REG - Treatt PLC - Final Results <Origin Href="QuoteRef">TET.L</Origin> - Part 2
29/11/2016 07:07
- Part 2: For the preceding part double click ID:nRSc3602Qa
Derivative financial instruments (754) (699)
(17,021) (11,760)
Total liabilities (33,409) (25,241)
Net assets 37,187 33,185
GROUP BALANCE SHEET (continued)
as at 30 September 2016
2016 2015
£'000 £'000
EQUITY
Share capital 1,053 1,050
Share premium account 2,757 2,757
Own shares in share trusts (332) (423)
Hedging reserve (627) (700)
Foreign exchange reserve 3,675 1,119
Retained earnings 30,661 29,382
Total equity attributable to owners of the Parent Company 37,187 33,185
The notes set out below form part of this full year results announcement
GROUP STATEMENT OF CASH FLOWS
for the year ended 30 September 2016
2016 2015
£'000 £'000
Cash flow from operating activities
Profit before taxation 8,293 7,776
Adjusted for:
Depreciation of property, plant and equipment 1,347 1,244
Amortisation of intangible assets 142 175
Loss on disposal of property, plant and equipment 2 46
Net finance costs 703 740
Share-based payments 566 198
(Increase)/decrease in fair value of derivatives (122) 143
Increase/(decrease) in post-employment benefit obligations 145 (208)
Operating cash flow before movements in working capital 11,076 10,114
Movements in working capital:
(Increase)/decrease in inventories (2,501) 2,907
Decrease/(increase) in trade and other receivables 688 (2,282)
Increase/(decrease) in trade and other payables, and provisions 1,541 (2,072)
Cash generated from operations 10,804 8,667
Taxation paid (2,022) (1,469)
Net cash from operating activities 8,782 7,198
Cash flow from investing activities
Investment in subsidiaries (752) -
Proceeds on disposal of property, plant and equipment - 5
Purchase of property, plant and equipment (679) (924)
Purchase of intangible assets (109) (108)
Interest received 8 1
(1,532) (1,026)
GROUP STATEMENT OF CASH FLOWS (continued)
for the year ended 30 September 2016
2016 2015
£'000 £'000
Cash flow from financing activities
Increase/(decrease) in bank loans 381 (2,145)
Interest paid (711) (741)
Dividends paid (2,095) (1,978)
Net sale of own shares by share trusts 265 180
(2,160) (4,684)
Net increase in cash and cash equivalents 5,090 1,488
Effect of foreign exchange rates 15 (33)
Movement in cash and cash equivalents in the period 5,105 1,455
Cash and cash equivalents at beginning of period 1,476 21
Cash and cash equivalents at end of period 6,581 1,476
Cash and cash equivalents comprise:
Cash and bank balances 6,588 1,477
Bank borrowings (7) (1)
6,581 1,476
The notes set out below form part of this full year results announcement
GROUP RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the year ended 30 September 2016
2016 2015
£'000 £'000
Movement in cash and cash equivalents in the period 5,105 1,455
Repayment/(increase) in bank loans (381) 2,145
Cash outflow from changes in net debt in the period 4,724 3,600
Effect of foreign exchange rates (223) (171)
Movement in net debt in the period 4,501 3,429
Net debt at beginning of period (6,155) (9,584)
Net debt at end of period (1,654) (6,155)
The notes set out below form part of this full year results announcement
NOTES TO THE FULL YEAR RESULTS
1. Basis of preparation
In accordance with Section 435 of the Companies Act 2006, the Group confirms
that the financial information for the years ended 30 September 2016 and 2015
are derived from the Group's audited financial statements and that these are
not statutory accounts and, as such, do not contain all information required
to be disclosed in the financial statements prepared in accordance with
International Financial Reporting Standards ("IFRS"). The statutory accounts
for the year ended 30 September 2015 have been delivered to the Registrar of
Companies. The statutory accounts for the year ended 30 September 2016 have
been audited and approved, but have not yet been filed.
The Group's audited financial statements for the year ended 30 September 2016
received an unqualified audit opinion and the auditor's report contained no
statement under section 498(2) or 498(3) of the Companies Act 2006.
The financial information contained within this preliminary statement was
approved and authorised for issue by the Board on 28 November 2016.
