Interim Results
INTERIM RESULTS
FOR THE PERIOD ENDED 30 JUNE 2007
Highlights Six months to 30th June Financial
Year
2007 2006* 2006
Revenue ¤163.2m ¤141.8m ¤312.1m
Trading Profit ¤16.4m ¤2.6m ¤32.2m
Non Recurring (Charge) / Credit ¤(16.5m) - ¤0.7m
Operating (Loss) / Profit ¤(0.1)m ¤2.6m ¤32.9m
EPS Basic (6.8)c 10.2c 137.4c
Diluted - 10.2c 136.9c
EPS Adjusted 50.8c (1.7)c 108.5c
Adjusted Diluted 49.4c 108.1c
-
*2006 results have been restated to reflect changes in accounting
policies adopted for the financial year 2006.
John B. McGuckian
Chairman
10 September 2007
Enquiries: Eamonn Rothwell Tel: +353-1-6075628
Garry O'Dea Tel: +353-1-6075628
Email: info@icg.ie
Website: www.icg.ie
PRELIMINARY STATEMENT OF RESULTS
FOR THE SIX MONTHS TO 30TH JUNE 2007
RESULTS
The Board of Irish Continental Group plc (ICG) reports Revenue of
¤163.2 million in the six months to 30th June 2007, compared with
¤141.8 million (restated) in the same period in 2006. Trading profit
was ¤16.4 million compared with ¤2.6 million in 2006. There was a
non recurring charge of ¤16.5 million relating to the proposed
acquisition of the Group (see below). Loss from operations was ¤0.1
million, compared with a profit of ¤2.6 million in the same period in
2006. Finance costs (net of investment revenue) were ¤0.9 million
which includes a net credit of ¤2.9 million in relation to interest
on defined benefit pension scheme assets and liabilities. There was
a loss before tax of ¤1.0 million compared with a profit of ¤2.6
million in the first half of 2006. The tax charge was ¤0.6 million
(2006: ¤0.2 million). Basic EPS was a loss of 6.8c compared with
earnings of 10.2c in 2006. Adjusted EPS, i.e. before non recurring
items and the net pension interest credit amounted to 50.8c (loss of
1.7c in 2006).
NON RECURRING ITEM
On 8th March 2007 a committee of Independent Directors of the Board
and the Board of Directors of Aella plc announced the terms of a
recommended acquisition for cash of the entire issued, and to be
issued, share capital of ICG by Aella for cash consideration of
¤18.50 per ICG Unit (the "Aella Offer"). On 14th June 2007 the
Independent Directors of ICG and the Board of Directors of Moonduster
Limited announced the terms of a recommended acquisition for cash of
the entire issued, and to be issued, share capital of ICG by
Moonduster for cash consideration of ¤22.00 per ICG unit ("The
Moonduster Offer"). In the announcement of the Moonduster Offer, the
Independent Directors indicated that by announcing their intention to
recommend the Moonduster Offer they were withdrawing their
recommendation of the Aella Offer. On 20th August 2007 the
Independent Directors of ICG announced the terms of a recommended
revised acquisition for cash of the entire issued, and to be issued,
share capital of ICG by Aella plc for a cash consideration of ¤24.00
per ICG unit. The non recurring charge of ¤16.5 million represents
estimated potential costs incurred by the Group to date in relation
to this process.
REDEMPTION OF REDEEMABLE SHARES
As stated above the offer period for the Company which commenced on 8
March 2007, is still ongoing. In the preliminary results
announcement for the year ended 31 December 2006, it was stated that,
in light of the Aella Offer , the Directors did not propose to
declare a further redemption of Redeemable Shares or payment of an
ordinary dividend for the year ended 31 December 2006. The offer
period is still ongoing and it remains a condition of the offers
which the Company has received that no new dividends or redeemable
share redemptions occur and accordingly the Directors continue to
propose not to declare any further redemption or dividend for the
time being.
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 ¤85.9 million (2006: ¤72.2 million).
Profit from operations was ¤12.2 million (2006: ¤1.4 million).
The Irish Ferries' passenger business is driven by car tourism. Our
total cars carried in the first half of 2007 is, at 173,000, up 19%
from the first half of 2006, whereas the market as a whole is up 4%.
The prior year comparison for the passenger business benefits
significantly from the consequential effects of industrial action in
November and December of 2005. When compared with the first half of
2005, when there was no such disruption, our total cars carried were
up 7%.
