Final Results
Glanbia PLC
02 March 2005
News Release Glanbia plc
Corporate Communications Department Glanbia House
Telephone + 353 56 7772200 Kilkenny
Ireland
Facsimile + 353 56 7750834
www.glanbia.com
2004 Results
for the year ended January 1, 2005
For further information contact
Glanbia plc +353 56 777 2200
Geoff Meagher, Finance Director
Geraldine Kearney, Corporate Communications, + 353 87 231 9430
Hogarth Partnership
UK +44 207 357 9477
John Olsen
2004 RESULTS 2 March 2005
Good progress and improved performance
Restructuring completed and group reorganised for growth
Glanbia plc, an international Consumer Foods, Food Ingredients and Nutritionals
Group, announces its 2004 Results for the year ended January 1, 2005.
Commenting today John Moloney, Group Managing Director, said:
'Overall the Group performed satisfactorily in 2004 delivering results in line
with expectations, notwithstanding the challenging trading environment in
Ireland, particularly the difficult pigmeat sector. We are pleased with the
progress made on the development and implementation of the Group's strategy and
the completion of the Group restructuring programme.
For 2005 our focus will be on the completion of the major strategic dairy
processing investments in New Mexico and Nigeria, development initiatives which
build scale and diversity and driving cost efficiencies that enhance
performance. The trading outlook across the Group has some challenges,
particularly in the context of managing the impact of EU dairy sector reform.
However with our strong market positions and evolving Nutritionals business, the
Group is well positioned for growth.'
Summary Results
Financial Highlights
• Turnover (1) up 10% to €1.83 billion (2003: €1.66 billion).
• Operating profit (2) down by 5.6% to €83.5 million (2003: €88.5
million), impacted by the sharp downturn in the Fresh Pork business.
• Profit before tax and exceptional items up 1% to €77.7 million (2003:
€77.1 million).
• Operating margin 4.6% (2003: 4.5%).
• Adjusted earnings per share (3) up 4.4% to 20.10 cent per share (2003:
19.26 cent).
• Earnings per share 20.41 cent (2003: loss per share 12.01 cent).
• Total dividend for the year up 5% to 5.25 cent per share (2003: 5.0
cent).
• Total financing costs reduced substantially to €16.4 million (4) (2003:
€26.0 million).
(1) Continuing operations
(2) Continuing operations, pre exceptional items. Total exceptional
items: gain of €1.2 million (2003: charge of €92.0 million)
(3) Pre exceptional items and amortisation of goodwill.
(4) Includes net interest of €5.96 million and €10.39 million for
preferred securities (non-equity minority interest).
Operational Highlights
• A satisfactory performance with results in line with expectations.
• Restructuring completed and Group organised around key areas for
strategic development.
• Demanding trading conditions in liquid milk and chilled foods
businesses.
• Difficult year for the pigmeat sector but positive signs of a recovery
towards year end.
• Strong growth in Food Ingredients, led by positive US markets and
increased US capacity.
• Strategic investments in New Mexico and Nigeria to be commissioned in
2005.
• Group Innovation Centre opened and first Nutritionals acquisition in
Europe completed.
Results
In 2004 the Group completed a programme of planned restructuring, which
culminated during the year with the sale of Glanbia Foods Ltd and the related
Glanbia Milk operations. The Group has retained a 25% interest in a new cheese
entity, The Cheese Company Holdings Limited.
1 January 2005 3 January 2004 Change
Group turnover €1,828.7 m €1,659.2 m Up 10%
Continuing operations
Operating profit €83.5 m €88.5 m Down 5.6%
Continuing operations, pre
exceptional items
Profit before tax €77.7 m €77.1 m Up 1%
Pre exceptional items
Exceptional items €1.2 m €(92.0) m Restructuring
completed
Profit before tax €78.9 m €(14.9)m
Post exceptional items
Adjusted earning per share 20.10 c 19.26 c Up 4.4%
Pre exceptional items and
amortisation of goodwill
Dividend per share 5.25 c 5.00 c Up 5%
Net debt €150.6 m €153.8 m
Financing cover 5.2 times 3.5 times
Net interest and preferred
securities/Operating profit
Turnover for continuing operations increased by 10% to €1,828.7 million (2003:
€1,659.2 million). Total Group turnover declined 10% to €1,846.0 million (2003:
€2,041.1 million) as a result of the planned restructuring of the Group's UK
operations. The Group share of the turnover of joint ventures increased 9.2% to
€75.0 million (2003: €68.7 million).
