7th Feb 2008 07:01
Fyffes PLC07 February 2008 Fyffes plc Preliminary Results 2007 Fyffes delivers strong organic revenue growth Continuing 2007 Operations • 2006 •Group revenue (excl share of joint ventures) 553.4m 407.7m Adjusted profit before tax * 18.4m 21.9m Adjusted earnings before interest and tax * 17.4m 18.4m Statutory profit before tax 13.2m 19.1m Total operating profit 11.1m 14.3m Adjusted fully diluted earnings per share ** 4.42 cent 5.70 cent Fully diluted earnings per share 2.63 cent 6.29 cent Proposed / final dividend 1.00 cent 1.70 cent * excluding the Group's share of profits of Blackrock, exceptional items, amortisation of intangibles and the Group's share of tax of its joint ventures ** excluding the Group's share of profits of Blackrock, exceptional items and amortisation of intangibles Commenting on the results, David McCann, Chairman, said: "Fyffes has delivered strong organic revenue growth and a satisfactory operatingprofit in 2007, despite a challenging environment. The Group remains on courseto double the size of its business by 2011 as targeted in its five yearstrategic plan. The significant cost inflation experienced by the industry lastyear is expected to increase further in 2008. Notwithstanding this, Fyffes istargeting a mid-single digit percentage increase in adjusted EBIT for 2008,excluding the anticipated positive impact of its recent entry into the US wintermelon market." 7 February 2008 For further information, please view the 2007 results slide presentation atwww.fyffes.com or contact Brian Bell or Andrew McLindon, Wilson Hartnell PR, Tel: +353-1-6690030. Financial results and operating review Revenue Group revenue in 2007 amounted to €553.4m. Group revenue in 2006 per the incomestatement was €407.7m, which excluded sales of €78.4m to companies in TotalProduce plc, prior to its demerger from Fyffes on 30 December 2006, which wereeliminated as inter-segment revenue. Adjusting for this, the like-for-likeincrease in Group revenue in 2007 is 13.8%. This reflects strong top-lineorganic growth in the year particularly in the Group's European banana volumes. Operating profit Fyffes now reports separately the profits from its tropical produce operationsand its 40% share of the profits from Blackrock International Land plc, which itdemerged in 2006. The Group's key performance measure for its tropical producebusiness is Adjusted EBIT. This is operating profit excluding its share ofBlackrock's results, exceptional items and amortisation of intangible assets,and before interest and tax (including the equivalent share of its jointventures). The calculation of Adjusted EBIT is set out in note 2 of theaccompanying financial information. Adjusted EBIT amounted to €17.4m in 2007, compared to €18.4m in the previousyear. This reflected the challenging environment faced by the industry duringthe year. The key drivers of performance for the Group's tropical produceoperations are average selling prices, exchange rates and the costs of fruit,shipping and fuel, all of which can result in volatility in year on yearprofitability. The impact of significant inflation in the costs of fruit,shipping and particularly fuel during the year was mitigated by more favourableaverage exchange rates and higher volumes. The Group's operating losses in its European winter melon business amounted to€2.8m in 2007, mainly due to the under performance of Nolem, its Brazilian jointventure. As previously signalled, the factors contributing to the losses inNolem were the appreciation of the local currency and lower than anticipatedproduction yields. Progress has been made on a number of fronts and managementis targeting an improved result in the current 2007/08 season. Fyffes' pineapple business delivered a modest profit in 2007, slightly ahead oflast year. Volumes were up 7%, year-on-year, to 7.9m cases. In December 2007,Fyffes changed the ownership structure of its pineapple farming interests which,it is anticipated, will contribute to improved results from pineapple activitiesin the future. Fyffes' 40% share of the net profit after tax of Blackrock International Landplc which, as noted above, is excluded from Adjusted EBIT, amounted