REG - Cranswick PLC - Half-year Report <Origin Href="QuoteRef">CWK.L</Origin> - Part 2
28/11/2017 07:06
- Part 2: For the preceding part double click ID:nRSb6505Xa
- 4.5 4.5
Profit after tax - 4.8 4.8
Earnings per share from discontinued operations
Basic earnings per share - 9.7 9.6
Diluted earnings per share - 9.6 9.6
Statement of cash flows
The statement of cash flows includes the following amounts relating to discontinued operations:
Operating activities - (1.2) (1.2)
Investing activities - (0.4) (0.4)
Net cash from discontinued operations - (1.6) (1.6)
The net assets which were sold were as follows:
£'m
Intangible assets - Goodwill 7.0
Property, plant and equipment 2.6
Inventories 1.1
Trade and other receivables 9.3
Trade and other payables (9.0)
11.0
Cash proceeds received 16.2
Cash and cash equivalents surrendered (0.5)
Legal costs incurred, settled in cash (0.2)
15.5
Profit on sale of business 4.5
7. Earnings per share
Basic earnings per share are based on profit for the period attributable to
Shareholders and on the weighted average number of shares in issue during the
period of 50,618,000 (31 March 2017: 50,191,000, 30 September 2016:
50,024,000). The calculation of diluted earnings per share is based on
50,910,000 shares (31 March 2017: 50,386,000, 30 September 2016: 50,287,000).
8. Dividends - half year ended 30 September
Half year Year to 31 March
2017£'m 2016£'m 2017£'m
Interim dividend for year ended 31 March 2017 of 13.1p per share - - 6.6
Final dividend for year ended 31 March 2017 of 31.0p (2016: 25.9p)per share 15.7 13.0 13.0
15.7 13.0 19.6
The interim dividend for the year ending 31 March 2018 of 15.1 pence per share
was approved by the Board on 28 November 2017 for payment to Shareholders on
26 January 2018 and therefore has not been included as a liability as at 30
September 2017.
9. Acquisitions
Ballymena
On 16 November 2016, the Group acquired 100 per cent of the issued share
capital of Dunbia Ballymena (renamed Cranswick Country Foods Ballymena). The
provisional fair values of the net assets at the date of acquisition which
have now been finalised and the terms of the contingent consideration payable
to the previous owners are in line with those disclosed in Note 15 of the 2017
Annual Report and Accounts.
Contingent consideration
During the period £4.0 million of contingent consideration was paid in
relation to a previous acquisition. This balance was provided in full at
March 2017.
10. Financial instruments
The Group's activities expose it to a number of financial risks which include
foreign currency risk, interest rate risk, credit risk and liquidity risk.
The Board considers the Group's financial instruments risk management strategy
to be the same as described within the Directors' Report on page 80 of the
Report & Accounts for the year ended 31 March 2017.
Fair value of financial instruments
All financial instruments are shown in the balance sheet at fair value as
follows:
Half year Year to31 March
2017 2016 2017
Bookvalue£'m Fairvalue£'m Bookvalue£'m Fairvalue£'m Bookvalue£'m Fairvalue£'m
Forward currency contracts (0.1) (0.1) (0.5) (0.5) 0.3 0.3
Contingent consideration (2.2) (2.2) (4.7) (4.7) (6.2) (6.2)
The book value of trade and other receivables, trade and other payables, cash
balances, overdrafts, amounts outstanding under the revolving credit facility
and finance leases and hire purchase contracts equates to fair value for the
Group.
Reconciliation of contingent consideration:
£'m
At 31 March 2017 (6.2)
Paid 4.0
At 30 September 2017 (2.2)
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities.
Level 2: other techniques for which all inputs which have a significant effect
on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
Transfers between levels of the fair value hierarchy are deemed to have
occurred at the end of the reporting period. There were no such transfers in
the period.
Fair value hierarchy (continued)
The Group's forward currency contracts are measured using Level 2 of the fair
value hierarchy. The valuations are provided by the Group's bankers from
their proprietary valuations models and are based on mid-market levels as at
close of business on the Group's reporting date.
Contingent consideration is measured using Level 3 of the fair value hierarchy
and relates to future amounts payable on acquisitions. Amounts payable are
based on agreements within purchase contracts, management's expectations of
the future profitability of the acquired entity and the timings of the
payments.
11. Analysis of Group net debt
At31 March 2017 Cash flow Non-cashmovements At 30 September2017
£'m £'m £'m £'m
Cash and cash equivalents 4.1 2.4 - 6.5
Revolving credit (15.0) (8.0) (0.1) (23.1)
Finance leases and hire purchase contracts (0.1) - - (0.1)
Net debt (11.0) (5.6) (0.1) (16.7)
Net debt is defined as cash and cash equivalents and loans receivable less
interest bearing liabilities net of unamortised issue costs.
12. Related party transactions
During the period the Group entered into transactions, in the ordinary course
of business, with its subsidiaries which are related parties. Balances and
transactions with subsidiaries are eliminated on consolidation.
