TIDMGNC
RNS Number : 3041J
Greencore Group PLC
04 December 2018
4 December 2018
THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION
Group well positioned to drive future growth and sustainable
returns in core UK market
Greencore Group plc ('Greencore' or the 'Group'), a leading
manufacturer of convenience food in the UK, today issues its
results for the year ending 28 September 2018.
HIGHLIGHTS (1,2)
-- FY18 Adjusted EPS of 15.1p, in line with previously announced guidance 14.7p-15.7p (3)
-- US business results presented as discontinued operations
following the disposal of the business for $1,075m
-- Plan to return GBP509m of capital to shareholders by way of tender offer
-- Pro Forma full year revenue growth of 8.7% in continuing operations
-- Adjusted Operating Profit growth of 1.7% in continuing
operations, weighted to the second half of the year
-- Net Debt reduction of GBP18.1m to GBP501.1m, driven by a GBP14.4m increase in Free Cash Flow
-- ROIC of 15.6% (FY17: 16.0%) generated in continuing operations, improving as year progressed
-- Well positioned to capitalise on industry leading position
and drive profitability and returns in core UK market
SUMMARY FINANCIAL PERFORMANCE
FY18 FY17 Change
GBPm GBPm
Continuing Operations
Group Revenue 1,498.5 1,438.4 +4.2%
Adjusted EBITDA 140.0 137.7 +1.7%
Adjusted Operating Profit 104.6 102.9 +1.7%
Adjusted Operating Margin 7.0% 7.2% -20 bps
Adjusted Profit Before Tax 79.6 80.1 -0.6%
Exceptional Items (before tax) (52.2) (53.2)
Group Operating Profit 49.8 45.5 +9.5%
Profit before taxation 17.8 15.8 +12.7%
Return on Invested Capital
("ROIC") 15.6% 16.0% -40 bps
Group
Adjusted EPS (pence) 15.1 15.4 -1.9%
Basic EPS (pence) 4.8 1.9 +152.6%
Total proposed dividend per
share (pence) 5.57 5.47 +1.8%
Operating Cash Flow 136.6 117.8 +GBP18.8m
Free Cash Flow 92.4 78.0 +GBP14.4m
Net Debt 501.1 519.2
Net Debt:EBITDA as per financing
agreements 2.3x 2.4x
ROIC 10.2% 12.2%
Commenting on the results, Patrick Coveney, Chief Executive
Officer, said:
"2018 was a year of significant change for Greencore. We
delivered good underlying growth in the UK, with favourable
consumer and retailer trends helping drive our core food to go
business. After the financial year-end, we took the decision to
sell our US business having received a compelling offer for it. We
will now focus all of our attention and resources on the
significant growth opportunities that we see in the UK, both
organic and inorganic. Despite the short-term uncertainties of
Brexit, our scale, depth and expertise in attractive and
structurally growing food categories mean that we are confident in
the future growth prospects for Greencore."
(1) The Group uses Alternative Performance Measures ('APMs')
which are non-IFRS measures to monitor the performance of its
operations and of the Group as a whole. These APMs along with their
definitions are provided in the Appendix.
(2) Continuing operations for FY17 and FY18 include central
costs previously allocated to discontinued operations.
(3) On 13 March 2018, the Group issued a profit forecast stating
"For FY18 the Group now anticipates Adjusted EPS in the range of
14.7p-15.7p". It subsequently confirmed that guidance on 22 May
2018, 31 July 2018 and 15 October 2018. Actual FY18 Adjusted EPS
was 15.1p, which was in line with the previously announced
guidance.
(4) Market/category growth rates are based on various Nielsen
data for the 52 weeks to 6 October 2018.
CAPITAL RETURN
Following the sale of its US business, Greencore is committed to
the prompt and efficient return of GBP509m of the transaction
proceeds to shareholders (the 'Capital Return'). After a
consultation exercise with shareholders in recent weeks, the Group
notes the preference of many of its shareholders to be offered a
choice regarding their participation in the proposed Capital
Return.
Taking these views into account, alongside the focus on an
efficient return of capital, the Group intends to implement the
Capital Return via a tender offer to all shareholders for up to
GBP509 million (the "Tender Offer"). To the extent the full Capital
Return is not effected through the Tender Offer, the Group intends
to return any remaining proceeds shortly thereafter, anticipated to
be by way of a special dividend.
Further information on the Tender Offer will be provided in a
circular to Greencore shareholders. The Company will finalise the
full details, including discussions with the relevant tax
authorities, and will publish the circular as soon as practicable.
The Capital Return is expected to be completed during the second
quarter of FY19.
OUTLOOK
The disposal of the Group's US business was completed on 25
November 2018. Its performance in FY19 will be presented as
discontinued operations. The financial impact of the net proceeds,
the associated capital return and leverage reduction, will all be
included in the performance of the continuing operations.
The Group entered FY19 with a stronger and leaner business in
the UK following the refinement of its portfolio and the
implementation of its streamlining and efficiency programme. The
Group anticipates continued underlying revenue growth in its key
convenience food categories. Adjusted Operating Profit growth will
be driven by this revenue growth, improved operational performance,
and by a planned review of central overheads. Although the Group
believes the risks from Brexit are manageable in the medium-term,
the near-term challenges associated with a 'no withdrawal
agreement' are uncertain. A strengthened balance sheet and strong
underlying free cash generation leaves the Group well positioned to
consider organic and inorganic investment consistent with its
strategic and returns objectives.
Over the medium term, the Group expects that its market
positioning, capability set, customer profile, well invested asset
network and proven economic model will generate strong growth, cash
generation and returns.
Basis of preparation
The financial information included within this Results Statement
has been extracted from the audited consolidated financial
statements of Greencore Group plc. Details of the basis of
preparation can be found in Note 1 to the attached financial
information.
Forward--looking statements
Certain statements made in this document are forward--looking.
These represent expectations for the Group's business, and involve
known and unknown risks and uncertainties, many of which are beyond
the Group's control. The Group has based these forward--looking
statements on current expectations and projections about future
events. These forward-looking statements may generally, but not
always, be identified by the use of words such as "will", "aims",
"anticipates", "continue", "could", "should", "expects", "is
expected to", "may", "estimates", "believes", "intends",
"projects", "targets", or the negative thereof, or similar
expressions.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Group's current expectations and assumptions as to such future
events and circumstances that may not prove accurate. A number of
material factors could cause actual results and developments to
differ materially from those expressed or implied by
forward-looking statements. You should not place undue reliance on
any forward-looking statements. These forward-looking statements
are made as of the date of this full year results statement. The
Group expressly disclaims any obligation to publicly update or
review these forward-looking statements other than as required by
law.
PRESENTATION
A presentation of the results for analysts and institutional
investors will take place at 9.00am today at the Lincoln Centre, 18
Lincoln's Inn Fields, London, WC2A 3ED. This presentation can also
be accessed live from the Investor Relations section on
www.greencore.com or alternatively via conference call.
Participants wishing to dial into the conference call can do so
using the following details:
Ireland number: +353 (0)1 246 5621
UK number: +44 (0)33 0336 9411
US number: +1 929 477 0402
Confirmation code: 6973222
A replay of the presentation will be available on
www.greencore.com and also through a 7 day conference call replay
facility.
Ireland replay number: +353 (0)1 533 9810
UK replay number: +44 (0)20 7660 0134
US replay number: +1 719 457 0820
Replay code: 6973222
For further information, please contact:
Patrick Coveney Chief Executive Officer Tel: +353 (0) 1 486
3313
Eoin Tonge Chief Financial Officer Tel: +353 (0) 1 486
3316
Jack Gorman Head of Investor Relations Tel: +353 (0) 1 486
3308
Rob Greening or Powerscourt Tel: +44 (0) 20 7250
Sam Austrums 1446
Billy Murphy or Drury | Porter Novelli Tel: +353 (0) 1 260
Louise Walsh 5000
About Greencore
-- A leading manufacturer of convenience food in the UK
-- Strong market positions in many UK convenience food
categories including sandwiches, sushi, salads, chilled ready
meals, chilled soups and sauces, chilled quiche, ambient sauces
& pickles, and frozen Yorkshire Puddings
-- Greencore is headquartered in Dublin, Ireland and employs approximately 11,300 people
-- For more information go to www.greencore.com or follow Greencore on social media
OPERATING REVIEW(1,2,4)
Convenience Foods UK & Ireland (Continuing operations)
FY18 FY17 Change Change
GBPm GBPm (As reported) (Pro forma
basis)
Revenue 1,498.5 1,438.4 +4.2% +8.7%
-------- -------- --------------- ------------
Adjusted Operating
Profit
(before reallocated
central costs) 110.6 106.8 +3.6%
-------- -------- --------------- ------------
Adjusted Operating
Profit 104.6 102.9 +1.7%
-------- -------- --------------- ------------
Adjusted Operating
Margin % 7.0% 7.2% -20 bps
-------- -------- --------------- ------------
Strategic Developments
FY18 was a year of strategic progress and development in the
Group's UK operations in several respects.
The Group's business in food to go categories (comprising
sandwiches, sushi and salads) generated revenue growth of 10.8% on
a Pro Forma basis and continued to extend its leadership position.
