TIDMTATE
RNS Number : 5560S
Tate & Lyle PLC
07 November 2019
7 November 2019
TATE & LYLE PLC STATEMENT OF HALF YEAR RESULTS
For the six months to 30 September 2019
Adjusted results Statutory results
Six months to 30
September(1)
Continuing Change
operations
GBPm unless stated Constant currency
otherwise 2019 2018 change 2019 2018
Sales 1 476 1 383 2% 7%
Profit before tax
(PBT) 181 166 3% 164 113 45%
Diluted earnings per
share (pence) 30.5p 27.9p 3% 27.8p 17.4p 60%
Net debt -
comparative at 31
March 2019 465* 337
Dividend per share
(pence) 8.8p 8.6p
---------------------- ----------------- ------ -------- ------ ----------
Key highlights
-- Encouraging first-half with performance in line with our expectations
-- Food & Beverage Solutions delivered top-line momentum and
double-digit profit(2) growth
-- Sucralose performed solidly with profit(2) broadly in-line
with the comparative period
-- Primary Products profit(2) lower in challenging market
conditions
-- 'Sharpen, Accelerate, Simplify' priorities supporting performance
-- Four-year US$100m productivity programme on track
-- Balance sheet strengthened following UK pension buy-in and debt refinancing
-- Important sustainable agriculture programme launched
-- Full-year guidance unchanged
Financial highlights
-- 11% increase in Food & Beverage Solutions profit(2) to GBP90m
-- Sales 4% higher(3) with good price and mix management in all
regions
-- Volume in line with the comparative period
-- 1% decrease in Sucralose profit(2) to GBP29m
-- 5% decrease in Primary Products profit(2) to GBP86m
-- Sweeteners and Starches profit(2) 5% lower; Commodities
profit(2) in line with the comparative period
-- Group statutory profit before tax 45% higher due to lower net exceptional costs
-- 3% increase(3) in adjusted profit before tax
-- 3% increase(3) in adjusted diluted earnings per share
-- Adjusted free cash flow GBP19m higher at GBP171m (GBP2m higher on pre-IFRS 16 basis(*) )
-- Net debt to EBITDA 1.0x (0.6x on pre-IFRS16 basis(*) )
-- Interim dividend increased by 0.2p to 8.8p per share; up 2.3%
Nick Hampton, Chief Executive, said:
"We made encouraging progress in the first half. In Food &
Beverage Solutions, increased focus on pricing and mix management
delivered strong growth. Profit from Primary Products was lower
despite good performance from our manufacturing and supply chain
network as market conditions continued to be challenging. Both
divisions benefited from productivity gains and cost discipline.
Cash generation was higher and during the half we took further
actions to strengthen our balance sheet.
Our priorities to sharpen the focus on our customers, accelerate
portfolio development and simplify the business are driving
momentum across the organisation and supporting performance. We are
also proud to have established an important programme to support
sustainable agriculture for US-grown corn.
Overall, the business is in a strong financial position and
delivering clear strategic progress.
Despite market challenges, our outlook for the year ending 31
March 2020 is unchanged and we continue to expect earnings per
share growth in constant currency to be broadly flat to low-single
digit."
1 The adjusted results for the six months to 30 September 2019
have been adjusted to exclude exceptional items, amortisation of
acquired intangible assets and the tax on those adjustments. A
reconciliation of statutory and adjusted information is included in
Note 2 to the Financial Information. Growth percentages are
calculated on unrounded numbers.
2 Adjusted operating profit, percentage change in constant currency
3 Change in constant currency
* IFRS 16 Leases adoption increased net debt by GBP173 million
and adjusted free cash flow by GBP17 million. Comparatives have not
been restated.
FINANCIAL HIGHLIGHTS
Constant
Six months to 30 September 2019 2018 currency
Continuing operations GBPm GBPm Change change
Sales:
- Food & Beverage Solutions 478 443 8% 4%
- Sucralose 76 77 (1%) (5%)
- Primary Products 922 863 7% 1%
------------------------------------ ------- ------- --------- ----------
Sales 1 476 1 383 7% 2%
------------------------------------ ------- ------- --------- ----------
Adjusted operating profit
- Food & Beverage Solutions 90 77 17% 11%
- Sucralose 29 27 5% (1%)
- Primary Products 86 85 1% (5%)
- Central (22) (23) 7% 8%
------------------------------------ ------- ------- --------- ----------
Adjusted operating profit 183 166 10% 4%
Net finance expense (15) (13)
Share of profit after tax of joint
ventures 13 13
------------------------------------ ------- ------- --------- ----------
Adjusted profit before tax 181 166 9% 3%
------------------------------------ ------- ------- --------- ----------
Adjusted effective tax rate 20.9% 21.5%
------------------------------------ ------- ------- --------- ----------
Adjusted diluted earnings per
share 30.5p 27.9p 9% 3%
Adjusted free cash flow 171 152
Net debt - comparative at 31 March
2019 465 337
------------------------------------ ------- ------- --------- ----------
The adjusted results for the six months to 30 September 2019
have been adjusted to exclude exceptional items, amortisation of
acquired intangible assets and the tax on those adjustments. A
reconciliation of statutory and adjusted information is included in
Note 2 to the Financial Information. Growth percentages are
calculated on unrounded numbers.
-- Food & Beverage Solutions adjusted operating profit of GBP90m:
- Sales 4% higher(1) reflecting good price and mix management
and the pass through of higher net corn costs.
- New Products sales increased(1) 12% to GBP55m, representing
11% of Food & Beverage Solutions sales.
- Profit 11% higher(1) reflecting cost discipline.
-- Sucralose adjusted operating profit of GBP29m, broadly in-line in constant currency:
- Production efficiencies and customer mix largely offset lower volume.
-- Primary Products adjusted operating profit of GBP86m:
- Sweeteners and Starches profit 5% lower(1) with good
performance from manufacturing and supply chain and cost discipline
partly offsetting weaker volume from challenging market
conditions.
o Sweetener volume in line with the comparative period.
o Industrial Starch volume 12% lower reflecting the closure of
paper capacity at a customer's facility and weaker paper and
packaging demand.
- Commodities profit of GBP6m, in line with the comparative period in constant currency.
-- Central costs at GBP22m, 8% lower(1) .
-- Net finance costs of GBP15m, 12% higher(1) reflecting
increased lease interest following IFRS 16 adoption.
-- Net exceptional costs of GBP11m with net exceptional cash
outflow of GBP12m. Exceptional items relate to actions to simplify
the business and the portfolio.
- GBP5m restructuring charge as part of the simplification programme.
- GBP6m closure costs of Primary Products' small, non-core savoury ingredients business.
-- Adjusted effective tax rate of 20.9% (2018 - 21.5%), lower
than expected due to the pension buy-in transaction. Adjusted
effective tax rate for the 2020 financial year expected to be in
the 20% to 22% range.
-- Group statutory profit before tax of GBP164m, GBP51m higher
mainly due to lower exceptional costs.
-- Adjusted free cash flow(2) increased to GBP171m. Cash
generation from operations was strong, while capital expenditure in
the half was GBP11m higher at GBP73m.
-- Net debt(2) at GBP465m, was GBP128m higher than at 31 March
2019. Following the adoption of IFRS 16 lease liabilities of
GBP173m are now included in net debt.
1 Change in constant currency
2 IFRS 16 Leases was adopted in the year without restating
comparatives. Lease payments are now classified as financing rather
than operating cash flows increasing adjusted free cash flow by
GBP17 million. IFRS 16 lease liabilities increased net debt by
GBP173 million at 30 September 2019.
Cautionary statement
This Statement of Half Year Results contains certain
forward-looking statements with respect to the financial condition,
results, operations and businesses of Tate & Lyle PLC. These
statements and forecasts involve risk and uncertainty because they
relate to events and depend upon circumstances that will occur in
the future. There are a number of factors that could cause actual
results or developments to differ materially from those expressed
or implied by these forward-looking statements and forecasts.
A copy of this Statement of Half Year Results for the six months
to 30 September 2019 can be found on our website at
www.tateandlyle.com. A hard copy of this statement is also
available from the Company Secretary, Tate & Lyle PLC, 1
Kingsway, London WC2B 6AT.
Webcast and Conference Call Details
A presentation of the results by Chief Executive, Nick Hampton,
and Chief Financial Officer, Imran Nawaz, will be audio webcast
live at 10.00 (GMT) on Thursday 7 November 2019. To view and/or
listen to a live audio-cast of the presentation, visit
https://brrmedia.news/62fmj. Please note that remote listeners will
not be able to ask questions during the Q&A session.
A webcast replay of the presentation will be available within
two hours of the end of the live broadcast on the link above.
For those unable to view the webcast, there will also be a
teleconference facility for the presentation. Details are given
below:
Dial in details:
UK dial in number: +44 (0)330 336 9411
US dial in number: +1 323 794 2588
Password: 8690611
There will be no replay facility for the teleconference. Please
use the link above to view the webcast replay.
For more information contact Tate & Lyle PLC:
Christopher Marsh, VP Investor Relations
Tel: +44 (0) 20 7257 2110 or Mobile: +44 (0) 7796 192 688
Andrew Lorenz, FTI Consulting (Media)
Tel: +44 (0) 20 3727 1323 or Mobile: +44 (0) 7775 641 807
Overview
We have made an encouraging start to the year with good
commercial and operational execution together with strong cost
discipline and gains from productivity initiatives delivering solid
financial results. The three priorities we announced in May 2018 to
sharpen the focus on our customers, accelerate portfolio
development and simplify the business are driving momentum across
the organisation and supporting performance. Cash generation
remains good, our balance sheet is robust, and we continue to
invest for long-term growth. Overall, although we continue to face
external cost pressures and an evolving and uncertain geopolitical
landscape, the business is in a strong financial position and
delivering clear strategic progress.