2. Accounting policies
These financial statements have been prepared in accordance with the
accounting policies set out in the full financial statements for the year
ending 30 September 2015.
There were no new standards and amendments to standards which are mandatory
and relevant to the Group for the first time for the financial year ending 30
September 2016 which had a material effect on this preliminary statement.
3. Accounting estimates
The preparation of the preliminary statement requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. In preparing this preliminary statement, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were the same as those applied to
the audited consolidated financial statements as at, and for the year ended,
30 September 2015.
4. Going concern
As at the date of this report, the Directors have a reasonable expectation
that the Group has adequate resources to continue in business for the
foreseeable future. During the year all the Group's expiring banking
facilities have been renewed on existing or improved terms. Accordingly, this
preliminary statement has been prepared on the going concern basis.
5. Risks and uncertainties
The operation of a public company involves a series of risks and uncertainties
across a range of strategic, commercial, operational and financial areas. The
principal risks and uncertainties that could have a material impact on the
Group's performance over the next twelve months (for example, causing actual
results to differ materially from expected results or from those experienced
previously) are the same in all material respects as those detailed on pages
23-26 of the 2015 Annual Report and Financial Statements.
6. Segmental information
Business segments
IFRS 8 requires operating segments to be identified on the basis of internal
financial information reported to the Chief Operating Decision Maker (CODM).
The Group's CODM has been identified as the Board of Directors who are
primarily responsible for the allocation of resources to the segments and for
assessing their performance. The disclosure in the Group accounts of
segmental information is consistent with the information used by the CODM in
order to assess profit performance from the Group's operations.
The Group operates one global business segment engaging in the manufacture and
supply of ingredient solutions for the flavour, fragrance and FMCG markets
with manufacturing sites in the UK, US and Kenya. Many of the Group's
activities, including sales, manufacturing, technical, IT and finance, are
managed globally on a Group basis.
Geographical segments
The following table provides an analysis of the Group's revenue by
geographical market:
2016 2015
Revenue by destination £'000 £'000
United Kingdom 8,794 10,878
Rest of Europe - Germany 5,527 4,576
- Ireland 5,871 7,903
- Other 11,011 10,834
The Americas - USA 33,729 27,447
- Other 4,142 6,721
Rest of the World - China 4,536 4,840
- Other 14,430 12,735
88,040 85,934
All Group revenue is in respect of the sale of goods, other than property
rental income of £17,000 (2015: £17,000). No country included within 'Other'
contributes more than 5% of the Group's total revenue. There were no
customers which represented more than 10% of Group revenue (2015: largest
customer represented 12.1% of Group revenue).
7. Exceptional items
The exceptional items referred to in the income statement can be categorised
as follows:
2016 2015
£'000 £'000
Legal and professional fees 302 174
Compensation for loss of office 251 -
553 174
Less: tax effect of exceptional items (38) (18)
515 156
The exceptional items in the year all relate to non-recurring items. The
legal and professional fees relate to the costs in respect of the full and
final settlement of the Earthoil earnout dispute. The restructuring costs
relate to one-off non-recurring reorganisation costs incurred in the US and
Kenya.
8. Taxation
2016 2015
£'000 £'000
Analysis of tax charge for the year
Current tax:
UK corporation tax on profits for the period 967 956
Adjustments to UK tax in respect of previous period 9 (11)
Overseas corporation tax on profits for the period 1,370 931
Adjustments to overseas tax in respect of previous periods 8 33
Total current tax 2,354 1,909
Deferred tax:
Origination and reversal of timing differences (179) (59)
Effect of reduced tax rate on opening assets and liabilities (27) -
Adjustments in respect of previous periods (4) (64)
Total deferred tax (210) (123)
Tax on profit on ordinary activities 2,144 1,786
Analysis of tax charge/(credit) in other comprehensive income (OCI):
Current tax:
Foreign currency translation differences - 2
Actuarial loss on defined benefit pension scheme - (43)
Total current tax - (41)
Deferred tax:
Cash flow hedges 47 (81)
Actuarial loss on defined benefit pension scheme (643) (86)
Total deferred tax (596) (167)
Total tax credit recognised in OCI (596) (208)
Analysis of tax charge/(credit) in equity:
Current tax:
Share-based payments (16) (38)
Deferred tax:
Share-based payments (75) 2
Total tax credit recognised in equity (91) (36)
9. Earnings per share
Basic earnings per share
Basic earnings per share is based on the weighted average number of ordinary
shares in issue and ranking for dividend during the year. The weighted
average number of shares excludes shares held by the Treatt Employee Benefit
Trust (EBT), together with shares held by the Treatt SIP Trust (SIP), which do
not rank for dividend.
