TIDMTOT
RNS Number : 3664P
Total Produce Plc
31 August 2017
TOTAL PRODUCE PLC
RESULTS TO 30 JUNE 2017
TOTAL PRODUCE CONTINUES STRONG GROWTH
-- Revenue up 12.2% to EUR2.15 billion
-- Adjusted fully diluted EPS up 10.1% to 6.78 cent
-- Adjusted EBITDA up 9.5% to EUR52.8m
-- Adjusted EBITA up 12.0% to EUR42.5m
-- Adjusted profit before tax up 11.8% to EUR39.0m
-- Interim dividend up 10.0% to 0.8906 cent per share
-- Continues to target increased full year adjusted earnings
per share in the upper half of the previously announced
range of 12.0 to 13.0 cent per share
Key performance indicators are defined overleaf
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce has delivered a strong first half-year
performance in 2017. Revenue has increased by 12.2% to EUR2.15
billion and adjusted earnings per share has increased by 10.1% to
6.78 cent.
The Group has continued its international expansion with a
number of significant North American transactions. It increased its
shareholding in the Oppenheimer group ('Oppy') from 35% to 65%. In
addition, Oppy concluded important strategic agreements with the
New Zealand based T&G Global. The Group's Los Angeles
headquartered Progressive Produce business increased its scale with
the acquisition of Keystone Fruit Marketing. The Group is actively
pursuing further investment opportunities.
We are pleased to announce a 10% increase in the interim
dividend to 0.8906 cent per share. The Group continues to target
increased full-year adjusted earnings per share in the upper half
of the previously-announced range of 12.0 to 13.0 cent per
share".
31 August 2017
For further information, please contact:
Brian Bell, Wilson Hartnell PR - Tel: +353-1-669-0030, Mobile:
+353-87-243-6130
TOTAL PRODUCE PLC INTERIM RESULTS FOR THE
SIX MONTHSED 30 JUNE 2017
2017 2016
EUR'million EUR'million % change
Total revenue (1) 2,147 1,914 +12.2%
Group revenue 1,823 1,589 +14.8%
Adjusted EBITDA (1) 52.8 48.2 +9.5%
Adjusted EBITA (1) 42.5 37.9 +12.0%
Operating profit (before exceptional
credits) 33.4 28.4 +17.9%
Adjusted profit before tax (1) 39.0 34.9 +11.8%
Profit before tax 35.4 25.6 +38.6%
Euro cent Euro cent % change
Adjusted fully diluted earnings per share
(1) 6.78 6.16 +10.1%
Basic earnings per share 6.95 4.77 +45.7%
Diluted earnings per share 6.88 4.70 +46.4%
Interim dividend per share 0.8906 0.8096 +10.0%
(1) Key performance indicators defined
Total revenue includes the Group's share of the revenue of its
joint ventures and associates.
Adjusted EBITDA is earnings before interest, tax, depreciation,
acquisition related intangible asset amortisation charges and
costs, fair value movements on contingent consideration and exceptional
items. It also excludes the Group's share of these items within
joint ventures and associates.
Adjusted EBITA is earnings before interest, tax, acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration and exceptional items. It also excludes
the Group's share of these items within joint ventures and associates.
Adjusted profit before tax excludes acquisition related intangible
asset amortisation charges and costs, fair value movements on
contingent consideration and exceptional items. It also excludes
the Group's share of these items within joint ventures and associates.
Adjusted fully diluted earnings per share excludes acquisition
related intangible asset amortisation charges and costs, fair
value movements on contingent consideration, exceptional items
and related tax on such items. It also excludes the Group's share
of these items within joint ventures and associates.
Forward-looking statement
Any forward-looking statements made in this press release have
been made in good faith based on the information available as of
the date of this press release and are not guarantees of future
performance. Actual results or developments may differ materially
from the expectations expressed or implied in these statements, and
the Company undertakes no obligation to update any such statements
whether as a result of new information, future events, or
otherwise. Total Produce's Annual Report contains and identifies
important factors that could cause these developments or the
Company's actual results to differ materially from those expressed
or implied in these forward-looking statements.
Overview
Total Produce (the 'Group') has delivered a strong performance in the
first half of 2017. Total revenue, adjusted EBITA and adjusted fully
diluted earnings per share grew by 12.2%, 12.0% and 10.1% respectively.
The results benefited from the contribution of acquisitions in the
period and a circa 4% like-for-like growth in revenue. The Group continues
to be cash generative with operating cashflows of EUR33.3m (2016: EUR32.5m)
before normal seasonal working capital outflows.
The Board is pleased to announce a 10.0% increase in the interim dividend
to 0.8906 (2016: 0.8096) cent per share.
Operating review
Total revenue increased 12.2% to EUR2.15 billion (2016: EUR1.91 billion)
with adjusted EBITA up 12.0% to EUR42.5m (2016: EUR37.9m). The results
benefited from the contribution of recent acquisitions offset in part
by a negative impact on the translation to Euro of the results of foreign
currency denominated operations. The deconsolidation of a subsidiary
to a joint venture interest had a marginal effect on revenue and adjusted
EBITA and no effect on adjusted earnings per share. On a like-for-like
basis, excluding acquisitions, divestments and currency translation,
revenue was circa 4% higher driven by an increase in average prices
with similar volumes.
Trading conditions overall were satisfactory. In the early part of
year, unusual weather conditions in Southern Europe lead to temporary
shortages of certain salad and vegetable lines. However given the Group's
diversified business model this did not have a material impact. Our
North American division experienced relatively less favourable trading
conditions in the period. While overall volumes in this division have
increased on a like-for-like basis from prior year, the result was
impacted by lower pricing due to greater volumes of product in the
market and weather conditions that negatively impacted quality.
The table below details a segmental breakdown of the Group's revenue
and adjusted EBITA for the six months ended 30 June 2017. Each of the
operating segments is primarily involved in the procurement, marketing
and distribution of hundreds of lines of fresh produce. Both European
divisions include businesses involved in the marketing and distribution
of healthfoods and consumer products. Segment performance is evaluated
based on revenue and adjusted EBITA.
(Unaudited) (Unaudited)
6 months to 30 June 6 months to 30 June
2017 2016
Total Adjusted Total Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Europe - Eurozone 903,194 13,772 869,802 13,252
Europe - Non-Eurozone 800,051 22,100 811,022 19,778
International 471,362 6,619 261,347 4,899
Inter-segment revenue (27,722) - (27,919) -
----------- ---------- ------------ ---------
Total revenue and adjusted EBITA 2,146,885 42,491 1,914,252 37,929
----------- ---------- ------------ ---------
Europe - Eurozone
This segment includes the Group's businesses in France, Ireland, Italy,
the Netherlands and Spain. Revenue increased by 3.8% to EUR903m (2016:
EUR870m) with a 3.9% increase in adjusted EBITA to EUR13.8m (2016:
EUR13.3m). Overall trading conditions were favourable despite challenging
conditions in Holland. The results were also marginally impacted by
the effect of a subsidiary being deconsolidated and treated as a joint
venture interest. Excluding the effect of acquisitions and divestments,
revenue on a like-for-like basis was up circa 5% on prior year due
primarily to average price increases with a slight increase in volumes.
Europe - Non-Eurozone
This segment includes the Group's businesses in the Czech Republic,
Poland, Scandinavia and the UK. Revenue decreased by 1.4% to EUR800m
(2016: EUR811m) with adjusted EBITA increasing by 11.7% to EUR22.1m
(2016: EUR19.8m) helped by higher average prices and the incremental
contribution of recent bolt-on acquisitions. The result was adversely
impacted by the translation of the results of foreign currency denominated
operations into Euro particularly the weakening of Sterling by 9.8%
and Swedish Krona by 3.3%.
On a like-for-like basis excluding acquisitions, divestments and currency
translation, revenue was circa 2% ahead of the prior year with average
price increases offsetting marginal volume decline.
International
This division includes the Group's businesses in North America and
India. Revenue increased by 80% to EUR471m (2016: EUR261m) with adjusted
EBITA increasing 35% to EUR6.6m (2016: EUR4.9m). The results benefited
from the incremental contribution of acquisitions. On 1 March 2017,
the Group acquired a further 30% of the Oppenheimer Group ('Oppy')
taking its interest to 65% and from this date it was fully consolidated
as a subsidiary. Previously the original 35% shareholding interest
was equity accounted for as an associate interest. In addition there
was a further bolt-on acquisition in North America in the first half
of the year. This was offset by relatively challenging trading conditions
in North America. While overall volumes have increased from prior year
particularly grapes, organics, potatoes and onions, the overall result
was impacted by lower pricing with increased volumes of product in
the market and weather conditions that negatively impacted quality
particularly tomatoes, berries and potatoes. Oppy also incurred start-up
losses in a new partnership for growing soft fruit.
Financial Review
Revenue and Adjusted EBITA
An analysis of the factors influencing the changes in revenue and adjusted
EBITA are discussed in the operating review above.
Share of profits of joint ventures and associates
The share of after tax profits of joint ventures and associates decreased
in the period to EUR4.4m (2016: EUR5.5m) largely due to Oppy Group
becoming a subsidiary on 1 March 2017 with the acquisition of a further
30% to take the Group's interest to 65%. Prior to this the original
35% shareholding was accounted for as an associate interest. This was
partly offset by a subsidiary interest being deconsolidated from January
2017 due to a change in nature of the shareholder arrangements and
being treated as a joint venture interest. Cash dividends received
from joint ventures and associates in the period amounted to EUR6.5m
(2016: EUR7.8m).
Intangible asset amortisation
Acquisition related intangible asset amortisation in subsidiaries increased
to EUR5.0m (2016: EUR3.9m) due to additional charges relating to recent
acquisitions. The share of intangible asset amortisation within joint
ventures and associates was EUR1.3m (2016: EUR1.3m).
