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Origin Enterprises (OGN)

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Thursday 10 March, 2011

Origin Enterprises

Interim Results Announcement

RNS Number : 6614C
Origin Enterprises Plc
10 March 2011
 



 

 

 

 

 

 

 

Origin Enterprises plc

 

 Interim Results Announcement

 

       Half Year ended 31 January 2011

 

 

         Results Summary                                       


6 months ended

31 Jan 2011

€'000

6 months ended

31 Jan 2010

€'000

%

Change

 

Revenue

-     Agri Services

-     Food

 

569,073

44,240

 

461,624

135,169

 

23%

(67%)

Revenue

613,313

596,793

3%

Operating profit*




-     Agri-Services

12,590

7,806

61%

-     Food

5,051

8,127

(38%)

Share of profit of associates and joint venture**

6,401

5,167

24%

Operating profit*

24,042

21,100

14%

Profit for the financial period

14,449

10,228

41%

Adjusted fully diluted EPS (cent per share)*

11.45

8.68

32%

Net debt

98,725

190,491

(48%)

                                                                                               

 

*before intangible amortisation (2011: €1.6m, 2010: €2.0m) and exceptional items (2011: €5.5m, 2010: €nil)

** Share of profit of associates and joint venture represents profit after interest and tax

 

Highlights

 

·    Excellent first half performance - 32% increase in adjusted earnings per share to 11.45c

·    61% increase in Agri-Services operating profit to €12.6m reflecting the improved operating environment for farming

·    Strong result from Marine Proteins and Oils joint venture

·    €91.8m year-on-year reduction in net debt to €98.7m

·    Repositioning of Group's business profile following completion of Valeo Foods transaction and the creation of an all-Ireland feed ingredients platform to deliver full year cash proceeds of c.€80m in FY2011 for strategic development of Agri-Services division

·    Origin separately announces today the acquisition of United Agri Products and Rigby Taylor furthering the development of the Group's Agri-Services division.


Origin Enterprises plc

 

Chief Executive Officer's comment:

 

Commenting on the announcement of the 2011 Interim Results, Origin Chief Executive Officer, Tom O'Mahony said:

 

"Origin has performed ahead of expectations during the first half of 2011 delivering strong growth in profits and cashflow.

 

Improving market conditions for primary producers have supported an excellent performance by our Agri-Services division reflected in further growth in Masstock's full service prescription agronomy offering and increased sales volumes of farm inputs.

 

The positive demand and supply fundamentals for fishmeal and fish oil raw materials has supported a sustained performance to date from the Group's Marine Proteins and Oils joint venture.

 

The completion of the Valeo Foods transaction in the period is an important step in refocusing the Group's activities whilst also strengthening the competitiveness and market positioning of our consumer foods interests.

 

The positive momentum and favourable planning environment for primary producers highlights the strategic nature of farming particularly in the context of the fragile supply side dynamics of primary food production.  Origin is a well positioned and focused Agri-Services group committed to building scale, systems and processes around the key elements which underpin profitable and sustainable systems of primary food production.

 

Origin also separately announced today the acquisition of United Agri Products Limited ('UAP') and Rigby Taylor Limited ('Rigby Taylor').  The acquisitions build upon Origin's core position in the provision of integrated production systems to primary food producers as well as broadening the Group's offering into new customer channels.

 

Based upon the Group's strong performance to date we expect full year adjusted earnings per share from the existing businesses to exceed consensus expectations and to be at least in line with last year.  The acquisition of United Agri Products and Rigby Taylor are expected to be earnings enhancing from the date of acquisition."

 

 

ENDS


 

The 2011 Interim Results Announcement is available on the company website www.originenterprises.com.  There will be a live conference call at 8.30am (GMT) today.  To listen to this conference call, please dial the number below.  Participants are requested to dial in 5 to 10 minutes prior to the scheduled start time.

 

Participant access numbers:                              

 

Ireland:                                     +353 (0) 1       486 0920

UK/International:                      +44   (0) 20     7138 0828

Switzerland:                              +41   (0) 43     456 9228

 

Confirmation Code:                  4597768

 

 

Enquiries:

 

Brendan Fitzgerald,                   Tel: +353 (0) 1 612 1259

Chief Financial Officer             

Origin Enterprises plc

 

Joe Murray                               Tel:         +353 (0) 1 498 0300

Murray Consultants                  Mobile:    +353 (0) 86 253 4950

 

10 March 2011


INTERIM RESULTS STATEMENT

 

Financial Review

 

Origin Enterprises plc ('Origin' or the 'Group') announces an increase of 32 per cent in adjusted fully diluted earnings per share for the half year ending 31 January 2011 to 11.45 cent per share (2010: 8.68c).  The Group's business is seasonal and is weighted towards the second half of the financial year. 

 

Revenue

 

Revenue was three per cent higher at €613.3 million. Agri-Services achieved revenue of €569.1 million, an increase of 23 per cent principally reflecting higher global fertiliser and feed ingredient prices and higher fertiliser volumes. The impact of currency was €18 million.  On a constant currency basis revenue was 19 per cent higher than the prior period.

