Interim Results

Tate & Lyle PLC 4 November 2004 - TATE & LYLE PLC ANNOUNCEMENT OF INTERIM RESULTS For the six months ended 30 September 2004 INTERIM RESULTS TO 30 SEPTEMBER 2004 2003 ------------------------------------------------------------------------------------------------------------------------ Profit before tax, amortisation and exceptional items (a) £130m £119m Profit before taxation £81m £111m Diluted earnings per share before amortisation and exceptional items 19.1p 17.7p Diluted earnings per share 12.3p 16.3p Interim dividend per share 5.7p 5.6p (a) Before net exceptional charges of £42 million (2003 - charges of £4 million) and amortisation of £7 million (2003 - £4 million) -- Profit before tax, amortisation and exceptional items of £130 million up 9.2% as reported and up 16.0% at constant exchange rates -- Exceptional growth in SPLENDA(R) Sucralose since April 2004 realignment -- £97 million construction of second sucralose plant announced -- Better than expected performance from Amylum due to lower cereal prices -- Profit before interest, amortisation and exceptional items / sales margin increased from 8.0% to 8.5% -- Interest cover increased from 8.5 times to 13.6 times -- Annualised RONOA of 17.0% -- Interim dividend increased by 0.1p to 5.7p per share 'We have made an excellent start to the financial year. With the exception of Amylum, trading in all major businesses is ahead of the corresponding period. Whilst results at Amylum are lower they have exceeded our expectations as cereal prices in Europe returned to levels similar to those before last year's dramatic increase. The realignment of our sucralose business, and the exciting growth experienced subsequently, has improved total profitability. In the second half of this financial year higher energy costs and the outcome of the annual pricing negotiations at Staley and Amylum, as usual at this time, will influence the overall results for the period. Although the second half is expected to benefit from the growth of SPLENDA(R) Sucralose the necessity to rebuild stock will have some short term adverse impact on profitability of this product. Nevertheless, we expect the results of the Group for the year as a whole to reflect satisfactory progress.' Sir David Lees Iain Ferguson CBE Chairman Chief Executive An interim statement incorporating the Group profit and loss account for the six months ended 30 September 2004 will be posted to shareholders shortly, and will be obtainable from The Company Secretary, Tate & Lyle PLC, Sugar Quay, Lower Thames Street, London EC3R 6DQ. SPLENDA(R) is a trademark of McNeil Nutritionals, LLC STATEMENT OF INTERIM RESULTS Comparisons are with the six months to 30 September 2003 unless stated otherwise. Overview Profit before tax, amortisation and exceptional items for the six months to 30 September 2004 was £130 million, £11 million better than that achieved in the corresponding period. At constant exchange rates this represented a 16.0% improvement (after adjusting for the £8 million adverse impact of exchange translation).(b) Overall trading has exceeded our expectations. In particular we have benefited from exceptional growth in sucralose and a faster decline in European cereal prices than anticipated; the latter leading to a better performance from Amylum than we had expected. Interest cover improved from 8.5 times to 13.6 times and the profit before interest, amortisation and exceptional items over sales margin improved from 8.0% to 8.5%. At 17.0% the annualised return on net operating assets (RONOA) represented a significant improvement over the corresponding period (15.9% - see notes 9 and 11). We announced the realignment of our SPLENDA(R) Sucralose activities with McNeil Nutritionals in February 2004. The main elements of the transaction were as follows: -- The cash price of £72 million was paid in April 2004. The terms of the realignment reflected, inter alia, that both parties would continue to participate in the success of each other's business. -- Tate & Lyle became the sole manufacturer of sucralose and sells SPLENDA(R) Sucralose as an ingredient to food and beverage companies worldwide. -- McNeil Nutritionals buys sucralose from Tate & Lyle and sells SPLENDA(R) Brand tabletop products worldwide. -- The accounting treatment of the SPLENDA(R)Sucralose realignment is shown below. Subsequently we have announced two expansions to the Alabama sucralose plant that will, by completion in April 2006, more than double the original capacity at a cost of £42 million (US$75 million). We have also announced our decision to construct a second plant in Singapore at a cost of £97 million (US$175 million), to be completed by January 2007. When completed the Singapore plant will have two-thirds the capacity of the expanded Alabama facility. In July we announced that Staley had reached agreement to end the long running high fructose corn syrup civil legal