3rd Sep 2007 07:01
Fyffes PLC03 September 2007 Fyffes delivers strong top-line organic growth 6 months to 6 months to 30 June 2007 30 June 2006 • • Continuing Operations Group revenue (excl share of joint ventures) 286.2m 197.5m Adjusted earnings before interest and tax * 12.7m 18.0m Adjusted profit before tax * 13.1m 19.5m Profit before tax 15.7m 17.7m Adjusted fully diluted earnings per share ** 3.11 cent 5.31 cent Fully diluted earnings per share 4.08 cent 5.28 cent Interim dividend 0.50 cent 1.69 cent * 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 Commenting on the results, David McCann, Chairman, said: "The Group's target for its full year earnings remains in line with its previousannouncement and these first half results are consistent with this. Managementremains focused on delivering its five year growth objectives and is pleased tohave achieved significant top-line organic growth in the year to date." 3 September 2007 For further information, please contact: Andrew McLindon or Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030 Financial results and operating review Revenue Group revenue in the six months to 30 June 2007 amounted to €286.2m, compared to€197.5m in the same period last year. However, these year-on-year figures arenot directly comparable as sales to Total Produce plc are included as thirdparty revenue in 2007, while the equivalent sales in 2006, prior to the demergerof the Group's General Produce and Distribution business, were eliminated asinter-segment revenue. Taking this into account, the underlying comparableincrease in Group revenue was in the mid-teens in percentage terms. This strongtop-line organic growth in the year to date reflects mid to high teenspercentage increases in banana and pineapple volumes. Operating profit Adjusted EBIT (which is operating profit, before exceptional items,amortisation, interest and tax, including the equivalent share of joint venturesand associates operating profit - the calculation of which is set out in note 2of the accompanying interim financial information), amounted to €12.7m in theseasonally stronger first half, compared to €18m in the same period last year.Statutory operating profit, after exceptional items, amortisation and the shareof joint ventures and associates interest and tax amounted to €14.6m in thefirst six months of 2007, compared to €15.5m in the first half last year. The key drivers of Fyffes' annual performance are average selling prices,exchange rates and the costs of fruit, shipping and fuel, all of which canresult in volatility in year on year profitability. The Group has previouslyindicated the primary factors contributing to the reduction in first halfoperating profits and the anticipated drop in full year earnings in 2007.Continental European banana prices were lower year-on-year during the firsthalf, primarily as a result of increased market volumes. Operating costs werehigher than the previous year during the first half reflecting, in particular,the significant increase in bunker fuel prices, although this was partly offsetby savings arising from new shipping arrangements and the impact of morefavourable exchange rates. The Group's share of losses in Nolem, its Brazilian winter melon joint venture,amounted to €2.8m in the six months to 30 June 2007. Significant internalresources have gone into addressing Nolem's business in order to deliver animproved result in the forthcoming season. Fyffes' pineapple business delivered an improved result compared to the sameperiod last year, reflecting the significant increase in volumes combined withslightly lower costs. Adjusted EBIT in the first half includes Fyffes' 40% share of the net profitbefore fair value property revaluation gains and tax of Blackrock InternationalLand plc, amounting to €1m, compared to €0.3m in the same period last year. TheGroup's share of property revaluation and currency gains recognised by Blackrockin the period are disclosed as part of exceptional items (see below). Successful Supreme Court appeal As a result of its recent successful Supreme Court appeal in its insider dealingcase against DCC plc, Jim Flavin and others, Fyffes expects to obtain an orderto allow it recover all of its legal costs, including the costs of the appeal,when the matter comes before the Supreme Court again in October. In addition,under the relevant provisions of the Irish Companies Act 1990, Fyffes isentitled to recover amounts from all of the defendants representing the profitsmade on the insider dealing transactions. The quantum of any such recovery willbe determined by the High Court, most probably in early 2008. Fyffes has notincluded any contingent gain in the interim financial statements in relation tothe amounts to be recovered, including its costs. However, in light of thesuccessful appeal, Fyffes believes that the provision of €7.5m in respect of thedefendant's