7th Sep 2006 07:02
Fyffes PLC07 September 2006 Fyffes reports first half results ahead of expectations 6 months to 6 months to 30 June 2006 30 June 2005 • • Restated Revenue (incl share of joint ventures) 1,177m 1,111m Adjusted profit before tax * 39.6m 76.1m Profit before tax 35.2m 74.7m Adjusted fully diluted earnings per share ** 7.96 cent 15.10 cent Fully diluted earnings per share 8.04 cent 15.41 cent Interim dividend 1.69 cent 1.69 cent Shareholders' funds *** 378.0m 470.1m * excluding exceptional items, amortisation of intangibles and the Group's shareof tax of its joint ventures and associates ** excluding exceptional items and amortisation of intangibles *** after €124.7m distribution in specie as a result of Blackrock demerger Commenting on the results, Carl McCann, Chairman, said: "Fyffes is pleased to report first half results ahead of its previousexpectations set out in a trading update at the end of June. The Group'strading performance for the first six months of the year reflects the impactwhich the changes in the EU's banana import regulations, combined withsignificant cost inflation, are having on the industry." 7 September 2006 For further information, please contact: Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030 Financial results and operating review Revenue Total revenue for the first six months of the year, including the Group's shareof its joint ventures and associates, was €1,177m compared to €1,111m in thesame period last year, an increase of 5.9%. Sales in the Group's TropicalProduce division, net of inter-segment revenue, increased to €251m in the firsthalf, from €208m in 2005. This reflects, in particular, the contribution fromTurbana in North America, in which the Group acquired a 50% stake in late 2005,combined with higher pineapple sales as a result of increases in volume.Turnover in the Group's General Produce and Distribution division amounted to€926m in the first half of 2006 compared to €903m in the same period last yearreflecting both organic growth and the benefit of a number of bolt-onacquisitions during the past twelve months. Operating profit Adjusted operating profit (before exceptional items and amortisation ofintangibles and excluding the Group's share of the tax charge of its jointventures and associates) was €38.9m in the first half compared to €73.8m in thesame period last year. The performance of the Group's main operating divisionsis analysed below. In the accompanying interim financial information, totaloperating profit of €34.5m (€72.4m in the first half of 2005), is stated, inaccordance with IFRS, after the Group's share of the taxation charge of itsjoint ventures and associates amounting to €1.1m (2005: €1.4m), amortisation ofintangibles of €2.2m (2005: €1.3m) and exceptional charges of €1.1m (2005: €1.3credit). Tropical Produce division As detailed in previous announcements, changes in the EU's banana importregulations introduced on 1 January 2006, combined with industry wide costinflation, have had a significant impact on the performance of the Group'sTropical Produce division. Adjusted operating profit in this division for thefirst six months of 2006 amounted to €16.9m, compared to €52.6m in the sameperiod last year. Consistent with the Group's earlier indications, higherimport duty increased costs in this division by €20.5m during the period. Inaddition, the impact of more expensive fruit, shipping and fuel, combined withan adverse movement in exchange rates, was €16.1m during the first half. Whilemarket conditions were less favourable for much of the period, this was largelyoffset by several factors including a modest increase in volumes, reducedoverheads, the contribution from the Group's new Turbana joint venture in NorthAmerica and an improved result in pineapples. General Produce and Distribution division Fyffes' General Produce and Distribution division delivered a satisfactoryoutturn in the first six months of the year, with adjusted operating profits of€22m compared to €21.2m in the same period last year. The increase in profitsreflects organic growth while the division continues to pursue furtherattractive acquisitions as a matter of routine. The Group's share of profitsfrom its Capespan joint venture improved year on year, largely as a result ofrestructuring undertaken in 2005. Generally across the division, volumes wereslightly lower than in the same period last year, reflecting tighter supplyconditions, particularly for key categories from South Africa. The impact ofthis was offset by a modest improvement in average prices. With the benefit ofrecently-announced acquisitions, including the second 50% of Lembcke in