case in the US with the payment of total damages of £56 million. This has resulted in an exceptional charge to the profit and loss account. Staley denies emphatically involvement in any wrongdoing, but settled with great reluctance to ensure an end to this lengthy action, and to avoid the risk and uncertainty that a US jury trial would have involved. The Board has declared an interim dividend of 5.7p per share, an increase of 0.1p (1.8%). This will be paid on 11 January 2005 to shareholders registered on 3 December 2004. Results for the six months to 30 September 2004 Sales were £1,666 million (£1,663 million). Exchange translation reduced sales by £126 million, sucralose added £62 million and underlying sales grew by 4.0%. (b) Exchange translation is calculated by re-converting local currency results for the comparative period at the current period's exchange rates Profit before interest and exceptional items was £142 million (£133 million) before a £7 million (£4 million) charge for amortisation of goodwill and intangible assets. Exchange translation reduced profit before interest by £9 million. The margin of profit before interest, amortisation and exceptional items to sales improved to 8.5% (8.0%). The net interest charge of £12 million (£14 million) benefited from lower interest rates. Exchange translation reduced the interest charge by £1 million. Profit before tax, amortisation and exceptional items was £130 million (£119 million). Exchange translation reduced profit before tax by £8 million (£2 million). Profit before tax was £81 million (£111 million). The net charge for exceptional items of £42 million (£4 million) consists of the charge of £56 million in respect of the settlement of the high fructose corn syrup class action suit in the US, together with £2 million in respect of loss on sale or termination of businesses, offset by a credit to the profit and loss account of £16 million following settlement of the remaining balance due on the loan note issued by the purchaser of Western Sugar. The effective rate of tax on profit before amortisation and exceptional items was 28.8% (year to 31 March 2004, 29.0%). Diluted earnings per share before amortisation and exceptional items were 19.1p (17.7p), and after exceptional items and amortisation were 12.3p (16.3p). Operating profit before depreciation of tangible fixed assets and amortisation of goodwill and intangible assets provided cash flow of £181 million (£162 million). Operating cash inflow was £72 million (£156 million) after the operating exceptional item of £56 million (£nil). The working capital outflow of £53 million was higher than normal and mainly reflects payments against provisions and margin deposits on raw materials. Capital expenditure totalled £51 million (£53 million) and investment expenditure totalled £81 million (£15 million). The latter included the cost of the realignment of the sucralose activities and investment into the DuPont Bio-3G joint venture. Since 31 March 2004 net debt has increased by £142 million to £530 million. Segmental Analysis of Profit before Interest and Exceptional Items Americas Profits in the segment were £82 million, £24 million better than in the comparative period despite exchange translation which reduced profits by £6 million. The contribution from SPLENDA(R) Sucralose was £25 million and this is reported in the Americas segment for the first time. Profits for Staley were higher in dollar terms. Good growth has been seen in value added food ingredients and industrial products. Ethanol has also performed strongly on higher gasoline prices in the US. Sweeteners gross margins were lower and industry high fructose corn syrup volumes are estimated to be slightly down. Net corn costs were higher with by-product prices tending to follow the corn price (which had increased sharply earlier in the year but has subsequently declined). The improvement in citric acid has continued with higher selling prices and this product line reported a small profit. The Aquasta(TM) astaxanthin plant is being commissioned. Construction of the Bio-3G plant in Loudon, Tennessee for our joint venture with DuPont has commenced and is on schedule. Since the realignment of the SPLENDA(R)Sucralose business in April 2004, when we undertook responsibility for manufacturing, the product has seen exceptional growth. The superior taste profile and heat and shelf-life stability which SPLENDA(R)Sucralose delivers, coupled with high growth in zero-calorie and low-carbohydrate foods has resulted in high demand. Additionally, the launch of new products by our customers has led to a bulge in demand in the first half year, as producers seek to fill the stock pipeline from their own factories through the wholesalers, retailers and to their customers. We have responded to this by improving the efficiency of the plant and by satisfying this demand out of stock, but this cannot continue