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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Origin Enterprises Plc | LSE:OGN | London | Ordinary Share | IE00B1WV4493 | ORD EUR0.01 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.30 | 3.20 | 3.40 | 3.30 | 3.30 | 3.30 | 0.00 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMOGN
RNS Number : 0079L
Origin Enterprises Plc
28 September 2016
Origin Enterprises plc
PRELIMINARY RESULTS STATEMENT
A solid performance in a challenging environment
28 September 2016
Origin Enterprises plc ('Origin' or 'the Group'), today announces its full year results for the year ended 31 July 2016.
Financial and Operating Highlights
-- Solid results in line with market expectations, against a highly challenging trading environment
-- Strong performance from Central & Eastern European farm services businesses acquired in 2016, with integration progressing to plan
-- Good volume recovery in Q4 following weak Q3 -- Agrii brand launched in Poland -- Continued track record of robust cash generation, with net cash of EUR3m at year end -- Adjusted diluted earnings per share of 44.51 cent, a decrease of 25.9 per cent -- Full year dividend maintained at 21.0 cent per share
Results Summary
Hot Features
Premium
2016 2015 %
EUR'000 EUR'000 Change
Group revenue 1,521,256 1,458,098 4.3
Group operating profit
Operating profit* 67,258 78,895 (14.7)
Associates and joint venture** 5,621 14,076 (60.1)
Total group operating profit* 72,879 92,971 (21.6)
Finance expense, net (7,367) (4,810) (53.2)
Profit before tax* 65,512 88,161 (25.7)
Basic EPS (cent) 46.03 61.72 (25.4)
Adjusted diluted EPS (cent)*** 44.51 60.10 (25.9)
Group net cash**** 3,122 88,800 -
Dividend per ordinary share
(cent) 21.00 21.00 -
* Before amortisation of non-ERP intangible assets and exceptional items
** Profit after interest and tax before amortisation of non-ERP intangible assets and before exceptional items
*** Before amortisation of non-ERP intangible assets, net of related deferred tax (2016: EUR3.1m, 2015: EUR10.2m) and exceptional items, net of tax (2016: EUR4.7m credit, 2015: EUR12.0m credit)
**** Includes restricted cash of EUR2.9m (2015: EUR29.4m)
Commenting on the results, Origin's Chief Executive Officer, Tom O'Mahony said:
"Origin Enterprises has delivered a solid operational and financial performance against the backdrop of a challenging planning and operating environment for primary food producers in 2016.
Highly adverse and unseasonal weather conditions, combined with weak farm sentiment, drove a highly competitive trading environment which negatively impacted the Group's profitability and returns. Overall performance has benefited from an excellent result from the Group's Central and Eastern European farm services businesses acquired in 2016, together with maintaining a group wide operational focus on strategic cost control, business integration and cash flow management. This focus will continue in 2017.
We remain committed to expanding Origin's footprint and will continue to prioritise investment in strategic acquisitions as well as in the further development of the Group's crop management systems and yield technology transfer platforms.
Notwithstanding the fact that sector sentiment remains subdued reflecting the current pressures on farm incomes, the Group is well positioned to respond to present market conditions and to benefit from a sustained improvement in primary producer returns."
SThe preliminary results statement is available on the company website www.originenterprises.com. There will be a live conference call at 8.00am (GMT) today. To listen to this conference call, please dial the number below. Participants are requested to dial in 5 to 10 minutes prior to the scheduled start time.
Confirmation Code: 4139302
Participant access number:
Dublin: Tel: +353 (0)1 246 5603 UK/International: Tel: +44 (0)20 3427 1908
Replay:
A replay of this call will be available for seven days.
Replay Access Code: 4139302
Replay Access Numbers:
Dublin: Tel: +353 (0)1 486 0902 UK/International: Tel: +44 (0)20 3427 0598
Enquiries:
Origin Enterprises plc
Imelda Hurley
Chief Financial Officer Tel: +353 (0)1 563 4959
Goodbody (ESM Adviser)
Kevin Keating Tel: +353 (0)1 667 0420
Davy (Nominated Adviser)
Anthony Farrell Tel: +353 (0)1 614 9993
Powerscourt
Jack Hickey (Ireland) Tel: +353 (0)83 448 8339 Rob Greening (UK) Tel: +44 207 250 1446
About Origin Enterprises plc
Origin Enterprises plc is a focused Agri-Services group providing on-farm agronomy advice and the supply of crop technologies and inputs. The Agri-Services business through its manufacturing and distribution operations in Ireland, the United Kingdom, Poland, Ukraine and Romania has leading market positions in the provision of specialist agronomy services, crop technologies, inputs and feed ingredients. The Group is listed on the ESM and AIM markets of the Irish and London Stock Exchanges.