 

Following the completion of the Valeo transaction on 26 November 2010 the results for Food for the period from 1 August to 26 November are now classified as discontinued. Comparative figures have also been restated to reflect the effect of discontinued operations. The result for Food is included on the associate and joint venture line effective 26 November 2010.

 

Food generated revenue for the period to 26 November of €44.2 million, a reduction of 67 per cent, attributable to the completion of the Valeo transaction in November 2010 and the wind-down of the Masterfoods contract in August 2010.

 

Operating Profit*

 

Operating profit* inclusive of discontinued activities and share of profits of associates and joint venture increased by 14 per cent to €24.0 million from €21.1 million in the previous period.  The impact of currency was €1.1 million.  On a constant currency basis operating profit increased by 12 per cent.

 

Operating profit* from Agri-Services amounted to €12.6 million compared to €7.8 million in the prior period, an increase of 61 per cent. The impact of currency was €0.6 million.  On a constant currency basis the increase was 54 per cent.

 

Operating profit* from Food for the period to 26 November was €5.1 million, a decrease of 38 per cent on the profits for the six months to 31 January 2010, reflecting the completion of the Valeo transaction and the related wind-down of the Masterfoods contract. The result for Food has been included on the associate and joint venture line from 26 November 2010.


 

Associates and joint venture

 

Our share of the profit after interest and taxation from associates and joint venture increased from €5.1 million to €6.4 million and principally consists of our 50 per cent interest in Welcon. The increase in the period is attributable to the contribution from Valeo which has been included on the associate and joint venture line for the two months to 31 January 2011. 

 

Financing costs

 

Financing costs are €1.6 million, a reduction of 21 per cent on the prior period reflecting reduced average debt, the benefit of an extra year's cashflow and lower interest rates.

 

Cashflow, net debt and working capital

 

Net cash outflow from operating activities was €43.7 million (2010: €33.7 million) reflecting the seasonal investment in working capital during the first half of the financial year and the impact of higher global feed and fertiliser prices. 

 

Group net debt was €98.7 million at 31 January 2011 (2010: €190.5m), a decrease of €91.8 million. This reduction is primarily due to a cash inflow of €69 million from the completion of the Origin Foods strategic repositioning and the creation of an all-Ireland Feed Ingredients platform in the period.  This performance also reflects the continuing strong cash generative nature of the Group's activities.

 

Investment in working capital is a key area of focus for the Group given the funding costs and the related risks in the current environment.  The half year represents a high point in the working capital cycle for the Group reflecting the seasonality of the business.

 

Dividend

 

On 6 January 2011 a dividend of nine cent per share was paid in respect of the year ended 31 July 2010 totalling €11.9 million.  As in the prior year, reflecting the seasonality of the business, the Group will declare an annual dividend at the time of the preliminary results announcement in September 2011.

 

*Operating profit and profit before financing costs are stated before intangible amortisation (2011: €1.6 million, 2010: €2.0 million) and exceptional items (2011: €5.5 million, 2010: €nil).


Review of Operations

 

Agri-Services

 


2011

€'000

2010

€'000

%

Change

Revenue

569,073

461,624

23%





Operating profit*

12,590

7,806

61%





Operating profit %

2.2%

1.7%

50 bps





 

Agri-Services comprises on-farm integrated agronomy services and business-to-business agri-inputs (feed and fertiliser sourcing, handling and distribution).  These businesses provide customised solutions that address the efficiency, quality and output requirements of primary food producers in Ireland, the UK and Poland.

 

Revenue increased by 23 per cent to €569.1 million reflecting a combination of increased volumes and higher global prices for feed and fertiliser.  Operating profit increased by 61 per cent to €12.6 million.  There was strong momentum in volumes and profit in the period reflecting renewed confidence at farm level underpinned by a positive planning environment for primary producers' purchasing and investment decisions.

 

UK/Poland

 

The Group's integrated agronomy services business in the UK delivered a strong result during the first half of the year supported by increased on-farm activity boosted by an early harvest, excellent planting conditions and a favourable output price environment.  Increased autumn plantings for the major winter wheat and oil seed rape crops combined with favourable weather patterns to date provide a strong platform for Masstock's full year performance.  Masstock's extensive arable research capability combined with a superior on-farm agronomy management competence ensures the delivery of the optimum combination of services and crop applications sustaining customers' investment returns.

 

In Poland, Dalgety Agra Polska recorded solid profit growth despite a delayed harvest.  The performance benefited from increased sales of value added agronomy applications and an excellent crop marketing campaign.

 

In the UK fertiliser market there was firm buying interest in the period reflecting the positive outlook for output prices.  In contrast to the same period in 2010 earlier demand has been experienced, principally attributable to the expectation of higher fertiliser prices closer to the main application period.


Ireland

 

In Ireland, there is renewed optimism within agriculture as most primary enterprises are now returning to meaningful profitability.  The balance of animal numbers continues to move in favour of dairy farming in preparation for the expected increase in output post the cessation of quotas in 2015.  Rising input costs remain a key focus for the industry given their impact on returns.

 

The Irish fertiliser business had a satisfactory performance during this seasonally quiet period as volumes remained broadly in line with the same period last year.

 

Feed Ingredients delivered a satisfactory performance in the period with volumes marginally lower than last year reflecting the combination of excellent quality fodder and higher ingredient prices.

