REG - Cranswick PLC - Preliminary Results <Origin Href="QuoteRef">CWK.L</Origin> - Part 2
23/05/2017 07:07
- Part 2: For the preceding part double click ID:nRSW8987Fa
(1,618) (60)
A profit of £4.5 million arose on the sale of The Sandwich Factory, being the
difference between the cash proceeds and the carrying value of net assets plus
attributable goodwill as follows:
£'000
The net assets which were sold were as follows:
Intangible assets - Goodwill 6,967
Property, plant and equipment 2,601
Inventories 1,086
Trade and other receivables 9,311
Trade and other payables (8,980)
10,985
£'000
Cash proceeds received 16,238
Cash and cash equivalents surrendered (534)
Legal costs incurred, settled in cash (180)
15,524
Profit on sale of business 4,539
10. Acquisitions
Cranswick Country Foods Ballymena
On 16 November 2016, the Group acquired 100 per cent of the issued share
capital of Dunbia Ballymena (renamed Cranswick Country Foods Ballymena) for a
total consideration of £18.1 million including £3.4 million settlement of
intercompany creditors due to the previous owner and a deferred consideration
of £1.3 million. The principal activity of Cranswick Country Foods Ballymena
is primary pig processing. The acquisition enhances Cranswick's pig
processing capability and establishes a significant presence in Northern
Ireland.
Fair values of the net assets at the date of acquisition were as follows:
Provisional fair value£'000
Net assets acquired:
Customer relationships 1,701
Property, plant and equipment 1,746
Inventories 598
Trade and other receivables 8,219
Bank and cash balances 212
Trade and other payables (6,333)
Corporation tax liability (368)
Deferred tax liability (252)
Provisions (274)
5,249
Goodwill arising on acquisition 9,528
Cost of acquisition 14,777
Satisfied by:
Cash 13,527
Contingent consideration 1,250
Net cash outflow arising on acquisition:
Cash consideration paid 13,527
Creditors repaid 3,353
Cash and cash equivalents acquired (212)
16,668
Intercompany loans were repaid on completion giving a total consideration for
the acquisition of £18,130,000. The fair values on acquisition are
provisional due to the timing of the transaction and will be finalised within
twelve months of the acquisition date.
All of the trade receivables acquired are expected to be collected in full.
Included in the £9,528,000 of goodwill recognised above are certain intangible
assets that cannot be individually separated from the acquiree and reliably
measured due to their nature. These items include the expected value of
synergies and an assembled workforce.
Transaction costs in relation to the acquisition of £0.3 million have been
expensed within administrative expenses.
Contingent consideration
The agreement includes contingent consideration payable in cash to the
previous owners of Cranswick Country Foods Ballymena based on obtaining a
licence to export to China. The amount payable will be either £nil or £1.25
million. The fair value of the contingent consideration on acquisition was
estimated at £1.25 million, undiscounted in the table above.
Crown Chicken
On 8 April 2016, the Group acquired 100 per cent of the issued share capital
of CCL Holdings Limited and its wholly owned subsidiary Crown Chicken Limited
('Crown') for net cash consideration of £39.4 million. The principal
activities of Crown Chicken Limited are the breeding, rearing and processing
of fresh chicken, as well as the milling of grain for the production of animal
feed. The acquisition provides the Group with a fully integrated supply chain
for its growing poultry business.
Fair values of the net assets at the date of acquisition were as follows:
Fair value£'000
Net assets acquired:
Customer relationships 2,938
Property, plant and equipment 17,501
Biological assets 4,805
Inventories 1,865
Trade and other receivables 9,946
Bank and cash balances 3,946
Trade and other payables (7,900)
Corporation tax liability (584)
Deferred tax liability (2,548)
Finance lease obligations (370)
29,599
Goodwill arising on acquisition 13,721
Total consideration 43,320
Satisfied by:
Cash 43,320
Net cash outflow arising on acquisition:
Cash consideration paid 43,320
Cash and cash equivalents acquired (3,946)
39,374
All of the trade receivables acquired have been collected in full.
Included in the £13,721,000 of goodwill recognised above are certain
intangible assets that cannot be individually separated from the acquiree and
reliably measured due to their nature. These items include the expected value
of synergies and an assembled workforce and the strategic benefits of vertical
integration including security of supply.
Transaction costs in relation to the acquisition of £0.4 million have been
expensed within administrative expenses.
11. 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 year.
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.
Like-for-like revenue
2017£'000 2016£'000 Change
Revenue 1,245,058 1,016,314 +22.5%
Crown Chicken (82,561) -
Ballymena (17,260) -
Like-for-like revenue 1,145,237 1,016,314 +12.7%
Adjusted operating profit
2017£'000 2016£'000 Change
Group operating profit 78,126 62,709 +24.6%
Net IAS 41 valuation movement (4,116) 951
Amortisation of customer relationship intangible assets 2,108 1,396
Adjusted Group operating profit 76,118 65,056 +17.0%
Adjusted profit before tax
2017£'000 2016£'000 Change
Profit before tax 77,487 62,070 +24.8%
Net IAS 41 valuation movement (4,116) 951
Amortisation of customer relationship intangible assets 2,108 1,396
Adjusted profit before tax 75,479 64,417 +17.2%
Adjusted earnings per share
2017 £'000 2017Basicpence 2017Dilutedpence 2016 £'000 2016Basicpence 2016Dilutedpence
On profit for the year from continuing operations 62,342 124.2 123.7 49,048 98.9 98.5
Amortisation of customer relationship intangible assets 2,108 4.2 4.2 1,396 2.8 2.8
Tax on amortisation of customer relationship intangible assets (379) (0.7) (0.7) (251) (0.5) (0.5)
Net IAS 41 valuation movement (4,116) (8.2) (8.2) 951 1.9 1.9
Tax on net IAS 41 valuation movement 700 1.4 1.4 (171) (0.3) (0.3)
On adjusted profit for the year from continuing operations 60,655 120.9 120.4 50,973 102.8 102.4
2017 £'000 2017Basicpence 2017Dilutedpence 2016 £'000 2016Basicpence 2016Dilutedpence
On profit for the year 67,178 133.8 133.3 45,395 91.5 91.2
Amortisation of customer relationship intangible assets 2,108 4.2 4.2 1,396 2.8 2.8
Tax on amortisation of customer relationship intangible assets (379) (0.7) (0.7) (251) (0.5) (0.5)
Net IAS 41 valuation movement (4,116) (8.2) (8.2) 951 1.9 1.9
Tax on net IAS 41 valuation movement 700 1.4 1.4 (171) (0.3) (0.3)
Impairment of goodwill - - - 4,635 9.3 9.3
Profit on sale of business (4,539) (9.0) (9.0) - - -
On adjusted profit for the year 60,952 121.5 121.0 51,955 104.7 104.4
Free cash flow
2017£'000 2016£'000 Change
Net cash from operating activities 72,890 83,834 -13.1%
Net interest paid (528) (443)
Free cash flow 72,362 83,391 -13.2%
12. Report and accounts
The Report and Accounts will be available on the Company's website at
www.cranswick.plc.uk on 23 June 2017. Further copies will be available upon
request from the Company Secretary, Cranswick plc, 74 Helsinki Road, Sutton
Fields, Hull, HU7 0YW.
This information is provided by RNS
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