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Origin Enterprises Plc   -  OGN   

Interim Results Statement

Released 07:00 06-Mar-2019

RNS Number : 9441R
Origin Enterprises Plc
06 March 2019
 

 

 

Origin Enterprises plc

INTERIM RESULTS STATEMENT

Positive start to trading in first half

 

6 March 2019

 

Origin Enterprises plc ('Origin' or 'the Group'), the Agri-Services group, today announces its interim results for the half year ended 31 January 2019.

 

Highlights

·    Group revenue up 19.5% to €701.6 million (H1 2018: €586.9 million), driven by increased agronomy services revenue and crop input volumes, increased fertiliser prices and the Fortgreen acquisition in Latin America

·    Positive performance in the first half of the year with operating profit of €9.1 million (H1 2018: €2.3 million)

·    Good first-time contribution, as guided, from the Fortgreen acquisition in Latin America, with an operating profit of €5.5 million

·    Underlying operating profit increase of €1.0 million reflecting favourable early season demand in Ireland and the UK

·    Good progress achieved in digital agronomy services enablement.  Over 800,000 hectares on-boarded on Contour digital platform by the end of the period 

·    Increase in net debt to €238.8 million (H1 2018: €171.4 million), following acquisition activity and increased investment in working capital

·    Interim dividend of 3.15 cent per share (H1 2018: 3.15 cent per share)

 

 

Results Summary

 

31 Jan 2019

€'000

 

31 Jan 2018

€'000

 

Change

€'000

Constant

Currency

   €'000

 

 

Group revenue

 

701,551

 

586,909

 

114,642

 

116,311

 

Operating profit1

9,071

2,263

6,808

6,751

 

Associates and joint venture2

1,809

1,707

102

97

 

Total Group operating profit1

10,880

3,970

6,910

6,848

 

Finance cost, net

(5,881)

(4,001)

(1,880)

(1,886)

 

Profit/(loss) before tax1

4,999

(31)

5,030

4,962

 

Adjusted diluted earnings per share (cent)3

3.61

0.27

3.34

3.30

 

Group net debt    

238,818

171,378

(67,440)

 

 

Interim dividend per ordinary share (cent)

3.15

3.15

-

 

 

 

 

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

2            Profit after interest and tax

3            Before amortisation of non-ERP intangible assets, net of related deferred tax (2019: €3.4 million, 2018: €2.4 million) and exceptional items, net of tax (2019: €0.7 million, 2018: €Nil)

 

 

Origin Enterprises plc

 

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

 

"Origin has achieved a good first half result, recording an operating profit of €9.1 million, up from €2.3 million in the first half of 2018.  The performance reflects the benefit of favourable early season demand for agronomy services and crop inputs, together with a strong first-time contribution from our Latin American segment.  Our investment in Latin America underlines the Group's ambition to pursue meaningful geographical diversification and seasonality balance in attractive growth markets. 

 

Looking ahead, the autumn and winter cropping profile established to date provides a solid foundation for the seasonally more important second half.  A full year outlook will be provided at the time of the update on third quarter trading on 19 June 2019."

 

 

 

ENDS

Capital Markets Day

 

Origin will host a capital markets day for analysts and institutional investors in London on Wednesday 8 May 2019. 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 (Irish/UK time) 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)1 431 9615

 

UK/International:

Tel: +44 (0)844 571 8892

 

 

 

 

Confirmation Code:

1371908

 

 

 

Replay

 

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

 

Replay Access Code:

 

1371908

 

 

 

Replay Access Numbers:

 

 

Dublin:

 

Tel: +353 (0)1 553 8777

UK/International:

 

Tel: +44 (0)844 571 8951

 

 

Enquiries

 

Origin Enterprises plc

 

 

Sean Coyle

 

 

Chief Financial Officer

Tel:

+353 (0)1 563 4959

 

 

 

Brendan Corcoran

 

 

Head of Investor Relations and
Group Planning

 

Tel:

 

+353 (0)1 563 4900

 

 

 

Goodbody (Euronext Growth (Dublin) Adviser)

 

 

Siobhan Wall

Tel:

+353 (0)1 641 6019

 

 

 

Davy (Nominated Adviser)

 

 

Anthony Farrell

Tel:

+353 (0)1 614 9993

 

 

 

Numis Securities (Stockbroker)

 

 

Stuart Skinner

Tel:

+44 (0)20 7260 1314

 

 

 

Powerscourt (Financial PR Advisers)

 

 

Jack Hickey / Eavan Gannon (Ireland)

Tel:

+353 (0)83 448 8339

Rob Greening / Jana Tsiligiannis (UK)

Tel:

+44 (0)207 250 1446

 

 

About Origin Enterprises plc

 

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

 

Euronext Growth (Dublin) ticker symbol:          OIZ

AIM ticker symbol:                                            OGN

Website:                                                           www.originenterprises.com

INTERIM RESULTS STATEMENT

 

Financial Review - Summary

 

 

6 months ended

31 Jan 2019

€'000

6 months ended

31 Jan 2018

€'000

 

 

 

Group revenue

701,551

586,909

Operating profit1

9,071

2,263

Associates and joint venture, net2

1,809

1,707

Group operating profit1

10,880

3,970

Finance cost, net

(5,881)

(4,001)

Pre-tax profit/(loss)

4,999

(31)

Income tax (charge)/credit

(393)

366

Adjusted net profit

4,606

335

 

 

 

Adjusted diluted earnings per share (cent)3

3.61

0.27

 

 

 

 

 

 

Adjusted net profit reconciliation

 

 

Reported net profit/(loss)

441

(2,024)

Amortisation of non-ERP intangible assets

4,265

2,726

Tax on amortisation of non-ERP related intangible assets

(833)

(367)

Exceptional items, net of tax

733

       - 

Adjusted net profit

4,606

   335

 

 

 

Adjusted diluted earnings per share (cent)3

3.61

0.27

 

 

Origin delivered adjusted diluted earnings per share3 for the period of 3.61 cent compared to adjusted diluted earnings per share of 0.27 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 0.47 cent. 

 

 

Group revenue

 

Group revenue was €701.6 million compared to €586.9 million in the corresponding period last year, an increase of 19.5%.  On an underlying basis at constant currency, revenues increased by €79.4 million (13.5%), reflecting increased agronomy service revenue and crop input volumes in addition to increased fertiliser prices.

 

Underlying growth in agronomy services and crop input volumes, excluding crop marketing, was 9.3% in the period compared to the corresponding period last year.

 

 

Operating profit1

 

Operating profit1 from the Agri-Services business was €9.1 million compared to a profit of €2.3 million in the corresponding period last year.  On an underlying basis, at constant currency, the increase year-on-year was €1.0 million.  Acquisitions contributed €5.8 million to operating profit, primarily due to a strong first-time contribution from the Group's Latin American division.