Exceptional items
Exceptional items in the period amounted to a net credit of EUR5.1m
(2016: EURNil) before tax. A gain of EUR12.4m arose on the remeasurement
to fair value of the Group's original 35% associate investment in the
Oppenheimer Group. A settlement credit of EUR1.7m was recognised as
a result of an enhanced transfer value offer to members of one of the
Irish defined benefit pension schemes. Offsetting this was a EUR9.1m
goodwill impairment charge. A full analysis of these exceptional items
is set out in Note 5 of the accompanying financial information.
Operating Profit
Operating profit before exceptional items increased by 17.9% in the
period to EUR33.4m (2016: EUR28.4m). Operating profit after these items
amounted to EUR38.5m (2016: EUR28.4m).
Net Financial Expense
Net financial expense in the period increased to EUR3.1m (2016: EUR2.8m)
with higher average net debt in the period due to acquisition expenditure
and debt assumed on acquisition partly offset by lower cost of funding.
The Group's share of the net interest expense of joint ventures and
associates in the period was EUR0.4m (2016: EUR0.2m). Net interest
cover for the period was 13.9 times based on adjusted EBITA.
Profit Before Tax
Excluding acquisition related intangible asset amortisation charges
and costs and fair value movements on contingent consideration, the
adjusted profit before tax increased by 11.8% in the period to EUR39.0m
(2016: EUR34.9m). Statutory profit before tax after these items was
EUR35.4m (2016: EUR25.6m).
Non-Controlling Interests
The non-controlling interests' share of after tax profits in the period
was EUR5.9m (2016: EUR5.4m). Included in this was the non-controlling
interests' share of acquisition related intangible asset amortisation
charges and costs with related tax impact of EUR1.3m (2016: EUR0.8m).
Excluding these non-trading items, the non-controlling interests' share
of after tax profits increased by EUR1.0m. The increase in the period
was due to the non-controlling interests' incremental share of profits
in recent acquisitions and overall good trading conditions in certain
non-wholly owned companies offset in part by the effect of a deconsolidation
of a subsidiary in January 2017.
Adjusted and Basic Earnings per Share
Adjusted fully diluted earnings per share increased 10.1% in the six
month period to 6.78 cent per share (2016: 6.16 cent) assisted by the
incremental contribution from new acquisitions. Management believes
that adjusted earnings per share, which excludes exceptional items,
acquisition related intangible asset amortisation charges and costs,
fair value movements on contingent consideration and related tax on
these items, provides a fairer reflection of the underlying trading
performance of the Group.
Basic earnings per share and diluted earnings per share after these
non-trading items amounted to 6.95 cent per share (2016: 4.77 cent)
and 6.88 cent per share (2016: 4.70 cent) respectively.
Note 6 of the accompanying financial information provides details of
the calculation of the respective earnings per share amounts.
Cash Flow and Net Debt
Net debt at 30 June 2017 was EUR153.3m compared to EUR95.7m at 30 June
2016 and EUR48.4m at 31 December 2016. The increase compared to 31
December 2016 is due to acquisitions (including debt assumed) and normal
seasonal working capital outflows. Net debt relative to annualised
adjusted EBITDA is 1.5 times and interest is covered 13.9 times by
adjusted EBITA. Average net debt for the six months ended June 2017
was EUR139.6m compared to EUR106.5m for the six months ended 30 June
2016 and EUR95.9m for the twelve months ended 31 December 2016. In
addition, the Group has trade receivables financing at 30 June 2017
of EUR48.4m (30 June 2016: EUR49.4m and 31 December 2016: EUR43.0m).
The Group generated EUR33.3m (2016: EUR32.5m) in operating cash flows
in the period before seasonal working capital outflows of EUR45.9m
(2016: EUR57.7m). Cash outflows on routine capital expenditure, net
of disposals, were EUR10.4m (2016: EUR9.0m). Dividends received from
joint ventures and associates in the period were EUR6.5m (2016: EUR7.8m)
while dividends paid to non-controlling interests increased to EUR8.5m
(2016: EUR3.8m).
Cash outflows on acquisitions amounted to EUR32.2m (2016: EUR34.9m)
and there was EUR25.2m net debt (2016: EUR0.8m cash) assumed on acquisition.
Contingent and deferred consideration payments relating to prior period
acquisitions were EUR8.8m (2016: EUR3.6m). There was a EUR6.7m cash
effect following the change in accounting of an investee from a subsidiary
interest to a joint venture interest. In the period there were cash
outflows of EUR8.9m (2016: EUR4.7m) on non-routine capital expenditure.
The Group distributed EUR7.2m (2016: EUR6.5m) in dividends to equity
shareholders in the period representing the payment of the final 2016
dividend. There was a positive movement of EUR8.6m (2016: EUR2.6m)
on the translation of foreign currency denominated debt into Euro at
30 June 2017 due primarily to the weaker Sterling, Swedish Krona, Canadian
and US Dollar exchange rates at the period end compared to those prevailing
at 31 December 2016.
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year-ended
to 30 June to 30 June 31 Dec 2016
2017 2016
EUR'm EUR'm EUR'm
Adjusted EBITDA (Note 4) 52.8 48.2 94.8
Deduct adjusted EBITDA of joint ventures
and associates (9.2) (10.8) (22.1)
Net financial expense and tax paid (10.2) (4.8) (17.3)
Other (0.1) (0.1) (1.7)
------------- ------------- --------------
Operating cash flows before working capital
movements 33.3 32.5 53.7
Working capital movements (45.9) (57.7) (9.5)
------------- ------------- --------------
Operating cash flows (12.6) (25.2) 44.2
Routine capital expenditure net of routine
disposal proceeds (10.4) (9.0) (15.3)
Dividends received from joint ventures
and associates 6.5 7.8 8.3
Dividends paid to non-controlling interests (8.5) (3.8) (6.8)
------------- ------------- --------------
Free cash flow (25.0) (30.2) 30.4
Cashflow from exceptional items (1.7) - 3.0
Acquisition payments, net (1) (32.2) (34.9) (44.2)
Net (debt)/cash assumed on acquisition
of subsidiaries (25.2) 0.8 0.8
Subsidiary now a joint venture (6.7) - (0.5)
Contingent and deferred consideration
payments (8.8) (3.6) (4.8)
Disposal of trading assets - 3.8 6.4
Non-routine capital expenditure/property
additions (8.9) (4.7) (7.8)
Dividends paid to equity shareholders (7.2) (6.5) (9.1)
Buy-back of own shares - (6.0) (6.0)
Proceeds from issue of share capital 2.1 1.3 1.8
Other 0.1 (0.2) (0.7)
------------- ------------- --------------
Total net debt movement in period (113.5) (80.2) (30.7)
Net debt at beginning of period (48.4) (18.1) (18.1)
Foreign currency translation 8.6 2.6 0.4
------------- ------------- --------------
Net debt at end of period (153.3) (95.7) (48.4)
============= ============= ==============
(1) Includes payments in period in respect of subsidiaries,
non-controlling interests, joint ventures and associates and is net
of contributions from non-controlling interests and proceeds on
disposal of shares to non-controlling interests.
Defined Benefit Pension Obligations
The net liability of the Group's defined benefit pension schemes
(net of deferred tax) decreased to EUR21.4m at 30 June 2017 from
EUR31.8m at 31 December 2016. The decrease in the liability is due
to the positive effect of an enhanced transfer value offer made to
members in one of the Irish schemes, an increase in the Eurozone
discount rates underlying the calculations of the present value of
the scheme's obligations and positive investment returns on pension
scheme assets. This was offset by the effect of a decrease in the
UK discount rates. Further details are outlined in Note 7 of the
accompanying financial information.
Shareholders' Equity
Shareholders' equity has increased by EUR8.2m to EUR234.5m at 30
June 2017. Profit after tax of EUR22.4m attributable to equity shareholders,
and remeasurement gains of EUR7.0m (net of deferred tax) on post-employment
benefit schemes, were offset by a currency translation loss of EUR4.0m
on the retranslation of the net assets of foreign currency denominated
operations to Euro, a EUR14.1m increase in put-option liability reserve
and the payment of dividends of EUR7.2m to equity shareholders of
the Company.
Development Activity
A key part of the Group's strategy is growth by acquisition. In line
with this strategy the Group made a number of acquisitions and investments
during the six months ended 30 June 2017 with committed investment
of EUR34.4m including EUR1.7m of deferred and contingent consideration
payable on the achievement of future profit targets.
On 1 March 2017, the Group completed the purchase of a further 30%
of the Oppenheimer Group which trades under the name of Oppy, for
a consideration of EUR28.2m. Together with the initial 35% acquired
in 2013, this brings the Group's shareholding in Oppy to 65%. Headquartered
in Vancouver, Canada with annual sales of almost CAD$1 billion (EUR720m),
Oppy is a leading provider of fresh produce to its strong base of
retail, wholesale and foodservice customers throughout the United
States and Canada. In addition to this, long term put and call options
are in place for the remaining 35% shareholding, not exercisable
before 2020.
In April 2017, Oppy entered strategically-important agreements with
New Zealand based T&G Global Limited which will enable both parties
to enhance their market positions as co-shareholders in two US produce
businesses.
In February 2017, the Group's Los Angeles headquartered fresh produce
business, Progressive Produce LLC, acquired the trade and business
assets of Keystone Fruit Marketing Inc. The Group made a number of
other bolt-on investments in Europe all of which complement the Group's
existing activities.
Further details on 2017 development activity including details of
consideration paid and assets and liabilities acquired are provided
in Note 9 of the accompanying financial information.
The Group continues to actively pursue further investment opportunities
in both new and existing markets.
Dividends
The Board has declared an interim dividend of 0.8906 (2016: 0.8096)
cent per share, which represents a 10.0% increase on the comparative
period. The dividend will be paid on 13 October 2017 to shareholders
on the register at 15 September 2017 subject to dividend withholding
tax. In accordance with company law and IFRS, this dividend has not
been provided for in the balance sheet at 30 June 2017.
