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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Associated British Foods Plc | LSE:ABF | London | Ordinary Share | GB0006731235 | ORD 5 15/22P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,908.50 | 1,913.50 | 1,914.50 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Textile Goods, Nec | 20.07B | 1.46B | 1.9867 | 9.61 | 13.98B |
From Feb 2020 to Feb 2025
TIDMABF
RNS Number : 8543B
Associated British Foods PLC
24 April 2012
Associated British Foods plc announces its
interim results for the 24 weeks ended 3 March 2012
ABF delivers adjusted earnings growth of 5%
Highlights
Hot Features
Premium
-- Group revenue up 11% to GBP5,766m
-- Adjusted operating profit up 6% at GBP412m*
-- Adjusted profit before tax up 3% to GBP363m **
-- Adjusted earnings per share up 5% at 34.4p **
-- Dividend per share up 8% to 8.5p
-- Net debt GBP1,592m after net capital investment of GBP326m
-- Operating profit up 6% to GBP378m, profit before tax up 3% at GBP329m
and basic earnings per share up 4% to 31.7p
George Weston, Chief Executive of Associated British Foods, said:
"The group delivered good growth in revenue and profit. AB Sugar and Primark both performed strongly, demonstrating continuing momentum. We expect substantial growth in both adjusted operating profit and adjusted earnings per share for the group for the full year."
* before amortisation of non-operating intangibles and profits less
losses on the disposal of non-current assets
** before amortisation of non-operating intangibles, profits less
losses on the disposal of non-current assets, and profits less
losses on the sale and closure of businesses.
All figures stated after amortisation of non-operating intangibles,
profits less losses on the disposal of non-current assets, and
profits less losses on the sale and closure of businesses are shown
on the face of the condensed consolidated income statement.
For further information please contact:
Associated British Foods:
Until 15.00 only
George Weston, Chief Executive
John Bason, Finance Director
Tel: 020 7638 9571
Chris Barrie/Nicola Swift, Citigate Dewe Rogerson
Tel: 020 7638 9571
Jonathan Clare
Tel: 07770 321881
After 15.00
John Bason, Finance Director
Tel: 020 7399 6500
ASSOCIATED BRITISH FOODS plc
INTERIM RESULTS ANNOUNCEMENT
FOR THE 24 WEEKS ENDED 3 MARCH 2012
CHAIRMAN'S STATEMENT
I am pleased to report interim results for the group with all business segments delivering revenue growth. In the conclusion to my statement in the 2011 annual report I commented that economic growth in developed economies around the world was likely to remain subdued in the medium term. With the consequent pressure on consumer disposable incomes, trading for our grocery and retail businesses has been challenging in this first half. However, commodity costs have subsided during the period and as the effects of forward purchasing unwind, the group is beginning to see some relief.
Revenue in the first half grew by 11% and adjusted operating profit increased by 6%. Net financing costs were higher than last year's first half, resulting from the higher level of net borrowings at the beginning of the period. Although lower than the rate used in the interim results last year, the underlying tax rate of 25.9% was, as expected, higher than last year's full rate of 24.6%. Adjusted earnings were 5% ahead at 34.4p per share.
Our sugar businesses delivered profit substantially ahead of last year with much stronger regional sugar prices and an excellent campaign in the UK compared with the challenges of last year's winter. Over recent years AB Sugar has made a significant investment in efficiency improvements to establish itself as a leader in beet sugar production in Europe and to make it more cost competitive on a global basis. Further improvements are planned. We believe the ending of sugar quotas in 2015, as recently proposed by the European Commission, is premature and is likely to jeopardise further investment in the European industry. AB Sugar is engaged with policymakers in the EU to explore alternative options for sugar reform.
In Grocery, Twinings Ovaltine and our UK businesses performed well. However, a combination of higher costs for the Castlemaine meat factory and a difficult trading environment in Australia led to a disappointing first half for our meat business in George Weston Foods although a recent improvement in its bakery business is encouraging. With an extensive overhead reduction programme now under way, the business has taken a charge for restructuring in the period. Allied Bakeries continued its focus on lowering its cost base with further capital expenditure in its bakeries and it also took a one-time overhead reduction charge. In Ingredients, a continuation of input cost pressures and increased competition, combined with a rationalisation charge, reduced operating profit in the yeast business.
Primark again delivered a robust result. Revenue grew by 15% in the half year driven by a strong programme of new store openings, with 1 million sq ft of selling space added in the last 12 months, and a like-for-like sales increase of 2%. We maintained our substantial capital investment in acquiring and fitting-out new stores and refurbishing existing properties, and this pace of expansion is expected to continue.
Our group exposure to sales in the eurozone is limited to some 20%. As uncertainty over the eurozone economies persists and government austerity measures take effect, growth rates and consumer demand can be expected to remain under pressure. Each of our businesses has analysed the potential impact of euro instability on their operations, looking at a range of possible outcomes and the action necessary to minimise the consequences. The diversity and geographic spread of the group's activities, together with the strength of the group balance sheet and the reduced reliance on bank finance, afford some protection from the worst effects of the eurozone problems.
The cash outflow that typically characterises our first half is a consequence of AB Sugar building inventory during its northern hemisphere campaign. The cash outflow before funding this year was lower than last year with the benefit of the higher profit, a lower working capital outflow and lower capital expenditure. Capital expenditure for Primark was in line with last year but, as projects within the food businesses complete, or near completion, the overall level of capital expenditure was lower. This had the effect of containing our net debt to GBP1,592m at the half year end.
On 29 March we completed a private placement of senior notes to a number of UK and US institutional lenders raising $526m with a range of maturities from 2019 to 2024. This issue provides funds, in addition to our existing committed bank facilities, some of which will be used to refinance debt maturing next year. The 3.66% average fixed interest coupon on these notes is higher than the current variable interest rate on shorter term bank borrowings which will increase the group's interest expense in the second half. By further diversifying our sources of funding and lengthening our debt maturity profile the financial strength and flexibility of the group has been enhanced.
Dividends
We have stated that the profit improvement in this financial year would be weighted towards the second half. The board has therefore decided to increase the interim dividend ahead of the half year increase in adjusted earnings per share. The interim dividend will be 8.5p, an increase of 8% on last year, and will be paid on 6 July 2012 to shareholders registered at the close of business on 8 June 2012.
Outlook
AB Sugar's investment over recent years, its focus on maximising capacity utilisation and operational efficiency and the strength of regional sugar prices, are expected to drive the full year profit for Sugar well ahead of last year. This, together with strong profit growth from Primark in the second half, should more than offset the lower profit in Grocery and Ingredients. We continue to expect this to result in substantial growth in both adjusted operating profit and adjusted earnings per share for the group for the full year.
Charles Sinclair
Chairman
24 April 2012
OPERATING REVIEW
Group revenues increased by 11% to GBP5,766m and adjusted operating profit was 6% ahead of last year at GBP412m. The first half was notable for the exceptional performance from AB Sugar and a creditable result from Primark. However, these results were held back by disappointing trading from AB Mauri and George Weston Foods in Australia. Average exchange rates remained similar to last year in all major currencies resulting in no material translation effects.
