 410,942
Net current liabilities (69,500) (52,614)
_________ _________
Total assets less current liabilities 759,169 838,446
_________ _________
Creditors
Amounts falling due after more than one year
- Bank debt 471,698 473,305
- Other 17,588 19,861
Provisions for liabilities and charges 46,177 46,142
Development grants 1,452 1,634
_________ _________
536,915 540,942
_________ _________
Net assets 222,254 297,504
======== ========
Capital and reserves
Called up share capital 125,116 123,647
Capital conversion reserve fund 934 934
Share premium account 97,489 92,459
Profit and loss account / other reserves (5,667) 75,945
_________ _________
Shareholders' funds - equity interests 217,872 292,985
Minority interests - equity interests 4,382 4,519
_________ _________
222,254 297,504
======== ========
CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 September 2005
2005 2004
Euro'000 Euro'000
Operating activities
Operating profit 83,320 78,897
Non cash items
- Depreciation 41,197 43,435
- Amortisation 20,112 20,043
Changes in working capital (21,886) (7,638)
Other movements (7,906) (8,526)
_________ _________
Cash flow from operating activities 114,837 126,211
Dividends from associates 3,385 7,254
Returns on investments and servicing of finance (32,460) (41,490)
Disposal of investments 2,626 -
Rationalisation costs at Greencore Sugar (15,598) -
Taxation (2,268) 2,670
Purchase of tangible fixed assets (57,393) (52,216)
Disposal of tangible fixed assets 2,885 903
Acquisition of subsidiary (17,371) -
Disposal of subsidiary and associated undertakings 9,158 22,413
Equity dividends paid (18,444) (18,572)
_________ _________
Cashflow before financing (10,643) 47,173
Increase in share capital 727 1,341
Translation differences (615) (5,855)
_________ _________
Movement in net debt in year (10,531) 42,659
Net debt at start of year (387,390) (430,049)
_________ _________
Net debt at end of year (397,921) (387,390)
======== ========
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 30 September 2005
2005 2004
Euro'000 Euro'000
Loss for period attributable to Group shareholders (59,063) (16,858)
Exchange adjustments 1,033 (6,229)
_________ _________
Total recognised losses for the year (58,030) (23,087)
======== ========
NOTES TO THE FINANCIAL STATEMENTS
Year ended 30 September 2005
1. Analysis of Results
2005 2004 (restated)
Turnover Operating Operating Turnover Operating Operating
profit profit profit profit
Pre goodwill Post goodwill Pre goodwill Post goodwill
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
By Activity
Continuing operations
Convenience Foods 846,377 67,719 47,083 796,692 58,941 38,400
Ingredients and Agribusiness 492,488 41,383 41,301 526,420 46,645 46,624
_________ _________ _________ _________ _________ _________
1,338,865 109,102 88,384 1,323,112 105,586 85,024
_________ _________ _________ _________ _________ _________
Discontinued operations
Convenience Foods 76,095 (5,064) (5,064) 122,233 (5,695) (6,127)
Ingredients and Agribusiness - - - 1,146 - -
________ _________ _________ _________ _________ _________
76,095 (5,064) (5,064) 123,379 (5,695) (6,127)
________ _________ _________ _________ _________ _________
Total - subsidiaries 1,414,960 104,038 83,320 1,446,491 99,891 78,897
======== _________ _________ ======== _________ _________
Associated undertakings
Continuing operations 43,189 4,446 4,446 43,305 4,244 4,244
Discontinued operations - - - 41,354 1,772 1,772
________ _______ _______ _______ _______ _______
Total - associates 43,189 4,446 4,446 84,659 6,016 6,016
======== _______ _______ ======== _______ _______
Total 108,484 87,766 105,907 84,913
======== ======== ======== ========
By Geographical Market
Results by origin
Continuing operations
UK and rest of world 976,318 78,585 57,924 978,987 72,855 52,314
Republic of Ireland 362,547 30,517 30,460 344,125 32,731 32,710
_________ _______ _______ _________ _________ _________
1,338,865 109,102 88,384 1,323,112 105,586 85,024
_________ _______ _______ _________ _________ _________
Discontinued operations
UK and rest of world 76,095 (5,064) (5,064) 122,233 (5,695) (6,127)
Republic of Ireland - - - 1,146 - -
________ _______ _________ _________ _________ _________
76,095 (5,064) (5,064) 123,379 (5,695) (6,127)
________ _______ _________ _________ _________ _________
Total 1,414,960 104,038 83,320 1,446,491 99,891 78,897
======== ======== ======== ======== ======== ========
Turnover by destination
Continuing operations
UK and rest of world 1,014,679 991,037
Republic of Ireland 324,186 332,075
________ ________
1,338,865 1,323,112
________ ________
Discontinued operations
UK and rest of world 76,095 122,233
Republic of Ireland - 1,146
________ ________
76,095 123,379
________ ________
Total 1,414,960 1,446,491
========= =========
The comparative amounts have been restated to reflect discontinued activities.
