2018-05-08T06:19:08.335Zreuters.comtag:reuters.com,2018-05-08:newsml_RSH3073Na:13TXT
This file is provided for EAP sample purposes only; it's structure and detail are subject to change, and should not be used as a definitive reference for actual development and processing.2018-05-08T06:19:08.335Z2018-05-08T06:19:08.335Z____UCDP:parsn_lse_10.54.4.69_1.2.37235:REG - Treatt PLC - Half-year Report2019-06-08T06:19:08.335Z3RSH3073NaREG - Treatt PLC - Half-year ReportConsumer Non-Cyclicals (TRBC level 1)Food & Beverages (TRBC level 2)Food & Tobacco (TRBC level 3)Food Processing (TRBC level 4)Starch, Vegetable Fat & Oil Manufacturing (TRBC level 5)Western EuropeUnited KingdomEuropeSuggested SourcesConsumer Products and ServicesConsumer ProductsFoodNews AnnouncementsRegulatory Corporate News AnnouncementsCompany NewsEurope daily earnings hits & missesTreatt PLC
RNS Number : 3073N
Treatt PLC
08 May 2018
TREATT PLC
HALF YEAR RESULTS
SIX MONTHS ENDED 31 MARCH 2018
Momentum continues with adjusted1,2 profit before tax growing by 20% compared to H1 2017
Treatt Plc (the 'Group'), the manufacturer and supplier of innovative ingredient solutions for the flavour, fragrance, beverage and consumer products industries, announces its half year results for the six months ended 31 March 2018.
FINANCIAL HIGHLIGHTS2:
Half year ended 31 March 2018
Half year ended 31 March 2017
Change
Revenue
£53.6m
£47.1m
+13.7%
Adjusted operating margin1
11.3%
11.0%
+38bps
Adjusted operating profit1
£6.1m
£5.2m
+17.6%
Adjusted profit before tax1
£5.8m
£4.8m
+20.4%
Adjusted basic earnings per share1
8.58p
6.58p
+30.3%
Dividend per share
1.60p
1.45p
+10.3%
OPERATIONAL HIGHLIGHTS:
· Encouraging start to new five-year strategy
· Core business categories of citrus, tea and sugar reduction continue to drive top-line growth
· Strong revenue growth in UK and US markets
· Funding in place to accelerate US expansion and deliver new UK facilities for the future
o US expansion well underway - completion due by end 2018
o Full planning permission granted for UK site relocation
· Since period end, contracts exchanged for sale of Earthoil Plantations for cash consideration of £11.0m
Commenting on the results, Group CEO, Daemmon Reeve, said:
"Following the exceptional performance of the Group in 2017, it is very encouraging to again be reporting both strong revenue and profit growth for the half year. Our strategy continues to deliver with the main business drivers of citrus, tea and sugar reduction performing well in the period.
Whilst there is still much to do to complete the year, and movements in exchange rates or raw material prices can impact results, the Board is currently confident that the Group will meet its expectations for the financial year ending 30 September 2018."
Notes:
1 All adjusted measures exclude exceptional items of net costs of £0.2m (2017: £nil) - see note 7 to the financial statements below.
2 All figures are shown excluding discontinued operations - see note 9.
Enquiries:
Treatt plc +44 (0)1284 702500
Daemmon Reeve Chief Executive Officer
Richard Hope Chief Financial Officer
Brokers
Investec Investment Banking
Patrick Robb +44 (0)20 7597 5970
David Anderson
Alex Wright
Public relations
DRD Partnership
Lawrence Dore +44 (0)20 3865 5971
HALF YEAR RESULTS STATEMENT
Introduction
The Group is pleased to report another encouraging set of results with revenue2 up 14% to £53.6m (2017 H1: £47.1m). Adjusted1,2 profit before tax of £5.8m for the half year ended 31 March 2018 was 20% higher than the £4.8m reported for the comparable period last year. Following the reduction in US corporate taxes, basic adjusted1,2 earnings per share grew by 30% from 6.58p (2017 H1) to 8.58p (2018 H1).
