4th Sep 2009 07:00
Fyffes delivers strong first half results
|
6 months to 30 June 2009 € |
6 months to 30 June 2008 € |
Increase % |
|
|
|
|||
|
Total revenue (incl share of joint ventures)
|
400.0m |
400.3m |
- |
|
Group revenue (excl share of joint ventures) |
335.3m |
302.0m |
+11.0 |
|
Adjusted earnings before interest and tax * |
18.1m |
15.5m |
+16.4 |
|
Adjusted profit before tax * |
18.6m |
15.7m |
+18.6 |
|
Adjusted fully diluted earnings per share ** |
4.46 cent |
3.55 cent |
+25.6 |
|
Interim dividend |
0.55 cent |
0.50 cent |
+10.0 |
* excluding the Group's share of Blackrock's results, exceptional items, amortisation of intangibles and the Group's share of tax of its joint ventures
** excluding the Group's share of Blackrock' results, exceptional items and amortisation of intangibles
Commenting on the results, David McCann, Chairman, said:
"During the first half of the year, Fyffes' key input costs were c.20% higher, including the negative impact of exchange rates. The Group has focused on the recovery of higher industry costs, achieving increases in average selling prices, and has also benefitted from its currency hedging. As a result, Fyffes is reporting a strong increase in profits and earnings per share for the period.
Trading conditions in Continental Europe during the summer months have been better than anticipated and, as a result, Fyffes is increasing its target Adjusted EBIT for the full year 2009 to the range €18m-€22m. Fyffes continues to pursue increases in selling prices in all markets in the context of the higher industry costs."
4 September 2009
For further information, please contact:Debbie O'Brien, Wilson Hartnell PR - Tel: +353-1-669-0030
Financial results and operating review
Revenue
Total revenue, including the Group's share of its joint ventures, amounted to €400m in the first six months of 2009, unchanged from the same period last year. Sales were 4% higher in the banana category. The Group achieved higher average selling prices in this category in the period but this was partly offset by a 1.7% reduction in volumes and the impact of exchange rates on Sterling denominated revenues. Total revenue was also impacted by a difficult market for pineapples, with volumes and average prices lower, and the cessation of the Group's Brazilian winter melon business.
Operating profit
Adjusted EBIT amounted to €18.1m in the seasonally stronger first half, compared to €15.5m in the same period last year. Adjusted EBIT is operating profit, excluding Fyffes' 40% share of Blackrock's result and before exceptional items, amortisation, interest and tax, including the equivalent share of joint ventures operating profit. The calculation of Adjusted EBIT is set out in note 2 of the accompanying interim financial information.
The key drivers of the short term performance of Fyffes' tropical produce operations, and its banana category in particular, are average selling prices, exchange rates and the costs of fruit, shipping and fuel, all of which can result in volatility in year on year profitability. During the first half of 2009, the banana industry experienced further cost inflation, continuing this trend into a third year. The impact of this was compounded by less favourable exchange rates due to the relative strength of the US Dollar. Input costs were c.20% higher in the first half compared to the same period last year, taking into account the stronger Dollar. Fruit costs in particular were up significantly reflecting, amongst other things, the impact of higher government imposed minimum export prices. These factors were partly offset by lower fuel prices year on year and the impact of favourable currency and fuel hedging. Market conditions, particularly in Continental Europe, were generally favourable, especially during the second quarter. This was mainly driven by lower market volumes and enabled Fyffes to achieve increases in its average selling prices. Overall, the Group's banana activities, delivered a €2.9m increase in profits for the first half of the year, compared to the same period in 2008. The Group must continue to pursue further increases in selling prices in all markets to offset the impact of higher industry costs and less favourable exchange rates.
The result in Fyffes' pineapple category was a small operating profit, in line with the same period last year. Market conditions were generally difficult during the period due to an oversupply of fruit. Fyffes has made further advances in its pineapple production activities this year, with higher profits on its existing farm in Costa Rica and the acquisition of a new farm in Panama which is expected to improve the Group's own supply curve.
In the Group's winter melon category, activities in Nolem in Brazil ceased during the period. Overall, Fyffes delivered an improved result on its winter melon activities as the Group's US business achieved a satisfactory profit despite difficult market conditions during the period and as a result of the elimination of losses in Nolem.
The Group's 40% share of the net loss after tax of Blackrock International Land plc, which is excluded from Fyffes' Adjusted EBIT as noted above, amounted to €1.5m compared to €3.7m in the same period last year.
Total operating profit for the six months ended 30 June 2009, including the Group's share of Blackrock's losses, exceptional items, amortisation and the joint ventures tax charges amounted to €12.1m, compared to €34.6m in the first half last year when the Group recognised a large exceptional gain on the successful settlement of it's litigation against DCC in April 2008.