 

On 31 January 2011 the Group announced the completion of the agreement reached with W & R Barnett Limited ('Barnett') in November 2010 to establish an all-Ireland grain and feed handling, logistics and trading business.  The all-Ireland business will be formed through the integration of Origin's R & H Hall ('Hall') business in the Republic of Ireland and the business of Origin and Barnett in Northern Ireland.

 

The consolidation is an important strategic initiative which will contribute to the long-term sustainability and competitiveness of Ireland's export orientated agri-food industry through improving logistical efficiencies and processes in sourcing strategic inputs.

 

The combined business brings together two of Ireland's leading indigenous grain and non-grain feed ingredient importing businesses servicing the animal feed and cereal milling industries.  Committed and long-established partnerships with global ingredient shippers combined with an extensive procurement, logistics and handling capability provide proven access to international markets and sources of supply.  A single logistics platform will be created which will support enhanced procurement synergies and a superior service offering to customers.

 

Overall the business-to-business agri-inputs business in both Ireland and the UK remain well placed to deliver a satisfactory performance during the seasonally more important second half of the year.

 

In a separate press release today Origin announces the acquisition of United Agri Products and Rigby Taylor furthering the development of the Agri-Services division.

 

 

 

 


Food - Discontinued activities

 

For the period under review the Food division incorporates the discontinued activities of Origin Foods for the period 1 August 2010 to 26 November 2010. 

 

Food generated revenue for this period of €44.2 million, a reduction of 67 per cent on the period for the six months to 31 January 2010.  Operating profit* was €5.1 million a decrease of 38 per cent on the profits for the six months to 31 January 2010.  The decreases are attributable to the completion of the Valeo transaction in November 2010 and the related wind-down of the Masterfoods contract from August 2010. 

 

The performance of the Food business for the two months to 31 January 2011 is covered in the associates and joint venture section.

 

Associates and joint venture

 

Valeo Foods Group Limited ('Valeo')

 

Valeo, formed through the merger of Origin Foods and Batchelors, in which Origin has a 44.1 per cent interest, is a leading consumer foods company with a portfolio of some of Ireland's most iconic staple food brands.  

 

Valeo delivered a good performance for the two month period to 31 January 2011, recording single digit volume increases against the background of an intensely competitive trading environment which continues to be impacted by the recession.

 

The business remained focused on its core categories with promotional support programs being implemented to ensure the maintenance of the market leading positions of each of Valeo's brands.  Value added offerings are being introduced to expand core product categories whilst investment in channel expansion is being undertaken as consumers continue to migrate between outlets in search of greater value.

 

The integration of Origin Foods and Batchelors will support improved competitiveness and market positioning of the principally non-discretionary food categories.  The integration planning and process execution is now well underway.

 

Welcon Invest AS ('Welcon')

 

Welcon, jointly owned by Origin and Austevoll Seafoods ASA, is Europe's largest manufacturer of marine proteins and oils servicing the aquaculture, pig and poultry feed sectors.

 

There was positive demand for Welcon finished product in the period as increased Norwegian and Scottish fish feed production was driven by favourable consumer demand for North Atlantic salmon and trout aquaculture output.  Fishmeal usage within pig and poultry diets was stable during the period.


Global fishmeal and fish oil prices remained strong reflecting reduced South American supply due to lower raw material availability and firm buying interest from Europe and Asia. 

 

During the period Welcon acquired a 25 per cent interest in Nergård Holding AS, a leading Norwegian integrated whitefish and pelagic fishery specialist with operations located north of the arctic circle.

 

Continental Farmers Group Plc ('Continental')

 

Continental, the large scale primary producer of combinable and root crops in Poland and Ukraine made very satisfactory progress in the period.  The benefits of scale and crop diversity in Continental's operations were reflected in a strong financial result in the period principally underpinned by very satisfactory returns from potato and sugar beet crops.  For 2011 the business is targeting 17,500 hectares under crops.  The application of active agronomy programmes combined with the benefit of enhanced operational leverage is expected to positively influence performance in the full year.

 

John Thompson & Son Limited ('John Thompson')

 

John Thompson, the largest single site animal feed mill on the island of Ireland, in which Origin has a 50 per cent shareholding, delivered a satisfactory performance during the year.

 

Outlook

 

The positive momentum and favourable planning environment for primary producers highlights the strategic nature of farming particularly in the context of the fragile supply side dynamics of primary food production.  Origin is a well positioned and focused Agri-Services group committed to building scale, systems and processes around the key elements which underpin profitable and sustainable systems of primary food production.

 

Based upon the Group's strong performance to date we expect full year adjusted earnings per share from the existing businesses to exceed consensus expectations and to be at least in line with last year.  The acquisition of United Agri Products and Rigby Taylor are expected to be earnings enhancing from the date of acquisition and to contribute approximately 3.5 cent per share in the period to 31 July 2011 reflecting the seasonality of these businesses.

