TIDMABF
RNS Number : 8983C
Associated British Foods PLC
23 April 2013
For release 23 April 2013
Associated British Foods plc announces its
interim results for the 24 weeks ended 2 March 2013
ABF delivers an excellent set of interim results
Highlights
-- Group revenue up 10% to GBP6,333m
-- Adjusted operating profit up 20% at GBP496m *
-- Adjusted profit before tax up 25% to GBP452m *
-- Adjusted earnings per share up 22% at 41.9p *
-- Dividend per share up 10% to 9.35p
-- Net debt GBP1,337m after net capital investment of GBP334m
-- Operating profit up 21% to GBP459m, profit before tax up 26% at
GBP415m and basic earnings per share up 23% to 38.9p
George Weston, Chief Executive of Associated British Foods,
said:
"This is an excellent set of results with adjusted operating
profit up 20%, a stronger cash flow and a year-on-year reduction in
net debt. We are committed to the long-term development of our
businesses through investment. These results have been achieved
through a focus on generating good returns from the investments we
have made over recent years."
* before amortisation of non-operating intangibles and profits less
losses on the disposal of non-current assets.
All figures stated after amortisation of non-operating intangibles,
profits less losses on the disposal of non-current assets, profits
less losses on the sale and closure of businesses and exceptional
items are shown on the face of the condensed consolidated income statement.
For further information please contact:
Associated British Foods:
Until 15.00 only
George Weston, Chief Executive
John Bason, Finance Director
Tel: 020 7638 9571
Chris Barrie/Nicola Swift, Citigate Dewe Rogerson
Tel: 020 7638 9571
Jonathan Clare
Tel: 07770 321881
After 15.00
John Bason, Finance Director
Tel: 020 7399 6500
ASSOCIATED BRITISH FOODS plc
INTERIM RESULTS ANNOUNCEMENT
FOR THE 24 WEEKS ENDED 2 MARCH 2013
For release 23 April 2013
CHAIRMAN'S STATEMENT
I am pleased to report an excellent set of interim results for
the group which exceeded our expectations at the start of the year.
This outperformance was driven by very strong trading by Primark.
Our food businesses remained on track with a much improved result
from Grocery, a big increase for Agriculture and some stabilisation
in underlying trading at Ingredients. After last year's record
performance from Sugar, the result this half year proved to be
resilient.
Revenue in the first half grew by 10% and adjusted operating
profit increased by 20%. Net financing costs in the period were
lower than last year's first half, resulting from the lower level
of net borrowings and a strong first half cash flow. The underlying
tax rate of 25.7% was little changed from that reported last half
year. Adjusted earnings were 22% ahead at 41.9p per share.
Our Sugar businesses delivered an underlying profit increase
this year. The weather-related challenges faced by the European
operations are being well managed and Illovo has made good progress
with a record production in Zambia following our recent factory
investment. The current EU sugar regime is in place until October
2015 and although, in October 2011, the European Commission
proposed the abolition of internal sugar quotas in 2015, the
European Council and European Parliament have recently proposed
extensions of existing quota arrangements to 2017 and 2020
respectively. A three-way negotiation process is now under way and
an agreement, acceptable to all parties, is expected in the late
summer. Much lower sugar prices in China resulted in these
operations making losses in the period. We are working hard to
reduce costs and have mothballed our two smallest beet sugar
factories in the region. A non-cash charge has been taken to write
down the carrying value of the associated assets.
The Primark success story continues. Trading in the period was
very strong, the profit margin was much improved, customers in
continental Europe have taken enthusiastically to the Primark brand
and there is very real momentum in the addition of selling space.
Encouraged by this success, capital investment will continue.
Grocery profit improved substantially and benefited from the
non-recurrence of restructuring costs taken last year. Twinings
Ovaltine and our UK and US businesses performed well. Although
George Weston Foods in Australia has some way to go to achieve an
acceptable level of profitability, the emergence of positive signs
in this period is encouraging. Agriculture again delivered a strong
result with a good performance from UK feeds and a further
demonstration of its successful focus on the value adding areas of
the business. The headline profit at Ingredients includes the
one-time cost for restructuring our European dry yeast capacity but
on an underlying basis the performance was in line with last
year.
For the second successive year, the cash outflow before funding
in the first half was lower than the prior year with the benefit of
the higher profit and a lower working capital outflow. Capital
expenditure, including new stores and extensions for Primark, was
in line with last year. Payment of deferred consideration on the
acquisitions of the Jordans and Patak's businesses, net of a
deferred receipt on the disposal of our former sugar business in
Poland, resulted in an outflow of GBP30m in the period. The
increased level of profit led to an increase in tax payments, with
GBP109m paid in the first half of which GBP67m was paid in the UK
compared with GBP42m last year. The recent weakening of sterling,
particularly against the US dollar, increased net debt since last
year end by GBP57m when foreign currency borrowings were translated
into sterling at the half year. Net debt nevertheless fell by
GBP255m from last half year to GBP1,337m at the period end.
On 5 March we repaid US$120m of the private placement financing
which carried a coupon of 6.3%, and in July the GBP150m British
Sugar 103/4% debenture will be redeemed, both of which will
substantially reduce the group's future average cost of borrowing.
There is no immediate need to replace this financing as the
headroom between the group's borrowing facilities and projected
levels of net debt is more than sufficient to meet the needs of the
business for the foreseeable future.
Dividends
As previously indicated, the profit improvement in this
financial year is expected to be weighted towards the first half.
Accordingly the board has decided to declare an interim dividend of
9.35p, an increase of 10% on last year. The dividend will be paid
on 5 July 2013 to shareholders registered at the close of business
on 7 June 2013.
Outlook
Low growth looks set to remain a feature of the developed
economies in which we operate. With this in mind we remain focused
on delivering operating efficiencies and maximising the return on
investments made by the group over recent years. We continue to
pursue growth opportunities in developing markets. For the full
year we expect strong profit growth from Primark, although not at
the same level of the first half which had the remaining benefit of
lower cotton prices, and we also expect an improvement in Grocery.
These will more than offset a reduction in profit from Sugar as a
result of lower EU production and lower prices in China. Given this
strong first half performance and some modest earnings growth in
the second half, we expect to make good progress for the financial
year.
Charles Sinclair
Chairman
23 April 2013
OPERATING REVIEW
Group revenues increased by 10% to GBP6,333m and adjusted
operating profit was 20% ahead of last year at GBP496m. Average
exchange rates were similar to last year in all major currencies
resulting in no material translation effects in these results. The
first half was notable for the exceptional trading from Primark
achieved during a difficult time for many retailers on European
high streets. This was a testament to the strong management team at
Primark and a very successful seasonal range. I am also pleased
with the on-target performance by George Weston Foods in Australia,
following a protracted period of operational and commercial
difficulties, and with the early progress made by the new team at
AB Mauri.
The operating profit achieved by AB Sugar in the last financial
year was a consequence of careful investment together with higher
production volumes and prices in the regions where we operate.
However, we have already seen much lower prices in China this year
and expect pressure in the EU and some countries in Africa. Our
focus is on improving efficiency, reducing cost and selectively
increasing capacity and downstream capability to mitigate the
effects on operating profit of margin reduction from lower
prices.