Exceptional items
An analysis of the exceptional gains and losses during the first half of the year is set out in note 3 of the accompanying financial information. A charge of €3m arose during the period as a result of the cessation of activities in the Group's Brazilian melon joint venture. Fyffes had written off its investment in this business in 2008 but incurred additional costs of €1.3m this year as a result of the cessation of activities. In addition, the cumulative currency losses on the Group's investment, which were charged in the statement of recognised gains and losses in previous years, have been recycled through the income statement in the period, giving rise to a non-cash charge of €1.7m. This has no impact on the Group's net assets. Partly off-setting this, the Group's Geest joint venture disposed of one of its UK distribution centres to a third party at the beginning of the year, giving rise to a profit of €0.3m.
Financial income
Net interest income in the Group's subsidiary companies in the six months to June 2009 amounted to €0.6m, unchanged from the same period last year, with higher average net cash balances offsetting the impact of lower interest rates. The Group's share of the net interest expense in its joint ventures in the first half was virtually nil, compared to €0.4m in the same period last year.
Profit before tax
Adjusted profit before tax amounted to €18.6m in the first half, up 18.6% compared to €15.7m in the same period last year. As set out in note 2 of the attached interim financial information, adjusted profit before tax excludes the Group's share of Blackrock's result, exceptional items, amortisation of intangible assets, and the Group's share of the tax charge of its joint ventures, which is reflected in the profit before tax under IFRS rules. Profit before tax, before these adjustments, amounted to €12.6m compared to €35.1m in the same period last year when the Group had a large exceptional gain.
Taxation
The underlying tax charge for the first half of the year has been estimated based on the tax rate that is expected to apply for the full year 2009. The tax charge for the period is analysed in note 4 of the accompanying financial information. Excluding the tax impact of exceptional items and deferred tax credits related to the amortisation of intangible assets, and including the Group's share of tax of its joint ventures, the underlying tax charge for the half year was €2.5m (2008 half year: €2m), equivalent to a rate of 13.5% (2008 half year: 12.5%), which is used for the purposes of calculating adjusted earnings per share. The equivalent underlying tax rate for the full year in 2008 was 11.1%.
Minority interest
The minority interest share of profit after tax for the first half amounted to €0.7m, compared to €1.1m in the same period last year.
Earnings per share
Adjusted fully diluted earnings per share, amounted to €4.46 cent in the first half of 2009 compared to €3.55 cent in the same period last year, an increase of 25.6%. This increase is in excess of the increase in adjusted profit before tax due to the reduction in the minority interest charge above and the lower number of shares in issue, reflecting the full year impact of the shares repurchased in 2008. As set out in note 5 of the accompanying financial information, adjusted earnings per share excludes the Group's share of Blackrock's result, the impact of exceptional items and the amortisation of intangible assets. Fully diluted earnings per share, before adjustments, amounted to €2.98 cent in the period, compared to €9.56 cent in the first half last year.
Dividend
The Board has declared an interim dividend for the year of €0.55 cent per share, an increase of 10% on the prior year. This dividend, which will be subject to Irish withholding tax rules, will be paid on 23 October 2009 to shareholders on the register on 18 September 2009. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 30 June 2009.
Balance sheet
Net cash
Net cash at 30 June 2009 amounted to €40.4m compared to €32.2m at the beginning of the year, an increase of €8.2m. Operating cash generated in the first half, comprising profit before tax, excluding the Group's share of profits in its joint ventures and before depreciation and amortisation amounted to €18m. During the period, Fyffes purchased a distribution centre in the UK from its Geest joint venture. This expenditure was funded by a dividend and the repayment of loans by this joint venture and as a result there was no net cash impact on the Group. In addition, further dividends and loan repayments from joint ventures in the period amounted to €2.8m. Other capital expenditure, mainly on farming projects in the Tropics, amounted to €2m during the first half. In addition, Fyffes invested €2.6m on acquisitions during the period, including debt acquired. Net tax payments amounted to €3.4m in the first half. The final dividend for 2008 of €3.5m was paid during the period.
There was a small net reduction in working capital during the first half of the year. While there was the normal seasonal working capital outflow in the Group's banana and pineapple categories, this was more than offset by the counter cyclical reduction in working capital in its US winter melon business following the ending of its season in May. During the second half of the year, this business will invest significantly in working capital ahead of the start of the new season in December. Combined with tax and dividend payments and capital expenditure in the second half of the year, the Group is targeting year end net cash balances in the range of €30m-€34m.
Investment in Blackrock International Land plc ('Blackrock')
In accordance with International Financial Reporting Standards, Fyffes' 40% stake in Blackrock is treated as an investment in an associated company and accounted for under equity accounting rules. Under these rules, Fyffes' carries this investment at €58.5m, representing its share of Blackrock's reported net assets at 30 June 2009. The market value of this investment at that date was €20.3m based on Blackrock's then share price of €8.7 cent. The resulting €38.2m discount to net asset value represented by such share price has not been recognised in Fyffes' balance sheet at 30 June 2009. The level of this discount to net asset value has narrowed by c.€10m since 31 December 2008.