During the first half of the financial year the Group's key product categories performed well, with our sugar reduction and tea categories both reporting double digit growth in sales, being 15.4% and 38.5% respectively. We also reported growth of 10.3% in citrus, a more mature market, where growth was in excess of the overall market as Treatt continues to gain market share.
Strategic review
This is the first set of financial results being reported against the revised strategy adopted in 2017 and the Board is pleased to report an encouraging start, particularly in its impact on the running of our citrus business which is now operated through a category management structure, embodying all functions across the global business.
While the key growth drivers of citrus, tea and sugar reduction continued to deliver strongly during the period, all other product categories performed well. Of particular note was the significant growth in revenues from our range of authentic, natural, fruit and vegetable extracts which are used to characterise the fresh authentic flavour in premium beverages. During the period we saw strong growth in our two largest markets, with revenues2 in the UK growing by 45% and the US in constant currency showing an increase of 25%.
A key part of our strategy revolves around our investment plans to build a scalable business for future long-term growth. Work on our US capacity expansion continues apace with construction work well under way and we look forward to this being completed by the end of 2018 as planned. This expansion will bring on line significant additional capacity for our fast-growing tea and sugar reduction categories as well as expanding and modernising our scientific infrastructure. We were also very pleased to receive full planning permission for our new UK site at the Suffolk Park in Bury St Edmunds earlier this year and expect to appoint the principal contractor soon. We remain on course to transition the UK business to the Suffolk Park in late 2019. We are confident that the new premises will provide further impetus to the Group's development - fostering innovation, driving efficiencies and providing an international base to showcase our products and welcome our customers to.
Financial review
The Group's increase in adjusted1,2 profit before tax has been driven by revenue2 growth of 14% to £53.6m (2017 H1: £47.1m) as a result of new business wins and growth with existing customers. In constant currency terms, revenue2 grew by 18%. Net operating margins1,2 increased to 11.3% (2017 H1: 11.0%) as a combined result of the increased revenue generated as well as maintaining a tight control on the Group's administrative expenses.
The effect of movements in foreign exchange rates in the period was not material with the weaker USD/GBP exchange rate resulting in a small negative net FX impact (net of hedging) on the H1 2018 results of approximately £0.2m.
During the period, the Group successfully raised net proceeds of £20.8m through a share placing to support the Group's growth plans including the £46m capital investment programme to expand the Group's US operations and UK site relocation. As at 31 March 2018, therefore, the Group had a positive cash balance of £6.5m compared to a net debt position of £10.2m at the start of the financial year. The Group's balance sheet will be further strengthened through the receipt of proceeds from the sale of Earthoil Plantations since the period end as explained below.
At the time of the equity fundraising in November 2017 the Group had secured commitments for new bank facilities to support the capital investment programme. A US seven-year construction facility for $7m has now been put in place, but remains undrawn. Following the expected receipt of the sale proceeds from the disposal of Earthoil Plantations (as set out below) the requirement for any additional UK bank facilities to support the capital investment programme will remain under review.
During the period there was a net working capital outflow of £6.7m which largely related to an increase in trade and other receivables of £7.4m as the period ended strongly. This is expected to unwind in H2 as there has not been any material change in the average days sales outstanding.
The recently enacted Tax Cuts and Jobs Act in the United States has resulted in a material reduction in the Group's overall tax charge. Consequently, the effective tax rate for the half year has been estimated at 17% (2017 H1: 27%). Excluding a one-off deferred tax credit of £0.3m, the effective rate for the half year was approximately 23% which is the rate currently anticipated for the full financial year ending 30 September 2018 (excluding the impact of the deferred tax credit).
The current year exceptional costs of £0.2m relate to accelerated depreciation charges on the current UK site and one-off costs in respect of the site relocation which do not fall to be capitalised.
