TIDMTOT
RNS Number : 4794K
Total Produce Plc
29 August 2019
TOTAL PRODUCE PLC
RESULTS TO 30 JUNE 2019
Total Produce continues strong earnings growth in 2019
-- Total Revenue up 39.6% to EUR3.051 billion
-- Adjusted EBITDA up 106.6% to EUR117.1m
-- Adjusted EBITA up 103.5% to EUR92.8m
-- Adjusted profit before tax up 57.8% to EUR65.9m
-- Adjusted fully diluted EPS (excluding impact of new lease accounting
standard) up 71.4% to 10.30 cent
-- Adjusted fully diluted EPS up 63.1% to 9.80 cent
-- Interim dividend of 0.9129 cent per share, unchanged
Performance measures are defined on page 34
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce, the leading international fresh produce company
is pleased to report strong results for the first half of the year.
As previously announced, the Group completed the acquisition of a
45% stake in Dole Food Company ('Dole'), one of the largest fresh
produce companies in the world on 31 July 2018. This is the first
full year incorporating the Group's share of Dole's results.
Total Produce recorded a 71.4% increase in adjusted fully
diluted EPS in the first half year, excluding the impact of the new
lease accounting standard, due primarily to the contribution of
Dole. This was in turn slightly offset by certain Eurozone markets.
The results of Dole are in line with expectations led by a good
recovery in the Fresh Vegetables division. The Dole business is
seasonal with the greater share of earnings recorded in the first
half of the financial year.
For the full year, Total Produce continues to target an increase
in the adjusted fully diluted EPS, excluding the impact of the new
lease accounting standard, in the mid-to-upper single digit range
over the 2018 adjusted fully diluted EPS of 13.50 cent.
The Group is pleased to announce an interim dividend of 0.9129
cent per share, unchanged on the prior period".
29 August 2019
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 2019
2019 2018
EUR'million EUR'million change
Total Revenue(1) 3,051 2,187 +39.6%
Group Revenue 1,833 1,857 (1.3%)
Adjusted EBITDA(1) (after add back of right-of-use
asset depreciation) 144.8 56.7 +155.5%
Adjusted EBITDA(1) 117.1 56.7 +106.6%
Adjusted EBITA(1) 92.8 45.6 +103.5%
Operating profit after intangible asset amortisation 60.9 44.9 +35.6%
Adjusted profit before tax(1) 65.9 41.8 +57.8%
Profit before tax 55.3 42.3 +30.8%
EUR'cent EUR'cent
Adjusted fully diluted earnings per share
(excluding IFRS 16) 10.30 6.01 +71.4%
Adjusted fully diluted earnings per share 9.80 6.01 +63.1%
Basic earnings per share 11.23 7.23 +55.3%
Diluted basic earnings per share 11.20 7.20 +55.5%
Total dividend per share 0.9129 0.9129 -
(1) Alternative Performance Measures
The Group uses a number of alternative performance measures (APMs), which
are non-IFRS measures to monitor financial performance. These measures
are referred to throughout the discussion of our reported operating performance
and financial position and are measures which are regularly reviewed
by Group management in assessing Group performance. The APMs are defined
on page 34 of this announcement.
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 good performance in the
first half of 2019. The results for the period include the Group's
45% share of Dole Food Company ('Dole'). The comparable prior period
did not include Dole, as the transaction completed on 31 July 2018
after receiving regulatory approval. Dole's overall business is seasonal
with the greater share of adjusted EBITA earned in the first half of
the financial year.
Total revenue in the period grew 39.6% to EUR3,051m (2018: EUR2,187m),
adjusted EBITDA increased by 106.6% to EUR117.1m (2018: EUR56.7m) with
adjusted EBITA increasing 103.5% to EUR92.8m (2018: EUR45.6m). The
increase on the comparative period was due to the incremental benefit
of the acquisition of Dole offset in part by competitive conditions
in certain markets in the Eurozone division and generally more uncertainty
surrounding international trade.
Excluding the impact from the new lease accounting standard (IFRS 16
Leases), the adjusted fully diluted earnings per share was 10.30 cent,
an increase of 71.4% with the increase due to incremental impact of
the acquisition of Dole together with the weighting of its profits
to the first half of the year. Including the effect of IFRS 16, adjusted
fully diluted earnings per share grew 63.1% to 9.80 cent (2018: 6.01
cent).
The Group continues to be cash generative with operating cash flows
of EUR30.7m (2018: EUR37.8m) before normal seasonal working capital
outflows.
The Board is pleased to announce an interim dividend of 0.9129 cent
per share, which is unchanged on the comparative period.
Operating review
The table below details a segmental breakdown of the Group's total
revenue and adjusted EBITA for the six months ended 30 June 2019. The
European and International operating segments are primarily involved
in the procurement, marketing and distribution of hundreds of lines
of fresh fruit and vegetables. The Group's 45% share of the results
of Dole is included as a separate operating segment. Dole is one of
the world's leading fresh producers/marketers and distributors of fresh
fruit and vegetables which are sold through a wide network in North
America, Europe, Latin America, the Middle East and Africa. Segment
performance is evaluated based on total revenue and adjusted EBITA.
(Unaudited) (Unaudited)
6 months to 30 June 6 months to 30 June
2019* 2018
Total Adjusted Total Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Europe - Non-Eurozone 766,403 22,678 781,229 21,378
Europe - Eurozone 816,410 11,211 874,218 14,906
International 604,917 8,945 556,430 9,320
Dole * 891,021 49,987 - -
Inter-segment revenue (27,400) - (25,377) -
----------- ---------- ------------ ---------
Total revenue and adjusted EBITA 3,051,351 92,821 2,186,500 45,604
----------- ---------- ------------ ---------
*Dole's financial calendar consists of thirteen 4 weekly periods and
the first half results are for the first six periods ended 15 June
2019. The Group's share of the adjusted EBITA of Dole above is after
the deduction of the Group's share of the non-controlling interests
charge within Dole and an allocation of a corporate overhead.
Total revenue increased 39.6% to EUR3,051m (2018: EUR2,187m) with adjusted
EBITA increasing by 103.5% to EUR92.8m (2018: EUR45.6m) due to the
incremental impact of the acquisition of Dole offset in part by the
continued challenging trading environment in certain parts of the Eurozone.
On a like-for-like basis, excluding acquisitions, divestments and currency
translation, revenues were 2% behind the comparative period with a
small decrease in volume partially offset by price increases.
Fresh produce markets particularly in certain parts of Europe were
very competitive. The poor weather in California in April to June led
to less optimal growing conditions and weaker trading in the strawberry
growing operation. There was a small drop in exported goods from the
US to India and China due to higher tariffs.
Europe - Non-Eurozone
This segment includes the Group's businesses in the Czech Republic,
Poland, Scandinavia and the UK. Revenue decreased by 1.9% to EUR766m
(2017: EUR781m). This was due in particular to the adverse impact of
the translation of the results of foreign currency denominated operations
into Euro, the cessation of a small distribution business in the second
half of 2018, offset in part by the incremental contribution of bolt-on
acquisitions. On a like-for-like basis excluding divestments, acquisitions
and disposals, revenue decreased by circa 1% with a small decrease
in volumes offset in part by a marginal average price increase. Adjusted
EBITA increased 6.1% to EUR22.7m with the benefit of good operating
margins and the incremental impact of the cessation of a small loss
making distribution business in the second half of 2018.
Europe - Eurozone
This segment includes the Group's businesses in France, Ireland, Italy,
the Netherlands and Spain. Revenue decreased by 6.6% to EUR816m (2018:
EUR874m) with a 24.8% decrease in adjusted EBITA to EUR11.2m (2018:
EUR14.9m). Overall trading conditions were challenging, particularly
in the Netherlands in the vegetable and salad categories where the
market remains very competitive. Trading was satisfactory in Southern
Europe but behind a particularly strong comparable period. Excluding
the effect of acquisitions and divestments, revenue on a like-for-like
basis was circa 6% behind prior year due to volume decreases partially
offset by a marginal price increase.
International
This division includes the Group's businesses in North America, South
America and India. Revenue increased by 8.7% to EUR605m (2018: EUR556m)
with the benefit on translation of results to Euro of the stronger
US and Canadian Dollar which strengthened by 6.6% and 2.5% respectively.
On a like-for-like basis excluding effects of currency, revenue increased
circa 2% with higher average pricing partially offset by some marginal
volume decline. Whilst domestic US volumes have marginally increased,
there was a small drop in US export volumes to India and China due
to increased tariffs.
Adjusted EBITA decreased 4.0% to EUR8.9m (2018: EUR9.3m) with poor
weather in California in April to June leading to weaker trading in
the strawberry growing operation. This was offset in part by the strong
US and Canadian Dollar which benefitted results on translation to Euro
and good performance in some other produce categories.
Dole
This segment includes the Group's share of the results of Dole. As
noted earlier, the Group completed the acquisition of the initial tranche
of 45% of Dole on 31 July 2018 and is equity accounting for its 45%
share of the results of Dole on an IFRS basis with effect from 1 August
2018. The 2019 financial year is therefore the first full year to reflect
this transaction.
Dole's financial calendar consists of thirteen periods of four weeks,
and the first half results are for the first six periods ended 15 June
2019. Dole's overall business is seasonal, with the greater share of
adjusted EBITA earned in the first half of the financial year. Hence
the results for the period ended are not indicative of the results
of the operations for a full year. As Dole is more vertically integrated
their operations are sensitive to a number of factors including weather
related phenomena and the effects on industry volumes, prices, produce
quality and costs.
On an IFRS basis, Dole has recorded revenues of $2,236m (EUR1,980m)
for the period ended 15 June 2019. Adjusted EBITDA was $161.0m (EUR142.9m)
with adjusted EBITA of $130.3m (EUR115.6m). Total Produce's 45% share
of revenue and adjusted EBITA was EUR891m and EUR50.0m respectively.
Trading for the period ended 15 June 2019 has been good. Revenues on
a like-for-like basis, excluding the disposal of the salad business
in Sweden, were in line with the comparable period. Adjusted EBITDA
and adjusted EBITA increased, led by a recovery in the Fresh Vegetable
division which was impacted by two industry-wide safety notices in
2018, not directly linked to Dole, which affected romaine lettuce.
Revenues in the Fresh Fruit division were marginally behind the comparable
prior period due primarily to unfavourable foreign currency exchange
movements in European denominated revenues and the sale of the salad
business in Sweden in the first half of 2019. Revenues in the Fresh
Vegetable division were ahead due to higher pricing of fresh packed
vegetables and packaged salads, higher volumes of packaged salads offset
in part by lower volumes in the fresh packed vegetable business.
Further details on the acquisition of Dole and its financial performance
and position for the period ended 15 June 2019 are outlined in Note
7 of the accompanying financial information.
Financial Review
Impact of IFRS 16 Leases
As explained in detail in Note 1 of the accompanying financial statements,
the Group has adopted IFRS 16 Leases (IFRS 16) with effect from 1 January
2019.
As a result of initially applying IFRS 16 in relation to leases that
were previously classified as operating leases, the Group recognised
EUR108.2m of right-of-use assets and EUR115.2m of lease liabilities
at 30 June 2019.
The incremental impact of adoption of IFRS 16 in the income statement
in the period is a reduction in operating expenses of EUR661,000 and
an increase in the net financial expense of EUR1,495,000. Profit after
tax of joint ventures and associates, which includes the Group's 45%
share of the results of Dole has decreased by EUR1,433,000. The incremental
impact of IFRS 16 on the adjusted earnings per share for the six month
period was a reduction of 0.50 cent per share.
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 Group's share of after tax profits of Dole for the period amounted
to EUR18.6m before exceptional items. Post exceptional items the Group's
share of after tax profits was EUR25.6m. Further details of the performance
of Dole and its financial position at the end of the period is outlined
in Note 7 of the accompanying financial statements.