Pension obligations
The deficit in the Group's defined benefit pension schemes, before deferred tax, increased from €10m at the beginning of the year to €17.5m at 30 June 2009. This movement includes an €8.3m actuarial loss as a result of a more conservative assumption in relation to the future rate of inflation in the UK, amongst other things. The schemes continue to be funded in line with actuarial advice and have been closed to new members.
Shareholders' funds
Shareholders' funds amounted to €201m at 30 June 2009, compared to €202.4m at the beginning of the year. The main movements in the period included the retained profit of €10.3m, less the €3.5m 2008 final dividend, the €6.2m actuarial loss net of deferred tax on the Group's defined benefit pension schemes and a €2.2m reduction in net assets arising from movements in the currency and hedging reserves.
Current trading
On 26 June 2009, Fyffes increased its target Adjusted EBIT for the full year to the range €16m-€20m. Trading conditions in the summer months in Continental Europe were better than anticipated and, as a result, Fyffes is increasing its target Adjusted EBIT for the full year to the range €18m-€22m. The industry continues to experience significant cost inflation and unfavourable exchange rates and consequently Fyffes will pursue further necessary increases in selling prices in all markets.
David McCann, Chairman
on behalf of the Board
4 September 2009
Copies of this announcement are available from the Company's registered office, 29 North Anne Street, Dublin 7 and on our website at www.fyffes.com.
Fyffes plc
Summary Group income statement
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Revenue (including share of joint ventures) |
399,987 |
400,300 |
758,227 |
|
Group revenue |
335,276 |
302,045 |
606,729 |
|
Group operating profit before exceptional items |
15,068 |
12,826 |
11,401 |
|
Intangible amortisation |
(1,461) |
(609) |
(2,574) |
|
Share of profit of joint ventures (after tax) |
2,606 |
1,399 |
2,832 |
|
Share of (loss) of associate after tax (Blackrock) |
(1,494) |
(3,742) |
(28,643) |
|
Exceptional items (including share of joint ventures) |
(2,668) |
24,688 |
15,549 |
|
Operating profit |
12,051 |
34,562 |
(1,435) |
|
Net financial income - Group |
578 |
571 |
1,563 |
|
Profit before tax |
12,629 |
35,133 |
128 |
|
Income tax (expense)/credit |
(1,638) |
(54) |
252 |
|
Profit for the period |
10,991 |
35,079 |
380 |
|
Attributable as follows: |
|||
|
Equity shareholders |
10,328 |
33,969 |
70 |
|
Minority interest |
663 |
1,110 |
310 |
|
10,991 |
35,079 |
380 |
|
|
Earnings per share |
|||
|
Basic |
2.99 |
9.63 |
0.02 |
|
Fully diluted |
2.98 |
9.56 |
0.02 |
|
Adjusted fully diluted |
4.46 |
3.55 |
3.95 |
Fyffes plc
Summary statement of comprehensive income and expense
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Movement on translation of net equity investments |
5,643 |
(5,904) |
(11,710) |
|
Share of foreign currency movement recognised in associated undertaking |
2 |
(968) |
(2,198) |
|
Loss in associated undertaking set against revaluation reserves |
- |
- |
(1,300) |
|
Revaluation of property asset |
873 |
- |
- |
|
Effective portion of cash flow hedges |
(8,909) |
(1,484) |
18,562 |
|
Deferred tax on effective portion of cash flow hedges |
1,114 |
269 |
(2,320) |
|
Actuarial (loss) recognised on defined benefit pension schemes |
(8,328) |
(5,739) |
(14,281) |
|
Deferred tax movements related to pension schemes |
2,100 |
1,048 |
2,812 |
|
Share of actuarial (loss) on joint ventures pension schemes |
(1,157) |
(505) |
(1,637) |
|
Deferred tax movement related to joint ventures pension schemes |
325 |
142 |
358 |
|
|
|||
|
Net income/(expense) recognised directly in equity |
(8,337) |
(13,141) |
(11,714) |
|
Profit for period |
10,991 |
35,079 |
380 |
|
|
|||
|
Total comprehensive income / (expense) |
2,654 |
21,938 |
(11,334) |
|
Attributable as follows: |