AB Sugar's result was particularly pleasing. It was the consequence of careful investments made, over a number of years, both in the acquisition of businesses and in organic capital, together with higher prices in the regions where we operate. Our organic investment has been directed at improving efficiency, reducing cost and increasing capacity which now exceeds 5 million tonnes annually. With production expected to be 4.5 million tonnes this year, there is still more room to grow.
Primark has now sold through the inventory that was bought when cotton prices were at their high point last year. Looking forward, the benefit of lower cotton prices together with the momentum of selling space growth and strong trading from new stores can be expected to accelerate the rate of profit growth.
The combination of higher input costs and increased competition for yeast in some parts of the world contributed to a decline in margin for Ingredients. As I said at the last financial year end, we remain committed to our investment in building capacity and in developing a sharper and more differentiated offering for both yeast and bakery ingredients.
The consumer food industry in developed countries faces the challenge of consumers seeking more value as their disposable incomes are squeezed. Twinings Ovaltine and our UK Grocery brands have performed well in this environment. With a focus on cost reduction, Allied Bakeries continued its capital development programme in the UK bakeries and a rationalisation charge was taken in Allied Bakeries and George Weston Foods. A new management team is now in place at George Weston Foods and progress has already been made in reducing overheads. Further rationalisation is under way and improvement in business performance is expected as the benefits flowing from the restructuring programme, enhanced efficiency of the Castlemaine plant and volume growth are delivered.
SUGAR
2012 2011
----------------------- ------ ------
Revenue GBPm 1,203 1,024
----------------------- ------ ------
Operating profit GBPm 172 108
----------------------- ------ ------
Revenue and profit were both substantially ahead of last year at 17% and 59% respectively. This was driven by a strong increase in the UK, further improvement in Spain and a better performance from Illovo.
In the UK, the production campaign was successfully completed at the end of February. Growers benefited from excellent conditions throughout the year, delivering record beet yields of 75.6 tonnes per hectare. Combined with a high sucrose content in the beet, production for the full year is expected to be 1.3 million tonnes, compared to just under 1.0 million tonnes last year which fell short of sales quota. British Sugar's profit was well ahead of last year reflecting this excellent campaign, strong factory performance and higher EU prices. The higher sugar volumes this year allowed the resumption of bioethanol production at Wissington, which had been suspended last year. The bioethanol plant is now operating close to capacity and the commissioning of the associated CO(2) liquefaction plant is almost complete.
In Spain, Azucarera's northern beet harvest also benefited from an excellent growing season, with growers reporting record Spanish yields. Together with a continued focus on higher factory extraction rates, the three northern beet factories produced 392,000 tonnes, exceeding the company's beet sugar quota of 378,000 tonnes. In addition to its beet sugar production, Azucarera produced a further 70,000 tonnes of co-refined cane sugar at these factories, and the Guadalete refinery in southern Spain has performed well, and close to capacity, despite the limited availability of preferential raw cane sugar supplies. Beet sugar production in the south is expected to be similar to last year with favourable growing conditions but a smaller area under cultivation. The substantial increase in profit resulted from higher volumes of beet and cane sugar produced, excellent factory performance and higher EU prices.
Illovo delivered a stronger result than last year with revenue and profit both ahead benefiting from favourable regional prices. Plant operations were satisfactory although sugar production for the season ended March 2012 was 1.5 million tonnes, compared with 1.6 million tonnes last year, as a result of severe drought in South Africa and lower sucrose content throughout the region. Illovo's sugar production is now expected to recover with much higher volumes in South Africa and with the expanded plants in Swaziland and Zambia operating closer to capacity. The Umzimkulu mill in South Africa, which was closed for the 2011/12 season, is due to operate during the new season which commenced in March 2012. Illovo has spent a number of years developing a proposal to invest in Mali, West Africa. The project has been constrained by incomplete funding of the agricultural component, and commitments required from the Government of Mali in relation to the project are still outstanding. Illovo has offered its assistance to the Government of Mali in order to resolve these outstanding issues but the recent military coup has added further uncertainty.
Further progress was made in our north China sugar operations. Increased agricultural plantings, improved beet yield, higher sugar content and better factory extraction rates combined to increase sugar production from 210,000 tonnes last year to 291,000 tonnes this year. Relocation of the Zhangbei factory, from its original site which was redesignated for development, is on track for completion in time for the 2012/13 campaign, with construction re-commencing in March following the north China winter freeze. In the south, reduced yield and lower extraction are expected to reduce sugar production to 387,000 tonnes compared with 415,000 tonnes last year. Sugar prices in China reduced steadily throughout calendar 2011 but since then the Beijing and Guangxi governments have intervened with a plan to purchase 1.5 million tonnes of strategic stock and prices have now stabilised. Profit in China is expected to be considerably lower than last year as a consequence.
Vivergo's wheat bioethanol plant in Hull is expected to be commissioned in late spring following successful testing of the grain intake and animal feed processing stages. Full capacity will be reached in 2013.
Agriculture
2012 2011
----------------------- ----- -----
Revenue GBPm 597 507
----------------------- ----- -----
Operating profit GBPm 16 18
----------------------- ----- -----
Each of the agriculture businesses achieved revenue growth in the period, led by KW Trident's strong sales of sugar beet feed and another excellent performance from AB Vista, our international micro-ingredients feed business. Profits in the UK and China were ahead of last year but lower grain prices and reduced volatility led to a fall in Frontier's profit from last year's very strong level.
In the UK, feed revenues were ahead in all sectors and KW Trident delivered an excellent performance with strong demand for sugar beet feed and a large sugar beet crop. Premier Nutrition, our specialist premix and pig starter feed business, strengthened its position in the UK broiler market winning substantial new business for premixes, and continued to develop its export business. Our share of the UK piglet starter feed market remained stable, during a challenging period for UK pig farmers, but the export starter business in the EU suffered volume and margin erosion. AB Vista delivered sales and profit growth ahead of expectations and continued its high level of investment in differentiating services and new product development. The recent launch of its new phytase enzyme, Quantum Blue, was highly successful.
Frontier had another strong period but, with cereal and oilseed prices drifting down from the extreme highs of 2011 and a more normal level of price volatility, trading opportunities were much reduced. Crop prices remained well ahead of the costs of production resulting in farmers investing in seed, fertiliser and crop protection inputs to support yields. Warm and dry autumn conditions, combined with a relatively mild winter, led to high plantings and advanced crop growth with a good yield potential and increased demand for fungicides and nutrients.
China saw good growth in feed volumes across all species driven by higher prices for pigs, eggs and milk. The business still faces a number of market challenges, particularly with continued high raw material commodity prices.