As a result of the increased operating profit and lower effective tax rate, basic adjusted earnings per share1,2 increased by 30.3% to 8.58p (2016: 6.58p). Following the fund raise in the period, capital employed increased by 11% from £56.7m to £62.9m. As a consequence, return on capital employed1,2 for the period was lower than in 2017 at 10.8% (2017: 12.0%), but is expected to grow as the impact from the Group's capital investment programme takes effect.
Dividend
The Board has declared an increase to the interim dividend of 10% to 1.60 pence per share (2017 interim dividend: 1.45 pence per share) which represents approximately one-third of the previous year's total dividend in line with our current policy. This will be payable on 16 August 2018 to all shareholders on the register at close of business on 6 July 2018.
Sale of Earthoil Plantations Limited
As announced on 8 May 2018, the Group has entered into a conditional agreement to sell Earthoil Plantations Limited for £11.0m (subject to adjustment based on Earthoil Plantations' actual trading performance in April and May 2018). This transaction is expected to complete on 31 May 2018. As previously stated, Earthoil was no longer core to Group operations and the Board is confident that by realising net proceeds of approximately £10.5m from this transaction, it can generate better returns by investing to drive future growth in core areas aligned with our strategy.
Prospects
The encouraging performance for the Group in the first half of the year has continued into the third quarter. Work continues on several projects not yet reflected in the current order book but which are of the quality and potential scale to drive further growth in the medium term.
Whilst there is still much to do to complete the year, and movements in exchange rates or raw material prices can impact results, the Board is currently confident that the Group will meet its expectations for the financial year ending 30 September 2018.
8 May 2018
Notes:
1. All adjusted measures exclude exceptional items of £0.2m (2017: £nil) - see note 7 to the financial statements below.
2. Excludes discontinued operations - see note 9 to the financial statements below.
TREATT PLC
HALF YEAR FINANCIAL STATEMENTS
CONDENSED GROUP INCOME STATEMENT
for the six months ended 31 March 2018
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
Notes
£'000
£'000
Revenue
6
53,574
47,132
Cost of sales
(40,938)
(35,631)
Gross profit
12,636
11,501
Administrative expenses
(6,557)
(6,333)
Operating profit
6,079
5,168
Net finance costs
(314)
(378)
Profit before taxation and exceptional items
5,765
4,790
Exceptional items
7
(212)
-
Profit before taxation
5,553
4,790
Taxation
8
(962)
(1,359)
Profit for the period from continuing operations
4,591
3,431
Profit for the period from discontinued operations
9
557
579
Profit for the period attributable to owners of the ParentCompany
5,148
4,010
Earnings per share
From continuing and discontinued operations:
Basic
10
9.27p
7.69p
Diluted
10
9.01p
7.50p
Adjusted basic
10
9.58p
7.69p
Adjusted diluted
10
9.32p
7.50p
From continuing operations:
Basic
10
8.27p
6.58p
Diluted
10
8.04p
6.41p
Adjusted basic
10
8.58p
6.58p
Adjusted diluted
10
8.34p
6.41p
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March 2018
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Profit for the period attributable to owners of the Parent Company
5,148
4,010
Other comprehensive income/(expense):
Items that may be reclassified subsequently to profit or loss:
Currency translation differences on foreign currency net investments
(1,183)
688
Current tax on foreign currency translation differences
37
-
Fair value movement on cash flow hedges
51
277
Deferred tax on fair value movement
(47)
(47)
(1,142)
918
Items that will not be reclassified subsequently to profit or loss:
Actuarial (loss)/gain on defined benefit pension scheme
(950)
1,011
Deferred tax on actuarial gain or loss
