Key Financial
Highlights September 2001
Go deeper with GlobalData
Announcement
of interim results for the six months ended 30 September 2001
- For September 2001 Interim
Results in full click here - For March 2001 Preliminary
Results in full click here - For September 2000 Interim
Results in full click here - For March 2000 Preliminary
Results in full click here - For Key Financial Highlights
for 52 weeks ended 25th September 1999 click
here - For Key Financial Highlights
for 26 weeks ended 27th March 1999 click
here - For 1998 Interim Results
in full click here - For 1998 Preliminary
Results in full click here
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INTERIM
RESULTS TO SEPTEMBER |
2001
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2000
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| Sales | £2,133m | £2,122m |
| Profit before interest, goodwill amortisation and exceptional items |
£97m | £107m |
| Profit before tax, goodwill amortisation and exceptional items |
£64m | £68m |
| Profit before taxation |
£64m | 1£2m |
| Diluted earnings per share before goodwill amortisation and exceptional items |
9.4p | 19.3p |
| Interim dividend declared |
5.5p | 5.5p |
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- Overall trading in
line with expectation - Net debt reduced by
£115 million - Amylum/Staley integration
well advanced - Domino disposal completed
after period end
progress has been made in our strategy to reshape Tate & Lyle. The important
completion of the disposal of Domino was announced on 6 November 2001. The integration
of Amylum and Staley continues according to plan.
Overall, trading in this
half year has been in line with our expectations. The outlook for the second
half year is positive notwithstanding increasingly difficult global economic
conditions. We remain committed to improving overall shareholder returns and
rebuilding interest and dividend cover. "
| Sir David Lees Chairman |
Larry Pillard Chief Executive |
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An interim statement incorporating
the Group profit and loss account for the six months ended 30 September 2001
will be posted to shareholders.
Copies of
this Announcement are available from:
Robert
Gibber, Company Secretary, Tate & Lyle PLC,
Sugar Quay, Lower Thames Street, London EC3R 6DQ
1 Comparative
figures have been restated following the adoption of a new accounting standard
FRS 19 on deferred taxation.
INTERIM REPORT
Comparisons are with the
27 week period to 30 September 2000 unless stated otherwise. The comparatives
have been restated to reflect the adoption of FRS 19 on deferred taxation.
Overview
Profit before tax, goodwill
amortisation and exceptional items for the six months to 30 September 2001 was
£64 million. As expected, this was below the £68 million achieved
in the corresponding period to 30 September 2000, mainly because of a £10
million increase, to £19 million, in losses before interest in the US
sugar businesses. Progress on the disposal of these businesses is referred to
below.
Trading in our three main
businesses has been equal to or ahead of the comparative period. Energy costs
increased by £11 million in the half year before mitigation by internal
action on energy conservation. In the second half year we hope to contain the
increase to single figures.
We announced on 26 September
2001 the signing of an agreement to realign our sucralose activities into a
new global alliance with McNeil Nutritionals ("McNeil"), a Johnson
& Johnson Company. Under this agreement, Tate & Lyle has received the
first of three annual advance license fees from McNeil of US $10 million each.
These annual fees are effective from 1 October and had no impact on the first
half year results. In the second half year, profit before interest will include
£3 million (US $5million) from the first instalment.
We continue to refocus the
Group towards higher-margin and higher-growth businesses, disposing of underperforming
or non-core assets and eliminating costs. The sale of Zambia Sugar together
with the disposal of other smaller businesses and surplus assets generated proceeds
of £20 million. This, together with the containment of capital expenditure
below the level of depreciation and a reduction in working capital, enabled
net debt to be reduced by £115 million.
We announced on 6 November
2001 that we have completed the disposal of Tate & Lyle North American Sugars
("Domino") for a cash consideration of £86 million (US$ 125
million). Total proceeds are the same as detailed in the announcement of the
sale dated 26 July 2001, except for an adjustment for the level of working capital.
This disposal again demonstrates that we are delivering on our strategy to retain
only those assets that produce acceptable returns. Proceeds will be used to
further reduce Group debt.
We announced on 26 September
2001 that the sale of the Western Sugar Company is progressing more slowly than
anticipated and the date for closing has been extended to 31 January 2002 to
coincide with the completion of the current beet processing campaign.
The Board has declared an
unchanged interim dividend of 5.5p per share, to be paid on 15 January 2002
to shareholders registered on 7 December 2001.
Results for the six months
to 30 September 2001
Sales were £2,133 million (£2,122 million). Profit before interest
and exceptional items was £93 million (£106 million) after a £4
million (£1 million) charge for amortisation of goodwill relating to the
purchase of minorities in Amylum and Staley in August 2000.
Exceptional items totalled
a profit of £4 million (loss £65 million), mainly comprising profit
on the sale of assets.
Profit before tax, goodwill
amortisation and exceptional items was £64 million (£68 million).
