REG - Hilton Food Grp Plc - Preliminary Results <Origin Href="QuoteRef">HFG.L</Origin> - Part 2
30/03/2017 07:06
- Part 2: For the preceding part double click ID:nRSd9216Aa
attacks including fraudulent external email activity. These kinds of attacks are generally increasing in frequency and sophistication.
Its potentialimpact The Group's operations are underpinned by a variety of IT systems. Loss or disruption to those IT systems could impact the Group's ability to effectively operate its facilities and on its sales and reputation.
Risk mitigation measures and strategiesadopted The Group has a robust IT control framework which is tested frequently by internal staff and by specialist external bodies. There is internal training and resources available with emphasis on prevention, user awareness and recovery. Financial controls mitigate the risk of fraudulent payments being processed.
Note: References in this preliminary announcement to the Strategic report, the
Corporate and social responsibility report, the Directors' report and the
Corporate Governance statement are to reports which will be available in the
Company's full published accounts.
Responsibility statement of the Directors in respect of the Annual report and
financial statements
Each of the Directors whose names and functions are set out below confirms
that to the best of their knowledge and belief:
· the Group and parent company financial statements, which have been prepared in accordance with applicable law and in conformity with IFRS, as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the Company; and
· the management reports, which comprise the Strategic report and the Directors' report, include a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties they face.
This responsibility statement was approved by the Board of Directors on 29
March 2017 and is signed on its behalf by:
Directors
R Watson OBE Chief Executive
N Majewski Chief Financial Officer
Consolidated income statement
2016 2015
52 weeks 53 weeks
Notes £'000 £'000
Continuing operations
Revenue 3 1,234,495 1,094,822
Cost of sales (1,083,667) (957,067)
Gross profit 150,828 137,755
Distribution costs (11,089) (10,091)
Administrative expenses (108,471) (99,887)
Share of profit in joint venture 3,056 1,222
Operating profit 34,324 28,999
Finance income 4 87 97
Finance costs 4 (1,202) (1,148)
Finance costs - net 4 (1,115) (1,051)
Profit before income tax 33,209 27,948
Income tax expense 5 (6,553) (6,489)
Profit for the year 26,656 21,459
Attributable to:
Owners of the parent 24,649 20,017
Non-controlling interests 2,007 1,442
26,656 21,459
Earnings per share attributable to owners of the parent during the year
Basic (pence) 6 33.7 27.5
Diluted (pence) 6 33.2 27.2
Consolidated statement of comprehensive income
2016 2015
52 weeks 53 weeks
£'000 £'000
Profit for the year 26,656 21,459
Other comprehensive income
Currency translation differences 8,266 (2,739)
Other comprehensive income/(expense) for the year net of tax 8,266 (2,739)
Total comprehensive income for the year 34,922 18,720
Total comprehensive income attributable to:
Owners of the parent 32,104 17,552
Non-controlling interests 2,818 1,168
34,922 18,720
The notes are an integral part of these consolidated financial statements.
Consolidated balance sheet
Group Company
2016 2015 2016 2015
Notes £'000 £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 8 70,396 67,230 - -
Intangible assets 9 8,584 10,073 - -
Investments 4,847 2,396 102,985 102,985
Deferred income tax assets 1,058 1,000 - -
84,885 80,699 102,985 102,985
Current assets
Inventories 24,382 18,272 - -
Trade and other receivables 118,608 96,095 41 470
Current income tax assets 33 - - 11
Cash and cash equivalents 59,304 52,806 208 150
202,327 167,173 249 631
Total assets 287,212 247,872 103,234 103,616
Equity
Equity attributable to owners of the parent
Ordinary shares 7,355 7,286 7,355 7,286
Share premium 7,273 8,191 7,273 8,191
Employee share schemes reserve 5,250 901 - -
Foreign currency translation reserve 2,966 (4,489) - -
Retained earnings 96,419 82,829 15,685 17,120
119,263 94,718 30,313 32,597
Reverse acquisition reserve (31,700) (31,700) - -
Merger reserve 919 919 71,019 71,019
88,482 63,937 101,332 103,616
Non-controlling interests 6,613 4,938 - -
Total equity 95,095 68,875 101,332 103,616
Liabilities
Non-current liabilities
Borrowings 10 17,409 28,405 - -
Deferred income tax liabilities 1,505 1,654 - -
18,914 30,059 - -
Current liabilities
Borrowings 10 9,567 11,728 - -
Trade and other payables 163,636 136,537 1,902 -
Current income tax liabilities - 673 - -
173,203 148,938 1,902 -
Total liabilities 192,117 178,997 1,902 -
Total equity and liabilities 287,212 247,872 103,234 103,616
The notes are an integral part of these consolidated financial statements.
