Final Results
Glanbia PLC
03 March 2004
Glanbia plc
Preliminary Announcement of Results
Year Ended 3 January 2004
Glanbia plc, the international dairy, consumer foods and nutritional products
company, announces its preliminary results for the year ended 3 January 2004.
Highlights:
• Solid performance delivered
• Operating profit * before exceptional items up 1.4% despite 11.9%
reduction in Group turnover
• Operating margin before exceptional items up to 4.5% from 3.9%
• Profit before tax and exceptional items up by 7.4% (13% in constant
currencies)
• Exceptional costs of €90.47m relate primarily to the finalisation of
UK restructuring, and also includes €6.95m to accelerate restructuring
arising from the Mid Term Review of CAP
• Adjusted earnings per share ** up 10.4% to 19.26 cent
• Year-end Net Debt / EBITDA *** 1.17, interest cover up to 5.93 times
• Strategic investments underway in US, Nigeria, Mexico and Ireland
• Glanbia well positioned for further growth in international nutrition and
consumer products
* Including share of operating profit of joint ventures & associates
** Before exceptional items and amortisation of goodwill
*** Earnings before interest, tax, depreciation, amortisation of goodwill and
exceptional items
Strategic Highlights:
• Construction commenced on $190m cheese and whey products production
facility in New Mexico, USA, which post completion will position Glanbia as
the number one producer of American style cheddar cheese in the US
• Joint venture signed with Conaprole, Uruguay, to market and sell
dairy ingredients into Central and South American markets
• Joint venture signed with PZ Cussons plc to build US$20m facility in
Nigeria to supply evaporated milk and milk powder to the local market
• Finalisation of UK restructuring programme -
- Sale of Glanbia Fresh Meats (UK) Limited; closure of UK fresh meat
facilities
- formation of a joint venture with Milk Link Limited to serve the UK
hard cheese market
• Commenced development of Group Innovation Centre in Kilkenny,
Ireland, to advance strategy of scientific innovation in nutritional foods
and ingredients
• Continuation of innovative pipeline of new nutritional products
Commenting on the results, Group Managing Director, John Moloney said,
'Glanbia had a solid performance in 2003, achieving strong operating margin
growth, improved profitability and positive cash flow. We have now completed our
UK restructuring which finalises a three-year programme of business
reorganisation. This narrowing of focus enables the advancement of our growth
strategy.
Significant progress was made in advancing this strategy with investment
initiatives in the US, Nigeria, Mexico and Ireland. Glanbia now has three
focussed platforms for future growth in cheese, nutritional ingredients and
consumer foods with a nutritional emphasis. We are confident that this strategy
will provide a strong platform for earnings growth into the future.'
Financial Highlights
Y/E 3 January Y/E 4 January Change
2004 2003
Euro Euro
Group Turnover 2,041.07m 2,316.74m -11.9%
Operating Profit* before 92.79m 91.54m +1.4%
exceptional items
Operating Margin before 4.5% 3.9%
exceptional items
Profit before Tax / 77.14m 71.81m +7.4%
exceptional items
Exceptional Change 90.47m 79.92m
Adjusted EPS** 19.26c 17.44c +10.4%
FRS 3 EPS (12.01)c (10.06)c
Dividend 5.00c 4.76c +5.0%
Net year end borrowings 153.80m 176.31m -12.8%
Year end Net Debt / EBITDA*** 1.17 1.22
____________________________________________________________________
* Including share of operating profit of joint ventures & associates
** Before exceptional items and amortisation of goodwill
*** Earnings before interest, tax, depreciation, amortisation of goodwill and
exceptional items
For further information, contact:
Glanbia plc:
Geraldine Kearney, Group Director of Communications, Glanbia plc
Tel: +353 (0)56-7772200 (office) or +353 (0)87-2319430 (mobile)
UK Enquiries:
John Olsen / Tom Leatherbarrow, Hogarth Partnership Tel: 0207 3579477
Results
(i) Profit and Loss Account
Glanbia's 2003 underlying results reflect a solid performance in a challenging
year, with increased operational efficiency, volume growth in key sectors and
improved margins.
