Interim Results

11th Sep 2008 07:00



Fyffes reports first half results

	6 months to 30 June 2008 €	6 months to 30 June 2007 €	Increase %
Group revenue (excl share of joint ventures)	302.0m	286.2m	+5.6
Adjusted earnings before interest and tax *	15.5m	11.7m	+32.7
Adjusted profit before tax *	15.7m	12.1m	+30.2
Profit before tax	35.1m	15.7m	+123.9
Adjusted fully diluted earnings per share **	3.55 cent	2.90 cent	+22.4
Fully diluted earnings per share	9.56 cent	4.08 cent	+134.3
Interim dividend	0.50 cent	0.50 cent	-

* excluding the Group's share of Blackrock's results, exceptional items, amortisation of intangibles and the Group's share of tax of its joint ventures

** excluding the Group's share of Blackrock's results, exceptional items and amortisation of intangibles

Commenting on the results, David McCann, Chairman, said:

"Over the last two years, our industry has experienced unprecedented increases in the costs of fruit, shipping and fuel. During the first half of 2008, Fyffes achieved increases in selling prices which, combined with more favourable exchange rates, enabled us to offset the impact of substantially higher costs. However, as announced on 29 August, the Group's expectations for the remainder of the year have changed, as the increases in selling prices needed to offset further increases in costs, and less favourable exchange rates, are not currently being achieved. Fyffes will continue to actively seek increases in selling prices in all markets in this regard."

11 September 2008

For further information, please contact:

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 2008 amounted to €302m, compared to €286.2m in the same period last year, an increase of 5.6%. This reflects the impact of higher average selling prices in the period, with volumes broadly similar to last year. 

Operating profit

Adjusted EBIT amounted to €15.5m in the seasonally stronger first half, compared to €11.7m in the same period last year. Adjusted EBIT is operating profit, excluding the Group's 40% share of Blackrock's result and before exceptional items, amortisation, interest and tax, including the equivalent share of joint ventures operating profit - the calculation of which is set out in note 2 of the accompanying interim financial information. Statutory operating profit, before these adjustments, amounted to €34.6m in the first six months of 2008, compared to €14.6m last year, reflecting net exceptional gains in the period of €24.7m.

The key drivers of Fyffes' short term performance are average selling prices, exchange rates and the costs of fruit, shipping and fuel, all of which can result in volatility in year on year profitability. During the first half of this year, the industry experienced a continuation of the unprecedented level of cost inflation which emerged during 2007. Bunker fuel costs, in particular, were 76% higher than the same period last year. Fruit procurement costs and ship charter rates were also significantly higher year on year. The impact of these higher costs was partly offset during the period by more favourable average exchange rates, due to the weakness of the US Dollar. In addition, Fyffes succeeded in achieving increases in average selling prices to further offset its substantially higher cost base. As a result, the Group's banana activities, including its share of profits from the Geest shipping business, delivered a €2.8m increase in profits for the first half of the year, compared to the same period in 2007.

Costs have increased further in recent weeks, particularly relating to fruit procurement, and the Group's expectations are that input costs will be close to 20% higher year on year in 2008. The recent strengthening of the US Dollar against the Euro and Sterling has further increased the Group's cost base. Consequently, Fyffes must actively pursue further increases in selling prices in all markets to offset the impact of these factors.

Fyffes' winter melon category achieved an improved result in the first half of the year, with losses reduced from €2.8m in same period last year to €0.9m. This included the first time contribution from the Group's US winter melon business. In addition, the level of losses in Nolem, the Brazilian based producer, were significantly reduced as production yields improved. This business is targeting further increases in selling prices for the forthcoming season to offset the continued strength of the local currency against the US Dollar.

Fyffes' pineapple activities delivered a small profit in the first half of 2008, slightly down on the same period last year. Climatic factors caused an over supply of fruit in the market during the period which resulted in lower average selling prices. Fyffes acquired the second 50% of a large pineapple farm in Costa Rica in December 2007 and this operation, which produces about 20% of the volume sold by the Group, has achieved an improved result in the period.

