TIDMPFD TIDMIRSH
RNS Number : 4586S
Premier Foods plc
16 November 2021
16 November 2021
Premier Foods plc (the "Group" or the "Company")
Half year results for the 26 weeks ended 2 October 2021
First half revenue ahead of guidance, firmly on track to deliver
full year expectations
Headline results FY21/22 FY20/21 Change vs Change vs
H1 H1 1yr ago 2yrs ago
Revenue (GBPm) 394.1 421.5 (6.5%) +7.5%
Trading profit(1) (GBPm) 57.8 65.8 (12.2%) +13.1%
Adjusted profit before
taxation(4) (GBPm) 46.4 47.7 (2.9%) +46.3%
Adjusted earnings per share(7)
(pence) 4.4 4.5 (3.8%) +44.5%
Net debt(9) (GBPm) (345.0) (403.1) 14.4% lower 30.0% lower
Statutory measures FY21/22 FY20/21 Change vs Change vs
H1 H1 1yr ago 2yrs ago
Operating profit (GBPm) 51.3 65.2 (21.3%) +42.9%
Profit before taxation
(GBPm) 30.7 50.5 (39.2%) +104.7%
Basic earnings per share
(pence) 2.5 5.1 (51.0%) +66.7%
Non-GAAP measures above are reconciled to statutory measures
throughout
Financial headlines
====================
Compared to 2 years ago
-- Q2 Group revenue up +8.5%, Q2 branded revenue ahead +13.3%
-- H1 Branded revenue up +11.4% reflecting strength of Group's branded growth model
-- Trading profit +13.1% ahead
-- Adjusted profit before tax GBP46.4m, up +46.3% due to trading
performance and significant interest cost savings
-- Statutory profit before tax GBP30.7m, up +104.7%
-- Net debt substantially lower than FY19/20 H1 at GBP345.0m
Compared to 1 year ago
-- Q2 Group revenue up +0.4%, Q2 branded revenue ahead +2.1%
-- H1 Branded revenue (6.1%) lower than prior year due to
lapping effect of exceptional pandemic related volumes
-- Statutory profit before tax down (39.2%); Hovis disposal gain in prior year
-- Net debt GBP58.1m lower than FY20/21 H1
-- Combined pensions surplus of GBP607.7m, GBP67.8m higher than six months earlier
Strategic & operational headlines
==================================
-- Very good strategic progress in the first half of the year, revenue ahead of expectations and strong profit
growth versus two years ago
-- Volume and value market share gains on a two-year basis
-- Branded growth model continuing to deliver sales growth through sustained consumer marketing investment and
benefits from NPD program
-- Successfully navigating macro and industry wide supply chain challenges and inflationary environment
-- Category expansion through Cape Herb & Spice, Oxo rubs and marinades with more to come in H2
-- International revenue growth up +7% vs two years ago; test launch of Mr Kipling confirmed in US for H2
-- Completed earnings enhancing refinancing in H1, with interest costs set to nearly halve compared to FY19/20
-- New ESG strategy, the 'Enriching Life Plan', announced with a series of major sustainability commitments
-- Firmly on track to deliver full year profit expectations
Alex Whitehouse, Chief Executive Officer
" We have delivered a very good first half performance, with
revenue growth ahead of expectations; quarter two was particularly
strong, with revenue growth of +8.5% vs two years ago. Our brands
have performed especially well with growth versus two years ago of
+11.4% and increased market share in both Grocery and Sweet Treats,
illustrating the continued success of our branded growth model. I
am particularly pleased with how well the business is successfully
navigating the widely reported industry wide challenges including
logistics, labour shortages and input cost inflation to deliver
such a strong set of results, which again underlines the robustness
of our operating capabilities.
"Adjusted profit before tax increased by +46% vs two years ago
benefiting from both the trading performance and significantly
reduced interest costs following the completion of our earnings
enhancing refinancing earlier in the year. Net debt is more than
GBP50m lower than this time last year.
"As we look ahead to the second half of the year, we will be
launching a range of insight driven new products and supporting six
of our key brands with advertising. We will expand our presence in
adjacent new categories, building on the initial success of Cape
Herb and Spice and Oxo Rubs & Marinades, as well as bringing to
market premium Mr Kipling biscuits and a range of branded Ice
cream. We will also continue to develop our overseas businesses
including the full roll-out of Mr Kipling in Canada and the test
launch of Mr Kipling in the USA.
"We enter the second half of the year with strong momentum, and
with a series of exciting plans in place for our brands, we remain
firmly on track to deliver on our profit expectations for the full
year. "
Environmental, Social and Governance (ESG)
===========================================
On 29 October 2021, the Group announced its new 'Enriching Life
Plan' ESG strategy building on the strong progress the business has
made to date. The Group recognises its responsibility and the
opportunity, as a leading UK food manufacturer, to forge a
healthier future for people and the planet, this new strategy will
build a more resilient business for the long-term, ensuring it can
thrive in a changing world. During the process of developing this
strengthened ESG strategy, the Group also conducted a materiality
review, engaging with a range of stakeholders.
This new ESG strategy is articulated through the three key
strategic pillars of Product, Planet and People. The Group has set
out a series of major sustainability targets under each pillar
which can be found on the Company's website.
Outlook
========
The Group enters the second half of the year with strong
momentum. It has a series of exciting brand plans, and with
expansion into more new categories, it is well placed to deliver
further strategic progress. It continues to successfully manage and
navigate through industry wide challenges across the supply chain
and has robust plans in place to respond to them. The Group will
benefit from substantially lower interest costs from its earnings
enhancing refinancing and is on track to deliver against its profit
expectations for the full year.
The Group's medium-term target of approximately 1.5x Net
debt/EBITDA remains unchanged and it reiterates its intention to
pay a dividend on a full year basis.
Further information
====================
A presentation to investors and analysts will be webcast today
at 9:00am GMT.
To register for the webcast follow the link:
www.premierfoods.co.uk/investors/investor-centre
A recording of the webcast will be available on the Company's
website later in the day.
A conference call for bond investors and analysts will take
place today, 16 November 2021, at 1:30pm GMT. Dial in details are
outlined below:
Telephone: 0800 376 7922 (UK toll free)
+44 20 7192 8000 (standard international access)
Conference ID: 1999172
A factsheet with highlights of the Half year results is
available at:
www.premierfoods.co.uk/investors/results-centre
A Premier Foods image gallery is available using the following
link:
www.premierfoods.co.uk/media/image-gallery/
As one of Britain's largest food producers, we're passionate
about food and believe each and every day we have the opportunity
to enrich life for everyone. Premier Foods employs over 4,000
people operating from 16 sites across the country, supplying a
range of retail, wholesale, foodservice and other customers with
our iconic brands which feature in millions of homes every day.
Through some of the nation's best-loved brands, including
Ambrosia, Batchelors, Bisto , Loyd Grossman, Mr. Kipling, Oxo and
Sharwood's, we're creating great tasting products that contribute
to healthy and balanced diets, while committing to nurturing our
people and our local communities, and going further in the pursuit
of a healthier planet, in line with our Purpose of 'Enriching Life
Through Food'.
Contacts:
Institutional investors and analysts:
Duncan Leggett, Chief Financial Officer +44 (0) 1727 815 850
Richard Godden, Director of Investor Relations +44 (0) 1727 815
850
Media enquiries:
Hannah Collyer, Corporate Affairs & ESG Director +44 (0)
1727 815 850
Headland
Ed Young +44 (0) 7884 666830
Jack Gault +44 (0) 7799 089357
- Ends -
This announcement may contain "forward-looking statements" that
are based on estimates and assumptions and are subject to risks and
uncertainties. Forward-looking statements are all statements other
than statements of historical fact or statements in the present
tense, and can be identified by words such as "targets", "aims",
"aspires", "assumes", "believes", "estimates", "anticipates",
"expects", "intends", "hopes", "may", "would", "should", "could",
"will", "plans", "predicts" and "potential", as well as the
negatives of these terms and other words of similar meaning. Any
forward-looking statements in this announcement are made based upon
Premier Foods' estimates, expectations and beliefs concerning
future events affecting the Group and subject to a number of known
and unknown risks and uncertainties. Such forward-looking
statements are based on numerous assumptions regarding the Premier
Foods Group's present and future business strategies and the
environment in which it will operate, which may prove not to be
accurate. Premier Foods cautions that these forward-looking
statements are not guarantees and that actual results could differ
materially from those expressed or implied in these forward-looking
statements. Undue reliance should, therefore, not be placed on such
forward-looking statements. Any forward-looking statements
contained in this announcement apply only as at the date of this
announcement and are not intended to give any assurance as to
future results. Premier Foods will update this announcement as
required by applicable law, including the Prospectus Rules, the
Listing Rules, the Disclosure and Transparency Rules, London Stock
Exchange and any other applicable law or regulations, but otherwise
expressly disclaims any obligation or undertaking to update or
revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.
Financial results
==================
Due to the unique nature of the prior period when the Group saw
exceptional patterns of demand for its products during the peak of
the Covid pandemic, it has managed and reviewed the performance of
its business this year with reference to two years ago and the
prior year. The commentary below for Revenue and Trading profit is
therefore provided with reference to both two years ago and the
prior year.
Revenue
Group revenue (GBPm) Grocery Sweet Treats Group
Branded 244.9 100.1 345.0
Non-branded 39.2 9.9 49.1
-------- ------------- --------
Total 284.1 110.0 394.1
% change vs 1 year ago
Branded (10.3%) +6.3% (6.1%)
Non-branded (10.1%) (6.4%) (9.4%)
-------- ------------- --------
Total (10.3%) +5.0% (6.5%)
% change vs 2 years ago
Branded +12.2% +9.5% +11.4%
Non-branded (14.4%) (12.2%) (14.0%)
Total +7.6% +7.1% +7.5%
Commentary versus two years ago
Group revenue compared to the same period two years ago
increased by 7.5%. Branded revenue was particularly strong over
this time frame, up 11.4%, while Non-branded revenue declined
(14.0%). In the second quarter, Group revenues increased by 8.5% to
GBP208.2m, with branded revenue up 13.3% and Non-branded revenue
(16.3%) lower. This second quarter's reported revenue was ahead of
the Group's expectations and reflects a strong performance from
several of its major brands.
The Group employs a branded growth model strategy which
leverages the strength of its market leading brands, launching
insightful new products, supporting them with emotionally engaging
advertising and building strategic retail partnerships. In
following this strategy, revenues in the UK have grown in sixteen
of the last seventeen quarters. On a two-year compound annual
growth rate basis, UK branded revenues in the first half of the
year have grown by 5.8%, which serves to illustrate the success of
this strategy and model.
In the first half of the year, the benefits of the branded
growth model have enabled the Group to gain both volume and value
market share(12) compared to the same period two years ago,
outperforming its categories in both Grocery and Sweet Treats.
Household penetration, a measure of how many consumers buy a brand
on at least one occasion in a given time frame, has seen a number
of the Group's brands retain higher penetration levels compared to
pre pandemic levels. The conclusion, therefore, is that some
consumers have tried the Group's brands and products during the
pandemic and enjoyed them so have continued to purchase them. In
e-commerce, the majority of consumers who turned to shopping online
for grocery products during the pandemic have continued to use this
channel. The Group's sales through online have grown by a very
significant 80% compared to two years ago and additionally, market
share has increased by 120 basis points.
Grocery
Revenue in the Grocery business increased by 7.6% in the first
half of the year compared to two years ago. The driver behind this
growth was the branded portfolio which saw revenue increase by
12.2%. In the second quarter, total Grocery revenue grew by 7.2%
and the branded portfolio saw revenue increase by 12.5%.
In the first half of the year, the Grocery business has seen
many of its brands grow revenue in double-digit terms compared to
the same period two years ago. Brands such as Bisto, Oxo,
Sharwood's are examples of this strong revenue performance and all
these have benefitted from sustained levels of consumer marketing
investment and new product development programmes. Additionally,
Angel Delight and Paxo have also grown exceptionally well over this
time frame, supported by product innovation such as Angel Delight
Dessert Kits and Paxo Veggie Fillers.
One of the major successes in recent years across the Group's
branded portfolio has been the Nissin noodle product ranges. The
Nissin brand has grown consistently strongly over the last four
years; in the first half of the year, revenues were over 140%
higher compared to the same period two years ago. It is now market
leader in the authentic snack pot market, having grown market share
from 11% in 2017 to 45% today. These outstanding results have been
achieved through leveraging the authentic flavour profiles of the
product ranges and also applying deep commercial relationships the
Group enjoys, increasing distribution and helping drive trial with
consumers to build the brand's performance.
