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Summary of Results
Shareholder Information
Five Year Summary
Chairman’s Statement
Directors and Secretary
Company Profile
Strategic Objectives
Developments in 2000
EU Banana Regulations
Codes of Best Practice
Operating and Financial Review
Statutory Financial Statements
Notice of Annual General Meeting
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3
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5
6
9
13
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15
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21
77
Contents
Fyffes is the leading fresh produce distributor in Europe and the
second largest fresh produce company in the world.
The Group's strategic objective is to increase shareholder value
through organic growth and targeted acquisitions.
Sourcing only the finest quality fresh fruit and vegetables from
around the world, Fyffes’ aim is to satisfy the demands of its
customers by procuring and delivering the widest range of products
to the highest standards of service from state of the art facilities using
the latest technologies, communications and distribution systems.
2 Fyffes plc Annual Report 2000
Summary of Results
14 months to 12 months to
31 December 2000 31 October 1999
€m €m
Turnover 2,229.7 1,886.4
Profit before tax 31.2 83.1(excl. e-commerce, exceptionals and goodwill)
e-commerce (16.9) _
Exceptionals and goodwill (6.8) 0.8
Adjusted earnings per share 5.36 cents 17.05 cents(excl. e-commerce, exceptionals and goodwill)
Total ordinary dividend per share 4.3 cents 4.3 cents
Shareholders’ funds 256.0 284.9
3Fyffes plc Annual Report 2000
Shareholder Information
Market Capitalisation
The market capitalisation of Fyffes plc at 31 December 2000, including the compulsorily convertible preference shares,
was €345 million. The ordinary share closing price at 26 April 2001 was also €100 cents, giving a market capitalisation at
that date of €345 million .
Web Site
The Group’s website was further expanded and enhanced during the period. It contains a wide range of detailed information
on the Group’s activities and products together with all the key financial data on the company. It will be updated on a
continuing basis for all company announcements and other relevant developments, including share price movements.
Investor Relations
Investors requiring further information on the Group are invited to contact: Philip Halpenny, Company Secretary,
Fyffes plc, 1 Beresford Street, Dublin 7, Ireland. Tel: +353-1-887 2700; Fax: +353-1-887 2751;
email: [email protected]
Registrar
Administrative queries about the holding of Fyffes plc shares can be directed to the Company Registrar: Computershare
Services (Ireland) Limited, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland.
Tel: +353-1-216 3100; Fax: +353-1-216 3151.
Annual General Meeting
The Annual General Meeting will take place at the Burlington Hotel, Ballsbridge, Dublin 4, Ireland on 18 June 2001 at
10.30 a.m. Notice of the meeting and related documentation are included at the back of this report, commencing on page 77.
* covers fourteen month period to December 31 2000.
** Adjusted profit before taxation excludes exceptional items, e-commerce losses and goodwill amortisation.
2000* 1999 1998 1997 1996
Five Year Summary € ’000 € ’000 € ’000 € ’000 € ’000
Turnover 2,229,658 1,886,412 1,905,589 1,853,928 1,814,965
Adjusted profit before taxation** 31,194 83,066 78,907 68,612 61,545
Profit on ordinary activities before taxation 7,528 83,877 78,907 68,612 61,545
Profit on ordinary activities after taxation (600) 65,744 60,822 52,433 49,289
Basic earnings per ordinary share (cents) (4.73) 18.63 16.19 13.34 11.11
Adjusted earnings per share (cents) 5.36 17.05 15.45 12.85 10.72
Dividend per ordinary share (cents) 4.300 4.300 3.583 2.896 2.329
Shareholders’ funds 256,013 284,910 231,908 225,071 199,233
Ordinary Share Price (cents) High Low Period end
Fourteen months ended 31 December 2000 398 68 100
Year ended 31 October 1999 240 150 170
5Fyffes plc Annual Report 2000
Last year was one of the most difficult experienced by the international banana trade. Throughout 2000, the industry
faced significantly higher costs due to the strength of the dollar, but found it impossible to recover these in higher
selling prices. This was mainly because of the impact of illegal banana imports into the EU for a substantial part of the
period. Fyffes' performance was similarly affected by this adverse trading environment, and we saw the reversal of the
strong growth trends achieved in recent years.
Faced with these difficult market conditions, we took radical steps to reduce Group costs and to rationalise our ripening and
distribution operations, in particular by the restructuring of the Fyffes and Geest activities in the UK. These actions should
deliver cost savings in the region of €20 million per annum for the Group, starting in 2001.
In a significant development for the industry, the EU and the US recently announced an agreement to resolve their
long-standing dispute on bananas. Under the terms of the settlement, banana imports into the EU will continue to be
regulated, with licences being allocated on the basis of historic trade.
The trading situation last year had a very real impact on all of us in the company who, justifiably, have taken great pride in
the strong performance that we have delivered over many years. It is small comfort that Fyffes’ result last year was well
ahead of other operators in the industry. However, right across the Group, people faced up to the difficult conditions and
took the tough decisions necessary to deal with the situation and re-establish our performance going forward. We
continue to have the best team in the business and we thank them for their commitment.
The current year has started positively with a return to more normal trading conditions. The net cash position remains
strong and supports the Group's continuing ambition to grow the business by sizeable acquisitions.
We are confident that we have the strategies in place to enable us to continue to develop at the forefront of our industry.
We believe that we can deliver a much improved result in 2001.
Neil V McCannChairman
25 April 2001
Chairman’s Statement
6 Fyffes plc Annual Report 2000
Directors and Secretary
1. N.V. Mc Cann ChairmanNeil McCann is Chairman of the Group. He
joined the business in the 1950’s and led it to
stock market flotation in 1981 and to its current
position as the largest fresh produce company in
Europe and one of the leading operators in the
global fresh produce industry.
2. G.B. Scanlan Non-Executive, FIBGerry Scanlan is a member of both the Audit
Commitee and chairman of the Compensation
Committee. He is a former Group Chief
Executive of Allied Irish Banks plc and a former
Chairman of the Irish Stock Exchange. He is a
non-executive director of several other companies.
3. R.E. Benner Non-Executive, OBERoland Benner is a member of the Audit
Committee. He was appointed an executive
director in 1983 when the Group acquired F.E.
Benner Limited. For many years, he was
Managing Director of the Group’s Northern
Ireland operations. He became a non-executive
director in December 1999.
4. Dr. P. F. deV. Clüver Non-ExecutiveDr Paul Clüver was co-opted to the board on
13th December 1999. He is Chairman of
Capespan Group Holdings Limited of South
Africa in which Fyffes plc acquired a 10%
shareholding on 4 November 1999. He is also
Chairman of the Unifruco, Vinfruco and Kromco
co-operatives in South Africa. He is a trustee of
the Worldwide Fund for Nature SA.
5. J.P. Tolan Corporate DevelopmentDirector, B Comm, FCAJimmy Tolan joined Fyffes in 1990 from KPMG.
He has managed the Group’s acquisitions team
since 1993. He was appointed to the Board as
Corporate Development Director on 14 June 1999.
6. D.V. Mc Cann Chief Executive, BCLDavid McCann joined the Group in 1986,
having previously practiced as a partner in a
leading Dublin law firm. As Group Managing
Director since 1989, he is responsible for the
Group’s operations. He was appointed Chief
Executive in 1995.
1
2 3 4 5
6
7Fyffes plc Annual Report 2000
7. J.F. Gernon, Group Finance Director,FCCAFrank Gernon joined the Group in 1973. He has
held various senior accounting and financial
positions in the Group, including Chief Financial
Officer and Company Secretary. He was
appointed Group Finance Director in January 1998.
8. C.P. Mc Cann Vice Chairman, BBS,MA, FCACarl McCann joined the Group from KPMG in
1980. He was Finance Director from 1983 to 1998
and became Vice Chairman in 1988. He was
recently appointed as an Irish government
nominee to The Trade and Development Body
established by the North - South Ministerial
Council of Ireland.
9. A.J. Ellis CBE, FCCA, FCMAJohn Ellis joined Fyffes Group Limited in
London in 1954 and held a number of senior
financial positions prior to being appointed its
Chief Executive Officer in 1969 and Chairman in1984. He was appointed to the Fyffes plc Boardin 1991.
10. D.J. Bergin Non-Executive, BA, LLBDenis Bergin is Chairman of the Audit
Committee and a member of the Compensation
Committee. He is a former partner in the leading
Irish law firm, Arthur Cox. He is a director of
several other companies.
11. P.T. Halpenny Company Secretary, FCA, BBSPhilip Halpenny joined the Group in 1991 from
PriceWaterhouseCoopers as Special Projects
Manager. He became Managing Director
Corporate Affairs in 1996 and was appointed
Company Secretary in January 1998.
7
8 9 10 11
Company Profile
9Fyffes plc Annual Report 2000
Fyffes is the largest importer
and distributor of fresh fruit
and vegetables in Europe
Company ProfileThe scale and scope of the Fyffes business has increased over the
last fourteen months, largely due to the completion of the
Capespan transaction in November 1999. It continues to be the
largest importer and distributor of fresh fruit and vegetables in
Europe, one of the largest companies in the international produce
sector and the fifth largest operator in the world banana business.
The Group is directly involved at all stages of the fresh produce
supply chain, including procurement, shipping, importation,
marketing and distribution. It also adds value to the products it
handles through ripening, processing, pre-packing and the
provision of marketing services.
Depending on the type of product, Fyffes takes on different roles in
supplying its customers' needs. In bananas, it acts as principal,
buying direct from growers in the producing countries. For other
produce, it acts both as principal and as marketer and distributor
for major international grower organisations.
BananasThe Group's bananas are sourced from the three main banana
producing areas of the world: the EU (The Canary Islands and
Martinique), the Caribbean ACPs (Windward Islands, Jamaica,
Belize and Suriname) and Latin America (Colombia, Honduras,
Guatemala and Costa Rica). The Geest banana business is the
main operator in the Windward Islands.
Slightly more than 50% of Fyffes' bananas are sourced from Latin
America with the balance coming from EU and ACP suppliers.
In general, the Group prefers to enter into long term contracts with
local producers rather than to own banana farms.
These twin policies of maintaining a range of sources and
reducing the level of farm ownership significantly reduce Fyffes'
exposure to the climatic and other risks associated with banana
production. The Group does, however, provide technical and other
support services to its growers.
Fyffes imports nearly 40 million boxes of bananas per annum into
Europe and is joint No.1 supplier to the EU market.
Company Profile
11Fyffes plc Annual Report 2000
ProduceIn the case of fresh produce other than bananas,
Fyffes acts both as principal and as marketer and
distributor for major international producer
organisations, such as Capespan, Carmel, Zespri
and Maroc. It also imports and distributes a
complete range of fresh produce from growers
and shippers in North and South America and
across Continental Europe.The alliance between
Fyffes and Capespan makes the combined entity
the biggest single supplier of fresh produce to the
whole of Europe handling approximately 160
million cases of produce per annum. It also
guarantees Fyffes security of supply for the
complete range of fresh produce products for
the full twelve months of the year.
DistributionOne of the keys to Fyffes' success in the produce
industry is its sophisticated distribution network
which delivers fresh fruit and vegetables to
supermarket shelves and customers' premises
across Europe direct from the highest quality
sources throughout the world.
This process starts with a fleet of 15 refrigerated
ships, each of which is compartmentalised to
enable different products to be carried at the
optimum holding temperature. The capacity of
these ships ranges from 100,000 to 250,000 boxes
(1,850 to 4,650 tonnes) each.
A procurement office in Coral Springs, Florida sources fresh produce directly from the Caribbean and Central America
to supplement banana volumes and to maximise transport efficiency.
On reaching port, Fyffes' produce is distributed from large, state of the art distribution facilities strategically located
near large centres of population so as to maximise the opportunities for market penetration. The Group operates from
approximately 70 physical locations spread throughout Europe, comprising ripening centres, distribution warehouses,
market stands and administrative offices.
More than 2,500 employees worldwide are committed to the task of delivering the finest quality produce to Fyffes'
customers on time and in prime condition.
Company Profile
13Fyffes plc Annual Report 2000
Fyffes imports and
distributes a complete range of
fresh produce from the
Americas and from Continental
Europe
Strategic ObjectivesThe Board and management of Fyffes remain firmly
focused on the creation and maximisation of
shareholder value. This is achieved through growing
the business organically and by selective acquisitions,
and by maintaining tight control over costs.
The balance between these strategies varies from
time to time. In the market conditions of last year,
the focus was very much on optimising operational
structures so as to achieve the flexibility necessary to
fit the changing environment. With continuing
strong cash flows and the healthiest balance sheet in
the international fresh produce sector, Fyffes is well
placed to develop its business further, to continue the
process of consolidation in the industry and to build
towards its ambition of being the number one fresh
produce company in the world.
Developments in 2000The difficult market conditions of the last fourteen
months called for swift and decisive action in several
areas of the business. Tough decisions were taken to
reduce costs and improve efficiency across all
operations. Non-performing activities were
terminated. The Group withdrew from all of its
banana farming activities in the Tropics. In addition,
in January 2001 the ripening and distribution
activities of Fyffes and Geest were merged, leading to
more efficient and streamlined banana operations in
the UK.
In November 1999, Fyffes completed the acquisition
of 50% of Capespan Europe, the exclusive marketer
of the famous Cape and Outspan brands in Europe.
At the same time, it acquired 10% of the parent
company, Capespan South Africa. While the first
year of ownership was adversely affected by
unusually bad weather during the growing season in
southern Africa, it is expected to make a positive
contribution going forward.
Company Profile
15Fyffes plc Annual Report 2000
Codes of Best PracticeA large proportion of Fyffes' fresh produce originates
in developing countries. The Group is acutely aware
of the ethical issues associated with the products that
it sources and sells, and it has established codes of
best practice to be complied with by its direct
suppliers. These are designed to reduce the impact
of agricultural production on the environment and
to ensure fair and equitable treatment of employees
in compliance with the labour laws applicable in
each jurisdiction. Regular compliance tests are
carried out to ensure that these codes of best practice
are being adhered to.