 

ENDS


About Origin Enterprises plc

Origin Enterprises plc is a focused Agri-Services Group with strategic investments in Consumer Foods and Marine Proteins and Oils.  The Group is listed on the ESM and AIM markets of the Irish and London Stock Exchanges.  The Agri-Services business through its manufacturing and distribution operations in Ireland, the United Kingdom and Poland has leading market positions in the supply of specialist agronomy services, crop nutrition and feed ingredients.

 

ESM ticker symbol: OIZ

AIM ticker symbol: OGN

 

Website: www.originenterprises.com


Origin Enterprises plc

 

Consolidated income statement

for the six months ended 31 January 2011

 




Six












months


Six


Six


Six






ended


months


months


months


Year




January


ended


ended


ended


ended




2011


January


January


January


31 July




Pre-


2011


2011


2010


2010




Exceptional


Exceptional


Total


Total


Total




€'000


€'000


€'000


€'000


€'000


Notes




(Note 4)




Restated


Restated










(Note 5)


(Note 5)




(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Audited)













Continuing operations












Revenue

3


569,073


-


569,073


461,624


1,077,009

Cost of sales



(515,500)


-


(515,500)


(417,058)


(946,162)

























Gross profit



53,573


-


53,573


44,566


130,847













Operating costs



(42,407)


2,919


(39,488)


(38,099)


(82,677)













Share of profit of associates and joint venture



 

 

6,401


 

 

(327)


 

 

6,074


 

 

5,167


 

 

11,572

























Operating profit



17,567


2,592


20,159


11,634


59,742













Finance income



2,302


-


2,302


2,554


4,201

Finance expenses



(8,425)


-


(8,425)


(10,316)


(19,414)

























Profit before tax



11,444


2,592


14,036


3,872


44,529













Income tax expense



(1,190)


-


(1,190)


(164)


(8,463)

























Profit from continuing operations



 

10,254


 

2,592


 

12,846


 

3,708


 

36,066













Profit/(loss) from discontinued operations

 

 

5


 

 

4,195


 

 

(8,125)


 

 

(3,930)


 

 

6,520


 

 

11,973

















































Profit attributable to equity shareholders



 

14,449


 

(5,533)


 

8,916


 

10,228


 

48,039


























Origin Enterprises plc

 

 

Consolidated income statement (continued)

for the six months ended 31 January 2011

 







Six


Six









months


months


Year







ended


ended


ended





Notes


January


January


31 July







2011


2010


2010







€'000


€'000


€'000







(Unaudited)


(Unaudited)


(Audited)












Earnings per share for the period

 












 

Basic earnings per share











 

Continuing operations




6


9.65c


2.79c


27.12c

 

Discontinued operations




6


(2.95c)


4.90c


9.00c

 







6.70c


7.69c


36.12c

 












 

Diluted earnings per share











 

Continuing operations




6


9.31c


2.69c


26.25c

 

Discontinued operations




6


(2.85c)


4.74c


8.72c

 







6.46c


7.43c


34.97c

 

Basic earnings per share- adjusted









 

Continuing operations




6


8.58c


3.61c


28.73c

 

Discontinued operations




6


3.31c


5.37c


9.75c

 







11.89c


8.98c


38.48c

 

Diluted earnings per share- adjusted









 

Continuing operations




6


8.26c


3.49c


27.82c

 

Discontinued operations




6


3.19c


5.19c


9.44c

 







11.45c


8.68c


37.26c

 

 

 

 

 

 

 

 

 


Origin Enterprises plc

 

 

Consolidated statement of comprehensive income

for the six months ended 31 January 2011

 


Six


Six




months


months


Year


ended


ended


ended


January


January


July


2011


2010


2010


€'000


€'000


€'000


(Unaudited)


(Unaudited)


(Audited)







Profit for the period

8,916


10,228


48,039







Other comprehensive income












Foreign exchange translation effects






-foreign currency borrowings

1,901


627


(2,099)

-foreign currency net investments

(2,251)


(2,669)


1,351

-recycling on disposal of subsidiary undertaking

(379)


-


-







Share of other comprehensive income of associates and joint venture (excluding pension obligations)

-


-


(692)







Group/associate defined benefit pension obligations






-actuarial gain/(loss) on Group's/associate's defined benefit pension schemes

 

894


(821)


(1,210)

-deferred tax effect of actuarial gains/(losses) in Group's

(295)


435


262

defined benefit pension schemes












Cash flow hedges






-gain relating to cash flow hedges

4,004


4,511


2,164

-deferred tax effect of cash flow hedges

(628)


(628)


(227)













Other comprehensive income/(expense) for the period, net of tax

 

3,246


 

1,455


 

(451)













Total comprehensive income for the period attributable to equity shareholders

 

12,162


 

11,683


 

47,588













 

 


Origin Enterprises plc

 

 

Consolidated statement of financial position

as at 31 January 2011

 

 



January


January


July



2011


2010


2010


Notes

€'000


€'000


€'000



(Unaudited)


(Unaudited)


(Audited)








ASSETS














Non current assets







Property, plant and equipment

7

80,945


84,543


129,182

Investment properties


16,002


59,214


16,002

Goodwill and intangible assets

8

68,681


113,170


114,595

Investments in associates and joint venture

9

154,088


87,152


89,741

Deferred tax assets


3,975


5,776


4,607















Total non current assets


323,691


349,855


354,127















Current assets







Inventory


116,808


112,090


82,138

Trade and other receivables


90,442


120,952


179,581

Derivative financial instruments


753


2,382


495

Cash and cash equivalents


72,958


25,100


76,043















Total current assets


280,961


260,524


338,257















TOTAL ASSETS


604,652


610,379


692,384















 