The Group continues to bring more healthy product ranges to
market such as Loyd Grossman 30% less sugar Lasagne sauces, no
added sugar Homepride pasta bakes and Saxa Sea Salt spray, which
uses just 1% of the daily recommended intake of salt per spray. In
the second half of the year, the Group will be launching a series
of exciting new better for you products such as Batchelors low fat
meat free rice and noodle pots, with flavours Facon and Cheese,
Chick'n Curry and Rice and Sweet Chilli Chick'n noodles. In the
Desserts category, Angel Delight will also be launching ready to
eat, on the go, low calorie dessert pots while Bird's is
introducing convenient, individual custard pots.
One of the Group's key strategies is to expand into adjacent
categories, leveraging the Group's proven branded growth model. For
example, the first half of this year has seen the launch of Oxo
Rubs and marinades, which represents Oxo's first major move beyond
its heartland of Stock and provides the brand greater access to
more summer eating occasions such as barbecues. Additionally, H1
has driven increased distribution of Cape Herb & Spice, the
product range of rubs, chilli and seasonings, through utilising the
Group's deep commercial relationships. Looking ahead to H2, the
next stage of this strategy sees the extension of the Mr Kipling,
Ambrosia and Angel Delight brands into the Ice-cream category with
a variety of flavour variants aligned to the respective brands.
Sweet Treats
The Sweet Treats business delivered revenue growth of 7.1% in
the period when compared to two years ago. This was driven by very
strong branded growth which increased by 9.5% to GBP100.1m, partly
offset by Non-branded revenue which was (12.2%) lower.
The branded performance was due to an excellent response from
the Sweet Treats innovation program. The new better for you Mr
Kipling 30% less sugar Viennese Whirls supported revenue growth in
the first half and ranges such as the premium Mr Kipling Signature
products and Cadbury Fudge and Crunchie cake bars also contributed
strongly to the performance. Additionally, Mr Kipling benefitted
from TV advertising in the period and further investment is planned
for the Group's largest brand in the second half of the year.
Looking ahead to the second half of the year, innovation to be
launched to market includes Cadbury Oreo cake bars, which will look
to build on the recent success of the Fudge and Crunchie variants.
Additionally, and building on the Group's strategy of expanding
into new, adjacent categories, Mr Kipling is entering the biscuit
category for the first time. A range of new biscuits targeting the
everyday treat occasion, came to market at the beginning of the
third quarter, leveraging the strength of the Mr Kipling brand.
International
In the International business, revenue on a constant currency
basis was 7%(8) higher than the same period two years ago. This
largely reflected growth in the Ireland business, as the
performance benefitted from applying the branded growth model,
including new product development and television advertising in
addition to entering new categories such as Quick Meals Snack &
Soups and Homebaking.
The Group continues to make strategic progress in building a
sustainable international business with the clear objective of
applying the successful branded growth model strategy used in the
UK to the priority markets of Ireland, North America, Australia and
Europe. In Canada, a full rollout of Mr Kipling snack pack cake
slices is planned for the second half of the year following a
successful trial and after refinement of the product proposition.
In the USA, plans are to take the same approach to cake as has been
undertaken in Canada. The Group now has the first confirmed listing
of Mr Kipling cake; this will be in the form of a test launch
initially to validate the model and the first shipment of products
expected to take place in the fourth quarter of the year. Also in
the USA, Sharwood's continues to gain distribution points in a key
retailer reflecting both increased store presence and new product
listings.
Europe is increasingly becoming a clear opportunity for the
Group and recent good progress by Sharwood's has been displayed in
both Spain and Germany. In Spain, revenue of Sharwood's cooking
sauces has increased by over 150% compared to two years ago,
reflecting strong growth in Indian sauces such as Tikka Masala
while sales in Germany have grown due to the popularity of
Sharwood's Rice pots.
Non-branded
Non-branded revenue was (14.0%) lower than the same period two
years ago. In Grocery, retailer non-branded revenue was slightly
ahead, and while volumes in out of home orientated business units
remain below pre-pandemic levels some of these are on an improving
trajectory. Sweet Treats Non-branded revenue was impacted by lower
margin contract exits.
Commentary versus prior year
Group revenue for the 26 weeks to 2 October 2021 was GBP394.1m,
a decrease of (6.5%) on the same period a year ago. Branded revenue
was (6.1%) lower at GBP345.0m while Non-branded revenue declined
(9.4%) to GBP49.1m. In the second quarter, Group revenues grew by
0.4% to GBP208.2m, with branded revenue up 2.1% and Non-branded
revenue (10.5%) lower.
Grocery
As expected, Grocery revenue was lower in the first half of the
year compared to the prior period. Branded and Non-branded revenue
declined by (10.3%) and (10.1%) respectively. The overarching
driver of these declines reflect the exceptional volumes
experienced in the prior year due to the elevated consumer demand
observed in the Group's grocery categories during the peak of the
Covid pandemic.
Within the first half of the year, branded revenue in the first
quarter was (19.6%) lower as it lapped particular strong prior
comparatives as described above. In the second quarter, branded
revenue was down just (0.4%) on the prior period when revenue had
grown by 13.0% against FY19/20 Q2. This was partly due to the
relaxation of lockdown restrictions in quarter two last year,
although there was evidence that consumers retained some cooking
habits which benefitted the Group's categories.
Sweet Treats
In Sweet Treats, revenue grew by 5.0% in the first half of the
year to GBP110.0m. The Branded part of the business enjoyed a
strong first half of the year, as revenue grew by 6.3% to
GBP100.1m, while Non-branded revenue was (6.4%) lower at GBP9.9m.
In FY20/21 H1, the cake category did not experience the same level
of elevated volumes compared to that seen in the Group's grocery
categories, as consumers focused on purchasing key household staple
products as the UK entered lockdown restrictions.
In the first half of the year, the cake category grew by 2.0%
compared to the prior period, as the Group's brands, Mr Kipling and
Cadbury cake, both saw strong growth in the first half of the year,
taking market share, as outlined above.
International
The International business saw revenue decline by (5%)(8) on a
constant currency basis. In a similar vein to the Grocery business
in the UK, revenue compared to the prior period was impacted by the
effects of the global pandemic. In particular, both the grocery
product ranges in Ireland and Australia saw lower sales in the
first half of the year. Furthermore, constraints associated with
global shipping have led to delays in products reaching end markets
such as Australia and North America, from the UK.
Non-branded
Grocery Non-branded sales were (10.1%) lower in the first half
of the year due to lower sales at Knighton Foods while there were
also some low margin contract exits in Desserts and Cooking Sauces
& accompaniments which impacted the performance in the period.
In Sweet Treats, revenue declined by (6.4%) which was due to the
impact of contract exits in fruit pies and slices ranges, which
largely impacted the first quarter. In the second quarter, Sweet
Treats Non-branded sales returned to growth.
The Group's Non-branded business is one which plays an important
and supportive role. The principles used are: to deploy low levels
of capital investment; protect branded intellectual property;
support the recovery of manufacturing overheads and apply strict
financial hurdles on new contracts.
Trading profit
GBPm FY21/22 FY20/21 Change vs Change vs
H1 H1 1 year ago 2 years
ago
Divisional contribution(2)
Grocery 64.3 78.5 (18.1%) +8.3%
Sweet Treats 12.7 9.1 +39.9% +22.5%
------- ------- ----------- ---------
Total 77.0 87.6 (12.1%) +10.4%
Group & corporate costs (19.2) (21.8) +11.7% (3.2%)
------- ------- ----------- ---------
Trading profit 57.8 65.8 (12.2%) +13.1%
Commentary versus two years ago
The Group delivered very strong Divisional contribution and
Trading profit results compared to two years ago. Trading profit
increased by 13.1% to GBP57.8m as Grocery and Sweet Treats
Divisional contribution grew by 8.3% and 22.5% respectively.
These performances reflect clear benefits from the Group's
proven branded growth model, through its innovation strategy,
consistent brand investment and collaborative customer
partnerships. Gross margins and Trading profit margins increased by
40 and 70 basis points respectively compared to two years ago while
consumer marketing investment was higher.
One of the Group's strategies is to increase its investment in
its supply chain infrastructure. The elements of this strategy
include capital investment to (i) increase efficiencies across the
manufacturing and logistics operations and (ii) to facilitate
growth through the Group's innovation strategy. Through these
strategies, the Group expects to deliver improvements in gross
margin, which then provides funds for additional brand investment,
in line with the branded growth model and so drive further branded
revenue growth as part of a virtuous cycle. An example of such
investment includes a new pots line at the Ashford site, which will
deliver innovation growth for the Batchelors and Sharwood's
brands.
Commentary versus prior year
The Group delivered Trading profit of GBP57.8m in the first half
of FY20/21, (12.2%) lower than the same period a year ago.
Divisional contribution was (12.1%) lower at GBP77.0m while Group
& corporate costs decreased by 11.7% to GBP19.2m. The Grocery
business reported Divisional contribution of GBP64.3m which was
(18.1%) lower than the prior period while Sweet Treats delivered
Divisional contribution growth of 39.9% to GBP12.7m.
Last year, the Grocery business saw some exceptionally strong
performances across its branded portfolio, as the substantial
increase in volumes seen during the peaks of the Covid pandemic saw
benefits to operational leverage, which in turn fed through to
Divisional contribution. With Grocery volumes lower than the prior
period, this resulted in reduced levels of operational leverage and
hence lower Divisional contribution in the first half of this
year.
In Sweet Treats, Divisional contribution grew by GBP3.6m
compared to the prior period reflecting strong revenue growth from
Mr Kipling and Cadbury cake which have flowed through to Divisional
contribution. Unlike the Group's grocery categories, the cake
market was less impacted by exceptional consumer buying trends
during the pandemic in 2020. There were also lower Covid related
costs in the Sweet Treats business in the first half of the year
compared to the prior period.
The Group continued to invest in its brands in the first half of
the year with Batchelors, Sharwood's and Mr Kipling all benefitting
from TV advertising in the period. In the second half of the year,
the Group plans to advertise six of its largest brands on TV. This
will be the second consecutive year that the Group will be
investing behind Ambrosia, Batchelors, Bisto, Mr Kipling, Oxo and
Sharwood's through TV advertising, which serves to demonstrate
consistent application of its branded growth model.
Group & corporate costs benefitted from lower management and
colleague bonuses in the period and the release of a provision no
longer required.
The Group notes there are a range of challenges facing global
supply chains across a number of industries such as a shortage of
heavy goods vehicle (HGV) drivers, general labour shortages and an
increasingly inflationary environment. The Group is actively and
successfully navigating through this environment and has a series
of robust plans in place for the second half of the year. With
further inflation now evident across a variety of input costs, the
Group will be taking a range of actions which it expects will be
effective later this financial year.
Operating profit
GBPm FY21/22 FY20/21 Change Change vs
H1 H1 vs 2 years
1 year ago
ago
Adjusted EBITDA(3) 67.1 74.9 (7.8) 6.6
Depreciation 9.3 9.1 (0.2) 0.1
Trading profit 57.8 65.8 (8.0) 6.7
Amortisation of intangible
assets (14.3) (13.5) (0.8) 0.6
Fair value movements
on foreign exchange &
derivatives 3.0 (0.3) 3.3 1.7
Reversal of impairment
loss of Loan receivable - 15.7 (15.7) -
Non-trading items:
Restructuring costs - (2.6) 2.6 0.7
Net interest on pensions
and administrative expenses 2.2 0.1 2.1 2.3
Other non-trading 2.6 - 2.6 3.4
Operating profit 51.3 65.2 (13.9) 15.4
------- ------- ------- ---------
Operating profit in the period was GBP51.3m, a decrease of
GBP13.9m compared to the prior period. This was due to two factors;
the exceptional Trading profit performance in the prior period as
described above and the reversal of the impairment loss on the
Hovis loan note principal, also in the prior period.
Amortisation of intangible assets was GBP14.3m in the first half
of the year; this compared to GBP13.5m in FY20/21 H1. Fair
valuation of foreign exchange and derivatives resulted in a
positive movement of GBP3.3m compared to the comparative period. An
impairment reversal of GBP15.7m was recognised in the prior period
in respect of the Hovis loan note previously written off; this
reflected a reassessment of the loan note's recoverability. Hovis
Holdings Limited was disposed by the Company and The Gores Group to
Endless LLP on 5 November 2020.
