TIDMOGN
RNS Number : 9441R
Origin Enterprises Plc
06 March 2019
Origin Enterprises plc
INTERIM RESULTS STATEMENT
Positive start to trading in first half
6 March 2019
Origin Enterprises plc ('Origin' or 'the Group'), the
Agri-Services group, today announces its interim results for the
half year ended 31 January 2019.
Highlights
-- Group revenue up 19.5% to EUR701.6 million (H1 2018: EUR586.9
million), driven by increased agronomy services revenue and crop
input volumes, increased fertiliser prices and the Fortgreen
acquisition in Latin America
-- Positive performance in the first half of the year with
operating profit of EUR9.1 million (H1 2018: EUR2.3 million)
-- Good first-time contribution, as guided, from the Fortgreen
acquisition in Latin America, with an operating profit of EUR5.5
million
-- Underlying operating profit increase of EUR1.0 million
reflecting favourable early season demand in Ireland and the UK
-- Good progress achieved in digital agronomy services
enablement. Over 800,000 hectares on-boarded on Contour digital
platform by the end of the period
-- Increase in net debt to EUR238.8 million (H1 2018: EUR171.4
million), following acquisition activity and increased investment
in working capital
-- Interim dividend of 3.15 cent per share (H1 2018: 3.15 cent per share)
Results Summary Constant
31 Jan 2019 31 Jan 2018 Change Currency
EUR'000 EUR'000 EUR'000 EUR'000
Group revenue 701,551 586,909 114,642 116,311
Operating profit(1) 9,071 2,263 6,808 6,751
Associates and joint venture(2) 1,809 1,707 102 97
Total Group operating profit(1) 10,880 3,970 6,910 6,848
Finance cost, net (5,881) (4,001) (1,880) (1,886)
Profit/(loss) before tax(1) 4,999 (31) 5,030 4,962
Adjusted diluted earnings
per share (cent)(3) 3.61 0.27 3.34 3.30
Group net debt 238,818 171,378 (67,440)
Interim dividend per ordinary
share (cent) 3.15 3.15 -
(1) Before amortisation of non-ERP intangible assets and exceptional items
(2) Profit after interest and tax
(3) Before amortisation of non-ERP intangible assets, net of
related deferred tax (2019: EUR3.4 million, 2018: EUR2.4 million)
and exceptional items, net of tax (2019: EUR0.7 million, 2018:
EURNil)
Origin Enterprises plc
Commenting on the results, Origin Chief Executive Officer, Tom
O'Mahony said:
"Origin has achieved a good first half result, recording an
operating profit of EUR9.1 million, up from EUR2.3 million in the
first half of 2018. The performance reflects the benefit of
favourable early season demand for agronomy services and crop
inputs, together with a strong first-time contribution from our
Latin American segment. Our investment in Latin America underlines
the Group's ambition to pursue meaningful geographical
diversification and seasonality balance in attractive growth
markets.
Looking ahead, the autumn and winter cropping profile
established to date provides a solid foundation for the seasonally
more important second half. A full year outlook will be provided at
the time of the update on third quarter trading on 19 June
2019."
S
Capital Markets Day
Origin will host a capital markets day for analysts and
institutional investors in London on Wednesday 8 May 2019. Further
information will be circulated in due course.
Conference Call
The results announcement is available on the Company website
www.originenterprises.com. There will be a live conference call at
8.30am (Irish/UK time) today. To participate in this conference
call, please dial the number below. Participants are requested to
dial in 5 to 10 minutes prior to the scheduled start time.
Participant access numbers:
Ireland: Tel: +353 (0)1 431
9615
UK/International: Tel: +44 (0)844 571
8892
Confirmation Code: 1371908
Replay
A replay of this call will be available for seven days.
Replay Access Code: 1371908
Replay Access Numbers:
Dublin: Tel: +353 (0)1 553
8777
UK/International: Tel: +44 (0)844 571
8951
Enquiries
Origin Enterprises plc
Sean Coyle
+353 (0)1 563
Chief Financial Officer Tel: 4959
Brendan Corcoran
Head of Investor Relations
and +353 (0)1 563
Group Planning Tel: 4900
Goodbody (Euronext Growth (Dublin)
Adviser)
+353 (0)1 641
Siobhan Wall Tel: 6019
Davy (Nominated Adviser)
+353 (0)1 614
Anthony Farrell Tel: 9993
Numis Securities (Stockbroker)
+44 (0)20 7260
Stuart Skinner Tel: 1314
Powerscourt (Financial PR Advisers)
Jack Hickey / Eavan Gannon +353 (0)83 448
(Ireland) Tel: 8339
Rob Greening / Jana Tsiligiannis +44 (0)207 250
(UK) Tel: 1446
About Origin Enterprises plc
Origin Enterprises plc is a focused Agri-Services group
providing specialist on-farm agronomy services, digital
agricultural services and the supply of crop technologies and
inputs. The Group has leading market positions in Ireland, the
United Kingdom, Belgium, Brazil, Poland, Romania and Ukraine.
Origin is listed on the Euronext Growth (Dublin) and AIM markets of
the Irish and London Stock Exchanges.
Euronext Growth (Dublin) ticker symbol: OIZ
AIM ticker symbol: OGN
Website: www.originenterprises.com
INTERIM RESULTS STATEMENT
Financial Review - Summary
6 months ended 6 months ended
31 Jan 2019 31 Jan 2018
EUR'000 EUR'000
Group revenue 701,551 586,909
Operating profit(1) 9,071 2,263
Associates and joint venture, net(2) 1,809 1,707
Group operating profit(1) 10,880 3,970
Finance cost, net (5,881) (4,001)
Pre-tax profit/(loss) 4,999 (31)
Income tax (charge)/credit (393) 366
Adjusted net profit 4,606 335
Adjusted diluted earnings per share
(cent)(3) 3.61 0.27
Adjusted net profit reconciliation
Reported net profit/(loss) 441 (2,024)
Amortisation of non-ERP intangible
assets 4,265 2,726
Tax on amortisation of non-ERP related
intangible assets (833) (367)
Exceptional items, net of tax 733 -
Adjusted net profit 4,606 335
Adjusted diluted earnings per share
(cent)(3) 3.61 0.27
Origin delivered adjusted diluted earnings per share(3) for the
period of 3.61 cent compared to adjusted diluted earnings per share
of 0.27 cent in the corresponding period last year. On a
like-for-like basis (excluding the impact of currency movements and
acquisitions) the underlying increase was 0.47 cent.
