TIDMPFD TIDMIRSH
RNS Number : 4032Y
Premier Foods plc
17 May 2016
17 May 2016
Premier Foods plc
Preliminary results for the 52 weeks ended 2 April
2016
---------------------------------------------------
Quarter 4 and Full Year sales trajectory provides strong
platform to accelerate growth
-- Full Year Group sales +0.6%; Branded sales flat
-- Q4 Group sales up +1.4%; Branded sales up +1.0%
-- Trading profit(3) GBP131.0m, in line with last year
-- Adjusted profit before tax(5) increased +GBP2.9m to GBP86.1m
-- Adjusted earnings per share(5) increased +4.6% to 8.3 pence
-- Net debt reduced to GBP534.2m from GBP584.9m - includes consolidation of Knighton
-- Improved overall IAS 19 pension schemes position
-- FY16/17 sales growth guidance raised to 2-4%
Premier Foods today announces its Preliminary results for the 52
weeks ended 2 April 2016.
Gavin Darby, Chief Executive Officer
-------------------------------------
"We are very pleased to report sales growth both in the year and
the fourth quarter in what continues to be a deflationary market.
Our strategy of investing behind our brands and bringing new
innovative products to market continues to deliver very positive
results, with six of our major brands growing on average +3.4% in
the year. The Sweet Treats business reported sales growth in every
quarter of the year while the International business also displayed
excellent progress during the year with sales up +18%(6) ."
"Our adjusted earnings per share increased by +4.6% in the year,
we reduced Net debt by over GBP50m and on an accounting basis our
pension schemes have an improved financial position."
"We recently set out some additional strategic initiatives which
we believe will further accelerate our growth and now expect to
deliver sales growth of 2-4% in both FY16/17 and the medium term.
The potential opportunities presented by our partnership with
Nissin are also very exciting. The Board is focused on delivering
shareholder value and we see a strong future for Premier Foods with
its leading category positions, great brands and strong operational
cash flows."
Continuing operations 2 April 4 April
2016 2015
(52 weeks) (15 months)
-------------------------- ------------ -------------
Revenue (GBPm) 771.7 964.3
Operating profit/(loss)
(GBPm) 54.5 (44.1)
Profit/(loss) after
taxation (GBPm) 34.0 (92.7)
Basic earnings/(loss)
per share (pence) 4.1 (12.7)
Adjusted earnings
per share (pence) 8.1 9.0
Underlying results 2 April 4 April Change
2016 2015(2)
(unaudited) (52 weeks) (52 weeks) (%)
-------------------------- ------------ ------------- -------
Group sales (GBPm) 771.7 767.4 0.6%
Trading profit (GBPm)(3) 131.0 131.0 0.0%
Adjusted profit before
tax (GBPm)(5) 86.1 83.2 3.5%
Adjusted earnings
per share (pence) 8.3 8.0 4.6%
Measures above are reconciled to statutory measures in the
appendices, where necessary
A presentation to investors and analysts will take place today,
17 May 2016, at 9:30am BST. The presentation will be webcast at
www.premierfoods.co.uk/investors/investor-centre. A recording of
the webcast will be available on the Company's website later in the
day.
A conference call for bond investors and analysts will take
place today, 17 May 2016, at 1:30pm BST. Dial in details are
outlined below:
Telephone: 0800 694 5707
+44 1452 541003
Conference
ID: 8881822
A factsheet of the Preliminary results is available at:
www.premierfoods.co.uk/investors/results-centre
For further information, please contact:
Institutional investors and
analysts:
Alastair Murray, Chief Financial
Officer +44 (0) 1727 815 850
Richard Godden, Head of Investor
Relations +44 (0) 1727 815 850
Media enquiries:
Richard Johnson, Corporate
Affairs Director +44 (0) 1727 815 850
Maitland
Kate O'Neill +44 (0) 20 7379 5151
Tom Eckersley
- Ends -
Notes to editors:
1. The statutory accounting period is the 52 weeks from 5 April 2015 to 2 April 2016.
2. Comparative pro forma results are prepared for the 52 weeks
ended 4 April 2015 and are unaudited.
3. Trading profit for the underlying business is reconciled to
continuing operations Trading profit in the appendices and is
defined as Operating profit before amortisation of intangible
assets, impairment, fair value movements on foreign exchange and
other derivative contracts, restructuring costs, profits and losses
associated with divestment activity and net interest on pensions
and administration costs.
4. EBITDA is Trading profit excluding depreciation.
5. Adjusted profit before tax is defined as Trading profit for
the underlying business less net regular interest. Net regular
interest is defined as net finance cost after excluding write-off
of financing costs, fair value movements on interest rate financial
instruments and other interest. Adjusted earnings per share is
defined as Adjusted profit before tax less a notional tax charge of
20.0% (2014/15: 21.0%) divided by the weighted average of the
number of shares of 826.0million (52 weeks ended 4 April 2015:
824.4million). The weighted average of the number of shares and
notional tax charge for the financial period from 1 January 2014 to
4 April 2015 was 731.4 million and 21.4% respectively.
6. International sales growth is stated excluding the impact of
foreign currency movements.
A Premier Foods image gallery is available using the following
link:
www.premierfoods.co.uk/media/image-gallery/
Operating review
-----------------
The following commentary unless otherwise stated is prepared for
the 52 weeks ended 2 April 2016 with comparative results for the 52
weeks ended 4 April 2015. Results are stated on an 'Underlying
business' basis which are unaudited and exclude all disposals and
joint ventures transactions previously completed. The comparative
results are stated on a 'Pro forma' basis. Trading results of
Knighton Foods Limited ("Knighton") which was consolidated on 1
April 2016 are not reflected in the Sales and Trading profit
results and associated commentary of the Operating review. All
references to the 'year', unless otherwise stated, are for the 52
weeks ended 2 April 2016 and the comparative period, 52 weeks ended
4 April 2015. All references to the 'quarter', unless otherwise
stated, are for the 13 weeks ended 2 April 2016 and the comparative
period, 13 weeks ended 4 April 2015.
GBPm 2015/16 2014/15(2) Change
(52 weeks) (52 weeks) (%)
Group Sales
Branded 683.4 683.7 (0.0)
Non-branded 88.3 83.7 5.5
------------ ------------ -------
Total 771.7 767.4 0.6
Divisional contribution 167.1 163.2 2.4
Group & corporate
costs (36.1) (32.2) (12.1)
------------ ------------ -------
Trading profit(3) 131.0 131.0 0.0
EBITDA 147.1 144.9 1.5
Quarter 4 sales results
GBPm 2015/16 2014/15 Change
Q4 Q4
(13 weeks) (13 weeks) (%)
Group Sales
Branded 168.8 167.2 1.0
Non-branded 16.7 15.7 6.5
------------ ------------ -------
Total 185.5 182.9 1.4
Introduction
Group sales for the 52 weeks ended 2 April 2016 were GBP771.7m,
an increase of 0.6% on the prior year. In the fourth quarter of the
year, total sales grew by 1.4% to GBP185.5m compared to the
equivalent quarter a year ago. While branded sales were flat, six
of the Group's eight largest brands delivered average sales growth
of 3.4% during the year. These six brands have received more focus
on innovation and marketing investment over the last two years and
this result clearly demonstrates that the Group's innovation and
brand marketing strategy is working.
Trading profit(3) for the 52 weeks ended 2 April 2016 was
GBP131.0m; in line with both the prior year and the Company's
expectations. Within this, the group has invested approximately
GBP3m more consumer marketing compared to the prior year, while
depreciation was GBP2.2m higher following recent increased levels
of capital investment in the Group's cake bakeries.
Market overview
During the past year, the UK grocery market has continued to
display volume growth alongside a consistently deflationary
environment. The rate of UK food deflation has remained broadly
constant at 1.5%-2.0% over the last twelve months and as previously
commented, reflects a combination of benign input costs and price
competition across the wider grocery market.
The significant growth channels of discounters and online have
continued their respective progress over the last year with the
Group displaying growth broadly in line with both these growth
sectors of the market. This reflects commitments to deliver growth
in the discounters channel, principally but not exclusively through
our non-branded offering, while dedicated resource has been
recruited to realise the opportunities in online through a more
focused and tailored approach.
During the year the Group continued to expand its offering of
products with a nutritional benefit in response to a growing
consumer demand for healthy choices. This included the launch of
the 'Exceedingly Good' range of Mr Kipling Snack Pack slices
containing wholesome ingredients such as oats, cranberry and
coconut, the launch of Bisto Best Reduced Salt which has been a
strong seller since its introduction in 2015 and increased
vegetable content of its Loyd Grossman, Sharwood's and Homepride
cooking sauces so that around 70% contain 'one of your five a day'.
Building on existing achievements, the Group has recently refreshed
its nutrition strategy for the next three years including plans to
reduce calories and levels of added sugar in a number of product
categories through reformulation initiatives, the introduction of
calorie caps for individual cakes and the expansion of single
portion packs of cake as a percentage of the portfolio. The Company
also plans further salt reductions throughout its portfolio and
will expand the number of new products launched into market with
added nutritional benefits or calorie reductions.
Brand investment and innovation
The Group increased its investment in consumer marketing in the
year to approximately GBP36m, an increase of nearly 10% on the
prior year. The Group is committed to progressively increasing its
consumer marketing investment over the medium term. In FY16/17 the
Group plans to spend GBP42-GBP44m on consumer marketing, increasing
its expenditure on media advertising and preparing the foundations
for the launch of certain Grocery brands in the chilled arena.
Consequently, nine of the Group's brands are planned to benefit
from TV advertising in FY16/17.
Where the Group has invested in marketing its brands and
introducing new products to market, it has demonstrated positive
results. During the past year, six of the Group's largest eight
brands; Bisto, Oxo, Loyd Grossman, Sharwood's, Mr Kipling and
Cadbury cake all grew sales and on average, by +3.4%. Ambrosia and
Batchelors, the other two major brands, saw sales decline by (2.9%)
in the year. In aggregate, the former six benefitted from both
higher level levels of marketing investment as a proportion of
sales and more product launches. In FY16/17, the Ambrosia and
Batchelors brands will receive higher levels of marketing
investment and are also expected to benefit from new products which
align to current consumer trends such as Ambrosia Deluxe custard,
Ambrosia Frozen Custard ice cream and Batchelors High Protein and
High Veg pots.
Customer relationships
The Group counts all of the major food retailers in the UK as
key customers of its products. In the ordinary course of business,
it is customary for the food retailers to regularly review their
product categories to ensure they offer their customers the best
value and choice in their stores through category range reviews.
Some of the Group's major customers have undertaken category range
reviews over the past year and in overall terms, the outcome of
these reviews is that they have concluded in line with the
Company's expectations. While the Company has lost some slower
selling product codes in some areas, it has also gained increased
availability of some higher selling product codes in other areas;
both changes were as expected. With its category based strategy,
the Company continues to enjoy good relationships across its
customer portfolio.
Grocery
GBPm FY15/16 FY14/15 Change Q4 Change
(%)
(52 (52 weeks) (%)
weeks)
Sales
Branded 504.9 508.5 (0.7%) 0.2%
Non-branded 43.7 43.2 1.1% 3.8%
------- ----------
Total sales 548.6 551.7 (0.6%) 0.5%
Divisional contribution 142.1 145.2 (2.1%) -
Grocery sales were GBP548.6m in the year, slightly behind the
prior year as growth in non-branded sales was offset by a small
decline in branded sales to GBP504.9m. Sales in the fourth quarter
increased by 0.5%, with both branded and non-branded delivering
growth compared to the prior year. These results are set against
the backdrop of deflation in the wider UK Grocery market.
Divisional contribution was GBP3.1m lower at GBP142.1m due to
increased consumer marketing investment in the year.
In the Flavourings & Seasonings category, Bisto and Oxo
recorded strong performances, growing both sales and volumes during
the year. For Bisto, the Group's second largest brand, new products
launched into market contributed to over half the sales growth,
with the new reduced salt Bisto Best product proving particularly
popular among consumers. Oxo sales benefitted from the launch of
Stock Pots using gel pot technology, aligned to key consumer trends
and which accounted for approximately half the brand's sales growth
in the year. This category has received a significant level of
investment and focus over the last two years and clearly
demonstrates that the Group's category led strategy is delivering
results.
In the Cooking Sauces and Accompaniments category, sales of Loyd
Grossman and Sharwood's continued their positive trajectory from
the first half of the year, with both delivering full year sales
growth. Loyd Grossman sales benefitted from the rollout of its
'Gastro' and 'Classic' pouches range and the gel pot Pan Melts
product, while Sharwood's Stir fry Melts were supported by a major
TV advertising campaign.