The year 2005 comprised 53 weeks (2004: 52 weeks).
2. Exceptional items
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 costs associated
with the fundamental restructuring of the business are shown as an exceptional
item.
In early October 2005, the Group also disposed of it's UK pizza business for a
nominal consideration. Notwithstanding operational improvements over the past
twelve months, this business consistently failed to deliver the performance or
returns that the Group demanded. The exceptional item includes a provision to
write down all of the assets related to the pizza business to their recoverable
amounts and to cover all costs directly related to the decision to sell the
pizza business.
In August 2005 a small non-core, deli-style, meat business with operations in
Ireland and Germany was sold, resulting in a profit of Euro1.8m.
The exceptional loss in the prior year represents an aggregate loss on the
disposal of the Group's former subsidiary, Rathbones Bakeries Limited, and
former associate, James Budget Sugars Limited. A net loss of Euro13.76m was
recorded on the write off of the excess of book value of assets over disposal
proceeds. In addition, goodwill of Euro38.2m, previously written off to reserves,
was reinstated and written off through the profit and loss account, giving rise
to a total loss of Euro51.96m.
A net tax credit of Euro17.3m (2004: credit of Euro0.54m) was recorded on the
exceptional items.
3. Dividends
The proposed final dividend per share of 7.58c (2004: 7.58c) is payable on 5
April 2006 to shareholders on the Register of Members, at 2 December 2005.An
interim dividend of 5.05c (2004: 5.05c) was paid on 4 October 2005.
4. Earnings Per Share
The calculation of adjusted earnings per share is after the elimination of the
exceptional loss of Euro103.6m (after tax relief: Euro17.3m) and goodwill amortisation
of Euro20.72m (tax relief: nil). The calculation of adjusted earnings per share in
2004 is after the elimination of the exceptional loss of Euro51.42m (after tax
relief: Euro0.54m), goodwill amortisation of Euro20.99m (tax relief: nil) and
amortisation of acquisition finance facility costs of Euro5.91m (tax relief: nil).
The calculation of basic earnings per share is based on a loss of Euro59.06m (2004:
loss of Euro16.86m). Both the calculation of adjusted earnings per share and basic
earnings per share are based on 193.35m ordinary shares (2004: 189.97m), being
the weighted average number of ordinary shares in issue during the period.
The diluted earnings per share has been calculated on the basis of 194.71m
ordinary shares (2004: 191.4m), and this reflects the effect of all dilutive
potential shares in issue.
The calculation of earnings per share excludes 3.9m treasury shares (2004: 4.2m)
arising from the share repurchase programme.
5. Accounting Policies
The foregoing accounts are prepared on the basis of the accounting policies set
out in the 2004 annual report.
The annual report and accounts will be circulated to shareholders in January
2006, prior to the Annual General Meeting to be held on 9 February 2006 in Jurys
Ballsbridge Hotel, Ballsbridge, Dublin 4, Ireland.
By order of the Board, C.M. Bergin, Company Secretary, 22 November 2005,
Greencore Group plc, St. Stephen's Green House, Earlsfort Terrace, Dublin 2,
Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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