 

 

Associates and joint venture2

 

Origin's share of the profit after interest and taxation from associates and joint venture amounted to €1.8 million, a 6.0% increase on the prior year.

 

 

Net debt and financing costs

 

The Group's financial position remains strong.

 

Average net debt amounted to €277.1 million compared to €222.0 million in the prior year.  Net debt at 31 January 2019 was €238.8 million compared with €171.4 million at 31 January 2018, and is 2.57 times EBITDA4 for the twelve months to 31 January 2019.  The average and period end net debt increase is principally attributable to the acquisition and working capital investment relating to the Brazil-based Fortgreen business, some build up of inventories in our UK businesses as a contingency against the uncertain outcome regarding Brexit and an increased investment in working capital in Continental Europe. Net finance costs amounted to €5.9 million compared to €4.0 million in the corresponding period last year.

 

At period end our key banking covenants are as follows:

 

 

Banking Covenant

2019

Times

2018

Times

 

 

 

 

 

 

 

 

Net debt to EBITDA

Maximum 3.5

2.57

2.17

 

 

 

 

EBITDA to net interest

Minimum 3.0

9.25

11.24

 

 

Working capital

 

Following the seasonal investment in working capital in the period, the net cash outflow from operating activities was €134.1 million (H1 2018: €97.5 million) and there was an increase of €137.5 million in working capital (H1 2018: €92.6 million).  The year-on-year net working capital outflow reflects planned inventory build in our UK businesses as a contingency against uncertain Brexit outcomes and a short-term increase in working capital investment in Continental Europe primarily driven by the later collection of receivables due to extended logistical bottlenecks impacting the timing of farmer grain sales.  Additional factors impacting working capital include the Fortgreen acquisition in Latin America and an overall increase in Group revenue.  We expect the increased level of working capital investment to unwind over the coming months.

 

 

Dividend

 

An interim dividend of 3.15 cent per share will be paid on 12 April 2019 to shareholders on the register on 29 March 2019.

 

 

1            Operating profit and Group operating profit are stated before amortisation of non-ERP intangible assets and exceptional items

2            Profit after interest and tax

3            Before amortisation of non-ERP intangible assets, net of related deferred tax (2019: €3.4 million, 2018: €2.4 million) and exceptional items, net of tax (2019: €0.7 million, 2018: €Nil)

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

Review of Operations

 

Group Overview

 

 

 

 

Change on prior period

 

 

2019

€m

 

2018

€m

 

Change

€m

 

Underlying4

€m

Constant Currency5 €m

 

 

 

 

 

 

 

Revenue

701.6

586.9

114.7

79.4

116.3

Operating profit1

9.1

2.3

6.8

1.0

6.8

 

 

 

 

 

 

Associates and joint venture2

1.8

1.7

0.1

0.1

0.1

 

 

 

 

 

 

Adjusted diluted EPS (cent)3

3.61

0.27

3.34

0.47

3.30

 

 

 

 

 

 

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

2 Profit after interest and tax

3 Before amortisation of non-ERP intangible assets, net of related deferred tax (2019: €3.4 million, 2018: €2.4 million) and exceptional items, net of tax (2019: €0.7 million, 2018: €Nil)

4 Excluding currency movements and the impact of acquisitions

5 Excluding currency movements

                 

 

Origin has delivered a strong financial and operating performance in the period with growth in Group revenue, operating profit and adjusted fully diluted earnings per share of €114.7 million, €6.8 million and 3.34 cent, respectively.  Performance in the period benefited from underlying growth in demand for agronomy services and crop inputs together with the impact of acquisitions in the period, contributing €5.8 million to operating profit.

 

 

Ireland and the United Kingdom

 

 

 

 

Change on prior period

 

 

2019

€m

 

2018

€m

 

Change

€m

 

Underlying3

€m

Constant Currency4 €m

 

 

 

 

 

 

 

Revenue

433.9

377.5

56.4

55.5

55.6

Operating profit1

2.8

1.2

1.6

1.6

1.6

 

 

 

 

 

 

Associates and joint venture2

1.8

1.7

0.1

0.1

0.1

 

 

 

 

 

 

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

2 Profit after interest and tax

3  Excluding currency movements and the impact of acquisitions

4 Excluding currency movements

                 

  

 

Ireland and the United Kingdom recorded a very satisfactory performance in the seasonally quiet first half.

 

Higher revenues and margins in the period largely reflected strong performances in Business-to-Business Agri-Inputs.  On an underlying basis at constant currency there was a €1.6 million increase in operating profit. Underlying agronomy service and crop input volume growth was 12.4% in the period.

 

In December 2018 the Group acquired a small UK based business, Symbio, which specialises in biological based crop technologies with applications in the Amenity and the broader Integrated Agronomy channels.

 

 

Integrated On-Farm Agronomy Services

 

Integrated Agronomy and On-Farm Services achieved a good performance in the first half supported by higher agronomy service revenues and crop input volumes.  An exceptionally mild and largely settled weather pattern for the period supported an extended autumn and winter crop planting season resulting in robust activity levels on-farm.  The favourable volume momentum in the period reflected, in part, early procurement planning by growers and farmers due to the current lack of certainty regarding the nature of the UK's departure from the European Union on 29 March 2019.  

 

Total autumn and winter plantings for the principal combinable crops are estimated to be 3.2% above last year at 2.8 million hectares with an increase in the area of winter wheat of 3.7% to 1.83 million hectares, more than offsetting a reduction in the area for oilseed rape by 4.4% to 0.6 million hectares.  Total autumn, winter and spring plantings for the 2019 growing season are forecasted to be marginally ahead of last year at 4.5 million hectares.

 

 

Digital Agricultural Services

 

Digital Agricultural Services delivered a strong operational performance in the period, with focus on product adoption and the implementation of extended application functionality covering agile decision support and new crop disease risk models.  The roll out of Contour, the Group's proprietary digital platform for agronomists and farmers, continued at pace with over 800,000 hectares on-boarded at the end of the period.

 

We remain focused on execution and helping farmers and growers realise the practical on-farm benefits of these new data and digitally enabled tools, increasing customer loyalty, and supporting our value-added distribution businesses. 

 

 

Business-to-Business Agri-Inputs

 

Business-to-Business Agri-Inputs recorded a good result in the period, with a strong performance from Fertiliser and Feed Ingredients set against a lower underlying contribution from Amenity. 

 

 

Fertiliser

 

Fertiliser has performed strongly in the period, recording higher volumes and positive margin development.  This performance has largely been driven by a stable pricing environment and favourable weather conditions which have provided confidence to primary producers to secure a portion of their nutrition requirements in advance of the 2019 spring season, resulting in the earlier timing of sales.  Volumes for the period have also been positively impacted by the extended 2018 season due to catch up activity on-farm with producers remediating the impact of poor growing conditions in spring and summer 2018.  Sales margins continue to be positively supported by growth in sales of differentiated fertiliser and bespoke nutrition applications.

