Final Results - Replacement

RNS Number : 6030W
Carr's Milling Industries PLC
10 November 2014
 



Carr's Milling Industries PLC ("Carr's" or the "Group") announces that the following amendments have been made to the Group's Full Year Results which were released at 07:00 on 10 November 2013 under RNS 5241W. In the financial year ended 30 August 2014, Retail sales grew by 0.5%, not 2.7% as detailed in the Chairman's Statement or 2.1% as detailed in the Chief Executive's Review. All other detail remains unchanged.

 

The full amended text is shown below.

 

 


10 November 2014

 

CARR'S MILLING INDUSTRIES PLC ("Carr's" or the "Group")

 

FULL YEAR RESULTS

 

"Strategic Diversity Delivering Results"

 

Carr's (CRM.L), the fully-listed Agriculture, Food and Engineering Group, announces results for the 52 weeks ended 30 August 2014.

 

Financial highlights (continuing operations)

 

·     Revenue down 8.4% to £429.0m (2013: £468.1m)

·     Profit before taxation up 7.8% to £16.6m (2013: £15.4m)

·     EBITDA up 9.1% to £20.4m (2013: £18.7m)

·     Basic EPS up 3.1% to 127.8p (2013: 123.9p)

·     Adjusted EPS up 5.6% to 130.8p (2013: 123.9p)

·     Proposed final dividend of 17.0p up 3.0% resulting in a total for the period of 34.0p (2013: 32.0p)

·     Capital expenditure of £8.0m during the period with net debt of £24.6m at the period end (2013: £22.1m)

 

Commercial highlights

 

·     Agriculture profit before tax (including contribution from associate and JVs) up 4.3% to £12.1m, despite revenue down 7.5% to £314.9m

 

·     Food profit before tax up 309.7% to £2.3m despite revenue down 7.5% to £87.1m

 

·     Engineering profit before tax down 11.7% to £3.7m with revenue down 19.6% to £26.9m.

 

Chris Holmes, Chairman, said:

 

"We have delivered another record year of pre-tax profit, building on successes of recent years.

 

In Agriculture, we anticipate the current year will be tough for our UK farming community with pressure on farmgate milk prices expected to remain.  However, we believe our diverse offering and broad geographic footprint will help to mitigate some of this impact.  In Food, our investment in Kirkcaldy is expected to realise further efficiencies in the current year and, despite some short term pressures expected in our Engineering division, the medium term prospects remain highly positive.

 

Overall, we have made a good start to the current financial year and the Board will continue to look at how best to maintain growth and achieve optimal returns for our shareholders.  We remain confident for the full year and excited about the long-term growth opportunities for the business."

 

Enquiries:

 

Carr's Milling Industries PLC

Tim Davies (Chief Executive Officer)

Neil Austin (Group Finance Director)

01228 554 600



Powerscourt

Nick Dibden

Sophie Moate

020 7250 1446

carrs@powerscourt-group.com

 

Notes to Editors

 

Carr's Milling Industries (CRM.L) is an international leader in the provision of essential industrial services focused on the Agriculture, Food and Engineering sectors. The Group offers a range of services including the manufacturing and supply of flour, remote handling equipment, farm machinery, feed blocks for livestock, and a UK network of rural stores, with a facility footprint spanning the UK, Europe and North America, supplying 31 countries around the world.  The Group is listed on the London Stock Exchange.  www.carrs-milling.com

 

 



Chairman's Statement

 

Review of the Year

 

I am pleased to report that the Group achieved another record profit before tax this year, building on the successes of recent years. This achievement can be attributed to a strong operational performance across the business.  Each division performed well, driven by the benefits from research and development, innovation, global geographic diversity and the strategic investments the Board has made. 

 

In the financial year 2012/2013 the harsh UK weather made a significant positive contribution to the Group's profit before tax. This year the UK experienced a mild winter, resulting in lower agricultural revenues, however the impact of this was partly offset by the severe weather conditions in the USA, particularly in the Upper Mid-West States.  The severe US weather resulted in record sales of our feed blocks and increased recognition of our brands.  In addition, the Group benefited from the increased sales both in the UK and USA of AminoMax®. Retail sales grew by 0.5%, further endorsing our continued investment programme in our Country Stores across Northern England and Southern Scotland, with enlarged branches at Annan and Brock opening during the year.

 

The now fully operational flour mill at Kirkcaldy has delivered the anticipated benefits to the Food division and this, coupled with the continuing excellent customer service from all our flour mills, has resulted in the expected increase to the profit before tax for the division.