In these and many other categories, the Group continued to play an
increasing role in supporting customer growth in new channels,
formats and product types.
The Group continued to optimise its portfolio in the UK, exiting
the cakes and desserts category with the phased closure of the
desserts manufacturing facility in Evercreech and the disposal of
the business in Hull. As part of the strategy to transition part of
its ready meals portfolio to fresher meal propositions, the Group
also announced it will phase out longer life ready meals
manufacturing at Kiveton (where it continues to manufacture quiche
and soup) by March 2019 and transfer volume to other
facilities.
The Group extended its long--term partnership model with key
customers in FY18, with several important business wins and
commercial launches delivered during the year across several
categories. The business also extended a number of contracts with
its core customers and added new customers in multiple
channels.
The Group implemented a streamlining and efficiency programme
across its operations in FY18. This involved the implementation of
a more compact and dynamic divisional structure, an accompanying
overhead reduction, and an enhanced focus on operational capability
and delivery. The overall programme is on track and will help
underpin operating margins.
Careful strategic capital investment in infrastructure and
capacity was made to support growth opportunities and create a
platform for enhanced returns. The extended and refurbished ready
meals facility in Warrington was opened in September, and provides
the Group with a centre of excellence for its customer base in
fresh ready meals.
There were exceptional charges relating to these strategic
developments and they are detailed in the Financial Review.
Performance
Reported revenue from continuing operations increased by 4.2% to
GBP1,498.5m. Pro Forma revenue growth was 8.7%. Adjusted Operating
Profit rose by 1.7% to GBP104.6m, with Adjusted Operating Margin
down 20bps to 7.0%. This includes central costs previously
allocated to discontinued operations. Excluding this impact,
Adjusted Operating Profit rose by 3.6% to GBP110.6m, with improved
profits in food to go categories being partly offset by a decline
in other activities, notably ready meals. On this basis, Adjusted
Operating Margin for FY18 was flat at 7.4% for the full year, with
a year on year improvement of 30bps in the second half. This
performance was delivered against the backdrop of a UK trading
environment which was characterised by retail competition, cost
inflation, and operational disruption from adverse weather.
The Group's activities in food to go categories accounted for
over 60% of revenue from continuing operations in FY18. Reported
revenue growth in these categories was 11.1%, and pro forma revenue
growth was 10.8% when the impact of the Heathrow sandwich facility
acquisition in FY17 is excluded. This pro forma growth accelerated
in the second half of the year.
FY18 pro forma revenue growth in these categories was driven by
solid category growth and an increased revenue contribution from
the distribution of third party products through the Direct to
Store network. Underlying growth in the food to go category was
approximately 3%. The Group remains confident in growth prospects
for the broader category, which are underpinned by favourable
consumer trends and ongoing investment by retail customers.
Following substantial investment in its distribution capability
in recent years, this part of the business helped drive strong
growth again in FY18. Consolidation in the overall distribution
market allowed this part of the business to grow faster than
originally anticipated. Revenue for the distribution of third party
products accounts for just under 10% of sales in continuing
operations. It is one of a set of capabilities beyond product
manufacturing that the Group is developing with customers, which
deepen and enhance these commercial relationships.
The other parts of the business comprise activities in the
chilled ready meals, chilled soups and sauces, chilled quiche,
ambient sauces and pickles, and frozen Yorkshire Pudding
categories, as well the Irish ingredient trading businesses.
Reported revenue across these businesses declined by 5.5%, but
increased by 4.9% on a pro forma basis when excluding the disposed
and exited businesses in Hull and Evercreech respectively, as well
as foreign exchange movements.
Pro forma revenue growth was driven by the ready meals and
cooking sauce businesses. Performance in ready meals was primarily
driven by stronger pricing, though volume trends deteriorated as
the year progressed. The performance in the cooking sauce business
was driven by higher volumes as own label penetration increased in
a low growth category. Solid progress was also made in the Group's
Irish trading businesses, driven by increased volumes.
Inflation trends in the Group's main UK cost components were
broadly as anticipated. Raw material and packaging costs rose by
approximately 3% in FY18 as certain commodity costs continued to
increase. Labour inflation in the UK was approximately 4% in the
year, primarily due to the effect of increased National Living Wage
levels on the Group's wage structure. The Group successfully
mitigated the overall effects of this inflation during FY18 by
working with customers on a variety of cost and innovation
programmes, and by continued internal cost efficiency
initiatives.
As noted previously, Adjusted Operating Profit in continuing
operations was negatively impacted by the adverse weather in the
first half. In the second half of the year, the Group was
encouraged by the year on year uplift in operating leverage. This
was most notable in its food to go categories where an improved
performance in the year was built on volume growth, recovery in its
salads business, and the rollout of the operational efficiency
programme. There were operating profit declines elsewhere in the
year, most notably in the ready meals part of the business where a
weaker volume and mix performance in the second half was combined
with the residual impact of commercial investments made during
FY17.
Brexit
Greencore continues to monitor closely the potential
implications of Brexit on its business, particularly in the areas
of volume, material sourcing and labour availability. The Group has
been engaged in Brexit planning since the result of the referendum
was first announced. A multi-functional team meets on an ongoing
basis to assess Brexit-related risks, build mitigation plans, test
alternative scenarios and support dialogue with our customers,
government, the wider industry and other stakeholders. Although the
Group believes the risks from Brexit are manageable in the
medium-term, the near-term challenges associated with 'no
withdrawal agreement being reached' remain uncertain.
Convenience Foods US (Discontinued operations)
FY18 FY17 Change Change
GBPm GBPm (As reported) (Pro forma
basis)
Revenue 1,061.8 881.3 +20.5% +6.6%
-------- ------ --------------- ------------
Adjusted Operating
Profit 48.0 37.2 +29.0%
-------- ------ --------------- ------------
Adjusted Operating
Margin 4.5% 4.2% +30bps
-------- ------ --------------- ------------
Disposal of US business
On 15 October 2018 the Group announced a proposed agreement to
sell its entire US business to Hearthside Food Solutions LLC for
$1,075m. The transaction subsequently completed on 25 November.
Results for the US business are presented as discontinued
operations in the Financial Statements.
Performance
After a challenging first half of the year, the discontinued US
operations demonstrated significant commercial and operational
improvement as the year progressed, driven by the former Peacock
Foods part of the business.
Reported revenue in discontinued operations increased by 20.5%
to GBP1,061.8m, and by 6.6% on a pro forma basis when adjusted for
FX, for the ownership of Peacock Foods for the full period of FY17,
and for the exclusion of Rhode Island which ceased trading during
the year. Revenue in the former Peacock Foods part of the business
accounted for approximately 83% of revenue in the period. In this
part of the business pro forma revenue grew by 15.1%, driven by
underlying category growth and the impact of new business. Pro
forma revenue in the original part of the US business declined by
22.4%, reflecting previously announced volume losses.
Adjusted Operating Profit from discontinued operations increased
by 29.0% to GBP48.0m in the period. The contribution of an extra
quarter of Peacock Foods compared to FY17, and the strong pro forma
volume growth and good operational performance in the former
Peacock Foods part of the business, more than offset the decline in
the original part of the business. There was a modest foreign
exchange translation benefit in FY18.
In March 2018 the Group decided to exit production at its Rhode
Island business and completed the disposal of the facility in
September 2018 for a consideration of $10.8m.
Group Cash Flow and Returns
FY18 FY17 Change
GBPm GBPm
Operating Cash Flow 136.6 117.8 +GBP18.8m
------ ------ ----------
Free Cash Flow 92.4 78.0 +GBP14.4m
------ ------ ----------
Net Debt 501.1 519.2
------ ------ ----------
Net Debt:EBITDA as per financing
agreements 2.3x 2.4x
------ ------ ----------
ROIC % - continuing operations 15.6% 16.0%
------ ------ ----------
Strategic developments
Following the completion of the disposal of our US business, the
Group received net cash proceeds of $1,055m (approximately GBP802m
as at the rate of the announcement date) after the payment of costs
relating to the disposal. The final amount is subject to customary
adjustments for cash, debt and working capital. The Group intends
to use these net proceeds to return GBP509m of value to
shareholders and to use the remainder of the net proceeds to reduce
leverage.
During FY18, the Group normalised the trajectory of capital
spend across the business, after a phase of significant investment
through FY16 and FY17 to support future growth, most notably in its
continuing operations. As a result, strategic capital expenditure
in its continuing operations was GBP24.6m (FY17:GBP62.4m).
Performance
Operating Cash Flow is used to measure the Group's net
generation of cash through business operations. The Group
calculates this measure as the net cash flow from operating and
investing activities before strategic capital expenditure,
contributions to legacy defined benefit pension schemes, interest
paid, tax paid, and acquisitions and disposals. Operating Cash Flow
increased by GBP18.8m to GBP136.6m in FY18, driven by increased
Adjusted EBITDA, reduced capital expenditure and reduced
exceptional cash outflows, offset by increases in working
capital.