to €4.5m in2007, compared to €5.8m in the previous year. Total operating profit, including the Group's share of Blackrock's result andafter exceptional items, amortisation and the Group's share of joint venturesinterest and tax amounted to €11.1m for the year, compared to €14.3m in 2006. Successful Supreme Court appeal Following the successful Supreme Court appeal in its insider dealing caseagainst DCC plc, Jim Flavin and others, Fyffes has now obtained an order toallow it recover all of its legal costs, including the costs of the appeal. Inaddition, under the relevant provisions of the Irish Companies Act 1990, Fyffesis also entitled to recover further amounts from all of the defendants arisingfrom the insider dealing transactions. The quantum of any such recovery isexpected to be determined by the High Court in 2008, with the hearing scheduledfor 17 June 2008. Fyffes has not included any contingent gain in its 2007financial statements in relation to the amounts to be recovered, including itscosts. A provision of €7.5m in respect of the defendant's costs, which Fyffesexpensed in 2005 following the original High Court decision, was written backduring the year, following the successful appeal. EU Competition investigation As announced on 24 July 2007, the EU Commission has issued a Statement 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 has responded to theStatement of Objections and has availed of its right to an oral hearing beforethe Commission. It is expected that the Commission will reach a conclusion onthis matter during 2008. At this time, Fyffes is unable to determine the finaloutcome of this process, including whether or not a fine will be imposed or thelevel of any fine. Any decision of the EU Commission can be appealed in theEuropean Courts. Fyffes continues to fully and vigorously defend itself againstthe allegations contained in the Statement of Objections. Exceptional items Net exceptional charges amounted to €8.2m in 2007. An analysis of this is setout in note 3 of the accompanying financial information and includes: • the €7.5m gain on the write-back of the provision for defendants' costs in relation to the DCC litigation noted above; • a €6.1m impairment charge in relation to the Group's Brazilian winter melon joint venture; • a loss of €3m on disposal of its 50% stake in its pineapple joint venture; • a €4.2m impairment charge on its investment in a shipping operation; • legal and professional fees of €2.7m in connection with the ongoing EU competition investigation. Financial income Net interest income in the Group's subsidiary companies in 2007 amounted to€2.1m, compared to €4.7m in the previous year. These amounts are not comparableas the prior year interest income was based on the pre-demerger capitalstructure of the Group and significantly higher average cash balances at thattime. Average net cash balances were €58m during 2007. The Group's share ofthe net interest expense in its joint ventures amounted to €1.2m in 2007,compared to €1.3m in the previous year. Profit before tax Adjusted profit before tax amounted to €18.4m in 2007 compared to €21.9m in theprevious year. As set out in note 2 of the accompanying financial information,adjusted profit before tax excludes the Group's share of Blackrock's profit,exceptional items, amortisation of intangible assets and the Group's share ofthe tax charge of its joint ventures, which is reflected in profit before taxunder IFRS rules. Profit before tax, excluding these adjustments, amounted to€13.2m compared to €19.1m in 2006. Taxation An analysis of the tax charge for the year is set out in note 4 of theaccompanying financial information. The underlying tax charge for the year was€1.9m compared to a charge of €1.1m in 2006, equivalent to a rate of 10.1%(2006: 4.9%). This excludes the tax impact of exceptional items, non-recurringtax charges or credits and deferred tax credits related to the amortisation ofintangible assets, and includes the Group's share of tax of its joint ventures.This underlying rate is used for the purposes of calculating adjusted earningsper share. The tax charge for 2007 per the income statement, before theseadjustments, was €3.1m, compared to a credit of €3.9m in the previous year. Minority interest The minority interest share of profit after tax for 2007 amounted to €0.8m,compared to €0.7m in the previous year. Earnings per share Adjusted fully diluted earnings per share, (which, as set out in note 5 of theaccompanying financial information, excludes the Group's share of profits ofBlackrock, exceptional items and amortisation of intangible assets), amounted to€4.42 cent in 2007 compared to €5.70 cent for continuing operations in theprevious year. Fully diluted earnings per share, before adjustments, amountedto €2.63 cent in 2007, compared to €6.29 cent for continuing operations in theprevious year. Dividend The Board is proposing to pay a final dividend for 2007 of 1 cent per share.Subject to shareholder approval at the forthcoming AGM, this dividend, whichwill be subject to Irish withholding tax rules, will be paid on 1 May 2008 toshareholders on the register on 4 April 2008. In accordance with company lawand IFRS, this dividend has not been provided for in the balance sheet at 30December 2007. Total dividends in respect of 2007 will amount to 1.50 cent,equivalent to a payout ratio of 34% based on adjusted earnings per share. Balance sheet Net funds Net funds at 30 December 2007 amounted to €48.8m compared to €79.7m at thebeginning of the year. This reduction in net funds reflects, in particular, an€18.7m increase in working capital due primarily to the strong growth in revenuein the year. Other significant cash outflows in the year included thepreviously signalled once-off pension contribution of €10.5m (see below), the2006 final dividend of €6m, further investment and loans to certain jointventure operations amounting to €5m and expenditure on acquisitions and otherinvestments of €11.2m. Pension obligations The Group's defined benefit pension schemes had a net surplus, before deferredtax, of €1.6m at 30 December 2007 compared to €15.1m net deficit at thebeginning of the year. This improvement reflects, in particular, the €10.5monce-off contribution into the UK pension scheme under Section 75 of the UKPensions Act, 1995. This related to a number of subsidiaries which have beendemerged to Total Produce plc and are no longer adhered to that scheme, inrespect of pensioners and deferred pensioners who were formerly employed inthose subsidiaries. In addition, a €5.5m actuarial gain arose during the year,primarily as a result of the increase in long term international bond yields,notwithstanding the reduction in asset values. Shareholders' funds Shareholders' funds amounted to €224.5m at 30 December 2007, compared to €227mat the beginning of the year. This reflects the profit for the year, plus theactuarial gains in the period, less a €5.1m currency movement on translation ofsterling denominated net assets, dividend payments of €7.8m and the €1.7m spenton the repurchase of 2m Fyffes shares in September 2007. Medium term strategy Fyffes' medium term strategy remains the doubling of revenue across its keyproduct categories by 2011, through a combination of acquisitions and organicgrowth. Satisfactory progress has been made in relation to organic growthtargets, as reflected in the increases in volumes in 2007. In addition, on theacquisitions front, the Group's recent entry into the US winter melon marketwill double its volumes in this category in 2008. Current trading The Group continues to target a mid-single digit percentage increase in AdjustedEBIT in 2008, excluding the anticipated positive impact of its recent entry intothe US winter melon market. In the context of the significant cost inflationbeing experienced by the industry, this target reflects anticipated improvementsin the Group's existing melon and pineapple operations, the benefit of morefavourable average exchange rates and achieving the required increases inselling prices. David McCann, Chairmanon behalf of the Board 7 February 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 plcSummary Group Income Statement for the year ended 30 December 2007 Pre-exceptional Exceptional Total Pre-exceptional Exceptional Total 2007 2007 2007 2006 2006 2006 •'000 •'000 •'000 •'000 •'000 •'000 Group revenue 