The Group's 40% share of the net loss after tax of Blackrock International Land plc, which is excluded from Fyffes' Adjusted EBIT as noted above, amounted to €3.7m compared to a profit of €3.8m in the same period last year. This reflects the reduction in property values recognised by Blackrock in the period.

 

Successful settlement of litigation against DCC plc and others

On 14 April 2008, the Group announced that it had settled its insider dealing litigation against DCC plc and others, resulting in a net payment to Fyffes of €37.6m. A net exceptional gain of €33m has been recognised in the period in this regard, after provision for all outstanding fees and related costs.

Other exceptional items

An analysis of the exceptional gains and losses during the first half of the year is set out in note 3 of the accompanying financial information. A container shipping business in which Fyffes acquired a minority stake in 2007 has recently ceased trading. As a result, Fyffes has provided against any outstanding loans and receivables due from this company. In addition, Fyffes has had to put in place, at short notice, alternative shipping arrangements for the remainder of this year, incurring incremental once-off shipping costs. The aggregate impact of these provisions and once-off costs amounted to €7.2m. Other exceptional costs recognised in the first half of the year included professional fees of €0.8m in respect of the ongoing EU Competition investigation and €0.3m incurred in relation to potential acquisitions which were terminated during the period.

Financial income

Net interest income in the Group's subsidiary companies in the six months to June 2008 amounted to €0.6m, compared to €1.1m in the same period last year, reflecting lower average net cash balances of €33.6m compared to €57m. The Group's share of the net interest expense in its joint ventures in the first half amounted to €0.4m, down from €0.7m in the same period last year.

Profit before tax

Adjusted profit before tax as set out in note 2 of the attached interim financial information - excluding the Group's share of Blackrock's result, amortisation of intangible assets, net exceptional gains and the Group's share of the tax charge of its joint ventures (which is reflected in profit before tax under IFRS rules) - amounted to €15.7m in the period compared to €12.1m in the first half last year. Profit before tax, excluding these adjustments, amounted to €35.1m compared to €15.7m in the same period last year.

Taxation

The underlying tax charge for the first half of the year has been estimated based on the tax rate that is expected to apply for the full year 2008. The tax charge for the period is analysed in note 4 of the accompanying financial information. Excluding the tax impact of exceptional items and deferred tax credits related to the amortisation of intangible assets, and including the Group's share of tax of its joint ventures, the underlying tax charge for the half year was €2m (2007 half year: €1.3m), equivalent to a rate of 13% (2007 half year: 11%), which is used for the purposes of calculating adjusted earnings per share. The equivalent underlying tax rate for the full year in 2007 was 10%.

Minority interest

The minority interest share of profit after tax for the first half amounted to €1.1m, compared to €0.4m in the same period last year.

Earnings per share

Adjusted fully diluted earnings per share, excluding the Group's share of Blackrock's result, the impact of exceptional items and the amortisation of intangible assets (as set out in note 5 of the accompanying financial information), amounted to €3.55 cent in the first half of 2008 compared to €2.90 cent in the same period last year, an increase of 22.4%. Fully diluted earnings per share, before adjustments, amounted to €9.56 cent in the period, compared to €4.08 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 be paid on 20 October 2008 to shareholders on the register at 19 September 2008. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 30 June 2008.

Balance sheet

Net cash

Net cash at 30 June 2008 amounted to €53m compared to €48.8m at the beginning of the year. The significant cash inflows in the first six months include the €34.3m proceeds on settlement of the litigation against DCC plc and others, net of expenses, and operating cash flows of €9.2m, excluding share of joint ventures profits and after the seasonal increase in working capital in the period. The most significant outflows in the period were the further investment in joint ventures of €23.6m, including the acquisition of 60% of a number of independent companies involved in the US winter melon category. In addition, the Group spent €5.4m on the repurchase of 8 million of its own shares in the period. The final dividend for 2007 of €3.5m was paid in March 2008. Capital expenditure amounted to €4m during the first half of the year. As indicated on 29 August, the Group's target year end net cash balance is now in the range €34m to €37m. This reflects anticipated second half operating losses, exceptional costs resulting from the change in certain of the Group's shipping arrangements as mentioned earlier, further significant capital expenditure on the expansion of the distribution centre in Coventry in the UK and the interim dividend payment.