162
(172)
(788)
839
Other comprehensive (expense)/income for the period
(1,930)
1,757
Total comprehensive income for the period attributable to owners of the Parent Company
3,218
5,767
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2017
Share capital
Share premium
Own shares in share trusts
Hedging reserve
Foreign exchange reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
1 October 2016
1,053
2,757
(332)
(627)
3,675
30,661
37,187
Net profit for the period
-
-
-
-
-
4,010
4,010
Exchange differences
-
-
-
-
688
-
688
Fair value movement on cash flow hedges
-
-
-
277
-
-
277
Actuarial gain on defined benefit pension scheme
-
-
-
-
-
1,011
1,011
Taxation relating to items above
-
-
-
(47)
-
(172)
(219)
Total comprehensive income
-
-
-
230
688
4,849
5,767
Transactions with owners:
Dividends
-
-
-
-
-
(2,267)
(2,267)
Share-based payments
-
-
-
-
-
477
477
Movement in own shares in share trusts
-
-
6
-
-
-
6
Gain on release of shares in share trusts
-
-
-
-
-
94
94
Issue of share capital
5
-
(5)
-
-
-
-
Taxation relating to items recognised directly in equity
-
-
-
-
-
1
1
Total transactions with owners
5
-
1
-
-
(1,695)
(1,689)
As at 31 March 2017
1,058
2,757
(331)
(397)
4,363
33,815
41,265
for the six months ended 31 March 2018
Share capital
Share premium
Own shares in share trusts
Hedging reserve
Foreign exchange reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
As at 1 October 2017
1,058
2,757
(175)
(80)
2,627
40,291
46,478
Net profit for the period
-
-
-
-
-
5,148
5,148
Exchange differences
-
-
-
-
(1,183)
-
(1,183)
Fair value movement on cash flow Hedges
-
-
-
51
-
-
51
Actuarial loss on defined benefit pension scheme
-
-
-
-
-
(950)
(950)
Transfer between reserves
-
-
-
227
-
(227)
-
Taxation relating to items above
-
-
-
(47)
37
162
152
Total comprehensive income
-
-
-
231
(1,146)
4,133
3,218
Transactions with owners:
Dividends
-
-
-
-
-
(1,939)
(1,939)
Share-based payments
-
-
-
-
-
529
529
Movement in own shares in share trusts
-
-
32
-
-
-
32
Gain on release of shares in share trusts
-
-
-
-
-
196
196
Issue of share capital
115
20,727
(10)
-
-
-
20,832
Taxation relating to items recognised directly in equity
-
-
-
-
-
40
40
Total transactions with owners
115
20,727
22
-
-
(1,174)
19,690
As at 31 March 2018
1,173
23,484
(153)
151
1,481
43,250
69,386
CONDENSED GROUP BALANCE SHEET
as at 31 March 2018
As at
As at
31 March
30 September
2018
2017
(unaudited)
(audited)
Notes
£'000
£'000
ASSETS
Non-current assets
Goodwill
9
-
2,727
Other intangible assets
546
604
Property, plant and equipment
15,592
14,821
Deferred tax assets
1,556
1,380
17,694
19,532
Current assets
Inventories
39,004
42,878
Trade and other receivables
25,295
19,973
Current tax assets
-
148
Derivative financial instruments
222
483
Cash and bank balances
8,484
4,748
Assets classified as held for sale
9
9,466
-
82,471
68,230
Total assets
100,165
87,762
LIABILITIES
Current liabilities
Borrowings
(1,430)
(7,680)
Provisions
(89)
(57)
Trade and other payables
(19,228)
(17,816)
Current tax liabilities
(1,204)
(1,450)
Liabilities classified as held for sale
9
(991)
-
(22,942)
(27,003)
Net current assets
59,529
41,227
Non-current liabilities
Borrowings
(560)
(7,293)
Post-employment benefits
(6,828)
(5,821)
Deferred tax liabilities
(449)
(764)
Derivative financial instruments
-
(403)
(7,837)
(14,281)
Total liabilities
(30,779)
(41,284)
Net assets
69,386
46,478
CONDENSED GROUP BALANCE SHEET (continued)
as at 31 March 2018
As at
As at
31 March
30 September
2018
2017
(unaudited)
(audited)
Notes
£'000
£'000
EQUITY
Share capital
12
1,173
1,058
Share premium account
13
23,484
2,757
Own shares in share trusts
(153)
(175)
Hedging reserve
151
(80)
Foreign exchange reserve
1,481
2,627
Retained earnings
43,250
40,291
Total equity attributable to owners of the Parent Company
69,386
46,478
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the six months ended 31 March 2018
