TGG
26/02/2016 09:29
FLLYR
PRICE SENSITIVE
REL: 0929 HRS T&G Global Limited
FLLYR: TGG: 2015 Full year Results
T&G GLOBAL LIMITED AND SUBSIDIARY COMPANIES
Results for announcement to the market
Based on audited financial statements
Reporting period Twelve months to 31 December 2015
Previous reporting period Twelve months to 31 December 2014
2015 2014 Restated* Percentage change*
$'000 $'000
Revenue from ordinary activities $812,764 $727,022 11.8%
Profit from ordinary activities after tax attributable to security holders
$18,100 $9,852 83.7%
Net profit attributable to security holders $18,100 $9,852 83.7%
*2014 balances have been restated due to early adoption of amendments to NZ
IAS 16 Property, Plant and Equipment and NZ IAS 41 Agriculture. For further
details on the restatement, refer to note 14 of the full audited financial
statements, which are attached with this announcement.
Dividend to shareholders Amount per share Imputed amount per share
Interim $0.06 $0.02
Dividend record date 27 November 2015
Dividend payment date 4 December 2015
2015 2014 Restated*
Net tangible assets per share $2.47 $2.27
Earnings and diluted earnings per share $0.154 $0.084
Comments Financial commentary, audited financial statements are attached as
part of this announcement.
T&G Global Ltd and its subsidiary companies ("T&G" or "the Group") are
pleased to announce a profit after tax of $19.5 million for the year ended 31
December 2015.
During the year, the Group early adopted the amendments to the International
Financial Reporting Standards for Agriculture (NZ IAS 41) and Property, Plant
and Equipment (NZ IAS 16). These amendments have resulted in restatements of
prior year comparatives and have changed certain balances in the income
statement and balance sheet including operating profit and profit after
income tax.
The commentary below refers to the restated 2014 balances as comparisons.
Further details on the restatement are available in note 14 to the financial
statements that are attached to this announcement.
Strong revenue and operating profit growth in 2015
Operating profit for the year is $30.2 million, an increase of 52% on last
year. This profit improvement is mainly due to revenue growth exceeding the
increase in operating expenses from strong performances of T&G's existing
business units and new business additions.
T&G's revenues increased strongly in 2015, up by 12% or $85.7 million on last
year. This was largely due to a full year of trading from Apollo Apples,
which was acquired towards the end of 2014, and the consolidation of T&G
Vizzarri Farms Pty Limited, a joint venture previously known as Delica Pty
Limited, due to a change of control resulting from a new shareholders'
agreement. Also contributing to increased revenue were the acquisitions of
Great Lake Tomatoes Limited and Rianto Limited during the year. Together
these new additions contributed $63.4 million of revenue to the Group with
the majority of the remaining increase attributable to higher volumes and
prices in the pipfruit business, an expansion of markets in the trading of
table grapes, improved revenue and commission income domestically from other
operations, further growth in imports into Australia, and diversified produce
exports from New Zealand to Australasia.
The growth in operating profit was mainly attributable to the Pipfruit
Division. The expanded hectares of T&G's own production combined with
favourable market conditions translated into higher earnings on T&G owned
orchards. Additionally EnzaFoods, T&G's apple juice concentrate and apple
solids producer, improved its operation and contributed positively to the
Group's operating profit by reducing its cost of sales substantially. The
trading entities in New Zealand and offshore also kept their trading margins
stable which, with increased trading volumes, resulted in significantly
higher operating profit than 2014.
Operating costs(1) increased by 9% on last year, with depreciation and
amortisation costs up approximately $4.0 million mainly due to prior year
acquisition of Apollo Apples increasing the asset base. Employee costs
increased by 30% principally from the newly acquired pipfruit and tomato
businesses. These are fully integrated growing and packing businesses
resulting in more labour intensive activities than the existing T&G
operations. Aside from an inflationary adjustment, the higher employee costs
were a result of an increase in market share for T&G's transport and hire
crates businesses, further investments in China and North America, and
restructure of some areas of the business to align with T&G's strategy.
Overall, excluding the business acquisitions, operating costs for the Group
have been maintained at similar levels to last year.
