Interim Results 2002
Kerry Group PLC
3 September 2002
KERRY GROUP PLC
Tuesday 3 September 2002
Interim Report
Half Year Ended 30 June 2002
Kerry, the global ingredients, flavours, and consumer foods group,
reports interim results for the half year ended 30 June 2002.
Financial Highlights
- Sales increased by 34.3% to EUR1.8 billion
- Like-for-like sales growth of 5%
- Operating profit* increased by 18.7% to EUR128m
- Restructuring cost of EUR25.5m
- Adjusted profit after tax* up 23.4% to EUR77.4m
- Adjusted earnings per share increased by 14.8% to 41.8 cent
- FRS3 earnings per share reduced from 31.8 cent to 20.2 cent
- Interim dividend per share up 12.3% to 3.65 cent
* before goodwill and exceptionals
Commenting on the half-year 2002 performance, Kerry Group Managing
Director, Hugh Friel said; 'The first half of 2002 has again
highlighted the strength and broad geographic base of the Group.
Turnover was up 34% with like-for-like sales growth of 5%. Despite
difficulties arising from international market developments in some
sectors, the Group achieved a 14.8% increase in adjusted earnings
per share. Our food ingredients, flavours, consumer foods and
foodservice operations continue to grow and develop in line with
Group projections and we expect a good outturn for the full year'.
For further information please contact:
Frank Hayes
Director of Corporate Affairs Tel no +353 66 7182304
Fax no +353 66 7182972
Kerry Web Site: www.kerrygroup.com
Kerry Group plc
Chairman's Statement
For the half year ended 30 June 2002
Results
_______
Kerry delivered a good performance in the first half of 2002,
demonstrating again the strength of the Group's broad technology,
customer and geographic base. Despite difficulties arising from
international market developments in some sectors, operating profit
before goodwill amortisation and exceptionals increased by 18.7% to
EUR128m. This reflects strong business development in all Group
operations and good progress in the integration of 2001 acquisitions.
Turnover increased by 34.3% to EUR1.8 billion, with like-for-like sales
showing a 5% increase compared to the first half of 2001 when account
is taken of acquisitions, divestitures and foreign exchange
fluctuations. As signalled at year-end, due to the business profile of
Group acquisitions in 2001 - in particular Golden Vale, and the on-going
restructuring and integration programme connected with the respective
business units, the Group operating margin decreased from 8.1% in the
first half of 2001 to 7.1% in the period under review.
Adjusted profit after tax and exceptional items increased by 23.4% to
EUR77.4m which, allowing for the increased number of shares in issue,
contributed a 14.8% increase in earnings per share to 41.8 cent.
Equivalently, pre-application of the new FRS19 reporting standard on
deferred tax, this result would have increased earnings per share by
13.4%. Basic FRS3 earnings per share decreased by 36.5% to 20.2 cent.
Assisted by on-going strong cash generating capability, the Group
continued to invest significant resources in existing businesses
and in strategic bolt-on investments. In particular good progress
was achieved in advancing the Group's convenience foods, culinary,
nutrition, foodservice and global flavour business development
objectives.
Operations Reviews
__________________
Ireland and Rest of Europe
Sales originating from Irish based operations almost doubled to
EUR627.1m, boosted primarily by the acquisition of Golden Vale
which was concluded at the end of September 2001. Operating profit
increased from EUR18.9m to EUR26.9m.
European operations (excluding Ireland) increased sales by 10.5% to
EUR628.3m while operating profits increased by 8.7% to EUR43.9m.
Kerry Foods again achieved good growth in its branded categories.
In Ireland a strong performance was achieved in pre-packed sliced
meats, rashers, cheese and cheese-snacks. The division's dedicated
foodservice business unit also made excellent progress since its
launch in 2001. Integration of businesses connected with the Golden
Vale acquisition has progressed satisfactorily and will be
substantially completed by year-end. The sale of the Bailieboro and
Artigarvan based dairy processing operations was completed during
the period under review. However margins in the dairy sector were
impacted by difficulties in international dairy markets - with
changes in input pricing lagging reduced output prices.
In the UK, Wall's and Richmond brands again grew market share. Good
progress was also made through prepared meals and microwaveable
convenient offerings. Kerry Foods Direct to Store had an excellent
first half - having further extended its market positioning through
the acquisition of the Pork Farms Bowyers Van Sales operation.