Free Cash Flow is used to measure the level of cash available
for allocation and distribution. This measure is calculated as the
net cash inflow/outflow before the following items: strategic
capital expenditure, M&A activity, issue and purchase of
shares, dividends paid to equity holders and translation and other
cash movements. Free Cash Flow increased by GBP14.4m to GBP92.4m in
FY18, primarily reflecting the increase in Operating Cash Flow.
Maintenance capital expenditure was GBP36.7m in the period, a
decrease of GBP3.0m year on year. Strategic capital expenditure in
the period was GBP26.8m for the Group (FY17: GBP83.6m), as
investment normalised after a phase of significant spending in FY16
and FY17. Cash tax remained very low. Overall, Net Debt decreased
to GBP501.1m (FY17:GBP519.2m).
Group ROIC for FY18 was 10.2% (FY17:12.2%) primarily reflecting
the full year dilutive impact of the addition of Peacock Foods and
an increased tax rate. ROIC in continuing operations was 15.6% in
FY18, a modest decline of 40bps. Improved profitability on a
broadly unchanged capital base supported an underlying increase but
this was offset by an increase in central costs previously
allocated to discontinued operations and the impact of an increased
tax rate.
Capital management
At the end of the financial year the Group's Net Debt:EBITDA
leverage as measured under financing agreements was 2.3x. The Group
was well financed with committed facilities of GBP728.5m at the end
of the fiscal year and a weighted average maturity of 3.6 years.
The Group plans to enter into discussions with its lenders to
refinance its existing debt agreements in the first half of FY19,
taking into account the return of capital to shareholders.
Following the disposal of the entire US operations and the
related return of capital to shareholders as noted above, the Group
is committed to focussing on dynamic capital management, balancing
the ongoing strategic and investment needs of the Group, leverage
reduction, returns to shareholders and a progressive dividend
policy. In this context the Board intends to target a leverage
ratio of between 1.5x to 2.0x Net Debt to EBITDA (as measured under
financing agreements) over the medium term. Managing to within this
range will enable the Group to make organic and inorganic
investments that fit with the Group's strategy and/or return
further cash to shareholders in an efficient manner, whether
through dividends or other forms of return of value.
FINANCIAL REVIEW(1,2)
The Group completed the disposal of its entire US business on 25
November 2018. The results of this business have been included as
discontinued operations in the Group Financial Statements in FY18
and the comparatives for FY17 have been re-presented on the same
basis.
Revenue and Adjusted Operating Profit - Continuing
operations
Reported revenue in the year was GBP1,498.5m, an increase of
4.2% versus FY17. Pro forma revenue growth was 8.7%. Adjusted
Operating Profit of GBP104.6m was 1.7% higher than in FY17, and
Adjusted Operating Margin was 7.0%, 20 basis points below the prior
year, primarily due to the increase in central costs that were
previously allocated to the discontinued Greencore US business.
Excluding the impact of central costs previously allocated to
discontinued operations, Adjusted Operating Profit rose by 3.6% to
GBP110.6m.
Net finance costs - Continuing operations
The Group's bank interest payable in FY18 was GBP26.2m, an
increase of GBP2.5m. The increase was driven by higher average Net
Debt through the year. GBP0.4m of interest on major projects was
capitalised during the period (FY17: GBP1.8m).
The Group's non-cash finance charge in FY18 was GBP6.7m (FY17:
GBP6.7m). The change in the fair value of derivatives and related
debt adjustments was a non-cash charge of GBP3.3m (FY17: charge of
GBP2.8m) reflecting the FX movement on balances where hedge
accounting is not applied. The non-cash pension financing charge of
GBP3.4m was GBP0.5m lower than the FY17 charge of GBP3.9m.
Taxation - Continuing operations
The Group's effective tax rate in FY18 (including the tax impact
associated with pension finance items) was 13% (FY17: 8%). The rate
had been lower as a result of the benefit of tax attributes
including those acquired as part of the Uniq plc acquisition.
Substantially all UK tax attributes have now been recognised on the
balance sheet such that there is no further rate benefit in the
current year, nor expected in the future.
There is a degree of uncertainty over the level of this
effective rate, due to a combination of factors including Base
Erosion and Profit Shifting ('BEPS') actions and the impact of
Brexit on levels of UK taxation.
Exceptional items
The Group incurred a pre--tax exceptional charge of GBP52.2m in
its continuing operations in FY18, and an after tax charge of
GBP44.4m. The potential cash outflow associated with these charges
in continuing operations is GBP21.4m, with GBP11.6m spent during
the year. The overall exceptional charge, including exceptional
charges related to discontinued operations, is comprised as
follows:
Exceptional Item FY18
Income FY18 Cashflow
Statement GBPm
GBPm
Continuing operations
----------- ----------------
Network rationalisation and optimisation: (21.2) -
related to the ready meals manufacturing
network
----------- ----------------
Reorganisation and integration: costs
relating to the streamlining and efficiency
programme in the UK (15.9) (12.1)
----------- ----------------
Business exit costs: relating to the
Group's exit from its cakes and desserts
businesses (13.9) 1.5
----------- ----------------
Pre-commissioning and start-up costs:
relating to the ready meals facility
in Warrington (1.2) (1.0)
----------- ----------------
Exceptional items (pre-tax) - continuing
operations (52.2) (11.6)
----------- ----------------
Tax on exceptional items - continuing 7.8 -
operations
----------- ----------------
Exceptional items (after tax) - continuing
operations (44.4) (11.6)
----------- ----------------
Discontinued operations
----------- ----------------
Exceptional items (pre-tax) - discontinued
operations (27.9) 3.2
----------- ----------------
Tax on exceptional items - discontinued 20.6 -
operations
----------- ----------------
Exceptional items (after tax) - discontinued
operations (7.3) 3.2
----------- ----------------
Earnings per share
Adjusted Earnings were GBP105.9m in the period, 5.4% ahead of
the prior year. Adjusted earnings per share for total operations of
15.1 pence was 1.9% behind FY17 which reflects the impact of an
increased number of shares in issue as a result of the rights issue
in December 2016. Basic earnings per share was 4.8 pence (FY17: 1.9
pence). The weighted average number of shares in issue in FY18 was
703.3m (FY17: 652.5m).
Cash Flow and Net Debt
Operating Cash Flow was GBP136.6m in FY18, an increase of
GBP18.8m driven by increased Adjusted EBITDA, reduced capital
expenditures and reduced exceptional cash outflows, offset by
increases in working capital. Free Cash Flow increased by GBP14.4m
to GBP92.4m in FY18, primarily reflecting the increase in Operating
Cash Flow, partly offset by a modest increase in contributions to
legacy defined pension schemes.
Adjusted EBITDA grew by 1.7% to GBP140.0m. A working capital
outflow of GBP15.9m was incurred, including a GBP17.0m outflow
associated with businesses disposed or exited during FY18. Capital
expenditure of GBP63.5m was incurred in the period (FY17:
GBP123.3m), as strategic investment spending normalised. The total
cash outflow during the year in respect of exceptional charges was
GBP15.0m (FY17: GBP33.7m), of which GBP6.6m was in respect of prior
year exceptional charges.
Cash tax continues to be low as the Group utilises historical
tax attributes in both the UK and the US. The cash tax rate in the
period was 1% (FY17: 0%). The cash tax rate for the Group is
expected to rise towards the Group's effective rate in the short
term as a result of increased profitability and a reduction in the
degree to which UK losses may be utilised in any one year.
The Group's Net Debt at 28 September 2018 was GBP501.1m, a
decrease of GBP18.1m from 29 September 2017, primarily reflecting
an increase in Free Cash Flow.
Financing
The Group remains well financed with committed facilities of
GBP728.5m at the end of September 2018 and a weighted average
maturity of 3.6 years.
Following the disposal of its US business the Group announced
its intention to return GBP509m to shareholders and utilise the
remainder of the net sales proceeds to reduce leverage. In
addition, the Group plans to enter into discussions with its
lenders to refinance its existing debt agreements in the first half
of FY19, taking into account the return of capital to
shareholders.
Pensions
All legacy defined benefit pension schemes 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.
The net pension deficit relating to legacy defined pension
schemes, before related deferred tax, at 28 September 2018 was
GBP89.3m, GBP35.5m lower than the position at 29 September 2017.
The net pension deficit after related deferred tax was GBP73.6m, a
decrease of GBP29.5m from 29 September 2017. The decrease in net
pension deficit was driven principally by a reduction in UK scheme
liabilities.
The valuations and funding obligations of the Group's legacy
defined benefit pension schemes are assessed on a triennial basis
with the relevant trustees. Following the most recent reviews,
including the latest agreed actuarial valuation for the Greencore
UK Defined Benefit Pension Scheme, the Group expects the annual
cash funding requirement for defined benefit pension schemes to
remain unchanged at approximately GBP15m.
Dividends
The Board of Directors is recommending a final dividend of 3.37
pence per share. This will result in a total dividend for the year
of 5.57 pence per share (FY17: 5.47 pence per share). The total
dividend represents a pay-out amount of approximately 37% of
Adjusted Earnings.
Principal risks and uncertainties
There are a number of potential risks and uncertainties which
could have a material impact on future Group performance and could
cause actual results to differ materially from expected and
historical results. The risks and uncertainties are described in
detail in the section Risks and Risk Management in the Annual
Report and Financial Statements for the year ended 28 September
2018 issued on 4 December 2018.