Summary and Outlook
Total Produce has delivered a strong first half-year performance
in 2017. Revenue has increased by 12.2% to EUR2.15 billion, and adjusted
earnings per share has increased by 10.1% to 6.78 cent.
The Group has continued its international expansion with a number
of significant North American transactions. It increased its shareholding
in the Oppenheimer group ('Oppy') from 35% to 65%. In addition, Oppy
concluded important strategic agreements with the New Zealand based
T&G Global. The Group's Los Angeles headquartered Progressive Produce
business increased its scale with the acquisition of Keystone Fruit
Marketing. The Group is actively pursuing further investment opportunities.
We are pleased to announce a 10% increase in the interim dividend
to 0.8906 cent per share. The Group continues to target increased
full-year adjusted earnings per share in the upper half of the previously-announced
range of 12.0 to 13.0 cent per share.
Carl McCann, Chairman
On behalf of the Board
31 August 2017
Total Produce plc
Condensed Group Income Statement
for the half-year ended 30 June 2017
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
6 months 6 months 6 months 6 months 6 months 6 months (Audited) (Audited) (Audited)
to to to to to to Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 31 Dec 31 Dec 31 Dec
2017 2017 2017 2016 2016 2016 2016 2016 2016
Pre- Exceptional Total Pre- Exceptional Total Pre- Exceptional Total
Exceptional items Exceptional items Exceptional items
(Note 5) (Note 5) (Note 5)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue,
including Group
share
of joint
ventures and
associates 2,146,885 - 2,146,885 1,914,252 - 1,914,252 3,762,405 - 3,762,405
Group revenue 1,823,461 - 1,823,461 1,588,839 - 1,588,839 3,105,475 - 3,105,475
Cost of sales (1,578,359) - (1,578,359) (1,368,448) - (1,368,448) (2,672,585) - (2,672,585)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Gross profit 245,102 - 245,102 220,391 - 220,391 432,890 - 432,890
Operating
expenses (211,061) 5,063 (205,998) (193,614) - (193,614) (379,924) (1,409) (381,333)
Share of profit
of joint
ventures and
associates 4,405 - 4,405 5,483 - 5,483 12,270 - 12,270
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Operating
profit before
acquisition
related
intangible
asset
amortisation 38,446 5,063 43,509 32,260 - 32,260 65,236 (1,409) 63,827
Acquisition
related
intangible
asset
amortisation (4,998) - (4,998) (3,884) - (3,884) (7,675) - (7,675)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Operating
profit after
acquisition
related
intangible
asset
amortisation 33,448 5,063 38,511 28,376 28,376 57,561 (1,409) 56,152
Net financial
expense (3,066) - (3,066) (2,804) - (2,804) (5,524) - (5,524)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Profit before
tax 30,382 5,063 35,445 25,572 - 25,572 52,037 (1,409) 50,628
Income tax
expense (6,957) (214) (7,171) (4,898) - (4,898) (10,638) (686) (11,324)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Profit for the
period 23,425 4,849 28,274 20,674 - 20,674 41,399 (2,095) 39,304
============ ============ ============ =============== ============ =============== ============ ============ ============
Attributable to:
Equity holders
of the parent 22,382 15,240 28,536
Non-controlling
interests 5,892 5,434 10,768
------------ --------------- ------------
28,274 20,674 39,304
============ =============== ============
Earnings per
ordinary share
Basic 6.95 4.77 8.91
Fully diluted 6.88 4.70 8.80
Adjusted fully
diluted 6.78 6.16 12.07
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Total Produce plc
Condensed Group Statement of Comprehensive Income
for the half-year ended 30 June 2017
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2016
2017 2016
EUR'000 EUR'000 EUR'000
Profit for the period 28,274 20,674 39,304
------------- ------------- --------------
Other comprehensive income:
Items that may be reclassified to profit
or loss:
Foreign currency translation effects:
* foreign currency net investments - subsidiaries (7,366) (11,176) (12,189)
* foreign currency net investments - joint ventures and
associates (2,201) 202 629
* foreign currency borrowings designated as net
investment hedges 6,521 4,667 3,496
* foreign currency recycled to income statement on
associate becoming a subsidiary (net of currency
movements on net investment hedges) (1,137) - -
Effective portion of changes in fair
value of cash flow hedges, net (119) (145) (43)
Deferred tax on items above 39 19 11
------------- ------------- --------------
(4,263) (6,433) (8,096)
------------- ------------- --------------
Items that will not be reclassified
to profit or loss:
Remeasurement gains/(losses) on post-employment
benefit schemes 8,944 (23,241) (23,769)
Revaluation gains on property, plant
and equipment - - 1,421
Revaluation losses on property, plant
and equipment - - (292)
Deferred tax on items above (1,662) 3,346 4,679
Share of joint ventures and associates
remeasurement gains/(losses) on post-employment
benefit schemes 709 (707) (824)
Share of joint ventures and associates
deferred tax on items above - - 4
------------- ------------- --------------
7,991 (20,602) (18,781)
------------- ------------- --------------
Other comprehensive income for the
period 3,728 (27,035) (26,877)
============= ============= ==============
Total comprehensive income for the
period 32,002 (6,361) 12,427
============= ============= ==============
Attributable to:
Equity holders of the parent 28,781 (10,856) 1,643
Non-controlling interests 3,221 4,495 10,784
------------- ------------- --------------
32,002 (6,361) 12,427
============= ============= ==============
Total Produce plc
Condensed Group Balance Sheet
as at 30 June 2017
(Unaudited) (Unaudited) (Audited)
30 June 2017 30 June 2016 31 Dec 2016
EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Property, plant and equipment 151,939 147,327 145,184
Investment property 8,375 8,784 8,585
Goodwill and intangible assets 292,028 238,978 220,490
Investments in joint ventures and
associates 87,155 76,293 92,910
Other financial assets 625 664 649
Other receivables 9,508 8,768 7,761
Employee benefit assets 124 - -
Deferred tax assets 16,813 11,951 15,458
Total non-current assets 566,567 492,765 491,037
-------------- -------------- -------------
Current assets
Inventories 103,638 80,359 61,195
Biological assets 4,540 - 194
Trade and other receivables 468,157 395,865 317,530
Corporation tax receivable 1,634 1,822 1,472
Derivative financial instruments 173 969 187
Bank deposits 3,700 4,700 2,500
Cash and cash equivalents 93,660 103,282 127,280
-------------- -------------- -------------
Total current assets 675,502 586,997 510,358
-------------- -------------- -------------
Total assets 1,242,069 1,079,762 1,001,395
============== ============== =============
Equity
Share capital 3,460 3,422 3,429
Share premium 150,247 255,793 148,204
Other reserves (132,431) (113,694) (113,707)
Retained earnings 213,244 70,511 188,396
-------------- -------------- -------------
Total equity attributable to equity
holders of the parent 234,520 216,032 226,322
Non-controlling interests 74,391 75,230 72,600
-------------- -------------- -------------
Total equity 308,911 291,262 298,922
-------------- -------------- -------------
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 200,236 127,518 130,162
Deferred government grants 274 1,268 481
Other payables 1,397 2,314 2,021
Contingent consideration 26,791 41,925 36,746
Put option liability 41,958 17,071 21,215
Corporation tax payable 5,836 6,319 5,836
Deferred tax liabilities 33,398 25,003 17,915
Employee benefit liabilities 31,757 39,310 37,777
Total non-current liabilities 341,647 260,728 252,153
-------------- -------------- -------------
Current liabilities
Interest-bearing loans and borrowings 50,449 76,172 47,984
Trade and other payables 526,398 439,730 389,708
Contingent consideration 9,902 8,066 9,629
Derivative financial instruments 617 215 569
Corporation tax payable 4,145 3,589 2,430
-------------- -------------- -------------
Total current liabilities 591,511 527,772 450,320
-------------- -------------- -------------
Total liabilities 933,158 788,500 702,473
-------------- -------------- -------------
Total liabilities and equity 1,242,069 1,079,762 1,001,395
============== ============== =============
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year Attributable to equity holders of the parent
ended 30
June 2017
Undeno-minated
capital
For the EUR'000
half-year ended Own Currency Other Non-
30 Share Share De-merger shares translation Reval-uation equity Retained controlling Total
June 2017 capital premium Reserve reserve reserve reserve reserves* earnings Total interests equity
(Unaudited) EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 31 December
2016 as
presented in
balance sheet 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 841 188,396 226,322 72,600 298,922
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Adjust for NCI
subject to
put option
transferred for
presentation
purposes - - - - - - - (20,259) - (20,259) 20,259 -
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
As at 1 January
2017 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 (19,418) 188,396 206,063 92,859 298,922
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Comprehensive
income
Profit for the
period - - - - - - - - 22,382 22,382 5,892 28,274
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Other
comprehensive
income:
Items that may
be reclassified
to profit or
loss:
Foreign currency
translation
effects, net - - - - - (4,038) - 2,738 - (1,300) (2,883) (4,183)
Effective portion
of cash
flow hedges, net - - - - - - - (53) - (53) (66) (119)
Deferred tax on
items above - - - - - - - 18 - 18 21 39
Items that will
not be
reclassified
to profit or
loss:
Remeasurement
gains on
post-employment
benefit schemes - - - - - - - - 8,678 8,678 266 8,944
Deferred tax on
items above - - - - - - - - (1,653) (1,653) (9) (1,662)
Share of joint
ventures and
associates
remeasurement
gains
on
post-employment
benefit
schemes - - - - - - - - 709 709 - 709
Total other
comprehensive
income - - - - - (4,038) - 2,703 7,734 6,399 (2,671) 3,728
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Total
comprehensive
income - - - - - (4,038) - 2,703 30,116 28,781 3,221 32,002
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Transactions with
equity holders
New shares issued 31 2,043 - - - - - (773) 773 2,074 - 2,074
NCI arising on
acquisition - - - - - - - - - - 4,634 4,634
NCI arising on
acquisition
subject to put
options - - - - - - - - - - 6,149 6,149
Recognition of
put option
liability at
acquisition - - - - - - - (25,072) - (25,072) - (25,072)
Remeasurement of
put option
liability in
period - - - - - - - 1,591 - 1,591 - 1,591
Subsidiary
becoming a joint
venture - - - - - - - - - - (6,668) (6,668)
Disposal of
shareholding to
NCI - - - - - - - - 1,136 1,136 7,495 8,631
Capital
contribution by
NCI - - - - - - - - - 1,996 1,996
Dividends - - - - - - - - (7,177) (7,177) (8,447) (15,624)
Share-based
payment
transactions - - - - - - - 276 - 276 - 276
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Total
transactions
with equity
holders 31 2,043 - - - - - (23,978) (5,268) (27,172) 5,159 (22,013)
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Balance as at 30
June 2017 3,460 150,247 140 (122,521) (8,580) (11,713) 24,088 (40,693) 213,244 207,672 101,239 308,911
======== ======== ================ ========== ======== ============ ============= =========== ========= =========== ============ =========
Transfer of NCI
subject to
put option for
presentation
purposes - - - - - - - 26,848 - 26,848 (26,848) -
-------- -------- ---------------- ---------- -------- ------------ ------------- ----------- --------- ----------- ------------ ---------
Balance as at 30
June 2017 3,460 150,247 140 (122,521) (8,580) (11,713) 24,088 (13,845) 213,244 234,520 74,391 308,911
======== ======== ================ ========== ======== ============ ============= =========== ========= =========== ============ =========
* Other equity reserves comprise the cash flow hedge reserve,
the share option reserve and the put option reserve.