553,365 - 553,365 407,717 - 407,717Cost of sales (490,630) - (490,630) (357,146) 3,112 (354,034) Gross profit 62,735 - 62,735 50,571 3,112 53,683 Distribution expenses (28,455) - (28,455) (17,173) - (17,173)Administrative expenses (20,147) 3,975 (16,172) (17,397) (7,327) (24,724)Other operating income/(expense) 1,338 (3,018) (1,680) 1,189 (3,131) (1,942)Share of profit of jointventures after tax (677) (9,148) (9,825) (1,131) (155) (1,286)Share of profit ofassociates after tax -Blackrock International Land plc 4,506 - 4,506 5,778 - 5,778 Operating profit 19,300 (8,191) 11,109 21,837 (7,501) 14,336Net financial income 2,127 4,726 Profit before tax 13,236 19,062Income tax (expense)/ credit (3,109) 3,858 Profit for the year 10,127 22,920Discontinued operationsafter tax and exceptionalitems - 13,560 Profit for the financial year 10,127 36,480 Attributable as follows:Equity shareholders 9,326 29,321Minority interests -continuing operations 801 659Minority interest -discontinued operations - 6,500 10,127 36,480 Earnings per ordinary share - cent Continuing operationsBasic 2.64 6.36Fully diluted 2.63 6.29Adjusted fully diluted, excluding Blackrock 4.42 5.70 Combined Group - pre demergerBasic n/a 8.38Fully diluted n/a 8.29Adjusted fully diluted, excluding Blackrock n/a 11.40 Fyffes plc Summary Group Statement of Recognised Income and Expense for the year ended 30December 2007 2007 2006 •'000 •'000 Foreign currency translation effects - foreign currency net equity investments (5,137) 6,615 - foreign currency borrowings - (491)Share of foreign currency movement recognised in associated undertaking (756) -Revision to deferred tax provision on revaluation reserve - (658)Fair value adjustment on investments - 1,400Effective portion of cash flow hedges (904) (6,304)Deferred tax on effective portion of cash flow hedges 114 780Actuarial gains recognised on defined benefit pension schemes 5,541 15,412Deferred tax movements related to pension schemes (2,454) (5,379)Share of actuarial gain on joint ventures defined benefit pension schemes 1,014 1,540Deferred tax on actuarial gain on joint ventures defined benefit pension schemes (284) (496) Net (expense)/income recognised directly in equity (2,866) 12,419Profit for year 10,127 36,480 Total recognised income and expense 7,261 48,899 Attributable as follows:Equity shareholders 6,512 41,327Minority interest 749 7,572 7,261 48,899 Summary statement of movement in shareholders' equity Total Total 2007 2006 •'000 •'000 Total shareholders' equity at beginning of year 227,022 500,678Increase in share capital / premium 268 995Acquisition of own shares (1,661) -Total recognised income and expense 6,512 41,327Movement in share option expense reserve 107 323In-specie distribution arising from demerger of property undertaking - (124,749)Fair value gains not previously recognised in demerged General Produce business - 108,071In-specie distribution arising from demerger of General Produce business - (255,508)Dividends paid to equity shareholders (7,776) (44,115) Total shareholders' equity at end of year 224,472 227,022 Fyffes plcSummary Group Balance Sheet as at 30 December 2007 2007 2006 •'000 •'000Non-current assetsProperty, plant and equipment 16,861 8,883Intangible assets 5,675 4,636Other receivables 635 -Investments in joint ventures and associates 146,512 150,390Employee benefits 3,030 644Equity investments 1,766 18Deferred tax assets 2,792 6,871 Total non-current assets 177,271 171,442 Current assetsInventory 12,582 11,915Biological assets 315 -Trade debtors and other receivables 55,788 66,297Derivative financial instruments 1,582 -Corporation tax recoverable 5,001 3,918Short term bank deposits 2,040 -Cash and cash equivalents 94,168 131,570 Total current assets 171,476 213,700 Total assets 348,747 385,142 EquityCalled-up share capital 21,844 21,600Share premium 98,846 98,822Revaluation reserves 23,463 24,137Other reserves 55,830 63,259Retained earnings 24,489 19,204 Total shareholders' equity 224,472 227,022Minority interest 1,226 1,107 Total equity and minority 225,698 228,129 Non-current liabilitiesInterest bearing loans and borrowings 40,000 26,136Employee benefits 1,392 15,734Other payables 8 