P.G. Kennedy, Chairman
3 December 2018
GROUP INCOME STATEMENT
year ended 28 September 2018
2018 2017
Exceptional Exceptional
Pre - (Note (Note
Notes exceptional 3) Total Pre - exceptional* 3)* Total*
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Continuing operations
Revenue 2 1,498.5 - 1,498.5 1,438.4 - 1,438.4
Cost of sales (1,023.0) - (1,023.0) (970.2) - (970.2)
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Gross profit 475.5 - 475.5 468.2 - 468.2
Operating costs, net (370.9) (52.2) (423.1) (365.3) (53.2) (418.5)
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Group Operating Profit
before acquisition related
amortisation 2 104.6 (52.2) 52.4 102.9 (53.2) 49.7
Amortisation of acquisition
related intangibles (2.6) - (2.6) (4.2) - (4.2)
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Group Operating Profit 102.0 (52.2) 49.8 98.7 (53.2) 45.5
Finance income 7 0.2 - 0.2 - - -
Finance costs 7 (33.1) - (33.1) (30.4) - (30.4)
Share of profit of
associates
after tax 0.9 - 0.9 0.7 - 0.7
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Profit before taxation 70.0 (52.2) 17.8 69.0 (53.2) 15.8
Taxation (13.0) 7.8 (5.2) (7.4) 8.9 1.5
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Profit for the period from
continuing operations 57.0 (44.4) 12.6 61.6 (44.3) 17.3
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Discontinued operations
Result from discontinued
operations 31.2 (7.3) 23.9 21.6 (25.0) (3.4)
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Profit for the financial
year 88.2 (51.7) 36.5 83.2 (69.3) 13.9
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Attributable to:
Equity shareholders 85.5 (51.7) 33.8 81.5 (69.3) 12.2
Non-controlling interests 2.7 - 2.7 1.7 - 1.7
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
88.2 (51.7) 36.5 83.2 (69.3) 13.9
--------------------------- ----- ------------ ----------- --------- ------------------ ----------- -----------
Earnings per share
Basic earnings per share
(pence) 54.8 1.9
------------------------- --- ---
Diluted basic earnings
per share (pence) 54.8 1.9
------------------------- --- ---
*Re-presented to reflect the change in presentation of
discontinued operations and categorisation of costs on a basis
consistent with the current year as set out in Note 1
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE
for year ended 28 September 2018
2018 2017
GBPm GBPm
--------------------------------------------------------- ------ ------
Items of income and expense taken directly to
equity for continuing and discontinued operations
Items that will not be reclassified to profit
or loss:
Actuarial gain on Group legacy defined benefit
pension schemes 24.3 30.1
Deferred tax on Group legacy defined benefit pension
schemes (4.5) (5.1)
--------------------------------------------------------- ------ ------
19.8 25.0
Items that may subsequently be reclassified to
profit or loss:
Currency translation adjustment 15.4 (45.2)
Tax on currency translation adjustment - 0.1
Hedge of net investment in foreign currency subsidiaries (10.6) 25.8
Cash flow hedges:
fair value movement taken to equity 4.1 1.9
transfer to Income Statement for the year 5.9 1.5
Tax on cash flow hedges - (0.1)
--------------------------------------------------------- ------ ------
Net income recognised directly within equity 34.6 9.0
Profit for the financial year 36.5 13.9
--------------------------------------------------------- ------ ------
Total recognised income and expense for the financial
year 71.1 22.9
--------------------------------------------------------- ------ ------
Attributable to:
Equity shareholders 68.4 21.1
Non-controlling interests 2.7 1.8
--------------------------------------------------------- ------ ------
Total recognised income and expense for the financial
year 71.1 22.9
--------------------------------------------------------- ------ ------
Attributable to:
Continuing operations 27.4 78.6
Discontinued operations 43.7 (55.7)
------------------------------------------------------ ---- ------
Total recognised income and expense for the financial
year 71.1 22.9
------------------------------------------------------ ---- ------
GROUP BALANCE SHEET
at 28 September 2018
2018 2017
Notes GBPm GBPm
-------------------------------------------- ----- ------- -------
ASSETS
Non-current assets
Goodwill and intangible assets 425.3 1,077.6
Property, plant and equipment 323.0 485.7
Investment property 6.3 6.3
Investment in associates 1.3 1.2
Retirement benefit assets 8 15.3 17.3
Derivative financial instruments 0.5 -
Deferred tax assets 41.7 93.5
-------------------------------------------- ----- ------- -------
Total non-current assets 813.4 1,681.6
-------------------------------------------- ----- ------- -------
Current assets
Inventories 39.1 81.9
Trade and other receivables 181.0 254.8
Derivative financial instruments 0.3 0.3
Cash and cash equivalents 7 37.0 19.8
Assets held for sale 4 944.7 -
-------------------------------------------- ----- ------- -------
Total current assets 1,202.1 356.8
-------------------------------------------- ----- ------- -------
Total assets 2,015.5 2,038.4
-------------------------------------------- ----- ------- -------
EQUITY
Capital and reserves attributable to equity
holders of the Company
Share capital 7.1 7.1
Share premium 650.8 647.8
Reserves 79.3 50.7
-------------------------------------------- ----- ------- -------
737.2 705.6
Non-controlling interests 6.4 5.2
-------------------------------------------- ----- ------- -------
Total equity 743.6 710.8
-------------------------------------------- ----- ------- -------
LIABILITIES
Non-current liabilities
Borrowings 7 537.9 539.0
Derivative financial instruments 13.4 14.3
Retirement benefit obligations 8 104.6 142.1
Other payables 3.7 11.9
Provisions for liabilities 8.9 29.8
Deferred tax liabilities 4.2 111.5
Total non-current liabilities 672.7 848.6
Current liabilities
Borrowings 0.2 -
Derivative financial instruments 0.1 -
Trade and other payables 377.9 460.3
Provisions for liabilities 6.7 8.4
Current tax payable 11.3 10.3
Liabilities directly associated with assets
held for sale 4 203.0 -
Total current liabilities 599.2 479.0
-------------------------------------------- ----- ------- -------
Total liabilities 1,271.9 1,327.6
-------------------------------------------- ----- ------- -------
Total equity and liabilities 2,015.5 2,038.4
-------------------------------------------- ----- ------- -------
GROUP CASH FLOW STATEMENT
for the year ended 28 September 2018
2018 2017
Notes GBPm GBPm
Profit before taxation 17.8 15.8
Finance income 7 (0.2) -
Finance costs 7 33.1 30.4
Share of profit of associates (after tax) (0.9) (0.7)
Exceptional items 3 52.2 53.2
------------------------------------------------ ------- -------- ---------
Continuing Operating Profit (pre-exceptional) 102.0 98.7
Discontinued Operating Profit (pre-exceptional) 4 30.4 22.2
Operating Profit (pre-exceptional) 132.4 120.9
Depreciation of property, plant and equipment 47.3 45.1
Amortisation of intangible assets 25.3 23.7
Employee share-based payment expense 1.6 3.5
Contributions to legacy defined benefit
pension schemes (15.1) (11.1)
Working capital movement (15.9) (3.0)
Other movements (3.2) 0.5
------------------------------------------------ ------- -------- ---------
Net cash inflow from operating activities
pre-exceptional items 172.4 179.6
Cash outflow related to exceptional items (15.0) (33.7)
Interest paid (26.7) (27.2)
Tax paid (0.9) (0.5)
Net cash inflow from operating activities 129.8 118.2
------------------------------------------------ ------- -------- ---------
Cash flow from investing activities
Dividends received from associates 0.8 0.5
Purchase of property, plant and equipment (60.5) (105.4)
Purchase of intangible assets (3.0) (17.9)
Acquisition of undertakings, net of cash
acquired - (606.2)
Disposal of undertakings - 2.9
Net cash outflow from investing activities (62.7) (726.1)
------------------------------------------------ ------- -------- ---------
Cash flow from financing activities
Proceeds from issue of shares 0.2 427.7
Ordinary shares purchased - own shares (2.0) (7.2)
Drawdown of bank borrowings - 199.7
Repayment of bank borrowings (9.6) -
Decrease in finance lease liabilities (1.3) (0.1)
Dividends paid to equity holders of the
Company (35.7) (16.5)
Dividends paid to non-controlling interests (1.5) (1.0)
Net cash (outflow)/inflow from financing
activities (49.9) 602.6
------------------------------------------------ ------- -------- ---------
Net increase/(decrease) in cash and cash
equivalents 17.2 (5.3)
------------------------------------------------ ------- -------- ---------
Reconciliation of opening to closing cash
and cash equivalents
Cash and cash equivalents at beginning
of year 19.8 25.5
Translation adjustment - (0.4)
Net increase/(decrease) in cash and cash
equivalents 17.2 (5.3)
Cash and cash equivalents at end of year 37.0 19.8
------------------------------------------------ ------- -------- ---------
NOTES TO THE RESULTS STATEMENT
year ended 28 September 2018
1.Basis of Preparation
The financial information included within this full year results
statement has been extracted from the audited Consolidated
Financial Statements of Greencore Group plc for the year ended 28
September 2018, to which an unqualified audit opinion is attached.
