REG - Genus - Interim Results <Origin Href="QuoteRef">GNS.L</Origin> - Part 3
28/02/2018 07:06
- Part 3: For the preceding part double click ID:nRSb1530Gb
31 31 30
December December June
2017 2016 2017
£m £m £m
Profit before tax from continuing operations 14.3 11.4 40.7
Add/(deduct):
Net IAS 41 valuation movement on biological assets and commodity futures 3.6 5.0 1.1
Amortisation of acquired intangible assets 5.0 3.6 8.7
Share-based payment expense 3.0 1.7 4.6
Exceptional items 2.4 4.2 2.5
Net IAS 41 valuation movement on biological assets in joint ventures and 0.1 (0.5) (0.5)
associates
Tax on joint ventures and associates 1.0 0.7 1.4
Attributable to non-controlling interest (0.4) (1.0) (2.1)
Adjusted profit before tax 29.0 25.1 56.4
Adjusted tax charge (4.0) (6.5) (14.1)
Adjusted profit after tax 25.0 18.6 42.3
Effective tax rate on adjusted profit 13.8% 25.9% 25.0%
14. Cash flow from operating activities
Six months ended Six months ended Year
31 31 December 2016 ended
December 2017 30
June
2017
£m £m £m
Profit for the period 42.6 8.8 34.3
Adjustment for:
Net IAS 41 valuation movement on biological assets 3.6 5.0 1.1
Amortisation of acquired intangible assets 5.0 3.6 8.7
Share-based payment expense 3.0 1.7 4.6
Share of profit of joint ventures and associates (2.5) (3.1) (6.2)
Finance costs (net) 2.5 1.7 3.7
Income tax (credit) / expense (28.3) 2.6 6.4
Exceptional items 2.4 4.2 2.5
Adjusted operating profit from continuing 28.3 24.5 55.1
operations
Depreciation of property, plant and equipment 4.9 4.3 8.8
(Profit) / loss on disposal of plant and equipment (0.1) 0.2 0.2
Loss on disposal of intangible assets 0.2 - -
Amortisation of intangible assets 2.2 0.8 2.5
Adjusted earnings before interest, tax, depreciation and amortisation 35.5 29.8 66.6
Exceptional item cash (3.6) (4.2) (5.4)
Other movements in biological assets and harvested produce (0.4) (3.0) (5.7)
(Decrease)/increase in provisions (0.4) (0.3) 0.1
Additional pension contribution in excess of pension charge
(3.6) (3.1) (6.6)
Other (0.7) 0.4 (0.9)
Operating cash flows before movement in working capital 26.8 19.6 48.1
(Increase)/decrease in inventories (1.7) (3.7) 1.4
Increase in receivables (2.3) (1.4) (9.0)
(Decrease)/increase in payables (0.8) (1.0) 5.8
Cash generated by operations 22.0 13.5 46.3
Interest received 0.1 0.5 0.8
Interest and other finance costs paid (1.9) (1.2) (3.1)
Cash flow from derivative financial instruments (0.3) 0.3 0.6
Income taxes paid (5.6) (4.8) (10.0)
Net cash from operating activities 14.3 8.3 34.6
15. Retirement benefit obligations
The Group has a number of defined contribution and defined benefit pension
schemes covering many of its employees, further details can be found in the
Genus Annual Report 2017. The aggregated position of defined benefit schemes
are provided below:
31 December 31 December 30
2017 2016 June 2017
£m £m £m
Present value of funded obligations 421.1 372.6 424.2
Present value of unfunded obligations 8.7 9.4 9.0
Total present value of obligations 429.8 382.0 433.2
Fair value of plan assets (420.1) (361.8) (418.4)
Restricted recognition of asset 6.5 9.5 6.5
Recognition of additional liability (MPF) 21.9 13.6 19.6
Recognised liability for defined benefit obligations 38.1 43.3 40.9
The Milk Pension Fund ('MPF')
The MPF was previously operated by the Milk Marketing Board, and was also open
to staff working for Milk Marque Ltd (the principal employer now known as
Community Foods Group Limited), National Milk Records plc, First Milk Ltd,
hauliers associated to First Milk Ltd, Dairy Farmers of Britain Ltd (which
went into receivership in June 2009) and Milk Link Ltd.
