(TOT.L) Total Produce PLC Buy/Sell

RNS Number : 6681Y Total Produce Plc 08 September 2009

TOTAL PRODUCE PLC INTERIM RESULTS FOR

6 MONTHS ENDING 30 JUNE 2009

TOTAL PRODUCE ANNOUNCES SATISFACTORY 2009 FIRST HALF RESULTS

· Revenue (including share of JVs and associates) growth of 1.2% to EUR1,311 million.
· Adjusted EBITA (i), down 4.7% to EUR26.3 million.

· Adjusted profit before tax (i), down 2.3% to EUR24.3 million.

· Adjusted earnings per share (ii), down 0.7% to 4.06 cent.

· Interim dividend maintained at 0.54 cent per share.

(i) excludes fair value movements on investment property, exceptional items and amortisation of intangible assets.

(ii) excludes fair value movements on investment property, exceptional items, amortisation of intangible assets and related tax.

Commenting on the results, Carl McCann, Chairman, said:

"We are pleased to report growth in revenue to EUR1,311 million for the first half year along with adjusted earnings per share almost unchanged at 4.06 cent per share. These results are in line with expectations and consistent with the Group's previously announced target earnings. The constant focus by Total Produce on costs has enabled the Group to overcome the tougher economic climate in various markets and to successfully meet its targets.

The Group's interim dividend is maintained at 0.54 cent per share. Total Produce is also pleased to confirm that it continues to target adjusted earnings per share in the range of 5.5 to 6.5 cent per share for the full year."

8 September 2009

For further information, please contact:

Debbie O'Brien or Sheila Gahan, Wilson Hartnell PR - Tel: +353-1-669-0030

TOTAL PRODUCE PLC INTERIM RESULTS FOR

6 MONTHS ENDING 30 JUNE 2009

2009 2008 % change
EUR million EUR million
Revenue, including Group share of joint 1,311 1,295 + 1.2%

ventures and associates
Group revenue 1,153 1,148 + 0.4%
Adjusted EBITDA (i) 32.7 34.7 - 5.7%
Adjusted EBITA (i) 26.3 27.6 - 4.7%
Adjusted profit before tax (i) 24.3 24.9 - 2.3%
Operating profit (before exceptional 22.7 24.8 - 8.3%

items)
Profit before tax (after exceptional 20.6 22.0 -6.4%

items)

Euro cent Euro cent % change
Adjusted earnings per share (ii) 4.06 4.09 - 0.7%
Basic and diluted earnings per share 3.42 3.61 - 5.3%
Interim dividend per share 0.54 0.54 No change

(i) excludes fair value movements on investment property, exceptional items and amortisation of intangible assets.

(ii) excludes fair value movements on investment property, exceptional items, amortisation of intangible assets and related tax.
Financial results and operating review

Revenue

Revenue, including Group share of joint ventures and associates ("revenue") for the six months ended 30 June 2009 increased by 1.2% to EUR1,311m helped by contributions from acquisitions in the second half of 2008. This increase was primarily offset by marginally lower like-for-like volumes in some of the Group's markets and lower translation value of non-euro revenues due to the strengthening of the euro relative to Sterling and the Swedish Krona in the period compared to the same period in 2008.

On a divisional basis, revenue in the Group's Produce Division grew by 2.8% to EUR1,252m. In this division, trading conditions have, as expected been more challenging in the current economic environment and short term larger volumes of certain lines created an excess of supply relative to demand during the first half of the year. Overall volumes in this division are up due to the contribution of acquisitions made in the second half of 2008. On a like-for-like basis volumes are slightly down with average prices lagging in some markets.

Within the Produce Division, revenue in Eurozone countries has increased due to the contribution from acquisitions in the second half of 2008. With the benefit of these acquisitions overall volumes are up, although like-for-like volumes and average prices were marginally behind. In the UK, the Produce Division has performed well despite the difficult trading conditions with positive demand for English produce. Overall volumes in the UK are up, with the contribution of bolt-on acquisitions leading to an increase in local currency revenue in the period. Like-for-like volumes are relatively flat. The strengthening of the Euro by 13% against Sterling in the period gave rise to a lower translated euro value of UK revenue. Similarly in Scandinavia, local currency sales are up helped by increased volumes, however the strengthening of the euro by 16% against the Swedish Krona in the period led to a decrease in revenue on translation.

Revenue in the Group's Consumer Goods and Healthfoods Division has decreased, reflecting the competitive trading conditions in Ireland.