Excluding the contribution from Dole the share of after tax profits
of joint ventures and associates increased in the period to EUR4.9m
(2018: EUR4.8m). Dividends declared from joint ventures and associates
in the period amounted to EUR6.0m (2018: EUR5.9m) with EUR6.3m (2018:
EUR5.9m) received in cash reflecting the Group's continued focus on
cash return from these investments.
Intangible asset amortisation
Acquisition related intangible asset amortisation in subsidiaries
decreased to EUR5.0m (2018: EUR5.3m) due to intangible assets becoming
fully amortised. The share of intangible asset amortisation within
joint ventures and associates was EUR1.3m (2018: EUR1.3m).
Exceptional items
Exceptional items in the period amounted to a net credit after tax
of EUR8.7m (2018: net credit EUR7.0m), which relate to exceptional
gains on a disposal of an investment and the Group's share of exceptional
items within Dole. A full analysis of these exceptional items is set
out in Note 5 of the accompanying financial information and has been
excluded from the calculation of the adjusted numbers.
Operating Profit
Operating profit before exceptional items increased by 36.1% in the
period to EUR52.4m (2018: EUR38.5m). Operating profit after these items
amounted to EUR60.9m (2018: EUR44.9m).
Net Financial Expense
Net financial expense (before exceptional items) in the period increased
to EUR5.5m (2018: EUR3.2m) due to the impact of applying IFRS 16, higher
average net debt in the period due to the acquisition of Dole, 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 EUR21.4m
(2018: EUR0.6m).
Profit Before Tax
Excluding acquisition related intangible asset amortisation charges
and costs, fair value movements on contingent consideration and share
of joint venture interest and tax which is netted in profit before
tax in the statutory income statement, the adjusted profit before tax
increased by 57.8% in the period to EUR65.9m (2018: EUR41.8m) due primarily
to the contribution of Dole partly offset by a reduction in profits
in some entities in the Eurozone and higher interest charges from funding
the Dole acquisition. Statutory profit before tax after these items
was EUR55.3m (2018: EUR42.3m).
Non-Controlling Interests
The non-controlling interests' share of after tax profits in the period
was EUR6.1m (2018: EUR7.8m). Included in this was the non-controlling
interests' share of exceptional items, acquisition related intangible
asset amortisation charges and costs (net of tax impact) of EUR1.0m
(2018: EUR1.6m). Excluding these non-trading items, the non-controlling
interests' share of after tax profits decreased by EUR2.3m to EUR7.1m
(2018: EUR9.4m). The decrease in the period was due primarily to a
decrease in certain non-wholly owned companies in Europe and North
America.
Adjusted and Basic Earnings per Share
Excluding the impact of the new IFRS 16 Leases standard, adjusted fully
diluted earnings per share was 10.30 cent, an increase of 71.4% due
to the benefit of the Dole acquisition offset in part by higher interest
charges to fund the Dole transaction and challenging conditions in
some markets in the Eurozone. Including the effect of IFRS 16, adjusted
fully diluted earnings per share increased by 63.1% in the six month
period to 9.80 cent per share (2018: 6.01 cent).
Management believes that adjusted fully diluted earnings per share,
which excludes acquisition related intangible asset amortisation charges
and costs, fair value movements on contingent consideration, unrealised
gains or losses on derivative financial instruments, gains and losses
on foreign currency denominated intercompany borrowings, exceptional
items and the 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 11.23 cent per share (2018: 7.23 cent)
and 11.20 cent per share (2018: 7.20 cent) respectively.
Note 6 of the accompanying financial information provide details of
the calculation of the respective earnings per share amounts.
Cash Flow and Net Debt
Net debt (excluding lease liabilities) at 30 June 2019 was EUR294.3m
compared to EUR173.7m (excluding restricted cash of EUR150.2m) at 30
June 2018. The increase reflects the additional finance of EUR110m
required for the Dole investment which completed on 31 July 2018. Net
debt at 31 December 2018 was EUR219.7m with the increase due to normal
seasonal working capital outflows in the period. Average net debt for
the six months ended June 2019 was EUR285.9m compared to EUR169.2m
for the six months ended 30 June 2018 and EUR217.1m for the year ended
31 December 2018 with both 2018 measures excluding the proceeds from
the share placing. In addition, the Group has trade receivables financing
at 30 June 2019 of EUR35.0m (30 June 2018: EUR48.1m and 31 December
2018: EUR30.0m).
The Group generated EUR30.7m (2018: EUR37.8m) in operating cash flows
in the period before seasonal working capital outflows of EUR62.2m
(2018: EUR61.4m). Cash outflows on routine capital expenditure, net
of disposals, were EUR9.8m (2018: EUR11.0m). Dividends received from
joint ventures and associates in the period were EUR6.3m (2018: EUR5.9m)
while dividends paid to non-controlling interests were EUR9.7m (2018:
EUR7.6m).
Cash outflows on acquisitions amounted to EUR9.9m (2018: EUR4.0m) with
the payments in 2019 primarily due to payment of Dole acquisition fees
and some bolt-on acquisitions in the period. Contingent and deferred
consideration payments relating to prior period acquisitions were EUR7.2m
(2018: EUR6.2m). In the period there were cash outflows of EUR3.8m
(2018: EUR5.0m) on non-routine capital expenditure. The Group distributed
EUR9.8m (2018: EUR9.5m) in dividends to equity shareholders in the
period, representing the payment of the final 2018 dividend. There
was a negative movement of EUR0.7m (2018: positive EUR6.5m) on the
translation of foreign currency denominated debt/cash into Euro at
30 June 2019.
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year-ended
to 30 June to 30 June 31 Dec 2018
2019 2018
EUR'm EUR'm EUR'm
Adjusted EBITDA 117.1 56.7 133.3
Deduct adjusted EBITDA of joint ventures
and associates (74.6) (10.1) (44.5)
Net financial expense and tax paid (11.2) (8.8) (20.5)
Right-of-use asset depreciation net of 1.2 - -
IFRS 16 lease payments
Other (1.8) - (0.2)
------------- ------------- --------------
Operating cash flows before working capital
movements 30.7 37.8 68.1
Working capital movements (62.2) (61.4) (15.2)
------------- ------------- --------------
Operating cash flows (31.5) (23.6) 52.9
Routine capital expenditure net of routine
disposal proceeds (9.8) (11.0) (22.1)
Dividends received from joint ventures
and associates 6.3 5.9 10.9
Dividends paid to non-controlling interests (9.7) (7.6) (10.5)
------------- ------------- --------------
Free cash flow (44.7) (36.3) 31.2
Cashflow from exceptional items (0.6) 0.8 3.0
Acquisition payments, net (1) (9.9) (4.0) (259.6)
Net cash assumed on acquisition of subsidiaries 0.4 2.3 3.8
Contingent consideration payments (7.2) (6.2) (7.0)
Non-routine capital expenditure/property
additions (3.8) (5.0) (7.4)
Dividends paid to equity shareholders (9.8) (9.5) (13.1)
Proceeds from issue of share capital
- share placing - 141.0 141.0
Proceeds from issue of share capital
- other - 0.2 0.4
Other 0.1 (0.2) (0.6)
------------- ------------- --------------
Total net debt movement in period (75.5) 83.1 (108.3)
Net debt at beginning of period (219.7) (113.1) (113.1)
Finance leases reclassified from net 1.6 - -
debt to lease liabilities
Foreign currency translation (0.7) 6.5 1.7
------------- ------------- --------------
Net debt at end of period (2) (294.3) (23.5) (219.7)
============= ============= ==============
Less restricted cash - (150.2) -
------------- ------------- --------------
Net debt at end of period, excluding
restricted cash(2) (294.3) (173.7) (219.7)
============= ============= ==============
(1) Includes payments in the 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. The 2018 full year
figure included EUR5.1m of long term funding to a joint venture in
Europe to fund a development.
(2) Net debt has been defined on Page 34 and excludes lease
liabilities.
Employee Defined Benefit Obligations
The net liability of the Group's defined benefit pension schemes (net
of deferred tax) decreased to EUR8.4m at 30 June 2019 (31 December
2018: EUR8.8m). The decrease in the net liability during the period
was primarily due to a 10% return on pension scheme assets in the period
and a reduction in the long term Irish inflation assumption which decreases
the net present value of the scheme's obligations. This was offset
by the impact of a reduction in the discount rates for the Irish and
UK schemes which results in an increase in the net present value of
the schemes' obligations. Other post-employment defined benefit obligations
increased to EUR6.2m at 30 June 2019 (31 December 2018: EUR5.0m). Further
details are outlined in Note 8 of the accompanying financial information.
Shareholders' Equity
Shareholders' equity has increased by EUR16.0m in the six month period
to EUR449.1m at 30 June 2019. On adoption of IFRS 16 Leases, the net
impact to retained earnings at 1 January 2019 was a reduction of EUR6.9m.
Profit after tax of EUR43.6m attributable to equity shareholders was
offset by remeasurement losses of EUR1.1m (net of deferred tax) on
post-employment benefit schemes, a currency translation loss of EUR2.8m
on the retranslation of the net assets of foreign currency denominated
operations to Euro, a EUR5.7m movement in the put option liability
and the payment of a dividend of EUR9.8m to equity shareholders of
the Company.
Development Activity
The Group made a number of bolt-on acquisitions during the six months
ended 30 June 2019 with committed investment of EUR4.0m including
EUR1.5m of deferred and contingent consideration payable on the achievement
of future profit targets.
Dividends
The Board has declared an interim dividend of 0.9129 (2018: 0.9129)
cent per share, unchanged on the comparative period. The dividend
will be paid on 11 October 2019 to shareholders on the register at
13 September 2019 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 2019.
Post Balance Sheet Events
There have been no material events subsequent to 30 June 2019 which
would require disclosure or adjustment in the financial statements.
Going Concern
The Directors are satisfied that the Group has adequate resources
to continue in operational existence for the foreseeable future. Accordingly,
they have adopted the going concern basis in preparing the financial
statements.
Changes to Board of Directors
As part of a planned transition to ensure orderly board succession,
and as previously announced, Imelda Hurley, former Director and CFO
of Origin Enterprises plc and Helen Nolan, former Company Secretary
of Bank of Ireland have joined the Board.
Frank Gernon and Jerome Kennedy have advised the Board that they will
retire prior to the 2020 AGM.
Following these changes, the Board will comprise nine directors, of
which three will be executive and six non-executive.
Summary and Outlook
Total Produce, the leading international fresh produce company is
pleased to report strong results for the first half of the year. As
previously announced, the Group completed the acquisition of a 45%
stake in Dole Food Company ('Dole'), one of the largest fresh produce
companies in the world on 31 July 2018. This is the first full year
incorporating the Group's share of Dole's results.
Total Produce recorded a 71.4% increase in adjusted fully diluted
EPS in the first half year, excluding the impact of the new lease
accounting standard, due primarily to the contribution of Dole. This
was in turn slightly offset by certain Eurozone markets. The results
of Dole are in line with expectations led by a good recovery in the
Fresh Vegetables division. The Dole business is seasonal with the
greater share of earnings recorded in the first half of the financial
year.
For the full year, Total Produce continues to target an increase in
the adjusted fully diluted EPS, excluding the impact of the new lease
accounting standard, in the mid-to-upper single digit range over the
2018 adjusted fully diluted EPS of 13.50 cent.
The Group is pleased to announce an interim dividend of 0.9129 cent
per share, unchanged on the prior period.
