2012 Interim Results

Origin Enterprises plc

Interim Results Announcement

Half Year ended 31 January 2012

Results Summary

* Before intangible amortisation and exceptional items

** Comparisons impacted by acquisitions in H2 FY11 which are loss making in the first half

*** Share of profit of associates and joint venture represents profit after interest and tax

**** Before intangible amortisation, net of related deferred tax (2012: €2.6 million, 2011: €1.4 million) and exceptional items (2012: €9.7 million, 2011: €5.5 million).

Highlights

·; Group performance in line with expectations with H1 now typically accounting for 15% of full year profits reflecting the repositioned business profile of the Group

·; 0.77 cent like for like reduction in earnings per share principally due to the later timing of business-to-business fertiliser sales

·; Strong performance from agronomy services with crop planting profile providing excellent platform for full year result

·; Commercial, technical and business process integration relating to FY2011 acquisitions progressing well

·; Agrii launched as new identity for combined Masstock and UAP

·; Sustained performance from associates and joint venture

·; On track to deliver full year consensus earnings expectations

Origin Enterprises plc

Chief Executive Officer's comment:

Commenting on the announcement of the 2012 Interim Results, Origin Chief Executive Officer, Tom O'Mahony said:

"Origin has performed in line with expectations during the seasonally quiet first half of the financial year. The expansion of the Group's Agri-Services division in 2011 and the formation of Valeo Foods in November 2010 have resulted in the second half of the financial year becoming much more seasonally important with 15 per cent of operating profits now typically earned in the first half of the year.

On-farm agronomy services across the UK and Poland performed strongly in the period reflecting positive investment momentum at farm level with favourable crop planting activity during the key autumn growing season providing an excellent foundation for the full year result.

In January, the Group combined Masstock and UAP under a new identity called Agrii. Agrii simply and clearly defines the essential relationship that exists between farming and agronomy and captures the essence of two of the UK's leading agri-service businesses coming together as one unified organisation. Commercial, technical and business process integration is progressing to plan.

The repositioning of the Group's business profile over the last three years has established Origin's leadership position in on-farm service support. We are now firmly focused on placing agri-intelligence at the heart of the enlarged business. Connecting crop science and research application with agronomy practice, inputs, farming decision support and economics supports the creation of customised and fully integrated solutions that deliver sustained improvement in crop yields and profitability for the benefit of primary food producers.

We remain confident regarding our future prospects and are comfortable with full year analyst earnings expectations."

ENDS

The 2012 Interim Results Announcement is available on the company website www.originenterprises.com. There will be a live conference call at 8.30am (GMT) today. To listen to this conference call, please dial the number below. Participants are requested to dial in 5 to 10 minutes prior to the scheduled start time.

Participant access numbers:

Ireland: Tel: +353 (0) 1 659 0423

UK/International: Tel: +44 (0) 20 3364 5381

Switzerland: Tel: +41 (0) 44 800 9658

Confirmation Code: 6832948

Enquiries:

Brendan Fitzgerald Tel: +353 (0) 1 612 1259

Chief Financial Officer

Origin Enterprises plc

Joe Murray Tel: +353 (0) 1 498 0300

Murray Consultants Mobile: +353 (0) 86 253 4950

8 March 2012

INTERIM RESULTS STATEMENT

Financial review

The strategic repositioning of the Group following the Valeo transaction in November 2011 and the Agri-Services acquisitions in the second half of the last financial year has significantly increased the seasonality profile of the Group's earnings. The first half of the financial year now typically accounts for approximately 15 per cent of annual profits.

Adjusted fully diluted earnings per share* for the half year ending 31 January 2012 amounted to 6.53 cent per share (2011: 11.45c). Adjusted fully diluted earnings per share* from continuing operations decreased from 8.26 cent per share to 6.53 cent per share. On a like for like basis (excluding the impact of acquisitions, the dilutive impact of the Valeo and R&H Hall transactions and currency movements) underlying earnings per share were 0.77 cent per share lower, principally reflecting the later timing of the business-to-business fertiliser sales.