GROCERY
2012 2011*
----------------------- ------ ------
Revenue GBPm 1,813 1,743
----------------------- ------ ------
Operating profit GBPm 75 109
----------------------- ------ ------
* restated - see note 1
Grocery revenue increased by 4% to GBP1,813m. The decline in operating profit was primarily driven by restructuring costs at George Weston Foods in Australia and Allied Bakeries in the UK, margin declines at Allied Bakeries and higher than expected costs of operating the Castlemaine meat factory in Australia.
Twinings Ovaltine continued to perform very well with good growth for tea in the US and exceptional growth for Ovaltine in developing markets. Profit in the first half was higher than last year, also benefiting from the non-repeat of a rationalisation charge for the tea supply chain. Marketing investment was increased again this year, particularly in UK advertising and promotion and in developing markets. The business in Thailand continued to trade during the recent heavy flooding, relying on inventive contingency planning to ensure our products reached consumers.
In Allied Bakeries, Kingsmill achieved revenue growth but a high level of promotion, as UK consumers increasingly seek value, affected margins. The brand was refreshed in January with a new pack design that more clearly distinguishes the various products in the range. This was supported by a television advertising campaign featuring 50/50 bread, Little Big Loaf Tasty Wholemeal and a recent innovation, 50/50 Pockets. A national press campaign promoted the fast-growing Burgen range and Allinson also benefited from press advertising to support the launch of a new variant, Sourdough. Allied Bakeries continued to roll out the largest capital development programme within the UK bakery industry to improve manufacturing efficiency and upgrade product quality. Construction of the new bread plant and bulk handling at the Stockport bakery is well under way and due to begin commissioning in June. A rationalisation charge has been taken in these results for the closure of two smaller bakeries and the cost of further overhead reduction.
Silver Spoon achieved growth in caster and icing sugars for home baking. The Billington's range was repackaged to improve its appearance on shelf and the Allinson range of culinary flours continued to grow strongly. Following EU approval of stevia extracts in December 2011 we launched the Truvia tabletop sweetener brand. The launch was supported with television and radio advertising as well as in-store promotion, and wide distribution has already been achieved. Jordans and Ryvita had a very strong first half with Ryvita crispbread and crackerbread in particular performing well in the UK. Competition in the UK cereal and cereal bar market remained strong but Jordans' international business performed well. The transfer of manufacturing from Stockport to Poole is now complete and operating successfully.
Westmill Foods continued to see reduced volumes with increased price awareness and a switch from premium to value brands in the highly pressured ethnic restaurant and takeaway trade, which led to a fall in profitability. Further progress was made in the noodles business with the leading brand in the sector, Lucky Boat, gaining market share. A third noodle line at the Trafford factory has now been commissioned, ahead of time and within budget. AB World Foods ran a strong promotional programme during the period which resulted in good sales volumes, particularly for Patak's. Blue Dragon is now the largest oriental ambient brand in the UK following its successful relaunch last year.
The difficult retail and competitor environment experienced by George Weston Foods in the latter part of last year continued into the first half this year although recently we have seen some improvement in the Tip Top bread business. Total revenue in the period was marginally ahead of last year with an increase in milling and baking largely offset by lower meat sales. Good progress was made in bakery operations with the opportunity to deliver further improvements. The performance of the meat business was unsatisfactory. It faced significant challenges at the new Castlemaine factory where the cost of operation remains too high, but progress continued to be made in improving productivity. In addition to the plans to drive factory efficiencies, progress on the restructuring of sales distribution channels and warehousing, and general reductions in administrative costs are expected to deliver improvements in performance. The half year result includes a provision for these restructuring costs.
Revenue at ACH was ahead of last year driven by an improved performance in oils with higher volumes and better margins achieved as underlying commodity costs weakened. Spice volumes were adversely impacted by price increases taken to recover higher input costs, new product launches and support for premium private label products. Margins in foodservice were affected by delays in increasing spice prices as a result of strong competition and customer promotion of private label. In Mexico the benefit of lower oil cost was offset by currency weakness resulting in the need to increase prices further at a time of heightened competitor activity. Capullo, our premium oil brand, was relaunched in the period and a new blended oil was launched under the Mazola brand.
INGREDIENTS
2012 2011*
----------------------- ----- ------
Revenue GBPm 538 527
----------------------- ----- ------
Operating profit GBPm 18 31
----------------------- ----- ------
*restated - see note 1
Revenue increased by 2% to GBP538m but operating profit declined to GBP18m as the challenges experienced by the yeast and bakery ingredients business, seen particularly in the second half of last year, continued. Operating profit was adversely affected in a number of regions by input cost pressures, increased competition and volume weakness. A rationalisation charge for the restructuring of the European region and the closure of a small production facility in Canada has been taken in the period. ABF Ingredients made progress in improving productivity at its yeast extracts factory in Harbin, China which, combined with growth in enzymes, delivered a profit improvement.
Continued growth was achieved in bakery ingredients across South and Central America with a broadened product range. However, margins were affected by difficult market conditions and raw material price pressure in Brazil. We continued to grow the business in Mexico and expect to benefit from the commissioning of the new yeast plant at Veracruz which is expected at the start of the next financial year. In North America the competitive market made price recovery challenging.
Our performance in Europe was adversely affected by increased competition which has made price increases to recover higher input costs difficult to achieve. Bakery ingredients in Spain continued to grow and commissioning of the new plant in Cordoba is expected at the end of the financial year. A rationalisation charge has been taken for a reduction in overhead in the European region.
In Asia, sales volumes in China were disappointing but we continued to make good progress in growing volumes in India where investment was made in production capacity and skilled resources in order to build on our market leadership position. Our plant in Vietnam was closed for part of the period although bakery ingredients production has now recommenced and yeast production is expected to restart in the second half of the financial year once certain operational improvements have been completed.
Capital investment in the period included the construction of new yeast plants at Veracruz in Mexico and Shandong province in China, together with expansion of dry yeast capacity at our Xinjiang plant in China and fresh yeast at our plants in Delhi and Chiplun in India. We are also constructing a new bakery ingredients facility in Spain to support growth in southern Europe. These projects are expected to be completed this financial year and the full benefit will be seen next year.
At ABF Ingredients, sales of feed and bakery enzymes made further progress, benefiting from the success of new products launched last year. Improvements were made in operational efficiency at the yeast extracts plant in China which eased capacity constraints at our factory in Germany and improved profitability. A buoyant US dairy market contributed to a strong performance in lactose and whey proteins. Further growth was achieved in sales of speciality lipids to the pharmaceutical sector.
RETAIL
2012 2011
----------------------- ------ ------
Revenue GBPm 1,615 1,406
----------------------- ------ ------
Operating profit GBPm 154 151
----------------------- ------ ------
Primark's momentum delivered strong growth in the first half with revenue ahead by 15% to GBP1,615m. Although trading at the start of the financial year was slow as a result of the unusually warm autumn, sales over the Christmas period were particularly strong and have continued to be good since the New Year, especially considering the economic climate. The revenue growth resulted from a 2% like-for-like sales increase and an extensive programme of new store openings. Trading in the new stores, especially in continental Europe, exceeded our expectations.