Full details of the basis of preparation of the Group Financial
Statements for the year ended 28 September 2018 are included in
Note 1 of the 2018 Annual Report.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue
operating for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the Group
Financial Statements.
The financial information presented in this full year results
statement has been prepared in accordance with the recognition and
measurement principles of International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee interpretations
adopted by the European Union (EU).
The financial information, which is presented in sterling and
expressed in millions (m), 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. The
accounting policies applied are consistent with those applied in
the Group Financial Statements for the year ended 28 September
2018. Full details of the Group's accounting policies are included
in the 2018 Annual Report.
The adoption of new standards and interpretations (as set out in
the 2018 Annual Report) that became effective for the Groups'
Financial Statements for the year ended 28 September 2018 did not
have any significant impact on the Group full year results
statement.
The Financial Statements of the Group are prepared to the Friday
nearest to 30 September. Accordingly, these Financial Statements
are prepared for the 52 week period ended 28 September 2018.
Comparatives are for the 52 week period ended 29 September 2017.
The Balance Sheets for 2018 and 2017 have been prepared as at 28
September 2018 and 29 September 2017 respectively.
Following the announcement in October 2018 to dispose of
Greencore's US business, in accordance with IFRS 5 Non-current
assets held for sale and discontinued operations, the results of
Greencore's US business have been presented within profit from
discontinued operations in the Group Income Statement with the
prior period comparatives re-presented accordingly.
In the year, an analysis of expenses between direct and indirect
costs was carried out and a more appropriate presentation was
identified which resulted in a reclassification of certain indirect
costs from cost of sales to operating costs. As a result, the prior
year comparatives were re-presented on the same basis. There was no
impact to previously reported profit.
2.Segment Information
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. 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.
The Group has two operating segments Convenience Foods UK &
Ireland and Convenience Foods US. Following the Group's decision to
dispose of Greencore's US business during the year, the Convenience
Foods US operating segment is now classified as a discontinued
operation, which is a reporting segment and the continuing
operations of the Group represents the Convenience Foods UK &
Ireland reporting segment.
Convenience Foods UK & Ireland: incorporating many UK
convenience food categories including sandwiches, sushi, salads,
chilled ready meals, chilled soups and sauces, chilled quiche,
ambient sauces and pickles, frozen Yorkshire puddings and cakes and
desserts categories as well as Irish Ingredient trading
businesses.
Discontinued Operations: comprising of the Convenience Foods US
segment, manufacturing convenience foods products for many of the
largest food brands, convenience retail and food service leaders in
the US. The segment produces a wide range of fresh frozen and
ambient products including sandwiches, meals kits and salad
kits.
The comparative amounts for profit and loss information have
been reclassified in line with the requirements of IFRS 5:
Non-current assets held for sale and discontinued
operations.
Convenience Discontinued
Foods UK & operations
Ireland Total
2018 2017 2018 2017 2018 2017
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ------- ------- ------- ------ ------- -------
Revenue 1,498.5 1,438.4 1,061.8 881.3 2,560.3 2,319.7
------------------------------------ ------- ------- ------- ------ ------- -------
Group operating profit before
exceptional items and amortisation
of acquisition related intangible
assets* 104.6 102.9 48.0 37.2 152.6 140.1
Amortisation of acquisition related
intangible assets (2.6) (4.2) (17.6) (15.0) (20.2) (19.2)
Exceptional items (52.2) (53.2) (27.9) (25.0) (80.1) (78.2)
------------------------------------ ------- ------- ------- ------ ------- -------
Group Operating Profit 49.8 45.5 2.5 (2.8) 52.3 42.7
Finance income 0.2 -
Finance costs (34.1) (31.0)
Share of profit of associates
after tax 0.9 0.7
Taxation 17.2 1.5
------------------------------------ ------- ------- ------- ------ ------- -------
Profit for the period 36.5 13.9
------------------------------------ ------- ------- ------- ------ ------- -------
* The current year includes GBP6.0m of central costs previously
allocated to discontinued operations, and the prior year has
been
re-presented to reflect GBP3.9m of central costs previously
allocated to discontinued operations.
3.Exceptional Items
Exceptional items are those which, in management's judgement,
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:
2018 2017
Continuing Discontinued Total Continuing Discontinued Total
operations operations operations operations
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ---- ------------- -------------- ------ ------------ ------------- ------
Network rationalisation
and optimisation (a) (21.2) (23.6) (44.8) - - -
Exit from cakes and
desserts (b) (13.9) - (13.9) (16.5) - (16.5)
Reorganisation and integration
costs (c) (15.9) (3.0) (18.9) (1.9) (9.3) (11.2)
Pre-commissioning and
start-up costs (d) (1.2) - (1.2) (3.6) (0.5) (4.1)
Transaction costs (e) - (1.3) (1.3) (0.4) (15.2) (15.6)
Intangible asset impairment (f) - - - (29.7) - (29.7)
Legal settlement (g) - - - (1.1) - (1.1)
----------------------------------- ---- ------------- -------------- ------ ------------ ------------- ------
(52.2) (27.9) (80.1) (53.2) (25.0) (78.2)
Tax on exceptional items (h) 7.8 - 7.8 8.9 - 8.9
Tax credit (i) - 20.6 20.6 - - -
----------------------------------- ---- ------------- -------------- ------ ------------ ------------- ------
Total exceptional charge (44.4) (7.3) (51.7) (44.3) (25.0) (69.3)
----------------------------------- ---- ------------- -------------- ------ ------------ ------------- ------
(a) Network rationalisation and optimisation
Continuing operations
In the period, the Group recognised a charge of GBP21.2m
relating to the rationalisation and optimisation of its prepared
meals manufacturing network in the UK, following the Group's
announcement in July 2018 to phase out of manufacturing of longer
life ready meals at its Kiveton facility. The charge comprises a
GBP15.6m impairment of property, plant and equipment, a GBP1.4m
impairment of goodwill and a provision for other costs associated
with the exit.
Discontinued operations
In the period, the Group recognised a charge of GBP23.6m
relating to the optimisation of its manufacturing network in its US
operations. The Group recognised an impairment charge of GBP20.6m
in relation to the exit from its Rhode Island business and
subsequent disposal, and in relation to the repurposing of its
Jacksonville manufacturing facility. The charge also includes other
onetime costs associated with the closure of the Rhode Island
facility.
(b) EXIT FROM CAKES AND DESSERTS
Continuing operations
In February 2018, the Group disposed of its cakes and desserts
business in Hull to Bright Blue Foods Ltd and subsequently disposed
of its dessert manufacturing facility at Evercreech in July 2018,
following its closure as announced in 2017 leading to a net loss on
disposal of GBP13.9m. The sale of the business in Hull and the exit
from dessert manufacturing at Evercreech marks Greencore's complete
exit from the UK cakes and desserts sector.
In the prior period, a charge of GBP16.5m was recognised related
to business exit costs associated with the exit from manufacturing
at Evercreech.
(c) REORGANISATION AND INTEGRATION COSTS
Continuing operations
In the period, the Group recognised a charge of GBP15.9m
relating to the implementation of its streamlining and efficiency
programme across Convenience Foods UK & Ireland.
In the prior period, the Group recognised a charge of GBP1.9m in
relation to the new organisation structure within Convenience Foods
UK & Ireland and the integration of The Sandwich Factory
Holdings Limited in the UK.
Discontinued operations
In the period, the Group recognised a charge of GBP3.0m in
relation to the restructure of the US leadership team and ongoing
integration cost associated with the Peacock Foods acquisition.
In the prior period, the Group recognised a charge of GBP9.3m in
relation to the integration of the Peacock Foods acquisition, which
completed in December 2016.
(d) PRE-COMMISSIONING AND START-UP COSTS
Continuing operations
In the period, the Group recognised a charge of GBP1.2m in
relation to pre-commissioning and start-up activities on the
expansion of its facility in Warrington.
In the prior period, the Group recognised a GBP3.6m charge in
relation to pre-commissioning and start-up costs relating to
significant plant development and related onboarding of new
business at its facilities in Warrington and Northampton in the
UK.
Discontinued operations
In the prior period, the Group recognised a GBP0.5m charge in
relation to pre-commissioning and start-up costs relating to
significant plant development and related onboarding of new
business.
(e) TRANSACTIONS COSTS
Continuing operations
In the prior period, the Group recognised a charge of GBP0.4m
comprising transaction costs relating to the acquisition of its
facility at Heathrow in June 2017.
Discontinued operations
In the period, the Group recognised a GBP1.3m charge comprising
transactions costs associated with the disposal of Greencore's US
business which completed in November 2018.
In the prior period, the Group recognised a GBP15.2m charge in
relation to the acquisition of Peacock Foods.
(f) INTANGIBLE ASSET IMPAIRMENT
Continuing operations
In the prior period, the Group recognised a charge of GBP29.7m
relating to the impairment of software assets, associated with the
decision not to proceed with the planned rollout of a common ERP
platform across the UK business.
(g) LEGAL SETTLEMENT
Continuing operations
In the prior period, the Group incurred a charge of GBP1.1m in
respect of a legal settlement and related costs.
