Final Results

Greencore Group PLC 22 November 2005 PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 Greencore, a major manufacturer of convenience foods and ingredients, announces a strong performance during the year ended 30 September 2005 FINANCIAL HIGHLIGHTS - Profit before tax* up 6.4% to €77.7m - Headline EPS* up 4.3% to 33.8 cent - Like-for-like sales growth of 7.5% in Convenience Foods - Like-for-like operating profit growth of 16.4% in Convenience Foods - Net interest down 6.5% to €30.4m - Exceptional charges - €65.4m for the fundamental restructuring of Greencore Sugar; €40.0m provision for Pizza disposal - Net debt at €398m, with a strong underlying trajectory of debt reduction * before exceptional items and amortisation BUSINESS HIGHLIGHTS - High levels of product innovation and close customer relationships delivered strong like-for-like sales growth in Convenience Foods - Aggressive pursuit of 'Total Lowest Cost' contributed to healthy margin performance in Convenience Foods - Further broadening of channel exposure; a third of Convenience Foods sales now made in 'alternative channels' - acquisition of Oldfields' sandwich business allows for further growth in these channels - Disposal of UK Pizza will remove a loss making business from Convenience Foods - Successful consolidation of sugar processing operations into a single plant at Mallow positioned the Group to respond to impending EU sugar reform - Strong operational performance and cash generation achieved by Ingredients and Agribusiness division in a difficult and uncertain environment - Favourable consumer trends position Convenience Foods for further growth in 2006 and beyond Commenting on the results, Greencore Group Chief Executive David Dilger said: 'These results demonstrate solid underlying performance. We have taken hard decisions in 2005 and this coming year may well require further decisions, particularly given impending EU sugar regime reform. 'We are especially pleased with progress in Convenience Foods, where we now have high performing businesses right across the range of our operations, and believe that the extensive restructuring required since our acquisition of Hazlewood is now complete. This division has the strategic and operational model to succeed in the convenience food market and I am confident that we will make further progress in the coming year.' Tuesday, 22 November 2005 For further information, please contact: David Dilger, Chief Executive Tel: +353 1 605 1045 Patrick Coveney, Chief Financial Officer Tel: +353 1 605 1018 Billy Murphy/Joe Carmody, Drury Communications Tel: +353 1 260 5000 Mark Garraway/Anthony Parker, College Hill Tel: +44 20 7457 2020 Brian Rafferty/David Leeney, Taylor Rafferty Tel: +1 212 889 4350 SUMMARY Greencore made significant progress in 2005. Profits before tax, amortisation and exceptionals grew by 6.4% and headline earnings per share grew by 4.3%. In addition, both divisions delivered significant change and are now better positioned to capitalise on changing market circumstances. The Convenience Foods division has performed strongly, with like-for-like profits up 16.4% to €67.7m. The Group competes in attractive categories, and the strategy of aggressive product innovation, broadening channel exposure and commitment to 'Total Lowest Cost' has driven like-for-like sales growth of 7.5% and sustained healthy margin performance. This represents excellent progress, with the division now accounting for 62% of Group continuing operating profit, up from 56% in 2004. The Ingredients and Agribusiness division faced a particularly challenging market environment in 2005. The uncertainty surrounding EU sugar regime and significant over-capacity in EU malt markets led to a reduction in divisional operating profits of 11.2% to €41.4m. However, the division continues to achieve excellent operational performance and generates significant cash for Greencore. The Group's associate businesses performed solidly this year, with the share of profits (net of interest) up 5.2% to €4.1m. The Group incurred exceptional charges totalling €103.6m (net of tax) in this period. The largest component (€65.4m) relates to the cost of restructuring Greencore Sugar and consolidating the full processing operation at Mallow - a critical project which generates significant annual savings, positions the Group in the top-quartile of European sugar processors and gives the Group the operational strength to respond to the impending EU sugar regime reform. This project was delivered with little disruption to Greencore Sugar's processing business. The Group also took a charge of €40.0m to provide for costs associated with disposing of the loss-making Pizza business in the UK in October 2005, thereby removing a business that had been a drag on the performance of Convenience Foods. Once again, the