|||
|
Equity shareholders |
1,991 |
20,828 |
(11,644) |
|
Minority interest |
663 |
1,110 |
310 |
|
2,654 |
21,938 |
(11,334) |
Consolidated statement of changes in equity
|
Half Year 2009 |
Share Capital €'000 |
Share Premium €'000 |
(Note 10)Other Reserves €'000 |
Retained Earnings €'000 |
Total Equity €'000 |
|
Balance at 1 January 2009 |
21,859 |
98,999 |
74,979 |
6,552 |
202,389 |
|
Profit for the period |
- |
- |
- |
10,328 |
10,328 |
|
Actuarial (loss) - defined benefit pension schemes |
- |
- |
- |
(8,328) |
(8,328) |
|
Deferred tax on actuarial loss |
- |
- |
- |
2,100 |
2,100 |
|
Share of actuarial (loss) on joint ventures pension schemes |
- |
- |
- |
(1,157) |
(1,157) |
|
Deferred tax related to joint ventures pension schemes |
- |
- |
- |
325 |
325 |
|
Revaluation of property asset |
- |
- |
(114) |
987 |
873 |
|
Share of foreign currency movement recognised in associated undertaking |
- |
- |
- |
2 |
2 |
|
Movement on translation of net equity investments |
- |
- |
5,643 |
- |
5,643 |
|
Effective portion of cash flow hedges |
- |
- |
(8,909) |
- |
(8,909) |
|
Deferred tax on effective portion of cash flow hedges |
- |
- |
1,114 |
- |
1,114 |
|
Total comprehensive income / (expense) |
- |
- |
(2,266) |
4,257 |
1,991 |
|
Dividend paid during the period |
- |
- |
- |
(3,453) |
(3,453) |
|
Movement in share option expense reserve |
- |
- |
50 |
- |
50 |
|
Balance at 30 June 2009 |
21,859 |
98,999 |
72,763 |
7,356 |
200,977 |
|
Half Year 2008 |
Share Capital €'000 |
Share Premium €'000 |
(Note 10)Other Reserves €'000 |
Retained Earnings €'000 |
Total Equity €'000 |
|
Balance at 1 January 2008 |
21,844 |
98,846 |
79,293 |
24,489 |
224,472 |
|
Profit for the period |
- |
- |
- |
33,969 |
33,969 |
|
Actuarial (loss) - defined benefit pension schemes |
- |
- |
- |
(5,739) |
(5,739) |
|
Deferred tax on actuarial loss |
- |
- |
- |
1,048 |
1,048 |
|
Share of actuarial (loss) on joint ventures pension schemes |
- |
- |
- |
(505) |
(505) |
|
Deferred tax related to joint ventures pension schemes |
- |
- |
- |
142 |
142 |
|
Share of foreign currency movement recognised in associated undertaking |
- |
- |
- |
(968) |
(968) |
|
Movement on translation of net equity investments |
- |
- |
(5,904) |
- |
(5,904) |
|
Effective portion of cash flow hedges |
- |
- |
(1,484) |
- |
(1,484) |
|
Deferred tax on effective portion of cash flow hedges |
- |
- |
269 |
- |
269 |
|
Total comprehensive income / (expense) |
- |
- |
(7,119) |
27,947 |
20,828 |
|
Dividend paid during the period |
- |
- |
- |
(3,533) |
(3,533) |
|
Movement in share option expense reserve |
- |
- |
125 |
- |
125 |
|
Acquisition of own shares |
- |
- |
(5,447) |
- |
(5,447) |
|
Increase in share capital/premium |
15 |
153 |
- |
- |
168 |
|
Balance at 30 June 2008 |
21,859 |
98,999 |
66,852 |
48,903 |
236,613 |
Fyffes plc
Summary Group balance sheet
|
(Unaudited) 30 June 2009 €'000 |
(Unaudited) 30 June 2008 €'000 |
(Audited) 31 Dec 2008 €'000 |
|
|
Non current assets |
|||
|
Property, plant and equipment |
70,375 |
18,429 |
52,818 |
|
Goodwill and intangible assets |
15,989 |
5,571 |
14,996 |
|
Other receivables |
458 |
546 |
484 |
|
Investments in joint ventures |
35,656 |
76,168 |
46,426 |
|
Investments in associate (Blackrock) |
58,485 |
87,408 |
59,977 |
|
Equity investments |
16 |
17 |
16 |
|
Employee benefits |
- |
1,507 |
- |
|
Deferred tax assets |
6,456 |
3,951 |
4,263 |
|
Total non current assets |
187,435 |
193,597 |
178,980 |
|
Current assets |
|||
|
Inventory |
18,550 |
18,246 |
17,054 |
|
Biological assets |
537 |
295 |
5,515 |
|
Trade and other receivables |
62,017 |
58,819 |
55,363 |
|
Derivative financial instruments |
6,538 |
1,106 |
14,566 |
|
Corporation tax recoverable |
534 |
2,906 |
2,036 |
|
Short term bank deposits |
20,082 |
- |
27,326 |
|
Cash and cash equivalents |
81,795 |
99,503 |
67,072 |
|
Total current assets |
190,053 |
180,875 |
188,932 |
|
Total assets |
377,488 |
