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Camellia PLC (CAM)

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Thursday 25 August, 2016

Camellia PLC

Half-year Report

RNS Number : 0722I
Camellia PLC
25 August 2016
 

Camellia Plc

Interim results

Camellia Plc (AIM:CAM) announces its interim results for the six months ended 30 June 2016.

Malcolm Perkins, Chairman of Camellia Plc, stated:

"Profits for the first six months of the year are substantially higher than the same period last year, once again demonstrating the strength in the diversity of the group."

"Underlying progress was made by all of our businesses, however a number have faced truly challenging conditions either due to weather or markets and the outlook for the group continues to be mixed.  In addition, unpredictable weather makes crop volumes hard to predict and has a consequential effect on prices.  In the short term the depreciation in sterling against most of our operating currencies in the agricultural division is likely to have a positive impact on our full year results.  In the UK, the lowering of the interest rate will inevitably have a detrimental impact on our banking operations and the continuing uncertainty following the EU referendum vote has triggered a slowdown in our engineering businesses. It is too early, and there remain too many uncertainties, to make any prediction for the full year."

Financial highlights








 Year ended


 Year ended


 Year ended



 Six months ended

30 June 2016


 Six months ended

30 June 2015


 31 December 2015



 £'m


 £'m


 £'m





Restated1


Restated1


Revenue

                106.1

102.5


257.8

Headline profit/(loss) before tax*

                  4.9


                  (3.1)


26.5


Profit/(loss) for the period

                  2.4


(4.3)


7.2


Earnings per share

                29.0

p

                (188.3)

p

50.7

p

Proposed interim dividend

                    35

p

                    34

p



Total dividend for the year





129

p

 

1 Restated to include bearer crops as property, plant and equipment: to include growing crop of green leaf tea at fair value and to 

include the green leaf element of made tea inventories at fair value in accordance with IAS 16 and IAS41 (amended).  The effect of the inclusion of fair values for green leaf growing crop and for green leaf in inventory as required by IAS41 is to accelerate the recognition of an element of profit which would historically have been recognised in future periods 

* Headline profit is a measure of the underlying performance of the group which is not impacted by exceptional items or items considered non-operational in nature

Highlights

·     

Agriculture benefitted from strong tea production volumes in the first half of the year in India, Kenya and Bangladesh and strong prices in India, offset in part by lower prices for our tea in all other jurisdictions and reduced profits from macadamia primarily due to drought 

·     

Duncan Lawrie made progress in implementing its growth plan however, as for all banks, the decision by the Bank of England to reduce interest rates and the uncertainties surrounding the property market, make the environment more challenging

·     

Abbey Metal Finishing continues to trade ahead of expectations following its turnaround last year

·     

AJT Engineering continues to be adversely impacted by conditions in the oil and gas market and the situation remains under close review

·     

Cash and cash equivalents at 30 June 2016 were £53.0 million (30 June 2015 - £40.5 million)


The Interim Report will be available to download from the investor relations section on the Company's website www.camellia.plc.uk

Enquiries

Camellia Plc                                                           

01622 746655

Tom Franks, CEO                                                     

Susan Walker CFO

 

Panmure Gordon                                                  

0207 886 2500

Nominated Advisor and Broker                                          

Andrew Godber

Erik Anderson

 

Chairman's statement

The divisional results are discussed in more detail in the operating review, but once again demonstrate the strength in the diversity of the group. Weather patterns continue to be erratic with benign conditions in Kenya leading to record crops but no end in sight to the drought in South Africa. There is no question that the uncertainty both before and after the EU referendum vote has had an impact on the UK economy, and on our UK businesses, but with most of our earnings coming from outside the UK the depreciation of sterling following the vote will help our reported result.

Underlying progress was made by all of our businesses in the first half of the year, however a number have faced truly challenging conditions either due to weather or markets. In the 2015 Annual Report we set out the strategy for each of our divisions; strategies which are designed to provide long term value to shareholders in line with the group's ethos. However, markets and economic conditions continue to change rapidly and these strategies will remain under review by the Board and Executive Committees.