into the second half year when we will seek to rebuild stock levels. The realignment went smoothly. One-off costs will be lower than our original estimate and are not expected to exceed £6 million (US$10 million). We have announced two expansions which will, by completion in April 2006, more than double the original capacity of the plant at a cost of £42 million (US$75 million). Sales for the six months to September 2004 totalled £62 million (US$113 million) and profit before interest was £25 million (US$46 million), after one-off realignment costs and a £2 million charge for amortisation of patents and a £1 million charge for goodwill. This compares to the pro forma figures for the 12 months to December 2003 of US$130 million for sales and US$38 million for profit before interest. In Mexico, Almex (our corn wet miller) remains profitable and Occidente (our Mexican cane sugar producer), also performed well. There has been no resolution to the long running North American Free Trade Agreement dispute between Mexico and the US regarding sweeteners. Redpath, our Canadian sugar refiner, performed well achieving higher profits benefiting from a £2 million mark-to-market gain on raw sugar stocks. Europe Profits in the segment were £56 million, £15 million lower than in the comparative period due to higher cereal prices in Europe during much of the period. Exchange translation decreased profits by £2 million. As expected, Amylum, our European sweetener and starch business, reported lower profits although the decline was less than anticipated. Volumes increased in sweeteners but starch volumes were lower. We saw good growth in higher value added food ingredients. Selling prices were increased but were insufficient to cover raw material prices which peaked at around a 40% increase versus the prior year following a poor harvest in 2003 as a result of dry weather. Good growing conditions for the 2004 harvests have generated large crops and cereal prices have declined faster than we expected, to levels similar to those before the 2003 drought. The high protein content of the 2003 crop reduced EU sales demand from bakers for vital wheat gluten but export demand remained strong, albeit at lower selling prices. Manufacturing costs increased as a result of processing wheat with much higher protein content and because of higher energy costs. Amylum's Eaststarch operations continued to perform well. Slovakia and Hungary, where two of the joint ventures are located, joined the EU in May. Our European sugar refineries in the UK and Portugal continue to produce stable profits and generate good cash flow. The latest comments from the Agricultural Commission to the EU suggest that reform of the sugar regime is now unlikely before July 2006, with legislative proposals not expected before the spring of 2005. Trading in Eastern Sugar has improved upon EU accession by Hungary, Slovakia and the Czech Republic. Rest of the World Profit in the segment was £5 million (£4 million). Nghe An Tate & Lyle Sugar Company in Vietnam performed well with better volumes and pricing. Exchange translation reduced profits by £1 million. Other Segments In the Animal Feed and Bulk Storage segment, the molasses business produced stable profits. The Other Businesses and Activities segment principally represents central costs. Included in the corresponding period was £3 million income relating to advance licence fees from sucralose. Retirement Benefits Under SSAP 24, we expect the profit and loss account charge for retirement benefits for the year to March 2005 to be similar to the £30 million charge in the prior year. Under FRS 17, the deficit for pension and healthcare liabilities has increased from £231 million at March 2004 to £235 million at September 2004. If the accounts had been prepared under FRS 17, the profit before tax would have been £4 million higher and net assets reduced by £111 million. Accounting Treatment of SPLENDA(R)Sucralose Realignment The cash price of £72 million reflected payment to acquire tangible and intangible assets with a fair value of £79 million and £32 million respectively. When we announced the realignment in February 2004, we disclosed that Tate & Lyle and McNeil Nutritionals would continue to participate in each other's business. This has resulted in a best estimate provision for deferred payments to McNeil Nutritionals of £60 million. No value has been recognised for future deferred receipts from McNeil Nutritionals, which are expected to at least match the deferred payments. The formal unwinding of the earlier arrangements, which included the termination of certain pre-existing contractual rights and obligations as well as mutual intellectual property and other asset transfers, gave rise to a tax liability of £24 million. A related deferred tax asset with a discounted value of £18 million has been recognised reflecting timing differences. The net impact of