Source - LSE Regulatory
RNS Number : 1025R
Origin Enterprises Plc
04 March 2021
 

Origin Enterprises plc

INTERIM RESULTS STATEMENT

Improved operating profit and strong working capital performance in seasonally quieter first half

 

4 March 2021

 

Origin Enterprises plc ('Origin' or 'the Group'), the international Agri-Services group, providing specialist agronomy advice, crop inputs and digital agricultural solutions to farmers, growers and amenity professionals, today announces its interim results for the half year ended 31 January 2021.

 

Financial and Operational Highlights

·    Group revenue decreased by 5.4% to €572.4 million. Excluding adverse foreign currency translation impacts, revenue was broadly consistent with H1 2020  

·    Operating profit of €1.2 million in the first half of the year (H1 2020: loss of €2.8m)

·    Increase in underlying1 operating profit of €5.7 million, driven by improved performance in Ireland and the UK, due to a return to more normalised autumn and winter crop plantings

·    Continental Europe and Latin America divisions performed in line with expectations, with adverse foreign currency translation impacting Latin America's contribution

·    Investment in second CRF manufacturing plant in Brazil near completion

·    Adjusted diluted loss per share of 1.53 cent (H1 2020: adjusted diluted loss per share of 4.53 cent)

·    Strong working capital performance across all business units, delivering a reduction of €88.0 million

·    Decrease in net bank debt5 by €105.9 million to €158.3 million delivered Net Debt/EBITDA ratio improvement from 3.24x to 2.76x

·    TJ Kelly joined the Group as Chief Financial Officer on 18 January 2021

·    Continued progress on the Group's sustainability agenda; improved ESG rating and became a signatory of the United Nations Global Compact

·    Interim dividend of 3.15 cent per share (H1 2020: 3.15 cent per share)

 

Results Summary

 

31 Jan 2021

€'000

 

31 Jan 2020

€'000

 

Change

€'000

Constant

Currency

€'000

 

Group revenue

 

572,410

 

604,908

 

(32,498)

 

(530)

Operating profit/(loss)2

1,220

(2,789)

4,009

5,716

Associates and joint venture3

785

1,137

(352)

(326)

Total Group operating profit/(loss)2

2,005

(1,652)

3,657

5,390

Finance cost, net

(4,549)

(5,532)

983

868

Loss before tax2

(2,544)

(7,184)

4,640

6,258

Adjusted diluted loss per share (cent)4

(1.53)

(4.53)

3.00

4.08

Group net bank debt5     

158,339

264,241

(105,902)

 

Interim dividend per ordinary share (cent)

3.15

3.15

-

 

 

1        Excluding currency movements and the impact of acquisitions

2       Before amortisation of non-ERP intangible assets and exceptional items

3       Profit after interest and tax

4      Before amortisation of non-ERP intangible assets, net of related deferred tax (2021: €3.4 million, 2020: €3.9 million) and exceptional items, net of tax (2021: charge of €0.4 million, 2020: gain of €0.3 million)

5       Net bank debt excludes IFRS16 Lease liabilities

 

Origin Enterprises plc

 

Commenting on the results, Origin Chief Executive Officer, Sean Coyle said:

 

"While continuing to navigate the challenges caused by COVID-19, weaker currencies in certain of the Group's geographies, and Brexit, the Group delivered an improved performance in the first half of the year. Operating profit of €1.2 million in the period compared favourably to a loss of €2.8 million in H1 2020. This was largely as a result of a more normalised cropping profile across the Group, set against last year's highly unseasonal and prolonged weather conditions which materially impacted business performance in H1 2020. 

 

Group revenue was €572.4 million for the first half, a decline of 5.4% on a reported basis, but in line with the corresponding period last year on a constant currency basis. Revenue performance reflects underlying volume growth of 2.0%, driven primarily by fertiliser tonnes, offset by pricing declines of 2.1%. Fertiliser prices were lower than last year for most of H1 2020 but increased towards the end of the period, while pricing of other crop inputs remained stable or increased in the period.

 

The Group delivered a strong working capital performance across all business units, with a significant reduction in working capital and net bank debt, driven by enhanced management of our inventory levels, debt recovery, and the one-off benefit of COVID-19 related UK VAT deferrals. Our improved balance sheet allows us to resume dividend payments, and pursue further M&A activity, in the second half of the year.

 

Despite the unprecedented disruption experienced during the period as a result of COVID-19, our businesses continued to operate effectively, while meeting the needs of the agricultural communities we serve. The uncertainty created by the pandemic continues and in this challenging environment for everyone, the Group's priority remains keeping our employees safe and well. Thanks to the collective efforts of all of our people we continue to serve our customers and deliver solid profitability and strong operating cash flow.

 

During the first half we advanced our sustainability agenda with an improved Sustainalytics rating and CDP awarded us a positive first-time climate score. We also became a signatory of the United Nations Global Compact and committed to making its core principles an integral part of our strategy, culture and day-to-day operations.

 

During the period we welcomed TJ Kelly, the Group's new Chief Financial Officer. TJ joined the Group in January and I would like to wish him every success in his role. I would also like to thank Declan Giblin for his valued contribution as a Board member, as he steps down from the Board at the end of the financial year to focus primarily on the growth and development of our LATAM platform.

 

While our H1 2021 performance sets a positive foundation for the full year, with an encouraging cropping profile across our geographies, continued wet and cold conditions in the UK and Ireland have meant that our expectation of 1.7 million hectares for the total winter wheat planted area in the UK is now lower than the 1.8 million hectares anticipated at our Q1 trading update, and may delay the spring application period. That, together with the renewed COVID-19 restrictions across all of our geographies, means that trading uncertainties remain heading into the seasonally more significant second half.  

 

The Group is well placed to deliver good growth in earnings for the full year, and consistent with prior years, we will provide an update on full year guidance at the time of the Q3 Trading Update on 16 June 2021."

 

 

ENDS

 

Conference Call

 

Origin will host a live conference call and webcast, for analysts and institutional investors today, 4 March 2021, at 08:30 (Irish/UK time). Dial-in details are set out below for the conference call and the webcast can be accessed on the Group website: www.originenterprises.com. Participants are requested to dial in 5 to 10 minutes prior to the scheduled start time.

 

Participant access numbers:

                                                                       

Ireland:

Tel: +353 (0)1 506 0650

 

UK/International:

Tel: +44 (0)844 481 9752

 

 

 

 

Confirmation Code:

7399082

 

 

Replay

 

A replay of this call will be available for seven days.