Operating profit before exceptional items from continuing operations declined
5.6% to €83.5 million (2003: €88.5 million), mainly as a result of the poor
performance of the Fresh Pork business, which was impacted by difficulties in
the Irish pigmeat sector during the year. Operating profit, pre exceptionals and
including share of joint venture and associates, declined by 8.8% to €84.6
million (2003: €92.8 million).
Profit before tax increased to €78.9 million as against a loss before tax in
2003 of €14.9 million. The pre tax loss in 2003 reflects the €92.0 million
exceptional charges in that year, as a consequence of the planned Group
restructuring, compared with a gain in 2004 of €1.2 million principally on the
sale of assets.
Adjusted earnings per share amounted to 20.10c up 4.4% (2003: 19.26c), while
earnings per share amounted to 20.41c compared with a loss per share of 12.01c
in 2003. The dividend for the year, including the proposed final dividend,
amounted to 5.25c per share (2003: 5.00c), representing an annual increase of
5%.
Net debt decreased €3.2 million to €150.6 million (2003: €153.8 million),
notwithstanding €126.3 million in capital expenditure and development
initiatives in 2004. The overall improvement in the Group's debt reflects the
proceeds of the disposal of Glanbia Foods Ltd (the UK hard cheese operation) and
solid cash flow from operations.
The interest charge declined to €6.0 million (2003: €15.0 million). This
includes an interest credit of €2.5 million in respect of a Stg£35.0 million
loan note from The Cheese Company Holdings Limited. The interest charge declined
due to a changing mix of debt and a more favourable interest rate environment.
The Group has a non-equity minority interest charge of €10.4 million relating to
preferred securities (2003: €11.0 million).
The total financing charge for the Group declined €9.6 million to €16.4 million
(2003: €26.0 million). Financing cover was 5.2 times in 2004, compared with 3.5
times in 2003.
Dividends
The Board is recommending a final dividend of 3.09c per share, compared with a
2.94c per share final dividend in 2003. This brings the total dividend for the
year to 5.25c per share (2003: 5.0c per share), representing a 5% increase.
Dividends will be paid on Monday, 23 May 2005 to shareholders on the register as
at Friday, 22 April 2005, the record date. Irish dividend withholding tax will
be deducted at the standard rate where appropriate.
Development initiatives 2004
In 2004, as part of the overall capital expenditure programme, the Group spent
€68.3 million on a number of development initiatives aligned with the Group's
development strategy, which is centred on high growth areas in Consumer Foods,
Food Ingredients and Nutritionals. This included investment in Southwest Cheese
Company LLC (New Mexico), Nigeria, Germany and organic expansion of our Idaho
facilities.
Organic Growth
• Three new plant extensions were commissioned in 2004 at the Group's USA
facilities. Production at the Gooding cheese facility expanded by 25% to
meet the growing demand for cheddar cheese primarily from the food service
and retail sectors. Two expansion projects at the Richfield whey plant
increased production of current nutritional brands as well as new product
development, reflecting the growing nutritional marketplace demand.
• In 2004 Consumer Foods Ireland reorganised its management structure
merging its two consumer facing businesses - liquid milk and chilled foods.
This business also expanded its customer support functions with investments
in people, realigned structures and change processes, supported by new
management information systems.