Group demonstrated its strong cash generative characteristics. Net debt at the end of September 2005 was €398m, €11m above the level of September 2004. However, this increase was driven by approximately €50m of one-off items associated principally with the Sugar restructuring and the acquisition of the Oldfields' sandwich business. The underlying trajectory of debt reduction remains firmly in place. DIVIDEND A final dividend of 7.58c is recommended by the directors. If approved by shareholders, this will make a total for the year of 12.63c, which is in line with last year's level. Shareholders will be offered the option of receiving dividends in the form of cash or shares. STRATEGY Greencore's value creation strategy is centred on the twin pillars of business development and cash generation. Central to this strategy is the Convenience Foods division, which now accounts for almost two thirds of the Group's operating profits and which continues to grow strongly. Development at that division is shaped by careful selection of the markets in which to compete: - markets where we can achieve a leading or number two position - markets where ownership is concentrated and demand is broadly in balance with supply - markets with higher than average growth rates - markets that generate higher than average profitability for its customers In addition, the Group applies consistent parameters on how to compete in each of these markets. Each business: - relentlessly pursues the 'Total Lowest Cost' agenda - the Group aspires to THE lowest cost position - constantly renews its product range to ensure best value for customers - broadens the range of channels it serves so as to bring increased diversity to its customer base - seeks out new premium positions to capture emerging consumer tastes - continuously invests in the scale and quality of its asset base - behaves as a 'true owner', rather than simply an operational or commercial manager The success of the Convenience Foods division in 2005 is a testament to this approach. The Group remains confident about the prospects for market growth, underpinned by a continuation of the demographic factors that have driven the increased demand for quality convenience food in the last decade. Furthermore, Greencore is well positioned to capitalise on the continuing shift of brand equity in the food industry, from manufacturers to retailers. Whilst the Ingredients and Agribusiness division is no longer the mainstay of the Group, it remains a significant cash generator. Greencore is the No.1 sugar producer in Ireland, the No.1 malt company in each of Ireland, the UK and Belgium, and the No.1 agri-chemicals and molasses distributor in Ireland. In anticipation of reform of the EU's sugar regime, Greencore has restructured its sugar processing capacity into one plant. This has not only delivered significant economic benefits, moving the division into the top quartile of European processors in terms of processing efficiency, but has also given Greencore valuable leverage in determining the optimum strategy to compete in a post EU sugar regime reform environment. OPERATIONAL REVIEW - CONVENIENCE FOODS DIVISION 2005 2004 Like-for-Like €m €m Change** Turnover (Continuing Operations) 846.4 796.7 +7.5% Operating Profit (Continuing Operations)* 67.7 58.9 +16.4% * before goodwill amortisation and exceptional items ** like-for-like sales and profit calculations (a) use constant exchange rates for comparisons (the impact of which was modest in the year under review), and (b) exclude discontinued operations The Convenience Foods division delivered strong revenue and margin growth in 2005. The results reflect careful choices on where to compete and strong capability to execute across the businesses. 1. Well-Chosen Categories The markets and segments where the Group competes offer attractive opportunities. While the chilled convenience food market remains attractive in aggregate, with double-digit annual growth through the last decade and 4% growth last year, the key to success lies increasingly in the specific market, segment and format choices that the Group has made. For example, in Chilled Sauces, where Greencore leads the industry with a 44% market share, the market grew at 10%. In Cakes, where the overall market grew at 5%, the Christmas cake segment had growth of 12%. Greencore leads this segment with 28% of the market and grew its business by 38% in 2005. 2. A Commitment to Being THE Lowest Cost Competitor Greencore is committed to delivering 'Total Lowest Cost' (TLC). The aim is not simply to be a 'low cost competitor' - it is to be 'THE lowest cost competitor'. This is as much about culture and leadership as it is about process and efficiency. In 2005, a significant portion of operating profits can be directly attributed to the delivery of the TLC agenda. Furthermore, the Group is finding that the substantial 'de-layering' and simplification that TLC requires has improved quality standards and broader business performance. 