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Origin Enterprises Plc  -  OGN   

Interim Results Statement

Released 07:01 09-Mar-2017

RNS Number : 9255Y
Origin Enterprises Plc
09 March 2017
 

 

Origin Enterprises plc

INTERIM RESULTS STATEMENT

An encouraging start to trading in seasonally quiet first half

 

9 March 2017

Origin Enterprises plc ('Origin' or 'the Group'), today announces its interim results for the half year ended 31 January 2017.

 

Highlights

·    Improved first half performance in seasonally quiet trading period

·    More stable near term planning environment for primary producers, combined with generally settled weather, has driven good early season demand for agronomy services and inputs

·    Solid foundation established for seasonally important second half with cropping base consistent with prior year

·    Agreement to acquire the fertiliser blending and nutrition business of Bunn Fertiliser in the UK

·    Commencement of a five year collaborative research partnership with University College Dublin to build digitally based agronomy advisory tools

·    Origin separately announced today the acquisition of the digital agricultural services group - Resterra

·    Interim dividend of 3.15 cent per share (2016: 3.15 cent per share)

 

 

Results Summary

6 months ended

31 Jan 2017

€'000

6 months ended

31 Jan 2016

€'000

 

 

Change

    €'000

 

Group revenue

 

564,436

 

507,213

 

 

57,223

Group operating profit/(loss)

 

 

 

 

-     Operating profit/(loss) - Agri-Services*

2,010

(1,790)

 

3,800

-     Associates and joint venture**

1,742

1,476

 

266

Total group operating profit/(loss)*

3,752

(314)

 

4,066

Finance cost, net

(3,816)

(3,769)

 

(47)

Loss before tax*

(64)

(4,083)

 

4,019

Basic loss per share (cent)

(8.09)

(5.24)

 

(2.85)

Adjusted diluted earnings/(loss) per share (cent)***

0.25

(2.47)

 

2.72

Group net debt****             

161,584

168,272

 

(6,688)

Interim dividend per ordinary share (cent)

3.15

3.15

 

-

 

*              Before amortisation of non-ERP intangible assets and exceptional items

**             Profit after interest and tax

***           Before amortisation of non-ERP intangible assets, net of related deferred tax (2017: €2.0 million, 2016: €3.5 million) and exceptional items, net of tax (2017: €8.5 million, 2016: €Nil)

****         Includes restricted cash of €Nil (2016: €2.9m)

 

 

Origin Enterprises plc

 

Chief Executive Officer's comment:

 

Commenting on the results, Origin Chief Executive Officer, Tom O'Mahony said:

 

"The Group achieved good volume growth and margin recovery in the seasonally quiet first half of the financial year following a challenging trading year in 2016. Performance was supported by a more stable near term planning environment for primary producers together with the benefit of generally settled weather, which led to increased on-farm activity throughout the period.

 

Our investment priorities for technology development and strategic acquisitions are focused on capturing growth opportunity in the provision of dynamic crop management systems that meet the requirements of today's primary producer as well as broadening new customer and service potential.

 

We remain focused on embedding strategic cost initiatives, working capital management and business integration. The consolidation of acquisitions completed in 2016 in the UK, Poland and Romania is progressing as planned. The performance in the period provides a solid foundation for the seasonally more important second half when over 90% of earnings are typically generated."

 

 

 

ENDS

 

Capital Markets Site Visit

 

Origin will host an analyst and institutional investor site visit to our Technology Centre in Throws Farm near Stansted, UK, on Wednesday 14 June 2017. Further information will be circulated in due course.

 

 

Conference Call

 

The results announcement is available on the Company website www.originenterprises.com.  There will be a live conference call at 8.30am (GMT) today.  To participate in this conference call, please dial the number below.  Participants are requested to dial in 5 to 10 minutes prior to the scheduled start time.

 

Participant access numbers:

                                                                       

Ireland:

Tel:

+353 (0)1 247 6528

UK/International:

Tel:

+44 (0)20 3427 1919

 

 

 

Confirmation Code:

 

9006163

 

 

Replay

 

A replay of this call will be available for seven days.

 

Replay Access Code:

 

9006163

 

 

 

Replay Access Numbers:

 

 

Dublin:

Tel:

+353 (0)1 486 0902

UK/International:

Tel:

+44 (0)20 3427 0598

 

 

Enquiries

 

Origin Enterprises plc

 

 

Imelda Hurley

 

 

Chief Financial Officer

Tel:

+353 (0)1 563 4959

 

 

 

Andrew Mills

 

 

Investor Relations Officer

Tel:

+353 (0)1 563 4900

 

 

 

Goodbody (ESM Adviser)

 

 

Siobhan Wall

Tel:

+353 (0)1 641 6019

 

 

 

Davy (Nominated Adviser)

 

 

Anthony Farrell

Tel:

+353 (0)1 614 9993

 

 

 

Powerscourt

 

 

Jack Hickey (Ireland)

Tel:

+353 (0)83 448 8339

Rob Greening (UK)

Tel:

+44 207 250 1446

 

About Origin Enterprises plc

 

Origin Enterprises plc is a focused Agri-Services group providing specialist on-farm agronomy services and the supply of crop technologies and inputs.  The Group has leading market positions in Ireland, the United Kingdom, Poland, Romania and Ukraine.  Origin is listed on the ESM and AIM markets of the Irish and London Stock Exchanges.

 

ESM ticker symbol:       OIZ

AIM ticker symbol:        OGN

Website:                       www.originenterprises.com

INTERIM RESULTS STATEMENT

 

Financial Review - Summary

 

 

6 months ended

31 Jan 2017

€'000

6 months ended

31 Jan 2016

€'000

 

 

 

Group revenue

564,436

507,213

Operating profit/(loss)*

2,010

(1,790)

Associates and joint venture, net**

1,742

1,476

Group operating profit/(loss)*

3,752

(314)

Finance cost, net

(3,816)

(3,769)

Pre-tax loss

(64)

(4,083)

Income tax credit

373

974

Adjusted net profit/(loss)

309

(3,109)

 

 

 

Adjusted diluted earnings/(loss) per share (cent)***

0.25

(2.47)

 

 

 

 

 

 

Adjusted net profit/(loss) reconciliation

 

 

Reported net loss

(10,157)

(6,578)

Amortisation of non-ERP intangible assets

2,307

4,131

Tax on amortisation of non-ERP related intangible assets

(304)

(662)

Exceptional items, net of tax

8,463

-          -

Adjusted net profit/(loss)

   309

(3,109)

 

 

 

Adjusted diluted earnings/(loss) per share (cent)***

0.25

(2.47)

 

 

Origin delivered adjusted diluted earnings per share*** for the period of 0.25 cent compared to adjusted diluted loss per share of 2.47 cent in the corresponding period last year.  On a like for like basis (excluding the impact of currency movements and acquisitions) the underlying increase was 3.24 cent.  The Group's earnings profile is significantly weighted towards the second half of the financial year when over 90 per cent of earnings are typically generated.