374,472 |
367,912 |
|
Equity |
|||
|
Called up share capital |
21,859 |
21,859 |
21,859 |
|
Share premium |
98,999 |
98,999 |
98,999 |
|
Other reserves |
72,763 |
66,852 |
74,979 |
|
Retained earnings |
7,356 |
48,903 |
6,552 |
|
Total shareholders' equity |
200,977 |
236,613 |
202,389 |
|
Minority interest |
2,198 |
2,335 |
1,536 |
|
Total equity and minority |
203,175 |
238,948 |
203,925 |
|
Non current liabilities |
|||
|
Interest bearing loans and borrowings |
592 |
42,413 |
705 |
|
Other payables |
3,412 |
7 |
2,723 |
|
Provisions |
10,118 |
2,884 |
7,826 |
|
Employee benefits |
17,495 |
4,591 |
9,985 |
|
Corporation tax payable |
11,093 |
15,731 |
16,093 |
|
Deferred tax liabilities |
4,434 |
3,168 |
5,702 |
|
Total non current liabilities |
47,144 |
68,794 |
43,034 |
|
Current liabilities |
|||
|
Interest bearing loans and borrowings |
60,867 |
4,051 |
61,466 |
|
Trade and other payables |
61,751 |
55,719 |
57,687 |
|
Corporation tax payable |
3,340 |
- |
1,341 |
|
Derivative financial instruments |
- |
6,374 |
- |
|
Provisions |
1,211 |
586 |
459 |
|
Total current liabilities |
127,169 |
66,730 |
120,953 |
|
Total liabilities |
174,313 |
135,524 |
163,987 |
|
Total liabilities and equity |
377,488 |
374,472 |
367,912 |
Fyffes plc
Summary Group cash flow statement
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Cash flows from operating activities |
14,422 |
42,159 |
30,634 |
|
Cash flows from investing activities |
(577) |
(28,733) |
(28,871) |
|
Cash flows from financing activities |
(6,795) |
(8,109) |
(1,681) |
|
Net movement in cash and cash equivalents |
7,050 |
5,317 |
82 |
|
Cash and cash equivalents, including bank overdrafts at start of period |
65,704 |
94,902 |
94,902 |
|
Joint venture becoming a subsidiary |
(243) |
- |
- |
|
Transfer from/(to) short term deposits |
7,244 |
- |
(27,326) |
|
Effect of foreign exchange movements on cash and cash equivalents |
(429) |
(809) |
(1,954) |
|
Cash and cash equivalents, including bank overdrafts at end of period |
79,326 |
99,410 |
65,704 |
|
Reconciliation of total net funds |
|||
|
Increase in cash and cash equivalents |
7,050 |
5,317 |
82 |
|
Net decrease/(increase) in debt |
3,072 |
(703) |
(9,137) |
|
Acquisition of subsidiary - net debt acquired |
(1,476) |
- |
(5,618) |
|
Joint venture becoming a subsidiary |
(243) |
- |
- |
|
Capital element of finance lease payments |
270 |
- |
280 |
|
New finance leases |
(91) |
- |
- |
|
Foreign exchange movement |
(390) |
(356) |
(2,161) |
|
Movement in net funds |
8,192 |
4,258 |
(16,554) |
|
Net funds at start of period |
32,227 |
48,781 |
48,781 |
|
Net funds at end of period |
40,419 |
53,039 |
32,227 |
Fyffes plc
Notes supporting 2009 interim financial statements
1. Basis of preparation
The interim financial information has been prepared in accordance with the accounting policies set out in the Group's consolidated financial statements for the year ended 31 December 2008 which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU Commission.
2. Adjusted profit before tax and EBIT
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Profit before tax per Income Statement |
12,629 |
35,133 |
128 |
|
Adjustments |
|||
|
Group share of tax charge of joint ventures |
369 |
903 |
142 |
|
Share of loss after tax of Blackrock International Land plc |
1,494 |
3,742 |
28,643 |
|
Exceptional items (note 3 below) |
2,668 |
(24,688) |
(15,549) |
|
Amortisation of intangible assets |
1,461 |
609 |
2,574 |
|
Adjusted profit before tax |
18,621 |
15,699 |
15,938 |
|
Exclude: |
|||
|
Financial income - Group |
(578) |
(571) |
(1,563) |
|
Financial expense - share of joint ventures |
18 |
384 |
890 |
|
Adjusted EBIT |
18,061 |
15,512 |
15,265 |
Fyffes believes that adjusted profit before tax, adjusted EBIT and adjusted earnings per share (note 5 below) are the appropriate measures of the underlying performance of the Group, excluding amortisation charges.