ESM ticker symbol: OIZ AIM ticker symbol: OGN Website: www.originenterprises.com
Financial Review - Summary
2016 2015
EUR'000 EUR'000
Group revenue 1,521,256 1,458,098
Operating profit* 67,258 78,895
Associates and joint venture,
net** 5,621 14,076
Group operating profit* 72,879 92,971
Finance costs, net (7,367) (4,810)
Pre-tax profits 65,512 88,161
Income tax (9,393) (12,690)
Adjusted net profit 56,119 75,471
Adjusted diluted EPS (cent)*** 44.51 60.10
Adjusted net profit reconciliation
Reported net profit 57,801 77,257
Amortisation of non-ERP intangible
assets
* Group 4,294 7,397
- 3,964
* Associates and joint venture (net of tax)
Tax on amortisation of non-ERP
related intangible assets (1,242) (1,183)
Exceptional items (net of
tax) (4,734) (11,964)
Adjusted net profit 56,119 75,471
Adjusted diluted EPS (cent)*** 44.51 60.10
Origin reports a 25.9 per cent decrease in adjusted diluted earnings per share*** for the year ending 31 July 2016 to 44.51 cent. On a like-for-like basis (adjusted for the impact of currency movements, acquisitions and the disposal of the Group's 32 per cent interest in Valeo Foods in July 2015) there was an underlying decrease in adjusted diluted earnings per share of 22.0 per cent.
Group revenue
Group revenue was EUR1,521.3 million compared to EUR1,458.1 million in the previous year, an increase of 4.3 per cent. Underlying revenue (adjusted for the impact of currency movements and acquisitions) decreased by EUR54.3 million (3.7 per cent) principally reflecting a combination of lower input prices and crop marketing volumes. Underlying service revenue and input volumes were 0.1 per cent higher in the period.
Operating profit*
Operating profit* amounted to EUR67.3 million compared to EUR78.9 million in the previous year. On a like-for-like basis (adjusted for currency movements and acquisitions) operating profit* decreased by EUR21.9 million (27.7 per cent). This was a solid result in the context of a particularly challenging year for primary food producers.
Associates and joint venture**
Origin's share of the profit after interest and taxation from associates and joint venture decreased by EUR8.5 million (60.1 per cent) to EUR5.6 million. The decrease was primarily driven by the disposal of the Group's 32 per cent interest in Valeo Foods in July 2015.
Finance costs and net debt
Net finance costs amounted to EUR7.4 million, an increase of EUR2.6 million (53.2 per cent) on the prior year. Average net debt amounted to EUR190 million compared to EUR186 million last year. Actual net cash at 31 July 2016 was EUR3.1 million**** compared to actual net cash of EUR88.8 million**** at the end of the previous year. This movement was driven primarily by an acquisition spend of EUR73.6 million in the current year.
Working capital
Investment in working capital remains a key area of focus for the Group given the associated funding costs. The year end represents the low point in the working capital cycle for the Group reflecting the seasonality of the business.
Adjusted diluted earnings per share ('EPS') ***
EPS*** amounted to 44.51 cent per share, a decrease of 25.9 per cent from 2015. This decrease is driven by foreign currency translation (- 0.7 per cent), the disposal of the Group's 32 per cent interest in Valeo Foods in July 2015 (- 14.2 per cent), the impact of acquisitions (+ 11.0 per cent) and a decrease in like-for-like underlying profits (- 22.0 per cent).
Exceptional items
Exceptional items net of tax amounted to a credit of EUR4.7 million in the period. These principally related to a gain arising from the revaluation of deferred acquisition consideration (EUR6.6 million), restructuring, acquisition, integration and other costs (EUR3.3 million) and a gain of EUR1.4 million relating to a fair value adjustment to the Group's investment properties.
Dividend
The Board recommends a final dividend of 17.85 cent per ordinary share which, when combined with the interim dividend of 3.15 cent per ordinary share, brings the total dividend for the year to 21.0 cent per ordinary share (2015: 21.0 cent). The final dividend is payable on 16 December 2016 to shareholders on the register on 2 December 2016.
Annual General Meeting (AGM)
The AGM will be held on 25 November 2016 at 11.00 a.m. in the Westbury Hotel, Grafton Street, Dublin 2.
* Before amortisation of non-ERP intangible assets and exceptional items
** Profit after interest and tax before amortisation of non-ERP intangible assets and before exceptional items
*** Before amortisation of non-ERP intangible assets, net of related deferred tax (2016: EUR3.1m, 2015: EUR10.2m) and exceptional items, net of tax (2016: EUR4.7m credit, 2015: EUR12.0m credit)
**** Including restricted cash of EUR2.9m (2015: EUR29.4m)
Review of Operations
Change on prior
year
2016 2015 Change Underlying**
EURm EURm EURm EURm
--------------------- --------- --------- --------- -------------
Group revenue 1,521.3 1,458.1 63.2 (54.3)
Operating profit* 67.3 78.9 (11.6) (21.9)
Operating margin* 4.4% 5.4% (100bps) -
Return on capital
employed 13.6% 18.5% (490bps) -
* Before amortisation of non-ERP intangible
assets and exceptional items
** Excluding currency movements and
the impact of acquisitions
------------------------------------------------------ -------------
Revenue from Agri-Services comprises the totality of Group revenue. Agri-Services incorporates integrated agronomy and on-farm services and business-to-business agri-inputs. During the year the Group's operations spanned Ireland, the UK, Poland, Romania and Ukraine.
Agri-Services had a challenging year. Underlying revenue decreased 3.7% principally reflecting the impact of lower input prices and crop marketing volumes. Underlying service revenue and input volumes increased 0.1 per cent in the period, reflecting a 3.2 per cent reduction in Ireland and the UK and a 12.2 per cent increase in Central and Eastern Europe. Operating margin was 100 basis points lower, largely reflecting the impact of unseasonal weather and weaker primary producer returns.