 

Group revenue

 

Group revenue was €564.4 million compared to €507.2 million in the corresponding period, an increase of 11.3 per cent.  On a like for like basis (excluding the impact of currency movements and acquisitions) revenues increased by €52.7 million (10.4 per cent), principally reflecting a combination of increased agronomy service revenue and crop input volumes partially offset by lower fertiliser prices and crop marketing prices and volumes. Underlying volume growth was 12.8 per cent in the period compared to the corresponding period last year.

Operating profit*

 

Operating profit* from the Agri-Services business was €2.0 million compared to a loss of €1.8 million in the corresponding period.  On a like for like basis (excluding the impact of currency movements and acquisitions) the increase year on year was €3.7 million.  The performance in the seasonally quiet first half of the year was mainly attributable to the benefit of higher agronomy service revenue and crop input volumes, together with improved margins.

 

Associates and joint venture**

 

Origin's share of the profit after interest and taxation from associates and joint venture increased by €0.2 million to €1.7 million.

 

Financing costs, net debt and working capital

 

Net finance costs amounted to €3.8 million, in line with the prior period, however average net debt amounted to €210.0 million compared to €166.0 million in the prior period. The movement is primarily due to the impact of the timing of the receipt of disposal proceeds in the comparative period.  The net finance cost remained at prior period levels, despite the increase in average net debt, due to the reduced blended interest rates applying to the period's borrowings. Net debt at 31 January 2017 was €161.6 million***** compared with €168.3 million***** at 31 January 2016, and is 1.95 times EBITDA**** for the twelve months to 31 January 2017.

 

Following the seasonal investment in working capital, the net cash outflow from operating activities was €140.1 million (2016: €168.5 million).  During the period there was an increase of €129.3 million in working capital (2016: €145.8 million), principally reflecting seasonal requirements.

 

Exceptional items

 

Exceptional items net of tax amounted to a charge of €8.5 million (2016: €Nil), primarily relating to restructuring costs in the UK.

 

Dividend

 

An interim dividend of 3.15 cent per share will be paid on 14 April 2017 to shareholders on the register on 31 March 2017.

 

*              Operating profit/(loss) and Group operating profit/(loss) are stated before amortisation of non-ERP intangible assets and exceptional items

**             Profit after interest and tax

***           Before amortisation of non-ERP intangible assets, net of related deferred tax (2017: €2.0 million, 2016: €3.5 million) and exceptional items, net of tax (2017: €8.5 million, 2016: €Nil)

****         Net debt/EBITDA ratio as per the requirements of the Group's syndicated bank loan agreement

*****        Includes restricted cash of €Nil (2016: €2.9 million)

Review of Operations

 

Agri-Services

 

 

 

 

Change on prior period

 

2017

€m

2016

€m

Change

€m

Underlying** €m

Revenue

564.4

507.2

57.2

52.7

 

 

 

 

 

Operating profit/(loss)*

2.0

(1.8)

3.8

3.7

 

 

 

 

 

* Before amortisation of non-ERP intangible assets and exceptional items

** Excluding the impact of currency movements and acquisitions

 

Revenue from Agri-Services comprises the totality of Group revenue.  It incorporates integrated agronomy and on-farm services and business-to-business agri-inputs.  During the period the Group's operations spanned Ireland, the UK, Poland, Romania and Ukraine.

 

Revenue and operating profit were €564.4 million and €2.0 million, respectively. On a like for like basis, excluding the impact of currency movements and acquisitions, revenue and operating result increased by €52.7 million and €3.7 million, respectively.  This was due to a combination of higher agronomy service revenue, crop input volumes and improved margins, partially offset by lower fertiliser prices and crop marketing prices and volumes.

 

Ireland and the United Kingdom

 

Underlying volume growth was 12.6 per cent in the period compared to the corresponding period last year. A more favourable short term outlook for farm incomes is principally reflecting the positive impact on output prices of sterling weakness and tighter global dairy supply. This, together with generally settled autumn and winter weather supporting good crop establishment, drove good early season demand in advance of the main application period in the second half.

 

Integrated On-Farm Agronomy Services

 

Origin's agronomy services brand is Agrii, which specialises in offering independent and innovative advice, crop inputs and services to arable, fruit and vegetable growers in the UK.

 

Agrii performed very satisfactorily in the period achieving volume growth and margin recovery across all service and input portfolios.

 

On-farm activity was robust in the period, with the planted area for the principal autumn and winter crops at 2.95 million hectares compared with 2.96 million hectares for the comparative period. In the case of winter wheat there is an estimated 1.4 per cent increase in plantings to 1.85 million hectares. Winter oil seed rape sowings are currently estimated at 0.5 million hectares which represents a reduction of approximately 10 per cent on last year, largely due to agronomic and rotational crop planning decisions. The total planted area for spring crops is expected to be approximately 1.4 million hectares, compared to 1.3 million in the prior period.

 

The business has continued to prioritise its performance improvement agendas together with embedding strategic cost initiatives throughout its operations.

 

Business-to-Business Agri-Inputs

 

Business-to-Business Agri-Inputs delivered a good result in the period, with an improved performance principally underpinned by year-on-year growth in fertiliser volumes in the UK.

 

Fertiliser

 

The Group's fertiliser brands comprise Goulding in Ireland and Origin Fertilisers in the UK.

 

Against the backdrop of highly competitive trading conditions, the business recorded higher volumes and improved margins in the UK in the period.  Strong early season demand reflected greater certainty in fertiliser raw material pricing which provided confidence to primary producers to fix a proportion of their nutrition requirements ahead of the main application period in the second half of the financial year.

 

Performance in Ireland was satisfactory during the seasonally quiet period for the business.

 

We anticipate higher market volumes for the year as a whole with application expected to be positively influenced by higher livestock numbers and improved returns for primary dairy producers.   

Amenity

Origin Amenity addresses the maintenance and improvement requirements of the professional sports turf, landscaping and amenity sectors in the UK. It comprises the advisory and input service brands of Rigby Taylor and Headland Amenity, together with the PB Kent portfolio of specialist nutrition applications.  

Origin Amenity delivered a good performance in the period, underpinned by further development momentum within the professional sports channel. Headland Amenity, which was acquired in 2016, is performing in line with expectations and the integration progressing as planned.

Feed Ingredients

Feed Ingredients achieved a satisfactory result in the period underpinned by a stable volume performance. Spot demand was generally robust throughout the period while currency volatility impacted customer forward buying momentum.

 

Central and Eastern Europe

 

Underlying volume growth was 13.6 per cent in the period compared to the corresponding period last year. Overall there was a satisfactory performance in the seasonally quiet trading period, with good early season momentum in the case of value added crop technologies. Sentiment on-farm is generally cautious as a result of the challenging year experienced by primary producers in 2016. A more concentrated or just-in-time demand profile for services and inputs is anticipated in the second half of the financial year.