 

Replay Access Code:

 

7399082

 

 

 

Replay Access Numbers:

 

 

Dublin:

 

Tel: +353 (0)1 553 8777

UK/International:

 

Tel: +44 (0)844 571 8951

 

Enquiries

 

Origin Enterprises plc

 

 

TJ Kelly

 

 

Chief Financial Officer

Tel:

+353 (0)1 563 4959

 

 

 

Brendan Corcoran

 

 

Head of Investor Relations and Group Planning

Tel:

+353 (0)1 563 4900

 

 

 

Goodbody (Euronext Growth (Dublin) Adviser)

 

 

Finbarr Griffin

Tel:

+353 (0)1 641 9278

 

 

 

Davy (Nominated Adviser)

 

 

Anthony Farrell

Tel:

+353 (0)1 614 9993

 

 

 

Numis Securities (Stockbroker)

 

 

Stuart Skinner

Tel:

+44 (0)20 7260 1314

 

 

 

FTI Consulting (Financial Communications Advisers)

 

 

Jonathan Neilan / Patrick Berkery

Tel:

+353 (0)1 765 0884

 

 

 

 

 

 

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

31 Jan 2021

€'000

6 months ended

31 Jan 2020

€'000

 

 

 

Group revenue

572,410

604,908

Operating profit/(loss)1

1,220

(2,789)

Associates and joint venture, net2

785

1,137

Adjusted Group operating profit/(loss)1

2,005

(1,652)

Finance cost, net

(4,549)

(5,532)

Pre-tax loss

(2,544)

(7,184)

Income tax credit

621

1,499

Adjusted net loss

(1,923)

(5,685)

 

 

 

Adjusted diluted loss per share (cent)3

(1.53)

(4.53)

 

 

 

 

 

 

Adjusted net profit reconciliation

 

 

Reported net loss

(5,752)

(9,365)

Amortisation of non-ERP intangible assets

4,023

4,797

Tax on amortisation of non-ERP related intangible assets

(631)

(857)

Exceptional items, net of tax

437

(260)

Adjusted net loss

(1,923)

(5,685)

 

 

 

Adjusted diluted loss per share (cent)3

(1.53)

(4.53)

 

 

Origin delivered an adjusted diluted loss per share3 in H1 2021 of 1.53 cent compared to an adjusted diluted loss per share of 4.53 cent in H1 2020. On a like-for-like basis (excluding the impact of currency movements and acquisitions/disposals) the underlying increase was 4.27 cent. 

 

 

Group revenue

 

Group revenue was €572.4 million in H1 2021 compared to €604.9 million in the corresponding period last year, a reduction of 5.4%. On an underlying basis at constant currency, revenues decreased by €0.5 million (0.1%).

 

The underlying increase in agronomy services and crop input volumes, excluding crop marketing, was 6.8% in H1 2021 compared to H1 2020 (and 2.0% including crop marketing).

 

 

Operating profit/(loss)1

 

Operating profit1 in H1 2021 was €1.2 million compared to a loss of €2.8 million in H1 2020. On an underlying basis at constant currency, the increase year-on-year was €5.7 million. 

 

 

Associates and joint venture2

 

Origin's share of the profit after interest and taxation from associates and joint venture amounted to €0.8 million, a €0.3 million decrease on the prior year, principally due to the disposal of the Group's interest in Ferrari Zagatto.

 

 

Net bank debt and financing costs

 

Net bank debt5 at 31 January 2021 was €158.3 million compared with €264.2 million at 31 January 2020, and is 2.76 times EBITDA4 for the twelve months to 31 January 2021. The period end net bank debt reduction is principally attributable to a continued focus on working capital efficiencies across the Group. Net finance costs amounted to €4.5 million compared to €5.5 million in the corresponding period last year. The reduction in net finance costs of €1.0 million in the period reflected reduced levels of net bank debt across the period including in higher interest geographies like Ukraine.

 

At period end our key banking covenants are as follows:

 

 

Banking Covenant

H1 2021

Times

H1 2020

Times

FY 20

Times

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt to EBITDA

Maximum 3.5

2.76

3.24

1.18

 

 

 

 

 

 

 

 

 

EBITDA to net interest

Minimum 3.0

6.75

7.57

5.76

 

 

 

 

Working capital

 

Following the seasonal investment in working capital in the period, the net cash outflow from operating activities was €94.3 million (H1 2020: €141.2 million) and there was a decrease in working capital at period end to €101.2 million (H1 2020: €189.2 million). The year-on-year net working capital reduction includes a more normalised working capital profile in the UK which was elevated in FY 20 due to higher inventory levels in advance of the possible hard Brexit on 31 October 2019. It also reflects a continued focus on working capital efficiencies across the Group, improved debtor recovery and enhanced inventory planning and management protocols in Continental Europe together with the positive impact of COVID-19 VAT deferrals in the UK, amounting to €13.9 million, the benefit of which will flow out over the coming twelve months.

 

 

Dividend

 

Due to the market challenges and uncertainty caused by COVID-19, the Board determined that it was prudent to suspend the final dividend for FY 20. We are pleased to announce that an interim dividend of 3.15 cent per share will be paid on 30 April 2021 to shareholders on the register on 9 April 2021.  

 

 

Executive and Non-Executive Director changes

 

On 18 January 2021, TJ Kelly joined Origin as Group Chief Financial Officer. TJ was also appointed as a Director of the Company at that time.

 

Declan Giblin, our CEO LATAM, has informed the Board of his intention to retire in the next two years, and has decided he will step down from the Board at the end of FY 21, to focus primarily on the continued growth and development of our LATAM platform. Declan joined the Board of Origin following the acquisition of Masstock in 2007, and has been instrumental in the growth of the Group in the subsequent 14 years. He initially led the creation of the Agrii group in the UK and subsequently led the diversification of the Group internationally with further acquisitions in the UK, Europe and LATAM.

 

In October the Group also announced the appointment of Ms Helen Kirkpatrick to the Board as an independent Non-Executive Director.

 

 

COVID-19

 

COVID-19 and its impact in the markets in which the Group operates continues to be a significant area of focus for the Board and senior management teams. The Group actively monitors the advice and guidance of governments and health authorities across our markets, with ongoing audits at all our operating facilities to ensure we adhere to safe social distancing and all other health and safety guidance.

 

The Group continues to monitor developments closely across our locations and is taking appropriate actions to ensure we provide the safest environment we can for our stakeholders, while continuing to serve the needs of the agricultural community in a responsible manner. The Group will repay the £0.2 million of furlough support payments claimed by our Amenity business in the period.

 

 

Brexit

 

Following the conclusion of the trade deal between the European Union and the United Kingdom, the Brexit transition period officially concluded on 31 December 2020. The Group had taken all appropriate steps to ensure we were adequately prepared in the event of a no deal scenario. All appropriate protocols are currently being adhered to and the Group is monitoring all advice and guidance issued by the European Union and the United Kingdom authorities to ensure our supply chain continues to operate effectively and our customers are served in an efficient and effective manner.

 

Origin currently utilises the UK-based CREST settlement system for electronic trades made in the Company's ordinary shares. As a consequence of Brexit it will no longer be possible for Irish public companies to use the CREST system after 30 June 2021. In common with all other affected Irish incorporated and traded PLCs, the Company will have to migrate settlement to another system based within the EU, through Euroclear Bank in Belgium. Origin held an Extraordinary General Meeting on 28 January 2021 where all three resolutions required to enable the migration to the Euroclear Bank settlement system were approved. It is expected that the migration will take place in mid-March 2021.