Group revenue
Group revenue was EUR701.6 million compared to EUR586.9 million
in the corresponding period last year, an increase of 19.5%. On an
underlying basis at constant currency, revenues increased by
EUR79.4 million (13.5%), reflecting increased agronomy service
revenue and crop input volumes in addition to increased fertiliser
prices.
Underlying growth in agronomy services and crop input volumes,
excluding crop marketing, was 9.3% in the period compared to the
corresponding period last year.
Operating profit(1)
Operating profit(1) from the Agri-Services business was EUR9.1
million compared to a profit of EUR2.3 million in the corresponding
period last year. On an underlying basis, at constant currency, the
increase year-on-year was EUR1.0 million. Acquisitions contributed
EUR5.8 million to operating profit, primarily due to a strong
first-time contribution from the Group's Latin American
division.
Associates and joint venture(2)
Origin's share of the profit after interest and taxation from
associates and joint venture amounted to EUR1.8 million, a 6.0%
increase on the prior year.
Net debt and financing costs
The Group's financial position remains strong.
Average net debt amounted to EUR277.1 million compared to
EUR222.0 million in the prior year. Net debt at 31 January 2019 was
EUR238.8 million compared with EUR171.4 million at 31 January 2018,
and is 2.57 times EBITDA(4) for the twelve months to 31 January
2019. The average and period end net debt increase is principally
attributable to the acquisition and working capital investment
relating to the Brazil-based Fortgreen business, some build up of
inventories in our UK businesses as a contingency against the
uncertain outcome regarding Brexit and an increased investment in
working capital in Continental Europe. Net finance costs amounted
to EUR5.9 million compared to EUR4.0 million in the corresponding
period last year.
At period end our key banking covenants are as follows:
Banking 2019 2018
Covenant Times Times
Maximum
Net debt to EBITDA 3.5 2.57 2.17
Minimum
EBITDA to net interest 3.0 9.25 11.24
Working capital
Following the seasonal investment in working capital in the
period, the net cash outflow from operating activities was EUR134.1
million (H1 2018: EUR97.5 million) and there was an increase of
EUR137.5 million in working capital (H1 2018: EUR92.6 million). The
year-on-year net working capital outflow reflects planned inventory
build in our UK businesses as a contingency against uncertain
Brexit outcomes and a short-term increase in working capital
investment in Continental Europe primarily driven by the later
collection of receivables due to extended logistical bottlenecks
impacting the timing of farmer grain sales. Additional factors
impacting working capital include the Fortgreen acquisition in
Latin America and an overall increase in Group revenue. We expect
the increased level of working capital investment to unwind over
the coming months.
Dividend
An interim dividend of 3.15 cent per share will be paid on 12
April 2019 to shareholders on the register on 29 March 2019.
(1) Operating profit and Group operating profit are stated
before amortisation of non-ERP intangible assets and exceptional
items
(2) Profit after interest and tax
(3) Before amortisation of non-ERP intangible assets, net of
related deferred tax (2019: EUR3.4 million, 2018: EUR2.4 million)
and exceptional items, net of tax (2019: EUR0.7 million, 2018:
EURNil)
(4) Net debt/EBITDA ratio as per the requirements of the Group's
syndicated bank loan agreement
Review of Operations
Group Overview
Change on prior period
Constant
2019 2018 Change Underlying(4) Currency(5)
EURm EURm EURm EURm EURm
----------------------------------- ----------- ------- --------- ------------------------- -------------
Revenue 701.6 586.9 114.7 79.4 116.3
Operating profit(1) 9.1 2.3 6.8 1.0 6.8
Associates and joint
venture(2) 1.8 1.7 0.1 0.1 0.1
Adjusted diluted EPS
(cent)(3) 3.61 0.27 3.34 0.47 3.30
(1) Before amortisation of non-ERP intangible assets and exceptional
items
(2) Profit after interest and tax
(3) Before amortisation of non-ERP intangible assets, net
of related deferred tax (2019: EUR3.4 million, 2018: EUR2.4
million) and exceptional items, net of tax (2019: EUR0.7 million,
2018: EURNil)
(4) Excluding currency movements and the impact of acquisitions
(5) Excluding currency movements
--------------------------------------------------------------------------------------------------------------
Origin has delivered a strong financial and operating
performance in the period with growth in Group revenue, operating
profit and adjusted fully diluted earnings per share of EUR114.7
million, EUR6.8 million and 3.34 cent, respectively. Performance in
the period benefited from underlying growth in demand for agronomy
services and crop inputs together with the impact of acquisitions
in the period, contributing EUR5.8 million to operating profit.
Ireland and the United Kingdom
Change on prior period
Constant
2019 2018 Change Underlying(3) Currency(4)
EURm EURm EURm EURm EURm
---------------------------------- ----------- ------- --------- ------------------------- -------------
Revenue 433.9 377.5 56.4 55.5 55.6
Operating profit(1) 2.8 1.2 1.6 1.6 1.6
Associates and joint
venture(2) 1.8 1.7 0.1 0.1 0.1
(1) Before amortisation of non-ERP intangible assets and exceptional
items
(2) Profit after interest and tax
(3) Excluding currency movements and the impact of acquisitions
(4) Excluding currency movements
-------------------------------------------------------------------------------------------------------------
Ireland and the United Kingdom recorded a very satisfactory
performance in the seasonally quiet first half.
Higher revenues and margins in the period largely reflected
strong performances in Business-to-Business Agri-Inputs. On an
underlying basis at constant currency there was a EUR1.6 million
increase in operating profit. Underlying agronomy service and crop
input volume growth was 12.4% in the period.
In December 2018 the Group acquired a small UK based business,
Symbio, which specialises in biological based crop technologies
with applications in the Amenity and the broader Integrated
Agronomy channels.
Integrated On-Farm Agronomy Services
Integrated Agronomy and On-Farm Services achieved a good
performance in the first half supported by higher agronomy service
revenues and crop input volumes. An exceptionally mild and largely
settled weather pattern for the period supported an extended autumn
and winter crop planting season resulting in robust activity levels
on-farm. The favourable volume momentum in the period reflected, in
part, early procurement planning by growers and farmers due to the
current lack of certainty regarding the nature of the UK's
departure from the European Union on 29 March 2019.
Total autumn and winter plantings for the principal combinable
crops are estimated to be 3.2% above last year at 2.8 million
hectares with an increase in the area of winter wheat of 3.7% to
1.83 million hectares, more than offsetting a reduction in the area
for oilseed rape by 4.4% to 0.6 million hectares. Total autumn,
winter and spring plantings for the 2019 growing season are
forecasted to be marginally ahead of last year at 4.5 million
hectares.
