TOT.L Regulatory News (TOT)

4 Mar 2008 07:01

Total Produce Plc04 March 2008 TOTAL PRODUCE ANNOUNCES 11.4% INCREASE IN 2007 EARNINGS • Sales revenue growth (incl. share of JV's) of 30.6%, to €2,431 million • Adjusted EBITA* up €5.0m, (12.7%) to €43.8 million • Adjusted profit before tax* up 7.9% to €38.9 million • Statutory profit before tax up 75.3% to €33.2 million • Adjusted earnings per share** up 11.4% to €6.35 cent • Increase of €16.3 million in shareholders funds to €163.7 million * excludes fair value movements on investment property, exceptional items,amortisation of intangible assets and the Group's share of its joint ventures'tax. ** excludes fair value movements on investment property, exceptional items,amortisation of intangible assets and related tax. Commenting on the results, Carl McCann, Chairman, said: "We are pleased to have achieved very satisfactory results, which are ahead ofexpectation, in our first year since demerger. The Group's earnings were up11.4% and the business has grown by 30.6% since last year." 4 March 2008 For further information, please contact:Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030 TOTAL PRODUCE PLC PRELIMINARY RESULTS FORYEAR ENDED 31 DECEMBER 2007 2007 2006 % Change • million • million Revenue, including share of JV/Assoc 2,431 1,861 30.6%Group Revenue 2,151 1,577 36.4%Adjusted EBITA * 43.8 38.8 12.7%Adjusted profit before tax * 38.9 36.1 7.9%Operating profit 37.7 21.7 73.5%Profit before tax 33.2 18.9 75.3% Euro cent Euro centAdjusted earnings per share ** 6.35 5.70 11.4%Basic earnings per share 5.43 2.02Dividend per share 1.65 - * excludes fair value movements on investment property, exceptional items,amortisation of intangible assets and the Group's share of tax of its jointventures. ** excludes fair value movements on investment property, exceptional items,amortisation of intangible assets and related tax. Financial results and operating review Income Statement Total revenue for 2007 increased year-on-year by €570 million (30.6%) to €2.43billion. Revenue excluding share of joint ventures grew 36.4% to €2.15 billion.The majority of this increase was in the general produce division and reflectsin particular the acquisition of Redbridge Holdings in January 2007 and thecontribution of a significant number of bolt-on acquisitions during the year.The current year also saw the full year impact on revenue of the acquisition ofthe remaining 50% of Lembcke A/S in September 2006. Modest mid-single digitincreases in average selling prices also contributed to revenue growth. Revenuein the Group's distribution business grew by 14.9% helped by the acquisition ofWholefoods Wholesale Limited. This performance is consistent with the Group's target to double its turnoverover five years. Operating profit One of the Group's key performance measures for its overall business is adjustedEBITA 1 (as defined below) which grew €5 million or 12.7% year on year to €43.8million. The full year cost of the UK rationalisation and integration programmewas €3 million excluding which the increase of €8 million over 2006 would havebeen 20.6%. Net EBITA margins were 1.80% compared to 2.09% last year or 1.93%before the rationalisation programme. This was due to lower margins in Redbridgeand higher rents payable to Blackrock International Land plc of €0.7 millionreflecting a full year rent charge in 2007. The full-year outcome for the produce division was satisfactory despite poorsummer weather and supply constraints in some key produce lines during theautumn and early winter. Weather conditions in the first half were particularlyfavourable for demand for our produce. EBITA in the Group's ambient consumergoods distribution business grew by 4% during 2007. Operating profit for the Group amounted to €37.7 million in 2007 compared to€21.7 million in 2006. Financial expense The net financial expense for the year was €4.6 million as compared to €2.8million for the prior year. The underlying capital structures are not, however,comparable as in 2006 the Group was a division of Fyffes plc. The net interestcover for 2007 was 9.3 times. Profit before tax Adjusted profit before tax 2 as defined below amounted to €38.9 million which isa 7.9% increase on the 2006 figure of €36.1 million. Profit before tax amountedto €33.2 million compared to €18.9 