2016 2015
Earnings (£'000) 6,149 5,990
Weighted average number of ordinary shares in issue (No: '000) 51,895 51,464
Basic earnings per share (pence) 11.85p 11.64p
Diluted earnings per share
Diluted earnings per share is based on the weighted average number of ordinary
shares in issue and ranking for dividend during the year, adjusted for the
effect of all dilutive potential ordinary shares. The number of shares used
to calculate earnings per share (EPS) have been derived as follows:
2016 2015
No ('000) No ('000)
Weighted average number of shares 52,575 52,450
Weighted average number of shares held in the EBT and SIP (680) (986)
Weighted average number of shares used for calculating basic EPS 51,895 51,464
Executive share option schemes 645 262
All-employee share options 122 152
Weighted average number of shares used for calculating diluted EPS 52,662 51,878
Diluted earnings per share (pence) 11.68p 11.55p
Adjusted earnings per share measures are calculated based on profits for the
year attributable to owners of the Parent Company before exceptional items as
follows:
2016 2015
£'000 £'000
Earnings for calculating basic and diluted earnings per share 6,149 5,990
Adjusted for:
Exceptional items (see note 7) 553 174
Taxation thereon (38) (18)
Earnings for calculating adjusted earnings per share 6,664 6,146
Adjusted basic earnings per share (pence) 12.84p 11.94p
Adjusted diluted earnings per share (pence) 12.65p 11.85p
10. Dividends
Equity dividends on ordinary shares:
Dividend per share for years ended
30 September:
20162 20151 20141 2016 2015
Pence Pence Pence £'000 £'000
Interim dividend 1.35p 1.28p 1.24p 662 638
Final dividend 3.00p 2.76p 2.60p 1,433 1,340
4.35p 4.04p 3.84p 2,095 1,978
1 Accounted for in the subsequent year in accordance with IFRS.
2 The declared interim dividend for the year ended 30 September 2016 of 1.35
pence was approved by the Board on 13 May 2016 and in accordance with IFRS has
not been included as a deduction from equity at 30 September 2016. The
dividend was paid on 14 October 2015 to those shareholders on the register at
9 September 2016. The proposed final dividend for the year ended 30 September
2016 of 3.00 pence will be voted on at the Annual General Meeting on 27
January 2017. Both dividends will therefore be accounted for in the financial
statements for the year ending 30 September 2017.
11. Related party transactions
Treatt Plc, the Parent Company, entered into the following material
transactions with related parties:
Transactions with subsidiaries
2016 2015
£'000 £'000
Interest received on loan notes from:
Earthoil Plantations Limited 4 14
Earthoil Kenya PTY EPZ Limited 2 6
Dividends received from:
R C Treatt & Co Limited 1,862 3,072
Treatt USA Inc 1,037 1,021
Balances with subsidiaries:
2016 2015
£'000 £'000
Redeemable loan notes receivable:
Earthoil Plantations Limited 950 950
Earthoil Kenya PTY EPZ Limited 400 400
Amounts owed to/(by) parent undertaking:
Earthoil Plantations Limited 13 (61)
R C Treatt & Co Limited (712) 116
The redeemable loan notes were redeemed in full after the balance sheet date.
Interest is receivable at 1% above UK base rate. Amounts owed to the Parent
Company are unsecured and will be settled in cash.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This announcement contains forward-looking statements that are subject to risk
factors associated with, among other things, the economic and business
circumstances occurring from time to time in the countries, sectors and
markets in which the Group operates. It is believed that the expectations
reflected in these statements are reasonable but they may be affected by a
wide range of variables which could cause actual results to differ materially
from those currently anticipated. No assurances can be given that the
forward-looking statements in this announcement will be realised. The
forward-looking statements reflect the knowledge and information available at
the date of preparation of this announcement and the Group undertakes no
obligation to update these forward-looking statements. Nothing in this
announcement should be construed as a profit forecast.
This information is provided by RNS
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