Net profit after tax
The combination of an outstanding performance in the Pipfruit Division and
substantial improvements in all other operating segments resulted in a net
profit after tax of $19.5 million for 2015, up on 2014 by 83% or $8.8
million.
The increase in operating profit was partially offset by an increase in
financing expenses. Additional finance costs arose as a consequence of the
Group's growth strategy including recent acquisitions of pipfruit, tomato and
asparagus businesses. In addition, T&G executed a comprehensive capital
expenditure programme that focused on improving existing facilities to
enhance competitiveness both domestically and globally.
Increased volumes and better pricing for pipfruit
The Pipfruit Division has benefited from increased volumes in its owned
growing operations since the acquisition of Apollo Apples in late 2014. T&G's
partner growers also experienced increased volumes of Jazz(TM), Envy(TM) and
Pacific Rose(TM) apples in the Northern Hemisphere, with Washington State
(USA) having a record crop in 2015. Consequently, higher royalty income has
arisen from T&G's plant variety rights (PVRs) for domestic and export sales
in North America. Despite large hail storms hitting all major growing regions
earlier in the year, New Zealand volumes (excluding Apollo Apples) were
maintained at similar levels to 2014.
The European market continued to be challenging due to the ongoing ban of
European fruit exports into Russia resulting in an oversupply in continental
Europe which led to low apple prices. Despite the downward pressure on apple
prices, T&G's New Zealand grown Jazz(TM) apples have been sold at record
prices, reaching the highest price since introduction to the European market.
Furthermore, the continuing success of Jazz(TM) in the United Kingdom boosted
sales by 25% compared to the same period last year.
Sales into Asia have progressed in 2015 with Envy(TM) being a clear favourite
of the Asian markets. As a result Envy(TM) has generated record returns for
our partner growers and T&G's owned orchards, and looks set to continue being
the star performer for both T&G and partner growers.
These successes in the pipfruit operation have increased T&G's operating
profit as well as contributed to the joint ventures and associates' success,
with Group's share of their profit up by 58%, or $2.3 million on last year.
Trading divisions gaining momentum
2015 also proved to be a successful year for the International Produce
Division mainly due to increased volumes and better margins resulting from
improved global trading of table grapes and asparagus. Further export growth
in the Pacific region, mainly Australia and Fiji also contributed favourably.
Substantial financial improvements were made in the New Zealand Produce
Division from the strong trading of citrus, apples and root-crop categories
while the service operations, transport and hire crates, performed above
expectations. Covered crops encountered challenging production conditions in
2015, however the impact was lessened by a good start into the summer season
at the beginning of 2015.
T&G's flower auction business also improved its operating results
significantly due to steadily regaining market share that was lost in
previous years.
Processed Foods Division
The Processed Foods Division has rebounded after a difficult year in 2014
that saw low volumes and low prices. Increased volumes coupled with vastly
improved efficiencies in the processing plants have contributed to a
substantially improved result for the division this year. The trading arm of
the division, Fruitmark, successfully maintained market share in Australia
and opened two new offices with one in New Zealand and one in Washington
State (USA). The combined operating results from the new offices have
exceeded expectations, with strong growth prospects for 2016.
Solid financial position
Total net assets for the Group as at 31 December 2015 have increased by $44
million when compared to the same period in 2014. The three main contributors
to the increase are a $35 million gain on asset revaluations before tax, $20
million of asset additions and $15 million of intangible assets recognised as
a result of the business acquisitions, and $8 million of net asset additions
from continued operations.
These increases are offset mainly by an increase in borrowings of $39 million
to fund the acquisitions. Share capital also increased by $5 million this
year as a result of a dividend reinvestment plan.
A stronger net asset position has seen the net tangible asset per share(2)
increasing from $2.27 per share to $2.47 per share. Earnings per share(3)
also significantly improved from 8.4 cents per share in 2014 to 15.4 cents
per share in 2015.
Authorised by:
Klaus Josef Lutz
Chairman
ENDS
Media queries:
Kylie Horomia, Corporate Communications Manager
(E) [email protected]
(+64) 9 573 4750 or (+64) 21 563 531
WEBSITE: www.tandg.global
End CA:00278386 For:TGG Type:FLLYR Time:2016-02-26 09:29:36