Digital Agricultural Services
Digital Agricultural Services delivered a strong operational
performance in the period, with focus on product adoption and the
implementation of extended application functionality covering agile
decision support and new crop disease risk models. The roll out of
Contour, the Group's proprietary digital platform for agronomists
and farmers, continued at pace with over 800,000 hectares
on-boarded at the end of the period.
We remain focused on execution and helping farmers and growers
realise the practical on-farm benefits of these new data and
digitally enabled tools, increasing customer loyalty, and
supporting our value-added distribution businesses.
Business-to-Business Agri-Inputs
Business-to-Business Agri-Inputs recorded a good result in the
period, with a strong performance from Fertiliser and Feed
Ingredients set against a lower underlying contribution from
Amenity.
Fertiliser
Fertiliser has performed strongly in the period, recording
higher volumes and positive margin development. This performance
has largely been driven by a stable pricing environment and
favourable weather conditions which have provided confidence to
primary producers to secure a portion of their nutrition
requirements in advance of the 2019 spring season, resulting in the
earlier timing of sales. Volumes for the period have also been
positively impacted by the extended 2018 season due to catch up
activity on-farm with producers remediating the impact of poor
growing conditions in spring and summer 2018. Sales margins
continue to be positively supported by growth in sales of
differentiated fertiliser and bespoke nutrition applications.
Amenity
Amenity delivered a satisfactory result, despite lower demand,
which reflected higher levels of carried forward customer
stockholding following unseasonal weather conditions experienced in
2018 which adversely impacted input and service application in that
period. Volume development is expected to return to normal levels
in the main spring and summer application periods in 2019, however
total volumes are expected to be lower for the year as a whole.
Feed Ingredients
Feed Ingredients achieved a good result in the period with
performance supported by the continuation of strong spot demand in
the first half following poor grass growing conditions in 2018.
Demand is expected to normalise in the second half of the financial
year against the heightened levels experienced in the prior
year.
The Group's animal feed manufacturing associate, John Thompson
& Sons Limited, in which the Group has a 50% shareholding,
delivered a satisfactory performance in the period.
Continental Europe(1)
Change on prior period
Constant
2019 2018 Change Underlying(3) Currency(4)
EURm EURm EURm EURm EURm
---------------------------------- ----------- ------- --------- ------------------------- -------------
Revenue 147.9 121.6 26.3 12.2 27.6
Operating profit(2) 0.6 0.9 (0.3) (0.7) (0.4)
(1) Excluding crop marketing. While crop marketing has a significant
impact on revenue, its impact on operating profit is insignificant.
An analysis of revenues, profits and margins attributable
to agronomy services and inputs more accurately reflects the
underlying drivers of business performance
(2) Before amortisation of non-ERP intangible assets and exceptional
items
(3) Excluding currency movements and the impact of acquisitions
(4) Excluding currency movements
-------------------------------------------------------------------------------------------------------------
Continental Europe recorded a EUR0.7 million reduction in
underlying operating profit at constant currency in the seasonally
less significant first half. The performance reflects challenging
market conditions and a particularly demanding operating
environment for farmers.
Service providers are responding to the effects of the delayed
spring season and prolonged dry conditions in 2018 which limited
harvest outcomes and early crop establishment in the period. The
resulting impacts on primary producer economics and on-farm cash
flow drove lower agronomy service and crop input application in the
period.
Underlying business volumes reduced by 0.3% compared with the
corresponding period last year. Value added technologies maintained
good growth momentum throughout the region and continued to
generate opportunities for the Group's agronomy portfolios.
Belgium
Belgium delivered a very satisfactory performance in the period,
supported by favourable volume and margin development. Positive
on-farm sentiment drove robust early season demand together with
favourable momentum in the case of differentiated and bespoke
nutrition applications.
Poland
Unseasonably dry weather impacted volumes in Poland for the
period resulting in lower underlying agronomy service and crop
input volumes. Early season demand was impacted by a reduction in
oilseed rape crop plantings, with the lower oilseed rape area being
offset by an increase in later sown winter cereal varieties. Autumn
and winter plantings are estimated to be approximately 1.9% higher
than the prior year at 4.7 million hectares. Spring plantings are
forecast to be broadly in line with last year resulting in an
increase in the total cropping area for the 2019 season of 0.9% to
8.2 million hectares.
Romania
Romania delivered a satisfactory result in the period in
challenging market conditions. Sustained dry conditions during the
early autumn have hampered oilseed and cereal crop establishment
resulting in lower agronomy service and input demand in the period.
Total autumn and winter crop plantings are forecast at 2.5 million
hectares compared with 3.1 million hectares last year.
The reduction in autumn and winter plantings is expected to be
largely offset by an increase in spring cropping, resulting in
combined winter and spring plantings for the 2019 growing season as
a whole estimated to be 1.5% behind last year at 8.1 million
hectares.
Ukraine
Ukraine recorded lower margins on higher underlying revenues in
the period with service providers responding to a more competitive
market backdrop. The period was characterised by lower liquidity at
primary producer level due to logistical bottlenecks which have
impacted the timing of the grain movement off-farm.
Growing conditions in the period were excellent with total
autumn and winter crop plantings estimated to be 6.4% ahead of the
comparative period at 8.3 million hectares. Total crop plantings
for the 2019 growing season are currently forecast at 22.9 million
hectares against 22.7 million hectares for the prior year.
Latin America
Change on prior period
Constant
2019 2018 Change Underlying(2) Currency(3)
EURm EURm EURm EURm EURm
---------------------------- ---------- ------- ----------- ---------------- -------------
Revenue 21.3 - 21.3 - 21.3
Operating profit(1) 5.5 - 5.5 - 5.5
(1) Before amortisation of non-ERP intangible
assets and exceptional items
(2) Excluding currency movements and
the impact of acquisitions
(3) Excluding currency movements
-------------------------------------------------------------- ---------------- -------------
Origin entered the Latin American market in August 2018 through
the acquisition of Fortgreen, a business which is focused on the
development and marketing of value added crop nutrition and
speciality inputs and which is headquartered in Paraná State in
southern Brazil.
Latin America has delivered an excellent first-time contribution
in the period. Integration is progressing to plan, with performance
in line with pre-acquisition expectations. A strong innovation
pipeline supported good growth in speciality soluble nutrition
technologies for grain and speciality crop applications.
The harvest period for Brazil's principal spring crop, Soya, is
progressing well with circa 51% of Paraná's planted area harvested
with some localised damage to the crops following a period of dry
weather in December and January.