Adjusted EBITA and operating profit

Adjusted EBITA (1) decreased by EUR1.3m or 4.7% to EUR26.3m on the same period in 2008. This outcome was satisfactory given the current economic environment and the strength of the euro in the period which had an impact on the translation of the non-euro results. The results included the contributions earned from prior year acquisitions whose earnings are seasonally weighted towards the first half of the year. Net adjusted EBITA margins were 2.01% compared to 2.13% in the same period in 2008, reflecting the trading conditions experienced during the first half of 2009.

Operating profit (after exceptional items) decreased to EUR22.3m in the period from EUR24.8m in the same period in 2008.

Exceptional items

The exceptional item of EUR0.4m in the period relates to the Group's share of fair value adjustments on properties held within joint ventures. Details of exceptional items are outlined in note 4 to the accompanying interim financial information and are excluded from the Group's adjusted EBITA and adjusted earnings per share calculations.

Net financial expense

Net financial expense for the year was EUR1.8m compared to EUR2.8m in the same period in 2008 due mainly to lower interest rates in the current period. Net interest cover for the period was 12.5 times (2008: 9.8 times).
Minority interest share of earnings

The EUR3.3m minority share of earnings was down EUR0.5m on the same period in 2008 due to a decrease in after tax profits in a number of the Group's non-wholly owned subsidiaries. This decrease was partially offset by the minority interest share in the after tax profits of companies acquired in the second half of 2008.

Adjusted and basic earnings per share

Adjusted earnings per share (2) amounted to 4.06 cent for the six months ended 30 June 2009, almost unchanged on the 4.09 cent recorded in the same period in 2008. This slight decrease in adjusted earnings per share was lower that the decrease in adjusted EBITA due to a lower finance expense and the lower minority interest share of after tax profits in the period. Basic earnings per share amounted to 3.42 cent compared to 3.61 cent in the same period in 2008.

Balance Sheet and Cashflow

The Group has a strong balance sheet and generates good operating cashflows from its broad geographical spread of activities.

The balance sheet has strengthened in the period with shareholders' equity increasing EUR12.8m since 31 December 2008 to EUR157.4m at 30 June 2009. The increase was due to earnings attributable to equity shareholders of EUR12.0m in the period and a gain on the translation of the net assets of foreign currency operations. This was offset by the increase in the net deficit on employee defined benefit pension schemes and the payment of the final 2008 dividend of EUR4.0m to equity shareholders of the company.

The Group's employee defined benefit pension deficit, net of deferred tax, increased by EUR2.3m since 31 December 2008, to EUR16.8m at 30 June 2009. The increase is due primarily to actuarial losses relating to changes in the assumptions underlying the calculation of the present value of scheme obligations and to pension scheme assets not achieving their expected return over the period. See note 6 of the accompanying financial information for further information. A review of the employee benefit pension schemes is currently in progress.

Net debt at 30 June 2009 was EUR82.3m compared to EUR80.0m at 30 June 2008 and EUR60.2m at 31 December 2008. Total Produce generated EUR22.9m in operating cashflows during the period before mid-year seasonal working capital outflows of EUR26.6m. The cash outflows on acquisitions and investments in subsidiaries and joint ventures along with deferred consideration payments, totalled EUR5.5m. Cash outflow on capital expenditure, net of disposals, was EUR5.9m representing a significant decrease on the net spend of EUR11.0m in the comparative period. Dividend payments to equity shareholders amounted to EUR4.0m during the period along with dividends of EUR2.8m to minority shareholders within a number of the Group's non-wholly owned subsidiaries.

Acquisitions and other developments

During the period, the Group invested EUR2.7m (including debt acquired) in a bolt on operation in Europe together with a total spend of EUR2.5m in new and existing joint ventures. The principal investment in the period was a 50% joint venture stake in ASF Holland which is involved exclusively in the soft fruit business and complements the Group's existing business in this specialist area.

Also in the period, Total Produce increased its shareholding in its South African investment in Capespan Group Limited ("Capespan") to 15.6% as a result of a share buy back by Capespan. The Capespan group is one of the world's leading marketers and exporters of fresh produce.
Buy-back

The Group continues to consider exercising its authority to buy its own shares in the market if the appropriate opportunities arise. This authority permits the Group to buy up to 10% of the issued share capital at a price which may not exceed 105% of the average price over the previous 5 trading days. Any shares which may be purchased will be acquired through a subsidiary of the Company and will be held as treasury shares and will not be cancelled. Any purchases should have a positive effect on earnings per share.

Dividend

The Board has declared an interim dividend of 0.54 cent per share, unchanged on the 2008 interim dividend. This dividend will be paid on 23 October 2009 to shareholders on the register on 25 September 2009 subject to Irish dividend withholding tax. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 30 June 2009.

