29th Sep 2009 07:00
For immediate release 29 September 2009
A.G.BARR p.l.c.
INTERIM RESULTS
A.G.BARR p.l.c. the soft drinks group announces its interim results today for the six months ended 1 August 2009.
Key Points
Total turnover versus the comparable period up 27.1% at £104.7m (2008 - £82.4m).
Like for like turnover stripping out the acquisition of Rubicon increased by 11.5%.
Profit on ordinary activities before tax increased by 19.5% to £13.50m (2008 - £11.26m).
Strong free cash flow in the period of £11.0m.
Net debt of £25.5m significantly better than forecast.
The IRN-BRU brand grew revenue by 6.5%, with particularly strong market share gains in England and Wales.
Rubicon has grown sales on a like for like basis by 22% - contributing £12.8m sales revenue in the period.
Rubicon integration delivered earlier than planned with little disruption and minimal cost.
Interim dividend of 6.25p per share, a like for like increase of 7.8% post share split.
Commenting on the results Chief Executive, Roger White, said:
"We are pleased to report a strong financial performance in a period of continued economic uncertainty. We have benefited from some better year on year weather, although not the previously forecast "barbecue summer". In the period, sales momentum across our portfolio has continued to gain pace. Strong performances from all our core carbonates brands and some real momentum behind the Rubicon brand have delivered excellent revenue growth.
The early integration of the Rubicon business has gone to plan and is now beginning to deliver further opportunities to grow the brand across a wider front. The acquisition has, to date, been financially enhancing to our business and is also improving our overall business balance across product sectors and geographically.
As a consequence of our increased focus on cash across the business we have delivered strong free cash flow and improvements in our net debt position ahead of expectations.
Comparative sales growth in the second half of the year is more challenging than that of the first half, however we believe we are well positioned to meet our expectations for the full year."
For more information, please contact:
A.G.Barr Tel: 01236 852400 Buchanan Communications Tel: 020 7466 5000
Roger White, Chief Executive Tim Thompson / Nicola Cronk
Alex Short, Finance Director
Interim Statement
We are pleased to report strong sales and profit growth in the six months to 1 August 2009.
Trading
Total turnover increased by 27.1% to £104.7m delivered by both strong organic growth in our core business and from Rubicon which was acquired in August 2008. Rubicon contributed £12.8m of turnover. Eliminating the effect of Rubicon, like for like sales increased by 11.5%.
Profit before tax increased by 19.5% to £13.5m. Basic earnings per share were 51.3 pence (2008: 44.2 pence), an increase of 16.2%.
The trading environment during the period remained challenging. Against the backdrop of difficult general economic conditions, the soft drinks market declined by 1% in both volume and value (source Nielsen). The carbonates segment performed better with 3% volume growth and 1% growth in value with consumers appearing to favour high-quality established brands.
It was widely reported that better than average weather was forecast for the U.K. this summer however the impact of weather was less marked than anticipated, with favourable comparisons in late June and early July but a less favourable comparison in May.
Operating margins held up despite continued pressure on input costs. Recent increases in oil and plastic pricing would suggest that cost volatility is likely to be an ongoing feature of our operating environment.
The integration benefits from the Rubicon acquisition are being achieved ahead of schedule, with minimal cost and as forecast the acquisition is earnings enhancing. The combination of the positive integration performance and strong sales growth in the period has meant that overall Rubicon has delivered ahead of our expectations. This is testament to the cooperation between the teams across the business.
Our core business remains the main driver of our performance. Our growth in the carbonates sector substantially outperformed the market. IRN-BRU grew revenue by 6.5% in the period with growth being particularly strong in England and Wales reflecting further increases in brand distribution.
Overall our regional portfolio continued to show strong growth in both carbonates and stills. The water market however remains competitive and Strathmore sales were down 5.9% reflecting the decline in the out of home channel.
Despite the difficult economic climate we have continued to invest in our business and brands - increasing spend on marketing activity across our core brands and investing in increased instore execution and sales resources. Operationally our performance has continued to improve reflecting the significant investments in prior years.