Carl McCann, Chairman
On behalf of the Board
29 August 2019
Total Produce plc
Condensed Group Income Statement
for the half-year ended 30 June 2019
(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
2019 2019 2019 2018 2018 2018 2018 2018 2018
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 3,051,351 - 3,051,351 2,186,500 - 2,186,500 5,043,490 - 5,043,490
Group revenue 1,832,598 - 1,832,598 1,857,024 - 1,857,024 3,727,591 - 3,727,591
Cost of sales (1,582,218) - (1,582,218) (1,606,397) - (1,606,397) (3,220,805) - (3,220,805)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Gross profit 250,380 - 250,380 250,627 - 250,627 506,786 - 506,786
Operating
expenses (216,556) 1,447 (215,109) (211,659) 6,386 (205,273) (432,618) 9,450 (423,168)
Share of
profit/(loss)
of
joint venture
- Dole 18,638 6,997 25,635 - - - (2,697) (3,658) (6,355)
Share of profit
of other
joint ventures
and associates 4,934 - 4,934 4,782 - 4,782 10,868 - 10,868
Operating
profit before
acquisition
related
intangible
asset
amortisation 57,396 8,444 65,840 43,750 6,386 50,136 82,339 5,792 88,131
Acquisition
related
intangible
asset
amortisation (4,986) - (4,986) (5,251) - (5,251) (10,281) - (10,281)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Operating
profit after
acquisition
related
intangible
asset
amortisation 52,410 8,444 60,854 38,499 6,386 44,885 72,058 5,792 77,850
Financial
expense (5,515) - (5,515) (3,202) 623 (2,579) (7,365) (667) (8,032)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit before
tax 46,895 8,444 55,339 35,297 7,009 42,306 64,693 5,125 69,818
Income tax
expense (5,964) 304 (5,660) (7,350) (18) (7,368) (14,619) (1,395) (16,014)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit for the
period 40,931 8,748 49,679 27,947 6,991 34,938 50,074 3,730 53,804
============ ============ ============ ============ ============ ============ ============ ============ ============
Attributable to:
Equity holders
of the parent 43,620 27,142 35,793
Non-controlling
interests 6,059 7,796 18,011
------------ ------------ ------------
49,679 34,938 53,804
============ ============ ============
Earnings per
ordinary share
Basic 11.23 7.23 9.37
Fully diluted 11.20 7.20 9.34
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Produce plc
Condensed Group Statement of Comprehensive Income
for the half-year ended 30 June 2019
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2018
2019 2018
EUR'000 EUR'000 EUR'000
Profit for the period 49,679 34,938 53,804
------------- ------------- ------------------
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Foreign currency translation effects:
* foreign currency net investments - subsidiaries (1,255) (3,921) (6,416)
* foreign currency net investments - joint ventures and
associates (373) (139) 3,236
* foreign currency borrowings designated as net
investment hedges (376) 53 (4,387)
* foreign currency recycled to income statement on
joint venture becoming a subsidiary - - 90
Effective portion of changes in fair
value of cash flow hedges, net (78) 336 340
Changes in fair value of cost of hedging,
net 145 26 23
Deferred tax on items above (2) (86) (97)
Share of joint ventures and associates
effective portion of cash flow hedges (1,708) - 51
Share of joint ventures and associates
deferred tax on items above 265 - 696
------------- ------------- ------------------
(3,382) (3,731) (6,464)
------------- ------------- ------------------
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement (losses)/gains on post-employment
defined benefit schemes (665) 7,411 6,323
Remeasurement (losses)/gains on other
post-employment defined benefit schemes (523) 561 354
Revaluation gains on property, plant
and equipment, net - - 475
Deferred tax on items above (128) (1,217) (1,172)
Share of joint ventures and associates
remeasurement losses on post-employment
benefit schemes (1,881) - (1,867)
Share of joint ventures and associates
deferred tax on items above 547 - 854
------------- ------------- ------------------
(2,650) 6,755 4,967
------------- ------------- ------------------
Other comprehensive income for the period (6,032) 3,024 (1,497)
------------- ------------- ------------------
Total comprehensive income for the period 43,647 37,962 52,307
============= ============= ==================
Attributable to:
Equity holders of the parent 37,021 29,392 33,071
Non-controlling interests 6,626 8,570 19,236
------------- ------------- ------------------
43,647 37,962 52,307
============= ============= ==================
Total Produce plc
Condensed Group Balance Sheet
as at 30 June 2019
(Unaudited) (Unaudited) (Audited)
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Property, plant and equipment 176,573 169,836 175,825
Right-of-use assets 109,793 - -
Investment property 7,369 7,228 7,344
Goodwill and intangible assets 267,112 276,275 266,950
Investments in joint venture - Dole 264,426 - 245,881
Investments in joint ventures and
associates - other 104,968 104,342 105,172
Other financial assets 4,968 712 3,465
Other receivables 24,181 11,660 18,724
Deferred tax assets 12,370 11,965 12,393
Total non-current assets 971,760 582,018 835,754
-------------- -------------- --------------------
Current assets
Inventories 84,134 102,569 90,295
Biological assets 4,215 3,036 5,066
Trade and other receivables 481,996 493,614 392,786
Other investments 8,629 - 6,612
Corporation tax receivable 2,765 3,702 4,523
Derivative financial instruments 4,584 423 4,388
Cash and cash equivalents 78,876 231,617 102,299
-------------- -------------- --------------------
Total current assets 665,199 834,961 605,969
-------------- -------------- --------------------
Total assets 1,636,959 1,416,979 1,441,723
============== ============== ====================
Equity
Share capital 4,105 4,101 4,104
Share premium 295,454 295,240 295,421
Other reserves (131,604) (130,674) (123,057)
Retained earnings 281,148 253,974 256,654
-------------- -------------- --------------------
Total equity attributable to equity
holders of the parent 449,103 422,641 433,122
Non-controlling interests 95,484 81,136 82,483
-------------- -------------- --------------------
Total equity 544,587 503,777 515,605
-------------- -------------- ------------------------
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 217,611 162,498 263,356
Lease liabilities 99,276 - -
Deferred government grants 297 360 322
Other payables 1,471 816 1,289
Contingent consideration and other
provisions 12,499 13,545 12,931
Put option liability 25,297 38,604 34,975
Corporation tax payable 6,658 6,286 6,676
Deferred tax liabilities 30,196 27,645 31,140
Employee benefit liabilities 16,140 13,842 15,964
Total non-current liabilities 409,445 263,596 366,653
-------------- -------------- --------------------
Current liabilities
Interest-bearing loans and borrowings 155,558 92,665 58,686
Lease liabilities 17,280 - -
Trade and other payables 500,017 538,697 482,934
Contingent consideration and other
provisions 7,253 13,543 14,333
Derivative financial instruments 405 229 296
Corporation tax payable 2,414 4,472 3,216
-------------- -------------- --------------------
Total current liabilities 682,927 649,606 559,465
-------------- -------------- --------------------
Total liabilities 1,092,372 913,202 926,118
-------------- -------------- --------------------
Total liabilities and equity 1,636,959 1,416,979 1,441,723
============== ============== ====================
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year Attributable to equity holders of the parent
ended 30 June
2019
-------------- ------------- ---------
Unde-
nominated Own Currency Other Non-
For the half-year Share Share capital De-merger shares translation Reval-uation equity Retained controlling Total
ended 30 June capital premium EUR'000 Reserve reserve reserve reserve reserves earnings Total interests equity
2019 (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
2019 as presented
in balance sheet 4,104 295,421 140 (122,521) (8,580) (22,721) 28,336 2,289 256,654 433,122 82,483 515,605
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Adjust for impact
of transition
to IFRS 16 - - - - - 159 - - (6,937) (6,778) (1,337) (8,115)
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Balance at 1
January 2019 as
presented
in the balance
sheet 4,104 295,421 140 (122,521) (8,580) (22,562) 28,336 2,289 249,717 426,344 81,146 507,490
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - - (34,673) - (34,673) 34,673 -
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
As at 1 January
2019 4,104 295,421 140 (122,521) (8,580) (22,562) 28,336 (32,384) 249,717 391,671 115,819 507,490
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Comprehensive
income
Profit for the
period - - - - - - - - 43,620 43,620 6,059 49,679
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Other
comprehensive
income:
Items that may be
reclassified
subsequently to
profit or loss:
Foreign currency
translation
effects,
net - - - - - (1,730) - (1,069) - (2,799) 795 (2,004)
Effective portion
of cash flow
hedges, net - - - - - - - (49) - (49) (29) (78)
Changes in fair
value of cost of
hedging, net - - - - - - - 135 - 135 10 145
Deferred tax on
items above - - - - - - - (11) - (11) 9 (2)
Share of JV &
associates
effective
portion of
cashflow hedges - - - - - - - (1,708) - (1,708) - (1,708)
Share of JV &
associates
deferred
tax on cashflow
hedges - - - - - - - 265 - 265 - 265
Items that will
not be
subsequently
reclassified to
profit or loss:
Remeasurement
losses on
defined
benefit pension
schemes - - - - - - - - (432) (432) (233) (665)
Remeasurement
losses on other
post-employment
defined benefits - - - - - - - - (540) (540) 17 (523)
Deferred tax on
items above - - - - - - - - (126) (126) (2) (128)
Share of JV &
associates
remeasurement
losses on
post-employment
defined
benefit schemes - - - - - - - - (1,881) (1,881) - (1,881)
Share of JV &
associates
deferred
tax on items
above - - - - - - - - 547 547 - 547
Total other
comprehensive
income - - - - - (1,730) - (2,437) (2,432) (6,599) 567 (6,032)
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------
Total
comprehensive
income - - - - - (1,730) - (2,437) 41,188 37,021 6,626 43,647
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Transactions with
equity holders
of the parent
New shares issued 1 33 - - - - - (10) 10 34 - 34
Non-controlling
interest arising
on acquisition of
subsidiaries - - - - - - - - - - 1,537 1,537
Put option
liability
extinguished
in the period - - - - - - - 11,657 - 11,657 - 11,657
Fair value
movements on put
option
liability - - - - - - - (891) - (891) - (891)
Dividends - - - - - - - - (9,767) (9,767) (9,229) (18,996)
Share-based
payment
transactions - - - - - - - 109 - 109 - 109
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Total
transactions
with equity
holders of the
parent 1 33 - - - - - 10,865 (9,757) 1,142 (7,692) (6,550)
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
As at 30 June 2019 4,105 295,454 140 (122,521) (8,580) (24,292) 28,336 (23,956) 281,148 429,834 114,753 544,587
============== ======== ================ ========== ======== ============ ============= ========= ========= ============= ============= =========
Transfer of NCI
subject to put
option
for presentation
purposes - - - - - - - 19,269 - 19,269 (19,269) -
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
As at 30 June 2019
as presented
in the balance
sheet 4,105 295,454 140 (122,521) (8,580) (24,292) 28,336 (4,687) 281,148 449,103 95,484 544,587
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2019 (Continued)
Attributable to equity holders of the parent
------------- ---------
Unde-nominated
capital Own Currency Other Non-
For the half-year Share Share EUR'000 De-merger shares translation Reval-uation equity Retained controlling Total
ended 30 June capital premium Reserve reserve reserve reserve reserves earnings Total interests equity
2018 (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
2018 as presented
in balance sheet 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (10,960) 233,632 259,809 79,774 339,583
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - - (26,788) -- (26,788) 26,788 - -
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
As at 1 January
2018 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (37,748) 233,632 233,021 106,562 339,583
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Comprehensive
income
Profit for the
period - - - - - - - - 27,142 27,142 7,796 34,938
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Other
comprehensive
income:
Items that may be
reclassified
subsequently
to profit or loss:
Foreign currency
translation
effects,
net - - - - - (4,551) - 60 - (4,491) 484 (4,007)
Effective portion
of cash flow
hedges, net - - - - - - - 250 - 250 86 336
Changes in fair
value of cost of
hedging, net - - - - - - - 31 - 31 (5) 26
Deferred tax on
items above - - - - - - - (78) - (78) (8) (86)
Items that will
not be
reclassified
subsequently to
profit or loss:
Remeasurement
gains on defined
benefit pension
schemes - - - - - - - - 7,387 7,387 24 7,411
Remeasurement
gains on other
post-employment
defined benefits - - - - - - - - 365 365 196 561
Deferred tax on
items above - - - - - - - - (1,214) (1,214) (3) (1,217)
Total other
comprehensive
income - - - - - (4,551) - 263 6,538 2,250 774 3,024
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------
Total
comprehensive
income - - - - - (4,551) - 263 33,680 29,392 8,570 37,962
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Transactions with
equity holders
of the parent
New shares issued 633 144,477 - - - - - (66) (3,821) 141,223 - 141,223
Non controlling
interest arising
on acquisition of
subsidiary - - - - - - - - - - 758 758
Fair value
movements on put
option
liability - - - - - - - 297 - 297 - 297
Joint venture
becoming a
subsidiary - - - - - - - - - - 157 157
Termination of
subsidiary with
NCI - - - - - - - - - - (57) (57)
Contribution by
non-controlling
interest - - - - - - - - - - 300 300
Dividends - - - - - - - - (9,517) (9,517) (7,217) (16,734)
Share-based
payment
transactions - - - - - - - 288 - 288 - 288
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Total transactions
with equity
holders
of the parent 633 144,477 - - - - - 519 (13,338) 132,291 (6,059) 126,232
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
As at 30 June 2018 4,101 295,240 140 (122,521) (8,580) (18,719) 28,035 (36,966) 253,974 394,704 109,073 503,777
-------------- -------- ---------------- ---------- -------- ------------ ------------- --------- --------- ------------- ------------- ---------
Transfer of NCI
subject to put
option
for presentation
purposes - - - - - - - 27,937 - 27,937 (27,937) -
As at 30 June 2018
as presented
in the balance
sheet 4,101 295,240 140 (122,521) (8,580) (18,719) 28,035 (9,029) 253,974 422,641 81,136 503,777
============== ======== ================ ========== ======== ============ ============= ========= ========= ============= ============= =========
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2019 (Continued)
Attributable to equity holders of the parent
---------------- ----------
Undenominated Own Currency Reval-uation Other Non-controlling
For the year Share Share capital De-merger shares translation reserve equity Retained interests Total
ended 31 capital premium EUR'000 reserve reserve reserve EUR'000 Reserves earnings Total EUR'000 equity
December EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
2018
(Unaudited)
As at 1 January
2018 as
presented
in the balance
sheet 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (10,960) 233,632 259,809 79,774 339,583
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - - (26,788) - (26,788) 26,788 -
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
As at 1 January
2018 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (37,748) 233,632 233,021 106,562 339,583
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
Comprehensive
income
Profit for the
year - - - - - - - - 35,793 35,793 18,011 53,804
Other
comprehensive
income:
Items that may
be reclassified
subsequently to
profit or loss:
Foreign currency
translation
effects,
net - - - - - (8,553) - 154 - (8,399) 922 (7,477)
Effective
portion of cash
flow
hedges, net - - - - - - - 248 - 248 92 340
Changes in fair
value of cost
of hedging, net - - - - - - - (14) - (14) 37 23
Deferred tax on
items above - - - - - - - (63) - (63) (34) (97)
Share of JV &
associates
effective
portion of cash
flow hedges - - - - - - - 51 - 51 - 51
Share of JV &
associates
deferred
tax on items
above - - - - - - - 696 - 696 - 696
Items that will
not be
reclassified
subsequently to
profit or loss:
Revaluation
gains on
property,
plant and
equipment, net - - - - - - 409 - - 409 66 475
Remeasurement
gains on
defined
benefit pension
schemes - - - - - - - - 6,306 6,306 17 6,323
Remeasurement
gains on other
post-employment
defined
benefits - - - - - - - - 230 230 124 354
Deferred tax on
items above - - - - - - (108) - (1,065) (1,173) 1 (1,172)
Share of JV &
associates
remeasurement
losses on
defined benefit
pension
schemes - - - - - - - - (1,867) (1,867) - (1,867)
Share of JV &
associates
deferred
tax on items
above - - - - - - - - 854 854 - 854
Total other
comprehensive
income - - - - - (8,553) 301 1,072 4,458 (2,722) 1,225 (1,497)
--------- --------- -------------- ----------- -------- ------------ ------------- ---------
Total
comprehensive
income - - - - - (8,553) 301 1,072 40,251 33,071 19,236 52,307
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
Transactions
with equity
holders
of the parent
New shares
issued 636 144,658 - - - - - (97) (3,790) 141,407 - 141,407
Non-controlling
interest
arising
on acquisition
of subsidiaries - - - - - - - - - - 2,314 2,314
Recognition of
put option
liability
on acquisition - - - - - - - (896) - (896) - (896)
Fair value
movements on
put option
liability - - - - - - - 4,728 - 4,728 - 4,728
Acquisition of
non-controlling
interests - - - - - - - - (388) (388) (723) (1,111)
Disposal of
shareholding to
non-controlling
interest - - - - - - - - 11 11 275 286
Contribution by
non-controlling
interest - - - - - - - - - - 130 130
Dividends - - - - - - - - (13,062) (13,062) (10,638) (23,700)
Share-based
payment
transactions - - - - - - - 557 - 557 - 557
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
Total
transactions
with equity
holders of the
parent 636 144,658 - - - - - 4,292 (17,229) 132,357 (8,642) 123,715
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
As at 31
December 2018 4,104 295,421 140 (122,521) (8,580) (22,721) 28,336 (32,384) 256,654 398,449 117,156 515,605
========= ========= ============== =========== ======== ============ ============= ========= ========== ========== ================ ==========
Transfer of NCI
subject to put
option for
presentation
purposes - - - - - - - 34,673 - 34,673 (34,673) -
--------- --------- -------------- ----------- -------- ------------ ------------- --------- ---------- ---------- ---------------- ----------
As at 31
December 2018
as presented
in the balance
sheet 4,104 295,421 140 (122,521) (8,580) (22,721) 28,336 2,289 256,654 433,122 82,483 515,605
========= ========= ============== =========== ======== ============ ============= ========= ========== ========== ================ ==========
Total Produce plc
Condensed Group Statement of Cash Flows
for the half-year ended 30 June 2019
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Net cash flows from operating activities
(Note 12) (26,570) (23,623) 44,943
-------------- -------------- -------------
Investing activities
Acquisition of subsidiaries (2,200) (1,899) (2,496)
Cash assumed on acquisition of subsidiaries,
net 401 2,334 3,833
Acquisition of, and investment in, joint
ventures and associates (7,715) (2,371) (251,949)
Payments of contingent consideration (7,205) (6,234) (7,009)
Acquisition of other investments - (5) -
Proceeds from disposal of joint ventures
and associates 48 22 -
Disposal of investment in subsidiary
to non-controlling interests - - 286
Acquisition of property, plant and equipment (11,916) (14,179) (25,942)
Acquisition of intangible assets - computer
software (1,904) (2,000) (4,352)
Acquisition of intangible assets - brands - (20) (19)
Development expenditure capitalised (56) (93) (121)
Proceeds from disposal of property,
plant and equipment -routine 301 229 797
Proceeds from exceptional items 2,396 849 5,876
Dividends received from joint ventures
and associates 6,282 5,903 10,908
Government grants received - - 11
Net cash flows from investing activities (21,568) (17,464) (270,177)
-------------- -------------- -------------
Financing activities
Drawdown of borrowings 135,062 84,090 436,319
Repayment of borrowings (111,788) (71,036) (329,766)
Proceeds from the issue of share capital 34 141,223 141,408
Capital element of finance lease repayments - (331) (681)
Lease payments (7,959) - -
Acquisition of non-controlling interests - - (490)
Capital contribution by non-controlling
interests - 300 130
Dividends paid to non-controlling interests (9,687) (7,585) (10,535)
Dividends paid to equity holders of
the parent (9,767) (9,517) (13,062)
Net cash flows from financing activities (4,105) 137,144 223,323
-------------- -------------- -------------
Net (decrease)/increase in cash, cash
equivalents and overdrafts (52,243) 96,057 (1,911)
Cash, cash equivalents and overdrafts
at start of period 92,739 88,979 88,979
Net foreign exchange difference (79) 5,978 5,671
-------------- -------------- -------------
Cash, cash equivalents and overdrafts
at end of
the period (Note 13) 40,417 191,014 92,739
-------------- -------------- -------------
Less restricted cash * - (150,185) -
-------------- -------------- -------------
Cash, cash equivalents and overdrafts,
excluding restricted cash (Note 13) 40,417 40,829 92,739
============== ============== =============
Condensed Summary Group Reconciliation of Net Debt
for the half-year ended 30 June 2019
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2019 30 June 31 Dec 2018
2018
EUR'000 EUR'000 EUR'000
Net (decrease) /increase in cash, cash
equivalents and overdrafts (52,243) 96,057 (1,911)
Drawdown of borrowings (135,062) (84,090) (436,319)
Repayment of borrowings 111,788 71,036 329,766
Capital element of finance lease repayments - 331 681
Other movements on finance leases - (253) (500)
Foreign exchange movement (669) 6,499 1,666
-------------- ------------ -------------
Movement in net debt (76,186) 89,580 (106,617)
Finance leases reclassified from net
debt on adoption of IFRS 16 1,636 - -
Net debt at beginning of the period (219,743) (113,126) (113,126)
-------------- ------------ -------------
Net debt at end of the period(1) (Note
13) (294,293) (23,546) (219,743)
-------------- ------------ -------------
Less restricted cash * - (150,185) -
-------------- ------------ -------------
Net debt at end of the period, excluding
restricted cash(1) (Note 13) (294,293) (173,731) (219,743)
============== ============ =============
*The restricted cash of EUR150.2m related to the proceeds of
EUR141m from the share placing (net of associated costs) that were
used to purchase dollars. The EUR150.2m is the retranslated amount
of the US Dollar deposit including accrued interest income. This
deposit was held in escrow at 30 June 2018 pending completion of
the Dole transaction.
(1) Net debt is defined on page 34 and excludes lease
liabilities.
Total Produce plc
Notes to the Interim Results for the half-year ended 30 June 2019
1. Basis of preparation
The condensed consolidated interim financial statements of Total Produce
plc as at, and for the six months ended 30 June 2019, 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 2018, 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 2019 and the comparative six months ended 30 June 2018 is unaudited.
The financial information for the year ended 31 December 2018 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 judgements, 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 judgements 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 2018.
Changes in significant accounting policy and disclosures
Except as described below, the accounting policies applied in these
interim financial statements are the same as those applied in the
Group's consolidated financial statements as at 31 December 2018.
The changes in accounting policy will be reflected in the Group's
consolidated financial statements as at 31 December 2019.
The Group has initially adopted IFRS 16 Leases with effect from 1
January 2019
A number of new standards are also effective from 1 January 2019 but
they have not had a material impact on the Group's consolidated financial
statements.
IFRS 16 Leases
The Group has initially adopted IFRS 16 Leases with effect from 1
January 2019.
IFRS 16 introduces a single lessee accounting model to be adopted
and accordingly the majority of all lease agreements will now result
in the recognition of a right-of-use asset and a lease liability on
the balance sheet. This will increase the Group's recognised assets
and liabilities. The income statement charge in relation to all leases
will now comprise a depreciation element relating to the right-of-use
asset and also a financing charge relating to the lease liability.
Lessor accounting remains similar to previous accounting policies.
The Group has applied IFRS 16 using the modified retrospective approach
on transition, under which the cumulative effect of initial application
is recognised in equity as an adjustment to the opening balance of
retained earnings, non-controlling interest and currency translation
reserve at 1 January 2019. The comparative information for prior periods
has not been re-stated. It is presented as previously reported under
IAS 17 and related interpretations.
The details of the changes in accounting policies are disclosed below:
Definition of a lease
Under IFRS 16 a contract is, or contains a lease if the contract conveys
the right to control the use of an identified asset for a period of
time in exchange for consideration. On transition to IFRS 16, the
Group used the practical expedient to grandfather the assessment of
which contracts were leases and therefore applied IFRS 16 on transition
only to those contracts that had previously been identified as leases.
Changes as a lessee
As a lessee, the Group previously classified leases as operating or
finance leases based on whether the lease transferred substantially
all of the risks and rewards of ownership. Under IFRS 16, the Group
recognises right-of-use-assets and lease liabilities for most leases
on its balance sheet. However, the Group has elected not to recognise
right-of-use assets and lease liabilities for some short-term leases
and leases of low-value assets. The Group recognises the lease payments
for these leases as an expense on a straight-line basis over the lease
term.
Accounting policies applied in respect of leases
The Group recognises a right-of-use asset and a lease liability at
the lease commencement date.
The right-of-use asset is initially measured at cost and subsequently
at cost less accumulated depreciation and impairments and adjusted
for certain remeasurements of the lease liability. The cost of the
right-of-use asset includes the lease liability recognised, any initial
direct costs, restoration costs and payments made on or before the
lease commencement date less any lease incentives received. The right-of-use
asset is depreciated on a straight line basis over the lower of the
lease term and the useful life of the asset. Where the lease contains
a purchase option and the lessee is reasonably certain to exercise
the purchase option the asset is depreciated over the useful life
of the asset. Right-of-use assets are subject to impairment testing.
The lease liability is initially measured as the present value of
the lease payments to be made over the term of the lease, discounted
using the rate implicit in the lease or, where this is not available,
the Group's incremental borrowing rate. Lease payments include fixed
and variable lease payments and amounts expected to be paid under
residual value guarantees. Lease payments also include the exercise
price of a purchase option where the Group is reasonably certain that
they will exercise the option and also any termination costs associated
with a lease where the lease term reflects the termination of the
lease.
The lease liability is subsequently increased by the interest cost
of the lease liability and decreased by lease payments made. The lease
liability is remeasured when there is a change in future lease payments
as a result of a change in an index or rate, a change in the amount
expected to be paid under a residual value guarantee, or a change
in the assessment of whether a purchase or termination option is reasonably
expected to be exercised or not exercised. The Group has availed of
the practical expedient not to separate lease components from any
associated non-lease components for leases of plant and equipment
and motor vehicles.
The Group has applied judgement in determining the lease term for
leases where they are the lessee and the lease contract contains renewal
and/or termination options. The assessment of whether the Group is
reasonably certain to exercise such options impacts the lease term
which in turn impacts the right-of-use asset and lease liability to
be recognised.
Transition
At transition, for leases previously classified as operating leases
under IAS 17, lease liabilities were measured as the present value
of the remaining lease payments, discounted at the incremental borrowing
rate at 1 January 2019. Right-of-use assets were measured at either:
* their carrying amount if IFRS 16 had been applied
since the commencement date, discounted using the
incremental borrowing rate at 1 January 2019. The
Group applied this approach for certain property
leases; or
* an amount equal to the lease liability, adjusted by
the amount of any prepaid or accrued lease payments.
The Group applied this approach to all other leases.
The Group used the following practical expedients when applying IFRS
16 to leases previously classified as operating leases under IAS 17:
* Applied the exemption not to recognise right-of-use
assets and lease liabilities for leases with less
than 12 months of a lease term.
* Excluded initial direct costs from measuring the
right-of-use asset at the date of initial
application.
* Used hindsight when determining the lease term if the
contract contained options to extend or terminate the
lease.
At transition, for leases previously classified as finance leases
under IAS 17, the carrying amount of the right-of use asset and lease
liability at 1 January 2019 were determined at the carrying amount
of the lease asset and lease liability under IAS 17 immediately before
that date.
Impact on the financial statements
Impact on transition
On transition to IFRS 16, the Group recognised additional right-of-use
assets, lease liabilities and restoration provisions with the difference
being recognised in reserves. The impact on transition is summarised
below:
1 January
2019
EUR'000
Right-of-use assets 115,336
Lease liabilities (121,101)
Restoration provisions (905)
Investment in joint ventures and associates - Dole (3,326)
Prepayments 1,513
Deferred tax asset 368
Retained earnings 6,937
Non-controlling interests 1,337
Currency translation reserve (159)
When measuring lease liabilities for leases that were classified as
operating leases, the Group discounted lease payments using its incremental
borrowing rate at 1 January 2019. The weighted average rate applied
was 2.6%.
The lease liabilities recognised at 1 January 2019 can be reconciled
to the operating lease commitments as at 31 December 2018 as follows:
EUR'000
Operating lease commitment at 31 December 2018 86,583
Extension options reasonably certain to be exercised 59,416
Non-lease components 3,360
Commitments relating to low value and short-term
leases (997)
Lease contracts not commenced at 1 January 2019 (5,635)
Effect of discounting (21,626)
Finance lease liabilities recognised at 31 December
2018 1,636
---------
Lease liabilities at 1 January 2019 122,737
---------
Impact on the Balance Sheet in the period
As a result of initially applying IFRS 16, in relation to leases that
were previously classified as operating leases, the Group recognised
EUR108.2m of right-of-use assets and EUR115.2m of lease liabilities
at 30 June 2019.
The carrying amount of right-of-use assets are as follows;
Land and Plant and Motor
buildings equipment vehicles Total
EUR'000 EUR'000 EUR'000 EUR'000
Reclassification of assets held
under finance leases from Property,
plant and equipment on adoption
of IFRS 16 - 379 1,521 1,900
Arising on adoption of IFRS 16 105,372 5,920 4,044 115,336
Additions in period 1,486 185 626 2,297
Arising on acquisition of a business 469 - - 469
Arising on business disposals (645) - - (645)
Termination of leases - - (21) (21)
Depreciation charge (7,207) (849) (1,118) (9,174)
Foreign exchange movement (242) (92) (35) (369)
----------- ----------- ---------- ----------
Carrying value at 30 June 2019 99,233 5,543 5,017 109,793
=========== =========== ========== ==========
The carrying amount of lease liabilities are as follows:
2019
EUR'000
Reclassification of finance leases on adoption of IFRS 16 1,636
Arising on adoption of IFRS 16 121,101
New leases arising in period 2,297
Arising on acquisition of a business 469
Arising on business disposals (654)
Leases terminated (21)
Lease payments (9,466)
Interest 1,507
Foreign exchange movement (313)
---------
Balance at 30 June 2019 116,556
=========
Impact on the income statement in the period
For subsidiaries in relation to those leases previously classified
as operating leases, under IFRS 16, the Group has recognised depreciation
and interest costs instead of an operating lease expense. During the
six months to 30 June 2019 the Group recognised EUR8,902,000 of depreciation
costs and EUR1,495,000 of interest costs from these leases. Under
IAS 17 the operating lease cost associated with these leases would
have been EUR9,563,000.
The Group's share of depreciation costs and of interest costs of joint
ventures and associates from leases that would previously have been
classified as operating leases amounted to EUR16,607,000 and EUR5,047,000
respectively. Under IAS 17 the Group's share of the operating lease
cost associated with these leases would have been EUR20,057,000.
The net incremental impact on Group's profit after tax and non-controlling
interests in the period was a decrease of EUR1,936,000.
The incremental impact of IFRS 16 on adjusted fully diluted earnings
per share was a decrease of 0.50 cent for the six month period.
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
2019 2018 2019 2018
Brazilian Real 4.3410 4.2036 (3.3%) 4.3511 4.4440 2.1%
Canadian Dollar 1.5066 1.5450 2.5% 1.4886 1.5601 4.6%
Czech Koruna 25.6785 25.5830 (0.4%) 25.4472 25.7240 1.1%
Danish Kroner 7.4661 7.4480 (0.2%) 7.4647 7.4668 0.0%
Indian Rupee 79.0941 79.4801 0.5% 78.4129 79.5453 1.4%
Polish Zloty 4.2915 4.2195 (1.7%) 4.2454 4.2973 1.2%
Pound Sterling 0.8712 0.8787 0.9% 0.8955 0.8986 0.3%
Swedish Krona 10.5308 10.1669 (3.6%) 10.5577 10.2188 (3.3%)
US Dollar 1.1296 1.2100 6.6% 1.1371 1.1445 0.6%
--------- --------- --------- -------- -------- ---------
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 2019,
the six months ended 30 June 2018 and the full year ended 31 December
2018.
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 - Non-Eurozone: This operating segment is an aggregation
of six operating segments in the Czech Republic, Poland, Scandinavia
and the United Kingdom primarily involved in the procurement,
marketing and distribution of fresh produce. Up to the middle
of 2018 it also included a small healthfoods business that has
been discontinued. These operating segments have been aggregated
because they have similar economic characteristics.
- 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.
- International: This segment is an aggregation of five operating
segments in North America, one in South America and one in India
primarily involved in the procurement, marketing and distribution
of fresh produce. These operating segments have been aggregated
because they have similar customer profiles and primarily transact
in US Dollar.
- Dole: This operating segment represents the Group's 45% interest
in Dole. Dole is one of the world's leading producers, marketers
and distributors of fresh fruit and vegetables. It has an iconic
brand and leading market positions and scale. It is one of the
world's largest producers of bananas and pineapples and a leader
in other fresh fruits, value added and fresh-packed vegetables
and berries. In terms of market share they hold the number one
and three positions respectively for bananas in North America
and Europe and are number two and three respectively for pineapples
in North America and Europe. They sell and distribute throughout
a wide network in North America, Europe, Latin America, the Middle
East and Africa.
Segment performance is evaluated based on total revenue and adjusted
EBITA. Management believes that adjusted EBITA, while not a defined
term under IFRS, gives 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, unrealised
gains or losses on derivative financial instruments, gains and losses
on foreign currency denominated intercompany borrowings 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 full detail in the analysis that follows.
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 2019 30 June 2018 31 Dec 2018
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 - Non-Eurozone 766,403 22,678 781,229 21,378 1,511,780 41,593
Europe - Eurozone 816,410 11,211 874,218 14,906 1,716,584 27,252
International 604,917 8,945 556,430 9,320 1,175,297 18,880
Dole* 891,021 49,987 - - 692,239 10,297
Inter-segment revenue** (27,400) - (25,377) - (52,410) -
---------- --------- ---------- --------------------- ---------- ---------
Total revenue and
adjusted EBITA 3,051,351 92,821 2,186,500 45,604 5,043,490 98,022
---------- --------- ---------- --------------------- ---------- ---------
*Dole's financial calendar consists of thirteen 4 weekly periods and
the first half results are for the first six periods ended 15 June
2019. The Group's share of the adjusted EBITA of Dole above is after
the deduction of the Group's share of the non-controlling interests
charge within Dole and an allocation of corporate overhead
**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 30 June 2018 31 Dec 2018
2019
EUR'000 EUR'000 EUR'000
Adjusted EBITA per
management reporting 92,821 45,604 98,022
Acquisition related
intangible asset
amortisation within
subsidiaries (i) (4,986) (5,251) (10,281)
Share of joint ventures
and associates
acquisition related
intangible asset
amortisation (i) (1,349) (1,323) (2,684)
Fair value movements on
contingent
consideration (ii) 1,067 1,581 4,043
Acquisition related costs
within
subsidiaries (iii) (23) (101) (105)
Share of joint ventures
and associates
net financial expense (iv) (21,359) (610) (13,784)
Share of joint ventures
and associates
tax (before tax on
exceptional items) (iv) (13,761) (1,401) (3,153)
-------------------------- ------------------------- -------------
Operating profit before
exceptional
items 52,410 38,499 72,058
Net financial expense
before exceptional
items (v) (5,515) (3,202) (7,365)
-------------------------- ------------------------- -------------
Profit before tax before
exceptional
items 46,895 35,297 64,693
Exceptional items (Note 5) (vi) 8,444 7,009 5,125
-------------------------- ------------------------- -------------
Profit before tax after
exceptional
items 55,339 42,306 69,818
========================== ========================= =============
(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) 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.
(vi) Exceptional items (Note 5) are not allocated to 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 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Profit before tax per income statement 55,339 42,306 69,818
Adjustments
Exceptional items (Note 5) (8,444) (7,009) (5,125)
Fair value movements on contingent
consideration (1,067) (1,581) (4,043)
Share of joint ventures and associates
tax (before tax on exceptional items) 13,761 1,401 3,153
Acquisition related intangible asset
amortisation within subsidiaries 4,986 5,251 10,281
Share of joint ventures and associates
acquisition related intangible asset
amortisation 1,349 1,323 2,684
Acquisition related costs within
subsidiaries 23 101 105
-------------- --------------- --------------
Adjusted profit before tax 65,947 41,792 76,873
-------------- --------------- --------------
Exclude
Net financial expense - subsidiaries
before exceptional items 5,515 3,202 7,365
Net financial expense - share of
joint ventures and associates 21,359 610 13,784
-------------- --------------- --------------
Adjusted EBITA 92,821 45,604 98,022
-------------- --------------- --------------
Exclude
Amortisation of software costs 947 771 1,397
Depreciation of property, plant and
equipment - subsidiaries 8,782 8,366 17,194
Depreciation of property, plant and
equipment - share of joint ventures
and associates 14,555 1,947 16,679
-------------- --------------- --------------
Adjusted EBITDA 117,105 56,688 133,292
-------------- --------------- --------------
Exclude
Depreciation of right of use assets 9,174 - -
- subsidiaries
Depreciation of right of use assets
- share of joint ventures and associates 18,533 - -
-------------- --------------- --------------
Adjusted EBITDA (before depreciation
on right-of-use assets) 144,812 56,688 133,292
-------------- --------------- --------------
5. Exceptional items
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 30 June 31 Dec 2018
2019 2018
EUR'000 EUR'000 EUR'000
Gain on disposal of investment (a) 1,447 - 14,728
Share of joint venture and associates
exceptional items - Dole (b) 6,199 - (4,580)
Foreign currency gains arising on foreign
currency intercompany borrowings relating
to proceeds from share placing (c) - 7,909 12,535
Costs associated with the Dole transactions,
net (d) - (900) (3,225)
Charge on employee defined benefit obligations
(e) - - (1,304)
Impairment of goodwill (f) - - (9,060)
Restructuring costs and costs associated
with termination of a business (g) - - (4,891)
Total exceptional items (before share
of joint ventures and associates tax) 7,646 7,009 4,203
Share of joint venture and associates
tax on exceptional items - Dole (b) 798 - 922
------------ ------------ -------------
Exceptional items within profit before
tax 8,444 7,009 5,125
Net tax credit/ (charge) on exceptional
items (h) 304 (18) (1,395)
------------ ------------ -------------
Total 8,748 6,991 3,730
------------ ------------ -------------
Attributable as follow:
Equity holders of the parent 8,135 6,991 560
Non-controlling interests 613 - 3,170
------------ ------------ -------------
8,748 6,991 3,730
============ ============ =============
(a) Gain on disposal of farming investment
In 2018 a subsidiary of the Group disposed of an interest in a farming
entity for consideration of shares in an equity investment which will
be realised over a period of three years and may vary depending on
certain circumstances. The exceptional gain, which represents the
gain on the disposal of the investment received to date and fair valuing
the investment held in escrow, net of associated costs, resulted in
an exceptional gain of EUR1.4m being recorded in the income statement
in 2019 and EUR14.7m being recorded in 2018.
(b) Share of joint ventures and associates exceptional items - Dole
Exceptional items in Dole relate to non-trading exceptional items
such as gains on disposal of businesses, non-cash gains/losses on
mark to market of derivative financial instruments, foreign currency
movements on long term foreign currency denominated inter-company
borrowings and restructuring costs. In 2018 it also included some
costs associated with the industry wide ban on romaine lettuce.
The share of the exceptional items in Dole for the period to 15 June
2019 was a gain of EUR6.2m and primarily related to the gain on the
sale of the Swedish salad business in the period. The Group share
of the exceptional loss in the five month period ended 31 December
2018 was a loss of EUR4.6m. The share of the associated tax credit
was EUR0.8m (31 December 2018: EUR0.9m).
(c) Foreign currency gains on foreign currency intercompany borrowings
relating to proceeds from share placing
In February 2018 the Group issued 63 million new ordinary shares,
raising proceeds of EUR141m (net of associated costs) to finance the
Dole transaction. The net proceeds from this share placing were used,
via an intercompany loan, to purchase US Dollars in February. The
strengthening of the US Dollar from the date of purchase to 30 June
2018 resulted in a foreign currency gain of EUR7.9m, and from the
date of purchase to the date when the intercompany loan was converted
to equity in August 2018 following the completion of the acquisition
of Dole resulted in a foreign currency gain of EUR12.5m.
(d) Costs associated with the Dole transactions, net
Costs associated with the committed financing and other transaction
costs associated with Dole net of interest income on the proceeds
of share placing were EUR0.9m in the period to 30 June 2018 and totalled
EUR3.2m in the year ended 31 December 2018.
(e) Charge on employee benefit obligations
In December 2018, a charge of EUR1.3m relating to the UK defined benefit
pension schemes was recognised in the income statement as a result
of the UK High Court ruling that pension benefits must be equalised
in respect of Guaranteed Minimum Pensions (GMPs) accrued between 17
May 1990 and 5 April 1997.
(f) Impairment of goodwill
In December 2018 the Group recognised a non-cash impairment charge
of EUR9.1m in relation to its fresh produce business in the Netherlands
which have experienced a difficult trading environment resulting in
a slower recovery than had been anticipated.
(g) Restructuring costs and costs associated with termination of a
business
In the second half of 2018, the Group ceased operations in a non-performing
sports supplements businesses in the UK. The total costs associated
with the termination of this business were EUR2.3m including the write
off of fixed assets, intangible assets, other assets and redundancies.
The Group implemented restructuring programmes in a number of entities
primarily within the Eurozone Division in late 2018 with the EUR2.6m
of costs associated with these programmes being recorded as an exceptional
cost in the income statement.
(h) Tax credit/ (charge) on exceptional items
The net tax effect on the exceptional items above was a credit of
EUR0.3m (year ended 31 December 2018: a charge of EUR1.4m and a charge
of EUR0.02m for the 6 months ended 30 June 2018).
Effect of exceptional items on cash flow statement
The net effect of the items above was a cash outflow of EUR0.6m for
the six month period to 30 June 2019 (2018: inflow EUR0.8m). The net
effect of exceptional items for the year ended 31 December 2018 was
a cash inflow of EUR3.0m.
6. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for
the period attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during
the period, excluding shares purchased by the Company which are held
as treasury shares.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
to
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 43,620 27,142 35,793
=============== ============== ==============
'000 '000 '000
Shares in issue at beginning of period 410,429 346,829 346,829
New shares issued from exercise of
share options (weighted average) 47 130 275
New shares issued from share placing
(weighted average) - 50,470 56,786
Effect of treasury shares held (22,000) (22,000) (22,000)
--------------- -------------- --------------
Weighted average number of shares
at end of period 388,476 375,429 381,890
=============== ============== ==============
Basic earnings per share - cent 11.23 7.23 9.37
=============== ============== ==============
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit for
the period 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
to
30 June 2019 30 June 31 Dec 2018
2018
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 43,620 27,142 35,793
=============== ============== ==============
'000 '000 '000
Weighted average number of shares
at end of period 388,476 375,429 381,890
Effect of share options with a dilutive
effect 867 1,409 1,257
--------------- -------------- --------------
Weighted average number of shares
at end of period (diluted) 389,343 376,838 383,147
=============== ============== ==============
Diluted earnings per share - cent 11.20 7.20 9.34
=============== ============== ==============
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 basic earnings per share and 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, unrealised gains or losses
on derivative financial instruments, gains and losses on foreign currency
denominated intercompany borrowings and exceptional items and the
related tax on these items.
Adjusted basic 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
during the period, excluding shares purchased by the Company which
are held as treasury shares.
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
to
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 43,620 27,142 35,793
Adjustments:
Exceptional items - net of tax (Note
5) (8,748) (6,991) (3,730)
Acquisition related intangible asset
amortisation within subsidiaries 4,986 5,251 10,281
Share of joint ventures and associates
acquisition related intangible asset
amortisation 1,349 1,323 2,684
Acquisition related costs within
subsidiaries 23 101 105
Fair value movements on contingent
consideration (1,067) (1,581) (4,043)
Tax effect of amortisation of goodwill,
intangible assets and fair value
movements on contingent consideration (1,006) (1,029) (805)
Non-controlling interests share of
items above (1,002) (1,572) 1
--------------- -------------- --------------
Adjusted profit attributable to equity
holders of the parent 38,155 22,644 40,286
=============== ============== ==============
'000 '000 '000
Weighted average number of shares 388,476 375,429 381,890
Weighted average number of shares
(diluted) 389,343 376,838 383,147
Adjusted basic earnings per share
- cent 9.82 6.03 10.55
=============== ============== ==============
Adjusted fully diluted earnings per
share - cent 9.80 6.01 10.51
=============== ============== ==============
Memo item for 2018
Adjusted fully diluted earnings per
share - cent (excluding the effect
of the Dole acquisition and related
share placing)* 6.94 13.50
============== ==============
*The calculation presented here is the adjusted fully diluted earnings
per share calculated excluding the impact of the Dole acquisition and
the related 63 million share placing in early February 2018.
7. Investment in Dole
As disclosed previously on 31 July 2018, the Group completed the transaction
to acquire a 45% stake in Dole Food Company ('Dole') for $300m.
In addition, and at any time after closing of the First Tranche, the
Group has the right, but not the obligation, to acquire (in any one
or more tranches of 1%) up to an additional 6% of Dole common stock
(the 'Second Tranche'). The Group has no present intention to exercise
its option to acquire the Second Tranche. In the event the Group exercises
the right to acquire the additional 6%, the total consideration for
the 51% stake shall be $312 million.
Following the second anniversary of the closing of the First Tranche,
the Group has the right, but not the obligation, to acquire the balance
of Dole common stock (the 'Third Tranche'), whereby the consideration
for the Third Tranche is to be calculated based on nine times the preceding
three year average historical Dole Adjusted EBITDA less net debt.However,
in no event shall the Third Tranche purchase price be less than $250
million or exceed $450 million(such cap subject to increase after six
years). The Third Tranche consideration is payable in cash or, if the
parties mutually agree, Total Produce stock.
From the fifth anniversary of completion of the acquisition of the First
Tranche, in the event the Group has notexercised its right to acquire
100% of Dole, Mr. David H. Murdock is permitted to cause a process to
market and sell 100% of Dole common stock.
On completion of the acquisition of the First Tranche on 31 July 2018,
the Group and Mr. David H. Murdock have balanced governance rights with
respect to Dole. The Board of Directors of Dole comprises of six members,
three of which are appointed by Total Produce and three by Mr. David
H. Murdock. Mr. David H. Murdock remains Chairman of Dole and Carl McCann
was appointed Vice Chairman. Major decisions require consent of at least
one Board Member appointed by each of Total Produce and Mr. David H.