Current Trading and Outlook

Total Produce is pleased to report growth in revenue to EUR1,311 million for the first half year along with adjusted earnings per share almost unchanged at 4.06 cent per share. These results are in line with expectations and consistent with the Group's previously announced target earnings. The constant focus by Total Produce on costs has enabled the Group to overcome the tougher economic climate in various markets and to successfully meet its targets.

The Group's interim dividend is maintained at 0.54 cent per share. Total Produce is pleased to confirm that it continues to target adjusted earnings per share in the range of 5.5 to 6.5 cent per share for the full year.

Carl McCann, Chairman

on behalf of the Board

8 September 2009

(1) Adjusted EBITA is operating profit excluding fair value movements on investment property, exceptional items, amortisation of intangible assets and before interest and tax (including the equivalent share of joint ventures). This calculation is set out in note 3 of the accompanying interim financial information.

(2) Adjusted earnings per share excludes fair value movements on investment property, exceptional items, amortisation of intangible assets and related tax on such items. This calculation is set out in note 5 of the accompanying interim financial information.

Copies of this announcement will be available from the Company's registered office at Charles McCann Building, Rampart Road, Dundalk, Co. Louth, Ireland and on our website at www.totalproduce.com.

Total Produce plc

Condensed Group Income Statement

for the half year ended 30 June 2009

(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited) (Audited
June 2009 June 2009 June 2009 June 2008 Dec 2008 Dec 2008 Dec 2008
Pre- Pre-
Exceptional Exceptional
EUR'000 Exceptional Total Total EUR'000 Exceptional Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000

Revenue, including Group share
of joint ventures and 1,310,632 _____- 1,310,632 1,294,722 2,515,694 - 2,515,694

associates

Group revenue 1,152,631 - 1,152,631 1,147,981 2,250,964 - 2,250,964
Cost of sales (999,521) ____- (999,521) (993,438) (1,951,218) - (1,951,218)
Gross profit 153,110 - 153,110 154,543 299,746 - 299,746
Operating expenses (131,651) - (131,651) (131,356) (262,412) (2,996) (265,408)
Share of profit of joint 1,287 (429) 858 1,609 2,575 (1,593) 982

ventures/associates
Operating profit 22,746 (429) 22,317 24,796 39,909 (4,589) 35,320
Net financial expense (1,752) - (1,752) (2,829) (5,509) - (5,509)
Profit before tax 20,994 (429) 20,565 21,967 34,400 (4,589) 29,811
Income tax expense (5,263) - (5,263) (5,539) (8,285) (185) (8,470)
Profit for the period 15,731 (429) 15,302 16,428 26,115 (4,774) 21,341

Attributable as follows:
Equity shareholders of the 12,024 12,686 15,357

Company
Minority interests 3,278 3,742 5,984
15,302 16,428 21,341

Earnings per share
Basic 3.42 cent 3.61 cent 4.36 cent
Fully diluted 3.42 cent 3.61 cent 4.36 cent
Adjusted fully diluted 4.06 cent 4.09 cent 6.75 cent

Total Produce plc

Condensed Group Statement of Comprehensive Income

for the half year ended 30 June 2009

(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2009 30 June 2008 31 Dec 2008
EUR'000 EUR'000 EUR'000

Movement on translation of net
equity investments and 5,923 943 (15,966)

borrowings Revaluation gains on property,
plant and equipment, net - - 3,929

Fair value adjustment on
available for sale financial 1,957 - 62

assets
Actuarial loss on defined (3,796) (8,458) (18,403)

benefit pension schemes
Effective portion of cashflow (490) (456) 668

hedges, net
Deferred tax on items taken 1,141 850 1,389

directly to equity Share of joint ventures'
revaluation loss on property, - - (660)

plant and equipment Share of joint ventures'
actuarial loss on defined - - (105)

benefit pension schemes Share of joint ventures' fair
value adjustment on available - - (3)

for sale financial assets Share of joint ventures'
effective portion of cashflow - - (9)

hedges Share of joint ventures'
deferred tax on items taken ___- 262
directly to equity _____-
Net income / (loss) recognised 4,735 (7,121) (28,836)

directly in equity
Profit for period 15,302 16,428 21,341
Total recognised income and 20,037 9,307 (7,495)

expense

Attributable as follows:
Equity shareholders of the 16,669 5,491 (13,923)

Company
Minority interests 3,368 3,816 6,428
20,037 9,307 (7,495)
Total Produce plc

Condensed Group Balance Sheet

as at 30 June 2009
(Unaudited) (Unaudited) (Audited)
30 June 2009 30 June 2008 31 Dec 2008
EUR'000 EUR'000 EUR'000