We have accounted for our section of the scheme and our share of any orphan
assets and liabilities, which together represent approximately 85% of the MPF.
Although the MPF is managed on a sectionalised basis, it is a "last man
standing scheme", which means that all participating employers are joint and
severally liable for all of the fund's liabilities.
Further details of the Milk Pension Fund can be found in the Genus Annual
Report 2017.
The principal actuarial assumptions (expressed as weighted averages) are:
31 December 31 December 30
2017 2016 June 2017
% % %
Discount rate 2.6 2.7 2.7
Retail Price Index (RPI) 3.2 3.2 3.2
Consumer Price Index (CPI) 2.1 2.1 2.1
16. Financial instruments fair value disclosures
The table below sets out the categorisation of the financial instruments held
by the Group at 31 December 2017.
We have categorised financial instruments held at valuation into a three-level
fair value hierarchy, based on the priority of the inputs to the valuation
technique in accordance with IFRS 13. The hierarchy gives the highest priority
to quoted prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3). Valuations
categorised as Level 2 are obtained from third parties. If the inputs used to
measure fair value fall within different levels of the hierarchy, we base the
category level on the lowest priority level input that is significant to the
fair value measurement of the instrument in its entirety.
Valuation 31 31 30
level December December 2016 June
2017 2017
£m £m £m
Financial assets
Derivative instruments in non-designated hedge accounting relationships
2 - 0.3 1.3
Derivative instruments in designated hedge accounting relationships
2 1.8 1.6 0.1
Other investments 2 5.5 3.9 5.5
Trade and other receivables excluding prepayments
2 78.9 76.0 81.0
Cash and equivalents 1 27.7 37.0 26.5
Assets held for sale 2 0.3 0.3 0.3
Financial liabilities
Derivative instruments in designated hedge accounting relationships
2 (0.8) - (0.4)
Derivative instruments in non-designated hedge accounting relationships
2 (0.8) (0.4) (0.6)
Put option over non-controlling interest 2 (3.1) (15.2) (3.3)
Trade and other payables excluding other taxes and social securities
2 (65.7) (65.4) (69.7)
Loans and overdrafts 2 (137.4) (142.4) (134.9)
Leasing obligations 2 (3.7) (3.6) (3.2)
The Directors consider that the carrying value amounts of financial assets and
financial liabilities recorded at amortised cost in the financial statements
are approximately equal to their fair values.
GENUS PLC
RESPONSIBILITY STATEMENT
For the six months ended 31 December 2017
We confirm that to the best of our knowledge;
a) the Condensed Set of Financial Statements has been prepared
in accordance with IAS 34;
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events during the
first six months and description of the principal risks and uncertainties for
the remaining six months of the year); and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party transactions
and charges therein).
Neither the Company nor the Directors accept any liability to any person in
relation to the half-yearly financial report except to the extent that such
liability could arise under English Law. Accordingly, any liability to a
person who has demonstrated reliance on any untrue or misleading statement or
omission shall be determined in accordance with section 90A of the Financial
Services and Markets Act 2000.
By order of the Board
Chief Executive Group Finance Director
Karim Bitar Stephen Wilson
27 February 2018
This information is provided by RNS
The company news service from the London Stock Exchange
- 1.1 -
Balance at 30 June 2017 24.8 47.9 72.7 7.5 0.4 1.0 81.6 -
Amortisation for the period 1.8 3.2 5.0 0.6 1.1 0.5 7.2 -
Transfers (0.2) - (0.2) 0.2 - - -
Reclassified from tangible assets - - - 0.4 - - 0.4 -
Disposals - - - - - (0.1) (0.1) -
Effect of movements in exchange rates - (1.8) (1.8) (0.1) - - (1.9) -
Balance at 31 December 2017 26.4 49.3 75.7 8.6 1.5 1.4 87.2 -
Carrying amounts
At 31 December 2017 26.1 30.1 56.2 2.9 19.8 2.6 81.5 101.9
At 30 June 2017 28.6 34.4 63.0 1.3 20.9 3.1 88.3 104.7
Included within the carrying amount of Software is £0.8m relating to internally generated software assets in the course of
construction.
