Interim Results
Irish Continental Group Interim Results For The Period Ended 30 June
2006
Highlights
Financial 2006 2005 %
Revenue ¤141.9m ¤139.6m 2%
EBITDA ¤18.5m ¤17.1m 8%
Profit from Operations ¤5.5m ¤4.3m 28%
EPS 10.6 c 6.4c 66%
Operational
Sailings
Fast Ferry 570 800 -29%
Conventional 1,513 1,506 -10%
2,083 2,306
Passengers Carried (000) 598 670 -11%
Cars Carried (000) 145 162 -10%
Freight Vehicles (000) 110 107 3%
Containers Shipped (000 teu) 227 229 -1%
Containers Handled at DFT (000) 79 78 1%
Comment
In comment, Chairman, John B. McGuckian, stated:
"We have achieved a solid result in challenging circumstances. Our
labour cost savings and capacity management have compensated for a
demanding trading environment."
Irish Continental Group is a shipping, transport and leisure group
principally engaged in the transport of passengers and cars, roll-on
roll-off freight and container lift-on lift-off freight on routes
between Ireland, the UK and Continental Europe. The Group also offers
travel and holiday packages primarily in France, Britain and Ireland.
Preliminary Statement Of Results For The Six Months To 30th June
2006 Results
The Board of Irish Continental Group plc (ICG) reports that, in the
seasonally less significant first half of the year, the Group
recorded EBITDA of ¤18.5 million compared with ¤17.1 million in the
same period in 2005. Revenue for the half year was ¤141.9 million
(2005: ¤139.6 million). Profit from operations was ¤5.5 million,
compared with ¤4.3 million in the same period in 2005. Finance costs
were up slightly at ¤2.8 million. Profit before tax was ¤2.7 million
compared with ¤1.7 million in the first half of 2005. The tax charge
was ¤0.2 million (2005: ¤0.2 million). EPS was 10.6c compared with
6.4c in 2005.
The Board has now decided to redeem one redeemable share per ICG unit
for a cash consideration of 10.92 c per redeemable share. This will
be paid on 27 October 2006 to shareholders on the register at 13
October 2006. The consideration per redeemable share represents an
increase of 10% on the interim redemption premium of 9.91875 cent
paid last year.
OPERATIONAL REVIEW
Ferries Division
The division comprises Irish Ferries, a leading provider of ferry
services between Ireland and both the UK and Continental Europe and
the chartering of multipurpose ferries to third parties.
Revenue in the division was ¤72.3 million (2005: ¤72.5 million).
Profit from operations was ¤4.3 million (2005: ¤2.3 million).
Irish Ferries' core tourist business is car tourism and this market
has been affected by substantial additional airline competition in
recent years. We have reduced frequency of our fast ferry from three
to two round trips a day. This represents a reduction of frequency
for passengers (but not freight) of 10%. Our total cars carried were
down 10% at 145,000 (2005: 162,000), which is in line with our
reduction in capacity. Total passenger numbers were down 11%.
The overall Roll on Roll off freight market continues to develop and
we also continue to grow, with our volumes up 3% to 110,000 units.
(There was no reduction in frequency in our conventional vessels).
Our initiative to reduce our crewing costs to internationally
competitive levels generated savings in line with expectations in the
half year. Fuel costs remained high and were ¤2 million more in
Irish Ferries than in the same period last year, although we are
recovering a substantial portion of the increase via surcharges.
In ship chartering the Pride of Bilbao remains on charter to P&O,
servicing their Spanish route from Portsmouth while the former Pride
of Cherbourg has been subchartered by P&O, ultimately to Toll
Shipping Pty, for service in New Zealand.
Restructuring
During the half year we completed the restructuring of our crewing
arrangements. Our vessels are now principally crewed by third party
crewing agencies at internationally competitive cost levels. The
severance costs involved on this amounted to a net ¤29.1million,
which was taken as an exceptional charge against the 2005 results.