Integrated Agronomy and On-Farm Services
United Kingdom
Origin's agronomy brand in the UK is Agrii, which specialises in offering independent and innovative advice, crop inputs and services to arable, fruit and vegetable growers. Agrii performed robustly in a very difficult environment in 2016. The business recorded lower revenues and margins in the period due to a combination of highly adverse weather and reduced farm profitability.
Unseasonably lower temperatures and higher average and sustained rainfall levels across the main crop growing regions of the United Kingdom during the second and third quarters led to very late spring growing conditions. This resulted in delayed and missed service and input application. Pressure on farm incomes and cash flow, combined with the more compressed nature of seasonal activity, led to highly competitive trading conditions and lower demand across a variety of market sectors.
The Group's service-orientated agronomy model continues to demonstrate resilience, benefiting from a broad cropping focus and customised approach designed to maximise the economic potential of farmers' crops. Agronomy service revenue and crop protection volumes recovered well during the fourth quarter following significant shortfalls in the third quarter. Seed and nutrition performed strongly for the year as a whole, growing market share despite the challenging backdrop.
During the period, the Group completed the acquisition of ReSo Seeds, a specialist mobile seed services company, and R&T Liming, a leading provider of extended nutrition applications. These businesses strongly complement the overall agronomy offering by broadening the technical and on-farm service component of Agrii's seed and nutrition portfolios.
Poland
The Agrii Polska brand was created in 2016 through the merger of Dalgety and the Kazgod Group which was acquired in 2016. This merger represents a transformative expansion to the Group's farm service footprint in Poland, and Agrii Polska is now a scale business with market leadership positions and an enhanced service capability.
The business achieved a satisfactory result in the context of extreme weather conditions which negatively impacted revenues, profits and margins. Service and input application was significantly curtailed following a combination of prolonged frost conditions and an absence of snow cover throughout Northern and Central Poland during March and April. This unusual weather pattern led to the loss of 1.2 million hectares or c. 20% of total autumn and winter crop plantings in addition to a shorter growing season for spring cropping. The market backdrop was generally mixed reflecting weak farm sentiment due to poor crop potential and a delayed season. This, together with a reduced market for service and input application drove highly competitive trading conditions in the period.
Romania
The Group's Romanian operations, comprising the farm service brands of Comfert and Redoxim, delivered an excellent maiden contribution in the period. There was a strong organic performance with higher underlying revenues, volumes and margins reflecting growth in all service and input portfolios.
Crop growing conditions were generally excellent throughout the period reflecting the benefit of good autumn establishment and favourable spring weather.
Integration was advanced during the period, with the initial areas of focus being organisational simplification, the introduction of enhanced technical support to the sales teams and product specialists, and the establishment of five knowledge transfer demonstration farms.
Ukraine
The Group's Ukrainian operations trade under the Agroscope brand. A more challenging market backdrop in the year drove a lower year-on-year operating profit result, with service providers responding competitively to the impacts of weaker local currency and on-farm cash flow pressures on primary producer economics.
Business-to-Business Agri-Inputs
Business-to-Business Agri-Inputs achieved a satisfactory performance in highly competitive market conditions.
Fertiliser
Origin's fertiliser brands are Goulding in Ireland and Origin Fertilisers in the UK. General uncertainty regarding fertiliser raw material price development and delayed seasonal timing due to late spring conditions, together with pressures on farm incomes, drove lower revenues, volumes and margins in the period. Weaker demand in the UK was partially offset by a robust volume performance in Ireland underpinned by higher livestock numbers with primary producers focused on maximising grass production to achieve higher milk volumes.
Specialist fertiliser applications maintained strong development momentum in the period through the roll out of technically enhanced nutrition solutions that meet the requirements of high yielding grassland and cereal crop production systems. Routine investment and operational improvement programmes are driving an enhanced capability within the business to address evolving market and structural changes, such as the demands of an increasingly concentrated sales offtake pattern.
Amenity
Origin's principal amenity brands are PB Kent and Rigby Taylor, which are based in the UK. These businesses service the professional sports turf, landscaping, general amenity and niche agriculture sectors. Amenity performed very satisfactorily in the period, with the professional channel continuing to provide growth opportunity supported by new customer development and the benefit of ongoing product and service innovation.
Development continues to be positively supported through the formation of industry leading partnerships. During the year, Rigby Taylor became the official service provider to the UK Football Association's pitch improvement programme, an initiative to improve playing surfaces in order to encourage increased participation in grass roots football. In 2016, the Group completed the acquisition of UK based Headland Amenity ('Headland'), a niche provider of advanced turf management and maintenance solutions. Headland's strong technical credentials will enhance the Group's sector position in the wider amenity market.
Feed
Against the backdrop of weaker returns from beef and dairy enterprises, Feed achieved a satisfactory performance underpinned by a modest volume increase in the period. Spot demand was robust at varying times during the year reflecting unsettled weather patterns, while price volatility drove generally weaker forward buying momentum.
Associates and joint venture
John Thompson & Sons Limited, in which Origin has a 50 per cent shareholding, is the largest single site multispecies animal feed mill in the European Union. It delivered a satisfactory performance during the year.