In European ingredients markets excellent progress was achieved due
to the on-going expansion of the prepared foods industry. Development
in coatings was constrained due to the difficulties experienced by
fish processors and to a lesser extent the poultry industry - in
particular in the UK and France. However on-going development of the
division's foodservice business in the quick-serve restaurant sector
proved satisfactory. The Voyager Foods (UK) and Aromont (France)
acquisitions performed well, successfully extending Kerry's position
as a pan-European provider of culinary systems and ready-to-use
ingredient solutions. The European snack sector continued to grow
and Kerry recorded good progress especially in Eastern Europe.
Americas
Sales in American markets increased by 22% to EUR473.5m. While
the 2001 acquisition programme contributed to this strong
performance, organic growth in Kerry's core businesses again
proved satisfactory. Operating profits increased by 18.1% to
EUR52.8m.
In the USA, subsequent to the high level of food industry
consolidation in 2000 and 2001, food companies that have
successfully progressed integration of acquired businesses
are again engaging in significant new product developments.
This momentum has already provided new opportunities in key
Kerry growth sectors, including ready-to-eat breakfast cereals,
nutritional products, health and energy bars, where Kerry
divisions have a strong focus and a range of technologies.
Such sectors are exhibiting growth rates in excess of 20%
year-on-year. Kerry is also realising good progress through its
focus on the natural food and organic sectors which are also
dynamic growth categories.
Kerry's U.S. specialty ingredients division performed in line
with expectations. Growth in the seasonings sector was impacted
by processor consolidation which resulted in a number of delayed
market development initiatives. The US$3m expansion and upgrade
of the Sturtevant seasonings facility was completed. The new
Calhoun Georgia US$22m coatings facility is also on target for
full commissioning in the second half of 2002. Higher cereal raw
material costs led to lower margins in coatings and foodservice
applications. However the dynamics of foodservice markets remain
positive. With the continued growth of hand-held foods, the
commercialisation of Kerry's FlavorCoreTM patented sauce filling
cold forming extrusion technology has attracted industry wide
interest for appetiser, hand-held and centre-of-plate applications.
Kerry's sweet ingredients division again benefited from the growth
in the nutritional and energy sectors. The NutriantTM division,
combining the Solnuts and Iowa Soy businesses, was successfully
launched and has made good progress through its range of
nutritional ingredients ranging from nut replacements, nutritional
additives, vegetarian products, specialist soy systems and organic
lines.
Kerry Canada continued to achieve good growth, particularly in
the speciality ingredients sector. In Mexico progress in snack and
convenience sectors was very encouraging. In Brazil, integration
of the Siber and Nutrir businesses acquired in 2001 is well advanced.
Good progress was achieved through sweet inclusions and flavours in
the ice-cream and dairy product sectors and through seasonings in
the meat industry. Market development in Peru and Equador is also
progressing well through export of added value products from Brazil.
Asia Pacific
Growth and development in Asia Pacific markets proved satisfactory
with sales increased by 9.9% to EUR70.9m and operating profits
increased by 13.4% to EUR4.4m.
Australia showed a good recovery with encouraging business
development across seasonings for meat and poultry applications
and Pinnacle branded bakery ingredients. Progress continued in the
quick-serve-restaurant sectors in Australia and New Zealand. Asian
markets remain difficult due to prevailing economic conditions in
major markets. However Kerry's core business performed well.
Market development opportunities in the Philippines, China, Vietnam
and Thailand continue to be progressed.
Development
___________
In the first half of 2002 the Group further progressed its
development strategy by adding a range of new technologies and
product offerings.
Reflecting the Group's focus on becoming the premier flavour
supplier dedicated to food and beverage markets, and its worldwide
service and flavour development capabilities, 'Mastertaste' - the
Group's new global flavour division, was launched at the Institute
of Food Technology (IFT) Annual Meeting and Expo in Anaheim,
California in June.
Mastertaste, now headquartered in Rosemont, Chicago, USA, with
flavour development facilities located in; New Jersey, Los Angeles,
Madison (WI), Greenville Missouri, Brentwood and Crossville
Tennessee, USA; Cam, UK; Turin and Druento, Italy; Rodgau, Germany;
and Sydney, Australia; brings together under a common identity,
focus and strategy the following flavour businesses acquired by Kerry,
Mastertaste (UK), the former Burns Philp flavours business (Australia),
San Giorgio Flavors (Italy), The Geneva Group (USA) and Hickory
Specialties Inc. (USA).
