REG - Genus - Interim Results <Origin Href="QuoteRef">GENS.L</Origin> - Part 3
24/02/2015 07:00
- Part 3: For the preceding part double click ID:nRSX6544Fb
47.6p
Adjusted earnings per share from continuing operations
Adjusted earnings per share 29.7p 24.6p 46.5p
Diluted adjusted earnings per share 29.4p 24.3p 46.4p
Earnings per share measures are calculated on the weighted average number of ordinary shares in issue during the period. As
in previous years, 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 calculated on the profit for the period of £20.0m (six months ended
31 December 2013: £17.2m; year ended 30 June 2014: £28.9m) 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 £18.0m (six months ended 31 December 2013: £14.9m; year ended 30 June 2014:
£28.2m), as follows:
Adjusted earnings from continuing operations Six monthsended31 December2014 Six monthsended31 December2013 Yearended30 June2014
£m £m £m
Profit before tax from continuing operations 28.6 22.0 38.2
Add/(deduct):
Net IAS 41 valuation movement on biological assets (9.0) (5.8) (7.5)
Amortisation of acquired intangible assets 2.9 2.6 5.8
Share-based payment expense 0.7 1.5 0.8
Acquisition and integration 0.5 1.5 1.8
Other (including restructuring) 1.1 (0.8) 0.2
Pension related - settlement gain (0.4) - -
Net IAS 41 valuation movement on biological assets in joint ventures and associates (0.3) (0.6) (0.7)
Tax on joint ventures and associates 0.6 0.2 0.7
Adjusted profit before tax 24.7 20.6 39.3
Adjusted tax charge (6.7) (5.7) (11.1)
Adjusted profit after taxation 18.0 14.9 28.2
Effective tax rate on adjusted profit 27.1% 27.7% 28.2%
13. Cash flow from operating activities
Six monthsended31 December2014 Six monthsended31 December2013 Yearended30 June2014
£m £m £m
Profit for the period 20.0 17.2 28.9
Adjustment for:
Net IAS 41 valuation movement on biological assets (9.0) (5.8) (7.5)
Amortisation of acquired intangible assets 2.9 2.6 5.8
Share-based payment expense 0.7 1.5 0.8
Share of profit of joint ventures and associates (2.4) (1.5) (1.9)
Finance costs 2.3 2.8 5.5
Income tax expense 8.6 4.8 9.3
Other exceptional items 1.2 0.7 2.0
Adjusted operating profit from continuing operations 24.3 22.3 42.9
Depreciation of property, plant and equipment 3.0 2.6 5.1
(Gain)/loss on disposal of plant and equipment (0.1) - 0.2
Amortisation of intangible assets 0.3 0.3 0.6
Adjusted earnings before interest, tax, depreciation and amortisation 27.5 25.2 48.8
Exceptional item cash (1.6) (0.7) (2.0)
Other movements in biological assets and harvested produce 1.9 (0.4) (3.0)
(Decrease)/increase in provisions (0.4) - 0.2
Additional pension contribution in excess of pension charge (3.1) (2.9) (5.6)
Other (0.3) (0.2) (0.3)
Operating cash flows before movement in working capital 24.0 21.0 38.1
(Increase)/decrease in inventories (1.2) (0.8) 1.5
(Increase)/decrease in receivables (0.8) (2.0) 1.1
Increase/(decrease) in payables 5.2 (0.4) 3.6
Cash generated by operations 27.2 17.8 44.3
Interest received 0.1 0.1 0.2
Interest and other finance costs paid (1.0) (0.8) (1.8)
Cash flow from derivative financial instruments (0.1) (0.2) (0.5)
Income taxes paid (6.6) (5.7) (9.9)
Net cash from operating activities 19.6 11.2 32.3
14. 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 2014. The aggregated position of defined benefit schemes are provided
below:
31 December2014 31 December2013 30 June
2014
£m £m £m
Present value of funded obligations 389.5 353.7 360.5
Present value of unfunded obligations 7.8 7.5 7.3
Total present value of obligations 397.3 361.2 367.8
Fair value of plan assets (326.1) (306.1) (314.6)
Restricted recognition of asset 6.4 4.4 5.0
Recognised liability for defined benefit obligations 77.6 59.5 58.2
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 75% 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 2014.
The principal actuarial assumptions at the date of the most recent actuarial valuations (expressed as weighted averages)
are:
31 December2014 31 December2013 30 June
2014
% % %
Discount rate 3.6 4.4 4.2
Expected return on plan assets 6.6 7.1 6.6
Medical cost trend rate 7.2 7.4 7.2
Future pension increases and inflation 3.0 3.2 3.2
15. Contingencies
There have been no material changes to the Group's contingent liabilities relating to the Group's ongoing joint and several
liability for the Milk Pension Fund, more fully described in the Annual Report 2014.
There have been no changes to any other contingent liabilities involving the Group in the six months ended 31 December 2014
which are expected to have, or have had, a material effect on the financial position or profitability of the Group.
16. Financial instruments fair value disclosures
The table below sets out the categorisation of the financial instruments held by the Group at 31 December 2014.
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 7. 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 31 December2014 31 December 2013
£m £m
Financial assets
Derivative instrument in a non-designated hedge accounting relationship 2 - 0.2
Financial liabilities
Derivative instrument in a designated hedge accounting relationship 2 - (0.2)
Derivative instrument in a non-designated hedge accounting relationship 2 (0.3) (1.0)
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.
17. Acquisition of subsidiary and related assets
On 1 September 2014 the Group acquired 100% of the share capital of Birchwood Genetics, Inc. a porcine distribution company
with three sites located in Ohio, Michigan and Kentucky in North America. Birchwood has been a PIC partner for over 14
years. It focuses on providing male PIC genetics in a "service-and-product package" that generates consistent, valuable
results helping to build and sustain the success of the mid- and small-sized customers it serves. This acquisition helps
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