RNS Number:3069Q
Canterbury Foods Group PLC
30 September 2003
FOR RELEASE 7.00AM 30 SEPTEMBER 2003
CANTERBURY FOODS GROUP PLC
("Canterbury Foods" or "the Company")
The largest UK producer of meat and pastry products for the UK food service
industry
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003
A PERIOD OF SUBSTANTIAL REORGANISATION
* Key Points
o Focus on food manufacturing
o Paul Ainsworth and Alison Everatt appointed Chief Executive and Finance
Director respectively
o New banking facilities agreed
o Debt reduced by sale of meat trading division
o Move to Aim completed
* Results
o Turnover #71.72m (2002: #73.64m)
o Operating loss #825,000 (2002: profit #560,000)
o Loss before tax #3.37m (2002: profit #1.79m)*
*2003 figure includes exceptional losses of #1.39m
*2002 figure includes exceptional profit of #2.25 million
* Canterbury Foods
(Continuing Group assuming restructuring had taken place on 31 December 2002)
o Turnover #23.2 million
o Operating profit before interest and goodwill amortisation #121,000
o Interest charges reduced to #580,000
* Outlook
o Cautiously optimistic regarding Group's prospects
For further information:
Canterbury Foods Group plc
Paul Ainsworth (Chief Executive) 01482 326 234
Alison Everatt (Finance Director) 01482 326 234
Teather & Greenwood Limited
Jeff Keating/Stephen Austin / David Galan 020 7426 9000
Beattie Financial
Brian Coleman-Smith / Amanda Sheehy 020 7398 3300
BACKGROUND
Canterbury Foods is a manufacturer of beefburgers, sausages and pastry products
for the food service and fast food markets. The Group also has a fast growing
food ingredients business which supplies components and ingredients such as
cooked sausages, bacon, stuffing and pastry to manufacturers throughout the
United Kingdom, whose customers include many of the major UK multiple retailers.
The Group's headquarters are based at its manufacturing site at Hull. It
operates out of seven plants in the UK at:
*Bridgend (South Wales) - ready to use pastry & pastry shapes
*Hackney (London) - frozen & chilled individual sausages
*Hull (East Yorkshire) - full range of frozen burgers
*Sheppey (Kent) - uncooked pies, pasties, sausage rolls
*Stoke-on-Trent (Staffordshire) - speciality fast food burgers
*Whitstable (Kent) - dumplings / stuffing balls
*Yate (Bristol) - speciality cooked sausages and meat products
The Group employs in the region of 600 people.
THE MARKET
-Market worth (purchase value)
-Fast Food (inc. takeaway, cafes) #1954m
-Pubs #1104m
-Restaurants #1327m
-Hotels #1270m
-Leisure/Travel # 570m
-Cost Sector #2283m
-TOTAL MARKET #8508m
*Frozen segment worth #2,500m
*Target market for Canterbury Foods - #850m
CUSTOMERS
The Group has over 400 customers across the UK and currently manufactures around
1,000 products for:
In-store Restaurants
Bake Off
Fast Food Wholesalers
National Wholesalers
National & Regional Pub Brands
Ready Meal Manufacturers
Regional Wholesalers
Sandwich Manufacturers
CANTERBURY FOODS GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003
Chairman's Statement
The six months were dominated by the urgent need to restructure the group,
reduce debt and provide a platform for Canterbury Foods to grow and prosper. A
great deal of effort was expended by the Board and management to achieve these
goals and, as already announced, the re-organisation of the Group was completed
in September resulting in the disposal of the meat trading division. At the same
time the company's shares were admitted to AIM and Paul Ainsworth and Alison
Everatt were appointed Chief Executive and Finance Director respectively.
In light of the changes in the Group, the results for the first six months do
not reflect the composition of the Group going forward. Turnover decreased
slightly from #73.64 million the previous year to #71.72 million in the
comparable period, of which #23.63 million relates to the continuing business in
Canterbury Foods. Operating loss before exceptional costs was #825,000 compared
to a profit before exceptional costs of #560,000 last time. Exceptional costs
relating to the reorganisation of the Group were #1.39 million, giving rise to
an overall loss of #2.22 million before tax and interest.
Loss per share adjusted to exclude exceptional items and calculated on the
reorganised share capital is 8.0p compared to earnings of 1.3p last year. The
Board is not recommending the payment of a dividend, but hope to reinstate
payment in due course.
Meat Trading
On the 5th September we disposed of our meat trading activities for
approximately #11.8 million. In the six months to 30th June operating profits in
this division declined from #1.1 million to #400,000. This was mainly due to
delayed shipments and problems occurring with poultry supplies from Brazil.
