REG-Tate & Lyle PLC Half-yearly Report <Origin Href="QuoteRef">TATE.L</Origin> - Part 2
05/11/2015 07:00
- Part 2: For the preceding part double click ID:nBw3Pb0pWa
Disclosure Rules and Transparency Rules (DTRs) of the Financial Conduct
Authority, paragraph DTR 4.2.4; and that the interim management report herein
includes a fair review of the information required by paragraphs DTR 4.2.7 and
DTR 4.2.8, namely:
* an indication of important events that have occurred during the first six
months and their impact on the condensed set of consolidated financial
information;
* a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
* material related party transactions in the first six months and any material
changes in the related party transactions described in the last Annual Report.
The Directors are responsible for the maintenance and integrity of the Company`s
website. UK legislation governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
The Directors of Tate & Lyle PLC are listed in the Tate & Lyle Annual Report for
the year ended 31 March 2015. The only change to the Board in the period being
the resignation of Virginia Kamsky with effect from 1 July 2015.
For and on behalf of the Board of Directors:
Javed Ahmed Nick Hampton
Chief Executive Chief Financial Officer
4 November 2015
Independent review report to Tate & Lyle PLC
Report on the condensed consolidated financial information
Our conclusion
We have reviewed Tate & Lyle PLC's condensed consolidated financial information
in the Statement of Half Year Results of Tate & Lyle PLC for the six month
period ended 30 September 2015. Based on our review, nothing has come to our
attention that causes us to believe that the condensed consolidated financial
information are not prepared, in all material respects, in accordance with
International Accounting Standard 34, `Interim Financial Reporting`, as adopted
by the European Union and the Disclosure Rules and Transparency Rules of the
United Kingdom`s Financial Conduct Authority.
What we have reviewed
The condensed consolidated financial information comprises:
* the consolidated statement of financial position at 30 September 2015;
* the consolidated income statement and consolidated statement of comprehensive
income for the period then ended;
* the consolidated statement of cash flows for the period then ended;
* the consolidated statement of changes in equity for the period then ended; and
* the explanatory notes to the condensed consolidated financial information.
The condensed consolidated financial information included in the Statement of
Half Year Results has been prepared in accordance with International Accounting
Standard 34, `Interim Financial Reporting`, as adopted by the European Union and
the Disclosure Rules and Transparency Rules of the United Kingdom`s Financial
Conduct Authority.
As disclosed in note 1 to the condensed consolidated financial information, the
financial reporting framework that has been applied in the preparation of the
full annual financial statements of the Group is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
Responsibilities for the condensed consolidated financial information and the
review
Our responsibilities and those of the Directors
The statement of half year results, including the condensed consolidated
financial information, is the responsibility of, and has been approved by, the
Directors. The Directors are responsible for preparing the statement of half
year results in accordance with the Disclosure Rules and Transparency Rules of
the United Kingdom`s Financial Conduct Authority.
Our responsibility is to express a conclusion on the condensed consolidated
financial information in the statement of half year results based on our review.
This report, including the conclusion, has been prepared for and only for Tate &
Lyle PLC for the purpose of complying with the Disclosure Rules and Transparency
Rules of the United Kingdom`s Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in
writing.
What a review of a condensed consolidated financial information involves
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, `Review of Interim Financial Information
Performed by the Independent Auditor of the Entity` issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and, consequently,
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion.
We have read the other information contained in the Statement of Half Year
Results and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed consolidated
financial information.