The Group's e-commerce activities experienced
varying fortunes during the period.
worldoffruit.com, which set out to establish a net
market place for the global fresh produce industry,
suffered from the collapse of the capital markets'
sentiment towards technology projects, as a result
of which the external funding necessary to take the
business forward as planned was not available.
This company has now scaled back its activities to
maintenance levels. On the other hand,
IngredientsNet.com, a joint venture with Glanbia
plc, has successfully established itself as an
e-procurement platform provider for the global
food ingredients market and is making good
progress in providing internet-based procurement
services to a number of major players in this sector.
On the capital side, in addition to some minor
acquisition activity, the main expenditure was on
new ripening and distribution facilities across
Europe, including a new national ripening centre
for Ireland, a similar facility serving Scotland and
Northern England and a new head office building
in Dublin, Ireland. This outlay was substantially
offset by the proceeds from the disposal of a
number of non-core and development properties
during the period, mainly in Ireland and the UK.
EU Banana RegulationsFollowing lengthy negotiations, the EU and the US
have recently announced a settlement of their long
running dispute about the way in which the EU
regulates the importation of bananas. As a result
of this agreement, the EU banana market will
continue to be regulated by means of quotas, with
the licences being allocated to individual operators
on the basis of their past trade. This new
arrangement will remain in place at least until 1
January 2006. Fyffes has consistently held the
view that a system based on historic activity is in
the best interests of the Group and of its suppliers.
Company Profile
16 Fyffes plc Annual Report 2000
Results for the year
Change of year endAs a result of the decision to change the accounting reference date of the Group to 31 December, announced in October 2000, these financial
statements cover a fourteen month period from 1 November 1999 to 31 December 2000.
OverviewThis financial period represented the most difficult in the Group's history as reflected by a significant reduction in profits, breaking a more
than 40 year record of annual increases in profitability.
Many factors combined to give rise to the reduction in profits. The most significant being that, in common with every major operator in
the industry, the Group's banana division experienced an extremely difficult trading environment throughout most of the period. The
principal factors affecting the performance of this division were the weakness of the Euro and Sterling against the US Dollar and extra
volume in the marketplace, particularly as a result of illegal imports during the first half of the period. In response to these circumstances,
the Group has carried out a thorough review of all aspects of its banana business and has taken radical steps to reduce costs and to
rationalise its ripening and distribution operations, particularly the restructuring of the Fyffes and Geest activities in the UK. These
actions are expected to deliver costs savings in the region of €20 million per annum for the Group, starting in 2001.
A further significant factor was the €16.9 million development and operating costs expensed in the period in the Group's e-commerce
businesses. In addition, the first time contribution from the Group's 50% investment in Capespan Europe was an operating loss of €2.1
million, due mainly to the severe weather conditions in South Africa in the early part of 2000.
TurnoverTotal turnover for the period increased from €1,886.4 million in the year ended 31 October 1999 to €2,229.7 million for the fourteen
months ended 31 December 2000 and includes, for the first time, the Group's share of the turnover of Capespan Europe, amounting to
€167.2 million. The additional turnover resulting from the inclusion of November and December 1999 in this fourteen month period
amounted to €279.3 million.
Operating profitOperating profit in the fourteen month period ended 31 December 2000 from fresh produce activities, excluding e-commerce activities and
goodwill amortisation, amounted to €27.8 million, including the Group's share of the operating losses in Capespan Europe of €2.1 million.
This includes operating losses of €5.8 million in two extra months, November and December 1999. The comparative figure for the twelve
months ended 31 October 1999 was €80.2 million. The geographical analysis below shows that the reduction in profits was more
pronounced in Ireland and the UK where the Group is more dependant on bananas.
Ireland/UK Europe Total2000 1999 2000 1999 2000 1999€m €m €m €m €m €m
Turnover 1,059.3 909.1 1,170.4 977.3 2,229.7 1,886.4
Operating profit 7.7 38.6 20.1 41.6 27.8 80.2
geographical analysis excluding e-commerce & goodwill amortisation
Operating and Financial Review
17Fyffes plc Annual Report 2000
e-commerce activitiesIn late 1999, the Group announced the establishment of worldoffruit.com, a net marketplace for the global fresh produce industry. However,
the external funding necessary to take the business forward as planned has not been available and the Group announced, in January 2001, that
the company has significantly scaled back its activities. All development and operating costs relating to worldoffruit.com, amounting to
€15.6 million in the period, have been expensed in the profit and loss account and classified as discontinued operations under the
requirements of Financial Reporting Standard No. 3.
In March 2000, the Group announced the establishment of a joint venture with Glanbia plc to create IngredientsNet.com, an e-procurement
platform provider for the global food ingredients market. The two companies have committed capital of €2.5 million each to fund the
start-up phase of this project. IngredientsNet.com launched its trading platform in late summer 2000 and is making good progress in
providing internet-based procurement services to a number of major players in the food ingredients sector. The Group's share of its
operating costs up to 31 December 2000 amounted to €1.3 million.
Exceptional itemsLargely in response to the difficult market conditions that prevailed in the period, the Group disposed of or terminated the activities of a
number of non-performing operations giving rise to exceptional losses, as defined by paragraph 20 of Financial Reporting Standard No. 3,
of €12.96 million. These included the termination of activities in a fruit packing business in Chile in which the Group has a 50% interest and
the disposal and termination of the Group's various farming interests in the Caribbean. These costs were partly offset by profits on disposal
of a number of non-core and development properties, mainly in Ireland and the UK, amounting to €10.45 million.
In addition to these exceptional items, which amount to a net pre-tax loss of €2.5 million, the Group's share of exceptional items in the Geest
joint venture, relating to the fundamental restructuring of its activities in the UK, amounted to €2.8 million.
A number of significant non-recurring items of income and expense also arose during the period which net out to a relatively immaterial
amount. These are detailed in note 7 to the financial statements on page 48.
Net interest and financial incomeNet interest and financial income in Fyffes and subsidiaries was €8.8 million for the fourteen months ended 31 December 2000 compared to
€6.6 million in the twelve months ended 31 October 1999. The increase includes €1 million dividend received from the Group's 10%
investment in Capespan South Africa, combined with higher interest rates during the period and income from the management of the
Group's currency exposures. The Group's share of the net interest expense of its joint ventures and associates was €5.4 million in the
period compared to €3.7 million in the previous year.
TaxationThe tax charge for the fourteen months ended 31 December 2000 was €8.1 million, including a charge of €2.4 million in respect of the
exceptional items. The effective tax rate applicable to continuing operations in the period was 20% compared to 21.6% in the previous year.
Adjusted earnings per shareThe full details of the calculation of earnings per share is set out in note 11 in the financial statements on pages 51 and 52. The adjusted
earnings per share for the fourteen months to 31 December 2000 were €5.36 cents, compared to €17.05 cents in the twelve months ended
31 October 1999. The equivalent figure for November and December 1999 was a loss of €1.41 cents. Adjusted earnings per share excludes
exceptional items, e-commerce activities, goodwill amortisation and reflects the mandatory conversion of the Group's preference shares in
November 2001.
DividendThe Board is proposing a final dividend for the period of €3.2549 cents per ordinary share, the same figure as in the year ended 31 October
1999. Combined with the interim dividend of €1.0451 cents, this gives a total dividend for the period of €4.3 cents, the same figure as last
year. The final dividend, which will be subject to Irish withholding tax rules, will be paid on 22 June 2001 to shareholders on the register on
25 May 2001.
Operating and Financial Review
18 Fyffes plc Annual Report 2000
Shareholders' fundsThe table above summarises the movements in shareholders' funds over the past three financial periods.
Cash flowNet cash at 31 December 2000 was €87.5 million compared to €138.7 million at 31 October 1999. During the period the Group spent
almost €100 million on fixed assets, investments and acquisitions (including deferred consideration payments in respect of prior year
acquisitions). This expenditure was partly offset by proceeds from the disposal of surplus assets and certain investments of €42.1 million.
Operations generated cash of €33.9 million in the period and this covered the tax and dividend payments in the period.
The summarised cash flow opposite shows how the Group generated, spent and reinvested its cash during the past five years. Over that
period, €339 million has been invested in acquisitions, investments and fixed assets.
Capital expenditure and investmentDuring the period the Group invested heavily in new ripening and distribution facilities. Expenditure amounted to €45.1 million and arose
mainly in Ireland, the UK, Spain and The Netherlands. This expenditure was partly offset by the disposal of surplus properties, mainly in
Ireland and the UK, which realised proceeds of €35.2 million.
In addition, the Group spent €21.2 million on investments in the period which includes €17.4 million in respect of the Group's 10% stake
in Capespan South Africa, with the balance being invested in certain government securities acquired by a subsidiary company in Europe.
This expenditure on investments was partly offset by proceeds on disposal of similar government securities and certain other small
investments amounting to €7.0 million.
Balance sheet, cash flow and related matters
2000 1999 1998
movement in shareholders’ funds €m €m €m
At beginning of period 284.9 231.9 225.1
Result for period (7.5) 59.9 53.6
Dividends (19.0) (18.3) (16.4)
Currency movements (1.7) 17.1 (3.7)
Shares issued 0.8 0.7 3.8
Shares brought back – (8.3) (8.3)
Goodwill adjustment (1.5) 1.9 (22.2)
At end of period 256.0 284.9 231.9
Operating and Financial Review
19Fyffes plc Annual Report 2000
2000 1999 1998 1997 1996
summary cashflows €m €m €m €m €m
Opening net cash 138.7 116.6 113.0 89.8 87.0
Inflows
Operating cash inflow 33.9 71.1 74.8 67.2 54.6
Dividends received from joint ventures & associates 2.9 4.7 6.2 3.1 1.2
Disposal of subsidiaries, joint ventures & associates (incl. debt) (2.9) 20.9 6.4 – 16.9
Disposal of fixed assets & investments 42.1 28.3 11.8 8.0 5.6
Shares issued for cash & acquisitions 0.8 0.7 0.7 7.0 4.3
Net funds acquired with subsidiaries – 0.3 0.3 – 10.3
Other net inflows 1.2 9.9 4.3 5.6 (5.2)
Total inflows 78.0 135.9 104.5 90.9 87.7
Outflows
Acquisitions (gross) (22.5) (12.7) (25.1) (33.0) (37.8)
Deferred consideration included above – 1.0 6.4 18.0 12.1
Deferred consideration payments (9.2) (10.9) (2.8) (3.8) (2.8)
Expenditure on fixed assets (45.1) (25.8) (36.4) (18.4) (28.2)
Expenditure on investments (21.3) (24.1) (5.4) (3.2) –
Taxation paid (10.3) (16.3) (17.3) (11.8) (16.6)
Dividends to shareholders (20.8) (16.7) (12.0) (12.6) (11.6)
Net debt acquired with subsidiaries – – – (2.9) –
Share buyback – (8.3) (8.3) – –
Total outflows (129.2) (113.8) (100.9) (67.7) (84.9)
Closing net cash 87.5 138.7 116.6 113.0 89.8
Operating and Financial Review
20 Fyffes plc Annual Report 2000
Acquisitions and disposalsDuring the period the Group spent €22.5 million on new acquisitions. This includes €20.1 million in respect of the acquisition of 50% of
Capespan Europe with the balance relating primarily to two small subsidiaries acquired in Spain.
As noted earlier the Group disposed of and terminated a number of operations during the period, mainly in the Caribbean, South America
and the UK, giving rise to exceptional losses of €13 million. These disposals and terminations gave rise to net cash outflows of €2.9 million.
Treasury activity and financial instrumentsThe Group finances its operations through a combination of retained profits and its net cash resources. Its financial instruments, which
arise from this financing activity, comprise bank deposits, bank loans, preference share capital and, from time to time, certain financial assets
such as government securities, commercial paper and other trade investments. Other financial instruments such as trade debtors and trade
creditors arise directly from operations. In addition, the Group enters into derivative instruments with a view to managing the currency risk
and to a lesser extent the interest rate risk arising from its operations.
The principal risks which arise from these financial instruments are foreign currency risk, interest rate risk and liquidity risk. The Board has
determined the policies for managing these risks as set out below and these remained unchanged throughout the financial period. It is
Group policy to manage these risks in a non-speculative manner.
While many of the Group's operations are carried out in Euro-zone countries, it also has significant operations in the UK and Denmark as
well as in a number of smaller countries. As a result, the Group's Euro denominated balance sheet is exposed to currency fluctuations, in
particular to GBP/EUR movements. While the net investment in overseas operations are initially hedged by currency borrowings, going
forward these businesses generally fund their operations locally. The Group also has large transactional currency exposures since a
significant portion of its costs, in particular product purchases, are denominated in US Dollars, while a similarly significant portion of its
revenues are in non-Euro currencies including Sterling and Danish Kroner.
The general approach of the Group to managing its exposure to interest rate fluctuations is to maintain the majority of its deposit and loan
portfolios on floating rates. Rates are usually fixed for relatively short periods in order to match funding requirements and to be able to
benefit from opportunities from movements in longer term rates. Derivative instruments such as forward rate agreements and interest rate
swaps are used from time to time to further manage the exposure to interest rate fluctuations.
In relation to liquidity the Group's policy is to maintain the majority of its net cash balances on relatively short term maturities to match its
funding requirements and to reflect the prudent approach of the Board to cash balances. Net cash is invested with institutions of the highest
credit rating, with limits, approved by the Board, on the amounts held with individual banks or institutions at any one time. It is also the
policy of the Group to have adequate committed undrawn facilities available at all times to cover unanticipated financing requirements.
The numerical disclosures now required under Financial Reporting Standard No. 13 in relation to the above risks are set out in note 36 to
the financial statements commencing on page 71.