Origin Enterprises plc

 

Consolidated statement of financial position (continued)

as at 31 January 2011




January


January


July




2011


2010


2010




€'000


€'000


€'000




(Unaudited)


(Unaudited)


(Audited)

EQUITY
















Called up share capital



1,385


1,386


1,386

Share premium



160,399


160,399


160,399

Retained earnings and other reserves



20,687


(16,305)


20,059









TOTAL EQUITY



182,471


145,480


181,844









LIABILITIES








Non current liabilities








Interest bearing borrowings



169,231


202,237


184,076

Deferred tax liabilities



12,693


19,582


18,038

Contingent acquisition consideration



6,389


12,287


13,005

Deferred government grants



-


2,414


2,377

Employee benefits



7,350


24,004


7,930

Derivative financial instruments



244


389


804

















Total non current liabilities



195,907


260,913


226,230









Current liabilities








Interest bearing borrowings



2,452


13,354


3,856

Trade and other payables



198,367


174,023


257,691

Dividend payable to shareholders



-


10,641


-

Employee benefits



12,703


-


12,703

Contingent acquisition consideration



6,551


-


-

Corporation tax payable



5,027


1,441


5,772

Derivative financial instruments



1,174


4,527


4,288

















Total current liabilities



226,274


203,986


284,310

















TOTAL LIABILITIES



422,181


464,899


510,540

















TOTAL EQUITY AND LIABILITIES



604,652


610,379


692,384









 


 

Origin Enterprises plc

 

Consolidated statement of changes in equity

for the six months ended 31 January 2011

 







Cash-




Share




Foreign











flow




 based




currency







Share


Share


hedge


Revaluation


payment


Reorganisation


translation


Retained





capital


premium


reserve


reserve


reserve


reserves


reserve


earnings


Total



€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000





















At 1 August 2010

1,386


160,399


(4,002)


34,701


2,748


(196,884)


(17,033)


200,529


181,844





















Share-based payments

-  


-  


 -  


 -  


   458  


-  


-  


-


458


Transfer of revaluation reserve to revenue reserve

-  


 -  


-  


   (22,262)  


 -  


 -  


-  


22,262


-


Redemption of deferred convertible shares

 (1)  


-  


 -  


-  


-  


-  


-  


-


(1)


Total comprehensive income for the year

-  


-  


3,376  


-  


-  


-  


 (729)  


9,515


12,162


Dividend paid to shareholders (Note 11)

-  


-  


-  


-  


-  


-  


-  


(11,992)


(11,992)








































At 31 January 2011

1,385


160,399


(626)


12,439


3,206


(196,884)


(17,762)


220,314


182,471








































Origin Enterprises plc

 

Consolidated statement of cash flows 

for the six months ended 31 January 2011

 

 


Six


Six




months


months


Year


ended


ended


ended


January 2011


January 2010


July 2010


€'000


€'000


€'000


(Unaudited)


(Unaudited)


(Audited)







Cash flows from operating activities






Profit before tax - continuing operations

14,036


3,872


44,529

Profit before tax - discontinued operations

4,815


7,464


13,770

Exceptional items

(2,592)


-


-

Finance income

(2,302)


(2,554)


(4,201)

Finance expenses

8,425


10,316


19,414

Share of profit of associates and joint venture

(6,401)


(5,167)


(11,572)

Depreciation of property, plant and equipment

2,879


3,210


6,525

Amortisation of intangible assets

1,660


2,002


3,914

Amortisation of government grants

(56)


(63)


(99)

Employee share-based payment charge

459


459


918

Pension contributions in excess of service costs

145


(562)


(3,666)



















Operating profit before changes in working capital

21,068


18,977


69,532

(Increase)/decrease in inventory

(79,623)


(15,992)


15,191

Decrease in trade and other receivables

52,968


73,154


22,008

(Decrease) in trade and other payables

(28,320)


(100,484)


(27,298)













Cash (absorbed)/generated from operating activities

(33,907)


(24,345)


79,433

Interest paid

(5,485)


(6,814)


(13,529)

Income tax paid

(4,271)


(2,558)


(7,851)













Net cash (outflow)/inflow from operating activities

(43,663)


(33,717)


58,053













 

 


Origin Enterprises plc

 

Consolidated statement of cash flows (continued)

for the six months ended 31 January 2011

 


Six


Six




months


months


Year


ended


ended


ended


January


January


July


2011


2010


2010


€'000


€'000


€'000


(Unaudited)


(Unaudited)


(Audited)







Cash flows from investing activities






Proceeds from sale of property, plant and equipment

837


777


984

Purchase of property, plant and equipment

(3,524)


(2,497)


(5,975)

Additions to intangible assets

(838)


-


(1,123)

Disposal of subsidiary- R&H Hall

44,742


-


-

Disposal of subsidiary- Shamrock/Odlums

24,542


-


-

Investment/loans to associates and joint venture

527


(772)