Sales of Ambrosia were down slightly in the year, however they
returned to healthy growth in the fourth quarter, assisted by two
new product ranges. These comprised a range of premium Deluxe
custard including clotted cream, toffee and contemporary salted
caramel flavours and a significant extension of the brand into the
ice cream market with a range of frozen custard ice cream.
Elsewhere in the Desserts category, Mr. Kipling and Cadbury sponge
puddings and Cadbury desserts pots have all performed strongly in
the year.
As previously highlighted, while sales and volumes of Batchelors
have experienced significant declines in the past, this declining
trend has materially reduced. New premium cup-a-soup products were
launched in the first half of the year, with flavours including
Thai Inspired Chicken & Sweet Potato and Southern Style Pulled
Pork. Additional new products to be launched in FY16/17 include
High Protein pots, High Veg pots and Soup Dippers.
In the fourth quarter, the Group entered into a partnership with
renowned baker, Paul Hollywood and launched a unique range of
premium artisanal home-baking products which are now available in a
number of the Group's major retail customers.
Sweet Treats
GBPm FY15/16 FY14/15 Change Q4 Change
(%)
(52 (52 weeks) (%)
weeks)
Sales
Branded 178.5 175.2 1.9% 3.0%
Non-branded 44.6 40.5 10.0% 10.5%
------- ----------
Total sales 223.1 215.7 3.4% 3.8%
Divisional contribution 25.0 18.0 38.9% -
Sweet Treats total sales increased by 3.4% in the full year and
by 3.8% in the fourth quarter. This marks a consistently strong
trajectory for the business unit which has delivered sales growth
in all four quarters of the year. Both branded and non-branded
sales grew in the year; up 1.9% and 10.0% respectively, with
similar trends recorded for the fourth quarter. Volumes, measured
in cases and packets of products, also displayed healthy increases
in the year. As expected, the business unit achieved its target of
delivering double-digit Divisional contribution margins in the
year, increasing from 8.3% in the prior year to 11.2% for
FY15/16.
Cadbury cake enjoyed an excellent year, with sales and volumes
growing in double-digit percentage terms in both the year and the
fourth quarter. While new products such as Amaze Bites and Hot
Cakes have provided nearly half of the brand's growth in the year,
the core range has also performed very well. Cadbury cake
benefitted from its first television advertising for eight years
during the year and this will be repeated in FY16/17.
Mr Kipling launched a number of new products in the year
including Deluxe Viennese Whirls, Fabulous Fancy, Victoria Sponge
and Coffee cakes, Exceedingly Good slices and premium cup cakes. Mr
Kipling grew sales in the year and up to the third quarter this
year, had delivered six quarters of consistent growth. Sales were
lower in the fourth quarter due to an exceptionally strong
comparative quarter in FY14/15. Both Mr Kipling and Cadbury have
been instrumental in driving category growth during the year with a
number of the new product launches supporting the Group's
premiumisation strategy.
Over half of the business unit's non-branded sales are generated
in the third quarter of the year, and the strong performance in
this area reflected mince pie contract gains across both multiple
retail and discounter channels. In 2015, the Company sold 185
million mince pies, an 8% increase on the prior year. Other
non-branded contract wins in the year which contributed to this
sales and volume growth included fruit pies.
The strong Divisional contribution margin delivery in the year
reflects improved asset utilisation through increased branded and
non-branded volumes, improving the product profitability mix and
efficiency benefits from capital projects.
International
Sales in the International business increased by approximately
15% in the year, and excluding the impact of adverse foreign
currency movements, were ahead approximately 18%.
The Australian business performed very well, up 47% during the
year as a result of new listings of both Sharwood's and Mr Kipling
and Cadbury cakes in certain retailers. Market share of Indian
cooking sauces increased by +4.6 percentage points reflecting
improved distribution levels.
Sales in the USA grew by 23%, with the fourth quarter
particularly strong, reflecting a very good Sharwood's performance
with market share in Indian cooking sauces up +2.2 percentage
points in the year. The Company also undertook a new trial of Mr.
Kipling Apple, Fruit and Mississippi Mud Pies across 250 stores of
a major US retailer in the third quarter of the year which
delivered some encouraging results. Ireland sales grew in constant
currency, supported by Bisto and Oxo TV advertising in the second
half of the year.
The International business unit has significantly increased the
size of the team during the year to reflect the growth aspirations
of the Group. The business unit now employs 28 people, an increase
from just 9 a year ago, across a range of key functions to support
the Group's growth plans.
Efficiency and cost control
Over the coming financial year, the Group will be looking more
closely at improving the quality and product consistency across
certain lines within its Grocery business. Expertise will be used
to review current manufacturing processes to identify areas for
improvement which are expected to deliver increased line
efficiencies. Additionally, and following a review of its Grocery
plant line management operations, teams will become more
streamlined, delivering greater flexibility within manufacturing
sites and resulting in overhead cost reductions.
In logistics, the Group is reviewing options in both its
transport and warehousing operations which may lead to changes in
the configuration of its network. While these reviews are ongoing,
the majority of these changes are likely to take place late in the
year and into FY17/18.
The Group maintains a continual focus on improving the returns
on investment from promotional activity in which it participates
with major customers. In the third quarter of the year, the Group's
key trading period of the year, the Grocery business delivered
improved returns on investment on promotional activity and also
executed 27% more off shelf instore shipper displays compared to
the prior year.
HM Government has recently implemented a National Living Wage
(NLW) for all employees above the age of 25 which was effective
from April 2016. The Company expects there will be a relatively
small increase in labour costs in FY16/17 as a result of this
legislation. The impact is expected to be greater at some of the
Group's manufacturing sites than others. While the NLW is expected
to rise to at least GBP9.00 an hour by 2020, this level represents
the bottom of current government forecasts. Additionally, HM
Government have also proposed to implement an Apprenticeship Levy,
effective from April 2017. The Group will look to offset the impact
of this levy through its continued investment in training and
apprenticeships and create a more flexible workforce.
Net regular interest
GBPm FY15/16 FY14/15 Change
(52 (52 weeks) (%)
weeks)
Senior secured notes
interest 30.8 30.9 0.2
Bank debt interest 8.5 10.2 17.7
Securitisation interest 1.2 2.5 48.9
-------
40.5 43.6 7.1
Amortisation and
deferred fees 4.4 4.2 (5.4)
--------- ------------- -------
Net regular interest 44.9 47.8 6.0
--------- ------------- -------
Net regular interest for FY15/16 was GBP44.9m, in line with the
Group's expectations and GBP2.9m lower than the prior year. The
Group's sources of financing were largely unchanged in the year,
except for the previously announced closure of its GBP80m debtors
securitisation programme. As a result of the low utilisation and
subsequent closure of this securitisation programme, interest
charges attributable to it more than halved to GBP1.2m in the year.
As expected, the largest component of financing was interest due to
holders of the senior secured notes and was GBP30.8m in the year.
Bank debt interest was GBP1.7m lower in the year due to
approximately one month's term loan debt from the previous
financing structure included in the comparative period.
The Company expects net regular interest for the 2016/17
financial year to be marginally lower than FY15/16.
Associate investments
As at 4 April 2015, the Company held a 49% interest in both
Hovis Limited ("Hovis") and Knighton. On 1 April 2016, the Company
gained control of Knighton for reporting purposes under IFRS 10 and
consequently this business is consolidated in the financial
statements for the year from that date.
GBPm Hovis Knighton Total
4 April 2015 22.6 12.6 35.2
Interest receivable 0.8 0.2 1.0
Share of loss from
associates (14.1) (8.5) (22.6)
Impairment charge (9.3) (4.3) (13.6)
------- --------- -------
2 April 2016 - - -
------- --------- -------
For the financial period ended 2 April 2016, the Company
recognised a share of loss from associates of (GBP22.6m), of which
(GBP14.1m) is due to the share of loss from its investment in
Hovis. This loss reflects the highly competitive UK Bread market.
The share of loss from the Company's investment in Knighton was
(GBP8.5m) during the period due to challenging market conditions,
an unsatisfactory systems implementation and following a review of
the carrying value of certain assets.
Additionally, the Group wrote off its remaining investment in
Hovis which is reflected in the impairment charge of GBP9.3m. The
remaining GBP4.3m investment in Knighton was written off reflecting
the challenging market conditions faced by the business.
Consequently, associate investments had a nil value as at 2 April
2016.
Cash flow
GBPm FY 15/16
Trading profit 131.0
Depreciation 16.1
Other non-cash items 4.1
Interest (41.7)
Pension contributions (12.9)
Capital expenditure (25.4)
Working capital & other 0.3
Recurring cash inflow 71.5
---------
Restructuring costs (7.5)
Free cash flow 64.0
Knighton consolidation (8.3)
Total cash inflow 55.7
---------
Total cash inflows in the year were GBP55.7m. Trading profit was
GBP131.0m, while depreciation of GBP16.1m was in line with the
Company's expectations, although this is expected to be slightly
higher in FY16/17 at GBP17-18m. Interest paid was GBP41.7m and
capital expenditure was GBP25.4m. Pension contributions of GBP12.9m
were broadly in line with the previously agreed schedule of pension
deficit contributions and costs associated with administering the
pension schemes. Other non-cash items principally relate to the
add-back of share based payments. Cash restructuring costs relating
to a major re-organisation of the Group's IT function is one of the
main elements of the GBP7.5m outflow in the year.
Net debt
Net debt at 2 April 2016 was GBP534.2m. This represents a
GBP50.7m reduction in Net debt compared to the prior year and also
includes the impact of consolidating Knighton.
GBPm
Net debt at 4 April 2015 584.9
Free cash flow generation
in period (64.0)
Knighton consolidation 8.3
Movement in debt issuance
costs 5.0
Net debt at 2 April 2016 534.2
EBITDA 147.1
Net debt / EBITDA 3.6x
The Company's Net debt / EBITDA ratio reduced to 3.6x at the
year end, down from 4.0x as at the end of 2014/15 and reflects the
Group's focus on debt reduction. The Group expects deleveraging
will progress at a slower rate from FY16/17 due to the increase in
the previously agreed annual deficit cash contributions to the
pension schemes.
Pensions
IAS 19 Accounting 2 April 2016 4 April 2015
Valuation (GBPm)
RHM Premier Combined RHM Premier Combined
Foods Foods
Assets 3,758.7 584.2 4,342.9 3,636.0 612.5 4,248.5
Liabilities (3,207.8) (1,004.2) (4,212.0) (3,394.4) (1,065.9) (4,460.3)
---------- ---------- ---------- ----------
Surplus/(Deficit) 550.9 (420.0) 130.9 241.6 (453.4) (211.8)
Net of tax (20.0%/21.4%) 440.7 (336.0) 104.7 189.9 (356.4) (166.5)
The IAS 19 pension schemes valuation reported a surplus for the
combined RHM and Premier Foods' pension schemes at 2 April 2016 of
GBP130.9m, equivalent to GBP104.7m net of notional tax charge. This
compares to a deficit at 4 April 2015 of GBP211.8m and GBP166.5m
after tax.
The valuation at 2 April 2016 comprised a GBP550.9m surplus in
respect of the RHM schemes and a deficit of GBP420.0m in relation
to the Premier Foods schemes.
One of the key reasons for the GBP248.3m reduction in combined
liabilities in the schemes, from GBP4,460.3m to GBP4,212.0m is the
25 basis points increase in the discount rate from 3.30% at 4 April
2015 to 3.55% at 2 April 2016. One of the largest movements in the
asset classes is in the swaps classification; this reflects the
impact of the RHM schemes hedging strategy.
The reduction in the pension valuation between these dates has
no impact on the previously agreed pension deficit cash
contributions which are fixed until December 2019. As previously
highlighted, one approach in valuing the pension liabilities as
part of the Enterprise value of the Company is to discount the post
tax future cash flows of the agreed deficit contribution payment
schedule. On this basis, the pension schemes deficit could be
valued between GBP400m-420m.