costs, expensed in 2005 following the original High Court decision,is now no longer necessary and consequently it has been written back. It isincluded as an exceptional gain in the interim financial statements. EU competition investigation As announced on 24 July 2007, the EU Commission has issued Statements ofObjections to a number of companies alleging infringements of Article 81 of theTreaty of Rome and Article 53 of the European Economic Area (EEA) Agreementrelating to the supply of bananas in the Northern European region of the EEA.Fyffes and its German joint venture have received the Statement of Objections,which is a procedural and preparatory document enabling the addressees toeffectively exercise their right to a fair hearing. Fyffes will respond to theStatement of Objections, after which the Commission will reach a conclusion onthis matter. At this time, Fyffes is unable to determine the final outcome ofthis process, including whether or not a fine will be imposed or the level ofany fine. Any decision of the EU Commission can be appealed in the EuropeanCourts. Fyffes intends to fully and vigorously defend itself against theallegations contained in the Statement of Objections. Exceptional items The main exceptional items arising in the period are an impairment charge of€6.1m in respect of the Group's investment in Nolem, as a result of itsunderperformance since acquisition in January 2006, and the gain of €7.5mrelating to the write-back of the provision for the defendants' legal costsfollowing the successful Supreme Court appeal mentioned earlier. In addition,Fyffes' 40% share of property revaluation and currency gains recognised inBlackrock International Land plc during the first half of the year amounted to€3.8m, before tax of €0.7m. Other smaller exceptional items amount to a netcharge of €0.6m and, in aggregate therefore, total exceptional items gave riseto a net gain before tax of €4.5m in the period. This gain has been excludedfrom adjusted profit before tax and adjusted earnings per share. Financial income Net interest income in the Group subsidiary companies in the six months to June2007 amounted to €1.1m, compared to €2.2m in the same period last year. Theseamounts are not directly comparable as the prior year interest income was basedon the pre-demerger capital structure of the Group and significantly higheraverage cash balances at that time. Interest income in the first half this yearwas earned on average net cash balances of €57m. The Group's share of the netinterest expense in its joint ventures in the first half amounted to €0.7m,similar to the same period last year. Profit before tax Adjusted profit before tax as set out in note 2 of the attached interimfinancial information- excluding amortisation of intangible assets, netexceptional gains and the Group's share of the tax charge of its joint venturesand associates, which is reflected in profit before tax under IFRS rules -amounted to €13.1m in the period compared to €19.5m in the first half last year.Profit before tax, excluding these adjustments, amounted to €15.7m compared to€17.7m in the same period 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 2007. The tax chargefor the period is analysed in note 4 of the accompanying financial information.Excluding the tax impact of exceptional items and deferred tax credits relatedto the amortisation of intangible assets, and including the Group's share of taxof its joint ventures and associates, the underlying tax charge for the halfyear was €1.6m (2006 half year: net credit of €0.1m), equivalent to a rate of12.5% which is used for the purposes of calculating adjusted earnings per share. The equivalent underlying tax rate for the full year in 2006 was 6.7%.However, the effective tax rate in 2006 is not directly comparable to the ratein the current year as the prior year charge reflects an allocation of thecombined tax charge of the Group prior to the demerger of the General Produceand Distribution business to Total Produce plc. Minority interest The minority interest share of profit after tax for the first half amounted to€0.4m, compared to €0.8m in the same period last year. Earnings per share Adjusted fully diluted earnings per share, excluding the impact of exceptionalitems and the amortisation of intangible assets as set out in note 5 of theaccompanying financial information, amounted to €3.11 cent in the first half of2007 compared to €5.31 cent in the same period last year. Fully dilutedearnings per share, for continuing operations before adjustments, amounted to€4.08 cent in the period, compared to €5.28 cent in the first half last year. Dividend The Board has declared an interim dividend for the year of €0.50 cent per share.This dividend, which will be subject to Irish withholding tax rules, will bepaid on 10 October 2007 to shareholders on the register on 14 September 2007.In