 

 

 

 

 

1      Operating profit/(loss) and Group operating profit/(loss) 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 (2021: €3.4 million, 2020: €3.9 million) and exceptional items, net of tax (2021: charge of €0.4 million, 2020: gain of €0.3 million)

4       Net debt/EBITDA ratio as per the requirements of the Group's syndicated bank loan agreement

5       Net bank debt excludes IFRS16 Lease liabilities

Review of Operations

 

Group Overview

 

 

 

 

Change on prior period

 

 

H1 2021

€'m

 

H1 2020

€'m

 

Change

€'m

 

Underlying4

€'m

Constant Currency5

€'m

 

 

 

 

 

 

 

Revenue

572.4

604.9

(32.5)

(0.5)

(0.5)

Operating profit / (loss)1

1.2

(2.8)

4.0

5.7

5.7

 

 

 

 

 

 

Associates and joint venture2

0.8

1.1

(0.3)

(0.1)

(0.3)

 

 

 

 

 

 

Adjusted diluted EPS (cent)3

(1.53)

(4.53)

3.00

4.27

4.08

 

 

 

 

 

 

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 (2021: €3.4 million, 2020: €3.9 million) and exceptional  items, net of tax (2021: charge of €0.4 million, 2020: gain of €0.3 million)

4    Excluding currency movements and the impact of acquisitions/disposals

5    Excluding currency movements

                       

 

Origin delivered an improved financial performance in the first half of the year compared to a challenging H1 2020 which was impacted by extreme, mainly weather related, operating conditions for farmers and growers in Ireland and the UK. This resulted in an increase in operating profit and adjusted fully diluted loss per share to €1.2 million and 1.53 cent, respectively. While Group revenue reduced by 5.4% to €572.4 million on a reported basis, when negative currency impacts are excluded, revenue was broadly flat compared to H1 2020. The improved performance was supported by a positive cropping profile across the Group with planting returning to more normalised levels compared with FY 20.

 

 

Ireland and the United Kingdom

 

 

 

 

Change on prior period

 

 

H1 2021

€'m

 

H1 2020

€'m

 

Change

€'m

 

Underlying3

€'m

Constant Currency4

€'m

 

 

 

 

 

 

 

Revenue

344.5

337.4

7.1

17.6

17.6

Operating loss1

(2.7)

(9.1)

6.4

6.1

6.1

 

 

 

 

 

 

Associates and joint venture2

0.8

0.9

(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 increased revenues and overall contribution in an improved performance in the seasonally quiet first half.

 

The increase in revenues and performance in the period largely reflected more normalised activity levels and a positive cropping profile set against prolonged unseasonal weather conditions in H1 2020. On an underlying basis, at constant currency, there was a €6.1 million reduction in operating loss. The increase in underlying business volumes was 10.1%, primarily driven by fertiliser and feed ingredient volumes.

 

 

Integrated On-Farm Agronomy Services

 

Integrated Agronomy and On-Farm Services recorded lower revenues in the period, however an increased contribution was delivered against the comparable period in H1 2020. The reduction in crop input volumes was primarily driven by a delayed harvest which impacted oil seed rape plantings, which were back 6.0% on H1 2020, and the impact of carried-over stock on-farm. Set against a challenging comparable period, farm sentiment has improved in H1 2021 with a more normalised cropping profile across the UK resulting in increased profitability.

 

Total autumn and winter plantings for principal crops are estimated to be 49.9%, or 0.8 million hectares, ahead of last year at 2.5 million hectares. The area of winter wheat is estimated to be up 68.1% to 1.7 million hectares (1.0 million hectares in FY 20), lower than the area expected at the time of our Q1 trading update (1.8 million hectares). As a result of the increased area of winter crops, the area of spring cropping in H1 2021 is expected to be back 9.1% on H1 2020, where an element of the winter shortfall was transferred to spring.

 

Total autumn, winter and spring plantings for the 2021 growing season are forecast to be 10.4% ahead of last year, at 4.4 million hectares. Although farm sentiment has improved with this more normalised cropping profile, farmers are facing challenges across the UK with prolonged cold and wet weather, which may delay the start of in-field operations for the second half of the year.

 

 

Digital Agricultural Services

 

Digital Agricultural Services has maintained the positive momentum of FY 20, with over 1.4 million active hectares on-boarded to the Group's digital platform by the end of H1 2021, compared to 1.2 million hectares at end of H1 2020. As we continue to embed our digital decision support services across the Group's established routes-to-market, enhancement of functionality remains a key priority which is being rolled out to farmers ahead of the main spring input application period in 2021.

 

 

Business-to-Business Agri-Inputs

 

Our Business-to-Business Agri-Inputs division had an improved start to the financial year, recording higher volumes and operating profit.

 

 

Fertiliser

 

With more positive on-farm sentiment, volumes in the period increased, resulting in an improved contribution compared to H1 2020. The more normalised autumn and winter cropping profile across the UK provides a solid foundation for an improved outlook for the remainder of the year.

 

Focus continues to be given to the Group's speciality and bespoke nutrition ranges, which maintained the positive momentum achieved to date.

 

 

Amenity

 

The Group's Amenity business delivered an improved performance in the period, benefitting from the easing of COVID-19 restrictions in the first quarter, and the recovery of some of the volume lost in the second half of FY 20 as a result of the pandemic. This positive momentum will be impacted by the extent to which COVID-19 restrictions, which were reintroduced across the UK in the second quarter, persist into the spring, impacting the key selling period.

 

 

Feed Ingredients

 

Feed Ingredients achieved a satisfactory performance in H1 2021, recording higher volumes compared to H1 2020. During the period, operations were temporarily impacted by a fire in the facility of our animal feed business, R&H Hall, at the Port of Cork, Ireland. Given the insurance cover in place, the financial impact from the fire is expected to be minimal. For the second half of the year volumes are expected to be lower, due to logistical challenges arising from commodity supply side constraints.

 

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 Europe1

 

 

 

 

Change on prior period

 

 

H1 2021

€'m

 

H1 2020

€'m

 

Change

€'m

 

Underlying3

€'m

Constant Currency4  €'m

 

 

 

 

 

 

 

Revenue

122.4

142.1

(19.7)

(11.1)

(11.1)

Operating profit2

0.1

0.7

(0.6)

(0.7)

(0.7)

 

 

 

 

 

 

1    Excluding crop marketing. While crop marketing has a significant impact on revenue, its impact on operating profit is insignificant. An analysis of revenue and profit 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 €0.7 million decrease in underlying operating profit at constant currency in the seasonally quieter first half. Underlying business volumes reduced by 5.7% in H1 2021, compared to H1 2020, with a solid start to the year in Poland set against a slower start in Romania and Ukraine. The overall winter and spring cropping area across our CE markets is expected to be marginally ahead of last year.

 

 

Belgium

 

Belgium achieved a satisfactory performance in the period delivering an increase in underlying business volumes. Performance is set against a challenging comparative period last year where demand was impacted by wet in-field conditions and an uncertain pricing environment for fertiliser raw materials.

 

 

Poland

 

Poland delivered an improved overall contribution while recording lower underlying business volumes in the seasonally quiet first half supported by a favourable business mix.