Combined pensions schemes 2 April 4 April
(GBPm) 2016 2015
Assets
Equities 405.4 348.5
Government bonds 474.8 547.5
Corporate bonds 1.9 329.8
Property 292.3 260.0
Absolute return products 1,227.6 1,332.9
Cash 326.9 294.4
Infrastructure funds 228.0 196.6
Swaps 862.5 430.0
Private equity 259.4 250.9
Other 264.1 257.9
----------------------- ----------------------------
Total Assets 4,342.9 4,248.5
Liabilities
Discount rate 3.55% 3.30%
Inflation rate (RPI/CPI) 3.0%/1.9% 3.0%/1.9%
Total Liabilities (4,212.0) (4,460.3)
Surplus/(Deficit) 130.9 (211.8)
Notional tax (20.0%/21.4%) (26.2) 45.3
----------------------- ----------------------------
Surplus/(Deficit) net
of tax 104.7 (166.5)
----------------------- ----------------------------
Pension sensitivities
Pension sensitivities Increase/ Increase/ Increase/
(IAS 19 basis, GBPm) (Reduction) (Reduction) (Reduction)
in assets in liabilities in deficit
25 basis point decrease
in government gilts 170 181 11
25 basis point increase
in credit spreads - (170) (170)
25 basis point increase
in RPI 55 71 16
Life expectancy increase
by 1 year - 171 171
The above table intends to provide assistance in understanding
the sensitivity of the valuation of pension assets and liabilities
to market movements of government gilts, credit spreads and the
retail price index (RPI). The asset movement caused by a change in
government gilts is predominantly driven by hedging in the RHM
pension scheme. It is stressed that these sensitivities are
indicative only and may change over time as the schemes' execution
of their investment strategies may evolve to maximise asset
performance.
Accelerating growth strategy
On 23 March 2016, the Group announced a number of strategic
initiatives to help accelerate growth across its three business
units of Grocery, Sweet Treats and International. Together with the
Group's existing plans, these new initiatives are expected to
support the Group to deliver its medium term sales growth guidance
of 2-4%.
The new initiatives will leverage the Company's existing
platforms, infrastructure and brand presence to expand further into
new formats, channels and markets:
-- In Sweet Treats, we plan to build on the successful trial of
our Cake-On-The-Go range of Mr Kipling twin pack slices and Cadbury
mini roll twin pack by accelerating growth of our brands in broader
convenience channels through capitalising on our manufacturing
investments, innovation expertise and dedicated new team.
-- In Grocery, we intend to extend our strong brands into
premium areas within the chilled grocery sector in both the sweet
and savoury segments, to meet consumers' growing
health-consciousness.
-- In International, we plan to leverage the investment we have
already made in hiring an experienced team to step-change the size
of our International business. Our focus will be on accelerating
the expansion of our cake brands in the US and other geographies
using our differentiated offering, unique formats and packaging.
Initial store trials have demonstrated the potential for future
growth in these markets.
The Group also announced on 23 March 2016 that it had entered
into a co-operation agreement with Nissin Foods Holdings Co., Ltd.
("Nissin") and subsequently a Relationship agreement was entered
into.
Over recent years, the Group has discussed a number of potential
strategic opportunities with Nissin. This new strategic partnership
has the potential to create significant long-term value for both
organisations through strategic co-operation in the following
areas:
-- Providing Premier with access to Nissin's innovative products
and formats to distribute in the UK market under either Nissin's or
Premier's brands, such as Batchelors.
-- Enabling Premier to benefit from Nissin's international scale
to accelerate the distribution of Premier's products in key
overseas markets.
-- Sharing of Nissin's significant intellectual property,
innovation and technical know-how to develop new products.
-- Creating opportunities for both companies to leverage their
joint manufacturing capabilities and infrastructure.
-- Facilitating sharing of expertise and best practice through
appropriate secondments of personnel.
Further to the Relationship agreement dated 22 April 2016, the
Group is today announcing that Mr. Kijima, Managing Director of
Nissin, is appointed a non-executive director of the Board of
Premier Foods with effect from 21 July 2016.
Outlook
The Group's strategy of investing behind its brands and bringing
new innovative products to market delivered positive results in
FY15/16. In FY16/17 consumer marketing investment is expected to
increase again, to GBP42-GBP44m, with nine brands planned to
benefit from television advertising. Building on this trajectory,
the Group now expects to deliver sales growth of 2-4% in both
FY16/17 and the medium term, and together with its supply chain
efficiency programme, anticipates good progress to be delivered in
FY16/17.
Future prospects for the Group are reinforced by the recently
announced initiatives to accelerate growth in each of its business
units in addition to the potential opportunities presented by the
partnership with Nissin. The Board are focused on delivering
shareholder value and see a strong future for Premier Foods with
its leading category positions, great brands and strong operational
cash flows.
Financial review
-----------------
Within this financial review, the Company presents its results
for the 52 weeks ended 2 April 2016 (364 days) with comparative
information for the financial period from 1 January 2014 to 4 April
2015 (459 days). All commentary on the performance of the Company
included below refers to continuing operations unless otherwise
stated and therefore reflects the respective periods that the
Company maintained ownership of previously completed disposals.
Income statement
Revenue from continuing operations in the year was GBP771.7m
compared to GBP964.3m in the prior year. Revenue in the comparative
period benefitted from an additional 95 days due to the transition
to the Company's new financial year end. As commented on in the
Operating review, revenues on a pro forma basis grew slightly in
the year with revenues of branded goods flat and non-branded goods
higher. Grocery revenues for the 52 weeks ended 2 April 2016 were
GBP548.6m compared to GBP699.6m in the comparative period, while
Sweet Treats revenues were GBP223.1m compared to the prior period
of GBP264.7m.
Gross profit was GBP295.5m in the year, a decrease of GBP38.0m
compared to the prior period, primarily due to the fewer days in
the accounting period. Within this, good progress was made in the
Sweet Treats business unit in the year, reflecting improved asset
utilisation through increased branded and non-branded volumes,
improving the product profitability mix and efficiency benefits
from capital projects. Gross margins increased by 3.7 percentage
points to 38.3% for the year to 2 April 2016.
Divisional contribution for the Group was GBP167.1m in the year
compared to GBP196.4m for the period ended 4 April 2015. Grocery
Divisional contribution was GBP142.1m, a decrease of GBP37.5m
compared to the prior period, while Sweet Treats Divisional
contribution was GBP25.0m, an increase of GBP8.2m, reflecting the
points identified above despite being a shorter time period.
Operating profit
The Group reported an Operating profit for the year of GBP54.5m,
set against an Operating loss of (GBP44.1m) for the comparative
period. Before impairment and loss on disposal of operations, the
Group delivered an Operating profit of GBP68.1m in the year,
compared to GBP45.8m for the period ended 4 April 2015; an increase
of GBP22.3m.
The main driver of the improved Operating performance in the
period was due to lower impairment charges in the year and lower
net interest on pensions and administrative expenses.
In the prior period impairments relating substantially to the
Sweet Treats business unit goodwill resulted in charges for the
period of GBP83.9m, while in FY15/16, impairment charges in the
Group were significantly lower at GBP13.6m reflecting the write
down of associate investments. Net interest on pensions and
administrative expenses in the year were GBP14.5m; GBP33.5m lower
than the prior period, due to a lower opening pension deficit
(GBP211.8m compared with GBP603.3m) and fewer reporting days in the
52 weeks ended 2 April 2016.
Amortisation of intangible assets was GBP37.6m in the year,
compared to GBP47.6m, although this entirely reflects the longer
comparative reporting period. The Group continues to expect the
annual run rate for intangible asset amortisation to be
approximately GBP38-40m.
Restructuring costs were GBP11.2m in the year, largely due to
costs associated with restructuring the Group's IT function and
corporate activity fees.
Trading profit on this statutory reporting basis was GBP128.8m
in the year compared to GBP150.2m in the prior reporting period.
This is largely due to the longer comparative reporting period, and
also includes GBP2.2m of costs predominantly relating to the write
off of legacy fixed assets. The Group also invested approximately
GBP3m more in consumer marketing in the year on a pro forma basis,
reflecting its strategy of investing behind its brands.
Finance costs
Net finance cost for the year ended 2 April 2016 was GBP44.9m
compared to GBP81.9m in the comparative period, in overall terms
due to lower levels of Group net debt following the re-financing
completed in April 2014. The Group's sources of financing were
largely unchanged in the year, except for the previously announced
closure of its GBP80m debtors securitisation programme. The largest
component of financing costs in the year was interest payable on
the senior secured notes issued by the Group in March 2014 and
amounted to GBP30.8m.
The higher financing costs in the prior period were due to costs
associated with previous financing facilities, and included
interest payable on term facility (GBP7.2m); deferred fees
associated with previous arrangements (GBP6.7m) and the write off
of financing costs associated with previous arrangements
(GBP14.6m). None of these costs relating to the Group's previous
financing facilities, as described above, were repeated in the 52
weeks ended 2 April 2016.
Write off costs associated with the closure of the Group's
securitisation programme in January 2016 amounted to GBP0.4m in the
year.
Associate investments
The Group reported a share of loss from associates of GBP22.6m
in the year, compared to a loss of GBP9.6m in the comparative
period. The share of loss associated with Hovis was GBP14.1m and
reflects competitive market conditions in the UK bread market. The
share of loss from Knighton for the year was GBP8.5m and was due to
a combination of challenging market conditions, costs associated
with an unsatisfactory systems implementation and following a
review of the carrying value of certain assets.
As a result of the losses in the year and challenging market
conditions, the Group wrote off its remaining investment in Hovis
which is reflected in the impairment charge of GBP9.3m. The
remaining GBP4.3m investment in Knighton was written off reflecting
the challenging market conditions faced by the Knighton business.
Consequently, associate investments had a nil value as at 2 April
2016.
On 1 April 2016, the Group gained control (as defined under IFRS
10) of Knighton, in which the Group already held 49% of the
ordinary share capital and associated voting rights and as a
result, the Group has consolidated Net debt of GBP8.3m relating to
this business. The securitisation facility drawn of GBP6.4m at 2
April 2016 relates to Knighton. In anticipation of acquiring 100%
of the Knighton business, the Group has arranged a new debtor
finance facility which was undrawn at the year end and is expected
to accommodate any additional working capital requirements from
Knighton.
Profit before taxation
The Group made a loss before tax of GBP13.0m for the year ended
2 April 2016 compared to a prior period loss of GBP135.6m.
Operating profit of GBP54.5m was offset by net finance costs of
GBP44.9m and a share of loss from associates of GBP22.6m as
outlined above.
Taxation
A taxation credit of GBP47.0m is reported for the 52 weeks ended
2 April 2016, due to movements in deferred tax. This compares to a
prior period credit of GBP42.9m, which largely reflects the loss
incurred in the comparative period. The applicable rate of
corporation tax for the year was 20.0% (4 April 2015: 21.4%).
The Group's deferred tax net asset as at 2 April 2016 was
GBP25.9m. Within this deferred tax net asset of GBP25.9m, the Group
recognises a deferred tax liability of GBP23.8m associated with
retirement benefit obligations reflecting the combined pension
schemes surplus at 2 April 2016. Additionally, the Group has
recognised an asset reflecting prior year tax losses of GBP70.5m
which equate to approximately GBP400m of losses which can be used
to offset taxable profits in future periods. These losses can
generally be carried forward indefinitely. Detailed proposals
announced in the Chancellor of the Exchequer's 2016 budget
regarding limits on interest charge deductions and the utilisation
of prior year losses are yet to be announced and hence any
potential implications on the Group's current or future tax
position will be disclosed in due course.
The corporation tax rate for 2016/17 is expected to be 20.0% and
the deferred tax rate is 18.0%.
Earnings per share
The Group reports a basic earnings per share on continuing
operations for the 52 weeks ended 2 April 2016 of 4.1 pence,
compared to a basic loss per share on continuing operations in the
prior period of 12.7 pence. Earnings/(loss) per share is calculated
by dividing the earnings/(loss) attributed to ordinary shareholders
of GBP34.0m (4 April 2015: (GBP92.7m)) by the weighted number of
shares in issue during the period. The weighted number of shares in
the comparative period reflects the issue of new shares on 24 March
2014 and is adjusted for the relevant bonus factor.
Adjusted earnings per share for continuing operations were 8.1
pence (4 April 2015: 9.0 pence). Adjusted earnings per share on
continuing operations has been calculated by dividing the adjusted
earnings (defined as Trading profit less net regular interest and
notional taxation) attributed to ordinary shareholders of GBP67.1m
(4 April 2015: GBP65.9m) by the weighted number of ordinary shares
in issue during each period. These earnings have been calculated by
reflecting tax at a notional rate of 20.0% (4 April 2015: 21.4%).
The weighted average number of shares in issue for the 52 weeks
ended 2 April 2016 was 826.0m and the comparative period ended 4
April 2015 was 731.4m.
Cash flow and borrowings
The Group's net borrowings as at 2 April 2016 were GBP534.2m, a
decrease of GBP50.7m since 4 April 2015. The cash inflow from
operations to 4 April 2015 was GBP137.1m, compared to an inflow of
GBP62.5m in the comparative period.