• There were a number of successful new products launched in 2004. In
addition to a range of chocolate and strawberry flavoured milks Consumer
Foods Ireland introduced two new soup ranges 'Avonmore Connoisseur' and
'Avonmore Kidz'. A range of fresh meat sauces was also launched under the
Avonmore brand in the latter half of the year. This new product momentum
will continue into 2005 with the development of new products and product
extensions planned.
Acquisitions
• Glanbia acquired a German based nutrient delivery systems business,
Kortus Food Ingredients Services GmbH ('Kortus') for €14.5 million. Kortus
specialises in the production, research and development of customised
nutrient systems for customers in the Infant Formula, Clinical Nutrition
and Dietetics markets. This business gives Glanbia a platform for growth in
those sectors as well as access to a strong sales presence in Germany and
Austria.
Joint Ventures
• The new US$190 million production facility in New Mexico, the Southwest
Cheese Company LLC joint venture with Dairy Farmers of America Inc. and
Select Milk Producers Inc. is on target to begin commissioning in October
2005. In addition to over 110,000 tonnes of cheese the plant will also
produce 7,500 tonnes of high quality value-added whey proteins, all of
which will be available for the development of the Group's Nutritionals
business.
• The 50:50 joint venture with PZ Cussons plc to build a new US$25 million
facility in Nigeria is set to begin commissioning in April 2005. This
creates opportunities for a new route to market for Food Ingredients
Ireland.
• Glanbia concluded a 50:50 joint venture agreement with Nashs Mineral
Waters (Marketing) Limited for a cash consideration of €1.3 million.
2005 TO DATE
Since year-end Glanbia and Dairygold Co-operative Society Limited announced
that, subject to approval of the Irish Competition Authority, Glanbia will
operate the CMP liquid milk, cream and juice brand. In addition Glanbia and
Dairygold also reached agreement in principle to enter into a contract
manufacturing arrangement to maximise utilisation of their respective milk
processing facilities. The agreements with Dairygold demonstrate the continuing
internal drive for production and cost efficiencies in response to the effects
of the Mid Term Review (MTR) of the Common Agricultural Policy (CAP) on the
market landscape.
Operations Review
Glanbia is now organised into cohesive business units structured around
developing the Group's strategic focus on Consumer Foods, Food Ingredients and
Nutritionals.
Agribusiness
As anticipated, 2004 was a challenging year for the Agribusiness division and
overall turnover declined by 3.0% to €227.4 million (2003: €234.5 million).
Operating profit declined 15.1% to €12.1 million (2003: €14.2 million)
reflecting the combined effects of poor grain markets and the influence of
changing demand patterns and pricing in an evolving farming sector. Operating
margin reduced to 5.3% (2003: 6.1%). During 2004 the division continued its
efficiency and cost management programme and the number of retail branch outlets
was reduced by 12 to 70 branches. With its evolving structure and more efficient
cost base Agribusiness is well positioned to provide a full product offering to
customers.
Consumer Foods
Overall the Consumer Foods Division had a challenging year. Turnover at €543.5
million (2003: €900.4 million) was down reflecting the completion of the planned
UK restructuring programme. Operating profit declined to €27.8 million (2003:
€44.8 million) reflecting the impact of the UK restructuring programme and a
sharp decline in the performance of the Fresh Pork business. Operating margin
improved to 5.1% (2003: 5.0%).
Liquid Milk and Chilled Foods
Against the background of a competitive grocery trade and food retail market in
Ireland, the liquid milk and chilled foods businesses performed reasonably well,
although both turnover and profitability reduced in 2004. The liquid milk
business was impacted by increased milk imports from Northern Ireland.
During 2004 a substantial investment was made integrating the supply chain
processes of liquid milk and chilled foods and while there is further work
planned in this area this new structure is beginning to yield benefits. With a
common set of customers and distribution channels, further opportunities in
terms of sales, distribution, customer service and product innovation will be
developed in 2005.
Consumer Foods continued to consolidate its position in 2004 with Ireland's
leading dairy food and beverage brands - comprising Avonmore, Premier, Yoplait,
Snowcream and Kilmeaden. The ongoing development and extension of the product
range for taste, nutrition, variety and convenience was a critical factor in
maintaining this leading market position.