Primark's expansion in continental Europe is proving to be very
successful and the prospects for further growth are exciting. We
are actively searching for appropriate locations in all the
countries where we operate and in the next financial year we will
open our first stores in France. Primark's margin in the first half
benefited from an ideal combination of lower cotton prices, better
exchange rates and lower markdowns. With a strengthening US dollar
we expect to see some pressure on margins in the next financial
year.
The consumer food industry in developed countries faces the
continuing challenge of consumers seeking more value as their
disposable incomes are squeezed. Our Grocery businesses have
performed well in this environment and look set for further growth.
Allied Bakeries continued its capital investment to reduce its cost
base. The management team at George Weston Foods has made
considerable progress with improvements in profitability in both
Tip Top bread and the Don KRC meat business. Both businesses
benefited from the restructuring undertaken last year.
We have focused on achieving good returns from the investments
we have made over recent years, and have paid close attention to
the management of working capital. The benefits of this are evident
in the stronger cash flow, the year-on-year reduction in net debt
and a higher return on capital employed.
SUGAR
2013 2012
----------------------- ------ ------
Revenue GBPm 1,323 1,203
----------------------- ------ ------
Operating profit GBPm 163 172
----------------------- ------ ------
Sugar revenues increased by 10% in the first half benefiting
from comparison with weaker volumes at the beginning of the prior
period in the UK and south China. Operating profit was lower than
last year with an improvement at Illovo more than offset by a
deterioration in China trading together with a non-cash charge for
the mothballing of our two smallest beet sugar factories in north
China.
UK revenues were ahead of last year, driven by higher volumes at
the beginning of the financial year than the abnormally low level
achieved last year. Poor growing conditions during 2012 resulted in
a lower beet yield and sugar recovery. As a consequence, this
year's UK campaign started later and factory throughput was lower
to allow for a slower filtration process. Sugar production for the
current year is now estimated to be 1.15 million tonnes compared
with last year's 1.32 million tonnes. The Vivergo bioethanol plant
in Hull is now operational, with full production expected during
the summer.
In Spain, delayed planting in the south is expected to reduce
the size of the southern crop and heavy rains extended the campaign
in the north into April, consequently delaying planting for the new
season. We expect to produce 393,000 tonnes of beet sugar, compared
with 468,000 tonnes last year, the Guadalete refinery is expected
to produce 222,000 tonnes of refined cane sugar and a further
94,000 tonnes of co-refined cane sugar will be produced at the
northern beet plants. Sales revenues in the first half were lower
than last year.
Our EU sugar profits for the full year are expected to be lower
than last year as a consequence of lower production volumes in the
UK and Spain, and higher beet costs.
The Chairman refers to the political discussions surrounding
proposals for further reform of the EU sugar regime. In the
meantime recent tenders have seen some reduction in import duties
payable.
Revenue and profit at Illovo benefited from higher production
volumes with increased cane yields and sugar content, particularly
in South Africa. Campaigns were extended in Zambia and Swaziland
where the recently expanded plants operated well. Sugar production
for the season ended March 2013 was 1.75 million tonnes, compared
with 1.53 million tonnes last year. With South Africa and Zambia
both carrying cane over into the new season, Illovo intends to
commence the new campaign as soon as practicable in order to
maximise factory throughput. Work on the new sugar warehouse in
South Africa has finished and it is now operational. The new
potable alcohol distillery at Kilombero in Tanzania is expected to
be commissioned this summer.
Sales volumes in China were unusually low in the prior period
and as a result, revenues in this first half were ahead despite
much lower prices. A larger cane crop is expected to increase
southern sugar production volumes for the full year to 484,000
tonnes compared with last year's 405,000 tonnes. Sugar production
in the north is expected to be marginally behind last year's
287,000 tonnes at 277,000 tonnes, and the new Zhangbei factory was
fully commissioned in time for the new season. As a result of much
lower sugar prices our operations in China will be loss-making this
year. It is anticipated that sugar prices will continue at this
level for some time and we have sought to reduce our cost base. At
the end of this campaign the small beet factories at Wangkui and
Baolongshan have been mothballed and a non-cash charge of GBP22m
has been taken in the period to write down the value of the
associated assets.
Agriculture
2013 2012
----------------------- ----- -----
Revenue GBPm 641 597
----------------------- ----- -----
Operating profit GBPm 20 16
----------------------- ----- -----
Revenue in the first half was 7% ahead of last year, driven
mainly by the increased cost of commodities. Some improvement in
operating costs led to firmer margins and another good performance
from Frontier advanced operating profit by 25%.
With limited alternatives available to farmers, demand for sugar
beet feed in the UK was high in the period but sales for the rest
of the year will be constrained by the smaller UK beet crop.
Premier Nutrition traded well in the UK and, with continuing
investment in Asia and Central and Eastern Europe, also achieved
good sales growth in this region. A number of manufacturing
efficiency projects are nearing completion, and our highly
automated production facility at Rugeley, designed to provide
increased assurance over feed safety, is now operational. AB
Vista's feed enzyme business continued to make good progress,
particularly in North America, supported by the success of the
recently launched Quantum Blue phytase.
Frontier traded at similar levels to last year. The supply of
grain in the UK has been poor, and of variable quality, leading to
a higher volume of wheat imports which increased the complexity and
cost of the UK cereal supply chain. Wet autumn conditions lowered
wheat plantings to 70% of normal levels, reducing the demand for
fertiliser and crop protection products, although volumes are
expected to pick up as spring planting resumes.
China revenues fell short of last year with lower demand for pig
and poultry feed. However, good growth was achieved in co-products
driven by strong sugar beet feed volumes and the development of new
products for the feed ingredients market. Good raw material
procurement underpinned profit delivery.
GROCERY
2013 2012
----------------------- ------ ------
Revenue GBPm 1,832 1,813
----------------------- ------ ------
Operating profit GBPm 97 75
----------------------- ------ ------
Grocery revenue increased by 1% to GBP1,832m and profit improved
substantially to GBP97m benefiting from the non-recurrence of
restructuring costs in George Weston Foods in Australia and Allied
Bakeries.
Twinings Ovaltine again performed well with some good market
share gains. Twinings sales in the UK were well ahead of last year
with continued success for the 'gets you back to you' television
advertising campaign and the launch of new tea infusions. Tea sales
were strong in the US where growth was driven by the K-cup
dispenser format and redesigned packaging which gave greater
prominence to the brand on shelf. Production efficiencies at the
new tea factory in Poland and cost reduction initiatives in the
Ovaltine plant in Switzerland drove further improvement in
operating profit.
The UK bread market remains highly competitive. The worst UK
harvest of recent years resulted in low volumes of wheat which was
also of inferior quality but Allied Bakeries continued to produce
high-quality bread and recovered the higher cost. Further expansion
of the Kingsmill brand was achieved with the launch of 50/50 Bagels
and a 50/50 Little Big Loaf. Kingsmill also launched a Fruit &
Fibre breakfast range of bread, muffins and bagels in the period
and new products were introduced under the Allinson and Burgen
ranges. The new bread plant at Stockport has been operational since
September and this summer will see the commissioning of Allied
Bakeries' largest plant, with a capacity of 10,000 loaves an hour,
at Walthamstow. Work has also commenced at West Bromwich to replace
two smaller production lines with a new bread plant which is
expected to be operational by the end of the calendar year.