 

A late harvest and wet in-field conditions resulted in some delays to in-field operations. Autumn and winter plantings are estimated to be marginally behind last year at 4.6 million hectares with an increase in winter barley offsetting a 1.6% reduction in the oil seed rape area. The shortfall in autumn and winter plantings are expected to largely transfer to spring, with the total cropping area for the 2021 growing season expected to be 0.9% behind the prior year at 8.1 million hectares.

 

 

Romania

 

Romania has had a slow start to the year, recording lower underlying business volumes and a reduced contribution in H1 2021. This reflected the impact of dry conditions early in the period which resulted in some delays to in-field operations. In the second quarter, most of the cropped area received sufficient rainfall to allow soil moisture levels to return to more normalised levels.

 

The total sown area for autumn and winter plantings is forecast to be 1.7% behind last year at 3.0 million hectares. Combined winter and spring plantings for the growing season are currently anticipated to be 1.1% behind last year at 8.3 million hectares.

 

Mild weather conditions at the end of the period allowed late sown crops to develop in good condition.

 

 

Ukraine

 

Ukraine recorded a satisfactory result in the period in line with expectations. There was a reduction in volumes and overall contribution driven by prolonged dry conditions early in the period, followed by subsequent wetter in-field conditions which curtailed planting activities. Overall crop establishment in the period is satisfactory, with sufficient snow cover in place to limit crop damage.  

 

Total autumn and winter plantings are anticipated to be marginally behind last year at 8.1 million hectares, with combined autumn and spring plantings currently forecast to be 1.9% ahead of last year at 24.2 million hectares.

 

 

Latin America

 

 

 

 

 

Change on prior period

 

 

H1 2021

€'m

 

H1 2020

€'m

 

Change

€'m

 

Underlying3

€'m

Constant Currency4 €'m

 

 

 

 

 

 

 

Revenue

 

21.6

21.9

(0.3)

8.7

8.7

Operating profit1

 

3.9

5.7

(1.8)

0.3

0.3

 

 

 

 

 

 

 

Associate2

 

-

0.2

(0.2)

-

(0.2)

 

 

 

 

 

 

 

 

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/disposals

4    Excluding currency movements

 

 

 

                         

 

Latin America achieved higher underlying revenues and operating profits in the seasonally significant first half. Underlying business volumes grew by 37.8% compared with the corresponding period last year. This performance was driven by a significant increase in controlled release fertiliser sales in H1 2021, together with a 3.5% increase to 38.3 million hectares in the total cropping area dedicated to soya, Brazil's principal crop. The cropping area dedicated to Brazil's secondary crop, maize is also expected to increase in the current year by 2.3% to 13.2 million hectares.

The impact of foreign currency translation has significantly impacted Latin America's contribution in the period and although reported operating profit has reduced by €1.8m (31.6%), underlying profit at constant currency has increased by €0.3m (6.2%) in H1 2021.

Fortgreen have almost completed the construction of a new controlled release fertiliser plant in Minas Gerais and it is expected to become operational in the second half of the financial year.

 

Outlook

 

Origin's H1 2021 performance sets a positive foundation for the full year, based on the encouraging cropping profile across our geographies. Uncertainties remain heading into the seasonally more important second half, including the impact of ongoing COVID-19 restrictions, a slightly reduced area for winter cropping in the UK, and persistent cold and damp conditions in the UK and Ireland, which may delay the spring application period.

 

The Group is well placed to deliver good growth in earnings for the full year and will provide a further update on the expected FY 21 outcome at the time of the Q3 Trading Update on 16 June 2021.

 

 

ENDS

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Income Statement     

for the six months ended 31 January 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months

 

Six months

 

Six months

 

Six months

 

Year

 

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

January

 

January

 

January

 

January

 

 July

 

 

2021

 

2021

 

2021

 

2020

 

2020

 

 

Pre-exceptional

 

Exceptional

 

Total

 

Total

 

Total

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

Notes

 

 

 

 

 

 

Note 7

 

Note 7

 

 

 

 

 

 

 

 

 

 

 

Revenue

5

572,410

 

-

 

572,410

 

604,908

 

1,589,142

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(495,559)

 

-

 

(495,559)

 

(527,580)

 

(1,359,547)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

76,851

 

-

 

76,851

 

77,328

 

229,595

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

(79,654)

 

(525)

 

(80,179)

 

(84,654)

 

(201,382)

 

 

 

 

 

 

 

 

 

 

 

Share of profit of associates and joint venture

785

 

-

 

785

 

1,137

 

6,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss)/profit

5

(2,018)

 

(525)

 

(2,543)

 

(6,189)

 

34,367

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

511

 

-

 

511

 

622

 

954

 

 

 

 

 

 

 

 

 

 

 

Finance expense

 

(5,060)

 

-

 

(5,060)

 

(6,154)

 

(12,204)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit before income tax

 

(6,567)

 

(525)

 

(7,092)

 

(11,721)

 

23,117

 

 

 

 

 

 

 

 

 

 

 

Income tax credit/(expense)

 

1,252

 

88

 

1,340

 

2,356

 

(3,258)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit attributable to equity shareholders

(5,315)

 

(437)

 

(5,752)

 

(9,365)

 

19,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months

 

Six months

 

Year

 

 

 

 

 

 

ended

 

ended

 

ended

 

 

 

 

 

 

January

 

January

 

 July

 

 

 

 

 

 

2021

 

2020

 

2020

 

 

 

 

 

 

 

 

 

 

 

Basic (loss)/earnings per share

6

 

 

 

 

(4.58c)

 

(7.46c)

 

15.81c

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss)/earnings per share

6

 

 

 

 

(4.58c)

 

(7.46c)

 

15.53c

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Comprehensive Income

for the six months ended 31 January 2021

 

 

 Six months

 

 Six months

 

Year

 

ended

 

ended

 

ended

 

January

 

January

 

July

 

2021

 

2020

 

2020

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit for the period

(5,752)

 

(9,365)

 

19,859

 

 

 

 

 

 

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

3,294

 

(703)

 

553

- deferred tax effect of remeasurements

(569)

 

120

 

      (70)

- share of remeasurements on associate's defined benefit pension schemes

-

 

-

 

(1,001)

- share of deferred tax effect of remeasurements - associates

-

 

-

 

190

 

 

 

 

 

 

Items that may be reclassified subsequently to the Group income statement:

 

 

 

 

 

Group foreign exchange translation details

 

 

 

 

 

- exchange difference on translation of foreign operations

(1,772)

 

6,653

 

(17,350)

Group/Associate cash flow hedges

 

 

 

 

 

- effective portion of changes in fair value of cash flow hedges

(1,403)

 

(977)

 

(1,976)

- fair value of cash flow hedges transferred to operating costs

1,904

 

87

 

(58)

- deferred tax effect of cash flow hedges

(78)

 

164

 

311

- share of associates and joint venture cash flow hedges

(1,632)

 

(3,663)

 

(5,508)

- deferred tax effect of share of associates and joint venture cash flow hedges

204

 

458

 

689

 

 

 

 

 

 

Other comprehensive (expense)/income for the period, net of tax

(52)

 

2,139

 

(24,220)

 

 

 

 

 

 