The reported results, after exceptional charges, reflect the completion of
restructuring in the UK through the sale of Glanbia Fresh Meats (UK) Limited and
the creation of the joint venture with Milk Link Limited to service the UK
cheese market.
Group turnover in 2003 was down 11.9% to €2,041.07m (2002: €2,316.74m)
reflecting the impact of the restructuring of operations in the UK in 2002 and
2003. Operating profit before exceptional costs (including share of operating
profit of joint ventures & associates) increased by 1.4% to €92.79m (2002:
€91.54m) and profit before tax and exceptional items increased by 7.4% to
€77.14m (2002: €71.81m). The Group continues to focus attention on improving
operational efficiencies and driving value added products, which resulted in an
improvement in operating margins to 4.5% (2002: 3.9%).
A net exceptional charge of €90.47m (2002: €79.92m) arises in the period from a
number of one off items. Of this, €16.45m has been charged against operating
profit, €9.50m of which relates to redundancy costs arising from the fire at the
Roosky pigmeat plant in 2002 and €6.95m relates to the costs of accelerating
efficiencies and cost effectiveness across all Irish businesses arising from the
impact of the EU Commission's Mid Term Review of the Common Agricultural Policy.
A further €85.61m of exceptional costs relate to the finalisation of the
restructuring of operations in the UK as part of the continuing refocusing of
operations around group strategy. Of this exceptional charge, €49.15m arises
from the sale of 75% of Glanbia Foods (announced in February 2004), €31.04m
arises from the sale of Glanbia Fresh Meats (UK) Limited and closure of related
meat processing facilities (announced in July 2003) and €5.42m arises due to the
recognition of increased pension obligations to former employees of the UK
Dairies business which was disposed of in a prior period.
The Group incurred an additional exceptional loss of €1.56m on the disposal of a
pig farm during the year. These exceptional costs were offset by an exceptional
gain of €11.60m from an insurance settlement, representing the surplus realised
over the net book value of the asset destroyed in the Roosky fire.
Of the net exceptional charge of €90.47m, €41.69m relates to the writeback
through the profit and loss account of goodwill previously written off against
reserves, €33.88m relates to a loss on the disposal of assets and €14.90m
relates to other costs.
After net exceptional items, the Group realised a loss before tax of €14.89m
(2002: (€8.11m)).
Adjusted earnings per share increased by 10.4% to 19.26c (2002: 17.44c). The FRS
3 loss per share was 12.01c (2002: (10.06c)).
(ii) Financing
Glanbia's financial position has been further strengthened during the year, as
the Group benefited from improved operating performance and good cash flows. Net
bank borrowings declined by 12.8% to €153.80m (2002: €176.31m). Capital
expenditure increased in the period to €41.74m (2002: €35.02m). Depreciation
reduced in the period to €38.13m (2002: €53.07m), a reduction of €5.77m arose as
a result of a review of the remaining useful lives of all plant and equipment
owned by the Group as required by FRS 15 (Tangible Fixed Assets), and the
remaining reduction in depreciation reflects the sale / cessation of operations
in 2002 and 2003.
The ratio of year-end net borrowings to EBITDA (Earnings before interest, tax,
depreciation, amortisation of goodwill and exceptional items) is now 1.17 (2002:
1.22).
The interest charge for the year (including share of joint ventures &
associates) declined by 20.7% to €15.65m (2002: €19.73m) reflecting lower
overall borrowings and continued strong emphasis by the Group on working capital
utilisation. Interest cover increased significantly to 5.9 times compared to 4.6
times in 2002. Non-equity minority interest, which relates to Preferred
Securities and Preference Shares, amounted to €11.00m (2002: €12.62m), impacted
by the weaker dollar.