Fresh Pork
Profitability in Glanbia Meats declined sharply in 2004 due to a weak pork
market and very competitive market supply dynamics. The pigmeat industry is
cyclical and this has been compounded in recent years by overcapacity relative
to the available supply of pigs. During 2004 the industry consolidated with a
reduction in the number of processors and as anticipated, trading conditions
improved late in the year with some margin recovery and growing international
demand. The Group expects an improved performance from Glanbia Meats in 2005.
Glanbia, with its modern plant and efficient operations is well positioned to
benefit in this stronger industry and operating environment.
UK Mozzarella Cheese Joint Venture
While the overall market for mozzarella cheese grew, trading conditions remained
highly competitive as dairy processors reposition their product portfolios in
the wake of the implementation of MTR in EU dairy markets. This gave rise to
aggressive price competition during the year. As a leading supplier of
innovative products, volumes at Glanbia Cheese grew, however profits were
depressed by the poor pricing environment. This market environment is expected
to improve somewhat in 2005. The strength of the Glanbia Cheese market position,
quality product and unique technology places this business in a good position to
benefit as these developments unfold.
Food Ingredients
This division delivered a good result, driven by a strong contribution from the
Group's US cheese operations and a satisfactory performance from the Irish
business. Turnover increased 18.6% to €1,075.2 million (2003: €906.2 million).
Operating profit grew 32.6% to €44.8 million (2003: €33.8 million) and operating
margin grew 44 basis points to 4.2% (2003: 3.7%). There was a small positive
contribution from the Nutritionals business.
Food Ingredients USA
Solid volume growth, good demand for whey, improved market pricing for cheese
and increased capacity at the Idaho facilities resulted in a strong performance
overall from the US business. Turnover and profits increased substantially with
an improvement in margins.
As part of an ongoing programme of investment - total €18.6 million - an
increase in capacity at the Idaho facilities for cheese and whey products was
completed during 2004. A further phase of investment to add new plant for the
production of protein isolates, which is a core product in the Nutritionals
business, was also commenced in 2004 and has recently been commissioned. Milk
production in Idaho is expected to be strong in 2005 and market demand
indications are positive.
Food Ingredients Ireland
Food Ingredients Ireland had a satisfactory year against a backdrop of solid
market demand. The combined benefits of rationalisation, an enhanced product mix
from innovation and increased capacity utilisation contributed to the
performance of the business.
Market demand was better than anticipated and this underpinned a stable product
and raw material pricing structure during the year. However with the
implementation of MTR, this situation is not expected to persist and a
rebalancing of the pricing structure in the sector is expected in the shorter
term. Food Ingredients Ireland as a large manufacturing operation will continue
to examine opportunities to minimise the impact of inflationary cost increases.
The recently announced agreement with Dairygold Co-operative is a logical
development in this regard.
Nutritionals
Glanbia Nutritionals made progress in 2004, achieving good sales growth
supported by the additional capacity in specialised whey protein isolate
products in Idaho. The business also developed and launched advanced,
differentiated and branded ingredients, targeted at a range of nutritional
requirements such as weight management, immune enhancement and performance.
These products were developed in partnership with customers at the Idaho Centre
of Excellence in the USA and the Group's Innovation Centre in Ireland. All the
products have received a positive response.
Investment was made during the year in resourcing and organising the
Nutritionals development programme and an acquisition of Kortus for €14.5
million was made in Germany during the year.
Glanbia's expertise and leading global position in the fractionation and
utilisation of whey proteins is the strategic rationale for this evolving
business, and the Group's strategy is to become a key global provider of
nutritional ingredients and nutritional solutions in this high growth market,
through a range of initiatives in capacity expansion, research and development,
and acquisition and joint ventures in both dairy and non dairy sectors.
