Average net working capital to sales increased to 45.3% (2018:...

Average net working capital to sales increased to 45.3% (2018: 37.8%) due to increased receivables in North America and Latin America after strong first half sales in those markets, and inventory build in North America and Europe in preparation for the upcoming northern hemisphere season. Net 2/9 working capital will decline in the second half of the financial year and is expected to be in a range of $1.3 billion to $1.4 billion at 31 July. Net debt at 31 January rose to $1,577 million from $981 million at HY18. The prior year net debt excludes the equity proceeds related to the acquisition funding. The higher net debt reflects both the increase in net working capital and the debt associated with the European acquisitions.

Net debt at 31 January was $1,577 million versus $981 million in the prior year. The prior year net debt excludes the equity proceeds related to the acquisition funding. The higher net debt is caused by the $550 million increase in net working capital; the increased debt associated with the acquisitions of $335 million; less the benefit of the equity proceeds from the October equity raising of $296 million. Gearing (net debt to net debt plus equity) was 41.4% (2018 1H: 21.2%). The leverage ratio (net debt divided by the 12-month rolling EBITDA) was 3.65x (2018 1H: 1.41x). The leverage ratio includes a pro-forma adjustment for the European acquisitions. Assuming net working capital is in the $1.3 to $1.4 billion range, leverage at July 2019 is expected to be well below 3x.

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