Equity shareholders' funds decreased marginally by 1% to €179.44m (2002:
€181.30m), due to the impact of the finalisation of the restructuring of UK
operations in 2003.
(iii) Dividend
A final dividend of 2.94c per share is proposed (2002: 2.80c), giving a total
dividend for the year of 5.00c per share (2002: 4.76c), an increase of 5%.
Subject to shareholder approval the final dividend will be paid on 24 May 2004
to shareholders on the Register as at 23 April 2004, the record date. Irish
dividend withholding tax will be deducted at the standard rate where applicable.
REVIEW OF OPERATIONS:
CONSUMER FOODS
The Group's Consumer Foods businesses encompass the manufacture and marketing of
value added fast moving consumer goods in Ireland, the UK and Continental
Europe. In Ireland this includes the market leading dairy and chilled
convenience food business as well as the processing and sale of Irish pork. In
the UK it encompasses the production of high quality own label cheese products
and the Leprino Joint Venture producing mozzarella for the European pizza
sector.
Overview:
In 2003 Consumer Foods accounted for 44.11% of the Group's turnover and 48.25%
of the Group's operating profit. Overall a challenging operating environment
resulted in a reduction in operating profit to €44.77m (2002: €47.59m), but
encouragingly, operating margins improved to 5.0% (2002: 4.0%). Turnover
declined to €900.41m (2002: €1,175.11m) due to the impact of the exit from the
UK consumer meats and foodservice distribution activities in 2002 and the exit
from the UK fresh meats business in 2003.
Consumer Foods benefited from enhanced operational efficiencies in key
businesses, new product extensions, nutritional product introductions and the
finalisation of the reorganisation of the UK activities. Very competitive block
mozzarella markets and currency weakness adversely impacted the Glanbia Cheese
business.
The new UK joint venture with Milk Link, announced in February 2004, is a
response to ongoing margin pressure in the highly competitive UK market and
allows Glanbia to retain a stake in a more integrated business which will
compete more effectively in this market, while realising cash for investment in
high growth areas.
Ireland:
Glanbia is Ireland's leading supplier of branded and value-added liquid milk
products and the market-leading supplier of fresh dairy products, cheeses, soups
and spreads principally under the Yoplait, Avonmore and Kilmeaden brands. The
Group also processes fresh pork for the retail and foodservice trade, selling in
Ireland, Europe, the US and Asia.
For over two decades the Glanbia brands have been household names and research
indicates they are synonymous with quality, convenience and health. This depth
of experience, combined with a constant focus on innovation and marketing is the
driver that positions this business as the market leader and the consumer's
choice.
In anticipating and responding to consumer needs we have expanded the range of
products through the introduction of a convenience 'grab and go' portfolio led
by Avonmore 'SuperMilk on the Go' and the milk-based nutritional and functional
beverage, 'Milk Plus'. The business is focused on the development and supply of
functional foods including the award-winning 'Yoplait Everybody' probiotic
yogurt drink. Ongoing nutritional product innovations are core to this business.
Irish pork operations had a reasonable performance in 2003. The Group has
expanded processing capacity at its facility in Roscrea and is in the process of
expanding capacity at its facility in Edenderry to replace the capacity lost in
the fire in Roosky in 2002.
Against the background of a competitive liquid milk sector and a challenging
retail environment, the Irish consumer foods business overall had a good
performance in 2003 with volume growth and expansion into new value-added
segments.
UK
The Group's UK Consumer Foods businesses for the period include Glanbia Foods,
Glanbia Cheese and the UK fresh meats operations (up to the date of sale - 5
July 2003). Glanbia Foods Limited is Britain's second largest producer of
cheddar, Stilton and British territorial cheeses. Glanbia Cheese, the pizza
cheese joint venture with Leprino Foods, is Europe's leading producer of
mozzarella for the pizza sector, serving quick service restaurants and chilled
and frozen pizza manufacturers
Glanbia Foods performed satisfactorily in 2003. Despite a highly competitive
market we achieved steady sales volumes and enhanced operating efficiencies.
