TIDMGNC
RNS Number : 3971T
Greencore Group PLC
06 December 2011
RESULTS STATEMENT
for the year ended 30 September 2011
6 December 2011
Greencore Group plc, a leading international convenience food
producer, today issues its results for the year ended 30 September
2011.
FY11 HIGHLIGHTS(1,2&3)
-- Group revenue of GBP804.2m, an increase of 8.7%, 4.3% on a
like for like basis(5)
-- Group operating profit from continuing operations of
GBP51.5m, in line with FY10
-- Continuing adjusted EPS(4) of 13.9p, up 20.9%
-- Proposed final dividend of 2.4 cent per share, making a total
distribution for the full year of 46% of Adjusted Earnings
-- Good performance in Convenience Foods despite challenging
market conditions
-- Successfully completed the acquisition of Uniq plc on 23
September 2011- integration on track
-- Refinancing completed - the Group has an average debt
maturity of 4.3 years at competitive rates
Summary Performance
FY11 FY10 Change
GBPm GBPm Increase/(decrease)
----------------------------------- ----- ----- -------------------
Group revenue 804.2 739.9 +8.7%
Group operating profit 51.5 51.6 -
Continuing adjusted EPS (pence)(4) 13.9 11.5 +20.9%
Convenience Foods Division
Revenue 732.2 678.1 +8.0%
Operating profit 49.3 46.8 +5.3%
Operating margin 6.7% 6.9% -20 bps
----------------------------------- ----- ----- -------------------
Note: The Group has changed its reporting currency from euro to
sterling to align the Group's external financial reporting with the
profile of the Group. Euro equivalents are provided in the appendix
to this statement
Commenting on the results, Patrick Coveney, Chief Executive
Officer said:
"2011 has seen Greencore complete its transformation into a
focused and growing convenience food business. Our underlying
business continues to trade well. The acquisitions that we made
during the year in both the UK and US should be taken as a clear
indication of our long-term strategy of supplementing organic
growth with strategic corporate activity, and we are delighted with
the way that the businesses are being quickly and efficiently
integrated into the Group. Whilst the UK and US food markets remain
challenging, we are confident of being able to drive further growth
and shareholder value through our close customer relationships,
strong operational performance and outstanding products."
___________________________________
(1) Continuing operations comparisons exclude activities
disposed of during FY10 (Malt in the Ingredients & Property
division and Water and the Continental businesses in the
Convenience Foods division).
(2) Operating profit and margin are stated before exceptional
items and acquisition related amortisation.
(3) Adjusted earnings 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) Non-GAAP measure, excluding the effect of the Rights Issue
on average shares in issue.
(5) Excluding the impact of the 53(rd) week and the acquisition
of On a Roll Sales. Following the change in reporting currency to
sterling the impact of currency is not material.
Presentation
A presentation of the results will be made to analysts and
institutional investors at 9am on Tuesday 6 December at Investec
London, 2 Gresham Street, London EC2V 7QP.
This presentation can be accessed live through the following
channels:
-- Webcast - details on www.greencore.com
-- Conference call
Ireland number: +353 (0) 1 4860918
+44 (0) 20 3364
UK number: 5381
Pass code: 3534073#
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 dial
into the replay:-
Ireland replay number: +353 (0) 1 4860902
+44 (0) 20 7111
UK replay number: 1244
Replay code: 3534073#
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 1018
Greg Lawless or Lisa Kavanagh Powerscourt Tel: +44 (0) 20
7250 1446
Billy Murphy or Anne-Marie Drury Communications Tel: +353 (0) 1
Curran 260 5000
About Greencore
-- A leading international producer of convenience food with
operations in the UK and the US
-- Strong market positions in the UK convenience food market
across sandwiches, chilled prepared meals, chilled soups and
sauces, ambient sauces & pickles, cakes & desserts and
Yorkshire puddings
-- Extending presence outside the UK with an emerging
convenience food business in the US
FY11 OVERVIEW (1,2&3)
The Group delivered a good performance overall growing revenues
by 8.7%, maintaining operating profit in a difficult environment
and growing continuing adjusted EPS(4) by 20.9% from 11.5 pence to
13.9 pence. The growth in continuing adjusted EPS(4) was driven by
a significant reduction in finance costs following the disposal of
non-core activities in Malt, Water and the Continental business in
FY10. The Group substantially strengthened its position in chilled
convenience foods in its chosen markets of the UK and the US during
the financial year through the acquisitions of Uniq plc and On a
Roll Sales. The Uniq acquisition was part funded by a Rights Issue
which significantly increased the issued share capital of the
company. The Group has changed its reporting currency from euro to
sterling to align the Group's external financial reporting with the
profile of the Group.
Convenience Foods
The Convenience Foods division delivered a good performance in
some of the most challenging market conditions in many years with
revenue growth of 8.0% and growth in operating profit of 5.3%
leading to an operating margin of 6.7% (FY10: 6.9%). The UK retail
market has experienced a difficult year with volume declines for
the first time in many years. Real disposable incomes have
declined; pronounced input cost inflation coupled with tax rises
and growing unemployment have held back consumption.
Against this background, the Group has continued to grow
revenues through its exposure to faster growing categories, through
meeting consumer and customer needs and through new business gains.
The UK business experienced input cost inflation of 4% and this was
successfully mitigated through internal efficiency programmes,
product reconfiguration and selective price increases.
Finance, Treasury and Taxation
The disposal programme undertaken during FY10 generated proceeds
of GBP93m which were used to reduce the level of Group debt. As a
result of the disposal programme, the Group's bank interest payable
fell by GBP5.0m to GBP16.9m. In May 2011, the Group completed the
refinancing of the primary bank facility of GBP280m for a five year
term at competitive rates. The average debt maturity of the Group
at 30 September 2011 was 4.3 years compared to 2.0 years at
September 2010.
Net debt at 30 September 2011 was GBP139.8m compared to
GBP164.1m at 24 September 2010. This reduction reflects the net
proceeds from the Rights Issue of GBP68.9m included within cash and
cash equivalents at year end and the assumption of Uniq plc's net
debt upon acquisition of GBP7.4m. Adjusting for these factors, net
debt was GBP201.3m, an increase of GBP37.2m reflecting the cost of
the acquisition of On a Roll Sales (GBP10.9m net of cash acquired
of GBP0.3m) and cash outflows relating to exceptional items of
GBP24.4m.
During the year, the Group resolved a number of outstanding tax
positions which led to a one off exceptional credit to the Income
Statement amounting to GBP11.7m. This also resulted in a reduction
in the effective tax rate for the year to 13% compared to 17% in
FY10.
Dividends
The Board of Directors is recommending a final dividend of 2.4
cent per share. This will result in a total distribution to
shareholders for the year of 46% of Adjusted Earnings, in line with
the overall distribution for FY10.
OUTLOOK
The business has made a good start to FY12 with revenue momentum
in all of our major categories. The Uniq businesses are trading in
line with our expectations and the integration is progressing to
plan. The retail and economic environment remains challenging.
Whilst input cost inflation is showing signs of moderating, it is
still expected to be modestly higher for our business than in FY11.
We have made good progress to date in mitigating this inflationary
impact. We have reshaped our portfolio, we have strong market
positions, we are delivering good performance and are thus well
positioned for further progress in FY12 and beyond.