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2017 (Continued)
Attributable to equity holders of the parent
Undeno-minated
capital
For the half-year EUR'000 Own Currency Other Non-
ended 30 Share Share De-merger shares translation Reval-uation equity Retained controlling Total
June 2016 capital premium Reserve reserve reserve reserve reserves* earnings Total interests equity
(Unaudited) EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January
2016 3,446 254,512 99 (122,521) (8,580) 70 22,178 2,027 87,589 238,820 74,959 313,779
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Comprehensive
income - - - - - - - - 15,240 15,240 5,434 20,674
Profit for the
period
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Other
comprehensive
income:
Items that may be
reclassified
to profit or loss:
Foreign currency
translation
effects, net - - - - - (6,016) - 421 - (5,595) (712) (6,307)
Effective portion
of cash flow
hedges, net - - - - - - - (190) - (190) 45 (145)
Deferred tax on
items above - - - - - - - 29 - 29 (10) 19
Items that will
not be
reclassified
to profit or loss:
Remeasurement
losses on
post-employment
benefit schemes - - - - - - - - (22,941) (22,941) (300) (23,241)
Deferred tax on
items above - - - - - - - - 3,308 3,308 38 3,346
Share of joint
ventures and
associates
remeasurement
losses
on
post-employment
benefit
schemes - - - - - - - - (707) (707) - (707)
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Total other
comprehensive
income - - - - - (6,016) - 260 (20,340) (26,096) (939) (27,035)
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Total
comprehensive
income - - - - - (6,016) - 260 (5,100) (10,856) 4,495 (6,361)
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Transactions with
equity holders
New shares issued 17 1,281 - - - - - (477) 477 1,298 - 1,298
NCI arising on
acquisition - - - - - - - - - - 165 165
NCI arising on
acquisition
subject to put
options - - - - - - - - - - 15,940 15,940
Recognition of
put option
liability at
acquisition - - - - - - - (17,155) - (17,155) - (17,155)
Remeasurement of
put option
liability in
period - - - - - - - (337) - (337) - (337)
Dividends - - - - - - - - (6,482) (6,482) (3,766) (10,248)
Own shares
acquired and
cancelled (41) - 41 - - - - - (5,973) (5,973) - (5,973)
Share-based
payment
transactions - - - - - - - 154 - 154 - 154
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Total transactions
with equity
holders (24) 1,281 41 - - - - (17,815) (11,978) (28,495) 12,339 (16,156)
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Balance as at 30
June 2016 3,422 255,793 140 (122,521) (8,580) (5,946) 22,178 (15,528) 70,511 199,469 91,793 291,262
-------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------ ---------
Transfer of NCI
subject to
put for
presentation
purposes - - - - - - - 16,563 - 16,563 (16,563) -
Balance as at 30
June 2016 3,422 255,793 140 (122,521) (8,580) (5,946) 22,178 1,035 70,511 216,032 75,230 291,262
======== ======== ================ ========== ======== ============ ============= ========== ========= ========= ============ =========
* Other equity reserves comprise the cash flow hedge reserve,
the share option reserve and the put option reserve .
Total Produce
plc
Condensed Group Statement of Changes in Equity
for the
half-year ended
30
June 2017
(Continued)
--------- ----------------------------------------------------------------------------------------------------------------- ----------------- ---------
Attributable to equity holders of the parent
Un-
denom Own Currency Reval-uation Other Non-controlling
Share Share inated De-merger shares translation reserve equity Retained interests Total
capital premium capital reserve reserve reserve EUR'000 Reserves* earnings Total EUR'000 equity
For the year EUR'000 EUR'000 EUR'000 EUR'000 EUR'00 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
ended 31
December
2016 (Audited)
As at 1 January
2016 3,446 254,512 99 (122,521) (8,580) 70 22,178 2,027 87,589 238,820 74,959 313,779
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Comprehensive
income
Profit for the
year - - - - - - - - 28,536 28,536 10,768 39,304
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Other
comprehensive
income:
Items that may
be reclassified
to profit or
loss:
Foreign currency
translation
effects, net - - - - - (7,745) - (514) - (8,259) 195 (8,064)
Effective
portion of cash
flow
hedges, net - - - - - - - (19) - (19) (24) (43)
Deferred tax on
items above - - - - - - - 4 - 4 7 11
Items that will
not be
reclassified
subsequently to
profit or loss:
Revaluation
gains/(losses)
on property,
plant and
equipment,
net - - - - - - 1,138 - - 1,138 (9) 1,129
Remeasurement
losses on
post-employment
benefit schemes - - - - - - - - (23,584) (23,584) (185) (23,769)
Deferred tax on
item above - - - - - - 772 - 3,875 4,647 32 4,679
Share of joint
ventures and
associates
remeasurement
losses
on
post-employment
benefit
schemes - - - - - - - - (824) (824) - (824)
Share of joint
ventures and
associates
deferred tax on
items above - - - - - - - - 4 4 - 4
Total other
comprehensive
income - - - - - (7,745) 1,910 (529) (20,529) (26,893) 16 (26,877)
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Total
comprehensive
income - - - - - (7,745) 1,910 (529) 8,007 1,643 10,784 12,427
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Transactions
with equity
holders
New shares
issued 24 1,763 - - - - - (651) 651 1,787 - 1,787
Own shares
acquired and
cancelled (41) - 41 - - - - - (5,973) (5,973) - (5,973)
Capital
Reduction - (108,071) 107,963 (108) - (108)
NCI arising on
acquisition - - - - - - - - - - 15,215 15,215
Recognition of
put option
liability
at acquisition - - - - - - - (17,155) - (17,155) - (17,155)
Put option
granted to NCI - - - - - - - (3,367) - (3,367) - (3,367)
Fair value
movements on
put
option
liability - - - - - - - (179) - (179) - (179)
Acquisition of
NCI - - - - - - - - (692) (692) (3,796) (4,488)
Disposal of
shareholding to
NCI - - - - - - - - - - 3,993 3,993
Contribution by
NCI - - - - - - - - - - 5 5
Share of buyback
within
associate
company - - - - - - - - (73) (73) - (73)
Subsidiary
becoming a
joint
venture - - - - - - - - - - (1,503) (1,503)
Dividends paid - - - - - - - - (9,076) (9,076) (6,798) (15,874)
Share-based
payment
transactions - - - - - - - 436 - 436 - 436
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Total
transactions
with equity
holders (17) (106,308) 41 - - - - (20,916) 92,800 (34,400) 7,116 (27,284)
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
As at 31
December 2016 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 (19,418) 188,396 206,063 92,859 298,922
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Transfer of NCI
subject to
put for
presentation
purposes - - - - - - - 20,259 - 20,259 (20,259) -
--------- ------------- -------- ----------- --------- ------------- -------------- ----------- ---------- ------------ ----------------- ---------
Balance as at 31
December 2016 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 841 188,396 226,322 72,600 298,922
========= ============= ======== =========== ========= ============= ============== =========== ========== ============ ================= =========
*Other equity reserves comprise the cash flow hedge reserve, the
share option reserve and the put option reserve.