The result for Glanbia Cheese was below expectations primarily due to the
competitive nature of the block mozzarella market driven largely by a European
response to the Mid Term Review of the Common Agricultural Policy. Overall the
business benefited from volume growth. The Northern Ireland facility has yet to
fully realise the benefits of technology investments and capacity expansion
completed in October 2003.
Significant progress was made during the year in terms of re-organising the
Groups UK operations. In July 2003 the Group announced its decision to withdraw
from its UK fresh pork operations and in February 2004 the Group announced its
decision to enter into a joint venture with Milk Link to service the UK hard
cheese sector.
FOOD INGREDIENTS AND NUTRITIONALS
Food Ingredients comprises the US and Irish dairy ingredients operations, as
well as the Group's expanding nutritional business. At facilities in Ireland
and the US, Glanbia processes and markets a range of milk, cheese and whey
protein ingredients for sale on international markets. It is also involved in a
number of strategic joint ventures.
Glanbia has a strong presence in international dairy ingredients markets, is the
largest producer of barrel cheese in the USA, is the second largest producer of
whey protein isolate worldwide and is the largest milk processor in Ireland.
In the nutritional sector Glanbia is a leading producer of high value-added
whey-based nutritional ingredients for domestic, US, Asian and European markets.
Overview:
Overall, the division accounts for 44.40% of the Group's turnover and 36.39% of
the Group's operating profit. Food Ingredients and Nutritionals performed well
during 2003, with operating profit up by 12.4% on 2003, and operating margins
increasing to 3.7%. However results were impacted by the weakness of the US
dollar against the Euro and weak US cheese markets in the first half of 2003.
Divisional operating profit increased to €33.77m (2002: €30.05m). The operating
margin was 3.7% (2002: 3.3%). Turnover was down marginally to €906.21m compared
to €910.08m in 2002.
Ingredients USA
The Group is the largest producer of US barrel cheese, the second largest
producer of whey protein concentrate and the third largest producer of lactose
in the US. It is one of the top producers of American type cheddar cheese,
supplying the food service, food processing and retail sectors. The business had
a satisfactory performance in 2003, delivering solid volume growth in a year
when cheese markets were weak, particularly in the first half. The joint venture
in New Mexico which was announced in 2003 will, on completion, make Glanbia the
number one producer of American type cheddar cheese in the US.
Ingredients Ireland
In Ireland, Glanbia Ingredients is the country's largest dairy processor,
utilising over 30% of the national manufacturing milk pool. Modern large-scale
facilities in three strategic locations produce a wide portfolio of cheese,
protein, butterfat-based and formulated products and cream base for Baileys
Irish liqueurs. Glanbia exports over 95% of output to European, North and South
American, African and Asian markets.
This business had a satisfactory performance during 2003.
Nutritionals
Glanbia's international nutritional ingredients activities are now being brought
to market via a separate, focused business unit. Good progress was made in
developing nutritional ingredients in 2003 and the business performed in line
with expectations. In 2003 the business commissioned new protein hydrolysis
capacity in the US and continued its pipeline of new product development with
the introduction of two novel ingredient solutions that extend the shelf life
and improve the texture of nutritional bars: BarFlex(TM) and BarPro(TM) both of
which are partially hydrolyzed milk protein isolate, along with Prolibra(TM)-a
weight loss solution.
In 2002 the business introduced Salibra, a bioactive whey fraction to support
intestinal health and wellness. Sales of Salibra are growing and the product is
being introduced into the sports nutrition sector in the US as a muscle
development and sports performance product. These product introductions
contributed to strong sales growth in the year. The business also added to its
research capability in Ireland and the US in the areas of applications and
clinical nutrition.