Total comprehensive expense for the period attributable to equity shareholders

(5,804)

 

(7,226)

 

 

(4,361)

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Financial Position

as at 31 January 2021

 

 

 

 

 

January

 

January

 

July

 

 

 

2021

 

2020

 

2020

 

Notes

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

8

 

108,760

 

114,230

 

109,363

Right of use asset

 

 

43,158

 

43,313

 

39,824

Investment properties

 

 

2,270

 

4,221

 

2,270 

Goodwill and intangible assets

9

 

234,492

 

273,057

 

235,949

Investments in associates and joint venture

10

 

36,177

 

41,194

 

40,597 

Other financial assets

 

 

531

 

620

 

575

Deferred tax assets

 

 

6,198

 

3,907

 

6,890

Post employment benefit surplus

 

 

3,896

 

-

 

403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current assets

 

 

435,482

 

480,542

 

435,871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Properties held for sale

 

 

24,200

 

24,135

 

27,100

Inventory

 

 

251,059

 

270,927

 

188,775

Trade and other receivables

 

 

286,042

 

306,446

 

406,857

Derivative financial instruments

 

 

67

 

677

 

1,460

Cash and cash equivalents

12

 

106,455

 

63,146

 

172,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

667,823

 

665,331

 

796,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

1,103,305

 

1,145,873

 

1,232,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Financial Position (continued)

as at 31 January 2021

 

 

 

 

January

 

January

 

July

 

 

 

2021

 

2020

 

2020

 

Notes

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Called up share capital presented as equity

13

 

1,264

 

1,264

 

1,264

Share premium

 

 

160,498

 

160,498

 

160,498

Retained earnings and other reserves

 

 

144,030

 

153,034

 

150,564

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

305,792

 

314,796

 

312,326

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Interest-bearing borrowings

12

 

225,835

 

299,868

 

205,889

Lease liability

12

 

34,341

 

31,584

 

31,961

Deferred tax liabilities

 

 

19,101

 

22,199

 

19,785

Put option liability

 

 

21,302

 

27,800

 

22,073

Provision for liabilities

11

 

1,532

 

1,906

 

1,649

Post employment benefit obligations

 

 

-

 

1,369

 

-

Derivative financial instruments

 

 

728

 

751

 

1,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current liabilities

 

 

302,839

 

385,477

 

282,619

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Interest-bearing borrowings

12

 

38,959

 

27,519

 

19,633

Lease liability

12

 

9,911

 

11,882

 

8,775

Trade and other payables

 

 

435,854

 

388,146

 

590,182

Corporation tax payable

 

 

7,421

 

6,540

 

11,976

Provision for liabilities

11

 

1,096

 

10,598

 

4,393

Derivative financial instruments

 

 

1,433

 

915

 

2,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

494,674

 

445,600

 

637,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

797,513

 

831,077

 

920,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

 

1,103,305

 

1,145,873

 

1,232,372

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Changes in Equity

for the six months ended 31 January 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Cashflow

 

 

 

based

 

 

 

currency

 

 

 

 

 

Share

 

Share

 

Treasury

 

redemption

 

hedge

 

Revaluation

 

payment

 

Re-organisation

 

translation

 

Retained

 

 

 

capital

 

premium

 

shares

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

earnings

 

Total

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 August 2020

1,264

 

160,498

 

(8)

 

134

 

(4,710)

 

12,843

 

1,131

 

(196,884)

 

(60,176)

 

398,234

 

312,326

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(5,752)

 

(5,752)

Other comprehensive expense for the period

-

 

-

 

-

 

-

 

(1,005)

 

-

 

-

 

-

 

(1,772)

 

2,725

 

(52)

Share-based payment charge

-

 

-

 

-

 

-

 

-

 

-

 

90

 

-

 

-

 

-

 

90

Change in fair value of put option

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(820)

 

(820)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2021

1,264

 

160,498

 

(8)

 

134

 

(5,715)

 

12,843

 

1,221

 

(196,884)

 

(61,948)

 

394,387

 

305,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Changes in Equity

for the six months ended 31 January 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

Capital

 

Cashflow

 

 

 

based

 

 

 

currency

 

 

 

 

 

Share

 

Share

 

Treasury

 

redemption

 

hedge

 

Revaluation

 

payment

 

Re-organisation

 

translation

 

Retained

 

 

 

capital

 

premium

 

shares

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

reserve

 

earnings

 

Total

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 August 2019

1,264

 

160,498

 

(8)

 

134

 

1,832

 

12,843

 

1,537

 

(196,884)

 

(42,826)

 

407,449

 

345,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(9,365)

 

(9,365)

Other comprehensive expense for the period

-

 

-

 

-

 

-

 

(3,931)

 

-

 

-

 

-

 

6,653

 

(583)

 

2,139

Share-based payment charge

-

 

-

 

-

 

-

 

-

 

-

 

90

 

-

 

-

 

-

 

90

Change in fair value of put option

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,081)

 

(1,081)

Dividend paid to shareholders

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(22,826)

 

(22,826)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2020

1,264

 

160,498

 

(8)

 

134

 

(2,099)

 

12,843

 

1,627

 

(196,884)

 

(36,173)

 

373,594

 

314,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Cash Flows 

for the six months ended 31 January 2021

 

 

 

 

 Six months

 

 Six months

 

Year

 

 

ended

 

ended

 

ended

 

 

January 2021

 

January 2020

 

July

2020

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

(Loss)/profit before tax

 

(7,092)

 

(11,721)

 

23,117

Exceptional items

 

525

 

(260)

 

6,505

Finance income

 

(511)

 

(622)

 

(954)

Finance expense

 

5,060

 

6,154

 

12,204

Profit on disposal of property, plant and equipment

 

(306)

 

(248)

 

(533)

Share of profit of associates and joint venture

 

(785)

 

(1,137)

 

(6,154)

Depreciation of property, plant and equipment

 

3,958

 

4,090

 

8,564

Depreciation of right of use assets

 

5,253

 

4,753

 

10,184

Amortisation of intangible assets

 

5,111

 

6,036

 

12,301

Employee share-based payment charge

 

90

 

90

 

(406)

Pension contributions in excess of service costs

 

(226)

 

(642)

 

(1,007)

Payment of exceptional rationalisation/ pension related costs

 

(962)

 

(449)

 

(726)

Payment of exceptional acquisition costs

 

-

 

(1,057)

 

(1,439)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flow before changes in working capital

 

10,115

 

4,987

 

61,656

 

 

 

 

 

 

 

(Increase)/decrease in inventory

 

(61,722)

 

(57,251)

 

6,622

Decrease in trade and other receivables

 

119,208

 

239,349

 

104,366

Decrease in trade and other payables

 

(156,117)

 

(320,499)

 

(80,663)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash (absorbed)/generated from operating activities

 

(88,516)

 

(133,414)

 

91,981

 

 

 

 

 

 

 

Interest paid

 

(2,157)

 

(3,639)

 

(8,628)

Income tax paid

 

(3,611)

 

(4,128)

 

(7,947)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash (outflow)/inflow from operating activities

 

(94,284)

 

(141,181)

 