 

Significant investment was made through the year in our Engineering division, particularly with the acquisition of Chirton Engineering Ltd in April 2014. The new facility for Wälischmiller at Markdorf, Germany was also completed during the year.  The Engineering division met its budgetary targets for the year, despite a lack of nuclear contracts in the UK and escalating economic and political issues worldwide.

 

Financial Review

 

Revenue for the period fell by 8.4% to £429.0 million (2013: £468.1 million). Profit before tax was up 7.8% to £16.6 million (2013: £15.4 million).

 

Basic earnings per share for the period were up by 3.1% to 127.8 pence (2013: 123.9 pence) with fully diluted earnings per share of 123.3 pence (2013: 121.7 pence) and adjusted earnings per share of 130.8 pence (2013: 123.9 pence).

 

Net cash generated from operating activities was £12.5 million (2013: £4.0 million). At the end of the period the Group had net debt of £24.6 million compared to net debt of £22.1 million at 31 August 2013.   This increase reflects acquisition activity in the year and our ongoing capital investment programme.

 

Working capital increased by £1.6 million and contributions to the deficit in the pension scheme totalled £2.8 million.

 

During the year the Group renewed its banking facilities for a 5 year period at improved margins.  Our headroom against existing facilities at the year-end was £17.4 million.  Borrowing and interest cover continue to remain well within our covenant limits, meaning that we are well placed to make strategic investments or acquisitions.

 

Share Split

 

The Board considers it appropriate to propose at the Company's Annual General Meeting on 13 January 2015, a sub-division of the existing ordinary shares on the basis of a ten for one share split, thereby reducing the nominal value of the existing ordinary shares to 2.5 pence each. It is anticipated that such a sub-division will improve the liquidity of the market in the Company's shares and reduce the bid/offer spread of the Company's shares. Further details will be set out in the Notice of the Annual General Meeting.

 

Dividend

 

The Board is proposing a 3.0% increase in the final dividend to 17.0 pence per ordinary share which, together with the two interim dividends of 8.5 pence per share each paid on 16 May and 10 October 2014, make a total of 34.0 pence per share for the year (2013: 32.0 pence per share). The final dividend, if approved by shareholders, will be paid on 16 January 2015 to shareholders on the register at the close of business on 19 December 2014 and the shares will go ex-dividend on 18 December 2014.

 

Board composition and Corporate Governance

 

During the current year ending August 2015, Alistair Wannop, Senior Independent Director, and Chairman of the Remuneration Committee, will become non-independent due to his length of service and in accordance with the UK Corporate Governance Code 2012. In order to address this and other compliance issues the Board is currently undertaking a search for an additional independent Non-Executive Director.

 

Outlook

 

The Engineering division continues to benefit from Wälischmiller's advanced technological capabilities, and several ongoing development projects will continue to be progressed over the next year. Global political and economic conditions in some of its key markets are likely to impact the current financial year, although the medium term prospects remain very positive. Chirton Engineering is expected to start realising benefits in its first full year of trading. 

 

Weak farmgate milk prices will undoubtedly have an adverse effect on the farming community. However, the diversity of the Agriculture division, both operationally and geographically, the technical advances made by our high quality products such as AminoMax®, and our highly regarded customer service levels will help to mitigate some of this impact through this financial year.

 

The Food division is expecting to realise further efficiencies from the Kirkcaldy mill and will also benefit from some significant new business at the Silloth mill.

 

Despite the very mild weather the current financial year has started in line with the Board's expectations, with a strong balance sheet and well invested assets, and with our continuing investment programme across the Group we remain well placed to capitalise on future opportunities. The Board will continue to look at how best to maintain growth and achieve optimal returns for its shareholders via both organic and acquisitive growth, including expanding our geographic footprint.

 

 

 

Chris Holmes

Chairman

 

 

Chief Executive's Review

 

A year of progressive investment

 

Our vision is to be recognised as an international business at the forefront of innovation and technology across Agriculture, Food and Engineering.  In order to achieve this we have built on the investment made throughout 2013, and over the last 12 months our investment programme has continued across our three divisions.

 

Agriculture

 

Profit before tax for the period increased by 9.5% to £9.6 million (2013: £8.8 million) on revenue down by 7.5% to £314.9 million (2013: £340.4 million). Profit before tax for the period including contributions from associate and joint ventures, increased by 4.3% to £12.1 million (2013: £11.6 million).

 

The geographic spread and operational diversity of our Agriculture businesses led to another successful year for our Agriculture division.     