Investment in Blackrock International Land plc ('Blackrock')

In accordance with International Financial Reporting Standards, Fyffes' 40% investment in Blackrock is treated as an investment in an associated company and accounted for under equity accounting rules. Under these rules, Fyffes' carries this investment at €87.4m, representing its share of Blackrock's reported net assets at 30 June 2008, which reflect up-to-date independent professional property valuations. The current market value of this investment is €31.5m, based on Blackrock's share price of €0.135. The resulting €55.9m discount to net asset value has not been recognised in Fyffes' balance sheet at 30 June 2008.

Pension obligations

The Group's defined benefit pension schemes had a net deficit of €3.1m at 30 June 2008, compared to a €1.6m net surplus at the beginning of the year. This change reflects, in particular, a €5.7m actuarial loss during the period.  This actuarial loss arose primarily as a result of the reduction in the value of scheme assets, reflecting the impact of the decline in global equity markets, partly offset by a reduction in liabilities due to the increase in long term international bond yields.

  Shareholders' funds

Shareholders' funds amounted to €236.6m at 30 June 2008, compared to €224.5m at the beginning of the year. This increase reflects the retained profit for the six months to 30 June 2008, the €5.7m actuarial loss noted above, the €5.4m cost of the repurchase of Fyffes plc shares, the payment of the 2007 final dividend of €3.5m and the €5.9m impact of the retranslation of non-euro denominated net assets during the period.

EU competition investigation

In 2007, the EU Commission issued a Statement of Objections to a number of companies alleging infringements of Article 81 of the Treaty of Rome and Article 53 of the European Economic Area (EEA) Agreement relating 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 to effectively exercise their right to a fair hearing. Fyffes has responded to the Statement of Objections and availed of its right to an oral hearing before the Commission in February 2008. It is expected that the Commission will reach a conclusion on this matter before the end of 2008. At this time, Fyffes is unable to determine the final outcome of this process, including whether or not a fine will be imposed or the level of any fine. Any decision of the EU Commission can be appealed in the European Courts. Fyffes continues to fully and vigorously defend itself against the allegations contained in the Statement of Objections.

Medium term strategy

Fyffes' medium term strategy remains the doubling of revenue across its key product categories within the five years ending 2011. This will be achieved through a combination of organic growth and by applying the Group's capital resources and borrowing capacity in further acquisitions and alliances. Satisfactory progress has been made in relation to the organic growth targets to date. Fyffes also continues to actively pursue acquisition opportunities to enable its medium term growth targets to be achieved and was pleased to complete the acquisition of the Sol melon business in the US at the beginning of the year.

Current trading

As reported on 29 August 2008, the outlook for the second half of the year has deteriorated. This results from further increases in the cost of fruit, combined with a significant strengthening of the US Dollar against the Euro and Sterling, while bunker fuel costs remain significantly higher than this time last year. There has been some improvement in year on year average selling prices but this has been insufficient to offset the impact of substantially higher costs. Fyffes will continue to actively seek increases in selling prices in all markets to offset the unprecedented level of cost inflation being experienced by the industry. Reflecting this, the Group's target Adjusted EBIT for the full year 2008 is now in the range €12 to €15m. Fyffes believes it can achieve an improved performance in 2009, assuming higher industry costs are recovered through increases in selling prices in all markets.

David McCann, Chairman

on behalf of the Board

11 September 2008

Copies of this announcement are available from the Company's registered office, 29 North Anne Street, Dublin 7 and on our website at www.fyffes.com.

