RNS Number : 3905E
IFR Capital PLC
26 September 2008
IFR Capital Plc
Interim Results for the Period ended 30 June 2008
IFR Capital Plc ("IFR Capital" or the "Company"), the investment company focused on consolidation opportunities in the European food
retail sector, today announces its interim results for the six months ended June 2008.
Highlights
* Strong growth in sales from acquisitions and organic growth
* Operating EBITDA (pre exceptional items) of EUR 15,5 million (2007: EUR 5,0 million) on revenue of EUR 374,0 million (2007:
EUR164,3 million)
* Successful internationalisation of Nordsee franchise
* Integration of Homann / Hamker faster than expected
* High Court proceedings between IFR Capital and ACP stayed until end of November
* Structure of IFR Capital balance sheet needs to be improved; third party offer made to ACP for all of its investment (Equity,
Preferred Equity, Debt)
Operational and Financial Review
The results for the period include full 6 month contributions from Nordsee GmbH ("Nordsee"), Homann Chilled Food GmbH ("Homann"),
Bastian's GmbH ("Bastian's") and a circa 5 month period for Hamker Lebensmittel Beteiligungs GmbH & Co. KG ("Hamker"). The Hamker
acquisition was completed at the end of January 2008.
IFR Capital's revenues for the six months ended 30 June 2008 were EUR374,0 million (1H07 EUR164,3 million), while EBITDA before
exceptional items amounted to EUR15,5 million (1H07 EUR5,0 million). Both sales and EBITDA are in line with the Board's expectations. Taking
the seasonality of the business into account, the Board expects the Company to achieve sales of EUR763 million and an operating EBITDA of
EUR52 million for the full year ending December 2008. The equity to total asset ratio at the end of the period was 29,4%. IFR currently has
EUR163 million of long term interest bearing debt and EUR107 million of preferred equity in issue (including accrued interest).
Operational efficiencies at the Nordsee division in Germany and Austria improved EBITDA by EUR2 million to EUR8,6 million from EUR6,6
million. Divisional EBITDA margin increased from 4,3% to 5,6% in the first half year and, because of the seasonality of the business, is
expected to increase to 9,3% by the end of 2008. Nordsee is expanding its international business to the Middle East and Eastern Europe with
successful store openings in Budapest, Bukarest and Prague to date and a planned opening in Dubai in November this year. The division
expects to enter the Turkish market in the near term.
The Homann / Hamker division for the period generated EUR209 million of sales and EUR6,8 million of EBITDA. Increased raw material
prices put pressure on the operating performance, however the Company has negotiated to pass a substantial proportion of these additional
costs onto retail customers, with effect from September. The integration process is being implemented faster than expected and will be
finished by the end of 2008. Major projects include combined procurement, centralisation of warehousing functions, merger of logistic
companies and the closure of the administrative operations of Hamker. EUR13 million of exceptional restructuring costs are expected to arise
in 2008 (with net exceptional items of EUR2.1 million during the 6 month period) to achieve an anticipated EUR16 million of annual
synergies. Another EUR5 million has been invested in a German TV campaign to strengthen the Homann brand in addition to the historic
marketing budget.
Bastian's, the premium bakery concept has generated strong growth of 17% on like for like sales and a profitable performance in its new
store in Cologne, opened at the end of 2007. The concept has proven a success and further locations are being investigated for future
development and growth.
The High Court proceedings between IFR Capital and ACP relating to the claim by ACP for an increase of the margin on a part of IFR
Capital's debt and the counterclaim by IFR Capital for an account of profits and / or other compensation for breach of fiduciary duties have
been stayed until the end of November.
The Company believes that, in order to realise its strategy of building a food group with EUR1,5 billion turnover and an EBITDA margin
of 10% within the next few years, it is a prerequisite that its capital structure be restructured.
The most important objective of IFR Capital in the second half of 2008 is therefore to improve the structure of its balance sheet. Given
the current terms of the preferred equity, it is essential that the preferred equity is refinanced, either by way of redemption or
conversion into ordinary equity or another similar instrument on acceptable terms to the Board. Theo Mr, one of the owners of the preferred
equity, is strongly supportive of converting the preferred equity into ordinary equity. However, ACP, the other owner of the preferred
equity, was not willing to convert its preferred equity into ordinary equity. ACP has received a cash offer for all of its investment in IFR
Capital from private investors, who are in line with the intentions of Theo Mr.
Heiner Kamps, the CEO and one of the main shareholders of IFR Capital, summarizes: "I am pleased with the development of the operating
business during the six months ended 30 June 2008, in spite of price increases of raw materials and difficult negotiations with retail
customers. We have established a good platform to realize our growth strategy. However, an inevitable precondition to realise this strategy
is for the preferred equity to be refinanced, and the Board believes that this should be converted into ordinary equity to strengthen the
balance sheet. The Company is aware that funding for this transaction is available, because of the support of the Company's financially
strong shareholders. In order to benefit from the opportunities for IFR that the market currently offers, there would need to be an
agreement on this transaction by the end of 2008."
Enquiries:
Chris Wells, Collins Stewart Europe Limited +44 20 7523 8350
(Nominated Advisor to the Company)
Ulrike Sucker, IFR Capital +49 211 310627 0
For further information on IFR Capital, please visit www.ifrcapital.eu.
IFR Capital PLC
Consolidated Income Statement
for the period ended June 30, 2008
Jan. 1, to Jun. 30, 2008 Jan. 1, to Jun. 30, 2007 12 months to Dec.
