REG - Assoc British Foods - ABF interim results for 24 weeks ended 28 Feb 2015 <Origin Href="QuoteRef">ABF.L</Origin> - Part 3
15/07/2015 13:48
- Part 3: For the preceding part double click ID:nRSU7064Kb
tax liabilities (266) (266)
Employee benefits liabilities (133) (133)
Net assets 1,974 1,955 300 1,063 2,164 (703) 6,753
Non-current asset additions 153 103 28 65 394 1 744
Depreciation 96 80 7 44 171 4 402
Amortisation 64 20 6 4 - - 94
Impairment of goodwill on closure of business - - - 4 - - 4
Geographical information United Europe The Asia
Kingdom & Africa Americas Pacific Total
£m £m £m £m £m
Revenue from external customers 5,631 3,924 1,211 2,177 12,943
Segment assets 3,951 3,220 968 1,572 9,711
Non-current asset additions 279 351 34 80 744
Depreciation 184 122 27 69 402
Amortisation 22 19 43 10 94
Impairment of goodwill on closure of business - - - 4 4
2. Income tax expense
24 weeks 24 weeks 52 weeks
ended ended ended
28 February 1 March 13 September
2015 2014 2014
£m £m £m
Current tax expense
UK - corporation tax at 20.5%/22.1%/22.1% 35 51 137
Overseas - corporation tax 47 49 148
UK - overprovided in prior periods - - 3
Overseas - overprovided in prior periods - - (2)
82 100 286
Deferred tax expense
UK deferred tax (2) (2) (17)
Overseas deferred tax 9 2 (19)
UK - overprovided in prior periods - - (6)
Overseas - overprovided in prior periods - - (7)
7 - (49)
Total income tax expense in income statement 89 100 237
Reconciliation of effective tax rate
Profit before taxation 213 434 1,020
Less share of (profit)/loss from joint ventures and associates (18) 1 (13)
Profit before taxation excluding share of profit after tax from joint ventures and associates 195 435 1,007
Nominal tax charge at UK corporation tax rate of 20.5%/22.1%/22.1% 40 96 222
Effect of higher and lower tax rates on overseas earnings (1) (7) (7)
Expenses not deductible for tax purposes 25 5 25
Disposal of assets covered by tax exemptions or unrecognised capital losses 23 - 2
Deferred tax not recognised 2 6 7
Adjustments in respect of prior periods - - (12)
89 100 237
Income tax recognised directly in equity
Deferred tax associated with defined benefit schemes (12) (12) (3)
Current tax associated with share-based payments - - (2)
Deferred tax associated with movement in cash flow hedging position 1 (2) 11
Current tax associated with movements in foreign exchange - - (2)
(11) (14) 4
Following the enactment of legislation by the UK government to reduce the corporation tax rate from 21% to 20% with effect from 1 April 2015, UK deferred tax has been calculated using a rate of 20%. This legislation was enacted before 13 September 2014 and accordingly the impact of these rate reductions on deferred tax was reflected in the group's financial statements for the financial year ended 13 September 2014.
3. Exceptional items
The exceptional item comprises a £98m non-cash charge to impair the group's shareholder loans to its 47% joint venture, Vivergo Fuels. Vivergo is based in the UK and is included in the Sugar segment. The impairment was a consequence of the continuing fall in crude oil and bioethanol prices and the further weakening of the euro against sterling both of which affected the group's assessment of the recoverability of its shareholder loans.
The exceptional item comprises a £98m non-cash charge to impair the group's shareholder loans to its 47% joint venture,
Vivergo Fuels. Vivergo is based in the UK and is included in the Sugar segment. The impairment was a consequence of the
continuing fall in crude oil and bioethanol prices and the further weakening of the euro against sterling both of which
affected the group's assessment of the recoverability of its shareholder loans.