The passenger business has been further helped by the reduction in
overall capacity within the industry which took effect in the latter
half of 2006, and is impacting in 2007. There was a reduction in one
competitor's fast ferry frequency on the Central Corridor, while on
the Southern Corridor another competitor temporarily suspended
services for 2007.
The overall Roll On Roll Off freight market continues to develop and
our volumes were up 19% to 131,000 units, when compared with the
first half of 2006.
Volume growth exceeded that of the market (itself up 7%), primarily
due to the absence of the knock-on effect of the industrial action in
late 2005 on carryings in the comparable period. Another factor in
the increase in volume growth is the timing of our drydockings which
effectively increased our capacity in January 2007, while one of our
competitors had a temporary reduction in capacity in March 2007 due
to operational reasons.
In ship chartering, the Pride of Bilbao remained on charter to P&O,
servicing their Spanish route from Portsmouth while the former Pride
of Cherbourg continued its subcharter to Toll Shipping Pty, in New
Zealand.
In January we announced the acquisition of the mv Kronprins Harald,
which we will rename Oscar Wilde, in an investment of approximately
¤45 million. The vessel remained on charter with the vendors until
its physical delivery scheduled for the second half of the year.
Container and Terminal Division
The division includes our intermodal freight services Eucon,
Feederlink and Eurofeeders as well as our strategically located
container terminals in Dublin and Belfast, (DFT & BCT).
Turnover in the division was ¤77.3 million (2006: ¤69.6 million).
Profit from operations was ¤4.2 million (2006: ¤1.2 million).
Total containers shipped on continuing routes were up 12% at 255,000
teu., while the number of units lifted at our port facilities in
Dublin (DFT) and Belfast (BCT) were up 11% at 88,000 lifts. During
the half year we broadened our product offering by introducing
refrigerated containers to cater for the market for temperature
controlled products for the first time.
A construction project to add capacity at DFT, our lift-on / lift-off
terminal in Dublin Port, com
menced in March 2007 and has progressed satisfactorily during the
half year.
FINANCE
Capital expenditure in the period was ¤51.3 million (2006: ¤8.4
million), principally the acquisition of the Oscar Wilde and the
development of DFT. Net debt at the end of the period amounted to
¤121.2 million. This compares with ¤113.8 million at 31 December
2006, the increase due mainly to the significant capital expenditure
partially offset by the positive cash flow from operations.
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
As restated
Notes
30 June 30 June 31 Dec
2007 2006 2006
¤m ¤m ¤m
Continuing operations
Revenue
163.2 141.8 312.1
Depreciation and amortisation
(16.2) (13.0) (27.5)
Employee benefits expense
(17.2) (19.7) (32.9)
Other operating expenses
(113.4) (106.5) (219.5)
Trading
profit
16.4 2.6 32.2
Non recurring (charge) / credit
(16.5) - 0.7
Operating (loss) / profit
(0.1) 2.6 32.9
Investment revenue
10.2 8.2 18.3
Finance costs
(11.1) (8.2) (17.9)
(Loss) / profit before taxation
(1.0) 2.6 33.3
Income tax expense
(0.6) (0.2) (1.0)
(Loss) / profit for the period: all
attributable to equity holders of the parent (1.6)
2.4 32.3
(Loss) / earnings per ordinary share (cent)
All from continuing operations
- basic
4 (6.8) 10.2 137.4
- diluted
4 - 10.2 136.9
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
FOR THE SIX MONTHS ENDED 30 JUNE 2007
As restated
30 June 30 June 31 Dec
2007 2006 2006
¤m ¤m ¤m
Gain on cash flow hedges
- - 0.6
Exchange differences
on translation of foreign
operations
(1.0) (2.7) (0.9)
Actuarial (loss) / gain on retirement
obligations
(0.8) 4.1 12.1
Deferred Tax on Group defined benefit