Currency movements reduced profits by £2 million, mainly due to the impact
of the Zimbabwe Dollar on ZSR Corporation. Profit before tax and after goodwill
amortisation and exceptional items was £64 million (£2 million).
The underlying rate of tax
on profit before goodwill amortisation and exceptional items of 30% increased
by 3 percentage points due to the adoption of Financial Reporting Standard 19
on deferred taxation. The prior period tax charge has been restated (and increased
by 2 percentage points to 29%) to reflect this change.
Diluted earnings per share
before goodwill amortisation and exceptional items were 9.4p (9.3p), and after
exceptional items and goodwill amortisation were 9.4p (loss of 5.8p).
The Group generated strong
net cash inflow from operating activities of £215 million (£195
million). Capital expenditure at £39 million (£57 million), remained
below depreciation. Interest
cover improves from 2.3 times in the 53 weeks to 31 March 2001 to3.0 times in
the half year to 30 September 2001. On a proforma basis had the sale of Domino
taken place at the beginning of the half year interest cover would have been
3.8 times.
Amylum Integration
Good progress has been made on the integration of Amylum and Staley as part
of our global ingredients business. As anticipated, little net benefit has accrued
in the six month period to 30 September 2001 because of one-off integration
costs. We are in consultation with works councils throughout our European operations
to discuss the cost improvement programme. We remain confident that we will
achieve our original target for annual benefits of £50 million by the
financial year ending March 2004.
Segmental Analysis before
Exceptional Items
Americas
Profits in the segment were
£45 million (£57 million). This was after £10 million increase
in losses in the US Sugar businesses to £19 million. Domino
accounted for £18 million of this loss, Western £1 million.
Profits at Staley were higher,
despite energy costs and a reduced performance from the citric acid product
line. Sweetener volumes and margins improved, reflecting price rises announced
at the beginning of the calendar year. Starch volumes increased but industrial
starch margins continue to suffer from lower pricing, in particular from the
paper industry. The contribution from ethanol improved. Energy conservation
measures partially offset increased energy costs. By-product pricing, especially
corn oil, has improved from the low level of last year. The citric acid industry
faces competition from Asian imports and new capacity. We have undertaken a
number of cost reduction initiatives to respond to this challenge. These included
the eight-week closure of the Mexican factory, which we re-opened in September
with a reduced workforce, the sourcing of lower-cost raw materials in the USA,
and delivering energy efficiency improvements in Brazil.
In our North American sugar
business Redpath, our Canadian refiner, performed well despite overall profits
being lower due to the recent fall in world raw sugar prices. In the US sugar
businesses, the sugar market remained substantially oversupplied and losses
increased by £10 million as margins and volumes were squeezed in the early
part of the financial year. As the six months progressed the situation eased.
There are signs of an improvement in sugar prices as a result of a smaller beet
crop in the US and the impact of the renewal of the government ‘Payment In Kind’
programme.
Europe
Profits in the segment improved
to £53 million (£48 million).
Amylum, our European cereal
sweetener and starch business, showed improved results due to a combination
of better pricing, volumes (related to good summer weather), and higher by-product
revenues. Results were enhanced by efficiency improvements and energy conservation
efforts, which partially offset the effect of higher energy prices and increased
raw material and ingredient costs.
In European Sugar, our refineries
in London and Lisbon performed well. The European Union beet sugar regime was
renewed from July 2001. A reduction in export revenues as a consequence of the
removal of the storage levy had a minor impact on profits. Our beet operations
in Central Europe continued to make satisfactory returns, with better margins
compensating for lower volumes.
Rest of the World
The sale of Zambia Sugar,
which was the largest unit in this segment, was completed on 2 April 2001. In
Zimbabwe, ZSR Corporation remained profitable in local currency but its contribution
fell in Sterling terms. Profits from sugar production in Vietnam increased with
both higher volumes and margins.
Animal Feed and Bulk
Storage
Profit in this sector, now
mainly molasses and storage, was £1 million (£2 million), due to
a competitive market in the UK. The molasses business is expected to improve
in the second half year following the normal seasonal trend.
Other Businesses and
Activities
Our reinsurance business
had modest exposure to the terrorist attacks in the USA on 11 September and
this, combined with the mark to market of investments associated with its business,
reduced profits by £6 million.
The Board
Lord Walker retired from the Board at the end of the Annual General Meeting
in August having served the Board with great distinction since 1990. We thank
him again for his outstanding service and contribution.
Outlook
"Substantial progress has been made in our strategy to reshape Tate &
Lyle. The important completion of the disposal of Domino was announced on 6
November 2001. The integration of Amylum and Staley continues according to plan.
Overall, trading in this half year has been in line with our expectations. The
outlook for the second half year is positive notwithstanding increasingly difficult
global economic conditions. We remain committed to improving overall shareholder
returns and rebuilding interest and dividend cover".
| Sir David Lees Chairman 7 November 2001 |
Larry Pillard Chief Executive 7 November 2001 |