6Provisions 3,294 4,073Corporation tax payable 16,345 17,280Deferred tax liabilities 3,266 1,935Total non-current liabilities 64,305 65,164 Current liabilitiesInterest bearing borrowings 7,426 25,747Trade payables and other payables 45,871 56,273Provisions 748 7,626Derivative financial instruments 4,699 2,203Total current liabilities 58,744 91,849 Total liabilities 123,049 157,013 Total liabilities and equity 348,747 385,142 Fyffes plcSummary Group Cash Flow Statement for the year ended 30 December 2007 2007 2006 •'000 •'000 Cash flows from operating activities (1,027) 45,931Cash flows from investing activities (17,541) (64,134)Cash flows from financing activities (11,080) (84,559) Net movement in cash and cash equivalents (29,648) (102,762)Cash and cash equivalents, including bank overdrafts at 1 January 127,719 226,881Subsidiary becoming a joint venture (1,738) -Translation adjustment on cash and cash equivalents (1,431) 3,600 Cash and cash equivalents, including bank overdrafts at 30 December 94,902 127,719 Reconciliation of total net funds (Decrease) in cash and cash equivalents (29,648) (102,762)(Decrease) in short term bank deposits - (220,035)Net decrease in debt 1,911 147,230Subsidiary becoming a joint venture (1,738) -Capital element of finance lease payments - 1,098New finance leases - (518)Debt in subsidiaries demerged to Total Produce plc - 79,377Translation adjustment (1,431) 4,437 Movement in net funds (30,906) (91,173)Net funds at the beginning of the year 79,687 170,860 Net funds at the end of the year 48,781 79,687 Comparative figures for 2006 reflect the combined Group pre-demergers. Fyffes plc Notes to Preliminary Results for the year ended 30 December 2007 1. Basis of preparation This preliminary financial information has been derived from the Group'sconsolidated financial statements for the year ended 30 December 2007 which havebeen prepared in accordance with International Financial Reporting Standards(IFRS) as endorsed by the EU Commission and the accounting policies set out inthe Group's 2007 Annual Report. 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 year ended 30 December 2006 reflect the results of thedemerged General Produce and Distribution business as a single figure fordiscontinued operations. The Balance Sheet at 30 December 2006 reflects theimpact of the demerger. The comparative Cash Flow Statement and Statement ofRecognised Income and Expense for the year ended 30 December 2006 reflects theresults of the combined Group for that year, pre-demerger. 2. Adjusted profit before tax and EBIT 2007 2006 •'000 •'000 Profit before tax per income statement - continuing operations 13,236 19,062AdjustmentsExceptional items (see note 3 below) 8,191 7,501Group share of tax charge/(credit) of joint ventures 86 (411)Amortisation of intangibles including share of joint ventures 1,366 1,480Group share of profit after tax of Blackrock International Land plc (4,506) (5,778) Adjusted profit before tax excluding Blackrock International Land plc 18,373 21,854ExcludeFinancial (income) - Group (2,127) (4,726)Financial expense - share of joint ventures 1,187 1,258 Adjusted EBIT 17,433 18,386 Fyffes believes that adjusted profit before tax and adjusted earnings per share(note 5 below) are the appropriate measures of the underlying performance of theGroup, excluding exceptional items, amortisation charges and the Group's shareof Blackrock's results. Similarly, adjusted earnings before interest, tax,exceptional items, amortisation and Blackrock (Adjusted EBIT) is a moreindicative reflection of the underlying operating performance of the Group'strading activities. 