  

 

 

Fyffes plc

Summary Group income statement

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Group revenue	302,045	286,161	553,365
Group operating profit before exceptional items	12,826	12,361	15,471
Intangible amortisation	(609)	(732)	(1,366)
Share of profit/(loss) of joint ventures (after tax)	1,399	(1,544)	689
Share of (loss)/profit of associates after tax (Blackrock)	(3,742)	3,773	4,506
Exceptional items	24,688	754	(8,191)
Operating profit	34,562	14,612	11,109
Net financial income - Group	571	1,082	2,127
Profit before tax	35,133	15,694	13,236
Income tax (expense)	(54)	(763)	(3,109)
Profit for the period	35,079	14,931	10,127
Attributable as follows:
Equity shareholders	33,969	14,564	9,326
Minority interest	1,110	367	801
	35,079	14,931	10,127
Earnings per share
Basic	9.63	4.12	2.64
Fully diluted	9.56	4.08	2.63
Adjusted fully diluted	3.55	2.90	4.42

  Fyffes plc

Summary statement of recognised income and expense

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Movement on translation of net equity investments	(5,904)	761	(5,137)
Share of foreign currency movement recognised in associated undertaking	(968)	-	(756)
Effective portion of cash flow hedges	(1,484)	(120)	(904)
Deferred tax on effective portion of cash flow hedges	269	16	114
Actuarial (loss)/gain recognised on defined benefit pension schemes	(5,739)	4,425	5,541
Deferred tax movements related to pension schemes	1,048	(2,087)	(2,454)
Share of actuarial loss/(gain) on joint ventures pension schemes	(505)	1,567	1,014
Deferred tax movement related to joint venture pension schemes	142	(439)	(284)
Net (expense)/income recognised directly in equity	(13,141)	4,123	(2,866)
Profit for year	35,079	14,931	10,127
Total recognised income and expense	21,938	19,054	7,261
Attributable as follows:
Equity shareholders	20,828	18,687	6,512
Minority interest	1,110	367	749
	21,938	19,054	7,261

Summary statement of movement in shareholders' equity

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Total shareholders' equity at beginning of period	224,472	227,022	227,022
Increase in share capital/premium	168	159	268
Total recognised income and expense	20,828	18,687	6,512
Acquisition of own shares	(5,447)	-	(1,661)
Movements in share option expense reserve	125	81	107
Dividends paid to equity shareholders	(3,533)	(6,011)	(7,776)
Total shareholders' equity at end of period	236,613	239,938	224,472

  Fyffes plc

Summary Group balance sheet

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Non current assets
Property, plant and equipment	18,429	9,160	16,861
Goodwill and intangible assets	5,571	4,636	5,675
Other receivables	546	-	635
Investments in joint ventures	76,168	63,804	54,394
Investments in associates (Blackrock)	87,408	89,409	92,118
Equity investments	17	4,183	1,766
Employee benefits	1,507	1,022	3,030
Deferred tax assets	3,951	4,802	2,792
Total non current assets	193,597	177,016	177,271
Current assets
Inventory (including biological assets)	18,541	15,820	12,897
Trade and other receivables	58,819	63,570	55,788
Derivative financial instruments	1,106	-	1,582
Corporation tax recoverable	2,906	2,275	5,001
Cash and cash equivalents	99,503	99,604	96,208
Total current assets	180,875	181,269	171,476
Total assets	374,472	358,285	348,747
Equity
Called up share capital	21,860	21,756	21,844
Share premium	98,998	98,825	98,846
Revaluation reserve	23,463	24,137	23,463
Other reserves	43,389	63,999	55,830
Retained earnings	48,903	31,221	24,489
Total shareholders' equity	236,613	239,938	224,472
Minority interest	2,335	1,469	1,226
Total equity and minority	238,948	241,407	225,698
Non current liabilities
Interest bearing loans and borrowings	42,413	20,000	40,000
Other payables	7	-	8
Provisions	2,884	3,809	3,294
Employee benefits	4,591	940	1,392
Corporation tax payable	15,731	15,780	16,345
Deferred tax liabilities	3,168	1,935	3,266
Total non current liabilities	68,794	42,464	64,305
Current liabilities
Interest bearing loans and borrowings	4,051	25,364	7,427
Trade and other payables	55,719	46,592	45,870
Derivative financial instruments	6,374	2,332	4,699
Provisions	586	126	748
Total current liabilities	66,730	74,414	58,744
Total liabilities	135,524	116,878	123,049
Total liabilities and equity	374,472	358,285	348,747