 

In the UK the winter weather was mild and wet, compared to the extremely cold and long winter of 2012/2013. While this was a relief for our farming customers, who were able to feed good quality home grown forage and reduce costs of production, it had an adverse impact on sales of compound/blended feed, feed blocks and fuel. However, one of our key strengths is our geographic diversity, and sales of feed blocks in the USA increased as a result of one of the coldest winters on record. In addition, livestock farmers were in a position where bought-in feed and supplementary feeding regimes were vital to maintain livestock performance.  The higher rainfall levels in the South East, Mid-West and North West of the USA ended the drought for the first time in several years, however, California and parts of Nevada remain in severe drought.  The slow, but important process of rebuilding livestock numbers in these areas has started and will benefit our USA block business in future years. 

 

Our ongoing and long term commitment to research and development has been key to delivering sustainable growth.  Research is focused on expanding our knowledge, enabling product development and innovation throughout our exisiting distribution network and into new territories.  Our branded feed blocks, Crystalyx®, continues to show significant underlying growth, with the new distribution network established in New Zealand resulting in an increase in sales of Crystalyx®.

 

The acquisition of Western Feed Supplements, based in Silver Springs, Nevada, USA by our subsidiary Animal Feed Supplements Inc ("AFS") in June 2013 will be expanded by an investment of $3.4 million to build a new manufacturing system.  This efficient plant, similar to our existing production facilities, will enable the production of our branded Smartlic® product by the summer of 2015 with the associated growth in sales and margin expected in year ending 2016.  In July 2014, our joint venture company, ACC Feed Supplement LLC, successfully commissioned the new low moisture feed block plant at Sioux City, Iowa, USA.  The total investment in this plant of $4.1 million will facilitate the increase in production and sales anticipated in the next financial year.  This is in line with our strategy to distribute our low moisture feed blocks across the USA. 

 

AminoMax®, our patented animal bypass protein product for dairy cows, manufactured at Watertown, New York State, USA and at Lancaster, UK, delivered significant sales growth in the year of 31.5%.  The increase in sales was driven by leading dairy farmers recognising the performance benefits of AminoMax®.  In order to support further growth and deliver greater levels of production efficiently a further $1.9 million will be invested in the Watertown plant during the second half of 2015.

 

In the UK we have developed a clear strategy for the growth of our business.  We will strengthen our current position by improving our retail offer, leading in dairy nutrition, geographic expansion and developing new products and providing new services which will improve our customers' profitability.

Retail sales increased 0.5% over the previous record year; this growth was a direct result of investment in our Country Stores and our ability to source and supply products which provide outstanding value for our customers.

 

Total sales of feed fell 10.5%, predominantly due to the beef and sheep farmers, following the mild winter conditions and the improved quality of home grown forage.  

 

We are cognisant of the volatile weather and pricing dynamics which agriculture is exposed to, but our broad based, strong and diverse division provides us with the opportunity to navigate a successful path through those uncertainties. We will continue to invest in research and development to bring new products, systems and techniques to market which will improve the profitability of our farming customers. 

 

Food

 

Profit before tax for the period increased 309.7% from £0.6 million to £2.3 million in this financial year on revenue down by 7.5% to £87.1 million (2013: £94.2 million), reflecting lower wheat prices.

 

The first wheat was milled at our new mill in Kirkcaldy in the summer of 2013. The commissioning process went well and the mill is now meeting all expectations with regard to performance and reliability. The benefits of the new mill have been delivered from improved operational efficiency, and the commercial benefits derived from increased customer confidence in our ability to produce high quality flour, milled to the highest standards of product integrity. We expect to deliver further increased financial benefits from the new mill during the next financial year.

 

Combined sales volumes of our other mills (Silloth in Cumbria and Maldon in Essex) were positive. Both mills increased sales to bakers supplying the expanding bake-off category. The Maldon mill continued to increase its presence in the markets for ethnic flour. We re-launched our branded retail flour products during the year and the new packaging won first prize at the Marketing Design Awards 2014.

 

The harvest of 2013 in the UK was of much higher quality than the extremely poor harvest of 2012.  Although the quality of the crop was much improved the size of the harvest was small, estimated at 12 million tonnes, circa 2 million tonnes below normal levels.  The portside location of our two northern mills at Kirkcaldy in Scotland and Silloth in Cumbria provide us with the flexibility to source wheat from the overseas and UK markets providing both quality and value.  This year there has been a switch from sourcing wheat from mainland Europe to a greater proportion sourced and shipped from the South of England. In a market where logistics will always be important, this flexibility is essential.

 

Engineering

 

Profit before tax for the period fell by 11.7% to £3.7 million (2013: £4.2 million) on revenue down by 19.6% to £26.9 million (2013: £33.4 million).