 

 

Amenity

 

Amenity delivered a satisfactory result, despite lower demand, which reflected higher levels of carried forward customer stockholding following unseasonal weather conditions experienced in 2018 which adversely impacted input and service application in that period.  Volume development is expected to return to normal levels in the main spring and summer application periods in 2019, however total volumes are expected to be lower for the year as a whole.

 

 

Feed Ingredients

 

Feed Ingredients achieved a good result in the period with performance supported by the continuation of strong spot demand in the first half following poor grass growing conditions in 2018.  Demand is expected to normalise in the second half of the financial year against the heightened levels experienced in the prior year.

 

The Group's animal feed manufacturing associate, John Thompson & Sons Limited, in which the Group has a 50% shareholding, delivered a satisfactory performance in the period.  

 

 

 

 

Continental Europe1

 

 

 

 

Change on prior period

 

 

2019

€m

 

2018

€m

 

Change

€m

 

Underlying3

€m

Constant Currency4 €m

 

 

 

 

 

 

 

Revenue

147.9

121.6

26.3

12.2

27.6

Operating profit2

0.6

0.9

(0.3)

(0.7)

(0.4)

 

 

 

 

 

 

Excluding crop marketing. While crop marketing has a significant impact on revenue, its impact on operating profit is insignificant.  An analysis of revenues, profits and margins attributable to agronomy services and inputs more accurately reflects the underlying drivers of business performance

Before amortisation of non-ERP intangible assets and exceptional items

3  Excluding currency movements and the impact of acquisitions

4 Excluding currency movements

                 

 

Continental Europe recorded a €0.7 million reduction in underlying operating profit at constant currency in the seasonally less significant first half.  The performance reflects challenging market conditions and a particularly demanding operating environment for farmers.

 

Service providers are responding to the effects of the delayed spring season and prolonged dry conditions in 2018 which limited harvest outcomes and early crop establishment in the period.  The resulting impacts on primary producer economics and on-farm cash flow drove lower agronomy service and crop input application in the period.

 

Underlying business volumes reduced by 0.3% compared with the corresponding period last year.  Value added technologies maintained good growth momentum throughout the region and continued to generate opportunities for the Group's agronomy portfolios.

 

 

Belgium

 

Belgium delivered a very satisfactory performance in the period, supported by favourable volume and margin development.  Positive on-farm sentiment drove robust early season demand together with favourable momentum in the case of differentiated and bespoke nutrition applications.

 

 

Poland

 

Unseasonably dry weather impacted volumes in Poland for the period resulting in lower underlying agronomy service and crop input volumes.  Early season demand was impacted by a reduction in oilseed rape crop plantings, with the lower oilseed rape area being offset by an increase in later sown winter cereal varieties.  Autumn and winter plantings are estimated to be approximately 1.9% higher than the prior year at 4.7 million hectares.  Spring plantings are forecast to be broadly in line with last year resulting in an increase in the total cropping area for the 2019 season of 0.9% to 8.2 million hectares. 

 

 

Romania

 

Romania delivered a satisfactory result in the period in challenging market conditions.  Sustained dry conditions during the early autumn have hampered oilseed and cereal crop establishment resulting in lower agronomy service and input demand in the period.  Total autumn and winter crop plantings are forecast at 2.5 million hectares compared with 3.1 million hectares last year.

 

The reduction in autumn and winter plantings is expected to be largely offset by an increase in spring cropping, resulting in combined winter and spring plantings for the 2019 growing season as a whole estimated to be 1.5% behind last year at 8.1 million hectares.

 

 

Ukraine

 

Ukraine recorded lower margins on higher underlying revenues in the period with service providers responding to a more competitive market backdrop.  The period was characterised by lower liquidity at primary producer level due to logistical bottlenecks which have impacted the timing of the grain movement off-farm.  

 

Growing conditions in the period were excellent with total autumn and winter crop plantings estimated to be 6.4% ahead of the comparative period at 8.3 million hectares.  Total crop plantings for the 2019 growing season are currently forecast at 22.9 million hectares against 22.7 million hectares for the prior year.

 

 

Latin America

 

 

 

 

 

Change on prior period

 

 

2019

€m

 

2018

€m

 

Change

€m

 

Underlying2

€m

Constant Currency3 €m

 

 

 

 

 

 

 

Revenue

 

21.3

-

21.3

-

21.3

Operating profit1

 

5.5

-

5.5

-

5.5

 

Before amortisation of non-ERP intangible assets and exceptional items

2 Excluding currency movements and the impact of acquisitions

3 Excluding currency movements

 

 

 

                   

 

Origin entered the Latin American market in August 2018 through the acquisition of Fortgreen, a business which is focused on the development and marketing of value added crop nutrition and speciality inputs and which is headquartered in Paraná State in southern Brazil.

Latin America has delivered an excellent first-time contribution in the period. Integration is progressing to plan, with performance in line with pre-acquisition expectations.  A strong innovation pipeline supported good growth in speciality soluble nutrition technologies for grain and speciality crop applications.  

The harvest period for Brazil's principal spring crop, Soya, is progressing well with circa 51% of Paraná's planted area harvested with some localised damage to the crops following a period of dry weather in December and January.  

The acquisition of a 20% shareholding in the Brazilian business Ferrari Zagatto E Cia. Ltda., announced in the prior financial year, is expected to complete in the second half of the current financial year.

 

 

Brexit

 

The Group continues to monitor Brexit negotiations and ensure that appropriate planning for a no-deal Brexit is in place. 

Additional storage was secured over the winter period as we come into the traditional peak season and additional inventory has been secured both on an owned and consigned / contract storage basis.  As a result we believe that we are well prepared for any short-term logistical disruption that may result from a no-deal Brexit.  However, the Board and senior management will continue to closely monitor the situation and adjust the Group's strategic plans as necessary. 

 

Outlook

 

Looking ahead, the autumn and winter cropping profile established to date provides a solid foundation for the seasonally more important second half.  A full year outlook will be provided at the time of the announcement of the third quarter trading update on 19 June 2019.