Purpose-driven organisation
Tate & Lyle's purpose is Improving Lives for Generations.
Our people believe passionately that, through our purpose, we can
successfully grow our business and have a positive impact on
society. We live our purpose through three main pillars. Firstly,
supporting healthy living by using our ingredients and expertise to
help people make healthier and tastier choices when they eat and
drink, and lead a more balanced lifestyle. Secondly, to help build
thriving communities where we operate. Thirdly, to care for the
planet we live on and help protect it for the benefit of future
generations.
In September, we announced an important multi-year partnership
with Land O' Lakes SUSTAIN(TM) , a US conservation solutions
provider, to support sustainable agriculture practices on 1.5
million acres of US-grown corn. This is equivalent to every single
acre of corn we buy globally each year. Under the programme,
participating farmers in the Midwest receive customised support to
help measure and improve greenhouse gas emissions, nitrogen
efficiency, water usage, wind erosion and soil quality. We are the
first corn wet-milling ingredient supplier to launch a sustainable
agriculture programme of this kind.
We are also working to increase energy efficiency and reduce
carbon emissions in our business. During the half, the Board
approved the construction of a new natural-gas fired combined heat
and power system at our Lafayette South corn wet-mill in Indiana.
This investment, which is subject to local regulatory approval, is
due to be completed in the second half of the 2021 calendar year
and will deliver significant improvements in energy and operational
efficiency, and substantially reduce greenhouse gas emissions.
Focus on three priorities to 'Sharpen, Accelerate, Simplify'
supporting performance
Sharpen the focus on our customers
-- We continue to build stronger relationships at all levels of
our customers' organisations. In the first half,
in addition to increased 'top-to-top' interactions with
customers, the number of calls or face-to-face meetings held each
month with customers to discuss growth opportunities increased by
20%. This helped increase the value of our customer project
pipeline by 6% in the same period and drive top-line growth.
-- We are increasingly seeking new ways to collaborate with
customers. During the half, we held our first two-day Fibre
Symposium for around 50 customers at our Innovation Centre in
Chicago, as well as a two-day sugar-reduction event in Shanghai
with more than 80 customers. We also launched our Healthink
workshops across Asia Pacific in Singapore, Malaysia and Vietnam.
Healthink brings together customers, academia, trade associations,
NGOs and our technical experts to look at ways to drive thinking on
healthier food and drink, and how our ingredients and solutions can
be used to tackle increasing levels of obesity, diabetes and
digestive health concerns.
-- In October, we opened our new offices and expanded labs in
Sao Paulo, Brazil, and a further expansion of our existing
application labs in Singapore. Both will allow us to collaborate
more closely with customers and to help them develop new products,
and reformulate existing products, to meet increasing consumer
demand for healthier, tastier food and beverages.
Accelerate portfolio development
-- New Product sales were 12% higher than the comparative
period. This growth was driven largely by our clean-label starches
and fibre products.
-- We continue to improve the balance of our innovation
portfolio with an increasing emphasis on developing line extensions
(i.e. new variants of existing product lines) as these tend to have
faster financial returns. For example, in the first half we
launched three new non-GMO starch products from our CLARIA(R) line
of clean label starches which add shelf-stability with a clean
taste, white colour, and neutral flavour to frozen soups, sauces,
and bakery fillings.
-- We continue to expand our global open innovation network.
Through our partnership with TERRA, a leading Food &
Agriculture Incubator, we partnered with three more start-ups on
early stage developments in areas such as food safety and
reclaiming value from waste streams.
Simplify our business
-- We are on track to deliver our four-year US$100 million
productivity target. This programme commenced in the 2019 financial
year to drive supply chain and selling and administration costs
benefits, delivering GBP25 million in productivity benefits in its
first year.
-- We approved capital investments to reduce energy costs and
increase efficiency such as a new co-generation system and new
boilers.
-- We delivered cost reduction and efficiency improvements in
our supply chain including projects to reclaim energy,
de-bottleneck production processes and improve yields through waste
reduction.
-- Zero-based budgeting continues to reduce discretionary costs,
particularly in areas such as travel, contractors and events.
-- We introduced new systems and processes to automate and
reduce bureaucracy, including new tools for recipe management and
remote working.
Strong balance sheet
Our strong balance sheet provides the means to invest in
accelerating growth and during the first half we took actions to
strengthen and de-risk it further. In August, we priced US$200
million of long-term debt which will be used to refinance a
maturing debt facility at lower cost. In September, we supported
the trustees of our main UK pension scheme in completing a GBP930
million bulk annuity insurance 'buy-in' securing an insurance
policy to meet the future pensions obligations for our main UK
pension scheme without incremental funding by the Group. This will
create an annual cash benefit of GBP20 million from the 2021
financial year.
Executive management
To simplify our management structure, the four regional general
managers in Food & Beverage Solutions now report directly to
Nick Hampton, Chief Executive. In addition, on 1 September 2019,
Harry Boot, President, Asia Pacific, Food & Beverage Solutions
was appointed to the Group's Executive Committee.
Outlook
The outlook for the year ending 31 March 2020 remains unchanged.
On 23 May 2019, the Group gave the following outlook statement for
the year ending 31 March 2020:
"We expect continuing progress in Food & Beverage Solutions
and gains from productivity initiatives to offset both lower
Sucralose profits and continued market challenges in Primary
Products. As a result, we expect earnings per share growth in
constant currency to be broadly flat to low-single digit."
SEGMENTAL OPERATING PERFORMANCE
Food & Beverage Solutions
Six months to 30 September 2019
Continuing operations Volume
change
Volume
North America 1%
Asia Pacific and Latin
America 3%
Europe, Middle East and
Africa (3%)
------------------------------- --------
Total -%
----------------------------- --------
Constant
currency
2019 2018 Change change
GBPm GBPm % %
Sales
North America 235 211 12% 6%
Asia Pacific and Latin
America 115 105 10% 8%
Europe, Middle East and
Africa 128 127 -% -%
------------------------------- -------- ------ -------- ---------
Total 478 443 8% 4%
------------------------------- -------- ------ -------- ---------
Adjusted operating profit 90 77 17% 11%
------------------------------- -------- ------ -------- ---------
Strong profit growth
Volume was in line with the comparative period. Sales increased
by 4% in constant currency to GBP478 million driven by good price
and mix management and the impact of passing through higher net
corn costs. Adjusted operating profit was 11% higher in constant
currency driven by good sales growth, cost discipline and operating
leverage. The effect of currency translation was to increase sales
by GBP16 million and adjusted operating profit by GBP4 million.
North America
Top-line momentum continued with volume up 1% and sales 6%
higher at GBP235 million. Sales growth was driven by good progress
across a range of categories, notably beverage, bakery and dairy
(especially ice cream). While the overall US food and beverage
market remains largely flat, we continue to see strong customer
demand in our key categories, particularly to deliver sugar and
calorie reduction.
Asia Pacific and Latin America
Volume increased by 3%. Sales increased by 8% in constant
currency to GBP115 million with single-digit growth in Asia Pacific
and double-digit growth in Latin America. In Asia Pacific, we saw
good sales growth in China in dairy and in South East Asia in
soups, sauces and dressings. In Latin America, sales growth was
strong in Mexico and in dairy in the Southern Cone. In Brazil,
macroeconomic conditions improved and new front-of-pack labelling
rules led to reformulation opportunities with customers.
Europe, Middle East and Africa
Volume decreased by 3%, while sales at GBP128 million were in
line with the comparative period as we continued to exit lower
margin texturant business to improve mix. The expansion of our
facility in Slovakia to double capacity of high-grade maltodextrin
(used in categories such as baby food) opened in October 2019.
New Products
Sales of New Products (products launched in the last seven
years) increased by 12% in constant currency (16% reported
currency) to GBP55 million. New Products represent 11% of Food
& Beverage Solutions sales. Sales of PROMITOR(R) Soluble Fibre
increased strongly reflecting its use as a fibre enrichment
solution and for sugar and calorie reduction particularly in
beverage, dairy, confectionery and bakery. We also saw good growth
in Non-GMO texturants and clean label starches from our CLARIA(R)
line of functional starches.
Sucralose
Constant
currency
Six months to 30 September 2019 2018 Change change
Continuing operations GBPm GBPm % %
Volume (6%)
Sales 76 77 (1%) (5%)
Adjusted operating profit 29 27 5% (1%)
------------------------------- ------ ------ -------- ---------
Solid results
Sucralose volume decreased by 6% and sales at GBP76 million
decreased by 5% in constant currency principally due to phasing.
Adjusted operating profit at GBP29 million was 1% lower in constant
currency reflecting good customer mix and cost management. The
effect of currency translation was to increase sales by GBP3
million and adjusted operating profit by GBP2 million.
Primary Products
Six months to 30 September 2019
Continuing operations Volume
change
Volume
North American Sweeteners -%
North American Industrial
Starches (12%)
Total Primary Products (2%)
=============================== ========
Constant
currency
2019 2018 Change change
GBPm GBPm % %
Sales
Total Primary Products 922 863 7% 1%
Adjusted operating profit
Sweeteners and Starches 80 80 1% (5%)
Commodities 6 5 5% -%
------------------------------- -------- ------ -------- ---------
Total Primary Products 86 85 1% (5%)
------------------------------- -------- ------ -------- ---------
Profit lower in constant currency in challenging market
conditions
Volume was 2% lower with sweeteners in line but weaker demand
for industrial starch. Sales at GBP922 million were up 1% in
constant currency reflecting the pass through of higher net corn
costs. Adjusted operating profit at
GBP86 million was 5% lower in constant currency.
Adjusted operating profit in Sweeteners and Starches was 5%
lower in constant currency with good performance from manufacturing
and supply chain and strong cost discipline offsetting cost
inflation and weaker volume from challenging market conditions.