Denmark,further growth is anticipated in this division in the remainder of 2006 and2007. Demerger of Fyffes' property undertaking to Blackrock International Land plc Following approval by shareholders at an EGM on 9 May 2006, Fyffes completed thedemerger of its property undertaking to Blackrock International Land plc ('Blackrock'), a new separately quoted property company listed on the StockExchange's AIM market in London and IEX market in Dublin. Fyffes' shareholdersreceived one new share in Blackrock for each Fyffes share owned. In addition,Fyffes subscribed €82.6m for new shares in Blackrock, equivalent to a 40% stake.From the proceeds of the share subscription, Blackrock repaid €62.6m to Fyffesin respect of debt associated with the property undertaking, resulting in a netcash transfer to Blackrock of €20m. Under the demerger arrangements, Fyffes transferred properties to Blackrock witha market value of €195m together with its interest in a joint venture propertyundertaking with a net asset value of €2.4m. Taking into account the net debtrelated to these properties which Blackrock repaid and a €9.5m reduction in theGroup's deferred tax liabilities as a result of the transfer of the properties,the demerger has resulted in a 'distribution-in-specie' to Fyffes' shareholdersof €124.7m. In addition, 60% of the revaluation reserves related to thedemerged properties, amounting to €33.4m net of deferred tax, has been deemed tobe realised and consequently has been transferred to profit and loss accountreserves. Fyffes continues to own properties, mainly in its Continental Europeansubsidiaries, with a market value at 30 June 2006 of €63.6m. In the seven weekperiod from the date of the demerger to 30 June 2006, Fyffes incurred rentalcosts of €0.7m on the properties owned by Blackrock which the Group continues tooccupy. During the same period, Fyffes' 40% share of Blackrock's profit beforetax and exceptional items amounted to €0.2m. Exceptional items During the first half of the year, Fyffes incurred professional and advisoryfees and similar costs amounting to €1.4m in relation to the demerger of itsproperty undertaking to Blackrock. In addition, the Group's 40% share ofsimilar costs incurred by Blackrock, together with Blackrock's currency losseson its sterling denominated properties, amounted to €0.3m. As a consequence ofthe demerger, once-off impairment and similar charges of €2.6m arose in respectof a number of the properties transferred to Blackrock. In 2005, the Groupcreated provisions in respect of the estimated future costs of fulfillingcertain contractual arrangements which had become onerous as a result of changesin the EU's banana import regulations on 1 January 2006. During the first halfof 2006, the Group settled its obligations in relation to these arrangements,with the unused provision balances of €3.1m - included as an exceptional item inthe income statement. In aggregate, these exceptional items gave rise to a net charge of €1.1m whichhas been excluded from adjusted profit before tax and adjusted earnings pershare. A net deferred tax credit amounting to €4m has been recognised in theincome statement in the period as a consequence of the transfer of certainproperties to Blackrock. This has been partly offset by a deferred tax chargeof €1m related to the release of the onerous contract provision. Thisexceptional net deferred credit of €3m has similarly been excluded from adjustedearnings per share. Interest income Net interest income in the first half amounted to €0.7m compared to €2.3m in thefirst six months last year. This reflects lower average net cash balancesthroughout the period, the result of significant investment and otherexpenditure during the first half, as outlined in the net cash paragraph below,including the impact of a reduction in higher yielding Sterling denominated cashbalances. Net interest income is stated after non-cash discounting charges(notional interest) amounting to €0.7m arising on deferred acquisition costs andprovisions falling due after more than one year. Profit before tax Adjusted profit before tax - excluding amortisation of intangible assets of€2.2m, net exceptional charges of €1.1m and the Group's €1.1m share of the taxcharge of its joint ventures and associates, which is reflected in profit beforetax under IFRS rules - amounted to €39.6m in the period compared to €76.1m lastyear. Profit before tax, excluding these adjustments, amounted to €35.2mcompared to €74.7m last year. Taxation The underlying tax charge for the first half of the year has been estimated, inaccordance with the measurement principles of IAS 34 Interim Reporting, based onthe tax rate