10. Biological assets
Fair value of biological assets Bovine Porcine Total
£m £m £m
Balance at 1 July 2017 137.5 215.6 353.1
Increases due to purchases 5.9 62.8 68.7
Decreases attributable to sales - (89.7) (89.7)
Decrease due to harvest (14.4) (10.3) (24.7)
Changes in fair value less estimated sale costs 11.5 31.9 43.4
Effect of movements in exchange rates (4.9) (7.9) (12.8)
Balance at 31 December 2017 135.6 202.4 338.0
Non-current biological assets 135.6 132.3 267.9
Current biological assets - 70.1 70.1
Balance at 31 December 2017 135.6 202.4 338.0
Balance at 1 July 2016 146.3 184.7 331.0
Increases due to purchases 6.7 80.2 86.9
Acquisition 5.4 - 5.4
Decreases attributable to sales - (95.2) (95.2)
Decrease due to harvest (17.6) (9.9) (27.5)
Changes in fair value less estimated sale costs 1.4 32.8 34.2
Effect of movements in exchange rates 11.0 14.5 25.5
Balance at 31 December 2016 153.2 207.1 360.3
Non-current biological assets 153.2 136.5 289.7
Current biological assets - 70.6 70.6
Balance at 31 December 2016 153.2 207.1 360.3
Balance at 1 July 2016 146.3 184.7 331.0
Increases due to purchases 11.9 176.0 187.9
Acquisition 5.4 - 5.4
Decreases attributable to sales - (197.8) (197.8)
Decrease due to harvest (40.7) (19.3) (60.0)
Changes in fair value less estimated sale costs 10.3 66.0 76.3
Effect of movements in exchange rates 4.3 6.0 10.3
Balance at 30 June 2017 137.5 215.6 353.1
Non-current biological assets 137.5 141.7 279.2
Current biological assets - 73.9 73.9
Balance at 30 June 2017 137.5 215.6 353.1
Bovine
Bovine biological assets include £7.4m (2016: £7.7m) representing the fair value of bulls owned by third parties but
managed by the Group, net of expected future payments to such third parties and are therefore treated as assets held under
finance leases. There are no movements in the carrying value of the bovine biological assets in respect of sales or other
changes during the period.
The current market determined post-tax rate used to discount expected future net cash flows from the sale of bull semen has
been assessed as 9.0% (2016: 8.0%).
Decreases due to harvest represent the semen extracted from the biological assets. Inventories of such semen are shown as
biological asset harvest.
Porcine
Included in increases due to purchases is the aggregate increase arising during the period on initial recognition of
biological assets in respect of multiplier purchases, other than parent gilts, of £23.6m (2016: £46.9m).
Decreases attributable to sales during the period of £89.7m (2016: £95.2m) include £27.6m (2016: £31.5m) in respect of the
reduction in fair value of the retained interest in the genetics of animals, other than parent gilts, transferred under
royalty contracts.
Also included is £46.8m (2016: £54.3m) relating to the fair value of the retained interest in the genetics in respect of
animals, other than parent gilts, sold to customers under royalty contracts in the period.
Total revenue in the period, including parent gilts, includes £81.7m (2016: £77.8m) in respect of these contracts,
comprising £28.3m (2016: £26.0m) on initial transfer of animals to customers and £53.5m (2016: £51.8m) in respect of
royalties received.
For pure line porcine herds, the net cash flows from the expected output of the herds are discounted at the Group's
required rate of return, adjusted for the greater risk implicit in including output from future generations. This adjusted
rate has been assessed as 11.0% (2016: 11.0%). The number of future generations which have been taken into account is seven
(2016: seven) and their estimated useful lifespan is 1.4 years (2016: 1.4 years).