The financial statements were approved by the Board on 29 March 2017 and were signed on its behalf by:
R. Watson OBE N. Majewski
Director Director
Hilton Food Group plc - Registered number: 06165540
Consolidated statement of changes in equity
Attributable to owners of the parent
Share capital Share premium Employee share schemes reserve Foreign currency translation reserve Retained earnings Reverse acquisition reserve Merger reserve Total Non-controlling interests Total equity
Group Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 29 December 2014 7,259 7,235 441 (2,024) 72,717 (31,700) 919 54,847 4,786 59,633
Profit for the year - - - - 20,017 - - 20,017 1,442 21,459
Other comprehensive income
Currency translation differences - - - (2,465) - - - (2,465) (274) (2,739)
Total comprehensive income for the year - - - (2,465) 20,017 - - 17,552 1,168 18,720
Issue of new shares 27 516 - - - - - 543 - 543
Adjustment in respect of employee share schemes - 408 342 - - - - 750 - 750
Tax on employee share schemes - 32 118 - - - - 150 - 150
Dividends paid 7 - - - - (9,905) - - (9,905) (1,016) (10,921)
Total transactions with owners 27 956 460 - (9,905) - - (8,462) (1,016) (9,478)
Balance at 3 January 2016 7,286 8,191 901 (4,489) 82,829 (31,700) 919 63,937 4,938 68,875
Profit for the year - - - - 24,649 - - 24,649 2,007 26,656
Other comprehensive income
Currency translation differences - - - 7,455 - - - 7,455 811 8,266
Total comprehensive income for the year - - - 7,455 24,649 - - 32,104 2,818 34,922
Issue of new shares 69 1,423 - - - - - 1,492 - 1,492
Adjustment in respect of employee share schemes - (1,949) 3,823 - - - - 1,874 - 1,874
Tax on employee share schemes - (392) 526 - - - - 134 - 134
Dividends paid 7 - - - - (11,059) - - (11,059) (1,143) (12,202)
Total transactions with owners 69 (918) 4,349 - (11,059) - - (7,559) (1,143) (8,702)
Balance at 1 January 2017 7,355 7,273 5,250 2,966 96,419 (31,700) 919 88,482 6,613 95,095
Company
Balance at 29 December 2014 7,259 7,235 - - 13,470 - 71,019 98,983
Profit for the year - - - - 13,555 - - 13,555
Total comprehensive income for the year - - - - 13,555 - - 13,555
Issue of new shares 27 516 - - - - - 543
Adjustment in respect of employee share schemes - 408 - - - - - 408
Tax on employee share schemes - 32 - - - - - 32
Dividends paid 7 - - - - (9,905) - - (9,905)
Total transactions with owners 27 956 - - (9,905) - - (8,922)
Balance at 3 January 2016 7,286 8,191 - - 17,120 - 71,019 103,616
Profit for the year - - - - 9,624 - - 9,624
Total comprehensive income for the year - - - - 9,624 - - 9,624
Issue of new shares 69 1,423 - - - - - 1,492
Adjustment in respect of employee share schemes - (1,949) - - - - - (1,949)
Tax on employee share schemes - (392) - - - - - (392)
Dividends paid 7 - - - - (11,059) - - (11,059)
Total transactions with owners 69 (918) - - (11,059) - - (11,908)
Balance at 1 January 2017 7,355 7,273 - - 15,685 - 71,019 101,332
The notes are an integral part of these consolidated financial statements.