4. Earnings per ordinary share 24 weeks 24 weeks 52 weeks
ended ended ended
28 February 1 March 13 September
2015 2014 2014
pence pence pence
Adjusted earnings per share 46.1 45.8 104.1
Disposal of non-current assets 0.6 0.1 (1.4)
Sale and closure of businesses (14.2) - (0.3)
Exceptional items (12.4) - -
Tax effect on above adjustments 0.3 - (0.1)
Amortisation of non-operating intangibles (3.5) (4.4) (9.1)
Tax credit on non-operating intangibles' amortisation and goodwill 0.6 1.3 2.7
Non-controlling interests' share of amortisation of non-operating intangibles net of tax 0.6 0.4 0.6
Earnings per ordinary share 18.1 43.2 96.5
5. Dividends 24 weeks 24 weeks 52 weeks
ended ended ended
28 February 1 March 13 September
2015 2014 2014
pence pence pence
Per share
2013 final - 22.65 22.65
2014 interim - - 9.70
2014 final 24.30 - -
24.30 22.65 32.35
Total £m £m £m
2013 final - 179 179
2014 interim - - 77
2014 final 192 - -
192 179 256
The 2014 final dividend of 24.30p per share was approved on 5 December 2014 and totalled £192m when paid on 9 January 2015. The 2015 interim dividend of 10.0p per share, total value of £79m, will be paid on 3 July 2015 to shareholders on the register on 5 June 2015.
6. Acquisitions and disposals
Dorset Cereals was acquired during the period for cash consideration of £60m, net of £8m of cash acquired. Other net assets acquired mainly comprised non-operating intangibles, property plant and equipment, and goodwill. Loss on sale and closure of
businesses was £116m in North China Sugar for the sale of the Yi'an factory and closure of the BoCheng factory, both in Heilongjiang province, comprising goodwill and operating intangible write-offs, property plant and equipment provisions and closure
costs. During the period Illovo Sugar disposed of 5.1% of Zambia Sugar for consideration of £11m.
7. Analysis of net debt
At Cash flow Non-cash Exchange At28 February 2015
13 September 2014 items adjustments
£m £m £m £m £m
Cash at bank and in hand, cash equivalents and overdrafts 399 (221) - (11) 167
Short-term loans (238) (106) (2) 3 (343)
Long-term loans (607) 1 2 (21) (625)
(446) (326) - (29) (801)
Cash and cash equivalents comprise bank and cash balances, call deposits and short-term investments with original maturities of three months or less. Bank overdrafts that are repayable on demand of £116m form an integral part of the group's cash
management and are included as a component of cash and cash equivalents for the purpose of the cash flow statement. Derivative assets include £42m in respect of a number of cross-currency swaps which have the economic effect of matching the currency mix
of the group's US private placement debt more closely to the currency mix of its operating asset base. These derivative assets are not included in the group's net debt.
8. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Full details of the group's other related party relationships, transactions and balances are given
in the group's financial statements for the 52 weeks ended 13 September 2014. There have been no material changes in these relationships in the 24 weeks ended 28 February 2015 or up to the date of this report. No related party transactions have taken
place in the first 24 weeks of the current financial year that have materially affected the financial position or the performance of the group during that period.
9. Basis of preparation
Associated British Foods plc ('the Company') is a company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company for the 24 weeks ended 28 February 2015 comprise those of the Company and its subsidiaries
(together referred to as 'the group') and the group's interests in associates and joint ventures. The consolidated financial statements of the group for the 52 weeks ended 13 September 2014 are available upon request from the Company's registered office at
10 Grosvenor Street, London W1K 4QY or at www.abf.co.uk. The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the consolidated financial statements of the group for the 52 weeks ended 13 September 2014. The preparation of interim financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing the condensed consolidated interim financial statements,
the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the 52 weeks ended 13 September 2014.
