10th Mar 2009 07:00
Fyffes plc
Preliminary Results 2008
Fyffes' profits slightly ahead of target
|
2008 € |
2007 € |
|
|
Total revenue |
758.2m |
708.9m |
|
Group revenue (excl share of joint ventures) |
606.7m |
553.4m |
|
Earnings before interest and tax * |
15.3m |
17.4m |
|
Profit before tax * |
15.9m |
18.4m |
|
Profit before tax ** |
31.5m |
10.2m |
|
Net funds - cash less bank debt |
32.2m |
48.8m |
|
Fully diluted earnings per share *** |
3.95 cent |
4.42 cent |
|
Total dividend - including proposed final dividend |
1.50 cent |
1.50 cent |
* excluding the Group's share of Blackrock's result, exceptional items, amortisation of intangibles and the Group's share of tax of its joint ventures
** excluding the Group's share of Blackrock's result, amortisation of intangibles and the Group's share of tax of its joint ventures, including exceptional items.
*** excluding the Group's share of Blackrock's result, exceptional items and amortisation of intangibles
Commenting on the results, David McCann, Chairman, said:
"Fyffes' profits for 2008 were slightly ahead of target and market expectations, notwithstanding the unprecedented increases in the costs of fruit, shipping and fuel experienced by the industry during the year. Fyffes' target EBIT for 2009 is in the range €14-18m. After a slow start to the year, pricing has improved in recent weeks and the Group's target for the year remains unchanged. In this difficult economic environment, Fyffes' products represent excellent value for money and we believe consumption will remain strong."
10 March 2009
For further information, please view the 2008 results slide presentation at www.fyffes.com or contact Brian Bell, Wilson Hartnell PR, Tel: +353-1-6690030.
Financial results and operating review
Revenue
Total turnover for the year, including the Group's share of revenue of its joint ventures, amounted to €758.2m, up 7.0% on 2007. Group revenue in 2008 amounted to €606.7m, up 9.6% on the previous year. This mainly reflects the first time contribution from a number of businesses acquired early in the year, including Sol Marketing Group, an importer of winter season melons into the US market. It also reflects higher average selling prices in Fyffes' key banana category, on relatively flat volumes year on year.
Operating profit
Adjusted EBIT for 2008 amounted to €15.3m, compared to €17.4m in the previous year. Adjusted EBIT is operating profit excluding Fyffes' 40% share of Blackrock's results, exceptional items and amortisation of intangible assets, and before interest and tax (including the equivalent share of EBIT of its joint ventures). The calculation of Adjusted EBIT is set out in note 2 of the accompanying financial information.
The key drivers of performance for the Group's tropical produce operations, and in particular in its banana business, are average selling prices, exchange rates and the costs of fruit, shipping and fuel, all of which can result in significant volatility in year on year profitability. During 2008, the Group experienced an unprecedented level of cost inflation, with the costs of fruit, shipping and, in particular, fuel all substantially higher year on year. The impact of this was mitigated by more favourable average exchange rates, due to the relative weakness of the US Dollar for much of the year. In addition, the Group sought and achieved increases in selling prices in all markets. However, the level of price increases secured was insufficient to offset the impact of the higher costs and, as a result, Adjusted EBIT in the Group's banana category declined by €6.2m in the year.
Fyffes' pineapple business delivered a small profit in 2008, in line with the previous year. As previously indicated, climatic factors caused an oversupply of product in the market place during the first half of the year and reduction in supply during the second half. This had a negative impact on selling prices and costs over the course of the year. The Group's pineapple farming operations in Costa Rica achieved a significantly improved result in 2008.
Fyffes' winter melon category comprises two separate operations; the Nolem joint venture which was acquired in 2006 and exports to Europe from Brazil, and Sol Marketing, acquired at the start of 2008, which imports into the US market from Honduras and Guatemala. While the Group's share of losses in Nolem was somewhat lower than in the previous year, this business continues to face significant challenges. Fyffes' US winter melon business made a satisfactory first time contribution in 2008. As a result, the Group's combined winter melon operations achieved a €3.4m improvement in operating profit year on year.
Fyffes' 40% share of after tax losses in Blackrock International Land plc which, as noted above, is excluded from Adjusted EBIT, amounted to €28.6m in 2008, compared to a profit of €4.5m in the previous year. This reflects the c.35% reduction in net asset value recognised by Blackrock following the most recent independent external valuation of its property portfolio at 31 December 2008.