Assets Non-current assets
Property, plant and equipment 124,835 130,828 121,679
Investment property 13,750 12,077 12,339
Goodwill and intangible assets 124,877 123,836 119,096
Investments in joint ventures 39,455 43,152 35,913

and associates
Equity investments 10,217 9,439 8,180
Other receivables 3,813 1,328 3,286
Deferred tax assets 7,284 5,169 6,168
Employee benefit assets 1,596 2,962 3,237
Total non-current assets 325,827 328,791 309,898

Current assets
Inventories 42,740 42,700 39,628
Trade and other receivables 311,992 310,556 271,327
Corporation tax receivable - - 1,577
Derivative financial 24 98 1,370

instruments
Cash and cash equivalents 90,954 67,598 85,293
Total current assets 445,710 420,952 399,195
Total assets 771,537 749,743 709,093

Equity
Called-up share capital 3,519 3,519 3,519
Share premium 252,574 252,574 252,574
Retained earnings and other (98,717) (90,755) (111,486)

reserves Total equity attributable to
equity shareholders of the 157,376 165,338 144,607

Parent
Minority interests 54,070 47,893 53,528
Total equity 211,446 213,231 198,135

Liabilities Non-current liabilities
Interest-bearing loans and 98,827 108,110 79,512

borrowings
Deferred government grants 1,969 2,127 1,932
Other payables 3,177 3,412 3,118
Provisions 10,276 8,095 8,366
Corporation tax payable 8,185 7,772 8,185
Deferred tax liabilities 20,476 18,957 20,820
Employee benefit liabilities 21,612 11,324 19,915
Total non-current liabilities 164,522 159,797 141,848

Current liabilities
Interest-bearing loans and 74,436 39,495 65,981

borrowings
Trade and other payables 314,529 329,086 298,496
Provisions 4,764 3,087 3,024
Derivative financial 282 1,267 174

instruments
Corporation tax payable 1,558 3,780 1,435
Total current liabilities 395,569 376,715 369,110
Total liabilities 560,091 536,512 510,958
Total liabilities and equity 771,537 749,743 709,093

Total Produce plc

Condensed Group Statement of Changes in Equity
for the half year ended 30 June 2009

For the half year ended 30
June 2008 Currency translation Share-
(Unaudited) Share reserve Other holders
capital Share EUR'000 Revaluation Demerger reserve equity Retained funds Minority interests Total
EUR'000 Premium reserve EUR'000 reserves Earnings EUR'000 EUR'000 equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 31 December 2007 3,519 252,574 (3,407) 14,152 (122,521) 31 19,366 163,714 45,997 209,711
Total recognised income and - - 790 - - (612) 5,313 5,491 3,816 9,307

expense
Minority arising on - - - - - - - - 1,020 1,020

acquisition
Dividends paid - - - - - - (4,047) (4,047) (2,940) (6,987)
Share-based payments - - - - _______- 180 - 180 - 180
Balance at 30 June 2008 3,519 252,574 (2,617) 14,152 (122,521) (401) 20,632 165,338 47,893 213,231
For the half year ended 30 Currency translation Other Share-holders
June 2009 Share Share premium reserve Revaluation reserve Demerger equity Retained earnings funds Minority Total
(Unaudited) capital EUR'000 EUR'000 EUR'000 reserve reserves EUR'000 EUR'000 interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 31 December 2008 3,519 252,574 (19,354) 16,568 (122,521) 816 13,005 144,607 53,528 198,135
Total recognised income and - - 5,897 - - 1,502 9,270 16,669 3,368 20,037

expense
Minority arising on - - - - - - - - (51) (51)

acquisition
Dividends paid - - - - - - (4,047) (4,047) (2,775) (6,822)
Share-based payments - - - - _______- 147 - 147 - 147
Balance at 30 June 2009 3,519 252,574 (13,457) 16,568 (122,521) 2,465 18,228 157,376 54,070 211,446
For the year ended 31 December Currency translation Other Share-
2008 Share Share premium reserve Revaluation reserve Demerger reserve equity Retained earnings holder Minority interests Total
(Audited) capital EUR'000 EUR'000 EUR'000 EUR'000 reserves EUR'000 funds EUR'000 equity
EUR'000 EUR'000 EUR'000 EUR'000
Balance at 31 December 2007 3,519 252,574 (3,407) 14,152 (122,521) 31 19,366 163,714 45,997 209,711
Total recognised income and - - (15,947) 2,416 - 504 (896) (13,923) 6,428 (7,495)

expense
Minority arising on - - - - - - - - 7,154 7,154

acquisition Buyout of minority
shareholders on acquisition - - - - - - 482 482 (2,474) (1,992)
Contribution by minority - - - - - - - - 1,770 1,770

interests
Dividends paid - - - - - - (5,947) (5,947) (5,347) (11,294)
Share-based payments - - - - - 281 - 281 - 281
Balance at 31 December 2008 3,519 252,574 (19,354) 16,568 (122,521) 816 13,005 144,607 53,528 198,135