There was a GBP4 million insurance recovery in the comparative
period. Commodities profit at GBP6 million was in line in constant
currency.
To simplify our business and focus capital investment on key
priorities, we have decided to close our small, non-core, savoury
ingredients business and not invest the significant capital
required to sustain this business, with production due to cease at
the end of the 2019 calendar year.
The effect of currency translation was to increase sales by
GBP46 million and adjusted operating profit by GBP5 million.
Sweeteners
Volume was in line with the comparative period due to strong
customer service and operational performance, despite soft demand
for bulk sweeteners in the US. Demand for carbonated soft drinks in
the US continued to be soft, partly reflecting higher pricing and
lower promotional intensity within that category.
Industrial Starches
Volume was 12% lower due to the closure of paper capacity at a
customer's facility combined with weaker demand for paper and for
packaging as e-commerce operators drove packaging optimisation
initiatives. US domestic demand was also impacted by increased
imports of paper.
Commodities
Commodities delivered profit of GBP6 million, in line in
constant currency. Co-product recoveries were in line with the
comparative period. Ethanol cash margins declined while income from
our network of corn elevators increased slightly.
Summary of financial results for the period to 30 September 2019
(unaudited)
Constant
currency
Six months to 30 September(1) 2019 2018 Change change
Continuing and total operations GBPm GBPm % %
--------------------------------------------- ------ ------ ------- ----------
Sales 1 476 1 383 7% 2%
Adjusted operating profit
- Food & Beverage Solutions 90 77 17% 11%
- Sucralose 29 27 5% (1%)
- Primary Products 86 85 1% (5%)
- Central (22) (23) 7% 8%
--------------------------------------------- ------ ------ ------- ----------
Adjusted operating profit 183 166 10% 4%
Net finance expense (15) (13)
Share of profit after tax of joint ventures 13 13
--------------------------------------------- ------ ------ ------- ----------
Adjusted profit before tax 181 166 9% 3%
Exceptional items (11) (47)
Amortisation of acquired intangible assets (6) (6)
Profit before tax 164 113 45% 36%
Income tax expense (33) (32)
--------------------------------------------- ------ ------ ------- ----------
Profit for the period 131 81
Earnings per share (pence)
Basic 28.2p 17.6p 60% 51%
Diluted 27.8p 17.4p 60% 51%
Adjusted earnings per share (pence)
Basic 30.8p 28.2p 9% 3%
Diluted 30.5p 27.9p 9% 3%
Cash flow and net debt(2)
Adjusted free cash flow 171 152
Net debt - At 30 September (comparative
at 31 March 2019) 465 337
--------------------------------------------- ------ ------ ------- ----------
1 Adjusted results and a number of other terms and performance
measures used in this document are not directly defined within
accounting standards. We have provided descriptions of the various
metrics and their reconciliation to the most directly comparable
measures reported in accordance with IFRS and the calculation
(where relevant) of any ratios in Note 2.
2 IFRS 16 Leases was adopted in the year without restating
comparatives. Lease payments are now classified as financing rather
than operating cashflows increasing adjusted free cash flow by
GBP17 million. IFRS 16 lease liabilities increased net debt by
GBP173 million at 30 September 2019.
Sales from continuing operations of GBP1,476 million were 7%
higher than the prior period (2% higher in constant currency).
Adjusted profit before tax of GBP181 million was 9% higher than
the prior period (3% in constant currency). Adjusted diluted
earnings per share increased by 2.6p to 30.5p (3% in constant
currency).
On a statutory basis, profit before tax increased by GBP51
million to GBP164 million driven by an improved operating
performance and lower exceptional charges of GBP11 million (2018 -
GBP47 million). As a result, statutory diluted earnings per share
increased by 10.4p to 27.8p.
Central costs
Central costs, which include head office costs and certain
treasury and legal activities, were 7% lower (8% in constant
currency) at GBP22 million, reflecting continued strong cost
discipline.
Net finance expense
Net finance expense from continuing operations was GBP2 million
higher than the prior period at GBP15 million, driven predominantly
by the adoption of the new leasing standard, IFRS 16, which
increased finance expense by GBP3 million. This has been partially
offset by higher finance income on cash deposits.
On 1 August 2019 the Group priced a US$200 million debt private
placement which will be issued on 19 November 2019 at which point
US$100 million 3.31% notes due 2029 and US$100 million 3.41% notes
due 2031 will be drawn down. The proceeds will be used to refinance
a maturing GBP200 million 6.75% bond.
Share of profit after tax of joint ventures
The Group's share of profit after tax of joint ventures of GBP13
million was in line with the prior period (2% lower in constant
currency).
Exceptional items
In the six months to 30 September 2019, the Group recorded a net
exceptional charge of GBP11 million, and a net exceptional cash
outflow of GBP12 million. Exceptional items comprised the
following:
-- GBP5 million restructuring charge as part of the previously
announced simplification programme, of which
GBP3 million is an exceptional cash item.
-- GBP6 million charge relating to the decision to exit the
Primary Products' small, non-core savoury ingredients business of
which GBP1 million is an exceptional cash item.
-- Total cash flows from exceptional items were GBP12 million,
including GBP10 million relating to charges recorded in the year to
31 March 2019.
During the six months to 30 September 2018, the Group recorded a
net exceptional charge of GBP47 million which mainly comprised a
GBP40 million non-cash impairment charge.
Taxation
The adjusted effective tax rate on earnings for the six months
to 30 September 2019 was 20.9% (2018 - 21.5%), the lower rate
primarily reflecting the pension buy-in transaction which enabled
the utilisation of some previously unrecognised tax losses in the
period. We now expect the adjusted effective tax rate for the year
ending
31 March 2020 to be in the range of 20% to 22%.
The reported effective tax rate (on statutory earnings) was
20.4% (2018 - 28.2%), the higher comparative period rate reflecting
higher non-tax deductible exceptional costs.
Earnings per share
Adjusted basic earnings per share increased by 9% (3% in
constant currency) to 30.8p and adjusted diluted earnings per share
at 30.5p were also 9% higher (3% in constant currency). Statutory
diluted earnings per share increased by 10.4p to 27.8p reflecting
lower exceptional charges in the period.
Dividend
An increase in the interim dividend for the six months to 30
September 2019 of 0.2p to 8.8p has been approved by the Board. This
will be paid on 3 January 2020 to all shareholders on the Register
of Members on 22 November 2019. In addition to the cash dividend
option, shareholders will continue to be offered a Dividend
Reinvestment Plan alternative.
Cash flow and net debt
Six months to 30 September(1)
----------------------------------------
2019 2018
GBPm GBPm
------------------------------------------------------ ---------------- ----------------------
Adjusted operating profit from continuing operations 183 166
Adjusted for:
Depreciation and adjusted amortisation 91 69
Working capital and other non-cash items in
adjusted operating profit 21 24
Net interest and tax paid (35) (31)
Net retirement benefit obligations (16) (14)
Capital expenditure (73) (62)
Adjusted free cash flow(2) 171 152
------------------------------------------------------ ---------------- ----------------------
At 30 September At 31 March
---------------- ----------------------
2019 2019
GBPm GBPm
------------------------------------------------------ ---------------- ----------------------
Net debt(2) 465 337
------------------------------------------------------ ---------------- ----------------------
1 Adjusted results and a number of other terms and performance
measures used in this document are not directly defined within
accounting standards. We have provided descriptions of the various
metrics and their reconciliation to the most directly comparable
measures reported in accordance with IFRS, and the calculation
where relevant of any ratios, in Note 2.
2 IFRS 16 Leases was adopted in the year without restating
comparatives. Lease payments are now classified as financing rather
than operating cash flows increasing adjusted free cash flow by
GBP17 million. IFRS 16 lease liabilities increased net debt by
GBP173 million at 30 September 2019.
Adjusted free cash flow (representing cash generated from
continuing operations after net interest paid, income tax paid, and
capital expenditure, and excluding the impact of exceptional items)
was GBP171 million, GBP19 million higher than the prior period
mainly due to the adoption of IFRS 16 Leases in the period. Before
the impact of IFRS 16, adjusted free cash flow was GBP2 million
higher.
Capital expenditure of GBP73 million, which included an GBP11
million investment in intangible assets, was GBP11 million higher
reflecting continued investment in capacity as well as safety,
efficiency and maintenance investments. We continue to expect
capital expenditure for the 2020 financial year to be around GBP140
million to GBP160 million.
Other significant cash flows in arriving at net debt included:
GBP27 million of dividends received from joint ventures, external
dividend payment of GBP97 million, and a GBP8 million payment for
share option commitments.
Overall net debt at 30 September 2019 of GBP465 million was
GBP128 million higher than at 31 March 2019. The adoption of IFRS
16 increased net debt by GBP173 million at 30 September 2019.
Strong cash generation decreased net debt by GBP61 million in the
period (2018 - decrease of GBP80 million) before the adverse impact
of exchange rates. Foreign currency translation, mainly due to the
stronger US dollar, increased net debt by GBP23 million.
Retirement benefits
The Group maintains pension plans for its employees and former
employees in a number of countries. Certain of these arrangements
are defined benefit pension schemes. All funded schemes in the UK
and US are closed for further accrual. In the US, the Group also
provides an unfunded post-retirement medical benefit scheme.
On 18 September, the Group further de-risked its retirement
benefit obligations by supporting the trustees of the main UK
defined benefit pension scheme in completing a GBP930 million bulk
annuity insurance policy 'buy-in' for that scheme. The 'buy-in'
secured an insurance asset that fully matches the remaining pension
liabilities of the scheme, with the result that the Company no
longer bears any investment, longevity, interest rate or inflation
risk.
