REG-Tate & Lyle PLC Final Results <Origin Href="QuoteRef">TATE.L</Origin> - Part 4
25/05/2017 07:05
- Part 4: For the preceding part double click ID:nBwbHCRQvc
Purchase price adjustments 3
Total consideration 115
Less: fair value of net assets acquired (80)
Provisional goodwill at 31 March 2016 35
Cash flows:
Total cash consideration (including purchase price adjustments) (59)
Less: net cash and working capital adjustments 5
Acquisition of business, net of cash acquired (54)
The fair value of net assets acquired was comprised as follows:
Book value on Fair value At 31 March
acquisition £m Adjustments 2016
£m £m
Intangible assets (customer relationships £20m, distribution agreement – 29 29
£9m)
Property, plant and equipment 48 (1) 47
Inventories 9 – 9*
Trade and other receivables 9 – 9
Cash and cash equivalents 6 – 6
Trade and other payables (10) – (10)
Tax liabilities (deferred tax liability £6 million) (4) (6) (10)
Net assets on acquisition 58 22 80
*Subsequently re-measured in year ended 31 March 2017; see update earlier in
this note.
Disposals made during the year ended 31 March 2016
As a result of the Eaststarch re-alignment the Group exited the predominantly
bulk ingredient plants in Bulgaria, Turkey and Hungary. The re-alignment of
the Group’s interest in Eaststarch resulted in a gain on
re-measurement/disposal of £73 million.
50% Other
Interest in Eaststarch Total
Note Slovakia plants £m
£m £m
Consideration 56 229 285
Purchase price adjustments 2 11 13
Total consideration 58 240 298
Total assets disposed (52) (133) (185)
Foreign exchange recycled from other comprehensive income – (34) (34)
Disposal cost (1) (5) (6)
Gain on re-measurement/disposal – reported within exceptional items 5 5 68 73
Cash flows:
Disposal of joint ventures 240
Transaction costs (within exceptional cash outflow) (4)
Net cash inflow on disposal 236
Exceptional gain on re-measurement/disposal reported as follows:
Re-measurement of interest in Slovakia – continuing operations 5 5
Disposal of other Eaststarch joint ventures – discontinued operations 5 68
Total gain on re-measurement/disposal – exceptional items 73
17. Related party disclosures
Transactions entered into by the Company, Tate & Lyle PLC, with
subsidiaries and between subsidiaries as well as the resultant balances of
receivables and payables are eliminated on consolidation and are not required
to be disclosed. Transactions and balances with and between joint ventures
will be disclosed in the Group’s 2017 Annual Report. There are no such
transactions with associates.
In the year ended 31 March 2017, the Group disposed of, and therefore ceased
to have related party transactions with two of its subsidiaries. The Group
disposed of its equity interest in Jiangsu Tate & Lyle Howbetter Food Co,
Ltd, its Food Systems business in China. The Group also completed the disposal
of its interest in its corn wet mill in Casablanca, Morocco. There were no
other material changes in related parties or in the nature of related party
transactions during the year. Further details can be found in Note 16.
In the year ended 31 March 2016, the Group re-aligned its Eaststarch joint
venture and therefore ceased to have related party transactions with it.
18. Foreign exchange rates
The principal exchange rates used to translate the results, assets and
liabilities and cash flows of the Group’s foreign operations into pounds
sterling were as follows:
Year ended 31 March
Average foreign exchange rates 2017 2016
£1 = £1 =
US dollar 1.30 1.51
Euro 1.19 1.37
At 31 March
Year end foreign exchange rates 2017 2016
£1 = £1 =
US dollar 1.25 1.44
Euro 1.17 1.26
19. Events after the reporting period
There were no post balance sheet events requiring disclosure in respect of the
year ended 31 March 2017.
TATE & LYLE PLC
ADDITIONAL INFORMATION
Calculation of changes in constant currency
Where changes in constant currency are presented in this statement, they are
calculated by retranslating current year results at prior year exchange rates.
This represents a change to the methodology applied in previous years, which
involved retranslating prior year results at current year exchange rates. This
change, which has not had a material impact, has been made to align with how
the majority of external stakeholders view constant currency performance
comparisons. The following tables provide reconciliation between 2017
performance at actual exchange rates and at constant currency exchange rates.
Absolute numbers presented in the tables are rounded for presentational
purposes, whereas the growth percentages are calculated on unrounded numbers.
Adjusted performance 2017 Underlying growth Change in
at constant
constant
Continuing operations 2017 FX £m
£m 2016 Change % currency
currency £m
%
£m £m
Sales 2 753 (361) 2 392 37 2 355 17% 2%
Speciality Food Ingredients 181 (23) 158 8 150 21% 5%
Bulk Ingredients 129 (18) 111 27 84 54% 32%
Central (46) (1) (47) (1) (46) – (1%)
Adjusted operating profit 264 (42) 222 34 188 40% 18%
Adjusted net finance expense (25) 3 (22) 1 (23) (9%) 2%
Share of profit after tax of joint 32 (1) 31 3 28 16% 13%
ventures and associates
Adjusted profit before tax 271 (40) 231 38 193 40% 20%
Adjusted income tax expense (49) 7 (42) (10) (32) (55%) (33%)
Adjusted profit after tax 222 (33) 189 28 161 37% 17%
Adjusted diluted EPS (pence) 47.1p (7.0p) 40.1p 5.6p 34.5p 37% 16%
RATIO ANALYSIS
31 March 31 March
2017 2016
Net debt to EBITDA – on financial covenant basis
= Net debt 439 423
Pre-exceptional EBITDA 470 345
= 0.9 times = 1.2 times
Interest cover – on financial covenant basis
= Operating profit before exceptional items and amortisation of intangible 328 235
assets
Net finance expense 24 22
= 13.9 times = 10.7 times
Earnings dividend cover
= Adjusted basic earnings per share from continuing operations 47.8 34.7
Dividend per share 28.0 28.0
= 1.7 times = 1.2 times
Cash dividend cover
= Adjusted free cash flow from continuing operations 174 53
Cash dividends 130 130
= 1.3 times = 0.4 times
Return on capital employed
= Profit before interest, tax and exceptional items from continuing operations 252 177
Average invested operating capital of continuing operations 1 762 1 564
= 14.3% = 11.3%
Adjusted operating cash flow 273 124*
Gearing
= Net debt 452 434
Total equity 1 332 1 029
= 34% = 42%
* Restated to reflect exclusion of operating post-retirement benefit costs
(see Note 3)
Note:
All ratios are calculated based on unrounded figures in £ million. Net debt
to EBITDA, interest cover, Adjusted Free cash flow, Adjusted operating cash
flow, Average invested operating capital and return on capital employed are
defined and reconciled in Note 3 of the attached financial information.
Gearing is prepared using equity accounted net debt and total equity from the
consolidated statement of financial position.
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