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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Total Produce Plc | LSE:TOT | London | Ordinary Share | IE00B1HDWM43 | 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% | 165.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTOT
RNS Number : 2001Z
Total Produce Plc
30 August 2018
TOTAL PRODUCE PLC
RESULTS TO 30 JUNE 2018
TOTAL PRODUCE PLC DELIVERS CONTINUED GROWTH IN 2018
Hot Features
Premium
-- Revenue up 1.8% to EUR2.2 billion
-- Adjusted EBITDA up 7.4% to EUR56.7m
-- Adjusted EBITA up 7.3% to EUR45.6m
-- Adjusted profit before tax up 7.0% to EUR41.8m
-- Adjusted fully diluted EPS (excluding impact of share placing)
up 2.3%
-- Adjusted fully diluted EPS (including impact of share placing)
down 11.4%
-- Interim dividend increased by 2.5% to 0.9129 cent per share
Key performance indicators are defined overleaf
Commenting on the results, Carl McCann, Chairman, said:
"Total Produce has delivered continued first-half growth in 2018. The Group's first-half adjusted EBITDA increased by 7.4%, and its adjusted EBITA increased by 7.3%. The Group continues to target full year growth excluding the impact of the Dole transaction and the related share placing.
As announced on 1 February 2018, the Group entered into an agreement to acquire a 45% stake in Dole Food Company, one of the largest fresh produce companies in the world, for $300m along with options to further increase the Group's stake. The transaction completed on 31 July 2018 having received regulatory approvals.
On 1 February 2018, 63 million ordinary shares were issued raising $180m to finance the Dole transaction. The 2019 financial year will be the first full year reflecting the scale of this transformative transaction. The conclusion of the Dole transaction represents a very significant development in the Group's successful expansion strategy.
An interim dividend of 0.9129 cent per share will be paid on 12 October 2018 representing a 2.5% increase on last year."
30 August 2018
For further information, please contact:
Peter O'Brien, Wilson Hartnell PR - Tel: +353-1-669-0030, Mobile: +353-87-811-4637
TOTAL PRODUCE PLC INTERIM RESULTS FOR THE
SIX MONTHSED 30 JUNE 2018
2018 2017
EUR'million EUR'million % change
Total revenue (1) 2,187 2,147 +1.8%
Group revenue 1,857 1,823 +1.8%
Adjusted EBITDA (1) 56.7 52.8 +7.4%
Adjusted EBITA (1) 45.6 42.5 +7.3%
Operating profit (before exceptional
credits) 38.5 33.4 +15.1%
Adjusted profit before tax (1) 41.8 39.0 +7.0%
Profit before tax 42.3 35.4 +19.4%
Euro cent Euro cent % change
Adjusted fully diluted earnings per
share (1) Pro-forma excluding impact
of share placing 6.94 6.78 +2.3%
Adjusted fully diluted earnings per
share (1) 6.01 6.78 (11.4%)
Basic earnings per share 7.23 6.95 +4.0%
Diluted earnings per share 7.20 6.88 +4.7%
Interim dividend per share 0.9129 0.8906 +2.5%
(1) Key performance indicators defined
Total revenue includes the Group's share of the revenue of its joint
ventures and associates.
Adjusted EBITDA is earnings before interest, tax, depreciation, acquisition
related intangible asset amortisation charges and costs, fair value
movements on contingent consideration, unrealised gains or losses
on derivative financial instruments, gains and losses on foreign currency
denominated intercompany borrowings and exceptional items. It also
excludes the Group's share of these items within joint ventures and
associates.
Adjusted EBITA is earnings before interest, tax, acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration, unrealised gains or losses on derivative
financial instruments, gains and losses on foreign currency denominated
intercompany borrowings and exceptional items. It also excludes the
Group's share of these items within joint ventures and associates.
Adjusted profit before tax excludes acquisition related intangible
asset amortisation charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial
instruments, gains and losses on foreign currency denominated intercompany
borrowings and exceptional items. It also excludes the Group's share
of these items within joint ventures and associates.
Adjusted fully diluted earnings per share excludes acquisition related
intangible asset amortisation charges and costs, fair value movements
on contingent consideration, unrealised gains or losses on derivative
financial instruments, gains and losses on foreign currency denominated
intercompany borrowings, exceptional items and related tax on such
items. It also excludes the Group's share of these items within joint
ventures and associates.
Forward-looking statement
Any forward-looking statements made in this press release have been made in good faith based on the information available as of the date of this press release and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in these statements, and the Company undertakes no obligation to update any such statements whether as a result of new information, future events, or otherwise. Total Produce's Annual Report contains and identifies important factors that could cause these developments or the Company's actual results to differ materially from those expressed or implied in these forward-looking statements.
Overview
Total Produce (the 'Group') has delivered a good performance in the
first half of 2018 with total revenue and adjusted EBITA growing by
1.8% and 7.3% respectively. Adjusted fully diluted earnings per share
(excluding the effect of the share placing to finance the Dole acquisition)
increased by 2.3%. The results benefited from the incremental contribution
of acquisitions in the past eighteen months offset in part by the negative
impact on the translation to Euro of the results of foreign currency
denominated operations. The Group continues to be cash generative with
operating cashflows of EUR37.8m (2017: EUR33.3m) before normal seasonal
working capital outflows.
The Board is pleased to announce an increase of 2.5% in the interim
dividend to 0.9129 (2017: 0.8906) cent per share.
Operating review
Total revenue increased 1.8% to EUR2.19 billion (2017: EUR2.15 billion)
with adjusted EBITA increasing by 7.3% to EUR45.6m (2017: EUR42.5m).
EBITA margin in the period increased to 2.09% (2017: 1.98%). The results
benefited from the contribution of recent acquisitions offset in part
by a negative impact on the translation to Euro of the results of foreign
currency denominated operations, principally due to the weaker US Dollar
and Swedish Krona. On a constant currency basis revenue and adjusted
EBITA increased by 5.6% and 11.7% respectively.
Unusual weather patterns in Europe had an impact on supply and demand
dynamics in the early months of the period which affected production
and trading. On a like-for-like basis, excluding acquisitions, divestments
and currency translation, revenue was in line with prior year with
a marginal increase in volume offset by a small decrease in average
prices. Volume increases in the North America business compensated
for a marginal decrease in volumes in the European business.
The table below details a segmental breakdown of the Group's revenue
and adjusted EBITA for the six months ended 30 June 2018. Each of the
operating segments is primarily involved in the procurement, marketing
and distribution of hundreds of lines of fresh produce. Both European
divisions include businesses involved in the marketing and distribution
of healthfoods and consumer products. Segment performance is evaluated
based on revenue and adjusted EBITA.
(Unaudited) (Unaudited)
6 months to 30 June 6 months to 30 June
2018 2017
Total Adjusted Total Adjusted
revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000
Europe - Eurozone 874,218 14,906 903,194 13,772
Europe - Non-Eurozone 781,229 21,378 800,051 22,100
International 556,430 9,320 471,362 6,619
Inter-segment revenue (25,377) - (27,722) -
----------- ---------- ----------- ----------
Total revenue and adjusted EBITA 2,186,500 45,604 2,146,885 42,491
----------- ---------- ----------- ----------
Europe - Eurozone
This segment includes the Group's businesses in France, Ireland, Italy,
the Netherlands and Spain. Revenue decreased by 3.2% to EUR874m (2017:
EUR903m) with an 8.2% increase in adjusted EBITA to EUR14.9m (2017:
EUR13.8m). Overall trading conditions were challenging in certain countries
due to unusual weather patterns as highlighted earlier which had an
impact on supply and demand. This was offset by good performance in
Southern Europe. Excluding the effect of acquisitions and divestments,
revenue on a like-for-like basis was circa 2% behind prior year due
primarily to volume offset by a marginal price increase.
Europe - Non-Eurozone
This segment includes the Group's businesses in the Czech Republic,
Poland, Scandinavia and the UK. Revenue decreased by 2.4% to EUR781m
(2017: EUR800m) with adjusted EBITA decreasing by 3.3% to EUR21.4m
(2017: EUR22.1m). This was due in particular to the adverse impact
of the translation of the results of foreign currency denominated operations
into Euro due to the weakening of the Swedish Krona by 5.9% and Sterling
by 2.0% and the impact of the unusual weather patterns as highlighted
earlier. This was offset in part by the contribution of bolt-on acquisitions
in the past twelve months.
On a like-for-like basis excluding acquisitions, divestments and currency
translation, revenue was circa 2% behind prior year with a slight decrease
in volume and average prices.
International
This division includes the Group's businesses in North America and
India. Revenue increased by 18.0% to EUR556m (2017: EUR471m) with adjusted
EBITA increasing 40.8% to EUR9.3m (2017: EUR6.6m). The results benefited
from the incremental contribution of acquisitions. On 1 March 2017,
the Group acquired a further 30% of the Oppenheimer Group ('Oppy')
taking its interest to 65% and from this date it was fully consolidated
as a subsidiary. Previously the original 35% shareholding was equity
accounted for as an associate interest. In addition there was the incremental
benefit from The Fresh Connection acquisition in October 2017. This
was offset in part by the weakening of the US Dollar and Canadian Dollar
in the period by 11.5% and 7.0% respectively which negatively impacted
the results on translation to Euro. On a like-for like basis revenue
increased by circa 6% due primarily to volume increases offset by a
marginal price decrease. Volumes in certain lines like potatoes and
asparagus increased due to greater supply with corresponding price
decreases. Berry and soft fruit volumes decreased in the period compensated
by increased pricing. In the prior period, the berry and soft fruit
market was impacted by weather conditions that led to surplus volumes
and lower pricing. Oppy also incurred start-up losses in a new soft
fruit growing partnership in the prior period.
Financial Review
Revenue and Adjusted EBITA
An analysis of the factors influencing the changes in revenue and adjusted
EBITA are discussed in the operating review above.
Share of profits of joint ventures and associates
The share of after tax profits of joint ventures and associates increased
in the period to EUR4.8m (2017: EUR4.4m) primarily due to incremental
effect of acquisitions in second half of 2017. Cash dividends received
from joint ventures and associates in the period amounted to EUR5.9m
(2017: EUR6.5m).
Intangible asset amortisation
Acquisition related intangible asset amortisation in subsidiaries increased
to EUR5.3m (2017: EUR5.0m) due to additional charges relating to recent
acquisitions. The share of intangible asset amortisation within joint
ventures and associates was EUR1.3m (2017: EUR1.3m).
Exceptional items
Exceptional items in the period amounted to a net credit of EUR7.0m
(2017: net credit EUR5.1m) before tax, which relate to exceptional
foreign currency gains and net costs associated with the Dole transaction
(including interest income on the proceeds from the share placing).