 

 

ENDS

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Income Statement       

for the six months ended 31 January 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months

 

Six months

 

Six months

 

Six months

 

Year

 

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

January

 

January

 

January

 

January

 

 July

 

 

2019

 

2019

 

2019

 

2018

 

2018

 

 

Pre-exceptional

 

Exceptional

 

Total

 

Total

 

Total

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

Notes

 

 

 

 

 

 

 

 

Note 5

 

 

 

 

 

 

 

 

 

 

 

Revenue

3

701,551

 

-

 

701,551

 

586,909

 

1,627,533

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(612,346)

 

-

 

(612,346)

 

(511,273)

 

(1,389,926)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

89,205

 

-

 

89,205

 

75,636

 

237,607

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

(84,399)

 

(733)

 

(85,132)

 

(76,099)

 

(171,409)

 

 

 

 

 

 

 

 

 

 

 

Share of profit of associates and joint venture

1,809

 

-

 

1,809

 

1,707

 

7,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

3

6,615

 

(733)

 

5,882

 

1,244

 

73,419

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

416

 

-

 

416

 

602

 

1,432

 

 

 

 

 

 

 

 

 

 

 

Finance expense

 

(6,297)

 

-

 

(6,297)

 

(4,603)

 

(9,514)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) before income tax

 

734

 

(733)

 

1

 

(2,757)

 

65,337

 

 

 

 

 

 

 

 

 

 

 

Income tax credit/(expense)

 

440

 

-

 

440

 

733

 

(8,552)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) attributable to equity shareholders

1,174

 

(733)

 

441

 

(2,024)

 

56,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months

 

Six months

 

Year

 

 

 

 

 

 

ended

 

ended

 

ended

 

 

 

 

 

 

January

 

January

 

 July

 

 

 

 

 

 

2019

 

2018

 

2018

 

 

 

 

 

 

 

 

 

 

 

Basic earnings/(loss) per share

4

 

 

 

 

0.35c

 

(1.61c)

 

45.22c

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings/(loss) per share

4

 

 

 

 

0.35c

 

(1.61c)

 

44.94c

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Comprehensive Income

for the six months ended 31 January 2019

 

 

 Six months

 

 Six

months

 

 

Year

 

ended

 

ended

 

ended

 

January

 

January

 

July

 

2019

 

2018

 

2018

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss)for the period

441

 

(2,024)

 

56,785

 

 

 

 

 

 

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

(4,753)

 

2,205

 

3,628

- deferred tax effect of remeasurements

800

 

(365)

 

(504)

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

-

 

-

 

5,865

- share of deferred tax effect of remeasurements - associates

-

 

-

 

(997)

 

 

 

 

 

 

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

 

 

 

 

 

Group foreign exchange translation details

 

 

 

 

 

- exchange difference on translation of foreign operations

2,784

 

(948)

 

(1,243)

Group/Associate cash flow hedges

 

 

 

 

 

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

(80)

 

(3,243)

 

1,396

- fair value of cash flow hedges transferred to operating costs

(2,708)

 

760

 

888

- deferred tax effect of cash flow hedges

462

 

436

 

(333)

- share of associates and joint venture cash flow hedges

(902)

 

(1,879)

 

4,827

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

113

 

235

 

(603)

 

 

 

 

 

 

Other comprehensive expense for the period, net of tax

(4,284)

 

(2,799)

 

12,924

 

 

 

 

 

 

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

(3,843)

 

(4,823)

 

69,709

 

 

 

 

 

 

 

 

 

 

 

 

   

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Financial Position

as at 31 January 2019

 

 

 

 

 

January

 

January

 

July

 

 

 

2019

 

2018

 

2018

 

Notes

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

6

 

124,717

 

117,418

 

117,929

Investment properties

 

 

11,825

 

9,675

 

11,825

Goodwill and intangible assets

7

 

285,310

 

215,746

 

216,334

Investments in associates and joint venture

8

 

 42,867

 

32,269

 

48,171

Other financial assets

 

 

 562

 

456

 

450

Derivative financial instruments

 

 

 608

 

986

 

835

Deferred tax assets

 

 

 5,085

 

4,663

 

3,280

Post employment benefit obligations

 

 

-

 

-

 

725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current assets

 

 

470,974

 

381,213

 

399,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventory

 

 

243,488

 

221,046

 

194,192

Trade and other receivables

 

 

301,315

 

229,960

 

461,199

Derivative financial instruments

 

 

1,051

 

122

 

1,399

Restricted cash

 

 

-

 

-

 

500

Cash and cash equivalents

 

 

84,892

 

85,869

 

147,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

630,746

 

536,997

 

804,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

1,101,720

 

918,210

 

1,204,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Financial Position (continued)

as at 31 January 2019

 

 

 

 

 

January

 

January

 

July

 

 

 

2019

 

2018

 

2018

 

Notes

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Called up share capital presented as equity

11

 

1,264

 

1,264

 

1,264

Share premium

 

 

160,422

 

160,422

 

160,422

Retained earnings and other reserves

 

 

142,363

 

97,855

 

168,561

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

304,049

 

259,541

 

330,247

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Interest-bearing borrowings

 

 

281,981

 

242,131

 

165,232

Deferred tax liabilities

 

 

29,829

 

18,272

 

22,171

Put option liability

 

 

27,097

 

5,516

 

5,531

Provision for liabilities

9

 

3,999

 

8,261

 

8,045

Post employment benefit obligations

 

 

3,694

 

813

 

-

Derivative financial instruments

 

 

197

 

-

 

46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current liabilities

 

 

346,797

 

274,993

 

201,025

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Interest-bearing borrowings

 

 

41,729

 

15,116

 

20,836

Put option liability

 

 

5,771

 

-

 

-

Trade and other payables

 

 

383,663

 

353,028

 

638,161

Corporation tax payable

 

 

4,200

 

7,657

 

8,143

Provision for liabilities

9

 

13,642

 

4,130

 

5,467

Derivative financial instruments

 

 

1,869

 

3,745

 

172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

450,874

 

383,676

 

672,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

797,671

 

658,669

 

873,804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

 

1,101,720

 

918,210

 

1,204,051

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Changes in Equity

for the six months ended 31 January 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Cashflow

 

 

 

based

 

Re-

 

currency

 

 

 

 

 

 

Share

 

Share

 

Treasury

 

redemption

 

hedge

 

Revaluation

 

payment

 

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 2018

1,264

 

160,422

 

(8)

 

134

 

3,510

 

12,843

 

538

 

(196,884)

 

(39,319)

 

387,747

 

330,247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

441

 

441

 

Other comprehensive expense for the period

-

 

-

 

-

 

-

 

(3,115)

 

-

 

-

 

-

 

2,784

 

(3,953)

 

(4,284)

 

Share-based payment charge

-

 

-

 

-

 

-

 

-

 

-

 

90

 

-

 

-

 

-

 

90

 

Dividend paid to shareholders (Note 13)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(22,445)

 

(22,445)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2019

1,264

 

160,422

 

(8)

 

134

 

395

 

12,843

 

628

 

(196,884)

 

(36,535)

 

361,790

 

304,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Changes in Equity

for the six months ended 31 January 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Cashflow

 

 

 

based

 

Re-

 

currency

 

 

 

 

 

 

Share

 

Share

 

Treasury

 

redemption

 

hedge

 