The figure is net of a rebate of the statutory redundancy element of
the severance package of ¤4.1million. Application has been made to
the appropriate authorities for the refund of this rebate.
Container and Terminal Division
The division includes our intermodal freight services Eucon,
Feederlink and Eurofeeders as well as our strategically located
container terminal in Dublin, DFT.
Turnover in the division was ¤70.2 million (2005: ¤67.5 million).
Profit from operations was ¤1.2 million compared with ¤2.0 million in
2005. Additional fuel costs of ¤2.0 million and ¤1.8 million in
higher ship charter costs were incurred in the division.
Total containers shipped on continuing routes were down 1% at 227,000
teu.,while the number of units lifted at our stevedoring facility in
Dublin (DFT) was up 1% at 79,000 lifts.
Finance
Depreciation and amortisation in the half year was ¤13.0 million
(2005: ¤12.8 million), while EBITDA for the 6 months amounted to
¤18.5 million (¤17.1 million in 2005). Capital expenditure in the
period was ¤8.4 million (2005: ¤8.7 million), mainly maintenance
capital expenditure on our vessels and investment in information
technology. The average interest cost in the period was 4.6% compared
with 4.4% in the first half of 2005. Net debt at the end of the
period amounted to ¤132.4 million. This compares with ¤105.9 million
at 31 December 2005, the increase due mainly to the severance
programme.
Outlook
The peak tourist season, which is the most important period for us,
has followed the pattern of the first half with growth in freight but
weaker car volumes, influenced by our reduction in frequency.
Overall our car volumes are down 12% year to date while our Roll on
Roll off freight volumes are up 3%.
New competing freight capacity coming on stream in the second half
may affect our ability to grow our freight business, against a
backdrop of expected market growth. Overall we expect a challenging
revenue environment in the second half mitigated by the flow through
of our cost savings.
John B. McGuckian
Chairman
7 September 2006
Enquiries: Eamonn Rothwell Tel: +353-1-6075628
Garry O'Dea Tel: +353-1-6075628
Email: info@icg.ie
Website: www.icg.ie
Consolidated Income Statement
For The Six Months Ended 30 June 2006
30-Jun 30-Jun 31-Dec
2006 2005 2005
Notes ¤m ¤m ¤m
Continuing operations
Revenue 141.9 139.6 298.7
Depreciation and amortisation -(13.0) -(12.8) -(27.8)
Employee benefits expense -(16.9) -(27.0) -(57.2)
Other operating expenses -(106.5) -(95.5) -(194.7)
Trading profit 5.5 4.3 19.0
Restructuring costs - - -(29.1)
Operating profit / (loss) 5.5 4.3 -(10.1)
Investment income 0.4 0.3 1.0
Finance costs -(3.2) -(2.9) -(5.7)
Profit / (loss) before taxation 2.7 1.7 -(14.8)
Income tax expense -(0.2) -(0.2) -(0.8)
Profit / (loss) for the period: all
attributable to equity holders of the 2.5 1.5 -(15.6)
parent
Earnings / (loss) per ordinary share
(cent)
All from continuing operations
- basic 4 10.6 6.4 (66.9)
- diluted 4 10.6 6.4 -
Consolidated Statement Of Recognised
Income And Expense
For The Six Months Ended 30 June 2006
30 June 30 June 31 Dec
2006 2005 2005
¤m ¤m ¤m
Exchange differences on translation (2.7) 5.3 5.8
of foreign operations
Actuarial gain / (loss) on retirement 4.1 (3.1) 3.9
obligations
Profit / (loss) for the year 2.5 1.5 (15.6)
Total recognised income / (expense)
for the period:
all attributable to equity holders of 3.9 3.7 (5.9)
the parent.