3. Exceptional items
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Cessation/impairment of Brazilian melon joint venture |
(2,989) |
- |
(5,760) |
|
Profit on disposal of property by joint venture |
321 |
- |
- |
|
Settlement of DCC plc litigation |
- |
32,976 |
32,995 |
|
Impairment of investment in shipping business and incremental costs |
- |
(7,188) |
(7,466) |
|
Net charge in joint venture for fine arising from EU Competition investigation |
- |
- |
(2,940) |
|
Professional fees and similar costs arising from EU investigation |
- |
(780) |
(1,140) |
|
MNOPF |
- |
- |
273 |
|
Professional fees incurred on terminated potential acquisitions |
- |
(320) |
(413) |
|
Total exceptional items |
(2,668) |
24,688 |
15,549 |
During the period, activities ceased in Nolem, the Group's Brazilian melon joint venture. The costs of exiting this business for the Group are estimated at €1.3m. In addition, the cumulative currency losses on the Group's investment which have been charged in the statement of total recognised income and expense in previous years, have been recycled through the income statement in the period, giving rise to a non-cash charge of €1.7m. This had no impact on net assets.
The Group's Geest joint venture disposed of its remaining UK distribution centre during the period giving rise to a profit of €0.3m. In addition, a €1m revaluation gain which the Group had previously recognised on this property was transferred to distributable reserves as a result of this disposal.
No tax charge or credit has been recognised in relation to these exceptional items.
4. Taxation
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Tax charge/(credit) per Income Statement |
1,638 |
54 |
(252) |
|
Group share of tax charge of its joint ventures netted in profit before tax |
369 |
903 |
142 |
|
Total tax charge/(credit) |
2,007 |
957 |
(110) |
|
Adjustments: |
|||
|
- Deferred tax credit relating to amortisation of intangibles |
507 |
213 |
888 |
|
- Tax effect of exceptional items |
- |
792 |
990 |
|
Tax charge on underlying activities |
2,514 |
1,962 |
1,768 |
Including the Group's share of the tax charge of its joint ventures and associates of €0.4m, which is netted in operating profit in accordance with IFRS, the total tax charge for the period amounted to €2m (2008 first half: €1m).
Adjusting for the tax effect of exceptional items and deferred tax credits related to the amortisation of intangible assets, the underlying tax charge for the period was €2.5m (2008 first half: €2m), equivalent to a rate of 13.5% (2008 first half: 12.5%) when applied to the Group's adjusted profit before tax. The Group's underlying tax rate for the first half of the year is based on the estimated tax rate that is expected to apply for the full year.
The equivalent underlying charge for the full year in 2008 was a charge of €1.8m, equal to a rate of 11.1%.
5. Earnings per share
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Profit attributable to equity shareholders |
10,328 |
33,969 |
70 |
|
No of shares '000 |
No of shares '000 |
No of shares '000 |
|
|
Weighted average number of ordinary shares outstanding |
364,320 |
364,242 |
364,281 |
|
Deduct: weighted average own shares held |
(19,022) |
(11,439) |
(15,230) |
|
Weighted average number of shares for calculation of basic earnings per share |
345,298 |
352,803 |
349,051 |
|
Weighted average number of options with dilutive effect |
1,154 |
2,460 |
2,022 |
|
Weighted average number of shares for calculation of fully diluted earnings per share |
346,452 |
355,263 |
351,073 |
|
€ Cent |
€ Cent |
€ Cent |
|
|
Basic earnings per share |
2.99 |
9.63 |
0.02 |
|
Fully diluted earnings per share |
2.98 |
9.56 |
0.02 |
|
€'000 |
€'000 |
€'000 |
|
|
Calculation of adjusted earnings per share |
|||
|
Profit attributable to equity shareholders |
10,328 |
33,969 |
70 |
|
Adjustments: |
|||
|
Exceptional items |
2,668 |
(24,688) |
(15,549) |
|
Share of Blackrock result |
1,494 |
3,742 |
28,643 |
|
Amortisation of intangible assets |
1,461 |
609 |
2,574 |
|
Tax effect of exceptional items |
- |
(792) |
(990) |
|
Deferred tax credit relating to amortisation of intangibles |
(507) |
(213) |
(888) |
|
Earnings for calculation of adjusted fully diluted earnings per share |
15,444 |
12,627 |
13,860 |
|
€ Cent |
€ Cent |
€ Cent |
|
|
Adjusted fully diluted earnings per share |
4.46 |
3.55 |
3.95 |
Adjusted fully diluted earnings per share excludes the Group's share of Blackrock's result, the impact of exceptional items after tax and minority interests, once off tax credits and amortisation charges on intangible assets and related deferred tax credits.