AGRI BUSINESS
The Agribusiness Division is the key linkage between Glanbia and its farmer
suppliers in Ireland and is engaged primarily in farm input sales, feed milling,
milk assembly and grain trading. The division also has interests in fertiliser
production, veterinary wholesaling, malting and port services.
Overall the division had a good performance in 2003. Market share gains were
made in feed and fertiliser sales in 2003. During the year the Division
continued its cost reduction programme and achieved enhanced operating
efficiencies across all elements of the business.
In 2003 the division accounted for 11.49% of the Group's turnover and 15.36% of
the Group's operating profit. Turnover increased to €234.45m (2002: €231.55m),
operating profit improved to €14.25m (2002: €13.89m). The operating margin was
6.0%.
STRATEGIC DEVELOPMENTS
During 2003 significant progress was made in developing our strategic focus on
the high growth areas of consumer products, dairy ingredients and in particular
the nutritional market. This was achieved both through wholly owned investments
and a number of strategic joint ventures, which offer a relatively low risk
entry into significant growth markets.
Specifically:
• The Group commenced construction of the $190m cheese and whey products
production facility in New Mexico, USA. This new plant will be 50% owned by
Glanbia with the balance jointly owned by Dairy Farmers of America Inc. and
Select Milk Producers Inc. It will position the Group as the number one
producer of American type cheddar cheese in the USA and simultaneously build
our global position as a supplier of advanced technology whey proteins to
the nutritional sector. Commissioning of the new facility is planned for
Autumn 2005.
• The Group entered into a strategic joint venture with Conaprole of Uruguay
in respect of the sales and marketing into Central and South American
markets of dairy ingredients manufactured by Glanbia in Ireland and the US
and by Conaprole in Uruguay. This venture is now operational and sales
performance is encouraging.
• The Group announced a 50/50 joint venture with PZ Cussons plc to build a
new US$20 million facility in Nigeria to supply evaporated milk and milk
powder to the local Nigerian market. The factory will be capable of
handling 35,000 tonnes of milk products per annum and will be commissioned
in early 2005. Glanbia will have full responsibility for operations while PZ
Cussons plc will be responsible for the marketing and distribution of the
product stream through its existing Nigerian subsidiary.
• The Group announced the development of a Group Innovation Centre, to be
completed by Autumn 2004. There is growing consumer awareness of the link
between health and diet and Glanbia as a food Group is committed to
achieving the highest standards of best practice in relation to science
based innovation. Group strategy is focused on developing products with a
health based functional foods and nutritional emphasis in both ingredient
and consumer form. This new world-class research and product development
facility, to be based in Ireland, is core to this strategy.
• On 23 February 2004, the Group announced the sale of a 75% interest in its
UK hard cheese business, Glanbia Foods Limited (through the sale of 100% of
Glanbia Foods limited and the simultaneous creation of a new joint venture
with Milk Link Ltd which will be 25% owned by the Group) for a net
consideration of €118.7m.
• The Group is actively pursuing a number of potential acquisition
opportunities in the nutritional ingredients sector.
OUTLOOK
Glanbia is now focussed on cheese, nutritional ingredients and consumer foods,
having completed its strategic reorganisation.
In determining the potential outcome for 2004 the Board has taken into
consideration the phasing of new investment projects, the transition to a new EU
dairy regime and a weakened dollar. Taking these factors into account, the
Board expects to make further progress in the current year.
Furthermore, the Board is confident that the developments commenced in 2003,
together with planned initiatives in 2004, will deliver satisfactory earnings
growth in 2005 and beyond.
ANNUAL REPORT AND ANNUAL GENERAL MEETING
The 2003 Annual Report for the Group will be published in April. The Annual
General Meeting will take place in the Newpark Hotel, Kilkenny on 18 May 2004.