Consolidated cash flow statement
Group Company
2016 2015 2016 2015
52 weeks 53 weeks 52 weeks 53 weeks
Notes £'000 £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 11 50,066 50,960 - -
Interest paid (1,202) (1,148) - (72)
Income tax (paid)/received (7,460) (4,553) - 54
Net cash generated from/(used in) operating activities 41,404 45,259 - (18)
Cash flows from investing activities
Purchases of property, plant and equipment (15,744) (13,676) - -
Proceeds from sale of property, plant and equipment 430 77 - -
Purchases of intangible assets (647) (54) - -
Interest received 87 97 - -
Dividends received - - 9,625 13,600
Dividends received from joint venture 1,184 - - -
Net cash (used in)/generated from investing activities (14,690) (13,556) 9,625 13,600
Cash flows from financing activities
Proceeds from borrowings - 3,336 - -
Repayments of borrowings (14,870) (6,157) - -
Repayment of inter-company loan - - - (4,403)
Issue of ordinary shares 1,492 543 1,492 543
Dividends paid to owners of the parent (11,059) (9,905) (11,059) (9,905)
Dividends paid to non-controlling interests (1,143) (1,016) - -
Net cash used in financing activities (25,580) (13,199) (9,567) (13,765)
Net increase/(decrease) in cash and cash equivalents 1,134 18,504 58 (183)
Cash and cash equivalents at beginning of the year 52,806 35,586 150 333
Exchange gains/(losses) on cash and cash equivalents 5,364 (1,284) - -
Cash and cash equivalents at end of the year 59,304 52,806 208 150
The notes are an integral part of these consolidated financial statements.
Notes to the financial statements
1 General information
Hilton Food Group plc ("the Company") and its subsidiaries (together "the
Group") is a specialist retail meat packing business supplying major
international food retailers in thirteen European countries and Australia. The
Company's subsidiaries are listed in a note.
The Company is a public limited company incorporated and domiciled in the UK.
The address of the registered office is 2-8 The Interchange, Latham Road,
Huntingdon, Cambridgeshire PE29 6YE. The registered number of the Company is
06165540.
The Company maintains a Premium Listing on the London Stock Exchange.
The financial year represents the 52 weeks to 1 January 2017 (prior financial
year 53 weeks to 3 January 2016).
This preliminary announcement was approved for issue on 29 March 2017.
2 Summary of significant accounting policies
The accounting policies are consistent with those of the annual financial
statements for the year ended 3 January 2016.
Basis of preparation
The consolidated financial statements of Hilton Food Group plc have been
prepared under the historical cost convention and in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRS), IFRIC interpretations and the Companies Act 2006 applicable to
companies reporting under IFRS.
The consolidated financial statements have been prepared on the going concern
basis. The reasons why the Directors consider this basis to be appropriate are
set out in the Performance and financial review.
The financial statements are presented in Sterling and all values are rounded
to the nearest thousand (£'000) except when otherwise indicated.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in a note.
The financial information included in this preliminary announcement does not
constitute statutory accounts of the Group for the years ended 1 January 2017
and 3 January 2016 but is derived from those accounts. Statutory accounts for
2015 have been delivered to the Registrar of Companies and those for 2016 will
be delivered following the Company's Annual General Meeting. The auditors have
reported on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
3 Segment information
Management have determined the operating segments based on the reports
reviewed by the Executive Directors that are used to make strategic
decisions.
The Executive Directors have considered the business from both a geographic
and product perspective.
From a geographic perspective, the Executive Directors consider that the Group
has seven operating segments: i) United Kingdom; ii) Netherlands; iii)
Republic of Ireland; iv) Sweden; v) Denmark; vi) Central Europe including
Poland, Czech Republic, Hungary, Slovakia, Latvia, Lithuania and Estonia; and
vii) Central costs and other including the share of profit from the joint
venture in Australia. The United Kingdom, Netherlands, Republic of Ireland,
Sweden and Denmark have been aggregated into one reportable segment 'Western
Europe' as they have similar economic characteristics as identified in IFRS 8.
Central Europe and Central costs and other comprise the other reportable
segments.
From a product perspective the Executive Directors consider that the Group has
only one identifiable product, wholesaling of meat. The Executive Directors
consider that no further segmentation is appropriate, as all of the Group's
operations are subject to similar risks and returns and exhibit similar long
term financial performance.