Six months ended 31 December 2017 Bovine Porcine Total
£m £m £m
Net valuation movement on biological assets*
Changes in fair value of biological assets 11.5 31.9 43.4
Inventory transferred to cost of sales at fair value (11.3) (10.3) (21.6)
Biological assets transferred to cost of sales at fair value - (25.2) (25.2)
0.2 (3.6) (3.4)
Fair value movements in related financial derivative - (0.2) (0.2)
0.2 (3.8) (3.6)
Six months ended 31 December 2016 Bovine Porcine Total
£m £m £m
Net valuation movement on biological assets*
Changes in fair value of biological assets 1.4 32.8 34.2
Inventory transferred to cost of sales at fair value (15.8) (9.9) (25.7)
Biological assets transferred to cost of sales at fair value - (13.1) (13.1)
(14.4) 9.8 (4.6)
Fair value movements in related financial derivative - (0.4) (0.4)
(14.4) 9.4 (5.0)
Year ended 30 June 2017 Bovine Porcine Total
£m £m £m
Net valuation movement on biological assets*
Changes in fair value of biological assets 10.3 66.0 76.3
Inventory transferred to cost of sales at fair value (38.8) (19.3) (58.1)
Biological assets transferred to cost of sales at fair value - (18.8) (18.8)
(28.5) 27.9 (0.6)
Fair value movements in related financial derivative - (0.5) (0.5)
(28.5) 27.4 (1.1)
* This represents the difference between operating profit including fair value movement on biological assets under IAS 41
and related financial derivative and operating profit prepared under historical cost accounting, which forms part of the
reconciliation to adjusted operating profit.
11. Equity accounted investees
The Group's share of profit after tax in its equity accounted investees for the six months ended 31 December 2017 was £2.5m
(2016: £3.1m).
31 December 2017£m 31 December 2016£m
Balance at 1 July 22.7 24.3
Share of post-tax retained profits of joint ventures and associates 2.5 3.1
Shareholder loan repayment - (1.7)
Effect of other movements including exchange rates (1.4) 1.1
Balance at 31 December 23.8 26.8
Summary financial information for equity accounted investees, adjusted for the percentage ownership held by the Group:
Revenue Net IAS 41 valuation movementon biological assets Expenses Taxation Profit after tax
Income statement £m £m £m £m £m
Six months ended 31 December 2017 13.6 (0.1) (10.0) (1.0) 2.5
Six months ended 31 December 2016 14.9 0.5 (11.6) (0.7) 3.1
Year ended 30 June 2017 28.4 0.5 (21.3) (1.4) 6.2
12. Related parties
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note. Transactions between the Group and its joint ventures and associates are described below:
Other related party transactions
Transaction value Balance outstanding
Six months ended 31 December 2017 Six months ended 31 December 2016 Year ended 30 June 2017 31 December 2017 31 December 2016 30June2017
£m £m £m £m £m £m
Purchase of goods and services to joint ventures and associates 1.3 2.3 3.7 (0.7) (0.1) (0.3)
All outstanding balances with joint ventures and associates are priced on an arm's length basis and are to be settled in
cash within six months of the reporting date. None of the balances are secured.
13. Earnings per share
Six monthsended31 December2017 Six months ended31 December2016 Yearended30 June2017
m m m
Weighted average number of ordinary shares (basic) 61.1 60.9 60.9
Dilutive effect of share options 1.0 0.7 0.9
Weighted average number of ordinary shares for the purpose of diluted earnings per share 62.1 61.6 61.8
Six monthsended31 December2017 Six months ended31 December2016 Yearended30 June2017
Earnings per share from continuing operations
Basic earnings per share 69.0p 13.3p 53.8p
Diluted earnings per share 67.8p 13.1p 53.0p
Adjusted earnings per share from continuing operations
Adjusted earnings per share 40.9p 30.5p 69.4p
Diluted adjusted earnings per share 40.3p 30.2p 68.4p
Earnings per share measures are calculated on the weighted average number of ordinary shares in issue during the period. As
in previous periods, adjusted earnings per share have been shown, since the Directors consider that this alternative
measure gives a more comparable indication of the Group's underlying trading performance.