REVIEW OF OPERATIONS (1&2)
Convenience Foods
FY11 FY10 Change
GBPm GBPm
------------------ ------ ------ --------
Revenue 732.2 678.1 +8.0%
Operating profit 49.3 46.8 +5.3%
Operating margin 6.7% 6.9% -20 bps
------------------ ------ ------ --------
The Convenience Foods division delivered a good performance in
some of the most challenging market conditions in many years with
revenue growth of 8.0% and growth in operating profit of 5.3%
leading to an operating margin of 6.7%. Excluding the impact of the
53(rd) week and the acquisition of On a Roll Sales, revenue was
ahead by 3.4%. The UK retail market has experienced a difficult
year with volume declines for the first time in many years. Real
disposable incomes have declined; pronounced input cost inflation
coupled with tax rises and growing unemployment have held back
consumption.
Against this background, the Group has continued to grow
revenues through its exposure to faster growing categories, through
meeting consumer and customer needs and through new business gains.
The UK business experienced input cost inflation of 4% and this was
successfully mitigated through internal efficiency programmes,
product reconfiguration and selective price increases.
The division was strengthened in both the US and the UK. In
December 2010, the Group completed the acquisition of On a Roll
Sales, a Brockton, MA, based business, predominantly manufacturing
and distributing a Food to Go offer for the convenience channel.
The business has profitably grown revenues at over 20% since
acquisition. In July 2011, the Group announced the acquisition of
Uniq plc in the UK. The acquisition was completed in late September
2011.
Food to Go
Food to Go is our largest business comprising fresh sandwiches,
salads and sushi. The sandwich market grew by 1%** in FY11 with
consumers seeking value through competitively priced lines and
"extra free" offers. In this context, our Food to Go business grew
revenues by 9% overall and we grew our market share with both
existing and new customers, successfully adding a new major retail
customer. NPD continues to be a feature of the market, both in
product and packaging, with further conversion to cardboard
skillets.
Prepared Meals
Our Prepared Meals business comprises two core categories,
chilled ready meals (CRM) and quiche. The business recorded double
digit revenue growth, ahead of both the CRM and quiche categories,
through growth with existing customers and the annualisation of
business gained during FY10, supported by significant innovation.
The CRM market again grew strongly (+10.1%) and is now worth over
GBP1.6bn at retail . This market growth has been supported by both
increased purchase frequency and increased spend per trip with
increased multibuy activities in most retailers. The quiche market
declined by 2.7% in value terms, in part influenced by a cool
summer.
Grocery
Our Grocery business comprises ambient cooking sauces, pickles
and table sauces. The business returned to growth in FY11 having
undertaken a significant SKU rationalisation programme in FY10 to
eliminate non economic product lines, in particular refocusing our
contract packing business. Greencore has a leading market position
in the UK private label cooking sauces market. Despite intense
competition from branded ambient cooking sauces, the own label
market grew by 3.7% in value terms . Greencore Grocery delivered
growth significantly ahead of the market through a combination of
growth on existing contracts and new business wins. The business
also captured further business in table sauces. The combination of
a focus on fewer SKU's, investments to improve automation and
efficiency, and staying very close to our customers, has delivered
a material improvement in business performance.
Cakes and Desserts
The Cakes and Desserts business experienced a difficult year.
The category has experienced a significantly higher level of
inflation than our other category businesses. This factor, coupled
with excess industry capacity and a flat cakes market , led to
declining returns. Against this backdrop, the business delivered
modest revenue growth in the year improving distribution with
several of our major retail partners.
Chilled Sauces and Soups
We have significant positions in the manufacture of chilled
sauces and chilled soup. The chilled soup market continued to
exhibit strong growth in FY11 with value growth of 10% . Our
business improved its share by expanding its business with existing
customers and gaining new lines during the year. We added further
capacity to enable us to meet demand in this seasonal category. The
chilled sauce market grew by over 7% although Italian sauces lagged
the market at +3% resulting in a slight underperformance of market
growth in our business.
Frozen Foods
Our frozen Yorkshire Pudding business had a challenging year as
we upgraded the ovens at the Leeds manufacturing facility following
the fire in March 2010. While the frozen Yorkshire Pudding category
experienced modest growth in FY11 , our business experienced a
decline as we looked to rebuild our position following service
issues related to the fire. Our service levels have now recovered
and in addition to the investment in new ovens, we have expanded
our storage capacity to enable us to support customers during peak
periods.
Foodservice Desserts - Ministry of Cake
We are the market leader in foodservice desserts in the UK with
a market share estimated at 20%. The business had a solid year
exhibiting modest growth. The business supplies the top selling
dessert lines to many of the UK's pub chains and wholesalers and
adding business in Continental Europe with a UK-based coffee
chain.
US Convenience Foods
Our US business has continued to develop during FY11. In
December 2010, we completed the acquisition of On a Roll Sales,
based to the south of Boston in Brockton, MA. The business has
considerably strengthened our regional Food to Go market position,
particularly in the convenience channel. Food to Go now accounts
for over half of our US revenue. Our grocery channel business had a
mixed year. We gained listings for WeightWatchers ready meals in
over 500 Walmart stores but experienced declines in deli salads
with some customer losses and lower demand during the peak summer
season. Input cost inflation was broadly recovered through pricing.
We completed the re-fit investment at the Newburyport facility and
improved our manufacturing and technical processes.
Ingredients & Property
FY11 FY10 Change
GBPm GBPm
------------------ ------ ------ -------
Revenue 72.0 61.8 +16.6%
Operating profit 2.2 4.8 -53.8%
The Ingredients & Property segment represented less than 10%
of overall Group revenue in FY11 and will represent a smaller
proportion following the acquisition of Uniq plc.
The edible oils and molasses businesses traded well in FY11 and
maintained returns in a high inflationary environment. Year on year
operating profit delivery was impacted by lower property trading
profits. Remediation was completed at the Mallow site and work
continues in line with our obligations at Carlow.
Subsequent to the year end outline planning permission was
obtained for mixed use development at the Littlehampton site.
** References to market share, category growth and market size
are based on Nielsen data for the 52 weeks to 1 October 2011 and
Greencore retail sales figures
References to market share, category growth and market size are
based on Kantar data for the 52 weeks to 2 October 2011
FINANCIAL REVIEW (1, 2 & 3)
-- Overview
Group revenue from continuing operations was GBP804.2m, an
increase of 8.7%. Excluding the impact of the 53(rd) week and the
acquisition of On a Roll Sales, revenue was ahead by 4.3%. Group
operating profit from continuing operations was GBP51.5m, in line
with FY10. The Group operating margin on continuing operations was
6.4% compared to 7.0% in FY10.
-- Interest Payable
The Group's bank interest payable in FY11 was GBP16.9m, a
GBP5.0m reduction on the FY10 charge of GBP21.9m. The composition
of the charge in FY11 was interest payable of GBP13.7m, commitment
fees for undrawn facilities of GBP1.1m and an amortisation charge
in respect of facility arrangement fees of GBP2.1m.
-- Non Cash Finance Charges
The Group's net non cash finance credit in FY11 was GBP3.0m
(GBP1.8m charge in FY10). The change in the fair value of
derivatives and related debt adjustments was a non cash credit of
GBP3.2m in FY11 (GBP3.2m charge in FY10) reflecting the impact of
marking to market the Group's fixed interest rate swaps. The non
cash pension financing charge of GBP1.8m was greater than the
charge in FY10 of GBP0.2m reflecting a reduction in interest rates
and the lower expected returns on pension assets. The credit in
respect of the increase in the present value of assets and
liabilities held was GBP0.2m (FY10: charge GBP0.1m).