pension schemes
(0.3) - (0.5)
(Loss) / profit for the period
(1.6) 2.4
32.3
Total recognised (expense) / income for
the period: all attributable to equity holders
of the parent - (decrease) / increase in
retained earnings
(3.7) 3.8 43.6
Effect of change in accounting policy
- 1.4 1.5
Total recognised income and expense
for the period as restated
(3.7) 5.2 45.1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Share
Share Share Capital Options Hedging Translation Retained
Capital Premium Reserve Reserve Reserve Reserve Earnings Total
¤m ¤m ¤m ¤m ¤m ¤m ¤m ¤m
Balance at
1 January
2007 15.9 40.6 2.2 0.5 0.5 2.7 115.9 178.3
Exchange
differences
arising
on
translation
of foreign
operations - - - - - (1.0) - (1.0)
Actuarial
loss on
defined
benefit
pension
schemes - - - - - - (0.8) (0.8)
Deferred
Tax on
Group
defined
benefit
pension
schemes - - - - - - (0.3) (0.3)
_____ _____ _____ _____ _____ _____ _____ _____
Net expense
recognised
directly in
equity - - - - - (1.0) (1.1) (2.1)
Loss for
the period - - - - - - (1.6) (1.6)
_____ _____ _____ _____ _____ _____ _____ _____
Total
recognised
income and
expense for
the period - - - - - (1.0) (2.7) (3.7)
Share issue 0.1 - - - - - - 0.1
Exercise of
share
options -
shares
issued at
premium - 0.9 - - - - - 0.9
Employee
share
options
expense - - - 0.3 - - - 0.3
_____ _____ _____ _____ _____ _____ _____ _____
0.1 0.9 - 0.3 - (1.0) (2.7) (2.4)
_____ _____ _____ _____ _____ _____ _____ _____
Balance at
30 June
2007 16.0 41.5 2.2 0.8 0.5 1.7 113.2 175.9
_____ _____ _____ _____ _____ _____ _____ _____
Analysed as
follows:
Share
capital 16.0
Share
premium 41.5
Other
reserves 5.2
Retained
earnings 113.2
_____
175.9
_____
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2007
As restated
Notes
30 June 30 June 31 Dec
2007 2006 2006
¤m ¤m ¤m
Assets
Non current assets
Property, plant & equipment 5
305.4 279.9 271.0
Intangible assets
6
2.6 3.2 2.8
Long term
receivables 4.7
4.8 4.5
Retirement benefit surplus
31.2 14.3 29.9
343.9 302.2 308.2
Current assets
Inventories
0.8 0.8 0.6
Trade and other receivables
46.1 48.6 53.5
Derivative financial instruments
0.4 0.4 0.5
Cash and cash equivalents
19.0 12.5 11.0
66.3 62.3 65.6
Total assets
410.2 364.5 373.8
Equity and liabilities
Capital and reserves
Share
capital
16.0 15.9 15.9
Share premium
41.5 40.4 40.6
Other
reserves
5.2 3.6 5.9
Retained earnings
113.2 81.2 115.9
Equity attributable to equity holders
175.9 141.1 178.3
Non-current liabilities
Borrowings
107.4 124.1 105.3
Obligations under finance leases
4.1 5.9 5.0
Trade and other
payables
- 3.3 -
Provisions 4.2
2.0 1.8
Deferred tax liabilities
5.9 5.2
5.6
Retirement benefit obligation
9.2 0.6 10.1
130.8
141.1 127.8
Current liabilities
Borrowings
26.3 11.6 11.9
Obligations under finance leases
2.4 3.3 2.6
Trade and other payables
70.5 62.6 47.8
Current tax
liabilities
4.2 4.1 3.6
Provisions
0.1 0.7 1.8
103.5 82.3 67.7
Total
liabilities
234.3 223.4 195.5
Total equity and liabilities
410.2 364.5 373.8
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
As restated
30 June 30 June 31 Dec
2007 2006 2006
¤m ¤m ¤m
Operating activities
(Loss) / profit for the period
(1.6) 2.4 32.3
Adjustments for:
Finance costs (net)
0.9 - (0.4)
Income tax expense
0.6 0.2 1.0
Retirement benefit obligation - service
cost
1.2 1.5 3.2
Retirement benefit obligation - payments
(1.1) (0.5) (1.7)
Depreciation of property, plant and equipment
15.7 12.6 26.5
Amortisation of intangible assets
0.5 0.5 1.1
Amortisation of deferred income
- (0.1) (0.1)
Share based payment expense
0.3 - 0.4
Gain on disposal of property, plant and
equipment
- - (0.2)
Restructuring programme payments
- (36.3) (35.4)
Increase in restructuring provisions
- - 3.7
Increase / (decrease) in other provisions
0.7 - (0.5)
Operating cash flow before
movements in working capital
17.2 (19.7) 29.9
Increase in inventories