The total operating result for the year, which is the Adjusted EBIT of €15.3m less the Group's share of Blackrock's result and after exceptional items, amortisation and the Group's share of joint ventures interest and tax, amounted to a loss of €1.4m for the year, compared to a profit of €11.1m in 2007.
EU Competition investigation
On 15 October 2008, the European Commission published its Decision following the conclusion of its investigation into the supply of bananas in the Northern European region of the EEA. No adverse findings were made against Fyffes and no fine imposed on it. Fyffes is very pleased with this outcome as regards its activities.
At the same time, the European Commission found the Group's German joint venture, Internationale Fruchtimport Gesellschaft Weichert & Co KG ("Weichert") and Fresh Del Monte Produce Inc ("Del Monte") jointly and severally liable for a fine of €14.7m for breaches of Article 81 of the Treaty of Rome and Article 53 of the European Economic Area (EEA) Agreement relating to the supply of bananas to the Northern European region of the EEA, in the period 1 January 2000 to 31 December 2002. Fyffes acquired its 80% interest in Weichert from Del Monte on 1 January 2003. The Commission found that Weichert was controlled by Del Monte throughout the period covered by the Decision.
Both Weichert and Del Monte have applied to the European Court of First Instance to have the Decision annulled. Weichert continues to assert that it did not breach EU Competition regulations. Based on legal advice, and pending the outcome of the appeals process, Weichert has provided for a net exceptional charge of €3.7m in its accounts in this regard. The Group's Income Statement reflects Fyffes' 80% share of the net exceptional charge recognised in Weichert's accounts, amounting to €2.9m, on a prudent basis, pending the outcome of the appeal process.
Exceptional items
Net exceptional items amounted to a gain of €15.5m in 2008. An analysis of this is set out in note 3 of the accompanying financial information and includes:
a €33m net gain on settlement of the Group's long running insider dealing case against DCC plc and others;
an impairment charge of €5.8m in relation to the Group's investment in Nolem, its Brazilian winter melon joint venture, and related loans and receivables, reflecting the continued under-performance of this business;
a charge of €7.5m relating to the Group's investment in a container shipping operation which ceased trading during 2008, comprising a €2.95m provision for all outstanding loans and receivables and €4.5m of incremental costs arising from the replacement of this shipping capacity at short notice;
the Group's €2.9m share of the net charge recognised by Weichert in relation to the fine arising from the EU Competition investigation; and
legal and professional fees of €1.1m in connection with the EU competition investigation, including the Group's share of costs incurred by Weichert.
Financial income
Net interest income in the Group's subsidiary companies in 2008 amounted to €1.6m, compared to €2.1m in the previous year, reflecting lower average cash balances and lower interest rates as well as higher non-cash discounting charges on deferred consideration liabilities. The Group's share of the net interest expense of its joint ventures amounted to €0.9m in 2008, compared to €1.2m in the previous year.
Profit before tax
Adjusted profit before tax amounted to €15.9m in 2008 compared to €18.4m in the previous year. As set out in note 2 of the accompanying financial information, adjusted profit before tax excludes the Group's share of Blackrock's result, exceptional items, amortisation of intangible assets and the Group's share of the tax charge of its joint ventures, which is reflected in profit before tax under IFRS rules. Profit before tax, excluding these adjustments, amounted to €0.1m.
Taxation
An analysis of the tax charge for the year is set out in note 4 of the accompanying financial information. The underlying tax charge for the year was €1.8m compared to €1.9m in 2007, equivalent to a rate of 11.1% (2007: 10.1%), when applied to the Group's Adjusted Profit before Tax. The underlying tax charge excludes the tax impact of exceptional items, non-recurring tax charges or credits and deferred tax credits related to the amortisation of intangible assets, and includes the Group's share of tax of its joint ventures. This underlying rate is used for the purposes of calculating adjusted earnings per share. The 2008 income statement shows a tax credit of €0.3m, before these adjustments, compared to a charge of €3.1m in the previous year.
Minority interest
The minority interest share of profit after tax for 2008 amounted to €0.3m, compared to €0.8m in the previous year.
Earnings per share
Adjusted fully diluted earnings per share, (which, as set out in note 5 of the accompanying financial information, excludes the Group's share of Blackrock's result, exceptional items and amortisation of intangible assets), amounted to €3.95 cent in 2008 compared to €4.42 cent in the previous year. Fully diluted earnings per share, before adjustments, amounted to €0.02 cent in 2008, compared to €2.63 cent in the previous year.