Dividend

Outlook

Malcolm Perkins

24 August 2016

Operating Review

This is the first time that we have reported our bearer crops as property, plant and equipment. In addition, we have included the growing crop of green leaf tea at fair value and included the green leaf element of made tea inventories at fair value as required by IAS 41, the effect of which is to accelerate the recognition of an element of profit which would historically have been recognised in future periods. All numbers including prior years have therefore been restated.

Agriculture

Tea

India: The tea crop in India in the first 6 months was better than last year (up approximately 21%), which was heavily drought affected, and prices were also higher than in the same period last year. Since 1 July, significant rainfall has caused flooding which has reduced our crop expectations for July and August and prices have reduced.

Bangladesh:

Kenya:

Malawi:

Macadamia

On a more positive note, the new macadamia cracking facility in Kenya has been completed within budget and has now been fully commissioned and is meeting our expectations.

Avocado

Speciality crops

In California, the Murcott harvest was significantly down on expectations for both volume and price. Although the Navel harvest was significantly higher than last year, prices were lower and the net benefit was insufficient to compensate for the lower Murcott revenues. Harvesting of the almonds and pistachios has yet to begin. There was a higher rainfall this winter than for some time which has increased the availability of surface water at the farm.

The grape harvest in South Africa was poor as a result of the drought which will inevitably impact volumes and revenues this year.

Soya yields in Brazil were above expectations.

The remaining speciality crops are performing broadly in line with expectations.

In total, the Agriculture division made a trading profit of £7.3 million (2015: profit £1.6 million) on turnover of £75.1 million (2015: £65.3 million).

 

Banking and Financial Services

Of our associated companies, BF&M reported core operating earnings in the first three months of 2016 ahead of the corresponding period in 2015. The remaining associates traded in line with expectations.

In total, the Banking and Financial Services division's subsidiaries made a trading loss of £2.8 million (2015: trading loss £1.2 million) on turnover of £6.0 million (2015: £6.7 million). In addition, our share of the profits of associates amounted to £2.6 million (2015: £0.5 million) reflecting the inclusion of BF&M as an associate from 1 July 2015.

Engineering

Engineering North: The oil industry in Aberdeen continues to suffer from the decline in the oil price and uncertainties surrounding investment in the North Sea. Orders at AJT continue to be below where we would like them to be and consequently we have had to take measures including a redundancy programme and the temporary introduction of reduced working hours in order to contain overheads. The situation remains under close review.

Engineering South: Abbey Metal Finishing continues to trade ahead of expectations following its turnaround last year. The remaining businesses in the division are trading broadly in line with expectations.

In total, the Engineering division made a trading loss of £0.9 million (2015: trading loss £3.5 million) on turnover of £10.1 million (2015: £15.1 million).

Food Service

Investments

Pensions

Tom Franks

Interim management report

Principal risks and uncertainties

Statement of directors' responsibilities

The directors of Camellia Plc are listed in the Camellia Plc statutory financial statements for the year ended 31 December 2015. There have been no subsequent changes of directors and a list of current directors is maintained on the group's website at www.camellia.plc.uk.

By order of the board

Malcolm Perkins

24 August 2016

Consolidated income statement

for the six months ended 30 June 2016

 




Six months



Six months



Year






ended



ended



ended






30 June



30 June



31 December






2016



2015



2015




Notes


£ millions



£ millions



£ millions









Restated



Restated



Revenue

5


106.1



102.5



257.8



Cost of sales

6


(76.5

)


(78.5

)


(179.2

)


Gross profit



29.6



24.0



78.6



Other operating income



1.3



0.9



1.9



Distribution costs



(3.9

)


(3.5

)


(12.9

)


Administrative expenses



(27.5

)


(28.3

)


(58.0

)


Trading (loss)/profit

5


(0.5

)


(6.9

)