that is expected to apply for the full year 2006. The tax chargefor the period is analysed in note 5 of the accompanying financial information.Excluding the €3m exceptional deferred tax credits noted earlier and deferredtax credits of €0.6m related to the amortisation of intangible assets, andincluding the Group's share of tax of its joint ventures of €1.1m, theunderlying tax charge for the half year was €6.9m (2005: €13.3m), equivalent toa rate of 17.5% (2005: 17.5%). The equivalent underlying tax rate for the fullyear in 2005 was 17.3%. The tax charge for the first half of the year in the income statement of €2.3m,equivalent to rate of 6.5%, is stated after the deferred tax credits above andexcludes the Group's share of the tax charge of its joint ventures andassociates. The underlying tax charge of €6.9m was used in the calculation ofadjusted earnings per share. Minority interest The minority interest share of profit after tax for the first half of 2006amounted to €4.5m, compared to €9.4m last year, reflecting the reduced profitsrecorded in certain of the Group's non-wholly owned subsidiaries in ContinentalEurope. Earnings per share Adjusted fully diluted earnings per share, excluding the impact of exceptionalitems and the amortisation of intangible assets, amounted to €7.96 cent in thefirst half of 2006 compared to €15.10 cent in the same period last year. Fullydiluted earnings per share before adjustments amounted to €8.04 cent in theperiod, compared to €15.41 cent in the first half last year. Prior year adjustment The Group changed its accounting policy in relation to the valuation of itsproperty assets, including investment property, in late 2005. All of theGroup's property assets were revalued and the financial information for previousyears was restated accordingly. Full details of the impact of this change wereset out in the Group's 2005 Annual Report. The comparative financialinformation for the first half of 2005, presented with this interim financialreport, has been restated on a consistent basis. The prior year opening balancesheet, as at 1 January 2005, has been restated to increase the value of theGroup's property assets, including investment property, by €74.9m and toincrease the Group's share of net assets of its joint ventures by €7.9m. Therewere corresponding adjustments in revaluation reserves, profit and loss accountreserves, deferred tax liabilities and minority interests. Pre-tax profits for the first half of 2005 have been increased by €6.3m, mainlyto reflect gains recognised on investment property during that period. TheGroup excludes such gains and any related deferred tax charges from thecalculation of its adjusted profit before tax and adjusted earnings per share.In addition, revaluation gains, net of deferred tax, of €6m relating to theGroup's subsidiaries and €0.9m relating to its joint ventures, have beenincluded in the statement of recognised income and expense for the first half of2005. Where appropriate, other comparative financial information has beenrestated on a basis consistent with its treatment in the 2005 Annual Report. Dividend The Board has declared an interim dividend for the year of €1.69 cent per share,unchanged from last year. This dividend, which will be subject to Irishwithholding tax rules, will be paid on 6 October 2006 to shareholders on theregister on 15 September 2006. In accordance with company law and IFRS, thisdividend has not been provided for in the balance sheet as at 30 June 2006. Balance sheet Net cash Net cash at 30 June 2006 amounted to €90.4m compared to €170.9m at 31 December2005. Cash inflows from operating activities amounted to €42.1m in the period,before a seasonal working capital outflow of €11.6m. Dividend payments amountedto €38.2m in the period, including the €20m special second interim dividend inrespect of 2005. Dividends of €7.8m were also paid to minority shareholders ofcertain of the Group's non-wholly owned subsidiaries. As noted earlier, theGroup invested a net amount of €20m in Blackrock during the period. Inaddition, total capital and investment expenditure in the period amounted to€34.5m, comprising €21.6m on the acquisition of subsidiaries and joint ventures,including deferred consideration payments and increased investments in respectof previous acquisitions, and €12.9m on property, plant and equipment. Taxpayments amounted to €11.9m during the period. Pension obligations The net deficit, after deferred tax, in the Group's defined benefit pensionschemes amounted to €5.4m at 30 June 2006 compared to €22.2m at 31 December2005. This improvement reflects a €16.7m actuarial gain (net of deferred taxmovements) during