Silver Spoon remains the leading retail sugar brand although the
intensely competitive marketplace adversely affected volumes and
margins. We continued to invest in Billington's, now the leading
brand of unrefined baking sugars, and Truvia, the stevia-based,
zero calorie sweetener which is the clear market leader in this new
category. A stevia/sugar blend for baking and a new tablet format
were launched in the period supported by television advertising.
The Allinson range of culinary flours continued to grow strongly
but the increase in wheat costs had an adverse impact on margins.
Ryvita performed well in the UK with particularly strong growth for
Thins, benefiting from the addition of a new flavour variant, and
the wider distribution of Rustic Bakes which were launched last
year. Jordans also had a good first half with growth in Country
Crisp and Granola, both of which benefited from new product
launches.
Westmill grew volumes in the period with share gains for its two
key catering brands, Lucky Boat noodles and Patak's. In September
2012 the acquisition of Elephant chapatti flour and associated
ethnic flour brands received competition clearance, and commercial
and logistics activities were successfully transferred by the end
of November. AB World Foods achieved good growth in Blue Dragon,
the UK's largest oriental ambient brand following last year's
relaunch, and Patak's both in the UK, where it was supported by a
high level of promotion, and internationally.
Trading at George Weston Foods in Australia met expectations in
the first half. Total revenue in the period was in line with last
year and profitability was significantly improved with the
non-recurrence of last year's restructuring costs. Price increases
were secured for Tip Top bread but the market continued to be
difficult with a high level of in-store bakery promotions. The
bakery business continued to make good progress with cost reduction
programmes continuing to offset inflationary pressure. Progress was
also made in the Don KRC meat business where production and sales
volumes were higher and cost control and customer service were both
improved.
Revenue and operating profit at ACH were ahead of last year.
Some recovery in the US baking sector and improvements in
operational efficiency more than offset commodity cost increases to
drive an improved performance for baking. Investment in new
products and marketing expenditure in the first half was higher
than last year which contributed to sales growth, particularly in
Canada. In Mexico, Capullo, our premium oil brand was relaunched
last year and, with increased marketing support, was better
positioned to meet the challenges of a competitive market.
INGREDIENTS
2013 2012
----------------------- ----- -----
Revenue GBPm 540 538
----------------------- ----- -----
Operating profit GBPm 2 18
----------------------- ----- -----
Revenue and underlying operating profit in the first half were
in line with last year. Following the successful start-up of the
new Mexican yeast plant, a provision of GBP15m has been made to
cover the expected cost of restructuring our European dry yeast
capacity.
Following the difficulties experienced by the yeast business
last year, the performance this period has seen some stabilisation
although markets remain very competitive. A solid performance in
Hispano-America drove revenue growth across all product categories
and a focus on operational efficiencies throughout the region
mitigated the effect of high inflation in Argentina and Venezuela.
In Brazil, raw material price instability and competitor activity
made trading conditions difficult and severely impacted margins.
However, recent increases in selling prices are expected to lead to
a better second half result, particularly in bakery
ingredients.
In the US, the difficulties faced by the country's third largest
plant bakery business will continue to have an impact on our
business in the short term. Commissioning of the new yeast plant in
Veracruz, Mexico progressed according to plan and domestic fresh
yeast sales began in March. Dry yeast commissioning will be under
way shortly with commercial production expected during the summer.
Expansion of the business across the Middle East and Africa saw the
opening of a new regional office in Dubai in March, and bakery
ingredients production at the new factory in Cordoba, Spain
commenced in October. Supply of yeast to the Vivergo bioethanol
plant has now commenced and volumes will increase as production
builds.
Yeast quality and productivity in China improved and there was
some reduction in molasses costs. Domestic volumes were level with
last year and there was strong demand for dry yeast exports.
Commissioning of the new fresh yeast plant in Yantai and the
recently expanded dry yeast capacity at Xinjiang were both
completed in the period.
At ABF Ingredients, further growth was achieved in bakery, feed
and speciality enzymes, driven by new products launched last year.
The growth achieved by enzymes since the factory in Finland was
expanded in 2009 has resulted in this factory reaching full
capacity and further expansion is now being planned. In the US,
strong dairy markets contributed to good results in whey proteins
and lactose, and sales of extruded grain products were well ahead
of last year. Responding to increased demand for extruded
ingredients and specialty animal feeds, a new cereal extrusions
factory is under construction at Evansville, Indiana in the US
which is on track to be operational at the end of the summer.
Operations at the new yeast extracts plant in China continued to
make good progress.
RETAIL
2013 2012
----------------------- ------ ------
Revenue GBPm 1,997 1,615
----------------------- ------ ------
Operating profit GBPm 238 154
----------------------- ------ ------
The performance from Primark in the first half was exceptionally
strong. Sales were 24% ahead of the same period last year including
7% like-for-like growth, a substantial expansion of retail selling
space and superior sales densities in the larger new stores. The
like-for-like growth benefited particularly from comparison with
weak sales during the unseasonably warm autumn of 2011. Trading
over the Christmas period was good but has been weaker during the
prolonged period of cold weather since the New Year. Trading in our
stores in northern continental Europe: Germany, the Netherlands,
Belgium and Austria, was particularly strong during the period.
Like-for-like growth in Spain was held back in the short term by
the large number of recent store openings there.
Operating profit margin was much higher than in the same period
last year, reflecting the benefit of lower cotton prices, a weaker
US dollar and lower markdowns as a result of better trading. No
further margin improvement from lower cotton prices is expected in
the second half. Although dollar-denominated garment purchases for
the balance of this financial year are already committed and the
related currency exposure is covered, the recent strengthening of
the US dollar against both sterling and the euro can be expected to
put pressure on margins for the forthcoming autumn and winter
ranges.
This was an extremely active period for new store openings.
Retail selling space increased by 0.7 million sq ft since the last
financial year end, and by 1.0 million sq ft, or 13%, since the
2012 half year. At 2 March 2013, we were trading from 257 stores
and 8.9 million sq ft of selling space. We opened 15 new stores in
the period including six in Spain and four in the UK including our
second store on London's Oxford Street, with 82,000 sq ft of
selling space. Two new stores were opened in Germany including one
in Frankfurt's Zeil, one of the country's premier shopping
locations. We opened our first two stores in Austria and a further
store in the Netherlands. We also relocated our store in Sunderland
to a larger site, and completed the refurbishment and extension of
our flagship store on Mary Street in Dublin. Capital expenditure of
GBP136m in the first half was in line with last year.