Mastertaste has realigned the constituent businesses within their
primary sweet and savoury sectors and the division is now focused
on further global expansion and technical development within these
sectors.
Since year-end 2001 the Group has also concluded the following
acquisitions at a total cost of EUR125m.
(a) Ingredients Businesses.
- Industrial Deshidratadora, S.A. de C.V. (IDSA)
In Mexico the acquisition of IDSA significantly expands the
Group's ingredients offering to convenience segments of the
food manufacturing, foodservice and retail sectors. IDSA is
the largest producer of convenience blends in Mexico and is
also a leading supplier of tomato powders. The acquired
business expands Kerry's product offering to include
spray-dried fruit preparations for instant beverages, dairy
applications, ready-to-eat cereals, cereal bars and mueslis.
In addition IDSA has also developed a strong retail branded
franchise, including Benedik Coffee and Lautrec coffee creamer.
Operating from two manufacturing facilities in San Juan del Rio
and Mexico City, the acquisition complements Kerry's business
from its existing Irapuato facilities.
- Ringger Foods
Ringger Foods (USA) is a leader in the development and manufacture
of speciality extruded food ingredients, which provide nutritional
fortification, texture and flavour, including rice crisps used in
granola, cereal and candy applications; cookie pieces for
confectionery, granola bars and cereals; and soy crisps containing
high protein soya. The acquired business operating from two
facilities located in Gridley, Illinois, extends Kerry's market
leadership in North American extruded ingredients markets,
complementing the Group's acquisition of SPI Foods Inc.,
acquired in 2001.
- Roskam Cereal & Agglomerates
In a further development of Kerry's sweet ingredients business in
the U.S. market, the Group also concluded the acquisition of the
Roskam cereal agglomerates business based in Grand Rapids, Michigan.
The business, which is being integrated with the Group's existing
sweet ingredients facilities in New Century, Kansas, broadens Kerry's
capabilities in cereal and snack growth sectors.
- Stearns & Lehman Inc.
The acquisition of Stearns & Lehman, a leading manufacturer of
coffeehouse chain, foodservice, and branded Italian-style
flavoured syrups, beverage flavourings and toppings for the
speciality coffee and beverage industries, was also concluded
since year-end. The acquired business, which is one of the
largest flavouring syrup manufacturers in the world and the leading
private label manufacturer of Italian-style syrups in the U.S.,
Canada, Europe and the Pacific Rim, operates from manufacturing
facilities in Mansfield, Ohio; Kent, Washington; and
Richmond (B.C.), Canada.
(b) Consumer Foods.
- Deli Products
In Ireland, the acquisition of Deli Products represents a
further development in terms of Kerry Foods' targeted
servicing of the snack and convenience requirements of the
fast-growing foodservice sector including sandwich bars and
the hot & cold serve-over counter trade.
- Northern Foods (Van Sales Service)
Kerry Foods Direct to Store - the leading distributor of
chilled snacks to independent retail and convenience stores in
the UK, further extended its market positioning through the
acquisition of the Pork Farms Bowyers van sales operation from
Northern Foods plc. Through this transaction Pork Farms will be
the exclusive brand for pastry and fried products to be
distributed through the enlarged van sales business. The
acquisition further strengthens Kerry Foods' branded leadership
in the UK sausage sector through the addition of the Porkinsons
brand and the use of the Bowyers brand under licence.
Finance
_______
Net cash flow from operating activities more than doubled to
EUR76.1m, notwithstanding the seasonal increase in working capital.
Group borrowings amounted to EUR897.6m compared to EUR658.6m at the
end of the first half of 2001 and EUR818.9m at year-end. Accordingly
the ratio of debt to EBITDA was similar to the year-end 2001 level
at a comfortable 2.5 times, while the level of debt expressed as a
percentage of market capitalisation stood at 32% compared to 28% at
the end of the first six months of 2001. Interest charges increased
to EUR26.7m compared to EUR22.0m for the same period last year,
with EBITDA to net interest covered 6.9 times (H1 2001: 6.8 times).
Financial Reporting Standard 19 - 'Deferred Tax' (FRS 19) is
applicable to the Group for the first time in the period under
review. FRS 19 requires deferred tax to be accounted for on a full
provision basis on all timing differences that have originated but
not reversed by the balance sheet date, except as otherwise required
by the standard. Accordingly, results for prior periods have been
restated in line with the new standard. In summary, the current
taxation charge in each of the three periods under review was
approximately 25% of normal trading profits. The FRS19 restatement
has had the effect of adding a further 5% charge against profits,
but has no cash impact.
