Final Results
10 March 2003 - 6:01PM
UK Regulatory
RNS Number:4893I
Irish Continental Group PLC
10 March 2003
PRELIMINARY STATEMENT
12 MONTHS TO 31 DECEMBER 2002
Financial Highlights
2002 2001
Turnover Euro325.8m Euro297.7m +9%
EBITDA Euro63.2m Euro51.1m +24%
EBIT* Euro34.9m Euro26.2m +33%
PBT Euro24.1m Euro11.7m +106%
Basic EPS 78.3c 38.4c +104%
Adjusted EPS** 85.0c 51.6c +65%
Net Debt Euro157.4m Euro187.0m -16%
* EBIT is stated before goodwill charges
** Adjusted EPS is EPS before goodwill charges
Operational Highlights
* Car carryings equalled year 2000 record of 400,000
* RoRo units equalled year 2001 record of 185,000 units
* Acquisition of HKCIL by Container division in July successfully
integrated.
* Commencement of Euro15m expansion of Dublin Container Terminal.
* 5 year charters of Pride of Bilbao and Pride of Cherbourg in place.
Share Buyback
* 8% of share capital (Euro14.5m) purchased and cancelled via buyback programme
while net debt also reduced by Euro29.6m (16%) to Euro157.4m.
Comment
In comment, Chairman, Tom Toner stated,
"We have regained momentum following the adverse impact of Foot & Mouth Disease
on our passenger market in 2001. We continued to invest in the future of the
business with the acquisition of HKCIL and the expansion of our terminal in
Dublin, a total investment of Euro19m. We have reduced net debt by almost Euro30m
while at the same time acquiring over Euro14m of our shares via our buyback
programme. This underlines the resilience of our business model in a time of
economic uncertainty. We look forward to the future with confidence".
Dublin
March 10th 2003
PRELIMINARY ANNOUNCEMENT OF RESULTS
12 MONTHS TO 31 DECEMBER 2002
RESULTS FOR YEAR
Turnover for the year grew 9% to Euro325.8 million with the principal growth being
in tourism traffic and container movements. EBITDA for the year was Euro63.2
million, up from Euro51.1 million the previous year while operating profit before
goodwill charges for the year increased to Euro34.9 million compared with Euro26.2
million in 2001. The interest charge was down to Euro9.0 million from Euro11 million,
reflecting reduced debt levels arising from our strong cash flow. Profit before
tax for the year amounted to Euro24.1 million compared with Euro11.7 million the
previous year. Following implementation of FRS19, which requires full provision
for deferred tax there was a tax charge of Euro3.1 million (12.8%) compared with
Euro1.5 million the previous year. Earnings per share were 78.3c, up 104%. Adjusted
EPS, i.e. EPS before goodwill charges were 85.0c, up 65%.
SECOND HALF RESULTS
In the seasonally more significant second half of the year, sales were Euro180.6
million (Euro160.0 million the previous year), EBITDA was 19% higher (Euro43.0 million
vs Euro36.1 million) and profit before tax was Euro20.8 million compared with Euro13.4
million last year
SHARE BUYBACK
We have decided to institute a share buyback as a means of delivering
shareholder value. We had already been in the process of paying down debt (which
had peaked at Euro214 million in June 2001) with the surplus liquidity available
from our strong cash flow. In November and December of the year we acquired 2.16
million shares (8%) of the issued capital, at a cost of approximately Euro14.5
million. The Group will continue to focus on generating value for shareholders
in the coming year.
DIVIDEND
In the light of the continuing share buyback programme it is proposed to adjust
the level of dividend growth. The proposed final dividend is 12.825c per share.
This is an increase of 12.5% on last year's final dividend making a total
increase of 15% for the year. It is proposed to pay this dividend on 16 May 2003
to Shareholders on the Company's register on 22 April 2003.
FERRIES DIVISION
The Ferries Division includes the activities of Irish Ferries, the ferry
chartering business and the travel services activities. EBITDA in the division
rose from Euro46.9m to Euro55.5m while profit before interest in the division was up
28% at Euro31.2 million (2001: Euro24.4 million) on turnover of Euro204.5 million (2001:
Euro187.4 million).