Finance Review
Before exceptional items and goodwill amortisation, adjusted earnings per share
increased 4.4% to 20.10 cent (2003: 19.26 cent). Earnings per share were 20.41
cent (2003: loss per share 12.01 cent), reflecting the completion of the planned
restructuring of the Group. The average number of shares in issue during the
year was 290.6 million (2003: 290.3 million).
Net cash inflow from operating activities amounted to €83.4 million for the
year. Capital investment was €126.3 million and proceeds of disposals €84.7
million. The Balance Sheet is materially changed, principally arising from the
disposal of Glanbia Foods Limited during the year. Capital employed has
increased from €298 million to €337.9 million.
Net borrowings as at 1 January 2005 amounted to €150.6 million, compared with
€153.8 million as at 3 January, 2004. Non-equity minority interests amounted to
€110.38 million compared with €115.76 million the previous year, the difference
arises on currency translation only.
Total financing (net borrowings and non equity minority interests) gives a
Financing/EBITDA ratio of 2.29 times (2003: 2.07 times).
International Financial Reporting Standards
It will become mandatory for all EU listed companies to report their
consolidated financial statements under International Financial Reporting
Standards (IFRS) from 2005 onwards. This will apply to the Group for its June
2005 Interim Results and Glanbia has established a programme to ensure full
compliance with IFRS. The main impact on the Group's financial statements is
expected to be the implementation of IAS 19 'Employers Benefits' and the
recognition on the Balance Sheet of pension fund deficits.
Board Changes
The Chairman, Mr Tom Corcoran, will retire from the Board of Glanbia plc in June
2005 and the Board will select and appoint a successor at that time.
2005 Outlook
'For 2005 our focus will be on the completion of the major strategic dairy
processing investments in New Mexico and Nigeria, development initiatives which
build scale and diversity and driving cost efficiencies that enhance
performance. The trading outlook across the Group has some challenges,
particularly in the context of managing the impact of EU dairy sector reform.
However with our strong market positions and evolving Nutritionals business, the
Group is well positioned for growth.'
ANNUAL REPORT AND ANNUAL GENERAL MEETING
The 2004 Annual Report for the Group will be published in April. The Annual
General Meeting will take place in the Newpark Hotel, Kilkenny on 17 May 2005.
Ends
Note to Editors:
ABOUT GLANBIA
The business units of Glanbia plc are structured around developing the Group's
strategic focus on the Consumer Foods, Food Ingredients and Nutritionals
markets. There are three operational divisions of Glanbia:
• Agribusiness Division - the key linkage between Glanbia and its Irish
raw materials supply base of 5,700 farmer suppliers. This business is
engaged primarily in feed milling, milk assembly and the marketing of a
range of farm inputs, including fertilisers, feed and grain through a
retail branch network.
• Consumer Foods - includes liquid milk, chilled foods and pork processing
as well as the UK mozzarella cheese joint venture.
• In Ireland Glanbia is the leading supplier of branded and value-added
liquid milk, fresh dairy, cheeses, soups and spreads in the retail market.
Glanbia Meats is the leading Irish fresh pork and bacon processor selling
to Irish and International markets.
• Food Ingredients - comprising the US and Irish dairy ingredients
operations and the Group's developing Nutritionals business. Glanbia
processes a range of milk, cheese and whey protein ingredients at
facilities in Ireland and the US for sale on international markets. Glanbia
Nutritionals supplies the global nutrition industry with a range of
solutions designed to address specific health and wellness benefits.