-- Taxation
The Group's effective tax rate in FY11 was 13% including the tax
impact associated with pension finance items, which is lower than
the full year effective tax percentage of 17% in FY10. During the
year, the Group resolved a number of outstanding tax positions
which led to a one off exceptional credit to the income statement
amounting to GBP11.7m. This has also resulted in a reduction in the
effective tax rate for the year.
-- Exceptional Items
An exceptional charge of GBP11.7m was recorded in FY11 as set
out below:
- a charge of GBP19.4m was recorded in relation to acquisition
activity during the year. Of this amount, GBP12.3m related to the
proposed merger of equals with Northern Foods to create Essenta
Foods and the subsequent assessment of an acquisition of Northern
Foods, together with modest costs associated with the assessment of
another proposed transaction with which the directors ultimately
decided not to proceed. GBP6.6m of transaction costs were incurred
in relation to the acquisition of Uniq plc and costs incurred on
the acquisition of On a Roll Sales amounted to GBP0.4 million;
- a charge of GBP3.6m in relation to settlement of an
outstanding claim relating to former activities of the Group;
- a charge of GBP1.3m on a restructuring programme to improve
long term operating performance; and
- a credit of GBP11.7m relating to the resolution of a number of
outstanding tax positions and a tax credit of GBP0.9m on
exceptional charges.
-- Earnings per share
Continuing adjusted earnings per share4 for FY11 were 13.9 pence
compared to 11.5 pence in FY10. This is based on a weighted average
number of ordinary shares for the year (prior to the impact of the
Rights Issue in late August) of 206.8m (FY10 204.5m). Including the
impact of the Rights Issue and the related bonus issue, the
weighted average number of ordinary shares for the year was 273.9m
and continuing adjusted earnings per share were 10.5 pence.
-- Capital Structure
The Group employs a combination of debt and equity to fund its
operations. At the end of FY11, the total capital employed in the
Group was GBP405.3m (FY10: GBP361.0m). Capital employed is defined
as the sum of the book value of shareholders' equity plus net debt
but excluding investment property and pension scheme assets or
deficits.
During FY11, the Group raised GBP68.9m net of associated fees by
way of a Rights Issue, by issuing five new shares for every six
shares held. The proceeds were applied as partial funding of the
acquisition of Uniq plc, paid during early October 2011. The
combination of new equity and debt raised to fund the acquisition
of Uniq plc was designed to maintain internally prescribed Group
net debt to EBITDA targets both on acquisition and within 18 months
of acquisition.
-- Net Debt
As at 30 September 2011, the Group's net debt was GBP139.8m.
Adjusting for the Rights Issue proceeds included within cash and
cash equivalents at year end and Uniq net debt assumed upon
acquisition, net debt was GBP201.3m.
The Group significantly extended the maturity profile of its
debt in FY11 by securing two new facilities: a five year GBP280m
Revolving Credit Facility in May 2011 and a five year GBP60m
bilateral bank facility in September 2011. In October 2010, $55m of
matured Private Placement notes were repaid. At the end of FY11,
the weighted average maturity of available committed debt
facilities of GBP443m was 4.3 years, increased from 2.0 years at
the end of FY10.
Average net debt, as is customary and having regard to the
seasonal profile of our business and our customers' and suppliers'
working capital profile, is estimated to have been approximately
GBP65m higher than net debt at the end of the financial year which
is a seasonal low point.
-- Pensions
The net pension deficit (before related deferred tax) increased
to GBP130.2m at 30 September 2011 from a net pension deficit of
GBP100.5m at 24 September 2010. The net pension deficit was
GBP105.7m after related deferred tax at 30 September 2011 (from a
deficit of GBP77.0m after related deferred tax at 24 September
2010).
The fair value of total plan assets relating to the Group's
defined benefit pension schemes (excluding associates) decreased to
GBP314.7m at 30 September 2011 from GBP323.5m at 24 September 2010.
The present value of the total pension liabilities for these
schemes increased to GBP444.9m from GBP424.0m over the same
period.
A net pension deficit of GBP2.4m relating to benefit obligations
of Uniq was recognised on acquisition and is included within the
movements described above.
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.
-- Cash Flow
A net cash inflow from operating activities (prior to
exceptional items) of GBP58.3m was recorded compared to GBP83.8m in
FY10. Capital expenditure of GBP23.0m was incurred in the year.
Interest costs of GBP19.9m were paid in the year with dividends to
equity holders of GBP10.8m.
-- Financial Control and Risk
The Group has a broad set of financial control procedures,
performance measures and monitoring controls to maintain a strong
control environment. A Risk Management Group (RMG) which reports to
the Audit Committee exists to identify and monitor the key risks
the Group faces and to ensure effective risk mitigation strategies
are in place.
On an ongoing basis, the Group's financial control environment
is subjected to continual review by the Group's finance function
with a particular focus on finance talent to ensure the Group's
financial control environment is maintained. Additionally,
individual businesses are measured against each other internally
and there is continual measuring of all key controls.
-- Key Performance Indicators
The Group uses a set of headline key performance indicators to
measure the performance of its operations and of the Group as a
whole. Although separate measures, the relationship between all
five is also monitored. In addition, other performance indicators
are measured at individual business unit level.
Sales growth
Group revenue from continuing businesses increased by 8.7% in
FY11 or 4.3% on a like for like basis(5) .
In our Convenience Foods business, the Group measures weekly
sales growth. In FY11, we recorded 8.0% growth or 3.4% growth on a
like for like basis(5) .
In the Ingredients & Property division, we track monthly
sales however this is not the primary measure of performance for
this division. In FY11, the division recorded a 16.6% increase in
revenue on continuing businesses.
Operating margin
The Group's pre-exceptional operating margin on continuing
businesses in FY11 was 6.4% compared to 7.0% in FY10. In
Convenience Foods, the operating margin on continuing businesses
was 6.7% compared to 6.9% in FY10.
Free cash flow
Group continuing free cash was GBP46.9m in FY11, which
represents 91.1% of Group operating profit of GBP51.5m. The Group's
free cash measure is net cash flow from operating activities after
capital expenditure but before exceptional items and pension
deficit funding.
Return on capital employed
The Group's return on capital on a continuing basis in FY11 was
13.2% (FY10 (as previously reported): 14.1%). Capital is defined as
the sum of the book value of shareholders' equity plus net debt but
excluding investment property and pension scheme assets or deficits
with the returns measure expressed as operating profit including
share of associates. To enable comparability with FY10, the Rights
Issue proceeds, the net debt of Uniq on acquisition and the
employee benefit obligations related to Uniq have been excluded
from Capital for the purpose of calculating Return on Capital
Employed in FY11.
Adjusted earnings per share
Adjusted earnings per share is stated before exceptional items,
the effect of foreign exchange (FX) on inter-company balances and
external loans where hedge accounting is not applied, the movement
in the fair value of all derivative financial instruments and
related debt adjustments, the amortisation of acquisition related
intangible assets and the effect of pension financing.
In the current year, an adjustment has been made to adjusted
earnings per share to exclude the effect of the Rights Issue during
the year. This is a non-GAAP measure and is reported in order to
show a meaningful metric for adjusted earnings per share that is
comparable to the prior year. The denominator for continuing
adjusted earnings per share has been calculated by excluding the
effects of the Rights Issue and related bonus issue on the weighted
average number of shares in issue during the year and the prior
year.