(h) TAX ON EXCEPTIONAL ITEMS
Continuing operations
In the period, the Group recognised a tax credit of GBP7.8m in
respect of exceptional charges.
(i) TAX CREDIT
Discontinued operations
In the period, the Group recognised a tax credit of GBP20.6m on
the revaluation of tax assets and liabilities as a result of the
rate change in the US. The tax credit was recognised within profit
from discontinued operations.
4.Discontinued Operations and Disposal Group Held for Sale
On 15 October 2018, the Group announced that it had reached an
agreement to sell Greencore's US business to Hearthside Food
Solutions LLC for cash consideration of $1,075m, subject to
customary adjustments for cash, debt and working capital. On 7
November 2018 the shareholders approved disposal and the
transaction subsequently completed on 25 November 2018.
Greencore's US business included within the Convenience Foods US
operating segment which has been presented as a discontinued
reporting segment (Note 2).
Results of Discontinued Operations
2018 2017
GBPm GBPm
----------------------------------------------------------- -------- --------
Revenue 1,061.8 881.3
Cost of sales (836.2) (697.5)
----------------------------------------------------------- -------- --------
Gross profit 225.6 183.8
Operating costs, net (177.6) (146.6)
----------------------------------------------------------- -------- --------
Group Operating Profit before acquisition related
amortisation and exceptional items 48.0 37.2
Amortisation of acquisition related intangibles (17.6) (15.0)
----------------------------------------------------------- -------- --------
Group Operating Profit before exceptional items 30.4 22.2
Exceptional items (27.9) (25.0)
Finance costs (1.0) (0.6)
Taxation 22.4 -
----------------------------------------------------------- -------- --------
Profit/(loss) for the year from discontinued operations 23.9 (3.4)
----------------------------------------------------------- -------- --------
Assets and Liabilities of Disposal Group Held for Sale
At 28 September 2018, the following assets and liabilities were
classified as held for sale:
2018
GBPm
-------------------------------------------------------- ------
Goodwill and intangible assets 644.9
Property, plant and equipment 122.7
Deferred tax assets 28.0
Inventory 38.7
Trade and other receivables 110.4
-------------------------------------------------------- ------
Assets held for sale 944.7
Trade and other payables 111.4
Provisions for liabilities 22.0
Deferred tax liabilities 69.6
-------------------------------------------------------- ------
Liabilities directly associated with the assets held
for sale 203.0
-------------------------------------------------------- ------
5.Earnings per Ordinary Share
Basic Earnings per Ordinary Share
Basic earnings per Ordinary Share is calculated by dividing the
profit attributable to equity holders of the Company by the
weighted average number of Ordinary Shares in issue during the
period, excluding Ordinary Shares purchased by the Company and held
in trust in respect of the Annual Bonus Scheme, the Performance
Share Plan and the Executive Share Option Scheme. The adjusted
figures for basic and diluted earnings per Ordinary Share is
calculated as profit attributable to equity holders of the Company
adjusted to exclude exceptional items (net of tax), the effect of
foreign exchange ('FX') on intercompany and certain 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 (net of tax) and the effect of interest expense relating to
legacy defined benefit pension liabilities (net of tax).
Numerator for Earnings per Share and Diluted Earnings per Share
Calculation
2018 2017
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------------ ------------- ------ ------------ ------------- ------
Profit attributable to
equity holders of Greencore
(numerator for basic earnings
per share calculation) 9.9 23.9 33.8 15.6 (3.4) 12.2
--------------------------------- ------------ ------------- ------ ------------ ------------- ------
Exceptional items (net
of tax) 44.4 7.3 51.7 44.3 25.0 69.3
Movement in fair value
of derivative financial
instruments and related
debt adjustments 3.4 - 3.4 (0.2) - (0.2)
FX effect on inter-company
and external balances where
hedge accounting is not
applied (0.1) - (0.1) 3.0 - 3.0
Amortisation of acquisition
related intangibles (net
of tax) 2.1 12.3 14.4 3.4 9.7 13.1
Pension financing (net
of tax) 2.7 - 2.7 3.1 - 3.1
--------------------------------- ------------ ------------- ------ ------------ ------------- ------
Numerator for adjusted
earnings per share calculation 62.4 43.5 105.9 69.2 31.3 100.5
--------------------------------- ------------ ------------- ------ ------------ ------------- ------
Denominator for Earnings per Share Calculation
2018 2017
'000 '000
----------------------------------------------------- -------- --------
Shares in issue at the beginning of the year 705,647 413,468
Effect of shares held by Employee Benefit Trust (3,389) (3,283)
Effect of shares issued during the year 1,054 220,704
Effect of bonus issue relating to Rights Issue - 21,592
----------------------------------------------------- -------- --------
Weighted average number of Ordinary Shares in issue
during the year 703,312 652,481
----------------------------------------------------- -------- --------
2018 2017
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
Pence Pence Pence Pence Pence Pence
------------------------------ ------------ ------------- -------- ------------ ------------- --------
Basic earnings per Ordinary
Share 1.4 3.4 4.8 2.4 (0.5) 1.9
------------------------------ ------------ ------------- -------- ------------ ------------- --------
Adjusted earnings per
Ordinary Share 15.1 15.4
------------------------------ ------------ ------------- -------- ------------ ------------- --------
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 Performance Share Plan awards, 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. A total of 12,886,062 (2017: 6,619,322) unvested
shares were excluded from the diluted earnings per share
calculation as they were either antidilutive or contingently
issuable Ordinary Shares which had not satisfied the performance
conditions attaching at the end of the 2018 financial year.
Denominator for Earnings per Share Calculation
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:
2018 2017
'000 '000
-------------------------------------------------------- -------- --------
Weighted average number of Ordinary Shares in issue
during the year 703,312 652,481
Dilutive effect of share options 747 2,257
-------------------------------------------------------- -------- --------
Weighted average number of Ordinary Shares for diluted
earnings per share 704,059 654,738
-------------------------------------------------------- -------- --------
The dilutive effect of share options has had no impact on the
diluted and adjusted earnings per Ordinary Share in the current or
the prior period.
6.Dividends Paid and Proposed
2018 2017
GBPm GBPm
--------------------------------------------------- ------ ------
Amounts recognised as distributions to equity
holders in the year:
Equity dividends on Ordinary Shares:
Final dividend of 3.37 pence for the year ended
29 September 2017 (2016: 3.37 pence) 23.8 17.0
Interim dividend of 2.20 pence for the year ended
28 September 2018 (2017: 2.10 pence) 15.6 14.8
--------------------------------------------------- ------ ------
Total 39.4 31.8
--------------------------------------------------- ------ ------
Proposed for approval at AGM:
Equity dividends on Ordinary Shares:
Final dividend of 3.37 pence for the year ended
28 September 2018 (2017: 3.37 pence) 23.8 23.8
--------------------------------------------------- ------ ------
The proposed final dividend for the year ended 28 September 2018
will be payable on 5 February 2019 to shareholders on the Register
of Members at 11 January 2019.
7.Components of Net Debt and Financing
The cash flows from financing activities are set out in the
Group Cash Flow Statement.
Net Debt 2018 2017
GBPm GBPm
Cash and cash equivalents (net of bank overdraft) 37.0 19.8
Bank borrowings (350.5) (353.7)
Non-bank borrowings (62.3) (61.6)
Private placement notes (124.8) (121.9)
Finance leases (0.5) (1.8)
------------------------------------------------------ ------- -------
Group Net Debt (501.1) (519.2)
------------------------------------------------------ ------- -------
Net Finance Costs - continuing operations 2018 2017
GBPm GBPm
------------------------------------------------------ ------- -------
Net finance costs on interest bearing cash and cash
equivalents, borrowings and other financing costs (26.1) (23.5)
Pension financing (3.4) (3.9)
Interest on obligations under finance leases (0.1) (0.2)
Fair value of derivative financial instruments and
related debt adjustments (3.4) 0.2
FX on inter-company and external balances where hedge
accounting is not applied 0.1 (3.0)
(32.9) (30.4)
------------------------------------------------------ ------- -------
Analysed as:
Finance income 0.2 -
Finance costs (33.1) (30.4)
------------------------------------------------------ ------- -------
(32.9) (30.4)
------------------------------------------------------ ------- -------
Cash at bank earns interest at floating rates based on daily
bank deposit rates. Short-term deposits are made for varying
periods, between one day and one month, depending on the immediate
cash requirements of the Group, and earn interest at the respective
short-term deposit rates.
The disposal of Greencore's US business triggered mandatory
prepayment offers under certain of the Group debt arrangements
however the Group's lenders have waived these prepayment
obligations. In October 2018, the Group announced its intention to
return GBP509m to shareholders and utilise the remainder of the net
sales proceeds to reduce leverage. In addition, the Group plans to
enter into discussions with its lenders to refinance its existing
debt agreements in the first half of FY 2019, taking into account
the return of capital to shareholders.
8. Retirement Benefit Schemes
The Group operates defined contribution pension schemes in all
of its main operating locations. The Group also has legacy defined
benefit pension schemes, which were closed to future accrual on 31
December 2009. In consultation with the independent actuaries to
the schemes, the valuations of the pension obligations have been
updated to reflect current market discount rates, rates of increase
in salaries, pension payments and inflation, current market values
of investments and actual investment returns.