After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the
condensed consolidated interim financial statements. The group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Operating review. Note 24 on pages 118 to 127 of the 2014
annual report provides details of the group's policy on managing its financial and commodity risks. The group has considerable financial resources, good access to debt markets, a diverse range of businesses and a wide geographic spread. It is therefore
well placed to continue to manage business risks successfully despite the current economic uncertainty. The 24-week period for the condensed consolidated interim financial statements of the Company means that the second half of the year is usually a 28
-week period, and the two halves of the reporting year are therefore not of equal length. For the Retail segment, Christmas, falling in the first half of the year, is a particularly important trading period. For the Sugar segment, the balance sheet, and
working capital in particular, is strongly influenced by seasonal growth patterns for both sugar beet and sugar cane, which vary significantly in the markets in which the group operates. The condensed consolidated interim financial statements are unaudited
but have been subject to an independent review by the auditor and were approved by the board of directors on 21 April 2015. They do not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The comparative figures
for the 52 weeks ended 13 September 2014 have been abridged from the group's 2014 financial statements and are not the Company's statutory financial statements for that period. Those financial statements have been reported on by the Company's auditor and
delivered to the Registrar of Companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006. This interim results announcement has been prepared solely to provide additional information to shareholders as a body, to assess the group's strategies and the potential for those strategies to succeed.
This interim results announcement should not be relied upon by any other party or for any other purpose.
10. Significant accounting policies
The accounting policies applied by the group in these condensed consolidated interim financial statements are substantially the same as those applied by the group in its consolidated financial statements for the 52 weeks ended 13 September 2014. IFRS 10
Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests on Other Entities are applicable for the first time in 2015, together with a number of minor changes to other standards. None have had a significant impact
on the group, other than in respect of additional disclosures which will be made in the consolidated financial statements for the year ending 12 September 2015.
CAUTIONARY STATEMENTS
This Interim Results Announcement contains forward-looking statements. These have been made by the directors in good faith
based on the information available to them up to the time of their approval of this report. The directors can give no
assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both
economic and business risk factors underlying such forward-looking information, actual results may differ materially from
those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any
forward-looking statements whether as a result of new information, future events or otherwise.
RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could have a material impact on the group's performance over
the remainder of the financial year and could cause actual results to differ materially from expected and historical
results. These include, but are not limited to, competitor activity and competition risk, commercial relationships with
customers and suppliers, changes in foreign exchange rates and commodity prices. Details of the principal risks facing the
group's businesses at an operational level are included on pages 46 to 49 of the group's statutory financial statements for
the 52 weeks ended 13 September 2014, as part of the corporate governance report. Details of further potential risks and
uncertainties arising since the issue of the previous statutory financial statements are included within the Chairman's
statement and the Operating review as appropriate.
RESPONSIBILITY STATEMENT
The Interim Results Announcement complies with the Disclosure and Transparency Rules ('the DTR') of the UK's Financial
Conduct Authority in respect of the requirement to produce a half yearly financial report.
The directors confirm that to the best of their knowledge:
· this financial information has been prepared in accordance with IAS 34 as adopted by the EU;
· this Interim Results Announcement includes a fair review of the important events during the first half and their
impact on the financial information, and a description of the principal risks and uncertainties for the remaining half of
the year as required by DTR 4.2.7R; and
· this Interim Results Announcement includes a fair review of the disclosure of related party transactions and
changes therein as required by DTR 4.2.8R.
On behalf of the board
George Weston John Bason Charles Sinclair
Chief Executive Finance Director Chairman
21 April 2015 21 April 2015 21 April 2015
Independent review report to Associated British Foods plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the Interim Results Announcement
for the 24 weeks ended 28 February 2015 which comprises the condensed consolidated income statement, the condensed
consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated cash
flow statement, the condensed consolidated statement of changes in equity and the related explanatory notes. We have read
the other information in the Interim Results Announcement and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting
the requirements of the Disclosure and Transparency Rules ('the DTR') of the UK's Financial Conduct Authority ('the UK
FCA'). Our review has been undertaken so that we might state to the Company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The Interim Results Announcement is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the Interim Results Announcement in accordance with the DTR of the UK FCA.
The annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as
adopted by the EU. The condensed set of financial statements included in this Interim Results Announcement has been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Interim
Results Announcement based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for
use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less
in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the Interim Results Announcement for the 24 weeks ended 28 February 2015 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Richard Pinckard
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London, E14 5GL
21 April 2015
This information is provided by RNS
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