As expected, the first half operating profit margin was lower than last year reflecting the absorption of high cotton costs and the decision taken not to pass on these higher costs to our customers. Cotton prices have since fallen and we are now beginning to see the benefit of lower input costs in the second half.
Primark's expansion has continued apace this year with ten new store openings in the first half. These included three in Spain, including our sixth store in Madrid which opened at Parque Sur on 3 March, three in Germany, one each in Portugal and the Netherlands, and two in the UK. Our flagship store in Scotland opened on Princes Street in Edinburgh just before Christmas. We also relocated to a much larger store in the Metro Centre in Gateshead and extended the stores in Bexleyheath and Harlow. Two menswear concessions were opened in Selfridges stores in Birmingham and the Manchester Trafford Centre. At the half year we were operating from 233 stores with 7.9 million sq ft of selling space, an increase of 0.6 million sq ft since the financial year end.
We currently expect to open a further six stores in the second half, including four in Spain, one in Germany and one in the UK. Together with further store extensions this will increase our selling space to 8.2 million sq ft by the year end. To service our stores in northern Europe we will take occupancy, in the summer, of a new 400,000 sq ft, purpose-built depot located in the west of Germany at Monchengladbach.
Capital expenditure of GBP139m in the first half was in line with last year reflecting the high number of stores opened in the period and those to open in the near future. Expenditure on new stores and refits for the full year is expected to be at a similar level to last year.
George Weston
Chief Executive
CONDENSED CONSOLIDATED INCOME STATEMENT
24 weeks 24 weeks 52 weeks
ended ended ended
3 March 5 March 17 September
2012 2011 2011
GBPm GBPm GBPm
Continuing operations Note
------------------------------------------ ---- -------- -------- -------------
Revenue 1 5,766 5,207 11,065
Operating costs (5,402) (4,870) (10,265)
364 337 800
Share of profit after tax from joint
ventures and associates 13 17 37
Profits less losses on disposal of
non-current assets 1 2 5
------------------------------------------ ---- -------- -------- -------------
Operating profit 378 356 842
Adjusted operating profit 1 412 390 920
Profits less losses on disposal of
non-current assets 1 2 5
Amortisation of non-operating intangibles (35) (36) (83)
Profits less losses on sale and closure
of businesses - - -
------------------------------------------ ----
Profit before interest 378 356 842
Finance income 5 4 9
Finance expense (53) (43) (101)
Other financial (expense)/income (1) 2 7
------------------------------------------ ---- -------- -------- -------------
Profit before taxation 329 319 757
Adjusted profit before taxation 363 353 835
Profits less losses on disposal of
non-current assets 1 2 5
Amortisation of non-operating intangibles (35) (36) (83)
Taxation - UK (40) (36) (92)
- Overseas (45) (47) (88)
2 (85) (83) (180)
------------------------------------------ ---- -------- -------- -------------
Profit for the period 244 236 577
========================================== ==== ======== ======== =============
Attributable to:
Equity shareholders 250 241 541
Non-controlling interests (6) (5) 36
------------------------------------------ ---- -------- -------- -------------
Profit for the period 244 236 577
========================================== ==== ======== ======== =============
Basic and diluted earnings per ordinary
share (pence) 3 31.7 30.6 68.7
Dividends per share for the period
(pence) 4 8.5 7.9 24.75
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
24 weeks 24 weeks 52 weeks
ended ended ended
3 March 5 March 17 September
2012 2011 2011
GBPm GBPm GBPm
Profit for the period recognised in
the income statement 244 236 577
Other comprehensive income/(expense)
Actuarial (losses)/gains on defined
benefit schemes (21) 132 12
Deferred tax associated with defined
benefit schemes 6 (37) (4)
Effect of movements in foreign exchange (33) 28 89
Net gain on hedge of net investment
in foreign subsidiaries 3 11 2
Deferred tax associated with movements
in foreign exchange - (1) (1)
Current tax associated with movements
in foreign exchange (1) (4) (1)
Movement in cash flow hedging position (3) (33) 6
Deferred tax associated with movement
in cash flow hedging position 1 8 (1)
Share of other comprehensive income
of joint ventures and associates (2) - -
---------------------------------------- --------- -------- ------------
Other comprehensive income for the
period (50) 104 102
---------------------------------------- --------- -------- ------------
Total comprehensive income for the
period 194 340 679
---------------------------------------- --------- -------- ------------
Attributable to:
Equity shareholders 208 346 657
Non-controlling interests (14) (6) 22
---------------------------------------- --------- -------- ------------
Total comprehensive income for the
period 194 340 679
---------------------------------------- --------- -------- ------------
CONDENSED CONSOLIDATED BALANCE SHEET
3 March 5 March 17 September
2012 2011 2011
GBPm GBPm GBPm
Non-current assets
Intangible assets 1,850 1,903 1,893
Property, plant and equipment 4,546 4,226 4,465
Biological assets 100 101 99
Investments in joint ventures 166 137 150
Investments in associates 43 40 44
Employee benefits assets 19 124 35
Deferred tax assets 174 164 150
Other receivables 191 201 203
-------- -------- -------------
Total non-current assets 7,089 6,896 7,039
-------- -------- -------------
Current assets
Inventories 1,727 1,555 1,425
Biological assets 114 112 112
Trade and other receivables 1,312 1,219 1,259
Other financial assets 30 16 26
Cash and cash equivalents 310 362 341
-------- -------- -------------
Total current assets 3,493 3,264 3,163
-------- -------- -------------
TOTAL ASSETS 10,582 10,160 10,202
-------- -------- -------------
Current liabilities
Loans and overdrafts (979) (908) (729)
Trade and other payables (1,665) (1,614) (1,627)
Other financial liabilities (14) (39) (22)
Income tax (140) (144) (133)
Provisions (94) (104) (31)
-------- -------- -------------
Total current liabilities (2,892) (2,809) (2,542)
-------- -------- -------------
Non-current liabilities
Loans (923) (815) (897)
Provisions (36) (94) (105)
Deferred tax liabilities (428) (455) (404)
Employee benefits liabilities (76) (83) (79)
-------- -------- -------------
Total non-current liabilities (1,463) (1,447) (1,485)
-------- -------- -------------
TOTAL LIABILITIES (4,355) (4,256) (4,027)
-------- -------- -------------
NET ASSETS 6,227 5,904 6,175
-------- -------- -------------
Equity
Issued capital 45 45 45
Other reserves 175 175 175
Translation reserve 689 644 712
Hedging reserve (1) (27) -
Retained earnings 4,919 4,655 4,816
-------- -------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY SHAREHOLDERS 5,827 5,492 5,748
Non-controlling interests 400 412 427
-------- -------- -------------
TOTAL EQUITY 6,227 5,904 6,175
-------- -------- -------------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
24 weeks 24 weeks 52 weeks
ended ended ended
3 March 5 March 17 September
2012 2011 2011
Note GBPm GBPm GBPm
Cash flow from operating activities
Profit before taxation 329 319 757
Profits less losses on disposal of
non-current assets (1) (2) (5)
