We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Barr (a.g.) Plc | LSE:BAG | London | Ordinary Share | GB00B6XZKY75 | ORD 4 1/6P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2.00 | 0.36% | 552.00 | 550.00 | 551.00 | 553.00 | 544.00 | 553.00 | 39,484 | 16:35:04 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Btld & Can Soft Drinks,water | 317.6M | 33.9M | 0.3046 | 18.09 | 613.2M |
From Apr 2019 to Apr 2024
TIDMBAG
RNS Number : 8712K
Barr(A.G.) PLC
27 September 2016
27 September 2016
A.G. BARR p.l.c. ("A.G. BARR")
INTERIM RESULTS FOR THE 6 MONTHSED 30 JULY 2016
A.G. BARR p.l.c., the soft drinks Group, which produces and markets some of the UK's leading brands, including IRN-BRU, Rubicon, Strathmore and Funkin, announces its interim results for the 6 months ended 30 July 2016.
Key Points
-- Total revenue was GBP125.6m (2015: GBP130.3m). Like for like revenue from ongoing business* declined 2.8%
-- Profit on ordinary activities before tax and exceptional items at GBP17.0m (2015: GBP16.9m)
-- Profit before tax was GBP21.1m including an exceptional credit of GBP4.1m** (2015: GBP16.9m with no exceptional items)
-- Free cash flow*** was GBP19.6m. Net debt stood at GBP6.6m (representing a net debt/EBITDA ratio of 0.3 times)
-- The Funkin business continues to perform ahead of expectations with revenue up 28% in the period
-- Strong International performance, with revenue up 16% -- Rockstar franchise territory extension signed September 2016 - includes Russia and Italy
-- Entering final stage of 3-year Fit for the Future programme with announcement of business reorganisation
-- Interim dividend of 3.53p per share (2015: 3.36p), an increase of 5% on the prior year
Commenting on the results, Roger White, Chief Executive said:
"We have delivered a solid first half performance, maintaining market share, improving our operating margin with a slight improvement in our pre-exceptional profit versus the prior year. This is despite continued price deflation in the UK market, a challenging customer and consumer environment as well as poor weather in the important early summer months leading up to the end of the reporting period.
"Good progress has been made across the key areas of innovation, product reformulation, brand development and operational efficiency. We will continue to focus on these areas throughout the second half of the financial year.
"Following our significant investment in assets, infrastructure and systems, delivered through our Fit for the Future business improvement programme, we are announcing the programme's final phase, a business reorganisation which will create a faster, more efficient and leaner organisational structure.
"We are beginning to see the benefits of our product development and innovation initiatives with both consumers and customers. Market conditions remain volatile and somewhat unpredictable however, assuming a strong trading performance in the key festive period, we remain on track to deliver profit (before tax and exceptionals) slightly ahead of last year."
For more information, please contact:
A.G. BARR 01236 852400 Instinctif Partners 020 7457 2020
Roger White, Chief Executive Justine Warren Stuart Lorimer, Finance Director Matthew Smallwood
*Note: Like for like revenue from ongoing business, for the 6 months ended 25 July 2015 is calculated as the reported turnover of GBP130.3m, including Funkin Limited, but excludes the GBP1.1m sales revenue derived from the discontinued Orangina franchise.
**Note : Net exceptional credit related in the main to the closure of our defined benefit pension scheme to future accrual.
***Note : Free cash flow is defined as net cash flow excluding movements in borrowings, expansionary capex, shares, dividend payments and non cash exceptional items.
Interim Statement
A.G. BARR has delivered a solid performance in the first half of the financial year, maintaining market share and improving operating margins in what was a volatile and deflationary market.
Internally we are now seeing the benefits of an improved operating platform, following the challenges experienced in the prior year. We have delivered excellent customer service across the summer and have driven numerous efficiency improvements across our business.
Trading
The soft drinks market in the period was down 0.7% in value and 0.4% in volume reflecting a deflationary market with increased promotional activity. The stills sector, although flat in revenue, was bolstered in volume terms by a 7% growth in water and consequently overall stills volume was up 1.5%, despite declines elsewhere in the stills sub sector. Carbonates were down 2.4% in volume and almost 1% in value. Deflation, although still a feature, has levelled out from its previous position and it is generally anticipated that the current period of food and drink price deflation could turn into a period of modest price inflation in 2017.
Total revenue for the period was GBP125.6m, with like for like revenue* declining 2.8%.
While maintaining overall market share we have seen the impact of changing consumer preferences across our portfolio. In line with general market trends, lower and no sugar products have performed better as consumers respond to the significant weight of negative media coverage pointed towards added sugar products particularly in the last 6 months.
We continue to make good progress across our longer term reformulation and innovation programme. Our most recent innovations to come to market, IRN-BRU XTRA and Rubicon Spring, both of which contain no added sugar, are both performing well at this early stage. We expect these new introductions to our portfolio to make a material contribution to the business across the balance of the year.
The Funkin business continues to perform strongly with 28% revenue growth in the period driven by distribution gains in the UK and the US, a successful innovation pipeline and investment in new digital platforms.
Our International business has also delivered a creditable performance with revenue up 16%. We expect this growth momentum to continue, supported by a further territory extension agreement with our partner Rockstar, signed on 1 September 2016, covering the Russian Federation, a number of central eastern European countries.
Margins in the period have been supported by ongoing cost control actions as well as the positive impact of our longer term structural cost reduction and capital investment programme, and we expect these factors to have a positive impact on margin over the full year.
Exceptional items
In the period we have reported a net GBP4.1m exceptional credit (before tax). This comprises recognition of a net GBP5.6m benefit arising from the closure, on 1 May 2016, of our defined benefit pension scheme to future accrual, partially offset by GBP1.5m of costs relating mainly to organisational change activities and some uncompleted corporate development activity (2015: Nil).