Net interest on pensions and administrative expenses was a
credit of GBP2.2m in the period. Expenses for operating the Group's
pension schemes were GBP3.2m in the period, offset by a net
interest credit of GBP5.4m due to an opening surplus of the Group's
combined pension schemes. There were no restructuring costs
incurred in the first half of the year; charges in the prior period
were GBP2.6m and were due to costs associated with advisory work on
the segregated merger pensions agreement announced on 20 April
2020. Other non-trading income of GBP2.6m in the period relates
primarily to the resolution of a legacy legal matter.
Finance costs
Net finance cost was GBP20.6m in the period, an increase of
GBP5.9m compared to the comparative period. Net regular interest in
H1 was GBP11.4m, a reduction of GBP6.7m compared to the prior year.
This reduction was principally due to lower Senior secured notes
interest charges following redemptions of the Group's now retired
2022 Floating Rate Notes ("FRN"). Consequently, Senior secured
notes interest declined by GBP6.1m to GBP7.7m in the first half of
the year when compared to the prior period.
GBPm FY21/22 H1 FY20/21 Change vs Change
H1 1 year ago vs
2 years
ago
Senior secured notes
interest 7.7 13.8 6.1 7.8
Bank debt interest -
net 2.5 2.7 0.2 (0.3)
--------
10.2 16.5 6.3 7.5
Amortisation of debt
issuance costs 1.2 1.6 0.4 0.5
---------- ------- ----------- --------
Net regular interest(5) 11.4 18.1 6.7 8.0
---------- ------- ----------- --------
Write-off of financing
costs 4.3 0.6 (3.7) (4.3)
Early redemption fee 4.7 - (4.7) (4.7)
Discount unwind - 0.1 0.1 1.0
Other finance cost 0.4 0.5 0.1 0.1
Other finance income (0.2) (4.6) (4.4) 0.2
---------- ------- ----------- --------
Net finance cost 20.6 14.7 (5.9) 0.3
---------- ------- ----------- --------
Bank debt interest of GBP2.5m was GBP0.2m lower in the first
half of the year. The Group's revolving credit facility was
GBP14.0m drawn as at 2 October 2021. Amortisation of debt issuance
costs were GBP0.4m lower at GBP1.2m, reflecting a lower quantum of
borrowing facilities held by the Group.
Following the completion of the Group's refinancing in the first
half of the year, the write-off of financing costs associated with
borrowings now retired and facilities which have since been
replaced were GBP4.3m in the period. Additionally, and as expected,
a fee of GBP4.7m was incurred relating to the early redemption of
the Group's now retired GBP300m 2023 dated Fixed Rate Notes.
In the prior period, other finance income of GBP4.6m related to
the reversal of the impairment on interest on the Hovis loan note,
reflecting the reassessment of the loan note's recoverability.
Taxation
The taxation charge for the 26 weeks ended 3 October 2021 of
GBP9.7m (2020/21: GBP7.1m) comprised primarily a charge on
operating activities of GBP6.3m (2020/21: GBP9.6m) and GBP3.5m due
to tax rate changes. In the Government's 2021 spring budget, the
rate of corporation tax effective from April 2023 will increase
from the current level of 19% to 25%. Therefore, deferred tax
balances have been restated depending on the rate which they are
expected to unwind.
The Group currently retains brought forward losses which it can
utilise to offset against future tax liabilities. Due to changes in
tax legislation with respect to the offset of tax losses, the Group
may recommence paying cash tax in low single digit GBPmillions in
the medium term.
Earnings per share
Earnings per share (GBPm) FY21/22 FY20/21 Change Change
H1 H1 vs vs
1 year 2 years
ago ago
Operating profit 51.3 65.2 (13.9) 15.4
Net finance cost (20.6) (14.7) (5.9) 0.3
---------
Profit before taxation 30.7 50.5 (19.8) 15.7
Taxation (9.7) (7.1) (2.6) (7.0)
-------- -------- -------- ---------
Profit after taxation 21.0 43.4 (22.4) 8.7
Average shares in issue
(million) 856.9 849.6 7.3 10.8
-------- -------- -------- ---------
Basic Earnings per share
(pence) 2.5 5.1 (2.6) 1.0
The Group reported a profit before tax of GBP30.7m in the
period, a decrease of GBP19.8m compared to FY20/21 H1. Profit after
tax in the first half of the year was GBP22.4m lower at
GBP21.0m.
Compared to two years ago, profit before tax grew by GBP15.7m
and profit after tax increased by GBP8.7m.
Adjusted earnings per FY21/22 FY20/21 Change Change
share (GBPm) H1 H1 vs vs
1 year 2 years
ago ago
Trading profit 57.8 65.8 (12.2%) 13.1%
Less: Net regular interest (11.4) (18.1) 36.8% 41.2%
-------- -------- -------- ---------
Adjusted profit before
tax 46.4 47.7 (2.9%) 46.3%
Less: Notional tax (19%) (8.8) (9.1) 2.9% (46.3%)
-------- -------- -------- ---------
Adjusted profit after
tax(6) 37.6 38.6 (2.9%) 46.3%
Average shares in issue
(millions) 856.9 849.6 7.3m 10.8m
-------- -------- -------- ---------
Adjusted earnings per
share (pence) 4.4 4.5 (3.8%) 44.5%
Adjusted profit before tax decreased by (2.9%) in the period to
GBP46.4m, reflecting lower Trading profit in the period partly
offset by lower net regular interest costs as described above.
Adjusted profit after tax also decreased by (2.9%), to GBP37.6m in
the first half of the year after deducting a notional 19.0% tax
charge of GBP8.8m. Based on average shares in issue of 856.9
million shares, adjusted earnings per share were (3.8%) lower at to
4.4p.
When compared to two years ago, adjusted profit before tax
increased by 46.3% due to both higher Trading profit and a
significantly lower net regular interest charge of GBP11.4m. On
this time frame comparison, adjusted profit after tax and adjusted
earnings per share increased by 46.3% and 44.5% respectively.
Free cash flow
GBPm FY21/22 FY20/21 H1
H1
Statutory cash flow statement
Cash generated from operating activities 13.5 35.1
Cash used in investing activities (7.4) (7.1)
Cash generated from/(used in) financing
activities 1.2 (165.5)
-------- -----------
Net increase/(decrease) in cash & cash equivalents 7.3 (137.5)
Cash, cash equivalents and bank overdrafts
at beginning of period 1.1 177.9
-------- -----------
Cash, cash equivalents and bank overdrafts
at end of period 8.4 40.4
-------- -----------
On a statutory basis, cash generated from operations was
GBP28.1m compared to GBP52.6m in the comparative period. Cash
generated from operating activities was GBP13.5m after deducting
net interest paid of GBP14.6m. Cash generated from financing
activities was GBP1.2m in the period versus (GBP165.5m) cash used
in the prior year. The cash generated from financing activities in
the first half of the year included the proceeds from the issuance
of the Group's GBP330m 2026 dated 3.5% Fixed Rate Notes in the
period. These proceeds were largely offset by the repayment in full
of the Group's GBP300m 2023 dated 6.25% Fixed Rate Notes, the last
remaining GBP20m of the Group's FRN, financing fees of GBP8.5m, an
early redemption fee of GBP4.7m relating to the retirement of the
GBP300m Fixed Rate Notes and dividends paid to shareholders of
GBP8.5m. In the prior period, the Group repaid a drawdown of
GBP85.0m on its committed revolving credit facility in the first
quarter of the year. This followed an earlier prudent decision by
the Group at the end of the previous financial year to draw this
GBP85.0m sum, reflecting early stage wider uncertainties associated
with the COVID-19 pandemic. Secondly, the Group used cash generated
during FY19/20 to fund an GBP80.0m part redemption of its FRN on 17
June 2020. The last remaining tranche of these Floating Rate Notes
was repaid in full on 3 June 2021.
GBPm FY21/22 H1 FY20/21 H1
Trading profit 57.8 65.8
Depreciation 9.3 9.1
Other non-cash items 1.4 1.4
Interest (14.6) (17.5)
Pension contributions (19.5) (26.3)
Capital expenditure (6.3) (7.1)
Working capital & other (23.2) 4.5
Non-trading items 2.0 (3.2)
Proceeds from share issue 0.6 0.8
Re-financing fees (13.2) -
Dividend (including pensions match) (11.0) -
Free cash flow(10) (16.7) 27.5
----------- -----------
The Group reported an outflow of Free cash in the period of
GBP16.7m. Trading profit of GBP57.8m was GBP8.0m lower than the
prior year for the reasons outlined above, while depreciation of
GBP9.3m was similar to the prior year. Other non-cash items of
GBP1.4m in line with FY20/21 and was predominantly due to share
based payments.
Net interest paid of GBP14.6m was GBP2.9m lower than the prior
year; this was largely due to reduced interest payments following
the part redemptions of the Group's FRN undertaken during FY20/21
and the final redemption payment made in the period. As with the
prior year period, no taxation was paid in the period due to the
availability of brought forward losses and capital allowances.
Total pension contributions in the first half of the year were
GBP19.5m (2020/21 H1: GBP26.3m); the reduction reflecting lower
administration costs and the phasing of government levy costs.
Pension deficit contribution payments were GBP18.9m in the period
and administration costs were GBP0.6m.
Capital expenditure in the first half of the year was GBP6.3m;
this was slightly lower than the prior year and reflects timing of
payments of capital projects and also continued Covid restrictions
for some projects at manufacturing sites. In the full year, the
Group expects capital expenditure to be approximately GBP25m, as it
looks to accelerate investment across the supply chain in the
medium term. Such investment is planned to be in both growth
projects supporting the Group's innovation strategy and cost
release projects to deliver efficiency savings. One of the key
objectives of this program, is that through improving operational
efficiency, the resultant accretion in gross margin provides
additional fund for brand investment. This strategy of investing in
supply chain infrastructure represents a virtuous cycle to provide
the fuel for the Group's branded growth model.
The first half of the year saw a working capital outflow of
(GBP23.2m) compared to an inflow of GBP4.5m in FY20/21 H1. This
outflow in the half was largely due to higher stock levels compared
to six months ago as the Group builds stock for the Christmas
season.
Re-financing fees paid during the period amounted to GBP13.2m
and were largely due to advisory, legal and arrangement fees and a
redemption fee of GBP4.7m as referred to above. Dividends paid in
the first half of the year were GBP11.0m; of this, GBP8.5m were
payments made to shareholders and GBP2.5m was due to a dividend
match payment in favour of the Group's pension schemes.
Net debt and sources of finance
Net debt at 2 October 2021 was GBP345.0m, an increase of
GBP12.3m compared to the previous year end and GBP58.1m lower than
the same point a year ago. On a pre-IFRS 16 basis, Net debt was
GBP327.7m which is GBP13.6m higher than the previous year end and
GBP55.1m lower than FY20/21 H1. Free cash outflow in the period was
(GBP6.7m) and the movement in debt issuance costs was GBP3.1m. As
at 2 October 2021, the Group held cash and bank deposits of
GBP8.4m.
GBPm Pre-IFRS 16(11) Post-IFRS 16
Net debt at 3 April 2021 314.1 332.7
Free cash outflow in period 16.7 16.7
Movement in debt issuance costs (3.1) (3.1)
Movement in lease creditor - (1.3)
Net debt at 2 October 2021 327.7 345.0
During the period, the Group entered into a new revolving credit
facility (RCF) with an updated lending group for a period of three
years from May 2021 with extension options for up to two additional
years. This new senior secured RCF is a committed facility of
GBP175m with an interest margin grid broadly in line with the
previous RCF. The prevailing coupon on the RCF is currently 2.5%
above GBP SONIA and undrawn elements of the RCF attract interest
equivalent to 35% of the applicable margin. Additionally, the Group
issued new October 2026 dated GBP330m Fixed Rate Notes during the
period. These notes attract an interest coupon of 3.5%; the first
call date in 15 June 2023. As referred to above, the Group redeemed
in full its GBP300m 2023 dated Fixed Rate Notes and the outstanding
2022 dated FRN in the period.