13. Property, plant and equipment
Additions to property, plant and equipment during the period totalled £30.3
million (2016: £24.5 million). Future capital expenditure under contract at
30 September 2017 was £11.2 million (2016: £10.4 million).
14. Alternative performance measures
The Board monitors performance principally through adjusted and like-for-like
performance measures. Adjusted profit and earnings per share measures exclude
certain non-cash items including the net IAS 41 valuation movement on
biological assets, amortisation of acquired intangible assets, profit on sale
of a business and goodwill impairment charges. Free cash flow is defined as
net cash from operating activities less net interest paid and like-for-like
revenue is defined as total revenue less revenue from entities acquired during
the period.
The Board believes that such alternative measures are useful as they exclude
volatile (net IAS 41 valuation movement on biological assets), one-off
(impairment of goodwill and profit on sale of a business) and non-cash
(amortisation of intangible assets) items which are normally disregarded by
investors, analysts and brokers in gaining a clearer understanding of the
underlying performance of the Group when making investment and other
decisions. Equally, like-for-like revenue provides these same stakeholders
with a clearer understanding of the organic sales growth of the business.
A reconciliation to relevant GAAP measures is given below:
Like-for-like revenue
Half year Year to 31 March
2017£'m 2016£'m 2017£'m
Revenue 714.6 580.8 1,245.1
Crown Chicken (3.5) - -
Ballymena (26.0) - -
Like-for-like revenue 685.1 580.8 1,245.1
Like-for-like revenue excludes the contribution from CCF Ballymena in the
current period and Crown Chicken in the current period prior to 8 April as
these businesses were acquired on 16 November 2016 and 8 April 2016
respectively.
Adjusted Group operating profit
Half year Year to 31 March
2017£'m 2016£'m 2017£'m
Group operating profit 44.7 40.8 78.1
Net IAS 41 valuation movement on biological assets (1.2) (3.6) (4.1)
Amortisation of customer relationship intangible assets 1.1 1.0 2.1
Adjusted Group operating profit 44.6 38.2 76.1
Adjusted profit before tax
Half year Year to 31 March
2017£'m 2016£'m 2017£'m
Profit before tax 44.5 40.5 77.5
Net IAS 41 valuation movement on biological assets (1.2) (3.6) (4.1)
Amortisation of customer relationship intangible assets 1.1 1.0 2.1
Adjusted profit before tax 44.4 37.9 75.5
Adjusted earnings per share
On adjusted profit for the period from continuing operations:
Half year Year to31 March
2017Basicpence 2017Diluted pence 2016Basic pence 2016Diluted pence 2017Basic pence 2017Diluted pence
On profit for the period from continuing operations 70.2 69.8 62.5 62.2 124.2 123.7
Net IAS 41 valuation movement on biological assets (2.4) (2.4) (7.1) (7.1) (8.2) (8.2)
Tax on net IAS 41 valuation movement on biological assets 0.4 0.4 1.2 1.2 1.4 1.4
Amortisation of customer relationship intangible assets 2.2 2.2 2.0 2.0 4.2 4.2
Tax on amortisation of customer relationship intangible assets (0.4) (0.4) (0.3) (0.3) (0.7) (0.7)
On adjusted profit for the period from continuing operations 70.0 69.6 58.3 58.0 120.9 120.4
On adjusted profit for the period:
Half year Year to31 March
2017Basic pence 2017Diluted pence 2016Basic pence 2016Diluted pence 2017Basic pence 2017Diluted pence
On profit for the period 70.2 69.8 72.2 71.8 133.8 133.3
Net IAS 41 valuation movement on biological assets (2.4) (2.4) (7.1) (7.1) (8.2) (8.2)
Tax on net IAS 41 valuation movement on biological assets 0.4 0.4 1.2 1.2 1.4 1.4
Amortisation of customer relationship intangible assets 2.2 2.2 2.0 2.0 4.2 4.2
Tax on amortisation of customer relationship intangible assets (0.4) (0.4) (0.3) (0.3) (0.7) (0.7)
Profit on sale of business - - (9.1) (9.1) (9.0) (9.0)
On adjusted profit for the period 70.0 69.6 58.9 58.5 121.5 121.0
Free cash flow
Half year Year to 31 March
2017£'m 2016£'m 2017£'m
Net cash from operating activities 39.6 38.4 72.9
Net interest paid (0.1) (0.2) (0.5)
Free cash flow 39.5 38.2 72.4
INDEPENDENT REVIEW REPORT TO CRANSWICK PLC
Report on the Group Interim Financial Information
Our conclusion
We have reviewed Cranswick plc's Group interim financial information (the
'interim financial statements') in the interim results of Cranswick plc for
the 6 month period ended 30 September 2017. Based on our review, nothing has
come to our attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
• The Group balance sheet as at 30 September 2017;
• The Group income statement and Group statement of comprehensive income
for the period then ended;
• The Group statement of cash flows for the period then ended;
• The Group statement of changes in equity for the period then ended; and
• The explanatory notes to the interim financial statements.
The interim financial statements included in the interim results have been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
As disclosed in note 1 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim results, including the interim financial statements, is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial
statements in the interim results based on our review. This report, including
the conclusion, has been prepared for and only for the company for the purpose
of complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
What a review of interim financial statements involves
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 United Kingdom. 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, 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.
We have read the other information contained in the interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
28 November 2017
a. The maintenance and integrity of the Cranswick plc website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the interim
financial statements since they were initially presented on the website.
b. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions
This information is provided by RNS
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