Net cash interest paid was GBP41.7m in the year (4 April 2015:
GBP59.1m), of which GBP30.8m related to cash payments to holders of
the Group's senior secured notes. The purchase of property, plant
and equipment was GBP23.0m in the period, a reduction of GBP11.1m
from the prior period and intangible asset purchases were GBP6.9m
which relate to certain IT systems implementation to provide
improved analysis in areas such as commercial reporting. No cash
tax was payable in the year due to the availability of relief for
capital expenditure and pension deficit contribution payments.
The Group repaid GBP58.0m of borrowings related to its revolving
credit facility in the year and closed its debtors securitisation
programme, resulting in a movement of GBP19.7m in the year.
In the comparative period, the Group received GBP500.0m proceeds
from the issue of its senior secured fixed and floating notes and
GBP353.4m gross proceeds from the issue of new equity following the
completion of the Capital Refinancing Plan in 2014. These proceeds
were used to repay term facilities under the previous financing
arrangements of GBP679.5m. Financing fees and other costs of
finance amounted to GBP58.3m which included fees associated with
the raising of new equity, issuing senior secured notes, new
revolving credit facilities, advisory fees and other fees arising
from previous re-financing arrangements.
Retirement benefit schemes
At 2 April 2016, the Company's pension schemes under the IAS 19
accounting valuation showed a combined gross surplus of GBP130.9m,
compared to a combined deficit of GBP211.8m at 4 April 2015. The
valuation at 2 April 2016 comprised a GBP550.9m surplus in respect
of the RHM schemes (4 April 2015: GBP241.6m) and a deficit of
GBP420.0m (4 April 2015: GBP453.4m) in relation to the Premier
Foods schemes. Further commentary on the Group's pension schemes is
provided in the Operating review.
The Accounting Standards Board under IFRIC 14, are currently
reviewing the recognition of a pensions surplus in the financial
statements of an entity. Dependent upon the final published
standard, there is potential that any future defined benefit
surplus may not be recognised in the financial statements of the
Group and additionally, the deficit valuation methodology may also
change.
Alastair Murray
Chief Financial Officer
Appendices
------------
The Company's results are presented for the 52 weeks ended 2
April 2016. Results are stated on an 'Underlying business' basis
which exclude all disposals and joint ventures transactions
previously completed and are unaudited. The comparative results are
stated on a 'Pro forma' basis, are unaudited and are presented to
illustrate the performance of the Company on the new reporting
calendar methodology.
'Continuing operations' includes the respective periods that the
Company maintained ownership of previously completed disposals and
joint ventures entered into. The results of the 52 weeks ended 2
April 2016 and its comparative period for statutory reporting
purposes, the financial period from 1 January 2014 to 4 April 2015,
are commented on in the financial review.
GBPm Continuing Less: Less: Add/(Less): 'Underlying'
operations Disposals Knighton 1 Jan business
- 5 Apr
2014
------------ ------------ ----------- ---------- ------------ -------------
2015/16
Sales 771.7 0.0 N/A N/A 771.7
Trading
profit(3) 128.8 2.2 N/A N/A 131.0
EBITDA(4) 144.9 2.2 N/A N/A 147.1
2014/15(2)
Sales 964.3 (0.2) (8.1) (188.6) 767.4
Trading
profit(3) 150.2 3.8 0.7 (23.7) 131.0
EBITDA(4) 168.7 3.6 0.7 (28.1) 144.9
------------ ------------ ----------- ---------- ------------ -------------
Continuing operations Trading profit of GBP128.8m in FY15/16
above includes GBP2.2m of non-cash costs predominantly relating to
the write off of legacy fixed assets in the year and is excluded
from 'Underlying business' Trading profit.
Continuing operations earnings per share is calculated as set
out below:
GBPm FY15/16 Period
to 4 April
2015
(52 weeks) (15 months)
Continuing Trading profit 128.8 150.2
Amortisation of intangible
assets (37.6) (47.6)
Foreign exchange fair value
movements 2.6 (0.6)
Net interest on pension and
administrative expenses (14.5) (48.0)
Restructuring costs (11.2) (8.2)
Loss on disposal of operations - (6.0)
Impairment (13.6) (83.9)
------------ -------------
Operating profit/(loss) 54.5 (44.1)
Net finance expense (44.9) (81.9)
Share of loss from associates (22.6) (9.6)
Loss before tax (13.0) (135.6)
Taxation credit 47.0 42.9
------------ -------------
Profit/(loss) after tax 34.0 (92.7)
Divided by:
Average shares in issue (millions) 826.0 731.4
Basic earnings/(loss) per
share 4.1p (12.7p)
Adjusted earnings per share is calculated as set out below:
GBPm 2 April 4 April
2016 2015(2)
(52 weeks) (52 weeks)
Underlying Trading profit 131.0 131.0
Less net regular interest (44.9) (47.8)
Adjusted profit before tax 86.1 83.2
Less notional tax at 20.0%/21.0% (17.2) (17.5)
------------ ------------
Adjusted profit after tax 68.9 65.7
Divided by:
Average shares in issue (millions) 826.0 824.4
Adjusted earnings per share 8.3p 8.0p
Pro forma results for 52 weeks to 2 April 2016 (Includes effect
of Knighton consolidation)
The table below is presented to show the pro forma trading
results of the Group as if it controlled Knighton for the duration
of the 52 weeks ended 2 April 2016 and are unaudited.
These results will form the basis on which the Group will report
its pro forma results for the 52 weeks ending 1 April 2017.
GBPm 52 weeks to 2 April 2016
------------------- ----------------------------------------------------------------
Q1 Q2 H1 Q3 Q4 FY
(13 (13 (26 (13 (13 (52
weeks) weeks) weeks) weeks) weeks) weeks)
------------------- --------- --------- --------- --------- --------- ---------
Grocery
Branded sales 110.1 116.1 226.2 155.0 123.7 504.9
Non-branded
sales 16.1 18.4 34.5 20.7 18.1 73.3
Total sales 126.2 134.5 260.7 175.7 141.8 578.2
Divisional
contribution - - 60.2 - - 140.2
Sweet Treats
Branded sales 40.0 40.4 80.4 53.0 45.1 178.5
Non-branded
sales 6.0 7.4 13.4 25.2 6.0 44.6
Total sales 46.0 47.8 93.8 78.2 51.1 223.1
Divisional
contribution - - 7.4 - - 25.0
Group
Branded sales 150.1 156.5 306.6 208.0 168.8 683.4
Non-branded
sales 22.1 25.8 47.9 45.9 24.1 117.9
Total sales 172.2 182.3 354.5 253.9 192.9 801.3
Divisional
contribution - - 67.6 - - 165.2
Group & corporate - - (17.6) - - (36.1)
Trading profit - - 50.0 - - 129.1
EBITDA - - 58.3 - - 146.5
------------------- --------- --------- --------- --------- --------- ---------
-- The Company reports its Full Year results on a 52 week ended basis.
-- The term Divisional contribution refers to Gross Profit less
selling, distribution and marketing expenses directly attributable
to the relevant business unit.
-- Group & corporate costs refer to group and corporate
expenses which are not directly attributable to a business unit and
are reported at total Group level.
-- The International business unit is currently too small for
separate disclosure and in line with accounting standards is
aggregated within the Grocery business unit for reporting
purposes.
Pension deficit contribution schedule
The table below shows the phasing of previously agreed deficit
contributions in the context of the Company's new financial
calendar.
GBPm 2016/17 2017/18 2018/19 2019/20
----------------------- -------- -------- -------- --------
Deficit contributions 48 49 44 44
----------------------- -------- -------- -------- --------
Administration
costs + PPF
levy 8-10 8-10 8-10 8-10
----------------------- -------- -------- -------- --------
Total cash
outflow 56-58 57-59 52-54 52-54
----------------------- -------- -------- -------- --------
Consolidated statement of profit or loss
52 weeks Period
ended ended
2 Apr 4 Apr
2016 2015
Note GBPm GBPm
----------------------------------------- ----- --------- --------
Continuing operations
Revenue 3 771.7 964.3
Cost of sales (476.2) (630.8)
----------------------------------------- ----- --------- --------
Gross profit 295.5 333.5
Selling, marketing and distribution
costs (128.4) (135.2)
Administrative costs (112.6) (242.4)
----------------------------------------- ----- --------- --------
Operating profit/(loss) 54.5 (44.1)
Operating profit before impairment
and loss on disposal of operations 68.1 45.8
Impairment of goodwill and property,
plant and equipment 7 - (83.9)
Impairment of investments in 7,
associates 8 (13.6) -
Loss on disposal of operations - (6.0)
----------------------------------------- ----- --------- --------
Finance cost 4 (48.1) (82.5)
Finance income 4 2.5 1.8
Net movement on fair valuation
of interest rate financial instruments 4 0.7 (1.2)
Share of loss from associates 8 (22.6) (9.6)
----------------------------------------- ----- --------- --------
Loss before taxation from continuing
operations (13.0) (135.6)
Taxation credit 5 47.0 42.9
----------------------------------------- ----- --------- --------
Profit/(loss) after taxation
from continuing operations 34.0 (92.7)
Loss from discontinued operations (4.8) (30.9)
----------------------------------------- ----- --------- --------
Profit/(loss) for the period
attributable to owners of the
parent 29.2 (123.6)
----------------------------------------- ----- --------- --------
Basic and diluted earnings/(loss)
per share
From continuing operations (pence) 6 4.1 (12.7)
From discontinued operations
(pence) 6 (0.6) (4.2)
From profit/(loss) for the period 3.5 (16.9)
----------------------------------------- ----- --------- --------
Adjusted earnings per share(1)
From continuing operations (pence) 6 8.1 9.0
----------------------------------------- ----- --------- --------
(1) Adjusted earnings per share is defined as trading
profit less net regular interest, less a notional
tax charge at 20% (2014/15: 21.4%) divided by the
weighted average number of ordinary shares of the
Company.