Pensions
IAS 19 results and commentary
IAS 19 Accounting 2 October 2021 3 April 2021
Valuation (GBPm)
RHM Premier Combined RHM Premier Combined
Foods Foods
Assets 4,489.4 828.1 5,317.5 4,459.4 792.5 5,251.9
Liabilities (3,532.6) (1,177.2) (4,709.8) (3,536.9) (1,175.1) (4,712.0)
---------- ---------- ---------- ----------
Surplus/(Deficit) 956.8 (349.1) 607.7 922.5 (382.6) 539.9
Net of deferred
tax (25%/19.0%) 717.6 (261.8) 455.8 747.2 (309.9) 437.3
The IAS 19 pension schemes valuation reported a surplus for the
combined RHM and Premier Foods' pension schemes at 2 October 2020
of GBP607.7m, an increase of GBP67.8m compared to six months
earlier. This is equivalent to a surplus of GBP455.8m net of a
deferred tax charge of 25.0%. An increase in asset values is the
key driver behind the increase in the surplus compared to 3 April
2021. Liabilities in each of the two sets of schemes were broadly
unchanged, with the discount rate assumption constant at 2.0%. When
compared to the position at 3 April 2021, the RHM scheme surplus
increased by 3.7% while the Premier Foods' scheme deficit reduced
by 8.8%.
A deferred tax rate of 25.0% is deducted from the IAS19
retirement benefit valuation of the Group's schemes to reflect the
fact that pension deficit contributions made to the Group's pension
schemes are allowable for tax. The deferred tax rate has been
increased from the 19.0% rate used for the prior period to 25.0%
following the change in the UK's corporation tax rate, effective
from April 2023.
Assets in the combined schemes increased by GBP65.6m, or by
1.2%, to GBP5,317.5m in the period. RHM scheme assets increased by
GBP30.0m to GBP4,489.4m while the Premier Foods' schemes assets
increased by GBP35.6m to GBP828.1m.
In the combined schemes, liabilities decreased by just GBP2.2m,
less than 0.1%, to GBP4,709.8m. The RPI inflation rate assumption
used increased by fifteen basis points to 3.40%.
Combined pensions schemes 2 October 2021 3 April 2021
(GBPm)
Assets
Equities 16.1 14.9
Government bonds 1,610.0 1,625.4
Corporate bonds 10.9 1.0
Property 513.6 467.9
Absolute return products 963.2 1,112.1
Cash 38.5 79.8
Infrastructure funds 324.9 321.5
Swaps 518.0 485.4
Private equity 279.3 240.6
LDI 5.1 191.2
Illiquid credits 202.8 174.9
Global credits 637.5 318.6
Other 197.6 218.6
--------------- -------------
Total Assets 5,317.5 5,251.9
Liabilities
Discount rate 2.00% 2.00%
Inflation rate (RPI/CPI) 3.40%/2.95% 3.25%/2.80%
Following the segregated merger of the Group's pension schemes,
effective June 2020, a funding valuation of the Premier Foods and
Premier Grocery Products sections as at 31 March 2021 is currently
in progress. Separately, the net present value of future pension
contributions to the end of the respective recovery periods is in
the range of GBP300-320m(13) .
Principal risks and uncertainties
==================================
Strong risk management is key to delivery of the business'
strategic objectives. The Group has an established risk management
process, the Executive Leadership Team performing a formal robust
assessment of the principal risks bi-annually which is reviewed by
the Board and Audit Committee. Risks are monitored at a segment and
functional level throughout the year considering both internal and
external factors. The Group's principal risks and uncertainties
were disclosed on page 46 to 53 of the annual report and accounts
for the financial period ended 3 April 2021 and these remain
relevant for the current period. The major strategic and
operational risks are summarised under the headings of Impact of
Government legislation, Macroeconomic and geopolitical instability,
Market and retailer actions, Operational integrity, Legal
compliance, Technology, Product portfolio, HR and employee risk,
Strategy delivery, International expansion. The Group notes the
increase since the year end of the widely reported macro-economic
and industry wide supply chain environment issues which it
continues to navigate successfully through.
Alex Whitehouse Duncan Leggett
Chief Executive Officer Chief Financial Officer
Appendices
===========
The Company's Half year results are presented for the 26 weeks
ended 2 October 2021 and the comparative period, 26 weeks ended 26
September 2020. All references to the 'quarter', unless otherwise
stated, are for the 13 weeks ended 2 October 2021 and the
comparative periods, 13 weeks ended 26 September 2020 and 13 weeks
ended 28 September 2019.
Quarter 2 Sales
================
Q2 Sales (GBPm) Grocery Sweet Treats Group
Branded 130.8 51.4 182.2
Non-branded 20.1 5.9 26.0
-------- ------------- --------
Total 150.9 57.3 208.2
% change vs 1 year ago
Branded (0.4%) 9.4% +2.1%
Non-branded (13.6%) 2.7% (10.5%)
-------- ------------- --------
Total (2.5%) 8.6% +0.4%
% change vs 2 years ago
Branded 12.5% 15.4% 13.3%
Non-branded (17.8%) (10.6%) (16.3%)
-------- ------------- --------
Total 7.2% 12.1% 8.5%
-------- ------------- --------
Notes and definitions of non-GAAP measures
===========================================
The Company uses a number of non-GAAP measures to measure and
assess the financial performance of the business. The Directors
believe that these non-GAAP measures assist in providing additional
useful information on the underlying trends, performance and
position of the Group. These non-GAAP measures are used by the
Group for reporting and planning purposes and it considers them to
be helpful indicators for investors to assist them in assessing the
strategic progress of the Group.
1. The Group uses Trading profit to review overall Group profitability. Trading profit is defined as profit/(loss)
before tax, before net finance costs, amortisation of intangible assets, non-trading items (items requiring
separate disclosure by virtue of their nature in order that users of the financial statements obtain a clear and
consistent view of the Group's underlying trading performance), fair value movements on foreign exchange and
other derivative contracts, net interest on pensions and administration expenses and past service costs.
2. Divisional contribution refers to Gross Profit less selling, distribution and marketing expenses directly
attributable to the relevant business segment.
3. Adjusted EBITDA is Trading profit as defined in (1) above excluding depreciation.
4. Adjusted profit before tax is Trading profit as defined in (1) above less net regular interest.
5. Net regular interest is defined as net finance cost after excluding write-off of financing costs, early
redemption fees, other interest payable and other finance income.
6. Adjusted profit after tax is Adjusted profit before tax as defined in (4) above less a notional tax charge of
19.0% (2020/21: 19.0%).
7. Adjusted earnings per share is Adjusted profit after tax as defined in (6) above divided by the weighted average
of the number of shares of 856.9 million (26 weeks ended 26 September 2020: 849.6 million).
8. International sales remove the impact of foreign currency fluctuations and adjusts prior year sales to ensure
comparability in geographic market destinations. The constant currency calculation is made by adjusting the
current year's sales to the same exchange rate as the prior year and two years ago, as applicable.
9. Net debt is defined as total borrowings, less cash and cash equivalents and less capitalised debt issuance costs.
10. Free cash flow is defined as the change in Net debt as defined in (9) above before the movement in debt issuance
costs.
11. Net debt on a pre-IFRS 16 basis, which excludes lease liabilities.
12. IRI, 24 weeks ended 2 October 2021.
13. The schedule of future contributions are as agreed per the 2019 actuarial funding valuation for the Premier Foods
Schemes, discounted using the Company post tax WACC of 7.5%.
Additional notes:
-- The Directors believe that users of the financial statements are most interested in underlying trading
performance and cash generation of the Group. As such intangible asset amortisation and impairment are excluded
from Trading profit because they are non-cash items.
-- Restructuring costs have been excluded from Trading profit because they are incremental costs incurred as part of
specific initiatives that may distort a user's view of underlying trading performance.
-- Net regular interest is used to present the interest charge related to the Group's ongoing financial indebtedness,
and therefore excludes non-cash items and other credits/charges which are included in the Group's net finance
cost.
-- Group & corporate costs refer to group and corporate expenses which are not directly attributable to a business
unit and are reported at total Group level.
-- In line with accounting standards, the International and Knighton business units, the results of which are
aggregated within the Grocery business unit, are not required to be separately disclosed for reporting purposes.
Responsibility statement of the directors in respect of the
half-yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial information has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted
for use in the UK;
-- the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first 26 weeks of the financial year and their impact on the
condensed set of financial information; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
26 weeks of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
The directors of Premier Foods plc are listed on pages 56-57 of
the Premier Foods plc annual report and accounts for the 53 weeks
ended 3 April 2021.
Approved by the Board on 16 November 2021 and signed on its
behalf by:
Alex Whitehouse
Chief Executive Officer
Duncan Leggett
Chief Financial Officer
INDEPENT REVIEW REPORT TO PREMIER FOODS PLC
Conclusion
We have been engaged by the company to review the condensed set
of financial information in the half-yearly financial report for
the 26 weeks ended 2 October 2021 which comprises the condensed
consolidated balance sheet, condensed consolidated statement of
profit or loss, condensed consolidated statement of comprehensive
income, condensed consolidated statement of cash flows, condensed
consolidated statement of changes in equity and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the 26 weeks ended 2
October 2021 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK
FCA").
Scope of review
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
UK. 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. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) 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.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 2, the latest annual financial statements
of the group were prepared in accordance with International
Financial Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union and in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006 and the next annual
financial statements will be prepared in accordance with UK-adopted
international accounting standards. The directors are responsible
for preparing the condensed set of financial statements included in
the half-yearly financial report in accordance with IAS 34 as
adopted for use in the UK.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Zulfikar Walji
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
16 November 2021
Condensed consolidated statement of profit or loss
(unaudited)
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
Note GBPm GBPm
---------------------------------------------- ----------------------- ---------------------
Revenue 4 394.1 421.5
Cost of sales (257.5) (274.9)
---------------------------------------------- ----------------------- ---------------------
Gross profit 136.6 146.6
Selling, marketing and distribution costs (59.6) (59.1)
Administrative costs (25.7) (38.0)
Reversal of impairment losses on financial
assets 4 - 15.7
---------------------------------------------- ----------------------- ---------------------
Operating profit 4 51.3 65.2
Finance cost 5 (21.1) (20.1)
Finance income 5 0.5 5.4
Profit before taxation 30.7 50.5
Taxation charge 6 (9.7) (7.1)
---------------------------------------------- ----------------------- ---------------------
Profit for the period attributable to owners
of the parent 21.0 43.4
---------------------------------------------- ----------------------- ---------------------
Basic earnings per share (pence) 7 2.5 5.1
---------------------------------------------- ----------------------- ---------------------
Diluted earnings per share (pence) 7 2.4 5.0
---------------------------------------------- ----------------------- ---------------------
Condensed consolidated statement of comprehensive income
(unaudited)
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
Note GBPm GBPm
------------------------------------------- ----- ------------------------- -------------------------
Profit for the period 21.0 43.4
Other comprehensive income, net of tax
Items that will never be reclassified
to profit or loss
Remeasurements of defined benefit schemes 8 43.5 (740.4)
Deferred tax (charge)/credit (30.6) 137.9
Current tax credit on pensions 3.1 3.6
Items that are or may be reclassified
to profit or loss
Exchange differences on translation 0.1 0.3
Other comprehensive income, net of tax 16.1 (598.6)
------------------------------------------- ----- ------------------------- -------------------------
Total comprehensive income attributable
to owners of the parent 37.1 (555.2)
------------------------------------------- ----- ------------------------- -------------------------
Condensed consolidated balance sheet (unaudited)
As at As at
2 Oct 2021 3 Apr 2021
Note GBPm GBPm
-------------------------------------------------- ----- ------------------ -----------------
ASSETS:
Non-current assets
Property, plant and equipment 188.0 192.1
Goodwill 646.0 646.0
Other intangible assets 304.0 317.2
Deferred tax assets 23.1 28.4
Net retirement benefit assets 8 969.7 934.7
2,130.8 2,118.4
Current assets
Stocks 90.7 68.8
Trade and other receivables 75.4 83.4
Derivative financial instruments 10 1.1 0.1
Cash and cash equivalents 12 8.4 4.2
------------------
175.6 156.5
-------------------------------------------------- ----- ------------------ -----------------
Total assets 2,306.4 2,274.9
-------------------------------------------------- ----- ------------------ -----------------
LIABILITIES:
Current liabilities
Trade and other payables (241.8) (249.8)
Financial liabilities:
-- short-term borrowings 9 (14.0) (3.1)
-- derivative financial instruments 10 (0.3) (2.3)
Lease liabilities 9 (2.2) (2.3)
Provisions for liabilities and charges 11 (2.6) (6.2)
------------------
(260.9) (263.7)
Non-current liabilities
Long term borrowings 9 (322.1) (315.2)
Lease liabilities 9 (15.1) (16.3)
Net retirement benefit obligations 8 (362.0) (394.8)
Provisions for liabilities and charges 11 (8.7) (8.4)
Deferred tax liabilities (116.9) (85.8)
Other liabilities (6.0) (7.1)
------------------
(830.8) (827.6)
-------------------------------------------------- ----- ------------------ -----------------
Total liabilities (1,091.7) (1,091.3)
-------------------------------------------------- ----- ------------------ -----------------
Net assets 1,214.7 1,183.6
-------------------------------------------------- ----- ------------------ -----------------
EQUITY:
Capital and reserves
Share capital 85.9 85.5
Share premium 0.8 0.6
Merger reserve 351.7 351.7
Other reserves (9.3) (9.3)
Profit and loss reserve 785.6 755.1
-------------------------------------------------- ------------------ -----------------
Total equity 1,214.7 1,183.6
-------------------------------------------------- ----- ------------------ -----------------
Condensed consolidated statement of cash flows
(unaudited)
26 weeks 26 weeks ended
ended
2 Oct 2021 26 Sept 2020
Note GBPm GBPm
-------------------------------------------- ----- ---------------- ---------------------
Cash generated from operations 12 28.1 52.6
Interest paid (14.9) (18.0)
Interest received 0.3 0.5
-------------------------------------------- ----- ---------------- ---------------------
Cash generated from operating activities 13.5 35.1
Purchase of property, plant and equipment (6.0) (6.2)
Purchase of intangible assets (1.4) (0.9)
-------------------------------------------- ----- ---------------- ---------------------
Cash used in investing activities (7.4) (7.1)
Proceeds from borrowings 344.0 -
Repayment of borrowings (320.0) (165.0)
Repayment of lease liabilities (1.3) (1.1)
Financing fees(1) (8.5) -
Early redemption fee(1) (4.7) -
Dividends paid (8.5) -
Proceeds from share issue 0.6 0.8
Purchase of shares to satisfy share awards (0.4) (0.2)
-------------------------------------------- ----- ---------------- ---------------------
Cash generated from/(used in) financing
activities 1.2 (165.5)
Net increase/(decrease) of cash and cash
equivalents 7.3 (137.5)
Cash, cash equivalents and bank overdrafts at
beginning of period 1.1 177.9
--------------------------------------------------- ---------------- ---------------------
Cash, cash equivalents and bank overdrafts
at end of period 12 8.4 40.4
-------------------------------------------- ----- ---------------- ---------------------
(1) Relate to payments made as part of the refinancing of the Group's
debt in June 2021. See note 9 for further details.