3. Aggressive Innovation, Especially in the Areas of Premium and Health Innovation is the life-blood of this business. In many categories, an annual product churn of more than 50% is required to deliver category excitement to customers and to sustain margins. Examples of successful product churn include a reconfigured range of chilled soups which grew that business by 16%, the re- launch of Italian premium ready meals and the award-winning 'Christmas Cake in a Tin' - a premium range that drove significant growth. Health sits at the core of the division's innovation agenda. For instance, as part of the move to healthier foods, Greencore has led the industry in removing undesirable trans-fats from quiche. Such developments bring mainstream lines into the healthier food sector and, in some areas, have resulted in specialist 'healthy' ranges beginning to contract. An area of specific opportunity is weight control, where WeightWatchers is the leading brand. This summer, the Group launched chilled meals under the WeightWatchers brand. Now stocked by almost all major multiples, the range is already a €15m+ brand with considerable further growth potential. More broadly, the division has further exploited the use of licensed brands to seek out premium (and higher margin) consumer occasions across all categories. For example, the use of licensed 'characters' such as Wallace and Gromit and King Kong has enabled the Cake's business to not only grow its novelty cake position by more than 20%, but also to leverage the newly installed automatic cake line to drive a step-change in efficiency. 4. Balanced Channel Exposure While the Group has continued to strengthen its ties with the major UK retailers, considerable emphasis is now being placed on the development of alternative channels, which account for approximately one third of divisional sales, and where, in many cases, strong growth is evident. For example, in Sandwiches, overall market growth was only 3%, but growth in the 'convenience format' ran at 8%, driven, in large part, by Greencore's own growth in this format of 17%. A strong and growing presence in convenience channels is a core objective of Greencore Sandwiches. In August, the Group acquired Oldfields, an award-winning producer of premium sandwiches and paninis focused on the coffee bar sector. This business will add more than 20% to Group sandwich sales and will provide immediate additional capacity to facilitate further growth. 5. A Decentralised Model that Bestows 'True Ownership' to the Businesses Greencore businesses 'own' their P&L - that is the 'Greencore way'. Ownership requires that businesses respond quickly to market opportunities. For example, the Grocery business moved quickly to 'contract supply' a major food manufacturer following a fire at their premises earlier this year. The ability to behave as 'owners' and rapidly capture commercial opportunities drives significant performance across the businesses. 6. Robust Financial Discipline Rigorous disciplines on fixed and working capital investments are a core feature of how Greencore operates. This year, divisional capital expenditure accounted for 112% of depreciation. This expenditure drove both efficiency improvement projects, such as further automation of the sandwich and chocolate cake lines, and investment into new product and market sectors, such as portioned cake and a new range of ethnic sauces. Where necessary, the Group has exited from under-performing businesses. In October 2005, the UK pizza business was sold to management. The decision to exit this category was not taken lightly. Notwithstanding operational improvements over the past 12 months, the level of operating losses made disposal essential. An exceptional charge of €40m (net of tax), relating primarily to a provision for the write-down of asset values, is reflected in the results. These features drive the strong economic performance of the division. However, in 2005, the Group also dealt with some exacting challenges. Food safety and healthy eating concerns: The Sudan 1 and Para Red incidents were a wake-up call to the food industry and revealed how quickly consumer confidence can be damaged. The consumer impact of these scares, allied to the media's sustained healthy eating campaign, has played a major role in reducing the growth of the ready meals market from 10% to 2%.While Greencore's position in the ready meal market remained strong, growth fell to 6% in 2005. Managing input costs, particularly energy: While every effort was made to improve energy efficiency, the dramatic rise in oil and gas prices increased overall energy costs in the division by approximately €3m. Overall