the period as a result of the increase in long term bondyields. The value of scheme assets was broadly unchanged during the period. Shareholders' funds Shareholders' funds amounted to €378m at 30 June 2006, compared to €500.7m at 31December 2005. The reduction during the first six months reflects, inparticular, the demerger of the Group's property undertaking to Blackrock which,as noted earlier, has been accounted for as a 'distribution-in-specie' toFyffes' shareholders, resulting in a €125m reduction in the Group's net assets.Other significant movements in shareholders' funds during the first halfincluded the profit for the period, dividends paid and the actuarial gain on theGroup's defined benefit pension schemes. EU competition investigation As previously disclosed, the European Commission is undertaking an investigationinto whether there have been infringements of Article 81 of the Treaty of Romeand Article 53 of the European Economic Area (EEA) Agreement by businessesinvolved in the supply of bananas and pineapples within the EEA. In June 2005,the Commission carried out inspections at a number of companies operating inthese markets, including Fyffes. At this time, it is not possible for the Groupto determine the final outcome of these investigations, including whether theEuropean Commission may seek to impose any fines and, if so, the level of anysuch fines. Fyffes has received two requests for further information from theCommission and continues to co-operate with it in relation to this matter. Litigation As previously announced, the company has appealed the decision of the High Courtin April 2006 in the case of Fyffes plc v. DCC plc, S&L Investments Limited, MrJames Flavin and Lotus Green Limited under the insider-dealing provisions of the1990 Companies Act. No date has yet been set for the hearing of this appeal. Demerger of Fyffes' General Produce and Distribution business Fyffes has separately announced today that, subject to shareholder approval, itintends to demerge its General Produce and Distribution division into a new,separately quoted company to be 100% owned by Fyffes' shareholders. This newcompany will be listed on the Irish Stock Exchange's IEX market in Dublin andwill appoint Davy as its nominated adviser and broker. Following the successful completion, earlier in the year, of the demerger of theGroup's property business to Blackrock International Land plc, Fyffes hasperformed a detailed strategic review of its business. Arising from thisprocess, the Board has concluded that shareholder value can be enhanced by thefurther demerger of the Group's General Produce and Distribution division, whichit believes has not previously been fully valued in Fyffes' share price. Detailed documentation is expected to be posted to shareholders in November 2006in advance of an Extraordinary General Meeting to seek approval for theproposals (subject to all necessary regulatory and other approval being obtainedin the meantime). A further announcement will be made at that time summarisingthe main terms of the proposed demerger. Current trading Notwithstanding the changed market conditions being experienced by the industryas a result of the revisions to the EU's banana import regulations at the startof the year and the significant cost inflation already highlighted, based on itstrading performance for the year to date, the Group's expectations of itsresults for the full year 2006 remain in line with its previous announcements inthis regard. Carl McCann, Chairmanon behalf of the Board 7 September 2006 Copies of this announcement will be posted to shareholders and are alsoavailable from the company's registered office, 29 North Anne Street, Dublin 7and on our website at www.fyffes.com. Fyffes plcSummary Group Income Statement (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 Restated Revenue including share of joint ventures and associates 1,176,615 1,110,806 2,174,006 Group Revenue 956,416 923,348 1,741,936 Group operating profits before exceptional items 34,156 63,071 97,295 Intangible amortisation (2,185) (1,285) (3,360) Share of profit of joint ventures/associates (after taxand before exceptional items) 3,675 9,280 15,055Exceptional items (including share of joint ventures/associates) (1,142) 1,346 (9,132) Operating profit 34,504 72,412 99,858 Net financing income - Group 711 2,274 5,961 Profit before tax 35,215 74,686 105,819Income tax expense (2,294) (10,848) (10,677) Profit for the period 32,921 63,838 95,142 Attributable as follows:Equity shareholders 28,414 54,427 83,014Minority interest 4,507 9,411 12,128 32,921 63,838 95,142 Earnings per share Basic 8.12 15.61 23.79Fully