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Cash flow from operating activities
Profit before taxation including discontinued operations
6,218
5,493
Adjusted for:
Depreciation of property, plant and equipment
758
709
Amortisation of intangible assets
68
71
Loss on disposal of property, plant and equipment
-
13
Loss on disposal of intangible assets
31
-
Net finance costs
344
420
Share-based payments
547
467
Decrease/(increase) in fair value of derivatives
137
(22)
Increase/(decrease) in post-employment benefit obligations
57
(55)
Operating cash flow before movements in working capital
8,160
7,096
Movements in working capital:
Increase in inventories
(1,520)
(10,061)
Increase in trade and other receivables
(7,374)
(2,908)
Increase in trade and other payables, and provisions
2,157
5,811
Cash generated from operations
1,423
(62)
Taxation paid
(892)
(1,512)
Net cash from operating activities
531
(1,574)
Cash flow from investing activities
Investment in subsidiaries
-
(900)
Proceeds on disposal of property, plant and equipment
-
-
Purchase of property, plant and equipment
(2,256)
(571)
Purchase of intangible assets
(114)
(36)
Repayment of redeemable loan notes
-
(675)
Interest received
8
1
(2,362)
(2,181)
CONDENSED GROUP STATEMENT OF CASH FLOWS (continued)
for the six months ended 31 March 2018
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Cash flow from financing activities
(Repayment)/increase in bank loans
(9,729)
1,408
Settlement of financial derivatives
(227)
-
Interest paid
(352)
(421)
Dividends paid
(1,939)
(2,267)
Proceeds on issue of shares
20,833
-
Net sale of own shares by share trusts
229
100
8,815
(1,180)
Net increase/(decrease) in cash and cash equivalents
6,984
(4,935)
Effect of foreign exchange rates
(28)
47
Movement in cash and cash equivalents in the period
6,956
(4,888)
Cash and cash equivalents at beginning of period
280
6,581
Cash and cash equivalents at end of period
7,236
1,693
Cash and cash equivalents comprise:
Cash and bank balances
8,484
3,703
Bank borrowings
(1,248)
(2,010)
7,236
1,693
CONDENSED GROUP RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the six months ended 31 March 2018
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Movement in cash and cash equivalents in the period
6,956
(4,888)
Repayment/(increase) in bank loans
9,729
(1,408)
Cash inflow/(outflow) from changes in net debt in the period
16,685
(6,296)
Effect of foreign exchange rates
34
(43)
Movement in net debt in the period
16,719
(6,339)
Net debt at beginning of period
(10,225)
(1,654)
Net cash/(debt) at end of period
6,494
(7,993)
Responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements for the six months ended 31 March 2018 has been prepared in accordance with IAS 34
(b) the half year report and condensed financial statements includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year)
(c) the half year report and condensed financial statements includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).
By order of the Board
RICHARD HOPE
Chief Financial Officer
7 May 2018
1. Basis of preparation
The Group is required to prepare its condensed half year financial statements in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards (IFRS)). The Group has adopted the reporting requirements of IAS 34 'Interim Financial Reporting'.
The consolidated condensed half year financial statements are prepared on the basis of all International Accounting Standards (IAS) and IFRS published by the International Accounting Standards Board (IASB) that are currently in issue. New interpretations may be issued by the International Financial Reporting Interpretations Committee (IFRIC) on existing standards and best practice continues to evolve. It is therefore possible that the accounting policies set out below may be updated by the time the Group prepares its full set of financial statements under IFRS for the year ending 30 September 2018.