A full analysis of these exceptional items is set out in Note 5 of
the accompanying financial information and has been excluded from the
calculation of the adjusted numbers.
Operating Profit
Operating profit before exceptional items increased by 15.1% in the
period to EUR38.5m (2017: EUR33.4m). Operating profit after these items
amounted to EUR44.9m (2017: EUR38.5m).
Net Financial Expense
Net financial expense (before exceptional items) in the period increased
to EUR3.2m (2017: EUR3.1m) with higher average net debt in the period
(excluding the proceeds from the share placing) due to acquisition
expenditure and debt assumed on acquisition partly offset by lower
cost of funding. Including exceptional items, net financial expense
was EUR2.6m (2017: EUR3.1m). The Group's share of the net interest
expense of joint ventures and associates in the period was EUR0.6m
(2017: EUR0.4m). Net interest cover for the period was 14.2 times based
on adjusted EBITA.
Profit Before Tax
Excluding acquisition related intangible asset amortisation charges
and costs and fair value movements on contingent consideration, the
adjusted profit before tax increased by 7.0% in the period to EUR41.8m
(2017: EUR39.0m). Statutory profit before tax after these items was
EUR42.3m (2017: EUR35.4m).
Non-Controlling Interests
The non-controlling interests' share of after tax profits in the period
was EUR7.8m (2017: EUR5.9m). Included in this was the non-controlling
interests' share of acquisition related intangible asset amortisation
charges and costs with related tax impact of EUR1.6m (2017: EUR1.3m).
Excluding these non-trading items, the non-controlling interests' share
of after tax profits increased by EUR2.2m to EUR9.4m (2017: EUR7.2m).
The increase in the period was due to the non-controlling interests'
incremental share of profits in recent acquisitions and overall good
trading conditions in certain non-wholly owned companies.
Adjusted and Basic Earnings per Share
Excluding the impact of the share placing in February 2018 adjusted
fully diluted earnings per share increased by 2.3% to 6.94 cent per
share. Including the impact of the share placing adjusted fully diluted
earnings per share decreased 11.4% in the six month period to 6.01
cent per share (2017: 6.78 cent). Management believes that adjusted
earnings per share, which excludes acquisition related intangible asset
amortisation charges and costs, fair value movements on contingent
consideration, unrealised gains or losses on derivative financial instruments,
gains and losses on foreign currency denominated intercompany borrowings,
exceptional items and the related tax on these items, provides a fairer
reflection of the underlying trading performance of the Group.
Basic earnings per share and diluted earnings per share after these
non-trading items amounted to 7.23 cent per share (2017: 6.95 cent)
and 7.20 cent per share (2017: 6.88 cent) respectively.
Note 6 of the accompanying financial information provide details of
the calculation of the respective earnings per share amounts.
Cash Flow and Net Debt
Net debt at 30 June 2018 was EUR23.5m. Excluding restricted cash of
EUR150.2m, net debt was EUR173.7m compared to EUR153.3m at 30 June
2017 and EUR113.1m at 31 December 2017. The increase compared to 31
December 2017 is due to normal seasonal working capital outflows. Net
debt relative to annualised EBITDA is 1.6 times and interest is covered
14.2 times by adjusted EBITA. Average net debt for the six months ended
June 2018 was EUR169.2m excluding the proceeds from the share placing
compared to EUR139.6m for the six months ended 30 June 2017 and EUR142.1m
for the twelve months ended 31 December 2017. In addition, the Group
has trade receivables financing at 30 June 2018 of EUR48.1m (30 June
2017: EUR48.4m and 31 December 2017: EUR39.1m).
The Group generated EUR37.8m (2017: EUR33.3m) in operating cash flows
in the period before seasonal working capital outflows of EUR61.4m
(2017: EUR45.9m). Cash outflows on routine capital expenditure, net
of disposals, were EUR11.0m (2017: EUR10.4m). Dividends received from
joint ventures and associates in the period were EUR5.9m (2017: EUR6.5m)
while dividends paid to non-controlling interests were EUR7.6m (2017:
EUR8.5m).
Cash outflows on acquisitions amounted to EUR1.7m (2017: EUR32.2m)
and there was EUR2.3m net cash (2017: EUR25.2m net debt) assumed on
acquisition. In addition to this, there were cash payments of EUR2.3m
(2017: EURNil) in respect of Dole acquisition costs. Contingent and
deferred consideration payments relating to prior period acquisitions
were EUR6.2m (2017: EUR8.8m). In the period there were cash outflows
of EUR5.0m (2017: EUR8.9m) on non-routine capital expenditure. The
Group distributed EUR9.5m (2017: EUR7.2m) in dividends to equity shareholders
in the period representing the payment of the final 2017 dividend.
Net proceeds of EUR141.0m were received from the share placing in February
2018. There was a positive movement of EUR6.5m (2017: EUR8.6m) on the
translation of foreign currency denominated debt/cash into Euro at
30 June 2018. This is primarily due to the translation gain on the
EUR141m proceeds from the share placing (net of associated costs) in
early February that were used to purchase dollars and placed on deposit
in order to hedge the investment in Dole. The strengthening of the
US Dollar from early February 2018 to the period end 30 June 2018 resulted
in a foreign exchange gain of EUR7.9m on the translation of the US
Dollar deposit to Euro.
The restricted cash of EUR150.2m relates to the proceeds of EUR141m
from the share placing (net of associated costs) that were used to
purchase dollars. The EUR150.2m is the retranslated amount of the US
Dollar deposit including accrued interest income. This deposit was
held in escrow at 30 June 2018 pending completion of the Dole transaction.
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year-ended
to 30 June to 30 June 31 Dec 2017
2018 2017
EUR'm EUR'm EUR'm
Adjusted EBITDA 56.7 52.8 104.4
Deduct adjusted EBITDA of joint ventures
and associates (10.1) (9.2) (22.6)
Net financial expense and tax paid (8.8) (10.2) (22.6)
Other 0.0 (0.1) (3.1)
------------- ------------- --------------
Operating cash flows before working capital
movements 37.8 33.3 56.1
Working capital movements (61.4) (45.9) (2.3)
------------- ------------- --------------
Operating cash flows (23.6) (12.6) 53.8
Routine capital expenditure net of routine
disposal proceeds (11.0) (10.4) (18.9)
Dividends received from joint ventures
and associates 5.9 6.5 8.2
Dividends paid to non-controlling interests (7.6) (8.5) (8.8)
------------- ------------- --------------
Free cash flow (36.3) (25.0) 34.3
Cashflow from exceptional items 0.8 (1.7) 0.5
Acquisition payments, net (1) (1.7) (32.2) (44.7)
Dole acquisition costs (2.3) - -
Net cash/(debt) assumed on acquisition
of subsidiaries 2.3 (25.2) (23.9)
Subsidiary now a joint venture - (6.7) (6.7)
Contingent and deferred consideration
payments (6.2) (8.8) (9.3)
Disposal of trading assets - - 2.1
Non-routine capital expenditure/property
additions (5.0) (8.9) (22.6)
Dividends paid to equity shareholders (9.5) (7.2) (10.1)
Proceeds from issue of share capital 141.0 - -
- share placing
Proceeds from issue of share capital
- other 0.2 2.1 2.6
Other (0.2) 0.1 (0.3)
------------- ------------- --------------
Total net debt movement in period 83.1 (113.5) (78.1)
Net debt at beginning of period (113.1) (48.4) (48.4)
Foreign currency translation 6.5 8.6 13.4
------------- ------------- --------------
Net debt at end of period (23.5) (153.3) (113.1)
============= ============= ==============
Less restricted cash (150.2) - -
------------- ------------- --------------
Net debt at end of period, excluding
restricted cash (173.7) (153.3) (113.1)
============= ============= ==============
(1) Includes payments in period in respect of subsidiaries, non-controlling interests, joint ventures and associates and is net of contributions from non-controlling interests and proceeds on disposal of shares to non-controlling interests.
Defined Benefit Pension Obligations
The net liability of the Group's defined benefit pension schemes (net
of deferred tax) decreased to EUR7.4m at 30 June 2018 (31 December
2017: EUR13.8m). The decrease in the net liability during the period
was primarily due to the increase in discount rates for the Irish and
UK schemes which results in a decrease in the net present value of
the schemes' obligations. Other post-employment benefit obligations
decreased to EUR4.8m at 30 June 2018 (31 December 2017: EUR5.3m). Further
details are outlined in Note 7 of the accompanying financial information.
Shareholders' Equity
Shareholders' equity has increased by EUR162.8m in the six month period
to EUR422.6m at 30 June 2018 primarily due to the EUR141.0m increase
from the share placing (less associated costs). Profit after tax of
EUR27.1m attributable to equity shareholders and remeasurement gains
of EUR6.5m (net of deferred tax) on post-employment benefit schemes,
were offset by a currency translation loss of EUR4.5m on the retranslation
of the net assets of foreign currency denominated operations to Euro
and the payment of EUR9.5m in dividends to equity shareholders of the
Company.
Development Activity
The Group made a number of bolt-on acquisitions during the six months
ended 30 June 2018 with committed investment of EUR2.8m including
EUR0.8m of deferred and contingent consideration payable on the achievement
of future profit targets.
In January 2018, the Group completed investments in two new state-of
-the-art facilities. The development of the Danish central distribution
facility south of Copenhagen was completed with 6 different temperature
zones, 26 banana ripening rooms, 4 stone fruit ripening rooms and
a dedicated packing area to prepare product to meet the specifications
required by our customers. Also, in January 2018 the Group's Exotic
business in the Netherlands specialising in ripening of avocados and
other stone fruit moved into a new facility. This ongoing investment
demonstrates the Group's commitment to investing in facilities to
deliver bespoke services and products to meet our customers' needs,
adding value and leveraging on our collective strengths to generate
efficiencies.
Investment in Dole Food Company and Share Placing
Investment in Dole Food Company ('The Transaction')
On 1 February 2018, the Group announced that it had entered into a
binding agreement to acquire a 45% stake in Dole Food Company ('Dole')
from Mr. David H. Murdock for a cash consideration of $300 million
(the 'First Tranche'). The acquisition of the First Tranche was approved
by the Board of Directors of Total Produce and was initially subject
to anti-trust review in a limited number of jurisdictions.
On 30 July 2018 the European Commission (the 'EC') approved the acquisition
of the First Tranche. The EC approval was conditional on the divestment
of Saba Fresh Cut AB (the Swedish bagged salad business owned by Dole).
This limited disposal has no material impact on the strategic rationale
or the commercial value of the transaction. As all other transaction
conditions precedent were satisfied at this date, the acquisition
of the First Tranche completed on 31 July 2018.