 

 

Poland

 

The Group's Polish farm services business, Agrii, performed satisfactorily against lower demand in the period reflecting the impact of a very difficult growing season in 2016 and delayed autumn harvest conditions. The integration of the Kazgod Group, acquired in November 2015, is substantially complete with strong progress achieved to date in relation to customer channel and service portfolio alignment. Autumn and winter crop plantings are equivalent to last year at approximately 5.3 million hectares with no significant establishment issues arising at this stage.

The expansion of Agrii's seed processing and input formulation capacity commenced during the period. This €6 million capital project is expected to be operational early in the 2018 financial year.

Romania

The Group's Romanian operations, comprising the farm service brands of Comfert and Redoxim delivered a very satisfactory result in the period. Performance reflected increased volumes supported by new customer gains together with the benefit of higher margins.

Autumn and winter crop establishment is generally satisfactory against the backdrop of weather related delays to cereal and oil seed rape plantings which is expected to result in a larger area devoted to spring cropping this year. Total plantings for the principal winter crops are estimated at 3.30 million hectares compared with 3.25 million hectares last year.   Total oil seed rape plantings are estimated at 600,000 hectares compared with 380,000 hectares for the comparative period.

 

Integration is progressing to plan with the primary focus concentrated on the development of enhanced technical sales support together with the further development of trial demonstration farms and knowledge transfer infrastructure.

Ukraine

 

The Group's Ukrainian farm services platform, Agroscope International, achieved higher revenues and margins in the period with performance principally underpinned by good momentum in the sale of value added technologies.

Autumn and winter crop plantings are estimated at 7.6 million hectares compared with 5.8 million hectares last year. Crops are generally well established and in good condition. Total crop plantings for the 2017 production year are expected to be in line with last year at 22.0 million hectares, approximately.

The financing environment for primary producers is currently more favourable and is generally reflective of an improved macro-economic backdrop.

Associates and joint venture

 

John Thompson & Sons Limited ('John Thompson')

 

John Thompson, the largest single site multi species animal feed mill in the European Union, in which Origin has a 50 per cent shareholding, delivered a satisfactory result in the period.

 

 

Other Group developments

 

On 12 December 2016, the Group announced the establishment of a dedicated digital, precision agriculture and crop science research partnership with University College Dublin ('UCD'), supported by Science Foundation Ireland ('SFI'). The five year development programme underpinning the research partnership will be financed by a €17.6 million investment which is co-funded by Origin and SFI. The collaboration encompasses a strong multi and inter-disciplinary approach, combining the expertise of UCD in data science and agricultural science with Origin's integrated crop management research and data, system capabilities and extensive on-farm knowledge exchange networks. The aim of the programme is to build digitally based and user driven advisory tools that provide rapid and localised decision support for agronomists and farmers.

 

Separately, Origin announced today the acquisition of the digital agricultural services group, the Resterra Group ('Resterra'). Under the terms of the transaction, Origin has acquired 100 per cent of the share capital of Resterra, on a debt free cash free basis, for consideration of £11.4 million. Additional contingent deferred consideration of up to £4.8 million will be payable upon the achievement of specific profit targets. Resterra specialises in the delivery of bespoke precision agronomy applications and is a leading provider of agri-tech services to primary producers, input manufacturers and agri-service companies to create, automate and systemise information access for rapid decision making. Resterra will enhance Origin's service capability in existing and wider geographies in addition to strongly complementing the work of the Origin-UCD collaborative partnership.

 

On 7 March 2017, Origin announced that it had reached agreement to acquire the fertiliser activities and certain assets of Bunn Fertiliser Limited in the UK ('Bunn') based on an enterprise value consideration of £18.2 million. Bunn is a leading provider of prescription fertiliser blends and nutrition management systems servicing arable, grassland and horticultural sectors. The transaction extends Origin's existing fertiliser blending activities, as well as its customer service capabilities, and will enable the Group to optimise operational and logistical efficiencies. The acquisition is subject to a number of conditions including clearance from the Competition and Markets Authority in the UK.

 

Outlook

 

The Group is well positioned to respond to current market conditions, and the encouraging start to the seasonally quiet first half provides a good foundation for the seasonally more important second half of the financial year when over 90 per cent of earnings typically arise.

 

A further update will be provided at the timing of the announcement of the third quarter Trading Update on 25 May 2017.

 

 

ENDS

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Income Statement       

for the six months ended 31 January 2017

 

 

 

 

 

 

Six months

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ended

 

Six months

 

Six months

 

 Six months

 

Year

 

 

 

 

 

 

 

January

 

ended

 

ended

 

ended

 

ended

 

 

 

 

 

 

 

 

2017

 

January

 

January

 

January

 

 July

 

 

 

 

 

 

 

 

Pre-

 

2017

 

2017

 

2016

 

2016

 

 

 

 

 

 

 

 

Exceptional

 

Exceptional

 

Total

 

Total

 

Total

 

 

 

 

 

 

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

Notes

 

 

 

 

 

(Note 4)

 

 

 

(Note 6)

 

(Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

3

 

 

 

564,436

 

-

 

564,436

 

507,213

 

1,521,256

 

 

 

Cost of sales

 

 

 

 

(493,556)

 

-

 

(493,556)

 

(438,477)

 

(1,300,712)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

70,880

 

-

 

70,880

 

68,736

 

220,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

 

 

 

(71,177)

 

(10,378)

 

(81,555)

 

(74,657)

 

(152,625)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of profit of associates and joint venture

 

 

 

 

 

1,742

 

 

-

 

 

1,742

 

 

1,476

 

 

5,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

 

3

 

 

 

 

1,445

 

 

(10,378)

 

 

(8,933)

 

 

(4,445)

 

 

73,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

 

 

 

262

 

-

 

262

 

273

 

453

 

 

 

Finance expense

 

 

 

 

(4,078)

 

-

 

(4,078)

 

(4,042)

 

(7,820)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit before income tax

 

 

 

 

 

(2,371)

 

 

(10,378)

 

 

(12,749)

 

 

(8,214)

 

 

66,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax credit/(expense)

 

 

 

 

 

677

 

 

1,915

 

 

2,592

 

 

1,636

 

 

(8,372)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit attributable to equity shareholders

 

 

 

 

 

 

 

(1,694)

 

 

 

 

(8,463)

 

 

 

 

(10,157)

 

 

 

 

(6,578)

 

 

 

 

57,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months

 

 Six months

 

Year

 

 

 

 

 

 

 

 

 

 

ended

 

ended

 

ended

 

 

 

 

 

 

 

 

 

 

January

2017

 

January

2016

 

 July

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss)/earnings

per share                                          5

 

 

 

 

 