Glanbia plc
Consolidated Profit and Loss Account
for the Year ended 01 January 2005
Pre- Pre-
exceptional Exceptional Total exceptional Exceptional Total
2004 2004 2004 2003 2003 2003
Notes €'000 €'000 €'000 €'000 €'000 €'000
Turnover
Continuing 1,828,661 - 1,828,661 1,659,153 - 1,659,153
operations
Discontinued 92,400 - 92,400 450,607 - 450,607
operations
Less share of
turnover of
joint venture (75,016) - (75,016) (68,687) - (68,687)
-------- -------- -------- -------- -------- --------
Group turnover 1 1,846,045 - 1,846,045 2,041,073 - 2,041,073
Cost of sales (1,612,927) - (1,612,927) (1,773,537) - (1,773,537)
-------- -------- -------- -------- -------- --------
Gross profit 233,118 - 233,118 267,536 - 267,536
Distribution costs (82,171) - (82,171) (94,697) - (94,697)
Administrative
expenses 2 (66,525) 400 (66,125) (80,970) (16,451) (97,421)
-------- -------- -------- -------- -------- --------
Operating profit
Continuing
operations 83,503 400 83,903 88,472 (16,451) 72,021
Discontinued 919 - 919 3,397 - 3,397
operations -------- -------- -------- -------- -------- --------
Group operating
profit 84,422 400 84,822 91,869 (16,451) 75,418
Share of operating 201 - 201 916 - 916
profit of joint -------- -------- -------- -------- -------- --------
ventures & associates
Operating profit
including joint
ventures &
associates 1 84,623 400 85,023 92,785 (16,451) 76,334
Loss on sale
of operation 3 - (2,601) (2,601) - (28,190) (28,190)
Provision for
loss on sale
of operation 4 - - - - (49,146) (49,146)
Profit on sale
of fixed assets 5 - 929 929 - 11,594 11,594
Profit/(loss) on
termination of
operations 6 - 2,445 2,445 - (9,827) (9,827)
Group interest (5,964) - (5,964) (15,023) - (15,023)
Share of interest
of joint ventures
and associates (917) - (917) (627) - (627)
-------- -------- -------- -------- -------- --------
Profit/(loss)
before taxation 77,742 1,173 78,915 77,135 (92,020) (14,885)
Taxation (8,805) - (8,805) (10,272) 1,546 (8,726)
-------- -------- -------- -------- -------- --------
Profit/(loss)
after taxation 68,937 1,173 70,110 66,863 (90,474) (23,611)
-------- -------- -------- --------
Equity minority
interest (413) (251)
Non-equity
minority interest (10,387) (11,005)
-------- --------
Profit/(loss) for
the year 59,310 (34,867)
Dividends 7 (15,268) (14,515)
-------- --------
Profit
retained /(loss)
absorbed for
the year 44,042 (49,382)
======== ========
Earnings per share 8 20.41 c (12.01)c
Adjusted earnings
per share 8 20.10 c 19.26 c
Glanbia plc
Consolidated Balance Sheet
as at 1 January 2005
2004 2003
€'000 €'000
Assets employed
Fixed assets
Tangible assets 321,780 363,641
Intangible assets 16,652 2,466
Financial assets
Investments in joint ventures:
Share of gross assets 86,632 40,542
Share of gross liabilities (36,805) (27,598)
-------- ---------
49,827 12,944
Investments in associates 9,908 9,607
Other investments 29,869 13,035
-------- ---------
89,604 35,586
-------- ---------
428,036 401,693
-------- ---------
Current assets
Stocks 133,419 202,736
Debtors 230,792 214,136
Cash and bank balances 51,625 59,775
-------- ---------
415,836 476,647
Creditors - Amounts falling due within one year 250,871 352,446
-------- ---------
Net current assets 164,965 124,201
-------- ---------
Total assets less current liabilities 593,001 525,894
-------- ---------
Less:
Non-current liabilities
Creditors - Amounts falling due after more than one
year 210,362 183,682
Provision for liabilities and charges
Deferred taxation 29,493 27,559
Capital grants 15,276 16,611
-------- ---------
337,870 298,042
======== =========
Capital and reserves
Called up equity share capital 17,559 17,551
Share premium account 80,212 80,005
Merger reserve 113,148 113,148
Revenue reserves 9,907 (34,088)
Own shares (2,563) (3,235)
Capital reserves 3,138 3,231
-------- ---------
Equity shareholders' funds 221,401 176,612
Equity minority interests 6,085 5,671
Non-equity minority interests 110,384 115,759
-------- ---------
337,870 298,042
======== =========
The financial statements were approved by the Board of Directors on 1 March 2005
and signed on its behalf by TP Corcoran, JJ Moloney and GJ Meagher, directors.