As part of the disposal, Bob Mollison and Colin Copland left the group and the
Board would like to wish them and the management and staff of Global Meats every
success under their new ownership.
Canterbury Foods
Trading in the first half started slowly, as a result of depressed demand,
following the relatively poor Christmas trading in 2002 and some de-stocking by
customers during the first quarter. However, trading improved throughout the
period as business gains impacted and costs were controlled. Year on year
volumes, excluding sales that were made to Burger King, were ahead in the first
half-year by #1.67 million.
A number of measures have been undertaken to improve the profitability of the
continuing group. Assuming these had been in place on 31st December 2002, the
turnover for the first half would have been #23.2 million with an operating
profit before amortisation of #121,000. Further, interest charges would have
been reduced by #577,000.
Current Trading and Outlook
Despite experiencing some short term problems at our Hull plant, which resulted
in reduced production of burgers, the directors are pleased to report that we
have had an encouraging start to the second half of the financial year with
sales volumes to date ahead of management expectations.
Management focus will continue to be on driving sales growth and further
reducing costs, with the aim of reducing debt and improving margins across the
group's seven factories. In the light of the actions taken, the directors are
cautiously optimistic regarding the Group's prospects.
Ken Manley
Chairman
30 September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2003
Unaudited Unaudited Audited
6 months ended 30.06.03 6 months ended 30.06.02 Year ended 31.12.02
Cont. Disc. Total Cont. Disc. Total Cont. Disc. Total
Op'ns Op'ns Op'ns Op'ns Op'ns Op'ns
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Note 1
Turnover
Group and 23,633 55,399 79,032 26,348 52,603 78,951 52,998 101,366 154,364
share of joint
ventures
Less: - Share - (7,313) (7,313) - (5,315) (5,315) - (11,331) (11,331)
of joint
ventures
turnover
-------- -------- -------- -------- -------- -------- ------- -------- --------
Group 23,633 48,086 71,719 26,348 47,288 73,636 52,998 90,035 143,033
Turnover
-------- -------- -------- -------- -------- -------- ------- -------- --------
Operating
(Loss)/
Profit
Operating (1,034) 55 (979) (334) 736 402 (1,361) (1,470) (2,831)
(Loss)/Profit
before joint
venture
Share in - 154 154 - 158 158 - 342 342
operating
profit of
joint
venture
-------- -------- -------- -------- -------- -------- ------- -------- --------
Total (1,034) 209 (825) (334) 894 560 (1,361) (1,128) (2,489)
operating
(Loss)/
Profit
Exceptional
items Note 2
- profit on - - - 2,249 - 2,249 2,249 - 2,249
disposal of
land
- loss on - (394) (394) - - - - - -
disposal of
operations
- (683) (315) (998) - - - - - -
reorganisation
costs
-------- -------- -------- -------- -------- -------- ------- -------- --------
(Loss)/Profit (1,717) (500) (2,217) 1,915 894 2,809 888 (1,128) (240)
on ordinary
activities
before
interest
Interest - - (1,157) - - (1,018) - - (2,028)
-------- -------- --------
(Loss)/Profit - - (3,374) - - 1,791 - - (2,268)
on ordinary
activities
before
taxation
Taxation Note - - 591 - - (103) - - 431
3
-------- -------- --------
(Loss)/Profit - - (2,783) - - 1,688 - - (1,837)
on ordinary
activities
after
taxation
Minority - - (23) - - (27) - - (88)
Interest
-------- -------- --------
Retained - - (2,806) - - 1,661 - - (1,925)
(Loss)/Profit
attributable
to
shareholders
====== ====== ======
(Loss)/
earnings per
share Note 4
- Adjusted - - (8.0)p - - 1.3p - - 3.6p
- Headline - - (17.1)p - - 10.1p - -
(11.7)p
- Fully - - (17.1)p - - 10.1p - -
(11.7)p
Diluted
CONSOLIDATED BALANCE SHEET
at 30 June 2003
Unaudited Unaudited Audited
30.06.03 30.06.02 31.12.02
#'000 #'000 #'000
Fixed assets
Intangible assets 18,184 19,787 18,985
Tangible assets 13,954 20,470 16,644
Investments in joint ventures
Share of gross assets 668 1,952 2,252
Share of gross liabilities (54) (1,397) (1,559)
---------- ---------- ----------
32,752 40,812 36,322
---------- ---------- ----------
Current assets
Stocks 12,405 15,325 15,126
Debtors falling due within one year 16,120 17,113 17,813
Cash at bank 165 786 1,628
---------- ---------- ----------
28,690 33,224 34,567
Creditors: amounts falling due within (44,867) (32,902) (49,942)
one year
---------- ---------- ----------
Net current (liabilities)/assets (16,177) 322 (15,375)
Total assets less current 16,575 41,134 20,947