Murdock.
The investment in Dole and its financial contribution is being treated
as a joint venture and accounted for under the equity method in accordance
with IFRS in the consolidated Group accounts following completion of
the acquisition of the First Tranche on 31 July 2018 and until an exercise
of the Third Tranche.
Total Produce is therefore equity accounting for its 45% share of the
results of Dole with effect from 1 August 2018. The overall business
is seasonal with the greater share of EBITDA in the first half of the
financial year. The 2019 financial year is therefore the first full
year reflecting this transaction.
The table below summarises the consideration paid and fair value of
the net identifiable assets of Dole on acquisition as prepared in accordance
with IFRS. The initial assignment of fair values to net assets for this
investment was performed on a provisional basis in respect of this acquisition
given the timing of completion of the transaction and could be finalised
within twelve months from the acquisition date. A number of adjustments
were identified and are presented in the table below. There was no income
statement impact from these adjustments in the period from date of acquisition
to 31 December 2018. Given that the adjustments are all equity accounted
for within investment in joint ventures and associates on the Balance
Sheet, no adjustment was required in the Total Produce Group Balance
Sheet.
Updated within Provisional
12 month period acquisition
accounting
2018 2018 2018 2018
Consideration paid US$'m EUR'm US$'m EUR'm
Cash consideration 300 256 300 256
Acquisition fees (net of contribution
from Dole) (a) 2 2 2 2
Fair value of Second Tranche Option (b) (5) (4) (5) (4)
--------- -------- -------- --------
Total cost of acquisition 297 254 297 254
--------- -------- -------- --------
Fair value of indemnification assets
on acquisition(c) (4) (4) (4) (4)
--------- -------- -------- --------
Total deemed cost of acquisition 293 250 293 250
--------- -------- -------- --------
Fair value identifiable assets and liabilities
on acquisition
Intangible assets - Brand 287 245 287 245
Property, plant and equipment 1,008 861 1,008 861
Assets held for sale / Actively marketed
property 185 158 185 158
Other non-current assets 105 89 105 89
Other current assets 869 742 869 742
Net debt (1,343) (1,147) (1,343) (1,147)
Employee benefit obligations (184) (157) (184) (157)
Other current liabilities (599) (511) (599) (511)
Other non-current liabilities (283) (242) (286) (244)
Non-controlling interests (8) (7) (8) (7)
--------- -------- -------- --------
Fair value of identifiable assets and
liabilities on acquisition 37 31 34 29
--------- -------- -------- --------
Total Produce's 45% share of identifiable
assets & liabilities on acquisition 17 14 15 13
--------- -------- -------- --------
Goodwill arising 276 236 278 237
--------- -------- -------- --------
(a) As part of the Securities Purchase Agreement, it was agreed that
Dole would make a contribution of $15m to cover professional and advisory
fees relating to the transaction.
(b) As part of the provisions of acquisition accounting, a fair value
was determined for the Second Tranche Option which is recognised as a
current derivative financial asset in the Total Produce Group balance
sheet and correspondingly reduces the deemed cost of the acquisition
of the First Tranche. The fair value of the Third Tranche Option was
not deemed material at the date of acquisition.
(c) As part of the Securities Purchase Agreement, the seller provided
indemnities against certain liabilities outstanding at the date of acquisition.
The fair value of these indemnities was recognised as a long term asset
in the Total Produce Group balance sheet with a corresponding reduction
in the deemed cost of the acquisition.
Summary of Financial Information for Dole for the period ended 15 June
2019
The following is the summarised financial information of Dole at 15
June 2019 based on consolidated financial statements prepared under
IFRS, modified for fair value adjustments on acquisition and differences
in the Group's accounting policies.
Summary income statement for the period ended
15 June 2019
2019 2019 2019 2019 2019 2019
US$'m US$'m US$'m EUR'm EUR'm EUR'm
Pre-exceptional Exceptional Pre-exceptional Exceptional
Items Total items Total
Revenue 2,236 - 2,236 1,980 - 1,980
Operating profit 130.3 15.6 145.9 115.6 13.8 129.4
Net financial expense (51.1) - (51.1) (45.3) - (45.3)
---------------- ------------ -------- ---------------- ------------ --------
Profit before tax 79.2 15.6 94.8 70.3 13.8 84.1
Income tax (31.3) 2.0 (29.3) (27.8) 1.8 (26.0)
---------------- ------------ -------- ---------------- ------------ --------
Profit for period 47.9 17.6 65.5 42.5 15.6 58.1
Non-controlling interests (1.2) - (1.2) (1.1) - (1.1)
---------------- ------------ -------- ---------------- ------------ --------
Profit for period attributable
to equity shareholders 46.7 17.6 64.3 41.4 15.6 57.0
================ ============ ======== ================ ============ ========
Groups' 45% share of
profit attributable
to equity shareholders 21.0 7.9 28.9 18.6 7.0 25.6
Summary of other comprehensive income statement for the period ended
15 June 2019
2019 2019
US$'m EUR'm
Other comprehensive expense for the
period (net of tax) (13.0) (11.5)
Non-controlling interests share - -
-------- --------
Other comprehensive expense for the
period attributable to equity shareholders (13.0) (11.5)
======== ========
Group's 45% share of other comprehensive
expense attributable to equity shareholders (5.8) (5.2)
======== ========
Key performance indicators for the period ended 15 June
2019
2019 2019
US$'m EUR'm
Adjusted EBITDA (adding back depreciation of right-of-use
assets) 202.4 179.6
Adjusted EBITDA 161.0 142.9
Adjusted EBITA 130.3 115.6
Impact of IFRS 16 on Dole
Impact on transition
As explained in Note 1, the Group has adopted IFRS 16 Leases using
the modified retrospective approach, with the date of initial application
of 1 January 2019. On transition to IFRS 16, the Group recognised additional
right of use assets, lease liabilities and restoration provisions with
the difference being recognised in reserves. The impact on transition
in Dole is summarised as follows:
2019
US$'m
Right-of-use assets 296
Lease liabilities (304)
Prepaid / Deferred rent (net) (3)
Deferred tax asset 3
Retained earnings 8
Impact for the period ended 15 June 2019
As a result of applying IFRS 16 to leases that were previously classified
as operating leases ,the Group has recognised depreciation and interest
costs instead of an operating lease expense. During the period ended
15 June 2019, Dole recognised $38m of depreciation costs and $12m of
interest costs from these leases. Under IAS 17 the operating lease
costs associated with these leases would have been $46m.
Right-of-use assets
The following is a reconciliation of right-of-use lease
assets in the period.
2019
US$'m
Reclassification of assets held under finance leases
from property, plant and equipment on adoption
of IFRS 16 21
Arising on adoption of IFRS 16 296
Additions (net of disposals) 13
Depreciation (41)
-------
Carrying value at 15 June 2019 289
=======
Lease liabilities
The following is a reconciliation of right-of-use liabilities
in the period.
2019
US$'m
Reclassification of finance leases on adoption of IFRS
16 22
Arising on adoption of IFRS 16 304
Payments during period (48)
Interest expense 12
Additions (net of disposals) 13
At 15 June 2019 303
======
Summary Balance Sheet of Dole at
15 June 2019
15 June 2019 31 December 2018
(Restated)*
US$'m EUR'm US$'m EUR'm
Intangible assets - Brand 286 252 286 250
Property, plant and equipment 1,024 901 1,046 913
Right-of- use assets 289 254 - -
Assets held for sale / Actively
marketed property 80 70 103 90
Other non-current assets 119 105 114 99
Other current assets 858 754 863 754
Net debt (1,272) (1,118) (1,350) (1,180)
Lease liabilities (303) (267) - -
Employee benefit obligations (187) (164) (186) (162)
Other non-current liabilities (258) (228) (262) (228)
Other current liabilities (571) (502) (593) (518)
Non-controlling interests (9) (8) (9) (8)
-------- -------- --------- --------
Fair value of net assets attributable
to equity shareholders 56 49 12 10
-------- -------- --------- --------
Total Produce's 45% share of net
assets 25 22 6 5
Goodwill 276 242 276 241
-------- -------- --------- --------
Total carrying amount of 45% interest
in Dole 301 264 282 246
======== ======== ========= ========
* As explained on page 26, the fair value of the net
identifiable assets on Dole were revised and finalised within
twelve months from the acquisition date.
Reconciliation of Group's carrying value of investment
in Dole
2019 2019
US$'m EUR'm
Carrying amount at start of 1 January 2019 282 246
Retained earnings adjustment on transition to IFRS
16 (4) (3)
Group share of profit for period attributable to equity
shareholders 29 25
Group share of other comprehensive expense for period
attributable to equity shareholders (6) (5)
Foreign exchange movement - 1
Total carrying amount of 45% interest in Dole at 15
June 2019 301 264
====== ======
8. Post-employment obligations
(Unaudited) (Unaudited) (Audited)
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Employee defined benefit
pension
schemes obligations (9,955) (9,029) (10,941)
Other post-employment
defined benefit
obligations (6,185) (4,813) (5,023)
-------------------------- ------------------------- --------------------------
(16,140) (13,842) (15,964)
========================== ========================= ==========================
Employee defined benefit
pension
schemes
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Pension assets 185,179 173,316 168,766
Pension obligations (195,134) (182,345) (179,707)
-------------------------- ------------------------- ---------------------
Net liability (9,955) (9,029) (10,941)
Net related deferred tax
asset 1,557 1,619 1,889
-------------------------- ------------------------- ---------------------
Net liability after tax (8,398) (7,410) (9,052)
========================== ========================= =====================
Movement in period
Net liability at beginning
of period (10,941) (16,707) (16,707)
Net interest expense and
current
service cost recognised
in the income
statement (872) (1,005) (2,035)
Exceptional charge to the
income
statement - - (1,304)
Employer contributions to
schemes
- normal 2,537 1,355 2,693
Remeasurement (loss)/gain
recognised
in other comprehensive
income (523) 7,411 6,323
Translation adjustment (156) (83) 89
-------------------------- ------------------------- ---------------------
Net liability at end of
period before
deferred tax (9,955) (9,029) (10,941)
========================== ========================= =====================
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 2019 reflects net pension liabilities
of EUR10.0m in respect of schemes in deficit, resulting in a net deficit
of EUR8.4m 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, inflation rates and mortality rates.
The decrease in the net liability during the period was primarily due
to a 10% return on pension scheme assets in the period and a reduction
in the long term Irish inflation assumption which decreases the net
present value of the scheme's obligations. This was offset by the impact
of a reduction in the discount rates for the Irish and UK schemes which
results in an increase in the net present value of the schemes' obligations.
The discount rate in Ireland and the Eurozone decreased to 1.40% (31
December 2018: 2.10% and 30 June 2018: 2.10%) and in the UK decreased
to 2.30% (31 December 2018: (2.90% - 3.00% and 30 June 2018: 2.90%).
The inflation assumption for Ireland and the Eurozone decreased to
1.20% (31 December 2018: 1.60% and 30 June 2018: 1.70%).
9. Dividends
The Board has declared an interim dividend of 0.9129 (2018: 0.9129)
cent per share, unchanged on the comparative period. The dividend
will be paid on 11 October 2019 to shareholders on the register at
13 September 2019 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 2019. The final dividend for 2018
of EUR9,767,000 was paid in June 2019.
During the period, the Group declared dividends of EUR9,229,000 to
non-controlling shareholders in certain of the Group's non wholly-owned
subsidiaries. In the same period cash dividends of EUR9,687,000 were
paid.