Continuing operations
Basic earnings per share from continuing operations is based on the net profit attributable to owners of the Company for
the period of £42.1m (six months ended 31 December 2016: £8.1m; year ended 30 June 2017: £32.8m) divided by weighted
average number of ordinary shares (basic and diluted) as calculated above.
Adjusted earnings per share is calculated on profit for the period before net IAS 41 valuation movement on biological
assets, amortisation of acquired intangible assets, share-based payment expense and exceptional items, after charging
taxation associated with those profits, of £25.0m (six months ended 31 December 2016: £18.6m; year ended 30 June 2017:
£42.3m), which is calculated as follows:
Adjusted earnings from continuing operations Six monthsended31December2017 Six monthsended31December2016 Yearended30 June2017
£m £m £m
Profit before tax from continuing operations 14.3 11.4 40.7
Add/(deduct):
Net IAS 41 valuation movement on biological assets and commodity futures 3.6 5.0 1.1
Amortisation of acquired intangible assets 5.0 3.6 8.7
Share-based payment expense 3.0 1.7 4.6
Exceptional items 2.4 4.2 2.5
Net IAS 41 valuation movement on biological assets in joint ventures and associates 0.1 (0.5) (0.5)
Tax on joint ventures and associates 1.0 0.7 1.4
Attributable to non-controlling interest (0.4) (1.0) (2.1)
Adjusted profit before tax 29.0 25.1 56.4
Adjusted tax charge (4.0) (6.5) (14.1)
Adjusted profit after tax 25.0 18.6 42.3
Effective tax rate on adjusted profit 13.8% 25.9% 25.0%
14. Cash flow from operating activities
Six months ended31 December 2017 Six months ended 31 December 2016 Year ended 30 June 2017
£m £m £m
Profit for the period 42.6 8.8 34.3
Adjustment for:
Net IAS 41 valuation movement on biological assets 3.6 5.0 1.1
Amortisation of acquired intangible assets 5.0 3.6 8.7
Share-based payment expense 3.0 1.7 4.6
Share of profit of joint ventures and associates (2.5) (3.1) (6.2)
Finance costs (net) 2.5 1.7 3.7
Income tax (credit) / expense (28.3) 2.6 6.4
Exceptional items 2.4 4.2 2.5
Adjusted operating profit from continuingoperations 28.3 24.5 55.1
Depreciation of property, plant and equipment 4.9 4.3 8.8
(Profit) / loss on disposal of plant and equipment (0.1) 0.2 0.2
Loss on disposal of intangible assets 0.2 - -
Amortisation of intangible assets 2.2 0.8 2.5
Adjusted earnings before interest, tax, depreciation and amortisation 35.5 29.8 66.6
Exceptional item cash (3.6) (4.2) (5.4)
Other movements in biological assets and harvested produce (0.4) (3.0) (5.7)
(Decrease)/increase in provisions (0.4) (0.3) 0.1
Additional pension contribution in excess of pension charge (3.6) (3.1) (6.6)
Other (0.7) 0.4 (0.9)
Operating cash flows before movement in working capital 26.8 19.6 48.1
(Increase)/decrease in inventories (1.7) (3.7) 1.4
Increase in receivables (2.3) (1.4) (9.0)
(Decrease)/increase in payables (0.8) (1.0) 5.8
Cash generated by operations 22.0 13.5 46.3
Interest received 0.1 0.5 0.8
Interest and other finance costs paid (1.9) (1.2) (3.1)
Cash flow from derivative financial instruments (0.3) 0.3 0.6
Income taxes paid (5.6) (4.8) (10.0)
Net cash from operating activities 14.3 8.3 34.6
15. Retirement benefit obligations
The Group has a number of defined contribution and defined benefit pension schemes covering many of its employees, further
details can be found in the Genus Annual Report 2017. The aggregated position of defined benefit schemes are provided
below:
31 December2017 31 December2016 30 June
2017
£m £m £m
Present value of funded obligations 421.1 372.6 424.2
Present value of unfunded obligations 8.7 9.4 9.0
Total present value of obligations 429.8 382.0 433.2
Fair value of plan assets (420.1) (361.8) (418.4)
Restricted recognition of asset 6.5 9.5 6.5
Recognition of additional liability (MPF) 21.9 13.6 19.6
Recognised liability for defined benefit obligations 38.1 43.3 40.9
The Milk Pension Fund ('MPF')
The MPF was previously operated by the Milk Marketing Board, and was also open to staff working for Milk Marque Ltd (the
principal employer now known as Community Foods Group Limited), National Milk Records plc, First Milk Ltd, hauliers
associated to First Milk Ltd, Dairy Farmers of Britain Ltd (which went into receivership in June 2009) and Milk Link Ltd.
