Half Yearly Report

•

Revenue (i) up 1.7% to €1.33 billion

•

Adjusted EBITDA (ii) up 3.0% to €33.7m

•

Adjusted EBITA (ii) up 2.9% to €27.1m

•

Adjusted profit before tax (ii) up 3.8% to €25.3m

•

Adjusted earnings per share (iii) up 1.5 % to 4.12 cent

•

Interim dividend maintained at 0.54 cent per share

(i), (ii) and (iii)

As defined overleaf

"Total Produce has delivered a solid performance in the first half of 2010 with an increase of 1.5% in adjusted earnings per share to 4.12 cent per share. After a slow start to the year due to unusually cold weather throughout Europe, demand for the Group's produce recovered with the Group also benefiting from favourable currency translation movements.

The Group's interim dividend is unchanged at 0.54 cent per share. Total Produce is pleased to confirm that, assuming current trading conditions continue, it is now targeting adjusted earnings per share towards the upper end of its annual target range of 5.5 to 6.5 cent per share."

2 September 2010

TOTAL PRODUCE PLC INTERIM RESULTS FOR THE

SIX MONTHS ENDED 30 JUNE 2010

2010

€'million

2009

€'million

% change

Revenue, including the Group's share of joint ventures and associates

1,333

1,311

+ 1.7%

Group revenue

1,200

1,172

+ 2.3%

Adjusted EBITDA (ii)  

33.7

32.7

+ 3.0%

Adjusted EBITA (ii)

27.1

26.3

+ 2.9%

Adjusted profit before tax (ii)  

25.3

24.3

+ 3.8%

Operating profit (before 2009 exceptional items)

23.0

22.7

+ 1.3%

Profit before tax

21.7

20.6

+ 5.5%

Euro cent

Euro cent

% change

Adjusted earnings per share (iii)  

4.12

4.06

+ 1.5%

Basic and diluted earnings per share

3.58

3.42

+ 4.7%

Interim dividend per share

0.54

0.54

-

(i)

includes the Group's share of revenue of joint ventures and associates

(ii)

excludes exceptional items and amortisation of intangible assets

(iii)

excludes exceptional items, amortisation of intangible assets and related tax

Summary Results

Total Produce (the 'Group') announces adjusted earnings per share (1) growth of 1.5% to 4.12 cent for the six months ended 30 June 2010.

Revenue of €1.33 billion represents a 1.7% increase on the prior period. Overall, the Group's core Fresh Produce Division recorded a strong performance despite the difficult weather conditions in the first quarter of the year with some geographic areas performing better than others. The Consumer Goods and Healthfoods Distribution Division continued to be affected by adverse trading conditions in that sector. The Group benefited from the strength of the Swedish Krona and Sterling in the period. Revenue is marginally down 0.7% on a constant currency basis (2).

Adjusted EBITA (3) for the period is €27.1m, an increase of 2.9% primarily due to a strong performance in the Fresh Produce Division and the positive impact of currency translation which is offset to a lesser extent by the performance of the Consumer Goods and Healthfoods Distribution Division.

Operating Review

The table below details a segmental breakdown of the Group's revenue and adjusted EBITA for the six months ended 30 June 2010. Segment performance is evaluated based on revenue and adjusted EBITA.

(Unaudited)

6 months to 30 June 2010

(Unaudited)

6 months to 30 June 2009

Segmental

revenue

€'000

Adjusted

EBITA

€'000

Segmental

revenue

€'000

Adjusted

EBITA

€'000

Eurozone Fresh Produce

655,785

14,870

618,779

13,545

Scandinavian Fresh Produce

313,519

8,692

299,215

7,664

UK Fresh Produce

255,902

2,635

282,359

3,810

Other Fresh Produce

81,625

2,497

66,449

1,702

Inter-segment revenue and unallocated costs

(14,977)

(1,443)

(15,191)

(1,434)

Total Fresh Produce

1,291,854

27,251

1,251,611

25,287

Consumer Goods and Healthfoods Distribution

41,214

(148)

59,021

1,049

Third party revenue and adjusted EBITA

1,333,068

27,103

1,310,632

26,336

Fresh Produce Division

The Group's core Fresh Produce Division is split into four distinct reporting segments. This division recorded a strong performance for the period ended 30 June 2010 despite a slow start due to abnormal weather conditions throughout much of Europe in the first quarter of the year. Revenue increased by 3.2% to €1.29 billion assisted by the strength of Swedish Krona and Sterling in the period, which led to higher translation values of non-euro revenues. Revenue in this division increased by 0.7% on a constant currency basis. Like-for-like volumes were marginally ahead with average selling prices unchanged.

Adjusted EBITA in the division grew 7.8% to €27.3m due to higher revenue and the strength of the Swedish Krona and Sterling in the period. Net adjusted EBITA margins in the Fresh Produce Division were 2.11% (2009: 2.02%) reflecting the Group's continued focus on synergies and operational efficiencies. Further information on each reporting segment follows.

