Group financial results

Sales were up 5%1 at £2.7 billion, while adjusted operating profit was up 17%1, with a 25%1 increase in profits from our Speciality Food Ingredients division, our focus for growth. With lower interest and tax, earnings per share increased by 34%1, and net debt reduced by 43% to £464m, just over a third of the level at the end of financial year 2009.

"Net debt reduced
by 43% to
£464 million."

Tim Lodge – Chief Financial Officer (photo)
Tim Lodge
Chief Financial

Summary of Group financial results

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£m (unless stated otherwise)

Year to
31 March

Year to
31 March



Continuing operations






2 720

2 533








Adjusted operating profit





Net finance expense





Adjusted profit before tax





Exceptional items





Amortisation of acquired intangibles





Profit/(loss) before tax





Income tax (expense)/credit





Profit/(loss) for the year from continuing operations





(Loss)/profit for the year from discontinued operations





Profit for the year










Earnings/(loss) per share from continuing operations




















Adjusted earnings per share from continuing operations




















Dividends per share





Interim paid




Final proposed















Net debt at 31 March





  1. 1 Constant currency change.

Sales of £2,720 million (2010 – £2,533 million) from continuing operations were 7% higher than the prior year (5% in constant currency). Sales in Speciality Food Ingredients increased by 2% (2% in constant currency) from £788 million to £805 million with sales volume increasing 7% year on year. The rate of sales growth was impacted by reduced selling prices for sucralose reflecting our strategy of securing long-term volume incentive contracts with our customers. Sales in Bulk Ingredients grew by 10% (7% in constant currency) to £1,915 million (2010 – £1,745 million).

Adjusted operating profit increased by 20% over the prior year (17% in constant currency) to £321 million (2010 – £268 million). Adjusted operating profits in Speciality Food Ingredients increased by 26% (25% in constant currency) to £206 million (2010 – £163 million) driven by increased volumes, operational leverage, improved product mix and lower manufacturing costs for sucralose. In Bulk Ingredients, adjusted operating profit grew by 15% (11% in constant currency) to £157 million (2010 – £136 million) driven by increased volumes, very strong returns from co-products on the back of the high corn price and an improved performance from ethanol, despite lower margins in sweeteners and industrial starches.

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.

Amortisation of intangibles acquired through business combinations was £13 million (2010 – £14 million).

Exceptional items from continuing and discontinued operations totalled a charge of £48 million (2010 – £276 million). Within continuing operations there was a net £10 million gain on the sale of the Fort Dodge facility and £15 million of costs associated with the business transformation programme. Within discontinued operations a loss of £55 million was booked on the disposal of EU Sugars, which remains subject to closing adjustments and adjudication as discussed in Note 35, partially offset by a gain of £12 million on the disposal of Molasses.

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 in the year from the decrease in average net debt due to the predominantly fixed nature of our gross borrowings. However the net interest charge is expected to be lower in the 2012 financial year as a result of lower levels of average net debt, the repayment of our US$300 million 6.125% bond in June 2011 and a positive impact from pension interest.

Adjusted profit before tax increased by 34% (32% in constant currency) to £263 million (2010 – £196 million). On a statutory basis, profit before tax was £245 million compared to a loss of £116 million in the prior year. The effective rate of tax on adjusted profit from continuing operations was 18.5% (2010 – 20.8%). The decrease was due mainly to changes in the geographical origin of profits and also the resolution of some historical tax issues.

"Speciality Food Ingredients accounts for 64% of operating profit, with margins around three times those of Bulk Ingredients. "

Discontinued operations comprise the EU Sugars, Molasses, International Sugar Trading, and the sugar operations in Vietnam and Israel. The operating loss from discontinued operations was £45 million after exceptional losses of £43 million (2010 – profit of £50 million, after exceptional gains of £22 million). On 20 April 2011, we announced the conditional sale of our Vietnam sugar interests. Any profit on disposal will be recognised as and when the sale completes. The loss from discontinued operations after taxation for the year was £29 million (2010 – profit of £40 million).

Total basic earnings per share was 35.3p (2010 – 3.3p) and total diluted earnings per share was 34.7p (2010 – 3.3p). Adjusted diluted earnings per share from continuing operations was 45.7p (2010 – 33.7p) and on the same basis basic earnings per share was 46.5p (2010 – 33.9p).