accordance with company law and IFRS, this dividend has not been provided forin the balance sheet at 30 June 2007. Balance sheet Net cash Net cash at 30 June 2007 amounted to €54.2m compared to €79.7m at the beginningof the year. This reduction in net funds reflects, in particular, a €24.9m increase inworking capital as a result of the strong growth in revenue in the seasonallystronger first half of the year. Other significant cash outflows in the periodincluded the previously signalled once-off pension contribution of €10.8m (seebelow), the 2006 final dividend of €6m, further investment and loans to certainjoint venture operations amounting to €6.2m and other investments of €4.2m. Pension obligations The Group's defined benefit pension schemes had a net surplus of €0.1m at 30June 2007 compared to €15.1m net deficit at the beginning of the year. Thisimprovement reflects, in particular, the €10.8m once-off contribution into theUK pension scheme under Section 75 of the UK Pensions Act, 1995 relating to anumber of subsidiaries which have been demerged to Total Produce plc and are nolonger adhered to that scheme, in respect of pensioners and deferred pensionerswho were formerly employed in those subsidiaries. In addition, a €4.4mactuarial gain arose during the period, primarily as a result of the increase inlong term international bond yields. Shareholders' funds Shareholders' funds amounted to €239.9m at 30 June 2007, compared to €227m atthe beginning of the year. This increase reflects the retained profit plus theactuarial gains in the period, less the payment of the 2006 final dividend. Medium term strategy Fyffes' medium term strategy remains the doubling of revenue across its keyproduct categories within the five years ending 2011. This will be achievedthrough a combination of organic growth and by applying the Group's substantialcapital resources and borrowing capacity in further acquisitions and alliances.Satisfactory progress is being made in relation to organic growth targets asreflected in the increases in volumes in the period. Fyffes also continues toactively pursue acquisition opportunities to enable its medium term growthtargets to be achieved. Current trading The Group's target for its full year adjusted EBIT remains unchanged from itsprevious announcement, at €15m. David McCann, Chairmanon behalf of the Board3 September 2007 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 plcSummary Group Income Statement (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Group revenue - continuing operations 286,161 197,510 407,717 Continuing operationsGroup operating profit before exceptional items 12,361 15,722 17,198Intangible amortisation (732) (748) (1,303)Share of (loss) / profit of joint ventures / associates (aftertax and before exceptional items) (1,556) 1,641 (1,278)Exceptional items (including share of joint ventures /associates) 4,539 (1,142) (281) Operating profit 14,612 15,473 14,336Net financial income - Group 1,082 2,188 4,726 Profit before tax 15,694 17,661 19,062Income tax (expense) / credit (763) 1,792 3,858 Profit for the period - continuing operations 14,931 19,453 22,920Profit for the period - discontinued operations - 13,468 13,560 Profit for the period 14,931 32,921 36,480 Attributable as follows:Equity shareholders 14,564 28,414 29,321Minority interest - continuing operations 367 779 659Minority interest - discontinued operations - 3,728 6,500 14,931 32,921 36,480 Earnings per share - continuing operationsBasic 4.12 5.34 6.36Fully diluted 4.08 5.28 6.29Adjusted fully diluted 3.11 5.31 5.70 Earnings per share - combined Group pre demergerBasic n/a 8.12 8.38Fully diluted n/a 8.04 8.29Adjusted fully diluted n/a 7.96 11.40 Fyffes plcSummary Statement of Recognised Income and Expense (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Movement on translation of net equity investments 761 (947) 6,124Revaluation of property - 200 -Revision to deferred tax provision on revaluation reserves - (843) (658)Fair value adjustment on investments - - 1,400Effective portion of cash flow hedges (120) (4,082) (6,304)Deferred tax on effective portion of cash flow hedges 16 502 780Actuarial gain recognised on defined benefit pension schemes 4,425 21,511 15,412Deferred tax movements related to pension schemes (2,087) (4,818) (5,379)Share of actuarial gain on joint ventures pension schemes 1,567 - 1,540Deferred tax movement related to joint ventures pensionschemes (439) - (496) Net income recognised directly in equity 4,123 11,523 12,419Profit for year 14,931 32,921 36,480 Total recognised income and expense 19,054 44,444 48,899 Attributable as follows:Equity shareholders 18,687 39,790 41,327Minority interest 367 4,654 7,572 19,054 44,444 48,899 Comparative figures for full year & half year 2006 reflect the combined Group pre demerger. Summary Statement of Movement in Shareholders' equity (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Total shareholders' equity at beginning of period 227,022 500,678 500,678Increase in share capital / premium 159 360 995Total recognised income and expense 18,687 39,790 41,327In-specie distribution arising from demerger of propertyundertaking - (124,749) (124,749)Fair value gains not previously recognised in Total Producedemerger - - 108,071In-specie distribution arising from demerger of GeneralProduce business - - (255,508)Movements in share option expense reserve 81 162 323Dividends paid to equity shareholders (6,011) (38,200) (44,115) Total shareholders' equity at end of period 239,938 378,041 227,022 Fyffes plcSummary Balance Sheet (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Pre demergerNon current assetsProperty, plant and equipment 9,160 97,067 8,883Investment property - 2,892 -Goodwill and intangible assets 4,636 88,386 4,636Other receivables - 1,105 -Investments in joint ventures and associates 153,213 187,144 150,390Equity investments 4,183 16,695 18Employee benefits 1,022 4,592 644Deferred tax assets 4,802 7,450 6,871Total non current assets 177,016 405,331 171,442 Current assetsInventory 15,820 40,363 11,915Trade and other receivables 63,570 262,360 66,297Derivative financial instruments - 426 -Corporation tax recoverable 2,275 - 3,918Short term bank deposits - 139,409 -Cash and cash equivalents 99,604 328,917 131,570Total current assets 181,269 771,475 213,700 Total assets 358,285 1,176,806 385,142 EquityCalled up share capital 21,756 21,539 21,600Share premium 98,825 98,248 98,822Revaluation reserve 24,137 36,297 24,137Other reserves 63,999 58,853 63,259Retained earnings 31,221 163,104 19,204 Total shareholders' equity 239,938 378,041 227,022Minority interest 1,469 47,944 1,107 Total equity and minority 241,407 425,985 228,129 Non current liabilitiesInterest bearing loans and borrowings 20,000 129,532 26,136Other payables - 3,768 6Provisions 3,809 3,375 4,073Employee benefits 940 13,079 15,734Corporation tax payable 15,780 24,621 17,280Deferred tax liabilities 1,935 17,132 1,935Total non current liabilities 42,464 191,507 65,164 Current liabilitiesInterest bearing loans and borrowings 25,364 248,352 25,747Trade and other payables 46,592 261,951 56,273Derivative financial instruments 2,332 441 2,203Provisions 126 44,396 7,626Corporation tax payable - 4,174 -Total current liabilities 74,414 559,314 91,849Total liabilities 116,878 750,821 157,013 Total liabilities and equity 358,285 1,176,806 385,142 Fyffes plcSummary Cash Flow Statement (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Cash flows from operating activities (13,436) 18,614 45,931Cash flows from investing activities (11,586) (51,423) (84,134)Cash flows from financing activities (9,062) 103,360 20,483 Net movement in cash and cash equivalents (34,084) 70,551 (17,720)Cash and cash equivalents, including bank overdrafts atstart of period 127,719 226,881 226,881Cash in subsidiaries demerged to Total Produce plc - - (85,042)Effect of foreign exchange movements on cash and cashequivalents 605 (804) 3,600 Cash and cash equivalents, including bank overdrafts at endof period 94,240 296,628 127,719 Reconciliation of total net funds (Decrease) / increase in cash and cash equivalents (34,084) 70,551 (17,720)(Decrease) in short term bank deposits - (78,067) (220,035)Decrease / (increase) in debt 8,078 (71,428) 147,230Interest bearing borrowings arising on acquisitions - (1,605) -Movements on finance leases - 509 580Net funds in subsidiaries demerged to Total Produce plc - - (5,665)Foreign exchange movement 559 (378) 4,437 Movement in net funds (25,447) (80,418) (91,173)Net funds at start of period 79,687 170,860 170,860 Net funds at end of period 54,240 90,442 79,687 Comparative figures for full year & half year 2006 reflect the combined Group pre demerger. Fyffes plcNotes supporting 2007 Interim Financial Information 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 2006 which were prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted by the EUCommission. The demerger of the Group's General Produce and Distribution business to TotalProduce plc completed on 30 December 2006. The comparative figures in theincome statement for the six months ended 30 June 2006 and the year ended 30December 2006 reflect the results of the General Produce and Distributionbusiness as a single figure for discontinued operations for those periods. Thebalance sheet at 30 December 2006 is stated after the impact of the demerger,whereas the balance sheet at 30 June 2006 is as originally reported, predemerger. Similarly, the comparative cash flow statements for the six monthsended 30 June 2006 and the year ended 30 December 2006 reflect the aggregatecash flows of the combined Group for those periods, pre demerger. 