Fit for the Future Business Reorganisation
We are now moving into the final phase of our Fit for the Future business improvement programme which has seen us invest significantly in assets, infrastructure, processes and systems over the last 3 years. We will now optimise these improvements through the implementation of a business-wide reorganisation, creating an improved organisational design better aligned to our strategy and better structured to improve our service, efficiency and speed to market. Our organisational restructure is likely to impact around 10% of our total employee base, and as such around 90 job losses are possible across our Commercial, Supply Chain and Central functions. Subject to consultation, we expect that the majority of the changes will be implemented before the end of the current financial year. The likely one-off cash cost associated with this reorganisation is c.GBP4m but with an ongoing annual benefit of c.GBP3m. All of these costs will be recognised as exceptional in the current year financial statements (see note 21 to the financial statements).
We believe that the actions we have taken, and continue to take, to develop and improve the business put us in a strong position to grow and develop shareholder value in the short, medium and longer term.
Balance Sheet
Our balance sheet remains robust with net debt of GBP(6.6)m and a net debt/EBITDA ratio of 0.3. Both measures show substantial reductions from the prior year as we have utilised our strong cash flow to pay down the debt associated with the purchase of Funkin Limited in February 2015. Free cash flow conversion was 90%, driven by a combination of tight capital management and payment cycle timing.
Our recent major capital initiatives including the continued development of our Milton Keynes site, the implementation of a business-wide systems and process redesign, and the installation of a new glass line at our Cumbernauld facility, have all been successfully completed. Ongoing capital expenditure will focus primarily on ensuring we maintain our well invested and flexible asset base and appropriately supporting our innovation agenda. Cash capital expenditure during the period amounted to GBP5.3m, in line with our long term capital plans and a significant reduction on the prior year spend of GBP7.9m.
Working capital continues to be tightly managed with net working capital in line with the prior year. Lower payables offset slightly higher inventories and lower receivables. Our aged inventory profile is strong, our adherence to payment terms is high and aged debt is low.
The closure of our defined benefit pension scheme to future accruals is part of our ongoing strategy to manage our pension scheme liabilities. Despite several de-risking activities being executed in the period, the pension deficit, on an IFRS19 basis, has risen from GBP13.7m (July 2015) to GBP25m (July 2016), driven by the reduction
in discount rates. The next full triennial valuation will be conducted as at April 2017.
Free cash flow of GBP19.6m was generated in the 6 month period. This was GBP12.3m greater than in the comparable period in the prior year due to tight capital management and payment cycle timing.
The strong balance sheet and consistent cash generation provide the ability to maintain our asset base, continue our progressive dividend policy and secure bank funding at very competitive rates while providing the flexibility to seek acquisitions should value creating opportunities present themselves.
Dividend
The Board has declared an interim dividend of 3.53 pence per share, payable on 21 October 2016 to shareholders on the register on 7 October 2016. This represents an increase on the prior year of 5% and reflects the Board's confidence in the current financial position and the future prospects of the Group.
Regulatory Update
Recently published official National Dietary and Nutritional Survey data shows that soft drinks are continuing to reduce their contribution of sugar to the UK diet, in stark contrast to many other food and drinks categories where sugar contribution is increasing. We have continued to reformulate and reduce sugar across our portfolio, as well as bringing new lower and no sugar products to the market. We continue to play our part in delivering the soft drinks industry-wide 5-year voluntary target of 20% calorie reduction by 2020, as well as being on track to have two thirds of our own portfolio lower or no sugar by 2018.
The Government's proposed soft drinks sugar tax is now in the consultation phase and we will participate fully in the process. We believe this proposed tax is a punitive and unnecessary distortion to competition in the UK market which will be very complex, expensive and difficult to implement. Our aggressive reformulation and sugar reduction actions, along with our innovation and marketing, will drive sustained and significant improvements in the balance and choice offered across our portfolio. We believe our positive actions and sugar reduction progress, along with those of many of our competitors within the soft drinks industry, make the implementation of a soft drinks only sugar tax an unnecessary measure in the context of Government health policy objectives.
Brexit
We anticipate the recent reduction in the value of Sterling, if sustained, will lead to higher input costs across a number of our key commodities. We currently forecast this to have a year on year impact of circa GBP3m - GBP4m in 2017 however we are taking action to offset this cost where possible.
Outlook
We are beginning to see the benefits of our product development and innovation initiatives with both consumers and customers. Market conditions remain volatile and somewhat unpredictable however, assuming a strong trading performance in the key festive period, we remain on track to deliver profit (before tax and exceptionals) slightly ahead of last year.