Passenger revenue recovered from the adverse impact of foot & mouth disease the
previous year while freight revenue was broadly unchanged for the year
reflecting a slowdown in trade to and from Ireland. During the year we operated
a total of 4,821 sailings, similar to the previous year's 4,867 sailings.
Irish Ferries - Passenger Revenue
In a tourism market influenced by world political and economic uncertainties our
overall passenger numbers were unchanged on 2001 at 1.76 million. However,
within this, car passengers increased by 5% offsetting an 8% decline in the
lower yield foot passenger volumes. On the Dublin/Holyhead and Rosslare/Pembroke
routes, passenger numbers were broadly unchanged at 1.54 million. On the Ireland
/France route, passenger numbers were up 6% to 0.22 million.
Across our route network car carryings increased by 5% to 400,000 (2001: 382,000
cars). On the Dublin/Holyhead route, car carryings were up 4.6% while the
Rosslare/Pembroke route saw an increase of 2.1%. Car volumes on the Ireland/
France route were up 10.9% on the previous year.
Irish Ferries Roll-on Roll-off Freight Revenue
It was a more difficult year for RoRo freight than in recent years, evidenced by
the filing for insolvency protection of one of our competitors on the Ireland-UK
freight market. For us it was a year of consolidation on both corridors of the
Irish Sea with our total carryings unchanged at 185,000 trucks. On the Dublin/
Holyhead route, a 2.6% increase in freight units to 122,000 was achieved by m.v.
Ulysses. On the Rosslare/Pembroke route there was a 6.4% decrease in carryings
to 58,000 units due mainly to additional capacity from our principal competitor.
On the Ireland/France route, 2,800 trucks were carried, in line with the
previous year. Overall freight revenue was unchanged.
Chartering
The 2,400 bed cruiseferry, m.v. "Pride of Bilbao", continued on bareboat charter
to P&O Ferries and during the year we concluded an extension of the original
1993 charter for a further period of 5 years to October 2007. We have also
chartered the m.v. "Isle of Innisfree" (now renamed the m.v. "Pride of
Cherbourg") to P&O, for a period of 5 years from July 2002. This modern vessel
operates a combined passenger and freight service between Portsmouth in the UK
and Cherbourg in France replacing two older ferries. The charter of m.v.
"Egnatia II" ended during the year and, in accordance with the charter
agreement, ownership of the vessel transferred to the charterers.
Travel Services
Due to a continued difficult trading environment for the traditional High Street
travel agent we restructured our agency division with the closure of 3 of our 9
branches and the transfer of their business to the remaining outlets. This will
reduce costs substantially.
Irishferries.com however had another outstanding year with annual bookings up
82% in the last 12 months, generating substantial savings in distribution costs.
CONTAINER AND TERMINAL DIVISION
Our Container and Terminal Division comprises our lift on lift off freight
network operated by Eucon, Eurofeeders and Feederlink together with our
Container Terminal in Dublin (DFT). It was a year of continued progress in the
division. Turnover was Euro122 million (Euro110.8 million the previous year). EBITDA
rose from Euro4.2 million to Euro7.7 million while an operating profit before goodwill
charges of Euro3.7 million was generated, up from Euro1.8 million in 2001. This result
was achieved despite some once-off costs due to the redevelopment of the Dublin
Container Terminal.
Container Lift-on Lift-off Freight
During the year we acquired Hudig & Kersten Continental Ireland Line ("HKCIL"),
for a consideration of Euro3.8m. This infill acquisition complements our existing
Ireland-Continent Service, Eucon. This acquisition, which was completed in July,
has been successfully integrated into our existing container freight service.
The acquisition increases our container fleet, strengthens our sales network
particularly in Holland and also gives us greater flexibility in scheduling. As
the operation has been fully and successfully integrated with our own operations
is no longer separately identifiable and we have eliminated the goodwill on
acquisition of Euro1.8 million via an immediate once-off charge to the profit and
loss account.