Eurozone Fresh Produce

The performance in the Eurozone improved in the period with a strong outturn in some key markets, offset somewhat by the impact of adverse weather in some regions in the first quarter of the year. This led to a 6% increase in revenue to €656m with like-for-like volumes increasing and average selling prices unchanged. Adjusted EBITA increased by €1.3m to €14.9m due primarily to the increase in revenue and reflects an increase in net adjusted EBITA margins to 2.27% from 2.19%.

Scandinavian Fresh Produce

Revenue in the Group's Scandinavian business increased by 4.8% to €314m assisted by a 10% strengthening of Swedish Krona in the period. Local currency revenue is 2% behind the equivalent period in the prior year, with a marginal decrease in both volume and average selling prices. Adjusted EBITA has increased by €1.0m to €8.7m due to currency translation and the increase in adjusted EBITA margins to 2.77% from 2.56%.

UK Fresh Produce

The adverse weather conditions experienced in the UK in the first quarter of 2010 led to a 12% decrease in local currency revenue. On a like-for-like basis, there were mid-single digit decreases in both volumes and average selling prices. The strength of Sterling in the period led to a lower reported decrease in revenue of 9.4% to €256m on translation to euro. Adjusted EBITA for the period was down €1.2m to €2.6m, reflecting a decrease in margin to 1.0% from 1.3% in the equivalent period in 2009, again due to the poor weather in the first quarter of the year.

Other Fresh Produce

This segment includes a number of other fresh produce businesses in the Czech Republic, India and South Africa. Revenue increased by €15m to €82m with adjusted EBITA up €0.8m to €2.5m due to improved trading performance in some of these entities.

Consumer Goods and Healthfoods Distribution Division

Revenue in the Consumer Goods and Healthfoods Distribution Division decreased by €18m to €41m, with a net adjusted EBITA loss of €0.1m in the period compared to a contribution of €1.0m for the equivalent period in 2009. The result reflects the continuing difficult trading conditions in this sector.

Financial Review

Financial expense, net

Net financial expense for the period is €1.3m compared to €1.8m in 2009. The decrease is due to lower average net debt balances and the Group has continued to benefit from the low interest rate environment. The Group's share of the net interest expense in joint ventures and associates is €0.5m compared to €0.3m in the same period in 2009.

Profit before tax

Adjusted profit before tax (4) increased by 3.8% to €25.3m. Profit before tax amounted to €21.7m in the six months to 30 June 2010 (2009: €20.6m). 

Exceptional items

There were no exceptional items in the period (2009: €0.4m). The exceptional item in 2009 related to a share of joint ventures' fair value losses on properties.

Non-controlling interests

The non-controlling interest's share of after-tax profits was €3.7m for the first six months of 2010, an increase of €0.4m on the same period in 2009. This increase is primarily due to improved performance in certain non-wholly-owned subsidiaries in the Eurozone.

Adjusted and basic earnings per share

Adjusted earnings per share of 4.12 cent for the six months ended 30 June 2010 represents an increase of 1.5% on the equivalent period in 2009. Basic earnings per share amounted to 3.58 cent (2009: 3.42 cent).

Net Debt and Cash Flow

The Group generated €22.8m in operating cash flows in the first six months of 2010 before mid-year seasonal working capital outflows of €28.9m. Cash outflows on capital expenditure, net of disposals, were €2.7m representing a decrease on the €5.9m net spend in the same period in 2009. Cash outflows on acquisitions decreased from €5.3m to €0.6m in the six months to 30 June 2010. Free cash flow for the twelve months ended 30 June 2010 amounted to €25.2m.

Net debt at 30 June 2010 was €71.8m compared to €82.3m at 30 June 2009 and €50.6m at 31 December 2009. There was an adverse impact of €3.3m in the period on net debt due to stronger Sterling and Swedish Krona.

In addition, the Group concluded a new US$100m multi-currency facility under which the Group may issue loan notes over a three year period with a maturity of up to ten years. During the current period, the Group issued loan notes under this facility with a face value of €30m and a maturity of seven years. This extends the Group's debt maturity profile and further increases the Group's capacity to finance future expansion.

(Unaudited)

6 months to 30 June 2010

€'million

(Unaudited)

6 months to 30 June 2009

€'million

(Audited)

Year ended 31 Dec 2009

€'million

Adjusted EBITDA

33.7

32.7

57.1

Deduct adjusted EBITA of joint ventures and associates

(3.0)

(2.4)

(4.1)

Net interest and tax paid

(5.7)

(5.3)

(10.5)

Other

(2.2)

(2.1)

(3.6)

Operating cash flows before working capital movements

22.8

22.9

38.9

Working capital movements

(28.9)

(26.6)

(0.1)

Operating cash flows

(6.1)

(3.7)

38.8

Capital expenditure net of disposal proceeds

(2.7)

(5.9)

(8.4)

Dividends received from joint ventures

0.8

1.7

1.8

Dividends paid to non-controlling interests

(4.7)

(2.8)

(5.0)

Free cash flow

(12.7)

(10.7)

27.2

Acquisition of subsidiaries, investment in joint ventures, net

(0.6)