Revenue

Group revenue for the six months was €507.4 million, a reduction of 17.3 per cent on the prior period. The Agri-Services business which is now the sole generator of Group revenue declined by 10.8 per cent in the period. On a like for like basis (excluding the impact of acquisitions, the transition of R&H Hall to associates and currency movements), Agri-Services revenues increased by 6.6 per cent reflecting higher global fertiliser and feed prices offset by reduced volumes principally due to the later timing of business-to-business fertiliser sales.

Operating profit**

Group operating profit** for the six months was €12.9 million. Operating profit** from the Agri-Services business amounted to €5.9 million compared to €12.6 million in the prior period - a decrease of €6.7 million. The acquisitions of United Agri Products, Rigby Taylor and the fertiliser business of Carr's Milling Industries PLC, which are seasonally loss making in the first half of the year, contributed €1.8 million of the reduction, the transitioning of R&H Hall to associates contributed €1.6 million and currency translation contributed €0.3 million. Excluding these, operating profit** from Agri-Services decreased by €3.0 million on a like for like basis, principally reflecting the impact of lower fertiliser volumes year on year as customers deferred purchasing commitments until closer to the main application period.

Associates and joint venture

Our share of the profit after interest and taxation from associates and joint venture increased by €0.6 million (10.4 per cent) from €6.4 million to €7.0 million. The increase in the period is principally attributable to a full six month contribution from Valeo (four months last year), an improved performance from Continental Farmers Group plc offset by a reduced share of profit from our 50 per cent interest in Welcon compared to the very strong results from this business in the previous two years.

Financing costs

Net finance costs amounted to €3.1 million, a decrease of €3.0 million (49.0 per cent) on the prior period reflecting the benefit from the cash generative nature of the business and lower interest rates.

Cashflow, net debt and working capital

Due to the seasonal nature of the business there is an increased investment in working capital in the first half of the financial year. This investment in the current year is higher due to the increased scale of the Agri-Services businesses following the acquisitions in the second half of the last financial year.

Net cash outflow from operating activities was €73.4 million (2011: €43.7 million) reflecting this increased seasonal investment in working capital.

Group net debt was €194.0 million at 31 January 2012 (2011: €98.7m), an increase of €95.2 million. The increase is primarily due to the acquisitions in the second half of last year.

Investment Properties

The Directors have reviewed the carrying value of investment properties in light of the continuing decline in the Irish property market, a lack of transactions, restricted bank financing for property related deals and a generally difficult economic environment. In particular the value of development land in regional areas is converging to that of agricultural land. This review resulted in a writedown in the carrying value of investment properties of €9.7 million. This non-cash charge has been shown as an exceptional item in the Income Statement for the half year ended 31 January 2012.

Dividend

On 6 January 2012 a dividend of 11 cent per share was paid in respect of the year ended 31 July 2011 totalling €14.6 million. As in the prior year, reflecting the seasonality of the business, the Group will declare an annual dividend at the time of the preliminary results announcement in September 2012.

* Before intangible amortisation, net of related deferred tax (2012: €2.6 million, 2011: €1.4 million) and exceptional items (2012: €9.7 million, 2011: €5.5 million).

** Operating profit and group operating profit are stated before intangible amortisation and exceptional items.

Review of Operations

Agri-Services

*before intangible amortisation and exceptional items

Agri-Services comprises on-farm integrated agronomy services and business-to-business agri-inputs. These businesses provide customised solutions that address the efficiency, quality and output requirements of primary food producers in Ireland, the UK and Poland.

Agri-Services performed in line with expectations, reflecting the increased seasonality of the business. Revenue decreased by 10.8 per cent to €507.4 million due to higher global fertiliser and feed prices offset by reduced volumes. Operating profit decreased from €12.6 million to €5.9 million whereas on a like for like basis (excluding the impact of acquisitions, the transition of R&H Hall to associates and currency movements) it declined by €3.0 million, principally reflecting the later timing of the business-to-business fertiliser sales.  