Dividend
The Board is proposing to pay a final dividend for 2008 of 1 cent per share. Subject to shareholder approval at the forthcoming AGM, this dividend, which will be subject to Irish withholding tax rules, will be paid on 15 May 2009 to shareholders on the register on 17 April 2009. In accordance with company law and International Financial Reporting Standards, this dividend has not been provided for in the balance sheet at 31 December 2008. Total dividends in respect of 2008 will amount to 1.50 cent, a payout ratio of 38% based on adjusted earnings per share, and equivalent to a yield of 8.3% at the current 18 cent share price.
Balance sheet
Net funds
Net funds at 31 December 2008 amounted to €32.2m compared to €48.8m at the beginning of the year. In addition to the Group's profit before exceptional items for the year, the net cash gain from exceptional items amounted to €27.1m. The reduction in net funds reflects the very significant level of expenditure and investment during the year. This included €17.3m on acquisitions, including net debt acquired, €14.9m on property, plant and equipment, including a large extension to one of the Group's ripening centres in the UK and the €10.7m returned to shareholders during the year in dividends and share buy backs.
Investment in Blackrock International Land plc ('Blackrock')
In accordance with International Financial Reporting Standards, Fyffes' 40% stake 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 €60m, representing its share of Blackrock's reported net assets at 31 December 2008, which reflect up-to-date independent professional valuations of its property portfolio. The market value of this investment at 31 December 2008 was €12.4m, based on its then share price of €0.053 per share. The resulting €47.6m discount to net asset value reflected in such share price has not been recognised in Fyffes' balance sheet at 31 December 2008.
Pension obligations
The Group's defined benefit pension schemes moved from a net surplus, before deferred tax, of €1.6m at the beginning of the year to a net deficit of €10m at the end of the year. This mainly reflects a net actuarial loss of €14.3m in the year, comprising a €28.4m reduction in asset values arising from the significant decline in global equity values, partly offset by a €14.1m reduction in liabilities as a result of the increase in the bond rates used in their calculation.
Shareholders' funds
Shareholders' funds amounted to €202.4m at 31 December 2008, compared to €224.5m at the beginning of the year. This reflects, in particular, the impact of the actuarial loss in the year, along with the €10.7m impact of dividends and shares bought back. In addition, there was a €11.7m reduction in the value of the Group's non-Euro denominated net assets in the year, mainly reflecting the significant weakening of Sterling late in 2008.
Current trading
On 7 January 2009, Fyffes indicated that it was targeting an Adjusted EBIT* for 2009 in the range €14m-18m. This was based on achieving significant price increases in all key markets to counteract the impact of the adverse movement in exchange rates due to the strengthening of the US Dollar, particularly relative to Sterling, and further cost inflation.
The Group has experienced a slow start to the year, as the increases in selling prices achieved in the first two months were insufficient to offset the higher costs and unfavourable exchange rates. However, pricing has significantly improved in recent weeks, particularly in Continental Europe and, consequently, the Group is maintaining its target result for the year.
* Adjusted EBIT excludes amortisation charges, the Group's 40% share of the results of Blackrock and exceptional items.