The acquisition of a 20% shareholding in the Brazilian business
Ferrari Zagatto E Cia. Ltda., announced in the prior financial
year, is expected to complete in the second half of the current
financial year.
Brexit
The Group continues to monitor Brexit negotiations and ensure
that appropriate planning for a no-deal Brexit is in place.
Additional storage was secured over the winter period as we come
into the traditional peak season and additional inventory has been
secured both on an owned and consigned / contract storage basis. As
a result we believe that we are well prepared for any short-term
logistical disruption that may result from a no-deal Brexit.
However, the Board and senior management will continue to closely
monitor the situation and adjust the Group's strategic plans as
necessary.
Outlook
Looking ahead, the autumn and winter cropping profile
established to date provides a solid foundation for the seasonally
more important second half. A full year outlook will be provided at
the time of the announcement of the third quarter trading update on
19 June 2019.
S
Origin Enterprises plc
Condensed Interim Consolidated Income Statement
for the six months ended 31 January 2019
Six months Six months Six months Six months Year
ended ended ended ended ended
January January January January July
2019 2019 2019 2018 2018
Pre-exceptional Exceptional Total Total Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Notes Note 5
Revenue 3 701,551 - 701,551 586,909 1,627,533
Cost of sales (612,346) - (612,346) (511,273) (1,389,926)
Gross profit 89,205 - 89,205 75,636 237,607
Operating costs (84,399) (733) (85,132) (76,099) (171,409)
Share of profit of associates and
joint venture 1,809 - 1,809 1,707 7,221
Operating profit 3 6,615 (733) 5,882 1,244 73,419
Finance income 416 - 416 602 1,432
Finance expense (6,297) - (6,297) (4,603) (9,514)
Profit/(loss) before income
tax 734 (733) 1 (2,757) 65,337
Income tax credit/(expense) 440 - 440 733 (8,552)
Profit/(loss) attributable to equity
shareholders 1,174 (733) 441 (2,024) 56,785
Six months Six months Year
ended ended ended
January January July
2019 2018 2018
Basic earnings/(loss) per
share 4 0.35c (1.61c) 45.22c
Diluted earnings/(loss) per
share 4 0.35c (1.61c) 44.94c
Origin Enterprises plc
Condensed Interim Consolidated Statement of Comprehensive
Income
for the six months ended 31 January 2019
Six months Six Year
months
ended ended ended
January January July
2019 2018 2018
EUR'000 EUR'000 EUR'000
Profit/(loss)for the period 441 (2,024) 56,785
Other comprehensive (expense)/income
Items that are not reclassified subsequently to the Group income statement:
Group/Associate defined benefit pension obligations
- remeasurements of Group's defined benefit pension schemes (4,753) 2,205 3,628
- deferred tax effect of remeasurements 800 (365) (504)
- share of remeasurements on associate's defined benefit pension schemes - - 5,865
- share of deferred tax effect of remeasurements - associates - - (997)
Items that may be reclassified subsequently to the Group income statement:
Group foreign exchange translation details
- exchange difference on translation of foreign operations 2,784 (948) (1,243)
Group/Associate cash flow hedges
* effective portion of changes in fair value of cash
flow hedges (80) (3,243) 1,396
* fair value of cash flow hedges transferred to
operating costs (2,708) 760 888
- deferred tax effect of cash flow hedges 462 436 (333)
* share of associates and joint venture cash flow
hedges (902) (1,879) 4,827
- deferred tax effect of share of associates and joint venture cash flow
hedges 113 235 (603)
Other comprehensive expense for the period, net of tax (4,284) (2,799) 12,924
Total comprehensive (expense)/income for the period attributable to equity
shareholders (3,843) (4,823) 69,709
============ ========= ========
Origin Enterprises plc
Condensed Interim Consolidated Statement of Financial
Position
as at 31 January 2019
January January July
2019 2018 2018
Notes EUR'000 EUR'000 EUR'000
ASSETS
Non-current assets
Property, plant and equipment 6 124,717 117,418 117,929
Investment properties 11,825 9,675 11,825
Goodwill and intangible assets 7 285,310 215,746 216,334
Investments in associates and joint venture 8 42,867 32,269 48,171
Other financial assets 562 456 450
Derivative financial instruments 608 986 835
Deferred tax assets 5,085 4,663 3,280
Post employment benefit obligations - - 725
Total non-current assets 470,974 381,213 399,549
Current assets
Inventory 243,488 221,046 194,192
Trade and other receivables 301,315 229,960 461,199
Derivative financial instruments 1,051 122 1,399
Restricted cash - - 500
Cash and cash equivalents 84,892 85,869 147,212
Total current assets 630,746 536,997 804,502
TOTAL ASSETS 1,101,720 918,210 1,204,051
Origin Enterprises plc
Condensed Interim Consolidated Statement of Financial Position
(continued)
as at 31 January 2019
January January July
2019 2018 2018
Notes EUR'000 EUR'000 EUR'000
EQUITY
Called up share capital presented as equity 11 1,264 1,264 1,264
Share premium 160,422 160,422 160,422
Retained earnings and other reserves 142,363 97,855 168,561
---------- -------- ----------
TOTAL EQUITY 304,049 259,541 330,247
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 281,981 242,131 165,232
Deferred tax liabilities 29,829 18,272 22,171
Put option liability 27,097 5,516 5,531
Provision for liabilities 9 3,999 8,261 8,045
Post employment benefit obligations 3,694 813 -
Derivative financial instruments 197 - 46
Total non-current liabilities 346,797 274,993 201,025
Current liabilities
Interest-bearing borrowings 41,729 15,116 20,836
Put option liability 5,771 - -
Trade and other payables 383,663 353,028 638,161
Corporation tax payable 4,200 7,657 8,143
Provision for liabilities 9 13,642 4,130 5,467
Derivative financial instruments 1,869 3,745 172
Total current liabilities 450,874 383,676 672,779
TOTAL LIABILITIES 797,671 658,669 873,804
TOTAL EQUITY AND LIABILITIES 1,101,720 918,210 1,204,051
Origin Enterprises plc
Condensed Interim Consolidated Statement of Changes in
Equity
for the six months ended 31 January 2019
Share- Foreign
Capital Cashflow based Re- currency
Share Share Treasury redemption hedge Revaluation payment organisation translation Retained
capital premium shares reserve reserve reserve reserve reserve reserve earnings Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 August
2018 1,264 160,422 (8) 134 3,510 12,843 538 (196,884) (39,319) 387,747 330,247
Profit for the
period - - - - - - - - - 441 441
Other
comprehensive
expense for
the period - - - - (3,115) - - - 2,784 (3,953) (4,284)
Share-based
payment
charge - - - - - - 90 - - - 90
Dividend paid
to
shareholders