Integrated Agronomy Services - UK and Poland

Agronomy services in the UK, comprising Masstock and UAP, delivered a strong first half result supported by good demand for full service on-farm applications. The performance largely reflects the combination of favourable autumn growing conditions and positive output price momentum underpinning attractive grower returns. Increases in customers planted acreage of winter wheat and oil seed rape, in the order of 1-2 per cent and 5 per cent respectively, provide an excellent foundation for the full year performance.

The business is experiencing growing demand for precision agriculture applications as farmers increasingly use sophisticated information based technologies to manage enterprise risk and improve productivity.

In Poland, Dalgety performed strongly in the period benefiting from higher sales of agronomy service applications in addition to the extension of crop sourcing and marketing activity within neighbouring geographies. The business is primarily focused on the larger scale intensive farming sector whilst also providing a differentiated service offering to smaller farm units and local service providers.

In January 2012 the Group announced that Masstock and UAP are to operate under a new identity called Agrii. Agrii communicates clearly and simply the essential focus of the business which is to deliver superior agri-intelligence and innovation to farming to maximise sustainable crop yield and profitability. This approach combines the most up-to-date agronomy capability, crop technologies and complementary expertise in specialist areas to deliver an 'Agronomy Plus' proposition to growers.

Agrii defines the strong relationship that exists between farming and agronomy. Internally Agrii establishes a renewed sense of relevance and acts as a strong unifying force for the enlarged organisation.

Agrii is now operating under a single management structure supported by a simplified and decentralised organisation focused on building regional leadership capabilities to drive an integrated approach to customer management. There has been significant progress relating to commercial, technical and business process integration in the period.

Agrii's priority is to establish an intelligence led, sustainable agri-services model through placing crop science and research at the heart of the business. Connecting high visibility science with Agrii's leading evidence based applied research and knowledge dissemination capability, secures early access to new crop varieties to drive innovative product strategies as well as the development of best practice establishment techniques. Delivering the latest innovation through electronic on-farm decision support systems enables Agrii to efficiently empower agronomists and farmers with the most comprehensive information, production technology and complementary expertise underpinning crop yield.

Business-to-business Agri Inputs - Ireland and the UK

In Ireland optimism within agriculture is reflected in a stable planning environment for primary producers with most enterprises generating satisfactory returns with a renewed interest in the beef and sheep sectors where profitability has improved significantly. The balance of animal numbers has continued to move in favour of dairy as farmers prepare for the expected expansion in milk output post the cessation of quota in 2015.

The fertiliser market in both Ireland and the UK experienced lower volume off-take compared with the same period last year, mirroring demand levels in the first half of the 2010 financial year. Customers have delayed their purchasing commitments until closer to the main application period largely due to limited pricing incentive to buy forward. The business remains well placed to fulfil customer off-take requirements in a concentrated drawdown period during the second half.

The integration of Carrs Fertilisers, acquired in July 2011, with Origin Fertilisers in the UK is progressing very satisfactorily and is expected to be completed by August 2012. Origin continues to focus on delivering speciality applications to strengthen and broaden the Group's nutrition offer. The acquisition of Carrs Fertilisers provides new technologies such as systems for the effective delivery of key trace elements through nutrition and applications enhancing the nutrient value of fertilisers. This provides opportunity for margin and volume development.

Origin's amenity business delivers advice and input solutions to the professional sports turf, landscaping and amenity sectors. Amenity provides important channel extension complementing the Group's co-ordinated growing systems research capability, product portfolio and distribution network whilst also strengthening Origin's route-to-market profile with key manufacturing partners. Amenity performed well in the period benefiting from range extension within Rigby Taylor together with the improved alignment of product offering with related market sectors. Rigby Taylor and the Group's specialist fertiliser business, PB Kent, were fully integrated in the period.

Feed ingredients delivered a satisfactory performance in the period against the background of reduced overall levels of feed usage due to excellent quality fodder stocks, continued good grass growth and milk quota restrictions.

Associates and joint venture

Welcon Invest AS ('Welcon')

Welcon, in which Origin has a 50 per cent shareholding, is Europe's largest manufacturer of marine proteins and oils servicing the aquaculture, pig and poultry feed sectors.