David McCann, Chairman
on behalf of the Board
10 March 2009
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 for the year ended 31 December 2008
|
Pre-exceptional 2008 €'000 |
Exceptional 2008 €'000 |
Total 2008 €'000 |
Pre-exceptional 2007 €'000 |
Exceptional 2007€'000 |
Total 2007 €'000 |
|
|
Revenue including Group share of joint ventures |
758,227 |
- |
758,227 |
708,915 |
- |
708,915 |
|
Group revenue |
606,729 |
- |
606,729 |
553,365 |
- |
553,365 |
|
Cost of sales |
(546,990) |
(4,516) |
(551,506) |
(490,630) |
- |
(490,630) |
|
Gross profit |
59,739 |
(4,516) |
55,223 |
62,735 |
- |
62,735 |
|
Distribution expenses |
(25,151) |
- |
(25,151) |
(28,455) |
- |
(28,455) |
|
Administrative expenses |
(23,607) |
(735) |
(24,342) |
(20,147) |
3,975 |
(16,172) |
|
Other operating income/ (expense) |
(926) |
26,066 |
25,140 |
1,338 |
(3,018) |
(1,680) |
|
Share of profit/(loss) of joint ventures after tax |
1,604 |
(5,266) |
(3,662) |
(677) |
(9,148) |
(9,825) |
|
Share of (loss)/profit of associate after tax - Blackrock International Land plc |
(28,643) |
- |
(28,643) |
4,506 |
- |
4,506 |
|
Operating (loss)/profit |
(16,984) |
15,549 |
(1,435) |
19,300 |
(8,191) |
11,109 |
|
Net financial income |
1,563 |
2,127 |
||||
|
Profit before tax |
128 |
13,236 |
||||
|
Income tax credit/(expense) |
252 |
(3,109) |
||||
|
Profit for the financial year |
380 |
10,127 |
||||
|
Attributable as follows: |
||||||
|
Equity shareholders |
70 |
9,326 |
||||
|
Minority interests |
310 |
801 |
||||
|
380 |
10,127 |
|||||
|
Earnings per ordinary share - cent |
||||||
|
Basic |
0.02 |
2.64 |
||||
|
Fully diluted |
0.02 |
2.63 |
||||
|
Adjusted fully diluted, excluding Blackrock |
3.95 |
4.42 |
||||
Fyffes plc
Summary Group Statement of Recognised Income and Expense for the year ended 31 December 2008
|
2008 €'000 |
2007 €'000 |
|
|
Foreign currency translation effects - net equity investments |
(11,710) |
(5,137) |
|
Share of foreign currency movement recognised in associated undertaking |
(2,198) |
(756) |
|
Loss in associated undertaking set against revaluation reserves |
(1,300) |
- |
|
Effective portion of cash flow hedges |
18,562 |
(904) |
|
Deferred tax on effective portion of cash flow hedges |
(2,320) |
114 |
|
Actuarial (losses)/gains recognised on defined benefit pension schemes |
(14,281) |
5,541 |
|
Deferred tax movements related to pension schemes |
2,812 |
(2,454) |
|
Share of actuarial (loss)/gain on joint ventures defined benefit pension schemes |
(1,637) |
1,014 |
|
Deferred tax on actuarial (loss)/gain on joint ventures defined benefit pension schemes |
358 |
(284) |
|
Net (expense) recognised directly in equity |
(11,714) |
(2,866) |
|
Profit for year |
380 |
10,127 |
|
Total recognised income and expense |
(11,334) |
7,261 |
|
Attributable as follows: |
||
|
Equity shareholders |
(11,644) |
6,512 |
|
Minority interest |
310 |
749 |
|
(11,334) |
7,261 |
Summary statement of movement in shareholders' equity
|
2008 €'000 |
2007 €'000 |
|
|
Total shareholders' equity at beginning of year |
224,472 |
227,022 |
|
Increase in share capital / premium |
168 |
268 |
|
Total recognised income and expense |
(11,644) |
6,512 |
|
Movement in share option expense reserve |
99 |
107 |
|
Acquisition of own shares |
(5,447) |
(1,661) |
|
Dividends paid to equity shareholders |
(5,259) |
(7,776) |
|
Total shareholders' equity at end of year |
202,389 |
224,472 |
Fyffes plc
Summary Group Balance Sheet as at 31 December 2008
|
2008 €'000 |
2007 €'000 |
|
|
Non-current assets |
||
|
Property, plant and equipment |
52,818 |
16,861 |
|
Intangible assets |
14,996 |
5,675 |
|
Other receivables |
484 |
635 |
|
Investments in joint ventures |
46,426 |
54,394 |
|
Investments in associate - Blackrock |
59,977 |
92,118 |
|
Employee benefits |
- |
3,030 |
|
Equity investments |
16 |
1,766 |
|
Deferred tax assets |
4,263 |
2,792 |
|
Total non-current assets |
178,980 |
177,271 |
|
Current assets |
||
|
Inventory |
16,602 |
12,582 |
|
Biological assets |
5,515 |
315 |
|
Trade debtors and other receivables |
55,363 |
55,788 |
|