This pace of store openings will not continue for the remainder
of this financial year. We expect to add a further 100,000 sq ft of
space this year mainly comprising the completion of extensions to
our Newcastle and Manchester stores. Expenditure on new stores and
refits for the full year is expected to be at a similar level to
last year. New store openings will accelerate early next year
including our first steps into France
George Weston
Chief Executive
CONDENSED CONSOLIDATED INCOME STATEMENT
24 weeks 24 weeks 52 weeks
ended ended ended
2 March 3 March 15 September
2013 2012 2012
GBPm GBPm GBPm
Continuing operations Note
------------------------------------------ ---- -------- -------- --------------
Revenue 1 6,333 5,766 12,252
Operating costs (5,879) (5,402) (11,302)
Exceptional items - - (98)
454 364 852
Share of profit after tax from joint
ventures and associates 5 13 27
Profits less losses on disposal of
non-current assets - 1 (6)
------------------------------------------ ---- -------- -------- --------------
Operating profit 459 378 873
Adjusted operating profit 1 496 412 1,077
Profits less losses on disposal of
non-current assets - 1 (6)
Amortisation of non-operating intangibles (37) (35) (100)
Exceptional items - - (98)
Profits less losses on sale and closure
of businesses - - (9)
------------------------------------------ ----
Profit before interest 459 378 864
Finance income 6 5 9
Finance expense (49) (53) (114)
Other financial (expense)/income (1) (1) 2
------------------------------------------ ---- -------- -------- --------------
Profit before taxation 415 329 761
Adjusted profit before taxation 452 363 974
Profits less losses on disposal of
non-current assets - 1 (6)
Amortisation of non-operating intangibles (37) (35) (100)
Exceptional items - - (98)
Profits less losses on sale and closure
of businesses - - (9)
Taxation - UK (56) (40) (91)
- Overseas (excluding tax on exceptional
items) (50) (45) (116)
- Overseas (on exceptional items) - - 29
3 (106) (85) (178)
------------------------------------------ ---- -------- -------- --------------
Profit for the period 309 244 583
========================================== ==== ======== ======== ==============
Attributable to:
Equity shareholders 307 250 555
Non-controlling interests 2 (6) 28
------------------------------------------ ---- -------- -------- --------------
Profit for the period 309 244 583
========================================== ==== ======== ======== ==============
Basic and diluted earnings per ordinary
share (pence) 4 38.9 31.7 70.3
Dividends per share paid and proposed
for the period (pence) 5 9.35 8.5 28.5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
24 weeks 24 weeks 52 weeks
ended ended ended
2 March 3 March 15 September
2013 2012 2012
GBPm GBPm GBPm
Profit for the period recognised in the
income statement 309 244 583
Other comprehensive income
Actuarial losses on defined benefit schemes (121) (21) (99)
Deferred tax associated with defined benefit
schemes 28 6 23
--------------------------------------------------- ---------- -------- ------------
Items that will not be reclassified to
profit or loss (93) (15) (76)
Effect of movements in foreign exchange 247 (33) (241)
Net (loss)/gain on hedge of net investment
in foreign subsidiaries (57) 3 11
Deferred tax associated with movements
in foreign exchange 1 - 3
Current tax associated with movements in
foreign exchange - (1) (4)
Movement in cash flow hedging position 24 (3) (21)
Deferred tax associated with movement in
cash flow hedging position (5) 1 4
Share of other comprehensive income of
joint ventures and associates 2 (2) -
--------------------------------------------------- ---------- -------- ------------
Items that are or may be subsequently reclassified
to profit or loss 212 (35) (248)
Other comprehensive income for the period 119 (50) (324)
--------------------------------------------------- ---------- -------- ------------
Total comprehensive income for the period 428 194 259
--------------------------------------------------- ---------- -------- ------------
Attributable to
Equity shareholders 436 208 281
Non-controlling interests (8) (14) (22)
--------------------------------------------------- ---------- -------- ------------
Total comprehensive income for the period 428 194 259
--------------------------------------------------- ---------- -------- ------------
CONDENSED CONSOLIDATED BALANCE SHEET
2 March 3 March 15 September
2013 2012 2012
GBPm GBPm GBPm
Non-current assets
Intangible assets 1,771 1,850 1,769
Property, plant and equipment 4,779 4,546 4,541
Biological assets 92 100 89
Investments in joint ventures 184 166 174
Investments in associates 39 43 40
Employee benefits assets 2 19 18
Deferred tax assets 210 174 189
Other receivables 154 191 151
-------- -------- -------------
Total non-current assets 7,231 7,089 6,971
-------- -------- -------------
Current assets
Inventories 1,795 1,727 1,500
Biological assets 115 114 109
Trade and other receivables 1,403 1,312 1,236
Derivative assets 40 30 33
Cash and cash equivalents 218 310 391
-------- -------- -------------
Total current assets 3,571 3,493 3,269
-------- -------- -------------
TOTAL ASSETS 10,802 10,582 10,240
-------- -------- -------------
Current liabilities
Loans and overdrafts (601) (979) (538)
Trade and other payables (1,923) (1,665) (1,752)
Derivative liabilities (31) (14) (50)
Income tax (132) (140) (150)
Provisions (63) (94) (98)
-------- -------- -------------
Total current liabilities (2,750) (2,892) (2,588)
-------- -------- -------------
Non-current liabilities
Loans (954) (923) (914)
Provisions (29) (36) (38)
Deferred tax liabilities (361) (428) (366)
Employee benefits liabilities (221) (76) (113)
-------- -------- -------------
Total non-current liabilities (1,565) (1,463) (1,431)
-------- -------- -------------
TOTAL LIABILITIES (4,315) (4,355) (4,019)
-------- -------- -------------
NET ASSETS 6,487 6,227 6,221
-------- -------- -------------
Equity
Issued capital 45 45 45
Other reserves 175 175 175
Translation reserve 732 689 532
Hedging reserve 2 (1) (17)
Retained earnings 5,165 4,919 5,099
-------- -------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY SHAREHOLDERS 6,119 5,827 5,834
Non-controlling interests 368 400 387
-------- -------- -------------
TOTAL EQUITY 6,487 6,227 6,221
-------- -------- -------------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
24 weeks 24 weeks 52 weeks
ended ended ended
2 March 3 March 15 September
2013 2012 2012
Note GBPm GBPm GBPm
Cash flow from operating activities
Profit before taxation 415 329 761
Profits less losses on disposal of non-current
assets - (1) 6
Profits less losses on sale and closure
of businesses - - 9
Finance income (6) (5) (9)
Finance expense 49 53 114
Other financial expense/(income) 1 1 (2)
Share of profit after tax from joint
ventures and associates (5) (13) (27)
Amortisation 54 44 122
Depreciation 197 173 394
Impairment of property, plant and equipment 8 - 92
Impairment of operating intangibles 4 - 6
Impairment of goodwill 10 - -
Net change in the fair value of biological
assets (21) (8) (28)
Share-based payment expense 6 4 8
Pension costs less contributions (2) (4) (38)
Increase in inventories (239) (320) (125)
(Increase)/decrease in receivables (128) (35) 3
Increase in payables 116 47 165
Purchases less sales of current biological
assets - (1) (3)
Decrease in provisions - (11) (17)
----------------------------------------------- ---- ---------- -------- ------------