liabilities
Creditors: amounts falling due after (1,469) (17,697) (2,286)
one year
Provisions for liabilities and (1,279) (3,226) (2,049)
charges
---------- ---------- ----------
13,827 20,211 16,612
Capital and reserves ---------- ---------- ----------
Called up share capital 16,399 16,399 16,399
Share premium 4,792 4,792 4,792
Profit and loss account (7,472) (1.088) (4,658)
---------- ---------- ----------
Equity shareholders funds 13,719 20,103 16,533
Minority interest 108 108 79
---------- ---------- ----------
13,827 20,211 16,612
===== ===== =====
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2003
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30.06.03 30.06.02 31.12.02
#'000 #'000 #'000
Cash flow from operating activities (584) (1,190) (1,161)
Returns on investments and servicing (953) (1,018) (2,028)
of finance
Taxation (16) (216) (328)
Net capital expenditure (391) (621) (130)
(Acquisitions)/disposals 1,750 - -
Sale of land - 3,300 3,300
---------- ---------- ----------
Cash flow before use of liquid (194) 255 (347)
resources and financing
---------- ---------- ----------
Financing
(Decrease) in debt (631) (3,053) (2,582)
---------- ---------- ----------
(Decrease) in cash in the period (825) (2,798) (2,929)
---------- ---------- ----------
(Decrease) in cash in the period (825) (2,798) (2,929)
Cash outflow from change in debt and 631 3,053 2,582
lease purchase
---------- ---------- ----------
(194) 255 (347)
New finance leases - (386) (1,524)
---------- ---------- ----------
Change in net debt (194) (131) (1,871)
Net debt at 1 January 2003 (26,791) (24,920) (24,920)
Net debt at 30 June 2003 (26,985) (25,051) (26,791)
====== ====== ======
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2003
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30.06.03 30.06.02 31.12.02
#'000 #'000 #'000
Reconciliation of operating (loss)/profit to operating cash flow
Operating (loss)/profit (825) 560 (2,489)
(Profit) from interest in associated (154) (158) (342)
undertakings
Goodwill amortisation 802 802 1,604
Impairment of fixed assets - - 3,140
Depreciation 1,328 1,417 2,750
Dividend to minorities - - (93)
Decrease in stocks 2,721 1,304 1,503
Decrease in debtors 1,693 1,927 1,227
(Decrease) in creditors (4,685) (6,907) (7,640)
Movement in exceptional items (1,392) - -
Movement in provisions (75) (120) (825)
Exchange differences 3 (15) 4
---------- ---------- ----------
Net (outflow) from operating (584) (1,190) (1,161)
activities
====== ====== ======
Notes to the Interim Report
1. Continuing and discontinued operations
Discontinued operations relate to Spacehire and the Meat Trading
Division which were disposed of on 30 June and 5 September
respectively.
2. Exceptional Items
These items relate to the disposal of Spacehire, the disposal of the
meat trading division, closure costs associated with the move to
third party distribution and associated reorganisation costs.
3. Taxation
Taxation in respect of the six months to 30 June 2003 includes a
deferred tax credit relating primarily to the release of accelerated
capital allowances following the disposal of Spacehire.
4. Earnings per share
Headline is based on the Group loss after tax and minority interest
and is calculated using the average number of new shares in issue,
following the capital reorganization, of 16,398,811
(2002 restated:16,398,811)
Adjusted earnings per share has been calculated on the same basis as
the headline, but excludes exceptional items, goodwill amortization
and the reduction in deferred tax during the period.
5. Interim results
These unaudited results do not amount to statutory accounts within
the meaning of s240 of the Companies Act 1984. The results for the
year ended 31 December 2002 have been derived from the full
accounts for the year, which have been delivered to the Registrar of
Companies and on which the auditors made reference to going concern,
but otherwise gave an unqualified report.
Copies of the interim statement will be sent to shareholders during
October and will be available to the public at the registered office
at Liverpool Street, Hull, East Yorkshire, HU3 4HW.
INDEPENDENT REVIEW REPORT TO CANTERBURY FOODS GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2003 which comprises the Profit and Loss Account,
the Balance Sheet, the Cash Flow Statement and the related notes. We have read
the other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003
PKF
London, UK
30 September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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