PricewaterhouseCoopers LLP
Chartered Accountants
London
4 November 2015
Notes:
a) The maintenance and integrity of the Tate & Lyle PLC website (www.tateandlyle.com) is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the condensed consolidated financial information since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Six months to Restated* Restated*
Six months to
Year to
Notes 30 September 30 September 31 March
2015 2014 2015
£m
£m
£m
Continuing operations 2 1 176 1 200 2 356
Sales
Operating profit 2 71 68 33
Finance income 2,4 - - 1
Finance expense 2,4 (14) (17) (32)
Share of profit after tax of joint ventures and associates 13 12 23
Profit before tax 2 70 63 25
Income tax expense 5 (3) (11) (21)
Profit for the period from continuing operations 67 52 4
(Loss)/profit for the period from discontinued operations 6 (3) 16 26
Profit for the period from total operations 64 68 30
Profit for the period from total operations attributable to:
- Owners of the Company 64 68 30
- Non-controlling interests - - -
Profit for the period from total operations 64 68 30
Earnings per share Pence Pence Pence
Continuing operations: 7
- Basic 14.4p 11.2p 0.9p
- Diluted 14.3p 11.1p 0.8p
Total operations: 7
- Basic 13.8p 14.7p 6.6p
- Diluted 13.7p 14.6p 6.5p
Analysis of adjusted profit for the period £m £m £m
from continuing operations
Profit before tax from continuing operations 70 63 25
Adjusted for:
Exceptional items 3 25 9 142
Amortisation of acquired intangible assets 4 4 9
Net retirement benefit interest 4 4 4 8
Adjusted profit before tax from continuing operations 16 103 80 184
Adjusted income tax expense from continuing operations 16 (18) (15) (34)
Adjusted profit for the period from continuing operations 16 85 65 150
* Prior year restated to reflect discontinued operations (see note 1). Where
adjusted metrics are presented, these have been further restated for the
adoption of equity accounting (see note 1).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Six months to Restated* Restated*
30 September Six months to Year to
30 September
31 March
2015 2014 2015
£m £m £m
Profit for the period (total operations) 64 68 30
Other comprehensive (expense)/income
Items that have been/may be reclassified to profit or loss:
Fair value loss on cash flow hedges (2) - (5)
Fair value loss/(gain) on cash flow hedges transferred
to the income statement 1 (1) (2)
Fair value (loss)/gain on available for sale financial assets (1) - 2
(Loss)/gain on currency translation of foreign operations (23) - 56
Fair value gain/(loss) on net investment hedge 8 - (32)
Share of other comprehensive expense of joint ventures
and associates (11) (8) (18)
Tax income relating to the above components - - 2
(28) (9) 3
Items that will not be reclassified to profit or loss:
Re-measurement of retirement benefit plans:
- Actual return (lower)/higher than interest on plan assets (81) 52 161
- Net actuarial gain/(loss) on retirement benefit obligation 102 (28) (186)
Tax (expense)/income relating to the above items (2) 1 20
19 25 (5)
Total other comprehensive (expense)/income (9) 16 (2)
Total comprehensive income 55 84 28
Analysed by:
- Continuing operations 64 74 16
- Discontinued operations (9) 10 12
Total comprehensive income 55 84 28
Attributable to:
- Owners of the Company 55 84 28
- Non-controlling interests - - -
Total comprehensive income 55 84 28
* Prior year restated to reflect discontinued operations (see note 1).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
Notes At At At
30 September 30 September 31 March
2015
2014
2015
£m
£m
£m
ASSETS
Non-current assets
Goodwill and other intangible assets 309 318 340
Property, plant and equipment 772 756 750
Investments in joint ventures 6 117 328 323
Investments in associates 4 4 4
Available-for-sale financial assets 16 29 15
Derivative financial instruments 25 25 30
Deferred tax assets 9 5 4
Trade and other receivables 1 1 2
Retirement benefit surplus 54 - 25
1 307 1 466 1 493
Current assets
Inventories 340 252 363
Trade and other receivables 270 375 290
Current tax assets 9 1 2
Available-for-sale financial assets 6 - 16
Derivative financial instruments 57 109 62
Other financial assets - 2 2
Cash and cash equivalents 9 234 323 195
Assets held for sale 6 225 - -
1 141 1 062 930
TOTAL ASSETS 2 448 2 528 2 423
EQUITY
Capital and reserves
Share capital 117 117 117
Share premium 406 406 406
Capital redemption reserve 8 8 8
Other reserves 33 49 61
Retained earnings 338 464 343
Equity attributable to owners of the Company 902 1 044 935
Non-controlling interests 1 1 1
TOTAL EQUITY 903 1 045 936
LIABILITIES
Non-current liabilities
Trade and other payables 13 2 13
Borrowings 9 285 440 463
Derivative financial instruments 13 6 15
Deferred tax liabilities 36 51 32
Retirement benefit deficit 237 189 252
Provisions for other liabilities and charges 8 8 8
592 696 783
Current liabilities
Trade and other payables 337 323 316
Current tax liabilities 54 30 45
Borrowings and bank overdrafts 9 494 356 305
Derivative financial instruments 27 63 25
Provisions for other liabilities and charges 41 15 13
953 787 704
TOTAL LIABILITIES 1 545 1 483 1 487
TOTAL EQUITY AND LIABILITIES 2 448 2 528 2 423
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Six months to Restated* Restated*
30 September
Six months to Year to
30 September 31 March
Continuing operations unless stated otherwise Notes 2015 2014 2015
£m £m £m
Cash flows from operating activities
Profit before tax from continuing operations 70 63 25
Adjustments for:
Depreciation of property, plant and equipment 39 41 85
Amortisation of intangible assets 16 10 24
Share-based payments 4 3 -
Exceptional items 27 - 113
Finance income 4 - - (1)
Finance expense 4 14 17 32
Share of profit after tax of joint ventures and associates (13) (12) (23)
Changes in working capital 53 42 8
Changes in net retirement benefit obligations (22) (16) (47)
Cash generated from continuing operations 188 148 216
Interest paid (9) (13) (30)
Net income tax paid (4) (11) (7)
Cash used in discontinued operations 6 (2) - -
Net cash generated from operating activities 173 124 179
Cash flows from investing activities
Purchase of property, plant and equipment (77) (51) (121)
Purchase of intangible assets (4) (22) (34)
Acquisition of businesses, net of cash acquired - (8) (26)
Purchase of available-for-sale financial assets (1) (1) (2)
Disposal of available-for-sale financial assets# 18 - 2
Interest received - - 1
Dividends received from joint ventures and associates 9 - 16
Net cash used in investing activities (55) (82) (164)
Cash flows from financing activities
Purchase of own shares - - (12)
Cash inflow from additional borrowings 19 23 278
Cash outflow from repayment of borrowings (3) - (319)
Repayment of capital element of finance leases (1) (1) (2)
Dividends paid to the owners of the Company 8 (92) (92) (130)
Net cash used in financing activities (77) (70) (185)
Net increase/(decrease) in cash and cash equivalents 41 (28) (170)
Cash and cash equivalents:
Balance at beginning of period 195 346 346
Net increase/(decrease) in cash and cash equivalents 41 (28) (170)
Currency translation differences (2) 5 19
Balance at end of period 9 234 323 195
A reconciliation of the movement in cash and cash equivalents to the movement in
net debt is presented in note 9.