Cash generated from operations 459 253 1,431
Income taxes paid (109) (70) (191)
----------------------------------------------- ---- ---------- -------- ------------
Net cash from operating activities 350 183 1,240
----------------------------------------------- ---- ----------
Cash flows from investing activities
Dividends received from joint ventures
and associates 4 4 11
Purchase of property, plant and equipment (323) (316) (700)
Purchase of intangibles (12) (10) (13)
Purchase of non-current biological assets (1) - (1)
Sale of property, plant and equipment 1 - 6
Purchase of subsidiaries, joint ventures
and associates (43) (5) (45)
Sale of subsidiaries, joint ventures
and associates 13 - 2
Loans to joint ventures (4) 4 24
Purchase of non-controlling interests (1) (1) -
Interest received 5 5 10
----------------------------------------------- ----
Net cash from investing activities (361) (319) (706)
----------------------------------------------- ---- ---------- -------- ------------
Cash flows from financing activities
Dividends paid to non-controlling interests (11) (13) (23)
Dividends paid to equity shareholders 5 (158) (133) (200)
Interest paid (39) (38) (108)
Financing:
Increase/(decrease) in short-term loans 86 237 (279)
(Decrease)/increase in long-term loans (12) 37 44
Sale of shares in subsidiary undertakings
to non-controlling interests - - 4
Net cash from financing activities (134) 90 (562)
----------------------------------------------- ---- ---------- -------- ------------
Net decrease in cash and cash equivalents (145) (46) (28)
Cash and cash equivalents at the beginning
of the period 245 291 291
Effect of movements in foreign exchange 10 (4) (18)
----------------------------------------------- ---- ---------- -------- ------------
Cash and cash equivalents at the end
of the period 7 110 241 245
=============================================== ==== ========== ======== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity shareholders
Issued Other Translation Hedging Retained Non-controlling Total
Note capital reserves reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance as at 15
September
2012 45 175 532 (17) 5,099 5,834 387 6,221
Total
comprehensive
income
Profit for the
period
recognised
in the income
statement - - - - 307 307 2 309
Actuarial losses
on defined
benefit schemes - - - - (121) (121) - (121)
Deferred tax
associated
with defined
benefit schemes - - - - 28 28 - 28
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Items that will
not be
reclassified
to profit or
loss - - - - (93) (93) - (93)
Effect of
movements in
foreign
exchange - - 250 - - 250 (3) 247
Net loss on
hedge of net
investment in
foreign
subsidiaries - - (50) - - (50) (7) (57)
Deferred tax
associated
with movements
in foreign
exchange - - - - 1 1 - 1
Movement in cash
flow hedging
position - - - 24 - 24 - 24
Deferred tax
associated
with movement
in cash flow
hedging
position - - - (5) - (5) - (5)
Share of other
comprehensive
income of joint
ventures
and associates - - - - 2 2 - 2
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Items that are
or may be
subsequently
reclassified
to profit or
loss - - 200 19 3 222 (10) 212
Other
comprehensive
income - - 200 19 (90) 129 (10) 119
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
comprehensive
income - - 200 19 217 436 (8) 428
Transactions
with owners
Dividends paid
to equity
shareholders 5 - - - - (158) (158) - (158)
Net movement in
own shares
held - - - - 7 7 - 7
Dividends paid
to
non-controlling
interests - - - - - - (11) (11)
Total
transactions
with
owners - - - - (151) (151) (11) (162)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 2
March 2013 45 175 732 2 5,165 6,119 368 6,487
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 17
September
2011 45 175 712 - 4,816 5,748 427 6,175
Total
comprehensive
income
Profit for the
period
recognised
in the income
statement - - - - 250 250 (6) 244
Actuarial losses
on defined
benefit schemes - - - - (21) (21) - (21)
Deferred tax
associated
with defined
benefit schemes - - - - 6 6 - 6
Items that will
not be
reclassified
to profit or
loss - - - - (15) (15) - (15)
Effect of
movements in
foreign
exchange - - (26) - - (26) (7) (33)
Net gain on
hedge of net
investment in
foreign
subsidiaries - - 3 - - 3 - 3
Current tax
associated with
movements in
foreign
exchange - - - - (1) (1) - (1)
Movement in cash
flow hedging
position - - - (2) - (2) (1) (3)
Deferred tax
associated
with movement
in cash flow
hedging
position - - - 1 - 1 - 1
Share of other
comprehensive
income of joint
ventures
and associates - - - - (2) (2) - (2)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Items that are
or may be
subsequently
reclassified
to profit or
loss - - (23) (1) (3) (27) (8) (35)
Other
comprehensive
income - - (23) (1) (18) (42) (8) (50)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
comprehensive
income - - (23) (1) 232 208 (14) 194
Transactions
with owners
Dividends paid
to equity
shareholders 5 - - - - (133) (133) - (133)
Net movement in
own shares
held - - - - 4 4 - 4
Dividends paid
to
non-controlling
interests - - - - - - (13) (13)
Total
transactions
with
owners - - - - (129) (129) (13) (142)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 3
March 2012 45 175 689 (1) 4,919 5,827 400 6,227
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 17
September
2011 45 175 712 - 4,816 5,748 427 6,175
Total
comprehensive
income
Profit for the
period
recognised
in the income
statement - - - - 555 555 28 583
Actuarial losses
on defined
benefit schemes - - - - (99) (99) - (99)
Deferred tax
associated
with defined
benefit schemes - - - - 23 23 - 23
Items that will
not be
reclassified
to profit or
loss - - - - (76) (76) - (76)
Effect of
movements in
foreign
exchange - - (192) - - (192) (49) (241)
Net gain/(loss)
on hedge
of net
investment in
foreign
subsidiaries - - 12 - - 12 (1) 11
Deferred tax
associated
with movements
in foreign
exchange - - - - 3 3 - 3
Current tax
associated with
movements in
foreign
exchange - - - - (4) (4) - (4)
Movement in cash
flow hedging
position - - - (21) - (21) - (21)
Deferred tax
associated
with movement
in cash flow
hedging
position - - - 4 - 4 - 4
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Items that are
or may be
subsequently
reclassified
to profit or
loss - - (180) (17) (1) (198) (50) (248)
Other
comprehensive
income - - (180) (17) (77) (274) (50) (324)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
comprehensive
income - - (180) (17) 478 281 (22) 259
Transactions
with owners
Dividends paid
to equity
shareholders 5 - - - - (200) (200) - (200)
Net movement in
own shares
held - - - - 8 8 - 8
Deferred tax
associated
with
share-based
payments - - - - (2) (2) - (2)
Dividends paid
to
non-controlling
interests - - - - - - (23) (23)
Changes in
ownership of
subsidiaries - - - - (1) (1) 5 4
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Total
transactions
with
owners - - - - (195) (195) (18) (213)
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
Balance as at 15
September
2012 45 175 532 (17) 5,099 5,834 387 6,221
----------------- ----- --------- --------- ------------ --------- --------- ------ ---------------- --------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. Operating segments
The group discloses five operating segments, as described below. These
are the group's operating divisions, based on the group's management and
internal reporting structure, which combine businesses with common characteristics.
The board is the chief operating decision maker.