Currency hedging instruments |
14,566 |
1,582 |
|
Corporation tax recoverable |
2,036 |
5,001 |
|
Short term bank deposits |
27,326 |
- |
|
Cash and cash equivalents |
67,072 |
96,208 |
|
Total current assets |
188,480 |
171,476 |
|
Total assets |
367,460 |
348,747 |
|
Equity |
||
|
Called-up share capital |
21,859 |
21,844 |
|
Share premium |
98,999 |
98,846 |
|
Other reserves |
74,979 |
79,293 |
|
Retained earnings |
6,552 |
24,489 |
|
Total shareholders' equity |
202,389 |
224,472 |
|
Minority interest |
1,536 |
1,226 |
|
Total equity and minority |
203,925 |
225,698 |
|
Non-current liabilities |
||
|
Interest bearing loans and borrowings |
705 |
40,000 |
|
Employee benefits |
9,985 |
1,392 |
|
Other payables |
2,723 |
8 |
|
Provisions |
7,826 |
3,294 |
|
Corporation tax payable |
16,093 |
16,345 |
|
Deferred tax liabilities |
5,702 |
3,266 |
|
Total non-current liabilities |
43,034 |
64,305 |
|
Current liabilities |
||
|
Interest bearing borrowings |
61,466 |
7,427 |
|
Trade payables and other payables |
57,235 |
45,870 |
|
Corporation tax payable |
1,341 |
- |
|
Provisions |
459 |
748 |
|
Currency hedging instruments |
- |
4,699 |
|
Total current liabilities |
120,501 |
58,744 |
|
Total liabilities |
163,535 |
123,049 |
|
Total liabilities and equity |
367,460 |
348,747 |
Fyffes plc
Summary Group Cash Flow Statement for the year ended 31 December 2008
|
2008 €'000 |
2007 €'000 |
|
|
Cash flows from operating activities |
30,634 |
(1,027) |
|
Cash flows from investing activities |
(28,871) |
(17,541) |
|
Cash flows from financing activities |
(1,681) |
(11,080) |
|
Net movement in cash and cash equivalents |
82 |
(29,648) |
|
Cash and cash equivalents, including bank overdrafts at start of year |
94,902 |
127,719 |
|
Transfer to short term deposits |
(27,326) |
- |
|
Subsidiary becoming a joint venture |
- |
(1,738) |
|
Translation adjustment on cash and cash equivalents |
(1,954) |
(1,431) |
|
Cash and cash equivalents, including bank overdrafts at end of year |
65,704 |
94,902 |
|
Reconciliation of total net funds |
||
|
Increase/(decrease) in cash and cash equivalents |
82 |
(29,648) |
|
Net (increase)/decrease in debt |
(9,137) |
1,911 |
|
Acquisition of subsidiary - net debt acquired |
(5,618) |
- |
|
Subsidiary becoming a joint venture |
- |
(1,738) |
|
Capital element of finance lease payments |
280 |
- |
|
Translation adjustment |
(2,161) |
(1,431) |
|
Movement in net funds |
(16,554) |
(30,906) |
|
Net funds at the beginning of the year |
48,781 |
79,687 |
|
Net funds at the end of the year |
32,227 |
48,781 |
Fyffes plc
Notes to Preliminary Results for the year ended 31 December 2008
1. Basis of preparation
This preliminary financial information has been derived from the Group's consolidated financial statements for the year ended 31 December 2008 which have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU Commission and the accounting policies set out in the Group's 2007 Annual Report.
2. Adjusted profit before tax and EBIT
|
2008 €'000 |
2007 €'000 |
|
|
Profit before tax per income statement |
128 |
13,236 |
|
Adjustments |
||
|
Exceptional items (see note 3 below) |
(15,549) |
8,191 |
|
Group share of tax charge of joint ventures |
142 |
86 |
|
Amortisation of intangibles including share of joint ventures |
2,574 |
1,366 |
|
Group share of loss/(profit) after tax of Blackrock International Land plc |
28,643 |
(4,506) |
|
Adjusted profit before tax |
15,938 |
18,373 |
|
Exclude |
||
|
Financial (income) - Group |
(1,563) |
(2,127) |
|
Financial expense - share of joint ventures |
890 |
1,187 |
|
Adjusted EBIT |
15,265 |
17,433 |
Fyffes believes that adjusted profit before tax and adjusted earnings per share (note 5 below) are the appropriate measures of the underlying performance of the Group, excluding exceptional items, amortisation charges and the Group's share of Blackrock's results. Similarly, adjusted earnings before interest, tax, exceptional items, amortisation and Blackrock (Adjusted EBIT) is a more indicative reflection of the underlying operating performance of the Group's trading activities.