9.6



Share of associates' results

8


2.6



0.5



4.2



Impairment of available-for-sale financial assets



-



-



(0.5

)


Impairment of property, plant and equipment and provisions



-



-



0.2



Profit on disposal of non-current assets

9


-



0.9



3.7



Profit on disposal of available-for-sale investments

10


1.1



0.2



0.3



Profit/(loss) from operations



3.2



(5.3

)


17.5



Investment income



0.3



1.2



1.4



Finance income



1.6



1.4



3.1



Finance costs



(0.2

)


(0.3

)


(0.7

)


Net exchange gain



0.5



0.5



0.8



Employee benefit expense



(0.5

)


(0.6

)


(1.7

)


Net finance income

11


1.4



1.0



1.5



Profit/(loss) before tax



4.9



(3.1


20.4



Comprising












- headline profit/(loss) before tax

7


4.9



(3.1

)


26.5



- post employment benefits - past service cost

7


-



-



(6.1

)





4.9



(3.1

)


20.4



Taxation

12


(2.5

)


(1.2

)


(13.2

)


Profit/(loss) for the period



2.4



(4.3

)


7.2



Profit/(loss) attributable to:












Owners of the parent



0.8



(5.2

)


1.4



Non-controlling interests



1.6



0.9



5.8






2.4



(4.3

)


7.2



Earnings per share - basic and diluted

14


29.0

p


(188.3

)p


50.7

p


 

Statement of comprehensive income

for the six months ended 30 June 2016

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions






Restated


Restated


Profit/(loss) for the period


2.4


(4.3

)

7.2


Other comprehensive income/(expense):








Items that will not be reclassified subsequently to profit or loss:








Remeasurements of post employment benefit obligations (note 19)


(15.9

)

7.2


9.1


Deferred tax movement in relation to post employment benefit obligations


-


-


0.6




(15.9

)

7.2


9.7


Items that may be reclassified subsequently to profit or loss:








Foreign exchange translation differences


28.1


(5.7

)

(12.3

)

Available-for-sale investments:








Valuation (losses)/gains taken to equity


(0.2

)

(1.1

)

0.2


Transferred to income statement on sale


-


-


(0.2

)

Share of other comprehensive income of associates


-


-


(0.1

)



27.9


(6.8

)

(12.4

)

Other comprehensive income/(expense) for the period, net of tax


12.0


0.4


(2.7

)

Total comprehensive income/(expense) for the period


14.4


(3.9

)

4.5


Total comprehensive income/(expense) attributable to:








Owners of the parent


9.0


(3.4

)

3.7


Non-controlling interests


5.4


(0.5

)

0.8




14.4


(3.9

)

4.5


 

Consolidated balance sheet

at 30 June 2016

 





30 June


30 June


31 December






2016


2015


2015




Notes


£ millions


£ millions


£ millions








Restated


Restated


Non-current assets










Intangible assets




7.7


7.6


7.9


Property, plant and equipment


15


220.3


224.7


203.3


Investment properties




16.0


10.7


15.8


Biological assets


16


12.6


10.0


11.3


Prepaid operating leases




0.9


0.8


0.8


Investments in associates




55.5


8.9


48.9


Deferred tax assets




2.9


0.2


2.5


Available-for-sale financial assets




34.2


63.0


30.6


Held-to-maturity financial assets




4.3


-


27.7


Other investments - heritage assets




9.0


9.0


9.0


Retirement benefit surplus


19


0.2


0.8


0.2


Trade and other receivables




35.3


7.8


22.7


Total non-current assets




398.9


343.5


380.7


Current assets










Inventories




51.6


42.9


38.1


Biological assets


16


8.7


6.9


7.2


Trade and other receivables




57.1


79.9


55.6


Held-to-maturity financial assets




38.5


-


1.8


Current income tax assets




1.0


1.2


0.8


Cash and cash equivalents


17


218.9


241.8


237.8


Total current assets




375.8


372.7


341.3


Current liabilities










Borrowings


18


(2.3

)

(4.1

)

(5.4

)