million in 2006. Taxation The underlying tax charge is set out in Note 4 of the accompanying preliminaryfinancial information. The charge, including the Group's share of the tax chargeof its joint ventures and associates, was €11.5 million (29.4%) compared to acharge of €9.7 million (26.8%) for the previous year. Minority interest The minority share of profits was €5.1 million for 2007, a reduction of €1.4million on 2006 due primarily to the deconsolidation of a subsidiary which isnow treated as a joint venture. Earnings per share Adjusted earnings per share3 (as defined below) amounted to 6.35 cent for 2007an 11.4% increase on the 2006 figure of 5.70 cent. This was slightly ahead ofexpectation. Basic earnings per share amounted to 5.43 cent compared to 2.02cent in 2006. Balance Sheet and Investments The Group balance sheet grew significantly during the period with shareholdersfunds increasing by 11.0% to €163.7 million. Net debt at the end of the year was €72.0 million which is slightly better thanforecast. During the year, the Group spent €83.9 million on acquisitions whichcomprised of €33 million on acquisition of subsidiaries, €7.3 million forinvestments in joint ventures and deferred consideration payments of €43.6million. The Group in January 2007 acquired Redbridge Holdings, the UK fresh producecompany, for a total consideration of €23 million which comprised of a cashconsideration of €13 million, including fees, a maximum deferred payment of €4.5million and an assumed pension liability of €5.5 million (net of deferred tax) During the year, €17 million of expenditure was incurred on six bolt-onacquisitions in the Fresh Produce sector, while in its ambient consumer goodsdistribution business the Group acquired Wholefoods Wholesale Limited., theleading distributor of high quality health foods, vitamins and minerals inIreland. During 2007, the Group also invested €7.3 million in joint ventures. The netcash investment in the joint venture with Blackrock International Land plc torelocate our Dublin distribution facilities was €5.7 million. In February 2007,a joint venture was formed with Tata to create distribution facilities for freshproduce in India. The strategy is to use our initial investment to establish twostate-of-the-art distribution facilities in India with plans to expand acrossthe sub-continent in due course. Deferred consideration of €43.6 million was paid during the year in respect ofprior period acquisitions and €41.7 million of this relates to the final paymentin respect of the Everfresh Group acquisition in May 2007. During the year, €15.6 million was also expended in capital expenditure. TheGroup's two new state-of-art fresh produce distribution centres in Sighthill,Edinburgh and Dunmurry, Belfast were completed and commissioned during the year.Excluding these new facilities, routine capital expenditure was broadly equal tothe depreciation charge of €13.7 million. Buy-back Having observed the recent Stock Market volatility, the Group is consideringexercising its authority to buy its own shares in the market if the appropriateopportunities arise. This authority permits the Group to buy up to 10% of theissued share capital at a price which may not exceed 105% of the average priceover the previous 5 trading days. Any shares which may be purchased will beacquired through a subsidiary of the Company and will be held as treasury sharesand will not be cancelled. Any purchases should have a positive effect onearnings per share. Dividend The Board is proposing a final dividend of 1.15 cent per share subject toapproval at the forthcoming AGM. This dividend will be paid on 29 May 2008 toshareholders on the register on 25 April 2008 subject to dividend withholdingtax. In accordance with company law, this dividend has not been provided forin the balance sheet at 31 December 2007. Total dividends for 2007 will amountto 1.65 cent per share. Outlook Trading in the year to date is in line with our expectation and the Board istargeting a mid-single digit growth in adjusted earnings per share for 2008.Total Produce will continue to pursue its plans to further expand and developthe Group. 