 

We continue to expand and develop our Engineering division in size, geography and in niche products, while maintaining our focus on the markets which we have supplied for many years: nuclear, petrochemical, oil and gas. 

 

In April 2014 we acquired Chirton Engineering Ltd, a precision machining business based in North Tyneside, which recorded sales of £5.0 million in its full financial year ended 30 August 2014. Chirton provides value-added manufacturing and services to businesses operating in offshore oil and gas manufacturing. It services an established global customer base, including IHC Merwede, Oceaneering, and Proserv Offshore.  Revenue synergies with Bendalls, our specialist fabrication business based in Carlisle, are anticipated enabling us to provide a full service offering to our customers from design and precision machining, through to fabrication.

 

Bendalls has commenced production of 33 pressure vessels for the BP Shah Deniz gas pipeline in Azerbaijan; this is an increase from the 27 pressure vessels previously reported. The value of the contract is now in excess of £8 million and is scheduled to complete in July 2015.  The start date for the manufacture of these pressure vessels was delayed due to design and specification changes and this adversely impacted the performance of Bendalls in the year. It is expected that significant orders for the decommissioning of certain nuclear plants in Sellafield will be awarded in 2015, with manufacture commencing towards the end of 2015.

 

During the year Wälischmiller, the remote handling and robotics business based in Markdorf, Germany, relocated to a new factory and office facility. This £4.5 million investment will provide an improved production environment, and a training and showroom facility. The USA is a key potential market for Wälischmiller and during the year we secured and supplied our first order to the USA.  Following the successful testing of our prototype for the Demo 2000 project with Shell and Statoil, we are working with our consortium partners on the development of our Telbot® for the remote inspection of oil and gas tanks.  This complex project will conclude next year on schedule, and a video of its progress can be found on our website www.carrs-milling.com. We are committed to research, design and development of the next generation of robots able to operate in hazardous environments.

 

Due to macro-economic pressures in the region, sales into Japan have declined and it is anticipated that this will continue for at least the next financial year. Further, as a result of the on-going political sanctions with Russia, future contracts with businesses based in Russia are likely to be restricted.

 

Carrs MSM ("MSM"), based in Swindon, builds and services master slave manipulators for the nuclear industry.  This was another successful year for MSM, recording record sales up 5.1% on last year, primarily due to the 'life of plant' contract with Sellafield signed in 2012.  Under this contract MSM supplies manipulators, parts, and repairs and services existing equipment to the many plants in the Sellafield complex.  MSM also won contracts to supply equipment to other UK nuclear plants including Hinkley Point and Hartlepool.

 

Prospects

 

Each of our divisions faces challenges over the next twelve months, including pressure on farm incomes, changes in the demand patterns for flour, and changing political conditions in key nuclear markets. Despite this our geographic and product diversity, coupled with the investments made in previous years, provide us with a platform for growth, and our experienced management and skilled employees will enable us to deliver this growth. The Board remains confident in reaching its full year expectations.

 

 

 

Tim Davies

Chief Executive

10 November 2014

 

 



UNAUDITED CONSOLIDATED INCOME STATEMENT

for the period ended 30 August 2014

 


Note

 

52 week

period

2014

(Restated)

52 week

period

2013

 

 

£'000

£'000

 

 

 

 

Continuing operations

 

 

 

Revenue

3

428,956

468,083

Cost of sales

 

(378,670)

(419,483)

 

 

 

 

Gross profit

 

50,286

48,600

 

 

 

 

Distribution costs

 

(19,438)

(21,001)

Administrative expenses

 

(15,421)

(14,262)

 

 

 

 

Group operating profit

 

15,427

13,337

 

 

 

 

Finance income

 

264

513

Finance costs

 

(1,624)

(1,318)

Share of post-tax profit in associate

 

1,579

1,903

Share of post-tax profit in joint ventures

 

907

916

 

 

 

 

Profit before taxation

3

16,553

15,351

 

 

 

 

Taxation

4

(3,660)

(3,036)

 

 

 

 

Profit for the period

 

12,893

12,315

 

 

 

 

Profit attributable to:

 

 

 

Equity shareholders

 

11,372

11,001

Non-controlling interests

 

1,521

1,314

 

 

 

 

 

 

12,893

12,315

Earnings per ordinary share

 

 

 

Basic

5

127.8p

123.9p

Diluted

 

123.3p

121.7p

Adjusted

5

130.8p

123.9p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the period ended 30 August 2014

 



 

52 week

Period

2014

 (Restated)   

       52 week

        period

         2013

 

 

£'000

         £'000

 

 

 