As announced at year-end, the Board approved an integration and
rationalisation plan at a cost of EUR52m for businesses connected
with the 2001 acquisitions. This programme is well advanced at a
cost in the period of EUR25.5m, of which EUR13.6m relates to cash
spent - including redundancy and contract compensation, plant
closure and relocation expenses. The programme, which will be
substantially completed by year-end, will deliver significant
efficiencies with a positive impact on earnings.
The basic weighted average number of ordinary shares in issue
for the period was 185,184,512 (half year ended 30 June 2001:
172,426,880; year-ended 31 December 2001: 175,674,473).
The diluted weighted average number of ordinary shares in issue
for the period was 186,439,440 (half year ended 30 June 2001:
173,577,567; year-ended 31 December 2001: 176,870,079).
Dividend
________
The Board has declared an interim dividend of 3.65 cent per share,
an increase of 12.3% on the 2001 interim dividend of 3.25 cent
per share. The interim dividend will be paid on 29 November 2002
to shareholders on the record date 1 November 2002.
Current Trading and Outlook
___________________________
Building on the first half performance, the Group is confident of
a good outturn for the full year with overall performance in line
with market expectations and Group projections. Re-organisation
and integration of businesses connected with 2001 acquisitions
is progressing very well, with encouraging prospects for new
business development. Kerry's focus on sectoral growth opportunities
in prepared foods, snack and convenient products, culinary systems,
food and beverage flavours, nutritional products and foodservice
markets, combined with its broad technology, geographical and
customer base, augurs well for the sustained profitable growth
of the Group.
Kerry Group plc
Consolidated Profit and Loss Account
for the half year ended 30 June 2002
Half Half Half Half
Year Year Year Year Year
Ended Ended Ended Ended Ended
30 June 30 June 30 June 30 June 31 Dec.
2002 2002 2002 2001 2001
Unaudited Unaudited Unaudited Unaudited Audited
Pre Exceptional Total Restated Restated
Exceptional items
items
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Turnover
Continuing operations 1,799,838 - 1,799,838 1,339,670 3,002,781
_________ _________ _________ _________ _________
Operating profit -
continuing operations
Before goodwill
amortisation and
exceptional items 127,963 - 127,963 107,848 260,445
Goodwill amortisation 20,202 - 20,202 8,775 23,367
Exceptional
restructuring costs - 25,524 25,524 - 8,097
_______ ________ ______ ______ _______
Operating profit 107,761 (25,524) 82,237 99,073 228,981
Profit on sale of
businesses - 1,789 1,789 - 6,205
(Loss) / profit on
sale of fixed assets - (31) (31) 876 2,187
Interest payable and
similar charges 26,652 - 26,652 21,968 47,644
______ ________ _______ ______ _______
Profit before taxation 81,109 (23,766) 57,343 77,981 189,729
Taxation - current 19,965 (2,146) 17,819 19,229 47,204
- deferred 3,936 (1,730) 2,206 3,917 9,391
______ ________ _______ _______ ______
Profit after taxation
and attributable to
ordinary shareholders 57,208 (19,890) 37,318 54,835 133,134
Dividends 6,802 - 6,802 5,604 18,491
_______ ________ _______ _______ _______
Retained profit for
the period 50,406 (19,890) 30,516 49,231 114,643
======= ======== ======= ======= =======
Earnings per ordinary share (cent) - note 2
- basic before goodwill amortisation
and exceptional items 41.8 36.4 87.9
- basic after goodwill amortisation
and exceptional items 20.2 31.8 75.8
- fully diluted after goodwill
amortisation and exceptional items 20.0 31.6 75.3
Kerry Group plc
Consolidated Balance Sheet
as at 30 June 2002
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
Restated Restated
EUR'000 EUR'000 EUR'000
Fixed assets
Tangible assets 844,418 721,248 885,773
Intangible assets 690,074 345,319 685,941
_________ _________ _________
1,534,492 1,066,567 1,571,714
Current assets
Stocks 406,769 329,040 362,173
Debtors 570,101 402,764 515,063
Cash at bank and in hand 30,521 24,802 19,794
_________ _______ _______
1,007,391 756,606 897,030
Creditors: Amounts falling
due within one year (883,191) (740,354) (775,579)
_________ _________ _________
Net current assets 124,200 16,252 121,451
________ _________ _________
Total assets less current
liabilities 1,658,692 1,082,819 1,693,165
Creditors: Amounts falling
due after more than one year (815,102) (494,560) (857,674)
Provisions for liabilities
and charges (46,562) (33,665) (41,143)
_________ _________ _________
797,028 554,594 794,348
========= ========= =========
Capital and reserves