Total Produce plc
Condensed Group Statement of Cash Flows
for the half-year ended 30 June 2017
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2017 30 June 2016 31 Dec 2016
EUR'000 EUR'000 EUR'000
Net cash flows from operating activities
(Note 11) (14,300) (25,184) 44,148
-------------- -------------- -------------
Investing activities
Acquisition of subsidiaries (33,117) (32,855) (32,887)
Cash/(overdrafts), assumed on acquisition
of subsidiaries, net (556) 1,921 1,940
Acquisition of, and investment in joint
ventures and associates (8,133) (2,071) (8,620)
Payments of contingent consideration (8,830) (1,689) (1,976)
Payments of deferred consideration - (1,871) (2,778)
Proceeds from disposal of trading assets - 3,827 6,419
Disposal of investment in subsidiary
to non-controlling interests 8,631 - 273
Acquisition of property, plant and
equipment (18,538) (13,798) (24,378)
Acquisition of intangible assets -
computer software (834) (546) (1,344)
Acquisition of intangible assets -
brands (481) - -
Development expenditure capitalised (158) (172) (253)
Proceeds from disposal of property,
plant and equipment 61 680 2,651
Proceeds from exceptional items - - 3,030
Dividends received from joint ventures
and associates 6,452 7,826 8,339
Net cash flows from investing activities (55,503) (38,748) (49,584)
-------------- -------------- -------------
Financing activities
Drawdown of borrowings 152,825 48,305 68,144
Repayment of borrowings (128,937) (20,638) (40,671)
Increase in bank deposits (1,200) (2,200) -
Proceeds from the issue of share capital 2,074 1,298 1,787
Buyback of own shares - (5,973) (5,973)
Costs of capital reduction - - (108)
Capital element of finance lease repayments (488) (1,066) (2,175)
Subsidiary becoming a joint venture (6,660) - (491)
Acquisition of non-controlling interests - - (3,044)
Capital contribution by non-controlling
interests 936 - 5
Dividends paid to non-controlling interests (8,447) (3,766) (6,798)
Dividends paid to equity holders of
the parent (7,177) (6,482) (9,076)
Net cash flows from financing activities 2,926 9,478 1,600
-------------- -------------- -------------
Net decrease in cash, cash equivalents
and overdrafts (66,877) (54,454) (3,836)
Cash, cash equivalents and overdrafts
at start of period 117,087 123,205 123,205
Net foreign exchange difference (438) (1,384) (2,282)
-------------- -------------- -------------
Cash, cash equivalents and overdrafts
at end of
the period (Note 12) 49,772 67,367 117,087
============== ============== =============
Total Produce plc
Condensed Summary Group Reconciliation of Net Debt
for the half-year ended 30 June 2017
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2017 30 June 31 Dec 2016
2016
EUR'000 EUR'000 EUR'000
Net decrease in cash, cash equivalents
and overdrafts (66,877) (54,454) (3,836)
Repayment of borrowings 128,937 20,638 40,671
Drawdown of borrowings (152,825) (48,305) (68,144)
Increase in bank deposits 1,200 2,200 -
Interest-bearing loans and borrowings
arising on acquisition (24,478) (474) (474)
Capital element of finance lease repayments 488 1,066 2,175
Finance leases arising on acquisition (149) (683) (673)
Other movements on finance leases 161 (275) (419)
Foreign exchange movement 8,584 2,634 389
-------------- ------------ -------------
Movement in net debt (104,959) (77,653) (30,311)
Net debt at beginning of the period (48,366) (18,055) (18,055)
-------------- ------------ -------------
Net debt at end of the period (Note 12) (153,325) (95,708) (48,366)
============== ============ =============
Total Produce plc
Notes to the Interim Results for the half-year ended 30 June 2017
1. Basis of preparation
The condensed consolidated interim financial statements of Total
Produce plc as at, and for the six months ended 30 June 2017, have
been prepared in accordance with IAS 34 Interim Financial Reporting,
as adopted by the EU. The accounting policies and methods of computation
adopted in the preparation of the financial information are consistent
with those set out in the Group's consolidated financial statements
for the year ended 31 December 2016, with the exception of those
disclosed below, which were prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
The interim financial information for both the six months ended
30 June 2017 and the comparative six months ended 30 June 2016 is
unaudited. The financial information for the year ended 31 December
2016 represents an abbreviated version of the Group's statutory
financial statements for that year. Those statutory financial statements
contained an unqualified audit report and have been filed with the
Registrar of Companies.
The preparation of interim financial statements requires management
to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements,
the significant judgments made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those applied to the consolidated financial statements
as at and for the year ended 31 December 2016.
Changes in accounting policy
There are no new standards or amendments that are effective for
the Group's financial year ending on 31 December 2017 and there
have been no changes in accounting policy from those for the financial
year ending the 31 December 2016.
New standards not yet effective
The following new standards are not yet effective but the impact
of these standards on the Total Produce Group are currently under
review.
IFRS 9 Financial Instruments which is effective from 1 January 2018
and replaces IAS 39 Financial Instruments: Recognition and Measurement.
The standard includes requirements for the recognition, measurement
and derecognition of financial instruments, introduces new hedge
accounting rules and a new expected credit loss model for calculating
impairment of financial assets. Total Produce is still assessing
the impact of this new standard on the Group Financial Statements.
IFRS 15 Revenue from Contracts with Customers which is effective
from 1 January 2018 and replaces IAS 18 Revenue, IAS 11 Construction
Contracts and associated interpretations. The standard provides
a single model to be applied to all contracts with customers. Total
Produce is still assessing the impact of this new standard but it
is not expected to have a material impact on the Group Financial
Statements.
IFRS 16 Leases which is effective from 1 January 2019 and replaces
IAS 17 Leases. It introduces a single lessee accounting model to
be adopted and accordingly the majority of all lease agreements
will now result in the recognition in the balance sheet of a right-of-use
asset and a lease liability. The income statement charge in relation
to all leases will now comprise a depreciation element relating
to the right-of-use asset and also an interest expense relating
to the lease liability. The Group is currently performing a detailed
assessment of the impact of the adoption of IFRS 16 and expects
to disclose its transition approach and quantitative information
before adoption.
2. Translation of foreign currencies
The reporting currency of the Group is Euro. The exchange rates
used for the translation of the results and balance sheets into
Euro are as follows:
Average rate Closing rate
6 months to
30 June 30 June % change 30 June 31 Dec % change
2017 2016 2017 2016
Brazilian Real 3.4393 4.1318 16.8% 3.7600 3.5879 (4.8%)
Canadian Dollar 1.4444 1.4853 2.8% 1.4830 1.4389 (3.1%)
Czech Koruna 26.6938 27.0395 1.3% 26.1970 27.0999 3.3%
Danish Kroner 7.4372 7.4501 0.2% 7.4362 7.4386 0.0%
Indian Rupee 74.0575 76.3884 3.1% 73.9411 74.9906 1.4%
Polish Zloty 4.3057 4.3663 1.4% 4.2339 4.4129 4.1%
Pound Sterling 0.8611 0.7844 (9.8%) 0.8785 0.8292 (5.9%)
Swedish Krona 9.6027 9.2985 (3.3%) 9.6559 9.4118 (2.6%)
US Dollar 1.0853 1.1163 2.8% 1.1423 1.1105 (2.9%)
-------- -------- --------- -------- -------- ---------
3. Segmental Analysis
The table below details a segmental breakdown of the Group's total
revenue and adjusted EBITA for the six months ended 30 June 2017, the
six months ended 30 June 2016 and the full year ended 31 December 2016.
In accordance with IFRS 8, the Group's reportable operating segments
based on how performance is currently assessed and resources are allocated
are as follows:
- Europe - Eurozone: This reportable segment is an aggregation
of thirteen operating segments principally in France, Ireland,
Italy, the Netherlands and Spain primarily involved in the
procurement, marketing and distribution of fresh produce and
some healthfoods and consumer goods products. These operating
segments have been aggregated because they have similar economic
characteristics.
- Europe - Non-Eurozone: This operating segment is an aggregation
of six operating segments in Scandinavia, United Kingdom, Poland
and the Czech Republic primarily involved in the procurement,
marketing and distribution of fresh produce and some healthfoods
and consumer goods products. These operating segments have
been aggregated because they have similar economic characteristics.
- International: This segment is an aggregation of six operating
segments in North America and India primarily involved in the
procurement, marketing and distribution of fresh produce. The
North American sports nutrition business was disposed of in
April 2016.
Segment performance is evaluated based on revenue and adjusted EBITA.
Management believe that adjusted EBITA, while not a defined term under
IFRS, provides a fair reflection of the underlying trading performance
of the Group. Adjusted EBITA represents earnings before interest, tax,
acquisition related intangible asset amortisation charges and costs,
fair value movements on contingent consideration and exceptional items.
It also excludes the Group's share of these items within joint ventures
and associates. Adjusted EBITA is therefore measured differently from
operating profit in the Group financial statements as explained and
reconciled in detail in the analysis below.
Finance costs, finance income and income taxes are managed on a centralised
basis. These items are not allocated between operating segments for
the purpose of the information presented to the Chief Operating Decision
Maker ('CODM') and are accordingly omitted from the detailed segmental
analysis that follows.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2017 30 June 2016 31 Dec 2016
Total Adjusted Total Adjusted Total Adjusted
revenue EBITA revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Europe - Eurozone 903,194 13,772 869,802 13,252 1,753,328 25,953
Europe - Non-Eurozone 800,051 22,100 811,022 19,778 1,521,936 38,769
International 471,362 6,619 261,347 4,899 543,713 9,020
Inter-segment revenue (27,722) - (27,919) - (56,572) -
---------- --------- ---------- --------- ---------- ---------
Total revenue and
adjusted EBITA 2,146,885 42,491 1,914,252 37,929 3,762,405 73,742
----------------------- ---------- --------- ---------- --------- ---------- ---------
All inter-segment revenue transactions are at arm's length.
Reconciliation of segmental profit to operating profit
Below is a reconciliation of adjusted EBITA per the Group's management
reports to operating profit and profit before tax as presented in
the Group income statement:
Note (Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to 30 June 31 Dec
30 June 2016 2016
2017
EUR'000 EUR'000 EUR'000
Adjusted EBITA per
management reporting 42,491 37,929 73,742
Acquisition related
intangible asset
amortisation within
subsidiaries (i) (4,998) (3,844) (7,675)
Share of joint ventures
and associates
acquisition related
intangible asset
amortisation (i) (1,282) (1,268) (2,557)
Fair value movements on
contingent
consideration (ii) (172) (767) (73)
Acquisition related costs
within
subsidiaries (iii) (715) (840) (922)
Share of joint ventures
and associates
net financial expense (iv) (382) (203) (481)
Share of joint ventures
and associates
tax (iv) (1,494) (2,631) (4,473)
------------------------- ------------------------- ------------
Operating profit before
exceptional
items 33,448 28,376 57,561
Exceptional items (Note 5) (v) 5,063 - (1,409)
------------------------- ------------------------- ------------
Operating profit after
exceptional
items 38,511 28,376 56,152
Net financial expense (vi) (3,066) (2,804) (5,524)
------------------------- ------------------------- ------------
Profit before tax 35,445 25,572 50,628
========================= ========================= ============
(i) Acquisition related intangible asset amortisation charges are
not allocated to operating segments in the Group's management
reports.