 

Profit for the period

 

12,893

12,315

 

 

 

 

Other comprehensive income/(expense)

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

         - Foreign exchange translation (losses)/gains arising on

             translation of overseas subsidiaries

 

(950)

231

 

 

 

 

Items that will not be reclassified subsequently to profit or

  loss:




         - Actuarial gains/(losses) on retirement benefit

             obligation:

               - Group

               - Share of associate


 

3,209

(619)

 

(96)

22

 

 

 

 

           - Taxation (charge)/credit on actuarial gains/(losses)

             on retirement benefit obligation:

               - Group

               - Share of associate


(642)

124

19

  (4)

 

 

 

 

Other comprehensive income for the period, net of

  tax

 

 

1,122

 

172

 

 

 

 

Total comprehensive income for the period

 

14,015

12,487

 

 

 

 

Total comprehensive income attributable to:

 

 

 

 

 

 

 

Equity shareholders

 

12,494

11,173

 

 

 

 

Non-controlling interests

 

1,521

1,314

 

 

 

 

 

 

14,015

12,487

 

 

 

 

 



UNAUDITED CONSOLIDATED BALANCE SHEET

as at 30 August 2014

 

 

 

2014

2013

 

 

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Goodwill

 

9,798

5,215

Other intangible assets

 

499

615

Property, plant and equipment

 

56,626

53,068

Investment property

 

656

675

Investment in associate

 

6,883

7,024

Interest in joint ventures

 

4,836

3,299

Other investments

 

77

72

Financial assets

 

 

 

        - Non-current receivables

 

501

1

Retirement benefit asset

 

2,056

-

Deferred tax assets

 

1,507

2,044

 

 

83,439

72,013

Current assets

 

 

 

Inventories

 

33,315

33,445

Trade and other receivables

 

63,623

66,434

Current tax assets

 

47

178

Financial assets

 

 

 

        - Derivative financial instruments

 

-

2

        - Cash and cash equivalents

 

17,268

22,884

 

 

114,253

122,943

 

 

 

 

Total assets

 

197,692

194,956

 

 

 

 

Liabilities

 

 

 

Current liabilities

 

 

 

Financial liabilities

 

 

 

      - Borrowings

 

(19,688)

(15,545)

      - Derivative financial instruments

 

(15)

(8)

Trade and other payables

 

(54,236)

(58,282)

Current tax liabilities

 

(1,631)

(1,639)

 

 

(75,570)

(75,474)

Non-current liabilities

 

 

 

Financial liabilities

 

 

 

      - Borrowings

 

(22,189)

(29,448)

Retirement benefit obligation

 

-

(3,272)

Deferred tax liabilities

 

(4,111)

(3,765)

Other non-current liabilities

 

(5,995)

(4,956)

 

 

(32,295)

(41,441)

 

 

 

 

Total liabilities

 

(107,865)

(116,915)

 

 

 

 

Net assets

 

89,827

78,041

 



UNAUDITED CONSOLIDATED BALANCE SHEET

as at 30 August 2014 (continued)

                                                           

 

 

2014

      2013

 

 

£'000

£'000

Shareholders' equity

 

 

 

Share capital

 

2,235

2,223

Share premium

 

8,453

8,183

Equity compensation reserve

 

640

326

Foreign exchange reserve

 

(535)

415

Other reserve

 

875

888

Retained earnings

 

67,996

57,396

Total shareholders' equity

 

79,664

69,431

Non-controlling interests

 

10,163

8,610

Total equity

 

89,827

78,041

 

 

 

 

 

 

 



 

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the period ended 30 August 2014

 

 

 

 

 

 

 

 

Share

Capital

£'000

 

 

Share

Premium

£'000

 

Equity

Compensation

Reserve

£'000

 

Foreign

Exchange

Reserve

£'000

 

 

Other

Reserve

£'000

 

 

Retained

Earnings

£'000

 

Total Shareholders' Equity

£'000

 

Non-

controlling

Interests

£'000

 

 

 

Total

£'000

 

At 2 September

2012

2,219

8,118

113

160

901

49,075

60,586

  7,274

67,860

Profit for the period

-

-

-

-

-

11,001

11,001

1,314

12,315

Other comprehensive income/(expense)

-

-

-

231

-

(59)

172

-

172

Total comprehensive income

-

-

-

231

-

10,942

11,173

1,314

12,487

Dividends paid

-

-

-

-

-

(2,619)

(2,619)

-

(2,619)

Equity-settled share-based payment transactions, net of tax

-

-

213

-

-

9

222

22

244

Allotment of shares

4

65

-

-

-

-

69

-

69

Transfer

-

-

-

24

(13)