Called-up equity share capital 23,180 21,554 23,125
Capital conversion reserve fund 340 340 340
Share premium account 361,333 193,690 357,873
Profit and loss account 378,804 315,709 376,208
_______ _______ _______
763,657 531,293 757,546
Deferred income 33,371 23,301 36,802
_______ _______ _______
797,028 554,594 794,348
======= ======= =======
Kerry Group plc
Consolidated Cash Flow Statement
for the half year ended 30 June 2002
Half Year Half Year Year
Ended Ended Ended
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
Operating profit before
goodwill amortisation and
exceptional items 127,963 107,848 260,445
Depreciation (net) 45,040 34,699 70,438
Change in working capital (93,399) (114,321) (34,473)
Exchange translation adjustment (3,538) 2,115 453
________ ________ ________
Net cash inflow from
operating activities 76,066 30,341 296,863
Return on investments and
servicing of finance (25,438) (21,141) (45,732)
Taxation (15,941) (17,927) (44,298)
Capital expenditure
Purchase of tangible fixed assets (48,673) (49,446) (95,647)
Proceeds on the sale of fixed assets 69 3,135 5,641
Development grants received 264 - 993
Acquisitions and disposals
Purchase of subsidiary
undertakings (124,985) (70,264) (599,422)
Proceeds on the sale of businesses 34,034 - 22,049
Deferred creditors paid (2,754) (16) (30)
Exceptional restructuring costs (13,591) - (8,097)
Consideration adjustment on
previous acquisitions - - 475
Equity dividends paid (12,513) (10,570) (16,574)
________ ________ ________
Cash outflow before the use
of liquid resources and financing (133,462) (135,888) (483,779)
Financing
Issue of share capital 3,515 40 165,794
Increase in debt due within
one year 112,025 177,343 36,590
Increase / (decrease) in debt
due after one year 28,649 (44,688) 273,194
_______ _________ ________
Increase / (decrease) in cash
in the period 10,727 (3,193) (8,201)
======= ========= =========
Kerry Group plc
Reconciliation of Net Cash Flow to Movement in Net Debt
for the half year ended 30 June 2002
Half Year Half Year Year
Ended Ended Ended
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
Increase / (decrease) in cash
in the period 10,727 (3,193) (8,201)
Cash flow from debt financing (140,674) (132,655) (309,784)
_________ _________ _________
Change in net debt resulting
from cash flows (129,947) (135,848) (317,985)
Exchange translation adjustment 51,275 (44,386) (22,592)
_________ _________ _________
Movement in net debt in the period (78,672) (180,234) (340,577)
Net debt at beginning of period (818,924) (478,347) (478,347)
_________ _________ _________
Net debt at end of period (897,596) (658,581) (818,924)
========= ========= =========
Kerry Group plc
Statement of Total Recognised Gains and Losses
for the half year ended 30 June 2002
Half Year Half Year Year
Ended Ended Ended
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
Restated Restated
EUR'000 EUR'000 EUR'000
Profit attributable to
ordinary shareholders 37,318 54,835 133,134
Exchange translation adjustment
on foreign currency net investments (27,920) 1,604 (3,309)
________ _______ ________
Total recognised gains and losses
relating to the period 9,398 56,439 129,825
======= ========
Prior year adjustment - deferred tax (36,063)
________
Total gains and losses recognised
since last annual report (26,665)
=========
Kerry Group plc
Reconciliation of Movements in Share Capital and Reserves
for the half year ended 30 June 2002
Share Capital
Capital Conversion Profit &
and Reserve Loss
Premium Fund Account Total
Restated Restated
EUR'000 EUR'000 EUR'000 EUR'000
At beginning of period 380,998 340 412,271 793,609
Prior year adjustment
- deferred tax - - (36,063) (36,063)
_______ _________ ________ _______
Adjusted opening balance 380,998 340 376,208 757,546
Retained profit - - 30,516 30,516
Share issue 3,515 - - 3,515
Exchange translation
adjustment - - (27,920) (27,920)
________ ________ ________ ________
At end of period 384,513 340 378,804 763,657
======= ======== ======== ========
The Profit & Loss Account figures comprise the following:
Intangible Profit &
Assets Retained Loss
Written Off Profits Account
Restated Restated
EUR'000 EUR'000 EUR'000
At beginning of period (438,298) 850,569 412,271
Prior year adjustment
-deferred tax - (36,063) (36,063)
_________ _________ ________
Adjusted opening balance (438,298) 814,506 376,208
Retained profit (20,202) 50,718 30,516
Exchange translation
adjustment - (27,920) (27,920)
_________ ________ ________
At end of period (458,500) 837,304 378,804
========= ======== ========
The exchange translation adjustment arises on the retranslation of
the Group's opening net investment in its overseas subsidiaries.