Profits less losses on sale and closure
of businesses - - -
Finance income (5) (4) (9)
Finance expense 53 43 101
Other financial expense/(income) 1 (2) (7)
Share of profit after tax from joint
ventures and associates (13) (17) (37)
Amortisation 44 41 96
Depreciation 173 154 317
Net change in the fair value of biological
assets (8) (13) (21)
Share-based payment expense 4 3 8
Pension costs less contributions (4) (4) (38)
Increase in inventories (320) (310) (176)
Increase in receivables (35) (130) (138)
Increase in payables 47 58 115
Purchases less sales of current biological
assets (1) (1) (2)
Decrease in provisions (11) (12) (69)
------------------------------------------- ---- --------- -------- ------------
Cash generated from operations 253 123 892
Income taxes paid (70) (51) (156)
------------------------------------------- ---- --------- -------- ------------
Net cash from operating activities 183 72 736
------------------------------------------- ---- ---------
Cash flows from investing activities
Dividends received from joint ventures
and associates 4 3 9
Purchase of property, plant and equipment (316) (384) (794)
Purchase of intangibles (10) (20) (49)
Purchase of non-current biological
assets - (1) (1)
Sale of property, plant and equipment - 5 18
Purchase of subsidiaries, joint ventures
and associates (5) (6) (24)
Sale of subsidiaries, joint ventures
and associates - 1 3
Loans to joint ventures 4 (13) (25)
Purchase of non-controlling interests (1) (29) (29)
Interest received 5 4 11
------------------------------------------- ----
Net cash from investing activities (319) (440) (881)
------------------------------------------- ---- --------- -------- ------------
Cash flows from financing activities
Dividends paid to non-controlling
interests (13) (10) (22)
Dividends paid to equity shareholders 4 (133) (128) (190)
Interest paid (38) (30) (99)
Financing:
Increase in short-term loans 237 484 342
Increase in long-term loans 37 31 105
Movements from changes in own shares
held - (16) (16)
------------------------------------------- ---- --------- -------- ------------
Net cash from financing activities 90 331 120
------------------------------------------- ---- --------- -------- ------------
Net decrease in cash and cash equivalents (46) (37) (25)
Cash and cash equivalents at the beginning
of the period 291 309 309
Effect of movements in foreign exchange (4) (2) 7
------------------------------------------- ---- --------- -------- ------------
Cash and cash equivalents at the end
of the period 6 241 270 291
=========================================== ==== ========= ======== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity shareholders
Issued Other Translation Hedging Retained Non-controlling Total
Note capital reserves reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance as at 18
September
2011 45 175 712 - 4,816 5,748 427 6,175
Total
comprehensive
income
Profit for the
period
recognised
in the income
statement - - - - 250 250 (6) 244
Actuarial losses
on defined
benefit schemes - - - - (21) (21) - (21)
Deferred tax
associated
with defined
benefit schemes - - - - 6 6 - 6
Effect of
movements in
foreign
exchange - - (26) - - (26) (7) (33)
Net gain on
hedge of net
investment in
foreign
subsidiaries - - 3 - - 3 - 3
Current tax
associated
with movements
in foreign
exchange - - - - (1) (1) - (1)
Movement in cash
flow hedging
position - - - (2) - (2) (1) (3)
Deferred tax
associated
with movement
in cash flow
hedging
position - - - 1 - 1 - 1
Share of other
comprehensive
income of joint
ventures
and associates - - - - (2) (2) - (2)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Other
comprehensive
income - - (23) (1) (18) (42) (8) (50)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
comprehensive
income - - (23) (1) 232 208 (14) 194
Transactions
with owners
Dividends paid
to equity
shareholders 4 - - - - (133) (133) - (133)
Net movement in
own shares
held - - - - 4 4 - 4
Dividends paid
to
non-controlling
interests - - - - - - (13) (13)
Total
transactions
with
owners - - - - (129) (129) (13) (142)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 3
March 2012 45 175 689 (1) 4,919 5,827 400 6,227
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 19
September
2010 45 175 606 (4) 4,471 5,293 451 5,744
Total
comprehensive
income
Profit for the
period
recognised
in the income
statement - - - - 241 241 (5) 236
Actuarial gains
on defined
benefit schemes - - - - 132 132 - 132
Deferred tax
associated
with defined
benefit schemes - - - - (37) (37) - (37)
Effect of
movements in
foreign
exchange - - 27 - - 27 1 28
Net gain on
hedge of net
investment in
foreign
subsidiaries - - 11 - - 11 - 11
Deferred tax
associated
with movements
in foreign
exchange - - - - (1) (1) - (1)
Current tax
associated
with movements
in foreign
exchange - - - - (4) (4) - (4)
Movement in cash
flow hedging
position - - - (29) - (29) (4) (33)
Deferred tax
associated
with movement
in cash flow
hedging
position - - - 6 - 6 2 8
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Other
comprehensive
income - - 38 (23) 90 105 (1) 104
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
comprehensive
income - - 38 (23) 331 346 (6) 340
Transactions
with owners
Dividends paid
to equity
shareholders 4 - - - - (128) (128) - (128)
Net movement in
own shares
held - - - - (13) (13) - (13)
Dividends paid
to
non-controlling
interests - - - - - - (10) (10)
Changes in
ownership of
subsidiaries - - - - (6) (6) (23) (29)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
transactions
with
owners - - - - (147) (147) (33) (180)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 5
March 2011 45 175 644 (27) 4,655 5,492 412 5,904
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 19
September
2010 45 175 606 (4) 4,471 5,293 451 5,744
Total
comprehensive
income
Profit for the
period
recognised
in the income
statement - - - - 541 541 36 577
Actuarial gains
on defined
benefit schemes - - - - 12 12 - 12
Deferred tax
associated
with defined
benefit schemes - - - - (4) (4) - (4)
Effect of
movements in
foreign
exchange - - 105 - - 105 (16) 89
Net gain on
hedge of net
investment in
foreign
subsidiaries - - 1 - - 1 1 2
Deferred tax
associated
with movements
in foreign
exchange - - - - (1) (1) - (1)
Current tax
associated
with movements
in foreign
exchange - - - - (1) (1) - (1)
Movement in cash
flow hedging
position - - - 5 - 5 1 6
Deferred tax
associated
with movement
in cash flow
hedging
position - - - (1) - (1) - (1)
Other
comprehensive
income - - 106 4 6 116 (14) 102
Total
comprehensive
income - - 106 4 547 657 22 679
Transactions
with owners
Dividends paid
to equity
shareholders 4 - - - - (190) (190) - (190)
Net movement in
own shares
held - - - - (8) (8) - (8)
Deferred tax
associated
with
share-based
payments - - - - 2 2 - 2
Dividends paid
to
non-controlling
interests - - - - - - (22) (22)
Changes in
ownership of
subsidiaries - - - - (6) (6) (24) (30)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
transactions
with
owners - - - - (202) (202) (46) (248)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 17
September
2011 45 175 712 - 4,816 5,748 427 6,175
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Operating segments
The group discloses five operating segments, as described below. These
are the group's operating divisions, based on the group's management and
internal reporting structure, which combine businesses with common characteristics.