(8.09c)

 

(5.24c)

 

46.03c

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss)/earnings

per share                                          5  

 

 

 

 

 

(8.06c)

 

(5.24c)

 

45.85c

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                       

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Comprehensive Income

for the six months ended 31 January 2017

 

 

 Six months

 

 Six months

 

Year

 

ended

 

ended

 

ended

 

January

 

January

 

July

 

2017

 

2016

 

2016

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit for the period

(10,157)

 

(6,578)

 

57,801

 

 

 

 

 

 

Other comprehensive (expense)/income

 

 

 

 

 

Items that are not reclassified subsequently to the Group income statement:

 

 

 

 

 

Group/Associate defined benefit pension obligations

 

 

 

 

 

- remeasurements of Group's defined benefit pension schemes

(777)

 

(109)

 

(4,881)

- deferred tax effect of remeasurements

193

 

81

 

926

- share of remeasurements on associate's defined benefit pension schemes

 

(3,058)

 

 

(372)

 

 

(356)

- share of deferred tax effect of remeasurements- associates

551

 

74

 

71

 

 

 

 

 

 

Items that may be reclassified subsequently to the Group income statement:

 

 

 

 

 

Group foreign exchange translation details

 

 

 

 

 

- exchange difference on translation of foreign operations

(2,489)

 

(13,987)

 

(29,008)

 

 

 

 

 

 

Group/Associate cash flow hedges

 

 

 

 

 

- effective portion of changes in fair value of cash flow hedges

1,566

 

2,205

 

1,633

- fair value of cash flow hedges transferred to operating costs

(1,721)

 

(847)

 

(473)

- deferred tax effect of cash flow hedges

95

 

(356)

 

(243)

- share of associates and joint venture cash flow hedges

(1,372)

 

3,790

 

2,405

- deferred tax effect  of share of associates and joint venture cash flow hedges

 

171

 

 

(474)

 

 

(301)

 

 

 

 

 

 

 

Other comprehensive expense for the period, net of tax

(6,841)

 

(9,995)

 

(30,227)

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive (expense)/income for the period attributable to equity shareholders

 

(16,998)

 

 

(16,573)

 

 

27,574

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Financial Position

as at 31 January 2017

 

 

 

 

January

 

January

 

July

 

 

2017

 

2016

 

2016

 

Notes

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

7

103,151

 

108,178

 

102,796

Investment properties

 

9,675

 

7,575

 

9,675

Goodwill and intangible assets

8

188,973

 

181,557

 

192,696

Investments in associates and joint venture

9

33,092

 

38,087

 

39,008

Other financial assets

 

862

 

2,341

 

2,550

Derivative financial instruments

 

168

 

-

 

-

Deferred tax assets

 

7,132

 

4,391

 

7,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current assets

 

343,053

 

342,129

 

354,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Inventory

 

202,255

 

224,279

 

163,438

Trade and other receivables

 

254,212

 

256,671

 

430,026

Derivative financial instruments

 

1,077

 

2,145

 

1,337

Restricted cash

 

-

 

2,937

 

2,948

Cash and cash equivalents

 

74,499

 

66,659

 

168,199

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

532,043

 

552,691

 

765,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

875,096

 

894,820

 

1,120,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Financial Position

as at 31 January 2017

 

 

 

January

 

January

 

July

 

 

 

2017

 

2016

 

2016

 

Notes

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Called up share capital presented as equity

12

 

1,264

 

1,264

 

1,264

Share premium

 

 

160,399

 

160,399

 

160,399

Retained earnings and other reserves

 

 

78,346

 

77,448

 

117,639

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

240,009

 

239,111

 

279,302

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Interest-bearing borrowings

 

 

217,363

 

218,620

 

159,124

Deferred tax liabilities

 

 

18,597

 

18,037

 

19,109

Put option liability

 

 

7,998

 

16,691

 

10,358

Provision for liabilities

10

 

3,997

 

2,846

 

4,010

Post employment benefit obligations

 

 

7,575

 

3,411

 

7,713

Derivative financial instruments

 

 

100

 

1,407

 

628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current liabilities

 

 

255,630

 

261,012

 

200,942

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Interest-bearing borrowings

 

 

18,720

 

19,248

 

8,901

Trade and other payables

 

 

343,140

 

349,281

 

604,404

Corporation tax payable

 

 

8,343

 

17,830

 

16,140

Provision for liabilities

10

 

8,071

 

7,914

 

9,768

Derivative financial instruments

 

 

1,183

 

424

 

592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

379,457

 

394,697

 

639,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

635,087

 

655,709

 

840,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

 

875,096

 

894,820

 

1,120,049

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Changes in Equity

for the six months ended 31 January 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Cashflow

 

 

 

based

 

 

 

currency

 

 

 

 

 

 

Share

 

Share

 

Treasury

 

redemption

 

hedge

 

Revaluation

 

payment

 

Re-organisation

 

translation

 

Retained

 

 

 

 

capital

 

premium

 

shares

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

earnings

 

Total

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 August 2016

1,264

 

160,399

 

(8)

 

134

 

1,273

 

12,843

 

-

 

(196,884)

 

(27,402)

 

327,683

 

279,302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(10,157)

 

(10,157)

 

Other comprehensive expense for the period

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,261)

 

 

-

 

 

-

 

 

-

 

 

(2,489)

 

 

(3,091)

 

 

(6,841)

 

Share-based payment charge

-

 

-

 

-

 

-

 

-

 

-

 

121

 

-

 

-

 

-

 

121

 

Dividend paid to shareholders (Note 14)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(22,416)

 

(22,416)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2017

1,264

 

160,399

 

(8)

 

134

 

12

 

12,843

 

121

 

(196,884)

 

(29,891)

 

292,019

 

240,009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Changes in Equity

for the six months ended 31 January 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Cashflow

 

 

 

based

 

 

 

currency

 

 

 

 

 

 

Share

 

Share

 

Treasury

 

redemption

 

hedge

 

Revaluation

 

payment

 

Re-organisation

 

translation

 

Retained

 

 

 

 

capital

 

premium

 

shares

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

earnings

 

Total

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 August 2015

1,264

 

160,399

 

(12)

 

134

 

(1,748)

 

12,843

 

1,749

 

(196,884)

 

1,606

 

303,004

 

282,355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(6,578)

 

(6,578)

 

Other comprehensive income/(expense) for the period

 

-

 

 

-

 

 

-

 

 

-

 

 

4,318

 

 

-

 

 

-

 

 

-

 

 

(13,987)

 

 

(326)

 

 

(9,995)

 

Share-based payment credit

-

 

-

 

-

 

-

 

-

 

-

 

(300)

 

-

 

-

 

-

 

(300)

 

Dividend paid to shareholders (Note 14)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(26,371)

 

(26,371)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2016

1,264

 

160,399

 

(12)

 

134

 