Glanbia plc
Consolidated Cash Flow Statement
For the Year Ended 1 January 2005
2004 2004 2003 2003
€'000 €'000 €'000 €'000
Group operating profit 84,422 91,869
Reorganisation and merger costs - (338)
Profit on disposal of fixed assets (920) (415)
Depreciation 29,320 38,125
Capital grants released (1,228) (1,443)
Increase in stocks (10,498) (35,004)
Increase in debtors (1,807) (2,333)
(Decrease) / increase in creditors (16,118) 3,749
Goodwill amortisation 273 297
------- -------
Net cash inflow from operating 83,444 94,507
activities
Returns on investments and servicing of finance
Interest received 573 277
Interest paid (11,349) (16,676)
Finance lease interest (90) (149)
Dividends paid to equity
minority interest - (1,463)
Dividends paid to non
equity minority interest (9,674) (20,540) (10,295) (28,306)
------- ------
Taxation (4,955) (9,816)
Capital expenditure and financial investment
Purchase of fixed assets (60,946) (41,741)
Disposal of fixed assets 1,409 2,629
Purchase of investments (55,211) (114,748) (2,410) (41,522)
------- ------
Acquisitions and disposals
Purchase of subsidiary
undertakings (10,157) -
Disposal of subsidiary 76,781 795
undertakings
Termination of operation 6,496 (1,851)
Fire insurance proceeds (net - 73,120 7,332 6,276
of redundancy and other costs) ------- ------
Equity dividends paid (14,813) (14,080)
------- -------
Cash inflow before management 1,508 7,059
of liquid resources and
finances
Financing
Decrease in term loans (8,513) (34,478)
Decrease in finance leases (613) (987)
Minority interest redemption - (100)
Share capital issued 215 -
Capital grants received 3 (8,908) 5 (35,560)
------- ------- ------ -------
Decrease in cash in year (7,400) (28,501)
------- -------
Reconciliation of net cash
flow to movement in net debt
Decrease in cash in year (7,400) (28,501)
Decrease in debt and finance 9,126 35,465
leasing ------- -------
Change in net debt resulting from cash 1,726 6,964
flows
Translation difference 1,505 15,547
------- -------
Movement in net debt in year 3,231 22,511
Net debt at 3 January
2004 (153,797) (176,308)
------- -------
Net debt at 1 January
2005 (150,566) (153,797)
------- -------
Glanbia plc
Notes to the Financial Statements
1. Segmental analysis
2004 2003
Analysis by class of business €'000 €'000
Turnover
Consumer Foods 543,524 900,411
Food Ingredients 1,075,153 906,210
Agribusiness 227,368 234,452
------- -------
1,846,045 2,041,073
======= =======
Operating profit 2004 2003
(Pre-exceptional operating profit including share of €'000 €'000
profits of joint venture and associates)
Consumer Foods 27,755 44,773
Food Ingredients 44,770 33,765
Agribusiness 12,098 14,247
------- -------
84,623 92,785
======= =======
2. Exceptional items
2004 2003
€'000 €'000
Redundancy credit/(cost) arising from
fire at Roosky plant (note 5) 230 (9,505)
Restructuring credit/(cost) associated
with EU Commissions Mid Term Review of
the Common Agricultural Policy 170 (6,946)
------- -------
400 (16,451)
======= =======
The credit in 2004 arises from the release of redundancy provisions no longer
required.
3. Loss on sale of operation
The loss arises primarily from the sale by the Group of a 75% interest in its
UK hard cheese business in April 2004 (see note 4). The Group also incurred
additional costs relating to prior period disposals.
UK
Hard Cheese Others Total
€'000 €'000 €'000
Loss on disposal of asset (2,520) (81) (2,601)
======== ======= =======
The loss on sale in 2003 arose mainly from the Group's sale of its UK Fresh
Meats operation at West Bromwich. The Group also disposed of a pig farm during
2003 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.