Continuing adjusted earnings per share excluding the effect of
the Rights Issue of 13.9p increased by 20.9% in FY11.
GROUP INCOME STATEMENT
year ended 30 September 2011
2011 2010
Exceptional Exceptional
Notes Pre - exceptional Note 3 Total Pre - exceptional Note 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP000
Continuing operations
Revenue 2 804,210 - 804,210 739,863 - 739,863
Cost of sales (559,069) - (559,069) (491,996) - (491,996)
----------------- ----------- --------- ----------------- ----------- ---------
Gross profit 245,141 - 245,141 247,867 - 247,867
Operating costs,
net (193,647) (24,305) (217,952) (196,274) - (196,274)
----------------- ----------- --------- ----------------- ----------- ---------
Group operating
profit/(loss) before
acquisition related
amortisation 2 51,494 (24,305) 27,189 51,593 - 51,593
Amortisation of
acquisition related
intangibles (2,638) - (2,638) (2,043) - (2,043)
----------------- ----------- --------- ----------------- ----------- ---------
Group operating
profit/(loss) 2 48,856 (24,305) 24,551 49,550 - 49,550
Finance income 6 19,710 - 19,710 22,606 - 22,606
Finance costs 6 (33,583) - (33,583) (46,387) - (46,387)
Share of profit
of associates after
tax 492 - 492 443 - 443
----------------- ----------- --------- ----------------- ----------- ---------
Profit/(loss) before
taxation 35,475 (24,305) 11,170 26,212 - 26,212
Taxation (3,951) 12,632 8,681 (4,680) - (4,680)
Profit/(loss) for
the period from
continuing operations 31,524 (11,673) 19,851 21,532 - 21,532
Discontinued operations
Result from discontinued
operations - - - 6,307 2,321 8,628
----------------- ----------- --------- ----------------- ----------- ---------
Profit/(loss) for
the financial period 31,524 (11,673) 19,851 27,839 2,321 30,160
----------------- ----------- --------- ----------------- ----------- ---------
Attributable to:
Equity shareholders 30,822 (11,673) 19,149 27,329 2,321 29,650
Non-controlling
interests 702 - 702 510 - 510
----------------- ----------- --------- ----------------- ----------- ---------
31,524 (11,673) 19,851 27,839 2,321 30,160
----------------- ----------- --------- ----------------- ----------- ---------
Adjusted continuing
basic earnings per
share (pence) * 5 13.9 11.5
Basic continuing
earnings per share
(pence) 5 7.0 8.1
* Adjusted continuing basic earnings per share excludes the
effect of the Rights Issue on the weighted average number of shares
in issue during the year (see Note 5)
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE
year ended 30 September 2011
2011 2010
GBP'000 GBP'000
Items of income and expense taken directly within
equity
Currency translation adjustment (300) (8,872)
Current tax on currency translation adjustment 265 (1,314)
Currency translation adjustment recycled to Income
Statement on disposal - 6,424
Hedge of net investment in foreign currency subsidiaries 593 247
Actuarial loss on Group defined benefit pension
schemes (36,942) (24,886)
Deferred tax on Group defined benefit pension
schemes 1,193 3,650
Cash flow hedges:
Gain taken to equity - 53
Transferred to Income Statement for the period - 1,526
Deferred tax on cash flow hedge - (430)
Cash flow hedge losses recycled to Income Statement
on disposal - 96
-------- --------
Net expense recognised directly within equity (35,191) (23,506)
Group result for the financial period 19,851 30,160
-------- --------
Total recognised income and expense for the financial
period (15,340) 6,654
-------- --------
Attributable to:
Equity shareholders (16,077) 6,366
Non-controlling interests 737 288
-------- --------
Total recognised income and expense for the financial
period (15,340) 6,654
-------- --------
GROUP BALANCE SHEET
at 30 September 2011
2011 2010
GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 472,172 343,184
Property, plant and equipment 214,847 184,532
Investment property 34,087 32,164
Investment in associates 582 579
Other receivables 2,818 5,353
Derivative financial instruments 16,364 16,304
Deferred tax assets 56,474 39,263
Total non-current assets 797,344 621,379
--------- --------
Current assets
Inventories 51,910 33,549
Derivative financial instruments - 2,109
Trade and other receivables 99,333 54,747
Cash and cash equivalents 81,564 9,931
--------- --------
Total current assets 232,807 100,336
--------- --------
Total assets 1,030,151 721,715
--------- --------
EQUITY
Capital and reserves attributable to equity holders
of the Company
Share capital 117,004 112,536
Share premium 171,010 102,782
Reserves (96,376) (66,015)
--------- --------
191,638 149,303
Non-controlling interests 2,962 2,444
--------- --------
Total equity 194,600 151,747
--------- --------
LIABILITIES
Non-current liabilities
Borrowings 222,216 157,288
Retirement benefit obligations 130,167 100,474
Other payables 3,538 4,405
Provisions for liabilities 10,815 3,351
Deferred tax liabilities 34,098 37,191
Government grants 83 97
--------- --------
Total non-current liabilities 400,917 302,806
--------- --------
Current liabilities
Borrowings 15,500 35,120
Derivative financial instruments 9,442 16,028
Trade and other payables 253,045 185,036
Consideration payable on acquisitions 113,344 -
Provisions for liabilities 16,274 7,038
Current taxes payable 27,029 23,940
--------- --------
Total current liabilities 434,634 267,162
--------- --------
Total liabilities 835,551 569,968
--------- --------
Total equity and liabilities 1,030,151 721,715
--------- --------
GROUP CASH FLOW STATEMENT
year ended 30 September 2011
2011 2010
GBP'000 GBP'000
Profit before taxation 11,170 26,212
Finance income (19,710) (22,606)
Finance costs 33,583 46,387
Share of profit of associates (after tax) (492) (443)
Exceptional items - continuing 24,305 -
----------- -----------
Operating profit - continuing (pre-exceptional) 48,856 49,550
Depreciation 17,096 16,785
Amortisation of intangible assets 3,899 3,383
Employee share option expense 1,744 1,496
Amortisation of government grants (13) (33)
Difference between pension charge and cash contributions (11,633) (8,853)
Working capital movement (1,552) 21,300
Other movements (109) 161
----------- -----------
Net cash inflow from operating activities before
exceptional items 58,288 83,789
Cash outflow related to exceptional items (24,385) (5,620)
Interest paid (19,876) (24,948)
Tax paid (2,407) (1,112)
Operating cash flows from discontinued operations - (11,783)
----------- -----------
Net cash inflow from operating activities 11,620 40,326
----------- -----------
Cash flow from investing activities
Dividends received from associates 485 464
Purchase of property, plant and equipment and
investment property (22,390) (21,306)
Purchase of intangible assets (618) -
Acquisition of undertakings (3,246) (2,522)
Disposal of undertakings 904 92,640
Interest received 44 864
Investing activities cash flows from discontinued
operations - (2,448)
----------- -----------
Net cash (outflow)/inflow from investing activities (24,821) 67,692
----------- -----------
Cash flow from financing activities
Proceeds from the issue of shares 68,449 -
Ordinary shares purchased - own shares (1,470) (1,729)
Drawdown of new bank facilities 287,565 98,459
Repayment of bank borrowings (220,598) (169,682)
Repayment of Private Placement Notes (33,013) (43,321)
Cash outflow arising on settlement of derivative
financial instruments (4,255) (8,294)
Decrease in finance lease liabilities - (16)
Dividends paid to equity holders of the Company (10,847) (10,754)
Dividends paid to non-controlling interests (219) (1,124)
----------- -----------
Net cash inflow/(outflow) from financing activities 85,612 (136,461)
----------- -----------
Net increase/(decrease) in cash and cash equivalents 72,411 (28,443)
----------- -----------
Reconciliation of opening to closing cash and
cash equivalents
Cash and cash equivalents at beginning of year 9,931 40,124
Translation adjustment (778) (1,750)
Increase/(decrease) in cash and cash equivalents 72,411 (28,443)
----------- -----------
Cash and cash equivalents at end of year 81,564 9,931
----------- -----------