(1,252)

Dividends received from associates and joint venture

2,048


1,974


5,807













Net cash flow from investing activities

68,334


(518)


(1,559)







Cash flows from financing activities






Repayment of bank loans

(13,365)


(30,062)


(51,079)

Dividend paid to equity shareholders

(11,992)


-


(10,641)

Payment of finance lease obligations

(330)


(480)


(886)













Net cash flow from financing activities

(25,687)


(30,542)


(62,606)













Net decrease in cash and cash equivalents

(1,016)


(64,777)


(6,112)







Translation adjustment

(820)


(2,732)


(1,097)







Cash and cash equivalents at start of period

72,625


79,834


79,834













Cash and cash equivalents at end of period

70,789


12,325


72,625













 

 

 

 


Origin Enterprises plc

 

Notes to the group condensed interim financial information

for the six months ended 31 January 2011

 

 

 

1      Basis of preparation

 

The group condensed interim financial information has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34). The condensed interim financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements in respect of the year ended 31 July 2010, which have been prepared in accordance with IFRSs. The financial statements for the year ended 31 July 2010 were filed with the Registrar of Companies and are available on the company's website www.originenterprises.com. Those financial statements contained an unqualified audit report.

 

The group condensed interim financial information for the six months ended 31 January 2011 and the comparative figures for the six months ended 31 January 2010 are unaudited and have not been reviewed by the Auditors. The financial information for the year ended 31 July 2010 represent an abbreviated version of the Group's full accounts for that year.

 

The group condensed financial information is presented in euro, rounded to the nearest thousand, which is the functional currency of the Group.

 

A comprehensive review of the group's performance for the six months ended 31 January 2011 is included on pages 2 to 10. The group's business is seasonal and is weighted towards the second half of the financial year.

 

 

2      Accounting policies

 

Except as described below, the group condensed interim financial information has been prepared on the basis of the accounting policies, significant judgements, key assumptions and estimates as set out on pages 33 to 39 of the Group's Annual Report for the year ended 31 July 2010.

 

The following amendments are mandatory for the first time for the financial year beginning 1 August 2010:

 

·      IFRS 9 "Financial Instruments";

·      Amendment to IFRS 2 "Group Cash settled share-based payment transactions";

·      Amendment to IFRS 1 "Additional Exemptions for First Time Adopters";

·      Amendment to IAS 32 "Classification of Rights Issues";

·      Amendment to IAS 24 "Related Party Disclosures";

·      Amendment to IFRIC 14 " Prepayments of a Minimum Funding Requirement"

·      IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments"

·      Improvements to IFRS 's 2010

 

 

 

 


Origin Enterprises plc

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

3

Segment information

























(a)   Segment revenue and result


























Agri-Services-

Continuing operations


Associates & Joint Venture-

Continuing operations


Food-

Discontinued operations


TOTAL



Six


Six




Six


Six




Six


Six




Six


Six





months


months


Year


months


months


Year


months


months


Year


months


months


Year



ended


ended


ended


ended


ended


ended


ended


ended


ended


ended


ended


ended



31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10



€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000





(Note 5)


(Note 5)




(Note 5)


(Note 5)




(Note 5)


(Note 5)




(Note 5)


(Note 5)



























Total revenue

569,073


461,624


1,077,009


-


-


-


44,240


135,169


260,056


613,313


596,793


1,337,065


Less revenue from discontinued operations

-


-


-


-


-


-


(44,240)


(135,169)


(260,056)


(44,240)


(135,169)


(260,056)


Revenue - continuing operations

569,073


461,624


1,077,009


-


-


-


-


-


-


569,073


461,624


1,077,009



























Total operating profit before amortisation of intangibles and exceptional items

12,590


7,806


50,998


-


-


-


5,051


8,127


14,856


17,641


15,933


65,854



























Amortisation of intangible assets

(1,424)


(1,339)


(2,828)


-


-


-


(236)


(663)


(1,086)


(1,660)


(2,002)


(3,914)


Less operating profit from discontinued operations

-


-


-


-


-


-


(4,815)


(7,464)


(13,770)


(4,815)


(7,464)


(13,770)



























Total operating profit before exceptional items

11,166


6,467


48,170


-


-


-


-


-


-


11,166


6,467


48,170


Share of profit of associates and joint venture

-


-


-


6,401


5,167


11,572


-


-


-


6,401


5,167


11,572


Exceptional item

2,919


-


-


(327)


-


-


-


-


-


2,592


-


-




















































Operating profit from continuing operations

14,085


6,467


48,170


6,074


5,167


11,572


-


-


-


20,159


11,634


59,742



















































The comparatives have been restated to reflect the effect of discontinued operations- see note 5


Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

3


















































Agri-Services-

Continuing operations


Associates & Joint Venture-

Continuing operations


Food-

Discontinued operations


TOTAL



























31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10



€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


Segment assets excluding investments in associates, joint venture and investment properties

 

 

356,876


 

 

302,184


 

 

379,590


 

 

-


 

 

-


 

 

-


 

 

-


 

 

128,571


 

 

125,906


 

 

356,876


 

 

430,755


 

 