(Note 13) - - - - - - - - - (22,445) (22,445)
At 31 January
2019 1,264 160,422 (8) 134 395 12,843 628 (196,884) (36,535) 361,790 304,049
Origin Enterprises plc
Condensed Interim Consolidated Statement of Changes in
Equity
for the six months ended 31 January 2018
Share- Foreign
Capital Cashflow based Re- currency
Share Share Treasury redemption hedge Revaluation payment organisation translation Retained
capital premium shares reserve reserve reserve reserve reserve reserve earnings Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 August
2017 1,264 160,422 (8) 134 (2,665) 12,843 358 (196,884) (38,076) 349,341 286,729
Loss for the
period - - - - - - - - - (2,024) (2,024)
Other
comprehensive
expense for
the period - - - - (3,691) - - - (948) 1,840 (2,799)
Share-based
payment
charge - - - - - - 80 - - - 80
Dividend paid
to
shareholders - - - - - - - - - (22,445) (22,445)
At 31 January
2018 1,264 160,422 (8) 134 (6,356) 12,843 438 (196,884) (39,024) 326,712 259,541
Origin Enterprises plc
Condensed Interim Consolidated Statement of Cash Flows
for the six months ended 31 January 2019
Six months Six Year
months
ended ended ended
January 2019 January 2018 July
2018
EUR'000 EUR'000 EUR'000
Cash flows from operating activities
Profit/(loss)before tax 1 (2,757) 65,337
Exceptional items 733 - (663)
Finance income (416) (602) (1,432)
Finance expense 6,297 4,603 9,514
Profit on disposal of property, plant and equipment (156) (128) (285)
Share of profit of associates and joint venture (1,809) (1,707) (7,221)
Depreciation of property, plant and equipment 3,845 3,498 7,451
Amortisation of intangible assets 5,476 3,972 7,946
Employee share-based payment charge 90 80 180
Pension contributions in excess of service costs (462) (691) (852)
Payment of exceptional rationalisaton costs (829) (2,943) (3,334)
Payment of exceptional acquisition costs (358) (1,443) (3,688)
Operating cash flow before changes in working capital 12,412 1,882 72,953
Increase in inventory (40,746) (60,830) (28,505)
Decrease in trade and other receivables 176,595 113,500 (58,469)
Decrease in trade and other payables (273,359) (145,253) 87,713
Cash (absorbed)/generated from operating activities (125,098) (90,701) 73,692
Interest paid (4,564) (2,698) (6,927)
Income tax paid (4,449) (4,073) (10,428)
Cash (outflow)/inflow from operating activities (134,111) (97,472) 56,337
Origin Enterprises plc
Condensed Interim Consolidated Statement of Cash Flows
(continued)
for the six months ended 31 January 2019
Six months Six Year
months
ended ended ended
January 2019 January 2018 July
2018
EUR'000 EUR'000 EUR'000
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 440 1,091 1,410
Purchase of property, plant and equipment (7,223) (6,373) (11,602)
Additions to intangible assets (1,717) (1,505) (5,645)
Arising on acquisitions (33,239) (16,164) (23,857)
Proceeds from sale of Chemical division - 5,250 5,250
Payment of contingent acquisition consideration (1,091) (704) (1,627)
Restricted cash 500 - (500)
Loan (advance)/repayment with associate (98) 84 85
Dividends received from associates 6,909 2,351 2,483
Cash outflow from investing activities (35,519) (15,970) (34,003)
Cash flows from financing activities
Drawdown of bank loans 180,557 86,132 141,775
Repayment of bank loans (45,000) (25,893) (158,155)
Payment of dividends to equity shareholders (Note 13) (22,445) (22,445) (26,371)
Cash inflow/(outflow) from financing activities 113,112 37,794 (42,751)
Net decrease in cash and cash equivalents (56,518) (75,648) (20,417)
Translation adjustment 1,233 141 261
Cash and cash equivalents at start of period 126,559 146,715 146,715
Cash and cash equivalents at end of period (Note 10) 71,274 71,208 126,559
Origin Enterprises plc
Notes to the Condensed Interim Consolidated Financial
Statements
for the six months ended 31 January 2019
1 Basis of preparation
The Group condensed interim consolidated financial statements
has been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting (IAS 34), as endorsed by
the EU. The condensed interim consolidated financial statements
have been prepared as information for the shareholders and do not
include all the information and disclosures required in the annual
financial statements. They should be read in conjunction with the
Group's annual financial statements in respect of the year ended 31
July 2018, which have been prepared in accordance with IFRSs. The
financial statements for the year ended 31 July 2018 are available
on the company's website www.originenterprises.com. Those financial
statements contained an unqualified audit report.
The Group condensed interim consolidated financial statements
for the six months ended 31 January 2019 and the comparative
figures for the six months ended 31 January 2018 are unaudited and
have not been reviewed by the Auditors. The summary financial
statements for the year ended 31 July 2018 represents an
abbreviated version of the Group's full accounts for that year.
The Group condensed interim consolidated financial statements
are presented in euro and rounded to the nearest thousand, which is
the functional currency of the parent.
A comprehensive review of the Group's performance for the six
months ended 31 January 2019 is included in the financial
highlights section included on pages 5 to 13. The group's business
is seasonal and is heavily weighted towards the second half of the
financial year.
2 Accounting policies
The Group interim financial statements have been prepared on the
basis of the accounting policies as set out on pages 90 to 97 of
the Group's Annual Report for the year ended 31 July 2018, with the
exception of the new accounting standards outlined below.
The following Standards and Interpretations are effective for
the Group in the current financial period but do not have a
material effect on the results or financial position of the
Group:
IFRS 9 Financial Instruments
The Group has adopted IFRS 9 Financial Instruments ("IFRS 9"),
which replaces the existing guidance in IAS 39 Financial
Instruments: Recognition and Measurement, from 1 August 2018. Under
IFRS 9, on initial recognition, a financial asset is classified as
measured at amortised cost or fair value through other
comprehensive income ("FVTOCI"), or fair value through profit or
loss ("FVTPL"). This classification is dependent on the business
model for managing the financial assets and on whether the cash
flows represent solely the payment of principal and interest. The
Group has quantified the impact on its consolidated financial
statements resulting from the application of IFRS 9. The vast
majority of financial assets held by the Group are trade
receivables and cash.