1 Adjusted EBITA is operating profit excluding fair value movements oninvestment property, exceptional items, amortisation of intangible assets, andbefore interest and tax (including the equivalent share of joint ventures). Thiscalculation is set out in note 2 of the accompanying preliminary financialinformation 2 Adjusted profit before tax excludes fair value movements on investmentproperty, exceptional items, amortisation of intangible assets and Group's shareof joint ventures tax which under IFRS rules is reflected in profit before tax.This calculation is set out in note 2 of the accompanying preliminary financialinformation 3 Adjusted earnings per share excludes fair value movement on investmentproperty, exceptional items, amortisation of intangible assets and related tax.This calculation is set out in note 5 of the accompanying preliminary financialinformation. Carl McCann, Chairmanon behalf of the Board4 March 2008 Copies of this announcement will be available from the company's registeredoffice, Charles McCann Building, Rampart Road, Dundalk, Co Louth and on ourwebsite at www.totalproduce.com. Total Produce plcSummary Group Income Statement for the year ended 31 December 2007 Total Pre- Exceptional Total 2007 exceptional Items 2006 2006 2006 •'000 •'000 •'000 •'000 Revenue including Group share of joint 2,431,147 1,860,892 - 1,860,892ventures and associatesGroup revenue 2,150,621 1,577,056 - 1,577,056Cost of sales (1,859,871) (1,353,920) - (1,353,920)Gross Profit 290,750 223,136 223,136 Distribution expenses (212,739) (150,685) - (150,685)Administration expenses (44,395) (42,784) - (42,784)Other operating expenses (626) (166) (22,749) (22,915)Other operating income 2,757 2,065 9,550 11,615Share of profit of joint ventures and 1,986 3,381 - 3,381associates (net of tax) Operating profit 37,733 34,947 (13,199) 21,748 Net financial expense (4,575) (2,832) - (2,832)Profit before tax 33,158 32,115 (13,199) 18,916Income tax expense (8,979) (8,773) 3,417 (5,356) Profit for the financial year 24,179 23,342 (9,782) 13,560 Attributable as follows:Equity shareholders 19,055 7,060Minority interests 5,124 6,500 24,179 13,560 Earnings per share - • cent Basic €5.43 cent €2.02 centAdjusted fully diluted €6.35 cent €5.70 cent Total Produce plc Summary Group Statement of Recognised Income and Expensefor the year ended 31 December 2007 2007 2006 •'000 •'000 Movement on translation of net equity investments (5,260) 3,639Revaluation gains on property, plant and equipment 1,706 -Deferred tax movement on revaluation of property, plant and equipment 204 -Share of joint venture revaluation of property, plant and equipment 294 -Share of joint venture tax on revaluation of property, plant and equipment (41) -Revisions to deferred tax provision on revaluation reserve - 585Fair value adjustment on equity investments (62) 1,400Effective portion of cash flow hedges (net of deferred tax) - (52)Actuarial gains recognised on defined benefit pension schemes 3,401 6,315Deferred tax on actuarial gains on defined benefit pension schemes (1,413) (236)Share of joint ventures actuarial gain/(loss) recognised on defined benefit pensionschemes (net of deferred tax) 123 (460)Share of joint ventures fair value gain on equity investments 25 - Net income recognised directly in equity (1,023) 11,191Profit for the financial year 24,179 13,560 Total recognised income and expense 23,156 24,751 Attributable as follows:Equity shareholders 17,354 17,838Minority interest 5,802 6,913 23,156 24,751 Total Produce plc Summary Group Balance Sheet as at 31 December 2007 2007 2006 •'000 •'000 Non-current assetsProperty, plant and equipment 124,226 112,049Investment property 12,194 9,009Goodwill & intangible assets 123,586 95,895Other receivables 1,609 1,627Investments in joint ventures and associates 41,453 26,859Equity investments 9,462 11,011Deferred tax assets 5,231 4,502Employee benefits 7,235 3,047Total non-current assets 324,996 263,999 Current assetsInventories 37,351 30,342Trade and other receivables 267,177 221,351Derivative financial instruments 171 17Cash and cash equivalents 87,104 87,909Corporation tax receivable 1,803 -Total current assets 393,606 339,619 Total assets 718,602 603,618 EquityCalled-up share capital 3,519 3,510Share premium 252,574 251,998Other reserves (111,745) (108,071)Retained earnings 19,366 -Total shareholders' equity 163,714 147,437Minority interest 45,997 48,501 Total equity and minority 209,711 195,938 Non-current liabilitiesInterest-bearing