2,570

 

12,843

 

1,449

 

(196,884)

 

(12,381)

 

269,729

 

239,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Cash Flows 

for the six months ended 31 January 2017

 

 

 

 Six months

 

 Six months

 

Year

 

ended

 

ended

 

ended

 

January 2017

 

January 2016

 

July 2016

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

(Loss)/profit before tax

(12,749)

 

(8,214)

 

66,173

Exceptional items

10,378

 

-

 

(4,955)

Finance income

(262)

 

(273)

 

(453)

Finance expense

4,078

 

4,042

 

7,820

Profit on disposal of property, plant and equipment

(132)

 

(16)

 

(143)

Share of profit of associates and joint venture

(1,742)

 

(1,476)

 

(5,621)

Depreciation of property, plant and equipment

3,378

 

3,248

 

7,073

Amortisation of intangible assets

3,597

 

5,368

 

6,800

Employee share-based payment charge/(credit)

121

 

(300)

 

(300)

Pension contributions in excess of service costs

(821)

 

(4,158)

 

(3,978)

Payment of exceptional rationalisaton costs

(8,331)

 

(7,256)

 

(7,202)

Payment of employment related incentive costs

-

 

(8,600)

 

(9,312)

Payment of exceptional acquisition costs

(275)

 

(658)

 

(1,392)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flow before changes in working capital

(2,760)

 

(18,293)

 

54,510

Increase in inventory

(40,980)

 

(55,622)

 

(3,610)

Decrease/(increase) in trade and other receivables

171,455

 

143,413

 

(60,368)

(Decrease)/increase in trade and other payables

(259,751)

 

(233,550)

 

43,328

 

 

 

 

 

 

 

 

 

 

 

 

Cash (absorbed)/generated from operating activities

(132,036)

 

(164,052)

 

33,860

Interest paid

(2,817)

 

(2,727)

 

(6,575)

Income tax paid

(5,222)

 

(1,714)

 

(11,635)

 

 

 

 

 

 

 

 

 

 

 

 

Cash (outflow)/inflow from operating activities

(140,075)

 

(168,493)

 

15,650

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Cash Flows

for the six months ended 31 January 2017

 

 

 Six months

 

Six months

 

Year

 

ended

 

ended

 

ended

 

January 2017

 

January 2016

 

July  2016

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Proceeds from sale of property, plant and equipment

225

 

169

 

1,133

Proceeds from sale of equity investment

-

 

-

 

1,051

Purchase of property, plant and equipment

(3,794)

 

(4,147)

 

(6,789)

Additions to intangible assets

(857)

 

(537)

 

(1,640)

Arising on acquisitions

(956)

 

(56,575)

 

(62,461)

Payment of put option liability

(1,746)

 

-

 

-

Payment of contingent acquisition consideration

(3,015)

 

-

 

(1,000)

Restricted cash

2,948

 

26,421

 

26,410

Investment in associates and joint venture

-

 

(172)

 

(164)

Dividends received from associates

3,697

 

2,936

 

2,942

 

 

 

 

 

 

 

 

 

 

 

 

Cash outflow from investing activities

(3,498)

 

(31,905)

 

(40,518)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Drawdown of bank loans

64,050

 

95,348

 

47,234

Bank overdraft arising on acquisition

-

 

(10,108)

 

(10,108)

Payment of dividends to equity shareholders (Note 14)

(22,416)

 

  (26,371)

 

(30,327)

Increase/(decrease) of finance lease obligations

67

 

114

 

(22)

 

 

 

 

 

 

 

 

 

 

 

 

Cash inflow from financing activities

41,701

 

58,983

 

6,777

 

 

 

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

(101,872)

 

(141,415)

 

(18,091)

 

 

 

 

 

 

Translation adjustment

(1,610)

 

(2,865)

 

(14,255)

 

 

 

 

 

 

Cash and cash equivalents at start of period

159,457

 

191,803

 

191,803

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period (Note 11)

55,975

 

47,523

 

159,457

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements

for the six months ended 31 January 2017

 

 

1    Basis of preparation

 

The Group condensed interim consolidated financial statements has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34), as endorsed by the EU. The condensed interim consolidated financial statements have been prepared as information for the shareholders and do not include all the information and disclosures required in the annual financial statements. They should be read in conjunction with the Group's annual financial statements in respect of the year ended 31 July 2016, which have been prepared in accordance with IFRSs. The financial statements for the year ended 31 July 2016 are available on the company's website www.originenterprises.com. Those financial statements contained an unqualified audit report.

 

The Goup condensed interim consolidated financial statements for the six months ended 31 January 2017 and the comparative figures for the six months ended 31 January 2016 are unaudited and have not been reviewed by the Auditors. The summary financial statements for the year ended 31 July 2016 represents an abbreviated version of the Group's full accounts for that year.

 

The Group condensed interim consolidated financial statements are presented in euro and rounded to the nearest thousand, which is the functional currency of the parent.

 

A comprehensive review of the Group's performance for the six months ended 31 January 2017 is included in the financial highlights section included on pages 5 to 10.  The group's business is seasonal and is heavily weighted towards the second half of the financial year.

 

 

2    Accounting policies

 

Except as described below, the Group interim financial statements have been prepared on the basis of the accounting policies as set out on pages 64 to 69 of the Group's Annual Report for the year ended 31 July 2016.

 

The following amendments, issued by the International Accounting Standards Board ('IASB') and the International Financial Reporting Interpretations Committee ('IFRIC'), are effective for the Group for the first time in the current financial period and where relevant have been adopted by the Group:

 

·      Annual improvements 2012-2014 cycle;

·      Amendment to IFRS 10 "Consolidated financial statements";

·      Amendment to IFRS 11 "Joint arrangements";

·      Amendment to IFRS 12 "Disclosure of interests in other entities";

·      Amendment to IAS 1 "Presentation of financial statements";

·      Amendment to  IAS 16 "Property, plant and equipment";

·      Amendment to IAS 27 "Separate financial statements";

·      Amendment to IAS 28 "Investment in associates";

·      Amendment to IAS 38 "Intangible assets".

 

The above amendments are effective for accounting periods beginning on or after 1 January 2016.

 

Adoption of the standards above has had no significant impact on the results or financial position of the Group during the period.

 

The Group has not applied early adoption of any standards for which the effective date is not yet required.

3     Segment information

 

IFRS 8, 'Operating Segments', requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the Chief Operating Decision Maker ('CODM') in order to allocate resources to the segments and to assess their performance. Two operating segments have been identified: Agri-Services and Associates and Joint Venture.

 

Origin's Agri-Services segment comprises integrated agronomy services and agri-inputs.  The Associates and Joint Venture operating segment is comprised of the feed ingredient businesses.