Inter-segment pricing is determined on an arm's length basis. Segment
result is adjusted operating profit, as shown on the face of the consolidated
income statement. Segment assets comprise all non-current assets except
employee benefits assets and deferred tax assets, and all current assets
except cash and cash equivalents. Segment liabilities comprise trade and
other payables, derivative liabilities and provisions. Segment results,
assets and liabilities include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated
items comprise mainly corporate assets and expenses, cash, borrowings,
employee benefits balances and current and deferred tax balances. Segment
non-current asset additions are the total cost incurred during the period
to acquire segment assets that are expected to be used for more than one
year, comprising property, plant and equipment, operating intangibles
and biological assets.
The group is comprised of the following operating segments:
The manufacture of grocery products, including hot beverages,
sugar & sweeteners, vegetable oils, bread & baked goods, cereals,
ethnic foods, herbs & spices, and meat products which are sold
to retail, wholesale and foodservice businesses.
The growing and processing of sugar beet and sugar cane for
Grocery sale to industrial users and to Silver Spoon, which is included
in the grocery segment.
The manufacture of animal feeds and the provision of other
Sugar products for the agriculture sector.
The manufacture of bakers' yeast, bakery ingredients, speciality
Agriculture proteins, enzymes, lipids and yeast extracts.
Ingredients Buying and merchandising value clothing and accessories through
Retail the Primark and Penneys retail chains.
Geographical information
In addition to the required disclosure for operating segments, disclosure
is also given of certain geographical information about the group's operations,
based on the geographical groupings: United Kingdom; Europe & Africa;
The Americas; and Asia Pacific.
Revenues are shown by reference to the geographical location of customers.
Profits are shown by reference to the geographical location of the businesses.
Segment assets are based on the geographical location of the assets.
Revenue Adjusted operating profit
24 weeks 24 weeks 52 weeks 24 weeks 24 weeks 52 weeks
ended ended ended ended ended ended
2 March 3 March 15 September 2 March 3 March 15 September
2013 2012 2012 2013 2012 2012
Operating segments GBPm GBPm GBPm GBPm GBPm GBPm
---------- ---------- --------------- -------- -------- ---------------
Grocery 1,832 1,813 3,726 97 75 187
Sugar 1,323 1,203 2,666 163 172 510
Agriculture 641 597 1,265 20 16 40
Ingredients 540 538 1,092 2 18 32
Retail 1,997 1,615 3,503 238 154 356
Central - - - (24) (23) (48)
---------- ---------- --------------- -------- -------- ---------------
6,333 5,766 12,252 496 412 1,077
Geographical information
United Kingdom 2,676 2,485 5,248 344 271 638
Europe & Africa 1,849 1,549 3,328 138 89 325
The Americas 620 607 1,241 52 50 100
Asia Pacific 1,188 1,125 2,435 (38) 2 14
---------- ---------- --------------- -------- -------- ---------------
6,333 5,766 12,252 496 412 1,077
1 Operating segments for the 24 weeks ended
2 March 2013
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
businesses 1,836 1,390 641 596 1,997 (127) 6,333
Internal revenue (4) (67) - (56) - 127 -
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 1,832 1,323 641 540 1,997 - 6,333
Adjusted operating profit
before joint ventures and
associates 93 169 16 (1) 238 (24) 491
Share of profit after tax
from joint ventures and
associates 4 (6) 4 3 - - 5
Adjusted operating profit 97 163 20 2 238 (24) 496
Amortisation of non-operating
intangibles (9) (11) - (17) - - (37)
Profit before interest 88 152 20 (15) 238 (24) 459
Finance income 6 6
Finance expense (49) (49)
Other financial expense (1) (1)
Taxation (106) (106)
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Profit for the period 88 152 20 (15) 238 (174) 309
===================================== ======== ====== ============ ============ ========= ======== ========
Segment assets (excluding
investments in joint ventures
and associates) 2,837 2,810 368 1,428 2,532 174 10,149
Investments in joint ventures
and associates 31 44 91 57 - - 223
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 2,868 2,854 459 1,485 2,532 174 10,372
Cash and cash equivalents 218 218
Deferred tax assets 210 210
Employee benefits assets 2 2
Segment liabilities (566) (607) (136) (193) (418) (126) (2,046)
Loans and overdrafts (1,555) (1,555)
Income tax (132) (132)
Deferred tax liabilities (361) (361)
Employee benefits liabilities (221) (221)
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Net assets 2,302 2,247 323 1,292 2,114 (1,791) 6,487
===================================== ======== ====== ============ ============ ========= ======== ========
Non-current asset additions 65 96 6 34 116 1 318
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 50 44 3 31 67 2 197
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 18 17 1 18 - - 54
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of property,
plant and equipment - 8 - - - - 8
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of operating
intangibles - 4 - - - - 4
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of goodwill - 10 - - - - 10
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 2,676 1,849 620 1,188 6,333
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 3,935 3,108 1,149 2,180 10,372
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Non-current asset additions 122 118 26 52 318
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 88 52 12 45 197
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 16 11 14 13 54
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of property,
plant and equipment - - - 8 8
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of operating
intangibles - - - 4 4
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of goodwill - - - 10 10
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
1 Operating segments for the 24 weeks ended
3 March 2012
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
businesses 1,815 1,281 602 574 1,615 (121) 5,766
Internal revenue (2) (78) (5) (36) - 121 -
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 1,813 1,203 597 538 1,615 - 5,766
Adjusted operating profit
before joint ventures and
associates 69 173 13 13 154 (23) 399
Share of profit after tax
from joint ventures and
associates 6 (1) 3 5 - - 13
Adjusted operating profit 75 172 16 18 154 (23) 412
Profits less losses on
disposal of non-current
assets - 1 - - - - 1
Amortisation of non-operating
intangibles (7) (12) - (16) - - (35)
Profit before interest 68 161 16 2 154 (23) 378
Finance income 5 5
Finance expense (53) (53)
Other financial expense (1) (1)
Taxation (85) (85)
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Profit for the period 68 161 16 2 154 (157) 244
===================================== ======== ====== ============ ============ ========= ======== ========
Segment assets (excluding
investments in joint ventures
and associates) 2,894 2,901 333 1,402 2,207 133 9,870
Investments in joint ventures
and associates 23 51 78 57 - - 209
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 2,917 2,952 411 1,459 2,207 133 10,079
Cash and cash equivalents 310 310
Deferred tax assets 174 174
Employee benefits assets 19 19
Segment liabilities (574) (524) (117) (166) (315) (113) (1,809)
Loans and overdrafts (1,902) (1,902)
Income tax (140) (140)
Deferred tax liabilities (428) (428)
Employee benefits liabilities (76) (76)
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Net assets 2,343 2,428 294 1,293 1,892 (2,023) 6,227
===================================== ======== ====== ============ ============ ========= ======== ========
Non-current asset additions 59 67 8 46 122 1 303
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 50 45 3 22 52 1 173
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 14 12 1 17 - - 44
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 2,485 1,549 607 1,125 5,766
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 3,760 2,946 1,102 2,271 10,079
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Non-current asset additions 91 116 32 64 303
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 77 40 12 44 173
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 6 17 11 10 44
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
1 Operating segments for the 52 weeks ended
15 September 2012
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from continuing
businesses 3,734 2,808 1,275 1,163 3,503 (231) 12,252
Internal revenue (8) (142) (10) (71) - 231 -
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 3,726 2,666 1,265 1,092 3,503 - 12,252
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Adjusted operating profit
before joint ventures and
associates 179 514 27 22 356 (48) 1,050
Share of profit after tax
from joint ventures and
associates 8 (4) 13 10 - - 27
Adjusted operating profit 187 510 40 32 356 (48) 1,077
Profits less losses on
disposal of non-current
assets - 1 - - - (7) (6)
Amortisation of non-operating
intangibles (16) (22) (1) (61) - - (100)
Exceptional items (98) - - - - - (98)
Profits less losses on
sale and closure of businesses - (6) - (3) - - (9)
Profit before interest 73 483 39 (32) 356 (55) 864
Finance income 9 9
Finance expense (114) (114)
Other financial income 2 2
Taxation (178) (178)
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Profit for the period 73 483 39 (32) 356 (336) 583
===================================== ======== ====== ============ ============ ========= ======== ========
Segment assets (excluding
investments in joint ventures
and associates) 2,685 2,510 275 1,353 2,423 182 9,428
Investments in joint ventures
and associates 24 47 87 56 - - 214
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 2,709 2,557 362 1,409 2,423 182 9,642
Cash and cash equivalents 391 391
Deferred tax assets 189 189
Employee benefit assets 18 18
Segment liabilities (573) (413) (104) (204) (526) (118) (1,938)
Loans and overdrafts (1,452) (1,452)
Income tax (150) (150)
Deferred tax liabilities (366) (366)
Employee benefits liabilities (113) (113)
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Net assets 2,136 2,144 258 1,205 1,897 (1,419) 6,221
===================================== ======== ====== ============ ============ ========= ======== ========
Non-current asset additions 153 160 14 96 329 3 755
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 105 95 7 47 132 8 394
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 33 24 3 62 - - 122
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of property,
plant and equipment 92 - - 3 - - 95
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of operating
intangibles 6 - - - - - 6
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Revenue from external customers 5,248 3,328 1,241 2,435 12,252
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Segment assets 3,689 3,002 1,051 1,900 9,642
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Non-current asset additions 270 278 65 142 755
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Depreciation 184 95 25 90 394
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Amortisation 15 49 26 32 122
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of property,
plant and equipment - - - 95 95
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
Impairment of operating
intangibles - - - 6 6
------------------------------------- -------- ------ ------------ ------------ --------- -------- --------
2. Exceptional items
In the 2012 full year results an exceptional charge of GBP98m was
made to impair property, plant and equipment (GBP92m) and operating
intangibles (GBP6m) in the Australian meat business. An exceptional
tax credit of GBP29m arose on this item.
3. Income tax expense
24 weeks 24 weeks 52 weeks
ended ended ended
2 March 3 March 15 September
2013 2012 2012
GBPm GBPm GBPm
Current tax expense
UK - corporation tax at 23.5%/25.5%/25.1% 56 37 108
Overseas - corporation tax 51 39 110
UK - overprovided in prior periods - - (6)
Overseas - overprovided in prior periods - - (2)
107 76 210
Deferred tax expense
UK deferred tax - 3 (14)
Overseas deferred tax (1) 6 (20)
UK - underprovided in prior periods - - 3
Overseas - underprovided in prior periods - - (1)
--------- -------- ------------
(1) 9 (32)
Total income tax expense in income
statement 106 85 178
========= ======== ============
Reconciliation of effective tax rate
Profit before taxation 415 329 761
Less share of profit from joint ventures
and associates (5) (13) (27)
--------- -------- ------------
Profit before taxation excluding share
of profit after tax from joint ventures
and associates 410 316 734
--------- -------- ------------
Nominal tax charge at UK corporation
tax rate of 23.5%/25.5%/25.1% 96 81 184
Different tax rates on overseas earnings (2) 1 (19)
Expenses not deductible for tax purposes 9 3 3
Disposal of assets covered by tax exemptions
or unrecognised capital losses - - 2
Deferred tax not recognised 3 - 14
Adjustments in respect of prior periods - - (6)
--------- -------- ------------
106 85 178
========= ======== ============
Income tax recognised directly in equity
Deferred tax associated with defined
benefit schemes (28) (6) (23)
Deferred tax associated with share
based payments - - 2
Deferred tax associated with movement
in cash flow hedging position 5 (1) (4)
Deferred tax associated with movements
in foreign exchange (1) - (3)
Current tax associated with movements
in foreign exchange - 1 4
--------- -------- ------------
(24) (6) (24)
========= ======== ============
In 2012, it was announced that the UK corporation tax rate, which was
to have been reduced from 26% to 25% with effect from 1 April 2012,
would be reduced further to 24% with effect from 1 April 2012, and to
23% with effect from 1 April 2013. These lower rates had not been substantively
enacted by the end of the reporting period and therefore were not reflected
in the interim report for 2012. Following substantive enactment before
the full year end, the impact of these rate reductions on current and
deferred tax was reflected in the consolidated financial statements
for the year ended 15 September 2012.
It has recently been announced that the UK corporation tax rate will
be further reduced to 21% with effect from 1 April 2014 and to 20% with
effect from 1 April 2015. Again, these rates have not yet been substantively
enacted and so are not reflected in the interim results for 2013. If
substantively enacted, these rate reductions will be reflected in the
results for the year ended 14 September 2013.
4. Earnings per ordinary share 24 weeks 24 weeks 52 weeks
ended ended ended
2 March 3 March 15 September
2013 2012 2012
pence pence pence
Adjusted earnings per share 41.9 34.4 87.2
Disposal of non-current assets - 0.1 (0.8)
Sale and closure of businesses - - (1.1)
Exceptional items - - (12.4)
Tax effect on above adjustments - - 3.9
Amortisation of non-operating intangibles (4.7) (4.4) (12.7)
Tax credit on non-operating intangibles
amortisation and goodwill 1.3 1.1 4.2
Non-controlling interests' share of
amortisation of non-operating intangibles
net of tax 0.4 0.5 2.0
Earnings per ordinary share 38.9 31.7 70.3
========== ============ ==============
5. Dividends
24 weeks 24 weeks 52 weeks
ended ended ended
2 March 3 March 15 September
2013 2012 2012
pence pence pence
Per share
2011 final - 16.85 16.85
2012 interim - - 8.50
2012 final 20.00 - -
---------- ------------ --------------
20.00 16.85 25.35
========== ============ ==============
Total GBPm GBPm GBPm
2011 final - 133 133
2012 interim - - 67
2012 final 158 - -
---------- ------------ --------------
158 133 200
========== ============ ==============
The 2012 final dividend of 20.0p per share was approved on 7 December
2012 and totalled GBP158m when paid on 11 January 2013. The 2013 interim
dividend of 9.35p per share, total value of GBP74m, will be paid on
5 July 2013 to shareholders on the register on 7 June 2013.
6. Acquisitions and disposals
There were no acquisitions or disposals in the period. The cash outflow
on purchase of subsidiaries, joint ventures and associates in the
cash flow statement of GBP43m comprised a GBP2m investment in a joint
venture and GBP41m deferred consideration paid in respect of previous
acquisitions. The cash inflow on sale of subsidiaries, joint ventures
and associates of GBP13m comprised deferred consideration received
in respect of previous disposals.