The scheme assets and liabilities were close to balance on a
funding basis, and the opportunity therefore arose for a 'buy-in'
transaction requiring no incremental funding by the Group. As the
scheme was in surplus on an accounting basis, in accordance with
the relevant accounting standards the impact of this transaction
was to derecognise GBP195 million of pension scheme accounting
surplus by charging the same amount to other comprehensive income.
There was no impact on profit before tax.
The other significant movement in retirement benefit obligations
in the period relates to actuarial losses of GBP155 million, which
arose because of a reduction in the discount rates applied to
pension liabilities in the US and UK. The corresponding gain on
plan assets in the period was GBP114 million. Neither items
impacted profit before tax.
At 30 September 2019, the Group's retirement benefit obligations
are now in a net deficit of GBP207 million (31 March 2019 - surplus
of GBP24 million), with the movement principally reflecting the
charges to other comprehensive income set out above. The closing
total net deficit substantially comprises the unfunded schemes in
the US.
As a result of the 'buy-in' cash contributions into the main UK
scheme will cease, saving approximately GBP20 million of cash
annually from the 2021 financial year.
Further information about retirement benefit obligations is
included in Note 8 to the condensed consolidated financial
statements.
Basis of preparation
The Group's principal accounting policies are unchanged compared
with the year ended 31 March 2019.
With effect from 1 April 2019 the Group has adopted IFRS 16
Leases which has had a material impact on Group net debt and
adjusted free cash flow and IFRIC 23 Uncertainty over Income Tax
Treatments which has not had a material impact. As permitted by
IFRS 16 comparatives have not been restated. Further information
can be found in Note 11.
Details of the basis of preparation, including information in
respect of the Group's adjusted performance metrics, can be found
in Note 1 to the attached financial information. Growth percentages
are calculated on unrounded numbers.
Going Concern
After making enquiries, the Directors are satisfied that the
Group has adequate resources to continue to operate for a period of
not less than 12 months from the date of approval of the financial
information and that there are no material uncertainties around
their assessment. For these reasons, the Directors continue to
adopt the going concern basis in preparing the condensed
consolidated financial information of the Group.
Risks and uncertainties
The principal risks and uncertainties affecting the business
activities of the Group are detailed on pages 61 to 65 of the Tate
& Lyle Annual Report 2019, a copy of which is available on the
Company's website at www.tateandlyle.com. In our view these
principal risks remain unchanged from those disclosed therein and
actions continue to be taken to substantially mitigate the impact
of such risks, should they materialise.
The Board reviewed the impact of Brexit and the contingency plan
we have in place in the event the UK leaves the EU without a deal;
and concluded that Brexit is not a material risk for us.
Impact of changes in exchange rates
The Group's reported financial performance at average rates of
exchange for the six months to 30 September 2019 was favourably
impacted by currency translation. The average and closing US dollar
and Euro exchange rates used to translate reported results were as
follows:
Average rates Closing rates
----------------- ----------------
Six months to 30 September 2019 2018 2019 2018
---------------------------- -------- ------- ------- -------
US dollar : sterling 1.26 1.33 1.23 1.30
Euro : sterling 1.13 1.13 1.13 1.12
---------------------------- -------- ------- ------- -------
For the period to 30 September 2019, net foreign exchange
translation increased Food & Beverage Solutions adjusted
operating profit by GBP4 million, increased Sucralose adjusted
operating profit by GBP2 million and increased Primary Products
adjusted operating profit by GBP5 million, with adjusted profit
before tax for the Group increasing in total by GBP10 million.
CONDENSED (INTERIM) CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
Six months Six months Year to
to to 31 March
30 September 30 September 2019
Notes 2019 2018 GBPm
Continuing operations GBPm GBPm
----------------------------------------- ---- ------- -------------- ------ -------------- -------- ------------
Sales 2 1 476 1 383 2 755
----------------------------------------------- ------- -------------- ------ -------------- -------- ------------
Operating profit 2 166 113 236
Finance income 4 2 5
Finance expense (19) (15) (31)
Share of profit after tax of
joint ventures 13 13 30
Profit before tax 164 113 240
Income tax expense 2 (33) (32) (59)
----------------------------------------------- ------- -------------- ------ -------------- -------- ------------
Profit for the period 131 81 181
----------------------------------------------- ------- -------------- ------ -------------- -------- ------------
Profit for the period all relates to continuing operations and
is entirely attributable to owners of the Company.
Earnings per share Pence Pence Pence
------------------------------------------ --- ------- -------------- ------------------ ----------------
- basic 2 28.2p 17.6p 39.2p
- diluted 2 27.8p 17.4p 38.6p
------------------------------------------ --- ------- -------------- ------------------ ----------------
Analysis of adjusted profit GBPm GBPm GBPm
for the period
------------------------------------------ --- ------- -------------- ------------------ ----------------
Profit before tax 164 113 240
Adjusted for:
Net charge for exceptional
items 4 11 47 58
Amortisation of acquired intangible
assets 6 6 11
Adjusted profit before tax 2 181 166 309
Adjusted income tax expense 2 (38) (36) (65)
------------------------------------------ --- ------- -------------- ------------------ ----------------
Adjusted profit for the period 2 143 130 244
------------------------------------------ --- ------- -------------- ------------------ ----------------
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME (UNAUDITED)
Six months Six months
to to Year to
30 September 30 September 31 March
2019 2018 2019
Note GBPm GBPm GBPm
-------------------------------------------------------- ----- -------------- -------------- ----------
Profit for the period 131 81 181
Other comprehensive income/(expense):
Items that have been/may be reclassified
to profit or loss:
Gain on currency translation of
foreign operations 75 82 75
Fair value loss on net investment
hedges (18) (25) (24)
Net loss on cash flow hedges (9) - -
Share of other comprehensive income
of joint ventures 4 4 4
Tax effect of the above items - - -
-------------------------------------------------------- ----- -------------- -------------- ----------
52 61 55
-------------------------------------------------------- ----- -------------- -------------- ----------
Items that will not be reclassified
to profit or loss:
Re-measurement of retirement benefit
plans:
* return on plan assets 8 114 (50) 29
* impact of 'buy-in' on main UK pension scheme 8 (195) - -
* net actuarial (loss)/gain on retirement benefit
obligations 8 (155) 48 (34)
Change in the fair value of FVOCI
investments 1 1 2
Tax effect of the above items 45 (3) 10
-------------------------------------------------------- ----- -------------- -------------- ----------
(190) (4) 7
Total other comprehensive (expense)/income (138) 57 62
-------------------------------------------------------- ----- -------------- -------------- ----------
Total comprehensive (expense)/income (7) 138 243
-------------------------------------------------------- ----- -------------- -------------- ----------
Total comprehensive income all relates to continuing operations
and is entirely attributable to owners of the Company.
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
At At At
30 September 30 September 31 March
2019 2018 2019
Notes GBPm GBPm GBPm
---------------------------------- -------- -------------- -------------- ----------
ASSETS
Non-current assets
Goodwill and other intangible
assets 348 354 342
Property, plant and equipment 1 189 989 982
Investments in joint ventures 95 85 102
Investments in equities 7 64 45 59
Retirement benefit surplus 8 10 187 207
Deferred tax assets 24 6 3
Trade and other receivables 1 - 2
Derivative financial instruments 7 - 5 -
1 731 1 671 1 697
---------------------------------- -------- -------------- -------------- ----------
Current assets
Inventories 413 417 434
Trade and other receivables 315 346 325
Current tax assets 5 3 4
Derivative financial instruments 7 36 38 48
Cash and cash equivalents 6 361 284 285
1 130 1 088 1 096
---------------------------------- -------- -------------- -------------- ----------
TOTAL ASSETS 2 861 2 759 2 793
----------------------------------- -------- -------------- -------------- ----------
EQUITY
Capital and reserves
Share capital 117 117 117
Share premium 406 406 406
Capital redemption reserve 8 8 8
Other reserves 272 221 217
Retained earnings 575 660 741
----------------------------------- -------- -------------- -------------- ----------
TOTAL EQUITY 1 378 1 412 1 489
LIABILITIES
Non-current liabilities
Borrowings 6 538 577 373
Retirement benefit deficit 8 217 169 183
Deferred tax liabilities 35 46 46
Provisions 14 24 20
Trade and other payables - 9 -
Derivative financial instruments 7 2 33 1
806 858 623
---------------------------------- -------- -------------- -------------- ----------
Current liabilities
Borrowings 6 256 24 224
Trade and other payables 305 354 342
Provisions 22 17 24
Current tax liabilities 42 74 45
Derivative financial instruments 7 52 20 46
677 489 681
---------------------------------- -------- -------------- -------------- ----------
Total liabilities 1 483 1 347 1 304
----------------------------------- -------- -------------- -------------- ----------
TOTAL EQUITY AND LIABILITIES 2 861 2 759 2 793
----------------------------------- -------- -------------- -------------- ----------
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Six months Six months Year
to 30 September to 30 September to
2019 2018 31 March
GBPm GBPm 2019
Notes GBPm
Cash flows from operating activities
Profit before tax from continuing
operations 164 113 240
Adjustments for:
Depreciation of property, plant
and equipment; and leases 79 55 112
Amortisation of intangible assets 18 20 40
Share-based payments 7 8 18
Exceptional income statement items 4 - 46 51
Net finance expense 15 13 26
Share of profit after tax of joint ventures (13) (13) (30)
Net retirement benefit obligations (16) (14) (25)
Changes in working capital and other
non-cash movements 14 16 (16)
Cash generated from continuing operations 268 244 416
Net income tax paid (25) (22) (58)
Interest paid (13) (11) (28)
------------------------------------------- -------- ----------------- ----------------- ----------
Net cash generated from operating
activities 230 211 330
------------------------------------------- -------- ----------------- ----------------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment (62) (46) (103)
Disposal of property, plant and
equipment (exceptional) 4 (1) - 3
Investments in intangible assets (11) (16) (27)
Purchase of equity investments (3) (6) (20)
Disposal of equity investments 2 2 3
Interest received 3 2 5
Dividends received from joint ventures 27 21 21
Sale and leaseback of rail cars
(exceptional) 4 - 13 16
Other investing cash flows - - (9)
------------------------------------------- -------- ----------------- ----------------- ----------
Net cash used in investing activities (45) (30) (111)
------------------------------------------- -------- ----------------- ----------------- ----------
Cash flows from financing activities
Purchase of own shares including
net settlement (8) (7) (8)
Cash inflow from additional borrowings 1 1 5
Cash outflow from repayment of borrowings (2) - (1)
Repayment of leases (18) (1) (2)
Dividends paid to the owners of
the Company 5 (97) (94) (134)
Net cash used in financing activities (124) (101) (140)
------------------------------------------- -------- ----------------- ----------------- ----------
Net increase in cash and cash equivalents 6 61 80 79
------------------------------------------- -------- ----------------- ----------------- ----------
Cash and cash equivalents
Balance at beginning of period 285 190 190
Net increase in cash and cash equivalents 61 80 79
Currency translation differences 15 14 16
------------------------------------------- -------- ----------------- ----------------- ----------
Balance at end of period 6 361 284 285
------------------------------------------- -------- ----------------- ----------------- ----------
A reconciliation of the movement in cash and cash equivalents to
the movement in net debt is presented in Note 6.