the realignment leads to initial goodwill under UK GAAP of £27 million. The estimate of deferred payments may be revised as further information becomes available with corresponding adjustments to goodwill. Any amounts received in respect of future deferred receipts from McNeil Nutritionals would result in a reduction of goodwill. Deferred payments and receipts under the realignment agreements which arose during the period to 30 September 2004 have been reflected in the movement of provisions and goodwill. International Financial Reporting Standards We will adopt international financial reporting standards ('IFRS') in the year ending March 2006. A detailed implementation project has been undertaken to effect orderly transition from UK accounting standards. The project is progressing well, is meeting internal guidelines, and has been reviewed by our external auditors. Our intention is to provide information on the effect of IFRS on our results for the year ended 31 March 2005, in June 2005. Directors As previously announced, Keith Hopkins and Mary Jo Jacobi retired from the Board at the Annual General Meeting on 29 July 2004, and David Fish stepped down as a Non-Executive Director with effect from 30 September 2004 due to the pressure of other commitments. On 3 November 2004 we announced the appointment of Kai Nargolwala as a Non-Executive Director with effect from 1 December 2004. It was also announced that Larry Pillard, who was appointed a Director in 1994 and served as Chief Executive from 1996 to 2002, would be retiring from the Board on 31 December 2004. Outlook We have made an excellent start to the financial year. With the exception of Amylum, trading in all major businesses is ahead of the corresponding period. Whilst results at Amylum are lower they have exceeded our expectations as cereal prices in Europe returned to levels similar to those before last year's dramatic increase. The realignment of our sucralose business, and the exciting growth experienced subsequently, has improved total profitability. In the second half of this financial year higher energy costs and the outcome of the annual pricing negotiations at Staley and Amylum, as usual at this time, will influence the overall results for the period. Although the second half is expected to benefit from the growth of SPLENDA(R)Sucralose the necessity to rebuild stock will have some short term adverse impact on profitability of this product. Nevertheless, we expect the results of the Group for the year as a whole to reflect satisfactory progress. Sir David Lees Iain Ferguson CBE Chairman Chief Executive INDEPENDENT REVIEW REPORT TO TATE & LYLE PLC Introduction We have been instructed by the Company to review the financial information which comprises the Group profit and loss account, the combined statement of recognised gains and losses and reconciliation of movements in shareholders' funds, the summarised Group balance sheet, the statement of cash flows, and notes 1 to 9 inclusive. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of Group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Listing Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2004. PricewaterhouseCoopers LLP Chartered Accountants London 4 November 2004 TATE & LYLE GROUP PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited 6 months to 6 months to Year to 30 September 30 September 31 March 2004 2003 2004 £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ Sales (Note 1) Group subsidiaries 1 504 1 510 2 874 Share of joint ventures and associates 162 153 293 -------------- ------------- --------------- 1 666 1 663 3 167 ============== ============= =============== Group operating profit before amortisation and operating exceptional items 122 110 214 Amortisation (7) (4) (8) Operating exceptional items (Note 3) (56) - - -------------- ------------- --------------- Group operating profit 59 106 206 Share of operating profits of joint ventures and associates before exceptional items 20 23 37 Share of operating exceptional items of joint ventures and associates (Note 3) - - 6 -------------- ------------- --------------- Total operating profit 79 129 249 Non-operating exceptional items: (Note 3) Exceptional profit/(loss) on sale or termination of businesses 14 (3) (6) Exceptional loss on sale of fixed assets - (1) - -------------- ------------- --------------- Profit before interest (Note 2) 93 125 243 Net interest payable (9) (13) (23) Share of joint ventures' and associates' interest before exceptional items (3) (1) (1) Share of joint ventures' and associates' exceptional interest items (Note 3) - - 5 -------------- ------------- --------------- Profit before taxation (Note 2) 81 111 224 Taxation (20) (35) (69) -------------- ------------- --------------- Profit after taxation 61 76 155 Minority interests (3) 1 (1) -------------- ------------- --------------- Profit for the period 58 77 154 Dividends paid