OREANDA-NEWS. August 14, 2015. Moy Park Holdings (Europe) Limited ("Moy Park") is a leading and highly regarded European food company, providing fresh, high quality and locally farmed poultry and convenience food products to major retailers and large foodservice customers throughout the UK, Ireland and Continental Europe.

Moy Park today announces its second quarter (Q2) results for the 13 weeks ended 27 June 2015.

Q2 2015 Financial Highlights

 

Q2 2015

Q2 2014

Q2 2015 v. Q2 2014

 

 

?'mn

?'mn

 

Revenue

360.3

356.4

+1.1%

EBITDA

29.5

26.6

+10.9%

Profit before Tax

5.8

8.3

-29.8%

Underlying EBITDA

31.2

26.6

+17.4%

Underlying Profit before Tax

12.4

10.1

+23.2%

Net Debt

213.7

171.6

+?42.1mn

Net Debt/EBITDA (times)*

1.91x

1.64x

+0.27 times

*Net Debt/EBITDA is calculated as Net Debt at the relevant period end divided by EBITDA before exceptional items for the 12 months to that date.

Underlying EBITDA is before corporate charges incurred in 2015.

Underlying Profit before Tax is before corporate charges, and additional bond interest incurred in the period when compared to the same period in the prior year.

Q2 2015 Highlights

·   Revenue increased 1.1%, from Q2 2014, to ?360.3 million in a period of commodity price deflation, with good sales volume growth in both the UK & Ireland and Continental European business units.

·    Underlying EBITDA, before inclusion of corporate charges from our parent company introduced in Q3 2014, grew 17.4% from ?26.6 million in Q2 2014 to ?31.2 million in Q2 2015.

·    Underlying PBT, before corporate charges, interest on the bond issued during Q2 2014 and the bond re-tap in Q2 2015, grew 23.2% from ?10.1 million in Q2 2014 to ?12.4 million in Q2 2015.

·   Long term funding for the business was increased during the period with a successful bond market re-tap. Senior ?100 million 6.25% notes due May 2021, were issued in April 2015.

·    Leverage (Net Debt/EBITDA) at the end of the period, following the bond re-tap, is 1.91 times. Leverage at the end of Q1 2015, pro forma for the bond re-tap, was approximately 2.1 times.

Commenting on the results, Janet Mc Collum, CEO of Moy Park said: "The second quarter of 2015 has seen Moy Park continue its solid start to the year in what is a challenging market. Our commitment to delivering the highest quality product offering to our customers and consumers, while maintaining our focus on controlling costs, has enabled us to report solid second quarter results. We have also produced another positive cash flow while continuing our programme of infrastructure investment which will facilitate our continued growth.

On June 21st 2015, our parent company Marfrig entered into an agreement with the Brazil-based company JBS to acquire 100% of Moy Park. While the ownership of the company will change on completion of the sale, our day to day focus remains very much business as usual and we will continue to deliver on our plans for growth. "

Q2 2015

Total revenue increased by ?3.9 million to ?360.3 million compared to the same period in the prior year. The revenue increase was driven by good volume growth in both the UK & Ireland and Continental Europe, partially offset by commodity input cost deflation, the strengthening of sterling relative to the euro (which reduced the sterling value of European revenues), and lower prices achieved on international sales of poultry dark meats and offal. EBITDA before corporate costs (?1.7 million) increased by ?4.6 million to ?31.2 million. The improvement in margins was the result of increased operating efficiencies, particularly across our convenience product range in the UK & Ireland and Continental Europe, and our ongoing focus on cost control which more than offset the lower prices on international sales.

UK & Ireland

UK & Ireland revenue of ?281.2 million was ahead of Q2 2014 with underlying growth of 3.1%. The increase in revenue was the result of good volume growth. This was partially off-set by commodity price deflation and the lower prices on international sales.

Europe

European revenue of €109.9 million was ahead of Q2 2014 with underlying growth of 7.2%. The increase in revenue was largely driven by higher sales of our poultry and beef products.

Debt funding and cash flow

The long term funding for the business was increased during the period with a successful bond market re-tap. Senior ?100 million 6.25% notes due May 2021 were issued in April 2015. These notes were added to the May 2014 issue of ?200 million 6.25% notes due May 2021. Net Debt at the end of the period was ?213.7 million giving a Net Debt/EBITDA ratio of 1.91 times. Pro-forma for the new bond issue Net Debt/EBITDA at 28 March 2015 was approximately 2.1 times.

Sale of Moy Park to JBS SA

On June 21st 2015, Marfrig Global Foods SA announced that it had entered into a definitive agreement to sell the entire equity holding in Moy Park Holdings Europe Limited to JBS SA. This transaction is subject to certain customary consents and approvals by the competent authorities, including antitrust agencies from Europe. The closing of the transaction is expected to occur between the third and fourth quarters of this year.

Outlook

We are pleased with the ongoing progress being made in the business and remain confident in the long term success and development of the company. We continue to build our business based on the highest quality standards of animal husbandry, production and processing and aim to meet and exceed the ever changing requirements of our customers and consumers. We continue to invest in our high quality asset base to ensure we have the capacity in place to facilitate further efficient growth.