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Other Retained Non-controlling Total
capital premium reserves earnings Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 24 September
2010 112,536 102,782 (14,109) (51,906) 149,303 2,444 151,747
Total recognised
income and expense
for the financial
year - - 258 (16,335) (16,077) 737 (15,340)
Currency translation
adjustment 1,591 (269) (1,322) - - - -
Employee share
option expense - - 1,744 - 1,744 - 1,744
Exercise, lapse
or forfeit of
share options 11 4 (1,144) 1,144 15 - 15
Shares acquired
by Deferred Share
Awards Trust (a) - - (1,638) 168 (1,470) - (1,470)
Shares granted
to beneficiaries
of the Deferred
Bonus Award Trust
(b) - - 1,419 (1,419) - - -
Issue of shares
- Rights Issue 1,500 69,255 - - 70,755 - 70,755
Costs associated
with the issue
of shares - (2,321) - - (2,321) - (2,321)
Dividends 1,366 1,559 - (13,236) (10,311) (219) (10,530)
At 30 September
2011 117,004 171,010 (14,792) (81,584) 191,638 2,962 194,600
--------- --------- ---------- ---------- --------- ---------------- ---------
Share Share Other Retained Non-controlling Total
capital premium reserves earnings Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 25 September
2009 119,871 109,252 (29,129) (45,904) 154,090 3,280 157,370
Total recognised
income and expense
for the financial
year - - (734) 7,100 6,366 288 6,654
Currency translation
adjustment (8,555) (7,800) 16,355 - - - -
Employee share
option expense - - 1,496 - 1,496 - 1,496
Settlement of
grant - - (110) - (110) - (110)
Exercise, lapse
or forfeit of
share options - - (258) 258 - - -
Shares acquired
by Deferred Share
Awards Trust (a) - - (1,729) - (1,729) - (1,729)
Dividends 1,220 1,330 - (13,360) (10,810) (1,124) (11,934)
--------- --------- ---------- ---------- --------- ---------------- ---------
At 24 September
2010 112,536 102,782 (14,109) (51,906) 149,303 2,444 151,747
--------- --------- ---------- ---------- --------- ---------------- ---------
NOTES TO THE RESULTS STATEMENT
year ended 30 September 2011
1. Basis of Preparation of Financial Information under IFRS
The financial information included within this Results Statement
has been extracted from the audited consolidated financial
statements of Greencore Group plc for the year ended 30 September
2011, to which an unqualified audit opinion is attached. The
financial information in this announcement for the years ended 30
September 2011 and 24 September 2010 is not the statutory financial
statements of the Company. The statutory financial statements of
the Company for the year ended 24 September 2010, to which an
unqualified audit opinion was attached, were annexed to the annual
return of the Company and filed with the Registrar of Companies.
The statutory financial statements of the Company for the year
ended 30 September 2011 were approved by the Board of Directors and
authorised for issue on 5 December 2011 and will be filed with the
Registrar of Companies following the Company's annual general
meeting.
The financial information presented in this Results Statement
has been prepared in accordance with the recognition and
measurement principles of International Financial Reporting
Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations adopted by the
European Union (EU).
The financial information, which is presented in sterling and
rounded to the nearest thousand (unless otherwise stated), has been
prepared under the historical cost convention, as modified by the
measurement at fair value of certain financial assets and financial
liabilities, including share options at grant date and derivative
financial instruments. The carrying values of recognised assets and
liabilities that are hedged are adjusted to record the changes in
the fair values attributable to the risks being hedged. Full
details of the Group's accounting policies are included in the 2011
Annual Report. Following the acquisition of Uniq plc in the period,
the Group has changed its reporting currency from euro to sterling.
This change aligns the Group's external financial reporting with
the profile of the Group. At the same time, Greencore Group plc has
changed its functional currency from euro to sterling. This change
reflects the increased concentration of the Group's activities in
sterling. The change in functional currency will be accounted for
prospectively from completion of the acquisition while the change
in presentation currency has been applied retrospectively.
The Group has reviewed its accounting policy for Exceptional
Items and is making the following clarification:
Exceptional Items include transaction costs related to
acquisition and disposal activity. In management's judgement such
costs, by virtue of their nature as non-recurring and unrelated to
the trading result of the business, should be highlighted and
disclosed as exceptional items.
With the exception of the changes described above, the
accounting policies are consistent with those applied in the Group
Financial Statements for the year ended 24 September 2010.
The adoption of the other new standards (as set out in the 2010
Annual Report) that are effective for the year ended 30 September
2011 did not have any significant impact on the Group Financial
Statements.
The financial statements of the Group are prepared for a 53 week
period ending on 30 September 2011. Comparatives are for a 52 week
period ended 24 September 2010. The balance sheets for 2011 and
2010 have been drawn up as at 30 September 2011 and 24 September
2010 respectively.
2. Segment Information
The Group is organised around different product portfolios. The
Group's reportable segments under IFRS 8 Operating Segments 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 and Property - this segment represents the
aggregation of 'all other segments' as allowed 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 and molasses and the
management of the Group's property assets.
The Greencore Malt reportable segment represented the
manufacture and sale of malt. This business was discontinued last
year.
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.
On 26 March 2010, the Group completed the disposal of its Malt
business, (Greencore Malt) and its bottled water business
(Greencore Water). On 20 August 2010, the Group completed the
disposal of its Dutch based Convenience Foods business (Greencore
Continental). In accordance with IFRS 5 Non-Current Assets Held for
Sale and Discontinued Operations, the operations of Greencore Malt,
Greencore Water and Greencore Continental were classified as
discontinued in the year ended 24 September 2010.
Convenience Ingredients Malt Total
Foods & Property (discontinued)
2011 2010 2011 2010 2011 2010 2011 2010
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total Revenue 732,176 725,852 72,034 61,785 - 78,296 804,210 865,933
Less: Revenue
from discontinued
operations - (47,774) - - - (78,296) - (126,070)
---------
Revenue - continuing
operations 732,176 678,078 72,034 61,785 - - 804,210 739,863
--------- --------- --------- --------- --------- --------- --------- ----------
Total operating
profit before
exceptional items
and acquisition
related amortisation 49,272 46,676 2,222 4,810 - 7,390 51,494 58,876
Less: Operating
loss/(profit)
from discontinued
operations - 107 - - - (7,390) - (7,283)
Group operating
profit before
exceptional items
and acquisition
related amortisation
- continuing
operations 49,272 46,783 2,222 4,810 - - 51,494 51,593
Amortisation
of acquisition
related intangible
assets (2,638) (2,043) - - - - (2,638) (2,043)
Exceptional items (24,305) -
Group operating
profit 46,634 44,740 2,222 4,810 - - 24,551 49,550
--------- --------- --------- --------- --------- ---------
Finance income 19,710 22,606
Finance costs (33,583) (46,387)
Share of profit
of associates
after tax - - 492 443 - - 492 443
--------- --------- --------- --------- --------- ---------
Profit before
taxation 11,170 26,212
--------- ----------
3. Exceptional Items
Exceptional Items are those that, in management's judgment,
should be disclosed separately by virtue of their nature or amount.