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
Share
capital Capital
and share redemption Other Retained Total
premium reserve reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ------------ ------------- ----------- ----------- ---------
At 1 April 2019 523 8 217 741 1 489
-------------------------------------- ------------ ------------- ----------- ----------- ---------
IFRS 16 lease adoption - - - (8) (8)
-------------------------------------- ------------ ------------- ----------- ----------- ---------
1 April 2019 restated 523 8 217 733 1 481
-------------------------------------- ------------ ------------- ----------- ----------- ---------
Profit for the period - - - 131 131
Other comprehensive income/(expense) - - 53 (191) (138)
-------------------------------------- ------------ ------------- ----------- ----------- ---------
Total comprehensive income/(expense) - - 53 (60) (7)
Hedging losses transferred to
inventory - - 2 - 2
Transactions with owners:
Share-based payments, net of tax - - - 7 7
Purchase of own shares including
net settlement - - - (8) (8)
Dividends paid (Note 5) - - - (97) (97)
-------------------------------------- ------------ ------------- ----------- ----------- ---------
At 30 September 2019 523 8 272 575 1 378
-------------------------------------- ------------ ------------- ----------- ----------- ---------
At 1 April 2018 523 8 159 677 1 367
-------------------------------------- ------------ ------------- ----------- ----------- ---------
Profit for the period - - - 81 81
Other comprehensive income/(expense) - - 62 (5) 57
-------------------------------------- ------------ ------------- ----------- ----------- ---------
Total comprehensive income - - 62 76 138
Hedging losses transferred to
inventory - - - - -
Transactions with owners:
Share-based payments, net of tax - - - 8 8
Purchase of own shares including
net settlement - - - (7) (7)
Dividends paid - - - (94) (94)
-------------------------------------- ------------ ------------- ----------- ----------- ---------
At 30 September 2018 523 8 221 660 1 412
-------------------------------------- ------------ ------------- ----------- ----------- ---------
At 1 April 2018 523 8 159 677 1 367
-------------------------------------- ------------ ------------- ----------- ----------- ---------
Profit for the year - - - 181 181
Other comprehensive income - - 57 5 62
-------------------------------------- ------------ ------------- ----------- ----------- ---------
Total comprehensive income - - 57 186 243
Hedging losses transferred to
inventory - - 1 - 1
Transactions with owners:
Share-based payments, net of tax - - - 20 20
Purchase of own shares including
net settlement - - - (8) (8)
Dividends paid - - - (134) (134)
-------------------------------------- ------------ ------------- ----------- ----------- ---------
At 31 March 2019 523 8 217 741 1 489
-------------------------------------- ------------ ------------- ----------- ----------- ---------
NOTES TO THE FINANCIAL INFORMATION
For the six months to 30 September 2019
1. Presentation of half year financial information
The principal activity of Tate & Lyle PLC and its
subsidiaries, together with its joint ventures, is the global
provision of ingredients and solutions to the food, beverage and
other industries.
The Company is a public limited company incorporated and
domiciled in the United Kingdom and registered in England. The
address of its registered office is 1 Kingsway, London WC2B 6AT.
The Company has its primary listing on the London Stock
Exchange.
Basis of preparation
This condensed set of consolidated financial information for the
six months to 30 September 2019 has been prepared on a going
concern basis in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority and IAS 34 Interim
Financial Reporting as adopted by the European Union (EU). The
condensed set of consolidated financial information should be read
in conjunction with the Group's Annual Report and Accounts for the
year to 31 March 2019, which were prepared in accordance with IFRSs
as adopted by the EU.
Having reviewed the Group's latest projected results, cash
flows, liquidity position and borrowing facilities, the Directors
are satisfied that the Group has adequate resources to continue to
operate for a period not less than 12 months from the date of
approval of the condensed set of financial information and that
there are no material uncertainties around their assessment.
Accordingly, the Directors continue to adopt the going concern
basis of accounting in preparing the condensed set of consolidated
financial information.
The condensed set of consolidated financial information is
unaudited, but has been reviewed by the external auditors. The
condensed set of consolidated financial information in the
Statement of Half Year Results does not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006. The Group's published Annual Report and Accounts for the year
to 31 March 2019 were approved by the Board of Directors on 22 May
2019 and filed with the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain an
emphasis of matter paragraph or a statement under Section 498 (2)
or (3) of the Companies Act 2006. The condensed set of consolidated
financial information for the six months to 30 September 2019 on
pages 13 to 28 was approved by the Board of Directors on 6 November
2019.
Changes in accounting policy and disclosures
The accounting policies adopted in the preparation of the
condensed set of consolidated financial information are consistent
with those of the Group's Annual Report and Accounts for the year
to 31 March 2019, but also reflect the adoption, with effect from 1
April 2019, of new or revised accounting standards, as set out
below. Further detail is provided in Note 11.
- IFRS 16 Leases (effective for the year beginning 1 April 2019)
The standard eliminates the classification of leases as either
operating or finance leases and introduces a single accounting
model. On adoption on 1 April 2019 lease commitments have been
recognised on the statement of financial position as liabilities of
GBP167 million within borrowings and associated 'right-of-use'
(ROU) assets of GBP151 million within property, plant and
equipment.
- IFRIC 23 Uncertainty over Income Tax Treatments (effective for
the year beginning 1 April 2019)
The interpretation clarifies the recognition principles when
there is uncertainty over income tax treatments under IAS 12. The
adoption of this interpretation has not had a material impact on
the Group's financial statements.
There are no other new standards, new interpretations or
amendments to standards or interpretations that have been published
that are exp ected to have a significant impact on the Group's
financial statements.
Seasonality
The Group's principal exposure to seasonality is in relation to
working capital. The Group's inventories are subject to seasonal
fluctuations reflecting the timing of crop harvests in North
America and purchases. Inventory levels typically increase from
September to November and gradually reduce in the first six months
of the calendar year.
Changes in constant currency
Where changes in constant currency are presented in this
statement, they are calculated by retranslating current period
results at prior period exchange rates. Reconciliations of the
movement in constant currency have been included in 'Additional
information' within this document.
Use of alternative performance measures
The Group also presents alternative performance measures,
including adjusted operating profit, adjusted profit before tax,
adjusted earnings per share and adjusted free cash flow, which are
used for internal performance analysis and incentive compensation
arrangements for employees. They are presented because they provide
investors with additional information about the performance of the
business which the Directors consider to be valuable. For the
periods presented, alternative performance measures exclude, where
relevant:
- Exceptional items (excluded as they are material in amount;
and are outside the normal course of business or relate to events
which do not frequently recur, and therefore merit separate
disclosure in order to provide a better understanding of the
Group's underlying financial performance);
- Amortisation of acquired intangible assets (costs associated
with amounts recognised through acquisition accounting that impact
earnings compared to organic investments); and
- Tax on the above items and tax items that themselves meet
these definitions. For tax items to be treated as exceptional,
amounts must be material and their treatment as exceptional enable
a better understanding of the Group's underlying financial
performance.
Alternative performance measures reported by the Group are not
defined terms under IFRS and may therefore not be comparable with
similarly-titled measures reported by other companies.
Reconciliations of the alternative performance measures to the most
directly comparable IFRS measures are presented in Note 2.
Exceptional items
Exceptional items comprise items of income, expense and cash
flow, including tax items that: are material in amount; and are
outside the normal course of business or relate to events which do
not frequently recur, and therefore merit separate disclosure in
order to provide a better understanding of the Group's underlying
financial performance. Examples of events that give rise to the
disclosure of material items of income, expense and cash flow as
exceptional items include, but are not limited to:
-- impairment events;
-- significant business transformation activities;
-- disposals of operations or significant individual assets;
-- litigation claims by or against the Group; and
-- restructuring of components of the Group's operations.
For tax items to be treated as exceptional, amounts must be
material and their treatment as exceptional enable a better
understanding of the Group's underlying financial performance.
Exceptional items in the Group's financial statements are
classified on a consistent basis across accounting periods.
2. Reconciliation of alternative performance measures
Income statement measures
For the reasons set out in Note 1, the Group presents
alternative performance measures including adjusted operating
profit, adjusted profit before tax and adjusted earnings per
share.