Consolidated Statement Of Changes In Equity
For The Six Months Ended 30 June 2006
Share Share Capital Share Hedging Translation Retained
Capital Premium Reserve Options Reserve Reserve Earnings Total
Reserve
¤m ¤m ¤m ¤m ¤m ¤m ¤m ¤m
Balance at 1 15.8 39.6 2.2 0.1 (0.1) 3.6 77.7 138.9
January 2006
Exchange
differences
arisingon - - - - - (2.7) - (2.7)
translation of
foreignoperations
Actuarial gain on
defined benefit - - - - - - 4.1 4.1
pension schemes
____________________________________________________________________
Net expense
recognised directly - - - - - (2.7) 4.1 1.4
in equity
Profit for the - - - - - - 2.5 2.5
period
____________________________________________________________________
Total recognised
income and expense - - - - - (2.7) 6.6 3.9
for the period
Share issue 0.1 - - - - - - 0.1
Exercise of share
options -
shares issued at - 0.8 - - - - - 0.8
premium
Increase in fair
value of cash
flow hedging - - - - 0.5 - - 0.5
derivatives
Redemption of
redeemable
share capital - - - - - - (4.5) (4.5)
____________________________________________________________________
0.1 0.8 - - 0.5 (2.7) 2.1 0.8
____________________________________________________________________
Balance at 30 June 15.9 40.4 2.2 0.1 0.4 0.9 79.8 139.7
2006
Consolidated Balance Sheet
As At 30 June 2006
30-Jun 30-Jun
2006 2005 2005
Notes ¤m ¤m ¤m
Assets
Non current assets
Property, plant & equipment 5 279.9 301.4 287.8
Intangible assets 6 3.2 0.7 3.3
Retirement benefit asset 14.3 - 8
Long term receivables 4.8 4.4 4.9
302.2 306.5 304
Current assets
Inventories 0.8 0.9 0.6
Trade and other receivables 48.6 38.2 37.6
Cash and cash equivalents 12.5 11.1 14
61.9 50.2 52.2
Total assets 364.1 356.7 356.2
Equity and liabilities
Capital and reserves
Share capital 15.9 15.8 15.8
Share premium 40.4 39.6 39.6
Capital reserves 2.2 2.2 2.2
Share options reserve 0.1 - 0.1
Hedging reserve 0.4 - (0.1)
Translation reserve 0.9 3.1 3.6
Retained earnings 79.8 89.6 77.7
Equity attributable to equity holders 139.7 150.3 138.9
Non-current liabilities
Bank loans 124.1 93.7 99.4
Obligations under finance leases 5.9 6.7 5.3
Trade and other payables 3.3 - 3.7
Derivative financial instruments (0.4) - 0.1
Retirement benefit obligation 0.6 5.9 0.6
Deferred tax liabilities 5.2 5.1 4.9
Provisions 2 1.6 2.1
140.7 113 116.1
Current liabilities
Trade and other payables 64 62.1 47.5
Current tax liabilities 4.1 4.7 4.8
Obligations under finance leases 3.3 4.1 3.5
Bank overdrafts and loans 11.6 22.5 11.7
Provisions 0.7 - 33.7
83.7 93.4 101.2
Total liabilities 224.4 206.4 217.3
Total equity and liabilities 364.1 356.7 356.2
Consolidated Cash Flow Statement
For The Six Months Ended 30 June 2006
30-Jun 30-Jun 31-Dec
2006 2005 2005
Notes ¤m ¤m ¤m
Operating activities
Profit / (loss) for the year 2.5 1.5 (15.6)
Adjustments for:
Finance costs (net) 2.8 2.6 4.7
Income tax expense 0.2 0.2 0.8
Retirement benefit obligation - service cost (1.3) 2.0 2.0
Retirement benefit obligation - payments (0.5) (1.8) (2.0)
Depreciation of property, plant and equipment 12.6 13.0 27.0
Amortisation of intangible assets 0.5 - 0.8