               

Information regarding the results of each reportable segment is included below. Performance is measured based on segment operating profit as included in the internal management reports that are reviewed by the Group's CODM, being the Origin Executive Directors. Segment operating profit is used to measure performance, as this information is the most relevant in evaluating the results of the Group's segments.

 

 

(i)

Segment revenue and result

Agri-Services

 

Associates & Joint Venture

 

Total Group

 

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

31/01/17

 

31/01/16

 

31/01/17

 

31/01/16

 

31/01/17

 

31/01/16

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

564,436

 

507,213

 

142,786

 

154,665

 

707,222

 

661,878

 

Less revenue from associates and joint venture

-

 

-

 

(142,786)

 

(154,665)

 

(142,786)

 

(154,665)

 

 

Revenue

 

564,436

 

 

507,213

 

 

-

 

 

-

 

 

564,436

 

 

507,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment result

 

2,010

 

 

(1,790)

 

 

1,742

 

 

1,476

 

 

3,752

 

 

(314)

 

                                        

 

 

 

 

 

 

 

 

 

 

 

 

Amortisation of non-ERP intangible assets

 

 

 

 

 

 

 

 

(2,307)

 

(4,131)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating profit/(loss) before exceptional items

 

 

 

 

 

 

 

 

1,445

 

(4,445)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exceptional loss

 

 

 

 

 

 

 

 

(10,378)

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

 

 

 

 

 

 

(8,933)

 

(4,445)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(ii)  Segment earnings before financing costs and tax is reconciled to reported loss before tax and loss after tax as follows:

 

 

Six months

 

Six months

 

ended

 

ended

 

31/01/17

 

31/01/16

 

€'000

 

€'000

 

 

 

 

Segment earnings before financing cost and tax

(8,933)

 

(4,445)

Finance income

262

 

273

Finance expense

(4,078)

 

(4,042)

 

 

 

 

Reported loss before tax

(12,749)

 

(8,214)

 

 

 

 

Income tax credit

2,592

 

1,636

 

 

 

 

Reported loss after tax

(10,157)

 

(6,578)

 

 

 

(iii) Segment assets

Agri-Services

 

Associates & Joint Venture

 

Total Group

 

 

Six months

 

Six months

 

Six months

 

Six  months

 

Six months

 

Six months

 

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

31/01/17

 

31/01/16

 

31/01/17

 

31/01/16

 

31/01/17

 

31/01/16

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment assets excluding investment in associates

 

 

 

 

 

 

 

 

 

 

 

 

and joint venture and investment properties

(including other financial assets)

 

748,895

 

 

772,404

 

 

-

 

 

-

 

 

748,895

 

 

772,404

 

 

Investment in associates and joint venture

 

 

 

 

 

 

 

 

 

 

 

 

(including other financial assets)

-

 

-

 

33,650

 

38,709

 

33,650

 

38,709

 

 

Segment assets

 

748,895

 

 

772,404

 

 

33,650

 

 

38,709

 

 

782,545

 

 

811,113

 

 

 

 

 

 

 

 

 

 

 

 

   Reconciliation to total assets as reported in Condensed Interim Consolidated Statement of Financial Position

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

74,499

 

66,659

 

Restricted cash

 

 

 

 

 

 

 

 

-

 

2,937

 

Investment properties

 

 

 

 

 

 

 

 

9,675

 

7,575

 

Derivative financial instruments

 

 

 

 

 

 

 

 

1,245

 

2,145

 

Deferred tax assets

 

 

 

 

 

 

 

 

7,132

 

4,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets as reported in Condensed Interim

Consolidated Statement of Financial Position

 

 

 

 

 

 

 

 

 

875,096

 

 

894,820

 

 

 

 

 

 

 

 

 

 

 

 

 

                             

 

(iv) Segment liabilities

Agri-Services

 

Associates & Joint Venture

 

Total Group

 

 

Six months

 

Six months

 

Six months

 

Six  months

 

Six

 months

 

Six

months

 

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

31/01/17

 

31/01/16

 

31/01/17

 

31/01/16

 

31/01/17

 

31/01/16

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

Segment liabilities

 

370,781

 

 

380,143

 

 

-

 

 

-

 

 

370,781

 

 

380,143

 

 

 

 

 

 

 

 

 

 

 

   Reconciliation to total liabilities as reported in Condensed Interim Consolidated Statement of Financial Position

 

Interest-bearing loans and liabilities

 

 

 

 

 

 

 

 

236,083

 

237,868

 

Derivative financial instruments

 

 

 

 

 

 

 

 

1,283

 

1,831

 

Current and deferred tax liabilities

 

 

 

 

 

 

 

 

26,940

 

35,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities as reported in Condensed Interim

Consolidated Statement of Financial Position

 

 

 

 

 

 

 

 

 

635,087

 

 

655,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                             

 

 

4        Exceptional items          

 

Exceptional items are those that, in management's judgement, should be disclosed separately by virtue of their nature or amount. Such items are included within the consolidated income statement caption to which they relate. The following exceptional items arose in the period:

 

 

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2017

 

2016

 

€'000

 

€'000

 

 

 

 

Rationalisation and other costs (i)

8,115

 

-

Transaction costs (ii)

348

 

-

 

 

 

 

Total exceptional charge, net of tax

8,463

 

-

 

 

 

(i)          Rationalisation costs primarily comprise termination payments arising from a restructuring of Agri-Services in the UK. The tax  impact of this exceptional item in the current period is a tax credit of €1.9 million.

 

(ii)         Transaction costs principally consist of acquisition related costs incurred.

 

5      (Loss)/earnings per share

 

 

Basic loss per share

 

 

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2017

 

2016

 

€'000

 

€'000

 

 

 

 

        Loss for the financial period attributable to equity shareholders

(10,157)

 

(6,578)

 

 

 

 

 

'000

 

'000

 

 

 

 

        Weighted average number of ordinary shares for the period

125,578

 

125,578

 

 

 

 

 

Cent

 

Cent

 

 

 

 

        Basic loss per share

(8.09)

 

(5.24)

                                                                                                                                                                                       

       

 

 

 

        Diluted loss per share

       

 

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2017

 

2016

 

€'000

 

€'000

 

 

 

 

        Loss for the financial period attributable to equity shareholders

(10,157)

 

(6,578)

 

 

 

 

 

'000

 

'000

 

 

 

 

        Weighted average number of ordinary shares used in basic calculation

125,578

 

125,578

        Impact of SAYE scheme

495

 

-

        Weighted average number of ordinary shares (diluted) for the period

126,073

 

125,578

 

 

 

 

 

Cent

 

Cent

 

 

 

 

        Diluted loss per share

(8.06)

 

(5.24)

 

         Adjusted basic earnings/(loss) per share

 

 

 

 

 

 

 

Six months

 

Six months

 

 

 

 

 

 

ended

 

ended

 

 

 

 

 

 

January

 

January

 

 

 

 

 

 

2017

 

2016

 

 

 