The following table shows the reconciliation of the key
alternative performance measures to the most directly comparable
measures reported in accordance with IFRS:
Six months to 30 September Six months to 30 September
2019 2018
----------------------------------------- -----------------------------------------
GBPm unless otherwise IFRS Adjusting Adjusted
stated reported items reported IFRS Adjusting Adjusted
Continuing operations reported items reported
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
Sales 1 476 - 1 476 1 383 - 1 383
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
Operating profit 166 17 183 113 53 166
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
Profit before tax 164 17 181 113 53 166
Income tax expense (33) (5) (38) (32) (4) (36)
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
Profit for the period 131 12 143 81 49 130
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
Effective tax rate 20.4% 20.9% 28.2% 21.5%
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
Earnings per share:
Number of ordinary
shares(1)
- basic 464.1 464.1 462.2 462.2
Basic earnings per
share 28.2p 2.6p 30.8p 17.6p 10.6p 28.2p
Number of ordinary
shares(1)
- diluted 469.9 469.9 467.6 467.6
Diluted earnings per
share 27.8p 2.7p 30.5p 17.4p 10.5p 27.9p
---------------------- -------------- ---------- ------------- -------------- ---------- -------------
1 Weighted average
Year to 31 March 2019
--------------------------------------------------
GBPm unless otherwise
stated IFRS Adjusting Adjusted
Continuing operations reported items reported
-------------------------------- -------------------------- ---------- ----------
Sales 2 755 - 2 755
-------------------------------- -------------------------- ---------- ----------
Operating profit 236 69 305
-------------------------------- -------------------------- ---------- ----------
Profit before tax 240 69 309
Income tax expense (59) (6) (65)
-------------------------------- -------------------------- ---------- ----------
Profit for the year 181 63 244
-------------------------------- -------------------------- ---------- ----------
Effective tax rate 24.4% 21.0%
Earnings per share:
Number of ordinary shares(1)
- basic 462.6 462.6
Basic earnings per share 39.2p 13.6p 52.8p
Number of ordinary shares(1)
- diluted 469.5 469.5
Diluted earnings per
share 38.6p 13.4p 52.0p
-------------------------------- -------------------------- ---------- ----------
1 Weighted average
The following table shows the reconciliation of the adjusting
items in the current and comparative periods:
Six months
Six months to Year to
to 30 September 30 September 31 March
2019 2018 2019
Continuing operations Note GBPm GBPm GBPm
----------------------------------------- ------ ----------------- -------------- ----------
Exceptional items included in operating
profit 4 11 47 58
Amortisation of acquired intangible
assets 6 6 11
------------------------------------------ ------ ----------------- -------------- ----------
Total excluded from adjusted profit
before tax 17 53 69
Tax credit on adjusting items (5) (4) (6)
------------------------------------------ ------ ----------------- -------------- ----------
Total excluded from adjusted profit
for the period 12 49 63
------------------------------------------ ------ ----------------- -------------- ----------
Cash flow measure
The Group also presents an alternative cash flow measure,
'Adjusted free cash flow' which is defined as cash generated from
continuing operations after net interest and tax paid, and capital
expenditure, and excluding the impact of exceptional items.
The following table shows the reconciliation of adjusted free
cash flow:
Six months Six months Year to
to to 31 March
30 September 30 September 2019
2019(1) 2018 GBPm
Continuing operations GBPm GBPm
Adjusted operating profit 183 166 305
Adjusted for:
Depreciation and adjusted amortisation 91 69 141
Share-based payments charge, net of tax 7 8 18
Changes in working capital and other non-cash
movements 14 16 (16)
Net retirement benefit obligations (16) (14) (25)
Capital expenditure (73) (62) (130)
Net interest and tax paid (35) (31) (81)
Adjusted free cash flow(1) 171 152 212
------------------------------------------------ -------------- -------------- ----------
1 IFRS 16 Leases was adopted in the year without restating
comparatives. Lease payments are now classified as financing rather
than operating cashflows, increasing adjusted free cash flow by
GBP17 million.
Financial strength measure
At the interim period the Group uses the net debt to EBITDA
ratio to assess its financial strength. The Group no longer uses
the interest cover ratio and so this has been removed. Performance
is based on the previous 12 months' results. The ratio is
calculated based on unrounded figures in GBP million.
Calculation of net debt to EBITDA ratio 30 September 31 March
2019(1) 2019
GBPm GBPm
---------------------------------------------------- ------------- ---------
Net debt (Note 6)(1) 465 337
---------------------------------------------------- ------------- ---------
Adjusted operating profit(2) 322 305
Add back depreciation and adjusted amortisation(2) 163 141
Pre-exceptional EBITDA 485 446
---------------------------------------------------- ------------- ---------
Net debt to EBITDA ratio (times) 1.0 0.8
---------------------------------------------------- ------------- ---------
1 IFRS 16 Leases was adopted in the year without restating
comparatives. For the ratio calculated at 30 September 2019, IFRS
16 lease liabilities increased net debt by GBP173 million and
EBITDA by GBP17 million. On a like-for-like basis the net debt to
EBITDA ratio was 0.6 times.
2 30 September 2019 results include the impact of IFRS 16 Leases
from adoption - i.e. six months only.
3. Segment information
Segment information is presented on a basis consistent with the
information presented to the Board (the designated Chief Operating
Decision Maker). All sales are from external customers.
a) Segment results Six months to 30 September 2019
-------------------------- ------------ -------------------------------------------
Food & Beverage Solutions
GBPm Primary
Sucralose Products Central Total
Continuing operations GBPm GBPm GBPm GBPm
------------------------------- -------------------------- ------------ --------------- -------------- ----------
Sales 478 76 922 - 1 476
Adjusted operating profit(1) 90 29 86 (22) 183
------------------------------- -------------------------- ------------ --------------- -------------- ----------
Adjusted operating margin 18.8% 38.0% 9.3% n/a 12.4%
------------------------------- -------------------------- ------------ --------------- -------------- ----------
1 Reconciled to statutory
profit for the period in Note
2. Six months to 30 September 2018
-------------------------- ------------ -------------------------------------------
Food & Beverage Solutions
GBPm Primary
Sucralose Products Central Total
Continuing operations GBPm GBPm GBPm GBPm
------------------------------- -------------------------- ------------ --------------- -------------- ----------
Sales 443 77 863 - 1 383
Adjusted operating profit(1) 77 27 85 (23) 166
------------------------------- -------------------------- ------------ --------------- -------------- ----------
Adjusted operating margin 17.4% 35.1% 9.8% n/a 12.0%
------------------------------- -------------------------- ------------ --------------- -------------- ----------
1 Reconciled to statutory
profit for the period in Note
2. Year to 31 March 2019
-------------------------- ------------ --------------- --------------------------
Food & Beverage Solutions
GBPm Primary
Sucralose Products Central Total
Continuing operations GBPm GBPm GBPm GBPm
------------------------------- -------------------------- ------------ --------------- -------------- ----------
Sales 889 164 1 702 - 2 755
Adjusted operating profit(1) 143 61 148 (47) 305
------------------------------- -------------------------- ------------ --------------- -------------- ----------
Adjusted operating margin 16.1% 37.0% 8.7% n/a 11.1%
------------------------------- -------------------------- ------------ --------------- -------------- ----------
1 Reconciled to statutory
profit for the year in Note
2.
Six months to Six months to Year to
30 September 30 September 31 March
2019 2018 2019
b) Geographic disclosure: sales GBPm GBPm GBPm
----------------------------------- -------------- -------------- ----------
Food & Beverage Solutions
North America 235 211 430
Asia Pacific and Latin America 115 105 201
Europe, Middle East and Africa 128 127 258
------------------------------------- -------------- -------------- ----------
Food & Beverage Solutions - total 478 443 889
------------------------------------- -------------- -------------- ----------
Sucralose - total 76 77 164
------------------------------------- -------------- -------------- ----------
Primary Products
Americas 870 804 1 588
Rest of the world 52 59 114
------------------------------------- -------------- -------------- ----------
Primary Products - total 922 863 1 702
------------------------------------- -------------- -------------- ----------
Total 1 476 1 383 2 755
------------------------------------- -------------- -------------- ----------
4. Exceptional items
Exceptional items recognised in the income statement are as
follows:
Six months Six months Year to
to to 31 March
30 September 30 September
2019 2018 2019
Income statement - continuing operations Footnote GBPm GBPm GBPm
------------------------------------------ ---------- -------------- -------------- ----------
Restructuring costs (a) (5) (2) (13)
Primary Products' savoury business (b)
exit (6) - -
Oats ingredients business disposal - (40) (43)
Gain on sale and leaseback of railcars - 11 14
Asset remediation - (16) (16)
------------------------------------------------------ -------------- -------------- ----------
Exceptional items included in profit
before tax (11) (47) (58)
------------------------------------------------------ -------------- -------------- ----------
In the six months to 30 September 2019, certain costs were
recorded as exceptional, each of which relates to the Group's
previously-announced programme to simplify the business and drive
productivity. These are set out below:
a) In the six months to 30 September 2019, the Group recorded a
restructuring charge of GBP5 million for employee severance and
associated programme costs, of which GBP2 million was recorded in
each of the Food & Beverage Solutions and Primary Products
operating segments and GBP1 million within Central. GBP3 million of
the total will be cash costs of which GBP2 million has been paid in
the period.
b) The Group recorded exit costs of GBP6 million for its Primary
Products' small, non-core savoury ingredients business, of which
GBP5 million is a non-cash charge for the associated property,
plant and equipment.
The most significant exceptional cost in the comparative periods
related to the impairment and subsequent disposal of the Group's
oats ingredients business, all of which was recorded within the
Food & Beverage Solutions operating segment. Remaining
exceptional costs included restructuring charges following the
Group's announcement in May 2018 to deliver US$100 million of
annualised cost savings relating to the previously announced
programme, the recognition of a provision to remediate
environmental health and safety risks associated primarily with
idle assets at manufacturing sites in North America and a gain on
sale and leaseback of certain tranches of railcars held under
operating leases. We continue to expect the cash costs of the
US$100 million productivity programme to be around US$40
million.