Outlook
Notwithstanding the fact that sector sentiment remains subdued reflecting the current pressures on farm incomes, the Group is well positioned to respond to present market conditions and to benefit from a sustained improvement in primary producer returns.
SOrigin Enterprises plc
Consolidated income statement
Year ended 31 July 2016
Pre- Pre-
exceptional Exceptional Total exceptional Exceptional Total
2016 2016 2016 2015 2015 2015
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Notes (Note 3) (Note 3)
Revenue 2 1,521,256 - 1,521,256 1,458,098 - 1,458,098
Cost of sales (1,300,712) - (1,300,712) (1,231,783) - (1,231,783)
Gross profit 220,544 - 220,544 226,315 - 226,315
Operating costs (157,580) 4,955 (152,625) (154,817) 10,020 (144,797)
Share of profit
of associates
and joint
venture 5,621 - 5,621 10,112 (433) 9,679
Operating profit 68,585 4,955 73,540 81,610 9,587 91,197
Finance income 453 - 453 3,268 - 3,268
Finance expense (7,820) - (7,820) (8,078) - (8,078)
Profit before
income tax 61,218 4,955 66,173 76,800 9,587 86,387
Income tax
(expense)/credit (8,151) (221) (8,372) (11,507) 2,377 (9,130)
Profit for the
year 53,067 4,734 57,801 65,293 11,964 77,257
2016 2015
Earnings per share for the year
Basic earnings per share 4 46.03c 61.72c
------- -------
Diluted earnings per share 4 45.85c 61.52c
------- -------
Origin Enterprises plc
Consolidated statement of comprehensive income
Year ended 31 July 2016
2016 2015
EUR'000 EUR'000
Profit for the year 57,801 77,257
Other comprehensive (expense)/income
Items that are not reclassified subsequently to the Group income statement:
Group/associate defined benefit pension obligations
-remeasurements on Group's defined benefit pension schemes (4,881) (3,654)
-deferred tax effect of remeasurements 926 599
-share of remeasurements on associate's defined benefit pension schemes (356) (7,716)
-share of deferred tax effect of remeasurements - associates 71 999
Items that may be reclassified subsequently to the Group income statement:
Group foreign exchange translation details
-exchange difference on translation of foreign operations (29,008) 15,888
Group/associate cash flow hedges
-effective portion of changes in fair value of cash flow hedges 1,633 (850)
-fair value of cash flow hedges transferred to operating costs and other income (473) 1,022
-deferred tax effect of cash flow hedges (243) (19)
-share of associates and joint venture cash flow hedges 2,405 28
-deferred tax effect of share of associates and joint venture cash flow hedges (301) (3)
-recycling on disposal of interest in associate - (43)
Other comprehensive (expense)/income for the year, net of tax (30,227) 6,251
Total comprehensive income for the year attributable to equity shareholders 27,574 83,508
Origin Enterprises plc
Consolidated statement of financial position
As at 31 July 2016
2016 2015
Notes EUR'000 EUR'000
ASSETS
Non-current assets
Property, plant and equipment 5 102,796 97,889
Investment properties 9,675 7,575
Goodwill and intangible assets 6 185,220 161,401
Investments in associates and joint venture 7 39,008 38,537
Other financial assets 2,550 494
Deferred tax assets 7,376 3,236
Total non-current assets 346,625 309,132
Current assets
Inventory 163,438 158,100
Trade and other receivables 430,026 336,021
Derivative financial instruments 1,337 96
Restricted cash 10 2,948 29,358
Cash and cash equivalents 168,199 199,303
Total current assets 765,948 722,878
TOTAL ASSETS 1,112,573 1,032,010
Origin Enterprises plc
Consolidated statement of financial position (continued)
As at 31 July 2016
2016 2015
Notes EUR'000 EUR'000
EQUITY
Called up share capital presented as equity 13 1,264 1,264
Share premium 160,399 160,399
Retained earnings and other reserves 117,639 120,692
TOTAL EQUITY 279,302 282,355
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 159,124 100,053
Deferred tax liabilities 19,109 16,343
Put option liability 10,358 16,461
Provision for liabilities 9 4,010 -
Post employment benefit obligations 8 7,713 7,373
Derivative financial instruments 628 414
Total non-current liabilities 200,942 140,644
Current liabilities
Interest-bearing borrowings 8,901 39,808
Trade and other payables 596,928 535,755
Corporation tax payable 16,140 21,253
Provision for liabilities 9 9,768 11,470
Derivative financial instruments 592 725
Total current liabilities 632,329 609,011
TOTAL LIABILITIES 833,271 749,655
TOTAL EQUITY AND LIABILITIES 1,112,573 1,032,010
Origin Enterprises plc
Consolidated statement of changes in equity
Year ended 31 July 2016
Share- Foreign
Capital Cashflow based currency
Share Share Treasury redemption hedge Revaluation payment Re-organisation translation Retained
capital premium shares reserve reserve reserve reserve reserve reserve earnings Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 August 2015 1,264 160,399 (12) 134 (1,748) 12,843 1,749 (196,884) 1,606 303,004 282,355
Profit for the
year - - - - - - - - - 57,801 57,801
Other
comprehensive
income/(expense)