(0.2) (0.2) -
Decrease / (increase) in receivables
7.4 (7.7) (15.9)
Increase in payables
22.9 15.8 2.4
Cash generated from operations
47.3 (11.8) 16.4
Income taxes paid
(0.2) (1.0) (1.7)
Interest
paid
(4.4) (3.0) (6.0)
Net cash from operating activities
42.7 (15.8) 8.7
Investing activities
Interest
received
0.6 0.4 0.3
Proceeds on disposal of property, plant and
equipment
- - 0.2
Purchases of property, plant and equipment
(51.0) (8.1) (11.4)
Purchase of intangible assets
(0.3) (0.3) (0.6)
Net cash used in investing activities
(50.7) (8.0) (11.5)
Financing activities
Redemption of redeemable shares
- (4.5) (7.2)
Repayments of borrowings
(50.0) (18.6) (11.8)
Repayments of obligations under finance
leases
(1.3) (1.8) (4.0)
Proceeds on issue of share capital 1.0
0.9 1.1
New bank loans raised
62.5 44.7 19.6
New finance leases raised
0.1 2.2 2.4
Increase / (decrease) in bank overdrafts
4.4 (0.1) -
Net cash from financing activities
16.7 22.8 0.1
Net increase / (decrease) in cash and cash
equivalents
8.7 (1.0) (2.7)
Cash and cash equivalents at the beginning
of the
year
11.0 14.0 14.0
Effect of foreign exchange rate changes
(0.7) (0.5) (0.3)
Cash and cash equivalents at the end
of the year
Bank balances and cash
19.0 12.5 11.0
NOTES TO THE FINANCIAL STATEMENTS
AS AT 30 JUNE 2007
1. Accounting policies
These June 2007 interim consolidated financial statements are for the
six months ended 30 June 2007. 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 2006 Annual Report, which is
available at
http://www.icg.ie/.
The figures included in the financial statements for the six months
ended 30 June 2007 and 30 June 2006 are unaudited. The full year
figures for the twelve months ended 31 December 2006 were extracted
from the audited financial statements for that year.
2. Segmental information: Analysis by class of business
As restated
6 months ended 12 months ended
30 June 2007 30 June 2006 31 Dec 2006
Revenue Profit Revenue Profit Revenue Profit
¤m ¤m ¤m ¤m ¤m ¤m
Ferries & 85.9 12.2 72.2 1.4 170.0 29.3
Travel
Container 77.5 4.2 70.2 1.2 142.6 3.6
and Terminal
Intersegment (0.2) - (0.6) - (0.5) -
Net Interest - (0.9) - - - 0.4
Non - (16.5) - - - -
allocated
item
_______ _______ _______ _______ _______ _______
163.2 (1.0) 141.8 2.6 312.1 33.3
_______ _______ _______ _______ _______ _______
3. Change in accounting policy
As reported in the 2006 Annual Report, there were two changes made to
the Group's accounting policies during the year.
The first change was in relation to passenger tickets and the
treatment of unused tickets. Due to the change in accounting policy,
passenger ticket revenue is now recognised at the date of travel.
The 2006 interim comparative has been restated in accordance with the
new policy, resulting in a charge to the income statement of ¤0.1
million for the period ended 30 June 2006 and a decrease in deferred
revenue accruals as previously reported in the balance sheet at 30
June 2006 of ¤1.4 million as follows:
Deferred
Revenue Retained
Revenue Accruals Earnings
¤m ¤m ¤m
As previously reported at 30 June 2006 141.9 12.7 79.8
Deferred revenue restatement -
Income Statement effect (0.1) - -
Balance Sheet effect (1.4) 1.4
_______ _______ _______
141.8 11.3 81.2
_______ _______ _______
The second change was in the area of employee benefits and the
presentation of the financial statements in relation to the Expected
return on scheme assets, now shown under Investment revenue and
Interest on scheme liabilities, now shown under Finance costs. These
had previously been netted off and accounted for under Employee
benefit expenses.
In the 2006 interim report, the net of these two amounts (¤2.8
million) was offset against Employee benefits expense. The 2006
interim comparative has been restated to reflect the change in
accounting policy. There is no impact on reported profit before tax.