diluted 8.04 15.41 23.48Adjusted fully diluted 7.96 15.10 25.14 Fyffes plcSummary Statement of Recognised Income and Expense (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 Restated Movement on translation of net equity investments (947) 12,435 7,092Revaluation of property 200 7,766 18,077Deferred tax on revaluation gains - (1,788) (3,398)Deferred tax impact of movements in revaluation reservesarising on demerger (843) - -Share of joint ventures revaluation of property - 951 1,966Deferred tax on joint ventures revaluation of property - (22) (263)Fair value adjustment on investments - (1,400) (1,400)Effective portion of cash flow hedges (4,082) 7,584 5,800Deferred tax on effective portion of cash flow hedges 502 (1,160) (725)Actuarial gain/loss recognised on defined benefit pensionschemes 21,511 (14,122) (2,671)Deferred tax movements related to pension schemes (4,818) 3,677 498Share of MNOPF deficit in joint ventures - - (3,025)Deferred tax impact of joint ventures MNOPF deficit - - 908Actuarial (loss) on joint ventures pension schemes - - (1,262)Deferred tax on joint ventures pension schemes - - 379 Net income recognised directly in equity 11,523 13,921 21,976Profit for period 32,921 63,838 95,142Total recognised income and expense 44,444 77,759 117,118 Attributable as follows:Equity shareholders 39,790 68,036 103,983Minority interest 4,654 9,723 13,135 44,444 77,759 117,118 Summary Statement of Movement in Shareholders' Equity (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 •'000 31 Dec 2005 Restated •'000 Total shareholders' equity at beginning of period 500,678 420,317 420,317Impact of adoption of IAS 32/39 on 1 January 2005 (net oftax) - (1,487) (1,487) Total shareholders' equity as restated 500,678 418,830 418,830 Increase in share capital/premium 360 1,085 1,544Total recognised income and expense 39,790 68,036 103,983Distribution in specie arising on property demerger (124,749) - -Movement in share option expense reserve 162 162 324Dividends paid to equity shareholders (38,200) (18,008) (24,003) Total shareholders' equity at end of period 378,041 470,105 500,678 Fyffes plcSummary Group Balance Sheet as at 30 June 2006 (Unaudited) (Unaudited) (Audited) 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 RestatedAssetsNon-current assetsProperty, plant and equipment 97,067 183,288 188,205Investment property 2,892 71,912 94,965Goodwill and intangible assets 88,386 80,558 82,594Other receivables 1,105 1,283 1,116Investments in joint ventures and associates 187,144 92,758 98,444Equity investments 16,695 16,559 16,543Employee benefits 4,592 - -Deferred tax assets 7,450 14,294 12,507 Total non-current assets 405,331 460,652 494,374 Current assetsInventory 40,363 39,381 39,699Trade and other receivables 262,360 223,503 203,107Derivative financial instruments 426 6,130 4,403Short term bank deposits 139,409 173,418 218,107Cash and cash equivalents 328,917 264,391 232,029 Total current assets 771,475 706,823 697,345 Total assets 1,176,806 1,167,475 1,191,719 EquityCalled-up share capital 21,539 21,489 21,516Share premium 98,248 97,479 97,911Revaluation reserve 36,297 59,521 68,453Other reserves 58,853 71,454 63,313Retained earnings 163,104 220,162 249,485Total shareholders' equity 378,041 470,105 500,678Minority interest 47,944 51,663 51,262 Total equity and minority 425,985 521,768 551,940 LiabilitiesNon-current liabilitiesInterest-bearing loans and borrowings 129,532 149,388 142,732Other payables 3,768 2,924 2,801Provisions 3,375 28,507 33,575Employee benefits 13,079 41,598 30,104Corporation tax payable 24,621 30,011 26,165Deferred tax liabilities 17,132 28,329 28,955 Total non-current liabilities 191,507 280,757 264,332 Current liabilitiesInterest bearing loans and borrowings 248,352 128,701 136,544Trade and other payables 261,951 223,616 214,386Derivative financial instruments 441 - 371Provisions 44,396 765 15,886Corporation tax payable 4,174 11,868 8,260Total current liabilities 559,314 364,950 375,447 Total liabilities 750,821 645,707 639,779 Total liabilities and equity 1,176,806 1,167,475 1,191,719 Summary Group Cash Flow Statement (Unaudited) (Unaudited) (Audited) 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 Restated Cash generated from operations 30,501 44,440 100,856Corporation tax paid (11,887) (5,397) (14,258) Cash inflows from operating activities 18,614 39,043 86,598Cash flows from investing activities (51,423) (18,659) (43,982)Cash flows from financing activities 103,360 10,917 (24,317) Net movement in cash and cash equivalents 70,551 31,301 18,299Cash and cash equivalents, including bank overdrafts atstart of period 226,881 204,705 204,705Effect of foreign