3. Exceptional items
|
2008 €'000 |
2007 €'000 |
|
|
Settlement of DCC litigation |
32,995 |
7,500 |
|
Impairment of investment in Brazilian melon joint venture & related receivables |
(5,760) |
(6,100) |
|
Impairment of investment in shipping business and incremental costs |
(7,466) |
(4,188) |
|
Net charge in joint venture for fine arising from EU Competition investigation |
(2,940) |
- |
|
Costs of EU Competition investigation including share of costs in joint venture |
(1,140) |
(2,650) |
|
Loss on disposal of pineapple joint venture |
- |
(3,048) |
|
Costs of terminated acquisitions |
(413) |
- |
|
Merchant Navy Officers Pension Fund (MNOPF) |
273 |
616 |
|
Reversal of impairment of property, plant and equipment |
- |
554 |
|
Costs related to demerger of Total Produce plc |
- |
(875) |
|
Total exceptional items per income statement |
15,549 |
(8,191) |
During the first half of the year, the Group settled its long running insider dealing litigation against DCC plc and others, resulting in a net payment to Fyffes of €37.6m. After provision for all outstanding costs, the Group recognised an exceptional gain of €33m in the year.
As a result of the continued underperformance of Nolem, its Brazilian winter melon joint venture, the Group has written down the remaining carrying value of its equity investment in this business, along with other loans and receivable balances. This gave rise to an exceptional charge in the year of €5.8m.
A container shipping business in which Fyffes acquired a minority stake in the previous year, ceased trading and commenced a process of liquidation during 2008. As a result, the Group has provided against all outstanding loans to this business amounting to €2.95m. In addition, Fyffes put in place, at short notice, alternative shipping arrangements for the remainder of the year, incurring net incremental costs amounting to €4.5m. These amounts have been treated as exceptional items.
As explained in the accompanying statement, based on legal advice, and pending the outcome of the appeals process, the Group's German joint venture Interfrucht Weichert has provided for a net exceptional charge of €3.7m in its accounts in respect of the fine imposed jointly and severally on it and Fresh Del Monte arising from the EU Competition investigation. The Group's Income Statement reflects Fyffes' 80% share of the net exceptional charge recognised in Weichert's accounts, amounting to €2.9m, on a prudent basis, pending the outcome of the appeal process.
During the year, the Group incurred legal and professional fees in connection with the EU Competition investigation amounting to €1.1m, including its share of costs in Weichert. The Group also incurred legal and professional fees amounting to €0.4m in connection with potential acquisitions which were terminated during the year. Adjustments to the Group's obligations in relation to the Merchant Navy Officers Pension Fund (MNOPF) during the year resulted in a net reduction of €0.3m in its liability in this regard.
There was a net tax credit on exceptional items in 2008 of €1m (2007: credit of €0.2m).
4. Corporation tax
|
2008 €'000 |
2007 €'000 |
|
|
Tax (credit)/charge per income statement |
(252) |
3,109 |
|
Group share of tax charge of its joint ventures netted in profit before tax |
142 |
86 |
|
Total tax (credit)/charge |
(110) |
3,195 |
|
Adjustments |
||
|
Deferred tax on amortisation of intangibles (including share of joint ventures) |
888 |
475 |
|
Tax impact of exceptional items |
990 |
159 |
|
Once-off tax (charges) |
- |
(1,974) |
|
Tax charge on underlying activities |
1,768 |
1,855 |
Including the Group's share of the tax charge of its joint ventures, amounting to €0.1m (2007: €0.1m), which is netted in operating profit in accordance with IFRS, the total tax credit for the year amounted to €0.1m (2007: charge of €3.2m). Excluding the impact of once-off tax charges, deferred tax credits related to the amortisation of intangibles and the tax effect of exceptional items, the underlying tax charge for the Group in 2008 was €1.8m (2007: charge of €1.9m), equivalent to a rate of 11.1% (2007: 10.1%) when applied to the Group's adjusted profit before tax.
5. Earnings per share
|
2008 €'000 |
2007 €'000 |
|
|
Profit for financial year attributable to equity shareholders |
70 |
9,326 |
|
'000 |
'000 |
|
|
Issued ordinary shares at start of year |
364,069 |
359,994 |
|
Effect of own shares held |
(15,230) |
(9,630) |
|
Effect of shares issued |
212 |
2,843 |
|
Weighted average number of shares for basic earnings per share calculation |
349,051 |
353,207 |
|
Weighted average number of options with dilutive effect |
2,022 |
2,065 |
|
Weighted average number of shares for fully diluted earnings per share calculation |
351,073 |
355,272 |
|
Basic earnings per share - € cent |
0.02 |
2.64 |
|
Diluted earnings per share - € cent |
0.02 |
2.63 |
Adjusted fully diluted earnings per share
|
2008 €'000 |
2008 € cent |
2007 €'000 |
2007 € cent |
|
|
Profit for financial year attributable to equity shareholders |
70 |
0.02 |
9,326 |
2.64 |
|
Adjustments |
||||
|
Settlement of DCC litigation |
(32,995) |
(9.45) |
(7,500) |
(2.12) |
|
Impairment of investment in Brazilian melon joint venture & receivables |
5,760 |
1.65 |
6,100 |
1.73 |
|
Impairment of investment in shipping business and related costs |
7,466 |
2.14 |
4,188 |
1.19 |
|
Net charge in joint venture for fine re EU Competition investigation |
2,940 |
0.84 |
- |
- |
|
Costs of EU Competition investigation including share of joint venture |
1,140 |
0.33 |
2,650 |
0.75 |
|
Loss on disposal of pineapple joint venture |
- |
- |
3,048 |
0.86 |
|
Merchant Navy Officers Pension Fund (MNOPF) |
(273) |
(0.08) |
(616) |
(0.17) |
|
Costs of terminated acquisitions |
413 |
0.12 |
- |
- |
|
Reversal of impairment of property, plant and equipment |
- |
- |
(554) |
(0.16) |
|
Costs related to demerger of Total Produce plc |
- |
- |
875 |
0.25 |
|
Amortisation charge including share of joint venture |
2,574 |
0.74 |
1,366 |
0.39 |
|
Share of loss/(profit) of Blackrock International Land plc |
28,643 |
8.20 |
(4,506) |
(1.28) |
|
Tax impact of exceptional items and amortisation charges |
(1,878) |
(0.54) |
1,340 |
0.38 |
|
Impact on earnings of dilutive share options |
- |
(0.02) |
- |
(0.04) |
|
Adjusted fully diluted earnings |
13,860 |
3.95 |
15,717 |
4.42 |
Adjusted fully diluted earnings per share is calculated to exclude the Group's share of the results of Blackrock International Land plc, exceptional items, intangible amortisation, related tax credits/charges, once off tax charges/credits and the impact of share options with a dilutive effect.
6. Employee post employment benefits
|
2008 €'000 |
2007 €'000 |
|
|
Asset/(liability) at beginning of year |
1,638 |
(15,090) |
|
Current/past service cost less finance income recognised in income statement |
(508) |
(1,009) |
|
Actuarial (loss)/gain recognised in statement of recognised income and expense |
(14,281) |
5,541 |
|
Regular contributions to schemes |
2,516 |
1,469 |
|
Section 75 contribution in connection with Total Produce demerger |
- |
10,547 |
|
Exchange movement |
650 |
180 |
|
Liability at end of year |
(9,985) |
1,638 |
|
Related deferred tax asset/(liability) |
2,090 |
(642) |
|
Net (liability)/asset after deferred tax |
(7,895) |
996 |
The table above summarises the movements during the year in the Group's various defined benefit pension schemes in Ireland, the UK and Continental Europe. The current/past service cost is charged in the Income Statement, net of the finance income on scheme assets. The actuarial (loss)/gain 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. During 2007, a contribution of €10.5m was made into the Group's UK pension scheme, in accordance with Section 75 of the UK Pensions Act, 1995. This represented payment on behalf of a number of subsidiaries which were demerged to Total Produce in December 2006 and are no longer adhered to that scheme, in respect of pensioners and deferred pensioners who were formerly employed in those subsidiaries.
7. Dividends and share buy back
|
2008 €'000 |
2007 €'000 |
|
|
Dividends paid on Ordinary €6 cent shares |
||
|
Interim dividend for 2008 (2007) of €0.50 cent in both years |
1,726 |
1,765 |
|
Final dividend for 2007 of €1.00 cent (2006: €1.70 cent) |
3,533 |
6,011 |
|
Total cash dividends paid in the year |
5,259 |
7,776 |
The directors have proposed a final dividend for 2008, subject to shareholder approval at the AGM of 1 cent per share. In accordance with IFRS, this dividend has not been provided for in the balance sheet at 31 December 2008.