Trade receivables and cash will continue to be accounted for at
amortised cost. IFRS 9 introduces a forward looking expected credit
losses model, rather than the current incurred loss model, when
assessing the impairment of financial assets in the scope of IFRS
9. Given historic loss rates and normal receivable ageing, the move
from an incurred loss model to an expected loss model has not had a
material impact.
On this basis, the classification and measurement changes do not
have a material impact on the Group's consolidated financial
statements. The impact of adopting IFRS 9 on the consolidated
financial statements was not material for the Group and there was
no adjustment to retained earnings on application at 1 August 2018.
In line with the transition guidance in IFRS 9 the Group has not
restated the 2018 prior year / half year results on adoption.
IFRS 15 Revenue from Contracts with Customers
The Group has adopted IFRS 15 Revenue from Contracts with
Customers ("IFRS 15"), which replaces the existing guidance in IAS
18 Revenue, from 1 August 2018. The core principle of IFRS 15 is
that an entity should recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in
exchange for those goods or services. Under IFRS 15, an entity
recognises revenue when (or as) a performance obligation is
satisfied i.e. when 'control' of the goods or services underlying
the particular performance obligation is transferred to the
customer. At the date of adoption, the Group assessed the impact on
its consolidated financial statements resulting from the
application of IFRS 15.
The vast majority of the Group's revenue is attributable to (1)
Agri-Inputs operations, (2) Agronomy and On-Farm Services
operations and (3) Digital Agricultural Services. Legal title of
goods sold is transferred on agreed contracted terms between
parties, and generally, there is one performance obligation in each
of the Group's sale contracts. Based on the Group's contractual and
trading relationships, the impact of adopting IFRS 15 on the
consolidated financial statements was not material for the Group
and there was no adjustment to retained earnings on application at
1 August 2018. The Group has not restated the 2018 prior year /
half year results on adoption.
The Group has not applied early adoption of any standards for
which the effective date is not yet required.
On a prospective basis, for all new liabilities recognised in
respect of shares held by non-controlling shareholders, all
movements in the fair value of such options will be recognised in
retained earnings.
IFRS 16 Leases
The Group's evaluation of the effect of adoption of IFRS 16,
'Leases' is ongoing. The Group expects that the adoption of IFRS 16
will have a material impact on the financial statements,
significantly increasing the Group's recognised assets and
liabilities. The fair values of these leases are currently being
evaluated. As a result of the transition to IFRS 16, the fair value
of these leases representing the present value of the lease
payments over the expected lease contract period will be recognised
as a Right of Use Asset with a corresponding value recognised as a
lease liability. This standard will be effective for and will be
adopted by the Group for the 2020 financial year beginning 1 August
2019.
3 Segment information
IFRS 8, 'Operating Segments', requires operating segments to be
identified on the basis of internal reports that are regularly
reviewed by the Chief Operating Decision Maker ('CODM') in order to
allocate resources to the segments and to assess their performance.
Three operating segments have been identified: (1) Ireland and the
United Kingdom, (2) Continental Europe and (3) Latin America.
Ireland and the United Kingdom
This segment includes the Group's wholly owned Irish and UK
based Business-to-Business Agri-Inputs operations, Integrated
Agronomy and On-Farm Services operations and Digital Agricultural
Services business. In addition, this segment includes the Group's
Associate and joint venture undertakings.
Continental Europe
This segment includes the Group's Business-to-Business
Agri-Inputs operations, Integrated Agronomy and On-Farm Services
operations in Belgium, Poland, Romania and Ukraine.
Latin America
This segment includes the Group's 65 per cent controlling
interest in the Brazilian based speciality nutrition and crop
inputs business, Fortgreen Commercial Agricola Ltda.
Information regarding the results of each reportable segment is
included below. Performance is measured based on segment operating
profit as included in the internal management reports that are
reviewed by the Group's CODM, being the Origin Executive Directors.
Segment operating profit is used to measure performance, as this
information is the most relevant in evaluating the results of the
Group's segments.
(i) Segment Ireland and UK Continental Europe Latin America Total Group
revenue and
result
Six Six Six Six Six Six Six Six
months months months months months months months months
ended ended ended ended ended ended ended ended
Jan 2019 Jan 2018 Jan Jan 2018 Jan Jan Jan 2019 Jan 2018
2019 2019 2018
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total revenue 644,207 534,864 246,318 209,418 21,312 - 911,837 744,282
Less revenue
from
associates
and joint
venture (210,286) (157,373) - - - - (210,286) (157,373)
---------- ---------- -------- --------- -------- -------- ---------- ----------
Revenue 433,921 377,491 246,318 209,418 21,312 - 701,551 586,909
========== ========== ======== ========= ======== ======== ========== ==========
Segment result 2,827 1,220 793 1,043 5,451 - 9,071 2,263
Profit from
associates
and
joint venture 1,809 1,707 - - - - 1,809 1,707
Amortisation
of non-ERP
intangible
assets (2,119) (1,876) (915) (850) (1,231) - (4,265) (2,726)
---------- ---------- -------- --------- -------- -------- ---------- ----------
Operating
profit/(loss)
before
exceptional
items 2,517 1,051 (122) 193 4,220 - 6,615 1,244
Exceptional
items (437) - - (253) - (43) - (733) -
---------- ---------- -------- --------- -------- -------- ---------- ----------
Operating
profit /
(loss) 2,080 1,051 (375) 193 4,177 - 5,882 1,244
========== ========== ======== ========= ======== ======== ========== ==========
Segment
earnings
before
financing
and tax 5,882 1,244
Finance income 416 602
Finance
expense (6,297) (4,603)
---------- ----------
Reported
profit/(loss)
before
tax 1 (2,757)
Income tax
credit 440 733
---------- ----------
Reported
profit/(loss)
after
tax 441 (2,024)
========== ==========
(ii) Segment Ireland & UK Continental Europe Latin America Total
assets Group
Six Six Six Six Six Six Six Six
months months months months months months months months
ended ended ended ended ended ended ended ended
Jan Jan Jan Jan 2018 Jan Jan Jan 2019 Jan
2019 2018 2019 2019 2018 2018
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Assets excluding
investment
in associates
and joint