pricing environment (especially with large multiple customers): Retail price deflation has become the norm. In this environment, robust market positions, reliable technical performance and strong customer service are not enough. The ability to consistently bring excitement to the category, while simultaneously taking cost out of the system, is also essential. Embedding these capabilities has enabled Greencore to sustain operating margins in this pricing environment. Managing these issues going forward will be an important driver of Group performance in 2006 and beyond. OPERATIONAL REVIEW - INGREDIENTS AND AGRIBUSINESS DIVISION 2005 2004 Like-for-Like €m €m Change** Turnover (Continuing Operations) 492.5 526.4 -6.2% Operating Profit* 41.4 46.6 -11.2% * before goodwill amortisation and exceptional items ** like-for-like sales and profit calculations (a) use constant exchange rates for comparisons (the impact of which was modest in the year under review), and (b) exclude discontinued operations The Ingredients and Agribusiness division had a difficult year, characterised by uncertainty and oversupply in the European sugar market, and by the malt industry moving towards a low point in its cycle. Despite some very significant operational achievements within the division, these marketplace conditions contributed to an 11.2% fall in operating profits to €41.4m. However, the division remained a strong cash generator for the Group. 1. Strong Performance in an Uncertain Sugar Environment In the interim results' statement in May, the Group outlined the rationale behind the decision to consolidate sugar processing at Mallow and to close the Carlow factory. Executing this strategy was a major undertaking, requiring the Group to reconfigure the Mallow facility in a very short time frame so it could process the entire Irish sugar quota. The Group is pleased that this project has been achieved with little disruption to the business, and is already delivering most of the economic benefits in terms of processing efficiency and reduced overheads that the Group had anticipated. This consolidation has moved Greencore Sugar to the top quartile of European processors in terms of processing efficiency. Furthermore, the new operational footprint gives Greencore leverage in assessing how best to respond in a post EU sugar regime reform environment. The Group took an exceptional charge (net of tax) of €65.4m to cater for this restructuring. However, while the anticipated efficiency and cost benefits have come through, the uncertainty surrounding the future of the EU sugar regime significantly impacted the trading environment in 2005: - Doubts over the future of processing in Ireland have led many of Greencore Sugar's major customers to establish secondary lines of supply with other European processors. - The EU Commission's decision not to declassify in September 2004 led to significant oversupply across the marketplace. - Consumer concerns with health and obesity have led to reduced demand for confectionary and soft drinks, two of Greencore Sugar's core market segments. These factors reduced sales and pricing levels in 2005. 2. A Retrenchment in Malt Reflecting Overcapacity and Price Pressure in Europe International malt prices are approaching a low point in the cycle, driven, in large part, by over-capacity in the industry. The pricing impact, along with significant increases in input costs and, in particular, energy increases of more than 30%, had a negative impact on the profitability of the Group's malt business. Greencore Malt has responded by closing three of its smaller less efficient maltings - Ipswich, Carnoustie and Banagher. Other maltsters are now starting to follow but the required rebalancing of industry capacity will not happen overnight. Greencore Malt's initiatives in the UK and Ireland, allied to strong operational performance, leave the Group well-positioned to benefit from an upturn in the malt cycle. The economic performance of the other agribusinesses was broadly similar to that achieved in 2004. ASSOCIATES The share of the profits from associates, net of interest, increased by 5.2% to €4.1m. Odlums, the largest of Greencore's associates, enjoyed record sales in 2005. Sales of oatmeal increased by almost 30%, driven by excellent performance from the market leading McCann's brand in the US and by widespread publicity about the benefits of increased consumption of wholegrains for human health. Exports now account for over 60% of our oatmeal business. FINANCIAL REVIEW Net debt at 30 September 2005 was €398m, a reduction of €19m from the March 2005 figure, but €11m higher than at September 2004. However, this year-end debt level reflects approximately €50m of one-off items, principally comprising the cash costs associated with the fundamental restructuring of Greencore Sugar and the