6. Investment in Blackrock International Land plc ('Blackrock')
In accordance with International Financial Reporting Standards, Fyffes' 40% stake in Blackrock is treated as an investment in an associated company and accounted for under equity accounting rules. Under these rules, Fyffes' carries this investment at €58.5m, representing its share of Blackrock's reported net assets at 30 June 2009. The market value of this investment at that date was €20.3m based on Blackrock's then share price of €8.7 cent. The resulting €38.2m discount to net asset value represented by such share price has not been recognised in Fyffes' balance sheet at 30 June 2009. The level of this discount to net asset value has narrowed by c.€10m since 31 December 2008.
7. Employee post employment benefits
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
(Deficit)/surplus at beginning of period |
(9,985) |
1,638 |
1,638 |
|
Current/past service cost less finance income recognised in income statement |
(805) |
(251) |
(508) |
|
Actuarial (loss) recognised in statement of comprehensive income and expense |
(8,328) |
(5,739) |
(14,281) |
|
Contributions to schemes |
2,704 |
1,355 |
2,516 |
|
Exchange movement |
(1,081) |
(87) |
650 |
|
(Deficit) at end of period |
(17,495) |
(3,084) |
(9,985) |
|
Related deferred tax asset |
4,190 |
406 |
2,090 |
|
Net (deficit) after deferred tax |
(13,305) |
(2,678) |
(7,895) |
This table summarises the movements in the net deficit on the Group's various defined benefit pension schemes in Ireland, the UK and Continental Europe. The current/past service cost is charged in the Income Statement, net of finance income on scheme assets. The actuarial (loss) is recognised in the Statement of Comprehensive Income and Expense, in accordance with the amendment to IAS 19, Actuarial Gains and Losses, Group Plans and Disclosures.
8. Dividends paid to equity shareholders
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Cash dividends paid on Ordinary €6 cent shares |
|||
|
Final dividend for 2008 of €1.00 cent |
3,453 |
- |
- |
|
Interim dividend for 2008 of €0.50 cent |
- |
- |
1,726 |
|
Final dividend for 2007 of €1.00 cent |
- |
3,533 |
3,533 |
|
Total cash dividends paid in the period |
3,453 |
3,533 |
5,259 |
The final dividend for 2008 of 1 cent per share, approved by the shareholders at the Annual General Meeting on 13 May 2009, gave rise to a distribution of €3.5m in the period.
The directors have proposed an interim dividend for 2009 of €0.55 cent per share (2008: €0.50 cent per share). This dividend, which will be subject to Irish withholding tax rules, will be paid on 23 October 2009 to shareholders on the register at 18 September 2009. In accordance with company law and IFRS, this dividend has not been provided in the balance sheet at 30 June 2009.
At 30 June 2009, 30 June 2008 and 31 December 2008, the company and subsidiary companies held 19,021,610 Fyffes plc ordinary shares. The right to dividends on these shares has been waived and they are excluded from the calculation of earnings per share.
9. Notes supporting cash flow statement
9.1 Cash generated from operations
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Profit for the period |
10,991 |
35,079 |
380 |
|
Income tax expense/(credit) |
1,638 |
54 |
(252) |
|
Tax (paid)/recovered |
(3,400) |
1,387 |
2,509 |
|
Depreciation of property, plant and equipment |
2,386 |
1,344 |
3,589 |
|
Impairment of investment in melon joint venture and related receivables |
2,007 |
- |
5,760 |
|
Impairment of investment in shipping business and related receivables |
- |
7,188 |
2,950 |
|
Contributions to defined benefit pension schemes less charge in income statement |
(1,899) |
(1,104) |
(2,008) |
|
Net interest received/(paid) less net interest income in income statement |
941 |
(218) |
(255) |
|
Amortisation of intangible assets |
1,461 |
609 |
2,574 |
|
Share of (profits) of joint ventures (after tax and exceptional items) |
(2,606) |
(1,399) |
(2,832) |
|
Share of losses of Blackrock |
1,494 |
3,742 |
28,643 |
|
Provision for fine in joint venture arising from EU Competition investigation |
- |
- |
2,940 |
|
Movement in working capital |