In addition, and at any time after closing of the First Tranche, the
Group has the right, but not the obligation, to acquire (in any one
or more tranches of 1%) up to an additional 6% of Dole common stock
(the 'Second Tranche'). The Group has no present intention to exercise
its option to acquire the Second Tranche. In the event the Group exercises
the right to acquire the additional 6% the total consideration for
the 51% stake shall be $312 million.
Following the second anniversary of the closing of the First Tranche,
the Group has the right, but not the obligation, to acquire the balance
of Dole common stock (the 'Third Tranche'), whereby the consideration
for the Third Tranche is to be calculated based on 9 times the three
year average historical Dole Adjusted EBITDA less net debt. However,
in no event shall the Third Tranche purchase price be less than $250
million or exceed $450 million (such cap subject to increase after
six years). The Third Tranche consideration is payable in cash or,
if the parties mutually agree, Total Produce stock.
From the fifth anniversary of completion of the acquisition of the
First Tranche, in the event the Group has not exercised its right
to acquire 100% of Dole, Mr. David H. Murdock is permitted to cause
a process to market and sell 100% of Dole common stock.
On completion of the acquisition of the First Tranche on 31 July 2018,
the Group and Mr. David H. Murdock have balanced governance rights
with respect to Dole. The Board of Directors of Dole will comprise
six members, three of which are appointed by Total Produce and three
by Mr. David H. Murdock. Mr. David H. Murdock will remain Chairman
of Dole and Carl McCann will be appointed Vice Chairman. Major decisions
will require consent of at least one Board Member appointed by each
of Total Produce and Mr. David H. Murdock.
The Group secured funding for the acquisition of the First Tranche
with a balance of equity and bank financing. As detailed below, the
Group raised c.$180 million (c.$175m net of costs) from a share placing
on 1 February 2018 with the balance funded through committed bank
financing. The conservative funding strategy in relation to the acquisition
of the First Tranche allows the Group to retain a strong balance sheet
post-closing for strategic and financial flexibility going forward.
Update on Dole Post Completion of Acquisition of The First Tranche
The investment in Dole and its financial contribution will be treated
as a joint venture and accounted for under the equity method in accordance
with IFRS in the consolidated Group accounts following completion
of the acquisition of the First Tranche on 31 July 2018 and until
an exercise of the Third Tranche.
Total Produce will therefore equity account for its 45% share of the
results of Dole with effect from 1 August 2018. The overall business
is seasonal with the greater share of EBITDA in the first half of
the financial year. The 2019 financial year will therefore be the
first full year reflecting this transaction.
Share Placing
On 1 February 2018 a total of 63 million new ordinary shares were
placed (the 'Placing Shares') in a placing transaction at a price
of EUR2.30 per Placing Share, raising gross proceeds of EUR145 million
or c.$180 million (before expenses) to finance the Dole transaction.
Net of expenses the proceeds were EUR141 million (c. US$ 175 million).
The Placing Shares represented approximately 19% of the Company's
issued ordinary share capital (excluding treasury shares) prior to
the placing. The new issued shares were admitted to the Irish Stock
Exchange and the London Stock Exchange on the ESM and AIM respectively
on 5 February 2018. Following the admission of the new shares, the
total number of ordinary shares in issue was 387,829,462 (excluding
22,000,000 treasury shares).
Dividends
The Board has declared an interim dividend of 0.9129 (2017: 0.8906)
cent per share, which represents a 2.5% increase on the comparative
period. The dividend will be paid on 12 October 2018 to shareholders
on the register at 14 September 2018 subject to dividend withholding
tax. In accordance with company law and IFRS, this dividend has not
been provided for in the balance sheet at 30 June 2018.
Post Balance Sheet Events
As noted in detail above, the acquisition of the 45% interest in Dole
Food Company ('Dole') from Mr. David H. Murdock for a cash consideration
of $300 million completed on 31 July 2018.
In July 2018 a subsidiary of the Group disposed of an interest in
a farming entity for consideration which will be realised over a period
of three years and may vary depending on certain circumstances. The
exceptional gain, estimated in excess of EUR15m before tax was recorded
post period end.
Going Concern
The Directors are satisfied that the Group have adequate resources
to continue in operational existence for the foreseeable future. Accordingly,
they have adopted the going concern basis in preparing the financial
statements.
Summary and Outlook
Total Produce has delivered continued first-half growth in 2018. The
Group's first-half adjusted EBITDA increased by 7.4%, and its adjusted
EBITA increased by 7.3%. The Group continues to target full year growth
excluding the impact of the Dole transaction and the related share
placing.
As announced on 1 February 2018, the Group entered into an agreement
to acquire a 45% stake in Dole Food Company, one of the largest fresh
produce companies in the world, for $300m along with options to further
increase the Group's stake. The transaction completed on 31 July 2018
having received regulatory approvals.
On 1 February 2018, 63 million ordinary shares were issued raising
$180m to finance the Dole transaction. The 2019 financial year will
be the first full year reflecting the scale of this transformative
transaction. The conclusion of the Dole transaction represents a very
significant development in the Group's successful expansion strategy.
An interim dividend of 0.9129 cent per share will be paid on 12 October
2018 representing a 2.5% increase on last year.
Carl McCann, Chairman
On behalf of the Board
30 August 2018
Total Produce plc
Condensed Group Income Statement
for the half-year ended 30 June 2018
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
6 months 6 months 6 months 6 months 6 months 6 months (Audited) (Audited) (Audited)
to to to to to to Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 31 Dec 31 Dec 31 Dec
2018 2018 2018 2017 2017 2017 2017 2017 2017
Pre- Exceptional Total Pre- Exceptional Total Pre- Exceptional Total
Exceptional items Exceptional items Exceptional items
(Note 5) (Note 5) (Note 5)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue,
including Group
share
of joint
ventures and
associates 2,186,500 - 2,186,500 2,146,885 - 2,146,885 4,286,231 - 4,286,231
-
Group revenue 1,857,024 - 1,857,024 1,823,461 - 1,823,461 3,674,294 - 3,674,294
Cost of sales (1,606,397) - (1,606,397) (1,578,359) - (1,578,359) (3,182,507) - (3,182,507)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Gross profit 250,627 - 250,627 245,102 - 245,102 491,787 - 491,787
Operating
expenses (211,659) 6,386 (205,273) (211,061) 5,063 (205,998) (423,875) 8,610 (415,265)
Share of profit
of joint
ventures and
associates 4,782 - 4,782 4,405 - 4,405 12,209 - 12,209
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Operating
profit before
acquisition
related
intangible
asset
amortisation 43,750 6,386 50,136 38,446 5,063 43,509 80,121 8,610 88,731
Acquisition
related
intangible
asset
amortisation (5,251) - (5,251) (4,998) - (4,998) (10,499) - (10,499)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Operating
profit after
acquisition
related
intangible
asset
amortisation 38,499 6,386 44,885 33,448 5,063 38,511 69,622 8,610 78,232
Net financial
expense (3,202) 623 (2,579) (3,066) - (3,066) (5,754) - (5,754)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Profit before
tax 35,297 7,009 42,306 30,382 5,063 35,445 63,868 8,610 72,478
Income tax
expense (7,350) (18) (7,368) (6,957) (214) (7,171) (9,613) (1,358) (10,971)
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Profit for the
period 27,947 6,991 34,938 23,425 4,849 28,274 54,255 7,252 61,507
============ ============ ============ =============== ============ =============== ============ ============ ============
Attributable to:
Equity holders
of the parent 27,142 22,382 47,826
Non-controlling
interests 7,796 5,892 13,681
------------ --------------- ------------
34,938 28,274 61,507
============ =============== ============
Earnings per
ordinary share
Basic 7.23 6.95 14.80
Fully diluted 7.20 6.88 14.68
Adjusted fully
diluted 6.01 6.78 13.48
------------ ------------ ------------ --------------- ------------ --------------- ------------ ------------ ------------
Total Produce plc
Condensed Group Statement of Comprehensive Income
for the half-year ended 30 June 2018
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2017
2018 2017
EUR'000 EUR'000 EUR'000
Profit for the period 34,938 28,274 61,507
------------- ------------- ------------------
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Foreign currency translation effects:
* foreign currency net investments - subsidiaries (3,921) (7,366) (13,537)
* foreign currency net investments - joint ventures and
associates (139) (2,201) (3,866)
* foreign currency borrowings designated as net
investment hedges 53 6,521 10,892
* foreign currency recycled to income statement on
associate becoming a subsidiary - (1,137) (1,137)
Effective portion of changes in fair
value of cash flow hedges, net 336 (119) (492)
Changes in fair value of cost of hedging, 26 -
net -
Deferred tax on items above (86) 39 124
------------- ------------- ------------------
(3,731) (4,263) (8,016)
------------- ------------- ------------------
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement gains on post-employment
defined benefit schemes 7,411 8,381 5,708
Remeasurement gains on other post-employment
benefit schemes 561 563 1,604
Revaluation gains on property, plant
and equipment, net - - 5,356
Deferred tax on items above (1,217) (1,662) (3,310)
Share of joint ventures and associates
remeasurement gains on post-employment
benefit schemes - 709 711
6,755 7,991 10,069
------------- ------------- ------------------
Other comprehensive income for the period 3,024 3,728 2,053
============= ============= ==================
Total comprehensive income for the period 37,962 32,002 63,560
============= ============= ==================
Attributable to:
Equity holders of the parent 29,392 28,781 54,193
Non-controlling interests 8,570 3,221 9,367
------------- ------------- ------------------
37,962 32,002 63,560
============= ============= ==================
Total Produce plc
Condensed Group Balance Sheet
as at 30 June 2018
(Unaudited) (Unaudited) (Audited)
30 June 2018 30 June 2017 31 Dec 2017
EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Property, plant and equipment 169,836 151,939 167,397
Investment property 7,228 8,375 7,203
Goodwill and intangible assets 276,275 292,028 281,081
Investments in joint ventures and
associates 104,342 87,155 106,421
Other financial assets 712 625 719
Other receivables 11,660 9,508 11,063
Employee benefit assets - 124 -
Deferred tax assets 11,965 16,813 13,759
Total non-current assets 582,018 566,567 587,643
-------------- -------------- -------------------
Current assets
Inventories 102,569 103,638 89,665
Biological assets 3,036 4,540 4,578
Trade and other receivables 493,614 468,157 365,334
Corporation tax receivable 3,702 1,634 4,375
Derivative financial instruments 423 173 6
Bank deposits - 3,700 -
Cash and cash equivalents 231,617 93,660 100,247
-------------- -------------- -------------------
Total current assets 834,961 675,502 564,205
-------------- -------------- -------------------
Total assets 1,416,979 1,242,069 1,151,848
============== ============== ===================
Equity
Share capital 4,101 3,460 3,468
Share premium 295,240 150,247 150,763
Other reserves (130,674) (132,431) (128,054)
Retained earnings 253,974 213,244 233,632
-------------- -------------- -------------------
Total equity attributable to equity
holders of the parent 422,641 234,520 259,809
Non-controlling interests 81,136 74,391 79,774
-------------- -------------- -------------------
Total equity 503,777 308,911 339,583
-------------- -------------- -------------------
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 162,498 200,236 165,649
Deferred government grants 360 274 386
Other payables 816 1,397 568