Such items are included within the Income Statement caption to
which they relate and are separately disclosed in the notes to the
Group Financial Statements.
The Group reports the following Exceptional Items:
2011 2010
GBP'000 GBP'000
Continuing operations
Transaction costs (a) (19,366) -
Legal settlement (b) (3,593) -
Restructuring (c) (1,346) -
(24,305) -
Tax on exceptional charges (d) 944 -
Exceptional tax credit (d) 11,688 -
Total continuing operations (11,673) -
Discontinued operations (net of tax)
Greencore Malt (e) - 11,047
Greencore Water (f) - (5,040)
Greencore Continental (g) - (3,686)
Total discontinued operations - 2,321
-------------- --------------
Total exceptional (expense)/income (11,673) 2,321
-------------- --------------
(a) Transaction costs
On 17 November 2010, the Boards of Greencore and of Northern
Foods plc ('Northern') announced that they had reached agreement on
the terms of a recommended merger of equals to create Essenta
Foods. The Greencore Board believes that the merger would have been
a compelling prospect for both companies, creating a business which
would offer substantial benefits for shareholders, customers and
employees and it was anticipated that the merger would complete in
the second quarter of 2011.
Subsequent to the announcement of the proposed merger, Greencore
and Northern commenced planning for the integration of the two
businesses, however, in late December 2010, a third party emerged
as a potential bidder for the acquisition of Northern. On 21
January 2011, the Board of Northern changed its recommendation in
favour of the merger to a recommendation in favour of an
alternative cash offer from this third party.
Following this announcement, the Group performed an assessment
of an acquisition of Northern and worked with a partner in order to
agree a simultaneous sale of certain branded businesses of
Northern. This approach was intended to provide significant funding
and allow Greencore to acquire only the parts of the Northern
business with the greatest synergy potential. This relatively
complex structure required a range of stakeholders to reach
agreement. However, after substantial investigation, the Board
determined that an improved offer could not be concluded on terms
which would deliver sufficiently strong returns to Greencore
shareholders and on 9 March 2011, the Board of Greencore announced
that it did not intend to make a revised offer for Northern. The
Group also incurred modest costs associated with the assessment of
another proposed transaction with which the Directors ultimately
decided not to proceed.
The total cost incurred on the above aborted transactions
amounted to GBP12.3 million, the more significant portion being
comprised of professional advisory costs and costs incurred to
satisfy the provisions relating to conditionality in making an
announcement in accordance with Rule 2.5 of the Takeover Code in
relation to the proposed Essenta merger.
On 12 July 2011, the Group announced that it had reached
agreement with the board of Uniq plc ('Uniq') on the terms of a
recommended cash offer to acquire the entire issued, and to be
issued, share capital of Uniq plc ('the Acquisition'). The offer
valued each Uniq share at 96 pence and the entire issued share
capital of Uniq at approximately GBP113 million. The Offer Document
containing the full terms and conditions of the Offer was posted to
Uniq Shareholders on 26 July 2011.
The Group also announced that it intended to raise approximately
EUR80.2 million by way of a fully underwritten Rights Issue (the
'Rights Issue') to fund part of the consideration for this
acquisition.
The Offer was declared unconditional as to acceptances on 29
July 2011. On 8 August, the proposed Acquisition and Rights Issue
were approved by Greencore Shareholders and on 24 August 2011, the
proposed Acquisition received clearance from the Irish Competition
Authority.
On 23 September 2011, the UK Office of Fair Trading indicated
that it did not intend to refer the Acquisition to the Competition
Commission and accordingly, each of the conditions to the Offer, as
set out in the Offer Document, were satisfied or waived and the
Offer was declared unconditional in all respects.
On 7 December 2010, the Group announced the acquisition of On a
Roll Sales ('On a Roll'), a convenience foods business based in
Brockton, Massachusetts as set out in Note 7.
The transaction costs incurred on the Uniq acquisition amounted
to GBP6.6 million, the more significant portion being comprised of
professional advisory costs and the costs incurred on the On a Roll
acquisition amounted to GBP0.4 million.
(b) Legal settlement
The Group settled an outstanding claim relating to its former
activities and recognised an exceptional charge of GBP3.6m in
respect of both the settlement and the related legal costs.
(c) Restructuring
During the year, the Group incurred certain one off costs as
part of a restructuring programme to improve long term operating
performance. The costs incurred to implement this restructuring
amounted to GBP1.3 million.
(d) Taxation
During the year, the Group resolved a number of outstanding tax
positions which has led to a one off credit to the income statement
amounting to GBP11.7m. A tax credit of GBP0.9m was recognised in
respect of exceptional charges in the period.
(e) Greencore Malt
The Group completed the disposal of the Malt businesses on 26
March 2010 and a profit on disposal of GBP11.0 million was
recognised in the Income Statement in the prior period. The net
impact of the disposal on the Group's equity was an increase of
GBP14.9m.
(f) Greencore Water
The Group completed the disposal of its bottled water business
on 26 March 2010 and a loss on disposal of GBP5.0 million was
recognised in the Income Statement in the prior year. The net
impact of the disposal on the Group's equity was a decrease of
GBP2.3 million.
(g) Greencore Continental
The Group completed the disposal of its Dutch based convenience
foods business on 20 August 2010 and a loss on disposal of GBP3.7m
was recognised in the Income Statement in the prior year.
4. Dividends
2011 2010
GBP'000 GBP'000
Amounts recognised as distributions to equity holders
during the year:
Equity dividends on ordinary shares:
Final dividend of 4.5c for the year ended 24 September
2010 (2009: 4.5c) 7,814 8,002
Interim dividend of 3.0c for the year ended 30
September 2011 (2010: 3.0c) 5,422 5,358
--------- ---------
13,236 13,360
--------- ---------
Proposed for approval at AGM:
Equity dividends on ordinary shares:
--------- ---------
Final dividend of 2.4c for the year ended 30 September
2011 (2010: 4.5c) 7,948 8,039
--------- ---------
The final dividend for the year ended 30 September 2011 is based
on an enlarged equity base subsequent to the Rights Issue.
This proposed dividend is subject to approval by the
shareholders at the annual general meeting and has not been
included as a liability in the Balance Sheet of the Group as at 30
September 2011, in accordance with IAS 10 Events after the Balance
Sheet Date
The proposed final dividend for the year ended 30 September 2011
will be payable on 2 April 2012 to shareholders on the Register of
Members at 16 December 2011.
5. 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 held
as treasury shares and shares held in trust in respect of Deferred
Bonus Awards Scheme and after adjusting the weighted average number
of shares for the effect of the Rights Issue and related bonus
issue on the average number of shares in issue during the year and
the prior year. The adjusted figures for basic and diluted earnings
per ordinary share are after the elimination of exceptional items,
the effect of foreign exchange (FX) on inter-company and external
balances where hedge accounting is not applied, the movement in the
fair value of all derivative financial instruments and related debt
adjustments, the amortisation of acquisition related intangible
assets and the effect of pension financing.