acquisition of Oldfields. The underlying trajectory of debt reduction remains strong. Net interest fell by €2.1m (6.5%) to €30.4m, reflecting an interest margin reduction achieved in the June refinancing and improved LIBOR/EURIBOR movements. The Group incurred exceptional charges (net of tax) of €103.6m in 2005. This figure comprises three separate items: - Costs associated with the fundamental restructuring of Greencore Sugar - net charge of €65.4m (a gross charge of €71.6m, less a tax credit of €6.2m). - Costs associated with providing for the sale of Pizza - net charge of €40.0m (a gross charge of €51.2m, less a tax credit of €11.2m). - Net gain of €1.8m on the disposal of Feldhues. Capital expenditure of €57.4m was incurred in the period, driven, in large part, by the capital expenditure required to deliver the fundamental restructuring at Greencore Sugar. Capital expenditure excluding the fundamental restructuring of Greencore Sugar was €40.0m. The depreciation charge for the year was €41.2m. The tax charge on ordinary activities of €10.9m equates to an effective tax rate of 14%. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) IFRS will apply to the Group's financial statements in 2006. Interim results for the first half of 2006 will be presented in accordance with IFRS, which will include the restatement of the 2005 half and full year primary financial statements as comparatives. OUTLOOK Greencore expects to hear, within a matter of days, the conclusions of the EU's review of the sugar regime. The Group will then carefully evaluate the competitive consequences for Ireland's sugar growing and sugar processing sectors prior to determining the best possible route forward for the industry and its key stakeholders. The consolidation of Greencore Sugar's processing in Mallow and its continued strong operational performance provides the Group with a highly competitive manufacturing cost base. This, together with access to a competitive and sustainable supply of sugar beet will be an essential precondition for profitability and, ultimately, for the very survival of Greencore Sugar in any new sugar regime. In the Malt business, having taken out significant capacity and with other players now following suit, Greencore is better positioned than most to manage through what is expected to be a challenging year. The Convenience Foods division is well positioned to deliver further sales and profit growth in the coming year. The division has a strategy, a capability to execute and a culture that has enabled it to sustain strong market positions and deliver value growth to its shareholders. In addition, the disposal of UK Pizza has removed a drag on business performance. The Convenience Foods division, which already accounts for almost two thirds of Group sales and profits, will become even more important to Greencore going forward. The board of directors is confident that the division has the strategic and operational model required to succeed in the convenience food market and anticipates further progress in 2006 and beyond. CONSOLIDATED PROFIT AND LOSS ACCOUNT Year ended 30 September 2005 2005 2004 Notes Before Exceptional Total Total exceptional items and (Restated items and amortisation Note 1) amortisation €'000 €'000 €'000 €'000 Turnover Continuing operations 1 1,338,865 - 1,338,865 1,323,112 Discontinued operations 1 76,095 - 76,095 123,379 _________ _________ _________ _________ 1,414,960 - 1,414,960 1,446,491 _________ _________ _________ _________ Operating profit before goodwill amortisation Continuing operations 1 109,102 - 109,102 105,586 Discontinued operations 1 (5,064) - (5,064) (5,695) _________ _________ _________ _________ 104,038 - 104,038 99,891 _________ _________ _________ _________ Goodwill amortisation - (20,718) (20,718) (20,994) Operating profit Continuing operations 109,102 (20,718) 88,384 85,024 Discontinued operations (5,064) - (5,064) (6,127) _________ _________ _________ _________ 104,038 (20,718) 83,320 78,897 Share of operating profit of associated 4,446 - 4,446 6,016 undertakings _________ _________ _________ _________ 108,484 (20,718) 87,766 84,913 _________ _________ _________ _________ Exceptional items 2 Fundamental reorganisation of Greencore Sugar - (71,627) (71,627) - Provision for loss on termination of operations - (51,171) (51,171) - Disposal of interest in subsidiaries and associate - 1,909 1,909 (51,957) _________ _________ _________ _________ - (120,889) (120,889) (51,957) _________ _________ _________ _________ Profit/(loss) on ordinary activities before interest and taxation 108,484 (141,607) (33,123) 32,956 Net interest payable (30,412) - (30,412) (32,540) Amortisation of issue costs of finance facility - - - (5,909) Share of interest payable - associates (386) - (386) (384) _________ _________ _________ _________ Profit/(loss) on