Contingent consideration 13,545 26,791 26,128
Put option liability 38,604 41,958 38,961
Corporation tax payable 6,286 5,836 6,286
Deferred tax liabilities 27,645 33,398 29,415
Employee benefit liabilities 13,842 31,757 22,000
Total non-current liabilities 263,596 341,647 289,393
-------------- -------------- -------------------
Current liabilities
Interest-bearing loans and borrowings 92,665 50,449 47,724
Trade and other payables 538,697 526,398 463,605
Contingent consideration 13,543 9,902 8,337
Derivative financial instruments 229 617 719
Corporation tax payable 4,472 4,145 2,487
-------------- -------------- -------------------
Total current liabilities 649,606 591,511 522,872
-------------- -------------- -------------------
Total liabilities 913,202 933,158 812,265
-------------- -------------- -------------------
Total liabilities and equity 1,416,979 1,242,069 1,151,848
============== ============== ===================
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year Attributable to equity holders of the parent
ended 30 June
2018
-------------- ------------- ----------
Unde-
nominated Own Currency Other Non-
For the half-year Share Share capital De-merger shares translation Reval-uation equity Retained controlling Total
ended 30 June capital premium EUR'000 Reserve reserve reserve reserve reserves* earnings Total interests equity
2018 (Unaudited) EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1 January
2018 as presented
in balance sheet 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (10,960) 233,632 259,809 79,774 339,583
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - - (26,788) -- (26,788) 26,788 - - - - - - -
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
As at 1 January
2018 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (37,748) 233,632 233,021 106,562 339,583
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Comprehensive
income
Profit for the
period - - - - - - - - 27,142 27,142 7,796 34,938
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Other
comprehensive
income:
Items that may be
reclassified
subsequently
to profit or
loss:
Foreign currency
translation
effects,
net - - - - - (4,551) - 60 - (4,491) 484 (4,007)
Effective portion
of cash flow
hedges,
net - - - - - - - 250 - 250 86 336
Changes in fair
value of cost of
hedging, net - - - - - - - 31 - 31 (5) 26
Deferred tax on
items above - - - - - - - (78) - (78) (8) (86)
Items that will
not be
subsequently
reclassified to
profit or loss:
Remeasurement
gains defined
benefit
pension schemes - - - - - - - - 7,387 7,387 24 7,411
Remeasurement
gains on other
post-employment
benefits - - - - - - - - 365 365 196 561
Deferred tax on
items above - - - - - - - - (1,214) (1,214) (3) (1,217)
Total other
comprehensive
income - - - - - (4,551) - 263 6,538 2,250 774 3,024
-------------- -------- ---------------- ---------- -------- ------------ ------------- ----------
Total
comprehensive
income - - - - - (4,551) - 263 33,680 29,392 8,570 37,962
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Transactions with
equity holders
of the parent
New shares issued 633 144,477 - - - - - (66) (3,821) 141,223 - 141,223
Non controlling
interest arising
on acquisition of
subsidiary - - - - - - - - - - 758 758
Fair value
movements on put
option
liability - - - - - - - 297 - 297 - 297
Joint venture
becoming a
subsidiary - - - - - - - - - - 157 157
Termination of
subsidiary with
NCI - - - - - - - - - - (57) (57)
Contribution by
non-controlling
interest - - - - - - - - - - 300 300
Dividends paid - - - - - - - - (9,517) (9,517) (7,217) (16,734)
Share-based
payment
transactions - - - - - - - 288 - 288 - 288
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Total
transactions
with equity
holders of the
parent 633 144,477 - - - - - 519 (13,338) 132,291 (6,059) 126,232
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Balance as at 30
June 2018 4,101 295,240 140 (122,521) (8,580) (18,719) 28,035 (36,966) 253,974 394,704 109,073 503,777
============== ======== ================ ========== ======== ============ ============= ========== ========= ========= ============= ==========
Transfer of NCI
subject to put
option
for presentation
purposes - - - - - - - 27,937 - 27,937 (27,937) -
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Balance as at 30
June 2018 4,101 295,240 140 (122,521) (8,580) (18,719) 28,035 (9,029) 253,974 422,641 81,136 503,777
============== ======== ================ ========== ======== ============ ============= ========== ========= ========= ============= ==========
* Other equity reserves comprise the cash flow hedge reserve, the cost of hedging reserve, the share option
reserve and the put option reserve.
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2018 (Continued)
Attributable to equity holders of the parent
------------- ----------
Unde-nominated
capital Own Currency Other Non-
For the half-year Share Share EUR'000 De-merger shares translation Reval-uation equity Retained controlling Total
ended 30 June capital premium Reserve reserve reserve reserve reserves* earnings Total interests equity
2017 (Unaudited) EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------- -------- ------------- ----------
As at 1 January
2017 as presented
in balance sheet 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 841 188,396 226,322 72,600 298,922
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - - (20,259) - (20,259) 20,259 - -
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
As at 1 January
2017 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 (19,418) 188,396 206,063 92,859 298,922
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Comprehensive
income
Profit for the
period - - - - - - - - 22,382 22,382 5,892 28,274
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Other
comprehensive
income:
Items that may be
reclassified
subsequently
to profit or loss:
Foreign currency
translation
effects,
net - - - - - (4,038) - 2,738 - (1,300) (2,883) (4,183)
Effective portion
of cash flow
hedges,
net - - - - - - - (53) - (53) (66) (119)
Deferred tax on
items above - - - - - - - 18 - 18 21 39
Items that will
not be
reclassified
subsequently to
profit or loss:
Remeasurement
gains on defined
benefit
pension schemes - - - - - - - - 8,312 8,312 69 8,381
Remeasurement
gains on other
post-employment
benefits - - - - - - - - 366 366 197 563
Deferred tax on
items above - - - - - - - - (1,653) (1,653) (9) (1,662)
Share of joint
ventures and
associates
remeasurement
gains on defined
benefit
pension schemes - - - - - - - - 709 709 - 709
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Total other
comprehensive
income - - - - - (4,038) - 2,703 7,734 6,399 (2,671) 3,728
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Total
comprehensive
income - - - - - (4,038) - 2,703 30,116 28,781 3,221 32,002
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Transactions with
equity holders
of the parent
New shares issued 31 2,043 - - - - - (773) 773 2,074 - 2,074
Non-controlling
interest arising
on acquisition of
subsidiary - - - - - - - - - - 10,783 10,783
Recognition of
put option
liability
on acquisition - - - - - - - (25,072) - (25,072) - (25,072)
Fair value
movements on put
option
liability - - - - - - - 1,591 - 1,591 - 1,591
Subsidiary
becoming a joint
venture - - - - - - - - - - (6,668) (6,668)
Disposal of
shareholding by
NCI - - - - - - - - 1,136 1,136 7,495 8,631
Capital
contribution of
NCI - - - - - - - - - - 1,996 1,996
Dividends - - - - - - - - (7,177) (7,177) (8,447) (15,624)
Share-based
payment
transactions - - - - - - - 276 - 276 - 276
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Total transactions
with equity
holders 31 2,043 - - - - (23,978) (5,268) (27,172) 5,159 (22,013)
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Balance as at 30
June 2017 3,460 150,247 140 (122,521) (8,580) (11,713) 24,088 (40,693) 213,244 207,672 101,239 308,911
-------------- -------- ---------------- ---------- -------- ------------ ------------- ---------- --------- --------- ------------- ----------
Transfer of NCI
subject to put
option
for presentation
purposes - - - - - - - 26,848 - 26,848 (26,848) -
Balance as at 30
June 2017 3,460 150,247 140 (122,521) (8,580) (11,713) 24,088 (13,845) 213,244 234,520 74,391 308,911
============== ======== ================ ========== ======== ============ ============= ========== ========= ========= ============= ==========
* Other equity reserves comprise the cash flow hedge reserve, the share option reserve and the put option reserve.
Total Produce plc
Condensed Group Statement of Changes in Equity
for the half-year ended 30 June 2018 (Continued)
Attributable to equity holders of the parent
----------------- ---------
Un-
denom Own Currency Reval-uation Other Non-controlling
Share Share inated De-merger shares translation reserve equity Retained interests Total
capital premium capital reserve reserve reserve EUR'000 Reserves* earnings Total EUR'000 equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'00 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1
January 2017 as
presented
in the balance
sheet 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 841 188,396 226,322 72,600 298,922
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
Adjust for NCI
subject to put
option
transferred for
presentation
purposes - - - - - - - (20,259) - (20,259) 20,259 -
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
As at 1 January
2017 3,429 148,204 140 (122,521) (8,580) (7,675) 24,088 (19,418) 188,396 206,063 92,859 298,922
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
Comprehensive
income
Profit for the
year - - - - - - - - 47,826 47.826 13,681 61,507
Other
comprehensive
income:
Items that may
be reclassified
subsequently to
profit or loss:
Foreign currency
translation
effects,
net - - - - - (6,493) - 3,800 - (2,693) (4,955) (7,648)
Effective
portion of cash
flow
hedges, net - - - - - - - (342) - (342) (150) (492)
Deferred tax on
items above - - - - - - - 86 - 86 38 124
Items that will
not be
reclassified
subsequently to
profit or loss:
Revaluation
gains on
property,
plant and
equipment, net - - - - - - 5,061 - - 5,061 295 5,356
Remeasurement
gains on
defined
benefit pension
schemes - - - - - - - - 5,686 5,686 22 5,708
Remeasurement
gains on other
post-employment
benefits - - - - - - - - 1,043 1,043 561 1,604
Deferred tax on
item above - - - - - - (1,114) - (2,071) (3,185) (125) (3,310)
Share of joint
ventures and
associates
remeasurement
gains on
post-employment
benefit schemes - - - - - - - - 711 711 - 711
Total other
comprehensive
income - - - - - (6,493) 3,947 3,544 5,369 6,367 (4,314) 2,053
--------- --------- -------- ----------- --------- ------------- -------------- -----------
Total
comprehensive
income - - - - - (6,493) 3,947 3,544 53,195 54,193 9,367 63,560
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
Transactions
with equity
holders
New shares
issued 39 2,559 - - - - - (924) 924 2,598 - 2,598
Non controlling
interest
arising
on acquisition
of a subsidiary - - - - - - - - - - 10,784 10,784
Recognition of
put option
liability
on acquisition - - - - - - - (25,072) - (25,072) - (25,072)
Fair value
movements on
put option
liability - - - - - - - 3,526 - 3,526 - 3,526
Disposal of
shareholding to
NCI - - - - - - - - 1,182 1,182 7,479 8,661
Contribution by
NCI - - - - - - - - - - 2,473 2,473
Subsidiary
becoming a
joint venture - - - - - - - - - - (6,699) (6,699)
Dividends paid - - - - - - - - (10,065) (10,065) (9,701) (19,766)
Share-based
payment
transactions - - - - - - - 596 - 596 - 596
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
Total
transactions
with equity
holders 39 2,559 - - - - (21,874) (7,959) (27,235) 4,336 (22,899)
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
As at 31
December 2017 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (37,748) 233,632 233,021 106,562 339,583
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
Transfer of NCI
subject to put
for
presentation
purposes - - - - - - - 26,788 - 26,788 (26,788) -
--------- --------- -------- ----------- --------- ------------- -------------- ----------- ---------- --------- ----------------- ---------
Balance as at 31
December 2017 3,468 150,763 140 (122,521) (8,580) (14,168) 28,035 (10,960) 233,632 259,809 79,774 339,583
========= ========= ======== =========== ========= ============= ============== =========== ========== ========= ================= =========
*Other equity reserves comprise the cash flow hedge reserve, the share option reserve and the put option reserve.