(ii) Fair value movements on contingent consideration are not allocated
to operating segments in the Group's management reports.
(iii) Acquisition related costs are transaction costs directly related
to the acquisition of subsidiaries and are not allocated to operating
segments in the Group's management reports.
(iv) Under IFRS, included within profit before tax is the Group's share
of joint ventures and associates profit after acquisition related
intangible amortisation charges and costs, tax and interest. In
the Group's management reports these items are excluded from the
adjusted EBITA calculation.
(v) Exceptional items (Note 5) are not allocated to operating segments
in the Group's management reports.
(vi) Financial income and expense is primarily managed at Group level,
and is therefore not allocated to individual operating segments
in the Group's management reports.
4. Adjusted profit before tax, adjusted EBITA and adjusted EBITDA
For the purpose of assessing the Group's performance, Total Produce
management believe that adjusted EBITDA, adjusted EBITA, adjusted
profit before tax and adjusted earnings per share (Note 6) are the
most appropriate measures of the underlying performance of the Group.
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June 30 June 2016 31 Dec 2016
2017
EUR'000 EUR'000 EUR'000
Profit before tax per income statement 35,445 25,572 50,628
Adjustments
Exceptional items (Note 5) (5,063) - 1,409
Fair value movements on contingent
consideration 172 767 73
Share of joint ventures and associates
tax 1,494 2,631 4,473
Acquisition related intangible asset
amortisation within subsidiaries 4,998 3,844 7,675
Share of joint ventures and associates
acquisition related intangible asset
amortisation 1,282 1,268 2,557
Acquisition related costs within
subsidiaries 715 840 922
------------- --------------- --------------
Adjusted profit before tax 39,043 34,922 67,737
Exclude
Net financial expense - subsidiaries 3,066 2,804 5,524
Net financial expense - share of
joint ventures and associates 382 203 481
------------- --------------- --------------
Adjusted EBITA 42,491 37,929 73,742
Exclude
Amortisation of software costs 692 605 1,356
Depreciation - subsidiaries 7,953 8,435 17,423
Depreciation - share of joint ventures
and associates 1,665 1,234 2,301
------------- --------------- --------------
Adjusted EBITDA 52,801 48,203 94,822
============= =============== ==============
5. Exceptional items
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2016
2017 2016
EUR'000 EUR'000 EUR'000
Fair value uplift on associate investment 12,428 - -
(a)
Credit arising from settlement of
the Group's defined benefit pension 1,710 - -
arrangements (b)
Impairment of goodwill (c) (9,075) - (5,183)
Profit on disposal of property and
leasehold interests (d) - - 3,774
Total exceptional items 5,063 - (1,409)
Net tax charge on exceptional items
(e) (214) - (686)
------------- ------------- --------------
Total 4,849 - (2,095)
============= ============= ==============
(a) Fair value uplift on associate investment
As outlined in detail in Note 9, On 1 March 2017 the Group acquired
a further 30% shareholding in the Oppenheimer Group ('Oppy') to take
its total shareholding to 65%. As a result of this increased shareholding,
Oppy became a subsidiary from this date and in accordance with IFRS,
the Group's previously held 35% associate interest was remeasured to
fair value resulting in a fair value gain of EUR11,291,000. This gain,
together with the reclassification of EUR1,137,000 of currency translation
gains from the currency translation reserve, were reclassified to the
income statement resulting in an exceptional gain of EUR12,428,000.
(b) Credit arising from settlement of the Group's defined benefit pension
arrangements
An Enhanced Transfer Value ('ETV') offer was made to members of one
of the Irish defined benefit pension schemes during the period. As
a result of members taking up this ETV offer, settlement credits of
EUR1,839,000, net of associated costs of EUR129,000, an exceptional
gain of EUR1,710,000 was recognised in the income statement. See Note
7 for further details.
(c) Impairment of goodwill
In 2017 the Group recognised a non-cash impairment charge of EUR9,075,000
in relation to a fresh produce business in the Netherlands which had
experienced a difficult trading environment resulting in a slower recovery
than had been anticipated. In 2016 the Group recognised a non-cash
impairment charge of EUR5,183,000 in relation to a sports nutrition
business in the UK as a result of a reduction in the forecasted profitability
due to a more competitive trading environment.
(d) Profit on disposal of property and leasehold interests
During 2016 the Group received compensation for the exit of a leasehold
interest. The compensation of EUR1,889,000 net of associated costs
was recognised within other operating income. Also during 2016, the
Group received compensation for costs arising from a fire in a facility
in Europe which caused damage to buildings, plant and machinery, motor
vehicles and small amounts of inventory. The facility has been repaired
and was fully operational from mid-2016 onwards. The insurance income,
net of associated costs and impairment, recognised in 2016 was EUR1,885,000
and was disclosed as an exceptional item in the income statement.
(e) Tax charge on exceptional items
The net tax effect on the exceptional items above was a charge of EUR214,000
in the period. The net tax charge on exceptional items for the year
ended 31 December 2016 was an EUR868,000 charge offset by a deferred
tax credit of EUR182,000 on reassessment of deferred tax on prior year
fair value movements on investment property.
Effect on exceptional items on cashflow statements
The net effect of the items above was a cash outflow of EUR1,672,000
for the six month period to 30 June 2017. The net effect of exceptional
items for the year ended 31 December 2016 was a cash inflow of EUR3,030,000.
6. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for
the year attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during
the year, excluding shares purchased by the company which are held
as treasury shares.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2017 to 30 June 31 Dec 2016
2016
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 22,382 15,240 28,536
=============== ============= ==============
'000 '000 '000
Shares in issue at beginning of period 343,015 344,609 344,609
New shares issued (weighted average) 838 810 1,417
Shares repurchased by Company (weighted
average) -- (3,705) (3,891)
Effect of treasury shares held (22,000) (22,000) (22,000)
--------------- ------------- --------------
Weighted average number of shares
at end of period 321,853 319,714 320,135
=============== ============= ==============
Basic earnings per share - cent 6.95 4.77 8.91
=============== ============= ==============
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit per
share attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding after adjustment
for the effects of all ordinary shares and options with a dilutive
effect.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2017 to 30 June 31 Dec 2016
2016
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 22,382 15,240 28,536
=============== ============= ==============
'000 '000 '000
Weighted average number of shares
at end of period 321,853 319,714 320,135
Effect of share options with a dilutive
effect 3,357 4,200 4,005
--------------- ------------- --------------
Weighted average number of shares
at end of period (diluted) 325,210 323,914 324,140
=============== ============= ==============
Diluted earnings per share - cent 6.88 4.70 8.80
=============== ============= ==============
The average market value of the Company's shares for the purpose of
calculating the dilutive effect of share options was based on the
quoted market prices for the period during which the options were
outstanding.
Adjusted fully diluted earnings per share
Management believe that adjusted fully diluted earnings per share
as set out below provides a fairer reflection of the underlying trading
performance of the Group after eliminating the effect of acquisition
related intangible asset amortisation charges and costs, fair value
movements on contingent consideration , property revaluations and
exceptional items and the related tax on these items.
Adjusted fully diluted earnings per share is calculated by dividing
the adjusted profit attributable to ordinary equity holders of the
parent (as calculated below) by the weighted average number of ordinary
shares outstanding after adjustment for the effects of all ordinary
shares and options with a dilutive effect.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2017 to 30 June
2016
EUR'000 EUR'000 31 Dec 2016
EUR'000
Profit attributable to equity holders
of the parent 22,382 15,240 28,536
Adjustments:
Exceptional items - net of tax (Note
5) (4,849) - 2,095
Acquisition related intangible asset
amortisation within subsidiaries 4,998 3,844 7,675
Share of joint ventures and associates
acquisition related intangible asset
amortisation 1,282 1,268 2,557
Acquisition related costs within
subsidiaries 715 840 922
Fair value movements on contingent
consideration 172 767 73
Tax effect of amortisation of intangible
assets (1,335) (1,238) (1,607)
Non-controlling interests share of
items above (1,309) (774) (1,128)
--------------- ------------- --------------
Adjusted fully diluted earnings 22,056 19,947 39,123
=============== ============= ==============
'000 '000 '000
Weighted average number of shares
at end
of period (diluted) 325,210 323,914 324,140
Adjusted fully diluted earnings per
share - cent 6.78 6.16 12.07
=============== ============= ==============
7. Post-employment benefit obligation
Employee defined benefit pension
scheme
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June
2017
EUR'000 30 June 2016 31 Dec 2016
EUR'000 EUR'000
Pension assets 184,467 182,251 189,008
Pension obligations (209,909) (221,561) (226,785)
------------- -------------- -------------
Net liability (25,442) (39,310) (37,777)
Net related deferred tax asset 4,053 5,767 5,956
------------- -------------- -------------
Net liability after tax (21,389) (33,543) (31,821)
============= ============== =============
Movement in period
Net liability at beginning of period (37,777) (17,174) (17,174)
Net interest expense and current
service cost recognised in the
income statement (1,776) (2,213) (3,237)
Settlement credit recognised in 1,839 -
the income statement -
Employer contributions to schemes
- normal 1,985 2,351 5,010
Employer contributions to schemes 1,672 -
- exceptional -
Remeasurement gains/(losses) recognised
in other comprehensive income 8,381 (23,241) (23,769)
Arising on acquisition (252) - -
Translation adjustment 486 967 1,393
------------- -------------- -------------
Net liability at end of period
before deferred tax (25,442) (39,310) (37,777)
============= ============== =============
The table above summarises the movements in the net liability of the
Group's various defined benefit pension schemes in Ireland, the UK,
Continental Europe and North America in accordance with IAS 19 Employee
Benefits (2011).