1,233 |
(4,301) |
(14,075) |
|
Other |
176 |
(222) |
711 |
|
Cash generated from operations |
14,422 |
42,159 |
30,634 |
9.2 Cash flows from investing activities
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Acquisition of subsidiaries net of cash acquired |
(1,147) |
- |
(11,659) |
|
Acquisition of and investment in joint ventures |
(320) |
(23,578) |
(1,487) |
|
Other equity investments |
- |
(1,200) |
(1,200) |
|
Acquisition of property, plant and equipment |
(7,355) |
(4,023) |
(14,855) |
|
Proceeds on disposal of property, plant and equipment |
22 |
68 |
330 |
|
Dividend income from joint ventures |
4,194 |
- |
- |
|
Loans repaid by joint ventures, net |
4,029 |
- |
- |
|
Cash flows from investing activities |
(577) |
(28,733) |
(28,871) |
9.3 Cash flows from financing activities
|
(Unaudited) 6 months to 30 June 2009 €'000 |
(Unaudited) 6 months to 30 June 2008 €'000 |
(Audited) Year ended 31 Dec 2008 €'000 |
|
|
Proceeds from issue of shares (including premium) |
- |
168 |
168 |
|
Net proceeds from/(repayment of) borrowings |
(3,072) |
703 |
9,137 |
|
Purchase of own shares |
- |
(5,447) |
(5,447) |
|
Capital element of lease payments |
(270) |
- |
(280) |
|
Dividends paid to equity shareholders |
(3,453) |
(3,533) |
(5,259) |
|
Cash flows from financing activities |
(6,795) |
(8,109) |
(1,681) |
9.4 Analysis of movement in net funds in the period
|
Opening 1 Jan 2009 €'000 |
Cash flow €'000 |
Acquisitions & disposals €'000 |
Non-cash movement €'000 |
Translation €'000 |
Closing 30 June 2009 €'000 |
|
|
Short term bank deposits |
27,326 |
(7,244) |
- |
- |
- |
20,082 |
|
Bank balances |
5,157 |
8,814 |
(243) |
- |
(612) |
13,116 |
|
Call deposits |
61,915 |
6,614 |
- |
- |
150 |
68,679 |
|
Cash and cash equivalents per balance sheet |
67,072 |
15,428 |
(243) |
- |
(462) |
81,795 |
|
Overdrafts |
(1,368) |
(1,134) |
- |
- |
33 |
(2,469) |
|
Cash and cash equivalents per cash flow statement |
65,704 |
14,294 |
(243) |
- |
(429) |
79,326 |
|
Bank loans - current |
(59,733) |
3,157 |
(1,476) |
- |
31 |
(58,021) |
|
Bank loans - non current |
(165) |
(85) |
- |
- |
13 |
(237) |
|
Finance leases |
(905) |
270 |
- |
(91) |
(5) |
(731) |
|
Total net funds |
32,227 |
10,392 |
(1,719) |
(91) |
(390) |
40,419 |
10. Reconciliation of changes in other reserves
|
Half Year 2009 |
Capital Conversion Reserve €'000 |
Capital Redemption Reserve €'000 |
Share Options Reserve €'000 |
Currency Translation Reserve €'000 |
Revaluation Reserve €'000 |
Own Share Reserve €'000 |
Fair Value Reserve €'000 |
Hedging Reserve €'000 |
Total €'000 |
|
Balance at 1 January 2009 |
1,034 |
70,662 |
1,110 |
(9,059) |
21,406 |
(23,690) |
- |
13,516 |
74,979 |
|
Revaluation of property asset |
- |
- |
- |
381 |
(495) |
- |
- |
(114) |
|
|
Movement on translation of net equity investments |
- |
- |
- |
5,643 |
- |
- |
- |
5,643 |
|
|
Effective portion of cash flow hedges |
- |
- |
- |
- |
- |
- |
- |
(8,909) |
(8,909) |
|
Deferred tax on effective portion of cashflow hedges |
- |
- |
- |
- |
- |
- |
- |
1,114 |
1,114 |
|
Movement in share options reserve |
- |
- |
50 |
- |
- |
- |
- |
- |
50 |
|
Balance at 30 June 2009 |
1,034 |
70,662 |
1,160 |
(3,035) |
20,911 |
(23,690) |
- |
5,721 |
72,763 |
|
Half Year 2008 |
Capital Conversion Reserve €'000 |
Capital Redemption Reserve €'000 |
Share Options Reserve €'000 |
Currency Translation Reserve €'000 |
Revaluation Reserve €'000 |
Own Share Reserve €'000 |
Fair Value Reserve €'000 |
Hedging Reserve €'000 |
Total €'000 |
|
Balance at 1 January 2008 |
1,034 |
70,662 |
1,011 |
4,092 |
23,463 |
(18,243) |
- |
(2,726) |
79,293 |
|
Movement on translation of net equity investments |
- |
- |
- |
(5,904) |
- |
- |
- |
(5,904) |
|
|
Effective portion of cash flow hedges |
- |
- |
- |
- |
- |
- |
- |
(1,484) |
(1,484) |
|
Deferred tax on effective portion of cashflow hedges |
- |
- |
- |
- |
- |
- |
- |
269 |
269 |
|
Movement in share options reserve |
- |
- |
125 |
- |
- |
- |
- |
- |
125 |
|
Acquisition of own shares |
- |
- |
- |
- |
- |
(5,447) |
- |
- |
(5,447) |
|
Balance at 30 June 2008 |
1,034 |
70,662 |
1,136 |
(1,812) |
23,463 |
(23,690) |
- |
(3,941) |
66,852 |
Related Shares:
FFY.L