Total container freight volumes carried on our own services rose 20% to 444,000
twenty-foot equivalent units as we incorporated HKCIL into our operation. On a
like for like basis, the underlying increase in volume was 11%, the growth
principally in feeder traffic. The pricing environment, particularly for export
cargo from Ireland remains difficult.
Dublin Container Terminal
During the year we commenced the third phase of our redevelopment of the
terminal. Three additional mobile gantries and one additional Liebherr built
ship to shore crane have been ordered and are being commissioned during 2003.
This resulted in some additional once off costs in 2002. The development will
not be complete until late in 2003 and in the meantime our capacity to grow
volume will be somewhat restricted. When complete however it will copper-fasten
DFT as the premier container terminal in the country. From 2004 onwards we will
be well placed to resume strong volume and revenue growth at the terminal. The
prospects for the terminal will be enhanced further when the Dublin Port Tunnel,
which will be located only 1 km from our facility, opens in 2005, allowing rapid
access to and from the port, bypassing the congested city centre.
CORPORATE DEVELOPMENTS
In the light of the recent difficulties experienced by Ireland's tourism market
we made a case, in 2001, to Government that we would be prepared to invest in
new tonnage for our highly seasonal Continental ferry service if a public
service obligation ("PSO") structure could be put in place, similar to that
employed in other European peripheral regions. This proposal was not accepted.
It is now of concern to us that our competitor Brittany Ferries appears to be
utilising previously granted state aid for an expansion of their service between
Ireland and France. This will severely damage the economics of our existing
service and may lead to its closure. We have drawn this to the attention of the
European Commission.
ACCOUNTING POLICIES
Deferred Taxation
In this preliminary statement we have implemented FRS19 Deferred Taxation. The
implementation of FRS 19 means that the results and balance sheet for 2001 are
restated. The effective tax rate for the year was 12.9% (12.8% the previous year
restated).
Pensions
In accordance with approved accounting standards, we continue to account for
pensions in accordance with SSAP24. In the light of current stock market
conditions we decided to accelerate the actuarial valuation of our pension
schemes. Based on the updated actuarial valuation as at 1 April 2002 our SSAP24
pension credit reflected in these financial statements for 2002 has reduced by
Euro3.3m, although the fund remains in surplus. There is also a surplus of Euro5.9
million on the FRS17 basis at 31 December 2002.
FINANCE
EBITDA amounted to Euro63.2 million for the year (2001: Euro51.1 million). Total
investment in the year amounted to Euro15.4 million. Year-end net debt amounted to
Euro157.4 million giving a comfortable gearing level of 85% (97% in 2001). Interest
cover was 3.7 times (2001: 2.1 times). Year-end cash balances amounted to Euro14.6
million. Shareholders' funds at year-end amounted to Euro185.9 million.
OUTLOOK
The outlook for 2003 is clouded by the global economic and political
environment, which remains uncertain. Tourism volumes in our markets have more
or less recovered to the peak 2000 levels and the challenge now is a resumption
in growth in tourism to Ireland. The outlook for RoRo and LoLo freight volumes
will depend on world and European macroeconomic conditions, where prospects are
somewhat unclear.
Following our recent investment programme over the last 5 years we now have one
of the most modern fleets in short sea unitised shipping leaving us well
positioned to compete in this challenging environment and make further progress
in the current year.
NOTE
All comparative figures are for the 12 month period to 31 December 2001
(unaudited) and the balance sheet as at that date (audited).