Trade and other payables




(288.6

)

(266.8

)

(258.9

)

Current income tax liabilities




(7.8

)

(4.4

)

(9.5

)

Employee benefit obligations


19


(1.3

)

(0.5

)

(1.0

)

Provisions




(0.1

)

(0.4

)

(0.3

)

Total current liabilities




(300.1

)

(276.2

)

(275.1

)

Net current assets




75.7


96.5


66.2


Total assets less current liabilities




474.6


440.0


446.9


Non-current liabilities










Borrowings


18


(4.8

)

(5.4

)

(5.1

)

Trade and other payables




(4.2

)

(3.7

)

(4.4

)

Deferred tax liabilities




(38.3

)

(39.1

)

(38.0

)

Employee benefit obligations


19


(54.7

)

(34.4

)

(37.8

)

Other non-current liabilities




-


(0.1

)

-


Total non-current liabilities




(102.0

)

(82.7

)

(85.3

)

Net assets




372.6


357.3


361.6


Equity










Called up share capital




0.3


0.3


0.3


Share premium




15.3


15.3


15.3


Reserves




313.0


300.4


306.6


Equity attributable to owners of the parent




328.6


316.0


322.2


Non-controlling interests




44.0


41.3


39.4


Total equity




372.6


357.3


361.6


 

Consolidated cash flow statement

for the six months ended 30 June 2016

 





Six months


Six months


Year






ended


ended


ended






30 June


30 June


31 December






2016


2015


2015




Notes


£ millions


£ millions


£ millions








Restated


Restated


Cash generated from operations










Cash flows from operating activities


20


(6.0

)

(0.8

)

39.5


Interest paid




(0.3

)

(0.3

)

(0.6

)

Income taxes paid




(7.3

)

(5.1

)

(9.4

)

Interest received




1.6


1.6


3.1


Dividends received from associates




1.2


0.3


1.2


Net cash flow from operating activities




(10.8

)

(4.3

)

33.8


Cash flows from investing activities










Purchase of intangible assets




(0.1

)

(0.8

)

(1.4

)

Purchase of property, plant and equipment




(6.9

)

(5.2

)

(16.3

)

Purchase of investment properties




(0.2

)

(8.6

)

(8.7

)

Proceeds from sale of non-current assets




0.1


1.8


6.5


Biological assets - new plantings




(0.1

)

(0.2

)

(0.4

)

Biological assets - disposals




0.3


0.5


0.5


Part disposal of a subsidiary




0.9


0.1


0.3


Purchase of available-for-sale financial assets




(1.0

)

(2.1

)

(2.3

)

Proceeds from sale of available-for-sale financial assets




1.2


1.0


1.7


Purchase of other investments - heritage assets




-


(0.1

)

(0.2

)

Income from investments




0.3


1.2


1.4


Net cash flow from investing activities




(5.5

)

(12.4

)

(18.9

)

Cash flows from financing activities










Equity dividends paid




-


-


(3.5

)

Dividends paid to non-controlling interests




(1.5

)

(1.1

)

(4.5

)

New loans




-


6.0


6.0


Loans repaid




(0.3

)

(0.1

)

(0.4

)

Net cash flow from financing activities




(1.8

)

4.8


(2.4

)

Net (increase)/decrease in cash and cash equivalents




(18.1

)

(11.9)

 

 

12.5


Cash and cash equivalents at beginning of period




65.6


54.1


54.1


Exchange gains/(losses) on cash




5.5


(1.7

)

(1.0

)

Cash and cash equivalents at end of period




53.0


40.5


65.6












For the purposes of the cash flow statement, cash and cash equivalents are included net of overdrafts repayable on demand. These overdrafts are excluded from the definition of cash and cash equivalents disclosed on the balance sheet.