Balance Sheet
During the period the business has increased its focus on cash management and has generated a free cash flow of £11m and increased EBITDA by 29.8% to £18.2m.
The Group net debt position as at 1 August 2009 of £25.5m was substantially better than previously forecast. However this position is flattered to an extent by payables which fell due in early August.
As previously announced, the 2 for 1 share split, which is aimed at improving liquidity and marketability of the company's shares became effective on 21 September.
The only note of substance to the strong Statement of Financial Position (formerly the Balance Sheet) is the change in the net pension deficit which has increased to £8.9m reflecting the increase in pension liabilities driven by lower gilt yields but partially offset by improved asset values in the period. A formal actuarial valuation was carried out as at April 2008 and concluded that the pension deficit recovery plan was performing as expected. The pension trustees and the company have agreed that no change to the deficit recovery plan is required at this time.
Dividend
Given the increase in profits and the continued satisfactory financial position of the company the board has declared an interim dividend of 6.25 pence per share, payable on 23 October 2009. This is an increase of 7.8% on a like for like basis on the interim dividend paid last year.
Current Trading and Outlook
Despite mixed weather in August and September in contrast to the forecast "barbecue summer" total turnover has continued to run ahead of last year. In contrast the overall soft drinks market has performed less well in August and overall competition in the sector is forecast to remain fierce.
In the first half we moved decisively to integrate the Rubicon business ahead of plan to help offset cost pressures due to weak sterling and the business has responded extremely well with strong sales momentum.
We anticipate continued volatility in our material costs and expect strong competition in our market place. Given our platform for sustainable, profitable growth and our investment in the development of the business, we are confident that we will meet our expectations for the full year.
R G Hanna R A White
CHAIRMAN CHIEF EXECUTIVE
29 September 2009
|
Consolidated Condensed Income statement |
|||||||
|
6 months ended 1 August 2009 |
6 months ended 26 July 2008 |
Year ended 31 January 2009 |
|||||
|
|
|
£000 |
|
£000 |
|
£000 |
|
|
Revenue |
104,658 |
82,373 |
169,698 |
||||
|
Cost of sales |
|
50,390 |
|
41,807 |
|
84,962 |
|
|
Gross profit |
54,268 |
40,566 |
84,736 |
||||
|
Net operating expenses |
40,048 |
29,920 |
61,552 |
||||
|
Operating profit |
14,220 |
10,646 |
23,184 |
||||
|
Operating profit before exceptional items |
|
14,220 |
|
10,516 |
|
23,054 |
|
|
Exceptional credit |
- |
(130) |
(130) |
||||
|
Operating profit |
|
14,220 |
|
10,646 |
|
23,184 |
|
|
|
|||||||
|
Finance income |
46 |
689 |
1,062 |
||||
|
Finance costs |
|
(804) |
|
(74) |
|
(1,037) |
|
|
Profit before tax |
13,462 |
11,261 |
23,209 |
||||
|
Tax on profit |
|
3,589 |
|
2,775 |
|
6,134 |
|
|
Profit attributable to equity holders |
|
9,873 |
|
8,486 |
|
17,075 |
|
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic earnings per share |
51.31 |
p |
44.16 |
p |
89.12 |
p |
|
|
Diluted earnings per share |
|
51.02 |
p |
43.52 |
p |
88.16 |
p |
|
Dividends |