  Fyffes plc

Summary Group cash flow statement

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Cash flows from operating activities	42,159	(8,568)	(1,027)
Cash flows from investing activities	(28,733)	(11,586)	(17,541)
Cash flows from financing activities	(8,109)	(13,930)	(11,080)
Net movement in cash and cash equivalents	5,317	(34,084)	(29,648)
Cash and cash equivalents, including bank overdrafts at start of period	94,902	127,719	127,719
Subsidiary becoming a joint venture	-	-	(1,738)
Effect of foreign exchange movements on cash and cash equivalents	(809)	605	(1,431)
Cash and cash equivalents, including bank overdrafts at end of period	99,410	94,240	94,902
Reconciliation of total net funds
Increase/(decrease) in cash and cash equivalents	5,317	(34,084)	(29,648)
(Increase)/decrease in debt	(703)	8,078	1,911
Subsidiary becoming a joint venture	-	-	(1,738)
Foreign exchange movement	(356)	559	(1,431)
Movement in net funds	4,258	(25,447)	(30,906)
Net funds at start of period	48,781	79,687	79,687
Net funds at end of period	53,039	54,240	48,781

  Fyffes plc

Notes supporting 2008 interim financial statements

1. Basis of preparation

The interim financial information has been prepared in accordance with the accounting policies set out in the Group's consolidated financial statements for the year ended 31 December 2007 which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU Commission.

2. Adjusted profit before tax and EBIT

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Profit before tax per Income Statement	35,133	15,694	13,236
Adjustments
Group share of tax charge of joint ventures	903	158	86
Share of loss/(profit) after tax of Blackrock	3,742	(3,773)	(4,506)
Exceptional items (note 3 below)	(24,688)	(754)	8,191
Amortisation of intangible assets	609	732	1,366
Adjusted profit before tax	15,699	12,057	18,373
Exclude:
Financial income - Group	(571)	(1,082)	(2,127)
Financial expense - share of joint ventures	384	715	1,187
Adjusted EBIT	15,512	11,690	17,433

Fyffes believes that adjusted profit before tax, adjusted EBIT and adjusted earnings per share (note 5 below) are the appropriate measures of the underlying performance of the Group, excluding exceptional items and amortisation charges.

3. Exceptional items

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Settlement of DCC plc litigation	32,976	-	-
Write-back of provision for defendants' costs in DCC litigation	-	7,500	7,500
Impairment of investment in melon joint venture	-	(6,100)	(6,100)
Professional fees and similar costs arising in relation to ongoing EU investigation	(780)	(500)	(2,650)
Reversal of impairment of property, plant and equipment	-	554	554
Impairment of investment in shipping business and related costs	(7,188)	-	(4,188)
Costs related to the demerger of Total Produce plc	-	(700)	(875)
Merchant Navy Officers Pension Fund (MNOPF)	-	-	616
Professional fees incurred on terminated potential acquisitions	(320)	-	-
Loss on disposal of pineapple joint venture	-	-	(3,048)
Total exceptional items	24,688	754	(8,191)

As announced on 14 April 2008, Fyffes settled its insider dealing litigation against DCC plc and others resulting in a net payment to Fyffes of €37.6m. After current and prior year costs not previously expensed, the net gain recognised in the period amounted to €33m.

In 2007, Fyffes acquired a minority stake in a containered shipping business. This business has had trading difficulties in 2008 and was recently put into the protection of the Courts. As a result, Fyffes has provided against any outstanding loans and receivables due. In addition, Fyffes has had to put alternative shipping arrangements in place at short notice, incurring incremental once-off shipping costs. The aggregate impact of these once-off costs and provisions amounted to €7.2m.

Fyffes incurred professional fees of €0.8m during the first half of the year in connection with the ongoing EU Competition investigation. In addition, the Group incurred professional fees of €0.3m in the year to date on a potential acquisition which was terminated at an advanced stage.

Net tax credits of €0.8m have been recognised in the period in relation to these exceptional items.