For the purposes of the cash flow statement cash and cash equivalents comprise:












Cash and cash equivalents




218.9


241.8


237.8


Less banking operation's funds




(164.2

)

(197.8

)

(167.4

)

Overdrafts repayable on demand (included in current liabilities - borrowings)




(1.7

)

(3.5

)

(4.8

)





53.0


40.5


65.6


Statement of changes in equity

for the six months ended 30 June 2016

 















Non-






Share


Share


Treasury


Retained


Other




controlling


Total




capital


premium


shares


earnings


reserves


Total


interests


equity




£ millions


£ millions


£ millions


£ millions


£ millions


£ millions


£ millions


£ millions










Restated


Restated


Restated


Restated


Restated


At 1 January 2015


0.3


15.3


(0.4

)

303.2


3.3


321.7


42.7


364.4


Restatement (note 3)


-


-


-


0.2


-


0.2


0.1


0.3


At 1 January 2015 restated


0.3


15.3


(0.4

)

303.4


3.3


321.9


42.8


364.7


Total comprehensive income/(expense) for the period


-


-


-


2.1


(5.5

)

(3.4

)

(0.5

)

(3.9

)

Dividends


-


-


-


(2.5

)

-


(2.5

)

(1.1

)

(3.6

)

Non-controlling interest subscription


-


-


-


-


-


-


0.1


0.1


At 30 June 2015


0.3


15.3


(0.4

)

303.0


(2.2

)

316.0


41.3


357.3


At 1 January 2015


0.3


15.3


(0.4

)

303.2


3.3


321.7


42.7


364.4


Restatement (note 3)


-


-


-


0.2


-


0.2


0.1


0.3


At 1 January 2015 restated


0.3


15.3


(0.4

)

303.4


3.3


321.9


42.8


364.7


Total comprehensive income/(expense) for the period


-


-


-


11.6


(7.9

)

3.7


0.8


4.5


Dividends


-


-


-


(3.5

)

-


(3.5

)

(4.5

)

(8.0

)

Non-controlling interest subscription


-


-


-


-


-


-


0.3


0.3


Share of associate's other equity movements


-


-


-


0.1


-


0.1


-


0.1


At 31 December 2015


0.3


15.3


(0.4

)

311.6


(4.6

)

322.2


39.4


361.6


Total comprehensive (expense)/income for the period


-


-


-


(15.2

)

24.2


9.0


5.4


14.4


Dividends


-


-


-


(2.6

)

-


(2.6

)

(1.5

)

(4.1

)

Non-controlling interest subscription


-


-


-


-


-


-


0.7


0.7


At 30 June 2016


0.3


15.3


(0.4

)

293.8


19.6


328.6


44.0


372.6


 

Notes to the accounts

1          Basis of preparation

These financial statements are the interim condensed consolidated financial statements of Camellia Plc, a company registered in England, and its subsidiaries (the "group") for the six month period ended 30 June 2016 (the "Interim Report"). They should be read in conjunction with the Report and Accounts (the "Annual Report") for the year ended 31 December 2015.

The financial information contained in this interim report has not been audited and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 December 2015 has been delivered to the Registrar of Companies. The auditors' opinion on these accounts was unqualified and does not contain an emphasis of matter paragraph or a statement made under Section 498(2) and Section 498(3) of the Companies Act 2006.

The interim condensed financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") including IAS 34 "Interim Financial Reporting". For these purposes, IFRS comprise the Standards issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Standards Interpretations Committee ("IFRS IC") that have been adopted by the European Union.

Where necessary, the comparatives have been restated from the previously reported interim results to take into account any presentational changes made in the Annual Report.

These interim condensed financial statements were approved by the board of directors on 24 August 2016. At the time of approving these financial statements, the directors have a reasonable expectation that the company and the group have adequate resources to continue to operate for the foreseeable future. They therefore continue to adopt the going concern basis of accounting in preparing the financial statements.

2          Accounting policies

These interim condensed financial statements have been prepared on the basis of accounting policies consistent with those applied in the financial statements for the year ended 31 December 2015. In addition, the group has implemented the following amended standards:

IAS 16 and IAS 41 (amendments)

Reporting for bearer plants

A summary of the above amendments was provided on page 48 of the 2015 Annual Report.