3. Exceptional items 2007 2006 •'000 •'000 Write-back of provision for defendants costs in DCC litigation 7,500 -Impairment of investment in Brazilian melon joint venture (6,100) -Impairment of investment in shipping business (4,188) -Costs related to EU Competition investigation (2,650) -Loss on disposal of pineapple joint venture (3,048) -Merchant Navy Officers Pension Fund (MNOPF) 616 -Impairment of property, plant and equipment (reversal in 2007) 554 (3,286)Costs related to demerger to Total Produce plc (875) (6,007)Costs related to demerger to Blackrock International Land plc - (1,320)Settlement of onerous contract - 3,112 Total exceptional items per income statement (8,191) (7,501) Following Fyffes' successful appeal in July 2007, in the Irish Supreme Court, ofits insider dealing litigation against DCC plc and others, a provision createdin 2005 for the defendants' legal costs in this case, amounting to €7.5m, is nolonger required and has been written back. It is not currently possible toaccurately estimate what additional amounts Fyffes will now recover in respectof its own costs and further amounts arising on the insider dealing transactionsto be determined by the Courts. Consequently, no contingent gain has beenaccrued in this regard in the financial statements. During the first half of the year, as a result of the under performance of theGroup's Brazilian melon joint venture since acquisition in January 2006, theBoard decided that it was appropriate to write down the carrying value of thisinvestment by €6.1m. The Group owns a minority shareholding in a containerisedshipping business. This arrangement continues to positively impact the Group'sshipping costs. However, an impairment charge of €4.2m has been recognised at30 December 2007 in respect of the carrying value of this equity investment. 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 €0.9m were incurred in the year. This was partlyoffset by the write-back of an impairment provision of €0.6m no longer required.Professional fees and similar costs incurred in relation to the ongoing EUCompetition investigation amounted to €2.65m in the year. During 2007, Fyffes' liability to the Trustee of the Merchant Navy OfficersPension Fund, in respect of former employees, increased following the mostrecent actuarial valuation of the scheme. However, the Trustee alsore-allocated a portion of the liability of one of the Group's subsidiaries tothe former owners of this entity. In addition, the Group has also secured acontribution to its costs from the former owners of another of its subsidiaries.The present value of these adjustments during the year gave rise to a creditin the income statement of €0.6m. In December 2007, Fyffes disposed of its 50% stake in its pineapple farmingjoint venture. The Group's loss on disposal of this joint venture amounted to€3.0m. There was a net tax credit on exceptional items in 2007 of €0.2m. 4. Corporation tax 2007 2006 •'000 •'000 Tax charge/(credit) per income statement 3,109 (3,858)Group share of tax charge/(credit) of its joint ventures netted in profit before tax 86 (411) Total tax charge/(credit) 3,195 (4,269)AdjustmentsDeferred tax on amortisation of intangibles (including share of joint ventures) 475 518Tax impact of exceptional items 159 304Once-off tax (charges)/credits (1,974) 4,511 Tax charge on underlying activities 1,855 1,064 Including the Group's share of the tax charge of its joint ventures, amountingto €0.1m (2006: credit of €0.4m), which is netted in operating profit inaccordance with IFRS, the total tax charge for the year amounted to €3.2m (2006:credit of €4.3m). Excluding the impact of once-off tax (charges)/credits,deferred tax credits related to the amortisation of intangibles and the taxeffect of exceptional items, the underlying tax charge for the Group was €1.9m(2006: charge of €1.1m), equivalent to a rate of 10.1% (2006: 4.9%) when appliedto the Group's adjusted profit before tax. 5. Earnings per share Continuing Discontinued Combined Operations Operations Operations 2007 2006 2006 2006 •'000 •'000 •'000 •'000 Profit for financial year attributable to equityshareholders 9,326 22,261 7,060 29,321 Number of shares '000 '000 Issued ordinary shares at start of year 359,994 358,598Effect of own shares held (9,630) (9,022)Effect of shares issued 2,843 375 Weighted average number of shares for basicearnings per share calculation 353,207 349,951Weighted average number of options with dilutiveeffect 2,065 3,857 Weighted average number of shares for fullydiluted earnings per share calculation 355,272 353,808 Basic earnings per share - • cent 2.64 6.36 2.02 8.38 Diluted earnings per share - • cent 2.63 6.29 2.00 8.29 Adjusted fully diluted earnings per share - 2007 2007 2007 •'000 • cent Profit for financial year attributable to equity shareholders 9,326 2.64AdjustmentsWrite-back of provision for defendants' costs in DCC litigation (7,500) (2.12)Impairment of investment in Brazilian melon joint venture 6,100 1.73Loss on disposal of investment in shipping business 4,188 1.19Costs related to EU Competition investigation 2,650 0.75Loss on disposal of pineapple joint venture 3,048 0.86Merchant Navy Officers Pension Fund (MNOPF) (616) (0.17)Impairment of property, plant and equipment and investment property (reversal in 2007) (554) (0.16)Costs related demerger of Total Produce plc 875 0.25Amortisation of intangible assets 1,366 0.39Share of profit of Blackrock International Land plc (4,506) (1.28)Tax impact of exceptional items and amortisation charges 1,340 0.38Impact on earnings of dilutive share options - (0.04) Adjusted fully diluted earnings - 2007 15,717 4.42 Continuing Discontinued Combined Continuing Discontinued Combined Operations Operations Operations Operations Operations Operations 2006 2006 2006 2006 2006 2006 •'000 •'000 •'000 • cent • cent • cent Profit for financial yearattributable to equityshareholders 22,261 7,060 29,321 6.36 2.02 8.38AdjustmentsImpairment of businesses - 22,749 22,749 - 6.50 6.50Costs of demerger of GeneralProduce and Distributionbusinesses 6,007 - 6,007 1.72 - 1.72Costs of demerger of propertyundertaking 1,320 - 1,320 0.38 - 0.38Profit on disposal ofleasehold interest - (3,430) (3,430) - (0.98) (0.98)Settlement of onerous contract (3,112) - (3,112) (0.89) - (0.89)Fair value movement oninvestment properties - (6,120) (6,120) - (1.75) (1.75)Share of profits of BlackrockInternational Land plc (5,778) - (5,778) (1.65) - (1.65)Impairment of property, plantand equipment and investmentproperty 3,286 - 3,286 0.94 - 0.94Amortisation of intangibleassets 1,480 3,063 4,543 0.42 0.88 1.30Tax effect of exceptionalitems and amortisation charges (5,333) (3,417) (8,750) (1.52) (0.98) (2.50)Minority impact ofexceptional items - 282 282 - 0.08 0.08Impact on earnings ofdilutive share options - - - (0.06) (0.07) (0.13) Adjusted fully dilutedearnings - 2006 20,131 20,187 40,318 5.70 5.70 11.40 Adjusted fully diluted earnings per share is calculated to exclude the Group'sshare of profits in Blackrock International Land plc, exceptional items,intangible amortisation, related tax charges/(credits), once off tax credits andthe impact of share options with a dilutive effect. 6. Post employment benefits 2007 2006 •'000 •'000 (Deficit) at beginning of year (15,090) (30,104)Current/past service cost less finance income recognised in income statement (1,009) (4,261)Actuarial gain recognised in statement of recognised gains and losses 5,541 15,412Regular contributions to schemes 1,469 4,032Section 75 contribution in connection with Total Produce demerger 10,547 -Impact of Total Produce demerger - 190Exchange movement 180 (359) Surplus/(deficit) at end of year 1,638 (15,090)Related deferred tax (liability)/asset (642) 2,024 Net surplus/(deficit) after deferred tax 996 (13,066) The above table summarises the movements during the year in the Group's variousdefined benefit pension schemes in Ireland, the UK and Continental Europe. TheGroup's Balance Sheet at 30 December 2007 reflects pension assets of €3.0m inrespect of schemes in surplus and pension liabilities of €1.4m in respect ofschemes in deficit. 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. During the first half of the year, a contribution of €10.5m was made into theGroup's UK pension scheme, in accordance with Section 75 of the UK Pensions Act1995. This represents payment on behalf of a number of subsidiaries which weredemerged to Total Produce plc in December 2006 and are no longer adhered to thatscheme in respect of pensioners and deferred pensioners who were formerlyemployed in those subsidiaries. 