4. Taxation

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Tax charge per Income Statement	54	763	3,109
Group share of tax charge of its joint ventures netted in profit before tax	903	158	86
Total tax charge	957	921	3,195
Add back:
- Deferred tax credit relating to amortisation of intangibles	213	278	475
- Once off tax charges	-	-	(1,974)
- Tax effect of exceptional items	792	125	159
Tax charge on underlying activities	1,962	1,324	1,855

Including the Group's share of the tax charge of its joint ventures and associates of €0.9m, which is netted in operating profit in accordance with IFRS, the total tax charge for the period amounted to €1m (2007 first half: €0.9m).

Adjusting for the tax effect of exceptional items and deferred tax credits related to the amortisation of intangible assets, the underlying tax charge for the period was €2m (2007 first half: €1.3m), equivalent to a rate of 12.5% (2007 first half: 11%) when applied to the Group's adjusted profit before tax. The Group's underlying tax rate for the first half of the year is based on the estimated tax rate that is expected to apply for the full year.

The equivalent underlying charge for the full year in 2007 was a charge of €1.9m, equal to a rate of 10.1%, excluding once-off tax charges.

 5. Earnings per share

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Profit attributable to equity shareholders	33,969	14,564	9,326
	No of shares '000	No of shares '000	No of shares '000
Weighted average number of ordinary shares outstanding	364,242	362,140	362,837
Deduct: weighted average own shares held	(11,439)	(9,022)	(9,630)
Weighted average number of shares for calculation of basic earnings per share	352,803	353,118	353,207
Weighted average number of options with dilutive effect	2,460	3,766	2,065
Weighted average number of shares for calculation of fully diluted earnings per share	355,263	356,884	355,272
Basic earnings per share	9.63	4.12	2.64
Fully diluted earnings per share	9.56	4.08	2.63
	€'000	€'000	€'000
Calculation of adjusted earnings per share
Profit attributable to equity shareholders	33,969	14,564	9,326
Adjustments:
Exceptional items	(24,688)	(754)	8,191
Share of Blackrock loss/(profit) after tax	3,742	(3,773)	(4,506)
Amortisation of intangible assets	609	732	1,366
Tax effect of exceptional items	(792)	(125)	(159)
Deferred tax credit relating to amortisation of intangibles	(213)	(278)	(475)
Once-off tax charges	-	-	1,974
Earnings for calculation of adjusted fully diluted earnings per share	12,627	10,366	15,717
Adjusted fully diluted earnings per share	3.55	2.90	4.42

Adjusted fully diluted earnings per share excludes the Group's share of Blackrock's result, the impact of exceptional items after tax, once off tax credits and amortisation charges on intangible assets and related deferred tax credits.

 6. Employee post employment benefits

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Surplus/(deficit) at beginning of period	1,638	(15,090)	(15,090)
Current/past service cost less finance income recognised in income statement	(251)	(760)	(1,009)
Actuarial gain recognised in statement of recognised income and expense	(5,739)	4,425	5,541
Contributions to schemes	1,355	728	1,469
Section 75 contribution following demerger	-	10,797	10,547
Exchange movement	(87)	(18)	180
(Deficit)/surplus at end of period	(3,084)	82	1,638
Related deferred tax asset/(liability)	406	(63)	(642)
Net (deficit)/surplus	(2,678)	19	996

This table summarises the movements in the net deficit on the Group's various defined benefit pension schemes in Ireland, the UK and Continental Europe. The Group's balance sheet at 30 June 2008 reflects net pension assets of €1.5m in respect of schemes in surplus and net pension liabilities of €4.6m in respect of schemes in deficit, representing the €3.1m net deficit before deferred tax above.

The current/past service cost is charged in the Income Statement, net of finance income on scheme assets. The actuarial gain/(loss) is recognised in the Statement of Recognised Income and Expense, in accordance with the amendment to IAS 19, Actuarial Gains and Losses, Group Plans and Disclosures.

The €5.7m actuarial loss in the period arose primarily as a result of the reduction in the value of scheme assets, reflecting the impact of the decline in global equity markets, partly offset by a reduction in liabilities due to the increase in long term international bond yields.