Condensed consolidated statement of changes in equity (unaudited)
Profit
Share Share Merger and loss
capital premium reserve Other reserves reserve Total equity
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
At 29 March 2020 84.8 1,409.4 351.7 (9.3) (156.6) 1,680.0
Profit for the period - - - - 43.4 43.4
Remeasurements of defined
benefit schemes 8 - - - - (740.4) (740.4)
Deferred tax credit - - - - 137.9 137.9
Current tax credit 3.6 3.6
Exchange differences on translation - - - - 0.3 0.3
Other comprehensive
income - - - - (598.6) (598.6)
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
Total comprehensive
income - - - - (555.2) (555.2)
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
Shares issued 0.4 0.4 - - - 0.8
Share-based payments - - - - 1.0 1.0
Purchase of shares to satisfy
share awards - - - - (0.2) (0.2)
Deferred tax movements on
share-based payments - - - - 1.3 1.3
At 26 September 2020 85.2 1,409.8 351.7 (9.3) (709.7) 1,127.7
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
At 3 April 2021 85.5 0.6 351.7 (9.3) 755.1 1,183.6
Profit for the period - - - - 21.0 21.0
Remeasurements of defined
benefit schemes 8 - - - - 43.5 43.5
Deferred tax charge - - - - (30.6) (30.6)
Current tax credit 3.1 3.1
Exchange differences on translation - - - - 0.1 0.1
Other comprehensive
income - - - - 16.1 16.1
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
Total comprehensive
income - - - - 37.1 37.1
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
Shares issued 0.4 0.2 - - - 0.6
Share-based payments - - - - 1.5 1.5
Purchase of shares to satisfy
share awards - - - - (0.4) (0.4)
Deferred tax movements on
share-based payments - - - - 0.8 0.8
Dividends 13 - - - - (8.5) (8.5)
At 2 October 2021 85.9 0.8 351.7 (9.3) 785.6 1,214.7
-------------------------------- ----- --------- --------- --------- --------------- ---------- -------------
1. General information
Premier Foods plc (the "Company") is a public limited company
incorporated and domiciled in England and Wales, registered number
5160050, with its registered office at Premier House, Centrium
Business Park, Griffiths Way, St Albans, Hertfordshire AL1 2RE. The
principal activity of the Company and its subsidiaries (the
"Group") is the manufacture and distribution of branded and own
label food products as described in the Group's annual report and
accounts for the financial period ended 3 April 2021.
2. Accounting policies
Basis of preparation
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK.
The annual financial statements of the group for the 52 weeks
ending 2 April 2022 will be prepared in accordance with UK-adopted
international accounting standards. As required by the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority,
the condensed set of financial statements has been prepared
applying the accounting policies and presentation that were applied
in the preparation of the company's published consolidated
financial statements for the 53 weeks ended 3 April 2021 which were
prepared in accordance with International Financial Reporting
Standards (IFRSs) adopted pursuant to Regulation (EC) No 1606/2002
as it applies in the European Union and in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. There has been no
significant impact on the Group profit or net assets on adoption of
new or revised accounting standards in the period. Amounts are
presented to the nearest GBP0.1m.
The financial information for the period ended 2 October 2021 is
unaudited but has been subject to an independent review by KPMG
LLP.
The Group's financial statements for the 53 weeks ended 3 April
2021, which were approved by the Board of Directors on 19 May 2021,
were reported on by KPMG LLP and delivered to the Registrar of
Companies. The report of the auditor was unqualified, did not
contain a reference to any matters to which the Auditor drew
attention by way of emphasis without qualifying their report and
did not contain any statement under section 498 (2) or (3) of the
Companies Act 2006.
This financial information was approved for issue on 16 November
2021.
Basis for preparation of financial information on a going
concern basis
The Group's revolving credit facility includes net debt/EBITDA
and EBITDA/interest covenants as detailed in note 9. In the event
these covenants are not met then the Group would be in breach of
its financing agreement and, as would be the case in any covenant
breach, the banking syndicate could withdraw funding to the Group.
The Group was compliant with its covenant tests as at 3 April 2021
and 2 October 2021.
Having undertaken a robust assessment of the Group's forecasts
with specific consideration to the trading performance of the
Group, cashflows and covenant compliance, the Directors have a
reasonable expectation that the Group is able to operate within the
level of its current facilities, meet the required covenant tests
and has adequate resources to continue in operational existence for
at least 12 months from the date of approval of these financial
statements. The Group therefore continues to adopt the going
concern basis in preparing its financial information for the
reasons set out below:
At 2 October 2021, the Group had total assets less current
liabilities of GBP2,045.5m and net assets of GBP1,214.7m. Liquidity
as at that date was GBP169.4m, made up of cash and cash
equivalents, and undrawn committed credit facilities of GBP161.0m
expiring in May 2024. At the time of the approval of this report,
the cash and liquidity position of the group has not changed
significantly.
The Group operates in the Food Manufacturing industry,
considered as essential during the current pandemic, and whilst
uncertainty still exists in respect of the potential future impact
of Covid-19, HM Government restrictions when necessary to be put in
place, mean more meals are eaten at home and hence increased demand
for the Group's product ranges. The Group's first priority remains
the health and wellbeing of its colleagues, customers and other
stakeholders and to date the Group has experienced no net financial
adverse impact of the Covid-19 pandemic with elevated levels of
demand seen.
The Directors have rigorously reviewed the situation relating to
Covid-19 and inflationary pressures across the industry, and have
modelled a series of 'downside case' scenarios impacting future
financial performance, cash flows and covenant compliance, that
cover a period of at least 12 months from the date of approval of
the financial statements. These downside cases represent severe but
plausible scenarios and include assumptions relating to an estimate
of the impact of inflation on the cost of production not fully
recovered through pricing and the closure of a proportion of
manufacturing sites due to colleague absence as opposed to
Government imposed guidelines. The Directors believe that the risk
of enforced site closures is low and continue to operate with
additional health and safety measures in all factories to minimise
the risk of a major supply disruption. To date there have been no
manufacturing site closures and a large proportion of colleagues
have now received a double vaccination. The Directors have also
considered driver shortages, climate change and upcoming UK
regulations impacting the food industry and consumer preferences
that may have an adverse impact on supply of, or the demand for
certain product groups.
Whilst the downside scenario is severe but plausible, it is
considered by the Directors to be prudent, having an adverse impact
on revenue, margin and cash flow. The Directors, in response,
identified mitigating actions within their control, that would
reduce costs, optimising cashflow and liquidity. Amongst these are
the following actions: reducing capital expenditure, reducing
marketing spend and delaying or cancelling discretionary spend. The
Directors have assumed no significant structural changes to the
business will be needed in any of the scenarios modelled.
The Directors, after reviewing financial forecasts and financing
arrangements, consider that the Group has adequate resources to
continue to meet its liabilities as they fall due for at least 12
months from the date of approval of this report. Accordingly, the
Directors are satisfied that it is appropriate to adopt the going
concern basis in preparing its consolidated financial
information.
3. Significant accounting policies, estimates and judgements
The following are areas of particular significance to the
Group's interim financial information and may include the use of
estimates, which is fundamental to the compilation of this
financial information. Results may differ from actual amounts.
Significant accounting policies
The following are considered to be the significant accounting
policies:
Deferred tax
Deferred tax arises due to certain temporary differences between
the carrying amounts of assets and liabilities for financial
reporting purposes and those for taxation purposes. The Group has a
significant loss related to prior periods. The deferred tax assets
and liabilities on a gross basis are material to the financial
information.
Deferred tax is measured at the tax rates that are expected to
apply in the periods in which the asset or liability is settled
based on tax rates (and tax laws) that have been enacted or
substantively enacted as at the balance sheet date.
For the purpose of recognising deferred tax on the pension
scheme surplus, withholding tax (at 35%) would apply for any
surplus being refunded to the Group at the end of the life of the
scheme. Corporation tax rate is 19% (2020/21: 19%). In the spring
budget of 2021, the corporation tax rate increased from the current
19% to 25% starting April 2023. Therefore, the deferred tax
balances have been restated between 22% to 25% depending on the
rate they are expected to unwind.
The directors have concluded that the future corporation tax
rate of 25% should apply to the recognition of deferred tax on the
pension scheme surplus, reflecting the directors' intention
regarding the manner of recovery of the deferred tax asset.
Deferred tax is recognised in the statement of profit or loss
except when it relates to items credited or charged directly to
OCI, in which case the deferred tax is also recognised in
equity.
When calculating the value of the deferred tax asset or
liability, consideration is given to the size of gross deferred tax
liabilities and deferred tax assets available to offset this. To
the extent that deferred tax assets exceed liabilities, estimation
is required around the level of asset that can be supported. The
following factors are taken into consideration.
-- Historic business performance
-- Projected profits or losses and other relevant information that allow profits chargeable to corporation tax to be
derived
-- The total level of recognised and unrecognised losses that can be used to reduce future forecast taxable profits
-- The period over which there is sufficient certainty that profits can be made that would support the recognition
of an asset
Estimates
The following are considered to be the key estimates within the
financial information:
Employee benefits
The present value of the Group's defined benefit pension
obligations depends on a number of actuarial assumptions. The
primary assumptions used include the discount rate applicable to
scheme liabilities, the long-term rate of inflation and estimates
of the mortality applicable to scheme members. Each of the
underlying assumptions is set out in more detail in note 8.
At each reporting date, and on a continuous basis, the Group
reviews the macro-economic, Company and scheme specific factors
influencing each of these assumptions, using professional advice,
in order to record the Group's ongoing commitment and obligation to
defined benefit schemes in accordance with IAS 19 (Revised).
Plan assets of the defined benefit schemes include a number of
assets for which quoted prices are not available. At each reporting
date, the Group determines the fair value of these assets with
reference to most recently available asset statements from fund
managers.
Where statements are not available at the reporting date a roll
forward of cash transactions between statement date and balance
sheet date is performed.
Goodwill
Impairment reviews in respect of goodwill are performed at least
annually and more regularly if there is an indicator of impairment.
Impairment reviews in respect of intangible assets are performed
when an event indicates that an impairment review is necessary.
Examples of such triggering events include a significant planned
restructuring, a major change in market conditions or technology,
expectations of future operating losses, or a significant reduction
in cash flows. In performing its impairment analysis, the Group
takes into consideration these indicators including the difference
between its market capitalisation and net assets.