Total Produce plc

Condensed Group Cash Flow Statement for the half year ended 30 June 2009
(Unaudited) (Unaudited) (Audited)
30 June 2009 30 June 2008 31 Dec 2008
EUR'000 EUR'000 EUR'000

Operating activities
Profit before tax 20,565 21,967 29,811
Depreciation of property, 6,375 7,060 13,911

plant and equipment
Impairment of property, plant - - 2,176

and equipment
Fair value movement on - - (2,497)

investment property
Impairment of available for - - 1,169

sale equity investments
Goodwill written off on - - 396

termination of business
Amortisation of intangible 2,500 2,205 4,776

assets (excluding JV's)
Amortisation of research and 237 223 382

development
Amortisation of grants (169) (288) (508)
Movement on provisions (1,943) - 1,943
Equity settled share-based 147 180 281

compensation expense
Contributions to defined (2,029) (2,051) (4,439)

benefit pension schemes
Defined benefit pension 1,281 823 1,677

schemes expense
Net (gain)/loss on disposal of (163) (323) 109

plant and equipment Net loss/(gain) on non-hedging
derivative financial 115 427 (442)

instruments
Net interest expense 1,752 2,829 5,509
Income from available for sale 352 271 270

equity investments
Share of profits of joint (858) (1,609) (982)

ventures and associates
Income tax paid (3,274) (256) (7,071)
Net interest paid (2,002) (3,597) (6,032)

Cash from operations before
working capital movements 22,886 27,861 40,439
(Increase) / decrease in (26,589) (14,799) 12,043

working capital
Cash flows from operating (3,703) 13,062 52,482

activities

Investing activities
Acquisition of subsidiaries, (2,718) (1,316) (17,922)

net of cash acquired Acquisition of and investment
in joint ventures, including (2,512) (2,666) (3,679)

loans
Acquisition of trade (16) (13) (47)

investment
Payments of deferred (292) (359) (1,677)

consideration
Acquisition of property, plant (6,422) (11,765) (16,380)

and equipment
Proceeds from disposal of 555 797 1,704

property, plant and equipment
Dividends received from joint 1,695 1,911 2,017

ventures/associates
Research and development (178) (165) (347)

expenditure capitalised
Government grants received 208 - 55
Cash flows from investing (9,680) (13,576) (36,276)

activities

Financing activities
Net increase / (decrease) in 15,659 (12,702) 3,577

borrowings
Capital element of finance (202) (423) (679)

lease repayments
Dividends paid to equity (4,047) (4,047) (5,947)

shareholders
Capital contribution by - - 750

minority interests
Dividends paid to minority (2,775) (2,940) (5,347)

interests
Cash flows from financing 8,635 (20,112) (7,646)

activities

Net (decrease) / increase in
cash and cash equivalents (4,748) (20,626) 8,560

Cash and cash equivalents,
including bank overdrafts at 77,221 74,111 74,111

start of period
Exchange translation 1,050 60 (5,450)

adjustment Cash and cash equivalents,
including bank overdrafts at 73,523 53,545 77,221

end of period
Total Produce plc

Notes supporting the interim condensed financial statements

for the half year ended 30 June 2009

1. Basis of preparation

The interim financial information has been prepared in accordance with the recognition and measurement requirements of IAS 34 Interim Financial Reporting, as adopted by the EU. The accounting policies and methods of computation adopted in the preparation of the financial information are consistent with those set out in the Group's consolidated financial statements for the year ended 31 December 2008 which were prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU Commission except as noted below.

The preparation of the interim financial information requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of certain assets, liabilities, revenues and expenses together with disclosure of contingent assets and liabilities. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The interim financial information for both the six months ended 30 June 2009 and the comparative six months ended 30 June 2008 are unaudited. The financial information for the year ended 31 December 2008 represents an abbreviated version of the Group's statutory financial statements for that year. Those statutory financial statements contained an unqualified audit report and have been filed with the Registrar of Companies.

Changes in accounting policies

A number of changes in accounting policies arise in the current period from the adoption of new or revised International Financial Reporting Standards as follows: