27th Feb 2006 07:02
Associated British Foods PLC27 February 2006 27 February 2006 Associated British Foods plc Pre Close Period Trading Update Associated British Foods plc issues the following update prior to entering theclose period for its interim results to 4 March 2006, which are scheduled to beannounced on 19 April 2006. The Chairman's statement at the Annual General Meeting on 9 December 2005 saidthat trading in the early part of the year had been a little ahead of theprevious year, that competition in all our markets was strong and the trend inenergy prices was a particular concern. We expected to deliver further progressas the year developed. This continues to be the case. We have previously highlighted that the EU market for sugar will likely face aperiod of price volatility over the next few years. This was expected to resultfrom imbalances in supply and demand within the market, the withdrawal ofexports from the EU and changes in producer behaviour in anticipation of reformof the EU sugar regime. Trading in the current year for British Sugar in the UKand Poland has been difficult with price pressure on contracts for this calendaryear and sharply higher energy costs. Operating profit for these businesseswill be lower than last year as a result. However, this year's campaigns wereexcellent in the UK and Poland and the UK crop is forecast at 1.34 milliontonnes. British Sugar has announced the closure of two of its four factories inPoland and continues to work on cost reduction and the exploitation of newrevenue opportunities, including the manufacture of bioethanol, in the UK. InChina, the effect on profit of a lower crop has been offset by much higherpricing for sugar. In Grocery, ACH has performed well and benefited from a continued strongcontribution from Capullo in Mexico. Twinings, Ovaltine and Ryvita all achievedstrong sales growth. However, bakery profitability in Australia continued to beaffected by the final commissioning costs of the new Sydney bakery and, in theUK, Allied Bakeries has achieved lower volumes than expected. In Ingredients, AB Mauri will contribute strongly, reflecting a full half yearof profit, the benefits of price and volume increases and growth in bakeryingredients. Capacity has been increased in a number of Asian factories and thenewly opened factory in Western China is operating well. Primark has continued to trade well and like-for-like sales growth is expectedto be some 6% in the first half year. This is despite the effects of the firewhich destroyed the main UK warehouse last November. Stock levels have nowrecovered well. Seven new stores were opened in the first half of the year andthree stores closed. The total number of stores is now 126 with 2.9 million sqft of retail selling space. Trading in the Littlewoods stores finished in January and the trading resultwill be somewhat ahead of our expectation at the time of acquisition. 41 storeshave now been transferred to Primark management to be refitted and these will beopened as Primark progressively from late Spring this year until early 2007.It is now expected that some 1.4 million sq ft of retail selling space will betraded from these stores compared to 1.2 million sq ft previously announced.Agreement has been reached to sell 59 of the remaining 79 stores and the valuerealised to date is also ahead of our expectation. Negotiations for the sale ofthe remaining stores are continuing. As expected net investment income will be lower this year as a result of theinvestment in the acquisition of the Littlewoods stores and higher interestexpense on our US dollar borrowings. Our interim results will be prepared under International Financial ReportingStandards ("IFRS") applying the accounting policies published in our IFRSTransition Document in December 2005. The comparative results for the 24 weeksended 5 March 2005 prepared under these policies are attached. For further enquiries please contact: Associated British FoodsJohn Bason, Finance Director Tel: 020 7399 6500 Citigate Dewe RogersonJonathan Clare, Chris Barrie, Sara Batchelor Tel: 020 7638 9571 Appendix Presentation of information under International Financial Reporting Standards("IFRS") The group's interim results for the period ending 4 March 2006 will be preparedapplying accounting policies in accordance with IFRS. These results willinclude comparative information for 2005. This appendix presents the restatement of the group's interim results for theperiod ending 5 March 2005, previously reported under UK Generally AcceptedAccounting Principles (UK GAAP). The restated statements have been prepared onthe same basis as those for the year ending 17 September 2005 which werepublished on 15 December 2005 and which are available on the company's websiteat www.abf.co.uk/investors. The restated financial information is unaudited. In the restated results for the year ending 17 September 2005 the group hadadopted the IASB's amendment to IAS 19 entitled IAS 19 Actuarial Gains andLosses. This has now been endorsed by the EU. In the restated results for theyear ending 17 September 2005 the group has early adopted IFRS 5, Non-currentAssets Held for Sale and Discontinued Operations. Reconciliations to assist the reader in understanding the nature and quantum ofdifferences between the application of UK GAAP and IFRS on these financialstatements are also included in this appendix. Restated consolidated statements Consolidated income statementfor the 24 weeks ended 5 March 2005 Unaudited 24 weeks ended 5 March 2005 Note £mRevenues 2,618Operating costs (2,387) 231Share of profit from joint ventures and associates 2Profits less losses on sale of fixed assets 19Operating profit 1 252Adjusted operating profit 243Profits less losses on the sale of fixed assets 19Amortisation of intangibles (10)Profit before interest 252Investment income 25Interest payable (14)Other net financial income 5Profit before taxation 268Adjusted profit before taxation 259Profits less losses on the sale of fixed assets 19Amortisation of intangibles (10)Taxation - UK 2 (42) - Overseas 2 (26) (68)Profit for the period 200 Attributable to: Equity shareholders 198Minority interests 2Profit for the period 200 Basic and diluted earnings per ordinary share (pence) 25.1Adjusted earnings per share (pence) 23.6Dividends per share (pence) 11.15 Consolidated balance sheetat 5 March 2005 Unaudited At 5 March 2005 £mNon-current assetsIntangible assets 1,078Property, plant and equipment 1,632Non-current assets held for sale 12Investments in joint ventures 15Investments in associates 13Employee benefits asset 73Deferred tax assets 41Other investments 1Total non-current assets 2,865 Current assetsInventories 841Trade and other receivables 665Other investments 429Cash and cash equivalents 640Total current assets 2,575TOTAL ASSETS 5,440 Current liabilitiesInterest bearing loans and overdrafts (102)Trade and other payables (753)Income tax (116)Amounts owed to joint ventures (2)Provisions (13)Total current liabilities (986) Non-current liabilitiesInterest bearing loans and overdrafts (503)Income tax (2)Provisions (39)Deferred tax liabilities (186)Employee benefits liability (10)Total non-current liabilities (740)TOTAL LIABILITIES (1,726)NET ASSETS 3,714 Equity Issued capital 47Other reserves 173Own shares reserve (12)Pension reserve 42Translation reserve 5Retained earnings 3,435 3,690Minority interest - equity 24TOTAL EQUITY 3,714 Consolidated cash flow statementfor the 24 weeks ended 5 March 2005 Unaudited 24 weeks ended 5 March 2005 £mCash flow from operating activitiesProfit before taxation 268Adjustments for non-cash items: - Amortisation 10- Depreciation 79- Other 8Pension cost less contributions 7Profits less losses on sale of fixed assets (19)Share of (profit) from joint ventures and associates (2)Investment income (25)Interest payable 14Other net financial income (5)Operating cash flow before changes in working 335capital and provisions Increase in inventories (314)Increase in receivables (15)Increase in payables 52Increase in other provisions 13Income tax paid (72)Net cash from operating activities (1) Cash flows from investing activitiesPurchase of tangible fixed assets (142)Proceeds from the sale of tangible fixed assets 31Purchase of subsidiary undertakings (630)Sale of subsidiary undertakings 1Proceeds from the sale of joint ventures and associates 1Interest received 27Net cash from investing activities (712) Cash flows from financing activities Dividends paid to minorities (2)Dividends paid to shareholders (88)Interest paid (13)Management of liquid resources 109Financing 200Net cash from financing activities 206 Net decrease in cash and cash equivalents (507)Cash and cash equivalents at 18 September 2004 1,144Effect of exchange rate fluctuations on cash held 3Cash and cash equivalents at 5 March 2005 640 Consolidated statement of recognised income and expensefor the 24 weeks ended 5 March 2005 Unaudited 24 weeks ended 5 March 2005 £m Foreign exchange translation differences 16Net loss recognised directly in equity 16Net profit for the period 200Total recognised income and expense for the period 216 Attributable to:Equity shareholders 214Minority interests 2Total recognised income and expense for the period 216 Notes to the interim report 1. Segmental Analysis - 24 weeks ended 5 March 2005 Business segments Unaudited Primary Inter- Grocery Food Agriculture Ingredients Retail Central segment Total £m £m £m £m £m £m £m £m Revenue from external 1,248 342 398 269 448 - - 2,705customersBusinesses disposed - - 4 - - - - 4Inter-segment revenue (4) (8) - (2) - - (77) (91)Total external revenue 1,244 334 402 267 448 - (77) 2,618 Adjusted profit from 84 78 8 25 59 (11) - 243operationsProfits less losses on - 19 - - - - - 19sale of property, plant& equipmentAmortisation of (1) - - (9) - - - (10)intangiblesProfit from operations 83 97 8 16 59 (11) - 252Net financing costs - - - - - 11 - 11Income tax expense - - - - - (68) - (68)Other net financial - - - - - 5 - 5incomeNet profit for the 83 97 8 16 59 (63) - 200period Segment assets (excl. 1,734 897 282 984 497 474 4,868investments inassociates and jointventures)Investment in associates 1 4 - 23 - - - 28& joint venturesSegment assets 1,735 901 282 1,007 497 474 - 4,896 Segment liabilities (333) (182) (74) (78) (95) (45) - (807) Capital expenditure 42 16 2 11 71 - - 142Depreciation 32 25 4 10 8 - - 79Amortisation 1 - - 9 - - - 10Other significant 13 - - 1 - - - 14non-cash expenses Geographical segments Australia, United Rest of The Asia & Inter- Kingdom Europe Americas Rest of segment Total world £m £m £m £m £m £mRevenue from external 1,390 303 519 439 (33) 2,618customersSegment assets 2,434 783 945 734 - 4,896Capital expenditure 88 19 9 26 - 142Depreciation 49 7 10 13 - 79Amortisation 1 2 5 2 - 10Other significant - 5 9 - - 14non-cash expenses Net Segment Assets & Liabilities 4,089 Balance Sheet (Extract) Intangible assets 1,078 Property, plant and equipment 1,632 Non-Current assets held for sale 12 Interests in net assets of : Joint Ventures 15 Associates 13 Current Assets Inventories 841 Trade and other receivables 665 Cash and cash equivalents 640 Trade and other (753) payables Amounts owed to Joint Ventures (2) Provisions (52) 4,089 Notes to the Interim Report (continued) 2. Income Tax Expense - 24 weeks ended 5 March 2005 Unaudited 24 weeks ended 5 March 2005 £mCurrent tax expenseUK - income tax at 30% 39Overseas - income and corporation tax 26 65Deferred tax expenseUK deferred tax 3Total income tax expense in income statement 68 Reconciliation of effective tax rateNominal tax charge at UK income tax rate (30%) 81Lower tax rates on overseas earnings (12)Expenses not deductible for tax purposes 3Utilisation of losses (5)Deferred tax not recognised 1 68 Detailed Reconciliations Consolidated income statement for the 24 weeks ended 5 March 2005 Consolidated balance sheet at 5 March 2005 Consolidated cash flow statement for the 24 weeks ended 5 March 2005 Please follow the link below, to view the above tables; http://www.rns-pdf.londonstockexchange.com/rns/9518y_-2006-2-27.pdf This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AB Foods