The board is the chief operating decision maker.
Inter-segment pricing is determined on an arm's length basis. Segment result
is adjusted operating profit, as shown on the face of the consolidated
income statement. Segment assets comprise all non-current assets except
employee benefits assets and deferred tax assets, and all current assets
except cash and cash equivalents. Segment liabilities comprise trade and
other payables, derivative liabilities and provisions. Segment results,
assets and liabilities include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated
items comprise mainly corporate assets and expenses, cash, borrowings,
employee benefits balances and current and deferred tax balances. Segment
non-current asset additions are the total cost incurred during the period
to acquire segment assets that are expected to be used for more than one
year, comprising property, plant and equipment, operating intangibles and
biological assets.
The group is comprised of the following operating segments:
Grocery The manufacture of grocery products, including hot beverages, sugar
& sweeteners, vegetable oils, bread & baked goods, cereals, ethnic foods,
herbs & spices, and meat products which are sold to retail, wholesale and
foodservice businesses.
Sugar The growing and processing of sugar beet and sugar cane for sale
to industrial users and to Silver Spoon, which is included in the grocery
segment.
Agriculture The manufacture of animal feeds and the provision of other
products for the agriculture sector.
Ingredients The manufacture of bakers' yeast, bakery ingredients, speciality
proteins, enzymes, lipids and yeast extracts.
Retail Buying and merchandising value clothing and accessories through
the Primark and Penneys retail chains.
Geographical information
In addition to the required disclosure for operating segments, disclosure
is also given of certain geographical information about the group's operations,
based on the geographical groupings: United Kingdom; Europe & Africa; The
Americas; and Asia Pacific.
Revenues are shown by reference to the geographical location of customers.
Profits are shown by reference to the geographical location of the businesses.
Segment assets are based on the geographical location of the assets.
Revenue Adjusted operating profit
24 weeks 24 weeks 52 weeks 24 weeks 24 weeks 52 weeks
ended ended ended ended ended ended
3 March 5 March 17 September 3 March 5 March 17 September
2012 2011 2011 2012 2011 2011
Operating segments GBPm GBPm GBPm GBPm GBPm GBPm
--------- --------- -------------- --------- -------- -------------
Grocery 1,813 1,743 3,671 75 109 244
Sugar 1,203 1,024 2,134 172 108 315
Agriculture 597 507 1,127 16 18 40
Ingredients 538 527 1,090 18 31 61
Retail 1,615 1,406 3,043 154 151 309
Central - - - (23) (27) (48)
--------- --------- -------------- --------- -------- -------------
5,766 5,207 11,065 412 390 921
Businesses disposed:
Grocery - - - - - (1)
- - - - - (1)
--------- --------- -------------- --------- -------- -------------
5,766 5,207 11,065 412 390 920
--------- --------- -------------- --------- -------- -------------
Geographical information
United Kingdom 2,485 2,194 4,788 271 230 491
Europe & Africa 1,549 1,336 2,735 89 56 213
The Americas 607 571 1,176 50 59 118
Asia Pacific 1,125 1,106 2,366 2 45 99
--------- --------- -------------- --------- -------- -------------
5,766 5,207 11,065 412 390 921
Businesses disposed:
The Americas - - - - - (1)
--------- --------- -------------- --------- -------- -------------
- - - - - (1)
--------- --------- -------------- --------- -------- -------------
5,766 5,207 11,065 412 390 920
--------- --------- -------------- --------- -------- -------------
The comparative results for the Grocery and Ingredients segments have been reclassified following a change of management responsibility for the Australian cake business.
1. Operating segments for the 24 weeks ended
3 March 2012
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
businesses 1,815 1,281 602 574 1,615 (121) 5,766
Internal revenue (2) (78) (5) (36) - 121 -
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 1,813 1,203 597 538 1,615 - 5,766
Adjusted operating profit
before joint ventures and
associates 69 173 13 13 154 (23) 399
Share of profit after tax
from joint ventures and
associates 6 (1) 3 5 - - 13
Adjusted operating profit 75 172 16 18 154 (23) 412
Amortisation of non-operating
intangibles (7) (12) - (16) - - (35)
Profits less losses on
disposal of non-current
assets - 1 - - - - 1
Profit before interest 68 161 16 2 154 (23) 378
Finance income 5 5
Finance expense (53) (53)
Other financial expense (1) (1)
Taxation (85) (85)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Profit for the period 68 161 16 2 154 (157) 244
====================================== ======== ====== ============ ============ ========= ======== ========
Segment assets (excluding
investments in joint ventures
and associates) 2,894 2,901 333 1,402 2,207 133 9,870
Investments in joint ventures
and associates 23 51 78 57 - - 209
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 2,917 2,952 411 1,459 2,207 133 10,079
Cash and cash equivalents 310 310
Deferred tax assets 174 174
Employee benefits assets 19 19
Segment liabilities (574) (524) (117) (166) (315) (113) (1,809)
Loans and overdrafts (1,902) (1,902)
Income tax (140) (140)
Deferred tax liabilities (428) (428)
Employee benefits liabilities (76) (76)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Net assets 2,343 2,428 294 1,293 1,892 (2,023) 6,227
====================================== ======== ====== ============ ============ ========= ======== ========
Non-current asset additions 59 67 8 46 122 1 303
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 50 45 3 22 52 1 173
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 14 12 1 17 - - 44
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 2,485 1,549 607 1,125 5,766
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 3,760 2,946 1,102 2,271 10,079
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Non-current asset additions 91 116 32 64 303
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 77 40 12 44 173
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 6 17 11 10 44
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
1. Operating segments for the 24 weeks ended
5 March 2011
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
businesses 1,746 1,079 509 564 1,406 (97) 5,207
Internal revenue (3) (55) (2) (37) - 97 -
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 1,743 1,024 507 527 1,406 - 5,207
Adjusted operating profit
before joint ventures and
associates 107 104 11 27 151 (27) 373
Share of profit after tax
from joint ventures and
associates 2 4 7 4 - - 17
Adjusted operating profit 109 108 18 31 151 (27) 390
Amortisation of non-operating
intangibles (11) (16) - (9) - - (36)
Profits less losses on
disposal of non-current
assets - 2 - - - - 2
Profit before interest 98 94 18 22 151 (27) 356
Finance income 4 4
Finance expense (43) (43)
Other financial income 2 2
Taxation (83) (83)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Profit for the period 98 94 18 22 151 (147) 236
====================================== ======== ====== ============ ============ ========= ======== ========
Segment assets (excluding
investments in joint ventures
and associates) 2,696 2,756 267 1,392 2,092 130 9,333
Investments in joint ventures
and associates 29 47 67 34 - - 177
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 2,725 2,803 334 1,426 2,092 130 9,510
Cash and cash equivalents 362 362
Deferred tax assets 164 164
Employee benefits assets 124 124
Segment liabilities (559) (492) (98) (177) (352) (173) (1,851)
Loans and overdrafts (1,723) (1,723)
Income tax (144) (144)
Deferred tax liabilities (455) (455)
Employee benefits liabilities (83) (83)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Net assets 2,166 2,311 236 1,249 1,740 (1,798) 5,904