John Nicolson Roger White Chairman Chief Executive
Consolidated Condensed Income Statement
Hot Features
Premium
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
============= ============ ======= ========== =============
Exceptional
Before items
exceptional (Note
items 8) Total Total Total
Note GBPm GBPm GBPm GBPm GBPm
----------------------------- ----- ------------- ------------ ------- ---------- -------------
Revenue 6 125.6 - 125.6 130.3 258.6
Cost of sales (66.7) - (66.7) (69.1) (137.5)
----------------------------- ----- ============= ------------ ------- ---------- -------------
Gross profit 6 58.9 - 58.9 61.2 121.1
Operating (expenses)/income (41.5) 4.1 (37.4) (43.9) (79.0)
============================= ===== ============= ============ ======= ========== =============
Operating profit 8 17.4 4.1 21.5 17.3 42.1
Finance income - - - - 0.1
Finance costs (0.4) - (0.4) (0.4) (0.9)
----------------------------- ----- ============= ------------ ======= ---------- -------------
Profit before
tax 17.0 4.1 21.1 16.9 41.3
Income tax expense 9 (3.8) (0.7) (4.5) (3.6) (7.0)
----------------------------- ----- ============= ------------ ======= ---------- -------------
Profit attributable
to equity holders 13.2 3.4 16.6 13.3 34.3
----------------------------- ----- ------------- ------------ ======= ---------- -------------
Earnings per
share (p)
----------------------------- ----- ------------- ============ ======= ========== =============
Basic earnings
per share 10 14.33 11.57 29.63
Diluted earnings
per share 10 14.31 11.50 29.51
----------------------------- ----- ------------- ------------ ------- ---------- -------------
Ex-div date: 6 October 2016
Record date: 7 October 2016
Consolidated Condensed Statement of Comprehensive Income
6 months
ended 6 months Year ended
30 July ended 25 30 January
2016 July 2015 2016
GBPm GBPm GBPm
======================================== ========= =========== ============
Profit for the period 16.6 13.3 34.3
Other comprehensive income
Items that will not be reclassified
to profit or loss
Remeasurements on defined
benefit pension plans (note
18) (19.2) 4.6 5.4
Deferred tax movements on
items taken direct to equity 3.0 (1.4) (2.5)
Current tax movements on
items taken direct to equity 0.5 0.5 1.3
Items that will be or have
been reclassified to profit
or loss
Effective portion of changes
in fair value of cash flow
hedges (0.8) - 1.7
Deferred tax movements on
items above - - (0.3)
Other comprehensive expenditure/income
for the period, net of tax (16.5) 3.7 5.6
Total comprehensive income
attributable to equity holders
of the parent 0.1 17.0 39.9
---------------------------------------- --------- ----------- ------------
Consolidated Condensed Statement of Changes in Equity
Cash
Share Share flow
Share premium options hedge Retained
capital account reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
======================= ========= ========= ========= ========= ========== =======
At 30 January 2016 4.9 0.9 1.4 1.0 171.9 180.1
Profit for the period - - - - 16.6 16.6
Other comprehensive
expenditure - - - (0.8) (15.7) (16.5)
----------------------- --------- --------- --------- --------- ---------- -------
Total comprehensive
(expenditure)/income
for the period - - - (0.8) 0.9 0.1
Company shares
purchased
for use by employee
benefit trusts (note
19) - - - - (0.8) (0.8)
Proceeds on disposal
of shares by employee
benefit trusts (note
19) - - - - 1.2 1.2
Recognition of
share-based
payment costs - - 0.5 - - 0.5
Transfer of reserve
on share award - - (0.3) - 0.3 -
Deferred tax on items
taken direct to
reserves - - - - - -
Dividends paid - - - - (11.5) (11.5)
----------------------- --------- --------- --------- --------- ---------- -------
At 30 July 2016 4.9 0.9 1.6 0.2 162.0 169.6
----------------------- --------- --------- --------- --------- ---------- -------
At 25 January 2015 4.9 0.9 2.3 (0.4) 148.8 156.5
Profit for the period - - - - 13.3 13.3
Other comprehensive
income - - - - 3.7 3.7
----------------------- --------- --------- --------- --------- ---------- -------
Total comprehensive
income for the period - - - - 17.0 17.0
Company shares
purchased
for use by employee
benefit trusts (note
19) - - - - (1.9) (1.9)
Proceeds on disposal
of shares by employee
benefit trusts (note
19) - - - - 1.3 1.3
Recognition of
share-based
payment costs - - 0.4 - - 0.4
Transfer of reserve
on share award - - (0.3) - 0.3 -
Deferred tax on items
taken direct to
reserves - - (0.1) - - (0.1)
Dividends paid - - - - (10.4) (10.4)
----------------------- --------- --------- --------- --------- ---------- -------
At 25 July 2015 4.9 0.9 2.3 (0.4) 155.1 162.8
----------------------- --------- --------- --------- --------- ---------- -------
Consolidated Condensed Statement of Changes in Equity
Cash
Share Share flow
Share premium options hedge Retained
capital account reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
============================== ========= ========= ========= ========= ========== =======
At 25 January 2015 4.9 0.9 2.3 (0.4) 148.8 156.5
Profit for the year - - - - 34.3 34.3
Other comprehensive income - - - 1.4 4.2 5.6
------------------------------ --------- --------- --------- --------- ---------- -------
Total comprehensive income
for the year - - - 1.4 38.5 39.9
Company shares purchased
for use by employee benefit
trusts (note 19) - - - - (5.1) (5.1)
Proceeds on disposal
of shares by employee
benefit trusts (note
19) - - - - 3.1 3.1
Recognition of share-based
payment costs - - 0.5 - - 0.5
Transfer of reserve on
share award - - (0.9) - 0.9 -
Deferred tax on items
taken direct to reserves - - (0.5) - - (0.5)
Dividends paid - - - - (14.3) (14.3)
------------------------------ --------- --------- --------- --------- ---------- -------
At 30 January 2016 4.9 0.9 1.4 1.0 171.9 180.1
------------------------------ --------- --------- --------- --------- ---------- -------
Consolidated Condensed Statement
of Financial Position
As at As at As at
30 July 25 July 30 January
2016 2015 2016
Note GBPm GBPm GBPm
------------------------------------ ----- --------- --------- ------------
Non-current assets
Intangible assets 13 106.8 108.3 107.5
Property, plant and equipment 14 87.4 82.0 85.3
194.2 190.3 192.8
------------------------------------ ----- --------- --------- ------------
Current assets
Inventories 18.6 18.0 15.6
Trade and other receivables 59.1 65.0 52.7
Derivative financial instruments 15 0.4 - 1.1
Cash and cash equivalents 7.4 10.6 6.8
Assets held for sale 12 - 0.9 -
85.5 94.5 76.2