* Prior year restated to reflect discontinued operations (see note 1).
# Includes cash flow associated with exceptional profit on disposal of part of
the Group`s ventures portfolio (six months to 30 September 2015 - £13 million).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Share Capital Other Retained Attributable Non- Total
capital & redemption reserves earnings to the owners controlling equity
share reserve of the interests
premium Company
£m £m £m £m £m £m £m
At 31 March 2015 523 8 61 343 935 1 936
Six months to 30 September 2015:
Profit for the period (total operations) - - - 64 64 - 64
Other comprehensive (expense)/income - - (28) 19 (9) - (9)
Total comprehensive (expense)/income - - (28) 83 55 - 55
Share-based payments, net of tax - - - 4 4 - 4
Dividends paid - - - (92) (92) - (92)
At 30 September 2015 523 8 33 338 902 1 903
At 31 March 2014 523 8 58 460 1 049 1 1 050
Year to 31 March 2015:
Profit for the year (total operations) - - - 30 30 - 30
Other comprehensive income/(expense) - - 3 (5) (2) - (2)
Total comprehensive income - - 3 25 28 - 28
Share-based payments, net of tax - - - - - - -
Purchase of own shares - - - (12) (12) - (12)
Dividends paid - - - (130) (130) - (130)
At 31 March 2015 523 8 61 343 935 1 936
At 31 March 2014 523 8 58 460 1 049 1 1050
Six months to 30 September 2014:
Profit for the period (total operations) - - - 68 68 - 68
Other comprehensive (expense)/income - - (9) 25 16 - 16
Total comprehensive (expense)/income - - (9) 93 84 - 84
Share-based payments, net of tax - - - 3 3 - 3
Dividends paid - - - (92) (92) - (92)
At 30 September 2014 523 8 49 464 1 044 1 1 045
Dividends on ordinary shares (pence per share):
Six months to Six months to Year to
30 September 30 September 31 March
Notes 2015 2014 2015
Pence Pence Pence
Proposed in respect of the period: 8
- Interim 8.2 8.2 8.2
- Final n/a n/a 19.8
8.2 8.2 28.0
Paid in the period: 8
- Interim - in respect of the period n/a n/a 8.2
- Final - in respect of the previous period 19.8 19.8 19.8
19.8 19.8 28.0
1. Presentation of half year financial information
The principal activity of Tate & Lyle PLC and its subsidiary and associated
undertakings together with its joint ventures is the global provision of
ingredients and solutions to the food, beverage and other industries.
The Company is a public limited company incorporated and domiciled in the United
Kingdom. The address of its registered office is 1 Kingsway, London WC2B 6AT.
The Company has its primary listing on the London Stock Exchange.
Basis of preparation
This condensed set of consolidated financial information for the six months
ended 30 September 2015 has been prepared on a going concern basis in accordance
with the Disclosure and Transparency Rules of the Financial Conduct Authority
and with IAS 34 Interim Financial Reporting as adopted by the European Union.
The condensed set of consolidated financial information should be read in
conjunction with the annual financial statements for the year ended 31 March
2015, which have been prepared in accordance with IFRSs as adopted by the
European Union.
Having reviewed the Group`s latest projected results, cash flows, liquidity
position and borrowing facilities, the Directors have a reasonable expectation
that the Group has adequate resources to continue in existence for the
foreseeable future. Accordingly, it is appropriate to continue to adopt the
going concern basis in preparing the condensed set of consolidated financial
information.