loans and borrowings 109,946 60,066Deferred government grants 2,385 2,081Other payables 2,612 538Provisions 8,380 4,384Corporation tax payable 7,772 7,785Deferred tax liabilities 20,151 15,047Employee benefits 8,675 3,237Total non-current liabilities 159,921 93,138 Current liabilitiesInterest-bearing borrowings 49,171 22,178Debt due to Fyffes plc arising on demerger - 15,665Trade and other payables 296,282 227,630Provisions 3,226 46,406Derivative financial instruments 291 3Corporation tax payable - 2,660Total current liabilities 348,970 314,542 Total liabilities 508,891 407,680 Total liabilities and equity 718,602 603,618 Total Produce plc Summary Group Cash Flow Statement for the year ended 31 December 2007 2007 2006 •'000 •'000Operating activitiesProfit for the period 24,179 13,560Income tax expense 8,979 5,356 Depreciation of property, plant and equipment 13,688 12,294 Impairment of property, plant and equipment 113 -Fair value movement on investment properties (360) (6,120) Impairments arising from demerger - 22,749 Amortisation of intangible assets 5,026 3,021 Amortisation of research and development 518 - Amortisation of grants (521) (323) Contributions to defined benefit pension schemes (4,563) (2,760) Defined benefit pension scheme expense 2,242 2,642 Net loss / (gain) on disposal of plant & equipment 69 (610) Net interest expense 4,776 2,932 Share of profits of joint ventures and associates (after tax) (1,986) (3,381) Corporation tax paid (11,627) (12,255)Equity settled share-based compensation 93 -Net loss on re-measurement of derivatives 94 (100)Net interest paid (3,145) (2,007) Cash generated from operations before movement in working capital 37,575 34,998Decrease in working capital 12,597 3,813 Cash flows from operating activities 50,172 38,811 Investing activitiesAcquisition of subsidiaries, net of cash acquired (32,994) (10,255) Acquisition of and investment in joint ventures including loans (7,300) (2,497) Acquisition of trade investment (40) (1,991) Payments of deferred consideration (43,556) (5,077) Acquisition of property, plant and equipment (15,609) (27,477) Acquisition of investment property (22) - Proceeds from disposal of property, plant and equipment 1,128 1,480 Dividends received from joint ventures/associates 2,152 80 Proceeds from disposal of minority share - 100 Government grants received 746 156 Research & development expenditure capitalised (303) - Subsidiary becoming a Joint Venture (8,589) - Cash flows from investing activities (104,387) (45,481) Financing activitiesProceeds from the issue of share capital to employees 585 -Net increase in borrowings 68,026 22,635 Net cash movement in balances with Fyffes (15,665) 34,299 Capital element of lease payments (1,270) (1,084) Dividends paid to Fyffes plc during prior year - (4,534) Capital contribution from minority interest - 116 Dividends paid to equity shareholders (1,755) - Dividends to minority interests (4,543) (3,620) Cash flows from financing activities 45,378 47,812 Net movement in cash and cash equivalents (8,837) 41,142Cash and cash equivalents, including bank overdrafts at start of period 85,042 42,882Exchange translation adjustment on cash and cash equivalents (2,094) 1,018 Cash and cash equivalents, including bank overdrafts at end of period 74,111 85,042 Total Produce plc Notes to Preliminary Results for the year ended 31 December 2007 1. Basis of preparation The financial information included in these preliminary result statements havebeen extracted from the Groups' financial statements for the year ended 31December 2007. The financial information is presented in Euro, rounded to the nearest thousand. 2. Adjusted profit before tax, EBITA and minority interests 2007 2006 €000 €000 Profit before tax per income statement 33,158 18,916 AdjustmentsExceptional items (note 3) - 13,199Fair value gains in investment property (360) -Share of joint ventures fair value gains on investment property (before tax) (271) -Group share of tax charge of joint ventures and associates 1,305 894Amortisation of intangibles including share of joint ventures 5,096 3,063 Adjusted profit before tax 38,928 36,072 ExcludeFinancial expense - Group 4,575 2,832Financial expense / (income) - share of joint ventures and associates 251 (70) Adjusted EBITA 43,754 38,834 Total Produce believes that the adjusted profit before tax and adjusted earningsper share (note 5 below) are the appropriate measures of the underlyingperformance of the Group, excluding fair value gains on investment properties,exceptional items and amortisation charges. Similarly, adjusted earnings beforeinterest, tax, fair value gains on investment properties, exceptional items andamortisation (adjusted EBITA) are a more indicative reflection of the underlyingoperations of the Group. 