Total Produce plc
Condensed Group Statement of Cash Flows
for the half-year ended 30 June 2018
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2018 30 June 2017 31 Dec 2017
EUR'000 EUR'000 EUR'000
Net cash flows from operating activities
(Note 11) (23,623) (14,300) 46,563
-------------- -------------- -------------
Investing activities
Acquisition of subsidiaries (1,899) (33,117) (36,230)
Cash/(overdrafts) assumed on acquisition
of subsidiaries, net 2,334 (556) 758
Acquisition of, and investment in, joint
ventures and associates (77) (8,133) (21,062)
Dole acquisition costs (2,294) - -
Payments of contingent consideration (6,234) (8,830) (9,269)
Acquisition of other financial assets (5) - (98)
Proceeds from disposal of joint ventures
and associates 22 - 400
Proceeds from disposal of trading assets - - 2,138
Cash derecognised on subsidiary becoming
a joint venture - (6,660) (6,689)
Net debt derecognised on disposal of
a subsidiary - - 2,304
Disposal of investment in subsidiary
to non-controlling interests - 8,631 8,661
Acquisition of property, plant and equipment (14,179) (18,538) (39,496)
Acquisition of intangible assets - computer
software (2,000) (834) (2,771)
Acquisition of intangible assets - brands (20) (481) (462)
Development expenditure capitalised (93) (158) (204)
Proceeds from disposal of property,
plant and equipment -routine 229 61 807
Proceeds from exceptional items 849 - 7,770
Dividends received from joint ventures
and associates 5,903 6,452 8,243
Government grants received - - 163
Net cash flows from investing activities (17,464) (62,163) (85,037)
-------------- -------------- -------------
Financing activities
Drawdown of borrowings 84,090 152,825 251,820
Repayment of borrowings (71,036) (128,937) (226,487)
(Increase)/decrease in bank deposits - (1,200) 2,500
Proceeds from the issue of share placing 141,013 - -
Proceeds from the issue of share capital 210 2,074 2,598
Capital element of finance lease repayments (331) (488) (869)
Capital contribution by non-controlling
interests 300 936 936
Dividends paid to non-controlling interests (7,585) (8,447) (8,843)
Dividends paid to equity holders of
the parent (9,517) (7,177) (10,065)
Net cash flows from financing activities 137,144 9,586 11,590
-------------- -------------- -------------
Net increase/(decrease) in cash, cash
equivalents and overdrafts 96,057 (66,877) (26,884)
Cash, cash equivalents and overdrafts
at start of period 88,979 117,087 117,087
Net foreign exchange difference 5,978 (438) (1,224)
-------------- -------------- -------------
Cash, cash equivalents and overdrafts
at end of
the period (Note 12) 191,014 49,772 88,979
-------------- -------------- -------------
Less restricted cash * (150,185) - -
-------------- -------------- -------------
Cash, cash equivalents and overdrafts,
excluding restricted cash (Note 12) 40,829 49,772 88,979
============== ============== =============
Condensed Summary Group Reconciliation of Net Debt
for the half-year ended 30 June 2018
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2018 30 June 31 Dec 2017
2017
EUR'000 EUR'000 EUR'000
Net increase/(decrease) in cash, cash
equivalents and overdrafts 96,057 (66,877) (26,884)
Drawdown of borrowings (84,090) (152,825) (251,820)
Repayment of borrowings 71,036 128,937 226,487
Increase/(decrease) in bank deposits - 1,200 (2,500)
Interest-bearing loans and borrowings
arising on acquisition - (24,478) (24,492)
Capital element of finance lease repayments 331 488 869
Finance leases arising on acquisition - (149) (149)
Other movements on finance leases (253) 161 (45)
Finance leases derecognised on disposal
of subsidiary - - 356
Foreign exchange movement 6,499 8,584 13,418
-------------- ------------ -------------
Movement in net debt 89,580 (104,959) (64,760)
Net debt at beginning of the period (113,126) (48,366) (48,366)
-------------- ------------ -------------
Net debt at end of the period (Note 12) (23,546) (153,325) (113,126)
-------------- ------------ -------------
Less restricted cash * (150,185) - -
-------------- ------------ -------------
Net debt at end of the period, excluding
restricted cash (Note 12) (173,731) (153,325) (113,126)`
============== ============ =============
*The restricted cash of EUR150.2m relating to the proceeds of EUR141m from the share placing (net of associated costs) that were used to purchase dollars. The EUR150.2m is the retranslated amount of the US Dollar deposit including accrued interest income. This deposit was held in escrow at 30 June 2018 pending completion of the Dole transaction.
Total Produce plc
Notes to the Interim Results for the half-year ended 30 June 2018
1. Basis of preparation
The condensed consolidated interim financial statements of Total
Produce plc as at, and for the six months ended 30 June 2018, have
been prepared in accordance with IAS 34 Interim Financial Reporting,
as adopted by the EU. The accounting policies and methods of computation
adopted in the preparation of the financial information are consistent
with those set out in the Group's consolidated financial statements
for the year ended 31 December 2017, with the exception of those
disclosed below, which were prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
The interim financial information for both the six months ended
30 June 2018 and the comparative six months ended 30 June 2017 is
unaudited. The financial information for the year ended 31 December
2017 represents an abbreviated version of the Group's statutory
financial statements for that year. Those statutory financial statements
contained an unqualified audit report and have been filed with the
Registrar of Companies.
The preparation of interim financial statements requires management
to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements,
the significant judgments made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those applied to the consolidated financial statements
as at and for the year ended 31 December 2017.
Changes in accounting policy
Except as described below, the accounting policies applied in these
interim financial statements are the same as those applied in the
Group's consolidated financial statements as at 31 December 2017.
The changes in accounting policy are also expected to be reflected
in the Group's consolidated financial statements as at 31 December
2018.
The Group has initially adopted the following standards with effect
from 1 January 2018:
* IFRS 15 Revenue from Contracts with Customers; and
* IFRS 9 Financial Instruments
A number of new standards are also effective from 1 January 2018
but they have not had a material impact on the Group's consolidated
financial statements.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers replaces IAS 18 Revenue
and IAS 11 Construction Contracts and associated interpretations.
The standard applies a single control model to be applied to all
contracts with customers. Under IFRS 15 revenue is recognised when
control of the goods has been transferred to the buyer at an amount
that reflects the consideration that the Group expects to receive
for the transfer of those goods.
The Group has considered the impact on its consolidated financial
statements resulting from the application of IFRS 15. The Group
recognises revenue at a point in time when control of the goods
has transferred to the customer, which can either be on shipping
or delivery depending on the terms of trade with the customer. The
Group measures revenue recognised as the consideration that it expects
to receive from its customers for the sale of these goods. The Group
assessed all of its material contracts with suppliers and customers
under the revised IFRS 15 principal versus agent considerations
and concluded that the accounting for all material arrangements
continued to be appropriate. Following our review it was concluded
that the impact of adopting IFRS 15 on the consolidated financial
statements was not material for Total Produce.
The Group has adopted the modified retrospective approach on transition
to IFRS 15, there has been no adjustment to retained earnings at
1 January 2018 and 2017 comparatives have not been restated.
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments:
Recognition and Measurement. The standard includes requirements
for the recognition, measurement and derecognition of financial
instruments, introduces new hedge accounting rules and a new expected
credit loss model for calculating impairment of financial assets.
The Group's findings following the evaluation of the effect of the
adoption of IFRS 9 are as follows:
* The vast majority of the Group's financial assets are
held as trade receivables or cash which will continue
to be accounted for at amortised costs. The Group's
other financial assets, which were previously
accounted for as Available For Sale (AFS), will be
measured at Fair Value through Profit or Loss (FVPL)
under IFRS 9. Accordingly, the classification and
measurement changes of IFRS 9 have not had a material
impact on the Group's consolidated financial
statements.
* The new hedging requirements of IFRS 9 have aligned
hedge accounting more closely to the Group's risk
management policies and made more hedging
relationships eligible for hedge accounting. All of
the Group's hedging relationships continued to be
appropriate under IFRS 9. The only change is the cost
of hedging which can now be accounted for through
other comprehensive income and is only recognised in
the income statement at the same time as the hedged
item affects profit or loss. Accounting for the costs
of hedging, which is not material, has been applied
prospectively, without restating comparatives.
* IFRS 9 introduces a forward-looking expected credit
losses model rather than the incurred loss model of
IAS 39. Given historic loss rates and the significant
portion of trade and other receivables that are
within terms, this change did not have a material
impact on the Group consolidated financial
statements.
The impact of applying IFRS 9 was not material for Total Produce
and there was no adjustment to retained earnings on application
at 1 January 2018. In line with the transition guidance in IFRS
9 Total Produce has not restated the 2017 comparatives.
New standards not yet effective
IFRS 16 Leases is effective from 1 January 2019 and replaces IAS
17 Leases. It introduces a single lessee accounting model to be
adopted and accordingly the majority of all lease agreements will
now result in the recognition of a right-of-use asset and a lease
liability on the balance sheet. The income statement charge in relation
to all leases will now comprise a depreciation element relating
to the right-of-use asset and also an interest expense relating
to the lease liability.