(5.3)

(7.9)

Other

(0.6)

(0.3)

(1.2)

Dividends paid to equity shareholders

(4.0)

(4.0)

(5.9)

Total cash flow

(17.9)

(20.3)

12.2

Net debt at beginning of period

(50.6)

(60.2)

(60.2)

Foreign currency translation

(3.3)

(1.8)

(2.6)

Net debt at end of period

(71.8)

(82.3)

(50.6)

Shareholders' Equity

The balance sheet has strengthened in the period with shareholders' equity increasing by €5.4m to €170.6m since 31 December 2009. The increase was primarily due to earnings in the period of €12.6m attributable to equity shareholders and a gain on the translation of the net assets of foreign currency operations of €7.3m. This was primarily offset by actuarial losses of €10.3m (net of deferred tax) on the Group's defined benefit pension schemes and the payment of the final 2009 dividend of €4.0m to equity shareholders of the Company.

Defined Benefit Pension Obligations

The net liability of the Group's defined benefit pension schemes (net of deferred tax) increased from €6.3m at 31 December 2009 to €15.3m at 30 June 2010. The increase in the liability is due to a decrease in the discount rates underlying the calculation of the present value of scheme obligations along with lower than expected returns on pension scheme assets. As explained in the 2009 Annual Report, the Group changed the benefit structure of two of its defined benefit pension schemes which reduced the Group's existing pension obligations. Please refer to Note 7 of the accompanying financial information for more details.

Development Activity

During the period, the Group invested €0.6m in a number of existing business interests. The Group continues to actively pursue further investment opportunities in both new and existing markets.

Dividends

The Board has declared an interim dividend of 0.54 cent per share, unchanged from the 2009 interim dividend. This dividend will be paid on the 2 November 2010 to shareholders on the register at 8 October 2010 and is subject to dividend withholding tax. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 30 June 2010.

Current Trading and Outlook

Total Produce has delivered a solid performance in the first half of 2010 with an increase of 1.5% in adjusted earnings per share to 4.12 cent per share. After a slow start to the year due to unusually cold weather throughout Europe, demand for the Group's produce recovered with the Group also benefiting from favourable currency translation movements.

The Group's interim dividend is unchanged at 0.54 cent per share. Total Produce is pleased to confirm that, assuming current trading conditions continue, it is now targeting adjusted earnings per share towards the upper end of its annual target range of 5.5 to 6.5 cent per share.

Carl McCann, Chairman

On behalf of the Board

2 September 2010

(1)

Adjusted earnings per share excludes exceptional items, amortisation of intangible assets and related tax. This calculation is set out in Note 6 of the accompanying financial information.

(2)

Percentage changes in constant currency reflect the 2010 and 2009 half year reported numbers of foreign operations retranslated at 2009 half- year average exchange rates.

(3)

Adjusted EBITA is operating profit excluding exceptional items, amortisation of intangible assets and excludes interest and tax (including the equivalent share of joint ventures). This calculation is set out in Note 4 of the accompanying financial information.

(4)

Adjusted profit before tax excludes exceptional items, amortisation of intangible assets and the Group's share of joint ventures tax which, under IFRS rules, is reflected in profit before tax. This calculation is set out in Note 4 of the accompanying financial information.

Copies of this announcement will be available from the Company's registered office at Charles McCann Building, Rampart Road, Dundalk, Co. Louth, Ireland and on our website at www.totalproduce.com.

Total Produce plc

Condensed Group Income Statement

for the half year ended 30 June 2010

(Unaudited)

6 months to

30 June 2010

Total

€'000

(Unaudited)

6 months to

30 June 2009

Pre-

exceptional

€'000

(Unaudited)

6 months to

30 June 2009

Exceptional items

€'000

(Unaudited)

6 months to

30 June 2009

Total

€'000

(Audited)

Year ended

31 Dec 2009

Pre-

exceptional

€'000

(Audited)

Year ended

31 Dec 2009

Exceptional items

€'000

(Audited)

Year ended

31 Dec 2009

Total

€'000

Revenue, including Group share of joint ventures and associates

1,333,068

1,310,632

-

1,310,632

2,431,423

-

2,431,423

Group revenue

1,199,508

1,172,204

-

1,172,204

2,186,442

-

2,186,442

Cost of sales

(1,042,376)

(1,019,094)

-

(1,019,094)

(1,891,238)

-

(1,891,238)

Gross profit

157,132

153,110

-

153,110

295,204

-

295,204

Operating expenses

(135,579)

(131,651)

-

(131,651)

(260,514)

2,590

(257,924)

Share of profit / (loss) of joint ventures and associates

1,493

1,287

(429)

858

1,635

(7,385)

(5,750)

Operating profit

23,046

22,746

(429)

22,317

36,325

(4,795)

31,530

Net financial expense

(1,341)

(1,752)

-

(1,752)

(3,166)

-

(3,166)

Profit before tax

21,705

20,994

(429)

20,565

33,159

(4,795)

28,364

Income tax expense

(5,409)

(5,263)