The principal actuarial assumptions are as follows:
2018 2017
UK Ireland UK Ireland
-------------------------------------- ----- ------- ----- -------
Rate of increase in pension payments* 3.10% 0% 3.05% 0%
Discount rate 2.90% 1.60% 2.75% 1.65%
Inflation rate 3.20% 1.60% 3.10% 1.45%
-------------------------------------- ----- ------- ----- -------
* The rate of increase in pension payments shown above applies
to the majority of the liability base, however, there are certain
categories within the Group that have an entitlement to pension
indexation and this is allowed for in the calculation.
The financial position of the schemes was as follows:
UK Schemes Irish 2018 2017
Schemes Total Total
GBPm GBPm GBPm GBPm
Total market value of scheme assets 217.9 255.5 473.4 478.6
Present value of scheme liabilities (318.1) (244.6) (562.7) (603.4)
----------------------------------------- -------------- -------- ------- -------
(Deficit)/surplus in schemes (100.2) 10.9 (89.3) (124.8)
Deferred tax asset 17.0 (1.3) 15.7 21.7
----------------------------------------- -------------- -------- ------- -------
Net (liability)/asset at end of the year (83.2) 9.6 (73.6) (103.1)
----------------------------------------- -------------- -------- ------- -------
Presented as:
Retirement benefit asset** 15.3 17.3
Retirement benefit obligation (104.6) (142.1)
----------------------------------------- -------------- -------- ------- -------
Deficit in schemes (89.3) (124.8)
----------------------------------------- -------------- -------- ------- -------
** The value of a net pension benefit asset is the value of any
amount the Group reasonably expects to recover by way of refund of
surplus from the remaining assets of a plan at the end of the
plan's life.
9.Information
The annual report and accounts will be published on the Group's
website on 4 December 2018.
By order of the Board, Conor O'Leary, Company Secretary on 3
December 2018 Greencore Group plc, 2 Northwood Avenue, Santry,
Dublin 9, Ireland.
Appendix
Alternative Performance Measures
The Group uses the following Alternative Performance Measures
('APMs') which are non-IFRS measures to monitor the performance of
its operations and of the Group as a whole: Pro Forma Revenue
Growth, Adjusted EBITDA, Adjusted Operating Profit, Adjusted
Operating Margin, Adjusted Profit before Tax ('PBT'), Adjusted
Earnings, Adjusted Earnings per Share, Maintenance and Strategic
Capital Expenditure, Operating Cash Flow, Free Cash Flow and Net
Debt.
The Group believes that these APMs provide useful historical
information to help investors evaluate the performance of the
underlying business and are measures commonly used by certain
investors and security analysts for evaluating the performance of
the Group. In addition, the Group uses certain APMs which reflect
the underlying performance on the basis that this provides a more
relevant focus on the core business performance of the Group.
i. Pro Forma Revenue Growth
The Group uses Pro Forma Revenue Growth as a supplemental
measure of its performance. The Group believes that Pro Forma
Revenue Growth provides a more accurate guide to underlying revenue
performance. Pro Forma Revenue Growth for continuing operations in
FY18 adjusts reported revenue to exclude the impact of the Heathrow
Acquisition in both years and excludes the cakes and desserts
category, representing Hull and Evercreech which have been disposed
of in the year. The discontinued Pro Forma Revenue Growth has been
adjusted to reflect the ownership of Peacock Foods for the full
period in FY17 and has excluded the Rhode Island site which ceased
trading in the current year. These figures are reported on a
constant currency basis.
2018
Convenience Foods Discontinued
UK & Ireland operations
----------------------------- ------------------- ---------------
Pro Forma Revenue Growth (%) 8.7% 6.6%
----------------------------- ------------------- ---------------
2018
Convenience Foods Discontinued
UK & Ireland operations
----------------------------- ------------------- ---------------
Reported revenue 4.2% 20.5%
Impact of acquisitions (0.2%) (24.1%)
Impact of disposals 4.8% 0.3%
Impact of currency (0.1%) 9.9%
----------------------------- ------------------- ---------------
Pro Forma Revenue Growth (%) 8.7% 6.6%
----------------------------- ------------------- ---------------
ii. Adjusted EBITDA, Adjusted Operating Profit and Adjusted
Operating Margin
Adjusted EBITDA, Adjusted Operating Profit and Adjusted
Operating Margin are used by the Group to measure the underlying
and ongoing operating performance of each business unit and of the
Group as a whole.
The Group calculates Adjusted Operating Profit as operating
profit before amortisation of acquisition related intangibles and
exceptional charges. Adjusted EBITDA is calculated as Adjusted
Operating Profit plus depreciation and amortisation. Adjusted
Operating Margin is calculated as Adjusted Operating Profit divided
by reported revenue.
2018 2017
Convenience Discontinued Convenience Discontinued
Foods UK&Ireland operations Total Foods UK&Ireland operations Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ----------------- ------------ ------------- ----------------- ------------ -------------
Profit for the
financial
year 12.6 23.9 36.5 17.3 (3.4) 13.9
Taxation(a) 5.2 (22.4) (17.2) (1.5) - (1.5)
Net finance costs(b) 32.9 1.0 33.9 30.4 0.6 31.0
Share of profit of
associates
after tax (0.9) - (0.9) (0.7) - (0.7)
Exceptional items 52.2 27.9 80.1 53.2 25.0 78.2
Amortisation of
acquisition
related intangibles 2.6 17.6 20.2 4.2 15.0 19.2
-------------------- ----------------- ------------ ------------- ----------------- ------------ -----------
Adjusted Operating
Profit 104.6 48.0 152.6 102.9 37.2 140.1
Depreciation and
amortisation(c) 35.4 17.0 52.4 34.8 14.8 49.6
-------------------- ----------------- ------------ ------------- ----------------- ------------ -----------
Adjusted EBITDA 140.0 65.0 205.0 137.7 52.0 189.7
-------------------- ----------------- ------------ ------------- ----------------- ------------ -----------
Adjusted Operating
Margin
(%) 7.0% 4.5% 6.0% 7.2% 4.2% 6.0%
-------------------- ----------------- ------------ ------------- ----------------- ------------ -----------
(a) Includes tax credit on exceptional items for continuing
operations of GBP7.8m (2017: GBP8.9m) and for discontinued
operations GBP20.6m
(2017: GBPnil)
(b) Finance costs less finance income
(c) Excludes amortisation of acquisition related intangibles
iii. Adjusted Profit Before Tax ('PBT') For Continuing
Operations
Adjusted PBT is used as a measure by the Group to measure
overall performance before associated tax charge and exceptional
items.
The Group calculates Adjusted PBT as Profit before taxation,
excluding tax on share of profit of associate and before
exceptional items, pension finance items, amortisation of
acquisition related intangibles, FX on inter-company and certain
external balances and the movement in the fair value of all
derivative financial instruments and related debt adjustments.
The following table sets out the calculation of Adjusted
PBT:
2018 2017
GBPm GBPm
------------------------------------------------ ------ ------
Profit before taxation for continuing
operations 17.8 15.8
Taxation on share of profit of associates 0.3 0.2
Exceptional items 52.2 53.2
Pension finance items 3.4 3.9
Amortisation of acquisition related intangibles 2.6 4.2
FX and fair value movements(a) 3.3 2.8
------------------------------------------------ ------ ------
Adjusted Profit before tax 79.6 80.1
------------------------------------------------ ------ ------
(a) FX on inter-company and certain external balances and the
movement in the fair value of all derivative financial instruments
and related debt adjustments.
iv. Adjusted Earnings and Adjusted Earnings Per Share
('EPS')
The Group uses Adjusted Earnings and Adjusted EPS as key
measures of the overall underlying performance of the Group and
returns generated for each share.
Adjusted Earnings is calculated as Profit attributable to equity
holders (as shown on the Group's Income Statement) adjusted to
exclude exceptional items (net of tax), 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 (net of tax)
and the interest expense relating to legacy defined benefit pension
liabilities (net of tax). Adjusted EPS is calculated by dividing
Adjusted Earnings by the weighted average number of Ordinary Shares
in issue during the year, excluding Ordinary Shares purchased by
Greencore and held in trust in respect of the Annual Bonus Plan,
the Performance Share Plan and the Executive Share Option Scheme,
and after adjusting the weighted average number of shares in the
prior year for the effect of the rights issue and related bonus
issue on the average number of shares in issue. Adjusted EPS is
also referred to as Adjusted Basic EPS.