IAS 16 and IAS 41 (amendments) amends the reporting for bearer plants. The group has applied the amendments retrospectively in accordance with the transition provisions of the standard and the comparative figures have been restated. The impact on the group has been in the following areas:

As bearer plants are now accounted for under IAS 16 rather than IAS 41 in the same way as property, plant and equipment, fair value adjustments are no longer required and instead the assets will now be depreciated. The produce on bearer plants will remain in the scope of IAS 41 and require a fair value adjustment. The effect has been that the loss before tax for the period to 30 June 2015 has reduced by £5.3 million and profit for the year to 31 December 2015 has decreased by £20.1 million.

The effect of these amendments is to increase earnings per share from a loss of (288.1)p per share to a loss of (188.3)p per share for the period 30 June 2015 and decease earnings per share from a profit of 450.7p per share to a profit of 50.7p per share for the year to 31 December 2015, the effect on the cash flow statement is immaterial.

3          Restatement - fair value of green leaf tea

As disclosed in the 2015 Annual Report, made tea was included in inventory at cost as no reliable fair value was available to reflect the uplift in value arising at the point of harvest of green leaf. Following a reassessment, the fair value for green leaf at the point of harvest can now be more reliably calculated. Made tea inventories now include the fair value of green leaf and the impact of this change is a £0.2 million uplift in opening reserves and £0.1 million uplift in non-controlling interest, at 1 January 2015.

4          Cyclical and seasonal factors

Due to climatic conditions the group's tea operations in India and Bangladesh produce most of their crop during the second half of the year. Tea production in Kenya remains at consistent levels throughout the year but in Malawi the majority of tea is produced in the first six months.

Soya and maize in Brazil and citrus in California are generally harvested in the first half of the year. In California the pistachio crop occurs in the second half of the year and has 'on' and 'off' years. The majority of the macadamia crop in Malawi and South Africa is harvested in the second half of the year but in Kenya the majority of macadamia is harvested in the first half. Avocados in Kenya are mostly harvested in the second half of the year.

There are no other cyclical or seasonal factors which have a material impact on the trading results.

5          Segment reporting



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015






Trading




Trading




Trading




Revenue


(loss)/profit


Revenue


(loss)/profit


Revenue


profit/(loss)




£ millions


£ millions


£ millions


£ millions


£ millions


£ millions










Restated




Restated


Agriculture and horticulture


75.1


7.3


65.3


1.6


186.5


26.8


Engineering


10.1


(0.9

)

15.1


(3.5

)

25.8


(5.5

)

Food storage and distribution


14.7


0.1


15.2


0.4


31.9


0.7


Banking and financial services


6.0


(2.8

)

6.7


(1.2

)

13.1


(3.6

)

Other operations


0.2


-


0.2


-


0.5


-




106.1


3.7


102.5


(2.7

)

257.8


18.4


Unallocated corporate expenses




(4.2

)



(4.2

)



(8.8

)

Trading (loss)/profit




(0.5

)



(6.9

)



9.6


Share of associates' results




2.6




0.5




4.2


Profit on disposal of non-current assets




-




0.9




3.7


Profit on disposal of available-for-sale investments




1.1




0.2




0.3


Impairment of available-for-sale financial assets




-




-




(0.5

)

Impairment of property, plant and equipment and provisions




-




-




0.2


Investment income




0.3




1.2




1.4


Net finance income




1.4




1.0




1.5


Profit/(loss) before tax




4.9




(3.1

)



20.4


Taxation




(2.5

)



(1.2

)



(13.2

)

Profit/(loss) after tax




2.4




(4.3

)



7.2


 

6          Cost of sales

Included in cost of sales are the following gains/(losses) arising from changes in fair value of biological assets:

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions






Restated


Restated


Gain arising from change in fair value of agricultural produce


3.8


3.9


2.9


Gain/(loss) from change in fair value of non-current biological assets


0.2


(0.2

)

1.9




4.0


3.7


4.8


In addition, included within inventories is a fair value gain of £4.1 million (2015: six months £4.1 million gain - year £0.4 million gain) relating to the uplift in green leaf tea values at the point of harvest.