The information relating to the six months ended 31 March 2018 and 31 March 2017 is unaudited and does not constitute statutory accounts. The statutory accounts for the year ended 30 September 2017 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The balance sheet for the year ended 30 September 2017 has been re-presented in accordance with IFRS 5 (see note 9). The report of the auditors was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 of the Companies Act 2006. These condensed half year financial statements for the six months ended 31 March 2018 have neither been audited nor formally reviewed by the Group's auditors.
2. Accounting policies
These condensed half year financial statements have been prepared on the basis of the same accounting policies and presentation set out in the Group's 30 September 2017 annual report.
There were no new standards, or amendments to standards, which are mandatory and relevant to the Group for the first time for the financial year ending 30 September 2018 which have had a material effect on these condensed half year financial statements.
3. Accounting estimates
The preparation of the condensed half year financial statements 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 these condensed half year financial statements, 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 2017.
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. 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 29-33 of the 2017 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 innovative ingredient solutions for the flavour, fragrance, beverage and consumer product industries with manufacturing sites in the UK and US. Many of the Group's activities, including sales, manufacturing, technical, IT and finance, are managed globally on a Group basis.
The segment information reported on in this note does not include any amounts for discontinued operations, details on which can be found in note 9.
Geographical segments
The following table provides an analysis of the Group's revenue by geographical market for continuing operations:
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
United Kingdom
5,371
3,711
Rest of Europe
- Germany
3,459
3,107
- Ireland
3,252
4,018
- Other
5,623
3,933
The Americas
- USA
19,884
17,400
- Other
3,647
4,166
Rest of the World
- China
3,026
2,782
- Other
9,312
8,015
53,574
47,132
7. Exceptional items
The exceptional items referred to in the income statement can be categorised as follows:
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Accelerated depreciation expense
108
-
UK relocation expenses
103
-
212
-
Less: tax effect of exceptional items
(40)
-
172
-
The exceptional items all relate to non-recurring items. The accelerated depreciation is in relation to the reduction in the estimated useful lives of UK assets which will not transition to the new UK site. Relocation expenses relate to one-off costs incurred in connection with the relocation of the Group's UK operations which is expected to take place in 2019.
8. Taxation
The effective tax rate for the six months ended 31 March 2018 has been estimated at 17% (six months ended 31 March 2017: 27.0%). This includes a one-off deferred tax credit of £339,000 as a result of the reduction in the main rate of US corporation tax. Excluding this credit, the effective group rate currently anticipated for the financial year ending 30 September 2018 is approximately 23%.
9. Discontinued operations
On 8 May 2018 the Group entered into a conditional agreement to dispose of Earthoil Plantations Limited which supplies ingredient solutions to the personal care industry. The disposal was effected as it was no longer core to Group operations and in order to generate cash flow for the expansion of the Group's other businesses. The disposal is expected to complete on 31 May 2018, on which date control of Earthoil Plantations Limited will pass to the acquirer.