Consolidated statement of comprehensive income
52 weeks Period
ended ended
2 Apr 2016 4 Apr
2015
Note GBPm GBPm
----------------------------------------- ----- ----------- --------
Profit/(loss) for the period 29.2 (123.6)
Other comprehensive income, net
of tax
Items that will never be reclassified
to profit or loss
Remeasurements of defined benefit
liability 12 344.8 379.3
Deferred tax charge 5 (65.9) (75.8)
Items that are or may be reclassified
to profit or loss
Exchange differences on translation (0.4) (0.6)
-----------
Other comprehensive income, net
of tax 278.5 302.9
----------------------------------------- ----- ----------- --------
Total comprehensive income attributable
to owners of the parent 307.7 179.3
----------------------------------------- ----- ----------- --------
Consolidated balance sheet
As at As at
2 Apr 4 Apr
2016 2015
Note GBPm GBPm
---------------------------------------- ----- ------------------- -------------------
ASSETS:
Non-current assets
Property, plant and equipment 187.8 183.3
Goodwill 649.8 646.0
Other intangible assets 496.0 528.4
Retirement benefit assets 12 550.9 241.6
Investments in associates 8 - 35.2
Deferred tax assets 5 25.9 41.9
1,910.4 1,676.4
Current assets
Inventories 63.2 68.8
Trade and other receivables 100.5 123.5
Cash and cash equivalents 14 8.0 44.7
Derivative financial instruments 1.6 -
173.3 237.0
---------------------------------------- ----- ------------------- -------------------
Total assets 2,083.7 1,913.4
---------------------------------------- ----- ------------------- -------------------
LIABILITIES:
Current liabilities
Trade and other payables (204.7) (212.6)
Financial liabilities
- short term borrowings 10 (0.4) (42.0)
- derivative financial instruments (2.0) (3.7)
Provisions for liabilities
and charges 11 (6.3) (8.6)
Current income tax liabilities (0.7) (0.7)
(214.1) (267.6)
Non-current liabilities
Financial liabilities - long
term borrowings 10 (541.8) (587.6)
Retirement benefit obligations 12 (420.0) (453.4)
Provisions for liabilities
and charges 11 (47.3) (51.6)
Other liabilities 13 (12.0) (13.0)
(1,021.1) (1,105.6)
---------------------------------------- ----- ------------------- -------------------
Total liabilities (1,235.2) (1,373.2)
---------------------------------------- ----- ------------------- -------------------
Net assets 848.5 540.2
---------------------------------------- ----- ------------------- -------------------
EQUITY:
Capital and reserves
Share capital 82.7 82.6
Share premium 1,406.6 1,406.4
Merger reserve 351.7 351.7
Other reserves (9.3) (9.3)
Profit and loss reserve (979.3) (1,291.2)
---------------------------------------- -------------------
Capital and reserves attributable
to owners of the parent 852.4 540.2
Non-controlling interest 9 (3.9) -
----------------------------------------
Total equity 848.5 540.2
---------------------------------------- ----- ------------------- -------------------
Consolidated statement of cash flows
52 weeks Period
ended ended
2 Apr 2016 4 Apr
2015
Note GBPm GBPm
--------------------------------------- ----- ------------------------ -------------------
Cash generated from operations 14 137.1 62.5
Interest paid (44.2) (60.9)
Interest received 2.5 1.8
--------------------------------------- ----- ------------------------ -------------------
Cash generated from operating
activities 95.4 3.4
Sale of businesses - 8.3
Cash outflow on business combination (0.2) -
Loan notes issued - (15.7)
Purchases of property, plant
and equipment (23.0) (34.1)
Purchases of intangible assets (6.9) (7.9)
Sale of property, plant and equipment - 1.7
--------------------------------------- ----- ------------------------ -------------------
Cash used in investing activities (30.1) (47.7)
Repayment of borrowings (58.0) (771.0)
Proceeds from borrowings - 500.0
Movement in securitisation funding
programme (19.7) (100.3)
Financing fees and other costs
of finance - (58.3)
Proceeds from share issue 0.3 353.4
Share issue costs - (13.3)
Purchase of shares to satisfy
share awards (1.8) (1.5)
--------------------------------------- ----- ------------------------ -------------------
Cash used in financing activities (79.2) (91.0)
Net decrease in cash and cash
equivalents (13.9) (135.3)
Cash, cash equivalents and bank
overdrafts at beginning of period 21.7 157.0
--------------------------------------- ----- ------------------------ -------------------
Cash, cash equivalents and bank
overdrafts at end of period 14 7.8 21.7
--------------------------------------- ----- ------------------------ -------------------
Consolidated statement of changes in equity
Note Share Share Merger Other Profit Non-controlling Total
capital premium reserve reserves and interest equity
loss
reserve
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ----- --------- --------- --------- ---------- ---------- ---------------- --------
At 1 January
2014 24.0 1,124.7 404.7 (9.3) (1,526.3) 0.1 17.9
Loss for the
period - - - - (123.6) - (123.6)
Remeasurements
of defined benefit
schemes 12 - - - - 379.3 - 379.3
Deferred tax
charge 5 - - - - (75.8) - (75.8)
Exchange differences
on translation - - - - (0.6) - (0.6)
Other comprehensive
income - - - - 302.9 - 302.9
---------------------- ----- --------- --------- --------- ---------- ---------- ---------------- --------
Total comprehensive
income - - - - 179.3 - 179.3
Shares issued 58.6 295.0 - - - - 353.6
Cost of shares
issued - (13.3) - - - - (13.3)
Share-based
payments - - - - 4.3 - 4.3
Shares purchased
to satisfy share
awards - - - - (1.5) - (1.5)
Disposal of
non-controlling
interest - - - - - (0.1) (0.1)
Realisation
of merger reserve - - (53.0) - 53.0 - -
At 4 April 2015 82.6 1,406.4 351.7 (9.3) (1,291.2) - 540.2
---------------------- ----- --------- --------- --------- ---------- ---------- ---------------- --------
At 4 April 2015 82.6 1,406.4 351.7 (9.3) (1,291.2) - 540.2
Profit for the
period - - - - 29.2 - 29.2
Remeasurements
of defined benefit
schemes 12 - - - - 344.8 - 344.8
Deferred tax
charge 5 - - - - (65.9) - (65.9)
Exchange differences
on translation - - - - (0.4) - (0.4)
Other comprehensive
income - - - - 278.5 - 278.5
---------------------- ----- --------- --------- --------- ---------- ---------- ---------------- --------
Total comprehensive
income - - - - 307.7 - 307.7
Shares issued 0.1 0.2 - - - - 0.3
Share-based
payments - - - - 4.1 - 4.1
Shares purchased
to satisfy share
awards - - - - (1.8) - (1.8)
Deferred tax
movements on
share-based
payments - - - - 1.9 - 1.9
Non-controlling
interest on
change of ownership - - - - - (3.9) (3.9)
At 2 April 2016 82.7 1,406.6 351.7 (9.3) (979.3) (3.9) 848.5
---------------------- ----- --------- --------- --------- ---------- ---------- ---------------- --------
1. Basis of preparation
The financial information included in this preliminary
announcement does not constitute the company's statutory accounts
for the periods ended 02 April 2016 and 04 April 2015 but is
derived from those accounts. Statutory accounts for the period
ended 04 April 2015 have been delivered to the registrar of
companies, and those for the period ended 02 April 2016 will be
delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The consolidated financial statements of the Company have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union (EU) ("adopted
IFRS") in response to IAS regulation (EC1606/2002), related
interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS, and on the historical cost basis, with the
exception of derivative financial instruments which are
incorporated using fair value.
Basis for preparation of financial statements on a going concern
basis
The Group's revolving credit facility includes net debt/EBITDA
and EBITDA/interest covenants. In the event these covenants are not
met then the Group would be in breach of its financing agreement
and, as would be the case in any covenant breach, the banking
syndicate could withdraw funding to the Group. The Group was in
compliance with its covenant tests as at 2 October 2015 and 2 April
2016. The Group's forecasts, taking into account reasonably
possible changes in trading performance, show that the Group should
be able to operate within the level of its current facilities
including covenant tests. The directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the next 12 months. The Group therefore
continues to adopt the going concern basis in preparing its
consolidated financial statements.
2. Critical accounting policies, estimates and judgements
The following are areas of particular significance to the
Group's financial statements and include the use of estimates and
the application of judgement, which is fundamental to the
compilation of a set of financial statements.
Employee benefits
The present value of the Group's defined benefit pension
obligations depends on a number of actuarial assumptions. The
primary assumptions used include the discount rate applicable to
scheme liabilities, the long-term rate of inflation and estimates
of the mortality applicable to scheme members.
At each reporting date, and on a continuous basis, the Group
reviews the macro-economic, Company and scheme specific factors
influencing each of these assumptions, using professional advice,
in order to record the Group's ongoing commitment and obligation to
defined benefit schemes in accordance with IAS 19 (Revised). Key
assumptions used are mortality rates, discount rates and inflation
set with reference to bond yields. Each of the underlying
assumptions is set out in more detail in note 12.
Goodwill and other intangible assets
Impairment reviews in respect of goodwill are performed annually
unless an event indicates that an impairment review is necessary.
Impairment reviews in respect of intangible assets are performed
when an event indicates that an impairment review is necessary.
Examples of such triggering events include a significant planned
restructuring, a major change in market conditions or technology,
expectations of future operating losses, or a significant reduction
in cash flows. The recoverable amounts of CGUs are determined based
on the higher of net realisable value and value in use
calculations. These calculations require the use of estimates.
The Group has considered the impact of the assumptions used on
the calculations and has conducted sensitivity analysis on the
impairment tests of the CGUs carrying values.
Acquired brands, trademarks and licences are considered to have
finite lives that range from 20 to 40 years for brands and
trademarks and 10 years for licences. The determination of the
useful lives takes into account certain quantitative factors such
as sales expectations and growth prospects, and also many
qualitative factors such as history and heritage, and market
positioning, hence the determination of useful lives are subject to
estimates and judgement.
Advertising and promotion costs
Sales rebates and discounts are accrued on each relevant
promotion or customer agreement and are charged to the statement of
profit or loss at the time of the relevant promotional buy-in as a
deduction from revenue. Accruals for each individual promotion or
rebate arrangement are based on the type and length of promotion
and nature of customer agreement. At the time an accrual is made
the nature and timing of the promotion is typically known. Areas of
estimation are sales volume/activity and the amount of product sold
on promotion.
For short term promotions, the Group performs a true up of
estimates where necessary on a monthly basis, using real time sales
information where possible and finally on receipt of a customer
claim which typically follows 1-2 months after the end of a
promotion. For longer term discounts and rebates the Group uses
actual and forecast sales to estimate the level of rebate. These
accruals are updated monthly based on latest actual and forecast
sales.
Expenditure on advertising is charged to the statement of profit
or loss when incurred, except in the case of airtime costs when a
particular campaign is used more than once. In this case they are
charged in line with the airtime profile.
Deferred tax assets
When assessing whether the recognition of a deferred tax asset
can be justified, and if so at what level, the directors take into
account the following:
Projected profits or losses included in the latest board
approved forecast and other relevant information that allow profits
chargeable to corporation tax to be derived
The total level of recognised and unrecognised losses that can
be used to reduce future forecast taxable profits
The period over which there is sufficient certainty that profits
can be made that would support the recognition of an asset
Further disclosures of the amounts recognised (and unrecognised)
are contained within note 5.
Associates
Associates are all entities over which the Group has significant
influence but not control.
Judgement is sometimes required when assessing whether the Group
has significant influence or control. Control is illustrated by the
power over relevant activities and the exposure to the variability
of returns. In determining whether the Group has the practical
ability to direct relevant activities, factors such as voting
rights, financial and operational dependency and any special
relationships are taken into consideration.
In addition, the carrying value of investments is assessed for
impairment with reference to current and future projections of
profitability and cash generation.
3. Segmental analysis
IFRS 8 requires operating segments to be determined based on the
Group's internal reporting to the Chief Operating Decision Maker
("CODM"). The CODM has been determined to be the Executive
Leadership Team as it is primarily responsible for the allocation
of resources to segments and the assessment of performance of the
segments.
The Group's operating segments are defined as "Grocery", "Sweet
Treats" and "International". The Grocery segment primarily sells
savoury ambient food products and the Sweet Treats segment sells
sweet ambient food products. The International segment has been
aggregated within the Grocery segment for reporting purposes, in
accordance with the criteria set out in IFRS 8.
The CODM uses Divisional contribution as the key measure of the
segments' results. Divisional contribution is defined as gross
profit after selling, marketing and distribution costs. Divisional
contribution is a consistent measure within the Group and reflects
the segments' underlying trading performance for the period under
evaluation.
The Group uses trading profit to review overall group
profitability. Trading profit is defined as operating profit before
amortisation of intangible assets, impairment, fair value movements
on foreign exchange and other derivative contracts, restructuring
costs, profits and losses associated with divestment activity and
net interest on pensions and administrative costs.
The segment results for the 52 weeks ended 2 April 2016 and for
the period ended 4 April 2015 and the reconciliation of the segment
measures to the respective statutory items are as follows:
52 weeks ended 2 Apr
2016
------------------------------------- --------------------------------
Grocery Sweet Continuing
Treats operations
GBPm GBPm GBPm
------------------------------------- -------- -------- ------------
Revenue 548.6 223.1 771.7
------------------------------------- -------- -------- ------------
Divisional contribution 142.1 25.0 167.1
Group and corporate costs (38.3)
------------------------------------- -------- -------- ------------
Trading profit 128.8
Amortisation of intangible
assets (37.6)
Fair value movements on foreign
exchange and other derivative
contracts 2.6
Restructuring costs (11.2)
Net interest on pensions
and administrative expenses (14.5)
------------------------------------- -------- --------
Operating profit before impairment
and loss on disposal of operations 68.1
Impairment of investments
in associates (13.6)
------------------------------------- -------- -------- ------------
Operating profit 54.5
Finance cost (48.1)
Finance income 2.5
Net movement on fair valuation
of interest rate financial
instruments 0.7
Share of loss from associates (22.6)
Loss before taxation from
continuing operations (13.0)
------------------------------------- -------- -------- ------------
Depreciation (8.2) (7.9) (16.1)
------------------------------------- -------- -------- ------------
Period ended 4 Apr
2015
--------------------------------------------------------------------
Grocery Sweet Continuing
Treats operations
GBPm GBPm GBPm
------------------------------------- ------------------- ------------------------- --------------------
Revenue 699.6 264.7 964.3
------------------------------------- ------------------- ------------------------- --------------------
Divisional contribution 179.6 16.8 196.4
Group and corporate costs (46.2)
------------------------------------- ------------------- ------------------------- --------------------
Trading profit 150.2
Amortisation of intangible
assets (47.6)
Fair value movements on foreign
exchange and other derivative
contracts (0.6)
Restructuring costs (8.2)
Net interest on pensions
and administrative expenses (48.0)
------------------------------------- ------------------- -------------------------
Operating profit before impairment
and loss on disposal of operations 45.8
Impairment of goodwill and
property, plant and equipment (83.9)
Loss on disposal of operations (6.0)
------------------------------------- ------------------- ------------------------- --------------------
Operating loss (44.1)
Finance cost (82.5)
Finance income 1.8
Net movement on fair valuation
of interest rate financial
instruments (1.2)
Share of loss from associates (9.6)
Loss before taxation from
continuing operations (135.6)
------------------------------------- ------------------- ------------------------- --------------------
Depreciation (10.1) (8.4) (18.5)
------------------------------------- ------------------- ------------------------- --------------------
Revenues in the 52 weeks ended 2 April 2016, on a continuing
basis, from the Group's four principal customers, which
individually represent over 10% of total revenue, are GBP164.7m,
GBP124.1m, GBP92.8m and GBP92.4m (Period ended 4 April 2015:
GBP224.4m, GBP161.2m, GBP122.4m and GBP113.6m).