-

(5,263)

(8,352)

(805)

(9,157)

Profit for the period

16,296

15,731

(429)

15,302

24,807

(5,600)

19,207

Attributable to:

Equity holders of the parent

12,583

12,024

13,018

Non-controlling interests

3,713

3,278

6,189

16,296

15,302

19,207

Earnings per ordinary share

Basic

3.58 cent

3.42 cent

3.70 cent

Fully diluted

3.58 cent

3.42 cent

3.70 cent

Adjusted fully diluted

4.12 cent

4.06 cent

6.47 cent

Total Produce plc

Condensed Group Statement of Comprehensive Income

for the half year ended 30 June 2010

(Unaudited)

6 months to 30 June 2010

€'000

(Unaudited)

6 months to 30 June 2009

€'000

(Audited)

Year ended 31 Dec 2009

€'000

Profit for the period

16,296

15,302

19,207

Other comprehensive income:

Movement on translation of net equity investments and borrowings

7,265

5,923

6,293

Revaluation gains on property, plant and equipment, net

-

-

2,358

Gains on re-measuring available-for-sale financial assets, net

39

1,957

2,619

Fair value adjustment on joint venture becoming a subsidiary

-

-

219

Actuarial (losses)/gains on defined benefit pension schemes

(12,474)

(3,796)

2,908

Effective portion of cash flow hedges, net

(31)

(490)

(748)

Deferred tax on items taken directly to other comprehensive income

1,997

1,141

153

Share of joint ventures' actuarial loss on defined benefit pension scheme

-

-

(21)

Share of joint ventures' loss on re-measuring available-for-sale financial assets

-

-

(10)

Share of joint ventures' effective portion of cash flow hedges, net

-

-

9

Share of joint ventures' deferred tax on items taken directly to other comprehensive income

-

-

3

Other comprehensive income for the period

(3,204)

4,735

13,783

Total comprehensive income for the period

13,092

20,037

32,990

Attributable to:

Equity holders of the parent

9,506

16,669

25,852

Non-controlling interests

3,586

3,368

7,138

13,092

20,037

32,990

Total Produce plc

Condensed Group Balance Sheet

as at 30 June 2010

(Unaudited)

30 June 2010

€'000

(Unaudited)

30 June 2009

€'000

(Audited)

31 Dec 2009

€'000

Assets

Non-current assets

Property, plant and equipment

124,379

124,835

124,126

Investment property

13,813

13,750

12,949

Goodwill and intangible assets

130,859

124,877

127,232

Investments in joint ventures and associates

35,405

39,455

32,959

Other financial assets

10,360

10,217

10,343

Other receivables

4,334

3,813

3,960

Deferred tax assets

6,815

7,284

5,808

Employee benefits

1,258

1,596

2,524

Total non-current assets

327,223

325,827

319,901

Current assets

Inventories

43,861

42,740

35,685

Trade and other receivables

328,598

311,992

245,751

Corporation tax receivable

-

-

1,084

Derivative financial instruments

41

24

55

Cash and cash equivalents

96,265

90,954

88,961

Total current assets

468,765

445,710

371,536

Total assets

795,988

771,537

691,437

Equity

Called-up share capital

3,519

3,519

3,519

Share premium

252,574

252,574

252,574

Retained earnings and other reserves

(85,538)

(98,717)

(90,905)

Total equity attributable to equity holders of the parent

170,555

157,376

165,188

Non-controlling interests

54,652

54,070

55,771

Total equity

225,207

211,446

220,959

Liabilities

Non-current liabilities

Interest-bearing loans and borrowings

126,250

98,827

122,768

Deferred government grants

1,612

1,969

1,783

Other payables

3,396

3,177

3,434

Provisions

3,189

10,276

11,010

Corporation tax payable

8,265

8,185

8,265

Deferred tax liabilities

18,025

20,476

18,891

Employee benefits

19,959

21,612

10,455

Total non-current liabilities

180,696

164,522

176,606

Current liabilities

Interest-bearing loans and borrowings

41,839

74,436

16,753

Trade and other payables

331,147

314,529

268,087

Provisions

12,585

4,764

4,644

Derivative financial instruments

150

282

356

Corporation tax payable

4,364

1,558

4,032

Total current liabilities

390,085

395,569

293,872

Total liabilities

570,781

560,091

470,478

Total liabilities and equity

795,988

771,537

691,437

Total Produce plc

Condensed Group Statement of Changes in Equity

for the half year ended 30 June 2010

Attributable to equity holders of the parent

Non- controlling interest

€'000

Total

equity

€'000

Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

For the half year ended 30 June 2010 (Unaudited)

As at 1 January 2010

3,519

252,574

(13,171)

17,797

(122,521)

3,637

23,353

165,188

55,771

220,959

Comprehensive income

Profit for the period

-

-

-

-

-

-

12,583

12,583

3,713

16,296

Other comprehensive income:

Foreign currency translation effects

-

-

7,252

-

-

-

-

7,252

13

7,265

Gains on re-measuring available-for-sale financial assets, net

-

-

-

-

-

39

-

39

-

39

Actuarial losses on defined benefit pension schemes, net

-

-

-

-

-

-

(12,292)