------------------------------------ ----- --------- --------- ------------
Total assets 279.7 284.8 269.0
------------------------------------ ----- --------- --------- ------------
Current liabilities
Loans and other borrowings - - 0.7
Trade and other payables 57.8 58.4 37.4
Derivative financial instruments 15 - 0.5 -
Provisions 16 - 0.1 0.1
Current tax 3.2 2.6 3.6
61.0 61.6 41.8
------------------------------------ ----- --------- --------- ------------
Non-current liabilities
Loans and other borrowings 14.2 30.4 17.5
Trade and other payables - 4.5 4.5
Deferred tax liabilities 9.9 11.8 12.2
Retirement benefit obligations 18 25.0 13.7 12.9
49.1 60.4 47.1
------------------------------------ ----- --------- --------- ------------
Capital and reserves attributable
to equity holders
Share capital 4.9 4.9 4.9
Share premium account 0.9 0.9 0.9
Share options reserve 1.6 2.3 1.4
Cash flow hedge reserve 0.2 (0.4) 1.0
Retained earnings 162.0 155.1 171.9
169.6 162.8 180.1
------------------------------------ ----- --------- --------- ------------
Total equity and liabilities 279.7 284.8 269.0
------------------------------------ ----- --------- --------- ------------
Consolidated Condensed Cash
Flow Statement
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
========================================= ========== ========= ============
Operating activities
Profit for the period 21.1 16.9 41.3
Adjustments for:
Interest receivable - - (0.1)
Interest payable 0.4 0.4 0.9
Depreciation of property, plant
and equipment 3.5 3.6 7.3
Amortisation of intangible assets 0.7 0.3 1.1
Share-based payment costs 0.5 0.4 0.5
Loss on sale of property, plant
and equipment - 0.1 0.2
Operating cash flows before movements
in working capital 26.2 21.7 51.2
(Increase) / decrease in inventories (3.0) (0.6) 1.8
(Increase) / decrease in receivables (6.4) (11.6) 0.6
Increase / (decrease) in payables 15.4 3.9 (16.8)
Difference between employer pension
contributions and amounts recognised
in the income statement (7.3) (0.4) (0.7)
----------------------------------------- ---------- --------- ------------
Cash generated by operations 24.9 13.0 36.1
Tax on profit paid (3.7) (3.7) (6.8)
----------------------------------------- ---------- --------- ------------
Net cash from operating activities 21.2 9.3 29.3
Investing activities
Acquisition of subsidiary (net
of cash acquired) - (15.7) (15.7)
Acquisition of intangible assets - (4.7) (4.8)
Purchase of property, plant and
equipment (5.3) (7.9) (14.7)
Proceeds on sale of property,
plant and equipment - 0.1 0.9
Interest received - - 0.1
----------------------------------------- ---------- --------- ------------
Net cash used in investing activities (5.3) (28.2) (34.2)
Financing activities
New loans received 16.0 47.0 34.0
Loans repaid (19.5) (31.5) (31.5)
Bank arrangement fees paid - (0.1) (0.1) Purchase of Company shares by employee benefit trusts (0.8) (1.9) (5.1) Proceeds from disposal of Company shares by employee benefit trusts 1.2 1.3 3.1 Dividends paid (11.5) (10.4) (14.3) Interest paid (0.1) (0.2) (0.3) ----------------------------------------- ---------- --------- ------------ Net cash generated (used in)/generated by financing activities (14.7) 4.2 (14.2) Net increase / (decrease) in cash and cash equivalents 1.2 (14.7) (19.1) ----------------------------------------- ---------- --------- ------------ Cash and cash equivalents at beginning of period 6.2 25.3 25.3 Cash and cash equivalents at end of period 7.4 10.6 6.2 ----------------------------------------- ---------- --------- ------------ 1 General information
A.G. BARR p.l.c. ('the Company') and its subsidiaries (together 'the Group') manufacture, market, distribute and sell soft drinks. The Group has manufacturing sites in the UK and sells mainly to customers in the UK with some international sales.
The Company is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is A.G. BARR p.l.c., Westfield House, 4 Mollins Road, Cumbernauld, G68 9HD.
This consolidated condensed interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 January 2016 were approved by the board of directors on 29 March 2016 and delivered to the Registrar of Companies. The comparative figures for the financial year ended 30 January 2016 are an extract of the Company's statutory accounts for that year. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 (2) or (3) of the Companies Act 2006.
This consolidated condensed interim financial information is unaudited but has been reviewed by the Company's Auditor.
2 Basis of preparation
This consolidated condensed interim financial information for the six months ended 30 July 2016 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority) and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The consolidated condensed interim financial information should be read in conjunction with the annual financial statements for the year ended 30 January 2016, which have been prepared in accordance with IFRSs as adopted by the European Union.
Going concern basis
The Group meets its day-to-day working capital requirements through its bank facilities. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group's forecasts and projections, taking account of reasonable sensitivities, show that the Group should be able to operate within available facilities. The Group therefore continues to adopt the going concern basis in preparing its consolidated condensed interim financial statements.
3 Accounting policies
The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 January 2016.
New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective date (or date of early adoption).
No new accounting standards have been adopted by the Group that have a material impact on the half year results or balances.
The following standards which have been issued have not yet been adopted by the Group:
i) IFRS 15 'Revenue from contracts with customers' is effective on 1 January 2018, subject to European Union (EU) endorsement;
ii) IFRS 9 'Financial instruments' which will be effective on 1 January 2018, subject to EU endorsement; and
iii) IFRS 16 'Leases' is effective on 1 January 2019, subject to EU endorsement.
4 Principal risks and uncertainties
The directors consider that the principal risks and uncertainties which could have a material impact on the Group's performance in the remaining 26 weeks of the financial year remain substantially the same as those stated on pages 42-44 of the Group's annual financial statements for the year ended 30 January 2016, which are available on our website, www.agbarr.co.uk.