The Group has performed an initial assessment of the impact of the
adoption of IFRS 16 throughout the Group. The Group plans to apply
the modified retrospective approach to IFRS 16 and to avail of exemptions
with regards to low value and short term leases. Details of the
non-cancellable operating leases held by the Group at 31 December
2017 have been included in Note 28 of the 2017 Annual Report.
Whilst the Group has performed an initial assessment of the impact
of applying IFRS 16, the actual impact is dependent on a number
of future conditions such as the Group's lease portfolio, discount
rates and expectations of lease term at the date of initial application
on 1 January 2019. The Group is continuing to assess the impact
of applying IFRS 16.
2. Translation of foreign currencies
The reporting currency of the Group is Euro. The exchange rates
used for the translation of the results and balance sheets into
Euro are as follows:
Average rate Closing rate
6 months to
30 June 30 June % change 30 June 31 Dec % change
2018 2017 2018 2017
Brazilian Real 4.2036 3.4393 (22.2%) 4.4876 3.9729 (13.0%)
Canadian Dollar 1.5450 1.4444 (7.0%) 1.5347 1.5037 (2.1%)
Czech Koruna 25.5830 26.6938 4.2% 26.0200 25.5350 (1.9%)
Danish Kroner 7.4480 7.4372 (0.1%) 7.4508 7.4454 (0.1%)
Indian Rupee 79.4801 74.0575 (7.3%) 79.9474 76.4059 (4.6%)
Polish Zloty 4.2195 4.3057 2.0% 4.3712 4.1766 (4.7%)
Pound Sterling 0.8787 0.8611 (2.0%) 0.8846 0.8879 0.4%
Swedish Krona 10.1669 9.6027 (5.9%) 10.4522 9.8386 (6.2%)
US Dollar 1.2100 1.0853 (11.5%) 1.1684 1.1980 2.5%
-------- -------- --------- -------- -------- ---------
3. Segmental Analysis
The table below details a segmental breakdown of the Group's total
revenue and adjusted EBITA for the six months ended 30 June 2018, the
six months ended 30 June 2017 and the full year ended 31 December 2017.
In accordance with IFRS 8, the Group's reportable operating segments
based on how performance is currently assessed and resources are allocated
are as follows:
- Europe - Eurozone: This reportable segment is an aggregation
of thirteen operating segments principally in France, Ireland,
Italy, the Netherlands and Spain primarily involved in the
procurement, marketing and distribution of fresh produce and
some healthfoods and consumer goods products. These operating
segments have been aggregated because they have similar economic
characteristics.
- Europe - Non-Eurozone: This operating segment is an aggregation
of six operating segments in Scandinavia, United Kingdom, Poland
and the Czech Republic primarily involved in the procurement,
marketing and distribution of fresh produce and some healthfoods
and consumer goods products. These operating segments have
been aggregated because they have similar economic characteristics.
- International: This segment is an aggregation of five operating
segments in North America, one in South America and one in
India primarily involved in the procurement, marketing and
distribution of fresh produce. These operating segments have
been aggregated because they have similar customer profiles
and primarily transact in US Dollar.
Segment performance is evaluated based on revenue and adjusted EBITA.
Management believe that adjusted EBITA, while not a defined term under
IFRS, provides a fair reflection of the underlying trading performance
of the Group. Adjusted EBITA represents earnings before interest, tax,
acquisition related intangible asset amortisation charges and costs,
fair value movements on contingent consideration, unrealised gains
or losses on derivative financial instruments, gains and losses on
foreign currency denominated intercompany borrowings and exceptional
items. It also excludes the Group's share of these items within joint
ventures and associates. Adjusted EBITA is therefore measured differently
from operating profit in the Group financial statements as explained
and reconciled in detail in the analysis that follows.
Finance costs, finance income and income taxes are managed on a centralised
basis. These items are not allocated between operating segments for
the purpose of the information presented to the Chief Operating Decision
Maker ('CODM') and are accordingly omitted from the detailed segmental
analysis that follows.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2018 30 June 2017 31 Dec 2017
Total Adjusted Total Adjusted Total Adjusted
revenue EBITA revenue EBITA revenue EBITA
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Europe - Eurozone 874,218 14,906 903,194 13,772 1,737,964 26,990
Europe - Non-Eurozone 781,229 21,378 800,051 22,100 1,542,598 41,716
International 556,430 9,320 471,362 6,619 1,061,927 14,838
Inter-segment revenue (25,377) - (27,722) - (56,258) -
---------- --------- ---------- --------- ---------- ---------
Total revenue and
adjusted EBITA 2,186,500 45,604 2,146,885 42,491 4,286,231 83,544
---------- --------- ---------- --------- ---------- ---------
All inter-segment revenue transactions are at arm's length.
Reconciliation of segmental profit to operating profit
Below is a reconciliation of adjusted EBITA per the Group's management
reports to operating profit and profit before tax as presented in
the Group income statement:
Note (Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to 30 June 31 Dec
30 June 2017 2017
2018
EUR'000 EUR'000 EUR'000
Adjusted EBITA per
management reporting 45,604 42,491 83,544
Acquisition related
intangible asset
amortisation within
subsidiaries (i) (5,251) (4,998) (10,499)
Share of joint ventures
and associates
acquisition related
intangible asset
amortisation (i) (1,323) (1,282) (2,460)
Fair value movements on
contingent
consideration (ii) 1,581 (172) 4,174
Acquisition related costs
within
subsidiaries (iii) (101) (715) (897)
Share of joint ventures
and associates
net financial expense (iv) (610) (382) (1,058)
Share of joint ventures
and associates
tax (iv) (1,401) (1,494) (3,182)
------------------------- ------------------------- ------------
Operating profit before
exceptional
items 38,499 33,448 69,622
Net financial expense
before exceptional
items (v) (3,202) (3,066) (5,754)
------------------------- ------------------------- ------------
Profit before tax before
exceptional
items 35,297 30,382 63,868
Exceptional items (Note 5) (vi) 7,009 5,063 8,610
------------------------- ------------------------- ------------
Profit before tax after
exceptional
items 42,306 35,445 72,478
========================= ========================= ============
(i) Acquisition related intangible asset amortisation charges are
not allocated to operating segments in the Group's management
reports.
(ii) Fair value movements on contingent consideration are not allocated
to operating segments in the Group's management reports.
(iii) Acquisition related costs are transaction costs directly related
to the acquisition of subsidiaries and are not allocated to operating
segments in the Group's management reports.
(iv) Under IFRS, included within profit before tax is the Group's share
of joint ventures and associates profit after acquisition related
intangible amortisation charges and costs, tax and interest. In
the Group's management reports these items are excluded from the
adjusted EBITA calculation.
(v) Financial income and expense is primarily managed at Group level,
and is therefore not allocated to individual operating segments
in the Group's management reports.
(vi) Exceptional items (Note 5) are not allocated to operating segments
in the Group's management reports.
4. Adjusted profit before tax, adjusted EBITA and adjusted EBITDA
For the purpose of assessing the Group's performance, Total Produce
management believe that adjusted EBITDA, adjusted EBITA, adjusted
profit before tax and adjusted earnings per share (Note 6) are the
most appropriate measures of the underlying performance of the Group.
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June 30 June 2017 31 Dec 2017
2018
EUR'000 EUR'000 EUR'000
Profit before tax per income statement 42,306 35,445 72,478
Adjustments
Exceptional items (Note 5) (7,009) (5,063) (8,610)
Fair value movements on contingent
consideration (1,581) 172 (4,174)
Share of joint ventures and associates
tax 1,401 1,494 3,182
Acquisition related intangible asset
amortisation within subsidiaries 5,251 4,998 10,499
Share of joint ventures and associates
acquisition related intangible asset
amortisation 1,323 1,282 2,460
Acquisition related costs within
subsidiaries 101 715 897
------------- --------------- --------------
Adjusted profit before tax 41,792 39,043 76,732
Exclude
Net financial expense - subsidiaries
before exceptional items 3,202 3,066 5,754
Net financial expense - share of
joint ventures and associates 610 382 1,058
------------- --------------- --------------
Adjusted EBITA 45,604 42,491 83,544
Exclude
Amortisation of software costs 771 692 1,443
Depreciation - subsidiaries 8,366 7,953 15,764
Depreciation - share of joint ventures
and associates 1,947 1,665 3,690
------------- --------------- --------------
Adjusted EBITDA 56,688 52,801 104,441
============= =============== ==============
5. Exceptional items
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to 30 June to 30 June 31 Dec 2017
2018 2017
EUR'000 EUR'000 EUR'000
Foreign currency gain on proceeds 7,909 - -
from share placing (a)
Costs associated with the Dole transactions, (900) - -
net (b)
Fair value uplift on associate investment
(c) - 12,428 12,428
Credit from settlement of defined
benefit pension arrangements (d) - 1,710 4,097
Impairment of goodwill (e) - (9,075) (9,075)
Gains related to property, plant
and equipment and leasehold interests
(f) - - 1,160
Total exceptional items * 7,009 5,063 8,610
Net tax charge on exceptional items
(g) (18) (214) (1,358)
------------- ------------- --------------
Total 6,991 4,849 7,252
============= ============= ==============
*Of the EUR7.0m in exceptional items, EUR6.4m has been recognised as
exceptional operating income and EUR0.6m recognised as exceptional
financial income.
(a) Foreign currency gains on proceeds from share placing
In February 2018 the Group issued 63 million new ordinary shares, raising
proceeds of EUR141m (net of associated costs) to finance the Dole transaction.
The net proceeds from this share placing were used to purchase US Dollars
in February. The strengthening of the US Dollar from the date of purchase
to period end resulted in a foreign currency gain of EUR7.9m on translation
of the US Dollar deposit to Euro.
(b) Costs associated with the Dole transactions, net
Costs associated with the committed financing and other transaction
costs associated with Dole net of interest income on the proceeds of
share placing have been disclosed as a net exceptional cost of EUR0.9m
in the period.
(c) Fair value uplift on associate investment
In March 2017 the Group acquired a further 30% shareholding in the
Oppenheimer Group ('Oppy') to take its total shareholding to 65%. As
a result of this increased shareholding, Oppy became a subsidiary from
this date and in accordance with IFRS, the Group's previously held
35% associate interest was remeasured to fair value resulting in a
fair value gain of EUR11.3m. This gain, together with the reclassification
of EUR1.1m of currency translation gains from the currency translation
reserve, was reclassified to the income statement resulting in an exceptional
gain of EUR12.4m.