4. Earnings per share
As
restated
6 12
months 6 months months
ended ended ended
30 31
June 30 June December
2007 2006 2006
cent cent cent
Basic (loss) / earnings per share (6.8) 10.2 137.4
Diluted earnings per share - 10.2 136.9
Adjusted earnings/ (loss) per share 50.8 (1.7) 108.5
Adjusted diluted earnings per share 49.4 - 108.1
The calculation of the basic and diluted earnings per share attributable to the ordinary equity
holders of the parent is based on the following data:
Earnings ¤m ¤m ¤m
Earnings for the purpose of basic earnings per share -
(Loss) / profit for the year attributable to equity holders of the
parent (1.6) 2.4 32.3
Earnings for the purpose of diluted earnings per share (1.6) 2.4 32.3
Earnings for the purpose of basic earnings per share -
(Loss) / profit for the year attributable to equity holders of the
parent (1.6) 2.4 32.3
Effect of non recurring charge / (credit) 16.5 - (0.7)
Effect of expected return on defined benefit pension scheme assets (9.6) (7.8) (17.8)
Effect of interest on defined benefit pension scheme liabilities 6.7 5.0 11.7
Earnings for the purpose of adjusted earnings per share 12.0 (0.4) 25.5
Number of shares
Weighted average number of ordinary shares for the purpose of basic
earnings per share 23.6 23.5 23.5
Effect of dilutive potential ordinary shares: Share options 0.7 0.1 0.1
Weighted average number of ordinary shares for the purpose of diluted
adjusted earnings per share 24.3 23.6 23.6
5. Property, plant and equipment
Assets under Plant & Land &
construction Ships equipment Vehicles buildings Total
¤m ¤m ¤m ¤m ¤m ¤m
Cost or
valuation
At 1 January 0.7 380.4 62.5 2.5 24.5 470.6
2007
Additions 3.3 46.4 1.0 0.3 - 51.0
Disposals - - - (0.2) - (0.2)
Exchange - (2.0) - - - (2.0)
differences
At 30 June 4.0 424.8 63.5 2.6 24.5 519.4
2007
Accumulated
depreciation
At 1 January - 149.5 41.4 1.3 7.4 199.6
2007
Charge for - 13.5 1.8 0.2 0.2 15.7
period
Disposals - - - (0.2) - (0.2)
Exchange - (1.1) - - - (1.1)
differences
At 30 June - 161.9 43.2 1.3 7.6 214.0
2007
Net book
amounts
At 1 January 0.7 230.9 21.1 1.2 17.1 271.0
2007
At 30 June 4.0 262.9 20.3 1.3 16.9 305.4
2007
At 30 June 2007 the Group has entered into commitments to the
value of ¤1.5 million for the purchase of fixed assets.
6. Intangible Assets
¤m
Cost
At 1 January 2007 6.6
Additions 0.3
At 30 June 2007 6.9
Amortisation
At 1 January 2007 3.8
Charge for the year 0.5
At 30 June 2007 4.3
Carrying amount
At 1 January 2007 2.8
At 30 June 2007 2.6
7. Net debt
Cash Overdrafts Loans Leases Total
¤m ¤m ¤m ¤m ¤m
At 1 January 2007
Current assets 11.0 - - - 11.0
Creditors due within one - (0.1) (11.8) (2.6) (14.5)
year
Creditors due after one - - (105.3) (5.0) (110.3)
year
11.0 (0.1) (117.1) (7.6) (113.8)
Cash flow 8.7 (4.4) (12.1) 1.1 (6.7)
Foreign exchange rate (0.7) - - - (0.7)
changes
19.0 (4.5) (129.2) (6.5) (121.2)
At 30 June 2007
Current assets 19.0 - - - 19.0
Creditors due within one - (4.5) (21.8) (2.4) (28.7)
year
Creditors due after one - - (107.4) (4.1) (111.5)
year
19.0 (4.5) (129.2) (6.5) (121.2)
8. 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.
9. 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 2007. Scheme liabilities
have been estimated using the same assumptions as at 31 December
2006 except that the discount rate has been increased to 5% for
schemes with euro liabilities and 5.3% for schemes with sterling
liabilities, reflecting the underlying long term interest rate and
yield on European AAA rated bonds.
10. Related party transactions
Transactions between the company and its subsidiaries, which are
related parties, have been eliminated on consolidation.
11. Board Approval
This interim report was approved by the Board of Directors of
Irish Continental Group plc on 7 September 2007.
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