Thomas C. Toner
Chairman
10th March, 2003
Enquiries to:
Eamonn Rothwell, Managing Director
Garry O'Dea, Finance Director
At Dublin 01-6075628
Website: www.icg.ie
Email: info@icg.ie
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002
Notes 2002 2001 2001
12 months 12 months 14 months
(audited) (unaudited) (audited /
restated*)
Eurom Eurom Eurom
Turnover 1 325.8 297.7 348.5
Operating costs (290.9) (271.5) (323.6)
______ ______ ______
Operating profit before exceptional item
and amortisation of goodwill 34.9 26.2 24.9
Amortisation of goodwill (0.1) (0.3) (0.3)
Exceptional item: goodwill write down 2 (1.7) (3.2) (3.2)
______ ______ ______
Operating profit 1 (33.1) 22.7 21.4
Net interest payable (9.0) (11.0) (12.4)
______ ______ ______
Profit on ordinary activities before taxation 24.1 11.7 9.0
Taxation 3 (3.1) (1.5) (1.5)
______ ______ ______
Profit attributable to shareholders of
Irish Continental Group plc. 21.0 10.2 7.5
Dividends 4 (5.1) (4.6) (4.6)
______ ______ ______
Profit retained for the period 15.9 5.6 2.9
______ ______ ______
Basic earnings per share 5 78.3c 38.4c 28.3c
Diluted earnings per share 5 78.0c 37.7c 27.8c
Adjusted earnings per share 5 85.0c 51.6c 40.5c
*Restated following the implementation of FRS19, Deferred Taxation.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2002
2002 2001
Notes 12 months 14 months
(audited) (audited*)
Eurom Eurom
Profit attributable to shareholders of Irish Continental Group plc. 21.0 7.5
Exchange translation adjustment (9.1) (5.3)
______ ______
Total recognised gains related to the period 11.9 2.2
Prior period adjustment (4.0)
______
Total losses recognised since the last annual report 7.9
______
* Restated following the implementation of FRS19, Deferred Taxation
CONSOLIDATED BALANCE SHEET
at 31 December 2002
2002 2001
12 months 14 months
(audited) (audited*)
Fixed Assets Eurom Eurom
Intangible assets - -
Tangible assets 367.9 397.7
Financial assets - 0.1
______ ______
367.9 397.8
______ ______
Current assets
Stocks 0.8 0.7
Debtors 53.3 60.3
Cash at bank and in hand 14.6 16.1
______ ______
68.7 77.1
______ ______
Creditors
(Amounts falling due within one year)
Bank loans and overdrafts 28.4 27.7
Trade and other creditors 65.8 66.9
Proposed dividend 3.2 3.1
Obligations under finance leases 2.3 2.3
Taxation and social welfare 1.5 2.9
______ ______
101.2 102.9
Net current liabilities (32.5) (25.8)
______ ______
Total assets less current liabilities 335.4 372.0
______ ______
Creditors
(Amounts falling due after more than one year)
Bank loans 130.1 165.2
Obligations under finance leases 11.2 7.9
Provision for liabilities and charges 8.2 6.3
______ ______
149.5 179.4
______ ______
Capital and reserves
Called up share capital 16.3 17.3
Share premium account 38.3 37.7
Capital reserves 0.1 0.1
Capital redemption reserve 1.4 -
Profit and loss account 129.8 137.5
______ ______
Shareholders' funds (all equity) 185.9 192.6
______ ______
335.4 372.0
* Restated following the implementation of FRS19, Deferred Taxation
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2002
Notes 2002 2001
12 months 14 months
(audited) (audited)
Eurom Eurom
Operating activities
Net cash inflow from operating activities 6 68.5 46.6
______ ______
Servicing of finance
Net interest paid (10.1) (14.1)
______ ______
Net cash outflow from servicing of finance (10.1) (14.1)
Taxation
Net corporation tax refunded/(paid) (0.9) 0.7
______ ______
Capital expenditure
Purchase of fixed assets (15.4) (99.2)
Sale of fixed assets 0.2 1.5
______ ______
Net cash outflow from investing activities (15.2) (97.7)
______ ______
Acquisitions
Purchase of subsidiary undertakings (3.8) (0.1)
______ ______
Net cash outflow from acquisitions (3.8) (0.1)
______ ______
Equity dividends paid (5.0) (4.0)
______ ______
Net cash inflow / (outflow) before financing 33.5 (68.6)