Kerry Group plc
Notes to the Interim Report
for the half year ended 30 June 2002
1. Analysis of results by region
_____________________________
Half Year Ended Half Year Ended Year Ended
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
Operating Operating Operating
Turnover Profit Turnover Profit Turnover Profit
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
By geographical market of origin:
Ireland 627,115 26,887 318,525 18,870 883,267 45,075
Rest of Europe 628,318 43,900 568,500 40,396 1,183,774 98,524
Americas 473,514 52,769 388,127 44,697 801,728 105,324
Asia Pacific 70,891 4,407 64,518 3,885 134,012 11,522
_________ _______ __________ _______ _________ _______
1,799,838 127,963 1,339,670 107,848 3,002,781 260,445
Goodwill
amortisation - (20,202) - (8,775) - (23,367)
Exceptional
restructuring
costs - (25,524) - - - (8,097)
_________ _______ _________ _______ _________ _______
1,799,838 82,237 1,339,670 99,073 3,002,781 228,981
========= ======= ========= ======= ========= =======
Turnover Turnover Turnover
EUR'000 EUR'000 EUR'000
By destination:
Ireland 322,400 221,655 520,707
Rest of Europe 868,939 634,665 1,422,996
Americas 503,961 402,924 873,436
Asia Pacific 104,538 80,426 185,642
_________ _________ _________
1,799,838 1,339,670 3,002,781
========= ========= =========
Turnover and operating profit as presented above, are stated net of
intra Group transactions.
2. Earnings per share
__________________
Half Year Half Year Year
Ended Ended Ended
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
Restated Restated
EPS EPS EPS
cent EUR'000 cent EUR'000 cent EUR'000
Adjusted earnings
before FRS19 * 43.9 81,346 38.7 66,651 94.6 166,260
Deferred tax
- FRS19 2.1 3,936 2.3 3,917 6.7 11,789
____ ______ ____ ______ ____ ______
Adjusted earnings ** 41.8 77,410 36.4 62,734 87.9 154,471
Goodwill amortisation 10.9 20,202 5.1 8,775 13.3 23,367
Exceptional items
- (net of tax) 10.7 19,890 (0.5) (876) (1.2) (2,030)
____ ______ _____ ______ _____ _______
Profit after tax,
goodwill amortisation
and exceptional items 20.2 37,318 31.8 54,835 75.8 133,134
Share option dilution 0.2 - 0.2 - 0.5 -
____ ______ ____ ______ ____ _______
20.0 37,318 31.6 54,835 75.3 133,134
==== ====== ==== ====== ==== =======
The basic weighted average number of ordinary shares in issue for the
period was 185,184,512 (half year ended 30 June 2001:172,426,880; year
ended 31 December 2001: 175,674,473). The diluted weighted average number
of ordinary shares in issue for the period was 186,439,440 (half year
ended 30 June 2001: 173,577,567; year ended 31 December 2001: 176,870,079).
The dilution arises in respect of executive share options outstanding.
In addition to the basic and diluted earnings per share two additional
earnings per share calculations are provided as they more accurately
reflect the Group's underlying trading performance. These are described
below:
** Adjusted earnings per share is calculated as profit after tax, before
goodwill amortisation and exceptional items divided by the weighted average
number of ordinary shares.
* Adjusted earnings per share before FRS19 is adjusted earnings as defined
above before the adoption of FRS19 (i.e. as previously reported). This
measure is given to show the impact of adopting the new deferred tax
standard.