ordinary activities before taxation 77,686 (141,607) (63,921) (5,877) Taxation (10,875) 17,273 6,398 (9,383) _________ _________ _________ _________ Profit/(loss) on ordinary activities after taxation 66,811 (124,334) (57,523) (15,260) Minority interests (1,540) - (1,540) (1,598) _________ _________ _________ _________ Profit/(loss) attributable to Group shareholders 65,271 (124,334) (59,063) (16,858) Dividends 3 (24,657) - (24,657) (24,204) _________ _________ _________ _________ Retained profit/(loss) 40,614 (124,334) (83,720) (41,062) ======== ======== ======== ======== Adjusted earnings per ordinary share 4 33.8c 32.4c Basic loss per ordinary share 4 (30.5c) (8.9c) Diluted loss per ordinary share 4 (30.3c) (8.8c) CONSOLIDATED BALANCE SHEET 30 September 2005 2005 2004 €'000 €'000 Fixed assets Intangible assets 330,563 336,865 Tangible assets 487,492 541,786 Financial assets 10,614 12,409 _________ _________ 828,669 891,060 _________ _________ Current assets Stocks 133,556 141,279 Debtors 135,495 130,771 Cash and bank balances 74,102 86,278 _________ _________ 343,153 358,328 _________ _________ Creditors Amounts falling due within one year - Bank debt 325 363 - Other 412,328 410,579 _________ _________ 412,653 410,942 Net current liabilities (69,500) (52,614) _________ _________ Total assets less current liabilities 759,169 838,446 _________ _________ Creditors Amounts falling due after more than one year - Bank debt 471,698 473,305 - Other 17,588 19,861 Provisions for liabilities and charges 46,177 46,142 Development grants 1,452 1,634 _________ _________ 536,915 540,942 _________ _________ Net assets 222,254 297,504 ======== ======== Capital and reserves Called up share capital 125,116 123,647 Capital conversion reserve fund 934 934 Share premium account 97,489 92,459 Profit and loss account / other reserves (5,667) 75,945 _________ _________ Shareholders' funds - equity interests 217,872 292,985 Minority interests - equity interests 4,382 4,519 _________ _________ 222,254 297,504 ======== ======== CONSOLIDATED CASH FLOW STATEMENT Year ended 30 September 2005 2005 2004 €'000 €'000 Operating activities Operating profit 83,320 78,897 Non cash items - Depreciation 41,197 43,435 - Amortisation 20,112 20,043 Changes in working capital (21,886) (7,638) Other movements (7,906) (8,526) _________ _________ Cash flow from operating activities 114,837 126,211 Dividends from associates 3,385 7,254 Returns on investments and servicing of finance (32,460) (41,490) Disposal of investments 2,626 - Rationalisation costs at Greencore Sugar (15,598) - Taxation (2,268) 2,670 Purchase of tangible fixed assets (57,393) (52,216) Disposal of tangible fixed assets 2,885 903 Acquisition of subsidiary (17,371) - Disposal of subsidiary and associated undertakings 9,158 22,413 Equity dividends paid (18,444) (18,572) _________ _________ Cashflow before financing (10,643) 47,173 Increase in share capital 727 1,341 Translation differences (615) (5,855) _________ _________ Movement in net debt in year (10,531) 42,659 Net debt at start of year (387,390) (430,049) _________ _________ Net debt at end of year (397,921) (387,390) ======== ======== STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Year ended 30 September 2005 2005 2004 €'000 €'000 Loss for period attributable to Group shareholders (59,063) (16,858) Exchange adjustments 1,033 (6,229) _________ _________ Total recognised losses for the year (58,030) (23,087) ======== ======== NOTES TO THE FINANCIAL STATEMENTS Year ended 30 September 2005 1. Analysis of Results 2005 2004 (restated) Turnover Operating Operating Turnover Operating Operating profit profit profit profit Pre goodwill Post goodwill Pre goodwill Post goodwill €'000 €'000 €'000 €'000 €'000 €'000 By Activity Continuing operations Convenience Foods 846,377 67,719 47,083 796,692 58,941 38,400 Ingredients and Agribusiness 492,488 41,383 41,301 526,420 46,645 46,624 _________ _________ _________ _________ _________ _________ 1,338,865 109,102 88,384 1,323,112 105,586 85,024 _________ _________ _________ _________ _________ _________ Discontinued operations Convenience Foods 76,095 (5,064) (5,064) 122,233 (5,695) (6,127) Ingredients and Agribusiness - - - 1,146 - - ________ _________ _________ _________ _________ _________ 76,095 (5,064) (5,064) 123,379 (5,695) (6,127) ________ _________ _________ _________ _________ _________ Total - subsidiaries 1,414,960 104,038 83,320 1,446,491 99,891 78,897 ======== _________ _________ ======== _________ _________ Associated undertakings Continuing operations 43,189 4,446 4,446 43,305 4,244 4,244 Discontinued operations - - - 41,354 1,772 1,772 ________ _______ _______ _______ _______ _______ Total - associates 43,189 4,446 4,446 84,659 6,016 6,016 ======== _______ _______ ======== _______ _______ Total 108,484 87,766 105,907 84,913 ======== ======== ======== ======== By Geographical Market Results by origin Continuing operations UK and rest of world 976,318 78,585 57,924 978,987 72,855 52,314 Republic of Ireland 362,547 30,517 30,460 344,125 32,731 32,710 _________ _______ _______ _________ _________ _________ 1,338,865 109,102 88,384 1,323,112 105,586 85,024 _________ _______ _______ _________ _________ _________ Discontinued operations UK and rest of world 76,095 (5,064) (5,064) 122,233 (5,695) (6,127) Republic of Ireland - - - 1,146 - - ________ _______ _________ _________ _________ _________ 76,095 (5,064) (5,064) 123,379 (5,695) (6,127) ________ _______ _________ _________ _________ _________ Total 1,414,960 104,038 83,320 1,446,491 99,891 78,897 ======== ======== ======== ======== ======== ======== Turnover by destination Continuing operations UK and rest of world 1,014,679 991,037 Republic of Ireland 324,186 332,075 ________ ________ 1,338,865 1,323,112 ________ ________ Discontinued operations UK and rest of world 76,095 122,233 Republic of Ireland - 1,146 ________ ________ 76,095 123,379 ________ ________ Total 1,414,960 1,446,491 ========= ========= The comparative amounts have been restated to reflect discontinued activities. The year 2005 comprised 53 weeks (2004: 52 weeks). 2. Exceptional items Following a strategic review of Greencore Sugar in anticipation of pending reform of the EU sugar regime and the increasingly competitive nature of its markets, a decision was made in January 2005 to consolidate all sugar manufacturing at Mallow and to close the Carlow facility. The costs associated with the fundamental restructuring of the business are shown as an exceptional item. In early October 2005, the Group also disposed of it's UK pizza business for a nominal consideration. Notwithstanding operational improvements over the past twelve months, this business consistently failed to deliver the performance or returns that the Group demanded. The exceptional item includes a provision to write down all of the assets related to the pizza business to their recoverable amounts and to cover all costs directly related to the decision to sell the pizza business. In August 2005 a small non-core, deli-style, meat business with operations in Ireland and Germany was sold, resulting in a profit of €1.8m. The exceptional loss in the prior year represents an aggregate loss on the disposal of the Group's former subsidiary, Rathbones Bakeries Limited, and former associate, James Budget Sugars Limited. A net loss of €13.76m was recorded on the write off of the excess of book value of assets over disposal proceeds. In addition, goodwill of €38.2m, previously written off to reserves, was reinstated and written off through the profit and loss account, giving rise to a total loss of €51.96m. A net tax credit of €17.3m (2004: credit of €0.54m) was recorded on the exceptional items. 3. Dividends The proposed final dividend per share of 7.58c (2004: 7.58c) is payable on 5 April 2006 to shareholders on the Register of Members, at 2 December 2005.An interim dividend of 5.05c (2004: 5.05c) was paid on 4 October 2005. 4. Earnings Per Share The calculation of adjusted earnings per share is after the elimination of the exceptional loss of €103.6m (after tax relief: €17.3m) and goodwill amortisation of €20.72m (tax relief: nil). The calculation of adjusted earnings per share in 2004 is after the elimination of the exceptional loss of €51.42m (after tax relief: €0.54m), goodwill amortisation of €20.99m (tax relief: nil) and amortisation of acquisition finance facility costs of €5.91m (tax relief: nil). The calculation of basic earnings per share is based on a loss of €59.06m (2004: loss of €16.86m). Both the calculation of adjusted earnings per share and basic earnings per share are based on 193.35m ordinary shares (2004: 189.97m), being the weighted average number of ordinary shares in issue during the period. The diluted earnings per share has been calculated on the basis of 194.71m ordinary shares (2004: 191.4m), and this reflects the effect of all dilutive potential shares in issue. The calculation of earnings per share excludes 3.9m treasury shares (2004: 4.2m) arising from the share repurchase programme. 5. Accounting Policies The foregoing accounts are prepared on the basis of the accounting policies set out in the 2004 annual report. The annual report and accounts will be circulated to shareholders in January 2006, prior to the Annual General Meeting to be held on 9 February 2006 in Jurys Ballsbridge Hotel, Ballsbridge, Dublin 4, Ireland. By order of the Board, C.M. Bergin, Company Secretary, 22 November 2005, Greencore Group plc, St. Stephen's Green House, Earlsfort Terrace, Dublin 2, Ireland. This information is provided by RNS The company news service from the London Stock Exchange

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