Amortisation of deferred income (0.1) (0.2) (0.1)
Share based payment expense - - 0.1
Gain on disposal of property, plant and
equipment - - (0.5)
Restructuring provision created - - 34.5
Restructuring payments (36.3) (4.3) (5.9)
(Decrease) in other provisions - - (1.2)
Operating cash flow before movements in working (19.6) 13.0 44.6
capital
(Increase) in inventories (0.2) (0.3) -
(Increase) / decrease in receivables (7.7) 4.5 (2.4)
Increase / (decrease) in payables 15.7 4.6 (2.9)
Cash generated from operations (11.8) 21.8 39.3
Income taxes paid (1.0) (0.9) (1.7)
Interest paid (3.0) (2.1) (5.9)
Net cash from operating activities (15.8) 18.8 31.7
Investing activities
Interest received 0.4 0.3 1.0
Proceeds on disposal of property, plant and
equipment - 0.1 0.6
Purchases of property, plant and equipment (8.1) (8.1) (11.9)
Purchase of intangible assets (0.3) (0.6) (1.6)
Net cash used in investing activities (8.0) (8.3) (11.9)
Financing activities
Redemption of redeemable shares (4.5) (4.0) (6.3)
Repayments of borrowings (18.6) (1.0) (77.9)
Repayments of obligations under finance
leases (1.8) (2.2) (4.3)
New bank loans raised 44.7 - 71.8
New finance leases raised 2.2 0.1 0.2
Proceeds on issue of share capital 0.9 - -
Decrease in bank overdrafts (0.1) (0.3) (0.2)
Net cash used in financing activities 22.8 (7.4) (16.7)
Net (decrease) / increase in cash and cash
equivalents (1.0) 3.1 3.1
Cash and cash equivalents at the beginning of the year 14.0 9.2 9.2
Effect of foreign exchange rate changes (0.5) (1.2) 1.7
Cash and cash equivalents at the end of the year
Bank balances and cash 12.5 11.1 14.0
Notes To The Financial Statements
As At 30 June 2006
1. Accounting policies
These June 2006 interim consolidated financial statements are for the
six months ended 30 June 2006. The interim financial report has been
prepared using accounting policies consistent with International
Financial Reporting Standards (IFRS) and the accounting policies and
methods of computation used in the interim financial statements are
consistent with those used in the Group 2005 Annual Report, which is
available at
http://www.icg.ie/.
The figures included in the financial statements for the six months
ended 30 June 2006 and 30 June 2005 are unaudited. The full year
figures for the twelve months ended 31 December 2005 were extracted
from the audited financial statements for that year.
2. Segmental information: Analysis by class of business
6 months ended 12 months ended
30 June 2006 30 June 2005 31 Dec 2005
Revenue Profit Revenue Profit Revenue Profit
¤m ¤m ¤m ¤m ¤m ¤m
Ferries & Travel 72.3 4.3 72.5 2.3 162.7 (14.3)
Container and Terminal 70.2 1.2 67.5 2.0 136.4 4.2
Intersegment (0.6) - (0.4) - (0.4) -
Net Interest - (2.8) - (2.6) - (4.7)
141.9 2.7 139.6 1.7 298.7 (14.8)
3. Redemptions of preference shares / dividend
The Company has decided to redeem one redeemable share per ICG unit
on 27 October 2006 to shareholders on the register at 13 October 2006
for a cash consideration of 10.92 cent per redeemable share (2005:
9.91875cent). No interim dividend will be paid.