10. Businesses acquired and other developments
A key part of the Group's strategy is to grow by acquisition. During
the six month period, the Group made a number of acquisitions and
investments with committed investment of EUR4.0m including EUR1.5m
of deferred and contingent consideration payable on the achievement
of future profit targets.
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.
Payment of contingent and deferred consideration in the period
During the period, the Group paid EUR7,205,000 of contingent consideration
relating to prior period acquisitions.
11. 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 2019, 30 June 2018 and 31 December 2018 are as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2019 30 June 2018 31 Dec 2018
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 investments(1) 13,597 n/a 712 n/a 10,077 10,077
Trade and other receivables
- current(1) * 463,690 n/a 476,011 n/a 381,295 n/a
Trade and other receivables
- non- current(1) * 24,181 n/a 11,660 n/a 18,724 n/a
Cash and cash equivalents(1) 78,876 n/a 231,617 n/a 102,299 n/a
Derivative financial
assets 4,584 4,584 423 423 4,388 4,388
------------ ------------ ------------
584,928 720,423 516,783
============ ============ ============
Trade and other payables
- current(1) (500,017) n/a (538,697) n/a (482,934) n/a
Trade and other payables
- non-current(1) (1,471) n/a (816) n/a (1,289) n/a
Bank overdrafts(1) (38,459) n/a (40,603) n/a (9,560) n/a
Bank borrowings (334,710) (335,210) (212,854) (212,324) (310,846) (310,817)
Derivative financial
liabilities (405) (405) (229) (229) (296) (296)
Contingent consideration (17,924) (17,924) (27,088) (27,088) (24,517) (24,517)
Other provisions(1) (1,828) n/a - - (2,747) n/a
Put option liability (25,297) (25,297) (38,604) (38,604) (34,975) (34,975)
------------ ------------ ------------
(920,111
) (858,891) (867,164)
------------ ------------ ------------
(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.
(Unaudited) (Unaudited) (Audited)
30 June 30June 30 June 30 30 31 Dec 31 Dec 31 Dec
2019 2019 2019 June June 2018 2018 2018
Level Level Level 2018 2018 Level Level Level
1 2 3 Level Level 1 2 3
2 3
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Assets measured at
fair value
At fair value through
profit or loss
Other investments 12,230 - 1,367 - 712 9,550 - 527
Interest rate swap - - - - - - 1 -
Options to acquire
additional shares
in subsidiaries, joint
ventures and associates - - 4,344 - - - - 4,317
Designated as hedging
instruments
Foreign exchange contracts - 240 - 423 - - 70 -
Liabilities measured
at fair value
At fair value through
profit or loss
Foreign exchange contracts - (25) - (23) - - (8) -
Interest rate swaps - (5) - (27) - - (12) -
Contingent consideration - - (17,924) - (27,088) - - (24,517)
At fair value through
equity
Put option liability - - (25,297) - (38,604) - - (34,975)
Designated as hedging
instruments
Foreign exchange contracts - (375) - (177) - - (276) -
Interest rate swaps - - - (2) - - - -
Additional disclosures for Level 3 fair value measurements
(Unaudited)
Options
(Unaudited) to acquire (Unaudited) (Unaudited)
Other investments additional Contingent Put option
EUR'000 shares consideration liability
(1) EUR'000 EUR'000
EUR'000
At 1 January 2019 527 4,317 (24,517) (34,975)
Paid during the period - - 7,205 -
Arising on acquisition of
subsidiaries - - (1,461) -
Extinguishment of put option
liability - - - 11,657
Fair value movement on put option
recognised directly within equity - - - (891)
Foreign exchange movements (8) 27 (218) (1,088)
Included in the income statement
* Fair value movements 848 - 1,067 -
-------------------- --------------- ---------------- --------------
At 30 June 2019 1,367 4,344 (17,924) (25,297)
==================== =============== ================ ==============
Presented on Balance Sheet as
follows:
Current asset/(liability) 846 - (6,337) -
Non-current asset/(liability) 521 4,344 (11,587) (25,297)
-------------------- --------------- ---------------- --------------
1,367 4,344 (17,924) (25,297)
==================== =============== ================ ==============
(1) The Group has options to acquire additional shares in certain
subsidiaries, joint ventures and associates at the end of the period.
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.
During the period, and with consent of the Group, a non-controlling
shareholder sold their shares to other third parties (existing management).
As a result the put option between the Group and this non-controlling
shareholder was extinguished.
12. Cash flows generated from operations
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 30 June 31 Dec 2018
2019 2018
EUR'000 EUR'000 EUR'000
Operating activities
Profit for the period 49,679 34,938 53,804
Adjustments for non-cash items:
Income tax expense 5,660 7,368 16,014
Income tax paid (5,659) (6,031) (13,349)
Depreciation of property, plant and
equipment 8,782 8,366 17,194
Depreciation of right of use assets 9,174 - -
Exceptional items - operating expenses (1,447) (6,386) (9,450)
Restructuring and termination payments
- exceptional (1,354) - (1,219)
Other exceptional cash flow (1,690) - (1,665)
Fair value movements on contingent
consideration (1,067) (1,581) (4,043)
Amortisation of intangible assets -
acquisition related 4,986 5,251 10,281
Amortisation of intangible assets -
capitalised development costs 120 164 267
Amortisation of intangible assets -
computer software 947 771 1,397
Amortisation of government grants (25) (26) (75)
Defined benefit pension scheme expense
- normal 872 1,005 2,035
Contributions to defined benefit pension
schemes - normal (2,537) (1,355) (2,693)
Other post-employment benefit schemes'
expense 223 218 442
Net contributions/(payments) for other
post-employment benefit schemes 22 (29) (168)
Share-based payment expense 109 288 557
Net gain on disposal of property, plant
and equipment (68) (112) (492)
Currency recycled to income statement
on joint venture becoming subsidiary - - 90
Net finance expense 5,515 2,579 8,032
Net financial expense paid (5,531) (2,748) (7,173)
(Gain)/loss on non-hedging derivative
financial instruments (42) 91 (59)
Gain on disposal of joint venture (88) - -
Fair value movements on biological
assets 713 (162) (6)
Fair value gain on other investments (848) - -
Movements in provisions (298) - -
Share of profits of joint ventures
and associates (30,569) (4,782) (4,513)
-------------- ------------- -------------
Net cash flows from operations before
working capital movements 35,579 37,827 65,208
-------------- ------------- -------------
Movements in working capital:
* Movements in inventories 6,400 (12,293) 1,179
* Movements in biological assets 182 1,179 (851)
* Movements in trade and other receivables (94,034) (123,912) (23,571)
* Movement in trade and other payables 25,303 73,576 2,978
-------------- ------------- -------------
Total movements in working capital (62,149) (61,450) (20,265)
-------------- ------------- -------------
Cash flows from operating activities (26,570) (23,623) 44,943
============== ============= =============
13. Analysis of Net Debt and Cash and Cash Equivalents
Net debt is a non-IFRS measure which comprises cash and cash equivalents
and current and non-current borrowings. The calculation of net debt
at 30 June 2019, 30 June 2018 and 31 December 2018 is as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2019 30 June 2018 31 Dec 2018
EUR'000 EUR'000 EUR'000
Current assets
Cash and cash equivalents 67,706 *218,376 91,099
Call deposits (demand balances) 11,170 13,241 11,200
Current liabilities
Bank overdrafts (38,459) (40,603) (9,560)
Current bank borrowings (117,099) (51,527) (48,658)
Current finance leases - (535) (468)
Non-current liabilities
Non-current bank borrowing (217,611) (161,327) (262,188)
Non-current finance leases - (1,171) (1,168)
-------------- -------------- -------------
Net debt at end of the period(1) (294,293) (23,546) (219,743)
-------------- -------------- -------------
Less restricted cash * - (150,185) -
-------------- -------------- -------------
Net debt at end of the period, excluding
restricted cash(1) (294,293) (173,731) (219,743)
============== ============== =============
Reconciliation of cash and cash equivalents per balance sheet to
cashflow statement
(Unaudited) (Unaudited) (Audited)
30 June 2019 30 June 31 Dec 2018
2018
EUR'000 EUR'000 EUR'000
Cash and cash equivalents per balance
sheet 78,876 231,617 102,299
Bank overdrafts (38,459) (40,603) (9,560)
-------------- ------------ -------------
Cash, cash equivalents and bank overdrafts
per
cash flow statement 40,417 191,014 92,739
-------------- ------------ -------------
Less restricted cash * - (150,185) -
-------------- ------------ -------------
Cash, cash equivalents and bank overdrafts
per
cash flow statement , excluding restricted
cash 40,417 40,829 92,739
============== ============ =============
*The restricted cash of EUR150.2m at June 2018 relates to the
proceeds of EUR141m from the share placing (net of associated
costs) that were used to purchase dollars. The EUR150.2m is the
retranslated amount of the US Dollar deposit including accrued
interest income. This deposit was held in escrow at 30 June 2018
pending completion of the Dole transaction.
(1) Net debt is defined on page 34 and excludes lease
liabilities.
14. Post balance sheet events
There have been no material events subsequent to 30 June 2019 which
would require disclosure or adjustment in the financial statements.
15. Related party transactions
There have been no related party transactions or changes to related
party transactions other from those as described in the 2018 Annual
Report that materially affect the financial position or affect the
performance of the Group for the six month period ended 30 June 2019.
16. Board approval
This interim results statement was approved by the Board of Directors
of Total Produce plc on 28 August 2019.
Glossary
Alternative Performance Measures defined
The Group uses a number of alternative performance measures (APMs),
which are non-IFRS measures to monitor financial performance. These
measures are referred to throughout the discussion of our reported
operating performance and financial position and are measures which
are regularly reviewed by Group management.
The principal APMs used by the Group are defined as follows:
Total revenue includes the Group's share of the revenue of its joint
ventures and associates.
Adjusted EBITDA is earnings before interest, tax, depreciation on property,
plant and equipment, acquisition related intangible asset amortisation
charges and costs, fair value movements on contingent consideration,
unrealised gains or losses on derivative financial instruments, gains
and losses on foreign currency denominated intercompany borrowings
and exceptional items. It also excludes the Group's share of these
items within joint ventures and associates. The calculation is outlined
on page 22 of this announcement.
Adjusted EBITDA (after add back of right-of-use asset depreciation)
is earnings before interest, tax, depreciation on property, plant and
equipment, depreciation on right-of-use assets, acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration, unrealised gains or losses on derivative
financial instruments, gains and losses on foreign currency denominated
intercompany borrowings and exceptional items. It also excludes the
Group's share of these items within joint ventures and associates.
The calculation is outlined on page 22 of this announcement.
Adjusted EBITA is earnings before interest, tax, acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration, unrealised gains or losses on derivative
financial instruments, gains and losses on foreign currency denominated
intercompany borrowings and exceptional items. It also excludes the
Group's share of these items within joint ventures and associates.
The calculation is outlined on page 22 of this announcement.
Adjusted profit before tax excludes acquisition related intangible
asset amortisation charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial instruments,
gains and losses on foreign currency denominated intercompany borrowings
and exceptional items. It also excludes the Group's share of these
items within joint ventures and associates. The calculation is outlined
on page 22 of this announcement.
Adjusted fully diluted earnings per share excludes acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration, unrealised gains or losses on derivative
financial instruments, gains and losses on foreign currency denominated
intercompany borrowings, exceptional items and related tax on such
items. It also excludes the Group's share of these items within joint
ventures and associates. The calculation is outlined on page 25 of
this announcement.
Net debt represents the net total of current and non-current borrowings
and cash and cash equivalents as presented in the Consolidated Group
Balance Sheet. It excludes lease liabilities. The calculation is outlined
on page 33 of this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR CKFDPFBKDNFB
(END) Dow Jones Newswires
August 29, 2019 02:00 ET (06:00 GMT)
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