The following table sets forth a reconciliation of the Group's
Profit attributable to equity holders of Greencore to its Adjusted
Earnings for the financial years indicated:
2018 2017
GBPm GBPm
--------------------------------------------------- ------- -------
Profit attributable to equity holders of Greencore 33.8 12.2
Exceptional items (net of tax) 51.7 69.3
FX effect on inter-company and external balances
where hedge accounting is not applied (0.1) 3.0
Movement in fair value of derivative financial
instruments and related debt adjustments 3.4 (0.2)
Amortisation of acquisition related intangibles
(net of tax) 14.4 13.1
Pension financing (net of tax) 2.7 3.1
--------------------------------------------------- ------- -------
Adjusted Earnings 105.9 100.5
--------------------------------------------------- ------- -------
2018 2017
'000 '000
--------------------------------------------- -------- --------
Weighted average number of Ordinary Shares
in issue during the year 703,312 652,481
--------------------------------------------- -------- --------
Pence Pence
--------------------------------------------- -------- --------
Adjusted Basic Earnings Per Share 15.1 15.4
--------------------------------------------- -------- --------
v. Capital Expenditure
Maintenance Capital Expenditure
The Group defines Maintenance Capital Expenditure as the
expenditure required for the purpose of sustaining the operating
capacity and asset base of the Group, and of complying with
applicable laws and regulations. It includes continuous improvement
projects of less than GBP1m that will generate additional returns
for the Group.
Strategic Capital Expenditure
The Group defines Strategic Capital Expenditure as the
expenditure required for the purpose of facilitating growth and
developing and enhancing relationships with existing and new
customers. It includes continuous improvement projects of greater
than GBP1m that will generate additional returns for the Group.
Strategic Capital Expenditure is generally expansionary expenditure
creating additional capacity beyond what is necessary to maintain
the Group's current competitive position and enables the Group to
service new customers and/or contracts or to enter into new
categories and/or new manufacturing competencies.
The following table sets forth the breakdown of the Groups
purchase of property, plant and equipment and purchase of
intangible assets between Strategic Capital Expenditure and
Maintenance Capital Expenditure:
2018 2017
Convenience
Foods Discontinued Convenience Discontinued
UK&Ireland Operations Total Foods UK&Ireland Operations Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ----------- -------------- ------- ----------------- ------------ -------
Purchase of property,
plant and equipment 48.8 11.7 60.5 80.3 25.1 105.4
Purchase of intangible
assets 2.8 0.2 3.0 17.2 0.7 17.9
------------------------------ ----------- -------------- ------- ----------------- ------------ -------
Net cash outflow from
capital expenditure 51.6 11.9 63.5 97.5 25.8 123.3
------------------------------ ----------- -------------- ------- ----------------- ------------ -------
Strategic Capital Expenditure 24.6 2.2 26.8 62.4 21.2 83.6
Maintenance Capital
Expenditure 27.0 9.7 36.7 35.1 4.6 39.7
------------------------------ ----------- -------------- ------- ----------------- ------------ -------
Net cash outflow from
capital expenditure 51.6 11.9 63.5 97.5 25.8 123.3
------------------------------ ----------- -------------- ------- ----------------- ------------ -------
vi. Operating Cash Flow and Free Cash Flow
The Group uses Operating Cash Flow to measure the amount of cash
generated by the operating activities of each business unit and of
the Group as a whole.
The Group calculates Operating Cash Flow as the net cash
inflow/(outflow) from operating and investing activities before
Strategic Capital Expenditure, contributions to legacy defined
benefit pension schemes, interest paid, tax paid, acquisition of
undertakings, net of cash acquired and disposal of
undertakings.
Free Cash Flow is a new APM. The Group use the Free Cash Flow to
measure the amount of cash available for distribution and
allocation.
The Group calculates the Free Cash Flow as the net cash
inflow/outflow before the following items: Strategic Capital
expenditure, acquisition of undertakings, net of cash, disposal of
undertakings, issue and purchase of shares, dividends paid to
equity holders, translation and other cash movements.
The following table sets forth the reconciliation from the
Groups net cash inflow from operating activities and net cash
outflow from investing activities to Operating Cash Flow and Free
Cash Flow:
2018 2017
GBPm GBPm
----------------------------------------------- ------- --------
Net cash inflow from operating activities 129.8 118.2
Net cash outflow from investing activities (62.7) (726.1)
----------------------------------------------- ------- --------
Net cash outflow from operating and investing
activities 67.1 (607.9)
----------------------------------------------- ------- --------
Strategic Capital Expenditure 26.8 83.6
Contributions to legacy defined pension
schemes 15.1 11.1
Tax paid 0.9 0.5
Interest paid 26.7 27.2
Acquisition of undertakings, net of cash
acquired - 606.2
Disposal of undertakings - (2.9)
----------------------------------------------- ------- --------
Operating Cash Flow 136.6 117.8
----------------------------------------------- ------- --------
Contributions to legacy defined pension
schemes (15.1) (11.1)
Tax paid (0.9) (0.5)
Interest paid (26.7) (27.2)
Dividends paid to non-controlling interests (1.5) (1.0)
----------------------------------------------- ------- --------
Free Cash Flow 92.4 78.0
----------------------------------------------- ------- --------
vii. Net Debt
Net Debt is used by the Group to measure overall cash generation
of the Group and to identify cash available to reduce
borrowings.
Net Debt comprises current and non-current borrowings less net
cash and cash equivalents. The following table sets out the
calculation of Net Debt:
2018 2017
GBPm GBPm
------------------------- ------- -------
Non-current
Bank borrowings (350.5) (353.7)
Private Placement Notes (124.8) (121.9)
Non-bank borrowings (62.3) (61.6)
Finance leases (0.5) (1.8)
------------------------- ------- -------
Total borrowings (538.1) (539.0)
Cash & cash equivalents 37.0 19.8
------------------------- ------- -------
Net Debt (501.1) (519.2)
------------------------- ------- -------
viii. Return on Invested Capital ('ROIC')
The Group uses ROIC as a key measure to determine returns from
each business unit and the Group as a whole, and as a key measure
to determine potential new investments.
The Group uses invested capital as a basis for this calculation
as it reflects tangible and intangible assets the Group has added
through its capital investment programme, the intangible assets the
Group has added through acquisition, as well as the working capital
requirements of the business.
The Group calculates ROIC as net Adjusted Operating Profit after
tax ('NOPAT') divided by average invested capital. NOPAT is
calculated as Adjusted Operating Profit plus share of profit of
associates before tax, less tax at the effective rate in the Income
Statement. Invested Capital is calculated as net assets (total
assets less total liabilities) excluding Net Debt and the balance
sheet value of derivatives not designated as fair value hedges, it
also excludes retirement benefit obligations (net of deferred tax
assets). Average Invested Capital is calculated by adding together
the invested capital from the opening and closing balance sheet and
dividing by two.
The following table sets forth the calculation of net operating
profit after tax ('NOPAT') and invested capital used in the
calculation of ROIC for the financial years indicated in respect of
the Group.
2018 2017
GBPm GBPm
----------------------------------------------- --------------- ---------------
Adjusted Operating Profit for the Group 152.6 140.1
Share of associates before tax 1.1 0.9
Taxation at the effective tax rate(a) (16.9) (11.3)
----------------------------------------------- --------------- ---------------
Group NOPAT 136.8 129.7
----------------------------------------------- --------------- ---------------
2018 2017
GBPm GBPm
----------------------------------------------- --------------- ---------------
Invested capital
Total assets 2,015.5 2,038.4
Total liabilities (1,271.9) (1,327.6)
Net Debt 501.1 519.2
Derivatives not designated as fair value
hedges 12.7 14.0
Retirement benefit obligation (net of deferred
tax asset) 73.6 103.1
----------------------------------------------- --------------- ---------------
Invested capital for the Group 1,331.0 1,347.1
----------------------------------------------- --------------- ---------------
Average invested capital for ROIC calculation
for Group(b) 1,339.1 1,060.9
----------------------------------------------- --------------- ---------------
ROIC (%) for the Group 10.2 12.2
----------------------------------------------- --------------- ---------------
(a) The effective tax rates for the Group for the financial
period ended 28 September 2018 and 29 September 2017, were 11% and
8%, respectively. This is a blended rate for continuing and
discontinued operations.
(b) The invested capital for the Group in 2016 was
GBP774.6m.
The following table sets forth the calculation of net operating
profit after tax ('NOPAT') and invested capital used in the
calculation of ROIC for the financial years indicated in respect of
the continuing operations.
2018 2017
GBPm GBPm
---------------------------------------------- ------------- -------------
Adjusted Operating Profit for continuing
operations 104.6 102.9
Share of associates before tax 1.1 0.9
Taxation at the effective tax rate(c) (13.7) (8.3)
---------------------------------------------- ------------- -------------
NOPAT for continuing operations 92.0 95.5
---------------------------------------------- ------------- -------------
2018 2017
GBPm GBPm
---------------------------------------------- ------------- -------------
Invested capital
Invested capital for the Group 1,331.0 1,347.1
Net assets of disposal group held for sale (741.7) (755.7)
---------------------------------------------- ------------- -------------
Invested capital for continuing operations 589.3 591.4
---------------------------------------------- ------------- -------------
Average invested capital for ROIC calculation
for continuing operations(d) 590.4 596.7
---------------------------------------------- ------------- -------------
ROIC (%) for continuing operations 15.6 16.0
---------------------------------------------- ------------- -------------
(c) The effective tax rates for continuing operations for the
financial period ended 28 September 2018 and 29 September 2017,
were 13% and 8%, respectively.
(d) The invested capital for continuing operations was GBP601.9m
in 2016 which excludes GBP172.7m of invested capital in respect of
discontinued operations.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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