exchange movements on cash and cashequivalents (804) 4,944 3,877 Cash and cash equivalents, including bank overdrafts atend of period 296,628 240,950 226,881 Reconciliation of net funds Increase in cash and cash equivalents 70,551 31,301 18,299(Decrease)/increase in short term bank deposits (78,067) (5,828) 41,219(Increase) in debt (71,428) (26,774) (48,350)Interest bearing borrowings arising on acquisitions (1,605) - -Movements on finance leases 509 796 1,048Foreign exchange movements (378) 8,144 6,563 Movement in net funds (80,418) 7,639 18,779Net funds at beginning of period 170,860 152,081 152,081 Net funds at end of period 90,442 159,720 170,860 Notes to supporting interim financial statements 1. Basis of preparation The interim financial information has been prepared in accordance with theaccounting policies set out in the Group's consolidated financial statements forthe year ended 31 December 2005 which were prepared in accordance withInternational Financial Reporting Standards (IFRS) as endorsed by the EUCommission. The comparative financial information for the six month period ended 30 June2005 has been restated on a consistent basis. In particular, the comparativeinformation has been restated to reflect the change in accounting policy adoptedby the Group in 2005 in relation to the valuation of property assets, includinginvestment property, as explained in Note 2 below. 2. Prior year adjustment In the second half of 2005 the Group changed its accounting policy in relationto the valuation of its property assets, including investment property. All ofthe Group's property assets were revalued and the financial information forprevious years was restated accordingly. Full details of the impact of thiswere set out in the Group's 2005 Annual Report. The comparative financialinformation for the first half of 2005 presented with this interim financialreport has been restated on a consistent basis. The prior year opening balancesheet, as at 1 January 2005, has been restated to increase the value of theGroup's property assets, including investment property, by €74.9m and toincrease the Group's share of net assets of its joint ventures by €7.9m. Therewere corresponding adjustments in revaluation reserves, profit and loss accountreserves, deferred tax liabilities and minority interests. 3. Adjusted profit before tax (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 Restated Profit before tax per income statement 35,215 74,686 105,819AdjustmentsGroup share of tax charge of joint ventures and associates 1,053 1,429 3,846Exceptional items (Note 4) 1,142 (1,346) 9,132Amortisation of intangible assets 2,185 1,285 3,360 Adjusted profit before tax 39,595 76,054 122,157 Fyffes believes that adjusted profit before tax and adjusted earnings per share(Note 6 below) are the appropriate measures of the underlying performance of theGroup, excluding exceptional items and amortisation charges. 4. Exceptional items (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 Restated Fair value gain on investment properties - 5,099 9,958Share of fair value gain on joint ventures investmentproperties - 498 996Impairment of property, plant and equipment (2,575) - (2,396)Costs related to the demerger of Blackrock InternationalLand plc (including currency losses) (1,691) - (400)Settlement of onerous contract 3,124 - -Merchant Navy Officers Pension Fund (MNOPF) - - (4,994)Costs of legal action against DCC plc and others - (4,251) (4,796)Provision for defendants costs in DCC plc litigation - - (7,500) Total exceptional items (1,142) 1,346 (9,132) The Group completed the demerger of certain of its property assets to a new,separately quoted property company, Blackrock International Land plc, in May2006. During the period the Group incurred once-off costs amounting to €1.7m inrelation to this transaction, mainly comprising professional and advisory feesand including its 40% share of such costs incurred directly by Blackrock. Inaddition, the Group incurred impairment costs amounting to €2.6m relating tocertain plant and equipment in a number of the properties transferred toBlackrock. In 2005 the Group created provisions in respect of the estimated future costs offulfilling certain contractual arrangements which had become onerous as a resultof changes in the EU banana import regulations on 1 January 2006. During thefirst half of 2006, the Group settled its obligations in relation to thesearrangements, with the unused provision balances of €3.1m reflected as anexceptional item in the income statement. 