2. Adjusted profit before tax and EBIT - continuing operations (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Profit before tax per Income Statement - continuing operations 15,694 17,661 19,062AdjustmentsGroup share of tax charge of joint ventures and associates 1,211 (60) 1,638Exceptional items (note 3 below) (4,539) 1,142 281Amortisation of intangible assets 732 748 1,303 Adjusted profit before tax - continuing operations 13,098 19,491 22,284 ExcludeFinancial income - Group (1,082) (2,188) (4,726)Financial expense - share of joint ventures 715 732 1,257 Adjusted EBIT - continuing operations 12,731 18,035 18,815 Fyffes believes that adjusted profit before tax, adjusted EBIT and adjustedearnings per share (note 5 below) are the appropriate measures of the underlyingperformance of the Group, excluding exceptional items and amortisation charges. 3. Exceptional items - continuing operations (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Share of fair value gain on joint ventures / associatesinvestment properties 3,785 - 7,065Write-back of provision for defendants costs in DCC plclitigation 7,500 - -Impairment of investment in melon joint venture (6,100) - -Professional fees and similar costs arising in relation toongoing EU investigation (500) - -Impairment of property, plant and equipment and investmentproperty ( reversal in 2007) 554 (2,575) (3,131)Costs related to the demerger of Blackrock International Landplc - (1,691) (1,320)Costs related to the demerger of Total Produce plc (700) - (6,007)Settlement of onerous contract - 3,124 3,112 Total exceptional items 4,539 (1,142) (281)Share of joint ventures / associates tax on exceptional items (740) - (1,631) Exceptional items net of share of tax of joint ventures /associates 3,799 (1,142) (1,912) As explained in more detail in the text of this announcement, following Fyffes'successful Supreme Court appeal of its insider dealing litigation against DCCplc and others, a provision created in 2005 for the defendants' legal costs inthis case, amounting to €7.5m, is no longer required and has been written back.It is not currently possible to accurately estimate what additional amounts theGroup will now recover in respect of its own costs and the profits on theoriginal transaction earned by DCC plc. Consequently, no contingent gain hasbeen accrued in this regard in these interim financial statements. As a result of the under performance of the Group's Brazilian melon jointventure since acquisition in January 2006, the Board has decided that it isappropriate to write down the carrying value of its investment by €6.1m. The Group's 40% share of property fair value gains recognised in BlackrockInternational Land plc during the period amounted to €3.8m, before tax of €0.7m. Further professional fees and similar costs relating to the demerger of theGroup's General Produce and Distribution business to Total Produce plc on 30December 2006 amounting to €0.7m were incurred in the period. This was partlyoffset by the write-back of an impairment provision of €0.55m no longer requiredin relation to a property transferred to Total Produce plc as a result of thedemerger. Professional fees and similar costs incurred in relation to theongoing EU Competition investigation amounted to €0.5m in the period. Including the share of tax on Blackrock's property revaluation gains notedabove, there was a net tax charge on exceptional items amounting to €0.6m. 4. Taxation - continuing operations (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Tax charge / (credit) per Income Statement 763 (1,792) (3,858)Group share of tax charge of its joint ventures / associatesnetted in profit before tax 1,211 (60) 1,638 Total tax charge / (credit) 1,974 (1,852) (2,220)Add back: Deferred tax credit relating to amortisation ofintangibles 278 262 518Add back: Once off tax credits relating to demergers - - 4,511Add back: Tax effect of exceptional items (615) 1,514 (1,327) Tax charge / (credit) on underlying activities 1,637 (76) 1,482 Including the Group's share of the tax charge of its joint ventures andassociates of €1.2m which is netted in operating profit in accordance with IFRS,the total tax charge for the period amounted to €2.0m (2006 first half: creditof €1.9m). Adjusting for the tax effect of exceptional items and deferred tax creditsrelated to the amortisation of intangible assets, the underlying tax charge forthe period was €1.6m (2006 first half: credit of €0.1m), equivalent to a rate of12.5%. The Group's underlying tax charge for the first half of the year isbased, in accordance with IAS34 Interim Reporting, on the estimated tax ratethat is expected to apply for the full year. The equivalent underlying charge for the full year in 2006 for continuingoperations was a charge of €1.5m, equal to a rate of 6.7%. However, the taxcharges above for the full and half year in 2006 in respect of continuingoperations are not directly comparable to the rate for the half year in 2007, asthe prior year charges