(d) Credit from settlement of defined benefit pension arrangements
In 2017, an Enhanced Transfer Value ('ETV') offer was made to members
of the Irish defined benefit pension schemes. As a result of members
taking up this ETV offer settlement credits net of associated costs
resulted in an accounting credit of EUR4.1m which was recognised in
the income statement for full year 2017 (with EUR1.7m being recognised
in the income statement in the period to 30 June 2017).
(e) Impairment of goodwill
In 2017 the Group recognised a non-cash impairment charge of EUR9.1m
in relation to a fresh produce business in the Netherlands which had
experienced a difficult trading environment resulting in a slower recovery
than had been anticipated.
(f) Profit on disposal of property and leasehold interests
During 2017 the Group recorded a profit of EUR1.2m after associated
costs on the disposal of property in Continental Europe.
(g) Tax charge on exceptional items
The net tax effect on the exceptional items above was EURNil (Full
year 2017: a charge of EUR1.4m and a charge of EUR0.2m for the 6 months
ended 30 June 2017).
Effect on exceptional items on cashflow statements
The net effect of the items above was a cash outflow of EUR0.8m for
the six month period to 30 June 2018 (2017: outflow EUR1.7m). The net
effect of exceptional items for the year ended 31 December 2017 was
a cash inflow of EUR0.5m.
6. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for
the period attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during
the period, excluding shares purchased by the company which are held
as treasury shares.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2018 to 30 June 31 Dec 2017
2017
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 27,142 22,382 47,826
================ ============= ==============
'000 '000 '000
Shares in issue at beginning of period 346,829 343,015 343,015
New shares issued from exercise of
share options(weighted average) 130 838 2,148
New shares issued from share placing
(weighted average) 50,470 - -
Effect of treasury shares held (22,000) (22,000) (22,000)
---------------- ------------- --------------
Weighted average number of shares
at end of period 375,429 321,853 323,163
================ ============= ==============
Basic earnings per share - cent 7.23 6.95 14.80
================ ============= ==============
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit for
the period attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding after adjustment
for the effects of all ordinary shares and options with a dilutive
effect.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2018 to 30 June 31 Dec 2017
2017
EUR'000 EUR'000 EUR'000
Profit attributable to equity holders
of the parent 27,142 22,382 47,826
================ ============= ==============
'000 '000 '000
Weighted average number of shares
at end of period 375,429 321,853 323,163
Effect of share options with a dilutive
effect 1,409 3,357 2,598
---------------- ------------- --------------
Weighted average number of shares
at end of period (diluted) 376,838 325,210 325,761
================ ============= ==============
Diluted earnings per share - cent 7.20 6.88 14.68
================ ============= ==============
The average market value of the Company's shares for the purpose of
calculating the dilutive effect of share options was based on the
quoted market prices for the period during which the options were
outstanding.
Adjusted basic earnings per share and adjusted fully diluted earnings
per share
Management believe that adjusted fully diluted earnings per share
as set out below provides a fairer reflection of the underlying trading
performance of the Group after eliminating the effect of acquisition
related intangible asset amortisation charges and costs, fair value
movements on contingent consideration, unrealised gains or losses
on derivative financial instruments, gains and losses on foreign currency
denominated intercompany borrowings and exceptional items and the
related tax on these items.
Adjusted basic earnings per share is calculated by dividing the adjusted
profit attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the
period, excluding shares purchased by the Company which are held as
treasury shares.
Adjusted fully diluted earnings per share is calculated by dividing
the adjusted profit attributable to ordinary equity holders of the
parent (as calculated below) by the weighted average number of ordinary
shares outstanding after adjustment for the effects of all ordinary
shares and options with a dilutive effect.
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2018 to 30 June
2017
EUR'000 EUR'000 31 Dec 2017
EUR'000
Profit attributable to equity holders
of the parent 27,142 22,382 47,826
Adjustments:
Exceptional items - net of tax (Note
5) (6,991) (4,849) (7,252)
Acquisition related intangible asset
amortisation within subsidiaries 5,251 4,998 10,499
Share of joint ventures and associates
acquisition related intangible asset
amortisation 1,323 1,282 2,460
Acquisition related costs within
subsidiaries 101 715 897
Fair value movements on contingent
consideration (1,581) 172 (4,174)
Tax effect of amortisation of goodwill,
intangible assets and fair value
movements on contingent consideration (1,029) (1,335) (6,598)
Non-controlling interests share of
items above (1,572) (1,309) 265
--------------- ------------- --------------
Adjusted profit attributable to equity
holders of the parent 22,644 22,056 43,923
=============== ============= ==============
'000 '000 '000
Weighted average number of shares 375,429 321,853 323,163
Weighted average number of shares
(diluted) 376,838 325,210 325,761
Weighted average number of shares
(diluted, excluding the effect of
the share placing) 326,368 325,210 325,761
Adjusted basic earnings per share
- cent 6.03 6.85 13.59
=============== ============= ==============
Adjusted fully diluted earnings per
share - cent 6.01 6.78 13.48
=============== ============= ==============
Adjusted fully diluted earnings per
share - cent (excluding the effect
of share placing) * 6.94 6.78 13.48
=============== ============= ==============
*The calculation presented here is the adjusted fully diluted earnings
per share calculated excluding the impact of the 63 million share
placing in early February 2018.
7. Post-employment benefit obligation
Employee defined benefit pension
scheme
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June
2018
EUR'000 30 June 2017 31 Dec 2017
EUR'000 EUR'000
Pension assets 173,316 184,467 175,343
Pension obligations (182,345) (209,909) (192,050)
------------- -------------- -------------
Net liability (9,029) (25,442) (16,707)
Net related deferred tax asset 1,619 4,053 2,860
------------- -------------- -------------
Net liability after tax (7,410) (21,389) (13,847)
============= ============== =============
Movement in period
Net liability at beginning of period (16,707) (37,777) (37,777)
Net interest expense and current
service cost recognised in the
income statement (1,005) (1,776) (2,298)
Settlement credit recognised in
the income statement - 1,839 6,683
Employer contributions to schemes
- normal 1,355 1,985 4,290
Employer contributions to schemes
- exceptional - 1,672 6,303
Remeasurement gains recognised
in other comprehensive income 7,411 8,381 5,708
Arising on acquisition - (252) (252)
Translation adjustment (83) 486 636
------------- -------------- -------------
Net liability at end of period
before deferred tax (9,029) (25,442) (16,707)
============= ============== =============
The table above summarises the movements in the net liability of the
Group's various defined benefit pension schemes in Ireland, the UK,
Continental Europe and North America in accordance with IAS 19 Employee
Benefits (2011).
The Group's balance sheet at 30 June 2018 reflects net pension liabilities
of EUR9.0m in respect of schemes in deficit, resulting in a net deficit
of EUR9.0m and a net deficit of EUR7.4m after deferred tax.
The current and past service costs, settlement credits and the net
finance expense on the net scheme liabilities are charged to the income
statement. Remeasurement gains and losses are recognised in other
comprehensive income. In determining the valuation of pension obligations,
consultation with independent actuaries is required. The estimation
of employee benefit obligations requires the determination of appropriate
assumptions such as discount rates, inflation rates and mortality
rates.
The decrease in the net liability during the period was primarily
due to the increase in discount rates for the Irish and UK schemes
which results in a decrease in the net present value of the schemes'
obligations. The discount rate in Ireland and the Eurozone increased
to 2.10% (31 December 2017: 2.00% and 30 June 2017: 2.20%) and in
the UK increased to 2.90% (31 December 2017: (2.50% - 2.60% and 30
June 2017: 2.60%).
In 2017 the Group initiated an Enhanced Transfer Value (ETV) program
whereby an offer above the minimum statutory transfer value was made
to all active and deferred members of the Irish defined benefit pension
schemes ("Schemes") to transfer their accumulated accrued benefits
from the Schemes, eliminating future accrual of benefits in the Schemes,
and receive a transfer value above the statutory minimum amount. Further
details on the program are outlined in the Group's 2017 Annual Report.
The program has reduced the volatility of the Schemes going forward.
Other post-employment benefit schemes
(Unaudited) (Unaudited) (Audited)
6 months 6 months to Year ended
to 30 June
2018
EUR'000 30 June 2017 31 Dec 2017
EUR'000 EUR'000
Net liability at beginning of period (5,293) - -
Arising on acquisition - (6,913) (6,913)
Net expense recognised in the income
statement (218) (221) (536)
Remeasurement gains recognised
in other comprehensive income 561 563 1,604
Employee contributions to schemes (12) (25) (24)
Benefits paid 41 33 131
Translation adjustment 108 372 445
------------- -------------- -------------
Net liability at end of period (4,813) (6,191) (5,293)
============= ============== =============
The table above summarises the movements in the net liability of the
Group's other post-employment benefit schemes. Certain employees in
one of the Group's North American subsidiaries hold non-voting shares
in the subsidiary. The Company has a contractual arrangement in place
to pay holders of these shares an agreed benefit on retirement, based
on profit levels in the company, to redeem these shares.
In accordance with IAS 19 Employee Benefits (2011), the net liability
of the obligation is measured as the net present value of the amounts
that are expected to be paid to employees for the shares at retirement.
The interest expense, which represents the unwinding of the net present
value of the liabilities, is charged to the income statement. Remeasurement
gains and losses, representing all other changes to the estimate of
the liability, are recognised in other comprehensive income.
Determining the valuation of the obligations requires the determination
of appropriate assumptions such as projected growth in profits, forfeiture
rates and retirement dates.
8. Dividends
The Board has declared an interim dividend of 0.9129 (2017: 0.8906)
cent per share, which represents a 2.5% increase on the comparative
period. The dividend will be paid on 12 October 2018 to shareholders
on the register at 14 September 2018 subject to dividend withholding
tax. In accordance with company law and IFRS, this dividend has not
been provided for in the balance sheet at 30 June 2018. The final
dividend for 2017 of EUR9,517,000 was paid in June 2018.
During the period, the Group declared dividends of EUR7,217,000 to
non-controlling shareholders in certain of the Group's non wholly-owned
subsidiaries. In the same period cash dividends of EUR7,585,000 were
paid.
9. Businesses acquired and other developments
A key part of the Group's strategy is to grow by acquisition. During
the six month period, the Group made a number of acquisitions and
investments with committed investment of EUR2.8m including EUR0.8m
of deferred and contingent consideration payable on the achievement
of future profit targets.
The initial assignment of fair values to net assets for all investments
has been performed on a provisional basis in respect of these acquisitions
given the timing of the completion of these transactions and will
be finalised within twelve months from the acquisition date, as permitted
by IFRS 3 (Revised) Business Combinations.
Payment of contingent and deferred consideration in the period
During the period, the Group paid EUR6,234,000 of contingent consideration
relating to prior period acquisitions.