Revaluation

 

payment

 

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 2017

1,264

 

160,422

 

(8)

 

134

 

(2,665)

 

12,843

 

358

 

(196,884)

 

(38,076)

 

349,341

 

286,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(2,024)

 

(2,024)

 

Other comprehensive expense for the period

-

 

-

 

-

 

-

 

(3,691)

 

-

 

-

 

-

 

(948)

 

1,840

 

(2,799)

 

Share-based payment charge

-

 

-

 

-

 

-

 

-

 

-

 

80

 

-

 

-

 

-

 

80

 

Dividend paid to shareholders

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(22,445)

 

(22,445)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2018

1,264

 

160,422

 

(8)

 

134

 

(6,356)

 

12,843

 

438

 

(196,884)

 

(39,024)

 

326,712

 

259,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Cash Flows 

for the six months ended 31 January 2019

 

 

 

 

 Six months

 

 Six

months

 

 

Year

 

 

ended

 

ended

 

ended

 

 

January 2019

 

January 2018

 

July

2018

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Profit/(loss)before tax

 

1

 

(2,757)

 

65,337

Exceptional items

 

733

 

-

 

(663)

Finance income

 

(416)

 

(602)

 

(1,432)

Finance expense

 

6,297

 

4,603

 

9,514 

Profit on disposal of property, plant and equipment

 

(156)

 

(128)

 

(285)

Share of profit of associates and joint venture

 

(1,809)

 

(1,707)

 

(7,221)

Depreciation of property, plant and equipment

 

3,845

 

3,498

 

7,451 

Amortisation of intangible assets

 

5,476

 

3,972

 

7,946 

Employee share-based payment charge

 

90

 

80

 

180 

Pension contributions in excess of service costs

 

(462)

 

(691)

 

(852)

Payment of exceptional rationalisaton costs

 

(829)

 

(2,943)

 

(3,334)

Payment of exceptional acquisition costs

 

(358)

 

(1,443)

 

(3,688)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flow before changes in working capital

 

12,412

 

1,882

 

72,953

 

 

 

 

 

 

 

Increase in inventory

 

(40,746)

 

(60,830)

 

(28,505)

Decrease in trade and other receivables

 

176,595 

 

113,500

 

(58,469)

Decrease in trade and other payables

 

(273,359)

 

(145,253)

 

87,713 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash (absorbed)/generated from operating activities

 

(125,098)

 

(90,701)

 

73,692 

 

 

 

 

 

 

 

Interest paid

 

(4,564)

 

(2,698)

 

(6,927)

Income tax paid

 

(4,449)

 

(4,073)

 

(10,428)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash (outflow)/inflow from operating activities

 

(134,111)

 

(97,472)

 

56,337 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Cash Flows (continued)

for the six months ended 31 January 2019

 

 

 

 Six months

 

 Six

months

 

 

Year

 

 

ended

 

ended

 

ended

 

 

January 2019

 

January 2018

 

July 

2018

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from sale of property, plant and equipment

 

440

 

1,091

 

1,410 

Purchase of property, plant and equipment

 

(7,223)

 

(6,373)

 

(11,602)

Additions to intangible assets

 

(1,717)

 

(1,505)

 

(5,645)

Arising on acquisitions

 

(33,239)

 

(16,164)

 

(23,857)

Proceeds from sale of Chemical division

 

-

 

5,250

 

5,250 

Payment of contingent acquisition consideration

 

(1,091)

 

(704)

 

(1,627)

Restricted cash

 

500

 

-

 

(500)

Loan (advance)/repayment with associate

 

(98)

 

84

 

85 

Dividends received from associates

 

6,909

 

2,351

 

2,483 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash outflow from investing activities

 

(35,519)

 

(15,970)

 

(34,003)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Drawdown of bank loans

 

180,557

 

86,132

 

141,775

Repayment of bank loans

 

(45,000)

 

(25,893)

 

(158,155)

Payment of dividends to equity shareholders (Note 13)

 

(22,445)

 

(22,445)

 

(26,371)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash inflow/(outflow) from financing activities

 

113,112

 

37,794

 

(42,751)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(56,518)

 

(75,648)

 

(20,417)

 

 

 

 

 

 

 

Translation adjustment

 

1,233

 

141

 

261

 

 

 

 

 

 

 

Cash and cash equivalents at start of period

 

126,559

 

146,715

 

146,715 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period (Note 10)

 

71,274

 

71,208

 

126,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements

for the six months ended 31 January 2019

 

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 2018, which have been prepared in accordance with IFRSs.  The financial statements for the year ended 31 July 2018 are available on the company's website www.originenterprises.com.  Those financial statements contained an unqualified audit report.

 

The Group condensed interim consolidated financial statements for the six months ended 31 January 2019 and the comparative figures for the six months ended 31 January 2018 are unaudited and have not been reviewed by the Auditors.  The summary financial statements for the year ended 31 July 2018 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 2019 is included in the financial highlights section included on pages 5 to 13.  The group's business is seasonal and is heavily weighted towards the second half of the financial year.

 

 

2      Accounting policies

 

The Group interim financial statements have been prepared on the basis of the accounting policies as set out on pages 90 to 97 of the Group's Annual Report for the year ended 31 July 2018, with the exception of the new accounting standards outlined below.

 

The following Standards and Interpretations are effective for the Group in the current financial period but do not have a material effect on the results or financial position of the Group:

 

IFRS 9 Financial Instruments 

 

The Group has adopted IFRS 9 Financial Instruments ("IFRS 9"), which replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement, from 1 August 2018.  Under IFRS 9, on initial recognition, a financial asset is classified as measured at amortised cost or fair value through other comprehensive income ("FVTOCI"), or fair value through profit or loss ("FVTPL").  This classification is dependent on the business model for managing the financial assets and on whether the cash flows represent solely the payment of principal and interest.  The Group has quantified the impact on its consolidated financial statements resulting from the application of IFRS 9.  The vast majority of financial assets held by the Group are trade receivables and cash.

 

Trade receivables and cash will continue to be accounted for at amortised cost.  IFRS 9 introduces a forward looking expected credit losses model, rather than the current incurred loss model, when assessing the impairment of financial assets in the scope of IFRS 9. Given historic loss rates and normal receivable ageing, the move from an incurred loss model to an expected loss model has not had a material impact.

 

On this basis, the classification and measurement changes do not have a material impact on the Group's consolidated financial statements.  The impact of adopting IFRS 9 on the consolidated financial statements was not material for the Group and there was no adjustment to retained earnings on application at 1 August 2018.  In line with the transition guidance in IFRS 9 the Group has not restated the 2018 prior year / half year results on adoption.  