5. Taxation (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2006 30 June 2005 31 Dec 2005 •'000 •'000 •'000 Restated Tax charge per income statement 2,294 10,848 10,677Share of tax charge of its ventures in profit before tax 1,053 1,429 3,846 Total tax charge 3,347 12,277 14,523 Add back: Deferred tax on amortisation of intangibles 616 360 719Add back: Once-off tax credits - 2,550 9,172Add back: Tax effect of exceptional items 2,967 (1,850) (3,266) Tax charge on underlying activities 6,930 13,337 21,148 Including the Group's share of tax of its joint ventures amounting to €1.1m(2005 first half: €1.4m), which is netted in operating profit in accordance withIFRS, the total tax charge for the period amounted to €3.3m (2005 first half:€12.3m). Adjusting for the tax effect of exceptional items and deferred tax creditsrelated to the amortisation of intangible assets (and once-off tax credits inthe prior year), the underlying tax charge for the period was €6.9m (2005 firsthalf: €13.3m), equivalent to a rate of 17.5% (2005 first half: 17.5%) whenapplied to the Group's adjusted profit before tax. The equivalent underlyingcharge for the full year in 2005 was €21.1m, equivalent to a rate of 17.3%).The Group's underlying tax rate for the first half of the year is based, inaccordance with IAS 34 Interim Reporting, on the estimated tax rate that isexpected to apply for the full year. 6. Earnings per share (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 •'000 31 Dec 2005 Restated •'000 Profit attributable to equity shareholders 28,414 54,427 83,014 No. of shares No. of shares No. of shares '000 '000 '000 Weighted average number of ordinary shares outstanding 358,818 357,583 357,993 Deduct weighted average own shares held (9,022) (9,022) (9,022) Weighted average number of shares for calculation of basicearnings per share 349,796 348,561 348,971 Weighted average number of options with dilutive effect 3,804 4,548 4,541Weighted average number of shares for calculation of fullydiluted earnings per share 353,600 353,109 353,512 •'cent •'cent •'cent Basic earnings per share 8.12 15.61 23.79 Fully diluted earnings per share 8.04 15.41 23.48 Calculation of Adjusted fully diluted earnings per share •'000 •'000 •'000 Profit attributable to equity shareholders 28,414 54,427 83,014AdjustmentsExceptional items 1,142 (1,346) 9,132Amortisation of intangible assets 2,185 1,285 3,360Tax effect of exceptional items (2,967) 1,850 3,266Deferred tax credit on amortisation of intangibles (616) (360) (719)Once-off tax credit - (2,550) (9,172) Earnings for calculation of adjusted fully dilutedearnings per share 28,158 53,306 88,881 •'cent •'cent •'cent Adjusted fully diluted earnings per share 7.96 15.10 25.14 Adjusted fully diluted earnings per share excludes the impact of exceptionalitems, after tax and minority interest, once-off tax credits and amortisationcharges on intangible assets and related deferred tax credits. 7. Employee post employment benefits (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 •'000 31 Dec 2005 Restated •'000 Deficit at beginning of period (30,104) (26,108) (26,108)Current/past service cost less finance income recognisedin income statement (1,889) (2,036) (4,357)Actuarial gain/(loss) recognised in statement ofrecognised income and expense 21,511 (14,122) (2,671)Contributions to schemes 1,927 1,893 3,690Exchange movement 68 (1,225) (658)Deficit at end of period (8,487) (41,598) (30,104)Related deferred tax asset 3,079 10,754 7,897Net deficit (5,408) (30,844) (22,207) This table summarised the movements in the net deficit on the Group's variousdefined benefit pension schemes in Ireland, the UK and Continental Europe. TheGroup's balance sheet at 30 June 2006 reflects net pension assets of €4.6m inrespect of schemes in surplus and net pension liabilities of €13.3m in respectof schemes in deficit, representing the €8.5m net deficit before deferred taxabove. The current/past service cost is charged in the Income Statement, net of thefinance income on scheme assets. The actuarial gain/(loss) is recognised in theStatement of Recognised Income and Expense, in accordance with the amendment toIAS 19 Actuarial Gains and Losses, Group Plans and Disclosures. The reductionin the scheme deficit during the period arose mainly as a result of the impactof the increase in long term international interest rates on the schemeliabilities. 