7. Analysis of net debt
At At
15 September Exchange 2 March
2012 Cash flow adjustments 2013
GBPm GBPm GBPm GBPm
Cash at bank and in
hand, cash equivalents
and overdrafts 245 (145) 10 110
Short-term borrowings (392) (86) (15) (493)
Loans over one year (914) 12 (52) (954)
-------------- ----------- ------------ ---------
(1,061) (219) (57) (1,337)
============== =========== ============ =========
Cash and cash equivalents comprise cash balances, call deposits and
investments with original maturities of three months or less. Bank
overdrafts that are repayable on demand and form an integral part
of the group's cash management are included as a component of cash
and cash equivalents for the purpose of the cash flow statement.
8. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed
in this note.
Full details of the group's other related party relationships, transactions
and balances are given in the group's financial statements for the
52 weeks ended 15 September 2012. There have been no material changes
in these relationships in the 24 weeks ended 2 March 2013 or up to
the date of this report.
No related party transactions have taken place in the first 24 weeks
of the current financial year that have materially affected the financial
position or the performance of the group during that period.
9. Basis of preparation
Associated British Foods plc ('the Company') is a company domiciled
in the United Kingdom. The condensed consolidated interim financial
statements of the Company for the 24 weeks ended 2 March 2013 comprise
those of the Company and its subsidiaries (together referred to as
'the group') and the group's interests in associates and jointly controlled
entities.
The consolidated financial statements of the group for the 52 weeks
ended 15 September 2012 are available upon request from the Company's
registered office at 10 Grosvenor Street, London W1K 4QY or at www.abf.co.uk.
The condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting. They
do not include all of the information required for full annual financial
statements and should be read in conjunction with the consolidated
financial statements of the group for the 52 weeks ended 15 September
2012.
The preparation of interim financial statements requires management
to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing the condensed consolidated interim financial statements,
the significant judgements made by management in applying the group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the 52 weeks ended 15 September 2012.
After making enquiries, the directors have a reasonable expectation
that the group has adequate resources to continue in operational existence
for the foreseeable future. For this reason they continue to adopt
the going concern basis in preparing the condensed consolidated interim
financial statements. The group's business activities, together with
the factors likely to affect its future development, performance and
position are set out in the Operating review. Note 24 on pages 96
to 107 of the 2012 annual report provides details of the group's policy
on managing its financial and commodity risks.
The group has considerable financial resources, good access to debt
markets, a diverse range of businesses and a wide geographic spread.
It is therefore well placed to continue to manage business risks successfully
despite the current economic uncertainty.
The 24 week period for the condensed consolidated interim financial
statements of the Company means that the second half of the year is
usually a 28 week period, and the two halves of the reporting year
are therefore not of equal length. For the Retail segment, Christmas,
falling in the first half of the year, is a particularly important
trading period. For the Sugar segment, the balance sheet, and working
capital in particular, is strongly influenced by seasonal growth patterns
for both sugar beet and sugar cane, which vary significantly in the
markets in which the group operates.
The condensed consolidated interim financial statements are unaudited
but have been subject to an independent review by the auditor and
were approved by the board of directors on 23 April 2013. They do
not constitute statutory financial statements as defined in section
434 of the Companies Act 2006. The comparative figures for the 52
weeks ended 15 September 2012 have been abridged from the group's
2012 financial statements and are not the Company's statutory financial
statements for that period. Those financial statements have been reported
on by the Company's auditor and delivered to the Registrar of Companies.
The report of the auditors was unqualified, did not include a reference
to any matters to which the auditors drew attention by way of emphasis
without qualifying their report and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
This interim results announcement has been prepared solely to provide
additional information to shareholders as a body, to assess the group's
strategies and the potential for those strategies to succeed. This
interim results announcement should not be relied upon by any other
party or for any other purpose.
10. Significant accounting policies
The accounting policies applied by the group in these condensed consolidated
interim financial statements are substantially the same as those applied
by the group in its consolidated financial statements for the 52 weeks
ended 15 September 2012. Whilst there have been a number of minor
changes to standards which become applicable for the year ending 14
September 2013, none have been assessed as having a significant impact
on the group.
The condensed consolidated statement of comprehensive income has been
amended to meet the revised requirements of IAS 1 Presentation of
Financial Statements. This is a presentational change only and no
figures or descriptions have changed.
CAUTIONARY STATEMENTS
This interim results announcement contains forward-looking
statements. These have been made by the directors in good faith
based on the information available to them up to the time of their
approval of this report. The directors can give no assurance that
these expectations will prove to have been correct. Due to the
inherent uncertainties, including both economic and business risk
factors underlying such forward-looking information, actual results
may differ materially from those expressed or implied by these
forward-looking statements. The directors undertake no obligation
to update any forward-looking statements whether as a result of new
information, future events or otherwise.
RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which
could have a material impact on the group's performance over the
remainder of the financial year and could cause actual results to
differ materially from expected and historical results. These
include, but are not limited to, competitor activity and
competition risk, commercial relationships with customers and
suppliers, changes in foreign exchange rates and commodity prices.
Details of the key risks facing the group's businesses at an
operational level are included on pages 48 to 51 of the group's
statutory financial statements for the 52 weeks ended 15 September
2012, as part of the corporate governance report. Details of
further potential risks and uncertainties arising since the issue
of the previous statutory financial statements are included within
the Chairman's statement and the Operating review as
appropriate.
RESPONSIBILITY STATEMENT
The interim results announcement complies with the Disclosure
and Transparency Rules ("the DTR") of the Financial Conduct
Authority in respect of the requirement to produce a half yearly
financial report.
The directors confirm that to the best of their knowledge:
-- this financial information has been prepared in accordance
with IAS 34 as adopted by the EU;
-- this interim results announcement includes a fair review of
the important events during the first half and their impact on the
financial information, and a description of the principal risks and
uncertainties for the remaining half of the year as required by DTR
4.2.7R; and
-- this interim results announcement includes a fair review of
the disclosure of related party transactions and changes therein as
required by DTR 4.2.8R.
On behalf of the board
George Weston John Bason Charles Sinclair
Chief Executive Finance Director Chairman
23 April 2013 23 April 2013 23 April 2013
Independent review report to Associated British Foods plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the interim results announcement for the
24 weeks ended 2 March 2013 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated cash flow statement, the condensed
consolidated statement of changes in equity and the related
explanatory notes. We have read the other information contained in
the interim results announcement and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA"). Our review
has been undertaken so that we might state to the Company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The interim results announcement is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the interim results announcement in accordance with
the DTR of the UK FCA.
The annual financial statements of the group are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this interim results announcement
has been prepared in accordance with IAS 34Interim Financial
Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the interim results
announcement based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the interim results announcement for the 24 weeks ended 2 March
2013 is not prepared, in all material respects, in accordance with
IAS 34 as adopted by the EU and the DTR of the UK FCA.
Richard Pinckard
for and on behalf of KPMG Audit Plc
Chartered Accountants
15 Canada Square
London
E14 5GL
23 April 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMGZDGZLGFZM
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