7. Dividends paid to equity shareholders

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Cash dividends paid on Ordinary €6 cent shares
Final dividend for 2007 of €1.00 cent	3,533	-	-
Interim dividend for 2007 of €0.50 cent	-	-	1,765
Final dividend for 2006 of €1.70 cent	-	6,011	6,011
Total cash dividends paid in the period	3,533	6,011	7,776

The final dividend for 2007 of €1.00 cent per share, approved by the shareholders at the Annual General Meeting on 24 April 2008, gave rise to a distribution of €3.5m in the period.

The directors have proposed an interim dividend for 2008 of €0.50 cent per share (2007: €0.50 cent per share). This dividend, which will be subject to Irish withholding tax rules, will be paid on 20 October 2008 to shareholders on the register at 19 September 2008. In accordance with company law and IFRS, this dividend has not been provided in the balance sheet at 30 June 2008.

At 30 June 2008, the company and subsidiary companies held 19,021,610 Fyffes plc ordinary shares (30 June 2007: 9,021,610 shares and 30 December 2007: 11,021,610 shares). The right to dividends on these shares has been waived and they are excluded from the calculation of earnings per share.

 8. Notes supporting cash flow statement

8.1 Cash generated from operations

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Profit for the period	35,079	14,931	10,127
Income tax expense	54	763	3,109
Tax recovered/(paid)	1,387	(627)	(2,180)
Depreciation of property, plant and equipment	1,344	1,444	2,866
Write back of provision for defendants' costs in DCC plc litigation	-	(7,500)	(7,500)
Impairment of investment in melon joint venture	-	6,100	6,100
Impairment of investment in shipping business and related costs	7,188	-	4,188
Loss on disposal of pineapple joint venture	-	-	3,048
Reversal of impairment of property, plant and equipment	-	(554)	(554)
Amortisation of intangible assets	609	732	1,366
Share of  (profits)/losses of joint ventures (after tax and exceptional items)	(1,399)	1,544	(689)
Share of losses/(profits) of Blackrock	3,742	(3,773)	(4,506)
Receipt of amounts due from Total Produce plc re: demerger	-	15,665	15,665
Section 75 contribution to UK pension scheme arising on demerger	-	(10,797)	(10,547)
Movement in working capital	(4,301)	(24,944)	(18,750)
Other	(1,544)	(1,552)	(2,770)
Cash generated from operations	42,159	(8,568)	(1,027)

8.2 Cash flows from investing activities

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Acquisition of and investment in joint ventures	(23,578)	(6,202)	(6,175)
Impact of change of ownership of joint venture	-	-	(4,582)
Other equity investments	(1,200)	(4,165)	(5,936)
Acquisition of property, plant and equipment	(4,023)	(1,384)	(2,275)
Proceeds on disposal of property, plant and equipment	68	165	297
Loans repaid by joint ventures, net	-	-	1,130
Cash flows from investing activities	(28,733)	(11,586)	(17,541)

8.3 Cash flows from financing activities

	(Unaudited) 6 months to 30 June 2008 €'000	(Unaudited) 6 months to 30 June 2007 €'000	(Audited) Year ended 30 Dec 2007 €'000
Proceeds from issue of shares (including premium)	168	159	268
Net proceeds from/(repayment of) borrowings	703	(8,078)	(1,911)
Purchase of own shares	(5,447)	-	(1,661)
Dividends paid to equity shareholders	(3,533)	(6,011)	(7,776)
Cash flows from financing activities	(8,109)	(13,930)	(11,080)

8.4 Analysis of movement in net funds in the period

	Opening 1 Jan 2008 €’000	Cash flow €’000	Non-cash movement €’000	Translation €’000	Closing 30 June 2008 €’000
Bank balances	6,020	31,699	-	(304)	37,415
Call deposits	90,188	(27,595)	-	(505)	62,088
Cash and cash equivalents per balance sheet	96,208	4,104	-	(809)	99,503
Overdrafts	(1,306)	1,213	-	-	(93)
Cash and cash equivalents per cash flow statement	94,902	5,317	-	(809)	99,410
Bank loans – current	(6,121)	1,882	-	281	(3,958)
Bank loans – non current	(40,000)	(2,585)	-	172	(42,413)
Total net funds	48,781	4,614	-	(356)	53,039

 

 

 

ENDIR DBLFFVKBZBBK

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