(12,292)

(182)

(12,474)

Effective portion of cash flow hedges, net

-

-

-

-

-

(53)

-

(53)

22

(31)

Deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

18

1,959

1,977

20

1,997

Total other comprehensive income

-

-

7,252

-

-

4

(10,333)

(3,077)

(127)

(3,204)

Total comprehensive income

-

-

7,252

-

-

4

2,250

9,506

3,586

13,092

Transactions with equity holders of the parent

Buyout of non-controlling interests arising on acquisition

-

-

-

-

-

-

(210)

(210)

(45)

(255)

Dividends

-

-

-

-

-

-

(4,047)

(4,047)

(4,660)

(8,707)

Share-based payment transactions

-

-

-

-

-

118

-

118

-

118

Total transactions with equity holders of the parent

-

-

-

-

-

118

(4,257)

(4,139)

(4,705)

(8,844)

As at 30 June 2010

3,519

252,574

(5,919)

17,797

(122,521)

3,759

21,346

170,555

54,652

225,207

Total Produce plc

Condensed Group Statement of Changes in Equity

for the half year ended 30 June 2010 (Continued)

Attributable to equity holders of the parent

Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

Non- controlling interests

€'000

Total

equity

€'000

For the half year ended 30 June 2009 (Unaudited)

As at 1 January 2009

3,519

252,574

(19,354)

16,568

(122,521)

816

13,005

144,607

53,528

198,135

Comprehensive income

Profit for the period

-

-

-

-

-

-

12,024

12,024

3,278

15,302

Other comprehensive income:

Foreign currency translation effects

-

-

5,897

-

-

-

-

5,897

26

5,923

Gains on re-measuring available-for-sale financial assets, net

-

-

-

-

-

1,957

-

1,957

-

1,957

Actuarial (losses)/gains on defined benefit pension schemes, net

-

-

-

-

-

-

(3,895)

(3,895)

99

(3,796)

Effective portion of cash flow hedges, net

-

-

-

-

-

(455)

-

(455)

(35)

(490)

Deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

1,141

1,141

-

1,141

Total other comprehensive income

-

-

5,897

-

-

1,502

(2,754)

4,645

90

4,735

Total comprehensive income

-

-

5,897

-

-

1,502

9,270

16,669

3,368

20,037

Transactions with equity holders of the parent

Non-controlling interests arising on acquisition

-

-

-

-

-

-

-

-

(51)

(51)

Dividends

-

-

-

-

-

-

(4,047)

(4,047)

(2,775)

(6,822)

Share-based payment transactions

-

-

-

-

-

147

-

147

-

147

Total transactions with equity holders of the parent

-

-

-

-

-

147

(4,047)

(3,900)

(2,826)

(6,726)

As at 30 June 2009

3,519

252,574

(13,457)

16,568

(122,521)

2,465

18,228

157,376

54,070

211,446

Total Produce plc

Condensed Group Statement of Changes in Equity

for the half year ended 30 June 2010 (Continued)

Attributable to equity holders of the parent

Non- controlling interests

€000

Total

equity

€'000

Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

For the year ended 31 December 2009 (Audited)

As at 1 January 2009

3,519

252,574

(19,354)

16,568

(122,521)

816

13,005

144,607

53,528

198,135

Comprehensive income

Profit for the year

-

-

-

-

-

-

13,018

13,018

6,189

19,207

Other comprehensive income:

Foreign currency translation effects

-

-

6,183

-

-

-

-

6,183

110

6,293

Revaluation gains on property, plant and equipment, net

-

-

-

1,546

-

-

-

1,546

812

2,358

Gains on re-measuring available-for-sale financial assets, net

-

-

-

-

-

2,619

-

2,619

-

2,619

Fair value adjustment on joint venture becoming a subsidiary

-

-

-

-

-

-

219

219

-

219

Actuarial gains on defined benefit pension schemes, net

-

-

-

-

-

-

2,656

2,656

252

2,908

Effective portion of cash flow hedges, net

-

-

-

-

-

(664)

-

(664)

(84)

(748)

Deferred tax on items taken directly to other comprehensive income

-

-

-

(317)

-

190

421

294

(141)

153

Share of joint ventures' actuarial loss on defined benefit pension scheme

-

-

-

-

-

-

(21)

(21)

-

(21)

Share of joint ventures' loss on re-measuring available-for-sale financial assets

-

-

-

-

-

-

(10)

(10)

-

(10)

Share of joint ventures' effective portion of cash flow hedges, net

-

-

-

-

-

-

9

9

-

9

Share of joint ventures' deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

3

3

-

3

Total other comprehensive income

-

-

6,183

1,229

-

2,145

3,277

12,834

949

13,783

Total comprehensive income

-

-

6,183

1,229

-

2,145

16,295

25,852

7,138

32,990

Transactions with equity holders of the parent

Buyout of non-controlling interests arising on acquisition

-

-

-

-

-

-

-

-

102

102

Dividends

-

-

-

-

-

-

(5,947)