Inter-segment transfers or transactions are entered into under
the same terms and conditions that would be available to unrelated
third parties.
The Group primarily supplies the UK market, although it also
supplies certain products to other countries in Europe and the rest
of the world. The following table provides an analysis of the
Group's revenue, which is allocated on the basis of geographical
market destination, and an analysis of the Group's non-current
assets by geographical location.
Revenue - continuing operations
52 weeks Period
ended ended
2 Apr 2016 4 Apr
2015
GBPm GBPm
--------------------------------- ----------- -------
United Kingdom 735.5 925.0
Other Europe 18.8 23.4
Rest of world 17.4 15.9
---------------------------------- ----------- -------
Total 771.7 964.3
---------------------------------- ----------- -------
Non-current assets
As at As at
2 Apr 2016 4 Apr
2015
GBPm GBPm
-------------------- ----------- --------
United Kingdom 1,910.4 1,676.4
--------------------- ----------- --------
4. Finance income and costs
52 weeks Period
ended ended
2 Apr 4 Apr
2016 2015
GBPm GBPm
-------------------------------------- -------------------- -------------------
Interest payable on bank loans
and overdrafts (5.1) (7.8)
Interest payable on term facility - (7.2)
Interest payable on senior secured
notes (30.8) (32.3)
Interest payable on revolving
facility (5.9) (7.0)
Interest payable on interest rate
derivatives (1.2) (2.9)
Other interest (payable)/receivable (0.3) 0.3
Amortisation of debt issuance
costs (4.4) (4.3)
Deferred fees(1) - (6.7)
(47.7) (67.9)
Write off of financing costs(2) (0.4) (14.6)
Total finance cost (48.1) (82.5)
-------------------------------------- -------------------- -------------------
Interest receivable on bank deposits 2.5 1.8
Total finance income 2.5 1.8
-------------------------------------- -------------------- -------------------
Movement on fair valuation of
interest rate derivative financial
instruments 0.7 (1.2)
-------------------------------------- -------------------- -------------------
Net finance cost (44.9) (81.9)
-------------------------------------- -------------------- -------------------
(1) Relates to accrual of deferred interest relating
to the Group's previous financing arrangements.
(2) Relates to the write-off of debt issuance
costs relating to the Group's previous financing
arrangements in 2014/15 and securitisation facility
in 52 weeks ended 2 April 2016, which terminated
in January 2016.
The net movement on fair valuation of interest rate financial
instruments relates to a GBP0.7m favourable movement on interest
rate swaps held (2014/15: GBP1.2m adverse).
5. Taxation
Current tax
Continuing Discontinued
operations operations Total
GBPm GBPm GBPm
---------------------------------- ---------------------- ------------------- -------------------
2015/16
Deferred tax
- Current period 51.9 1.0 52.9
- Prior periods (4.5) - (4.5)
- Adjustment to restate
opening deferred tax at 18.0% (0.4) - (0.4)
Income tax credit 47.0 1.0 48.0
---------------------------------- ---------------------- ------------------- -------------------
2014/15
Deferred tax
- Current period 42.3 2.1 44.4
- Prior periods 0.6 - 0.6
Income tax credit 42.9 2.1 45.0
---------------------------------- ---------------------- ------------------- -------------------
Reductions in the UK corporation tax rate from 23% to 21%
(effective from 1 April 2014) and 20% (effective from 1 April 2015)
were substantively enacted on 2 July 2013. Further reductions to
19% (effective from 1 April 2017) and to 18% (effective 1 April
2020) were substantively enacted on 26 October 2015. The deferred
tax asset at 2 April 2016 has been calculated based on these
rates.
An additional reduction to 17% (effective from 1 April 2020) was
announced in the Budget on 16 March 2016. If enacted, this will
reduce the Company's future current tax charge accordingly and
reduce the deferred tax asset at 2 April 2016 by GBP1.4m.
Tax relating to items recorded in other comprehensive income for
continuing operations was:
52 weeks Period
ended ended
2 Apr 4 Apr
2016 2015
GBPm GBPm
---------------------------------- -------------------- -------------------
Deferred tax charge on reduction (3.7) -
of corporate tax rate
Deferred tax charge on pension
movements (62.2) (75.8)
(65.9) (75.8)
---------------------------------- -------------------- -------------------
The tax credit for the period differs from the standard rate of
corporation tax in the United Kingdom of 20.0% (2014/15: 21.4%).
The reasons for this are explained below:
52 weeks Period
ended ended
2 Apr 2016 4 Apr
2015
GBPm GBPm
---------------------------------------- -------------------- -------------------
Loss before taxation for
continuing operations (13.0) (135.6)
Tax credit at the domestic income
tax rate of 20.0% (2014/15: 21.4%) 2.6 29.0
Tax effect of:
Non-deductible items (1.0) (1.0)
Other disallowable items - (1.3)
Impairment of goodwill - (14.5)
Share of loss from associates (4.6) (2.1)
Previously unrecognised advanced
capital allowances - (9.6)
Adjustment for share-based
payments (0.9) (1.0)
Previously unrecognised losses
utilised 0.1 7.3
Adjustment due to current
period deferred tax being
provided at 18.0% (2014/15:
20%) 0.4 (1.1)
Movements in losses recognised 55.3 36.6
Adjustment to restate opening deferred (0.4) -
tax at 18% (2014/15: 20%)
Adjustments to prior periods (4.5) 0.6
Income tax credit 47.0 42.9
----------------------------------------- -------------------- -------------------
Deferred tax
Deferred tax is calculated in full on temporary differences
using the tax rate appropriate to the jurisdiction in which the
asset/(liability) arises and the tax rates that are expected to
apply in the periods in which the asset or liability is settled. In
all cases this is 18.0% (2014/15: 20.0%) except for an asset of
GBP0.3m (2014/15: GBP2.0m) relating to Irish retirement benefit
obligations where the local rate of 12.5% has been used.
52 weeks Period
ended ended
2 April 4 April
2016 2015
GBPm GBPm
------------------------------------- ---------------- ----------------
At 5 April 2015 / 1 January 2014 41.9 72.7
Credited to the statement of profit
or loss 48.0 45.0
Charged to other comprehensive
income (65.9) (75.8)
Credited to equity 1.9 -
At 2 April 2016 / 4 April 2015 25.9 41.9
------------------------------------- ---------------- ----------------
The Group has recognised a deferred tax asset based on future
taxable profits, derived from the latest Board approved
forecasts.
Due to the level of taxable profits anticipated the Group has
not recognised deferred tax assets of GBPnil (2014/15: GBP43.0m)
relating to UK corporation tax losses. In addition, the Group has
losses of GBP22.4m (2014/15: GBP24.9m) relating to ACT and GBP13.4m
(2014/15: GBP14.9m) relating to capital losses. Under current
legislation these losses can generally be carried forward
indefinitely.
Deferred tax liabilities Intangibles Retirement Other Total
benefit
obligation
-------------------------------- -------------------- ------------------- -------------------- -------------------
GBPm GBPm GBPm GBPm
-------------------------------- -------------------- ------------------- -------------------- -------------------
At 1 January 2014 (73.0) - (4.0) (77.0)
Current period credit 3.1 - - 3.1
Prior period credit 0.1 - - 0.1
At 4 April 2015 (69.8) - (4.0) (73.8)
Prior period restatement
of opening balances
- To income statement 7.0 - 0.4 7.4
Current period credit 2.1 - - 2.1
Prior period (charge)/credit (0.7) - 3.4 2.7
Charged to other comprehensive
income - (23.8) - (23.8)
At 2 April 2016 (61.4) (23.8) (0.2) (85.4)
-------------------------------- -------------------- ------------------- -------------------- -------------------
Retirement Share
Deferred tax Accelerated benefit based Financial
assets tax depreciation obligation payments instruments Losses Other Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------------------ ---------------- -------------- ----------------- ---------- -------- --------
At 1 January
2014 25.5 120.7 1.0 2.5 - - 149.7
Prior period
credit
- To statement
of profit or
loss 0.2 0.1 0.2 - - - 0.5
- To other
comprehensive
income - 0.8 - - - - 0.8
Current period
(charge)/credit (5.0) (2.0) (0.4) 0.4 41.9 4.3 39.2
Charged to other
comprehensive
income - (76.6) - - - - (76.6)
Deferred tax
credit on
discontinued
activities 2.1 - - - - - 2.1
At 4 April 2015 22.8 43.0 0.8 2.9 41.9 4.3 115.7
Prior period
restatement of
opening balances
- To income
statement (2.2) (0.5) (0.1) (0.3) (4.2) (0.4) (7.7)
- To equity - (3.7) - - - - (3.7)
Current period
credit/(charge) 14.2 0.8 0.3 (0.6) 36.3 (0.2) 50.8
Prior period
charge
- To statement
of profit or
loss (1.2) (1.2) (0.1) - (4.5) (1.3) (8.3)
Charged to other
comprehensive
income - (38.4) - - - - (38.4)
Credited to
equity - - 1.9 - - - 1.9
Deferred tax
credit on
discontinued
activities - - - - 1.0 - 1.0
At 2 April 2016 33.6 - 2.8 2.0 70.5 2.4 111.3
----------------- ------------------ ---------------- -------------- ----------------- ---------- -------- --------
Net deferred tax asset GBPm
----------------------------- -----
52 weeks ended 2 April 2016 25.9
Period ended 4 April 2015 41.9
--------------------------------- -----
Where there is a legal right of offset and an intention to
settle as such, deferred tax assets and liabilities may be
presented on a net basis. This is the case for most of the Group's
deferred tax balances and therefore they have been offset in the
tables above. Substantial elements of the Group's deferred tax
assets and liabilities, primarily relating to the defined benefit
pension obligation, are greater than one year in nature.
6. Earnings/(loss) per share
Basic earnings/(loss) per share has been calculated by dividing
the profits attributable to owners of the parent of GBP29.2m
(2014/15: GBP123.6m loss) by the weighted average number of
ordinary shares of the Company.
Weighted average shares
2015/16 2014/15
Number Number
(000s) (000s)
--------------------------------------- ----------------- --------
Weighted average number of ordinary
shares for the purpose of basic
earnings/(loss) per share 826,017 731,390
Effect of dilutive potential ordinary
shares:
- Share options 1,005 1,907
Weighted average number of ordinary
shares for the purpose of diluted
earnings/(loss) per share 827,022 733,297
--------------------------------------- ----------------- --------
Earnings per share calculation
52 weeks ended 2 Period ended
Apr 2016 4 Apr 2015
Dilutive Dilutive
effect effect
of of
share share
Basic options Diluted Basic options Diluted
--------------------- --------------------- ------------- ------------- ------------- ------------ -------------
Continuing
operations
Earnings/(Loss)
after tax (GBPm) 34.0 34.0 (92.7) (92.7)
--------------------- ---------------------
Earnings/(Loss)
per share (pence) 4.1 0.0 4.1 (12.7) - (12.7)
--------------------- --------------------- ------------- ------------- ------------- ------------ -------------
Discontinued
operations
Loss after tax
(GBPm) (4.8) (4.8) (30.9) (30.9)
--------------------- ---------------------
Loss per share
(pence) (0.6) 0.0 (0.6) (4.2) - (4.2)
--------------------- --------------------- ------------- ------------- ------------- ------------ -------------
Total
Earnings/(Loss)
after tax (GBPm) 29.2 29.2 (123.6) (123.6)
--------------------- ---------------------
Earnings/(Loss)
per share (pence) 3.5 0.0 3.5 (16.9) - (16.9)
--------------------- --------------------- ------------- ------------- ------------- ------------ -------------
Dilutive effect of share options
The dilutive effect of share options is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. The
only dilutive potential ordinary shares of the Company are share
options. A calculation is performed to determine the number of
shares that could have been acquired at fair value (determined as
the average annual market share price of the Company's shares)
based on the monetary value of the subscription rights attached to
the outstanding share options.