 

IFRS 15 Revenue from Contracts with Customers 

 

The Group has adopted IFRS 15 Revenue from Contracts with Customers ("IFRS 15"), which replaces the existing guidance in IAS 18 Revenue, from 1 August 2018.  The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied i.e. when 'control' of the goods or services underlying the particular performance obligation is transferred to the customer.  At the date of adoption, the Group assessed the impact on its consolidated financial statements resulting from the application of IFRS 15.

 

The vast majority of the Group's revenue is attributable to (1) Agri-Inputs operations, (2) Agronomy and On-Farm Services operations and (3) Digital Agricultural Services.  Legal title of goods sold is transferred on agreed contracted terms between parties, and generally, there is one performance obligation in each of the Group's sale contracts.  Based on the Group's contractual and trading relationships, the impact of adopting IFRS 15 on the consolidated financial statements was not material for the Group and there was no adjustment to retained earnings on application at 1 August 2018.  The Group has not restated the 2018 prior year / half year results on adoption. 

 

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

 

On a prospective basis, for all new liabilities recognised in respect of shares held by non-controlling shareholders, all movements in the fair value of such options will be recognised in retained earnings.

  

IFRS 16  Leases 

 

The Group's evaluation of the effect of adoption of IFRS 16, 'Leases' is ongoing.  The Group expects that the adoption of IFRS 16 will have a material impact on the financial statements, significantly increasing the Group's recognised assets and liabilities.  The fair values of these leases are currently being evaluated.  As a result of the transition to IFRS 16, the fair value of these leases representing the present value of the lease payments over the expected lease contract period will be recognised as a Right of Use Asset with a corresponding value recognised as a lease liability.  This standard will be effective for and will be adopted by the Group for the 2020 financial year beginning 1 August 2019.

 

 

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. Three operating segments have been identified: (1) Ireland and the United Kingdom, (2) Continental Europe and (3) Latin America.

 

Ireland and the United Kingdom

This segment includes the Group's wholly owned Irish and UK based Business-to-Business Agri-Inputs operations, Integrated Agronomy and On-Farm Services operations and Digital Agricultural Services business.  In addition, this segment includes the Group's Associate and joint venture undertakings.

 

Continental Europe

This segment includes the Group's Business-to-Business Agri-Inputs operations, Integrated Agronomy and On-Farm Services operations in Belgium, Poland, Romania and Ukraine.

 

Latin America

This segment includes the Group's 65 per cent controlling interest in the Brazilian based speciality nutrition and crop inputs business, Fortgreen Commercial Agricola Ltda.

 

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

Ireland and UK

 

Continental Europe

 

Latin America

 

Total Group

 

Six months

 

Six

months

 

Six months

 

Six

months

 

Six months

 

Six

months

 

Six months

 

Six

months

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

644,207

 

534,864

 

246,318

 

209,418

 

21,312

 

-   

 

911,837

 

744,282

Less revenue from associates and joint venture

(210,286)

 

(157,373)

 

-      

 

-      

 

-      

 

-   

 

(210,286)

 

(157,373)

Revenue

433,921

 

377,491

 

246,318

 

209,418

 

21,312

 

-   

 

701,551

 

586,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment result

2,827

 

1,220

 

793

 

1,043

 

5,451

 

-   

9,071

 

2,263

Profit from associates and joint venture

1,809

 

1,707

 

-   

 

-   

 

-   

 

-   

 

1,809

 

1,707

Amortisation of non-ERP intangible assets

(2,119)

 

(1,876)

 

(915)

 

(850)

 

(1,231)

 

-   

 

(4,265)

 

(2,726)

Operating profit/(loss) before exceptional items

2,517

 

1,051

 

(122)

 

193

 

4,220

 

-   

 

6,615

 

1,244

Exceptional items

(437)

-   

-      

 

(253)

 

-      

 

(43)

 

-   

 

(733)

 

-      

Operating profit / (loss)

2,080

 

1,051

 

(375)

 

193

 

4,177

 

-   

 

5,882

 

1,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before financing and tax

 

 

 

 

 

 

 

 

 

 

 

 

5,882

 

1,244

Finance income

 

 

 

 

 

 

 

 

 

 

 

 

416

 

602

Finance expense

 

 

 

 

 

 

 

 

 

 

 

 

(6,297)

 

(4,603)

Reported profit/(loss) before tax

 

 

 

 

 

 

 

 

 

 

 

 

1

 

(2,757)

Income tax credit

 

 

 

 

 

 

 

 

 

 

 

 

440

 

733

Reported profit/(loss) after tax

 

 

 

 

 

 

 

 

 

 

 

 

441

 

(2,024)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(ii) Segment assets

Ireland & UK

 

Continental Europe

 

Latin America

 

Total Group

 

 

Six months

 

Six months

 

Six

months

 

Six

months

 

Six

months

 

Six

months

 

Six months

 

Six months

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

Assets excluding investment in associates

and joint venture

555,627

 

543,842

 

322,915

 

250,003

 

88,113

 

-   

 

966,655

 

793,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in associates and joint venture

(including other financial assets)

43,429

 

32,725

 

-   

 

-   

 

-   

 

-   

 

43,429

 

32,725

Segment assets

599,056

 

576,567

 

322,915

 

250,003

 

88,113

 

-   

 

1,010,084

 

826,570

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

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

84,892

 

85,869

Derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

1,659

 

1,108

Deferred tax assets

 

 

 

 

 

 

 

 

 

 

 

 

5,085

 

4,663

Total assets as reported in Condensed Interim Consolidated Statement of Financial Position

 

1,101,720

 

918,210

 

 

 

 

 

 

(iii) Segment liabilities

Ireland & UK

 

Continental Europe

 

Latin America

 

Total Group

 

Six

months

 

Six

months

 

Six

months

 

Six

months

 

Six

months

 

Six

months

 

Six months

 

Six months

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

Jan 2019

 

Jan 2018

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

Segment liabilities

264,728

 

259,920

 

126,360

 

111,828

 

46,778

 

-   

 

437,866

 

371,748

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

 

 

 

 

Interest-bearing loans and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

323,710

 

257,247

Derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

2,066

 

3,745

Current and deferred tax liabilities

 

 

 

 

 

 

 

 

 

 

 

 

34,029

 

25,929

Total liabilities as reported in Condensed Interim Consolidated Statement of Financial Position

 

797,671

 

658,669

 

 

 

 

 

4      Earnings/(loss) per share

 

Basic earnings/(loss) per share

 

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2019

 

2018

 

€'000

 

€'000

 

 

 

 

        Profit/(loss) for the financial period attributable to equity shareholders

441

 

(2,024)

 

 

 

 

 

'000

 

'000

 

 

 

 

        Weighted average number of ordinary shares for the period

125,582

 

125,582

 

 

 

 

 

Cent

 

Cent

 

 

 

 

        Basic earnings/(loss)per share

0.35

 