Accounting policies and standardsThe Group remains committed to the adoption of best practice in the preparation of its financial statements. During the period Financial
Reporting Standard No. 15 - Tangible Fixed Assets - became applicable. Its implementation had no significant implications for the Group,
as explained in note 15 on page 54 of the financial statements. Financial Reporting Standard No. 16 - Current Tax - also became applicable
and similarly had no significant implications for the Group.
Introduction of Euro notes and coinsThe Group has already addressed most of the issues which arise from the introduction of the Euro. It is satisfied that it is well placed to deal
with the final phase of the Euro implementation plan, the introduction of Euro notes and coins and the phasing out of domestic currencies
in the participating member states, in February 2002.
21Fyffes plc Annual Report 2000
Directors and other information
Directors’ report
Corporate governance report
Compensation committee report
Statement of directors’ responsibilities
Auditors’ report
Statement of accounting policies
Group profit and loss account
Other statements
Group balance sheet
Company balance sheet
Group cash flow statement
Notes forming part of the financial statements
Principal subsidiaries, joint ventures and associates
Notice of Annual General Meeting
22
23
25
29
34
35
36
39
40
41
42
43
44
74
77
Contents
22 Fyffes plc Annual Report 2000
Directors and other information
Fyffes plc
Neil V. McCann ChairmanCarl P. McCann Vice ChairmanDavid V. McCann Chief ExecutiveA. John Ellis CBE (UK)John F. GernonJimmy P. TolanRoland E. Benner OBE Denis J. BerginDr. Paul F. ClüverGerald B. Scanlan
Fyffes Group Ireland Limited
Eugene J. Caulfield ChairmanJohn V. BrowneMichael C. ClerkinFrank J. DavisDonal W. EarlsRichard G. KieranStephen J. McAdamFrancis G. McKernanAnthony G. McLoughlinCharles D. ShaughnessyThomas G. ShieldsLaurence P. Swan
Fyffes Group Limited
A. John Ellis CBE ChairmanCoen BosRory P. ByrneEugene J. CaulfieldFrank J. DavisAndrew H. Denham-SmithDavid J. FlynnMichael J. KeySeamus MulvennaThomas G. Murphy
Secretary and registered office
Philip T. Halpenny1 Beresford StreetDublin 7.
Auditors
KPMGChartered Accountants1 Stokes PlaceSt. Stephen's GreenDublin 2.
Solicitors
Arthur Cox S.J. Berwin & Co.Arthur Cox Building 222 Grays Inn RoadEarlsfort Terrace London WC1X 8HB.Dublin 2.
Niles Barton & Wilmer111 S. Calvert StreetSuite 1400 Baltimore Maryland 21202-6185U. S. A.
Bankers
Allied Irish Banks plc Barclays Bank PLC Bankcentre Pall MallBallsbridge London SW1Y 5AX.Dublin 4.
ABN AMRO Foppingadreef 221102 BS AmsterdamThe Netherlands.
Stockbrokers
J. & E. Davy49 Dawson StreetDublin 2.
HSBC Securities10 Queen Street PlaceLondonEC4R 1BI
Registrars
Computershare Services (Ireland) LimitedHeron HouseCorrig RoadSandyford Industrial EstateDublin 18.
23Fyffes plc Annual Report 2000
Directors’ report
The directors present their report to the shareholders, together with the audited financial statements for the period ended 31 December 2000.
Principal activities and business review
Fyffes plc is a major distributor of fresh fruit and produce in Ireland, the UK and Continental Europe. A detailed business review is included in
the Chairman's Statement, Company Profile and Operating and Financial Review on pages 5 to 20.
Profit
Details of the profit and movements on the profit and loss account for the period ended 31 December 2000 are set out on pages 39 and 40.
Dividends
The interim dividend of €1.0451 cents (1999:€1.0451 cents) per ordinary share was paid on 1 August 2000. It is proposed to pay a final
dividend of €3.2549 cents (1999:€3.2549 cents) per ordinary share. The total dividend for the period is €4.3 cents (1999: €4.3 cents) per
ordinary share. Dividends on the preference shares are paid on 1 November and 1 May each year. Consequently in the financial period from
1 November 1999 to 31 December 2000 three dividends of €5.2376 cents each were paid on these shares. The next interim preference
dividend is due to be paid on 1 May 2001 and, at 31 December 2000, an accrual equal to one third of the dividend due on that date has been
accrued.
Future developments
A review of future development of the business is included in the Chairman's Statement, Company Profile and Operating and Financial Review
on pages 5 to 20.
Directors and secretary
On 9 February 2000, James F. Flavin resigned from the Board. Neil V. McCann, John F. Gernon and Gerald B. Scanlan retire from the Board in
accordance with the Articles of Association and, being eligible, offer themselves for re-election. None of these directors has a service contract
with any Group company.
Directors’ and company secretary’s interests
Details of the directors’ and company secretary’s share interests and interests in share options of the company are set out in the compensation
committee report on pages 29 to 34.
Substantial holdings
The directors have been notified of the following significant interests in the issued ordinary share capital of the company at 31 December
2000:
Number of
Ordinary Shares Percentage
Balkan Investment Company and related parties 34,566,579 11.4%
The shares attributed to Balkan Investment Company and related parties include those shares owned by Neil V. McCann, Carl P. McCann and
David V. McCann as shown on page 32, who are directors of Balkan Investment Company. Neil V. McCann is deemed, within the meaning of
the Companies Act, 1990, to have an interest in the shares owned by Balkan Investment Company and related companies. On 12 January
2001, Balkan Investment Company and related companies purchased an additional 5,500,000 shares to bring the shares attributed to Balkan
Investment Company and related parties to 40,066,579, amounting to 13.2% of the shares in issue at that time.
In addition, Bank of Ireland Nominees Limited has notified the directors that it holds between 10% and 15% of the issued ordinary share
capital of the company. AIB Custodial Nominees Limited and Marathon Asset Management Limited have notified the directors that they hold
between 5% and 10% of the issued ordinary share capital of the company. Bank of Ireland Nominees Limited, AIB Custodial Nominees Limited
and Marathon Asset Management Limited state that these shares are not beneficially owned by them. Aberdeen Asset Management Ireland
Limited has notified the directors that they hold between 3% and 5% of the issued ordinary share capital of the company. The Board has not
been notified of any other holdings of 3% or more of the issued ordinary share capital of the company.
At the beginning of the financial period, DCC plc owned 31,169,493 ordinary shares in the company, accounting for 10.5% of such shares in
issue at that time. On various dates during February 2000 DCC plc sold their entire holding of Fyffes plc ordinary shares.
24 Fyffes plc Annual Report 2000
Directors’ report (continued)
Directors' interests in contracts
None of the directors had a beneficial interest in any material contract to which the holding company or any subsidiary undertaking was a
party during the period.
Treasury shares
At 31 December 2000 the number of treasury shares held amounted to 9,021,610 ordinary €6 cents shares at a cost of €16,582,000 (1999:
9,021,610 ordinary €6 cents shares at a cost of €16,582,000). These shares were delisted in the prior year. These shares represent 3% of the
ordinary shares in issue at 31 December 2000.
Introduction of the Euro
Details of the Group’s activities in relation to the introduction of the Euro are set out in the operating and financial review on pages 16 to 20.
Health and safety
Fyffes plc is committed to complying with the Safety, Health and Welfare at Work Act, 1989. Safety statements are prepared for all relevant
companies in the Group to assist in ensuring a safe place and system of work.
Auditors
In accordance with Section 160 (2) of the Companies Act, 1963, the auditors, KPMG , Chartered Accountants, will continue in office.
Subsidiary, joint venture and associated undertakings
Information on the principal subsidiary, joint venture and associated undertakings is included on pages 74 to 76 .
On behalf of the Board
Neil V. McCann John F. Gernon
Chairman Finance Director
21 March 2001
25Fyffes plc Annual Report 2000
Corporate governance report
Application of the Combined Code principles
Fyffes plc is firmly committed to business integrity, high ethical values and professionalism in all its activities and operations. As an essential
part of this commitment, the Board endorses the highest standards in corporate governance. This report describes how Fyffes plc applies the
principles and provisions of the Combined Code on Corporate Governance of the London and Irish Stock Exchanges (“the Combined Code”).
Compliance with the Combined Code provisions
Having regard to practical difficulties in achieving compliance specific to the change in the accounting year-end, and except for certain other
matters which are described below, the directors confirm that Fyffes plc has complied, throughout the accounting period ended 31 December
2000, with the provisions of the Combined Code.
The Board of directors
Fyffes plc is led by a strong and effective Board of directors (see biographical details set out on pages 5 and 6). The Board has consisted of
executive directors (of at least six in number throughout the period) and non-executive directors (averaging four in number throughout the
period). At 31 December 2000 there were ten directors, four of which were non-executive.
Each of the executive directors has extensive knowledge of the fresh produce industry, in addition to wide-ranging business skills and
commercial acumen. All of the directors bring an objective judgement to bear on issues of strategy, performance, resources (including key
appointments) and standards of conduct. Board members are selected because of their pertinent experience and appropriate training is
available to them where considered necessary.
Enhanced and effective governance is achieved by the separation of the roles of chairman and chief executive, as this division of
responsibilities at the head of the company ensures a balance of power and authority.
The Board of Fyffes considers that throughout the accounting period, the majority of its non-executive directors were independent. Roland
Benner had been a former employee of the company and an executive director up to his change in status to non-executive director on 13
December 1999, and as such the Board does not consider him to be fully independent within the meaning of the Combined Code. The full
Board believes all of its non-executive directors are independent in approach and that they bring an unfettered perspective to their advisory
and monitoring roles.
The Board meets regularly throughout the year. There are six routinely scheduled Board meetings held annually, in addition to which
meetings are called as and when issues arising would warrant. The Board and its committees are supplied with high quality, up-to-date
information for review prior to each meeting to enable them to discharge their duties. The Board has identified and formally adopted a
schedule of key matters that are reserved for its decision, with certain other matters delegated to Board committees, the details of which are
set out below. There is an agreed Board procedure enabling directors to take independent professional advice at the company’s expense.
There is open communication between senior executive management and Board members.
Each Board member has access to the advice and services of the company secretary, who is responsible to the Board for ensuring that
appropriate procedures are followed, and that applicable regulations are complied with. The appointment and removal of the company
secretary is specifically reserved for the approval of the Board.
The Memorandum and Articles of Association require that one third of the Board must go forward by rotation for re-election at the Annual
General Meeting (AGM) each year, together with all new directors appointed since the previous AGM.
Details of the subcommittees appointed by the Board are as follows:
Audit committee
This committee, which comprises three non-executive directors, namely Roland Benner, Denis Bergin (Chairman) and Gerry Scanlan, reviews
internal control matters and the scope and effectiveness of internal and external audit. The finance director, the head of internal audit, and a
representative of the external auditors normally attend meetings.
26 Fyffes plc Annual Report 2000
Corporate governance report (continued)
Compensation committee
The compensation committee, which has responsibility for executive directors remuneration, is comprised exclusively of non-executive
directors, namely Denis Bergin and Gerry Scanlan (Chairman). The Board considers that both of the directors are independent in the exercise
of their duties on this committee. The detailed responsibilities of the committee are set out in the compensation committee report on pages 29
to 34.
Nomination committee
The Board has not appointed a separate nomination committee, believing that the entire Board of directors more appropriately undertakes to
nominate candidates in addition to ratifying their appointment.
Risk committee
In September 1999, the Turnbull Working Group, which was set up to provide guidance to assist directors of listed companies to implement
the Combined Code provisions relating to internal controls and risk management, issued its final report ("the Turnbull Guidelines"). In
response to this initiative, the Board established a separate risk committee in February 2000, the terms of reference of which are to revert to
the Board with its assessment of the key risks facing the Group, and to assist the Board in fulfilling its responsibility as to the manner in which
risk is recognised, assessed, and managed on an on-going basis. The members of the committee, which met several times during the period,
are Roland Benner, Denis Bergin, Frank Gernon (Chairman), Carl McCann and Gerry Scanlan. A senior member of executive management is
dedicated to executing the process under the direction of the committee.
Internal controls and the management of risk
The Board is ultimately responsible for the overall system of internal controls for the company and its subsidiaries and for reviewing the
effectiveness of these controls. The system is designed to manage risks that may impede the achievement of the Group’s business objectives
rather than to eliminate these risks. The internal controls system therefore provides reasonable assurance (but not absolute assurance),
against material misstatement or loss.
The key risks, which might impair the business from achieving its objectives, are identified and assessed by conducting detailed reviews with
executive managers at divisional level. Divisional management thereafter becomes charged with the cost efficient mitigation of the risks within
their areas of responsibility. Evaluation and suggestions for strategic change are reviewed by the risk committee, which in turn appraises the
Board of its findings. In studying the report of the risk committee, the Board also conducts its own risk identification and assessment so that it
becomes sufficiently aware of the principal threats that may jeopardise the Group.
The process of management of risk within Fyffes is co-ordinated by the risk committee, which meets regularly to develop the process
consistently throughout the Group, to review findings and to periodically advise the Board of its conclusions.
The Board, through its risk committee, has reviewed and updated the process for identifying and evaluating the significant risks affecting the
business, and the policies and procedures by which these risks are managed effectively. The Board has embedded these structures and
procedures throughout the Group, and considers them to be a robust and efficient mechanism to create a culture of risk awareness at every
level of management.
The directors regard the ongoing implementation of the Turnbull Guidelines as a positive mechanism for change, adding value in the interests
of shareholders by utilising sound and considered judgement, while simultaneously making the organisation alert to best management
practices.
Fyffes continues to operate a vigorous internal audit function under the direction of the audit committee. Both the internal audit and risk
management functions facilitate each other, and together with divisional management, they provide the Board with distinct sources of
reasonable assurance as to the effectiveness of the system of internal controls that governs the Group’s control environment.