31,
2007
EUR k EUR k EUR k
Revenue 374,012 164,283 480,523
Changes in inventories 1,238 -1,467
Other operating income 16,199 4,450 13,596
Cost of materials -222,507 -67,599 -220,812
Personnel expenses -79,797 -57,219 -133,698
Depreciation, amortization and impairment losses -14,015 -6,444 -21,627
Other operating expenses -75,741 -38,925 -98,959
Profit / (loss) from operations -611 -1,454 17,556
Finance income 561 2,288 3,436
Finance costs -21,298 -5,267 -22,189
Loss before income taxes -21,348 -4,433 -1,197
Income tax credit / (expense) 2,705 830 15,782
Profit / (loss) for the period -18,643 -3,603 14,585
Attributable to:
- Equity holders of -18,643 -3,603 14,585
the parent
- Minority interests 0 0 0
-18,643 -3,603 14,585
Earnings / (loss) per share:
basic/diluted for profit / (loss) for the
period
attributable to
ordinary
equity holders of EUR -0,00 EUR -0,00 EUR 0,07
the parent
IFR Capital PLC
Consolidated Balance Sheet
Jun. 30, 2008 Jun. 30, 2007 Dec. 31, 2007
EUR k EUR k EUR k
ASSETS
Non-current assets
Property, plant and equipment 128,491 103,323 106,551
Intangible assets 493,630 459,620 480,933
Other financial assets 432 2 432
Other assets 2,605 3,039 2,595
625,158 565,984 590,511
Current assets
Inventories 32,300 17,555 19,149
Trade receivables 19,859 20,589 20,170
Other financial assets 13,517 20,315 17,631
Other assets 12,078 1,219
Cash and cash equivalents 24,710 20,110 22,455
102,464 78,569 80,624
TOTAL ASSETS 727,622 644,553 671,135
EQUITY AND LIABILITIES
Equity
Issued capital 2,228 2,228 2,228
Share premium 213,229 213,229 213,229
Other reserves -2 -12 -14
Retained earnings / (losses) -1,882 -3,989 16,761
213,573 211,456 232,204
Non-current liabilities
Interest-bearing loans and borrowings 162,507 166,301
Pension provisions and similar obligations 60,566 64,224 60,488
Other provisions 10,291 5,841 12,138
Other financial liabilities 98,642 1,039 48,987
Deferred tax liabilities 60,708 52,256 59,810
392,714 123,360 347,724
Current liabilities
Interest-bearing loans and borrowings 8,867 125,878 1,638
Other provisions 29,626 31,780 23,634
Trade payables 50,589 35,287 44,054
Other financial liabilities 10,130 116,636 16,933
Other liabilities 21,607 4,423
Income tax liabilities 516 156 525
121,335 309,737 91,207
Total liabilities 514,049 644,553 671,135
TOTAL EQUITY AND LIABILITIES 727,622 644,553 671,135
Chief Financial Officer
IFR CAPITAL PLC
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2007
Issued Share Retained Other Total
Capital premium Earnings Reserves Equity
EUR k EUR k EUR k EUR k EUR k
At 1 January 2007 1,350 126,324 -386 0 127,288
Foreign currency translation 0 0 0 -12 -12
Total income and expense for the period
recognised direct in equity 0 0 0 -12 -12
Loss for the year 0 0 -3,603 0 -3,603
Total income and expense for the period 0 0 -3,603 -12 -3,615
Issue of Share capital 878 86,905 0 0 87,783
At 30 June 2007 2,228 213,229 -3,989 -12 211,456
IFR Capital PLC
Consolidated Cash Flow Statement for the period
January 1, 2008 to June 30, 2008
Jan. 1, to Jun. 30, 2008 Jan. 1, to Jun. 30, 2007 12 months to Dec.
31, 2007
EUR k EUR k EUR k
Cash flows from operating activities
Loss before income tax -21,348 -1,454 -1,197
Adjustments to reconcile loss before tax to net cash flows
Non-cash
Deprec. and impairm. of property, plant, equipment and intangible assets 6,444 21,627
Loss on disposals of property, plant and -101 87 251
equipment
Interest income -561 -3,436
Interest expense 21,298 22,189
Movement in provisions, pensions and -227 -4,508 -5,489
similar obligations
Working capital adjustments
Increase (-)/decrease (+) of trade 4,352 1,821 2,512
receivables
Increase (-)/decrease (+) of inventories 375 477 -1,097
Increase (-)/decrease (+) of other -4,224 350 211
receivables
Increase (+)/decrease (-) of trade payables and other payables -3,513 -4,198
Realisation of Badwill -8,980 0
Income tax paid -192 -173 -199
Cash flows from operating activities 687 -469 31,174
Cash flows from investing activities
Proceeds from disposals of property, plant and equipment 5,928 11 36
Purchase of property, plant and equipment -10,846 -7,253 -23,079
Purchase of intangible assets -96 -1,654 -645
Acquisition of subsidiaries, net of cash acquired -27,949 -23,357 -94,293
Disbursements of loans 0 0
Interest received 561 3,515
Cash flows from investing activities -32,402 -32,253 -114,466
Cash flows from financing activities
Proceeds from the issue of shares 0 0
Proceeds from the issue of preference shares 50,000 48,200
Repayments of loans and other short or long-term borrowings -5,553 -43,875 -17,521
Payment of finance lease liabilities 0 -650
Interest and transaction costs paid -10,489 -4,151 -25,126
Cash flows from financing activities 33,958 -48,026 4,903
Net (decrease)/increase in cash and cash equivalents 2,243 -80,748 -78,389
Net foreign exchange difference 12 -14
Cash and cash equivalents at 1 January 22,455 100,858 100,858
Cash and cash equivalents at June 30 24,710 20,110 22,455
This information is provided by RNS
The company news service from the London Stock Exchange
END
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