Total cash outflow for the six months to 30 September 2019 from
exceptional items was GBP12 million, of which GBP2 million related
to income statement charges recorded in the period to 30 September
2019 and GBP10 million related to income statement charges recorded
in the year to 31 March 2019.
Further details in respect of cash flows from exceptional items
are set out below.
Six months
to Six months Year to
30 September to 30 September 31 March
Net cash (outflows)/inflows on exceptional 2019 2018 2019
items Footnote GBPm GBPm GBPm
Restructuring costs (a) (7)* (1) (6)
Oats ingredients business disposal (1) - 3
Gain on sale and leaseback of railcars - 13 16
Asset remediation (4) - (1)
Net cash (outflows)/inflows - exceptional
items (12) 12 12
-------------------------------------------------------- -------------- ----------------- ----------
* Cash payments of GBP5 million were made in respect of
exceptional items recognised in the income statement in the year to
31 March 2019.
The total cash flows on exceptional items are included in the
statement of cash flows as follows:
Reconciliation to the statement of
cash flows
--------------------------------------------- ----- ---- ---- ----
Exceptional charge included in profit
before tax 11 47 58
Cash outflows relating to restructuring
costs (a) (7) (1) (6)
Cash outflows relating to asset remediation (4) - (1)
---------------------------------------------------- ---- ---- ----
As presented within cash flows from operating
activities - 46 51
---------------------------------------------------- ---- ---- ----
Cash flows relating to oats ingredients
business disposal (1) - 3
Cash inflows on gain on sale and leaseback
of railcars - 13 16
---------------------------------------------------- ---- ---- ----
As presented within cash flows from investing
activities (1) 13 19
---------------------------------------------------- ---- ---- ----
5. Dividends on ordinary shares
The Directors have declared an interim dividend of 8.8p per
share for the six months to 30 September 2019 (six months to 30
September 2018 - 8.6p per share), payable on 3 January 2020.
The final dividend for the year to 31 March 2019 of GBP97
million, representing 20.8p per share, was paid during the six
months to 30 September 2019.
6. Net debt
The components of the Group's net debt are as follows:
At At At
30 September 30 September 31 March
2019 2018 2019
GBPm GBPm GBPm
----------------------------------- -------------- -------------- ----------
Borrowings(1) (610) (601) (597)
Debt-related derivative financial
instruments (32) (20) (25)
Lease liabilities(1) (184) - -
Cash and cash equivalents 361 284 285
----------------------------------- -------------- -------------- ----------
Net debt (465) (337) (337)
----------------------------------- -------------- -------------- ----------
1 IFRS 16 Leases was adopted in the year without restating
comparatives. IFRS 16 lease liabilities increased net debt by
GBP173 million to 30 September 2019. During the period, GBP11
million (31 March 2019 - GBP11 million; 30 September 2018 - GBP13
million) relating to IAS 17 finance leases has been reclassified
from borrowings to lease liabilities.
Debt-related derivative financial instruments represent the net
fair value of currency and interest rate swaps that are used to
manage the currency and interest rate profile of the Group's net
debt. At 30 September 2019, the net fair value of these derivatives
comprised assets of GBP7 million (30 September 2018 - GBP12
million; 31 March 2019 - GBP6 million) and liabilities of GBP39
million (30 September 2018 - GBP32 million; 31 March 2019 - GBP31
million).
On 1 August 2019 the Group priced a US$200 million debt private
placement which will be issued on 19 November 2019 at which point
US$100 million 3.31% notes due 2029 and US$100 million 3.41% notes
due 2031 will be drawn down. The proceeds will be used to refinance
a maturing GBP200 million 6.75% bond.
Movements in net debt were as follows:
Six months Six months Year to
to to 31 March
30 September 30 September 2019
2019 2018 GBPm
GBPm GBPm
-------------------------------------------
Net debt carried forward from previous
period (337) (392) (392)
IFRS 16 adoption at beginning of the (167) - -
period
------------------------------------------- -------------- -------------- ----------
Net debt at beginning of period (504) (392) (392)
------------------------------------------- -------------- -------------- ----------
Net increase in cash and cash equivalents 61 80 79
Net in-period decrease/(increase) in
borrowings and leases 4 - (2)
Currency translation differences(1) (23) (23) (21)
Other fair value movements (3) (2) (1)
Decrease in net debt in the period 39 55 55
------------------------------------------- -------------- -------------- ----------
Net debt at end of the period (465) (337) (337)
------------------------------------------- -------------- -------------- ----------
1 Includes the foreign currency element of the fair value
movement on currency swaps and the translation of foreign
denominated borrowings.
7. Financial instruments
Carrying amount versus fair value
The fair value of borrowings, excluding lease liabilities, is
estimated to be GBP629 million (30 September 2018 - GBP593 million;
31 March 2019 - GBP596 million) and has been determined using
quoted market prices, broker dealer quotations or discounted cash
flow analysis. The carrying value of other assets and liabilities
held at amortised cost is not materially different from their fair
value.
Fair value measurements recognised in the balance sheet
The table below shows the Group's financial assets and
liabilities measured at fair value at 30 September 2019. The fair
value hierarchy categorisation, valuation techniques and inputs, is
consistent with those used in the year to 31 March 2019.
At 30 September 2019 At 31 March 2019
------------------------------ ------------------------------
Level Level Level Total Level Level Level Total
1 2 3 GBPm 1 2 3 GBPm
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ------ ------ ------ ------ ------ ------ ------ ------
Assets at fair value
Investments in equities(1) - - 64 64 - - 59 59
Derivative financial instruments:
- currency swaps - - - - - 1 - 1
- interest rate swaps - 7 - 7 - 5 - 5
- commodity pricing contracts 5 - 24 29 2 1 39 42
----------------------------------- ------ ------ ------ ------ ------ ------ ------ ------
Assets at fair value 5 7 88 100 2 7 98 107
----------------------------------- ------ ------ ------ ------ ------ ------ ------ ------
Liabilities at fair value
Derivative financial instruments:
- currency swaps - (39) - (39) - (31) - (31)
- commodity pricing contracts (9) (3) (3) (15) (7) (7) (2) (16)
----------------------------------- ------ ------ ------ ------ ------ ------ ------ ------
Liabilities at fair value (9) (42) (3) (54) (7) (38) (2) (47)
----------------------------------- ------ ------ ------ ------ ------ ------ ------ ------
1 Includes FVPL assets of GBP38 million (31 March 2019 - GBP35
million) and FVOCI assets of GBP26 million (31 March 2019 - GBP24
million).
The Group's net US commodity position is recognised at fair
value on the basis that doing so aligns with the economics of the
business and minimises price risk volatility. The most significant
unobservable inputs in the valuation of US commodity contracts
remain the future price of co-product positions and basis and so
are included as Level 3 financial instruments. They are valued
based on the Group's own assessment of the particular commodity,
its supply and demand and expected pricing. A 10% movement in the
price of co-products and basis would result in a net fair value
movement of GBP1 million and GBP1 million respectively.
In the period GBP2 million (year to 31 March 2019 - GBPnil) of
commodity pricing contracts have transferred from Level 2 to Level
3 as the Level 3 element of those contracts exceeded 10% of the
total contract value in the period to 30 September 2019.
The derivative financial instruments included with the Group's
Level 2 financial instruments are valued based on observable
inputs. The fair value of swaps is based indirectly on published
rate curves and the commodity contracts are valued by reference to
the Chicago Mercantile Exchange.
Investment in equities are valued based on management's
assessment of the value of those investments and so is sensitive to
a number of market and non-market factors.
The following table reconciles the movement in fair value of net
financial instruments classified in fair value hierarchy 'Level
3':
Commodity Commodity
pricing pricing
Financial assets at contract contract
Financial assets at FVPL FVOCI - assets - liabilities Total
GBPm GBPm GBPm GBPm GBPm
-------------------------- ------------------------- -------------------------- ---------- --------------- ------
At 1 April 2019 35 24 39 (2) 96
-------------------------- ------------------------- -------------------------- ---------- --------------- ------
Income statement:
- prior year amounts
settled - - (38) 1 (37)
- current year
unrealised net
gain/(loss) - - 23 (2) 21
Other comprehensive
income - 1 - - 1
Non-qualified deferred
compensation
arrangements 1 - - - 1
Purchases 2 1 - - 3
Disposals (2) - - - (2)
Currency translation
differences 2 - - - 2
-------------------------- ------------------------- -------------------------- ---------- --------------- ------
At 30 September 2019 38 26 24 (3) 85
-------------------------- ------------------------- -------------------------- ---------- --------------- ------
8. Retirement benefit obligations
On 18 September, the Group supported the trustees of the main UK
pension scheme in completing a GBP930 million bulk annuity
insurance policy 'buy-in' for that scheme. As a result, the assets
of the main UK pension scheme were replaced with an insurance asset
matching UK scheme liabilities. The impact of this transaction was
to derecognise GBP195 million of pension scheme accounting surplus
by charging the same amount to other comprehensive income. There
was no impact on profit before tax.
The other significant movement in retirement benefit obligations
in the period relates to actuarial losses of GBP155 million, which
arose because of a reduction in the discount rates applied to
pension liabilities in the US (from 3.8% to 3.0%) and UK (from 2.4%
to 1.8%). The corresponding gain on plan assets in the period was
GBP114 million. Neither items impacted profit before tax.