505,496



























Investment in associates and joint venture

-


-


-


154,088


87,152


89,741


-


-


-


154,088


87,152


89,741



























 

356,876


 

302,184


 

379,590


 

154,088


 

87,152


 

89,741


 

-


 

128,571


 

125,906


 

510,964


 

517,907


 

595,237



























Reconciliation to total assets as reported in Statement of Financial Position






























































72,958


25,100


76,043




















16,002


59,214


16,002




















753


2,382


495




















3,975


5,776


4,607






































































 

604,652


 

610,379


 

692,384



























Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

3

Segment information
























 


(c)    Segment liabilities
























 



Agri-Services-

Continuing operations


Associates & Joint Venture-

Continuing operations


Food-

Discontinued operations


TOTAL

 




























31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10


31/01/11


31/01/10


31/07/10



€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000


€'000



























Segment liabilities

231,360


180,441


260,709


-


-


-


-


32,287


32,997


231,360


212,728


293,706




















































Reconciliation to total liabilities as reported in Statement of Financial Position






































































Interest bearing loans and liabilities



















171,683


215,591


187,932


Dividend payable to shareholders



















-


10,641


-


Derivative financial instruments



















1,418


4,916


5,092


Income tax and deferred tax liabilities



















17,720


21,023


23,810




















































Total liabilities as reported in

Statement of Financial Position



















 

422,181


 

464,899


 

510,540



























Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

4        Exceptional items      

 

Exceptional items are those that, in management's judgement, should be disclosed by virtue of their nature or amount. Such items are included within the Income Statement caption to which they relate. The following exceptional items arose in the period;

 

 

 

2011


2010


€'000


€'000









Loss on disposal of operation (i)

8,125


-

Gain on disposal of operation (ii)

(2,919)


-

Net exceptional loss arising in associates and joint venture

327


-





Total exceptional items

5,533


-





 

(i)    On 26 November 2010, the Group transferred its 100% shareholding in Origin Foods to Valeo Foods, in which the Group has a 44.1% shareholding. Net assets transferred to Valeo Foods were €83.5m. With effect from 26 November 2010, Origin's 44.1% investment in Valeo Foods has been treated as an associate undertaking and accounted for using the equity method in accordance with IAS 28. A loss arose on this transaction as follows:

 

 

 



2011




€'000


Net assets transferred to Valeo Foods on 26 November 2010:




Property, plant and equipment


30,810


Intangible assets


43,174


Working capital


12,976


Provisions for liabilities and charges


(3,429)








83,531






Consideration




-       Cash received and receivable

(27,518)



-       Vendor loan note

(33,540)



-       Fair value of 44.1% equity interest in Valeo Foods

(17,108)

(78,166)






Costs directly related to the transaction


2,760










Loss on disposal of operation


8,125







Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

 

4     Exceptional items (continued)

 

 

 

(ii)     On 10 November 2010, Origin Enterprises plc ('Origin') announced that it had reached agreement with W&R Barnett Limited ('Barnett') to establish an all Ireland grain and feed handling logistics and trading business. The all Ireland business was to be formed through the integration of Origins R&H Hall ('Hall') business in the Republic of Ireland and the business of Origin and Barnett in Northern Ireland. The  transaction was completed on 28 January 2011. Under the terms of the transaction, Barnett acquired a 50% interest in R&H Hall mirroring the economic interests of Origin and Barnett in the Northern Ireland business.

 

 

Origin now holds a 50% interest in Hall and from 28 January 2011 this 50% holding is treated as an associate undertaking in accordance with IAS 28. A gain of €2.9m arose on the transaction as follows:

         

 


2011



€'000


Net assets transferred on 28 January 2011:



Property, plant and equipment

15,412


Working capital

36,277


Provisions for liabilities and charges

(2,667)






49,022





Consideration received and receivable, net

(40,886)


Fair value of 50% equity interest in Hall

(11,055)








Gain on disposal of operation

(2,919)








 


Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

5

Discontinued operations












 

The  results of the discontinued operations (i.e. Origin Foods) included in the income statement are set out below. The comparative profit from discontinued operations has been re-presented to include those operations classified as discontinued in the current period.

 

 


Six months


Six months


Year


ended


ended


ended


*Jan


Jan


Jul


2011


2010


2010


€'000


€'000


€'000







Revenue

44,240


135,169


260,056

Expenses

(39,189)


(127,042)


(245,200)













Operating profit before amortisation of intangibles

5,051


8,127


14,856







Intangible amortisation

(236)


(663)


(1,086)













Profit before tax

4,815


7,464


13,770

Attributable income tax expense

(620)


(944)


(1,797)













Profit after tax for the period

4,195


6,520


11,973







Loss on disposal of operation (note 4)

(8,125)


-


-







(Loss)/profit for the year from discontinued operations

 

(3,930)

 


 

6,520

 


 

 

*Results of Origin Foods for the period from 1 August 2010 to 26 November 2010

 


Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

 

6

Earnings per share














6 months


6 months


Year


6 months


6 months


Year



ended


ended


ended


ended


ended


ended



Jan


Jan


Jul


Jan


Jan


Jul



2011


2010


2010


2011


2010


2010



€'000


€'000


€'000


EPS (cent)