10. Financial instruments
The fair values of financial assets and financial liabilities, together
with the carrying amounts in the Condensed Group Balance Sheet at
30 June 2018, 30 June 2017 and 31 December 2017 are as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2018 30 June 2017 31 Dec 2017
Carrying Fair Carrying Fair Carrying Fair
value value value value value value
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Other financial assets(1) 712 n/a 625 n/a 719 n/a
Trade and other receivables
- current(1) * 476,011 n/a 448,928 n/a 356,269 n/a
Trade and other receivables
- non- current(1) * 11,660 n/a 9,508 n/a 11,063 n/a
Bank deposits(1) - n/a 3,700 n/a - n/a
Cash and cash equivalents(1) 231,617 n/a 93,660 n/a 100,247 n/a
Derivative financial
assets 423 423 173 173 6 6
------------ ------------ ------------
720,423 556,594 468,304
============ ============ ============
Trade and other payables
- current(1) (538,697) n/a (526,398) n/a (463,605) n/a
Trade and other payables
- non-current(1) (816) n/a (1,397) n/a (568) n/a
Bank overdrafts(1) (40,603) n/a (43,888) n/a (11,268) n/a
Bank borrowings (212,854) (212,324) (204,364) (205,386) (200,235) (200,491)
Finance lease liabilities(1) (1,706) (1,786) (2,433) (2,666) (1,870) (1,941)
Derivative financial
liabilities (229) (229) (617) (617) (719) (719)
Contingent consideration (27,088) (27,088) (36,693) (36,693) (34,465) (34,465)
Put option liability (38,604) (38,604) (41,958) (41,958) (38,961) (38,961)
------------ ------------ ------------
(860,597) (857,748) (751,691)
------------ ------------ ------------
1. The Group has availed of the exemption under IFRS 7 Financial Instruments:
Disclosure for additional disclosures where fair value closely approximates
carrying value.
* For the purposes of this analysis prepayments have not been included
within other receivables. Carrying value of other financial assets,
trade receivables and other receivables are stated net of impairment
provisions where appropriate and consequently fair value is considered
to approximate to carrying value.
A number of other put and call options arising from acquisitions are
of immaterial fair value.
The Group uses the following hierarchy for determining and disclosing
the fair value of financial instruments by valuation technique:
* Level 1: quoted (unadjusted) prices in active markets
for identical assets or liabilities;
* Level 2: other techniques for which all inputs which
have a significant effect on the recorded fair value
are observable, either directly or indirectly;
* Level 3: techniques which use inputs which have a
significant effect on the recorded fair value that
are not based on observable market data.
At 30 June 2018, 30 June 2017 and 31 December 2017 the Group recognised
and measured the following instruments at fair value:
(Unaudited) (Unaudited) (Audited)
30 June 30 June 30 June 30 June 31 Dec 31 Dec
2018 2018 2017 2017 2017 2017
Level Level Level Level Level Level
2 3 2 3 2 3
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Assets measured at fair
value
At fair value through
profit or loss
Foreign exchange contracts - - 73 - - -
Designated as hedging
instruments
Foreign exchange contracts 423 - 100 - 6 -
Liabilities measured at
fair value
At fair value through
profit or loss
Foreign exchange contracts (23) - (49) - (48) -
Interest rate swaps (27) - (86) - (61) -
Contingent consideration - (27,088) - (36,693) (34,465)
Designated as hedging
instruments
Foreign exchange contracts (177) - (399) - (606) -
Interest rate swaps (2) - (83) - (4) -
At fair value through
equity
Put option liability - (38,604) - (41,958) - (38,961)
Additional disclosures for Level 3 fair value measurements
Contingent consideration and put option liability
(Unaudited) (Unaudited)
Contingent Put option
consideration liability
EUR'000 EUR'000
At 1 January 2018 (34,465) (38,961)
Paid during the period 6,234 -
Arising on acquisition of subsidiaries (716) -
Fair value movement on put option recognised
directly within equity - 297
Foreign exchange movements 278 60
Included in the income statement
1,581 -
* Fair value movements
At 30 June 2018 (27,088) (38,604)
--------------- --------------------
Presented on Balance Sheet as follows:
Current liability (13,543) -
Non-current liability (13,545) (38,604)
--------------- --------------------
(27,088) (38,604)
=============== ====================
Contingent consideration
Contingent consideration represents the provision for the net present
value of the amounts expected to be payable in respect of acquisitions
which are subject to earn-out arrangements. Contingent consideration
for each individual transaction is valued internally by the Group
Finance team in consultation with Senior Management and updated as
required at each reporting period.
Put option liability
The Group has a number of contractual put options and forward commitments
in place in relation to non-controlling interest ('NCI') shares in
subsidiaries whereby the NCI shareholder can require the Group, or
the Group has agreed to acquire ('forward commitment') the shares
in these subsidiaries at various future dates. The value of the put
option or forward commitment liability recognised represents management's
best estimate of the fair value of the amounts which may be payable
discounted to net present value. The put option or forward commitment
for each individual transaction is valued internally by the Group
Finance team in consultation with Senior Management and updated as
required at each reporting period.
11. Cash flows generated from operations
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year ended
to to
30 June 2018 30 June 2017 31 Dec 2017
EUR'000 EUR'000 EUR'000
Operating activities
Profit for the period 34,938 28,274 61,507
Adjustments for non-cash items:
Income tax expense 7,368 7,171 10,971
Income tax paid (6,031) (7,435) (16,471)
Depreciation of property, plant and
equipment 8,366 7,953 15,764
Reversal of impairment of property,
plant & equipment - - (362)
Exceptional items (Note 5) (7,009) (5,063) (8,610)
Exceptional cash flow relating to defined
ETV contributions and costs - (1,672) (7,254)
Fair value movements on contingent
consideration (1,581) 172 (4,174)
Amortisation of intangible assets -
acquisition related 5,251 4,998 10,499
Amortisation of intangible assets -
capitalised development costs 164 153 299
Amortisation of intangible assets -
computer software 771 692 1,443
Amortisation of government grants (26) (30) (81)
Defined benefit pension scheme expense
- normal 1,005 1,776 2,298
Contributions to defined benefit pension
schemes - normal (1,355) (1,985) (4,290)
Other post-employment benefit schemes'
expense 218 221 536
Net payments for other post-employment
benefit schemes (29) (8) (107)
Share-based payment expense 288 276 596
Net gain on disposal of property, plant
and equipment (112) (198) (432)
Net finance expense - before exceptional
items 3,202 3,066 5,754
Net financial expense paid (2,748) (2,746) (6,137)
(Gain)/loss on non-hedging derivative
financial instruments 91 (57) (434)
Loss on disposal of trading assets - - 39
Gain on disposal of joint venture - - (5)
Fair value movements on biological
assets (162) 449 (289)
Share of profits of joint ventures
and associates (4,782) (4,405) (12,209)
Net cash flows from operations before
working capital movements 37,827 31,602 48,851
------------------- ------------------ -------------
Movements in working capital:
* Movements in inventories (12,293) (23,839) (10,409)
* Movements in biological assets 1,179 (4,564) (2,127)
* Movements in trade and other receivables (123,912) (93,523) (4,253)
* Movement in trade and other payables 73,576 76,024 14,501
Total movements in working capital (61,450) (45,902) (2,288)
------------------- ------------------ -------------
Cash flows from operating activities (23,623) (14,300) 46,563
=================== ================== =============
12. Analysis of Net Debt and Cash and Cash Equivalents
Net debt is a non-IFRS measure which comprises bank deposits, cash
and cash equivalents and current and non-current interest-bearing
loans and borrowings. The calculation of net debt at 30 June 2018,
30 June 2017 and 31 December 2017 is as follows:
(Unaudited) (Unaudited) (Audited)
30 June 2018 30 June 2017 31 Dec 2017
EUR'000 EUR'000 EUR'000
Current assets
Bank deposits - 3,700 -
Cash and cash equivalents *218,376 74,594 89,929
Call deposits (demand balances) 13,241 19,066 10,318
Current liabilities
Bank overdrafts (40,603) (43,888) (11,268)
Current bank borrowings (51,527) (5,591) (35,861)
Current finance leases (535) (970) (595)
Non-current liabilities
Non-current bank borrowing (161,327) (198,773) (164,374)
Non-current finance leases (1,171) (1,463) (1,275)
-------------- -------------- -------------
Net debt at end of the period (23,546) (153,325) (113,126)
-------------- -------------- -------------
Less restricted cash * (150,185) - -
-------------- -------------- -------------
Net debt at end of the period, excluding
restricted cash (173,731) (153,325) (113,126)`
============== ============== =============
Reconciliation of cash and cash equivalents per balance sheet to cashflow statement
(Unaudited) (Unaudited) (Audited)
6 months to 6 months Year ended
30 June 2018 to 30 June
2017
EUR'000 EUR'000 31 Dec 2017
EUR'000
Cash and cash equivalents per balance
sheet 231,617 93,660 100,247
Bank overdrafts (40,603) (43,888) (11,268)
--------------- ------------- -------------
Cash, cash equivalents and bank overdrafts
per
cash flow statement 191,014 49,772 88,979
--------------- ------------- -------------
Less restricted cash * (150,185) - -
--------------- ------------- -------------
Cash, cash equivalents and bank overdrafts
per
cash flow statement , excluding restricted
cash 40,829 49,772 88,979
=============== ============= =============
*The restricted cash of EUR150.2m relates to the proceeds of EUR141m from the share placing (net of associated costs) that were used to purchase dollars. The EUR150.2m is the retranslated amount of the US Dollar deposit including accrued interest income. This deposit was held in escrow at 30 June 2018 pending completion of the Dole transaction.
13. Post balance sheet events
On 1 February 2018, the Group announced that it had entered into
a binding agreement to acquire a 45% stake in Dole Food Company ('Dole')
from Mr. David H. Murdock for a cash consideration of $300 million
(the 'First Tranche') which was subject to anti-trust review in a
limited number of jurisdictions. On 31 July 2018 the European Commission
(the 'EC') approved the acquisition of the First Tranche. As all
other Transaction condition precedents had been satisfied at this
date, the acquisition of the First Tranche completed.
In July 2018 a subsidiary of the Group disposed of an interest in
a farming entity for consideration which will be realised over a
period of three years and may vary depending on certain circumstances.
The exceptional gain, estimated in excess of EUR15m before tax was
recorded post period end.
14. Related party transactions
There have been no related party transactions or changes to related
party transactions other from those as described in the 2017 Annual
Report that materially affect the financial position or affect the
performance of the Group for the six month period ended 30 June 2018.
15. Board approval
This interim results statement was approved by the Board of Directors
of Total Produce plc on 29 August 2018.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR SEUFAUFASEEA
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August 30, 2018 02:00 ET (06:00 GMT)
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