are based on an allocation of the combined tax charge forthe Group prior to the demerger of the General Produce and Distribution businessto Total Produce plc. 5. Earnings per share (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000Continuing operations Profit attributable to equity shareholders - continuingoperations 14,564 18,674 22,261 No of shares No of shares No of shares '000 '000 '000 Weighted average number of ordinary shares outstanding 362,140 358,818 358,973Deduct: weighted average own shares held (9,022) (9,022) (9,022)Weighted average number of shares for calculation of basicearnings per share 353,118 349,796 349,951Weighted average number of options with dilutive effect 3,766 3,804 3,857 Weighted average number of shares for calculation of fullydiluted earnings per share 356,884 353,600 353,808 5. Earnings per share (cont'd) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 • cent • cent • cent Basic earnings per share 4.12 5.34 6.36Fully diluted earnings per share 4.08 5.28 6.29 •'000 •'000 •'000Calculation of adjusted earnings per shareProfit attributable to equity shareholders 14,564 18,674 22,261AdjustmentsExceptional items (4,539) 1,142 281Amortisation of intangible assets 732 748 1,303Tax effect of exceptional items 615 (1,514) 1,327Deferred tax credit relating to amortisation of intangibles (278) (262) (518)Once-off tax credits - - (4,511) Earnings for calculation of adjusted fully diluted earningsper share 11,094 18,788 20,143 Adjusted fully diluted earnings per share 3.11 5.31 5.70 Adjusted fully diluted earnings per share excludes the impact of exceptionalitems, after tax and minority interests, once off tax credits and amortisationcharges on intangible assets and related deferred tax credits. (Unaudited) (Audited) 6 months to Year ended 30 June 2006 30 Dec 2006 •'000 •'000Combined operations - pre demergerProfit attributable to equity shareholders 28,414 29,321 No of shares No of shares '000 '000 Weighted average number of shares for calculation of basicearnings per share (as above) 349,796 349,951 Weighted average number of shares for calculation of fullydiluted earnings per share (as above) 353,600 353,808 • cent • cent Basic earnings per share 8.12 8.38Fully diluted earnings per share 8.04 8.29 5. Earnings per share (cont'd) (Unaudited) (Audited) 6 months to Year ended 30 June 2006 30 Dec 2006 •'000 •'000Calculation of adjusted earnings per shareProfit attributable to equity shareholders 28,414 29,321AdjustmentsExceptional items 1,142 15,111Amortisation of intangible assets 2,185 4,366Tax effect of exceptional items, once-off credits andamortisation charges (3,583) (8,750)Minority impact of exceptional items - 282 Earnings for calculation of adjusted fully diluted earningsper share 28,158 40,330 Adjusted fully diluted earnings per share 7.96 11.40 Adjusted fully diluted earnings per share excludes the impact of exceptionalitems, after tax and minority interests, once off tax credits and amortisationcharges on intangible assets and related deferred tax credits. 6. Employee post employment benefits (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Deficit at beginning of period (15,090) (30,104) (30,104)Current / past service cost less finance income recognised inincome statement (760) (1,889) (4,261)Actuarial gain recognised in statement of recognised incomeand expense 4,425 21,511 15,412Contributions to schemes 728 1,927 4,032Section 75 contribution following demerger 10,797 - -Impact of demerger to Total Produce plc - - 190Exchange movement (18) 68 (359) Surplus / (deficit) at end of period 82 (8,487) (15,090)Related deferred tax (liability)/asset (63) 3,079 2,024 Net surplus / (deficit) 19 (5,408) (13,066) This table summarises the movements in the net surplus / deficit on the Group'svarious defined benefit pension schemes in Ireland, the UK and ContinentalEurope. The Group's balance sheet at 30 June 2007 reflects net pension assetsof €1.0m in respect of schemes in surplus and net pension liabilities of €0.9min respect of schemes in deficit, representing the €0.1m net surplus beforedeferred tax above. The current / past service cost is charged in the Income Statement, net of thefinance income on scheme assets. The actuarial gain 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 reduction in the overall deficit during the period arose mainly as a resultof a contribution of €10.8m into the Group's UK scheme under Section 75 of theUK Pensions Act relating to pensioners and deferred pensioners who were formerlyemployed by subsidiaries which were demerged to Total Produce plc and are nolonger adhered to that scheme, combined with the impact of the increase in longterm international interest rates on the scheme liabilities. 