27Fyffes plc Annual Report 2000
Corporate governance report (continued)
Communication with shareholders
Communication with shareholders is given a high priority in Fyffes and there is regular dialogue with individual shareholders, as well as
general presentations at the time of the release of the annual and interim results. The Group issues its results promptly to individual
shareholders and also publishes them on the company’s website (www.fyffes.com).
There is a business presentation provided at the Group’s AGM followed by a question and answer forum which offers shareholders the
opportunity to question the Board. The AGM is valued by the Board as an occasion where individual shareholders’ views and suggestions can
be noted and considered by the directors, and the procedures at such meetings are in accordance with the provisions of the Combined Code.
Accountability and audit
The contents of the operating and financial review, the directors’ report and financial statements (in addition to official company press releases
and interim results issued during the period) have been reviewed in order to seek a balanced presentation, and that the company’s position
and prospects are understandable by shareholders.
A summary of directors’ responsibilities in respect of the financial statements is given on page 34. The system of internal controls and risk
management designed to safeguard shareholders’ investment and the company’s assets is set out above. The audit committee, whose
composition and functions are described above, has considered in conjunction with the external auditors, the accounting policies adopted in
the financial statements and has examined the internal controls that have been established within the Group.
Going concern
After making enquiries, the directors have a reasonable expectation that the company, and the Group as a whole, have adequate resources to
continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the
financial statements.
Senior non-executive director
Gerry Scanlan was appointed as the senior independent non-executive director on 9 December 1999, and continues to act in that capacity.
Change of accounting date
During the period the Board resolved to change the accounting year-end of the company and the Group from 31 October to 31 December.
Consequently the financial statements cover the trading activity from 1 November 1999 to 31 December 2000, a period of 14 months.
Although the company strives to conform to the provisions of the Combined Code, full compliance was not practically feasible for the whole
of the accounting period in the following respects:
• Up to the appointment to the Board of Dr. Paul Clüver on 13 December 1999 as non-executive director, and the change in status from
executive to non-executive director of Roland Benner on the same date, the non-executive directors had not comprised at least one third of
the Board. For the remainder of the period since 13 December 1999 the company has complied with this recommendation of the Combined
Code.
• The Turnbull Guidelines provided for transitional arrangements for companies with accounting periods ending on or before 22 December
2000, which required the Board to state that procedures necessary to implement the guidance had been established by the period end. For
companies with accounting periods ending on or after 23 December 2000, the directors are required to confirm that the procedures are in
place for the whole of the accounting period up to the date of the annual report. In recognising these requirements, the Board has
established comprehensive structures and procedures governing risk management (which are described above), but due to the extended
accounting period they were not in place for the entire period covered by this report.
Appointment for specified terms
The company does not comply with the Combined Code provision requiring non-executive directors to be appointed for specified terms.
However, new directors are subject to re-election at the first AGM after their appointment and all directors are subject to retirement and re-
election by rotation under the Articles of Association of the company.
28 Fyffes plc Annual Report 2000
Corporate governance report (continued)
Directors’ remuneration
The disclosures regarding directors’ remuneration have been drawn up in accordance with the Listing Rules of the Irish Stock Exchange and
are set out on pages 30 and 31.
Annual General Meeting
Details of proxy votes will be announced in respect of each resolution at the forthcoming AGM. The company has arranged for the Notice of
the 2001 AGM and related papers (which are contained at the back of this report) to be sent to shareholders at least 20 working days before
the meeting. The relevant papers were sent out in excess of 20 days before the 2000 AGM.
External auditors
During the period the audit committee did not formally review the nature and extent of non-audit services provided by the external auditors to
the company and the Group. It is the intention of the audit committee to review the scope of the audit and other services provided by the
external auditors during 2001 as required by the provisions of the Combined Code.
29Fyffes plc Annual Report 2000
Compensation committee report
Throughout the financial period ended 31 December 2000, the company has complied with the provisions relating to directors’ remuneration
contained in the Combined Code as applied to Irish Listed Companies.
Composition and terms of reference of compensation committee
The compensation committee is comprised solely of two non-executive directors, Gerry Scanlan (appointed Chairman 13 March 2000), and
Denis Bergin, with no financial interest other than as shareholders in the matters to be decided, no potential conflicts of interest arising from
cross-directorships and no day to day involvement in the running of the business.
The terms of reference of the compensation committee are:
• to make recommendations to the Board;
• to determine the executive directors’ remuneration;
• to determine the service agreements (if any), remuneration packages and employment conditions of the executive directors;
• if necessary to determine termination payments to be made to executive directors;
• to report to shareholders on directors’ remuneration in accordance with the requirements of the Irish Stock Exchange; and
• where appropriate, to recommend to shareholders the establishment of long-term incentive schemes, to set appropriate targets for such
schemes, to define the basis of participation in such schemes and to determine the grant of awards under such schemes.
The Chairman of Fyffes plc is consulted about the remuneration of other executive directors and the compensation committee is authorised to
obtain access to professional advice, if deemed appropriate.
The remuneration of the non-executive directors is approved by the Board.
Remuneration policy
The Group’s policy on executive directors’ remuneration recognises that employment and remuneration conditions for senior executives must
properly reward and motivate them to perform in the best interests of the shareholders.
The elements of the remuneration package for executive directors are basic salary and benefits, annual incentive bonus, pensions and
participation in the company’s share option scheme and profit sharing scheme. It is the policy to grant options to key management to
encourage identification with shareholders’ interests. Employees are encouraged to hold shares for a further period after exercise subject to
the need to finance any cost of acquisition and associated tax liability.
Executive directors’ basic salary and benefits
Basic salary of executive directors is reviewed annually with regard to personal performance, Group performance and competitive market
practice.
Performance related bonus
The Group pays performance related annual bonuses to executive directors and senior managers. The level earned in any one year depends
on an assessment of individual performance and the overall performance of the Group.
Pensions
Pensions for executive directors are calculated on basic salary only and provide for two-thirds of salary for full service at retirement.
Employee share option scheme
It is the Group’s policy to grant share options as an incentive to enhance performance and to encourage employee share ownership in the
company. A new employee share option scheme was approved by shareholders in April 1997 to replace the previous share option scheme
which had expired after ten years of operation. The percentage of share capital which can be issued under the employee share option scheme
and individual limits comply with institutional guidelines. The amount of ordinary share capital over which options may be granted in any ten
year period is limited to 5% of the aggregate of the issued ordinary share capital and the ordinary share capital to be issued on conversion of
the convertible cumulative preference share capital. At 31 December 2000 options had been granted but not yet exercised over 12,455,007 (31
October 1999: 12,107,846) ordinary shares at prices ranging from €1.02 to €2.70.
30 Fyffes plc Annual Report 2000
Compensation committee report (continued)
Employee profit sharing scheme
The company has an employee profit sharing scheme which appropriated shares at market value for directors and other employees of the
Group during the period. The executive directors purchased 35,888 ordinary €6 cents shares under this scheme during the period. Non
executive directors do not participate in this scheme. Such shares held by the directors at the period end are included in the directors’ share
interests disclosed on page 32.
Service contracts
No service contracts exist between the company or any of the Group’s subsidiary undertakings and any executive or non-executive directors
of the company.
Directors’ interests in contracts
There were no contracts at any stage during the period between the company or any of the Group’s subsidiary undertakings and any director
of the company.
Directors’ remuneration
Aggregate directors’ remuneration charged in the profit and loss account in the period was as follows:
Executive Directors Non-Executive Directors Total
2000 2000 1999 2000 2000 1999 2000 2000 1999
14 months 12 months 12 months 14 months 12 months 12 months 14 months 12 months 12 months
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Basic salaries 2,087 1,789 1,834 - - - 2,087 1,789 1,834
Fees - - - 162 142 114 162 142 114
Performance bonuses 166 142 409 - - - 166 142 409
Benefits 79 69 65 - - - 79 69 65
Pension contributions 168 145 120 - - - 168 145 120
Other remuneration - - - 138 122 - 138 122 -
2,500 2,145 2,428 300 264 114 2,800 2,409 2,542
Consultancy fees paid
to past directors 127 109 76 - - - 127 109 76
Total remuneration 2,627 2,254 2,504 300 264 114 2,927 2,518 2,618
Number of directors (average) 6 6.3 4 3 10 9.3
31Fyffes plc Annual Report 2000
Directors’ remuneration (continued)
This is analysed by individual director, in accordance with the rules of the Irish Stock Exchange as follows:
Two Months November/December 1999 Twelve Months Ended December 2000
Total Salary Other Total Salary Other Total Total
14 months or Fees Bonus Benefits & 2 months or Fees Bonus Benefits & 12 months 12 months
31 12 00 Consultancy 1999 Consultancy 31 12 2000 31 10 1999
€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
Executive directors
N. V. McCann 332 63 - 2 65 254 - 13 267 389
C. P. McCann 457 60 - 2 62 381 - 14 395 500
D. V. McCann 457 60 - 2 62 381 - 14 395 500
A. J. Ellis 370 50 - 2 52 303 - 15 318 349
J. F. Gernon 372 39 10 2 51 248 60 13 321 313
J. P. Tolan* 344 26 14 - 40 222 82 - 304 107
R. E. Benner** - - - - - - - - - 150
2,332 298 24 10 332 1,789 142 69 2,000 2,308
Non-executive directors
R. E. Benner** 186 7 - 16 23 41 - 122 163 -
D. J. Bergin 48 7 - - 7 41 - - 41 38
G. B. Scanlan 41 6 - - 6 35 - - 35 38
Dr. P. F. Clüver 25 - - - - 25 - - 25 -
J. F. Flavin - - - - - - - - - 38
300 20 - 16 36 142 - 122 264 114
Pension contributions 168 - - 23 23 - - 145 145 120
Payments to
past directors 127 - - 18 18 - - 109 109 76
Total 2,927 318 24 67 409 1,931 142 445 2,518 2,618
* In the year ended 31 October 1999, the remuneration disclosed for J. P. Tolan is in respect of the four and a half months from the date of
his appointment to the Board, on 14 June 1999.
** On 13 December 1999 R. E. Benner changed from an executive to a non-executive director. Therefore his remuneration for the year ended
31 October 1999 is disclosed under executive directors’ remuneration.
Other benefits for executive directors relate entirely to motor expense allowances. R. E. Benner received remuneration for consultancy
services, unrelated to Board or committee work.
Compensation committee report (continued)
32 Fyffes plc Annual Report 2000
Compensation committee report (continued)
Pension entitlements of executive directors
The pension benefits attributable to the executive directors during the period and the total accrued pensions at the end of the period were asfollows:
Increase in accrued Transfer Total accruedpension during value of pension at end
period increase of period(a) (b) (c)
€’000 €’000 €’000
C. P. McCann 9 68 92D. V. McCann 9 90 135J. F. Gernon 8 81 111J. P. Tolan 10 56 32
Total 36 295 370
(a) The increase in accrued pension during the year excluding inflation.
(b) The transfer value of the increase in accrued pension has been calculated based on actuarial advice.These transfer values do not represent sums paid or due, but are the amounts that the pension scheme would transfer to another pensionscheme in relation to the benefits accrued in the period, in the event of a member of the scheme leaving service.
(c) This represents the pension which would be paid annually, on normal retirement date, based on service to the end of the period.
Directors' and company secretary's share interests
The interests of the directors in the issued share capital of the company are shown below.
At 31 December 2000 At 31 October 1999Beneficial number Beneficial number
Fyffes plc Fyffes plcConvertible Convertible
Fyffes plc Cumulative Fyffes plc CumulativeOrdinary Preference Ordinary Preference
Shares of Shares of Shares of Shares of€6 cents €1.2697381 €6 cents €1.2697381
N. V. McCann 779,243 4,502 771,521 4,502C. P. McCann 1,485,253 4,290 1,327,531 4,290D. V. McCann 563,749 581 406,027 581A. J. Ellis 215,470 - 220,470 -J. F. Gernon 307,885 9,919 287,885 9,919J. P. Tolan 58,558 - 50,836 -R. E. Benner 7,507,795* 10,000* 7,507,795* 10,000*D. J. Bergin 28,399 2,550 13,399 2,550Dr. P. F. Clüver - - - -G. B. Scanlan 10,000 - 10,000 -
* Roland E. Benner is deemed, within the meaning of the Companies Act 1990, to have a beneficial interest in these shares, which are heldby Lambent Limited.
Neil V. McCann is deemed, within the meaning of the Companies Act 1990, to have an interest in an additional 31,738,334 Fyffes plc ordinary€6 cents shares (1999: 28,943,334 Fyffes plc ordinary €6 cents shares) held by Balkan Investment Company and related companies. On 12January 2001, Balkan Investment Company and related companies purchased an additional 5,500,000 Fyffes plc ordinary €6 cents shares tobring its shareholding to 37,238,334.
At 31 December 2000 the company secretary, Philip Halpenny, held 150,962 Fyffes plc ordinary €6 cents shares (1999: 82,240 Fyffes plcordinary €6 cents shares).
John F. Gernon held nil ordinary €6 cents shares (1999: 785) and nil convertible cumulative preference shares of €1.2697381 (1999: 150) inFyffes plc in a non-beneficial capacity at 31 December 2000.
The market price of the shares at 31 December 2000 was €1 and the range during the period was €0.68 to €3.98.
33Fyffes plc Annual Report 2000
Compensation committee report (continued)
Directors’ and company secretary’s interests in share options
Information on directors’ and company secretary’s options to subscribe for ordinary shares of the company is set out below.
