REG - Treatt PLC - Half Yearly Report <Origin Href="QuoteRef">TET.L</Origin> - Part 2
15/07/2015 18:13
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estimation
uncertainty were the same as those applied to the audited consolidated
financial statements as at, and for the year ended, 30 September 2014.
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. Since the period end all the Group's expiring banking
facilities have been renewed on existing or improved terms. Accordingly, the
condensed half year financial statements have 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 remaining six months of this financial year (for
example, causing actual results to differ materially from expected results or
from those experienced previously) are the same as those detailed on pages
17-18 of the 2014 Annual Report and Financial Statements.
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
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 as one global business segment. The Group is engaged in
the manufacture and supply of ingredient solutions for the flavour, fragrance
and FMCG industries with manufacturing sites in the UK, US and Kenya. Many of
the Group's activities, including sales, purchasing, 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:
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
United Kingdom 5,392 4,744 9,975
Rest of Europe 11,271 10,928 21,566
The Americas 16,254 13,136 29,638
Rest of the World 8,491 8,298 18,010
41,408 37,106 79,189
7. Exceptional items
The exceptional items referred to in the income statement can be categorised
as follows:
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Legal and professional fees 98 236 292
Agency termination - - 1,110
98 236 1,402
The exceptional items in the year all relate to non-recurring items. The
legal and professional fees relate to the earnout dispute in relation to the
acquisition of the Earthoil Group, which remains on-going.
8. Taxation
Taxation has been provided on pre-exceptional profits at 26.2% (six months
ended 31 March 2014: 28.9%) which is the effective group rate currently
anticipated for the financial year ending 30 September 2015.
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
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.
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
(unaudited) (unaudited) (audited)
Earnings (£'000) 2,070 1,751 3,949
Weighted average number of ordinary shares in issue (No: '000) 51,444 51,323 51,335
Basic earnings per share (pence) 4.02p 3.41p 7.69p
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:
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
(unaudited) (unaudited) (audited)
No ('000) No ('000) No ('000)
Weighted average number of shares 52,450 52,405 52,405
Weighted average number of shares held in the EBT and SIP (1,006) (1,082) (1,070)
Weighted average number of shares used for calculating basic EPS 51,444 51,323 51,335
Executive share option schemes 156 39 40
All-employee share options 147 233 177
Weighted average no. of shares used for calculating diluted EPS 51,747 51,595 51,552
Diluted earnings per share (pence) 4.00p 3.39p 7.66p
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
9 Earnings per share (continued)
Adjusted earnings per share
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:
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings for calculating basic and diluted earnings per share 2,070 1,751 3,949
Adjusted for:
Exceptional items (see note 7) 98 236 1,402
Taxation thereon - - (244)
Earnings for calculating adjusted earnings per share 2,168 1,987 5,107
Adjusted basic earnings per share (pence) 4.21p 3.87p 9.95p
Adjusted diluted earnings per share (pence) 4.19p 3.85p 9.91p
10. Dividends
Equity dividends on ordinary shares:
Dividend per share for years ended Six months to Six months to Year to
30 September: 31 March 31 March 30 September
20152 20141 20131 2015 2014 2014
(unaudited) (unaudited) (audited)
Pence Pence Pence3 £'000 £'000 £'000
Interim dividend 1.28p 1.24p 1.10p 638 565 565
Final dividend N/A 2.60p 2.60p 1,340 - 1,334
N/A 3.84p 3.70p 1,978 565 1,899
1 Accounted for in the subsequent year in accordance with IFRS.
2 The declared interim dividend for the year ended 30 September 2015 of 1.28
pence was approved by the Board on 18 May 2015 and in accordance with IFRS has
not been included as a deduction from equity at 31 March 2015. The dividend
will be paid on 16 October 2015 to those shareholders on the register at 11
September 2015 and will, therefore, be accounted for in the financial
statements for the year ended 30 September 2016.
3 Following a resolution approved by shareholders on 16 May 2014, the share
capital of the Company was sub-divided on a five for one ratio (i.e. five new
2 pence ordinary shares replacing each existing 10 pence ordinary share) and
accordingly, where required the above numbers have been restated on the basis
of the new share capital.
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
11. Contingent liabilities
As disclosed in note 27 of the 2014 annual report and financial statements,
the sellers of the Earthoil Group, which was acquired by the Group in April
2008, have filed a claim in the Chancery Division of the High Court against
the Group for £1.8m which has subsequently been extended to £2.3m. Following
rulings by the High Court and Court of Appeal on issues of contractual
interpretation, two of which were found in Treatt's favour and one in favour
of the sellers of the Earthoil Group, the matter has now been referred to
chartered accountants for determination of the substantive claim, being the
quantum of the Earn-out. The costs of resolving the dispute currently total
£1,037,000, of which the current year's costs of £98,000 have been included in
exceptional items (see note 7), on a consistent basis to the prior year. The
total eventual legal and professional fees of the dispute are currently
unknown, but are likely to exceed £1.25m.
12. Related party transactions
Treatt Plc, the Parent Company, entered into the following material
transactions with related parties:
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Interest received on loan notes from:
Earthoil Plantations Limited 7 7 14
Earthoil Kenya PTY EPZ Limited 3 3 6
Dividends received from:
R C Treatt & Co Limited 2,637 563 936
Treatt USA Inc - - 902
Redeemable loan notes receivable:
Earthoil Plantations Limited 950 950 950
Earthoil Kenya PTY EPZ Limited 400 400 400
Amounts owed to/(by) parent undertaking:
Earthoil Plantations Limited 105 1,009 45
R C Treatt & Co Limited (149) (997) (13)
The redeemable loan notes are redeemable in full on 31 December 2015 or from
31 March 2009 on request from the issuer. 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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