75,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Condensed Interim Consolidated Statement of Cash Flows (continued)

for the six months ended 31 January 2021

 

 

 

 Six months

 

 Six months

 

Year

 

 

ended

 

ended

 

ended

 

 

January 2021

 

January 2020

 

July 

2020

 

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from sale of investment property

 

2,900

 

-

 

-

Proceeds from disposal of investment in associate

 

-

 

-

 

904

Proceeds from sale of property, plant and equipment

 

587

 

542

 

991

Purchase of property, plant and equipment

 

(3,512)

 

(7,041)

 

(12,056)

Additions to intangible assets

 

(4,522)

 

(1,792)

 

(3,670)

Payment of contingent acquisition consideration

 

(1,655)

 

(2,341)

 

(7,386)

Loan repayment with associate

 

56

 

42

 

113

Dividends received from associates

 

4,197

 

5,682

 

5,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash outflow from investing activities

 

(1,949)

 

(4,908)

 

(15,328)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Drawdown of bank loans

 

109,841

 

199,821

 

250,025

Repayment of bank loans

 

(57,235)

 

(59,603)

 

(209,528)

Lease liability payments

 

(5,982)

 

(5,397)

 

(11,422)

Payment of dividends to equity shareholders (Note 14)

 

-

 

(22,826)

 

(26,780)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash inflow from financing activities

 

46,624

 

111,995

 

2,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (decrease)/ increase in cash and cash equivalents

 

(49,609)

 

(34,094)

 

62,373

 

 

 

 

 

 

 

Translation adjustment

 

665

 

1,979

 

2,418

 

 

 

 

 

 

 

Cash and cash equivalents at start of period

 

152,676

 

87,885

 

87,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period (Note 12)

 

103,732

 

55,770

 

152,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements

for the six months ended 31 January 2021

 

1    Basis of preparation

 

The Group condensed interim consolidated financial statements have 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 2020, which have been prepared in accordance with IFRSs. The financial statements for the year ended 31 July 2020 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 2021 and the comparative figures for the six months ended 31 January 2020 are unaudited and have not been reviewed by the Auditors. The summary financial statements for the year ended 31 July 2020 represent an abbreviated version of the Group's full accounts for that year.

 

A comprehensive review of the Group's performance for the six months ended 31 January 2021 is included in the financial highlights included on pages 5 to 12. The group's business is seasonal and is heavily weighted towards the second half of the financial year.

 

 

2    Going concern

 

Having reassessed the principal risks facing the Group, the Directors believe that the Group is well placed to manage these risks successfully. No concerns or material uncertainties have been identified as part of our assessment which also considered the impact of the COVID-19 pandemic.

 

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report. The Board considered the profile of the group's borrowing facilities and the plans in place for renewal/refinancing of facilities that fall due within the next twelve months. For this reason, the Directors continue to adopt the going concern basis of accounting in preparing the condensed interim consolidated financial statements.

 

Impact of COVID-19

 

The Group has considered the impact of COVID-19 with respect to the judgements and estimates it makes in the application of its accounting policies. The Group reassessed the carrying value of goodwill (€162.1 million) allocated to the Group's cash generating units ('CGUs'), which have been updated to take account of future potential trading scenarios as a result of this pandemic. No indicators of impairment were identified.

 

The carrying value of trade receivables were also reviewed for indicators of impairment. There has been no significant deterioration in the ageing of trade receivables and there was no material increase in the impairment losses for trade receivables.

 

 

3    Accounting policies

 

The Group condensed interim consolidated financial statements have been prepared on the basis of the accounting policies as set out on pages 130 to 140 of the Group's Annual Report for the year ended 31 July 2020.

 

There are a number of new standards which are also effective from 1 August 2020. The following amendments, issued by the International Accounting Standards Board ('IASB') and the International Financial Reporting Interpretations Committee ('IFRIC'), are effective for the Group for the first time in the current financial period and where relevant have been adopted by the Group:

·      Amendments to References to the Conceptual Framework in IFRS Standards;

·      Amendments to IAS 1 'Presentation of Financial Statements' and IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' Definition of material;

·      Amendments to IFRS 3 'Business Combinations' - Definition of a business;

·      Amendments to IFRS 9 'Financial instruments', IAS 39 'Financial instruments: Recognition and measurement' and IFRS 7 'Financial  instruments: Disclosures' - Interest Rate Benchmark Reform;

·      Amendments to 'IFRS 16 Leases' - COVID-19-related rent concessions

Adoption of the standards above has had no material impact on the Group condensed interim consolidated financial statements during

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

4    Reporting currency

 

The Group condensed interim consolidated financial statements are presented in euro (denoted by the symbol '€') and rounded to the nearest thousand, which is the functional currency of the parent. Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the period end date are translated to functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Consolidated Income Statement.

 

The principal exchange rates used for translation of results and balance sheets into euro were as follows:

 

 

Average foreign exchange rate

 

Closing foreign exchange rate

 

Six months

Six months

 

 

Six months

Six months

 

 

ended

ended

Year ended

 

ended

ended

Year ended

 

Jan 2021

Jan 2020

July 2020

 

Jan 2021

Jan 2020

July 2020

 

EUR €1=

EUR €1=

EUR €1=

 

EUR €1=

EUR €1=

EUR €1=

 

 

 

 

 

 

 

 

Brazilian Real

6.42944

4.54413

5.09412

 

6.59468

4.67975

6.12525

British Pound Sterling

0.90251

0.87305

0.87885

 

0.88520

0.83950

0.90450

Polish Zloty

4.49292

4.30103

4.37478

 

4.53460

4.30090

4.40910

Romanian Leu

4.86466

4.75977

4.79315

 

4.87990

4.77940

4.83310

Ukrainian Hryvnia

33.52279

27.10321

28.28343

 

33.91050

26.71283

32.88067

 

 

 

 

 

 

 

 

 

5     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.

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

5    Segment information (continued)

 

 

Ireland & UK

 

Continental Europe

 

Latin America

 

Total Group

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

ended

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

Jan 2020

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

500,211

 

489,359

 

206,351

 

245,659

 

21,596

 

31,816

 

728,158

 

766,834

Less revenue from associates and joint venture

(155,748)

 

(151,963)

 

-      

 

-      

 

-      

 

(9,963)

 

(155,748)

 

(161,926)

Revenue

344,463

 

337,396

 

206,351

 

245,659

 

21,596

 

21,853

 

572,410

 

604,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment result

(2,688)

 

(9,079)

 

41

 

633

 

3,867

 

5,657

 

1,220

 

(2,789)

Profit from associates and joint venture

785

 

893

 

-   

 

-   

 

-   

 

244

 

785

 

1,137

Amortisation of non-ERP intangible assets

(2,394)

 

(2,490)

 

(757)

 

(1,072)

 

(872)

 

(1,235)

 

(4,023)

 

(4,797)

Operating (loss)/profit before exceptional items

(4,297)

 

(10,676)

 

(716)

 

(439)

 

2,995

 

4,666

 

(2,018)

 

(6,449)

Exceptional items

(525)

 

(178)

 

-   

 

-   

 

-   

 