Options held at Options held at Date from
31 October 31 December Exercise which Expiry
1999 Granted Exercised Lapsed 2000 price exercisable date
N. V. McCann 37,500 - - - 37,500 €1.16 25/07/1991 24/07/2001
C. P. McCann 150,000 - 150,000 - - €1.21 04/05/1990 03/05/2000
41,667 - - - 41,667 €1.16 25/07/1991 24/07/2001
950,000** - - - 950,000 €1.17 22/09/2000 21/09/2007
265,000*** - - - 265,000 €2.30 12/01/2002 11/01/2009
D. V. McCann 150,000 - 150,000 - - €1.21 04/05/1990 03/05/2000
8,333 - - - 8,333 €1.16 25/07/1991 24/07/2001
950,000** - - - 950,000 €1.17 22/09/2000 21/09/2007
265,000*** - - - 265,000 €2.30 12/01/2002 11/01/2009
J. F. Gernon 65,000 - - - 65,000 €1.16 17/01/1991 16/01/2001
30,000 - - - 30,000 €1.21 30/07/1991 29/07/2001
12,778 - - - 12,778 €1.16 25/07/1991 24/07/2001
35,000 - - - 35,000 €1.02 12/02/1993 11/02/2003
25,000 - - - 25,000 €1.32 27/07/1993 26/07/2003
350,000** - - - 350,000 €1.17 22/09/2000 21/09/2007
100,000*** - - - 100,000 €2.30 12/01/2002 11/01/2009
J. P. Tolan 22,500 - - 22,500 - €1.13 26/11/1990 25/11/2000
1,250 - - - 1,250 €1.16 25/07/1991 24/07/2001
20,000 - - - 20,000 €1.02 12/02/1993 11/02/2003
25,000 - - - 25,000 €1.32 27/07/1993 26/07/2003
300,000** - - - 300,000 €1.17 22/09/2000 21/09/2007
131,250*** - - - 131,250 €2.30 12/01/2002 11/01/2009
P. T. Halpenny* 75,000 - - - 75,000 €1.32 27/07/1993 26/07/2003
250,000** - - - 250,000 €1.17 22/09/2000 21/09/2007
- 50,000**** - - 50,000 €2.70 25/01/2003 24/01/2010
* Company secretary
** These options are only exercisable when the earnings per share figure in respect of the year ended 31 October 1999 or any subsequent
year is greater than the earnings per share figure for the year ended 31 October 1996 by a percentage which is not less than (on a year
on year basis) the annual percentage increase in the consumer price index plus 2% compounded during that period.
*** These options are only exercisable when the earnings per share figure in respect of the year ended 31 December 2001 or any subsequent
year is greater than the earnings per share figure for year ended 31 October 1998 by a percentage which is not less than (on a year on
year basis) the annual percentage increase in the consumer price index plus 2% compounded during that period.
**** These options are only exercisable when the earnings per share figure in respect of the year ended 31 December 2002 or any subsequent
year is greater than the earnings per share figure for the year ended 31 October 1999 by a percentage which is not less than (on a year
on year basis) the annual percentage increase in the consumer prices index plus 2% compounded during that period.
C.P. McCann and D.V. McCann both exercised options over 150,000 shares on 28 April 2000 at an exercise price of €1.21 per share.
34 Fyffes plc Annual Report 2000
Compensation committee report (continued)
Directors’ and company secretary’s interests in share options (continued)
Since the period end the directors and company secretary were issued share options as follows:
Ordinary €6 cents
share options issued
on 26 March 2001
at €0.85
C. P. McCann 200,000
D. V. McCann 200,000
J. F. Gernon 130,000
J. P. Tolan 130,000
P. T. Halpenny 100,000
The options are only exercisable when the earnings per share figure in respect of the year ended 31 December 2003 or any subsequent year is
greater than the earnings per share figure for the period ended 31 December 2000 by a percentage which is not less than (on a year on year
basis) the annual percentage increase in the consumer price index plus 2% compounded during that period.
Irish company law requires the directors to prepare financial statements for each financial period which in accordance with applicable Irish law
and accounting standards give a true and fair view of the state of affairs of the Group and the company and of the profit or loss for that
period. In preparing those financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position
of the Group and the company and to enable them to ensure that the financial statements comply with the Companies Acts, 1963 to 1999 and
all Regulations to be construed as one with those Acts. They have general responsibility for taking such steps as are reasonably open to them
to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
On behalf of the Board
N. V. McCann J. F. Gernon
Chairman Finance Director
Statement of directors’ responsibilities
35Fyffes plc Annual Report 2000
Auditors’ report to the members of Fyffes plc
We have audited the financial statements on pages 36 to 76.
Respective responsibilities of directors and auditors in relation to the annual report
The directors are responsible for preparing the annual report, including as described on page 34, the financial statements. Our
responsibilities, as independent auditors are established in Ireland by statute, the Auditing Practices Board, the Listing Rules of the Irish Stock
Exchange, and by our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the
Companies Acts. As also required by the Acts, we state whether we have obtained all the information and explanations we require for our
audit, whether the financial statements agree with the books of account and report to you our opinion as to whether:
• the company has kept proper books of account;
• the directors’ report is consistent with the financial statements;
• at the balance sheet date a financial situation existed that may require the company to hold an extraordinary general meeting, on the
grounds that the net assets of the company, as shown in the financial statements, are less than half of its share capital.
We also report to you if, in our opinion, information specified by law or the Listing Rules regarding directors’ remuneration and transactions
with the company is not disclosed.
We review whether the statements on pages 25 to 28 reflect the company’s compliance with those provisions of the Combined Code specified
for our review by the Irish Stock Exchange, and we report if it does not. We are not required to form an opinion on the effectiveness of the
company’s corporate governance procedures or its internal controls.
We read the other information contained in the annual report, including the corporate governance statement, and consider whether it is
consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a
test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are
appropriate to the Group's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide
us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the
financial statements.
Opinion
In our opinion, the financial statements give a true and fair view of the state of affairs of the company and of the Group as at 31 December
2000 and of the loss of the Group for the period then ended and have been properly prepared in accordance with the Companies Acts, 1963 to
1999 and all Regulations to be construed as one with those Acts.
We have obtained all the information and explanations we considered necessary for the purposes of our audit. In our opinion, proper books
of account have been kept by the company. The company’s balance sheet is in agreement with the books of account.
In our opinion, the information given in the directors' report on pages 23 and 24 is consistent with the financial statements on pages 36 to 76.
The net assets of the company, as stated in the balance sheet on page 42, are more than half of the amount of its called up share capital and,
in our opinion, on that basis there did not exist at 31 December 2000 a financial situation which, under Section 40(1) of the Companies
(Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the company.
Chartered Accountants
Registered Auditors
Dublin 21 March 2001
36 Fyffes plc Annual Report 2000
Statement of accounting policies for the period ended 31 December 2000
A summary of the principal Group accounting policies all of which have been applied consistently throughout the period and in the preceding
year are set out below. The financial statements are presented in Euro following the irrevocable fixing of exchange rates by the 11 Member
States with effect from 1 January 1999. The Irish Pound rate was irrevocably fixed at IR£0.787564 = €1.
Basis of accounting
The financial statements are prepared in accordance with generally accepted accounting principles under the historical cost convention, as
modified to include the revaluation of certain of the Group's principal tangible fixed assets and comply with financial reporting standards
applicable in the Republic of Ireland and the United Kingdom.
Basis of consolidation
The Group financial statements consolidate the financial statements of the company and all of its subsidiary undertakings prepared to the end
of the financial period. Where the financial year ends of subsidiary undertakings differ from that of the Group, the amounts included in the
consolidated financial statements in respect of these subsidiary undertakings are represented by their latest financial statements prepared up
to their respective year ends, together with management accounts for the intervening periods to 31 December 2000.
The results of subsidiary undertakings acquired or disposed of in the period are included in the consolidated profit and loss account from the
date of acquisition or up to the date of the disposal. Upon the acquisition of a business, fair values are attributed to the identifiable net assets
acquired. Goodwill arising on acquisitions is dealt with as set out below. Companies in which the Group has a 50% voting shareholding are
treated as subsidiary undertakings where the directors are of the opinion that the Group actually exercises dominant influence over the
financial and operating policies of that undertaking.
Where Group companies are parties to contractual arrangements where all significant matters of operational and financial policy are pre
determined, the Group financial statements, in accordance with Financial Reporting Standard 9, include the transactions, assets, liabilities and
cash flows of the Group companies measured according to the terms of the agreement governing the contractual arrangements. Where the
relevant contractual arrangements involve the Group company entering into a transaction, the financial benefit of which ultimately accrues to
another party to the agreement, the adjustments necessary to exclude the effect of those transactions from the Group financial statements are
made on consolidation in accordance with Financial Reporting Standard 2.
Joint venture undertakings
Joint venture undertakings (joint ventures) are those undertakings over which the Group exercises control jointly with one or more parties.
The Group’s share of the profits less losses of joint ventures is included in the consolidated profit and loss account. The Group’s interest in
their net assets is included as a fixed asset investment in the consolidated balance sheet using the gross equity method at an amount
representing the Group’s share of the fair value of the net assets at acquisition plus the Group’s share of post acquisition retained profits or
losses. Goodwill arising on the acquisition of joint ventures is dealt with as stated below.
The amounts included in the consolidated financial statements in respect of the post acquisition profits of joint ventures are taken from their
latest financial statements prepared up to their respective financial year ends together with management accounts for the intervening periods
to 31 December 2000.
Associated undertakings
Associated undertakings (associates) are those undertakings in which the Group has a participating interest in the equity capital and over
which it is able to exercise significant influence.
The Group’s share of the profits less losses of associates is included in the consolidated profit and loss account. The Group’s interest in their
net assets is included as a fixed asset investment in the consolidated balance sheet using the equity method at an amount representing the
Group’s share of the fair value of the net assets at acquisition plus the Group’s share of post acquisition retained profits or losses. Goodwill
arising on the acquisition of associates is dealt with as stated below.
The amounts included in the consolidated financial statements in respect of the post acquisition profits of associates are taken from their latest
financial statements prepared up to their respective year ends together with management accounts for the intervening periods to 31 December
2000.
37Fyffes plc Annual Report 2000
Statement of accounting policies (continued) for the period ended 31 December 2000
Goodwill
Purchased goodwill arising on the acquisition of a business represents the excess of the acquisition cost over the fair value of the identifiable
net assets when they were acquired. Subsequent changes to the amount of deferred acquisition consideration is adjusted for against
goodwill. Any excess of the aggregate of the fair value of the identifiable net assets acquired over the fair value of the acquisition cost is
negative goodwill.
Purchased goodwill arising on acquisitions prior to 1 November 1998 was eliminated against reserves on acquisition and negative goodwill
arising on such acquisitions was credited directly to reserves as a matter of accounting policy. On disposal of the business any goodwill so
treated is included in determining the profit or loss on sale of the business.
Purchased goodwill arising on acquisitions after 1 November 1998 is capitalised in the balance sheet and amortised over the estimated
economic life of the goodwill.
Negative goodwill arising on such acquisitions is also capitalised and shown separately in the balance sheet and credited to the profit and loss
account to match the periods in which the acquired non-monetary assets are recovered. Any excess over the non-monetary assets acquired is
credited to the profit and loss account in the periods benefited.
Goodwill arising on the acquisition of subsidiaries is shown separately in the balance sheet in intangible assets. Goodwill arising on the
acquisition of joint ventures and associates is included in the carrying amount of the investments.
Turnover
Turnover comprises the value of goods and services supplied to third party customers and excludes intercompany sales and value added
taxation.
Taxation
The charge for taxation is based on the profit for the period. Deferred taxation is accounted for in respect of timing differences between profit
as computed for taxation purposes and profit as stated in the financial statements to the extent that such differences are expected to reverse
in the foreseeable future.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at historical cost less accumulated depreciation except for certain items of land and buildings which are
carried at revalued amount less accumulated depreciation. The company is availing of the transitional provisions of Financial Reporting
Standard 15, Tangible Fixed Assets in continuing to carry such assets at their previous revalued amount, which is not being updated for
changes in value, except for subsequent additions, disposals, depreciation and impairment if any. Depreciation is calculated to write off the
cost or valuation of tangible fixed assets, other than freehold land, on a straight line basis, by reference to the following estimated useful
lives:-
Freehold properties 30 - 50 years
Leasehold properties Over the lesser of 40 years or the
unexpired portion of the lease
Plant, equipment and shipping 10 - 20 years
Motor vehicles 5 years
Provision is also made for any impairments of tangible fixed assets.
Stocks
Stocks are valued at the lower of cost and estimated net realisable value. Cost is determined by reference to invoice price, together with the
cost of delivery where appropriate. Net realisable value is the estimated proceeds of sale less all costs to be incurred in marketing, selling and
distribution.
38 Fyffes plc Annual Report 2000
Statement of accounting policies (continued) for the period ended 31 December 2000
Leased assets
Assets held under leasing arrangements that transfer substantially all the risks and rewards of ownership (finance leases) to the Group are
included in the balance sheet as tangible fixed assets at cost less accumulated depreciation and the capital element of future rentals is treated
as a liability. The interest element is charged to the profit and loss account over the period of the finance lease in proportion to the balance of
capital repayments outstanding.
Rentals in respect of all other leases are charged to the profit and loss account as incurred.
Pensions
The Group makes contributions to independently administered pension funds. The regular cost of providing benefits is charged to operating
profit over the service lives of the members of the scheme on the basis of a constant percentage of pensionable pay. Variations from regular
costs arising from periodic valuations of the principal schemes are allocated to operating profit over the expected remaining service lives of
the members.
Foreign currencies
Financial statements of overseas subsidiaries, joint ventures and associates denominated in currencies other than the Euro are translated at
the rates of exchange ruling at the balance sheet date. Exchange differences arising on the restatement of opening net investments are offset
through reserves against retained profits and reflected in the statement of total recognised gains and losses.
Exchange gains or losses on foreign currency borrowings and long term intercompany loans, used to finance or provide a hedge against
Group equity investments in overseas subsidiaries, joint ventures and associates are offset against retained profits to the extent of the
exchange differences arising on the net investments.
Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the date of the transactions or at contracted
rates where matching contracts exist. All resulting monetary assets and liabilities denominated in foreign currencies are translated into Irish
Pounds at the rates of exchange ruling at the balance sheet date or at the contracted rate and then converted into Euro. The resulting profits
or losses are dealt with in the profit and loss account. At the period end, the Irish Pound/Sterling exchange rate was Stg79.8p (1999:
Stg81.33p). The equivalent Euro/Sterling exchange rate was Stg62.85p (1999: Stg64.05p).
Derivative financial instruments
The Group is a party to derivative financial instruments (derivatives), primarily to manage its exposure to fluctuations in foreign currency
exchange rates and interest rates.
Gains and losses on derivative contracts used to hedge foreign exchange are recognised in the profit and loss account when the hedged
transactions occur.
Interest rate swap agreements and similar contracts are used to manage interest rate exposures. Amounts payable or receivable in respect of
these derivatives are recognised as adjustments to interest expense over the period of the contracts.
Liquid resources
Liquid resources include current asset investments in government gilts, commercial paper, term deposits and monies held in escrow.
Financial fixed assets
Company
Investments in subsidiaries, joint ventures and associates and other investments are stated at cost less any provision required for permanent
diminutions in value. Income from financial fixed assets is recognised in the profit and loss account in the period in which it is receivable.
Group
Other investments are stated at cost less any provision required for permanent diminutions in value with the exception of government
securities which are marked to market.
39Fyffes plc Annual Report 2000
Group profit and loss account for the period ended 31 December 2000
Note Continuing Discontinued Total TotalOperations Acquisitions Operations 14 months 12 months
ended ended31 December 31 October
2000 2000 2000 2000 1999€’000 €’000 €’000 €’000 €’000
Turnover including Group share of joint
ventures and associates 4 2,062,411 167,247 - 2,229,658 1,886,412Less: Share of joint ventures’ turnover (191,370) (167,247) - (358,617) (180,327)Less: Share of associates’ turnover (11,712) - - (11,712) (17,591)
Group turnover 1,859,329 - - 1,859,329 1,688,494Cost of sales (1,614,586) - - (1,614,586) (1,432,430)
Gross profit 244,743 - - 244,743 256,064Net operating expenses 5 (221,382) - (15,585) (236,967) (194,425)
Goodwill amortisation (279) - - (279) (48)
Group operating profit 23,082 - (15,585) 7,497 61,591Share of joint ventures’ goodwill amortisation (40) (1,122) - (1,162) (88)Share of joint ventures’ operating profit/(loss)
- produce 5,054 (2,058) - 2,996 17,015- e-commerce (1,326) - - (1,326) -
Share of associates’ operating profit 1,408 - - 1,408 1,527
Operating profit - Group and its share
of joint ventures and associates 28,178 (3,180) (15,585) 9,413 80,045
Exceptional items - Group 8(Loss)/profit on disposal of fixed assets (1,032) 6,719Loss on disposal and termination of subsidiaries (1,484) (5,772)
(2,516) 947
Share of exceptional items - joint ventures 8 (2,798) -
Profit on ordinary activities before interest 4,099 80,992
Net interest receivable and income from financialassets - Group 6 8,785 6,579Share of net interest payable - joint ventures 6 (4,514) (3,439)Share of net interest payable - associates 6 (842) (255)
Profit on ordinary activities before taxation 7 7,528 83,877Tax on profit on ordinary activities 9 (8,128) (18,133)
(Loss)/profit on ordinary activities after taxation (600) 65,744Minority interests - equity and non-equity (6,869) (5,829)
(Loss)/profit for the financial period attributable to
Group shareholders (7,469) 59,915
Dividends - on equity and non-equity shares 10- paid (8,477) (6,001)- proposed/provided (10,499) (12,339)
(18,976) (18,340)
Retained (loss)/profit for the financial period - Group and
its share of joint ventures and associates (26,445) 41,575
€ cents € centsEarnings per ordinary share 11
- basic (4.73) 18.63
- fully diluted (4.73) 17.09
Adjusted earnings per share 11 5.36 17.05
N. V. McCann J. F. GernonChairman Finance Director
40 Fyffes plc Annual Report 2000
Other statements for the period ended 31 December 2000
Note 14 months 12 months
ended ended
31 December 31 October
2000 1999
Movements on profit and loss account €'000 €'000
At beginning of period/year 98,467 46,194
Retained (loss)/profit for the financial period/year (26,445) 41,575
Goodwill:
Adjustments to prior period acquisitions (1,637) (120)
On disposal of subsidiary undertakings 32 20 1,222
On disposal of associates 121 746
Currency translation adjustment (1,718) 17,146
Acquisition of own shares - (8,296)
At end of period/year 68,808 98,467
Group statement of total recognised gains and losses
(Loss)/profit for the financial period/year (7,469) 59,915
Currency translation adjustment (1,718) 17,146
Total recognised gains and losses for the period/year (9,187) 77,061
Note of historical cost profits and losses
There is no material difference between the historical cost profit on ordinary activities before taxation and the reported profit on ordinary
activities before taxation in either period.
Reconciliation of movements in shareholders' funds
Total recognised gains and losses for the period/year (9,187) 77,061
Transactions with shareholders:
Dividends on equity and non-equity shares 10 (18,976) (18,340)
Shares issued 762 729
Acquisition of own shares - (8,296)
Net goodwill adjustment 32 (1,496) 1,848
Net (decrease)/increase in shareholders' funds (28,897) 53,002
At beginning of period/year 284,910 231,908
At end of period/year 256,013 284,910
41Fyffes plc Annual Report 2000
Group balance sheet at 31 December 2000
Note 31 December 31 October
2000 1999
€'000 €'000
Fixed assets
Intangible assets 13 2,483 2,454
Goodwill 14 4,758 3,698
Tangible assets 15 160,903 155,953
Financial assets: 16
Joint ventures:
Share of gross assets (including goodwill) 157,110 133,006
Share of gross liabilities (including minority interests) (148,687) (120,429)
8,423 12,577
Associates 5,761 5,320
Other investments 41,417 27,006
223,745 207,008
Current assets
Stocks 17 38,458 35,790
Debtors 18 206,540 207,174
Cash at bank and in hand 361,939 380,396
606,937 623,360
Creditors: amounts falling due within one year 19 (380,892) (412,298)
Net current assets 226,045 211,062
Total assets less current liabilities 449,790 418,070
Creditors: amounts falling due after more than one
year (including convertible debt) 20 (138,567) (78,061)
Provisions for liabilities and charges 23 (16,991) (19,262)
294,232 320,747
Capital and reserves
Called-up share capital 24 83,328 89,666
Share premium 25 93,060 85,960
Revaluation reserve 27 503 503
Other reserves 28 10,314 10,314
Profit and loss account 29 68,808 98,467
Shareholders' funds (including non-equity interests) 30 256,013 284,910
Minority interests (including non-equity interests) 31 38,219 35,837
294,232 320,747
N. V. McCann J. F. Gernon
Chairman Finance Director
42 Fyffes plc Annual Report 2000
Company balance sheet at 31 December 2000
Note 31 December 31 October
2000 1999
€'000 €'000
Fixed assets
Tangible assets 15 546 248
Financial assets 16 305,751 264,628
306,297 264,876
Current assets
Debtors 18 130,958 126,354
Cash at bank and in hand 345 145
131,303 126,499
Creditors: amounts falling due within one year 19 (186,359) (96,436)
Net current (liabilities)/assets (55,056) 30,063
Total assets less current liabilities 251,241 294,939
Creditors: amounts falling due after more than one
year (including convertible debt) 20 (18,731) (22,973)
232,510 271,966
Capital and reserves
Called-up share capital 24 83,328 89,666
Share premium 25 93,060 85,960
Revaluation reserve 27 503 503
Other reserves 28 10,314 10,314
Profit and loss account 29 45,305 85,523
Shareholders' funds (including non-equity interests) 30 232,510 271,966
N. V. McCann J. F. Gernon
Chairman Finance Director
43Fyffes plc Annual Report 2000
Group cash flow statement for the period ended 31 December 2000
Note 14 months 12 months
ended ended
31 December 31 October
2000 1999
€'000 €'000
Cash inflows from operating activities 1 33,859 71,053
Dividends received from joint ventures 2,865 2,652
Dividends received from associates 74 2,009
Returns on investments and servicing of finance 2 (10,270) (2,905)
Corporation tax paid (10,286) (16,263)
Capital expenditure and financial investment 2 (23,026) (19,557)
Acquisitions and disposals 2 (34,595) (5,313)
Equity dividends paid (12,444) (10,708)
Cash (outflow)/inflow before management of
liquid resources and financing (53,823) 20,968
Decrease in liquid resources 2 16,748 7,577
Financing 2 52,940 (43,462)
Increase/(decrease) in cash for the period/year 15,865 (14,917)
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash for the period/year 3 15,865 (14,917)
(Decrease) in liquid resources 3 (16,748) (7,577)
Net (decrease)/increase in debt 3 (52,178) 35,895
Changes in net funds resulting from cash flows (53,061) 13,401
New finance leases 3 (618) -
Loans disposed of with subsidiary undertakings - 3,847
Translation adjustment 3 2,510 4,828
Movement in net funds in the period/year (51,169) 22,076
Net funds at beginning of period/year 138,704 116,628
Net funds at end of period/year 3 87,535 138,704
44 Fyffes plc Annual Report 2000
Notes forming part of the financial statements
1 Reconciliation of operating profit to net cash inflow from operating activities
14 months 12 months
ended ended
31 December 31 October
2000 1999
€'000 €'000
Group operating profit 7,497 61,591
Depreciation of tangible fixed assets 17,363 15,588
Amortisation of goodwill - subsidiaries 279 48
Increase in operating debtors (1,538) (3,945)
Increase in operating creditors 13,096 3,941
Increase in stocks (2,209) (5,828)
Amortisation of grants (629) (342)
Cash inflow from operating activities 33,859 71,053
2 Analysis of cash flows for headings netted in the cash flow statement
Note 14 months 12 months
ended ended
31 December 31 October
2000 1999
€'000 €'000
Returns on investments and servicing of finance
Interest received and income received on financial assets 28,701 20,302
Interest paid and similar financial costs (26,778) (14,252)
Dividends paid to preference shareholders (8,372) (5,950)
Dividends paid to minority interests (3,770) (2,960)
Interest element of finance lease payments (51) (45)
Net cash outflow for returns on investments and servicing of finance (10,270) (2,905)
Capital expenditure and financial investment
Expenditure on tangible fixed assets (45,131) (25,830)
Proceeds on sale of tangible fixed assets 35,190 22,543
Proceeds on sale of unlisted investments and government securities 6,958 5,797
Purchase of trade investments and government securities 16 (21,236) (24,068)
Grants received 1,193 2,001
Net cash outflow for capital expenditure and financial investment (23,026) (19,557)
45Fyffes plc Annual Report 2000
Notes (continued)
2 Analysis of cash flows for headings netted in the cash flow statement (continued)
Note 14 months 12 months
ended ended
31 December 31 October
2000 1999
€'000 €'000
Acquisitions and disposals
Purchase of subsidiary undertakings 32 (1,731) (9,862)
Net cash acquired - 274
Purchase of joint ventures 16 (20,784) (1,895)
Payments in respect of deferred consideration (9,155) (10,881)
Disposal/termination of subsidiary undertakings 32 (1,100) 4,023
Net overdrafts disposed 32 108 2,860
Disposal of associates/joint ventures 32 (1,933) 10,168
Net cash outflow from acquisitions and disposals (34,595) (5,313)
Management of liquid resources
Decrease in bank deposits 16,748 7,577
Financing
Loans due within one year - drawn down 39,905 50,398
- repaid (18,986) (63,049)
Loans due after one year - drawn down 33,899 3,361
- repaid (2,579) (25,977)
Capital element of finance lease payments (61) (628)
Net increase/(decrease) in debt 52,178 (35,895)
Issue of share capital (including premium thereon) 24 762 729
Acquisition of own shares - (8,296)
Net cash inflow/(outflow) from financing 52,940 (43,462)
3 Analysis of net funds
Acquisitions& disposals
At 1 (excluding At 31
November Cash cash and Non-cash Translation December
1999 Flow overdrafts) Movement Adjustment 2000
€'000 €'000 €'000 €'000 €'000 €'000
Cash in hand, at bank 43,849 (6,316) - - 529 38,062
Overdrafts (29,994) 22,181 - - (256) (8,069)
15,865
Bank deposits 336,547 (16,748) - - 4,078 323,877
Loans due within one year (142,735) (20,919) - 30,810 (1,224) (134,068)
Loans due after one year (68,819) (31,320) - (30,810) (615) (131,564)
Finance leases (144) 61 - (618) (2) (703)
(52,178)
Net funds 138,704 (53,061) - (618) 2,510 87,535
46 Fyffes plc Annual Report 2000
Notes (continued)
4 Segmental analysis
Turnover, operating profit and net assets are analysed as follows by business activity and geographical market.
Total - Group including its share of joint ventures and associates
Operating Net Operating NetTurnover Profit Assets Turnover Profit Assets
2000 2000 2000 1999 1999 1999By activity €’000 €’000 €’000 €’000 €’000 €’000
Continuing Operations Produce 1,911,702 25,745 197,862 1,825,261 77,634 174,398Acquisitions - Produce 167,247 (2,058) (978) - - -IngredientsNet.com - (1,326) 495 - - -Other activities 150,709 4,078 13,438 61,151 2,547 7,645
Subtotal 2,229,658 26,439 210,817 1,886,412 80,181 182,043
worldoffruit.com - (15,585) (4,120) - - -Goodwill amortisation - (1,441) - - (136) -
2,229,658 9,413 206,697 1,886,412 80,045 182,043
Net cash 87,535 138,704
294,232 320,747
Total - Group including its share of joint ventures and associates
Operating Net Operating NetTurnover Profit Assets Turnover Profit Assets
Geographical Market 2000 2000 2000 1999 1999 1999- by origin €’000 €’000 €’000 €’000 €’000 €’000
Continuing OperationsIreland, UK and other 990,563 6,784 180,567 909,085 38,608 149,619Continental Europe 1,071,848 21,713 31,228 977,327 41,573 32,424
Sub total 2,062,411 28,497 211,795 1,886,412 80,181 182,043AcquisitionsIreland, UK and other 68,739 (424) (2,209) - - -Continental Europe 98,508 (1,634) 1,231 - - -
Subtotal 167,247 (2,058) (978) - - -
worldoffruit.com - (15,585) (4,120) - - -Goodwill amortisation - (1,441) - - (136) -
2,229,658 9,413 206,697 1,886,412 80,045 182,043
Net cash 87,535 138,704
294,232 320,747
The geographical analysis of turnover by destination is not materially different.