The Group's balance sheet at 30 June 2017 reflects pension assets
of EUR0.1m in respect of schemes in surplus and pension liabilities
of EUR25.5m in respect of schemes in deficit, resulting in a net deficit
of EUR25.4m and a net deficit of EUR21.4m after deferred tax.
The current and past service costs, settlement credits and the net
finance expense on the net scheme liabilities are charged to the income
statement. Remeasurement gains and losses are recognised in other
comprehensive income.
In determining the valuation of pension obligations, consultation
with independent actuaries is required. The estimation of employee
benefit obligations requires the determination of appropriate assumptions
such as discount rates, inflations rates and mortality rates.
In 2017 the Group initiated an Enhanced Transfer Value (ETV) program
whereby an offer above the minimum statutory transfer value was made
to all active and deferred members in one of the Irish defined benefit
pension schemes to transfer their accumulated accrued benefits from
the defined benefit pension scheme and receive an ETV. For those members
who elected to avail of the offer, the Group transferred EUR1.7m to
the defined pension scheme to fund the ETV and EUR7.3m was paid from
the pension scheme's assets in a full and final settlement of defined
benefit obligations of EUR9.1m. The ETV program resulted in a net
accounting credit of EUR1.7m in 2017, representing the net settlement
of the defined benefit obligations of employees who elected for the
ETV option of EUR1.8m, net of professional fees incurred of EUR0.1m.
This credit has been disclosed as an exceptional item in the Group's
income statement (Note 5). The net effect of the program was to improve
the funding position and reduce future volatility.
The decrease in the net liability during the period was primarily
due to the effects of the ETV offer, as described above, and an increase
in discount rates in the Eurozone, which results in a decrease in
the net present value of the schemes' obligations and positive returns
of 2.7% on pension scheme assets in the six month period. This was
offset in part by a reduction in the discount rate for the UK schemes.
The discount rate in Ireland and the Eurozone increased to 2.20% (31
December 2016: 1.90% and 30 June 2016: 1.70%) and in the UK decreased
to 2.60% (31 December 2016: (2.75 - 2.80% and 30 June 2016: 3.10%).
Other post-employment obligation
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June
2017
EUR'000 30 June 2016 31 Dec 2016
EUR'000 EUR'000
Net liability at beginning of period - - -
Arising on acquisition (6,913) - -
Net expense recognised in the income (221) -
statement -
Remeasurement gains recognised
in other comprehensive income 563 - -
Employee contributions to schemes (25) - -
Benefits paid 33 - -
Translation adjustment 372 - -
------------- -------------- -------------
Net liability at end of period (6,191) - -
============= ============== =============
The table above summarises the movements in the net liability of the
Group's other post-employment benefit obligations.
Certain employees in one of the Group's North American subsidiaries
hold non-voting shares in the subsidiary. The Company has a contractual
arrangement in place to pay holders of these shares an agreed benefit
on retirement, based on profit levels in the company, to redeem these
shares.
In accordance with IAS 19 Employee Benefits (2011), the net liability
of the obligation is measured as the net present value of the amounts
that are expected to be paid to employees for the shares at retirement.
The interest expense, which represents the unwinding of the net present
value of the liabilities, is charged to the income statement. Remeasurement
gains and losses, representing all other changes to the estimate of
the liability, are recognised in other comprehensive income.
Determining the valuation of the obligations requires the determination
of appropriate assumptions such as projected growth in profits, forfeiture
rates and retirement dates.
8. Dividends
The Board has approved an interim dividend of 0.8906 (2016: 0.8096)
cent per share which represents a 10.0% increase on the comparative
period. This dividend, which will be subject to Irish withholding
tax rules, will be paid on 13 October 2017 to shareholders on the
register at 15 September 2017. In accordance with company law and
IFRS, this dividend has not been provided for in the balance sheet
at 30 June 2017. The final dividend for 2016 of EUR7,177,000 was paid
in May 2017.
During the period, the Group paid dividends of EUR8,447,000 (2016:
EUR3,766,000) to non-controlling shareholders in certain of the Group's
non wholly-owned subsidiaries.
9. Businesses acquired and other developments
A key part of the Group's strategy is to grow by acquisition. In
line with this strategy the Group made a number of acquisitions
and investments in the six month period as explained below.
Investments in subsidiaries
During the six month period, the Group made a number of acquisitions
in the fresh produce sector in North America and in Europe. On 1
March 2017, the Group completed the purchase of a further 30% of
the Oppenheimer Group ('Oppy') for consideration of EUR28.2m. In
addition to the initial 35% acquired in 2013, this brings the Group's
shareholding in GVL to 65%. Headquartered in Vancouver, Canada with
annual sales of almost CAD$ 1 billion (EUR720m), Oppy is a leading
provider of fresh produce to its strong base of retail, wholesale
and foodservice customers throughout the United States and Canada.
In addition to this, long term put and call options are in place
for the remaining 35% shareholding, exercisable from early 2020.
In February 2017, the Group's Los Angeles headquartered fresh produce
business, Progressive Produce LLC acquired the trade and business
assets of Keystone Fruit Marketing Inc. The Group made a number
of other bolt-on investments in Europe all of which complement the
Group's existing activities.
Details of consideration and assets and liabilities arising on acquisition
of subsidiaries, the largest being Oppy is as follows:
Total
(Unaudited)
6 months to
30 June 2017
EUR'000
Consideration paid and payable on all subsidiary acquisitions
in period
Cash consideration 33,117
Contingent consideration 1,336
Deferred consideration 376
Settlement of pre-existing relationship with acquiree 4,384
Non-cash contribution by non-controlling shareholder 1,060
--------------
Total fair value of consideration 40,273
==============
Identifiable assets acquired and liabilities assumed
Property, plant and equipment 4,430
Intangible assets 55,373
Investment in associates 1,112
Biological assets 2,384
Inventories 22,578
Trade and other receivables 78,752
Cash, cash equivalents and bank overdrafts (556)
Bank borrowings (24,478)
Finance leases (149)
Trade and other payables including corporation tax (84,452)
Employee benefits (7,165)
Deferred tax liabilities - net (15,000)
--------------
Fair value of net identifiable assets and liabilities
acquired 32,829
==============
Non-controlling interests arising on acquisition
Non-controlling interests measured at net asset value 10,783
==============
Goodwill calculation
Fair value of consideration 40,273
Fair value of pre-existing interest in acquiree 24,684
Fair value of net identifiable assets and liabilities
acquired (32,829)
Non-controlling interest arising on acquisition 10,783
--------------
Goodwill arising 42,911
==============
The principal factor contributing to the recognition of goodwill
of EUR42,911,000 is the value and skills of the assembled workforce
in the acquired entities along with the anticipated cost savings
and synergies arising from the integration into the Group's existing
business.
The Group incurred acquisition related costs of EUR715,000 on legal
and professional fees and due diligence in respect of completed acquisitions.
These costs have been included in operating expenses in the period.
The initial assignment of fair values to net assets for all investments
has been performed on a provisional basis in respect of these acquisitions
given the timing of the completion of these transactions and will
be finalised within twelve months from the acquisition date, as permitted
by IFRS 3 (Revised) Business Combinations.
Disposal of shareholding to non-controlling interests and investment
in associate
On 6 April 2017, Oppy entered strategically-important agreements
with the New Zealand based T&G Global Limited ('T&G') which will
enable both parties to enhance their market positions as co-shareholders
in two US produce businesses.
T&G, through its wholly owned subsidiary Enza Fresh, previously held
a 15% shareholding in Oppy's largest subsidiary, the US focussed
marketer David Oppenheimer & Company LLC ('DOC') and a US transport
company David Oppenheimer Transport ('DOT'). On 6 April 2017, Enza
Fresh merged with Grandview Brokerage LLC ('GBLLC') and as part of
this agreement obtained a 39.4% shareholding in GBLLC with the right
thereafter to match the effective share of GBLLC held by Total Produce.
As GBLLC owns 100% of DOC and 15% of DOT, the transaction resulted
in T&G increasing its shareholding in DOC from 15% to 39.4% and reducing
its interest in DOT from 15% to 6%. The net proceeds received by
Oppy for the disposal of the shareholding in GBLLC were EUR8,631,000.
Separately Oppy acquired from T&G a 50% share of a T&G Californian
headquartered US export business known in the market as Delica North
America ('Delica NAM') for a cash consideration of EUR8,085,000.
Delica NAM is focussed on exporting a wide range of fresh produce
from the US predominantly to the important Chinese and south east
Asian markets. Under the terms of the shareholders agreement, Oppy
is considered to have significant influence rather than joint control
of this investment and therefore has accounted for it as an associate
in accordance with IAS 28 Investments in Associates and Joint Ventures
(2011).
Put option liability
Within certain current year transactions, non-controlling shareholders
have an option to put their shareholding to Total Produce. Up to
the point of exercise of these put options, the non-controlling shareholder
continues to have a right to dividends and voting rights on the shareholdings
that are subject to the put option. Where the holder of the put retains
a present ownership interest in the shares, the Group applies the
partial recognition of non-controlling interest method for put options.
The non-controlling interest is therefore recognised in the traditional
manner but is transferred against the put liability reserve for presentation
purposes in the balance sheet.
The estimated fair value at date of acquisition for the consideration
on exercise of these put options was EUR25,072,000. This put option
liability has been recognised in a put option reserve attributable
to the equity holders of the parent. The valuation method applied
for the purposes of this fair value assessment was the option price
formula in the share purchase agreements with the inputs based on
the budget plan for 2017 and an application of a steady growth rate,
discounted to a net present value with the assumption that the put
option would be exercised at the earliest possible date. In accordance
with the Group accounting policy for put options (partial recognition
of NCI method), and for presentation purposes in the balance sheet,
the carrying value of the NCI relating to these shareholdings with
a put option at period end has been transferred to the put option
reserve.
Payment of contingent consideration
During the period, the Group paid EUR8,830,000 of contingent consideration
relating to prior period acquisitions.
The Group continues to actively pursue further investment opportunities
in both new and existing markets.