No adjustment is made to the profit or loss in calculating basic
and diluted earnings per share.
There is no dilutive effect of share options calculated in the
prior period as the Group made a loss.
Adjusted earnings per share ("Adjusted EPS")
Adjusted earnings per share is defined as trading profit less
net regular interest, less a notional tax charge at 20.0% (2014/15:
21.4%) divided by the weighted average number of ordinary shares of
the Company.
Net regular interest is defined as net finance costs after
excluding write-off of financing costs, fair value movements on
interest rate financial instruments and other interest.
Trading profit and Adjusted EPS have been reported as the
directors believe these provide an alternative measure by which the
shareholders can better assess the Group's underlying trading
performance.
52 weeks Period
ended ended
2 Apr 4 Apr
2016 2015
GBPm
-------------------------------------- --------- -------
Trading profit 128.8 150.2
Less net regular interest (44.9) (66.4)
--------- -------
Adjusted profit before tax 83.9 83.8
Notional tax at 20.0% / 21.4% (16.8) (17.9)
Adjusted profit after tax 67.1 65.9
-------------------------------------- --------- -------
Average shares in issue (m) 826.0 731.4
Adjusted EPS (pence) 8.1 9.0
Net regular interest
Net finance cost (44.9) (81.9)
Exclude fair value movements on
interest rate financial instruments (0.7) 1.2
Exclude write-off of financing
costs 0.4 14.6
Exclude other interest 0.3 (0.3)
Net regular interest (44.9) (66.4)
-------------------------------------- --------- -------
7. Impairment
There has been no goodwill or intangible asset impairment
recognised in 2015/16. A total impairment charge of GBP13.6m was
recognised during the year relating to the Group's investments in
Hovis Holdings Limited ("Hovis") (GBP9.3m) and Knighton Foods
Investments Limited ("Knighton") (GBP4.3m). The impairment relating
to Hovis reflects the highly competitive bread industry and the
significant losses in the year to date. The impairment relating to
Knighton reflects the challenging market conditions faced by the
Knighton business.
In 2014/15, a total impairment charge of GBP83.9m was recognised
in continuing operations, comprising goodwill allocated to the
Sweet Treats CGU (GBP67.9m) and property, plant and equipment
relating to a reduction in the recoverable value of certain assets
in the Grocery business (GBP16.0m). A total impairment charge of
GBP10.9m was recognised in discontinued operations in 2014/15 due
to the write down of software (GBP6.8m) and inventory (GBP4.1m)
associated with the Bread business.
8. Associates
During 2014/15, the Group disposed of its majority interest in
the Bread business and the Powdered Beverages and Desserts
business. The Group's 49% retained interest in the share capital of
these businesses was recognised as an investment in associate and
the carrying value of these investments are given in the table
below.
The Group issued a loan note to Hovis for GBP15.7m on 26 April
2014. As part of the Powdered Beverages and Desserts business
disposal transaction, the Group held a promissory note from
Knighton of GBP3.5m. These loans were reclassified to investments
in associates during the period, in order to reflect the fact that
in substance they form part of the carrying value of the Group's
respective investments, in accordance with IAS 28 Investments in
Associates and Joint Ventures.
Refer to note 7 for details of impairment charges.
Hovis Knighton Total
GBPm GBPm GBPm
------------------------------- -------------------------- --------------------------- --------------------------
At 1 January 2014 - - -
Additions 30.1 13.1 43.2
Interest receivable 1.4 0.2 1.6
Share of loss from associates (8.9) (0.7) (9.6)
------------------------------- -------------------------- --------------------------- --------------------------
At 4 April 2015 22.6 12.6 35.2
Interest receivable 0.8 0.2 1.0
Share of loss from associates (14.1) (8.5) (22.6)
Impairment charge (9.3) (4.3) (13.6)
At 2 April 2016 - - -
------------------------------- -------------------------- --------------------------- --------------------------
9. Ownership of subsidiaries/businesses
On 1 April 2016, the Group gained control (as defined under IFRS
10) of Knighton, in which the Group already held 49% of the
ordinary share capital and associated voting rights. The Group
considers that it had power to control Knighton as the company
became financially and operationally dependent upon the Group, with
the Group taking operational decisions over the relevant activities
of the company.
On acquiring such control, the Group was required to consolidate
Knighton.
At 2 April 2016, the Group owned 49% of the ordinary share
capital.
Goodwill of GBP3.8m is attributable to the intellectual property
of Knighton and synergies which arise on acquisition.
Given the proximity of the transfer of control to period end the
fair values of all the assets and liabilities are provisional.
The following table summarises the consideration for Knighton,
and the amounts of the assets acquired and liabilities assumed.
Provisional
values
on acquisition
Recognised amounts of identifiable assets GBPm
acquired and liabilities assumed
---------------------------------------------- ------------------
Property, plant & equipment 2.4
Inventories 7.0
Trade and other receivables 9.2
Trade and other payables (16.2)
Cash and cash equivalents (0.2)
Financial liabilities - borrowings and other
loans (9.9)
---------------------------------------------- ------------------
Total identifiable net liabilities (7.7)
---------------------------------------------- ------------------
Non-controlling interest 3.9
---------------------------------------------- ------------------
Goodwill 3.8
---------------------------------------------- ------------------
Total consideration -
---------------------------------------------- ------------------
Pro-forma consolidated results
The pro-forma consolidated results of the Group, as if control
of Knighton had been gained at the beginning of the period, would
include revenue from continuing operations of GBP801.3m (compared
with Group revenue of GBP771.7m) and underlying losses before
taxation of GBP21.9m (compared with underlying losses before
taxation of GBP13.0m).
In preparing the proforma results, revenue and costs have been
included as if the businesses were acquired on 5 April 2015 and the
inter-company transactions have been eliminated.
Contribution since acquisition has had no material impact on
Group results.
Subsidiaries with significant non-controlling interests
The Group has one subsidiary company which has a material
non-controlling interest of 51%, Knighton. Summary financial
information in relation to Knighton is shown above.
10. Bank and other borrowings
As at As at
2 Apr 4 Apr
2016 2015
GBPm GBPm
--------------------------------- ------------------- -------------------
Current:
Bank overdrafts (0.2) (23.0)
Securitisation facility - (19.7)
Transaction costs - 0.7
Finance lease obligations (0.2) -
Total borrowings due within one
year (0.4) (42.0)
--------------------------------- ------------------- -------------------
Non-current:
Secured senior credit facility
- revolving (55.0) (113.0)
Transaction costs 6.9 8.3
-------------------
(48.1) (104.7)
Bank term loan (1.5) -
--------------------------------- ------------------- -------------------
(1.5) -
Senior secured notes (500.0) (500.0)
Transaction costs 14.2 17.1
--------------------------------- -------------------
(485.8) (482.9)
--------------------------------- ------------------- -------------------
Securitisation facility (6.4) -
--------------------------------- ------------------- -------------------
(6.4) -
Total borrowings due after more
than one year (541.8) (587.6)
--------------------------------- ------------------- -------------------
Total bank and other borrowings (542.2) (629.6)
--------------------------------- ------------------- -------------------
Revolving credit facility
The revolving credit facility of GBP272m is due to mature in
March 2019 and attracts an initial bank margin of 3.50% above
LIBOR. Banking covenants of net debt / EBITDA and EBITDA / interest
are in place and are tested biannually.
The Group entered into a three year floating to fixed interest
rate swap in June 2014, with a nominal value of GBP150m amortising
to GBP50m, attracting a swap rate of 1.44%.
Term loan
The term loan at the period end relates to that of Knighton and
matures in October 2018, priced at 2.75% above LIBOR.
Securitisation facility
The Group's existing debtor's securitisation facility was
terminated in January 2016. The securitisation facility drawn at
the period end relates to that of Knighton and matures in October
2018, priced at 2.25% above LIBOR.
Senior secured notes
The senior secured notes totalling GBP500m are split between
fixed and floating tranches. The fixed note of GBP325m matures in
March 2021 and attracts an interest rate of 6.50%. The floating
note of GBP175m matures in March 2020 and attracts an interest rate
of 5.00% above LIBOR.
11. Provisions for liabilities and charges
Total provisions for liabilities and charges of GBP53.6m at 2
April 2016 (4 April 2015: GBP60.2m) comprise restructuring
provisions of GBP26.4m (4 April 2015: GBP25.9m) which primarily
relate to provisions for non-operational leasehold properties, and
other provisions of GBP27.2m (4 April 2015: GBP34.3m) which
primarily relate to insurance claims, dilapidations against
leasehold properties and environmental liabilities.
12. Retirement benefit schemes
Defined benefit schemes
The Group operates a number of defined benefit schemes under
which current and former employees have built up an entitlement to
pension benefits on their retirement. These are as follows:
(a) The Premier schemes, which comprise:
Premier Foods Pension Scheme ("PFPS")
Premier Grocery Products Pension Scheme ("PGPPS")
Premier Grocery Products Ireland Pension Scheme ("PGPIPS")
Chivers 1987 Pension Scheme
Chivers 1987 Supplementary Pension Scheme.
(b) The RHM schemes, which comprise:
RHM Pension Scheme
Premier Foods Ireland Pension Scheme
The most recent triennial actuarial valuation of the PFPS, the
PGPPS and RHM pension schemes was carried out on 31 March 2013 / 5
April 2013 to establish ongoing funding arrangements. Deficit
recovery plans have been agreed with the Trustees of each of the
schemes. The current triennial valuations as at 31 March 2016 / 2
April 2016 are ongoing but will not affect deficit recovery
contributions until after 2019. Actuarial valuations for the
schemes based in Ireland took place during the course of 2014. The
Premier Foods Ireland pension scheme is a triennial scheme.
The exchange rates used to translate the overseas euro based
schemes are GBP1.00 = EUR1.3584 for the average rate during the
period, and GBP1.00 = EUR1.2536 for the closing position at 2 April
2016.
At the balance sheet date, the combined principal actuarial
assumptions were as follows:
Premier RHM schemes
schemes
At 2 April 2016
Discount rate 3.55% 3.55%
Inflation - RPI 3.00% 3.00%
Inflation - CPI 1.90% 1.90%
Expected salary increases n/a n/a
Future pension increases 2.00% 2.00%
---------------------------- --------- ------------
At 4 April 2015
Discount rate 3.30% 3.30%
Inflation - RPI 3.00% 3.00%
Inflation - CPI 1.90% 1.90%
Expected salary increases n/a n/a
Future pension increases 2.00% 2.00%
---------------------------- --------- ------------
For the smaller overseas schemes the discount rate used was
1.85% (2014/15: 1.40%) and future pension increases were 1.50%
(2014/15: 1.50%).
The mortality assumptions are based on standard mortality tables
and allow for future mortality improvements. The assumptions are as
follows:
Premier RHM schemes
schemes
--------------------------------- --------- ------------
Life expectancy at 2 April 2016
Male pensioner, currently aged
65 87.8 86.2
Female pensioner, currently
aged 65 90.0 88.4
Male non-pensioner, currently
aged 45 89.1 87.5
Female non-pensioner, currently
aged 45 91.5 89.9
---------------------------------- --------- ------------
Life expectancy at 4 April 2015
Male pensioner, currently aged
65 87.8 86.4
Female pensioner, currently
aged 65 90.1 88.6
Male non-pensioner, currently
aged 45 89.2 87.7
Female non-pensioner, currently
aged 45 91.6 90.1
---------------------------------- --------- ------------
A sensitivity analysis on the principal assumptions used to
measure the scheme liabilities at the period end is as follows:
Change in assumption Impact on scheme
liabilities
------------------------ ----------------------- --------------------
Discount rate Increase/decrease Decrease/increase
by 0.1% by GBP69m/GBP71m
Inflation Increase/decrease Increase/decrease
by 0.1% by GBP29m/GBP29m
Assumed life expectancy Increase by 1 Increase by GBP171m
at age 60 (rate year
of mortality)
------------------------ ----------------------- --------------------
The sensitivity information has been derived using projected
cash flows for the Schemes valued using the relevant assumptions
and membership profile as at 2 April 2016. Extrapolation of these
results beyond the sensitivity figures shown may not be
appropriate.