(11)

-

-

-

 

 

 

 

 

 

 

 

 

 

At 31 August 2013

(Restated)

2,223

8,183

326

415

888

57,396

69,431

8,610

78,041

 

At 1 September

2013 (Restated)

2,223

8,183

326

415

888

57,396

69,431

8,610

78,041

Profit for the period

-

-

-

-

-

11,372

11,372

1,521

12,893

Other comprehensive (expense)/income

-

-

-

(950)

-

2,072

1,122

-

1,122

Total comprehensive (expense)/income

-

-

-

(950)

-

13,444

12,494

1,521

14,015

Dividends paid

-

-

-

-

-

(2,912)

(2,912)

-

(2,912)

Equity-settled share-based payment transactions, net of tax

-

-

314

-

-

55

369

32

401

Allotment of shares

12

270

-

-

-

-

282

-

282

Transfer

-

-

-

-

(13)

13

-

-

-

 

 

 

 

 

 

 

 

 

 

At 30 August 2014

2,235

8,453

640

(535)

875

67,996

79,664

10,163

89,827

 

 

 

 


UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

for the period ended 30 August 2014

 


Note

52 week

period

2014

52 week

period

2013

 

 

£'000

£'000

Cash flows from operating activities

 

 

 

Cash generated from operations

6

17,125

7,233

Interest received

 

275

746

Interest paid

 

(1,668)

(1,280)

Tax paid

 

(3,226)

(2,707)

 

 

 

 

Net cash generated from operating activities

 

12,506

3,992

 

 

 

 

Cash flows from investing activities

 

 

 

Acquisition of subsidiaries (net of cash acquired)

 

(3,649)

(810)

Investment in joint venture

 

(965)

-

Loan to joint ventures

 

(159)

(807)

Loan repaid by associate

 

225

-

Other loans

 

(270)

-

Purchase of intangible assets

 

(57)

(108)

Proceeds from sale of property, plant and equipment

 

738

221

Purchase of property, plant and equipment

 

(7,201)

(9,937)

Proceeds from sale of investment property

 

-

268

Purchase of investments

 

-

(26)

Disposal of investment

 

32

10

Redemption of preference shares in joint venture

 

150

150

Net cash used in investing activities

 

(11,156)

(11,039)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issue of ordinary share capital

Net proceeds from issue of new bank loans

 

283

2,731

68

11,581

Finance lease principal repayments

 

(2,325)

(1,118)

Repayment of loan from related party

 

(225)

-

Repayment of borrowings

 

(7,077)

(1,333)

Increase/(decrease) in other borrowings

 

2,256

(193)

Dividends paid to shareholders

 

(2,912)

(2,619)

Receipt of grant income

 

450

350

 

 

 

 

Net cash (used in)/generated from financing

   activities


 

(6,819)

 

6,736

 

 

 

 

Effect of exchange rate changes

 

(181)

110

 Net decrease in cash and cash equivalents

 

(5,650)

 (201)

 

 

 

 

Cash and cash equivalents at beginning of the period

 

22,675

22,876

Cash and cash equivalents at end of the period

 

17,025

22,675

 

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE UNAUDITED PRELIMINARY STATEMENT

 

1. Basis of preparation

 

    The Group's unaudited Preliminary Announcement does not constitute statutory consolidated financial statements for the 52 week period ended 30 August 2014 or the 52 week period ended 31 August 2013, which will be filed with the Registrar of Companies for the 52 week period ended 30 August 2014, following the Company's Annual General Meeting.

 

    The financial statements for the 52 week period ended 31 August 2013 were unqualified and have been delivered to the Registrar of Companies.

 

2. Accounting policies

 

The accounting policies adopted are consistent with those of the previous financial year with the following exception.

 

The Group has adopted 'Amendment to IAS19: (revised 2011) Employee benefits' with effect from 1 September 2013.  This has resulted in a change of accounting policy and the restatement of the prior period financial statements.  The change to the accounting policy has been to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability at the beginning of the period.  The net interest amount also takes into account changes to the net liability during the period.  The effect of this is to remove the previous concept of recognising an expected return on plan assets.