7. Dividends and share buy back 2007 2006 •'000 •'000 Dividends paid on Ordinary €6 cent sharesInterim dividend for 2007 of €0.50 cent 1,765 -Final dividend for 2006 of €1.70 cent 6,011 -Interim dividend for 2006 of €1.69 cent - 5,915Final dividend for 2006 of €5.20 cent - 18,197Special second interim dividend for 2005 of €5.72 cent - 20,003 Total cash dividends paid in the year 7,776 44,115 Distributions in specieDemerger of property undertaking to Blackrock International Land plc - 124,749Demerger of General Produce and Distribution business to Total Produce plc - 255,508 Total distributions in the year 7,776 424,372 The directors have proposed a final dividend for 2007, subject to shareholderapproval at the AGM of 1 cent per share (2006: 1.70 cent). In accordance withIFRS, this dividend has not been provided for in the balance sheet at 30December 2007. During September 2007, the Company purchased 2m Fyffes ordinary €6 cent sharesin the market at an aggregate cost of €1.7m. At 30 December 2007, the Companyand subsidiary companies held 11,021,610 (2006: 9,021,610) Fyffes plc ordinaryshares. The right to dividends on these shares has been waived and they areexcluded from the calculation of earnings per share. 8. Notes supporting cash flow statement 8.1 Cash generated from operations 2007 2006 •'000 •'000 Profit for the year 10,127 36,480Taxation expense 3,109 1,498Tax paid (2,181) (21,820)Depreciation of property, plant and equipment 2,866 14,388Fair value movement on investment properties - (5,770)Release of provision for DCC legal fees (7,500) -Reduction in MNOPF liability (616) -Payments in connection with MNOPF (512) -Loss on disposal of pineapple joint venture 3,048 -Impairment of businesses 6,100 22,749Impairment of investment in shipping business 4,188 -Impairment of property, plant and equipment (reversal in 2007) (554) 2,781Settlement of onerous contract - (3,112)Net gain on disposal of property, plant and equipment (163) (758)Defined benefit pension scheme expense 1,009 4,261Contributions paid to defined benefit pension schemes (1,469) (4,032)Amortisation of intangible assets - 3,021Share of profits of joint ventures and associates (incl amortisation) (3,829) (7,873)Net interest income (2,127) (1,191)Interest received less interest paid 1,088 5,194Receipt of amounts owed by Total Produce plc re demerger 15,665 -Section 75 pension contribution (10,547) -Movement in working capital (18,750) 716Other 21 (601) Cash generated from operations (1,027) 45,931 8.2 Cash flows from investing activities 2007 2006 •'000 •'000 Acquisition of subsidiary, net of cash acquired (5,262) (12,631)Investment in and advances to joint ventures (5,118) (18,775)Proceeds on disposal of pineapple joint venture 680 -Payments of deferred consideration - (5,077)Acquisition of property, plant and equipment including investment property (2,275) (35,644)Proceeds from disposal of property, plant and equipment including investment property 297 1,879Loans repaid by joint ventures 73 2,226Dividends received from joint ventures and associates - 5,092Acquisition of other equity investments (5,936) (1,991)Other - 787 Cash flows from investing activities (17,541) (64,134) 8.3 Cash flows from financing activities 2007 2006 •'000 •'000 Proceeds from issue of shares (including premium) 268 995Purchase of own shares (1,661) -Net (reduction) in borrowings (1,911) (147,230)Decrease in short term bank deposits - 220,035Capital element of lease payments - (1,098)Cash impact of distributions in specie: - Blackrock International Land plc - (20,000) - Total Produce plc - (85,042)Dividends paid to equity shareholders (7,776) (44,115)Capital contribution of investment to minority - 116Dividends to minority interests - (8,220) Cash flows from financing activities (11,080) (84,559) 8.4 Analysis of movement in net funds in the year Opening Subsidiary Closing 1 Jan Non cash becoming 30 Dec 2007 Cash flow movement Translation JV 2007 •'000 •'000 •'000 •'000 •'000 •'000 Bank balances 9,296 (3,190) - (86) - 6,020Call deposits 122,274 (29,017) - (1,331) (1,738) 90,188 Cash & cash equivalents per balance sheet 131,570 (32,207) - (1,417) (1,738) 96,208Overdrafts (3,851) 2,559 - (14) - (1,306) Cash & cash equivalents per cash flowstatement 127,719 (29,648) - (1,431) (1,738) 94,902Bank loans - current (21,896) (4,225) 20,000 - - (6,121)Bank loans - non current (26,136) 6,136 (20,000) - - (40,000) Total net funds 79,687 (27,737) - (1,431) (1,738) 48,781 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FFY.L