The segment information provided to the Executive Directors for the reportable segments is as follows:
Central costs and other Central costs and other
Western Central 2016 Western Central 2015
Europe Europe Total Europe Europe Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total segment revenue 1,175,989 87,023 - 1,263,012 1,020,844 74,165 - 1,095,009
Inter-segment revenue (28,512) (5) - (28,517) (187) - - (187)
Revenue from external customers 1,147,477 87,018 - 1,234,495 1,020,657 74,165 - 1,094,822
Operating profit/(loss)/segment result 35,899 2,129 (3,704) 34,324 32,107 2,255 (5,363) 28,999
Finance income 18 69 - 87 20 76 1 97
Finance costs (956) - (246) (1,202) (1,066) - (82) (1,148)
Income tax (expense)/credit (7,215) (427) 1,089 (6,553) (6,959) (455) 925 (6,489)
Profit/(loss) for the year 27,746 1,771 (2,861) 26,656 24,102 1,876 (4,519) 21,459
Depreciation and amortisation 18,581 999 126 19,706 18,205 1,036 122 19,363
Additions to non-current assets 14,892 1,294 205 16,391 12,905 547 278 13,730
Segment assets 259,355 18,477 8,289 286,121 224,739 17,836 4,297 246,872
Current income tax assets 33 -
Deferred income tax assets 1,058 1,000
Total assets 287,212 247,872
Segment liabilities 179,658 8,992 1,962 190,612 165,283 9,411 1,976 176,670
Current income tax liabilities - 673
Deferred income tax liabilities 1,505 1,654
Total liabilities 192,117 178,997
Sales between segments are carried out at arm's length. Revenue from external
customers reported to the Executive Directors is measured in a manner
consistent with that in the income statement.
The Executive Directors assess the performance of each operating segment based
on its operating profit. Operating profit is measured in a manner consistent
with that in the income statement.
The amounts provided to the Executive Directors with respect to total assets
and liabilities are measured in a manner consistent with that of the financial
statements. The assets are allocated based on the operations of the segment
and their physical location. The liabilities are allocated based on the
operations of the segment. The Group interest bearing reorganisation loan is
not considered to be a segment liability.
The Group has four principal customers (comprising groups of entities known to
be under common control), Tesco, Ahold, Coop Danmark and ICA Gruppen. These
customers are located in the United Kingdom, Netherlands, Republic of Ireland,
Sweden, Denmark and Central Europe including Poland, Czech Republic, Hungary,
Slovakia, Latvia, Lithuania and Estonia.
Analysis of revenues from external customers and non-current assets are as follows:
Revenues from external customers Non-current assets excluding deferred tax assets
2016 2015 2016 2015
£'000 £'000 £'000 £'000
Analysis by geographical area
United Kingdom - country of domicile 488,106 441,673 43,020 39,784
Netherlands 294,308 257,398 8,183 9,445
Sweden 208,974 182,621 15,715 13,752
Republic of Ireland 64,452 55,880 5,666 3,999
Denmark 91,637 83,174 7,594 9,757
Central Europe 87,018 74,076 3,649 2,962
1,234,495 1,094,822 83,827 79,699
Analysis by principal customer
Customer 1 570,062 513,401
Customer 2 317,740 284,560
Customer 3 225,657 197,608
Customer 4 89,936 81,634
Other 31,100 17,619
1,234,495 1,094,822
4 Finance income and costs
2016 2015
Group £'000 £'000
Finance income
Interest income on short term bank deposits 82 90
Other interest income 5 7
Finance income 87 97
Finance costs
Bank borrowings (915) (920)
Finance leases (162) (161)
Other interest expense (125) (67)
Finance costs (1,202) (1,148)
Finance costs - net (1,115) (1,051)
5 Income tax expense
2016 2015
Group £'000 £'000
Current income tax
Current tax on profits for the year 7,091 6,787
Adjustments to tax in respect of previous years (91) (18)
Total current tax 7,000 6,769
Deferred income tax
Origination and reversal of temporary differences (56) (389)
Adjustments to tax in respect of previous years (391) 109
Total deferred tax (447) (280)
Income tax expense 6,553 6,489
Deferred tax credited directly to equity during the year in respect of
employee share schemes amounted to £111,000 (2015: £118,000).
The tax on the Group's profit before income tax differs from the theoretical
amount that would arise using the standard rate of UK Corporation Tax of 20%
(2015: 20.25%) applied to profits of the consolidated entities as follows:
2016 2015
£'000 £'000
Profit before income tax 33,209 27,948
Tax calculated at the standard rate of UK Corporation Tax 20% (2015: 20.25%) 6,642 5,659
Expenses not deductible for tax purposes 317 618
Joint venture income not taxable (611) (247)
Adjustments to tax in respect of previous years (482) 91
Profits taxed at rates other than 20% (2015: 20.25%) 495 375
Other 192 (7)
Income tax expense 6,553 6,489
There is no tax impact relating to components of other comprehensive income.