|
|
|
|
|
|
|
|
Dividend per share paid |
30.40 |
p |
28.00 |
p |
39.60 |
p |
|
|
Dividend paid (£000) |
5,837 |
5,373 |
7,604 |
||||
|
Dividend per share proposed |
6.25 |
p |
11.60 |
p |
30.40 |
p |
|
|
Dividend proposed (£000) |
|
2,433 |
|
2,258 |
|
5,916 |
|
|
Consolidated Condensed Statement of Comprehensive Income |
||||||
|
6 months ended 1 August 2009 |
6 months ended 26 July 2008 |
Year ended 31 January 2009 |
||||
|
Profit after tax for the period |
9,873 |
8,486 |
17,075 |
|||
|
Other comprehensive income |
||||||
|
Actuarial loss recognised on defined benefit pension plans |
(5,009) |
- |
(62) |
|||
|
Fair value gains on cash flow hedges |
- |
- |
102 |
|||
|
Effective portion of changes in fair value of cash flow hedges |
280 |
- |
(1,476) |
|||
|
Deferred tax movements on items taken directly to equity |
1,493 |
(87) |
(63) |
|||
|
Current tax movements on items taken directly to equity |
|
- |
|
- |
|
193 |
|
Other comprehensive income for the period, net of tax |
(3,236) |
(87) |
(1,306) |
|||
|
Total comprehensive income attributable to equity holders of the parent |
|
6,637 |
|
8,399 |
|
15,769 |
|
Consolidated Condensed Statement of Financial Position |
||||||
|
As at 1 August 2009 |
Restated As at 26 July 2008 |
Restated As at 31 January 2009 |
||||
|
|
|
£000 |
|
£000 |
|
£000 |
|
Non-current assets |
||||||
|
Intangible assets |
76,612 |
10,687 |
76,807 |
|||
|
Property, plant and equipment |
56,265 |
53,869 |
58,861 |
|||
|
Financial instruments |
98 |
- |
33 |
|||
|
|
|
132,975 |
|
64,556 |
135,701 |
|
|
Current assets |
||||||
|
Inventories |
15,178 |
11,687 |
14,528 |
|||
|
Trade and other receivables |
39,505 |
35,093 |
27,139 |
|||
|
Cash and cash equivalents |
10,469 |
21,290 |
6,680 |
|||
|
Assets classified as held for sale |
2,864 |
2,864 |
2,864 |
|||
|
|
|
68,016 |
|
70,934 |
|
51,211 |
|
Total assets |
|
200,991 |
|
135,490 |
|
186,912 |
|
Current liabilities |
||||||
|
Borrowings |
10,000 |
- |
5,000 |
|||
|
Trade and other payables |
41,895 |
35,344 |
30,978 |
|||
|
Provisions |
75 |
80 |
80 |
|||
|
Current tax |
4,098 |
2,734 |
2,857 |
|||
|
|
|
56,068 |
|
38,158 |
38,915 |
|
|
Non-current liabilities |
||||||
|
Borrowings |
25,702 |
- |
32,665 |
|||
|
Deferred income |
110 |
72 |
144 |
|||
|
Financial instruments |
1,197 |
- |
1,477 |
|||
|
Retirement benefit obligations |
8,900 |
6,595 |
4,989 |
|||
|
Deferred tax liabilities |
14,808 |
2,634 |
16,057 |
|||
|
|
|
50,717 |
|
9,301 |
55,332 |
|
|
Capital and reserves attributable to equity holders |
||||||
|
Called up share capital |
4,865 |
4,865 |
4,865 |
|||
|
Share premium account |
905 |
905 |
905 |
|||
|
Share options reserve |
838 |
582 |
716 |
|||
|
Cash flow hedge reserve |
(1,094) |
- |
(1,374) |
|||
|
Retained earnings |
88,692 |
81,679 |
87,553 |
|||
|
|
|
94,206 |
|
88,031 |
92,665 |
|
|
Total equity and liabilities |
|
200,991 |
|
135,490 |
186,912 |
|
|
Consolidated Condensed Cash Flow Statement |
|||||||||||
|
6 months ended 1 August 2009 |
6 months ended 26 July 2008 |
Year ended 31 January 2009 |
|||||||||
|
|
|
£000 |
|
£000 |
|
£000 |
|||||
|
Operating activities |
|||||||||||
|
Profit before tax |
13,462 |
11,261 |
23,209 |
||||||||
|
Adjustments for: |
|||||||||||
|
Interest receivable |
(46) |
(689) |
(1,062) |
||||||||
|
Interest payable |
804 |
74 |
1,037 |
||||||||
|
Depreciation of property, plant and equipment |