2011 2010
GBP'000 GBP'000
Profit attributable to equity holders of the Company 19,149 29,650
Exceptional items (net of tax) 11,673 (2,321)
Fair value of derivative financial instruments
and related debt adjustments where hedge accounting
is not applied (3,168) 3,225
FX on inter-company and external balances where
hedge accounting is not applied (1,416) (1,697)
Amortisation of acquisition related intangible
assets (net of tax) 1,859 1,368
Pension financing (net of tax) 700 (384)
Fair value of derivative financial instruments
and related debt adjustments and pension financing
included in discontinued operations - (298)
Numerator for adjusted earnings per share calculation 28,797 29,543
Result from discontinued operations - pre-exceptional - (6,307)
Fair value of derivative financial instruments
and related debt adjustments and pension financing
included in discontinued operations - 298
---------- -----------
Numerator for continuing adjusted earnings per
share calculation 28,797 23,534
---------- -----------
Numerator for discontinued basic EPS
Discontinued profit for the year - 8,628
---------- -----------
Numerator for discontinued adjusted EPS
Result from discontinued operations - pre-exceptional - 6,307
Fair value of derivative financial instruments
and related debt adjustments and pension financing
included in discontinued operations - (298)
---------- -----------
Numerator for discontinued adjusted EPS - 6,009
---------- -----------
2011 *2010
Pence Pence
Basic earnings per share
Continuing operations 7.0 8.1
Discontinued operations - 3.3
-------- --------
7.0 11.4
-------- --------
Adjusted basic earnings per share
Continuing operations 10.5 9.1
Discontinued operations - 2.3
-------- --------
10.5 11.4
-------- --------
Denominator for earnings per share calculation
2011 *2010
Shares in issue at the beginning of the year (thousands) 210,574 208,333
Treasury shares (thousands) (3,905) (3,905)
Shares held by Trust (thousands) (1,765) (1,641)
Effect of bonus issue related to Rights Issue 49,003 54,760
Effect of shares issued in period (thousands) 20,030 1,715
-------- --------
Weighted average number of ordinary shares in
issue during the year (thousands) 273,937 259,262
-------- --------
*Restated to include the effect of the bonus issue of shares
incorporated in the Rights Issue in 2011
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 options, 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
6,899,179 (2010:7,101,345) 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.
2011 *2010
Pence Pence
Diluted earnings per ordinary share
Continuing operations 6.9 8.0
Discontinued operations - 3.3
------- -------
6.9 11.3
------- -------
Adjusted diluted earnings per ordinary share
Continuing operations 10.4 9.0
Discontinued operations - 2.3
------- -------
10.4 11.3
------- -------
A reconciliation of the weighted average number of ordinary
shares used for the purpose of calculating the diluted earnings per
share amounts is as follows:
Denominator for diluted earnings per share calculation
2011 *2010
Weighted average number of ordinary shares in
issue during the year (thousands) 273,937 259,262
Dilutive effect of share options (thousands) 2,392 3,210
-------- --------
Weighted average number of ordinary shares for
diluted earnings per share (thousands) 276,329 262,472
-------- --------
Non-GAAP performance measure
In the current year, an additional non-GAAP measure for earnings
per share is reported, in order to show a metric excluding the
effect of the Rights Issue. The purpose of the Rights Issue, which
occurred on 18 August 2011, was to part-fund the acquisition of
Uniq plc, which completed post year end, with all conditions
precedent being achieved on 23 September 2011. Given the timing
mismatch above, the directors believe it is useful to shareholders
to provide an additional non-GAAP measure for earnings per share.
IAS 33 Earnings per Share requires the inclusion of the impact of
the Rights Issue on the weighted average number of shares in the
period, with an adjustment to the prior period for the bonus
element of the Rights Issue. Basic and adjusted earnings per share
have been computed on this basis. The directors believe that, in
order to provide shareholders with an additional meaningful metric
for earnings per share, which is comparable with the prior year, an
additional non-GAAP measure, not prepared in accordance with IAS
33, is appropriate. This measure has been calculated using the same
numerator as adjusted earnings per share described above while the
denominator has been calculated by excluding the effects of the
Rights Issue and related bonus issue on the weighted average number
of shares in issue during the year and the prior year.
2011 2010
Pence Pence
Adjusted earnings per share excluding the effect
of the Rights Issue
Continuing operations 13.9 11.5
Discontinued operations - 2.9
--------- ---------
13.9 14.4
--------- ---------
Diluted adjusted earnings per share excluding
the effect of the Rights Issue
Continuing operations 13.8 11.4
Discontinued operations - 2.9
--------- ---------
13.8 14.3
--------- ---------
Denominator for adjusted earnings per share excluding the effect
of the Rights Issue calculation
2011 2010
Shares in issue at the beginning of the year (thousands) 210,574 208,333
Treasury shares (thousands) (3,905) (3,905)
Shares held by Trust (thousands) (1,635) (1,641)
Effect of shares issued in period (thousands) 1,754 1,715
--------- ---------
Weighted average number of ordinary shares in
issue during the year (thousands) 206,788 204,502
--------- ---------
Denominator for diluted adjusted earnings per share excluding
the effect of the Rights Issue calculation
2011 2010
Weighted average number of ordinary shares in
issue during the year (thousands) 206,788 204,502
Dilutive effect of share options (thousands) 2,137 2,548
--------- ---------
Weighted average number of ordinary shares for
diluted earnings per share (thousands) 208,925 207,050
--------- ---------
6. Comparable Net Debt and Financing
2011 2010
GBP'000 GBP'000
Net Debt
Current assets
Cash and cash equivalents 81,564 9,931
Current liabilities
Borrowings before fair value adjustment (15,500) (33,013)
Non-current liabilities
Borrowings before fair value adjustment (205,140) (141,339)
---------- ----------
Comparable net debt (139,076) (164,421)
Borrowings - fair value hedge adjustment (17,076) (18,056)
Cross currency interest rate swaps - fair value
hedges 16,364 18,413
---------- ----------
Group net debt (139,788) (164,064)
---------- ----------
Net debt and comparable net debt are Non-GAAP measures used by
the Group as key performance indicators.
During the year the Group repaid GBP33.0 million of Private
Placement Notes which had reached their maturity dates. In
addition, the Group refinanced its revolving credit facility which
resulted in the repayment of existing facilities totalling GBP220.6
million on 21 May 2011 and the draw down of an equal amount of new
facilities on the same date. The cash flows from financing
activities are set out in the Group Cash Flow Statement.
2011 2010
Finance (Costs)/Income GBP'000 GBP'000
Net finance costs on interest bearing cash,
cash equivalents and borrowings (16,915) (21,886)
Net pension financing (1,780) (222)
Fair value of derivative financial instruments
and related debt adjustments 3,168 (3,225)
Foreign exchange gain on intercompany and external
balances where hedge accounting is not applied 1,416 1,697
Unwind of discount on assets and liabilities 238 (145)
--------- ---------
(13,873) (23,781)
--------- ---------
Analysed as:
Finance income 19,710 22,606
Finance costs (33,583) (46,387)
--------- ---------
(13,873) (23,781)
--------- ---------
7. Acquisitions
During the year ended 30 September 2011 the Group recognised two
business combinations.