and proposed (27) (26) (88) -------------- ------------- --------------- Retained profit 31 51 66 ============== ============= =============== Earnings per share (Note 4) Basic 12.3p 16.3p 32.7p Diluted 12.3p 16.3p 32.6p ------------------------------------------------------------------------------------------------------------------------ Before amortisation and exceptional items Profit before taxation (£ million) 130 119 227 Diluted earnings per share (pence) 19.1p 17.7 33.9p ------------------------------------------------------------------------------------------------------------------------ TATE & LYLE SUMMARISED GROUP BALANCE SHEET Unaudited Unaudited Audited as at as at as at 30 September 30 September 31 March 2004 2003 2004 £ million (restated) (restated) £ million £ million ------------------------------------------------------------------------------------------------------------------------ Fixed assets Intangible assets 191 146 136 Tangible assets 1 128 1 131 1 062 Investments 215 234 216 -------------- -------------- -------------- 1 534 1 511 1 414 -------------- -------------- -------------- Current assets Stocks 275 253 273 Debtors 416 425 337 Investments and cash at bank and in hand (Note 5) 116 92 154 -------------- -------------- -------------- 807 770 764 Creditors - due within one year Borrowings (Note 5) (123) (1) (30) Other (367) (428) (407) -------------- -------------- -------------- Net current assets 317 341 327 -------------- -------------- -------------- Total assets less current liabilities 1 851 1 852 1 741 Creditors - due after more than one year Borrowings (Note 5) (523) (544) (512) Other (1) (10) (5) Provisions for liabilities and charges (295) (252) (246) -------------- -------------- -------------- Total net assets 1 032 1 046 978 ============== ============== ============== Capital and reserves Called up share capital 123 123 123 Share premium account and other reserves 502 489 501 Profit and loss account 377 395 327 -------------- -------------- -------------- Shareholders' funds 1 002 1 007 951 Minority interests 30 39 27 -------------- -------------- -------------- 1 032 1 046 978 ============== ============== ============== TATE & LYLE STATEMENT OF CASH FLOWS Unaudited Unaudited Audited 6 months to 6 months to Year to 30 September 30 September 31 March 2004 2003 2004 (restated) (restated) £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ -------------- ------------- ------------- Operating profit before exceptional items 115 106 206 Depreciation of tangible fixed assets 59 52 106 Operating exceptional items (56) - - Amortisation of goodwill and intangibles 7 4 8 Change in working capital (53) (6) (31) -------------- ------------- ------------- Net cash inflow from operating activities 72 156 289 Dividends from joint ventures and associates 17 4 8 Returns on investment and servicing of finance -------------- ------------- ------------- Net interest paid (11) (23) (35) Dividends paid to minority interests in subsidiary undertakings - - (1) -------------- ------------- ------------- (11) (23) (36) Taxation paid (39) (24) (74) Capital expenditure and financial investment -------------- ------------- ------------- Purchase of tangible fixed assets (51) (53) (118) Sale of tangible fixed assets 3 - 2 Purchase of fixed asset investments (1) - (1) Sale of fixed asset investments 22 - 22 -------------- ------------- ------------- (27) (53) (95) Acquisitions and disposals Sale of businesses - 34 39 Acquisition of subsidiary (74) - - Acquisitions of joint ventures and associates (6) (15) (15) Equity dividends paid (62) (61) (87) -------------- ------------- ----- Net cash (outflow)/inflow before financing and management of liquid resources (130) 18 29 ============== ============= ===== Reconciliation of cash flow to net debt ------------------------------------------------------------------------------------------------------------------------ Net cash (outflow)/inflow before financing and management of liquid resources (130) 18 29 Issue of shares 1 - 2 Purchase of own shares (6) (10) (10) Changes in debt not involving cash flow: - Exchange movements (7) (3) 49 - Redemption of bond discount - 13 13 -------------- ------------- ----- (Increase)/reduction in net borrowings (142) 18 83 Net borrowings at start of period (388) (471) (471) -------------- ------------- ----- Net borrowings at end of period (530) (453) (388) ============== ============= ===== TATE & LYLE COMBINED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Unaudited Unaudited Audited 6 months to 6 months to Year to 30 September 30 September 31 March 2004 2003 2004 £ million (restated) (restated) £ million £ million ------------------------------------------------------------------------------------------------------------------------ Profit for the period 58 77 154 Currency difference on foreign currency net investments 18 (11) (63) Taxation on