Income statement

Central costs

Central costs, which include head office, treasury and reinsurance activities, increased by £11 million to £42 million reflecting the costs associated with strengthening the Group’s senior management team, costs associated with our financing portfolio and one-off costs of £6 million in the first half relating to the review of the Group’s activities. The effect of exchange translation was to increase central costs by £1 million.

Energy costs

Energy costs for the year were £170 million (2010 – £178 million), a decrease of 4% (7% in constant currency). The improvement of £12 million in constant currency was due principally to lower prices (£22 million) and efficiency improvements (£9 million), partly offset by higher volumes (£14 million) and an unfavourable input mix (£5 million). We have covered the cost of almost 70% of our estimated energy needs for the 2012 financial year, and while contracts have been secured at higher prices than in the 2011 financial year we will look to mitigate some of the upward pressure through efficiencies.

Exceptional items from continuing operations

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Year to
31 March

Year to
31 March

Business transformation costs



Gain on disposal of assets net of pre-disposal costs – Fort Dodge


Impairment charges – Fort Dodge


UK Group Pension Scheme changes


Closure costs


Write-down of assets


Exceptional items



Exceptional items within our continuing operations during the year totalled a net charge of £5 million on a pre-tax basis. We recognised an exceptional gain of £10 million relating to the Fort Dodge facility which was sold on 30 March 2011. The facility was impaired in the previous financial year. We have incurred an exceptional charge of £15 million in relation to business transformation costs, principally restructuring associated with the new Commercial and Food Innovation Centre in Chicago, USA and the implementation of a common global IS/IT platform and global support services.

The tax impact on continuing net exceptional items is a charge of £10 million. In addition, an exceptional tax credit of £8 million has been recognised in respect of unrealised profit on inventory following the restructuring of our business. This credit has no impact on cash paid or received.

Exceptional items from continuing operations in the 2010 financial year comprised a £3 million charge relating to business transformation costs in Speciality Food Ingredients, an impairment charge of £217 million relating to the decision to mothball our Fort Dodge facility, a £55 million charge relating to our decision to mothball the sucralose manufacturing facility in McIntosh, Alabama, USA, and the write-off of £28 million of research and development assets from which we no longer expect to receive a commercial benefit. We also recognised a £5 million exceptional gain in relation to changes to the UK Group Pension Scheme. The exceptional tax credit on continuing operations was £117 million, primarily due to the deferred tax asset related to the impairment of the Fort Dodge facility. An exceptional tax credit of £15 million was also recognised in respect of the release of various tax provisions.

Net finance expense

The net finance expense from continuing operations decreased from £72 million to £58 million, principally as a result of lower pension interest expense. We were not able to benefit fully from the decrease in average net debt due to the fixed nature of our gross borrowings.

However, the net interest charge is expected to be significantly lower in the 2012 financial year as a result of lower levels of average net debt, a reduction of our average effective interest rate principally as a result of the repayment of our US$300 million bond in June 2011, and a change from a £4 million pension interest expense in the year ended 31 March 2011 to an anticipated pension interest credit of £5 million in the year ending 31 March 2012.


The taxation charge from continuing operations before exceptional items and amortisation of acquired intangible assets was £49 million (2010 – £41 million) as a result of higher pre-tax adjusted profit. The effective rate of tax on adjusted profit decreased to 18.5% (2010 – 20.8%) as a result of the geographic mix of profits and also the resolution of some historical tax issues.

The effective tax rate for the 2012 financial year is expected to remain broadly in line with this year’s effective tax rate assuming the geographic mix of profits is in line with our expectations.

Discontinued operations

Discontinued operations comprise our former Sugars Division, principally our former EU Sugars business which we sold in September 2010, our former Molasses business which we sold in December 2010, our former International Sugar Trading business, and our Vietnam and Israeli sugar interests which are reported as assets held for sale. On 20 April 2011 we announced we had entered into a conditional agreement to sell our Vietnam business.

Sales from discontinued operations for the year decreased to £590 million from £1,074 million as a result of the sale of EU Sugars and Molasses part way through the year. The operating loss from our discontinued operations totalled £45 million, after exceptional losses of £43 million (2010 – profit of £50 million, after exceptional profits of £22 million).

The exceptional pre-tax loss for the year of £43 million comprises the £55 million loss on disposal of EU Sugars booked during the year partially offset by the £12 million profit on the disposal of Molasses. Taxation on our discontinued operations was a £16 million credit (2010 – £11 million charge) after reflecting an exceptional tax credit of £19 million (2010 – £5 million charge). The loss from discontinued operations after taxation for the year was £29 million (2010 – profit of £40 million). The final loss on disposal of EU Sugars is subject to closing adjustments arising from the agreement of post completion statements. The process to reach such agreement is ongoing, and items totalling £54 million remain outstanding and are expected to be submitted for adjudication to an independent expert.

These items relate to the impact of major turbulence in the supply of raw sugar to the EU during the period prior to closing which resulted in an increase in certain rolling re-export commitments of the business arising under the EU Sugar Regime. The Group believes that its position is fully supported and as such will be robustly defended. No provision in respect of outstanding items has been recorded.

Earnings per share

Adjusted diluted earnings per share from continuing operations was 45.7p (2010 – 33.7p), an increase of 36% (34% in constant currency) as a result of higher operating profits, lower finance costs and the reduction in the effective tax rate. On the same basis, basic earnings per share was higher by 37% (36% in constant currency) at 46.5p (2010 – 33.9p).

Total basic earnings per share at 35.3p was higher than the prior year as the 2010 basic earnings per share of 3.3p was impacted by significant exceptional costs.


The Board is recommending a 5% increase in the final dividend to 16.9p (2010 – 16.1p) making a full year dividend of 23.7p (2010 – 22.9p) per share, up 3.5% on the prior year. Subject to shareholder approval, the proposed final dividend will be due and payable on 5 August 2011 to all shareholders on the Register of Members at 1 July 2011. In addition to the cash dividend option, shareholders will also be offered a Dividend Reinvestment Plan (DRIP) alternative. The DRIP replaces the scrip alternative that was previously available to shareholders.