A segmental analysis of turnover, operating profit and net assets by geographical area and business activity is not provided separately for theGroup or for its joint ventures and associates as, in the opinion of the directors, the disclosure of such information would be seriouslyprejudicial to the interests of the Group, its joint ventures and associates.
47Fyffes plc Annual Report 2000
Notes (continued)
5 Net operating expenses
Total Total
14 months 12 months
ended ended
Continuing Discontinued 31 December 31 October
2000 2000 2000 1999
€’000 €'000 €'000 €’000
Distribution costs 144,626 - 144,626 133,979
Administrative expenses 78,773 15,585 94,358 62,184
Other operating income (2,017) - (2,017) (1,738)
Net operating expenses 221,382 15,585 236,967 194,425
The expenses included within discontinued operations relate to costs incurred in respect of worldoffruit.com. The operating expenses of
subsidiaries acquired in the period are not material.
6 Net interest receivable and income from financial assets
14 months 12 months
ended ended
31 December 31 October
2000 1999
€'000 €'000
Group
Interest receivable 23,048 19,637
Interest payable on bank loans and overdrafts repayable
within five years (18,051) (13,069)
Interest payable on other loans (753) (305)
Finance lease interest (51) (45)
Net interest receivable 4,193 6,218
Income from financial assets - unlisted 4,073 177
Income from financial assets - listed 519 184
8,785 6,579
Joint ventures
Interest receivable 1,173 1,218
Interest payable on bank loans and overdrafts repayable
within five years (1,934) (2,119)
Finance lease interest (3,666) (2,538)
Other interest payable (87) -
(4,514) (3,439)
Associates
Interest receivable 9 9
Interest payable on bank loans and overdrafts repayable
within five years (184) (264)
Other interest payable (667) -
(842) (255)
48 Fyffes plc Annual Report 2000
Notes (continued)
7 Profit on ordinary activities before taxation
14 months 12 months
ended ended
31 December 31 October
2000 1999
€'000 €'000
This is arrived at after charging/(crediting)
Depreciation of tangible fixed assets 17,363 15,588
Auditors' remuneration 970 993
Operating lease rentals:
Plant and machinery 1,356 2,682
Other 5,508 5,626
Profit on disposal of tangible fixed assets (10,445) (3,905)
Amortisation of grants (629) (342)
Loss on disposal and termination of operations of subsidiary undertakings 1,484 5,772
Amortisation of capitalised goodwill - subsidiaries 279 48
Amortisation of capitalised goodwill - joint ventures 1,162 88
Details of directors’ remuneration, pension entitlements and interests in share options are set out in the compensation committee report on
pages 29 to 34.
Profit before tax includes a number of items of income and expenditure which are non recurring. Certain legal cases, which had been ongoing
for a number of years, were settled during the period and resulted in a gain of €8,057,000, net of the Group’s share of legal costs of
€1,869,000 arising in a joint venture undertaking. The gains arising on the settlement of certain cases have been included within cost of sales
as the costs relating to these cases have been charged to cost of sales in prior periods. Non recurring costs, including operating losses and
restructuring costs, arising on the reorganisation and restructuring of operations in the UK and Continental Europe amounted to €3,906,000.
The Group’s share of a charge arising from an impairment review on certain assets in a joint venture undertaking amounted to €1,900,000. In
addition, there were a number of smaller non recurring charges amounting to approximately €1,000,000, the most significant of which was a
charge of €600,000 in relation to the Group’s UK ESOP scheme.
49Fyffes plc Annual Report 2000
Notes (continued)
8 Exceptional items
Note 14 months 12 months
ended ended
31 December 31 October
2000 1999
€’000 €’000
Group
Profit on disposal of tangible fixed assets 10,445 3,905
(Loss)/profit on disposal or termination of activities of joint ventures and associates (11,477) 2,814
Net (loss)/profit on disposal of fixed assets (1,032) 6,719
(Loss) on disposal or termination of subsidiary undertakings 32 (1,484) (5,772)
(2,516) 947
During the period the Group disposed of a number of properties in Ireland and the UK giving rise to a net profit of €10,445,000.
As part of a significant rationalisation programme within the Group’s banana operations the Group terminated its involvement in banana
farming in the Caribbean and sold its remaining farming interests in Belize.
In addition the Group continued its rationalisation programme within its produce division. The South American fruit packing business in Chile
in which the Group has a 50% interest terminated its operations during the period and a number of specialised distribution operations in the
UK were terminated.
The tax effect of these exceptional items is a net charge of €2,440,000.
In the prior year, the Group disposed of properties in Ireland and the UK giving rise to a net profit of €3,905,000. The disposal of the Group’s
18.54% interest in United Beverages Holdings Limited was completed in March 1999, giving rise to a profit of €2,814,000. During the second
half of 1999, the Group sold or terminated the activities of a number of subsidiary companies in the UK and Continental Europe and reduced
its investment in an operation in South America. These transactions gave rise to losses amounting to €5,772,000.
Group share of exceptional items - joint ventures
This represents the Group’s share of the costs of a fundamental restructuring of the banana ripening operations and the loss on termination of
certain other banana operations of a joint venture undertaking, incurred towards the end of the period.
50 Fyffes plc Annual Report 2000
Notes (continued)
9 Tax on profit on ordinary activities
14 months 12 monthsended ended
31 December 31 October2000 1999
€'000 €'000Corporation tax:Ireland - (10% to 25%)Current tax on profit for the period/year 4,104 6,569Adjustment in respect of prior year 1,364 (521)
5,468 6,048
OverseasCurrent tax on profit for the period/year 6,029 8,163Adjustment in respect of prior year (777) (403)
5,252 7,760
Total corporation tax 10,720 13,808Irrecoverable ACT (1,436) -Deferred tax (credit)/charge (2,541) 2,368
Group tax charge 6,743 16,176Share of tax of joint ventures 1,310 1,803Share of tax of associates 75 154
8,128 18,133
The corporation tax charge for Irish companies has been reduced by reliefs available under Part 14 of the Taxes Consolidation Act, 1997.
10 Dividends - on equity and non-equity shares
14 months 12 monthsended ended
31 December 31 October2000 1999
€'000 €'000Ordinary shares of €6 cents - equityInterim dividend €1.0451 cents (1999 : €1.0451 cents) paid on 1 August 2000 3,068 3,026Proposed final dividend €3.2549 cents (1999 : €3.2549 cents) 9,568 9,376
Total equity 12,636 12,402
Preference shares - non-equity€10.4753 cents (net) convertible cumulative preference shares of €1.2697381 eachPaid 5,409 2,975Provided 931 2,963
Total non-equity 6,340 5,938
Total 18,976 18,340
At 31 December 2000, the company and subsidiary companies held 9,021,610 (1999: 9,021,610) ordinary shares of €6 cents in Fyffes plc. Therights to dividends on these shares have been waived.
Dividends on the preference shares are paid on 1 November and 1 May each year. Consequently in the financial period from 1 November1999 to 31 December 2000 three dividends have been paid on these shares. The proposed preference dividend covers the period 1 November2000 to 31 December 2000 so that the total charge covers the full fourteen month period.
51Fyffes plc Annual Report 2000
Notes (continued)
11 Earnings per ordinary share
14 months 12 months
ended ended
31 December 31 October
2000 1999
The calculations of earnings per share are based on the following: €’000 €’000
Basic
(Loss)/profit after taxation and minority interests (7,469) 59,915
Preference dividends (6,340) (5,938)
Earnings for basic earnings per share calculation (13,809) 53,977
Number Number
of shares of shares
(’000) (’000)
Weighted average number of ordinary shares outstanding 301,245 296,608
Deduct weighted average number of own shares acquired (9,022) (6,841)
Weighted average number of ordinary shares for basic earnings per share calculation 292,223 289,767
€cents €cents
Basic earnings per share (4.73) 18.63
Fully diluted €’000 €’000
Earnings for basic earnings per share calculation (13,809) 53,977
Add back preference dividends - 5,938
Earnings for fully diluted earnings per share calculation (13,809) 59,915
Number Number
of shares of shares
(’000) (’000)
Weighed average number of ordinary shares outstanding 301,245 296,608
Deduct weighted average own shares acquired (9,022) (6,841)
Weighted average number of convertible preference shares - 56,732
Weighted average number of options with dilutive effect - 3,989
Weighted average number of shares for calculation of fully diluted earnings per share 292,223 350,488
€ cents € cents
Fully diluted earnings per share (4.73) 17.09
In the fourteen months ended 31 December 2000, the preference dividend would have the effect of reducing the loss per share and
consequently under FRS 14, the preference dividend cannot be added back in the calculation of fully diluted earnings per share in the period.
The convertible preference shares and share options are similarly excluded from the number of shares in the calculation of fully diluted
earnings per share.
52 Fyffes plc Annual Report 2000
Notes (continued)
11 Earnings per ordinary share (continued)
14 months 12 months
ended ended
31 December 31 October
2000 1999
Earnings Per share Earnings Per share
€’000 € cents €’000 € cents
Adjusted earnings per share
Basic earnings per share calculation (13,809) (4.73) 53,977 18.63
Adjustments:
Profit on disposal of tangible fixed assets (net of tax) (8,005) (2.74) (3,238) (1.12)
Loss on disposal/termination of associates and joint ventures 14,275 4.89 (2,814) (0.97)
Loss on disposal/termination of subsidiaries 1,484 0.51 5,772 1.99
Goodwill amortisation 1,441 0.49 136 0.05
worldoffruit.com 15,585 5.33 - -
IngredientsNet.com 1,326 0.46 - -
Adjusted basic earnings per share 12,297 4.21 53,833 18.58
Impact of convertible preference shares
Dividend on preference shares 6,340 1.82 5,938 1.69
Impact on earnings of higher number of shares - (0.67) - (3.22)
Adjusted earnings per share 18,637 5.36 59,771 17.05
Number Number
of shares of shares
(’000) (’000)
Weighted average number of ordinary shares for basic earnings per share calculation 292,223 289,767
Weighted average number of convertible preference shares 52,799 56,732
Weighted average number of share options 2,646 3,989
Weighted average number of shares for fully diluted adjusted earnings per share calculation 347,668 350,488
The convertible preference shares are mandatorily convertible in November 2001 and consequently the adjusted earnings per share above is
calculated showing the impact on earnings per share had these shares been converted into ordinary shares from the beginning of the period
which has the effect of increasing the number of shares in the calculation from 292,223,000 to 345,022,000 before the inclusion of the share
options.
Adjusted earnings per share are calculated to adjust for the impact of exceptional items, goodwill amortisation, operating losses in
worldoffruit.com, the Group’s share of operating losses of IngredientsNet.com and taking into account the mandatory conversion of the
Group’s preference shares in November 2001.
53Fyffes plc Annual Report 2000
Notes (continued)
12 Employees
14 months 12 monthsended ended
31 December 31 October2000 1999
Number NumberThe average weekly number of employees, including executive directors, during the period/year, analysed by category, was as follows:
Production 638 1,470Sales and distribution 1,420 1,547Administration 515 578
2,573 3,595
The aggregate payroll costs of these employees were as follows: €’000 €’000
Wages and salaries 103,339 94,273Social welfare costs 10,415 8,985Other pension costs 4,117 3,507
117,871 106,765
13 Intangible assets
31 December 31 October2000 1999
Trademark €'000 €'000
At beginning of period/year 2,454 2,316Translation adjustment 29 138
At end of period/year 2,483 2,454
This represents the cost of acquiring the worldwide rights to the Fyffes trademark. The trademark is reviewed for impairment at each balancesheet date. In the opinion of the directors the value of the trademark is not less than cost and it does not have a finite useful life.
14 Goodwill
31 December
2000
Group €’000
Cost
At beginning of period 3,746Acquisitions in period (note 32) 1,335Exchange adjustment 4
At end of period 5,085
Amortisation
At beginning of period 48Amortised in period 279
At end of period 327
Net book value
At end of period 4,758
At beginning of period 3,698
Positive goodwill is amortised over the expected useful economic life of the business acquired. This amortisation period ranges from 5 to 20years depending on the nature of the business acquired.
54 Fyffes plc Annual Report 2000
Notes (continued)
15 Tangible assets
Freehold Plant,
and equipment Total
leasehold and Motor 31 December
properties shipping vehicles 2000
Group €'000 €'000 €'000 €'000
Cost or valuation
At beginning of period 108,450 120,786 6,511 235,747
Additions 26,615 19,236 1,471 47,322
Acquisitions 120 9 3 132
Disposal of business (1,841) (1,473) (26) (3,340)
Disposals (25,460) (11,682) (2,607) (39,749)
Translation adjustment 1,388 1,437 103 2,928
At end of period 109,272 128,313 5,455 243,040
Depreciation
At beginning of period 14,503 61,842 3,449 79,794
Charge 2,571 13,245 1,547 17,363
Disposal of business (396) (578) (8) (982)
Disposals (3,490) (9,409) (2,105) (15,004)
Translation adjustment 158 738 70 966
At end of period 13,346 65,838 2,953 82,137
Net book value:
At end of period 95,926 62,475 2,502 160,903
At beginning of period 93,947 58,944 3,062 155,953
The depreciable element of freehold and leasehold properties amounts to €97,281,000 (1999 - €86,775,000).