On 23 September 2011, the Group's acquisition of Uniq plc
('Uniq') was declared unconditional in all respects. The
acquisition provides further critical mass in the Food to Go market
and exposure to the premium chilled desserts market, in both cases
with a major retail customer with which the Group previously had
little trade.
On 6 December 2010, the Group acquired a 100% interest in On A
Roll Sales ("On A Roll"), a
manufacturer of fresh sandwiches based in Brockton, south of
Boston, Massachusetts. The Group
obtained control of On A Roll by way of asset purchase. This
acquisition provides an additional
revenue stream to Greencore USA's Food to Go category and
complements our existing businesses
in Newburyport and Cincinnati.
The fair value of the assets acquired in each of these
transactions has been determined provisionally as at the
acquisition date. The provisional fair values are as set out in the
table below.
On a
Roll Uniq
Sales plc Total
GBP'000 GBP'000 GBP'000
Assets
Intangible assets 6,907 38,297 45,204
Property, plant and equipment 404 29,583 29,987
Deferred tax asset - 19,744 19,744
Inventory 342 10,780 11,122
Trade and other receivables 746 28,418 29,164
----------
Total assets 8,399 126,822 135,221
-------- ---------- ----------
Liabilities
Borrowings - (15,500) (15,500)
Trade and other payables (1,198) (48,072) (49,270)
Provisions for liabilities - (19,610) (19,610)
Current taxes payable - (5,833) (5,833)
Retirement benefit obligations - (2,446) (2,446)
Deferred tax liabilities - (9,574) (9,574)
-------- ---------- ----------
Total liabilities (1,198) (101,035) (102,233)
-------- ---------- ----------
Net assets acquired 7,201 25,787 32,988
-------- ---------- ----------
Goodwill 4,322 78,792 83,114
-------- ---------- ----------
Total Enterprise value 11,523 104,579 116,102
-------- ---------- ----------
Satisfied by:
Cash payments 11,116 - 11,116
Cash acquired (241) (8,123) (8,364)
-------- ---------- ----------
Net cash outflow 10,875 (8,123) 2,752
Consideration payable 648 112,702 113,350
-------- ---------- ----------
Total consideration 11,523 104,579 116,102
-------- ---------- ----------
8. Information
The annual report and accounts will be published on the Group's
website on 6 December 2011.
By order of the Board, Conor O'Leary, Company Secretary, 5
December 2011, Greencore Group plc, 2 Northwood Avenue, Santry,
Dublin 9, Ireland.
________________________
APPENDIX TO RESULTS STATEMENT
Following the acquisition of Uniq plc in the period, the Group
has changed its reporting currency from euro to sterling. This
change aligns the Group's external financial reporting with the
profile of the Group. For information purposes the Group Income
Statement and Balance Sheet are presented below in euro and rounded
to the nearest thousand (unless otherwise stated). In presenting
the Group Income Statement and Balance Sheet for 2011 in euro the
reported information was converted to euro from sterling using the
following procedures.
-- Assets, liabilities and equity were translated to euro at the
closing rates of exchange at the respective balance sheet dates
-- Income and expenses were translated to euro at actual rates
of exchange for the transactions (or the average rate where this
was a reasonable approximation).
GROUP INCOME STATEMENT
year ended 30 September 2011
2011 2010
(Unaudited) (Audited)
Exceptional Exceptional
Notes Pre - exceptional Note 3 Total Pre - exceptional Note 3 Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR000
Continuing operations
Revenue 925,838 - 925,838 855,952 - 855,952
Cost of sales (643,569) - (643,569) (569,193) (569,193)
----------------- ------------ --------- ----------------- ------------ ---------
Gross profit 282,269 - 282,269 286,759 - 286,759
Operating costs,
net (223,124) (28,187) (251,311) (227,071) - (227,071)
----------------- ------------ --------- ----------------- ------------ ---------
Group operating
profit/(loss) before
acquisition related
amortisation 59,145 (28,187) 30,958 59,688 - 59,688
Amortisation of
acquisition related
intangibles (3,050) - (3,050) (2,364) - (2,364)
----------------- ------------ --------- ----------------- ------------ ---------
Group operating
profit/(loss) 56,095 (28,187) 27,908 57,324 - 57,324
Finance income 22,709 - 22,709 26,153 - 26,153
Finance costs (38,637) - (38,637) (53,665) - (53,665)
Share of profit
of associates after
tax 572 - 572 513 - 513
----------------- ------------ --------- ----------------- ------------ ---------
Profit/(loss) before
taxation 40,739 (28,187) 12,552 30,325 - 30,325
Taxation (4,553) 14,555 10,002 (5,415) - (5,415)
Profit/(loss) for
the period from
continuing operations 36,186 (13,632) 22,554 24,910 - 24,910
Discontinued operations
Result from discontinued
operations - - - 7,297 2,253 9,550
----------------- ------------ --------- ----------------- ------------ ---------
Profit/(loss) for
the financial period 36,186 (13,632) 22,554 32,207 2,253 34,460
----------------- ------------ --------- ----------------- ------------ ---------
Attributable to:
Equity shareholders 35,376 (13,632) 21,744 31,617 2,253 33,870
Non-controlling
interests 810 - 810 590 - 590
----------------- ------------ --------- ----------------- ------------ ---------
36,186 (13,632) 22,554 32,207 2,253 34,460
----------------- ------------ --------- ----------------- ------------ ---------
GROUP BALANCE SHEET
at 30 September 2011
2011 2010
(Unaudited) (Audited)
EUR'000 EUR'000
ASSETS
Non-current assets
Intangible assets 548,655 404,555
Property, plant and equipment 249,648 217,532
Investment property 39,609 37,916
Investment in associates 677 682
Other receivables 3,274 6,310
Derivative financial instruments 19,015 19,220
Deferred tax assets 65,622 46,284
Total non-current assets 926,500 732,499
----------- ---------
Current assets
Inventories 60,319 39,549
Derivative financial instruments 115,424 2,486
Trade and other receivables - 64,537
Cash and cash equivalents 94,775 11,707
----------- ---------
Total current assets 270,518 118,279
----------- ---------
Total assets 1,197,018 850,778
----------- ---------
EQUITY
Capital and reserves attributable to equity holders
of the Company
Share capital 135,955 132,661
Share premium 198,710 121,162
Reserves (111,986) (77,820)
----------- ---------
222,679 176,003
Non-controlling interests 3,441 2,881
----------- ---------
Total equity 226,120 178,884
----------- ---------
LIABILITIES
Non-current liabilities
Borrowings 258,211 185,415
Retirement benefit obligations 151,252 118,442
Other payables 4,111 5,193
Provisions for liabilities 12,567 3,950
Deferred tax liabilities 39,621 43,842
Government grants 96 114
----------- ---------
Total non-current liabilities 465,858 356,956
----------- ---------
Current liabilities
Borrowings 18,011 41,401
Derivative financial instruments 10,972 18,894
Trade and other payables 294,037 218,126
Consideration payable on acquisitions 131,703 -
Provisions for liabilities 18,910 8,297
Current taxes payable 31,407 28,220
----------- ---------
Total current liabilities 505,040 314,938
----------- ---------
Total liabilities 970,898 671,894
----------- ---------
Total equity and liabilities 1,197,018 850,778
----------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BCBDDXXGBGBU
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