8. Dividends paid to equity shareholders (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 •'000 31 Dec 2005 Restated •'000 Dividends paid on Ordinary €6 cent sharesFinal dividend for 2004 of €5.20 cent - 18,008 18,100Final dividend for 2005 of €5.20 cent 18,197 - -Interim dividend for 2005 of €1.69 cent - - 5,903Special second interim dividend for 2005 of €5.72 cent 20,003 - - Total paid in the year 38,200 18,008 24,003 A special second interim dividend for 2005 of €20m, equivalent to €5.72 cent pershare was declared on 12 December 2005 and paid on 3 March 2006. The finaldividend for 2005 of €5.2 cent per share was approved by the shareholders on 30May 2006 giving rise to a distribution of €18.2m in the period. The directorshave proposed an interim dividend for 2006 of €1.69 cent per share (2005: €1.69cent per share). This dividend, which will be subject to Irish withholding taxrules, will be paid on 6 October 2006 to shareholders on the register on 15September 2006. In accordance with company law and IFRS, this dividend has notbeen provided for in the balance sheet at 30 June 2006. At beginning and end of each financial period, the company and subsidiarycompanies held 9,021,610 Fyffes plc ordinary shares. The right to dividends onthese shares has been waived and they are excluded from the calculation ofearnings per share. 9. Demerger of Fyffes' property undertaking to Blackrock Internal Land plc As explained in more detail in the accompanying text, arising from the demergerof its property undertaking, Fyffes transferred properties to Blackrock with amarket value of €195m together with its interest in a joint venture propertyundertaking with a net asset value of €2.4m. Taking into account the net debtrelated to these properties of €62.6m which Blackrock repaid and a €9.5mreduction in the Group's deferred tax liabilities as a result of the transfer ofthe properties, the demerger has resulted in a 'distribution-in-specie' toFyffes' shareholders amounting to €124.7m. 10. Notes supporting cash flow statement 10.1 Cash generated from operations (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 •'000 31 Dec 2005 Restated •'000 Profit for the period 32,921 63,838 95,142Income tax expense 2,294 10,848 10,677Depreciation of property, plant and equipment 7,247 6,850 14,014Fair value movement on investment properties - (5,099) (9,958)Impairment of property, plant and equipment 2,575 - 2,396Amortisation of intangible assets 2,185 1,285 3,360Share of profits of joint ventures and associates (aftertax and exceptional items) (3,373) (9,778) (16,051)Onerous contract provision (3,124) - 3,400Movement in working capital (11,568) (24,049) (3,077)Other 1,344 545 953 Cash generated from operations 30,501 44,440 100,856 10.2 Cash flows from investing activities (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 31 Dec 2005 •'000 Restated •'000 Acquisition of subsidiaries, net of cash acquired (2,463) (66) (668)Acquisition of and investment in joint ventures (13,822) (1,854) (9,784)Investment in Blackrock International Land plc (net of debtrepaid) (20,000) - -Payments of deferred consideration (3,693) (2,700) (2,701)Acquisition of property, plant and equipment includinginvestment property (12,879) (18,884) (42,580)Proceeds from disposal of property, plant and equipmentincluding investment property 896 921 1,908Dividends received from joint ventures/associates 80 722 5,310Capital repaid by joint ventures, net - 3,202 4,277Other 458 - 256 Cash flows from investing activities (51,423) (18,659) (43,982) 10.3 Cash flows from financing activities (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 30 June 2006 30 June 2005 Year ended •'000 31 Dec 2005 •'000 Restated •'000 Proceeds from issue of shares (including premium) 360 1,085 1,544Net increase in borrowings 71,428 26,774 48,350Decrease/(increase) in short term bank deposits 78,067 5,828 (41,219)Capital element of lease payments (526) (794) (1,213)Dividends paid to equity shareholders (including €20mspecial dividend) (38,200) (18,008) (24,003)Repayment of investment in subsidiary to minority - (1,348) (146)Dividends to minority interests (7,769) (2,620) (7,630) Cash flows from financing activities 103,360 10,917 (24,317) 10.4 Analysis of movement in net funds in the period 1 Jan 2006 Cash Flow Acquisitions Non-cash 30 June •'000 •'000 & disposals •'000 Translation 2006 •'000 •'000 •'000 Cash in hand, at bank 41,735 33,477 - - (144) 75,068Call deposits 190,294 64,224 - - (669) 253,849Cash and cash equivalents per balancesheet 232,029 97,701 - - (813) 328,917Overdrafts (5,148) (27,150) - - 9 (32,289) Cash and cash equivalents per cashflow statement 226,881 70,551 - - (804) 296,628Short term bank deposits 218,107 (78,067) - - (631) 139,409Bank loans - current (130,414) (56,888) (196) (29,033) 1,493 (215,038)Bank loans - non current (141,325) (14,540) (1,310) 29,033 (392) (128,534)Finance leases (2,389) 526 (99) (17) (44) (2,023) Net funds 170,860 (78,418) (1,605) (17) (378) 90,442 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FFY.L