The Group has considered these indicators along with underlying
trading performance assumed within the impairment analysis and
concluded that there were no indicators of impairment during the 26
weeks ended 2 October 2021.Whilst uncertainty still exists in
respect of the potential future impact of Covid-19, the Group has
experienced no net financial adverse impact of the Covid-19
pandemic to date.
Commercial arrangements
Sales rebates and discounts are accrued on each relevant
promotion or customer agreement and are charged to the statement of
profit or loss at the time of the relevant promotional buy-in as a
deduction from revenue. Accruals for each individual promotion or
rebate arrangement are based on the type and length of promotion
and nature of customer agreement. At the time an accrual is made
the nature, funding level and timing of the promotion is typically
known. Areas of estimation are sales volume/activity, phasing and
the amount of product sold on promotion.
For short term promotions, the Group performs a true up of
estimates where necessary on a monthly basis, using real time
customer sales information where possible and finally on receipt of
a customer claim which typically follows 1-2 months after the end
of a promotion. For longer term discounts and rebates the Group
uses actual and forecast sales to estimate the level of rebate.
These accruals are updated monthly based on latest actual and
forecast sales.
Judgements
The following are considered to be the key judgements within the
financial information:
Non-trading items
Non-trading items have been presented separately throughout the
financial information. These are items that management believes
require separate disclosure by virtue of their nature in order that
the users of the financial information obtain a clear and
consistent view of the Group's underlying trading performance. In
identifying non-trading items, management have applied judgement
including whether i) the item is related to underlying trading of
the Group; and/or ii) how often the item is expected to occur.
4. Segmental analysis
IFRS 8 requires operating segments to be determined based on the
Group's internal reporting to the Chief Operating Decision Maker
("CODM"). The CODM has been determined to be the Executive
Leadership Team as it is primarily responsible for the allocation
of resources to segments and the assessment of performance of the
segments.
The Group's operating segments are defined as 'Grocery', 'Sweet
Treats', and 'International'. The Grocery segment primarily sells
savoury ambient food products and the Sweet Treats segment sells
sweet ambient food products. The International segment has been
aggregated within the Grocery segment for reporting purposes as
revenue is below 10% of the Group's total revenue and the segment
is considered to have similar characteristics to that of Grocery.
This is in accordance with the criteria set out in IFRS 8.
The CODM uses Divisional contribution as the key measure of the
segments' results. Divisional contribution is defined as gross
profit after selling, marketing and distribution costs. Divisional
contribution is a consistent measure within the Group and reflects
the segments' underlying trading performance for the period under
evaluation.
The Group uses trading profit to review overall Group
profitability. Trading profit is defined as profit/loss before tax
before net finance costs, amortisation of intangible assets,
non-trading items, fair value movements on foreign exchange and
other derivative contracts and net interest on pensions and
administrative expenses.
The segment results for the period ended 2 October 2021 and 26
September 2020, and the reconciliation of the segment measures to
the respective statutory items included in the financial
information, are as follows:
26 weeks ended 2 Oct 2021
-----------------------------------------------------------------------------------------------------
Grocery Sweet Total
Treats
GBPm GBPm GBPm
------------------------------------------------------ ------------ ------------ -----------------
Revenue 284.1 110.0 394.1
------------------------------------------------------ ------------ ------------ -----------------
Divisional contribution 64.3 12.7 77.0
Group and corporate costs (19.2)
------------------------------------------------------ ------------ ------------ -----------------
Trading profit 57.8
Amortisation of intangible assets (14.3)
Fair value movements on foreign exchange and other derivative
contracts(1) 3.0
Net interest on pensions and administrative expenses 2.2
Non-trading items:
- Other(2) 2.6
Operating profit 51.3
Finance cost(3) (21.1)
Finance income 0.5
Profit before taxation 30.7
------------------------------------------------------ ------------ ------------ -----------------
Depreciation (5.3) (4.0) (9.3)
------------------------------------------------------ ------------ ------------ -----------------
(1) The gain of GBP3.0m reflects changes in fair value rate during the
26-week period and movement in nominal value of the instruments held
at 2 October 2021 from the 3 April 2021 position.
(2) Other relates primarily to the resolution
of a legacy legal matter.
(3) Finance cost includes GBP4.3m write-off of transaction fees and
GBP4.7m early redemption fee as part of the refinancing of the Group's
debt in June 2021. See note 5 for further details.
26 weeks ended 26 Sept
2020
------------------------------------------------------ ---------------------------------------------
Grocery Sweet Total
Treats
GBPm GBPm GBPm
------------------------------------------------------ ------------ ------------ -----------------
Revenue 316.7 104.8 421.5
------------------------------------------------------ ------------ ------------ -----------------
Divisional contribution 78.5 9.1 87.6
Group and corporate costs (21.8)
------------------------------------------------------ ------------ ------------ -----------------
Trading profit 65.8
Amortisation of intangible assets (13.5)
Fair value movements on foreign exchange and other derivative
contracts (0.3)
Reversal of impairment losses on financial assets(1) 15.7
Net interest on pensions and administrative expenses 0.1
Non-trading items:
- Restructuring costs (2.6)
Operating profit 65.2
Finance cost (20.1)
Finance income(2) 5.4
------------ ------------
Profit before taxation 50.5
------------------------------------------------------ ------------ ------------ -----------------
Depreciation (5.1) (4.0) (9.1)
------------ ------------ -----------------
(1) Revaluation of the Hovis loan note principal, driven by value attributed
to this loan through the Hovis sales process.
(2) Finance income in 2020/21 includes GBP4.6m reversal of the impairment
of the interest on the Hovis loan note, driven by value attributed to
this loan through the Hovis sales process.
Inter-segment transfers or transactions are entered into under
the same terms and conditions that would be available to unrelated
third parties.
5. Finance income and costs
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
GBPm GBPm
---------------------------------------- ------------------------- ------------------------
Interest payable on bank loans and
overdrafts (2.5) (2.9)
Interest payable on senior secured
notes (7.7) (13.8)
Interest payable on revolving facility (0.3) (0.6)
Amortisation of debt issuance costs (1.2) (1.6)
(11.7) (18.9)
Write off of financing costs(1) (4.3) (0.6)
Early redemption fee(2) (4.7) -
Other interest payable (0.4) (0.6)
Total finance cost (21.1) (20.1)
---------------------------------------- ------------------------- ------------------------
Interest receivable on bank deposits 0.3 0.8
Other finance income 0.2 4.6
Total finance income 0.5 5.4
---------------------------------------- ------------------------- ------------------------
Net finance cost (20.6) (14.7)
---------------------------------------- ------------------------- ------------------------
(1) Relates to the refinancing of the senior secured fixed
rate notes due 2023 and revolving credit facility in the current
period and redemption of senior secured floating rate notes
due 2022 in the previous period. See note 9 for further details.
(2) Relates to a non-recurring payment arising on the early
redemption of the GBP300m senior secured fixed rate notes due
to mature in October 2023 as part of the refinancing of the
Group's debt in June 2021.
6. Taxation
Current tax
26 weeks ended 26 weeks
ended
2 Oct 2021 26 Sept 2020
GBPm GBPm
------------------------- ------------------------ -------------
Current tax
- Current period (3.1) (3.6)
Deferred tax
- Current period (3.2) (3.4)
- Prior periods 0.1 (0.1)
- Changes in tax rate (3.5) -
Income tax charge (9.7) (7.1)
------------------------- ------------------------ -------------
Tax relating to items recorded in other comprehensive income
included:
26 weeks 26 weeks
ended ended
2 Oct 2021 26 Sept
2020
GBPm GBPm
--------------------------------------------------- ----------------------- --------------------
Corporation tax credit on pension movements 3.1 3.6
Deferred tax charge on change in corporate (17.9) -
tax rate
Deferred tax credit on prior year 1.6 -
Deferred tax (charge)/credit on pension movements (14.3) 137.9
(27.5) 141.5
--------------------------------------------------- ----------------------- --------------------
The applicable rate of corporation tax for the period is 19%.
Per the Finance Act of 2021, the corporation tax rate will increase
from the current 19% to 25% starting April 2023. Therefore, the
deferred tax balances have been restated between 22% to 25%
depending on the rate at which they are expected to unwind. As a
result of the change in tax rate a tax charge of GBP3.5m has been
recorded in the consolidated statement of profit or loss and a tax
charge of GBP17.9m has been recorded in other comprehensive
income.
Tax charged for the 26 weeks ended 2 October 2021 has been
calculated by applying the effective rate of tax which is expected
to apply to Group for the period ended 2 April 2022 using rates
substantively enacted by 2 October 2021 as required by IAS 34
'Interim Financial Reporting'. The tax charge for the period
differs from the standard rate of corporation tax in the United
Kingdom of 19.0% (2020/21: 19.0%). The reason for the increase in
the tax rate is primarily driven by the change in corporate tax
rate as explained above. See below for more details:
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
GBPm GBPm
-------------------------------------------- ---------------------------- ------------------------
Profit before taxation 30.7 50.5
Tax charge at the domestic income tax
rate of 19.0% (2019/20: 19.0%) (5.8) (9.6)
Tax effect of:
Non-deductible items - (0.5)
Other disallowable items 0.2 0.1
Reversal of impairment losses on financial
assets - 3.0
Adjustment to restate opening deferred (3.5) -
tax balances
Difference between current and deferred (0.7) -
tax rate
Adjustments to prior periods 0.1 (0.1)
Income tax charge (9.7) (7.1)
--------------------------------------------- ---------------------------- ------------------------
7. Earnings per share
Basic earnings per share has been calculated by dividing the
profit for the period ended 2 October 2021 attributable to owners
of the parent of GBP21.0m (2020/21: GBP43.4m profit) by the
weighted average number of ordinary shares of the Company.
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
Number Number
---------------------------------------------- --------------- ---------------
Weighted average number of ordinary shares
for the purpose of basic earnings per share
(m) 856.9 849.6
Effect of dilutive potential ordinary shares
(m) 18.2 14.9
--------------- ---------------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 875.1 864.5
---------------------------------------------- --------------- ---------------
26 weeks ended 2 Oct 26 weeks ended 26
2021 Sept 2020
Basic Dilutive Diluted Basic Dilutive Diluted
effect effect
of share of share
options options
----------------------------- ------ ---------- -------- ------ ---------- --------
Profit after tax (GBPm) 21.0 21.0 43.4 43.4
Weighted average number
of shares (m) 856.9 18.2 875.1 849.6 14.9 864.5
----------------------------- ------
Earnings per share (pence) 2.5 (0.1) 2.4 5.1 (0.1) 5.0
----------------------------- ------ ---------- -------- ------ ---------- --------
Dilutive effect of share options
The dilutive effect of share options is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. The
only dilutive potential ordinary shares of the Company are share
options and share awards. A calculation is performed to determine
the number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the share awards
and the subscription rights attached to the outstanding share
options.
No adjustment is made to the profit or loss in calculating basic
and diluted earnings per share.
Adjusted earnings per share ("Adjusted EPS")
Adjusted earnings per share is defined as trading profit less
net regular interest payable, less a notional tax charge at 19.0%
(2020/21: 19.0%) divided by the weighted average number of ordinary
shares of the Company.
Net regular interest is defined as net finance cost after
excluding write-off of financing costs, early redemption fees,
other interest payable and other finance income.
Trading profit and Adjusted EPS have been reported as the
directors believe these assist in providing additional useful
information on the underlying trends and performance of the
Group.
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
GBPm GBPm
-------------------------------------- -------------------------- ------------------------
Trading profit 57.8 65.8
Less net regular interest (11.4) (18.1)
-------------------------- ------------------------
Adjusted profit before tax 46.4 47.7
Notional tax at 19% (2020/21: 19%) (8.8) (9.1)
-------------------------------------- -------------------------- ------------------------
Adjusted profit after tax 37.6 38.6
Average shares in issue (m) 856.9 849.6
Adjusted EPS (pence) 4.4 4.5
-------------------------------------- -------------------------- ------------------------
Net regular interest
Net finance cost (20.6) (14.7)
Exclude write off of financing costs 4.3 0.6
Exclude early redemption fee 4.7 -
Exclude other interest payable 0.4 0.6
Exclude other finance income (0.2) (4.6)
Net regular interest (11.4) (18.1)
-------------------------------------- -------------------------- ------------------------
8. Retirement benefit schemes
Defined benefit schemes
The Group operates a number of defined benefit schemes under
which current and former employees have built up an entitlement to
pension benefits on their retirement. These are as follows:
(a) The Premier schemes, which comprise:
Premier Foods Pension Scheme ('PFPS') (section of RHM Pension
Scheme)
Premier Grocery Products Pension Scheme ('PGPPS') (section of
RHM Pension Scheme)
Premier Grocery Products Ireland Pension Scheme ('PGPIPS')
Chivers 1987 Pension Scheme
Chivers Supplementary Pension Scheme
Hillsdown Holdings Limited Pension Scheme
(b) The RHM schemes, which comprise:
RHM Pension Scheme
Premier Foods Ireland Pension Scheme
Actuarial valuations are being conducted for the Premier Foods
and Premier Grocery Products Sections as at 31 March 2021. Draft
valuation reports were not available at the time of preparing the
financial information. The triennial valuation cycle will then
continue with effect from 31 March 2022 for all three sections of
the RHM Pension Scheme. Actuarial valuations for the schemes based
in Ireland were completed during the course of 2019 and 2020.