 

 

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the financial period attributable to equity shareholders

 

 

 

 

(10,157)

 

(6,578)

 

Amortisation of non-ERP related intangible assets

 

 

 

 

2,307

 

4,131

 

Tax on amortisation of non-ERP related intangible assets

 

 

 

 

(304)

 

(662)

 

Exceptional items, net of tax

 

 

 

 

8,463

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic earnings/(loss)

 

 

 

 

309

 

(3,109)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cent

 

Cent

 

Adjusted basic earnings/(loss) per share

 

 

 

 

0.25

 

(2.47)

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings/(loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total adjusted basic earnings/(loss) - as above

 

 

 

 

309

 

(3,109)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cent

 

Cent

 

Total adjusted diluted earnings/(loss) per share

 

 

 

 

0.25

 

(2.47)

 

 

 

 

 

 

 

 

 

 

The calculation of basic adjusted earnings/(loss) per share is based on the weighted average number of shares in issue during the period of 125,578,447 (31 January 2016: 125,578,447).  The weighted average number of shares used in the calculation of adjusted diluted earnings/(loss) per share is 126,073,154 (31 January 2016: 125,578,447).

 

6      Condensed Interim Consolidated Income Statements for the six months ended 31 January 2016 and year ended 31 July 2016

 

        An analysis of the Condensed Interim Consolidated Income Statement (including exceptional items) for the six months ended 31 January 2016 and year ended 31 July 2016 is set out below.

 

 

        Six months ended 31 January 2016

 

 

 

 

Six months

 

 

 

 

 

 

 

 

ended

 

Six months

 

Six months

 

 

 

 

January

 

ended

 

ended

 

 

 

 

2016

 

January

 

January

 

 

 

 

Pre-

 

2016

 

2016

 

 

 

 

Exceptional

 

Exceptional

 

Total

 

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

507,213

 

-

 

507,213

 

 

Cost of sales

 

(438,477)

 

-

 

(438,477)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

68,736

 

-

 

68,736

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

(74,657)

 

-

 

(74,657)

 

 

Share of profit of associates and joint venture

 

 

1,476

 

 

-

 

 

1,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(4,445)

 

-

 

(4,445)

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

273

 

-

 

273

 

 

Finance expense

 

(4,042)

 

-

 

(4,042)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax

 

(8,214)

 

-

 

(8,214)

 

 

 

 

 

 

 

 

 

 

 

Income tax credit

 

1,636

 

-

 

1,636

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

(6,578)

 

 

-

 

 

(6,578)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 31 July 2016

 

 

 

 

Year

 

 

 

 

 

 

 

 

ended

 

Year

 

Year

 

 

 

 

July

 

ended

 

ended

 

 

 

 

2016

 

July

 

July

 

 

 

 

Pre-

 

2016

 

2016

 

 

 

 

Exceptional

 

Exceptional

 

Total

 

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

1,521,256

 

-

 

1,521,256

 

 

Cost of sales

 

(1,300,712)

 

-

 

(1,300,712)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

220,544

 

-

 

220,544

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

(157,580)

 

4,955

 

(152,625)

 

 

Share of profit of associates and joint venture

 

 

5,621

 

 

-

 

 

5,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

68,585

 

4,955

 

73,540

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

453

 

-

 

453

 

 

Finance expense

 

(7,820)

 

-

 

(7,820)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before income tax

 

61,218

 

4,955

 

66,173

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(8,151)

 

(221)

 

(8,372)

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

 

 

53,067

 

 

4,734

 

 

57,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7      Property, plant and equipment

 

 

January

 

July

 

2017

 

2016

 

€'000

 

€'000

 

 

 

 

Net book value

 

 

 

At beginning of period

102,796

 

97,889

Arising on acquisitions (Note 13)

-

 

14,804

Additions

4,452

 

6,780

Disposals

(93)

 

(990)

Depreciation charge

(3,378)

 

(7,073)

Translation adjustments

(626)

 

(8,614)

 

 

 

 

 

 

 

 

At end of period

103,151

 

102,796

 

 

 

 

 

 

 

 

 

       

8      Goodwill and intangible assets

 

 

January

 

July

 

2017

 

2016

 

€'000

 

€'000

 

 

 

 

 

 

 

 

Net book value

 

 

 

At beginning of period

192,696

 

161,401

Arising on acquisitions (Note 13)

-

 

51,216

Additions

857

 

7,859

Amortisation of non-ERP intangible assets

(2,307)

 

(4,294)

ERP intangible amortisation

(1,290)

 

(2,506)

Translation adjustments

(983)

 

(20,980)

 

 

 

 

 

 

 

 

188,973

 

192,696

 

 

 

 

 

 

        Included in the total goodwill and intangible assets above is goodwill of €118,063,000 (July 2016: €111,274,000). There have been no indicators of impairment in the first half of the year therefore a full assessment of the carrying value of goodwill and intangibles will be carried out in the second half of the year.

9      Investments in associates and joint venture

 

 

              January

 

 

July

 

              2017

 

              2016

 

             €'000

 

             €'000

 

 

 

 

At beginning of period

39,008

 

38,537

Share of profits after tax

1,742

 

5,621

Dividends received

(3,697)

 

(2,942)

Share of other comprehensive(expense)/ income

(3,708)

 

1,819

Translation adjustments

(253)

 

(4,027)

 

 

 

 

 

 

 

 

At end of period

33,092

 

39,008

 

 

 

 

 

 

 

 

 

 

 

 

 

10     Provision for liabilities 

 

        The estimate of provisions is a key judgement in the preparation of the financial statements.

 

 

 

 

January

 

 

July

 

 

 

              2017

 

              2016

 

 

 

             €'000

 

             €'000

 

 

 

 

 

 

 

 

At beginning of period

13,778

 

11,470

 

 

Arising on acquisition

-

 

7,585

 

 

Provided in period

9,677

 

4,253

 

 

Paid in period

(11,346)

 

(8,229)

 

 

Released in period

-

 

(210)

 

 

Translation adjustments

(41)

 

(1,091)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At end of period

12,068

 

13,778

 

 

 

 

 

 

 

 

 

 

 

                 

 

          Provisions for liabilities relate to various operating and employment related costs and contingent acquisition consideration that arose on              acquisitions during the prior year ended 31 July 2016. 

11

Analysis of net debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 July

 

 

 

 

Non-cash

 

 

Translation

 

  

31 January

 

 

 

2016

 

Cash flow

 

movements

 

adjustment

 

2017

 

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

168,199

 

(92,155)

 

-

 

(1,545)

 

74,499

 

 

Overdraft

(8,742)

 

(9,717)

 

-

 

(65)

 

(18,524)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

159,457

 

(101,872)

 

-

 

(1,610)

 

55,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease obligations

(358)

 

(67)

 

-

 

10

 

(415)

 

 

Loans

(158,925)

 

(64,050)

 

(351)

 

6,182

 

(217,144)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash/(debt)

 

 

 

174

 

 

(165,989)

 

 

(351)

 

 

4,582

 

 

(161,584)

 

 

Restricted cash

2,948

 

(2,948)

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash/(debt) including restricted cash

 

3,122

 

 

(168,937)

 

 

(351)

 

 

4,582

 

 

(161,584)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         

          The loans included above are unsecured and the facility extends to May 2020.