4. Earnings / (loss) per share
6 months to 6 months to 12 months
to
30 June 2006 30 June 2005 31 Dec 2005
Basic earnings per share
Earnings: profit / (loss) 2.5 1.5 (15.6)
after tax (Em)
Weighted average shares in 23.5 23.3 23.3
issue during the period
(million)
Earnings / (loss) per share 10.6 6.4 (66.9)
(cent)
Diluted earnings per share
Earnings: profit after tax 2.5 1.5 -
(Em)
Diluted weighted average 23.6 23.4 -
shares in issue during the
period (million)
Earnings per share (cent) 10.6 6.4 -
Adjusted earnings per share
- basic
Earnings: profit after tax 2.5 1.5 13.5
before exceptional item
(Em)
Weighted average shares in 23.5 23.3 23.3
issue during the period
(million)
Earnings per share (cent) 10.6 6.4 57.9
Adjusted earnings per
share-diluted
Earnings: profit after tax 2.5 1.5 13.5
before exceptional item
(Em)
Diluted weighted average 23.6 23.4 23.6
shares in issue during the
period (million)
Earnings per share (cent) 10.6 6.4 57.2
5. Property, plant and equipment
Ships Property Plant & Vehicles Total
equipment
¤m ¤m ¤m ¤m ¤m
Cost or valuation
At 1 January 2006 384.8 24.5 58.6 2.3 470.2
Additions 5.7 - 2.1 0.3 8.1
Disposals (6.7) - - (0.1) (6.8)
Exchange adjustment (6.6) - - - (6.6)
At 30 June 2006 377.2 24.5 60.7 2.5 464.9
Accumulated depn
At 1 January 2006 136.6 6.9 37.5 1.4 182.4
Charge for period 10.5 0.2 1.7 0.2 12.6
Disposals (6.7) - - (0.1) (6.8)
Exchange adjustment (3.2) - - - (3.2)
At 30 June 2006 137.2 7.1 39.2 1.5 185.0
Net book amounts
At 1 January 2006 248.2 17.6 21.1 0.9 287.8
At 30 June 2006 240.0 17.4 21.5 1.0 279.9
At 30 June 2006 the Group has entered into commitments to the value
of ¤1.3 million for the purchase of fixed assets.
6. Intangible assets
¤m
Cost
At 1 January 2006 6.0
Additions 0.4
At 30 June 2006 6.4
Amortisation
At 1 January 2006 2.7
Charge for the year 0.5
At 30 June 2006 3.2
Carrying amount
At 1 January 2006 3.3
At 30 June 2006 3.2
7. Provisions
At 31 December 2005 the Group carried provisions of ¤35.8 million in
respect of restructuring payments, claims provision and deferred
grant. ¤33.1 million has been used in the 6 months to 30 June 2006.
Accordingly at 30 June 2006 the balance on these provisions stands at
¤2.7 million.
8. Net debt
Cash Overdrafts Loans Leases Total
¤m ¤m ¤m ¤m ¤m
At 31 December 2005
Current assets 14.0 - - - 14.0
Creditors due within one year - (0.1) (11.6) (3.5) (15.2)
Creditors due after one year - - (99.4) (5.3) (104.7)
14.0 (0.1) (111.0) (8.8) (105.9)
Cash flow (1.0) 0.1 (26.1) (0.4) (27.4)
Foreign exchange rate (0.5) - 1.4 - 0.9
changes
12.5 - (135.7) (9.2) (132.4)
At 30 June 2006
Current assets 12.5 - - - 12.5
Creditors due within one year - - (11.6) (3.3) (14.9)
Creditors due after one year - - (124.1) (5.9) (130.0)
12.5 - (135.7) (9.2) (132.4)
9. Tax
Corporation tax for the interim period is estimated based on the best
estimates of the weighted average annual corporation tax rate
expected to apply for the full financial year.
10. Retirement benefit schemes
Retirement benefit scheme valuations have been updated at the half
year to reflect management's best estimates of scheme assets and
schemes liabilities. Scheme assets have been valued as per investment
managers valuations at 30 June 2006. Scheme liabilities have been
estimated using the same assumptions as at 31 December 2005 except
that the discount rate has been increased to 4.75% in line with the
underlying long term interest rate and European AAA rated bonds.
11. Related party transactions
Transactions between the company and its subsidiaries, which are
related parties, have been eliminated on consolidation.
12. Board approval
This interim report was approved by the Board of Directors of Irish
Continental Group plc on 6 September 2006.
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