venture 555,627 543,842 322,915 250,003 88,113 - 966,655 793,845
Investment in
associates
and joint
venture
(including other
financial
assets) 43,429 32,725 - - - - 43,429 32,725
------- ------- ------- -------- ------- ------- --------- -------
Segment assets 599,056 576,567 322,915 250,003 88,113 - 1,010,084 826,570
======= ======= ======= ======== ======= ======= ========= =======
Reconciliation to total assets as reported in Condensed Interim Consolidated
Statement of Financial Position
Cash and cash
equivalents 84,892 85,869
Derivative
financial
instruments 1,659 1,108
Deferred tax
assets 5,085 4,663
--------- -------
Total assets as reported in Condensed Interim Consolidated Statement of
Financial
Position 1,101,720 918,210
========= =======
(iii) Segment Ireland & UK Continental Europe Latin America Total Group
liabilities
Six Six Six Six Six Six Six Six
months months months months months months months months
ended ended ended ended ended ended ended ended
Jan Jan Jan Jan 2018 Jan Jan Jan 2019 Jan
2019 2018 2019 2019 2018 2018
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Segment
liabilities 264,728 259,920 126,360 111,828 46,778 - 437,866 371,748
======= ======= ======= ======== ======= ======= ========= =======
Reconciliation of total liabilities as reported in Condensed Interim
Consolidated
Statement of Financial Position
Interest-bearing
loans and
liabilities 323,710 257,247
Derivative
financial
instruments 2,066 3,745
Current and
deferred tax
liabilities 34,029 25,929
---------
Total liabilities as reported in Condensed Interim Consolidated Statement
of Financial Position 797,671 658,669
========= =======
4 Earnings/(loss) per share
Basic earnings/(loss) per share
Six months Six months
ended ended
January January
2019 2018
EUR'000 EUR'000
Profit/(loss) for the financial period attributable to equity shareholders 441 (2,024)
========== ==========
'000 '000
Weighted average number of ordinary shares for the period 125,582 125,582
========== ==========
Cent Cent
Basic earnings/(loss)per share 0.35 (1.61)
========== ==========
Diluted earnings/(loss) per share Six months Six months
ended ended
January January
2019 2018
EUR'000 EUR'000
Profit/(loss) for the financial period attributable to equity shareholders 441 (2,024)
========== ==========
'000 '000
Weighted average number of ordinary shares used in basic calculation 125,582 125,582
Impact of shares with dilutive effect 1,108 77
Impact of SAYE scheme 726 531
---------- ----------
Weighted average number of ordinary shares (diluted) for the period 127,416 126,190
========== ==========
Cent Cent
Diluted earnings/(loss) per share 0.35 (1.61)
========== ==========
Adjusted basic earnings per share Six months Six months
ended ended
January January
2019 2018
EUR'000 EUR'000
Profit/(loss) for the financial period attributable to equity shareholders 441 (2,024)
Amortisation of non-ERP related intangible assets 4,265 2,726
Tax on amortisation of non-ERP related intangible assets (833) (367)
Exceptional items, net of tax 733 -
---------- ----------
Adjusted basic earnings 4,606 335
========== ==========
Cent Cent
Adjusted basic earnings per share 3.67 0.27
Total adjusted basic earnings - as above 4,606 335
Cent Cent
Total adjusted diluted earnings per share 3.61 0.27
========== ==========
The calculation of basic adjusted earnings per share is based on
the weighted average number of shares in issue during the period of
125,581,696 (31 January 2018: 125,581,696). The weighted average
number of shares used in the calculation of adjusted diluted
earnings/(loss) per share is 127,416,250 (31 January 2018:
126,190,275).
5 Condensed Interim Consolidated Income Statements for the six
months ended 31 January 2018 and year ended 31 July 2018
An analysis of the Condensed Interim Consolidated Income
Statement (including exceptional items) for the six months ended 31
January 2018 and year ended 31 July 2018 is set out below.
Six months ended 31 January 2018
Six months Six months Six months
ended ended ended
Jan 2018 Jan 2018 Jan 2018
Pre-Exceptional Exceptional Total
EUR'000 EUR'000 EUR'000
Revenue 586,909 - 586,909
Cost of sales (511,273) - (511,273)
---------------- ------------ ------------
Gross profit 75,636 - 75,636
Operating costs (76,099) - (76,099)
Share of profit of associates and joint venture 1,707 - 1,707
---------------- ------------ ------------
Operating profit 1,244 - 1,244
Finance income 602 - 602
Finance expense (4,603) - (4,603)
---------------- ------------ ------------
Loss before income tax (2,757) - (2,757)
Income tax credit 733 - 733
---------------- ------------ ------------
Loss for the period (2,024) - (2,024)
================ ============ ============
Year ended 31 July 2018
Year ended Year ended Year ended
Jul 2018 Jul 2018 Jul 2018
Pre-Exceptional Exceptional Total
EUR'000 EUR'000 EUR'000
ended ended ended
Revenue 1,627,533 - 1,627,533
Cost of sales (1,389,926) - (1,389,926)
---------------- ------------ ------------
Gross profit 237,607 - 237,607
Operating costs (172,072) 663 (171,409)
Share of profit of associates and joint venture 7,221 - 7,221
---------------- ------------ ------------
Operating profit 72,756 663 73,419
Finance income 1,432 - 1,432
Finance expense (9,514) - (9,514)
---------------- ------------ ------------
Profit before income tax 64,674 663 65,337
Income tax expense (7,900) (652) (8,552)
---------------- ------------ ------------
Profit for the year 56,774 11 56,785
================ ============ ============
6 Property, plant and equipment
January July
2019 2018
EUR'000 EUR'000
Net book value
At beginning of period 117,929 105,271
Arising on acquisitions (Note 12) 2,512 10,087
Additions 7,390 11,628
Disposals (283) (1,571)
Depreciation charge (3,845) (7,451)
Translation adjustments 1,014 (35)
At end of period 124,717 117,929
7 Goodwill and intangible assets
January July
2019 2018
EUR'000 EUR'000
Net book value
At beginning of period 216,334 205,961
Arising on acquisitions (Note 12) 67,973 11,997
Additions 1,621 5,645
Amortisation of non-ERP intangible assets (4,265) (5,655)
ERP intangible amortisation (1,211) (2,291)
Translation adjustments 4,858 677
At end of period 285,310 216,334
Included in the total goodwill and intangible assets above is
goodwill of EUR183,704,000 (July 2018: EUR138,112,000). There have
been no indicators of impairment in the first half of the year
therefore a full assessment of the carrying value of goodwill and
intangibles will be carried out in the second half of the year.
8 Investments in associates and joint venture
January
July
2019 2018
EUR'000 EUR'000
At beginning of period 48,171 34,206
Share of profits after tax 1,809 7,221
Dividends received (6,909) (2,483)
Share of other comprehensive expense (789) 9,092
Translation adjustments 585 135
At end of period 42,867 48,171
9 Provision for liabilities
The estimate of provisions is a key judgement in the preparation
of the Interim condensed financial statements.