 

7          Headline profit/(loss)

The group seeks to present an indication of the underlying performance which is not impacted by exceptional items. This measure of profit/(loss) is described as 'headline' and is used by management to measure and monitor performance.

The following item has been excluded from the headline measure:

-

A charge of £6.1 million included in cost of sales for the year ended 31 December 2015 for past service relating to legislation enacted in Bangladesh which required companies to make a payment on retirement or other events terminating employment to all employees, based upon compensation and length of service.

 

8          Share of associates' results

The group's share of the results of associates is analysed below:

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions


Profit before tax


3.2


0.8


5.2


Taxation


(0.6

)

(0.3

)

(1.0

)

Profit after tax


2.6


0.5


4.2


From 1 July 2015, following a re-evaluation of the group's relationship with BF&M Limited, the directors concluded that the group is in a position to exercise significant influence over BF&M Limited. As a result the investment in this company has been reclassified from available-for-sale financial assets to an investment in associate. Six months of the group's share of BF&M's result for the year ending 31 December 2015 have been included in the above results. In addition, in 2015 £22.7 million was credited to the income statement which reflected the negative goodwill arising from the recognition of BF&M Limited as an associate, which was offset by an impairment provision of £22.7 million which was provided against the group's equity carrying value of this investment to reflect its fair value. The net effect impact of these items on the income statement was £nil.

9          Profit on non-current assets

In 2015, a profit of £1.6 million was realised in relation to the property, plant and equipment previously owned by AKD Engineering Limited which was sold following the closure of the business at the end of June 2015 and profits of £2.1 million (2015: six months £0.9 million) were realised during the year in relation to the disposal of former sites owned by Abbey Metal Finishing Company Limited and GU Cutting and Grinding Services Limited.

10        Profit on disposal of available-for-sale investments

The profit of £1.1 million includes a profit of £0.9 million relating to the part disposal of the group's interest in VISA Europe.

 

11        Finance income and costs

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions


Interest payable on loans and bank overdrafts


(0.2

)

(0.3

)

(0.7

)

Finance costs


(0.2

)

(0.3

)

(0.7

)

Finance income - interest income on short-term bank deposits


1.6


1.4


3.1


Net exchange gain on foreign currency balances


0.5


0.5


0.8


Employee benefit expense


(0.5

)

(0.6

)

(1.7

)

Net finance income


1.4


1.0


1.5


The above figures do not include any amounts relating to the banking subsidiaries.

12        Taxation on profit on ordinary activities

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions






Restated


Restated


Current tax








Overseas corporation tax


5.0


3.3


13.4










Deferred tax








Origination and reversal of timing differences








Overseas deferred tax


(2.5

)

(2.1

)

(0.2

)

Tax on profit on ordinary activities


2.5


1.2


13.2


Tax on profit on ordinary activities for the six months to 30 June 2016 has been calculated on the basis of the estimated annual effective rate for the year ending 31 December 2016.

13        Equity dividends

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions


Amounts recognised as distributions to equity holders in the period:








Final dividend for the year ended 31 December 2015 of 95.00p (2014: 92.00p) per share


2.6


2.5


2.5



Interim dividend for the year ended 31 December 2015 of 34.00p per share






1.0








3.5










Dividends amounting to £0.1 million (2015: six months £0.1 million - year £0.1 million) have not been included as group companies hold 62,500 issued shares in the company. These are classified as treasury shares.










Proposed interim dividend for the year ended 31 December 2016 of 35.00p (2015: 34.00p) per share


1.0


1.0












The proposed interim dividend was approved by the board of directors on 24 August 2016 and has not been included as a liability in these financial statements.