 

3. Segmental information

 

    The segmental information for the period ended 30 August 2014 is as follows:

 

 

 

Agriculture

£'000

Food

£'000

Engineering

£'000

Other

£'000

Group

£'000

 

 

 

 

 

 

Total segment revenue

315,019

87,107

26,939

47

429,112

Inter segment revenue

(94)

(1)

(61)

-

(156)

 

Revenue from external customers

314,925

87,106

26,878

47

428,956

 

EBITDA1

12,563

4,955

4,618

(1,719)2

20,417

 

Depreciation of property, plant and equipment

 

(2,215)

 

(1,856)

 

(690)

 

(121)

 

(4,882)

Depreciation of investment property

-

(4)

-

(15)

(19)

Profit on the disposal of property, plant  and equipment

 

102

 

(6)

 

8

 

-

 

104

Amortisation of intangible assets

(56)

(17)

(120)

-

(193)

 

 

 

 

 

 

Operating profit

10,394

3,072

3,816

(1,855)2

15,427

Finance income

88

2

3

171

264

Finance costs

(897)

(784)

(107)

164

(1,624)

 

 

 

 

 

9,585

2,290

3,712

(1,520)

14,067

Share of post-tax profit of associate

1,579

-

-

-

1,579

Share of post-tax profit of joint ventures

907

-

-

-

907

 

 

 

 

 

 

 Profit before taxation

 12,071

 2,290

 3,712

(1,520)

16,553

 

      1Earnings before interest, tax, depreciation and amortisation (and before profit on the disposal of property, plant and

         equipment)

      2Includes Head Office net expense of £(753,000) and retirement benefit charge of £(687,000)

 

 

 

 

 

3. Segmental information (continued)

 

    The segmental information for the period ended 31 August 2013 (Restated) is as follows:

 

 

 

Agriculture

£'000

Food

£'000

Engineering

£'000

Other

£'000

Group

£'000

 

 

 

 

 

 

Total segment revenue

340,505

94,176

33,484

47

468,212

Inter segment revenue

(64)

(4)

(61)

-

(129)

 

Revenue from external customers

340,441

94,172

33,423

47

468,083

 

EBITDA1

11,987

2,650

5,333

(1,262)3

18,708

 

Depreciation of property, plant and equipment

(2,329)

(1,752)

(964)

(120)

(5,165)

Depreciation of investment property

-

(4)

-

(58)

(62)

Profit on the disposal of property, plant  and

  equipment

 

4

 

34

 

12

 

58

 

108

Amortisation of intangible assets

(108)

(18)

(126)

-

(252)

 

 

 

 

 

 

Operating profit

9,554

910

4,255

(1,382)3

13,337

Finance income

253

2

50

208

513

Finance costs

(1,056)

(353)

(102)

193

(1,318)

 

 

 

 

 

8,751

559

4,203

(981)

12,532

Share of post-tax profit of associate

1,903

-

-

-

1,903

Share of post-tax profit of joint ventures

916

-

-

-

916

 

 

 

 

 

 

 Profit before taxation

 11,570

 559

 4,203

(981)

15,351

 

     3Includes Head Office net expense of £(457,000) and retirement benefit charge of £(692,000)

 

 

 

 

4. Taxation

 



 

2014

(Restated)

2013

 

 

£'000

£'000

 (a) Analysis of the charge in the period

Current tax:

UK corporation tax

  Current period

  Adjustment in respect of prior years

Foreign tax

  Current period

  Adjustment in respect of prior years


 

 

 

1,480

238

 

1,722

98

 

 

669

25

 

1,826

8

 

Group current tax

 

 

3,538

 

2,528

 Deferred tax:

Origination and reversal of timing differences

  Current period

  Adjustment in respect of prior years


 

 

362

(240)

 

 

 532

(24)

 

Group deferred tax

 

 

 

122

 

508

 

Tax on profit from ordinary activities


 

3,660

 

3,036

 

(b) Factors affecting tax charge for the period

The tax assessed for the period is lower (2013: lower) than the rate of corporation tax in the UK of 22.17% (2013: 23.58%).  The differences are explained below:

 

 


 

2014

£'000

 

(Restated)

2013

£'000

Profit before taxation

 

16,553

15,351

 

Tax at 22.17% (2013: 23.58%)

Effects of:

Tax effect of share of profit in associate and joint ventures

Tax effect of expenses that are not allowable in determining taxable profit

Effects of different tax rates of foreign subsidiaries

Effects of changes in tax rates

Adjustment in respect of prior years

Other


 

3,670

 

(551)

75

420

(57)

96

7

 

3,620

 

(677)

  153

353

(429)

9

7

 

Total tax charge for the period


 

3,660

 

3,036

 

 



5. Earnings per share

 

Basic earnings per share are based on profit attributable to shareholders and on a weighted average number of shares in issue during the period of 8,899,525 (2013: 8,880,841).  The calculation of diluted earnings per share is based on 9,225,431 shares (2013: 9,037,234).