====================================== ======== ====== ============ ============ ========= ======== ========
Non-current asset additions 111 147 6 32 140 2 438
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 43 41 5 19 45 1 154
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 16 16 - 9 - - 41
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 2,194 1,336 571 1,106 5,207
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 3,679 2,791 1,022 2,018 9,510
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Non-current asset additions 117 206 24 91 438
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 75 32 12 35 154
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 5 19 7 10 41
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
1. Operating segments for the 52 weeks ended
17 September 2011
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
businesses 3,677 2,265 1,134 1,164 3,043 (218) 11,065
Internal revenue (6) (131) (7) (74) - 218 -
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 3,671 2,134 1,127 1,090 3,043 - 11,065
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Adjusted operating profit
before joint ventures and
associates 237 308 27 51 309 (48) 884
Share of profit after tax
from joint ventures and
associates 7 7 13 10 - - 37
Businesses disposed (1) - - - - - (1)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Adjusted operating profit 243 315 40 61 309 (48) 920
Amortisation of non-operating
intangibles (24) (31) (1) (27) - - (83)
Profits less losses on
disposal of non-current
assets 3 2 - - - - 5
Profit before interest 222 286 39 34 309 (48) 842
Finance income 9 9
Finance expense (101) (101)
Other financial income 7 7
Taxation (180) (180)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Profit for the period 222 286 39 34 309 (313) 577
====================================== ======== ====== ============ ============ ========= ======== ========
Segment assets (excluding
investments in joint ventures
and associates) 2,824 2,503 280 1,441 2,310 124 9,482
Investments in joint ventures
and associates 38 50 73 33 - - 194
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 2,862 2,553 353 1,474 2,310 124 9,676
Cash and cash equivalents 341 341
Deferred tax assets 150 150
Employee benefit assets 35 35
Segment liabilities (593) (409) (96) (193) (398) (96) (1,785)
Loans and overdrafts (1,626) (1,626)
Income tax (133) (133)
Deferred tax liabilities (404) (404)
Employee benefits liabilities (79) (79)
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Net assets 2,269 2,144 257 1,281 1,912 (1,688) 6,175
====================================== ======== ====== ============ ============ ========= ======== ========
Non-current asset additions 226 193 11 93 323 2 848
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 87 77 9 42 100 2 317
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 36 32 1 27 - - 96
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 4,788 2,735 1,176 2,366 11,065
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 3,671 2,916 1,075 2,014 9,676
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Non-current asset additions 290 320 61 177 848
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 146 74 24 73 317
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 12 47 15 22 96
-------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
2. Income tax expense
24 weeks 24 weeks 52 weeks
ended ended ended
3 March 5 March 17 September
2012 2011 2011
GBPm GBPm GBPm
Current tax expense
UK - corporation tax at 25.5%/27.5%/27.1% 37 32 80
Overseas - corporation tax 39 28 88
UK - underprovided in prior periods - - 16
Overseas - overprovided in prior periods - - (25)
76 60 159
Deferred tax expense
UK 3 4 (5)
Overseas 6 19 22
UK - underprovided in prior periods - - 1
Overseas - underprovided in prior periods - - 3
-------- -------- ------------
9 23 21
Total income tax expense in income statement 85 83 180
======== ======== ============
Reconciliation of effective tax rate
Profit before taxation 329 319 757
Less share of profit from joint ventures
and associates (13) (17) (37)
-------- -------- ------------
Profit before taxation excluding share
of profit after tax from joint ventures
and associates 316 302 720
-------- -------- ------------
Nominal tax charge at UK corporation
tax rate of 25.5%/27.5%/27.1% 81 83 195
Higher and lower tax rates on overseas
earnings 1 (12) (35)
Expenses not deductible for tax purposes 3 12 22
Utilisation of losses - - (2)
Deferred tax not recognised - - 5
Adjustments in respect of prior periods - - (5)
-------- -------- ------------
85 83 180
======== ======== ============
Income tax recognised directly in equity
Deferred tax associated with defined
benefit schemes (6) 37 4
Deferred tax associated with share based
payments - - (2)
Deferred tax associated with movement
in cash flow hedging position (1) (8) 1
Deferred tax associated with movements
in foreign exchange - 1 1
Current tax associated with movements
in foreign exchange 1 4 1
-------- -------- ------------
(6) 34 5
======== ======== ============
In 2011, it was announced that the UK corporation tax rate, which
had been reduced from 28% to 27% with effect from 1 April 2010,
would be further reduced to 26% with effect from 1 April 2011.
This announcement was made subsequent to the end of the reporting
period and was not therefore reflected in the interim report for
2011. The impact of this additional rate reduction on current and
deferred tax was reflected in the consolidated financial statements
for the year ended 17 September 2011. It was also announced that
the UK corporation tax rate would reduce by a further 1% each year
for the following three years, falling to 23% with effect from
1 April 2014. Each annual reduction will be reflected as the relevant
legislation becomes substantively enacted. The interim results
for the period ended 3 March 2012 reflect the reduction of 1% to
25% that was enacted in 2011.
It has recently been announced that the UK corporation tax rate
will be further reduced by 1% with effect from 1 April 2012. As
last year, the announcement was made after the end of the reporting
period and has not therefore been reflected in the interim results
for 2012 but will be reflected in the results for the full year
ending 15 September 2012.
3. Earnings per ordinary share 24 weeks 24 weeks 52 weeks
ended ended ended
3 March 5 March 17 September
2012 2011 2011
pence pence pence
Adjusted earnings per share 34.4 32.9 74.0
Disposal of non-current assets 0.1 0.3 0.6
Amortisation of non-operating intangibles (4.4) (4.6) (10.5)
Tax credit on non-operating intangibles
amortisation and goodwill 1.1 1.4 3.2
Non-controlling interests' share of
amortisation of non-operating intangibles
net of tax 0.5 0.6 1.4
Earnings per ordinary share 31.7 30.6 68.7
========== ============ ==============
4. Dividends
24 weeks 24 weeks 52 weeks
ended ended ended
3 March 5 March 17 September
2012 2011 2011
pence pence pence
Per share
2010 final - 16.20 16.20
2011 interim - - 7.90
2011 final 16.85 - -
---------- ------------ --------------
16.85 16.20 24.10
========== ============ ==============
Total GBPm GBPm GBPm
2010 final - 128 128
2011 interim - - 62
2011 final 133 - -
---------- ------------ --------------
133 128 190
========== ============ ==============
The 2011 final dividend of 16.85p per share was approved on 9 December
2011 and totalled GBP133m when paid on 13 January 2012. The 2012 interim
dividend of 8.5p per share, total value of GBP67m, will be paid on
6 July 2012 to shareholders on the register on 8 June 2012.
5. Acquisitions and disposals
There were no acquisitions or disposals in the period. Cash flow on
purchase of subsidiaries, joint ventures and associates in the cash
flow statement of GBP5m comprised a GBP4m investment in joint ventures
and GBP1m paid in respect of previous acquisitions.