We do note that the result of the recent referendum in favour of the UK leaving the European Union may have an impact on the Group. Like many other businesses, we are closely following developments in this area, but we believe that it is still too early to quantify or determine with certainty the impact on the Group of the UK leaving the European Union. The Group is a UK based group whose sales are predominantly made in the UK but it has some non-UK income and an exposure to US Dollars and Euros through the purchase of commodities. We will continue to monitor developments and adapt our strategy as the impact of the UK exit from the European Union becomes clear.
5 Financial risk management and financial instruments
The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow and fair value interest rate risk and price risk), credit risk and liquidity risk.
The condensed interim financial statements should be read in conjunction with the Group's annual financial statements for the year ended 30 January 2016 as they do not include all financial risk management information and disclosures contained within the annual financial statements. There have been no changes in the risk management policies since the year end.
6 Segment reporting
The Group's management committee has been identified as the chief operating decision-maker. The management committee reviews the Group's internal reporting in order to assess performance and allocate resources. The management committee has determined the operating segments based on these reports.
The management committee considers the business from a product perspective. This led to the operating segments identified in the table below: there has been no change to the segments during the period (after aggregation).
The performance of the operating segments is assessed by reference to their gross profit before exceptional items. Exceptional items are reported separately in note 8.
6 months ended
30 July 2016
Still
drinks
and
Carbonates water Other Total
GBPm GBPm GBPm GBPm
------------------------- ------------ -------- ------ ------
Total revenue 92.0 26.9 6.7 125.6
Gross profit before
exceptional items 47.9 7.5 3.5 58.9
------------------------- ------------ -------- ------ ======
6 months ended 25 July
2015
Still
drinks
and
Carbonates water Other Total
GBPm GBPm GBPm GBPm
------------------------- ------------ -------- ------ ------
Total revenue 96.3 27.6 6.4 130.3
Gross profit before
exceptional items 50.2 8.2 2.8 61.2
------------------------- ------------ -------- ------ ------
Year ended 30 January
2016
Still
drinks
and
Carbonates water Other Total
GBPm GBPm GBPm GBPm
------------------------- ------------ -------- ------ ------
Total revenue 189.7 57.1 11.8 258.6
Gross profit before
exceptional items 98.6 16.9 5.6 121.1
------------------------- ------------ -------- ------ ------
There are no intersegment sales. All revenue is from external customers.
Other segments represent the sale of Funkin cocktail solutions, rental income for vending machines, and the sale of ice-cream and other soft drink related items.
The gross profit before exceptional items from the segment reporting is reconciled to the total profit before income tax as shown in the consolidated condensed income statement.
All of the assets of the Group are managed by the management committee on a central basis rather than at a segment level. As a result, no reconciliation of segment assets and liabilities to the consolidated condensed statement of financial position has been disclosed for any of the periods presented.
All of the segments included within "Carbonates" and "Still drinks and water" meet the aggregation criteria set out in IFRS 8 Operating segments.
7 Seasonality of operations
Revenues and operating profits are affected by weather conditions, the timing of marketing investment and execution of promotional activity. As a result it is anticipated that the operating profits for the second half of the year ending 28 January 2017 will be higher than those for the six months ended 30 July 2016.
8 Operating profit
The following items have been charged to operating profit during the period:
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
--------------------------- --------- --------- ------------
Acquisition costs - 0.7 0.7
Inventory write down 0.2 - 0.4
Foreign exchange (gains)
/ losses recognised (0.8) 0.6 1.0
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completing production and selling expenses.
During the period several items have been classified as exceptional due to their nature and scale. All items have been included within operating expenditure, and have been analysed in the table below:
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
-------------------------------- ----------- ----------- --------------
Abortive acquisition costs 0.4 - -
Investigation of online sales
capabilities 0.5 - -
Redundancy costs 0.6 - -
Curtailment gain (7.0) - -
Other costs relating to pension
scheme closure 1.4 - -
--------------------------------
Net exceptional credit (4.1) - -
-------------------------------- ----------- ----------- --------------
During the period, GBP0.4m of acquisition fees were incurred in relation to an unsuccessful acquisition. These costs included advisory and legal fees.
GBP0.5m of advisory costs have been incurred as part of a strategic review of the market threats posed by new and emerging digital trading models.
GBP0.6m of redundancy costs have been incurred, arising from a reorganisation of direct sales routes that was completed in the period.
The Group's defined benefit pension scheme closed to future accrual in May 2016. This resulted in a GBP7.0m curtailment gain. Offsetting the curtailment gain is a further GBP1.4m of costs incurred in relation to the closure of the defined benefit pension scheme. This includes the cost of GBP1.3m past service cost for one year's additional service negotiated with the active members of the scheme and GBP0.1m of further costs relating to the closure of the scheme.
9 Tax on profit
The interim period tax charge is accrued based on the estimated average annual effective income tax rate of 21.3% (six months ended 25 July 2015: 21.3%; year ended 30 January 2016: 17.1%).
The Chancellor announced in his Summer Budget on 8 July 2015 that the main rate of corporation tax will be reduced to 19% from 1 April 2017 and 18% from 1 April 2020 and the future current tax charges will reduce accordingly. Finance No.2 Bill 2015 became substantively enacted on 26 October 2015. The deferred tax liability at 30 July 2016 has therefore been calculated using the rate of 18% substantively enacted at the balance sheet date.
10 Earnings per share
Basic earnings per share have been calculated by dividing the earnings attributable to equity holders of the parent by the weighted average number of shares in issue during the year, excluding shares held by the employee share scheme trusts.