3. Exceptional items 2007 2006 •'000 •'000 Fair value gain on investment properties - 6,120Gain on disposal of leasehold interest in property - 3,430Impairment losses - (22,749) Total exceptional items per income statement - (13,199) During the prior year, the Group recognised impairment losses arising fromchanges in a number of the businesses giving rise to an aggregate non cashcharge in the income statement of €22.7m. Exceptional operating income comprisesthe gain on disposal of a leasehold interest on a property occupied in Irelandgiving rise to a gain of €3.4m and a fair value adjustment of €6.1m on aninvestment property in the UK. 4. Income Tax 2007 2006 €000 €000 Tax charge per Income Statement 8,979 5,356Group share of tax charge of its joint ventures/associates netted in profit 1,305 894before tax Total tax charge 10,284 6,250 AdjustmentsDeferred tax on amortisation of intangibles (including share of joint ventures/associates) 1,112 2,500Deferred tax on fair value gains on investment properties 63 (2,072)Tax impact of other exceptional items - (616)Once-off tax credits arising on demergers during the prior year 3,605 - Tax charge on underlying activities 11,459 9,667 Including the Group's share of the tax charge of its joint ventures andassociates amounting to €1.3m (2006: €0.9m), which is netted in operating profitin accordance with IFRS, the total tax charge for the year amounted to €10.3m(2006: €6.3m). Excluding the impact of once-off tax credits, deferred tax credits related tothe amortisation of intangibles and the tax effect of exceptional items and fairvalue gains on investment properties, the underlying tax charge for the year was€11.5m (2006: €9.7m), equivalent to a rate of 29.4% (2006: 26.8%) when appliedto the Group's adjusted profit before tax. 5. Earnings per share 2007 2006 €000 €000 Profit for financial year attributable to equity shareholders 19,055 7,060 '000 '000 Weighted average number of ordinary shares for the financial year 351,003 349,951 Basic earnings per share - • cent 5.43 2.02 Adjusted fully diluted earnings per share 2007 2007 •'000 • cent per share Profit for financial year attributable to equity shareholders 19,055 5.43Adjustments:Fair value movement on investment properties (360) (0.10)Share of joint ventures fair value movement on investment properties (255) (0.07)Amortisation of intangible assets 5,096 1.45Tax effect of fair value movement on investment properties and amortisation (1,191) (0.34)chargesMinority impact of intangible amortisation charges and related tax (63) (0.02) Adjusted fully diluted earnings - 2007 22,282 6.35 2006 2006 •'000 • cent per share Profit for financial year attributable to equity shareholders 7,060 2.02Adjustments:Impairment losses (note 3) 22,749 6.50Profit on disposal of leasehold interest (note 3) (3,430) (0.98)Fair value movement on investment properties (note 3) (6,120) (1.75)Amortisation of intangible assets 3,063 0.88Tax effect of exceptional items and amortisation charges (3,417) (0.98)Minority impact of exceptional items 282 0.08Impact on earnings of dilutive share options - (0.07) Adjusted fully diluted earnings - 2006 20,187 5.70 Adjusted fully diluted earnings per share is calculated to adjust for fair valuemovements on investment property, exceptional items, intangible amortisation,related tax charges/credits and the impact of share options with a dilutiveeffect 6. Employee post employment benefits 2007 2006 •'000 •'000 Deficit at beginning of year (190) (6,623)Employee employment benefit liability acquired as part of acquisition of (7,467) -subsidiaryCurrent/past service cost less net finance income recognised in income statement (2,242) (2,642)Actuarial gain recognised in statement of recognised income and expense 3,401 6,315Contributions to schemes 4,563 2,760Foreign exchange movement 495 - Deficit at end