6. Analysis of net debt
At At
17 September Exchange 3 March
2011 Cash flow adjustments 2012
GBPm GBPm GBPm GBPm
Cash at bank and in
hand, cash equivalents
and overdrafts 291 (46) (4) 241
Short-term borrowings (679) (237) 6 (910)
Loans over one year (897) (37) 11 (923)
------------- ----------- ------------ ---------
(1,285) (320) 13 (1,592)
============= =========== ============ =========
Cash and cash equivalents comprise cash balances, call deposits and
investments with original maturities of three months or less. Bank
overdrafts that are repayable on demand and form an integral part
of the group's cash management are included as a component of cash
and cash equivalents for the purpose of the cash flow statement.
7. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed
in this note.
Full details of the group's other related party relationships, transactions
and balances are given in the group's financial statements for the
52 weeks ended 17 September 2011. There have been no material changes
in these relationships in the 24 weeks ended 3 March 2012 or up to
the date of this report.
No related party transactions have taken place in the first 24 weeks
of the current financial year that have materially affected the financial
position or the performance of the group during that period.
8. Basis of preparation
Associated British Foods plc ('the Company') is a company domiciled
in the United Kingdom. The condensed consolidated interim financial
statements of the Company for the 24 weeks ended 3 March 2012 comprise
those of the Company and its subsidiaries (together referred to as
'the group') and the group's interests in associates and jointly controlled
entities.
The consolidated financial statements of the group for the 52 weeks
ended 17 September 2011 are available upon request from the Company's
registered office at 10 Grosvenor Street, London W1K 4QY or at www.abf.co.uk
The condensed consolidated interim financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting. They do not
include all of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial statements
of the group for the 52 weeks ended 17 September 2011.
The preparation of interim financial statements requires management
to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing the condensed consolidated interim financial statements,
the significant judgements made by management in applying the group's
accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the consolidated financial statements
for the 52 weeks ended 17 September 2011.
After making enquiries, the directors have a reasonable expectation
that the group has adequate resources to continue in operational existence
for the foreseeable future. For this reason they continue to adopt
the going concern basis in preparing the condensed consolidated interim
financial statements. The group's business activities, together with
the factors likely to affect its future development, performance and
position are set out in the Operating review. Note 24 on pages 93 to
104 of the 2011 Annual Report provides details of the group's policy
on managing its financial and commodity risks.
The group has considerable financial resources, good access to debt
markets, a diverse range of businesses and a wide geographic spread.
It is therefore well placed to continue to manage business risks successfully
despite the current economic uncertainty.
The 24 week period for the condensed consolidated interim financial
statements of the Company means that the second half of the year is
usually a 28 week period, and the two halves of the reporting year
are therefore not of equal length. For the Retail segment, Christmas,
falling in the first half of the year, is a particularly important
trading period. For the Sugar segment, the balance sheet, and working
capital in particular, is strongly influenced by seasonal growth patterns
for both sugar beet and sugar cane, which vary significantly in the
markets in which the group operates.
The condensed consolidated interim financial statements are unaudited
but have been subject to an independent review by the auditor and were
approved by the board of directors on 24 April 2012. They do not constitute
statutory financial statements as defined in section 434 of the Companies
Act 2006. The comparative figures for the 52 weeks ended 17 September
2011 have been abridged from the group's 2011 financial statements
and are not the Company's statutory financial statements for that period.
Those financial statements have been reported on by the Company's auditor
and delivered to the Registrar of Companies. The report of the auditors
was unqualified, did not include a reference to any matters to which
the auditors drew attention by way of emphasis without qualifying their
report and did not contain a statement under section 498(2) or (3)
of the Companies Act 2006.
The interim results announcement has been prepared solely to provide
additional information to shareholders as a body, to assess the group's
strategies and the potential for those strategies to succeed. This
interim results announcement should not be relied upon by any other
party or for any other purpose.
9. Significant accounting policies
The accounting policies applied by the group in these condensed consolidated
interim financial statements are substantially the same as those applied
by the group in its consolidated financial statements for the 52 weeks
ended 17 September 2011. Whilst there have been a number of minor changes
to standards which become applicable for the year ending 15 September
2012, none have been assessed as having a significant impact on the
group.
CAUTIONARY STATEMENTS
This interim results announcement contains forward-looking statements. These have been made by the directors in good faith based on the information available to them up to the time of their approval of this report. The directors can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could have a material impact on the group's performance over the remainder of the financial year and could cause actual results to differ materially from expected and historical results. These include, but are not limited to, competitor activity and competition risk, commercial relationships with customers and suppliers, changes in foreign exchange rates and commodity prices. Details of the key risks facing the group's businesses at an operational level are included on pages 46 to 48 of the group's statutory financial statements for the 52 weeks ended 17 September 2011, as part of the corporate governance report. Details of further potential risks and uncertainties arising since the issue of the previous statutory financial statements are included within the Chairman's statement and the Operating review as appropriate.
RESPONSIBILITY STATEMENT
The interim results announcement complies with the Disclosure and Transparency Rules ("the DTR") of the Financial Services Authority in respect of the requirement to produce a half yearly financial report.
The directors confirm that to the best of their knowledge:
-- this financial information has been prepared in accordance with IAS 34 as adopted by the EU;
-- this interim results announcement includes a fair review of the important events during the first half and their impact on the financial information, and a description of the principal risks and uncertainties for the remaining half of the year as required by DTR 4.2.7R; and
-- this interim results announcement includes a fair review of the disclosure of related party transactions and changes therein as required by DTR 4.2.8R.
George Weston John Bason Charles Sinclair Chief Executive Finance Director Chairman 24 April 2012 24 April 2012 24 April 2012
On behalf of the board
Independent review report to Associated British Foods plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the interim results announcement for the 24 weeks ended 3 March 2012 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated cash flow statement, the condensed consolidated statement of changes in equity and the related explanatory notes. We have read the other information contained in the interim results announcement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim results announcement is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim results announcement in accordance with the DTR of the UK FSA.
The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this interim results announcement has been prepared in accordance with IAS 34Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim results announcement based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim results announcement for the 24 weeks ended 3 March 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.
Richard Pinckard
for and on behalf of KPMG Audit Plc
Chartered Accountants
15 Canada Square
London, E14 5GL
24 April 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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