Ends
3 March 2004
Glanbia plc
Consolidated Profit and Loss Account
for the Year ended 3 January 2004
Pre- Pre-
exceptional Exceptional Total exceptional Exceptional Total
2003 2003 2003 2002 2002 2002
Notes Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000
Turnover 2,109,760 - 2,109,760 2,386,437 - 2,386,437
Less (68,687) - (68,687) (69,699) - (69,699)
share of
turnover
of joint
venture
------------- ------------- -------------- -------------- -------------- --------------
Group 1 2,041,073 - 2,041,073 2,316,738 - 2,316,738
turnover
Cost of (1,773,537) - (1,773,537) (2,010,118) - (2,010,118)
sales
------------- ------------- -------------- -------------- -------------- --------------
Gross 267,536 - 267,536 306,620 - 306,620
profit
Distribution (94,697) - (94,697) (127,339) - (127,339)
costs
Administra 2 (80,970) (16,451) (97,421) (90,693) - (90,693)
tive
expenses
------------- ------------- -------------- -------------- -------------- --------------
Group 91,869 (16,451) 75,418 88,588 - 88,588
operating
profit
Share of 916 - 916 2,947 - 2,947
operating
profit of
joint
ventures
and
associates
------------- ------------- -------------- -------------- -------------- --------------
Operating 1 92,785 (16,451) 76,334 91,535 - 91,535
profit
including
joint
ventures
and
associates
Loss on 3 - (28,190) (28,190) - (25,610) (25,610)
sale of
operations
Provision 4 - (49,146) (49,146) - - -
for loss
on sale
of
operations
Profit on 5 - 11,594 11,594 - 13,754 13,754
sale of
fixed
assets
Loss on 6 - (9,827) (9,827) - (68,064) (68,064)
termination
of operations
Group (15,023) - (15,023) (19,206) - (19,206)
interest
Share of (627) - (627) (521) - (521)
interest
of joint
ventures
and
associates
------------- ------------- -------------- -------------- -------------- --------------
Profit / 77,135 (92,020) (14,885) 71,808 (79,920) (8,112)
(loss)
before
taxation
Taxation (10,272) 1,546 (8,726) (7,939) - (7,939)
------------- ------------- -------------- -------------- -------------- --------------
Profit / 66,863 (90,474) (23,611) 63,869 (79,920) (16,051)
(loss)
after
taxation
------------- ------------- -------------- --------------
Equity (251) (677)
minority
interest
Non-equity (11,005) (12,619)
minority
interest
-------------- --------------
Loss for (34,867) (29,347)
the year
Dividends 7 (14,515) (13,833)
-------------- --------------
Loss (49,382) (43,180)
absorbed
for the
year
========= ==========
Earnings 8 (12.01) c (10.06) c
per share
Adjusted 8 19.26 c 17.44 c
earnings
per share
The financial statements were approved by the Board of Directors on 2 March 2004
and signed on its behalf by TP Corcoran, JJ Moloney and GJ Meagher, Directors.
Glanbia plc
Consolidated Balance Sheet
as at 3 January 2004
2003 2002
Eur'000 Eur'000
Assets employed
Fixed assets
Tangible assets 363,641 416,826
Goodwill 2,466 4,420
Financial assets
Investments in joint ventures:
Share of gross assets 40,542 30,527
Share of gross liabilities (27,598) (17,426)
--------------------- ---------------------
12,944 13,101
Investments in associates 9,607 9,101
Other investments 15,903 14,252
--------------------- ---------------------
38,454 36,454
--------------------- ---------------------
404,561 457,700
--------------------- ---------------------
Current assets
Stocks 202,736 180,022
Debtors 210,402 226,838
Cash and bank balances 59,775 90,953
--------------------- ---------------------
472,913 497,813
Creditors - Amounts falling due within one year 348,751 317,442
--------------------- ---------------------
Net current assets 124,162 180,371
--------------------- ---------------------
Total assets less current liabilities 528,723 638,071
--------------------- ---------------------
Less:
Non-current liabilities
Creditors - Amounts falling due after more than one year 183,682 275,407
Provision for liabilities and charges
Deferred taxation 27,559 23,723
Capital grants 16,611 18,505
--------------------- ---------------------
300,871 320,436
============ ============
Capital and reserves
Called up equity share capital 17,551 17,551
Share premium account 80,005 80,005
Merger reserve 113,148 113,148
Revenue reserves (34,088) (32,232)
Capital reserves 2,825 2,825
--------------------- ---------------------
Equity shareholders' funds 179,441 181,297
Equity minority interests 5,671 6,983
Non-equity minority interests 115,759 132,156
--------------------- ---------------------
300,871 320,436
============ ============
The financial statements were approved by the Board of Directors on 2 March 2004
and signed on its behalf by TP Corcoran, JJ Moloney and GJ Meagher, Directors.