Subsidiary becoming a joint venture
In 2017, as a result of changes in the nature of a shareholder relationship
it was determined that the Group no longer held a controlling influence
in an investee and that the Group jointly controlled this investee.
Thereafter the investee was equity accounted as a joint venture interest.
The following is a summary of the assets and liabilities derecognised:
Identifiable assets and liabilities
derecognised EUR'000
Intangible assets 66
Property, plant and equipment 7,131
Trade investments 3
Inventories 1,401
Trade and other receivables 12,741
Cash and cash equivalents 6,660
Corporation tax liabilities (328)
Deferred tax liabilities, net (404)
Deferred government grants (177)
Trade and other payables (14,108)
--------------------
Net assets derecognised 12,985
Non-controlling interest (6,668)
--------------------
Net assets derecognised 6,317
--------------------
Investment in joint venture 6,317
--------------------
The carrying value of the net assets derecognised in relation to
this subsidiary closely approximates to fair value.
10. Financial instruments
The fair values of financial assets and financial liabilities, together
with the carrying amounts in the Condensed Group Balance Sheet at
30 June 2017, 30 June 2016 and 31 December 2016 are as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2017 30 June 2016 31 Dec 2016
Carrying Fair Carrying Fair Carrying Fair
value value value value value value
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Other financial assets(1) 625 625 664 664 649 649
Trade and other receivables
- current(1) * 448,928 n/a 381,205 n/a 305,518 n/a
Trade and other receivables
- non- current(1) * 9,508 9,508 8,768 8,768 7,761 7,761
Bank deposits(1) 3,700 n/a 4,700 n/a 2,500 n/a
Cash and cash equivalents(1) 93,660 n/a 103,282 n/a 127,280 n/a
Derivative financial
assets 173 173 969 969 187 187
---------- ---------- ----------
556,594 499,588 443,895
========== ========== ==========
Trade and other payables
- current(1) 526,398 n/a 439,730 n/a 389,708 n/a
Trade and other payables
- non-current(1) 1,397 1,397 2,314 2,314 2,021 2,021
Bank overdrafts(1) 43,888 n/a 35,915 n/a 10,193 n/a
Bank borrowings 204,364 205,386 163,818 165,148 165,005 165,336
Finance lease liabilities(1) 2,433 2,666 3,957 4,153 2,948 3,232
Derivative financial
liabilities 617 617 215 215 569 569
Contingent consideration 36,693 36,693 49,991 49,991 46,375 46,375
Put option liability 41,958 41,958 17,071 17,071 21,215 21,215
---------- ---------- ----------
857,748 713,011 638,034
---------- ---------- ----------
1. The Group has availed of the exemption under IFRS 7 Financial Instruments:
Disclosure for additional disclosures where fair value closely approximates
carrying value.
* For the purposes of this analysis prepayments have not been included
within other receivables. Carrying value of other financial assets,
trade receivables and other receivables are stated net of impairment
provisions where appropriate and consequently fair value is considered
to approximate to carrying value.
A number of other put and call options arising from acquisitions are
of immaterial fair value.
The Group uses the following hierarchy for determining and disclosing
the fair value of financial instruments by valuation technique:
* Level 1: quoted (unadjusted) prices in active markets
for identical assets or liabilities;
* Level 2: other techniques for which all inputs which
have a significant effect on the recorded fair value
are observable, either directly or indirectly;
* Level 3: techniques which use inputs which have a
significant effect on the recorded fair value that
are not based on observable market data.
At 30 June 2017, 30 June 2016 and 31 December 2016 the Group recognised
and measured the following instruments at fair value:
(Unaudited) (Unaudited) (Audited)
30 June 30 June 30 June 30 June 31 Dec 31 Dec
2017 2017 2016 2016 2016 2016
Level Level Level Level Level Level
2 3 2 3 2 3
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Assets measured at fair
value
At fair value through
profit or loss
Foreign exchange contracts 73 - - - 1 -
Designated as hedging
instruments
Foreign exchange contracts 100 - 969 - 186 -
Liabilities measured at
fair value
At fair value through
profit or loss
Foreign exchange contracts (49) - - - (24) -
Interest rate swaps (86) - (110) - (91) -
Contingent consideration - (36,693) - (49,991) - (46,375)
Designated as hedging
instruments
Foreign exchange contracts (399) - (90) - (444) -
Interest rate swaps (83) - (15) - (10)
At fair value through
equity
Put option liability - (41,958) - (17,071) - (21,215)
Additional disclosures for Level 3 fair value measurements
Contingent consideration and put option liability
(Unaudited) (Unaudited)
Contingent Put option
consideration liability
EUR'000 EUR'000
At 1 January 2017 46,375 21,215
Paid during the period (8,830) -
Arising on acquisition of subsidiaries 1,336 25,072
Fair value movement on put option recognised
directly within equity - (1,591)
Foreign exchange movements (2,360) (2,738)
Included in the income statement
172 -
* Fair value movements
At 30 June 2017 36,693 41,958
--------------- --------------------
Presented on Balance Sheet as follows:
Current liability 9,902 -
Non-current liability 26,791 41,958
--------------- --------------------
36,693 41,958
=============== ====================
Contingent consideration
Contingent consideration represents the provision for the net present
value of the amounts expected to be payable in respect of acquisitions
which are subject to earn-out arrangements. Contingent consideration
for each individual transaction is valued internally by the Group
Finance team in consultation with Senior Management and updated as
required at each reporting period.
Put option liability
The Group has a number of contractual put options and forward commitments
in place in relation to non-controlling interest ('NCI') shares in
subsidiaries whereby the NCI shareholder can require the Group, or
the group has agreed to acquire ('forward commitment') the shares
in these subsidiaries at various future dates. The value of the put
option or forward commitment liability recognised represents management's
best estimate of the fair value of the amounts which may be payable
discounted to net present value. The put option or forward commitment
for each individual transaction is valued internally by the Group
Finance team in consultation with Senior Management and updated as
required at each reporting period.
11. Cash flows generated from operations
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2017 30 June 2016 31 Dec 2016
EUR'000 EUR'000 EUR'000
Operating activities
Profit for the period 28,274 20,674 39,304
Adjustments for non-cash items:
Income tax expense 7,171 4,898 11,324
Income tax paid (7,435) (1,715) (11,531)
Depreciation of property, plant and
equipment 7,953 8,435 17,423
Exceptional items (Note 5) (5,063) - 1,409
Fair value movements on contingent
consideration 172 767 73
Amortisation of intangible assets
- acquisition related 4,998 3,844 7,675
Amortisation of intangible assets
- development costs capitalised 153 103 407
Amortisation of intangible assets
- computer software 692 605 1,356
Amortisation of government grants (30) (531) (602)
Share-based payment expense 276 154 436
Defined benefit pension scheme expense
- normal 1,776 2,213 3,237
Contributions to defined benefit
pension schemes - normal (1,985) (2,351) (5,010)
Contributions to defined benefit
pension schemes - exceptional (1,672) - -
Other employee benefit scheme expense 221 - -
Payments relating to other employee (8) -
benefit scheme, net -
Net gain on disposal of property,
plant and equipment (198) (27) (416)
Net finance expense 3,066 2,804 5,524
Net financial expense paid (2,746) (3,045) (5,744)
Net (gain)/loss on non-hedging derivative
financial instruments (57) (98) 31
Loss on disposal of trading assets - 927 943
Share of profits of joint ventures
and associates (4,405) (5,483) (12,270)
Fair value movement in biological
assets 449 308 128
Cash flows from operations before
working capital movements 31,602 32,482 53,697
-------------- -------------- -------------
Movements in working capital:
* Movements in inventories (23,839) (17,144) 1,695
(4,564) -
* Movements in biological assets -
* Movements in trade and other receivables (93,523) (101,374) (24,537)
* Movement in trade and other payables 76,024 60,852 13,293
Total movements in working capital (45,902) (57,666) (9,549)
-------------- -------------- -------------
Cash flows from operating activities (14,300) (25,184) 44,148
============== ============== =============
12. Analysis of Net Debt and Cash and Cash Equivalents
Net debt is a non-IFRS measure which comprises bank deposits, cash
and cash equivalents and current and non-current interest-bearing
loans and borrowings. The calculation of net debt at 30 June 2017,
30 June 2016 and 31 December 2016 is as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2017 30 June 2016 31 Dec 2016
EUR'000 EUR'000 EUR'000
Current assets
Bank deposits 3,700 4,700 2,500
Cash and cash equivalents 74,594 85,391 111,261
Call deposits (demand balances) 19,066 17,891 16,019
Current liabilities
Bank overdrafts (43,888) (35,915) (10,193)
Current bank borrowings (5,591) (38,759) (36,276)
Current finance leases (970) (1,498) (1,515)
Non-current liabilities
Non-current bank borrowing (198,773) (125,059) (128,729)
Non-current finance leases (1,463) (2,459) (1,433)
-------------- -------------- -------------
Net debt at end of period (153,325) (95,708) (48,366)
============== ============== =============
Reconciliation of cash and cash equivalents per balance sheet to
cashflow statement
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2016
2017 2016
EUR'000 EUR'000 EUR'000
Cash and cash equivalents per balance
sheet 93,660 103,282 127,280
Bank overdrafts (43,888) (35,915) (10,193)
------------- ------------- --------------
Cash, cash equivalents and bank
overdrafts per
cash flow statement 49,772 67,367 117,087
============= ============= ==============
13. Post balance sheet events
There have been no material events subsequent to 30 June 2017 which
would require disclosure or adjustment in this report.
14. Related party transactions
There have been no related party transactions or changes to related
party transactions other from those as described in the 2016 Annual
Report that materially affect the financial position or affect the
performance of the Group for the six month period ended 30 June 2017.
15. Board approval
This interim results statement was approved by the Board of Directors
of Total Produce plc on 30 August 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDDFASFWSESA
(END) Dow Jones Newswires
August 31, 2017 02:01 ET (06:01 GMT)
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