4. Provision for loss on sale of operation
The 2003 provision arose from the sale by the Group in April 2004 of a 75%
interest in its UK hard cheese business.
2004 2003
€'000 €'000
Loss on disposal of asset after year end - (18,629)
Write back of goodwill on asset disposed after
year end - (30,517)
------- -------
- (49,146)
======= =======
5. Profit on sale of fixed assets
The 2004 profit arises from the sale of a site in the Consumer Foods business.
2004 2003
€'000 €'000
Profit on disposal of tangible assets 929 11,594
======= =======
The profit in 2003 arose 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 8 May 2002.
6. Profit / (loss) on termination of operations
The gain arises from the sale by the Group of its UK Fresh Meats and UK Consumer
Meats plants at Drongan, Gainsborough and Milton Keynes during 2004, following
the sale of its UK Fresh Meats business in 2003 and the closure of its UK
Consumer Meats business in 2002.
2004 2003
€'000 €'000
Profit / (loss) arising on termination of
operations 2,445 (8,578)
Goodwill written off on termination - (1,249)
------- -------
2,445 (9,827)
======= =======
The loss in 2003 relates to the closure of the Group's UK Fresh Meats operations
at Drongan and Gainsborough, and an adjustment to the loss arising from the
closure of the Group's UK Consumer Meats operation in June 2002.
7. Dividends
2004 2003
Interim dividend paid per share (cent) 2.16 2.06
Final dividend proposed per share (cent) 3.09 2.94
------- -------
5.25 5.00
======= =======
Total dividend (€'000) (15,268) (14,515)
======= =======
8. Earnings per share
2004 2003
€'000 €'000
Profit / (loss) after taxation and minority
interest 59,310 (34,867)
======= =======
Weighted average number of ordinary shares in issue 290.617 290.303
(million) ======= =======
Earnings per share 20.41c (12.01c)
======= =======
Adjustments:
Goodwill amortisation 0.10c 0.10c
Exceptional items (0.14c) 5.13c
Loss on sale of operations 0.89c 9.71c
Provision for loss on sale of operations - 16.93c
Profit on sale of fixed assets (0.32c) (3.99c)
(Gain) / loss on termination of operations (0.84c) 3.39c
------- -------
Adjusted Earnings per Share 20.10c 19.26c
======= =======
9. Debtors
Included in Debtors of €230.8 million is a subordinated secured loan of €51.9
million granted by The Cheese Company Holdings Limited in 2004, representing
part proceeds arising on the sale by the Group of a 75% interest in its UK hard
cheese business. The loan note yields interest at 1.75% above LIBOR. The
principle and compounded interest is repayable over 40 quarterly instalments
from 1 April 2008 to 1 January 2018.
10. Group borrowings
2004 2003
€'000 €'000
Borrowings due within one year 3,509 43,221
Borrowings due after one year 198,682 170,351
Less:
Cash and bank balances (51,625) (59,775)
------- -------
Net borrowings 150,566 153,797
======= =======
11. Accounting policies
These accounts have been prepared under the historical cost convention using the
same accounting policies as detailed in the 2003 annual financial statements,
with the exception of a new accounting policy being adopted in respect of Own
Shares as required under Urgent Issues Task Force Abstract 38 'Accounting for
ESOP Trusts' issued in December 2003. This new policy reclassified Own Shares
held of €2.6 million from Other Investments to Equity Shareholders' Funds and
has no impact on the Group's consolidated profit and loss account.
12. Basis of preparation and reporting currency
The financial information set out in this document does not constitute full
statutory accounts for the year ended 1 January 2005 (referred to as 2004
accounts) or 3 January 2004 (referred to as 2003 accounts) but is derived from
same. The 2004 and 2003 accounts have been audited and received unqualified
audit reports. The 2004 financial statements were approved by the Board of
Directors on 1 March 2005.
This information is provided by RNS
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