During 2008, the Company purchased 8 million Fyffes ordinary €0.06 shares in the market at an aggregate cost of €5.4m. At 31 December 2008, the Company and subsidiary companies held 19,021,610 (2007: 11,021,610) Fyffes plc ordinary 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
|
2008 €'000 |
2007 €'000 |
|
|
Profit for the year |
380 |
10,127 |
|
Taxation (credit)/expense |
(252) |
3,109 |
|
Tax received/(paid) |
2,509 |
(2,180) |
|
Depreciation of property, plant and equipment |
3,589 |
2,866 |
|
Release of provision for DCC legal fees |
- |
(7,500) |
|
Reduction in MNOPF liability |
(273) |
(616) |
|
Payments in connection with MNOPF |
(679) |
(512) |
|
Loss on disposal of pineapple joint venture |
- |
3,048 |
|
Impairment of investment in melon joint venture and related receivables |
5,760 |
6,100 |
|
Impairment of investment in shipping business and related receivables |
2,950 |
4,188 |
|
Reversal of impairment of property, plant and equipment |
- |
(554) |
|
Net gain on disposal of property, plant and equipment |
(135) |
(163) |
|
Defined benefit pension scheme expense |
508 |
1,009 |
|
Contributions paid to defined benefit pension schemes |
(2,516) |
(1,469) |
|
Amortisation of intangible assets - subsidiaries |
1,346 |
- |
|
Share of (profits)/loss of joint ventures (incl amortisation) |
(1,604) |
677 |
|
EU Competition investigation costs incurred by joint venture |
818 |
- |
|
Provision for fine in joint venture arising from EU Competition investigation |
2,940 |
- |
|
Share of loss/(profit) of associate |
28,643 |
(4,506) |
|
Net interest income |
(1,563) |
(2,215) |
|
Interest received less interest paid |
1,308 |
1,089 |
|
Receipt of amounts owed by Total Produce plc re demerger |
- |
15,665 |
|
Section 75 pension contribution |
- |
(10,547) |
|
Movement in working capital |
(14,075) |
(18,750) |
|
Settlement of hedging instruments |
881 |
- |
|
Equity settled share-based payments |
99 |
107 |
|
Cash flows from operating activities |
30,634 |
(1,027) |
8.2 Cash flows from investing activities
|
2008 €'000 |
2007 €'000 |
|
|
Acquisition of subsidiaries- net of cash acquired |
(11,659) |
- |
|
Acquisition/investment in and advances to joint ventures |
(1,487) |
(6,175) |
|
Impact of change of ownership of joint venture |
- |
(4,582) |
|
Acquisition of property, plant and equipment |
(14,855) |
(2,275) |
|
Proceeds from disposal of property, plant and equipment |
330 |
297 |
|
Loans repaid by joint ventures |
- |
1,130 |
|
Other equity investments |
(1,200) |
(5,936) |
|
Cash flows from investing activities |
(28,871) |
(17,541) |
8.3 Cash flows from financing activities
|
2008 €'000 |
2007 €'000 |
|
|
Proceeds from issue of shares (including premium) |
168 |
268 |
|
Purchase of own shares |
(5,447) |
(1,661) |
|
Net increase/(reduction) in borrowings |
9,137 |
(1,911) |
|
Capital element of lease payments |
(280) |
- |
|
Dividends paid to equity shareholders |
(5,259) |
(7,776) |
|
Cash flows from financing activities |
(1,681) |
(11,080) |
8.4 Analysis of movement in net funds in the year
|
Opening 1 Jan 2008 €'000 |
Cash flow €'000 |
Acquisition of subsidiaries €'000 |
Non cash movement €'000 |
Translation €'000 |
Closing 31 Dec 2008 €'000 |
|
|
Short term bank deposits |
- |
- |
- |
27,326 |
- |
27,326 |
|
Bank balances |
6,020 |
1,004 |
- |
- |
(1,867) |
5,157 |
|
Call deposits |
90,188 |
(863) |
- |
(27,326) |
(84) |
61,915 |
|
Cash & cash equivalents per balance sheet |
96,208 |
141 |
- |
(27,326) |
(1,951) |
67,072 |
|
Overdrafts |
(1,306) |
(59) |
- |
- |
(3) |
(1,368) |
|
Cash & cash equivalents per cash flow statement |
94,902 |
82 |
- |
(27,326) |
(1,954) |
65,704 |
|
Bank loans - current |
(6,121) |
(8,036) |
(2,766) |
(42,592) |
(218) |
(59,733) |
|
Bank loans - non current |
(40,000) |
(1,101) |
(1,696) |
42,592 |
40 |
(165) |
|
Finance leases |
- |
280 |
(1,156) |
- |
(29) |
(905) |
|
Total net funds |
48,781 |
(8,775) |
(5,618) |
- |
(2,161) |
32,227 |
Related Shares:
FFY.L