of year (1,440) (190)Related deferred tax asset 833 592 Net (deficit)/asset (607) 402 The table summarises the movements in the net deficit on the Group's variousdefined benefit pension schemes in Ireland, the UK and Continental Europe. TheGroup's balance sheet at 31 December 2007 reflects pension assets of €5.2m inrespect of schemes in surplus and pension liabilities of €8.7m in respect ofschemes in deficit. An employee post employment benefit liability of €7.5m (before deferred tax) wasacquired during the year as part of the Group's acquisition of RedbridgeHoldings. The current/past service cost is charged in the Income Statement, net of thefinance income on scheme assets and liabilities. Actuarial gains/ (losses) arerecognised in the Statement of Recognised Income and Expense. The increase in the scheme's deficit during the year arose mainly because of theliability assumed as part of the Redbridge acquisition and the reduction invalue of the schemes assets due to poor stock market returns in the second halfof 2007. These increases in liabilities were offset by the impact of theincrease in long term international interest rates which reduces the presentvalue of the schemes liabilities. 7. Dividends 2007 2006 •'000 •'000Dividends paid on Ordinary €1 cent sharesInterim dividend for 2007 of €0.50 cent 1,755 - The directors have proposed a final dividend for 2007, subject to shareholderapproval at the AGM of 1.15 cent per share. This dividend has not been providedfor in the balance sheet at 31 December 2007. 8. Summary Statement of Movement in Shareholders' Equity 2007 2006 •'000 •'000 Total shareholders' equity at beginning of year 147,437 165,678Total recognised income and expense 17,354 17,838Shares issued 585Share based payment expense 93Dividends paid to equity shareholders (1,755)Dividends paid to Fyffes plc and subsidiaries - (4,534)Distribution in specie arising from property demerger - (39,346)Movement in funding balance with Fyffes - 7,801 Total shareholders' equity at end of year 163,714 147,437 During the year, dividends of €1.8m were paid to the equity shareholders of theCompany. During the prior year, dividends of €4.5m were recognised and paid to Fyffesplc, the legal parent at the date of such distributions. During the prior year, as part of the distribution by Fyffes plc of its propertyundertakings to Blackrock International Land plc, fair value gains of €39.3mrecognised in respect of properties held by entities in its General Produce andDistribution business were distributed to Fyffes plc. 9. Businesses acquired during the year During the year, the Group completed the acquisition of a number of businessesas described earlier in this announcement. The total consideration for acquisitions of subsidiaries amounted to €31.1m(excluding cash and bank overdrafts acquired). Including cash and bankoverdrafts acquired, the net cash outflow for these acquisitions amounted to€33.0m. The net spend on investment in new joint ventures during the year was€7.0m. The acquisition method of accounting has been used to consolidate the businessesacquired. The accounting for some of the business acquisitions is provisional.Other than the valuation of intangible assets there are no material differencesarising between the fair value of assets and liabilities acquired and theacquirees carrying value at acquisition date. If, however, any fair values needto be adjusted, they will be reflected in the acquisition accounting within oneyear of acquisition date. 10. Analysis of movement in net debt in the year 1 Jan 2007 Cash Flow Acquisitions Non-cash 31 Dec •'000 •'000 & disposals •'000 2007 •'000 Translation •'000 •'000 Bank balances and deposits 87,909 1,643 - (2,448) 87,104Overdrafts (2,867) (10,480) - - 354 (12,993)Cash and cash equivalents percash flow statement 85,042 (8,837) - - (2,094) 74,111 Bank loans - non current (59,232) (65,055) (2,943) 14,391 3,686 (109,153)Bank loans - current (18,323) (2,971) - (14,391) 207 (35,478)Finance leases (1,822) 1,270 (552) (556) 167 (1,493)Total interest bearingborrowings (79,377) (66,756) (3,495) (556) 4,060 (146,124) Debt due to Fyffes plc arisingon demerger (15,665) 15,665 - - - - Net debt (10,000) (59,928) (3,495) (556) 1,966 (72,013) This information is provided by RNS The company news service from the London Stock Exchange