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
--------------------------------
Profit attributable to equity
holders of the Company (GBPm) 16.6 13.3 34.3
Weighted average number of
ordinary shares in issue 115,805,375 115,280,958 115,714,487
-------------------------------- ------------ ------------ ------------
Basic earnings per share
(pence) 14.33 11.57 29.63
-------------------------------- ------------ ------------ ------------
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
Profit attributable to equity
holders of the Company (GBPm) 16.6 13.3 34.3
Weighted average number of
ordinary shares in issue 115,805,375 115,280,958 115,714,487
Adjustment for dilutive effect
of share options 159,822 676,859 505,871
-------------------------------- ------------ ------------ ------------
Diluted weighted average
number of ordinary shares
in issue 115,965,197 115,957,817 116,220,358
Diluted earnings per share
(pence) 14.31 11.50 29.51
-------------------------------- ------------ ------------ ------------
The underlying EPS figure is calculated using profit attributable to equity holders before exceptional items:
Year
6 months 6 months ended
ended 30 ended 25 30 January
July 2016 July 2015 2016
--------------------------------
Profit attributable to equity
holders of the Company before
exceptional items (GBP000) 13.2 13.3 34.3
Weighted average number
of ordinary shares in issue 115,805,375 115,280,958 115,714,487
-------------------------------- ------------ ------------
Underlying earnings per
share (pence) 11.40 11.57 29.63
-------------------------------- ------------ ------------ ------------
This measure has been included in the financial statements as it provides a closer guide to the underlying financial performance as the calculation excludes the effect of exceptional items.
11 Dividends paid
Year
6 months 6 months ended 6 months 6 months Year
ended ended 30 ended ended ended
30 July 25 July January 30 July 25 July 30 January
2016 2015 2016 2016 2015 2016
per per
share per share share
(p) (p) (p) GBP000 GBPm GBP000
------------------- --------- ---------- --------- --------- --------- ------------
Paid final
dividend 9.97 9.01 9.01 11.5 10.4 10.4
Paid first
interim dividend - - 3.36 - - 3.9
9.97 9.01 12.37 11.5 10.4 14.3
------------------- ========= ========== ========= ========= ========= ============
An interim dividend of 3.53p (an increase of 5% on last year) per share was approved by the board on 27 September 2016 and will be paid on 21 October 2016 to shareholders on record as at 7 October 2016.
12 Held for sale assets
In the comparative period the property, plant and equipment related to the manufacturing site at Tredegar have been presented as held for sale as at 25 July 2015 following the decision to close the site. The property, plant and equipment was subsequently sold during September 2015.
13 Intangible assets
Year
6 months 6 months ended
ended ended 30
30 July 25 July January
2016 2015 2016
GBP000 GBP000 GBP000
------------------------ --------- --------- ---------
Opening net book value 107.5 80.9 80.9
Additions - 27.7 27.7
Amortisation (0.7) (0.3) (1.1)
Closing net book value 106.8 108.3 107.5
------------------------ --------- --------- ---------
The additions for periods presented represent goodwill and other intangible assets acquired as part of the acquisition of Funkin Limited, internally generated software development costs and third party consultancy costs incurred in relation to the Business Process Redesign project that completed in the year ended 30 January 2016.
The amortisation charge for the six months ended 30 July 2016 represents GBP0.6m (six months ended 25 July 2015: GBP0.2m; year ended 30 January 2016: GBP0.8m) of charges in relation to the Business Process Redesign project and GBP0.1m (six months ended 25 July 2015: GBP0.1m; year ended 30 January 2016: GBP0.3m) of charges for the Rubicon and Funkin customer lists.
14 Property, plant and equipment
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBP000 GBP000 GBP000
------------------------------------ --------- --------- ------------
Opening net book value 85.3 79.6 79.6
Additions 5.6 7.1 14.1
Disposals - (0.2) (1.1)
Property, plant and equipment
classified as held for sale (note
12) - (0.9) -
Depreciation (3.5) (3.6) (7.3)
Closing net book value 87.4 82.0 85.3
------------------------------------ --------- --------- ------------
The closing balance includes GBP4.8m (as at 25 July 2015: GBP0.6m; as at 30 January 2016: GBP5.5m) of assets under construction.
15 Financial instruments
Current assets of GBP0.4m (at 25 July 2015: GBPnil; 30 January 2016: GBP1.1m) relate to forward foreign currency contracts with a maturity of less than 12 months and are classified as fair value through the cash flow hedge reserve.
Current liabilities of GBPnil (at 25 July 2015: GBP0.5m; 30 January 2016: GBPnil) represents forward foreign currency contracts with a maturity of less than 12 months and are classified as fair value through the cash flow hedge reserve.
Fair value hierarchy
IFRS 7 requires all financial instruments carried at fair value to be analysed under the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. The fair value of the forward foreign exchange contracts is determined using forward exchange rates at the date of the statement of financial position, with the resulting value discounted accordingly as relevant.
All financial instruments carried at fair value are Level 2.
Fair values of financial assets and financial liabilities
The table below sets out the comparison between the carrying amount and fair value of all of the Group's financial instruments, with the exception of trade and other receivables and trade and other payables.