The fair values of plan assets split by type of asset are as
follows:
Premier schemes % of total RHM schemes % of total Total % of total
GBPm % GBPm % GBPm
----------------------------- ---------------- ----------- ------------ ----------- -------- -----------
Assets with a quoted price in an active market at 2 April 2016:
UK equities 1.4 0.2 0.5 0.0 1.9 0.1
Global equities 18.5 3.1 385.0 10.2 403.5 9.3
Government bonds 22.7 3.9 452.1 12.0 474.8 10.9
Corporate bonds - - 1.9 0.1 1.9 0.0
Property 8.2 1.4 284.1 7.6 292.3 6.7
Absolute return products 368.3 63.1 859.3 22.9 1,227.6 28.2
Cash 8.7 1.5 318.2 8.5 326.9 7.5
Other 156.1 26.7 2.5 0.1 158.6 3.7
Assets without a quoted price in an active market at 2 April 2016:
Infrastructure funds - - 228.0 6.1 228.0 5.2
Swaps - - 862.5 22.8 862.5 20.0
Private equity - - 259.4 6.9 259.4 6.0
Other 0.3 0.1 105.2 2.8 105.5 2.4
Fair value of scheme assets
as at 2 April 2016 584.2 100 3,758.7 100 4,342.9 100
----------------------------- ---------------- ----------- ------------ ----------- -------- -----------
Assets with a quoted price in an active market at 4 April 2015:
UK equities 0.9 0.1 51.7 1.4 52.6 1.2
Global equities 21.4 3.5 274.5 7.5 295.9 7.0
Government bonds 21.4 3.5 526.1 14.5 547.5 12.9
Corporate bonds 4.4 0.7 325.4 8.9 329.8 7.8
Property 7.5 1.3 252.5 7.0 260.0 6.1
Absolute return products 391.0 63.8 941.9 25.9 1,332.9 31.4
Cash 13.8 2.3 280.6 7.7 294.4 6.9
Other 152.1 24.8 - - 152.1 3.6
Assets without a quoted price in an active market at 4 April 2015:
Infrastructure funds - - 196.6 5.4 196.6 4.6
Swaps - - 430.0 11.9 430.0 10.1
Private equity - - 250.9 6.9 250.9 5.9
Other - - 105.8 2.9 105.8 2.5
----------------------------- ---------------- ----------- ------------ ----------- -------- -----------
Fair value of scheme assets
as at 4 April 2015 612.5 100 3,636.0 100 4,248.5 100
----------------------------- ---------------- ----------- ------------ ----------- -------- -----------
The RHM scheme invests directly in interest rate and inflation
swaps to protect from fluctuations in interest rates and
inflation.
The amounts recognised in the balance sheet arising from the
Group's obligations in respect of its defined benefit schemes are
as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
------------------------------ ---------- ------------ ----------
At 2 April 2016
Present value of funded
obligations (1,004.2) (3,207.8) (4,212.0)
Fair value of plan assets 584.2 3,758.7 4,342.9
------------------------------ ---------- ------------ ----------
(Deficit)/surplus in schemes (420.0) 550.9 130.9
------------------------------ ---------- ------------ ----------
At 4 April 2015
Present value of funded
obligations (1,065.9) (3,394.4) (4,460.3)
Fair value of plan assets 612.5 3,636.0 4,248.5
------------------------------ ---------- ------------ ----------
(Deficit)/surplus in schemes (453.4) 241.6 (211.8)
------------------------------ ---------- ------------ ----------
The aggregate deficit of GBP211.8m has moved to a surplus of
GBP130.9m in the current period. This movement of GBP342.7m
(2014/15: GBP391.5m decrease) is primarily due to asset performance
in the RHM schemes and the impact of an increase in the discount
rate on the defined benefit obligations.
Changes in the present value of the defined benefit obligation
were as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
---------------------------- ---------- ------------ ----------
Defined benefit obligation
at 1 January 2014 (916.9) (2,904.8) (3,821.7)
Current service cost (0.1) - (0.1)
Interest cost (49.4) (156.5) (205.9)
Remeasurement losses (149.4) (521.5) (670.9)
Exchange differences 6.6 3.5 10.1
Benefits paid 43.3 184.9 228.2
Defined benefit obligation
at 4 April 2015 (1,065.9) (3,394.4) (4,460.3)
Interest cost (33.7) (109.3) (143.0)
Remeasurement gains 63.0 162.2 225.2
Exchange differences (4.6) (2.5) (7.1)
Benefits paid 37.0 136.2 173.2
---------------------------- ---------- ------------ ----------
Defined benefit obligation
at 2 April 2016 (1,004.2) (3,207.8) (4,212.0)
---------------------------- ---------- ------------ ----------
Changes in the fair value of plan assets were as follows:
Premier RHM Total
schemes schemes
GBPm GBPm GBPm
------------------------------------------- ------- --------- -------
Fair value of plan assets
at 1 January 2014 531.4 2,687.0 3,218.4
Interest income on plan assets 28.5 145.4 173.9
Remeasurement gains 81.7 968.5 1,050.2
Administrative costs (7.8) (8.1) (15.9)
Contributions by employer 28.2 31.1 59.3
Exchange differences (6.2) (3.0) (9.2)
Benefits paid (43.3) (184.9) (228.2)
Fair value of plan assets at 4 April 2015 612.5 3,636.0 4,248.5
Interest income on plan assets 18.7 117.4 136.1
Remeasurement (losses)/gains (19.4) 139.0 119.6
Administrative costs (2.6) (5.0) (7.6)
Contributions by employer 7.6 5.3 12.9
Exchange differences 4.4 2.2 6.6
Benefits paid (37.0) (136.2) (173.2)
Fair value of plan assets at 2 April 2016 584.2 3,758.7 4,342.9
The reconciliation of the net defined benefit (deficit)/surplus
over the period is as follows:
Premier RHM schemes Total
schemes
GBPm GBPm GBPm
Deficit in schemes at 1 January 2014 (385.5) (217.8) (603.3)
Amount recognised in profit or loss (28.8) (19.2) (48.0)
Remeasurements recognised in other comprehensive income (67.7) 447.0 379.3
Contributions by employer 28.2 31.1 59.3
Exchange rate gains 0.4 0.5 0.9
(Deficit)/surplus in schemes at 4 April 2015 (453.4) 241.6 (211.8)
Amount recognised in profit or loss (17.6) 3.1 (14.5)
Remeasurements recognised in other comprehensive income 43.6 301.2 344.8
Contributions by employer 7.6 5.3 12.9
Exchange rate losses (0.2) (0.3) (0.5)
(Deficit)/surplus in schemes at 2 April 2016 (420.0) 550.9 130.9
Remeasurements recognised in the consolidated statement of
comprehensive income are as follows:
Premier RHM Total
schemes schemes
GBPm GBPm GBPm
2015/16
Remeasurement gain on plan liabilities 63.0 162.2 225.2
Remeasurement (loss)/gain on plan assets (19.4) 139.0 119.6
Net remeasurement gain for the period 43.6 301.2 344.8
2014/15
Remeasurement loss on plan liabilities (149.4) (521.5) (670.9)
Remeasurement gain on plan assets 81.7 968.5 1,050.2
Net remeasurement (loss)/gain for the period (67.7) 447.0 379.3
The actual return on plan assets was a GBP255.7m gain (2014/15:
GBP1,224.1m gain), which is GBP119.6m more (2014/15: GBP1,050.2m
more) than the interest income on plan assets of GBP136.1m
(2014/15: GBP173.9m) at the start of the relevant periods.
The remeasurement gain on liabilities of GBP225.2m (2014/15:
GBP670.9m loss) comprises a gain due to member experience of
GBP15.5m (2014/15: GBP1.8m gain), a gain due to demographic
assumptions of GBP49.8m (2014/15: GBP5.3m gain) and a gain due to
changes in financial assumptions of GBP159.9m (2014/15: GBP678.0m
loss).
The net remeasurement gain taken to the consolidated statement
of comprehensive income was GBP344.8m (2014/15: GBP379.3m gain).
This gain was GBP278.9m (2014/15: GBP303.4m gain) net of taxation
(with tax at 18% for UK schemes, and 12.5% for Irish schemes).
The Group expects to contribute approximately GBP8-10m to its
defined benefit plans in 2016/17 in relation to expenses and
government levies and GBP48m of additional contributions to fund
the scheme deficits.
The Group has an unconditional right to a refund of any surplus
in the RHM Pension Scheme and so the asset has not been restricted
and no additional liability has been recognised.
The total amounts recognised in the consolidated statement of
profit or loss are as follows:
Premier schemes RHM schemes Total
GBPm GBPm GBPm
2015/16
Operating profit
Administrative costs (2.6) (5.0) (7.6)
Net interest (cost)/credit (15.0) 8.1 (6.9)
Total (17.6) 3.1 (14.5)
2014/15
Operating loss
Current service cost (0.1) - (0.1)
Administrative costs (7.8) (8.1) (15.9)
Net interest cost (20.9) (11.1) (32.0)
Total (28.8) (19.2) (48.0)
Defined contribution schemes
A number of companies in the Group operate defined contribution
schemes, predominantly stakeholder arrangements. In addition a
number of schemes providing life assurance benefits only are
operated. The total expense recognised in the statement of profit
or loss of GBP5.4m (2014/15: GBP8.5m) represents contributions
payable to the plans by the Group at rates specified in the rules
of the plans.
13. Other liabilities
As at As at
2 Apr 4 Apr
2016 2015
GBPm GBPm
------- ------------------
Deferred income (11.7) (12.8)
Other accruals (0.3) (0.2)
Other liabilities (12.0) (13.0)
------- ------------------
14. Notes to the cash flow statement
Reconciliation of loss before tax to cash flows from operating activities
52 weeks ended Period ended
2 Apr 2016 4 Apr 2015
GBPm GBPm
Continuing operations
Loss before taxation (13.0) (135.6)
Net finance cost 44.9 81.9
Share of loss from associates 22.6 9.6
Operating profit/(loss) 54.5 (44.1)
Depreciation of property, plant and equipment 16.1 18.5
Amortisation of intangible assets 37.6 47.6
Loss on disposal of businesses - 6.0
Loss on disposal of non-current assets 1.8 2.5
Impairment of property, plant and equipment - 16.0
Impairment of investments in associates 13.6 -
Impairment of goodwill - 67.9
Fair value movements on foreign exchange and other derivative contracts (2.6) 0.6
Equity settled employee incentive schemes 4.1 3.4
Decrease/(Increase) in inventories 12.7 (11.2)
Decrease in trade and other receivables 26.2 23.6
Decrease in trade and other payables and provisions (24.8) (53.4)
Movement in retirement benefit obligations 1.6 (7.1)
Cash generated from continuing operations 140.8 70.3
Discontinued operations (3.7) (7.8)
Cash generated from operating activities 137.1 62.5
Reconciliation of cash and cash equivalents to net borrowings
52 weeks ended Period ended
2 Apr 2016 4 Apr 2015
GBPm GBPm
Net outflow of cash and cash equivalents (13.9) (135.3)
Increase in finance leases (0.2) -
Decrease in borrowings 69.8 401.7
Other non-cash movements (5.0) (20.5)
Decrease in borrowings net of cash 50.7 245.9
Total net borrowings at beginning of period (584.9) (830.8)
Total net borrowings at end of period (534.2) (584.9)
Analysis of
movement in
borrowings
As at Cash flows on Other As at
4 April 2015 Cash flows acquisition non-cash movements 2 Apr 2016
GBPm GBPm GBPm GBPm GBPm
Bank overdrafts (23.0) 23.0 (0.2) - (0.2)
Cash and bank
deposits 44.7 (36.7) - 8.0
Net cash and cash
equivalents 21.7 (13.7) (0.2) - 7.8
Borrowings - term
facilities - - (1.5) - (1.5)
Borrowings -
revolving credit
facilities (113.0) 58.0 - - (55.0)
Borrowings - senior
secured notes (500.0) - - - (500.0)
Finance lease
obligations - - (0.2) - (0.2)
Securitisation
facility (19.7) 19.7 (6.4) - (6.4)
Gross borrowings
net of cash(1) (611.0) 64.0 (8.3) - (555.3)
Debt issuance costs 26.1 - - (5.0) 21.1
Total net
borrowings(1) (584.9) 64.0 (8.3) (5.0) (534.2)
(1) Borrowings exclude derivative
financial instruments.
15. Contingencies
There were no material contingent liabilities at 2 April 2016
(2014/15: none).
16. Subsequent events
On 22 April 2016, a Relationship agreement was entered into with
Nissin Foods Holdings Co., Ltd. ("Nissin") on terms and conditions
that are customary for a substantial shareholding of this nature.
Nissin have a right to appoint a non-executive director to the
Board of Premier Foods plc.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GGUWUAUPQPUQ
(END) Dow Jones Newswires
May 17, 2016 02:01 ET (06:01 GMT)
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