Results classified within discontinued operations comprise the majority of the
Group`s European Bulk Ingredients business following the re-alignment of the
Group`s Eaststarch joint venture, as announced in April 2015, along with the
European Sugars business which was disposed in 2010. Results for comparative
periods have been restated accordingly. The assets and liabilities of the
disposed elements of the Group`s Eaststarch joint venture are classified as held
for sale in the Group`s statement of financial position at 30 September 2015.
This transaction completed on 31 October 2015.
The condensed set of consolidated financial information is unaudited, but has
been reviewed by the external auditors. The condensed set of consolidated
financial information in the Statement of Half Year Results does not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006.
The Group`s published consolidated financial statements for the year ended 31
March 2015 were approved by the Board of Directors on 27 May 2015 and filed with
the Registrar of Companies. The report of the auditors on those accounts was
unqualified and did not contain an emphasis of matter paragraph or a statement
under Section 498 (2) or (3) of the Companies Act 2006. The condensed set of
consolidated financial information for the six months ended 30 September 2015 on
pages 18 to 39 was approved by the Board of Directors on 4 November 2015.
Changes in accounting policy and disclosures
The accounting policies adopted in the preparation of the condensed set of
consolidated financial information are consistent with those of the Group`s
Annual Report and Accounts for the year ended 31 March 2015, other than the
adoption, with effect from 1 April 2015, of new or revised accounting standards,
as set out below:
- IAS 19 Defined Benefit Plans: Employee Contributions (Amendments)
- Annual improvements 2010-2012 (effective 1 July 2014) (endorsed for 1 Feb
2015)
- Annual improvements 2011-2013 (effective 1 July 2014) (endorsed for 1 Jan
2015)
The adoption of the Amendments has not had a material effect on the results or
financial position of the Group.
The following new standards, new interpretations and amendments to standards and
interpretations have been issued that are relevant to the Group but are not
effective for the financial year beginning 1 April 2015 and have not been
adopted early:
- IFRS 9 Financial instruments (effective 1 January 2018)
- IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018)
- Various minor improvements to accounting standards have arisen from the IASB`s
2012-2014 review cycle.
While the directors do not expect that the adoption of the standards listed
above will have a material impact on the financial statements of the Group in
future periods, the Group has not yet undertaken a detailed impact assessment of
their effect.
Use of adjusted measures
Tate & Lyle presents adjusted performance measures including adjusted operating
profit, adjusted profit before tax and adjusted earnings per share information
that are used for internal performance analysis and incentive compensation
arrangements for employees and are presented because they provide investors with
valuable additional information about the performance of the business. For the
periods presented, adjusted performance measures exclude, where relevant,
exceptional items, the amortisation of acquired intangible assets, net
retirement benefit interest and tax on those adjustments.
Following re-alignment of the Group`s Eaststarch joint venture on 31 October
2015, adjusted performance measures are now presented on an equity accounted
basis with restated comparatives. Under the equity method of accounting, the
Group`s share of the after tax profits and losses of the joint ventures are
shown on one line of the consolidated income statement, its share of their net
assets are shown on one line of the consolidated statement of financial position
and the consolidated statement of cash flows reflects cash flows between the
Group and the joint ventures (investments in and dividends received from joint
ventures) within cash flows from investing activities. Adjusted measures were
previously presented on a proportionately consolidated basis (whereby the
Group`s share of the income and expenses, assets and liabilities and cash flows
of joint ventures was combined on a line-by-line basis with those of Tate & Lyle
PLC and its subsidiaries) reflecting the Group`s management of its joint
ventures on an integrated basis with its subsidiaries. Adjusted performance
measures reported by the Group are not defined terms under IFRS and may
therefore not be comparable with similarly-titled measures reported by other
companies. The Directors do not regard these measures as a substitute for, or
superior to, the equivalent measures presented in accordance with IFRS.
Reconciliations of the adjusted performance measures to the most directly
comparable measures presented in accordance with IFRS are presented in Note 16.
Exceptional items
Exceptional items comprise items of income and expenditure, including tax items,
that are material in amount and unlikely to recur and which merit separate
disclosure in order to provide an understanding of the Group`s underlying
financial performance. Examples of events giving rise to the presentation of
material items of income and expense as exceptional items include, but are not
limited to, impairment events, significant business transformation activities,
acquisitions or disposals of operations or significant individual assets,
litigation claims by or against the Group, gains and losses on the Group`s
Ventures portfolio and the restructuring of components of the Group`s
operations.
Discontinued operations
In the Group`s financial statements, the results, assets and liabilities and
cash flows of discontinued operations are presented separately from those of
continuing operations. An operation is classified as discontinued if it is a
component of the Group that: (i) has been disposed of, or meets the criteria to
be classified as held for sale; and (ii) represents a separate major line of
business or geographic area of operations or will be disposed of as part of a
single co-ordinated plan to dispose of a separate major line of business or
geographic area of operations.
On the 31 October 2015, the Group
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