438

 

(525)

 

260

Operating (loss)/profit

(4,822)

 

(10,854)

 

(716)

 

(439)

 

2,995

 

5,104

 

(2,543)

 

(6,189)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment earnings before financing and tax

 

 

 

 

 

 

 

 

 

 

 

 

(2,543)

 

(6,189)

Finance income

 

 

 

 

 

 

 

 

 

 

 

 

511

 

622

Finance expense

 

 

 

 

 

 

 

 

 

 

 

 

(5,060)

 

(6,154)

Reported loss before tax

 

 

 

 

 

 

 

 

 

 

 

 

(7,092)

 

(11,721)

Income tax credit

 

 

 

 

 

 

 

 

 

 

 

 

1,340

 

2,356

Reported loss after tax

 

 

 

 

 

 

 

 

 

 

 

 

(5,752)

 

(9,365)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

5      Segment information (continued)

 

(ii) Segment assets

Ireland & UK

 

Continental Europe

 

Latin America

 

Total Group

 

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

 

Six months

 

Six months

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

ended

 

ended

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

 

Jan 2021

 

Jan 2020

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

€'000

 

€'000

Assets excluding investment in associates

and joint venture

528,166

 

594,305

 

327,041

 

335,047

 

98,670

 

106,977

 

953,877

 

1,036,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in associates and joint venture

(including other financial assets)

36,708

 

40,530

 

-   

 

-   

 

-   

 

1,284

 

36,708

 

41,814

Segment assets

564,874

 

634,835

 

327,041

 

335,047

 

98,670

 

108,261

 

990,585

 

1,078,143

Reconciliation to total assets as reported in Condensed Interim Consolidated Statement of Financial Position

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

106,455

 

63,146

Derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

67

 

677

Deferred tax assets

 

 

 

 

 

 

 

 

 

 

 

 

6,198

 

3,907

Total assets as reported in Condensed Interim Consolidated Statement of Financial Position

 

1,103,305

 

1,145,873

 

 

 

 

 

(iii) Segment liabilities

Ireland & UK

 

Continental Europe

 

Latin America

 

Total Group

 

Six months

 

Six months

 

Six months

 

Six months

 

Six months

 

 

Six months

 

Six months

 

ended

 

ended

 

ended

 

ended

 

ended

 

 

ended

 

ended

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

Jan 2020

 

Jan 2021

 

 

Jan 2021

 

Jan 2020

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

€'000

 

€'000

Segment liabilities

253,816

 

211,310

 

170,819

 

169,307

 

35,149

 

49,202

 

459,784

 

429,819

Reconciliation of total liabilities as reported in Condensed Interim Consolidated Statement of Financial Position

 

 

 

 

Interest-bearing loans and lease liabilities

 

 

 

 

 

 

 

 

 

 

 

 

309,046

 

370,853

Derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

2,161

 

1,666

Current and deferred tax liabilities

 

 

 

 

 

 

 

 

 

 

 

 

26,522

 

28,739

Total liabilities as reported in Condensed Interim Consolidated Statement of Financial Position

797,513

 

831,077

 

 

 

 

                                       

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

6    Loss per share

 

Basic loss per share

 

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2021

 

2020

 

€'000

 

€'000

 

 

 

 

Loss for the financial period attributable to equity shareholders

(5,752)

 

(9,365)

 

 

 

 

 

'000

 

'000

 

 

 

 

Weighted average number of ordinary shares for the period

125,596

 

125,596

 

 

 

 

 

Cent

 

Cent

 

 

 

 

Basic loss per share

(4.58)

 

(7.46)

                                                                                                                                                                                       

 

Diluted loss per share

Six months

 

Six months

 

ended

 

ended

 

January

 

January

 

2021

 

2020

 

€'000

 

€'000

 

 

 

 

Loss for the financial period attributable to equity shareholders

(5,752)

 

(9,365)

 

 

 

 

 

'000

 

'000

 

 

 

 

Weighted average number of ordinary shares used in basic calculation

125,596

 

125,596

Potential impact of shares with dilutive effect (1)

1,402

 

323

Potential impact of SAYE scheme with dilutive effect  (1)

1,901

 

677

Weighted average number of ordinary shares (diluted) for the period

128,899

 

126,596

 

 

 

 

 

Cent

 

Cent

 

 

 

 

        Diluted loss per share

(4.58)

 

(7.46)

 

         (1) The impact from potential shares are anti-dilutive for earnings per share

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

6   Loss per share (continued)

 

 

Adjusted basic loss per share

 

Six months

 

Six months

 

 

 

ended

 

ended

 

 

 

January

 

January

 

 

 

2021

 

2020

 

 

 

€'000

 

€'000

 

 

 

 

 

 

 

Loss for the financial period attributable to equity shareholders

 

(5,752)

 

(9,365)

 

Amortisation of non-ERP related intangible assets

 

4,023

 

4,797

 

Tax on amortisation of non-ERP related intangible assets

 

(631)

 

(857)

 

Exceptional items, net of tax

 

                          437

 

(260)

 

Adjusted basic loss

 

(1,923)

 

(5,685)

 

 

 

 

 

 

 

 

 

Cent

 

Cent

 

Adjusted basic loss per share

 

(1.53)

 

(4.53)

 

 

 

 

 

 

 

Total adjusted basic loss - as above                  

 

(1,923)

 

(5,685)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cent

 

Cent

 

Total adjusted diluted loss per share (1)

 

(1.53)

 

(4.53)

 

 

 

 

 

 

The calculation of basic adjusted earnings per share is based on the weighted average number of shares in issue during the period of 125,595,854 (31 January 2020: 125,595,854). The weighted average number of shares used in the calculation of adjusted diluted earnings/(loss) per share is 128,898,822 (31 January 2020: 126,596,854).

 

(1) The impact from potential shares are anti-dilutive for earnings per share.

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

7    Condensed Interim Consolidated Income Statements for the six months ended 31 January 2020 and year ended 31 July 2020

 

An analysis of the Condensed Interim Consolidated Income Statement (including exceptional items) for the six months ended 31 January 2020 and year ended 31 July 2020 is set out below.