We have accounted for our section of the scheme and our share of any orphan assets and liabilities, which together
represent approximately 85% of the MPF. Although the MPF is managed on a sectionalised basis, it is a "last man standing
scheme", which means that all participating employers are joint and severally liable for all of the fund's liabilities.
Further details of the Milk Pension Fund can be found in the Genus Annual Report 2017.
The principal actuarial assumptions (expressed as weighted averages) are:
31 December2017 31 December2016 30 June
2017
% % %
Discount rate 2.6 2.7 2.7
Retail Price Index (RPI) 3.2 3.2 3.2
Consumer Price Index (CPI) 2.1 2.1 2.1
16. Financial instruments fair value disclosures
The table below sets out the categorisation of the financial instruments held by the Group at 31 December 2017.
We have categorised financial instruments held at valuation into a three-level fair value hierarchy, based on the priority
of the inputs to the valuation technique in accordance with IFRS 13. The hierarchy gives the highest priority to quoted
prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs
(Level 3). Valuations categorised as Level 2 are obtained from third parties. If the inputs used to measure fair value fall
within different levels of the hierarchy, we base the category level on the lowest priority level input that is significant
to the fair value measurement of the instrument in its entirety.
Valuation level 31December2017 31December 2016 30June2017
£m £m £m
Financial assets
Derivative instruments in non-designated hedge accounting relationships 2 - 0.3 1.3
Derivative instruments in designated hedge accounting relationships 2 1.8 1.6 0.1
Other investments 2 5.5 3.9 5.5
Trade and other receivables excluding prepayments 2 78.9 76.0 81.0
Cash and equivalents 1 27.7 37.0 26.5
Assets held for sale 2 0.3 0.3 0.3
Financial liabilities
Derivative instruments in designated hedge accounting relationships 2 (0.8) - (0.4)
Derivative instruments in non-designated hedge accounting relationships 2 (0.8) (0.4) (0.6)
Put option over non-controlling interest 2 (3.1) (15.2) (3.3)
Trade and other payables excluding other taxes and social securities 2 (65.7) (65.4) (69.7)
Loans and overdrafts 2 (137.4) (142.4) (134.9)
Leasing obligations 2 (3.7) (3.6) (3.2)
The Directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised
cost in the financial statements are approximately equal to their fair values.
GENUS PLC
RESPONSIBILITY STATEMENT
For the six months ended 31 December 2017
We confirm that to the best of our knowledge;
a) the Condensed Set of Financial Statements has been prepared in accordance with IAS 34;
b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of
important events during the first six months and description of the principal risks and uncertainties for the remaining six
months of the year); and
c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of
related party transactions and charges therein).
Neither the Company nor the Directors accept any liability to any person in relation to the half-yearly financial report
except to the extent that such liability could arise under English Law. Accordingly, any liability to a person who has
demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A
of the Financial Services and Markets Act 2000.
By order of the Board
Chief Executive Group Finance Director
Karim Bitar Stephen Wilson
27 February 2018
This information is provided by RNS
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