 

 

12

   Share capital

January

 

July

 

 

2017

 

2016

 

 

€'000

 

€'000

 

 

 

 

 

 

Authorised

 

 

 

 

250,000,000 ordinary shares of €0.01 each (i)

2,500

 

2,500

 

 

 

 

 

 

Allotted, called up and fully paid

 

 

 

 

126,378,777 ordinary shares of €0.01 each (i)

1,264

 

1,264

 

(i)     Ordinary shareholders are entitled to dividends as declared and each ordinary share carries equal voting rights at meetings of the Company.

13     Acquisition of subsidiary undertakings

 

         During the prior year the Group completed a number of acquisitions in Romania and Poland, with additional bolt-on acquisitions in the United Kingdom.  These acquisitions improved the strategic position of the Group's integrated agronomy services business and further the Group's focus on building new capability, systems and process development along with organisational simplification.

 

         Details of the acquisitions are as follows:

 

(i)             On 17 September 2015 the Group completed the acquisition of 100 per cent of Redoxim SRL.  Based in Romania, Redoxim SRL is a leading provider of agronomy services, macro and micro inputs to arable, vegetable and horticulture growers.

 

(ii)             On 23 November 2015 the Group completed the acquisition of 100 per cent of the Kazgod Group.  Based in Poland, the Kazgod Group is a leading provider of agronomy services, inputs, crop marketing solutions as well as a manufacturer of micro nutrition applications.

 

(iii)            On 16 December 2015 the Group completed the acquisition of 100 per cent of Comfert SRL.  Based in Romania, Comfert SRL is a leading provider of agronomy services, integrated inputs and crop marketing support to arable and vegetable growers.

 

(iv)           On 20 August 2015 the Group completed the acquisition of 100 per cent of ReSo Seeds Limited.  Based in the United Kingdom, ReSo Seeds Limited is a leading mobile seed cleaning and processing specialist company.

 

(v)            On 1 July 2016 the Group completed the acquisition of 100 per cent of Headland Amenity Limited.  Based in the United Kingdom, Headland Amenity Limited is a technically advanced supplier of products and synergistic programmes to improve sports turf surfaces.

 

 

Subsequent to the finalisation of the consolidated financial statements that were issued on 27 September 2016, certain adjustments were identified to the initial fair value accounting of acquisitions that were completed during the twelve months ended 31 July 2016. In line with Group policy, any adjustments to the initial accounting for a business combination are recognised within twelve months of the acquisition date and are effected as if they were identified at the acquisition date.

 

These adjustments have been included in the comparative year end 31 July 2016 numbers presented in the Condensed Interim Consolidated Statement of Financial Position and the related notes therein and represent adjustments of the goodwill and trade and other payables balances.

Details of the net assets acquired and goodwill (excluding debt acquired) arising from the business combinations are as follows:

 

 

Fair

 

 

value

Assets

 

€'000

Non-current

 

 

Property, plant and equipment

 

14,804

Intangible assets

 

17,131

Other financial assets

 

1,656

Deferred tax asset

 

1,777

 

 

 

Total non-current assets

 

35,368

 

 

 

Current assets

 

 

Inventory

 

23,682

Trade receivables

 

73,627

Other receivables

 

9,120

 

 

 

Total current assets

 

106,429

 

 

 

Liabilities

 

 

Trade and other payables

 

(95,457)

Finance lease obligation

 

(250)

Corporation tax

 

(752)

Deferred tax liability

 

(2,650)

 

 

 

Total liabilities

 

(99,109)

 

 

 

Total identifiable net assets at fair value

 

42,688

Goodwill arising on acquisition

 

34,085

 

Total net assets acquired (excluding debt acquired)

 

 

76,773

 

 

 

Consideration satisfied by:

 

 

Cash consideration

 

45,605

Cash acquired

 

(5,181)

Net cash outflow

 

40,424

 

 

 

Deferred consideration

 

3,472

Contingent consideration

 

4,113

 

 

 

Consideration

 

48,009

Debt acquired

 

28,764

 

 

 

 

 

 

Consideration plus debt acquired

 

76,773

 

14       Dividends

 

On 18 December 2016 a final dividend of 17.85 cent per ordinary share was paid in respect of the year ended 31 July 2016 which when combined with the interim dividend of 3.15 cent per ordinary share brings the total dividend for the year ended 31 July 2016 to 21 cent per ordinary share.

 

An interim dividend of 3.15 cent (2016: 3.15 cent) per ordinary share will be paid on 14 April 2017 to shareholders on the register on 31 March 2017.  These condensed interim consolidated financial statements do not reflect this dividend payable.

 

15       Taxation

 

The taxation expense for the interim period is an estimate based on the expected full year effective tax rate on full year profits.

 

16      Contingent liabilities

 

The Group is not aware of any major changes with regard to contingent liabilities in comparison with the situation as of 31 July 2016.

 

17      Financial commitments  

 

The Group has a financial commitment of €8.8 million attributable to a strategic partnership with University College Dublin ('UCD'). The commitment is over a five year period.

 

18      Related party transactions

 

 Related party transactions occurring in the period were similar in nature to those described in the 2016 Annual Report.

 

19      Release of half yearly condensed interim consolidated financial statements

 

The Group condensed interim consolidated financial information was approved for release by the Board on 8 March 2017.

 

20      Distribution of Interim Report

 

This interim report is available on the Group's website (www.originenterprises.com). A printed copy is available to the public at the Company's registered office.

 

21      Subsequent events

 

On 7 March 2017 Origin announced it had reached agreement to acquire the fertiliser activities and certain assets of Bunn Fertilisers Limited ('the transaction). Under the terms of the transaction, Origin will acquire the business on a debt free and cash free basis for a consideration of £14.2 million payable in cash on completion. The total enterprise value of the transaction inclusive of estimated average working capital is expected to be £18.2 million. Completion of the transaction is subject to a number of conditions including obtaining clearance from the Competition and Markets Authority in the United Kingdom.

 

On 9 March 2017 Origin announced that it had acquired the digital agricultural services group, the Resterra Group ('Resterra').  Under the terms of the transaction Origin has acquired 100 percent of Resterra, on a debt free cash free basis, for consideration of £11.4 million. Additional contingent deferred consideration of up to £4.8 million will be payable based upon the achievement of specific profit targets.

 

 

 

 

 

 

 

 


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Interim Results Statement - RNS