Glanbia plc
Summary Cash Flow Statement
for the Year ended 3 January 2004
2003 2003 2002 2002
Eur'000 Eur'000 Eur'000 Eur'000
Group operating profit 91,869 88,588
Reorganisation and merger costs (338) (775)
Profit on disposal of fixed assets (415) (885)
Depreciation 38,125 53,072
Grants amortised (1,443) (1,670)
Working capital increase (33,588) (12,085)
Goodwill amortisation 297 313
-------------- --------------
Net cash inflow from operating activities 94,507 126,558
Returns on investments and servicing of finance
Interest paid (16,548) (20,236)
Dividends paid to minority interest (11,758) (28,306) (11,813) (32,049)
-------------- --------------
Taxation (9,816) (4,990)
Capital expenditure and financial investment
Purchase of fixed assets (net of grants received) (41,736) (35,007)
Disposal of fixed assets 2,629 6,377
(Purchase) / disposal of investments (2,410) (41,517) 10,705 (17,925)
-------------- --------------
Acquisitions and disposals
Purchase of subsidiary undertakings - (677)
Disposal of subsidiary undertakings 795 1,184
Termination of operation (1,851) (8,648)
Minority interest redeemed (100) -
Fire insurance proceeds (net of redundancy and other 7,332 6,176 - (8,141)
costs)
-------------- --------------
Equity dividends paid (14,080) (13,533)
-------------- --------------
Change in net debt resulting from cash flows 6,964 49,920
Currency translation impact 15,547 16,431
-------------- --------------
Decrease in net borrowings 22,511 66,351
======== ========
Glanbia plc
Notes to the Financial Statements
3 January 2004
1. Segmental analysis
2003 2002
Eur'000 Eur'000
Analysis by class of business
Turnover
Consumer Foods 900,411 1,175,114
Food Ingredients 906,210 910,075
Agribusiness 234,452 231,549
------------------ ------------------
2,041,073 2,316,738
========== ==========
Operating profit
(including share of profits of joint venture and associates)
Consumer Foods 44,773 47,590
Food Ingredients 33,765 30,051
Agribusiness 14,247 13,894
------------------ ------------------
92,785 91,535
========== ==========
Analysis by geographical segments
Turnover by market destination
Ireland 793,753 837,533
UK / rest of Europe 653,747 885,703
USA / other 593,573 593,502
------------------ ------------------
2,041,073 2,316,738
========== ==========
2. Exceptional items
2003 2002
Eur'000 Eur'000
(9,505) -
(a) Redundancy cost arising from fire at Roosky plant
(b) Restructuring cost associated with EU Commission
Mid Term Review of the Common Agricultural Policy (6,946) -
------------------ ------------------
(16,451) -
========== ==========
3 Loss on sale of operation
The loss arises primarily from the sale by the Group of its UK fresh meats
operation at West Bromwich in July 2003. The Group also disposed of a pig
farm during the period, and recognised an additional loss representing
increased pension obligations to former employees of the UK Dairies operation
which was disposed of in a prior period.