The results of the discontinued operations, which have been included in the income statement, were as follows:
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Revenue
4,049
4,656
Cost of sales
(3,121)
(3,773)
Gross profit
928
883
Administrative expenses
(233)
(139)
Operating profit
695
744
Net finance costs
(30)
(42)
Profit before taxation
665
702
Taxation
(108)
(123)
Profit for the period attributable to owners of the Parent Company
557
579
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
As at
31 March
2018
(unaudited)
£'000
Goodwill
2,727
Property, plant and equipment
403
Other intangible assets
72
Inventories
4,648
Trade and other receivables
1,583
Deferred tax assets
33
Total assets classified as held for sale
9,466
9. Discontinued operations (continued)
As at
31 March
2018
(unaudited)
£'000
Trade and other payables
434
Current tax liabilities
557
Total liabilities classified as held for sale
991
Net assets of disposal group
8,475
10. 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
31 March
31 March
2018
2017
(unaudited)
(unaudited)
Earnings (£'000)
5,148
4,010
Less: Profit from discontinued operations
(557)
(579)
Earnings from continuing operations
4,591
3,431
Weighted average number of ordinary shares in issue (No: '000)
55,545
52,118
Basic earnings per share - continuing and discontinued
9.27p
7.69p
Basic earnings per share - continuing
8.27p
6.58p
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
31 March
31 March
2018
2017
(unaudited)
(unaudited)
No ('000)
No ('000)
Weighted average number of shares
56,168
52,780
Weighted average number of shares held in the EBT and SIP
(623)
(662)
Weighted average number of shares for calculating basic EPS
55,545
52,118
Executive share option schemes
1,261
1,064
All-employee share options
306
312
Weighted average number of shares for calculating diluted EPS
57,112
53,494
Diluted earnings per share - continuing and discontinued
9.01p
7.50p
Diluted earnings per share - continuing
8.04p
6.41p
10. 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
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Earnings for calculating basic and diluted earnings per share
5,148
4,010
Adjusted for:
Exceptional items (see note7)
212
-
Taxation thereon
(40)
-
Earnings for calculating adjusted earnings per share:
From continuing and discontinued operations
5,320
4,010
Less: Profit from discontinued operations
(557)
(579)
Adjusted earnings from continuing operations
4,763
3,431
Adjusted basic earnings per share (pence)
- Continuing and discontinued operations
9.58p
7.69p
- Continuing operations
8.58p
6.58p
Adjusted diluted earnings per share (pence)
- Continuing and discontinued operations
9.32p
7.50p
- Continuing operations
8.34p
6.41p
11. Dividends
Equity dividends on ordinary shares:
Six months to
Six months to
31 March
31 March
2018
2017
(unaudited)
(unaudited)
£'000
£'000
Interim dividend for the year ended 30 September 2016 of 1.35p per share
-
702
Final dividend for the year ended 30 September 2017 of 3.35p per share (2016: 3.00p per share)
1,939
1,565
1,939
2,267
The declared interim dividend for the year ending 30 September 2018 of 1.60 pence was approved by the Board on 7 May 2018 and in accordance with IFRS has not been included as a deduction from equity at 31 March 2017. The dividend will be paid on 16 August 2018 to those shareholders on the register at 6 July 2018 and will, therefore, be accounted for in the financial statements for the year ending 30 September 2018.
12. Share capital
Called up, allotted and fully paid
£'000
Number
At 1 October 2017
1,058
52,905,170
Issued in period
115
5,765,500
At 31 March 2018
1,173
58,670,670
During the period Treatt Plc (the 'Parent Company') issued 5,265,500 ordinary shares of 2p each in a placing with institutional investors, raising net proceeds of £20.8m to support the Group's capital investment programme in the UK and US. In addition, the Parent Company issued 470,000 ordinary shares to the Treatt SIP Trust and 30,000 ordinary shares to the Employee Benefit Trust for the purpose of meeting obligations under various employee share option and incentive schemes.
The Parent Company has one class of ordinary shares with a nominal value of 2p each, which carry no right to fixed income.
13. Share premium account
£'000
At 1 October 2017
2,757
Premium arising on issue of equity shares
21,483
Expenses of issue of equity shares
(756)
At 31 March 2018
23,484
As disclosed in note 12, during the period the company issued 5,265,000 ordinary shares of 2p each. These were issued at a share price of £4.10 per share, representing a premium of £4.08 per share.
14. Capital commitments
During the period the Group entered into material contracts in connection with the US expansion and UK relocation projects totaling £6.8m, of which £5.1m was unprovided for at the period end.
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
The company news service from the London Stock Exchange
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