exchange difference on foreign currency net investments 7 (8) (28) --------------- -------------- ------------ Total recognised gains for the period 83 58 63 Dividends (27) (26) (88) Issue of shares 1 1 2 Purchase of own shares (6) (10) (10) --------------- -------------- ------------ Net increase/(reduction) in shareholders' funds 51 23 (33) --------------- -------------- ------------ Opening shareholders' funds as previously stated 989 1 012 1 012 Prior period adjustment to reflect own shares deducted from shareholders' funds (38) (28) (28) --------------- -------------- ------------ Opening shareholders' funds as restated 951 984 984 --------------- -------------- ------------ Closing shareholders' funds 1 002 1 007 951 =============== ============== ============ TATE & LYLE NOTES TO INTERIM STATEMENT For the 6 months to 30 September 2004 1. Segmental analysis of sales Unaudited Unaudited Audited 6 months to 6 months to Year to 30 September 30 September 31 March 2004 2003 2004 £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ Sweeteners and starches - Americas 660 643 1 219 - Europe 716 691 1 336 - Rest of the world 205 221 412 ---------------- ------------- ----------- 1 581 1 555 2 967 Animal feed and bulk storage 84 107 195 Other businesses and activities 1 1 5 ---------------- ------------- ----------- 1 666 1 663 3 167 ================ ============= =========== Included in the analysis of total sales are the following amounts relating to associates and joint ventures: Unaudited Unaudited Audited 6 months to 6 months to Year to 30 September 30 September 31 March 2004 2003 2004 £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ Sweeteners and starches - Americas 64 64 123 - Europe 95 86 163 - Rest of the world 2 1 4 --------------- -------------- ------------ 161 151 290 Animal feed and bulk storage 1 2 3 Other businesses and activities - - - --------------- -------------- ------------ 162 153 293 =============== ============== ============ TATE & LYLE PLC NOTES TO INTERIM STATEMENT (continued) For the 6 months to 30 September 2004 2. Segmental analysis of profit before taxation Before Exceptional After exceptional items exceptional items items 6 months to 30 September 2004 (unaudited) £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ Sweeteners and starches - Americas 82(a) (40) 42(a) - Europe 56(b) - 56(b) - Rest of the world 5 - 5 --------------- -------------- ------------- 143 (40) 103 Animal feed and bulk storage 3 (2) 1 Other businesses and activities (11) - (11) --------------- -------------- ------------- 135 (42) 93 Net interest expense (12) - (12) --------------- -------------- ------------- Profit before taxation 123 (42) 81 --------------- -------------- ------------- (a) These profit figures each include £5 million amortisation. (b) These profit figures each include £2 million amortisation. 6 months to 30 September 2003 (unaudited) ------------------------------------------------------------------------------------------------------------------------ Sweeteners and starches - Americas 58(c) (4) 54(c) - Europe 71(c) - 71(c) - Rest of the world 4 - 4 --------------- --------------- ------------- 133 (4) 129 Animal feed and bulk storage 2 - 2 Other businesses and activities (6) - (6) --------------- --------------- ------------- 129 (4) 125 Net interest expense (14) - (14) --------------- --------------- ------------- Profit before taxation 115 (4) 111 --------------- --------------- ------------- (c) These profit figures each include £2 million amortisation. Year to 31 March 2004 (audited) ------------------------------------------------------------------------------------------------------------------------ Sweeteners and starches - Americas 127(d) 2 129(d) - Europe 111(d) - 111(d) - Rest of the world 8 - 8 ---------------- ------------- --------------- 246 2 248 Animal feed and bulk storage 6 (2) 4 Other businesses and activities (9) - (9) ---------------- ------------- --------------- 243 - 243 Net interest expense (24) 5 (19) ---------------- ------------- --------------- Profit before taxation 219 5 224 ---------------- ------------- --------------- (d) These profit figures each include £4 million amortisation. All results to 30 September 2004 and 31 March 2004 arise from continuing activities. TATE & LYLE NOTES TO INTERIM STATEMENT (continued) For the 6 months to 30 September 2004 3. Exceptional items Profit/(loss) Tax Minority Profit/(loss) before tax interest for the period 6 months to 30 September 2004 (unaudited) £ million £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ Operating exceptional items (56) 22 - (34) Profit on sale or termination of business 14 (5) - 9 ----------------- ------------- ---------- ------------- (42) 17 - (25) ----------------- ------------- ---------- ------------- The net charge for exceptional items of £42 million consists of the charge of £56 million in respect of the settlement