3. Exceptional items
_________________
Half Year Half Year Year
Ended Ended Ended
30 June 2002 30 June 2001 31 Dec. 2001
Unaudited Unaudited Audited
Restated
EUR'000 EUR'000 EUR'000
Exceptional restructuring costs (25,524) - (8,097)
Profit on sale of businesses 1,789 - 6,205
(Loss) / profit on sale of
fixed assets (31) 876 2,187
________ _____ ______
(23,766) 876 295
Taxation effect of exceptional
items: - current 2,146 - 275
- deferred 1,730 - 1,460
________ _____ _______
(19,890) 876 2,030
======== ===== =======
The exceptional restructuring costs relate to the integration of the Golden
Vale Group and the other acquisitions completed by the Group during 2001.
These costs can be analysed as follows:
EUR'000
Redundancies and
contract compensation 14,452
Plant closure / relocation
expenses 3,999
Plant and other assets written off 5,901
Other 1,172
______
25,524
======
During the six months ended 30 June 2002 the Group disposed of a number
of businesses in Ireland and the UK. These included the Bailieboro and
Artigarvan milk processing businesses, which were acquired in 2001 as
part of the Golden Vale Group, and the UK Fried Products business based
in Poole, UK.
4. Businesses acquired
___________________
The Group completed a number of acquisitions during the period at a
total cost of EUR125m.
The acquisition of Industrial Deshidratadora S.A. de C.V. (IDSA),
which is based in Mexico, was completed in May 2002. The company
employs in excess of 250 people and is Mexico's largest producer
of convenience blends with a product range including tomato powders,
spray-dried fruit preparations for instant beverages and dairy
applications.
Ringger Foods, a speciality extruded ingredients manufacturer
operating from two facilities in Gridley, Illinois was acquired
in February 2002. Its principal market is the US and its product
range includes rice crisps, cookie pieces and soy crisps.
Acquired in April 2002, Roskam, a cereal and agglomerates business
based in Grand Rapids, Michigan and employing in excess of 80 people,
broadens Kerry's capabilities in cereal and snack growth sectors.
Stearns & Lehman Inc., a speciality ingredients company with
manufacturing facilities in the US and Canada was acquired in March
2002. The company produces and markets more than 140 syrups, dressings,
specialty sugars and toppings and is the leading private label
manufacturer of Italian-style syrups in the US, Canada, Europe and
the Pacific Rim.
Deli Products, a manufacturer and distributor of chilled convenience
'food-to-go' was acquired in January 2002. Based in Dublin, the
business services the fast-growing foodservice sector.
Northern Foods Van Sales business, which was acquired in March 2002,
further strengthens Kerry Foods' branded leadership in the UK
convenient foods sector.
5. Accounting policies
___________________
These accounts have been prepared using the same accounting policies
detailed in the 2001 annual financial statements with the exception
of Financial Reporting Standard 19 - 'Deferred Tax' (FRS19) which
is applicable to the Group for the first time in the half year ended
30 June 2002 (see note 6). In adopting FRS19 the Group has chosen to
discount deferred tax assets and liabilities.
6. Deferred tax
____________
These accounts reflect the adoption of FRS19 which requires deferred
tax to be accounted for on a full provision basis on all timing
differences that have originated but not reversed by the balance
sheet date, except as otherwise required by the standard.
Prior year results have been restated in line with the new standard
and the effect on the Group is as follows: Profit after tax for the
periods ended 30 June 2001 and 31 December 2001 decreased by EUR3.9m
to EUR54.8m and EUR10.3m to EUR133.1m respectively. Net assets for
the same periods decreased by EUR30.8m to EUR554.6m and EUR36.1m to
EUR794.3m.
The restated deferred tax charge in the Profit and Loss Account for
the year ended 31 December 2001 is comprised as follows:
Year
Ended
31 Dec. 2001
Audited
Restated
EUR'000 EUR'000
As previously reported (938)
Prior year adjustment FRS19:
- on ordinary activities 11,789
- on exceptional items (1,460) 10,329
_______ ______
9,391
======
7. Interim accounts
________________
These accounts are not full accounts and except where indicated
are unaudited. Full accounts to 31 December 2001, which received
an unqualified audit report, have been filed with the Registrar
of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
KBEBBQ
Latest directors dealings
- 2 days ago IntegraFin Holding
- 2 days ago Spirent Communications
- 2 days ago CRH (CDI)
- 2 days ago Bezant Resources
- 2 days ago EJF Investments Ltd NPV