The exchange rates used to translate the overseas euro based
schemes are GBP1.00 = EUR1.1642 for the average rate during the
period, and GBP1.00 = EUR1.1672 for the closing position at 2
October 2021.
All pension schemes are closed to future accrual with the
exception of the Premier Foods Ireland Pension Scheme which
contains notional accrual under a legacy arrangement for two of its
members.
The disclosures in note 8 represent those schemes that are
associated with Premier ('Premier schemes') and those that are
associated with ex-RHM companies ('RHM schemes'). These differ to
that disclosed on the balance sheet, in which the schemes have been
split between those in an asset position and those in a liability
position.
A t the balance sheet date, the combined principal actuarial
assumptions were as follows:
Premier RHM schemes
schemes
At 2 October 2021
Discount rate 2.00% 2.00%
Inflation - RPI 3.40% 3.40%
Inflation - CPI 2.95% 2.95%
Expected salary increases n/a n/a
Future pension increases 2.15% 2.15%
---------------------------- --------- ------------
At 3 April 2021
Discount rate 2.00% 2.00%
Inflation - RPI 3.25% 3.25%
Inflation - CPI 2.80% 2.80%
Expected salary increases n/a n/a
Future pension increases 2.10% 2.10%
---------------------------- --------- ------------
For the smaller overseas schemes, the discount rate used was
1.15% (2020/21: 1.10%) and future pension increases were 1.70%
(2020/21: 1.60%).
The directors have considered the impact of the current Covid-19
pandemic on the mortality assumptions and consider that use of the
updated Continuous Mortality Improvement (CMI) 2020 projections
released in March 2021 for the future improvement assumption a
reasonable approach. Whilst the CMI projections are the latest
available, it is too soon to quantify the impact Covid-19 may have
on the scheme liabilities and the directors will continue to
monitor any potential future impact upon the mortality assumptions
used .
Premier schemes % of total RHM schemes % of total Total % of total
GBPm % GBPm % GBPm
------------------------------------- ---------------- ----------- ------------ ----------- -------- -----------
Assets with a quoted price in an active market at 2 October 2021:
Government bonds 404.3 48.8 1,167.5 26.0 1,571.8 29.6
Cash 5.0 0.6 31.4 0.7 36.4 0.7
Assets without a quoted price in an active market at 2 October 2021:
UK equities 0.8 0.1 0.3 0.0 1.1 0.0
Global equities 9.2 1.1 5.8 0.1 15.0 0.3
Government bonds 33.3 4.0 4.9 0.1 38.2 0.7
Corporate bonds 2.1 0.3 8.8 0.2 10.9 0.2
UK Property 82.8 10.0 273.8 6.1 356.6 6.7
European property 29.3 3.6 127.7 2.9 157.0 3.0
Absolute return products 66.9 8.1 896.3 20.0 963.2 18.1
Infrastructure funds 22.6 2.7 302.3 6.7 324.9 6.1
Interest rate swaps - - 458.3 10.2 458.3 8.6
Inflation swaps - - 59.7 1.3 59.7 1.1
Private equity 32.7 3.9 246.6 5.5 279.3 5.3
LDI - - 5.1 0.1 5.1 0.1
Global credit 74.2 9.0 563.3 12.5 637.5 12.0
Illiquid credit 60.0 7.2 142.8 3.2 202.8 3.8
Cash 2.0 0.2 0.1 0.0 2.1 0.0
Other 2.9 0.4 194.7 4.4 197.6 3.7
Fair value of scheme assets
as at 2 October 2021 828.1 100 4,489.4 100 5,317.5 100
------------------------------------- ---------------- ----------- ------------ ----------- -------- -----------
Assets with a quoted price in an active market at 3 April 2021:
Government bonds 45.1 5.7 1,527.7 34.3 1,572.8 29.9
Cash 14.8 1.9 64.9 1.5 79.7 1.5
Assets without a quoted price in an active market at 3 April 2021(1) :
UK equities 0.6 0.1 0.3 0.0 0.9 0.1
Global equities 8.1 1.0 5.9 0.1 14.0 0.3
Government bonds 34.3 4.3 18.3 0.4 52.6 1.0
Corporate bonds 1.0 0.1 - - 1.0 0.0
UK Property 84.6 10.7 278.8 6.2 363.4 6.9
European property 20.6 2.6 83.9 1.9 104.5 2.0
Absolute return products 228.2 28.8 883.9 19.8 1,112.1 21.1
Infrastructure funds 19.3 2.5 302.2 6.8 321.5 6.1
Interest rate swaps - - 464.2 10.4 464.2 8.8
Inflation swaps - - 21.2 0.5 21.2 0.4
Private equity 22.3 2.8 218.3 4.9 240.6 4.6
LDI 191.2 24.1 - - 191.2 3.6
Global credit 16.9 2.1 301.7 6.8 318.6 6.1
Illiquid credit 47.1 5.9 127.8 2.9 174.9 3.4
Cash 0.1 0.0 - - 0.1 0.0
Other(2) 58.3 7.4 160.3 3.5 218.6 4.2
------------------------------------- ---------------- ----------- ------------ ----------- -------- -----------
Fair value of scheme assets as at 3
April 2021 792.5 100 4,459.4 100 5,251.9 100
------------------------------------- ---------------- ----------- ------------ ----------- -------- -----------
(1) Updated to provide enhanced disclosure on the assets within the Other category.
(2) Included in Other in the RHM schemes is GBP112.8m of assets which have been sold during
the 53 weeks ended 3 April 2021 and are awaiting settlement at the year-end date.
For assets without a quoted price in an active market fair value
is determined with reference to net asset value statements provided
by third parties.
Where pensions asset valuations are not available as at the
balance sheet, the directors use the most recent valuation
available, reflect cash movements to the balance sheet date and
then assess and make adjustments based upon their review of
appropriate market movements which could impact upon the valuations
reported. Pension asset valuations are therefore subject to
estimation uncertainty due to market volatility, which could result
in a material movement in asset values over the next 12 months.
The mortality assumptions are based on standard mortality tables
and allow for future mortality improvements. The assumptions are as
follows:
Premier RHM schemes
schemes
--------------------------------------- --------- ------------
Life expectancy at 2 October 2021
Male pensioner, currently aged 65 87.2 85.4
Female pensioner, currently aged 65 89.4 87.8
Male non-pensioner, currently aged 45 87.8 86.6
Female non-pensioner, currently aged
45 90.4 89.4
Life expectancy at 3 April 2021
Male pensioner, currently aged 65 87.2 85.4
Female pensioner, currently aged 65 89.4 87.8
Male non-pensioner, currently aged 45 87.8 86.6
Female non-pensioner, currently aged
45 90.4 89.4
---------------------------------------- --------- ------------
The amounts recognised in the balance sheet arising from the
Group's obligations in respect of its defined benefit schemes are
as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
--------------------------------------------- ---------- ------------ ----------
At 2 October 2021
Present value of defined benefit obligation (1,177.2) (3,532.6) (4,709.8)
Fair value of plan assets 828.1 4,489.4 5,317.5
--------------------------------------------- ---------- ------------ ----------
(Deficit)/surplus in schemes (349.1) 956.8 607.7
--------------------------------------------- ---------- ------------ ----------
At 3 April 2021
Present value of defined benefit obligation (1,175.1) (3,536.9) (4,712.0)
Fair value of plan assets 792.5 4,459.4 5,251.9
--------------------------------------------- ---------- ------------ ----------
(Deficit)/surplus in schemes (382.6) 922.5 539.9
--------------------------------------------- ---------- ------------ ----------
The aggregate surplus of GBP539.9m has increased to a surplus of
GBP607.7m during the period ended 2 October 2021. The increase of
GBP67.8m (53 weeks ended 3 April 2021: GBP690.5 decrease) is
primarily due to remeasurement gains on scheme assets.
Changes in the present value of the defined benefit obligation
were as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
----------------------------------------- ---------- ------------ ----------
Defined benefit obligation at 28 March
2020 (1,049.6) (3,240.0) (4,289.6)
Interest cost (22.8) (60.4) (83.2)
Past service cost (0.4) (2.5) (2.9)
Settlement 27.4 57.8 85.2
Remeasurement loss (171.6) (442.8) (614.4)
Exchange differences 2.6 1.5 4.1
Benefits paid 39.3 149.5 188.8
Defined benefit obligation at 3 April
2021 (1,175.1) (3,536.9) (4,712.0)
Interest cost (11.4) (34.8) (46.2)
Remeasurement losses (9.3) (31.0) (40.3)
Exchange differences (0.2) (0.1) (0.3)
Benefits paid 18.8 70.2 89.0
----------------------------------------- ---------- ------------ ----------
Defined benefit obligation at 2 October
2021 (1,177.2) (3,532.6) (4,709.8)
----------------------------------------- ---------- ------------ ----------
Changes in the fair value of plan assets were as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
------------------------------------------ ------- ------------ --------
Fair value of scheme assets at 28 March
2020 774.7 4,745.3 5,520.0
Interest income on scheme assets 16.2 81.4 97.6
Settlement (18.1) (61.1) (79.2)
Remeasurement gains/(losses) 16.7 (152.6) (135.9)
Administrative costs (6.8) (3.9) (10.7)
Contributions by employer 45.5 1.5 47.0
One-off contribution by employer(1) 7.0 - 7.0
Exchange differences (3.4) (1.7) (5.1)
Benefits paid (39.3) (149.5) (188.8)
------------------------------------------ ------- ------------ --------
Fair value of scheme assets at 3 April
2021 792.5 4,459.4 5,251.9
Interest income on scheme assets 7.6 44.0 51.6
Remeasurement gains 26.8 57.0 83.8
Administrative costs (2.0) (1.2) (3.2)
Contributions by employer 19.3 0.2 19.5
Dividend match pension contribution(2) 2.5 - 2.5
Exchange differences 0.2 0.2 0.4
Benefits paid (18.8) (70.2) (89.0)
------------------------------------------ ------- ------------ --------
Fair value of plan assets at 2 October
2021 828.1 4,489.4 5,317.5
------------------------------------------ ------- ------------ --------
(1) One-off contribution by employer in the prior period is
related to Hovis disposal proceeds due to the Premier schemes.
(2) Contribution by the Group to the Premier schemes due to the
payment of dividends during the year.