3,781 |
3,387 |
7,018 |
||||||||
|
Fair value adjustment to financial instruments |
(65) |
- |
82 |
||||||||
|
Amortisation of intangible assets |
195 |
114 |
340 |
||||||||
|
Impairment of intangible assets |
- |
- |
284 |
||||||||
|
Share-based payment costs |
243 |
175 |
341 |
||||||||
|
Loss / (Gain) on sale of property, plant and equipment |
3 |
(15) |
(13) |
||||||||
|
Government grants written back |
|
(34) |
|
- |
|
(28) |
|||||
|
Operating cash flows before movements in working capital |
18,343 |
14,307 |
31,208 |
||||||||
|
(Increase) / decrease in inventories |
(815) |
721 |
1,038 |
||||||||
|
(Increase) / decrease in receivables |
(12,582) |
(9,044) |
1,976 |
||||||||
|
Increase / (decrease) in payables |
11,146 |
7,406 |
(468) |
||||||||
|
Net (decrease) in retirement benefit obligation |
|
(1,098) |
|
(1,920) |
|
(2,996) |
|||||
|
Cash generated by operations |
14,994 |
11,470 |
30,758 |
||||||||
|
Tax on profit paid |
|
(2,104) |
|
669 |
|
(2,142) |
|||||
|
Net cash from operating activities |
12,890 |
12,139 |
28,616 |
||||||||
|
Investing activities |
|||||||||||
|
Refund of payment for / (acquisition) of subsidiary |
216 |
(20) |
(58,694) |
||||||||
|
Acquisition of intangible assets |
- |
(140) |
(140) |
||||||||
|
Purchase of property, plant and equipment |
(1,381) |
(3,995) |
(10,639) |
||||||||
|
Proceeds on sale of property, plant and equipment |
94 |
113 |
161 |
||||||||
|
Interest received |
|
43 |
|
689 |
|
1,041 |
|||||
|
Net cash used in investing activities |
(1,028) |
(3,353) |
(68,271) |
||||||||
|
Financing activities |
|||||||||||
|
New loans received |
5,000 |
- |
54,500 |
||||||||
|
Loans repaid |
(7,000) |
- |
(16,500) |
||||||||
|
Bank arrangement fees paid |
- |
- |
(366) |
||||||||
|
Purchase of financial instrument |
- |
- |
(114) |
||||||||
|
Purchase of company shares by employee benefit trusts |
(228) |
(767) |
(1,482) |
||||||||
|
Proceeds from disposal of company shares by employee benefit trusts |
726 |
819 |
862 |
||||||||
|
Dividends paid |
(5,837) |
(5,373) |
(7,604) |
||||||||
|
Interest paid |
|
(734) |
|
(74) |
|
(860) |
|||||
|
Net cash (used in) / generated by financing activities |
(8,073) |
(5,395) |
28,436 |
||||||||
|
Net increase/(decrease) in cash and cash equivalents |
|
3,789 |
|
3,391 |
|
(11,219) |
|||||
|
Cash and cash equivalents at beginning of period |
6,680 |
17,899 |
17,899 |
||||||||
|
Cash and cash equivalents at end of period |
|
10,469 |
|
21,290 |
|
6,680 |
|||||
|
Consolidated Condensed Statement of Changes in Equity |
|||||||
|
Share capital |
Share premium account |
Share options reserve |
Cash flow hedge reserve |
Retained earnings |
Total |
||
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
At 31 January 2009 |
4,865 |
905 |
716 |
(1,374) |
87,553 |
92,665 |
|
|
Cash flow hedge - recognition of fair value |
- |
- |
- |
280 |
- |
280 |
|
|
Actuarial loss on defined benefit pension plans |
- |
- |
- |
- |
(5,009) |
(5,009) |
|
|
Deferred tax on items taken directly to equity |
- |
- |
90 |
- |
1,403 |
1,493 |
|
|
Profit for the period |
|
- |
- |
- |
- |
9,873 |
9,873 |
|
Total comprehensive income for the period |
- |
- |
90 |
280 |
6,267 |
6,637 |
|
|
Purchase of company shares by employee benefit trusts |
- |
- |
- |
- |
(228) |
(228) |
|
|
Proceeds from disposal of company shares by employee benefit trusts |
- |
- |
- |
- |
726 |
726 |