(5,947)

(4,997)

(10,944)

Share-based payment transactions

-

-

-

-

-

676

-

676

-

676

Total transactions with equity holders of the parent

-

-

-

-

-

676

(5,947)

(5,271)

(4,895)

(10,166)

As at 31 December 2009

3,519

252,574

(13,171)

17,797

(122,521)

3,637

23,353

165,188

55,771

220,959

Total Produce plc

Condensed Group Statement of Cash Flows

for the half year ended 30 June 2010

(Unaudited)

6 months to

30 June 2010

€'000

(Unaudited)

6 months to

30 June 2009

€'000

(Audited)

Year ended

31 Dec 2009

€'000

Net cash flows from operating activities before working capital movements (Note 10)

22,780

22,886

38,909

Increase in working capital

(28,877)

(26,589)

(104)

Net cash flows from operating activities

(6,097)

(3,703)

38,805

Investing activities

Acquisition of subsidiaries, net of cash, cash equivalents and bank overdrafts acquired

(286)

(2,718)

(5,058)

Acquisition of, and investment in, joint ventures, including loans

(311)

(2,512)

(2,848)

Acquisition of other financial assets

-

(16)

(15)

Payments of deferred consideration

(385)

(292)

(1,142)

Acquisition of property, plant and equipment

(3,968)

(6,422)

(9,543)

Proceeds from disposal of property, plant & equipment

1,252

555

1,134

Dividends received from joint ventures and associates

853

1,695

1,779

Proceeds from disposal of joint ventures and associates

-

-

293

Research and development expenditure capitalised

(208)

(178)

(348)

Government grants received

2

208

214

Net cash flows from investing activities

(3,051)

(9,680)

(15,534)

Financing activities

Net (decrease)/increase in borrowings

(2,041)

15,659

(6,624)

Capital element of finance lease repayments

(170)

(202)

(354)

Dividends paid to shareholders of the parent

(4,047)

(4,047)

(5,947)

Dividends paid to non-controlling interests

(4,660)

(2,775)

(4,997)

Net cash flows from financing activities

(10,918)

8,635

(17,922)

Net (decrease)/increase in cash and cash equivalents, including bank overdrafts

(20,066)

(4,748)

5,349

Cash and cash equivalents, including bank overdrafts at start of period

84,624

77,221

77,221

Effect of exchange rate fluctuations on cash held

1,760

1,050

2,054

Cash and cash equivalents, including bank overdrafts at end of period

66,318

73,523

84,624

Summary Group Reconciliation of Net Debt

for the half year ended 30 June 2010

(Unaudited)

30 June 2010

€'000

(Unaudited)

30 June 2009

€'000

(Audited)

31 Dec 2009

€'000

Net (decrease) / increase in cash, cash equivalents, including bank overdrafts

(20,066)

(4,748)

5,349

Net decrease / (increase) in borrowings

2,041

(15,659)

6,624

Capital element of finance lease repayments

170

202

354

Other movements on finance leases

(129)

(109)

(128)

Foreign exchange movement

(3,280)

(1,795)

(2,559)

Movement in net debt

(21,264)

(22,109)

9,640

Net debt at beginning of period

(50,560)

(60,200)

(60,200)

Net debt at end of period

(71,824)

(82,309)

(50,560)

Total Produce plc

Notes to the Interim Results for the half year ended 30 June 2010

1.

Basis of preparation

The interim financial information has been prepared in accordance with the recognition and measurement requirements of IAS34 Interim Financial Reporting, as adopted by the EU. The accounting policies and methods of computation adopted in the preparation of the financial information are consistent with those set out in the Group's consolidated financial statements for the year ended 31 December 2009, which were prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU Commission, except as noted below.

The preparation of the interim financial information requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of certain assets, liabilities, revenues and expenses together with disclosure of certain contingent assets and liabilities. Estimates and underlying assumptions are reviewed on an ongoing basis as outlined in Note 12.

The interim financial information for both the six months ended 30 June 2010 and the comparative six months ended 30 June 2009 are unaudited. The financial information for the year ended 31 December 2009 represents an abbreviated version of the Group's statutory financial statements for that year. Those statutory financial statements contained an unqualified audit report and have been filed with the Registrar of Companies.

Changes in accounting policies

A number of changes in accounting policies arise in the current period from the adoption of amended or revised International Financial Reporting Standards as follows:

IFRS 3 Business Combinations has been revised. The revised standard, which has been adopted by the Group with effect from 1 January 2010, introduces significant changes in the accounting for business combinations occurring after this date. Changes affect the valuation of non-controlling interest, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent consideration and business combinations achieved in stages. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs and future reported results.

Amendments have also been made to IAS 27 Consolidated and Separate Financial Statements and this amended standard has been adopted by the Group with effect from 1 January 2010. IAS 27(Amended) requires that a change in ownership interest of a subsidiary (without loss of control) is accounted for as a transaction with owners in their capacity as owners. Therefore, such transactions will no longer give rise to goodwill, nor will it give rise to a gain or a loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary.