Fair
Carrying amount value
---------------------------------------------------------
Other
Fair financial
value liabilities
- hedging Loans at amortised Level
instruments and receivables cost Total 2
As at 30 July 2016 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------- ------------- ----------------- -------------- ------- -------
Financial assets not
measured at fair value
Cash and cash equivalents - 7.4 - 7.4 7.4
Trade receivables - 55.0 - 55.0 55.0
- 62.4 - 62.4 62.4
---------------------------- ------------- ----------------- -------------- ------- -------
Financial assets measured
at fair value
Foreign exchange contracts
used for hedging 0.4 - - 0.4 0.4
0.4 - - 0.4 0.4
---------------------------- ------------- ----------------- -------------- ------- -------
Financial liabilities
measured at fair value
Contingent consideration - - 4.5 4.5 4.5
- - 4.5 4.5 4.5
---------------------------- ------------- ----------------- -------------- ------- -------
Financial liabilities
not measured at fair
value
Finance lease liabilities - - 0.2 0.2 0.2
Unsecured bank borrowings - - 14.0 14.0 14.0
Trade payables - - 26.0 26.0 26.0
- - 40.2 40.2 40.2
---------------------------- ------------- ----------------- -------------- ------- -------
Fair
Carrying amount value
---------------------------------------------------------------------
Other
Fair financial
value liabilities
- hedging Loans at amortised Level
instruments and receivables cost Total 2
As at 25 July 2015 GBPm GBPm GBPm GBPm GBPm
---------------------- ------------------ ----------------- -------------- -------------- -------
Financial assets not
measured at fair
value
Trade receivables - 28.6 - 28.6 28.6
Cash and cash
equivalents - 10.6 - 10.6 10.6
- 39.2 - 39.2 39.2
---------------------- ------------------ ----------------- -------------- -------------- -------
Financial assets
measured
at fair value
Foreign exchange
contracts
used for hedging - - - - -
- - - - -
---------------------- ------------------ ----------------- -------------- -------------- -------
Financial liabilities
measured at fair
value
Foreign exchange
contracts
used for hedging 0.5 - - 0.5 0.5
Contingent
consideration - - 4.5 4.5 4.5
0.5 - 4.5 5.0 5.0
---------------------- ------------------ ----------------- -------------- -------------- -------
Financial liabilities
not measured at fair
value
Unsecured bank
borrowings - - 30.5 30.5 30.5
Trade payables - - 20.6 20.6 20.6
- - 51.1 51.1 51.1
---------------------- ------------------ ----------------- -------------- -------------- -------
Fair
Carrying amount value
====================== -------------------------------------------------------------
Other
Fair financial
value liabilities
- hedging Loans at amortised Level
instruments and receivables cost Total 2
As at 30 January 2016 GBPm GBPm GBPm GBPm GBPm
---------------------- ------------------ ----------------- -------------- ------ -------
Financial assets not
measured at fair
value
Foreign exchange
contracts
used for hedging 1.1 - - 1.1 1.1
Trade receivables - 50.0 - 50.0 50.0
Cash and cash
equivalents - 6.8 - 6.8 6.8
1.1 56.8 - 57.9 57.9
---------------------- ------------------ ----------------- -------------- ------ -------
Financial liabilities
measured at fair
value
Contingent
consideration - - 4.5 4.5 4.5
- - 4.5 4.5 4.5
---------------------- ------------------ ----------------- -------------- ------ -------
Financial liabilities
not measured at fair
value
Finance lease
liabilities - - 0.2 0.2 0.2
Unsecured bank
borrowings - - 18.0 18.0 18.0
Trade payables - - 8.4 8.4 8.4
- - 26.6 26.6 26.6
---------------------- ------------------ ----------------- -------------- ------ -------
The carrying value of non-current borrowings is disclosed before the deduction of the unamortised arrangement fee of GBPnil (at 25 July 2015: GBP0.1m; 30 January 2016: GBP0.1m).The fair values of the non-current borrowings are based on cash flows discounted using the current variable interest rate charged on the borrowings of 1.50% and a discount rate of 1.50%.
16 Provisions
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
------------------------------- --------- --------- --------------
Opening provision 0.1 1.0 1.0
Provision utilised during the
period (0.1) (0.9) (0.9)
Closing provision - 0.1 0.1
------------------------------- --------- --------- ------------
17 Borrowings and loans
Movements in borrowings are analysed as follows:
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
----------------------------------------- --------- --------- ------------
Opening loan balance 18.1 15.1 15.1
Borrowings made 16.0 47.0 34.0
Bank overdrafts - - 0.5
Repayments of borrowings and overdrafts (20.1) (31.6) (31.5)
========================================= ========= ========= ============
Closing loan balance before arrangement
fees 14.0 30.5 18.1
Unamortised arrangement fee - (0.1) (0.1)
Closing loan balance 14.0 30.4 18.0
----------------------------------------- --------- --------- ------------
The reconciliation of the above closing loan balance to the figures on the face of the consolidated condensed statement of financial position is as follows:
As at As at As at
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
----------------------------- --------- --------- ------------
Overdraft - - 0.6
Closing loan balance 14.0 30.5 17.5
Unamortised arrangement fee - (0.1) (0.1)
Finance lease liabilities 0.2 - 0.2
Total borrowings and loans 14.2 30.4 18.2
----------------------------- --------- --------- ------------
Disclosed as
Current liabilities - - 0.7
Non-current liabilities 14.2 30.4 17.5
============================= ========= ========= ============
The reconciliation to net debt is as follows:
As
at
As at As at 30
30 July 25 July January
2016 2015 2016
GBPm GBPm GBPm
============================ --------- --------- ---------
Closing borrowings balance 14.0 30.5 18.1
Cash and cash equivalents (7.4) (10.6) (6.8)
Net debt 6.6 19.9 11.3
---------------------------- --------- --------- ---------
The undrawn facilities at 30 July 2016 are as follows:
Total
facility Drawn Undrawn
GBPm GBPm GBPm
----------------------------- ---------- ------ --------
Revolving credit facilities 45.0 14.0 31.0
Overdraft 5.0 - 5.0
50.0 14.0 36.0
----------------------------- ---------- ------ --------
During the six months ended 25 July 2015, the Group renegotiated a GBP35m revolving credit facility. A total arrangement fee of GBP0.1m was incurred and is being amortised over the life of the loan facility. The revolving credit facility will expire in January 2018. A further GBP10m revolving credit facility was arranged in the year ended 26 January 2014 and will expire in March 2017.