At 30 September 2019, the Group's retirement benefit obligations
are now in a net deficit of GBP207 million (31 March 2019 - surplus
of GBP24 million), with the movement principally reflecting the
charges to other comprehensive income set out above. The closing
total net deficit substantially comprises the unfunded schemes in
the US. The net deficit of GBP18 million relating to UK plans was
not subject to the 'buy-in'.
Other movements in retirement benefit obligations comprise a net
income statement charge of GBP2 million, employer contributions of
GBP18 million and an increase in the net deficit for currency
translation of GBP10 million.
These movements are set out in the table below:
Six months to 30 September
2019
---------------------------------
UK plans US plans Total
GBPm GBPm GBPm
--------------------------------------------------------------- ----------- ---------- ------
Net surplus/(deficit) at 1 April 2019 181 (157) 24
--------------------------------------------------------------- ----------- ---------- ------
Income statement:
- current service costs - (1) (1)
- administration costs - (1) (1)
- net interest expense 2 (2) -
Other comprehensive income:
- return on plan assets 71 43 114
- impact of the 'buy-in' (195) - (195)
- actuarial loss (90) (65) (155)
Other movements:
- employer's contributions 14 4 18
- non-qualified deferred compensation arrangements - (1) (1)
- currency translation differences (1) (9) (10)
--------------------------------------------------------------- ----------- ---------- ------
Net deficit at 30 September 2019 (18) (189) (207)
--------------------------------------------------------------- ----------- ---------- ------
9. Contingent liabilities
The Group is subject to claims and litigation generally arising
in the ordinary course of its business. Provision is made when
liabilities are considered likely to arise and the expected quantum
of the exposure is estimable. The risk in relation to claims and
litigation is monitored on an ongoing basis and provisions amended
accordingly. It is not expected that claims and litigation existing
at 30 September 2019 will have a material adverse effect on the
Group's financial position.
10. Events after the reporting period
There are no material post balance sheet events requiring
disclosure in respect of the six months to 30 September 2019.
11. Accounting standards adopted in the year
As explained in Note 1, the Group has adopted IFRS 16 Leases and
IFRIC 23 Uncertainty over Income Tax Treatments. The impact of the
adoption of these standards is below. Comparatives have not been
restated.
IFRS 16 Leases
The Group has adopted IFRS 16 from 1 April 2019 using the
modified retrospective approach. The Group's leases principally
comprise railcars, properties and other miscellaneous leases such
as motor vehicles or machinery. The Group has not restated
comparatives for the 2019 financial year as permitted. The
reclassifications and the adjustments arising from the new leasing
standard are therefore recognised in the opening balance sheet on 1
April 2019.
a) Adjustments recognised on adoption of IFRS 16
31 March 1 April
2019 Adjustment 2019
GBPm GBPm GBPm
-------------------------------- --------- ----------- --------
Non-current assets
Property, plant and equipment 982 151 1 133
Liabilities
Trade and other payables 342 (5) 337
Borrowings 597 167 764
Deferred tax liabilities 46 (3) 43
-------------------------------- --------- ----------- --------
Equity
Retained earnings 741 (8) 733
-------------------------------- --------- ----------- --------
The Group has recognised lease liabilities in relation to leases
which had previously been classified as 'operating leases' under
the principles of IAS 17 Leases. These liabilities were measured at
the present value of the remaining lease payments, discounted using
the lessee's incremental borrowing rate as at 1 April 2019. The
weighted average incremental borrowing rate applied to the lease
liabilities on 1 April 2019 was 4%. For leases previously
classified as finance leases, the Group recognised the carrying
amount of the lease asset and lease liability immediately before
transition as the carrying amount of the right-of-use asset and the
lease liability at the date of initial application.
1 April
2019
GBPm
----------------------------------------------------------- --------
Operating lease commitments disclosed as at 31 March 2019 308
Less: contract not recognised as an IFRS 16 lease (112)
Discounted using the Group's incremental borrowing rate
at the date of initial application (29)
----------------------------------------------------------- --------
Recognised as IFRS 16 leases at 31 March 2019 167
Add: finance lease liabilities as at 31 March 2019 11
Lease liability at 1 April 2019 178
----------------------------------------------------------- --------
Of which:
Current lease liabilities 26
Non-current lease liabilities 152
----------------------------------------------------------- --------
At 31 March 2019 the Group had an IAS 17 operating lease of
GBP112 million in respect of an energy procurement contract and
related infrastructure. This contract was not recognised as an IFRS
16 lease as the Group has determined that it does not have the
right to direct the use of the related asset.
Where practicable the associated right-of-use assets were
measured on a retrospective basis, as if the new rules had always
been applied. Where this was not possible, right-of-use assets were
measured at the amount equal to the lease liability as at 1 April
2019. There were no onerous lease contracts that would have
required an adjustment to the right-of-use assets at the date of
initial application.
The recognised right-of-use assets relate to the following types
of asset:
1 April 2019
GBPm
--------------------- -------------
Railcars 97
Properties 51
Other 3
--------------------- -------------
Right-of-use assets 151
--------------------- -------------
b) Accounting policy and key judgements
Having adopted IFRS 16 the Group applies the following approach.
At the commencement date of the lease, the Group recognises lease
liabilities measured at the present value of lease payments to be
made over the lease term which includes periods covered by renewal
options the Group is reasonably certain to exercise. In calculating
the present value of lease payments, the Group uses the incremental
borrowing rate at the lease commencement date.
The Group recognises right-of-use assets at the commencement
date of the lease. Right-of-use assets are measured at cost
including the amount of lease liabilities recognised and initial
direct costs incurred. Right-of-use assets are subject to
impairment.
The Group applies the short-term lease exemption and the
low-value lease exemption. The effect of applying this is not
expected to be material.
IFRIC 23 Uncertainty over Income Tax Treatments
The interpretation is to be applied to the determination of
taxable profit, tax bases, unused tax losses, unused tax credits
and tax rates, when there is uncertainty over income tax treatments
under IAS 12. The interpretation specifically addresses the
following:
-- Whether an entity considers uncertain tax treatments separately
-- The assumptions an entity makes about the examination of tax
treatments by taxation authorities
-- How an entity determines taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax rates
-- How an entity considers changes in facts and circumstances
The Group applies significant judgement in identifying
uncertainties over income tax treatments and operates in a complex
multinational environment. Following a detailed assessment the
Group has determined that the adoption of this interpretation has
not had a material impact on the Group's financial statements.
No other new standards, new interpretations or amendments to
standards or interpretations have been published which are expected
to have a significant impact on the Group's financial
statements.
ADDITIONAL INFORMATION
For the six months to 30 September 2019
Calculation of changes in constant currency
Where changes in constant currency are presented in this
statement, they are calculated by retranslating current period
results at prior period exchange rates. The following table
provides a reconciliation between the six months to September 2019
performance at actual exchange rates and at constant currency
exchange rates. Absolute numbers presented in the table are rounded
for presentational purposes, whereas the growth percentages are
calculated on unrounded numbers.
Change
Six months to 30 2019 in
September Adjusted at constant Underlying constant
performance 2019 FX currency growth 2018 Change currency
Continuing operations GBPm GBPm GBPm GBPm GBPm % %
Sales 1 476 (65) 1 411 28 1 383 7% 2%
Adjusted operating
profit
Food & Beverage
Solutions 90 (4) 86 9 77 17% 11%
Sucralose 29 (2) 27 - 27 5% (1%)
Primary Products 86 (5) 81 (4) 85 1% (5%)
Central (22) 1 (21) 2 (23) 7% 8%
Adjusted operating
profit 183 (10) 173 7 166 10% 4%
Net finance expense (15) - (15) (2) (13) (17%) (12%)
Share of profit
after tax of joint
ventures 13 - 13 - 13 2% (2%)
Adjusted profit
before tax 181 (10) 171 5 166 9% 3%
Adjusted income
tax expense (38) 3 (35) 1 (36) (6%) 1%
Adjusted profit
after tax 143 (7) 136 6 130 10% 4%
Adjusted diluted
EPS (pence) 30.5p (1.8p) 28.7p 0.8p 27.9p 9% 3%
Statement of Directors' responsibilities
The Directors confirm: that this condensed consolidated set of
financial information has been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting as
adopted by the European Union; that the condensed consolidated set
of financial statements gives a true and fair view of the assets,
liabilities, financial position and profit or loss as required by
the Disclosure Guidance and Transparency Rules (DTRs) sourcebook of
the United Kingdom's Financial Conduct Authority, paragraph DTR
4.2.4; and that the interim management report herein includes a
fair review of the information required by paragraphs DTR 4.2.7 and
DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
consolidated financial information;
-- a description of the principal risks and uncertainties for
the remaining six months of the financial year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
The Directors are responsible for the maintenance and integrity
of the Company's website. UK legislation governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors of Tate & Lyle PLC are listed in the Tate
& Lyle Annual Report for the year ended 31 March 2019; the
changes to the Board since 31 March 2019 being the appointment of
Kimberly Nelson on 1 July 2019 and the retirement as a director of
Douglas Hurt on 25 July 2019.
For and on behalf of the Board of Directors:
Nick Hampton Imran Nawaz
Chief Executive Chief Financial Officer
6 November 2019
INDEPENDENT REVIEW REPORT TO TATE & LYLE PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the Statement of Half Year Results for
the six months to 30 September 2019 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated statement of
financial position, the condensed consolidated statement of cash
flows, the condensed consolidated statement of changes in equity
and the related explanatory notes. We have read the other
information contained in the Statement of Half Year Results and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The Statement of Half Year Results is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the Statement of Half Year Results in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this Statement of Half Year Results has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the Statement of Half
Year Results based on our review.
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 United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and 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.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the Statement of Half Year Results for the six months to 30
September 2019 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
6 November 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR UNSWRKUAARAA
(END) Dow Jones Newswires
November 07, 2019 02:00 ET (07:00 GMT)
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