The financial information is presented in euro, rounded to the nearest thousand.

2.

Translation of foreign currencies

The financial information of the Group is presented in euro. Results and cash flows of foreign currency denominated operations have been translated into euro at the average exchange rates for the period, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date. Adjustments arising on the translation of the results of foreign currency denominated operations at average rates, and on restatement of the opening net assets at closing rates, are dealt with within a separate translation reserve within equity, net of differences on related foreign currency borrowings. All other translation differences are taken to the income statement. The principal rates used in the translation of results and balance sheets into euro were as follows:

Average rate

6 months to

Closing rate

30 June

2010

30 June

2009

% change

30 June

2010

31 Dec

2009

% change

Pound Sterling

0.8619

0.8884

3.0%

0.8187

0.8885

7.9%

Swedish Krona

9.7774

10.8542

9.9%

9.5323

10.2445

7.0%

Czech Koruna

25.6784

27.0510

5.1%

25.6852

26.4057

2.7%

Danish Kroner

7.4422

7.4531

0.1%

7.4491

7.4411

(0.1%)

South African Rand

10.0081

12.2811

18.5%

9.3899

10.5654

11.1%

3.

Segmental Analysis

In accordance with IFRS 8, the Group's reportable operating segments based on how performance is assessed and resources are allocated are as follows:

-

Eurozone Fresh Produce: This segment is an aggregation of operating segments in the Eurozone involved in the procurement and distribution of fresh produce. These operating segments have been aggregated because they have similar economic characteristics.

-

Scandinavian Fresh Produce: This operating segment is involved in the procurement and distribution of fresh produce in Sweden and Denmark.

-

UK Fresh Produce: This operating segment is involved in the procurement and distribution of fresh produce in UK.

-

Consumer Goods and Healthfoods Distribution: This operating segment includes the Group's consumer goods distribution business and its healthfoods distribution business which is a full service distributor and marketing partner to the grocery, pharmacy, optical and healthfood sectors.

A further number of other operating segments involved in the fresh produce business have been identified which are combined under 'Other Fresh Produce' as they are not individually material.

Segment performance is evaluated based on revenue and adjusted EBITA. Management believes that adjusted EBITA, while not a defined term under IFRS, gives a fair reflection of the underlying trading performance of the Group. Adjusted EBITA represents earnings before interest, tax and amortisation of intangible assets, and also excludes exceptional items, fair value movements on investment properties and the Group's share of joint ventures tax and financial expense. Adjusted EBITA is, therefore, measured differently from operating profit in the Group financial statements as explained and reconciled in full detail in the analysis that follows.

Finance costs, finance income, income taxes and certain corporate costs are managed on a centralised basis. These items are not allocated between operating segments for the purpose of the information presented to the Chief Operating Decision Maker and are, accordingly, omitted from the detailed segmental analysis that follows.

(Unaudited)

6 months to

30 June 2010

(Unaudited)

6 months to

30 June 2009

(Audited)

Year ended

31 Dec 2009

Segmental

revenue

€'000

Adjusted

EBITA

€'000

Segmental

revenue

€'000

Adjusted

EBITA

€'000

Segmental

revenue

€'000

Adjusted

EBITA

€'000

Eurozone Fresh Produce

655,785

14,870

618,779

13,545

1,150,812

23,352

Scandinavian Fresh Produce

313,519

8,692

299,215

7,664

549,864

13,719

UK Fresh Produce

255,902

2,635

282,359

3,810

519,369

6,016

Other Fresh Produce

81,625

2,497

66,449

1,702

132,132

3,067

Inter -segment revenue and unallocated costs

(14,977)

(1,443)

(15,191)

(1,434)

(26,927)

(3,044)

Total Fresh Produce

1,291,854

27,251

1,251,611

25,287

2,325,250

43,110

Consumer Goods and Healthfoods

41,214

(148)

59,021

1,049

106,173

770

Third party revenue and adjusted EBITA

1,333,068

27,103

1,310,632

26,336

2,431,423

43,880

All inter-segment revenue transactions are at arm's length.

Reconciliation of segmental profit to operating profit

Below is a reconciliation of adjusted EBITA per management reports to operating profit and profit before tax per the Group income statement.

Note

(Unaudited)

6 months to

30 June 2010

€'000

(Unaudited)

6 months to 30 June 2009

€'000

(Audited)

Year ended 31 Dec 2009

€'000

Adjusted EBITA per management reporting

27,103

26,336

43,880

Amortisation of intangible assets in subsidiaries

(i)

(2,548)

(2,500)

(5,087)

Share of joint ventures amortisation

(ii)

(228)

(129)

(579)

Share of joint ventures and associates interest

(ii)

(508)

(259)

(591)

Share of joint ventures and associates tax

(ii)

(773)

(702)

(1,298)

Operating profit before exceptional items

23,046

22,746

36,325

Exceptional items

(iii)

-

(429)

(4,795)

Operating profit after exceptional items

23,046

22,317

31,530

Financial income/(expense), net

(iv)

(1,341)

(1,752)

(3,166)

Profit before tax

21,705

20,565

28,364

(i)

Intangible asset amortisation is not allocated to operating segments in the Group's management accounts

(ii)

Under IFRS, included within profit before tax is the share of joint ventures and associates profit after intangible asset amortisation charges, tax and interest. In the Group's management accounts, the Group's share of these items is excluded from the adjusted EBITA calculation

(iii)

Exceptional items (Note 5) are not allocated to operating segments in the management reports

(iv)

Financial income and expense is primarily managed at Group level and not allocated to individual operating segments in the management reports

4.