______ ______
Financing
Issue of ordinary share capital 1.0 0.3
Repurchase of ordinary share capital (14.5) -
Drawdown of loans - 61.0
Inception of finance leases 5.9 0.4
Repayment of amounts borrowed (26.2) (32.2)
Capital element of finance lease payments (2.2) (2.8)
______ ______
Net cash inflow/(outflow) from financing (36.0) 26.7
______ ______
Decrease in cash 7 (2.5) (41.9)
______ ______
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1. Segmental information
Analysis by class of business
Turnover Profit Before Tax Net Assets
2002 2001 2002 2001 2002 2001
12 months 12 months 12 months 12 months
Eurom Eurom Eurom Eurom Eurom Eurom
Ferries and Travel 204.5 187.4 31.2 24.4 303.3 345.9
Container and Terminal 122.0 110.8 3.7 1.8 31.4 33.3
Intersegment turnover (0.7) (0.5) - - - -- -
325.8 297.7 34.9 26.2 334.7 379.2
Goodwill - - (1.8) (3.5) - -
Net interest - - (9.0) (11.0) - -
Debt - - - - (157.4) (186.6)
Construction in progress 8.6
_____ _____ _____ _____ _____ _____
325.8 297.7 24.1 11.7 185.9 192.6
_____ _____ _____ _____ _____ _____
Analysis by origin
2002 2001
12 months 12 months
Eurom Eurom
Ireland 134.7 101.6
United Kingdom 112.1 133.6
Continental Europe 78.9 62.5
______ ______
325.7 297.7
______ ______
It is not practicable to analyse trading profit and net assets by geographical
area. All turnover arises from continuing activities and excludes intra Group
transactions and value added tax.
2 Goodwill
The write off of goodwill in 2002 relates to an acquisition made by the
container division during the year that has been merged with the existing
business to the extent that the value of goodwill will not be capable of
objective measurement in future years.
2. Taxation
2002 2001
Current Tax Charge: Eurom Eurom
Corporation tax on profits for the year:
Irish Corporation tax - -
Overseas corporation tax @ 35% 0.5 -
Deferred tax charge:
Originating and reversing timing differences 2.6 1.5
______ ______
3.1 1.5
______ ______
4 Dividends
2002 2001
12 months 14 months
Eurom Eurom
Interim dividend of 6.84c per share (2001: 1.9 1.5
5.7c per share)
Proposed dividend of 12.0c per share (2001: 3.2 3.1
11.4c per share)
______ ______
5.1 4.6
______ ______
5. Earnings Per Share
The calculation of earnings per share is based on the weighted average number of
shares in issue of 26.82m (2001: 26.53m) and profits attributable to
shareholders of Euro21.0m (2001 12 months: Euro10.2m). Diluted earnings per share is
computed in accordance with FRS14 and is based on weighted average shares in
issue, including options exercisable as of the date of this report of 26.93m
shares (2001: 27.0m). Adjusted earnings per share is based on the weighted
average number of shares in issue of 26.82 million (2001: 26.53 million) and
profit attributable to shareholders, before goodwill and exceptional item, of
Euro22.8m (2001 12 months: Euro13.7m).
6. Reconciliation of operating profit to the cash inflow from operating
activities
2002 2001
Eurom Eurom
Operating profit 33.1 21.4
Depreciation charges 28.7 28.9
Amortisation and write-off of goodwill 1.8 3.5
Grant amortisation (0.4) (0.4)
Loss of sale of assets/write-off of investment 0.3 0.4
Decrease/(increase) in prepayment of pension 10.0 (6.5)
contributions
Movement in working capital (5.0) (0.7)
_____ _____
Net cash inflow from operating activities 68.5 46.6
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7. Reconciliation of net cash flow to movement in net debt
2002 2001
Eurom Eurom
Decrease in cash/overdraft (2.5) (41.9)
Decrease/(increase) in debt 22.5 (26.4)
_____ _____
Change in net debt resulting from cash flows 20.0 (68.3)
Translation adjustment 9.6 4.7
_____ _____
Net movement 29.6 (63.6)
Opening net debt (187.0) (123.4)
_____ _____
Closing net debt (157.4) (187.0)
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