for the year - - - - 3,021 - - - (29,008) (4,240) (30,227)
--------- ------------ ------------ ----------- -------- ----------------- ------- ----------------------- ----------- -------- --------
Total
comprehensive
income for the
year - - - - 3,021 - - - (29,008) 53,561 27,574
Transfer of
shares (Note 13
(ii)) - - 4 - - - (4) - - - -
Share-based
payment credit - - - - - - (300) - - - (300) Transfer of share based payment reserve to retained earnings - - - - - - (1,445) - - 1,445 - Dividend paid to shareholders - - - - - - - - - (30,327) (30,327) At 31 July 2016 1,264 160,399 (8) 134 1,273 12,843 - (196,884) (27,402) 327,683 279,302
Origin Enterprises plc
Consolidated statement of cash flows
Year ended 31 July 2016
2016 2015
EUR'000 EUR'000
Cash flows from operating activities
Profit before tax 66,173 86,387
Exceptional items (4,955) (9,587)
Finance income (453) (3,268)
Finance expense 7,820 8,078
Profit on disposal of property, plant and equipment (143) (117)
Share of profit of associates and joint venture, net of intangible amortisation (5,621) (10,113)
Depreciation of property, plant and equipment 7,073 6,299
Amortisation of intangible assets 6,800 10,110
Employee share-based payment credit (300) (76)
Pension contributions in excess of service costs (3,978) (1,615)
Payment of exceptional rationalisation costs (7,202) (3,199)
Payment of employment related incentive costs (9,312) -
Payment of exceptional acquisition costs (1,392) (2,090)
Operating cash flow before changes in working capital 54,510 80,809
Increase in inventory (3,610) (15,129)
Increase in trade and other receivables (60,368) (24,700)
Increase in trade and other payables 43,328 30,088
Cash generated from operating activities 33,860 71,068
Interest paid (6,575) (6,782)
Income tax paid (11,635) (9,402)
Cash inflow from operating activities 15,650 54,884
Origin Enterprises plc
Consolidated statement of cash flows (continued)
Year ended 31 July 2016
2016 2015
EUR'000 EUR'000
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 1,133 358
Proceeds from sale of equity investment 1,051 -
Purchase of property, plant and equipment (6,789) (8,719)
Additions to intangible assets (1,640) (2,637)
Arising on acquisition (62,461) -
Payment of contingent acquisition consideration (1,000) -
Cash consideration on disposal of associate and joint venture - 42,946
Repayment of vendor loan note - principal - 35,100
Repayment of vendor loan note - interest - 9,070
Restricted cash 26,410 (29,358)
Investment in associates and joint venture (164) -
Dividends received from associates 2,942 2,899
Cash (outflow)/inflow from investing activities (40,518) 49,659
Cash flows from financing activities
Drawdown/(repayment) of bank loans 47,234 (33,812)
Bank overdraft arising on acquisition (10,108) -
Payment of dividends to equity shareholders (30,327) (25,033)
Payment of finance lease obligations (22) (146)
Cash inflow/(outflow) from financing activities 6,777 (58,991)
Net (decrease)/increase in cash and cash equivalents (18,091) 45,552
Translation adjustment (14,255) 11,615
Cash and cash equivalents at start of year 191,803 134,636
Cash and cash equivalents at end of year (Note 12) 159,457 191,803
Origin Enterprises plc
Notes to the preliminary results statement
for the year ended 31 July 2016
1 Basis of preparation
The financial information included on pages 11 to 32 of this preliminary results statement has been extracted from the Group financial statements for the year ended 31 July 2016 on which the auditor has issued an unqualified audit opinion.
The financial information has been prepared in accordance with the accounting policies set out in the Group's consolidated financial statements for the year ended 31 July 2016, which were prepared in accordance with International Financial Reporting Standards as adopted by the EU.
The consolidated financial information is presented in euro, rounded to the nearest thousand which is the functional currency of the parent.
2 Segment information
IFRS 8, 'Operating Segments' requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the Chief Operating Decision Maker ('CODM') in order to allocate resources to the segments and to assess their performance. Two operating segments have been identified; Agri-Services and Associates and Joint Venture.
Origin's Agri-Services segment comprises integrated agronomy services and agri-inputs. The Associates and Joint Venture operating segment is comprised of the feed ingredient businesses (prior year included a consumer foods business).
Information regarding the results of each reportable segment is included below. Performance is measured based on segment operating profit as included in the internal management reports that are reviewed by the Group's CODM, being the Origin Executive Directors. Segment operating profit is used to measure performance, as this information is the most relevant in evaluating the results of the Group's segments. Segment results include all items directly attributable to a segment.