Adjusted profit before tax and adjusted EBITA

For the purpose of assessing the Group's performance, Total Produce management believes that adjusted EBITA, adjusted profit before tax and adjusted earnings per share (Note 6) are the most appropriate measures of the underlying performance of the Group.

(Unaudited)

6 months to 30 June 2010

€'000

(Unaudited)

6 months to 30 June 2009

€'000

(Audited)

Year ended 31 Dec 2009

€'000

Profit before tax per income statement

21,705

20,565

28,364

Adjustments

Exceptional items before share of joint venture tax (Note 5)

-

429

4,859

Group share of tax charge of joint ventures and associates

773

702

1,234

Amortisation of intangibles including share of joint ventures

2,776

2,629

5,666

Adjusted profit before tax

25,254

24,325

40,123

Exclude

Financial income/(expense), net - Group

1,341

1,752

3,166

Financial income/(expense), net - share of joint ventures and associates

508

259

591

Adjusted EBITA

27,103

26,336

43,880

5.

Exceptional items

(Unaudited)

6 months to 30 June 2010

€'000

(Unaudited)

6 months to 30 June 2009

€'000

(Audited)

Year ended 31 Dec 2009

€'000

Pension curtailment gain (a)

-

-

4,084

Profit on disposal of property, plant and equipment (b)

-

-

1,040

Share of JV's fair value losses on property (c)

-

(429)

(7,449)

Impairment of property (d)

-

-

(1,197)

Revaluation of property (e)

-

-

(312)

Impairment of goodwill (f)

-

-

(1,025)

Total exceptional items (before joint venture tax)

-

(429)

(4,859)

Share of JV's tax on fair value losses on property

-

-

64

Total exceptional items (after share of joint venture tax)

-

(429)

(4,795)

Tax on exceptional items

-

-

(805)

Total

-

(429)

(5,600)

(a)

Pension curtailment gain

In 2009 an exceptional gain of €4,084,000 arose from the change in the benefit structure of two defined benefit pension schemes. The tax charge on this exceptional gain amounted to €511,000.

(b)

Profit on disposal of property, plant and equipment

A profit of €1,040,000 arose in 2009 on disposal of an asset which, considering the materiality of the gain, the directors believed appropriate to regard as exceptional in order to distinguish it from income in the Group's core activities. The tax charge on this exceptional gain amounted to €330,000.

(c)

Share of joint ventures' fair value losses on property

The Group's share of changes in the fair value of joint ventures' property of €7,385,000, net of deferred tax, was recognised in the income statement in 2009. These losses primarily relate to property owned by a joint venture in Dublin. €429,000 of this loss was recognised in the six months to 30 June 2009.

(d)

Impairment of property

On revaluation of the Group's properties in 2009, in addition to the revaluation gain included in the statement of comprehensive income, properties where the carrying value exceeded market value were identified, resulting in an impairment charge in the amount of €1,197,000.

(e)

Revaluation of property

Fair value losses arising in 2009 amounting to €312,000 were recognised in the income statement. A deferred tax credit of €36,000 was recognised in the income statement as a result of these revaluations.

(f)

Impairment of goodwill

On completion of the Group's annual goodwill impairment testing for 2009, a charge of €1,025,000 was recognised in relation to the goodwill associated with part of the Consumer Goods and Healthfoods Distribution Division.

6.

Earnings per share

(Unaudited)

6 months to 30 June 2010

€'000

(Unaudited)

6 months to 30 June 2009

€'000

(Audited)

Year ended 31 Dec 2009

€'000

Profit attributable to equity holders of the parent

12,583

12,024

13,018

'000

'000

'000

Weighted average number of ordinary shares for the period

351,887

351,887

351,887

Basic and diluted earnings per share - € cent

3.58

3.42

3.70

Calculation of adjusted earnings per share

(Unaudited)

6 months to

30 June 2010

€'000

(Unaudited)

6 months to 30 June 2009

€'000

(Audited)

Year ended 31 Dec 2009

€'000

Profit attributable to equity holders of the parent

12,583

12,024

13,018

Adjustments:

Amortisation of intangible assets (including share of joint ventures)

2,776

2,629

5,666

Exceptional items (Note 5)

-

429

4,795

Tax effect of exceptional items and amortisation charges

(637)

(579)

(400)

Non-controlling interest's impact of exceptional items, intangible amortisation charges and related tax

(219)

(202)

(302)

Adjusted fully diluted earnings