|
|
Recognition of share-based payment costs |
- |
- |
243 |
- |
- |
243 |
|
|
Transfer of reserve on share award |
- |
- |
(211) |
- |
211 |
- |
|
|
Dividends paid |
|
- |
- |
- |
- |
(5,837) |
(5,837) |
|
At 1 August 2009 |
|
4,865 |
905 |
838 |
(1,094) |
88,692 |
94,206 |
|
At 26 January 2008 |
4,865 |
905 |
964 |
- |
78,044 |
84,778 |
|
|
Deferred tax on items taken directly to equity |
- |
- |
(87) |
- |
- |
(87) |
|
|
Profit for the period |
|
- |
- |
- |
- |
8,486 |
8,486 |
|
Total comprehensive income for the period |
- |
- |
(87) |
- |
8,486 |
8,399 |
|
|
Purchase of company shares by employee benefit trusts |
- |
- |
- |
- |
(767) |
(767) |
|
|
Proceeds from disposal of company shares by employee benefit trusts |
- |
- |
- |
- |
819 |
819 |
|
|
Recognition of share-based payment costs |
- |
- |
175 |
- |
- |
175 |
|
|
Transfer of reserve on share award |
- |
- |
(470) |
- |
470 |
- |
|
|
Dividends paid |
|
- |
- |
- |
- |
(5,373) |
(5,373) |
|
At 26 July 2008 |
|
4,865 |
905 |
582 |
- |
81,679 |
88,031 |
|
At 26 January 2008 |
4,865 |
905 |
964 |
- |
78,044 |
84,778 |
|
|
Cash flow hedge - recognition of fair value |
- |
- |
- |
(1,476) |
- |
(1,476) |
|
|
Movement in cash flow hedge |
- |
- |
- |
102 |
- |
102 |
|
|
Actuarial loss on defined benefit pension plans |
- |
- |
- |
- |
(62) |
(62) |
|
|
Current tax on items taken directly to equity |
- |
- |
- |
- |
193 |
193 |
|
|
Deferred tax on items taken directly to equity |
- |
- |
(80) |
- |
17 |
(63) |
|
|
Profit for the period |
|
- |
- |
- |
- |
17,075 |
17,075 |
|
Total comprehensive income for the period |
- |
- |
(80) |
(1,374) |
17,223 |
15,769 |
|
|
Purchase of company shares by employee benefit trusts |
- |
- |
- |
- |
(1,481) |
(1,481) |
|
|
Proceeds from disposal of company shares by employee benefit trusts |
- |
- |
- |
- |
862 |
862 |
|
|
Recognition of share-based payment costs |
- |
- |
341 |
- |
- |
341 |
|
|
Transfer of reserve on share award |
- |
- |
(509) |
- |
509 |
- |
|
|
Dividends paid |
|
- |
- |
- |
- |
(7,604) |
(7,604) |
|
At 31 January 2009 |
|
4,865 |
905 |
716 |
(1,374) |
87,553 |
92,665 |
Restatement
Consistent with the presentation in the financial statements for the year ended 31 January 2009, the deferred tax assets and liabilities as disclosed in the 26 July 2008 comparatives have both been reduced by £3.3m as they related to the same items of property that had historically been eligible for Industrial Buildings Allowance relief. Whilst the adjustment has no effect on the profit for the year or net assets, non-current assets and liabilities have reduced from £67.9m and £12.6m to £64.6m and £9.3m respectively.
The retained earnings figure as at 26 July 2008 has been restated to include the value of the own shares held for use by employee benefit trusts. Previously the purchased value of the shares held by the employee benefit trusts was disclosed as a separate line on the balance sheet. The inclusion of the balance with retained earnings is to bring the reporting in to line with common practice. The restatement has reduced the retained earnings figures and previously presented own shares held figure as follows:
|
Earnings per share |
|
|
|
As at 26 July 2008 £000 |
|
As at 31 January 2009 £000 |
|
Reduction in own shares held |
2,629 |
3,258 |
||||
|
Reduction in retained earnings |
|
2,629 |
3,258 |
Related Shares:
Barr (A.G.)