Welcon delivered a good performance for the period despite lower profits in comparison to the very strong performance in the preceding two years. Production activity was lower in the first half of the year due largely to the impact of quota adjustments for raw material. Fishmeal and fish oil demand remained robust underpinned by increased aquaculture feed consumption and also higher inclusions in pig and poultry feed diets evidencing improved returns in these sectors. Global fishmeal prices, although lower year-on-year, are stable reflecting good demand levels with buyers short term requirements mostly covered at this stage. Fish oil prices remain firm supported by strong demand and limited unsold stocks.

In February 2012, Welcon completed the acquisition of a 50 per cent interest in Hordafor AS. Hordafor is a leading producer of fish oil and protein concentrate from salmon and pelagic trimmings. The acquisition provides Welcon with strategic access to alternative raw material processing technologies in addition to new market outlets for marine by-products.

Valeo Foods Group Limited ('Valeo')

Valeo, in which Origin has a 32 per cent shareholding, is a leading consumer foods company with a portfolio of some of Ireland's most iconic food brands.

The trading environment continues to remain extremely challenging with declining consumer spending underpinning a relentless drive for value. This dynamic is being reflected in a requirement for increasing promotional investment to sustain retail brand competitiveness and maintain market share against private label offerings. Delayed cost recovery is also being experienced in certain categories.

Valeo delivered a solid performance in the period maintaining volumes across core categories supported by the introduction of complementary product lines and the development of strong consumer offerings. Following the completion of the acquisition of the Jacob Fruitfield Food Group in September 2011, its operations were successfully migrated to Valeo in the period.

Continental Farmers Group Plc ('Continental')

Continental, in which Origin holds a 24 per cent interest, is a large scale producer of value added agriculture crops with operations in Northern Poland and Ukraine. Continental's proven farming know-how together with the benefit of operational scale facilitates the application of diversified cropping plans that optimise productivity and output price realisations.

Continental achieved excellent crop yields in the 2011 harvest and delivered a very successful autumn planting programme. In January, Continental announced that it had entered into a joint venture agreement with ED&F Man, a major global integrated commodity and logistics service provider, for the long-term production and supply of sugar beet in the Mykolaiv region of southern Ukraine. The agreement which is subject to customary regulatory approvals provides important strategic regional and crop diversity for Continental and underlines the strength of its farm management and land assembly capability.

Outlook

The repositioning of the Group's business profile over the last three years has established Origin's leadership position in on-farm service support. We are now firmly focused on placing agri-intelligence at the heart of the enlarged business. Connecting crop science and research application with agronomy practice, inputs, farming decision support and economics supports the creation of customised and fully integrated solutions that deliver sustained improvement in crop yields and profitability for the benefit of primary food producers.

We remain confident regarding our future prospects and are comfortable with full year analyst earnings expectations.

ENDS

About Origin Enterprises plc

Origin Enterprises plc is a focused Agri-Services Group with investments in marine proteins and consumer foods. The Group is listed on the ESM and AIM markets of the Irish and London Stock Exchanges. The Agri-Services business through its manufacturing and distribution operations in Ireland, the United Kingdom and Poland has leading market positions in the supply of specialist agronomy services, crop nutrition and feed ingredients.

ESM ticker symbol: OIZ

AIM ticker symbol: OGN

Website: www.originenterprises.com

Origin Enterprises plc

Consolidated income statement

for the six months ended 31 January 2012

Origin Enterprises plc

Consolidated income statement (continued)

for the six months ended 31 January 2012

\* There were no shares with a dilutive effect in the current period as all convertible shares were anti-dilutive.

Origin Enterprises plc

Consolidated statement of comprehensive income

for the six months ended 31 January 2012

Origin Enterprises plc

Consolidated statement of financial position

as at 31 January 2012

Origin Enterprises plc

Consolidated statement of financial position (continued)

as at 31 January 2012

Origin Enterprises plc

Consolidated statement of changes in equity

for the six months ended 31 January 2012

Origin Enterprises plc

Consolidated statement of cash flows 

for the six months ended 31 January 2012

Origin Enterprises plc

Consolidated statement of cash flows (continued)

for the six months ended 31 January 2012