 


 

2014

(Restated)

2013


Earnings

 

£'000

Earnings per share pence

Earnings

 

£'000

Earnings

 per share

pence

 

 

 

 

 

Earnings per share - basic

11,372

127.8

11,001

123.9

 

 

 

 

 

Amortisation and non-recurring items:

 

 

 

 

Amortisation of intangible assets

193

2.2

252

2.8

Taxation relief on amortisation

(50)

(0.6)

(64)

(0.7)

Derivative financial instrument gain in

  respect of property, plant and equipment

-

-

(236)

  (2.7)

Taxation on derivative gain

-

-

54

0.6

Acquisition related costs*

123

1.4

-

-

Earnings per share - adjusted

11,638

130.8

11,007

123.9

 

 

*Disallowable for tax purposes



6. Cash generated from operations

 


 

2014

(Restated)

2013

 

£'000

£'000

 

 

 

Profit for the period

12,893

12,315

Adjustments for:

 

 

Tax

3,660

3,036

Tax credit in respect of R&D

(102)

-

Depreciation of property, plant and equipment

4,882

5,165

Depreciation of investment property

19

62

Intangible asset amortisation

193

252

Profit on disposal of property, plant and equipment

(104)

(108)

Profit on disposal of investment

-

(14)

Amounts written off property, plant and equipment

-

7

Amortisation of grants

(54)

(50)

Net fair value loss on share based payments

401

244

Net foreign exchange differences

160

(220)

Net fair value losses/(gains) on derivative financial instruments in

  operating profit

 

9

 

(303)

Interest income

(264)

(513)

Interest expense and borrowing costs

1,679

1,354

Share of profit from associate and joint ventures

(2,486)

(2,819)

 

IAS19 income statement credit in respect of employer contributions

 

(2,806)

 

(2,867)

IAS19 income statement charge

687

692

 

 

 

Changes in working capital (excluding the effects of acquisitions):

 

 

Decrease/(increase) in inventories

807

(6,088)

Decrease/(increase) in receivables

4,880

(5,699)

(Decrease)/increase in payables

(7,329)

2,787

 

Cash generated from operations

 

17,125

 

7,233

 

7. Pensions

 

The Group operates its current pension arrangements on a defined benefit and defined contribution basis. The valuation of the defined benefit scheme under the IAS19 accounting basis showed a surplus (2013: deficit) net of the related deferred tax liability (2013: asset) in the scheme at 30 August 2014 of £1.6m (2013: £2.6m).

 

A Group subsidiary undertaking is a participating employer in a defined benefit pension scheme of the associate. The IAS19 accounting basis showed a deficit, for that scheme, net of the related deferred tax asset in the scheme at 30 August 2014 of £3.5m (2013: £3.2m). The Group recognises in its balance sheet approximately 50% of the deficit and deferred tax asset through its investment in associate.

 

In the period, the retirement benefit charge in respect of the Carr's Milling Industries Pension Scheme 1993 was £687,000 (2013 Restated: £692,000).

 

 

 

 

8. Analysis of changes in net debt

 


At 1

September

 

Cash

Other

Non-Cash

 

Exchange

At 30

  August

 

2013

Flow

Changes

Movements

2014

 

£'000

£'000

£'000

£'000

£'000

Cash and cash   

  equivalents

 

22,884

 

(5,616)

 

-

 

-

 

17,268

Bank overdrafts

(209)

147

-

(181)

(243)

 

22,675

(5,469)

-

(181)

17,025

 

 

 

 

 

 

Loans and other

  borrowings:

- current

- non-current

 

 

(13,262)

(20,137)

 

 

(160)

2,475

 

 

(3,789)

3,735

 

 

-

-

 

 

(17,211)

(13,927)

Finance leases:

 

 

 

 

 

- current

(2,074)

2,325

(2,485)

-

(2,234)

- non-current

(9,311)

-

1,049

-

(8,262)

Net debt

(22,109)

(829)

(1,490)

(181)

(24,609)

 

9.         The Board of Directors approved the preliminary announcement on 10 November 2014.

 

10.       The results included in the preliminary announcement are unaudited.  The financial information set out in this announcement does not constitute the statutory accounts for the periods ended 30 August 2014 and 31 August 2013.  The statutory accounts for the period ended 30 August 2014 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

 

11.       The Company intends to post a Summary Report and Accounts to shareholders by 3 December 2014.  The full Report and Accounts will be available upon request from the Company Secretary, Carr's Milling Industries PLC, Old Croft, Stanwix, Carlisle, CA3 9BA or alternatively on the Company's website: www.carrs-milling.com

 

 


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