 

 

Six months ended 31 January 2020

 

 

 

 

 

 

 

 

 

 

Six months

 

Six months

 

Six months

 

 

 

 

ended

 

ended

 

ended

 

 

 

 

Jan 2020

 

Jan 2020

 

Jan 2020

 

 

 

 

Pre-Exceptional

 

Exceptional

 

Total

 

 

 

 

€'000

 

€'000

 

€'000

 

 

Revenue

 

604,908

 

-

 

604,908

 

 

Cost of sales

 

(527,580)

 

-

 

(527,580)

 

 

Gross profit

 

77,328

 

-

 

77,328

 

 

Operating costs

 

(84,914)

 

260

 

(84,654)

 

 

Share of profit of associates and joint venture

 

1,137

 

-

 

1,137

 

 

Operating loss

 

(6,449)

 

260

 

(6,189)

 

 

Finance income

 

622

 

-

 

622

 

 

Finance expense

 

(6,154)

 

-

 

(6,154)

 

 

Loss before income tax

 

(11,981)

 

260

 

(11,721)

 

 

Income tax credit

 

2,356

 

-

 

2,356

 

 

Loss attributable to equity shareholders

 

(9,625)

 

260

 

(9,365)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 31 July 2020

 

 

 

 

 

 

 

 

 

 

Year ended

 

Year ended

 

Year ended

 

 

 

 

July 2020

 

July 2020

 

July 2020

 

 

 

 

Pre-Exceptional

 

Exceptional

 

Total

 

 

 

 

€'000

 

€'000

 

€'000

 

 

Revenue

 

1,589,142

 

-

 

1,589,142

 

 

Cost of sales

 

(1,359,547)

 

-

 

(1,359,547)

 

 

Gross profit

 

229,595

 

-

 

229,595

 

 

Operating costs

 

(194,877)

 

(6,505)

 

(201,382)

 

 

Share of profit of associates and joint venture

 

6,154

 

-

 

6,154

 

 

Operating profit

 

40,872

 

(6,505)

 

34,367

 

 

Finance income

 

954

 

-

 

954

 

 

Finance expense

 

(12,204)

 

-

 

(12,204)

 

 

Profit before income tax

 

29,622

 

(6,505)

 

23,117

 

 

Income tax expense

 

(4,519)

 

1,261

 

(3,258)

 

 

Profit for the year

 

25,103

 

(5,244)

 

19,859

 

 

 

 

 

 

 

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

8    Property, plant and equipment

 

January

 

July

 

2021

 

2020

 

€'000

 

€'000

 

 

 

 

Net book value

 

 

 

At beginning of period

109,363

 

               108,411

Leased asset transfer on IFRS 16 adoption

-

 

(1,230)

Additions

3,160

 

14,055

Disposals

(281)

 

(424)

Depreciation charge

(3,958)

 

(8,564)

Translation adjustments

476

 

(2,885)

 

 

 

 

 

 

 

 

At end of period

108,760

 

109,363

 

 

 

 

 

 

 

 

 

 

9    Goodwill and intangible assets     

 

January

 

July

 

2021

 

2020

 

€'000

 

€'000

 

 

 

 

Net book value

 

 

 

At beginning of period

235,949

 

271,085

Additions

4,522

 

3,684

Impairment of goodwill and intangibles

-

 

(6,853)

Amortisation of non-ERP intangible assets

(4,023)

 

(9,381)

ERP intangible amortisation

(1,088)

 

(2,920)

Translation adjustments

(868)

 

(19,666)

 

 

 

 

 

 

 

 

At end of period

234,492

 

235,949

 

 

 

 

 

 

 

 

 

Included in the total goodwill and intangible assets above is goodwill of €162,138,000 (July 2020: €162,681,000). 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.

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

10    Investments in associates and joint venture

 

             January

 

 

July

 

              2021

 

             

2020

 

             €'000

 

            

€'000

 

 

 

 

At beginning of period

40,597

 

47,140

Share of profits after tax, before exceptional items

785

 

6,154

Dividends received

(4,197)

 

(5,776)

Disposal of equity investment

-

 

(113)

Share of other comprehensive expense

(1,428)

 

(5,630)

Disposal of interest in Ferrari Zagatto

-

 

(1,308)

Translation adjustments

420

 

130

 

 

 

 

 

 

 

 

At end of period

36,177

 

40,597

 

 

 

 

 

 

 

 

 

 

 

 

 

11   Provision for liabilities

 

        The estimate of provisions is a key judgement in the preparation of the condensed interim consolidated condensed financial statements.

 

 

January

 

July

 

              2021

 

             

2020

 

             €'000

 

            

€'000

 

 

 

 

At beginning of period

6,042

 

18,618

Provided in period

-

 

144

Paid in period

(2,608)

 

(9,750)

Released in period

(843)

 

(2,000)

Translation adjustments

         37

 

(970)

 

 

 

 

 

 

 

 

At end of period

2,628

 

6,042

 

 

 

 

 

 

 

 

 

Provisions primarily relate to contingent acquisition consideration arising on a number of acquisitions completed during prior years.

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

12   Analysis of net debt

 

 

31 July

 

 

 

Non-cash

 

Translation

 

31 January

 

 

2020

 

Cashflow

 

movements

 

adjustment

 

2021

 

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

 

 

 

 

 

 

 

 

 

 

 

Cash

172,309 

 

(65,977)

 

-

 

123

 

106,455

 

Overdraft

(19,633)

 

16,368

 

-

 

542

 

(2,723)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

152,676

 

(49,609)

 

-

 

665

 

103,732

 

 

 

 

 

 

 

 

 

 

 

 

Loans

(205,889)

 

(52,606)

 

(300)

 

(3,276)

 

(262,071)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt

(53,213)

 

(102,215)

 

(300)

 

(2,611)

 

(158,339)

 

 

 

 

 

 

 

 

 

 

 

 

Lease liabilities

(40,736)

 

5,982

 

(8,779)

 

(719)

 

(44,252)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt including lease liabilities

(93,949)

 

(96,233)

 

(9,079)

 

(3,330)

 

(202,591)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Group has unsecured committed banking facilities of €430m, comprising three loan facilities. There is a revolving loan facility of €300m, which matures June 2024, a term loan facility of €100m which matures May 2022 and a loan facility of €30m which matures September 2021.

 

The Group adopted IFRS 16 on the transition date of 1 August 2019. As at 31 January 2021, the Group has an outstanding lease liability of €44,252,000 (July 2020: €40,736,000) and a corresponding right-of-use leased asset €43,158,000 (July 2020: €39,824,000) has been recognised.

 

 

13   Share capital

 

 

January

 

July

 

 

2021

 

2020

 

 

€'000

 

€'000

 

Authorised        

 

 

 

 

250,000,000 ordinary shares of €0.01 each (i)

2,500

 

2,500

 

 

 

 

 

 

Allotted, called up and fully paid

 

 

 

 

126,396,184 ordinary shares of €0.01 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.

 

 

 

Origin Enterprises plc

 

Notes to the Condensed Interim Consolidated Financial Statements (continued)

for the six months ended 31 January 2021

 

14   Dividends

 

The Board determined that it was prudent to suspend the final dividend for the 2020 financial year (2019: 18.17 cent per share).

 

An interim dividend of 3.15 cent (2020: 3.15 cent) per ordinary share will be paid on 30 April 2021 to shareholders on the register on 9 April 2021. These condensed interim consolidated financial statements do not reflect this dividend payable. 

 

 

15   Taxation

 

The taxation credit for the interim period is an estimate based on the expected full year effective tax rate on full year profits.

 

 

16   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 2020.

 

 

17   Financial commitments

 

The Group has a financial commitment of €5.2 million attributable to a strategic partnership with University College Dublin ('UCD'). The commitment is over a four year period.

 

 

18   Related party transactions

 

Related party transactions occurring in the period were similar in nature to those described in the 2020 Annual Report.

 

 

19   Release of half yearly condensed interim consolidated financial statements

 

The Group condensed interim consolidated financial information was approved for release by the Board on 3 March 2021.

 

 

20   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.

 

 

 

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