January July
2019 2018
EUR'000 EUR'000
At beginning of period 13,512 15,464
Arising on acquisition (Note 12) 6,755 2,995
Provided in period 121 2,007
Paid in period (2,258) (4,964)
Released in period (850) (2,137)
Translation adjustments 361 147
At end of period 17,641 13,512
Provisions for liabilities relate to various operating and
employment related costs and contingent acquisition consideration
that arose on various acquisitions.
10 Analysis of net debt
31 July Cash Arising on Non-cash Translation 31 January
2018 flow acquisition movements adjustment 2019
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cash 147,212 (66,744) 3,470 - 954 84,892
Overdraft (20,653) 6,756 - - 279 (13,618)
Cash and cash equivalents 126,559 (59,988) 3,470 - 1,233 71,274
Finance lease obligations (862) (354) - - (3) (1,219)
Loans (164,553) (135,203) (8,177) (339) (601) (308,873)
Net debt (38,856) (195,545) (4,707) (339) 629 (238,818)
Restricted cash 500 (500) - - - -
Net debt including
restricted cash (38,356) (196,045) (4,707) (339) 629 (238,818)
The loans included above are unsecured and the facility extends
to May 2022.
11 Share capital
January July
2019 2018
EUR'000 EUR'000
Authorised
250,000,000 ordinary shares of EUR0.01 each (i) 2,500 2,500
Allotted, called up and fully paid
126,382,206 ordinary shares of EUR0.01 each (i) 1,264 1,264
(i) Ordinary shareholders are entitled to dividends as declared
and each ordinary share carries equal voting rights at meetings of
the Company.
12 Acquisition of subsidiary undertakings
During the period, the Group completed the acquisition of
Fortgreen Commercial Agricola Ltda ('Fortgreen') in Brazil and the
acquisition of Symbio Group ('Symbio') in the United Kingdom. These
acquisitions complement the Group's prescription fertilisers and
speciality nutrition business.
Details of the acquisitions are as follows:
(i) On 14 August 2018 the Group acquired a 65 per cent
controlling interest in the Brazilian based speciality nutrition
and crop inputs business, Fortgreen Commercial Agricola Ltda.
(ii) On 20 November 2018 the Group completed the acquisition of
100 per cent of Eco Solutions (C & R) Limited trading as
Symbio. Based in the United Kingdom, Symbio specialises in
biological based crop technologies.
Details of the net assets acquired and provisional goodwill
arising from the business combinations are as follows:
Fair
value
Assets EUR'000
Non-current
Property, plant and equipment 2,512
Intangible assets 25,561
Total non-current assets 28,073
Current assets
Inventory 6,078
Trade and other receivables 16,221
Corporation tax asset 123
Total current assets 22,422
Liabilities
Trade and other payables (10,354)
Deferred tax liability (7,949)
Total liabilities (18,303)
Total identifiable net assets at fair value 32,192
Goodwill arising on acquisition 42,412
Total net assets acquired (excluding debt acquired) 74,604
Consideration satisfied by:
Cash consideration 36,709
Cash acquired (3,470)
Net cash outflow 33,239
Contingent consideration 6,755
Put option 26,433
Consideration 66,427
Debt acquired 8,177
Total consideration plus debt acquired 74,604
The goodwill recognised on acquisition is attributable to the
skills and technical talent of the acquired business's workforce,
and the synergies expected to be achieved from integrating the
company into the Group's existing business.
Origin acquired a 65 per cent interest in Fortgreen for cash
consideration on 14 August 2018. The Group have also entered into
an arrangement with the minority shareholder, under which the
minority shareholder has the right at various dates to sell the
remaining 35 per cent interest to Origin based on an agreed
formula. In the event that this is not exercised, Origin has a
similar right to acquire the 35 per cent interest. Origin has
recognised an option liability of EUR26.4 million which is the fair
value of the future estimated amount payable to exercise the
option. This has been determined based on an agreed formula which
includes an expectation of future trading performance and timing of
when the options are expected to be exercised, discounted to
present day value.
Origin has elected to apply the anticipated acquisition method
in accounting for the option whereby the non-controlling interest
is not recognised but rather treated as already acquired by Origin
both in the Consolidated Statement of Financial Position and the
Consolidated Statement of Comprehensive Income. This treatment has
been adopted as the Directors have formed the view that based on
the structure and timing of the option contracts sufficient risks
and rewards are deemed to have transferred to Origin. Profits and
losses attributable to the minority shareholder in respect of their
35 per cent interest will be presented as attributable to the
equity shareholders of Origin and not as attributable to minority
interests. The EUR26.4 million financial liability recognised by
the Group forms part of the contingent consideration for the
acquisition. For all new liabilities recognised in respect of
shares held by non-controlling shareholders, all movements in the
fair value of such options will be recognised in retained
earnings.
Post-acquisition revenues and operating profit relating to the
current year acquisitions amounted to EUR21.5 million and EUR5.8
million. If the acquisitions had occurred on 1 August 2018,
management estimates total consolidated revenue would have been
EUR704.3 million and consolidated operating profit for the
six-month period would have been EUR9.4 million. In determining
these amounts management has assumed that the fair value
adjustments that arose on the dates of acquisition would have been
the same if the acquisition occurred on 1 August 2018.
13 Dividends
On 15 December 2018 a final dividend of 17.85 cent per ordinary
share was paid in respect of the year ended 31 July 2018 which when
combined with the interim dividend of 3.15 cent per ordinary share
brings the total dividend for the year ended 31 July 2018 to 21
cent per ordinary share.
An interim dividend of 3.15 cent (2018: 3.15 cent) per ordinary
share will be paid on 12 April 2019 to shareholders on the register
on 29 March 2019. These condensed interim consolidated financial
statements do not reflect this dividend payable.
14 Taxation
The taxation credit for the interim period is an estimate based
on the expected full year effective tax rate on full year
profits.
15 Contingent liabilities
The Group is not aware of any major changes with regard to
contingent liabilities in comparison with the situation as of 31
July 2018.
16 Financial commitments
The Group has a financial commitment of EUR7.4 million
attributable to a strategic partnership with University College
Dublin ('UCD'). The commitment is over a four year period.
17 Related party transactions
Related party transactions occurring in the period were similar
in nature to those described in the 2018 Annual Report.
18 Release of half yearly condensed interim consolidated financial statements
The Group condensed interim consolidated financial information
was approved for release by the Board on 5 March 2019.
19 Distribution of Interim Report
This interim report is available on the Group's website
(www.originenterprises.com). A printed copy is available to the
public at the Company's registered office.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFEDVVIEIIA
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