of the high fructose corn syrup class action suit in the US, together with £2 million in respect of loss on sale or termination of businesses, offset by a credit to the profit and loss account of £16 million following settlement of the remaining balance due on the loan note issued by the purchaser of Western Sugar. The charge of £4 million for exceptional items for the 6 months to September 2003 primarily related to closure costs of the citric acid facility in Mexico. Exceptional items totalled a net credit of £5 million in the year to 31 March 2004. This comprises an operating credit of £6 million and an interest credit of £5 million, representing refunds of duty, and non-operating charges of £6 million arising on sale or termination of businesses. 4. Earnings/(losses) per share The basic earnings per share of 12.3p (6 months to 30 September 2003 - 16.3p, year to 31 March 2004 - 32.7p) are calculated by dividing profits after taxation and minority interests and preference dividend of £58 million (September 2003 - £77 million, March 2004 - £154 million), by the weighted average number of ordinary shares in issue during the period of 470.6 million (September 2003 - 471.9 million; March 2004 - 471.4 million). The diluted earnings per share are calculated on the assumptions that the outstanding options over 8.4 million shares (September 2003 - 2.3 million shares) had been exercised and that the funds so generated would be used to purchase 6.3 million ordinary shares (September 2003 - 1.5 million ordinary shares) at the average price during the period of 323.3p (September 2003 - 329.5p), thereby increasing the average number of shares to 472.7 million (September 2003 -472.7 million). Earnings/(losses) Diluted earnings/(losses) per share 6 months 6 months Year to 6 months 6 months Year to to 30 Sept to 30 Sept 31 March to 30 Sept to 30 Sept 31 March 2004 2003 2004 2004 2003 2004 £ million £ million £ million pence pence pence ------------------------------------------------------------------------------------------------------------------------ Diluted earnings of the period 58 77 154 12.3 16.3 32.6 Amortisation 7 4 8 1.5 0.8 1.7 Exceptional items 25 3 (2) 5.3 0.6 (0.4) -------------------------------------------------------------------- Diluted earnings before amortisation and exceptional items 90 84 160 19.1 17.7 33.9 ==================================================================== The exceptional items recognised in the 6 months to 30 September 2004 include a tax credit of £17 million and minority interest credit of £nil million (6 months to 30 September 2003 tax credit of £nil million and minority interest credit of £1 million, year to 31 March 2004 tax charge of £4 million and minority interest credit of £1 million). Diluted earnings per share before amortisation and exceptional items is presented in order to assist in the understanding of the underlying performance of the Group's business. TATE & LYLE NOTES TO INTERIM STATEMENT (continued) For the 6 months to 30 September 2004 5. Analysis of net debt Unaudited Unaudited Audited 30 September 30 September 31 March 2004 2004 2003 £ million £ million £ million ------------------------------------------------------------------------------------------------------------------------ Investments and cash at bank and in hand 116 92 154 Borrowings due within one year (123) (1) (30) Borrowings due after more than one year (523) (544) (512) ---------------- ------------------ ------------- (530) (453) (388) ================ ================== ============= 6. Average exchange rates 30 September 30 September 31 March 2004 2003 2004 ------------------------------------------------------------------------------------------------------------------------ US Dollar £1 = $ 1.81 1.61 1.69 Euro £1 = € 1.49 1.43 1.44 Canadian Dollar £1 = C$ 2.42 2.24 2.29 7. Period end exchange rates 30 September 30 September 31 March 2004 2003 2004 ------------------------------------------------------------------------------------------------------------------------ US Dollar £1 = $ 1.80 1.66 1.84 Euro £1 = € 1.46 1.43 1.49 Canadian Dollar £1 = C$ 2.29 2.24 2.42 8. Basis of preparation ----------------------------------------------------------------------------------------------- The foregoing accounts are prepared on the basis of the accounting policies set out in the 2004 Annual Report for the year to 31 March 2004, except for the change in accounting policy in respect of UITF 38 (see note 9). The financial information at 31 March 2004 contained in this interim statement has been abridged from the full Group accounts, which received an unqualified auditors' report and did not contain a statement under section 237(2) or (3) of the Companies Act 1985 (as amended). The full Group accounts have been delivered to the Registrar of Companies. 