Fresh UK Pig
Meats Dairies Farm Total
Eur'000 Eur'000 Eur'000 Eur'000
Loss on disposal of asset (10,852) (5,417) (651) (16,920)
Goodwill write back to profit (10,262) - (909) (11,171)
and loss account on sale
Goodwill written off on sale (99) - - (99)
---------------- ---------------- ---------------- ----------------
(21,213) (5,417) (1,560) (28,190)
========= ========= ========= =========
The loss on sale in 2002 arose mainly from the Group's sale of its UK
Foodservice distribution business in August 2002. The Group also sold two
farms during 2002.
Notes to the Financial Statements continued
3 January 2004
4 Provision for loss on sale of operation
The provision arises from the sale by the Group of a 75% interest in its UK hard
cheese business (Glanbia Foods Ltd), which was announced on 23 February 2004.
2003 2002
Eur'000 Eur'000
Loss on disposal of asset after period end (18,629) -
Write back of goodwill on asset disposed after period end (30,517) -
---------------- ----------------
(49,146) -
========= =========
5. Profit on sale of fixed assets
The profit arises from the excess of insurance proceeds received over the net
book value of assets destroyed by fire at the pigmeat processing plant in
Roosky, Ireland on 8th May 2002.
2003 2002
Eur'000 Eur'000
On disposal of investments - 13,396
Profit on disposal of tangible assets 11,594 358
---------------- ----------------
11,594 13,754
========= =========
The directors have taken the decision not to reinstate the processing plant at
Roosky but rather to restore the lost capacity at the two remaining pig
processing plants, with the result that a redundancy cost of €9,505k has been
incurred during the period (see note 2a).
6. Loss on termination of operations
The loss arises from the decision to close the Group's UK fresh meat operations
at Drongan and Gainsborough, and an adjustment relating to the loss arising from
the closure of the Groups UK Consumer Meats operation in June 2002.
2003 2002
Eur'000 Eur'000
Loss arising on termination of operations (8,578) (30,370)
Goodwill write back to profit and loss account on termination - (37,694)
Goodwill written off on termination (1,249) -
---------------- ----------------
(9,827) (68,064)
========= =========
7. Dividends
2003 2002
Interim dividend paid per share (cent) 2.06 1.96
Final dividend proposed per share (cent) 2.94 2.80
---------------- ----------------
5.00 4.76
========= =========
Total dividend (Eur'000) 14,515 13,833
========= =========
Notes to the Financial Statements continued
3 January 2004
8. Earnings per share
2003 2002
Eur'000 Eur'000
Profit after taxation and minority interest (34,867) (29,347)
========= =========
Weighted average number of ordinary
shares in issue (million) 290.303 291.703
========= =========
Earnings per share (cent) (12.01) (10.06)
========= =========
Adjustments:
Goodwill amortisation 0.10 0.11
Exceptional items 5.13 -
Loss on sale of operations 9.71 8.78
Provision for loss on sale of operations 16.93 -
Profit on sale of fixed assets (3.99) (4.72)
Loss on termination of operations 3.39 23.33
---------------- ----------------
Adjusted Earnings per Share 19.26 17.44
========= =========
9. Group Borrowings
2003 2002
Eur'000 Eur'000
Borrowings due with one year 43,221 1,117
Borrowings due after one year 170,351 266,144
Less:
Cash and bank balances (59,775) (90,953)
---------------- ----------------
Net borrowings 153,797 176,308
========= =========
10. Accounting policies
These accounts have been prepared using the same accounting policies as detailed
in the 2002 annual financial statements.
11. Basis of preparation and reporting currency
The financial information set out in this document does not constitute full
statutory accounts for the years ended 3 January 2004 (referred to as 2003
accounts) or 4 January 2003 (referred to as 2002 accounts) but is derived from
same. The 2003 and 2002 accounts have been audited and received unqualified
audit reports. The 2003 financial statements were approved by the Board of
Directors on 2 March 2004.
The financial statements are prepared under the historical cost convention and
are presented in Euro.
This information is provided by RNS
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