(1.61)

                                                                                                                                                                                       

 

        Diluted earnings/(loss) per share

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2019

 

2018

 

€'000

 

€'000

 

 

 

 

        Profit/(loss) for the financial period attributable to equity shareholders

441

 

(2,024)

 

 

 

 

 

'000

 

'000

 

 

 

 

        Weighted average number of ordinary shares used in basic calculation

125,582

 

125,582

        Impact of shares with dilutive effect

1,108

 

77

        Impact of SAYE scheme

726

 

531

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

127,416

 

126,190

 

 

 

 

 

Cent

 

Cent

 

 

 

 

        Diluted earnings/(loss) per share

0.35

 

(1.61)

 

 

 

 

 

 

Adjusted basic earnings per share

 

Six months

 

Six months

 

 

 

ended

 

ended

 

 

 

January

 

January

 

 

 

2019

 

2018

 

 

 

€'000

 

€'000

 

 

 

 

 

 

 

Profit/(loss) for the financial period attributable to equity shareholders

 

441

 

(2,024)

 

Amortisation of non-ERP related intangible assets

 

4,265

 

2,726

 

Tax on amortisation of non-ERP related intangible assets

 

(833)

 

(367)

 

Exceptional items, net of tax

 

733

 

-   

 

Adjusted basic earnings

 

4,606

 

335

 

 

 

 

 

 

 

 

 

Cent

 

Cent

 

Adjusted basic earnings per share

 

3.67

 

0.27

 

 

 

 

 

 

 

Total adjusted basic earnings - as above

 

4,606

 

335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cent

 

Cent

 

Total adjusted diluted earnings per share

 

3.61

 

0.27

 

 

 

 

 

 

The calculation of basic adjusted earnings per share is based on the weighted average number of shares in issue during the period of 125,581,696 (31 January 2018: 125,581,696). The weighted average number of shares used in the calculation of adjusted diluted earnings/(loss) per share is 127,416,250 (31 January 2018: 126,190,275).

 

   

5      Condensed Interim Consolidated Income Statements for the six months ended 31 January 2018 and year ended 31 July 2018

 

        An analysis of the Condensed Interim Consolidated Income Statement (including exceptional items) for the six months ended 31 January 2018 and year ended 31 July 2018 is set out below.

 

 

Six months ended 31 January 2018

 

 

 

 

 

 

 

 

 

 

Six months

 

Six months

 

Six months

 

 

 

 

ended

 

ended

 

ended

 

 

 

 

Jan 2018

 

Jan 2018

 

Jan 2018

 

 

 

 

Pre-Exceptional

 

Exceptional

 

Total

 

 

 

 

€'000

 

€'000

 

€'000

 

 

Revenue

 

586,909

 

-

 

586,909

 

 

Cost of sales

 

(511,273)

 

-

 

(511,273)

 

 

Gross profit

 

75,636

 

-

 

75,636

 

 

Operating costs

 

(76,099)

 

-

 

(76,099)

 

 

Share of profit of associates and joint venture

 

1,707

 

-

 

1,707

 

 

Operating profit

 

1,244

 

-

 

1,244

 

 

Finance income

 

602

 

-

 

602

 

 

Finance expense

 

(4,603)

 

-

 

(4,603)

 

 

Loss before income tax

 

(2,757)

 

-

 

(2,757)

 

 

Income tax credit

 

733

 

-

 

733

 

 

Loss for the period

 

(2,024)

 

-

 

(2,024)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 31 July 2018

 

 

 

 

 

 

 

 

 

 

Year ended

 

Year ended

 

Year ended

 

 

 

 

Jul 2018

 

Jul 2018

 

Jul 2018

 

 

 

 

Pre-Exceptional

 

Exceptional

 

Total

 

 

 

 

€'000

 

€'000

 

€'000

 

 

 

 

ended

 

ended

 

ended

 

 

Revenue

 

1,627,533

 

-

 

1,627,533

 

 

Cost of sales

 

(1,389,926)

 

-

 

(1,389,926)

 

 

Gross profit

 

237,607

 

-

 

237,607

 

 

Operating costs

 

(172,072)

 

663

 

(171,409)

 

 

Share of profit of associates and joint venture

 

7,221

 

-

 

7,221

 

 

Operating profit

 

72,756

 

663

 

73,419

 

 

Finance income

 

1,432

 

-

 

1,432

 

 

Finance expense

 

(9,514)

 

-

 

(9,514)

 

 

Profit before income tax

 

64,674

 

663

 

65,337

 

 

Income tax expense

 

(7,900)

 

(652)

 

(8,552)

 

 

Profit for the year

 

56,774

 

11

 

56,785

 

 

 

 

 

 

 

 

 

 

 

 

6      Property, plant and equipment

 

January

 

July

 

2019

 

2018

 

€'000

 

€'000

 

 

 

 

Net book value

 

 

 

At beginning of period

117,929

 

105,271

Arising on acquisitions (Note 12)

2,512

 

10,087

Additions

7,390

 

11,628

Disposals

(283)

 

(1,571)

Depreciation charge

(3,845)

 

(7,451)

Translation adjustments

1,014

 

(35)

 

 

 

 

 

 

 

 

At end of period

124,717

 

117,929

 

 

 

 

 

 

 

 

 

 

       

7      Goodwill and intangible assets

 

 

January

 

July

 

2019

 

2018

 

€'000

 

€'000

 

 

 

 

Net book value

 

 

 

At beginning of period

216,334

 

205,961

Arising on acquisitions (Note 12)

67,973

 

11,997

Additions

1,621

 

5,645

Amortisation of non-ERP intangible assets

(4,265)

 

(5,655)

ERP intangible amortisation

(1,211)

 

(2,291)

Translation adjustments

4,858

 

677

 

 

 

 

 

 

 

 

At end of period

285,310

 

216,334

 

 

 

 

 

 

    Included in the total goodwill and intangible assets above is goodwill of €183,704,000 (July 2018: €138,112,000).  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.

 

 

8      Investments in associates and joint venture

 

 

              January

 

 

             2019

 

 

             €'000

 

 

 

 

 

At beginning of period

48,171

 

34,206

Share of profits after tax

1,809

 

7,221

Dividends received

(6,909)

 

(2,483)

Share of other comprehensive expense

(789)

 

9,092

Translation adjustments

585

 

135

 

 

 

 

 

 

 

 

At end of period

42,867

 

48,171

 

 

 

 

 

 

 

9      Provision for liabilities

 

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

 

 

 

 

January

 

 

July

 

 

 

             2019

 

              2018

 

 

 

             €'000

 

             €'000

 

 

 

 

 

 

 

 

At beginning of period

13,512

 

15,464

 

 

Arising on acquisition (Note 12)

6,755

 

2,995

 

 

Provided in period

121

 

2,007

 

 

Paid in period

(2,258)

 

(4,964)

 

 

Released in period

(850)

 

(2,137)

 

 

Translation adjustments

         361

 

147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At end of period

17,641

 

13,512

 

 

 

 

 

 

 

 

 

 

 

                 

 

Provisions for liabilities relate to various operating and employment related costs and contingent acquisition consideration that arose on various acquisitions.