7. Dividends paid to equity shareholders (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Cash dividends paid on Ordinary €6 cent sharesFinal dividend for 2006 of €1.70 cent 6,011 - -Interim dividend for 2006 of €1.69 cent - - 5,915Final dividend for 2005 of €5.20 cent - 18,197 18,197Special second interim dividend for 2005 of 5.72 cent - 20,003 20,003 Total cash dividends paid in the period 6,011 38,200 44,115 Distributions in specieDemerger of property undertaking to Blackrock InternationalLand plc - 124,749 124,749Demerger of General Produce & Distribution business to TotalProduce plc - - 255,508 Total distributions in the period 6,011 162,949 424,372 The final dividend for 2006 of €1.70 cent per share, approved by theshareholders at the Annual General Meeting on 12 June 2007, gives rise to adistribution of €6m in the period. The directors have proposed an interim dividend for 2007 of €0.50 cent per share(2006: €1.69 cent per share). This dividend, which will be subject to Irishwithholding tax rules, will be paid on 10 October 2007 to shareholders on theregister at 14 September 2007. In accordance with company law and IFRS, thisdividend has not been provided in the balance sheet at 30 June 2007. At the 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. 8. Notes supporting cash flow statement 8.1 Cash generated from operations (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Profit for the period 14,931 32,921 36,480Income tax expense 763 2,294 1,498Tax paid (627) (11,887) (21,820)Depreciation of property, plant and equipment 1,444 7,247 14,388Fair value movement on investment properties - - (5,770)Impairment of investment in melon joint venture 6,100 - -Write back of provision for defendants' costs in DCC plclitigation (7,500) - -Impairment of businesses and investments on demerger to TotalProduce plc - - 22,749Impairment of property, plant and equipment (write back in2007) (554) 2,575 2,781Amortisation of intangible assets 732 2,185 3,021Share of (profit) of joint ventures and associates (aftertax and exceptional items) (2,229) (3,373) (7,873)Onerous contract provision - (3,124) (3,112)Movement in working capital (24,944) (11,568) 715Other (1,552) 1,344 2,874 Cash generated from operations (13,436) 18,614 45,931 Figures in respect of the half year and full year in 2006 relate to the combinedGroup before the demerger of the General Produce and Distribution business toTotal Produce plc. 8.2 Cash flows from investing activities (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Acquisition of subsidiaries, net of cash acquired - (2,463) (12,631)Acquisition of and investment in joint ventures (6,202) (13,822) (18,775)Acquisition of other investments (4,165) - -Investment in Blackrock International Land plc (net of debtrepaid) - (20,000) (20,000)Payments of deferred consideration - (3,693) (5,077)Acquisition of property, plant and equipment, includinginvestment property (1,384) (12,879) (35,644)Proceeds from disposal of property, plant and equipment,including investment property 165 896 1,879Dividends received from joint ventures and associates - 80 5,092Loans repaid by joint ventures, net - - 2,226Other - 458 (1,204) Cash flows from investing activities (11,586) (51,423) (84,134) Figures in respect of the half year and full year in 2006 relate to the combinedGroup before the demerger of the General Produce and Distribution business toTotal Produce plc. 8.3 Cash flows from financing activities (Unaudited) (Unaudited) (Audited) 6 months to 6 months to Year ended 30 June 2007 30 June 2006 30 Dec 2006 •'000 •'000 •'000 Proceeds from issue of shares (including premium) 159 360 995Net (reduction) / increase in borrowings (8,078) 71,428 (147,230)Decrease in short term bank deposits - 78,067 220,035Capital element of lease payments - (526) (1,098)Dividends paid to equity shareholders (including €20m specialdividend in 2006) (6,011) (38,200) (44,115)Section 75 pension contribution (10,797) - -Receipt from Total Produce in connection with demerger 15,665 - -Capital contribution by minority - - 116Dividends to minority interests - (7,769) (8,220) Cash flows from financing activities (9,062) 103,360 20,483 Figures in respect of the half year and full year in 2006 relate to the combinedGroup before the demerger of the General Produce and Distribution business toTotal Produce plc. 8.4 Analysis of movement in net funds in the period Opening Non-cash Closing 1 Jan 2007 Cash flow movement Translation 30 June 2007 •'000 •'000 •'000 •'000 •'000 Bank balances 9,296 (4,311) - (5) 4,980Call deposits 122,274 (28,261) - 611 94,624 Cash and cash equivalents perbalance sheet 131,570 (32,572) - 606 99,604Overdrafts (3,851) (1,512) - (1) (5,364) Cash and cash equivalents per cashflow statement 127,719 (34,084) - 605 94,240Bank loans - current (21,896) 1,919 - (23) (20,000)Bank loans - non current (26,136) 6,159 - (23) (20,000) Total net funds 79,687 (26,006) - 559 54,240 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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