6 Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to
owners of the parent by the weighted average number of ordinary shares in
issue during the year.
Diluted earnings per share are calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The Company has share options for which a
calculation is done to determine the number of shares that could have been
acquired at fair value (determined as the average annual market share price of
the Company's shares) based on the monetary value of the subscription rights
attached to outstanding share options. The number of shares calculated as
above is compared with the number of shares that would have been issued
assuming the exercise of the share options.
2016 2015
Group Basic Diluted Basic Diluted
Profit attributable to owners of the parent (£'000) 24,649 24,649 20,017 20,017
Weighted average number of ordinary shares in issue (thousands) 73,247 73,247 72,748 72,748
Adjustment for share options (thousands) - 945 - 970
Adjusted weighted average number of ordinary shares (thousands) 73,247 74,192 72,748 73,718
Basic and diluted earnings per share (pence) 33.7 33.2 27.5 27.2
7 Dividends
2016 2015
Group and Company £'000 £'000
Second interim dividend in respect of 2015 paid 9.2p per ordinary share 6,725 -
Final dividend in respect of 2015 paid 1.3p per ordinary share (2015: 9.5p) 951 6,919
Interim dividend in respect of 2016 paid 4.6p per ordinary share (2015: 4.1p) 3,383 2,986
Total dividends paid 11,059 9,905
The Directors propose a final dividend of 12.5p per share payable on 30 June
2017 to shareholders who are on the register at 2 June 2017. This dividend
totalling £9.2m has not been recognised as a liability in these consolidated
financial statements.
8 Property, plant and equipment
Land and buildings (including leasehold improvements) Plant and machinery Fixtures and fittings Motor vehicles Total
Group £'000 £'000 £'000 £'000 £'000
Cost
At 29 December 2014 37,675 160,215 8,554 297 206,741
Exchange adjustments (724) (5,167) (250) (1) (6,142)
Additions 3,521 9,391 755 9 13,676
Reclassification - (235) 53 - (182)
Disposals (1,464) (561) (88) (7) (2,120)
At 3 January 2016 39,008 163,643 9,024 298 211,973
Accumulated depreciation
At 29 December 2014 17,267 109,911 6,802 119 134,099
Exchange adjustments (460) (3,573) (188) - (4,221)
Charge for the year 3,737 12,219 860 68 16,884
Reclassification - (72) 21 - (51)
Disposals (1,464) (406) (91) (7) (1,968)
At 3 January 2016 19,080 118,079 7,404 180 144,743
Net book amount
At 29 December 2014 20,408 50,304 1,752 178 72,642
At 3 January 2016 19,928 45,564 1,620 118 67,230
Cost
At 4 January 2016 39,008 163,643 9,024 298 211,973
Exchange adjustments 1,909 16,426 931 5 19,271
Additions 344 14,480 714 206 15,744
Reclassification (note 9) 103 (267) 1,636 - 1,472
Disposals (1,464) (1,522) (257) (155) (3,398)
At 1 January 2017 39,900 192,760 12,048 354 245,062
Accumulated depreciation
At 4 January 2016 19,080 118,079 7,404 180 144,743
Exchange adjustments 1,405 12,237 773 1 14,416
Charge for the year 2,713 13,666 795 84 17,258
Reclassification (note 9) - - 1,508 - 1,508
Disposals (1,464) (1,426) (256) (113) (3,259)
At 1 January 2017 21,734 142,556 10,224 152 174,666
Net book amount
At 1 January 2017 18,166 50,204 1,824 202 70,396
Land and buildings are held under short leaseholds. Details of bank borrowings
secured on assets of the Group are given in note 10. Depreciation charges are
included within administrative expenses in the income statement.
The cost and net book amount of property plant and equipment in the course of
its construction included above comprise plant and machinery £1,980,000 (2015:
£1,654,000).
Property, plant and equipment include the following amounts where the Group is
a lessee under a finance lease:
2016 2015
£'000 £'000
Cost - capitalised finance leases 3,487 3,011
Accumulated depreciation (2,254) (1,794)
Net book amount 1,233 1,217
Included in assets held under finance leases are land and buildings with a net book amount of £1,233,000 (2015: £1,217,000).
9 Intangible assets
Product licences Computer software Goodwill Total
Group £'000 £'000 £'000 £'000
Cost
At 29 December 2014 19,305 4,116 836 24,257
Exchange adjustments (560) (137) - (697)
Additions - 54
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