 

 

 

10     Analysis of net debt

 

 

 

 

 

31 July

 

 

Cash

 

 

Arising on

 

 

Non-cash

 

 

Translation

 

31 January

 

 

2018

 

flow

 

acquisition

 

movements

 

adjustment

 

2019

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

147,212

 

(66,744)

 

3,470

 

-

 

954

 

    84,892

 

Overdraft

(20,653)

 

6,756

 

-

 

-

 

279

 

  (13,618)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

126,559

 

(59,988)

 

3,470

 

-

 

1,233

 

71,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease obligations

(862)

 

(354)

 

-

 

-

 

(3)

 

(1,219)

 

Loans

(164,553)

 

(135,203)

 

(8,177)

 

(339)

 

(601)

 

(308,873)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt

(38,856)

 

(195,545)

 

(4,707)

 

(339)

 

629

 

(238,818)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

500

 

(500)

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt including restricted cash

(38,356)

 

(196,045)

 

(4,707)

 

(339)

 

629

 

(238,818)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The loans included above are unsecured and the facility extends to May 2022.

 

 

 

11     Share capital

 

 

January

 

July

 

 

2019

 

2018

 

 

€'000

 

€'000

 

 

 

 

 

 

Authorised

 

 

 

 

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

2,500

 

2,500

 

 

 

 

 

 

Allotted, called up and fully paid

 

 

 

 

126,382,206 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.

 

 

 

12     Acquisition of subsidiary undertakings

 

     During the period, the Group completed the acquisition of Fortgreen Commercial Agricola Ltda ('Fortgreen') in Brazil and the acquisition of Symbio Group ('Symbio') in the United Kingdom.  These acquisitions complement the Group's prescription fertilisers and speciality nutrition business.

 

        Details of the acquisitions are as follows:

 

(i)    On 14 August 2018 the Group acquired a 65 per cent controlling interest in the Brazilian based speciality nutrition and crop inputs business, Fortgreen Commercial Agricola Ltda.

 

(ii)   On 20 November 2018 the Group completed the acquisition of 100 per cent of Eco Solutions (C & R) Limited trading as Symbio. Based in the United Kingdom, Symbio specialises in biological based crop technologies.

 

Details of the net assets acquired and provisional goodwill arising from the business combinations are as follows:

 

 

 

Fair

 

 

value

Assets

 

€'000

Non-current

 

 

Property, plant and equipment

 

2,512

Intangible assets

 

25,561

 

 

 

Total non-current assets

 

28,073

 

 

 

Current assets

 

 

Inventory

 

6,078

Trade and other receivables

 

16,221

Corporation tax asset

 

123

 

 

 

Total current assets

 

22,422

 

 

 

Liabilities

 

 

Trade and other payables

 

(10,354)

Deferred tax liability

 

(7,949)

 

 

 

Total liabilities

 

(18,303)

 

 

 

Total identifiable net assets at fair value

 

32,192

Goodwill arising on acquisition

 

42,412

 

Total net assets acquired (excluding debt acquired)

 

 

74,604

Consideration satisfied by:

 

 

Cash consideration

 

36,709

Cash acquired

 

(3,470)

Net cash outflow

 

33,239

Contingent consideration

 

6,755

Put option

 

26,433

Consideration

 

66,427

Debt acquired

 

8,177

Total consideration plus debt acquired

 

74,604

   

The goodwill recognised on acquisition is attributable to the skills and technical talent of the acquired business's workforce, and the synergies expected to be achieved from integrating the company into the Group's existing business.

 

Origin acquired a 65 per cent interest in Fortgreen for cash consideration on 14 August 2018.  The Group have also entered into an arrangement with the minority shareholder, under which the minority shareholder has the right at various dates to sell the remaining 35 per cent interest to Origin based on an agreed formula.  In the event that this is not exercised, Origin has a similar right to acquire the 35 per cent interest.  Origin has recognised an option liability of €26.4 million which is the fair value of the future estimated amount payable to exercise the option.  This has been determined based on an agreed formula which includes an expectation of future trading performance and timing of when the options are expected to be exercised, discounted to present day value.

 

Origin has elected to apply the anticipated acquisition method in accounting for the option whereby the non-controlling interest is not recognised but rather treated as already acquired by Origin both in the Consolidated Statement of Financial Position and the Consolidated Statement of Comprehensive Income.  This treatment has been adopted as the Directors have formed the view that based on the structure and timing of the option contracts sufficient risks and rewards are deemed to have transferred to Origin.  Profits and losses attributable to the minority shareholder in respect of their 35 per cent interest will be presented as attributable to the equity shareholders of Origin and not as attributable to minority interests.  The €26.4 million financial liability recognised by the Group forms part of the contingent consideration for the acquisition.  For all new liabilities recognised in respect of shares held by non-controlling shareholders, all movements in the fair value of such options will be recognised in retained earnings. 

 

Post-acquisition revenues and operating profit relating to the current year acquisitions amounted to €21.5 million and €5.8 million.  If the acquisitions had occurred on 1 August 2018, management estimates total consolidated revenue would have been €704.3 million and consolidated operating profit for the six-month period would have been €9.4 million.  In determining these amounts management has assumed that the fair value adjustments that arose on the dates of acquisition would have been the same if the acquisition occurred on 1 August 2018.

 

 

13     Dividends

 

On 15 December 2018 a final dividend of 17.85 cent per ordinary share was paid in respect of the year ended 31 July 2018 which when combined with the interim dividend of 3.15 cent per ordinary share brings the total dividend for the year ended 31 July 2018 to 21 cent per ordinary share.

 

An interim dividend of 3.15 cent (2018: 3.15 cent) per ordinary share will be paid on 12 April 2019 to shareholders on the register on 29 March 2019.  These condensed interim consolidated financial statements do not reflect this dividend payable.

 

 

14     Taxation

 

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

 

 

15   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 2018.

 

 

16   Financial commitments  

 

The Group has a financial commitment of €7.4 million attributable to a strategic partnership with University College Dublin ('UCD'). The commitment is over a four year period.

 

 

17    Related party transactions

 

 Related party transactions occurring in the period were similar in nature to those described in the 2018 Annual Report.

 

 

18    Release of half yearly condensed interim consolidated financial statements

 

The Group condensed interim consolidated financial information was approved for release by the Board on 5 March 2019.

 

 

19   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.

 


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.
 
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Interim Results Statement - RNS