The reconciliation of the net defined benefit surplus over the
period is as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
-------------------------------------------------- --------- ------------ --------
(Deficit)/surplus in schemes at 28 March
2020 (274.9) 1,505.3 1,230.4
Amount recognised in profit or loss (4.5) 11.3 6.8
Remeasurements recognised in other comprehensive
income (154.9) (595.4) (750.3)
Contributions by employer 45.5 1.5 47.0
One-off contribution by employer 7.0 - 7.0
Exchange differences recognised in other
comprehensive income (0.8) (0.2) (1.0)
(Deficit)/surplus in schemes at 3 April
2021 (382.6) 922.5 539.9
Amount recognised in profit or loss (5.8) 8.0 2.2
Remeasurements recognised in other comprehensive
income 17.5 26.0 43.5
Contributions by employer 19.3 0.2 19.5
Dividend match pension contribution 2.5 - 2.5
Exchange differences recognised in other
comprehensive income - 0.1 0.1
-------------------------------------------------- --------- ------------ --------
(Deficit)/surplus in schemes at 2 October
2021 (349.1) 956.8 607.7
-------------------------------------------------- --------- ------------ --------
The total amounts recognised in the consolidated statement of
profit or loss are as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
---------------------------------- --------- ------------ -------
26 weeks ended 2 October 2021
Operating profit
Administrative costs (2.0) (1.2) (3.2)
Net interest (cost)/credit (3.8) 9.2 5.4
---------------------------------- --------- ------------ -------
Total (cost)/credit (5.8) 8.0 2.2
---------------------------------- --------- ------------ -------
26 weeks ended 26 September 2020
Operating profit
Settlement cost - (3.3) (3.3)
Administrative costs (3.5) (2.4) (5.9)
Net interest (cost)/credit (3.4) 12.7 9.3
Total (cost)/credit (6.9) 7.0 0.1
---------------------------------- --------- ------------ -------
52 weeks ended 3 April 2021
Operating profit
Past service cost (0.4) (2.5) (2.9)
Settlement cost 9.3 (3.3) 6.0
Administrative costs (6.8) (3.9) (10.7)
Net interest (cost)/credit (6.6) 21.0 14.4
---------------------------------- --------- ------------ -------
Total (cost)/credit (4.5) 11.3 6.8
---------------------------------- --------- ------------ -------
9. Bank and other borrowings
As at As at
2 Oct 2021 03 Apr 2021
GBPm GBPm
---------------------------------------------------- ---------------------- ----------------------
Current:
Bank overdrafts - (3.1)
Secured senior credit facility - revolving (14.0) -
Lease liabilities (2.2) (2.3)
---------------------------------------------------- ----------------------
Total borrowings due within one year (16.2) (5.4)
---------------------------------------------------- ---------------------- ----------------------
Non-current:
Lease liabilities (15.1) (16.3)
---------------------------------------------------- ---------------------- ----------------------
(15.1) (16.3)
Transaction costs(1) 7.9 4.8
----------------------
7.9 4.8
Senior secured notes (330.0) (320.0)
(322.1) (320.0)
Total borrowings due after more than one year (337.2) (331.5)
Total bank and other borrowings (353.4) (336.9)
---------------------------------------------------- ---------------------- ----------------------
(1) Included in transaction costs is GBP2.3m (2020/21: GBP3.5m) relating to the revolving
credit facility. During the period, transaction costs of GBP8.5m were capitalised in relation
to the new revolving credit facility and the issue of senior secured fixed rate notes.
Revolving credit facility
During the period, the Group entered into a new revolving credit
facility (RCF) with an updated lending group for a period of three
years from May 2021 with the option of extending for up to two
additional years, which led to a write off of previously
capitalised transaction fees of GBP2.3m . The RCF of GBP175m
attracts a leverage-based margin of between 2.0% and 4.0% above
SONIA. Banking covenants of net debt / EBITDA and EBITDA / interest
are in place and are tested biannually.
The covenant package attached to the revolving credit facility
is:
Net debt EBITDA
/ EBITDA(1) / Interest(1)
-------------- ---------------- -----------------
2021/22 FY 3.50x 3.00x
2022/23 FY 3.50x 3.00x
-------------- ---------------- -------------------
(1) Net debt, EBITDA and Interest are as
defined under the revolving credit facility.
Senior secured notes
During the period, the Group issued new Senior Secured Fixed
Rate Notes maturing October 2026. The senior secured notes are
listed on the Irish GEM Stock Exchange. The notes totalling GBP330m
mature in October 2026 and attract an interest rate of 3.5%. The
gross proceeds were used to redeem GBP300m Senior Secured Fixed
Rate Notes maturing October 2023, which led to the write off of
previously capitalised transaction fees of GBP1.9m and an early
redemption fee of GBP4.7m.
During the period, the Group also redeemed the remaining GBP20m
Senior Secured Floating Rate Notes maturing July 2022. This
redemption led to the write off of previously capitalised
transaction fees of GBP0.1m.
10. Financial instruments
The following table shows the carrying amounts (which
approximate to fair value except as noted below) of the Group's
financial assets and financial liabilities. Fair value is the price
that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date. Set out below is a summary of methods and
assumptions used to value each category of financial
instrument.
As at 2 Oct 2021 As at 3 April
2021
Carrying Fair Carrying Fair
amount value amount value
GBPm GBPm GBPm GBPm
-------------------------------------------- --------------- --------------- --------------- ---------------
Loans and receivables:
Cash and cash equivalents 8.4 8.4 4.2 4.2
Financial assets at amortised cost:
Trade and other receivables 47.7 47.7 49.4 49.4
Financial assets at fair value through
profit or loss:
Trade and other receivables 1.6 1.6 2.5 2.5
Derivative financial instruments
- Commodity and energy derivatives 1.1 1.1 0.1 0.1
Financial liabilities at fair value
through profit or loss:
Derivative financial instruments
- Forward foreign currency exchange
contracts (0.3) (0.3) (2.3) (2.3)
Financial liabilities at amortised
cost:
Trade and other payables (235.0) (235.0) (243.8) (243.8)
Senior secured notes (330.0) (333.0) (320.0) (326.6)
Senior secured credit facility - revolving (14.0) (14.0) - -
Bank overdraft - - (3.1) (3.1)
-------------------------------------------- --------------- --------------- --------------- ---------------
The following table presents the Group's assets and liabilities
that are measured at fair value using the following fair value
measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
-- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
-- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
(level 3).
As at 2 Oct 2021 As at 3 April
2021
Level Level Level Level
1 2 1 2
---------------------------------------- ------------ --------------- ------------ -------
GBPm GBPm GBPm GBPm
Financial assets at fair value through
profit or loss:
Derivative financial instruments
- Commodity and energy derivatives - 1.1 - 0.1
Financial liabilities at fair value
through profit or loss:
Derivative financial instruments
- Forward foreign currency exchange
contracts - (0.3) - (2.3)
Financial liabilities at amortised
cost:
Senior secured notes (333.0) - (326.6) -
---------------------------------------- ------------ --------------- ------------ -------
The fair value of trade and other receivables and trade and
other payables is considered to be equal to the carrying amount of
these items due to their short-term nature.
Calculation of fair values
The fair values of the financial assets and liabilities are
defined as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Methods and
assumptions used to estimate the fair values are consistent with
those used in the 53 weeks ended 3 April 2021.
11. Provisions for liabilities and charges
As at As at
2 Oct 2021 3 April 2021
GBPm GBPm
---------------------------- ------------------- -------------------
Within one year (2.6) (6.2)
Between two and five years (3.3) (3.3)
After 5 years (5.4) (5.1)
---------------------------- ------------------- -------------------
Total (11.3) (14.6)
---------------------------- ------------------- -------------------
During the 26 period ended 2 October 2021 provisions for
liabilities and charges reduced by GBP3.3m. The reduction of
GBP3.3m is due primarily to release of a provision no longer
required and utilisation of provision. Total provisions for
liabilities and charges of GBP11.3m (3 April 2021: GBP14.6m)
comprise primarily provisions for site costs, dilapidations and
environmental liabilities related to leasehold properties and
provisions for insurance.
12. Notes to the cash flow statement
Reconciliation of profit before taxation to cash flows from operating
activities
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
GBPm GBPm
--------------------------------------------------- -------------------------- ------------------------
Profit before taxation 30.7 50.5
Net finance cost 20.6 14.7
Operating profit 51.3 65.2
Depreciation of property, plant and equipment 9.3 9.1
Amortisation of intangible assets 14.3 13.5
Loss on disposal of property, plant and equipment - 0.3
Reversal of impairment losses on financial
assets(1) - (15.7)
Fair value movements on financial instruments (3.0) 0.3
Equity settled employee incentive schemes 1.5 1.0
Increase in stocks (21.9) (27.3)
Decrease in trade and other receivables 8.0 2.4
(Decrease)/Increase in trade and other payables
and provisions (7.2) 30.2
Dividend match pension contribution(2) (2.5) -
Movement in retirement benefit obligations (21.7) (26.4)
--------------------------
Cash generated from operations 28.1 52.6
--------------------------------------------------- -------------------------- ------------------------
(1) Relates to the reversal of the loss allowance against a Loan
to Associates in the prior year.
(2) Contribution by the Group to the Premier schemes due to the payment
of dividends during the year.
Analysis of movement in borrowings
As at Non-cash Other
3 April Cash interest non-cash As at
2021 flows expense movements 2 Oct 2021
GBPm GBPm GBPm GBPm GBPm
--------------------- -------------------- ------------- ---------------- --------------------- -----------------
Bank overdrafts (3.1) 3.1 - - -
Cash and bank
deposits 4.2 4.2 - - 8.4
--------------------- -------------------- ------------- ---------------- --------------------- -----------------
Net cash and cash
equivalents 1.1 7.3 - - 8.4
Borrowings -
revolving
credit facilities - (14.0) - - (14.0)
Borrowings - Senior
Secured
Fixed Rate Notes
maturing
October 2023 (300.0) 300.0 - - -
Borrowings - Senior
Secured
Fixed Rate Notes
maturing
October 2026 - (330.0) - - (330.0)
Borrowings - Senior
Secured
Floating Rate Notes
maturing
July 2022 (20.0) 20.0 - - -
Lease liabilities (18.6) 1.3 (0.4) 0.4 (17.3)
-------------------- ------------- ---------------- ---------------------
Gross borrowings net
of
cash (1) (337.5) (15.4) (0.4) 0.4 (352.9)
Debt issuance
costs(2) 4.8 8.5 - (5.4) 7.9
--------------------- --------------------
Total net borrowings
(1) (332.7) (6.9) (0.4) (5.0) (345.0)
--------------------- -------------------- ------------- ---------------- --------------------- -----------------
Total net borrowings
excluding
lease liabilities
(1) (314.1) (8.2) - (5.4) (327.7)
--------------------- -------------------- ------------- ---------------- --------------------- -----------------
(1) Borrowings excludes derivative financial instruments.
(2) The non-cash movement in debt issuance costs relates to the amortisation
of capitalised borrowing costs only.
13. Dividends
The following dividends were declared and paid by the Group for
the year.
26 weeks 26 weeks
ended ended
2 Oct 2021 26 Sept
2020
GBPm GBPm
----------------------- ----------- -----------
1.0 pence per ordinary 8.5 -
share
----------------------- ----------- -----------
A final dividend of 1.0 pence per share for the 53 week period
ended 3 April 2021 was approved by the shareholders at the
Company's Annual General Meeting on 23 July 2021 and was
subsequently paid on 30 July 2021.
14. Capital commitments
The Group has capital expenditure on property, plant and
equipment contracted for at the end of the reporting period but not
yet incurred at 2 October 2021 of GBP7.2m (2020/21: GBP9.3m).
15. Contingencies
There were no material contingent liabilities as at 2 October
2021 and 3 April 2021.
16. Related party transactions
The Group's related party transactions and relationships for the
53 weeks ended 3 April 2021 were disclosed on page 141 of the
annual report and accounts for the financial period ended 3 April
2021.
As at 2 October 2021 the following are also considered to be
related parties under the Listing Rules due to their shareholdings
exceeding 10% of the Group's total issued share capital:
- Nissin Foods Holding Co., Ltd. ('Nissin') is considered to be
a related party by virtue of its 19.14% (2020/21: 19.30%) equity
shareholding in Premier Foods plc and its right to appoint a member
to the Board of directors.
Oasis Management Company Ltd ('Oasis') and Paulson Investment
Company LLC, ('Paulson') were considered to be a related party at
26 September 2020 by virtue of its 10.03% and 6.25% equity
shareholding and 0.40% and 3.98% interest through a total return
swap, respectively, in Premier Foods plc. As at 2 October 2021, the
disclosed shareholding positions of both Oasis and Paulson were
less than 10% of the Group's total issued share capital. Oasis
retains its right to appoint a member to the Board of
Directors.
Transactions with related parties
Transactions with associates and major shareholders during the
period are set out below.
26 weeks ended 26 weeks ended
2 Oct 2021 26 Sept 2020
GBPm GBPm
-------------------- ---------------------- ------------------
Sale of services:
- Hovis - 0.4
Total sales - 0.4
-------------------- ---------------------- ------------------
Purchase of goods:
- Nissin 10.0 8.4
Total purchases 10.0 8.4
-------------------- ---------------------- ------------------
Retirement benefit obligations
As stated in note 8, the Group has entered into an arrangement
with the Pension Scheme Trustees as part of the funding
requirements for any actuarial deficit in the Scheme. Full details
of this arrangement are set out on pages 122-127 of the Premier
Foods plc annual report and accounts for the 53 weeks ended 3 April
2021.
17. Subsequent events
There were no reportable events after the balance sheet
date.
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END
IR FFSEEIEFSESF
(END) Dow Jones Newswires
November 16, 2021 02:00 ET (07:00 GMT)
Grafico Azioni Premier Foods (LSE:PFD)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Premier Foods (LSE:PFD)
Storico
Da Apr 2023 a Apr 2024