EPS (cent)


EPS (cent)















Basic













Profit attributable to equity shareholders

8,916


10,228


48,039


6.70


7.69


36.12


Amortisation of intangible assets

1,660


2,002


3,914


1.25


1.51


2.94


Amortisation of related deferred tax liability

(294)


(281)


(767)


(0.22)


(0.22)


(0.58)


Exceptional items, net of tax

5,533


-


-


4.16


-


-




























Adjusted earnings per share

15,815


11,949


51,186


11.89


8.98


38.48









































Diluted













Profit attributable to equity shareholders

8,916


10,228


48,039


6.46


7.43


34.97


Amortisation of intangible assets

1,660


2,002


3,914


1.20


1.45


2.85


Amortisation of related deferred tax liability

(294)


(281)


(767)


(0.21)


(0.20)


(0.56)


Exceptional items, net of tax

5,533


-


-


4.00


-


-




























Adjusted earnings per share

15,815


11,949


51,186


11.45


8.68


37.26



























 

        The calculation of basic adjusted earnings per share is based on the weighted average number of shares in issue during the period of 133,015,572

        (31 January 2010:  133,015,572, 31 July 2010: 133,015,572).  The weighted average number of shares used in the calculation of adjusted diluted earnings per share is 138,098,000 (31 January 2010:137,626,000, 31 July 2010: 137,377,000).

 

       


Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

7      Property, plant and equipment

 


January


July


2011


2010


€'000


€'000





At beginning of period

129,182


86,760

Additions

2,716


6,169

Transfer from investment properties

-


43,212

Disposal of subsidiary undertakings

(46,222)


-

Disposals

(1,278)


(925)

Depreciation charge

(2,879)


(6,525)

Translation adjustments

(574)


491













At end of period

80,945


129,182









 

 

8      Goodwill and intangibles


January


July


2011


2010


€'000


€'000





At  beginning of period

114,595


115,999

Additions

838


1,222

Disposal of subsidiary undertaking- goodwill

(20,928)


-

Disposal of subsidiary undertaking- other intangibles

(22,246)


-

Amortisation

(1,660)


(3,914)

Translation adjustments

(1,918)


1,288









At end of period

68,681


114,595






Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

 

9      Investments in associates and joint venture

 


              Jan


           Jan


Jul


              2011


          2010


                     2010


             €'000


        €'000


                    €'000







At beginning of period

89,741


83,631


83,631

Share of profits after tax and exceptional items

6,074


5,167


11,572

Dividends received

(2,048)


(1,974)


(5,807)

Investment in Valeo Foods and R& H Hall

28,158


-


-

Vendor loan note including interest receivable

33,908


-


-

Investment in Continental Farmers Group plc

-


538


538

Loans/interest to associates and joint venture

(468)


228


714

Share of reserve movements

                        -


                        -


(692)

Actuarial loss on associate's defined benefit pension






scheme, net of deferred tax

-


-


(701)

Translation adjustments

(1,277)


(438)


486













At end of period

154,088


87,152


89,741







 

10

Analysis of net debt












 
















31 Jul




Non cash


Arising


Translation


   31 Jan



2010


Cashflow


movements


 on


Adjustment


2011









disposal







€'000


€'000


€'000


€'000


€'000


€'000















Cash

76,043


(2,323)


-


-


(762)


72,958


Overdrafts

(3,418)


1,307


-


-


(58)


(2,169)




























Cash and cash equivalents

72,625


(1,016)


-


-


(820)


70,789















Finance lease obligations

(820)


330






17


(473)


Loans

(183,694)


13,365


(370)


(242)


1,900


(169,041)




























Net Debt

(111,889)


12,679


(370)


(242)


1,097


(98,725)




























Origin Enterprises plc

 

Notes to the group condensed interim financial information (continued)

for the six months ended 31 January 2011

 

11      Dividends

 

 

On 6 January 2011 a dividend of 9 cent per ordinary share was paid in respect of the year ended 31 July 2010 totalling €11,992,000. The dividend was approved by shareholders at the Annual General Meeting on 22 November 2010.

 

 

 

12    Contingent liabilities

 

The group is not aware of any major changes with regard to contingent liabilities in comparison with the situation as of 31 July 2010.

 

 

13    Subsequent events

 

On 8 March 2011, Origin acquired United Agri Products Limited (UAP). Under the terms of the transaction Origin acquired 100% of UAP based on an enterprise value of Stg£33m and the delivery of average working capital. Further consideration of Stg£4m will be paid in March 2013.

 

On 9 March 2011, Origin acquired Rigby Taylor Limited (Rigby Taylor). Under the terms of this transaction Origin acquired 100% of the share capital of Rigby Taylor for an initial cash consideration of Stg£9.2m. Deferred consideration of up to Stg£1m will be paid upon the achievement of specific profit targets.

 

The results for both UAP and Rigby Taylor will be consolidated into the Origin results from the date of acquisition to 31 July 2011.

 

 

14    Related party transactions

 

Related party transactions occurring in the period were similar in nature to those described in the 2010 Annual Report.

 

 

 

15    Release of half yearly condensed financial statements

 

The group condensed financial information was released by the Board on 10 March 2011.

 


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