The directors confirm that the Group has sufficient headroom to enable it to meet the covenants on its existing borrowings. There are sufficient working capital and undrawn funding facilities available to meet the Group's ongoing requirements.
18 Retirement benefit obligations
On 20 January 2016 the Company announced its intention to close the defined benefit section of the A.G. BARR p.l.c (2008) Pension and Life Assurance Scheme to future accrual. Following consultation with the pension scheme Trustee and active members, the scheme closed to future accrual from 1 May 2016 giving rise to a curtailment gain of GBP7.0m.
As part of the consultation with the pension scheme Trustee and active members an additional year of service was accrued for active member employees prior to the closure, resulting in a past service cost of GBP1.3m.
These two items have been treated as exceptional items in the six months ended 30 July 2016.
The defined retirement benefit scheme had a deficit of GBP25.0m as at 30 July 2016 (as at 25 July 2015: GBP13.7m; 30 January 2016: GBP12.9m). The reconciliation of the closing deficit is as follows:
6 months 6 months Year
ended ended ended
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
===================================== --------- --------- ------------
Opening present value of obligation (120.2) (131.0) (131.0)
Current service cost (0.4) (0.8) (1.9)
Curtailment gain 7.0 - 0.2
Interest cost (2.2) (2.1) (4.3)
Past service cost (1.3) - -
Remeasurement - changes in
financial assumptions (27.9) 10.2 12.7
Benefits paid 1.6 1.6 4.0
Premiums paid - - 0.1
Closing position (143.4) (122.1) (120.2)
------------------------------------- ========= ========= ============
Opening fair value of plan
assets 107.3 112.7 112.7
Interest income 2.0 1.7 3.6
Remeasurement - actuarial return
on assets 8.7 (5.6) (7.3)
Employer contributions 2.0 1.2 2.4
Benefits paid (1.6) (1.6) (4.0)
Premiums paid - - (0.1)
Closing fair value of plan
assets 118.4 108.4 107.3
------------------------------------- ========= ========= ============
As at As at As at
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
===================================== --------- --------- ------------
Closing present value of obligation (143.4) (122.1) (120.2)
Closing fair value of plan
assets 118.4 108.4 107.3
Closing net deficit (25.0) (13.7) (12.9)
------------------------------------- ========= ========= ============
The key financial assumptions used to value the liabilities were as follows:
As at As at As at
30 July 25 July 30 January
2016 2015 2016
% % %
------------------------- --------- --------- ------------
Discount rate 2.40 3.70 3.70
Future salary increases 3.90 4.40 4.20
Inflation assumption 2.90 3.40 3.20
------------------------- --------- --------- ------------
19 Movements in own shares held by employee benefit trusts
During the six months ended 30 July 2016 the employee benefit trusts of the Group acquired 151,042 (six months ended 25 July 2015: 321,789; year ended 30 January 2016: 913,724) of the Company's shares. The total amount paid to acquire the shares has been deducted from shareholders' equity and is included within retained earnings. At 30 July 2016 the shares held by the Company's employee benefit trusts represented 1,099,331 (25 July 2015: 1,366,277; 30 January 2016: 1,254,095) shares at a purchased cost of GBP6.2m (25 July 2015: GBP8.6m; 30 January 2016: GBP8.9m).
There were 300,114 (six months ended 25 July 2015: 305,696; year ended 30 January 2016: 1,009,813) shares utilised in satisfying share options from the Company's employee share schemes during the same period.
The related weighted average share price at the time of exercise for the six months ended 30 July 2016 was GBP5.15 (six months ended 25 July 2015: GBP6.18; year ended 30 January 2016: GBP5.28) per share.
20 Contingencies and commitments
As at As at As at
30 July 25 July 30 January
2016 2015 2016
GBPm GBPm GBPm
----------------------------------- --------- --------- ------------
Commitments for the acquisition
of property, plant and equipment 2.5 6.4 6.1
----------------------------------- --------- --------- ------------
21 Events occurring after the reporting period
Interim dividend
As disclosed in note 11, an interim dividend of 3.53p per share will be paid to shareholders on 21 October 2016.
External audit tender
Noting the requirements on audit tendering set out in the Combined Code, the Competition and Markets Authority Order and the Department for Business, Innovation and Skills proposals to implement the EU's June 2014 Audit Directive and Regulation, the Audit Committee has agreed that a competitive tender process be commenced during the second half of this year in readiness for the external audit for the year ending 27 January 2018.
Organisational restructure
Today, 27 September 2016, the Company announces a proposed organisation restructure that is likely to impact around 10% of the total employee base. This is expected to result in around 90 job losses across the Company.
The consultation process with the impacted employees will commence immediately and it is anticipated that the majority of the changes resulting from the process will have been implemented by the end of the financial year, 28 January 2017.
The expected cost of the reorganisation has been estimated at c.GBP4m and will be recognised as an exceptional cost in the financial statements for the year ending 28 January 2017.
22 Related party transactions
There have been no related party transactions in the first 26 weeks of the current financial year which have materially affected the financial position or performance of the Group.
Statement of Directors' Responsibilities
The directors' confirm that these consolidated condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, as adopted by the European Union. The interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.
The directors of A.G. BARR p.l.c. are listed in the Annual Report and Accounts for the 53 weeks ended 30 January 2016.
For and on behalf of the board of directors
Roger White Stuart Lorimer Chief Executive Finance Director 27 September 2016 27 September 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAXNKAELKEFF
(END) Dow Jones Newswires
September 27, 2016 02:00 ET (06:00 GMT)
1 Year Barr (a.g.) Chart |
1 Month Barr (a.g.) Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