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
2 Segment information (continued)
(i) Segment revenue and results
Agri-Services Associates & joint venture Total Group
---------------------- ----------------------------- ----------------------
2016 2015 2016 2015 2016 2015
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total revenue 1,521,256 1,458,098 314,233 461,854 1,835,489 1,919,952
Less revenue from associates
and joint venture - - (314,233) (461,854) (314,233) (461,854)
Revenue 1,521,256 1,458,098 - - 1,521,256 1,458,098
---------- ---------- -------------- ------------- ---------- ----------
Segment result 67,258 78,895 5,621 14,076 72,879 92,971
Amortisation of non-ERP
intangible assets - Group (4,294) (7,397)
Amortisation of non-ERP intangible assets -
Associates and joint venture - (3,964)
---------- ----------
Total operating profit before
exceptional items 68,585 81,610
Exceptional items 4,955 9,587
---------- ----------
Operating profit 73,540 91,197
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
2 Segment information (continued)
(ii) Segment earnings before financing costs and tax is reconciled to reported profit before tax and profit after tax as follows:
2016 2015
EUR'000 EUR'000
Segment earnings before financing costs and tax 73,540 91,197
Finance income 453 3,268
Finance expense (7,820) (8,078)
Reported profit before tax 66,173 86,387
Income tax expense (8,372) (9,130)
Reported profit after tax 57,801 77,257
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
3 Exceptional items
Exceptional items are those that, in management's judgement, should be separately presented and disclosed by virtue of their nature or amount. Such items are included within the Consolidated Income Statement caption to which they relate. The following exceptional items arose during the year:
2016 2015
EUR'000 EUR'000
Gain on disposal of interest in associate (i) - 22,047
Rationalisation costs (ii) (2,846) (11,377)
Gain on disposal of investment (iii) 1,341 -
Transaction and strategy related costs (iv) (2,228) (1,031)
Fair value adjustment on investment properties (v) 2,100 -
Fair value adjustment on put option liability(vi) 6,588 381
Arising in associates and joint venture, net of tax (vii) - (433)
Total exceptional credit before tax 4,955 9,587
Tax (charge)/credit on exceptional items (221) 2,377
------- --------
Total exceptional credit after tax 4,734 11,964
------- --------
(i) Gain on disposal of interest in associate
On 28 July 2016 Origin announced the disposal of its 32 per cent equity interest in the consumer foods group Valeo Foods Group Limited to CapVest Partners LLP together with the settlement/disposal of the outstanding principal and accumulated interest receivable relating to the Group's vendor loan note, which was put in place at the time of the formation of Valeo. A total cash consideration of EUR86.6 million has been received in connection with the transaction comprising EUR42.5 million in respect of the disposal of the Group's 32 per cent shareholding and EUR44.1 million in full settlement of the vendor loan note. A gain of EUR22.0 million arose on the transaction and was recognised as an exceptional item in the year ended 31 July 2015.
(ii) Rationalisation costs
Rationalisation costs comprise termination payments arising from the restructuring of Agri-Services in the UK. The tax impact of this exceptional item in the current year is a tax credit of EUR0.6 million.
(iii) Gain on disposal of investment
A gain on disposal of an investment in Adaptris Group Limited has been recorded in the current year of EUR1.3 million. The tax impact of this exceptional item in the current year is a tax charge of EUR0.3 million.
(iv) Transaction and strategy related costs
Transaction related costs principally comprise costs incurred in relation to the acquisitions during the year and strategy related costs relate to once off costs associated with the Groups' Agrii Services strategy review. The tax impact of this exceptional item in the current year is a tax credit of EUR0.2 million.
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
3 Exceptional items - continued
(v) Fair value adjustment on investment properties
During the current year the Group commissioned an independent valuations expert to conduct a valuation of the Groups' investment properties. The valuation was on the basis of market value and complies with the requirements of the Valuation and Appraisal Standards issued under the auspices of the Society of Chartered Surveyors. This valuation resulted in an increase to the carrying value of investment properties of EUR2.1 million. The tax impact of this exceptional item in the current year is a tax charge of EUR0.7 million.
(vi) Fair value of put option liability
This gain relates to the movement in fair value of the put option liability in respect of the Agroscope acquisition.
(vii) Arising in associates and joint venture, net of tax
The exceptional costs arising in associates and joint venture in the prior year relate to the Group's share of redundancy, acquisition and financing costs arising in Valeo.
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
4 Earnings per share
Basic earnings per share
2016 2015
EUR'000 EUR'000
Profit for the financial year attributable to equity shareholders 57,801 77,257
------- -------
'000 '000
Weighted average number of ordinary shares for the year 125,579 125,166
------- -------
Cent Cent
Basic earnings per share 46.03 61.72
------- -------
Diluted earnings per share
2016 2015
EUR'000 EUR'000
Profit for the financial year attributable to equity shareholders 57,801 77,257
------- -------
'000 '000
Weighted average number of ordinary shares used in basic calculation 125,579 125,166
Impact of the SAYE scheme (i) 495 -
Impact of shares with a dilutive effect (ii) - 413
------- -------
Weighted average number of ordinary shares (diluted) for the year 126,074 125,579
------- -------
Cent Cent
Diluted earnings per share 45.85 61.52
------- -------
(i) During the current year the shareholders approved a Save As You Earn ('SAYE') Scheme for adoption within the Group. The SAYE Scheme provides for the grant of options (with an agreed market value exercise price) linked to a savings arrangement. On vesting, such savings will be used to exercise options granted pursuant to the SAYE Scheme. The SAYE Scheme will be subject to an overall limit that the number of shares issued or issuable within any ten year period, when aggregated with all other employee share schemes of the Company, will not exceed 10% of the Group's issued share capital. The dilutive impact on the ordinary shares of this SAYE Scheme is included in the calculation above.
(ii) In the prior year shares with a dilutive effect related to the equity entitlements which had fully vested under the 2012 LTIP.
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
4 Earnings per share (continued)
2016 2015
EUR'000 EUR'000
Adjusted basic earnings per share
Weighted average number of ordinary shares for the year 125,579 125,166
------- -------
2016 2015
EUR'000 EUR'000
Profit for the financial year 57,801 77,257
Adjustments:
Amortisation of non-ERP related intangible assets (Note 6) 4,294 7,397
Share of associate and joint venture amortisation of non-ERP related intangible assets,
net
of tax (Note 7) - 3,964
Tax on amortisation of non-ERP related intangible assets (1,242) (1,183)
Exceptional items, net of tax (4,734) (11,964)
------- --------
Adjusted earnings 56,119 75,471
------- --------
Cent Cent
Adjusted basic earnings per share 44.69 60.30
------- --------
Adjusted diluted earnings per share
2016 2015
EUR'000 EUR'000
Weighted average number of ordinary shares used in basic calculation 125,579 125,166
Impact of the SAYE scheme (i) 495 -
Impact of shares with a dilutive effect (ii) - 413
-------
Weighted average number of ordinary shares (diluted) for the year 126,074 125,579
------- -------
2016 2015
EUR'000 EUR'000
Adjusted earnings (as above) 56,119 75,471
------- -------
Cent Cent
Adjusted diluted earnings per share 44.51 60.10
------- -------
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
5 Property, plant and equipment
2016 2015
EUR'000 EUR'000
At 1 August 97,889 90,426
Arising on acquisition 14,804 -
Additions 6,780 8,536
Disposals (990) (241)
Depreciation charge for the year (7,073) (6,299)
Translation adjustments (8,614) 5,467
At 31 July 102,796 97,889
6 Goodwill and intangible assets
2016 2015
EUR'000 EUR'000
At 1 August 161,401 151,372
Arising on acquisition 43,740 -
Additions 7,859 2,637
Amortisation of non-ERP intangible assets (4,294) (7,397)
ERP intangible amortisation (2,506) (2,713)
Translation adjustments (20,980) 17,502
At 31 July 185,220 161,401
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
7 Investments in associates and joint venture
2016 2015
EUR'000 EUR'000
At 1 August 38,537 54,911
Share of profits after tax, before exceptional items 5,621 14,077
Share of intangible amortisation, net of tax - (3,964)
Share of acquisition and rationalisation costs, net of tax - (433)
Dividends received (2,942) (2,899)
Disposal of interest in Valeo (i) - (19,364)
Share of other comprehensive income 1,819 (6,693)
Translation adjustment (4,027) 2,902
At 31 July 39,008 38,537
Split as follows:
Total associates 18,693 22,682
Total joint venture 20,315 15,855
------ ------
39,008 38,537
(i) During the prior year, Origin sold its 32% shareholding in Valeo Foods Group Limited ('Valeo') to CapVest Partners LLP. As a result Origin no longer has an investment in Valeo. This gave rise to a gain on disposal of EUR22,047,000 which was recorded in the Consolidated Income Statement as an exceptional gain for the year ended 31 July 2015 (Note 3).
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
8 Post employment benefit obligations
The Group operates a number of defined benefit pension schemes and defined contribution schemes with assets held in separate trustee administered funds. All of the defined benefit schemes are closed to new members.
During the prior year the Origin UK Defined Benefit Pension Schemes were merged into one scheme with assets and liabilities transferred to a new single Defined Benefit Scheme. The assets of the scheme continue to be managed under the pre-existing investment arrangements and the liabilities have not changed.
The valuations of the defined benefit schemes used for the purposes of the following disclosures are those of the most recent actuarial valuations carried out at 31 July 2016 by an independent, qualified actuary. The valuations have been performed using the projected unit method.
Movement in net liability recognised in the Consolidated Statement of Financial Position
2016 2015
EUR'000 EUR'000
At 1 August (7,373) (5,193)
Current service cost (589) (582)
Past service cost (107) -
Contributions 4,674 2,197
Other finance expense (91) (140)
Remeasurements (4,881) (3,654)
Translation adjustments 654 (1)
At 31 July (7,713) (7,373)
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
9 Provision for liabilities
The estimate of provisions is a key judgement in the preparation of the financial statements.
2016 2015
EUR'000 EUR'000
At 1 August 11,470 2,818
Arising on acquisition 7,585 -
Provided in
year 4,253 11,377
Paid in year (8,229) (3,250)
Released in
year (210) -
Currency
translation
adjustment (1,091) 525
---------------------------------- ----------------------------------
At 31 July 13,778 11,470
Provisions primarily relate to contingent acquisition consideration arising on a number of acquisitions completed during the current year and rationalisation costs comprising termination payments arising from the restructuring of Agri-Services in the UK.
10 Restricted cash
On 28 July 2015, Origin announced that it had reached agreement to acquire Romanian based Redoxim SRL. On that date, Origin placed in escrow an amount of EUR29,358,000 being the total consideration payable less local withholding tax. The completion of the acquisition was dependent on an approval process which required notification to the Official Gazette of Romania. This approval process was subsequently finalised and the acquisition of Redoxim SRL completed on 17 September 2015. On this date, 90 per cent of the funds in escrow were released to the sellers of Redoxim. The balance of EUR2,948,000 was paid post year end on 17 September 2016.
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
11 Acquisition of subsidiary undertakings
During the year the Group completed a number of acquisitions in Romania and Poland, with some additional bolt-on acquisitions in the United Kingdom. These acquisitions improved the strategic position of the Group's integrated agronomy services business and further the Group's focus on building new capability, systems and process development along with organisational simplification. Details of the acquisitions are as follows:
(i) On 17 September 2015 the Group completed the acquisition of 100 per cent of Redoxim SRL. Based in Romania, Redoxim SRL is a leading provider of agronomy services, macro and micro inputs to arable, vegetable and horticulture growers.
(ii) On 23 November 2015 the Group completed the acquisition of 100 per cent of the Kazgod Group. Based in Poland, the Kazgod Group is a leading provider of agronomy services, inputs, crop marketing solutions as well as a manufacturer of micro nutrition applications.
(iii) On 16 December 2015 the Group completed the acquisition of 100 per cent of Comfert SRL. Based in Romania, Comfert SRL is a leading provider of agronomy services, integrated inputs and crop marketing support to arable and vegetable growers.
(iv) On 20 August 2015 the Group completed the acquisition of 100 per cent of ReSo Seeds Limited. Based in the United Kingdom, ReSo Seeds Limited is a leading mobile seed cleaning and processing specialist company.
(v) On 1 July 2016 the Group completed the acquisition of 100 per cent of Headland Amenity Limited. Based in the United Kingdom, Headland Amenity Limited is a technically advanced supplier of products and synergistic programmes to improve sports turf surfaces.
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
11 Acquisition of subsidiary undertakings - continued
Details of the net assets acquired and goodwill (excluding debt acquired) arising from the business combinations are as follows:
Fair
value
Assets EUR'000
Non-current
Property, plant and equipment 14,804
Intangible assets 17,131
Other financial assets 1,656
Deferred tax asset 1,777
---------
Total non-current assets 35,368
---------
Current assets
Inventory 23,682
Trade receivables 73,627
Other receivables 9,120
Total current assets 106,429
---------
Liabilities
Trade payables (79,879)
Other payables (8,102)
Finance lease obligation (250)
Corporation tax (752)
Deferred tax liability (2,650)
---------
Total liabilities (91,633)
---------
Total identifiable net assets at fair value 50,164
Goodwill arising on acquisition 26,609
---------
Total net assets acquired (excluding debt acquired) 76,773
---------
Consideration satisfied by:
Cash consideration 45,605
Cash acquired (5,181)
---------
Net cash outflow 40,424
Deferred consideration 3,472
Contingent consideration 4,113
Consideration 48,009
Debt acquired 28,764
Consideration plus debt acquired 76,773
---------
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
12 Analysis of net debt
Non-cash Translation
2015 Cashflow movements adjustment 2016
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cash 199,303 (16,433) - (14,671) 168,199
Overdrafts (7,500) (1,658) - 416 (8,742)
Cash and cash equivalents 191,803 (18,091) - (14,255) 159,457
Finance lease obligations (142) 22 (250) 12 (358)
Loans (132,219) (47,234) (798) 21,326 (158,925)
Net cash 59,442 (65,303) (1,048) 7,083 174
Restricted cash 29,358 (26,410) - - 2,948
Net cash including restricted cash 88,800 (91,713) (1,048) 7,083 3,122
Origin Enterprises plc
Notes to the preliminary results statement (continued)
for the year ended 31 July 2016
13 Share capital 2016 2015
EUR'000 EUR'000
Authorised
250,000,000 ordinary shares of EUR0.01 each (i) 2,500 2,500
Allotted, called up and fully paid
126,378,777 ordinary shares of EUR0.01 each (i) (ii) 1,264 1,264
(i) Ordinary shareholders are entitled to dividends as declared and each ordinary share carries equal voting rights at meetings of the Company.
(ii) In December 2012, the issued ordinary share capital was increased by the issue of 1,212,871 ordinary shares of nominal value of EUR0.01 each, at an issue price of EUR4.04 each, pursuant to a share subscription by a wholly owned subsidiary for the purposes of the Origin Long Term Incentive Plan 2012 ( "2012 LTIP Plan"). Under the terms of 2012 LTIP Plan, 412,541 of these shares were transferred to the directors and senior management as a result of certain financial targets having been achieved. The remaining 800,330 ordinary shares continue to be held as treasury shares.
14 Related party transactions
Related party transactions occurring in the year were similar in nature to those described in the 2015 Annual Report.
15 Dividend
The Board is recommending a dividend of 17.85 cent per ordinary share which, when combined with the interim dividend of 3.15 cent per ordinary share, brings the total dividend for the year to 21 cent per ordinary share (2015: 21 cent per ordinary share). Subject to shareholders' approval at the Annual General Meeting, the dividend will be paid on 16 December 2016 to shareholders on the register on 2 December 2016. In accordance with IFRS this dividend has not been provided for in the Consolidated Statement of Financial Position as at 31 July 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKODDFBKDBCB
(END) Dow Jones Newswires
September 28, 2016 02:01 ET (06:01 GMT)
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