 

14        Earnings per share (EPS)

 



         Six months


         Six months


         Year




         ended


         ended


         ended




         30 June


         30 June


         31 December




         2016


         2015


         2015




Earnings


EPS


Earnings


EPS


Earnings


EPS




£ millions


Pence


£ millions


Pence


£ millions


Pence








Restated


Restated


Restated


Restated


Basic and diluted EPS














Attributable to ordinary shareholders


0.8


29.0


(5.2

)

(188.3

)

1.4


50.7


Basic and diluted earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue of 2,762,000 (2015: six months 2,762,000 - year 2,762,000), which excludes 62,500 (2015: six months 62,500 - year 62,500) shares held by the group as treasury shares.

15        Property, plant and equipment

During the six months ended 30 June 2016 the group acquired assets with a cost of £6.9 million (2015: six months £5.2 million - year £16.3 million). Assets with a carrying amount of £0.1 million were disposed of during the six months ended 30 June 2016 (2015: six months £0.9 million - year £2.8 million).

16        Biological assets

Non-current biological assets includes the fair value of timber and livestock. Current biological assets relates to the fair value of growing crop and agricultural produce for bearer crops.

17        Cash and cash equivalents

Included in cash and cash equivalents of £218.9 million (2015: six months £241.8 million - year £237.8 million) are cash and short-term funds, time deposits with banks and building societies and certificates of deposit amounting to £164.2 million (2015: six months £197.8 million - year £167.4 million), which are held by banking subsidiaries and which are an integral part of the banking operations of the group.

18        Borrowings

Borrowings (current and non-current) include loans and finance leases of £5.4 million (2015: six months £6.0 million - year £5.7 million) and bank overdrafts of £1.7 million (2015: six months £3.5 million - year £4.8 million). The following loans and finance leases were taken out and repaid during the six months ended 30 June 2016:

 


£ million


Balance at 1 January 2016

5.7


Repayments - loans

(0.3

)

Balance at 30 June 2016

5.4


19        Retirement benefit schemes

The UK defined benefit pension scheme for the purpose of IAS 19 has been updated to 30 June 2016 from the valuation as at 31 December 2015 by the actuary and the movements have been reflected in this interim statement. Overseas schemes have not been updated from 31 December 2015 valuations as it is considered that there have been no significant changes.

An actuarial loss of £15.9 million was realised in the period, of which a gain of £6.9 million was realised in relation to the scheme assets, £0.4 million was realised in relation to experience gains on scheme liabilities and a loss of £23.2 million was realised in relation to changes in the underlying actuarial assumptions. The assumed discount rate has decreased to 2.8% (31 December 2015: 3.8%), the assumed rate of inflation (CPI) has decreased to 1.8% (31 December 2015: 2.0%) and the assumed inflation rate for salaries decreased to 1.8% (31 December 2015: 2.0%). There has been no change in the mortality assumptions used.

20        Reconciliation of profit/(loss) from operations to cash flow

 



Six months


Six months


Year




ended


ended


ended




30 June


30 June


31 December




2016


2015


2015




£ millions


£ millions


£ millions






Restated


Restated


Profit/(loss) from operations


3.2


(5.3

)

17.5


Share of associates' results


(2.6

)

(0.5

)

(4.2

)

Depreciation and amortisation


7.6


7.6


14.4


Impairment of assets


-


-


0.5


Gain arising from changes in fair value of biological assets


(8.1

)

(7.8

)

(5.2

)

Profit on disposal of non-current assets


-


(0.9

)

(3.7

)

Profit on disposal of investments


(1.1

)

(0.2

)

(0.3

)

Profit on part disposal of subsidiary


(0.2

)

-


-


(Increase)/decrease in working capital


(2.4

)

6.7


16.4


Pensions and similar provisions less payments


3.3


(0.6

)

4.0


Net (increase)/decrease in funds of banking subsidiaries


(5.7

)

0.2


0.1




(6.0

)

(0.8

)

39.5


21        Related party transactions

There have been no related party transactions that had a material effect on the financial position or performance of the group in the first six months of the financial year.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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