9. Prior period adjustment - UITF 38 ----------------------------------------------------------------------------------------------- The Group has adopted Urgent Issues Task Force, Abstract 38 (UITF 38) 'Accounting for ESOP Trusts' for the 2004 Interim Results. As a result, shares in the Company held through an employee share scheme trust which were previously reported as investments are now recorded as a deduction from equity shareholders funds. At 31 March 2004, the carrying value of these shares was £38 million which has been set against the profit and loss reserve of the balance sheet. The comparative figures for balance sheet, profit and loss reserve and cash flow statement have been restated to reflect the change in treatment such that shareholders' funds at 30 September 2003 and at 31 March 2004 have been reduced by £38 million. The reclassification has reduced shareholders' funds at 30 September 2004 by £44 million. The Group has also adopted UITF 17 (as revised) which results in the cost of the awards made under the Group's share schemes now being calculated with reference to the fair value of the shares at the date of award rather than the cost of the shares purchased by the Group. The impact of this revision on the charges made in respect of the share schemes is not material. TATE & LYLE NOTES TO INTERIM STATEMENT (continued) For the 6 months to 30 September 2004 10. Net margin analysis Before amortisation and exceptional items 6 months to 6 months to Year to 30 September 2004 30 September 2003 31 March 2004 ------------------------------------------------------------------------------------------------------------------------ % % % Sweeteners and starches - Americas 13.2 9.3 10.7 - Europe 8.1 10.6 8.6 - Rest of the world 2.4 1.8 1.9 Sweeteners and starches total 9.5 8.8 8.6 Animal feed and bulk storage 3.6 1.9 3.1 Group 8.5 8.0 7.9 After amortisation and exceptional items ------------------------------------------------------------------------------------------------------------------------ Sweeteners and starches - Americas 6.4 8.4 10.6 - Europe 7.8 10.3 8.3 - Rest of the world 2.4 1.8 1.9 Sweeteners and starches total 6.5 8.3 8.4 Animal feed and bulk storage 1.2 1.9 2.1 Group 5.6 7.5 7.7 TATE & LYLE NOTES TO INTERIM STATEMENT (continued) For the 6 months to 30 September 2004 11. Ratio analysis 6 months to 6 months to Year to 30 September 30 September 31 March 2004 2003 2004 restated restated ------------------------------------------------------------------------------------------------------------------------ Net borrowings to EBITDA - Tate & Lyle PLC and its subsidiaries Net borrowings 530 453 388 ---------------------------------- ----------- ---------- --------- Annualised pre-exceptional EBITDA (2 x 181) (2 x 162) 320 = 1.5 times = 1.4 times = 1.2 times Gearing Gearing = Net borrowings 530 453 388 ----------------- ----------- ---------- --------- Total net assets 1 032 1 046 978 = 51% = 43% = 40% Interest cover - Tate & Lyle PLC and its subsidiaries = Operating profit before amortisation and exceptional items ----------------------------------------------------------- Net interest payable 122 110 214 ----------- ---------- --------- 9 13 23 = 13.6 times = 8.5 times = 9.3 times Return on Net Operating Assets = Annualised profit before interest, tax and exceptional items ------------------------------------------------------------ Average net operating assets (2 x 135) (2 x 129) 243 ----------- ---------- --------- 1 589 1 627 1 576 = 17.0% = 15.9% =15.4% Net operating assets are calculated as: Total net assets 1 032 1 046 978 Add back net borrowings 530 453 388 Add back unallocated liabilities - dividends & tax 94 124 155 --------------- ------------- ------------ Net operating assets 1 656 1 623 1 521 --------------- ------------- ------------ Average net operating assets 1 589 1 627 1 576 Webcast and Conference Call A presentation of the results by Chief Executive, Iain Ferguson and Group Finance Director, Simon Gifford will be audio webcast live at 10.00am (GMT) today. To view the presentation slides and/or listen to a live audio webcast of the presentation, visit http://cm01.vavos.net/xl?preid=102050 or http://www.tateandlyle.com/TateAndLyle/ir_investor_relations/results/default.htm. Please note that remote listeners will not be able to ask questions during the Q&A session. A webcast replay of the presentation will be available for six months, at the links above. In addition a conference call for analysts and investors will be held today at 15.00 (GMT), 10.00am (Eastern). Dial In (US): (913)981-5536 - Toll, (800) 289-0552 - Toll Free Dial In (UK): +44(0)20 7019 9504 - Toll, 0800 279 9640 - Toll Free A replay is scheduled to run from 4 November to 11 November, 2004 Replay (US): (719)457-0820 - Toll, (888) 203-1112 - Toll Free (Passcode: 887301) Replay (UK): +44 (0)20 7984 7578 - Toll, 0800 559 3271 - Toll Free (Passcode: 887301)

Companies

Tate & Lyle (TATE)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today