The net book value of tangible assets includes an amount of €607,000 (1999 - €106,000) in respect of assets held under finance leases.
Depreciation charged during the period on such assets amounted to €157,000 (1999 - €233,000).
The freehold and leasehold properties in the United Kingdom and Ireland were valued on an open market basis for their existing use at 31
October 1988 and 1989 by professional valuers. The fleet of ships was valued on an open market basis for its existing use by professional
valuers in June 1991. All tangible fixed assets acquired since that date are recorded at cost less accumulated depreciation.
The Group has adopted the provisions of Financial Reporting Standard No. 15, Tangible Fixed Assets, and has chosen not to follow a policy of
revaluation of Tangible Fixed Assets. In accordance with the provisions of the Standard in relation to previously revalued assets the Group
has opted to retain the net book value of those assets rather than restate them to historical cost. There is no material difference between the
historical cost of revalued assets and their revalued amount.
55Fyffes plc Annual Report 2000
Notes (continued)
15 Tangible assets (continued)
Plant,
equipment
and shipping
Company €'000
Cost
At beginning of period 776
Additions 536
Disposals (437)
At end of period 875
Depreciation
At beginning of period 528
Charge for period 196
Disposals (395)
At end of period 329
Net book value:
At end of period 546
At beginning of period 248
56 Fyffes plc Annual Report 2000
Notes (continued)
16 Financial assets
Interest in Interest in
joint ventures associates
Group €’000 €’000
At beginning of period 12,577 5,320
Translation adjustment (86) 615
Subsidiary becoming an associate - 696
Cash paid on acquisitions (including goodwill of €19,228,000) 20,784 -
Cash received from joint venture in period (4,930) -
Preference share capital converted to loan from associate in period - (1,762)
Long term loans made in period 1,817 -
Disposals/write offs (9,964) (712)
Retained profits less dividends and distributions paid (10,613) 418
Goodwill amortised (1,162) -
Dividend accrued in previous year not received - 1,186
At end of period 8,423 5,761
The interest in joint ventures and associates at 31 December 2000 represents the Group’s share of the net assets of those undertakings
including goodwill arising on acquisitions made since 1 November 1998.
The following additional disclosures are given in relation to the Group’s share of the net assets of its joint ventures:
31 December 31 October
2000 1999
€’000 €’000
Fixed assets 47,910 59,115
Current assets 90,447 73,231
Liabilities due within one year (55,464) (58,995)
Liabilities due after one year (92,618) (61,434)
Minority interest (605) -
(10,330) 11,917
Goodwill arising on acquisition net of amortisation 18,753 660
8,423 12,577
The Group’s share of finance lease obligations and bank borrowings included in the financial statements of two of its joint venture companies,
Windward Isles Banana Company Holdings (Jersey) Limited and Windward Isles Banana Company (UK) Limited are as follows:
31 December 31 October
2000 1999
€’000 €’000
Finance lease obligations:
- due within one year 1,796 1,486
- due after one year 38,409 36,015
Bank borrowings:
- due within one year 4,773 7,808
- due after one year 3,488 13,270
Further details on these obligations are set out in note 33(c)(i). Under certain banking agreements Windward Isles Banana Company (UK)
Limited has agreed to maintain dividend payments at not more than Stg£4,000,000 in any one year.
57Fyffes plc Annual Report 2000
Notes (continued)
16 Financial assets (continued)
Listed Government Unlisted
investments securities investments Total
Other investments including listed investments €’000 €’000 €’000 €’000
Group
At beginning of period 15,022 5,530 6,454 27,006
Translation adjustment - 16 117 133
Additions - 3,350 17,886 21,236
Disposals - (6,569) (182) (6,751)
Revaluation - (80) (127) (207)
At end of period 15,022 2,247 24,148 41,417
In the opinion of the directors the value of the unlisted investments is not less than the carrying value. Government securities are marked to
market, thus their carrying value at the period end represents their market value.
Listed investments are all listed on a recognised Stock Exchange. The market value of these investments at 31 December 2000 was
€12,857,000. In the opinion of the directors, the decrease in market value of the listed investments below cost is not expected to be
permanent. No tax liability would arise if the listed investments were sold at market value.
Other
Shares in investments Shares in
subsidiary in subsidiary associates and Other
undertakings undertakings joint ventures investments Total
€’000 €’000 €’000 €’000 €’000
Company
At beginning of period 264,615 - - 13 264,628
Additions in period 1,460 - 22,603 17,371 41,434
Advanced in period - 6,666 - - 6,666
Impairment in period (298) (6,666) - - (6,964)
Disposals in period (13) - - - (13)
At end of period 265,764 - 22,603 17,384 305,751
Other investments in subsidiary undertakings represents a capital contribution to worldoffruit.com during the period. In the opinion of the
directors the value of the investments is not less than the carrying value. Principal subsidiaries, joint ventures and associates are set out on
pages 74 to 76.
58 Fyffes plc Annual Report 2000
Notes (continued)
17 Stocks
31 December 31 October
2000 1999
Group €'000 €'000
Goods for resale 35,523 32,932
Consumable stores 2,935 2,858
38,458 35,790
The replacement cost of stocks does not differ materially from the amount stated above.
18 Debtors
31 December 31 October
2000 1999
Group €'000 €'000
Due within one year:
Trade debtors 157,586 150,877
Advance corporation tax recoverable 923 1,071
Other debtors 32,127 29,590
Prepayments and accrued income 8,994 12,004
Amounts due from joint ventures 5,396 7,380
205,026 200,922
Due after one year:
Other debtors 1,514 6,241
Amounts due from joint ventures - 11
206,540 207,174
Company
Amounts due from subsidiary undertakings 126,209 123,102
Advance corporation tax recoverable - 199
Amounts due from joint ventures 2,249 2,230
Other debtors 2,500 823
130,958 126,354
59Fyffes plc Annual Report 2000
Notes (continued)
19 Creditors: amounts falling due within one year
31 December 31 October
2000 1999
Group €'000 €'000
Trade creditors 131,670 109,575
Bank loans and overdrafts (see note 21) 142,137 172,729
Accruals and deferred income 36,767 34,221
Other creditors 25,572 29,474
Corporation tax (net of advance corporation tax
recoverable of €6,477,000 (1999: €6,355,000)) 9,538 10,605
Advance corporation tax payable - 199
Proposed dividends 10,499 12,339
Deferred acquisition consideration (see note 20) 11,558 17,585
Obligations under finance leases (see note 22) 155 57
Irish income tax and social welfare 1,109 490
Irish value added tax 1,737 1,309
Other tax 8,185 8,851
Grants 357 357
Amounts due to joint ventures 1,608 14,507
380,892 412,298
Company
Bank loans and overdrafts (see note 21) 54,779 12,307
Amounts due to subsidiary undertakings 118,490 68,168
Proposed dividends 10,499 12,339
Accruals and deferred income 2,495 3,005
Corporation tax 10 212
Other creditors 86 405
186,359 96,436
60 Fyffes plc Annual Report 2000
Notes (continued)
20 Creditors: amounts falling due after more than one year
31 December 31 October
2000 1999
Group €'000 €'000
Bank loans (see note 21) 131,564 68,819
Deferred acquisition consideration (see below) 1,091 3,358
Obligations under finance leases (see note 22) 548 87
Other creditors 1,198 1,855
Grants 3,590 3,026
Convertible redeemable loan notes 2004 576 916
138,567 78,061
Company
Bank loans (see note 21) 18,155 21,876
Convertible redeemable loan notes 2004 576 916
Other creditors - 181
18,731 22,973
Total deferred acquisition consideration, due within and after more than one year, amounts to €12,649,000 (1999: €20,943,000) and represents
full provision for the amounts expected to be payable. Deferred acquisition consideration is due entirely within five years.
The loan notes are redeemable on six months notice in writing by the holder. Otherwise, these loan notes are convertible at various dates up
to 2004.
21 Bank loans and overdrafts
31 December 31 October
2000 1999
Group €'000 €'000
Repayable:
Within one year 142,137 172,729
After one year but within two years 67,582 41,462
After two years but within five years 60,964 24,332
After five years 3,018 3,025
273,701 241,548
At 31 December 2000 bank loans and overdrafts of €9,390,000 (1999 - €9,286,000) were secured on the assets of subsidiary undertakings.
Company
Repayable:
Within one year 54,779 12,307
After one year but within two years 1,520 18,403
After two years but within five years 16,635 3,473
72,934 34,183
61Fyffes plc Annual Report 2000
Notes (continued)
22 Lease obligations
31 December 31 October
2000 1999
Finance leases €'000 €'000
Group
Due:
Within one year 155 57
After one year but within five years 548 87
703 144
Operating leases
The annual non-cancellable commitments under operating leases are as follows:
Land & buildings Other
31 December 31 October 31 December 31 October
2000 1999 2000 1999
Group €'000 €'000 €'000 €'000
Operating leases which expire:
Within one year 1,310 1,535 2,153 1,991
After one year but within five years 207 617 782 689
After five years 2,563 2,043 - 243
4,080 4,195 2,935 2,923
62 Fyffes plc Annual Report 2000
Notes (continued)
23 Provisions for liabilities and charges
31 December 31 October
2000 1999
Deferred taxation €'000 €'000
Group
At beginning of period/year 19,262 16,369
Charged/(credited) in period/year (2,541) 2,368
Translation adjustment 270 525
At end of period/year 16,991 19,262
Deferred taxation represents provision for timing differences as follows:
31 December 31 October
2000 1999
Group €'000 €'000
Accelerated capital allowances 7,008 7,752
Other timing differences 9,983 11,510
16,991 19,262
The full potential liability on total differences is as follows:
31 December 31 October
2000 1999
€'000 €'000
Accelerated capital allowances 8,891 9,602
Other timing differences 12,520 13,177
21,411 22,779
63Fyffes plc Annual Report 2000
Notes (continued)
24 Called-up share capital
Number 31 December 31 Octoberof shares 2000 1999
Group and company ('000) €'000 €'000
Authorised
Ordinary shares of €6 cents each 438,000 26,280 26,280
€10.4753 cents (net) convertible cumulative preferenceshares of €1.2697381 each 58,000 73,645 73,645
5% convertible cumulative redeemable preferenceshares of Stg£1 each 6,000 9,281 9,281
Unclassified shares of Stg£1 each 6,500 9,038 9,038
Allotted, called-up and fully paid
Ordinary shares of €6 cents each 302,977 18,179 17,825
€10.4753 cents (net) convertible cumulative preferenceshares of €1.2697381 each 51,309 65,149 71,841
83,328 89,666
Number
of shares
Movements during period ('000) €'000
Ordinary shares of €6 cents each
At beginning of period 297,085 17,825Share options exercised 622 37Conversion of €10.4753 cents (net) convertible cumulativepreference shares of €1.2697381 each 5,270 317
At end of period 302,977 18,179
At 31 December 2000, the total number of shares acquired by the company and subsidiary companies in Fyffes plc amounted to 9,021,610(1999: 9,021,610) ordinary shares of €6 cents each. These shares have been included in the total number of ordinary shares of 302,977,000 at31 December 2000, above. The rights to dividends on these shares have been waived and they are not included in the calculation of earningsper share. All of these shares have been delisted by the company.
The holders of the €10.4753 cents (net) convertible cumulative preference shares are entitled to convert into fully paid €6 cents ordinaryshares at a price of €1.3967 per ordinary share on the last day of any month between August 1991 and November 2001 (inclusive) whenconversion is automatic. For the purposes of conversion each convertible cumulative preference share shall have a value of €1.3967. Ifconversion had taken place at 31 December 2000 an additional 51,309,118 ordinary shares would have been issued.
The holders of the €10.4753 cents (net) convertible cumulative preference shares of €1.2697381 each have the right to receive notice of andattend general meetings of the company. The shares are non-voting except in certain specified circumstances. During the period 5,270,000(1999 - 217,000) shares were converted into fully paid ordinary shares in accordance with the above terms.
Under the company’s share option scheme options have been granted to employees to purchase ordinary shares in the company at pricesranging from €1.02 to €2.70. The aggregate nominal value of the options granted but not exercised shall not exceed 5% of the nominal valueof the total allotted ordinary share capital of the company. During the period 621,339 options were exercised for a total consideration of€762,000, 968,500 options were granted and 22,500 options lapsed. At 31 December 2000, options over 12,432,507 (1999 - 12,107,846)ordinary shares had not yet been exercised.
64 Fyffes plc Annual Report 2000
Notes (continued)
25 Share premium account
31 December 31 October2000 1999
Group and company €'000 €'000
At beginning of period/year 85,960 85,008Premium on issue of ordinary shares and conversion of preference shares 7,100 952
At end of period/year 93,060 85,960
26 Analysis of changes in share capital and share premium during the period
Share Share
Capital Premium
Group and company €'000 €'000
At beginning of period 89,666 85,960Ordinary shares issued for cash - share options exercised 37 725Preference shares converted in period (6,375) 6,375
At end of period 83,328 93,060
27 Revaluation reserve
31 December 31 October2000 1999
Group and company €'000 €'000
At beginning and end of period/year 503 503
28 Other reserves
Capital Capital
redemption conversion
reserve reserve
fund fund Total
Group and company €’000 €’000 €’000
At beginning and end of period 9,280 1,034 10,314
29 Profit and loss account
The loss attributable to Group shareholders dealt with in the financial statements of the holding company for the period ended 31 December2000 was €21,299,000 (1999 - €6,099,000). As permitted by Section 3(2) of the Companies (Amendment) Act, 1986, the profit and loss accountof the company has not been separately presented in these financial statements.
The Group's share of the post acquisition retained profits of associates and joint ventures at 31 December 2000 amounted to €32,620,000(1999 - €36,332,000).
Currency translation adjustments of €502,000 debit (1999 - €315,000 credit) arising on the retranslation of foreign currency borrowings havebeen netted against the currency movements arising on the retranslation of the net assets of overseas subsidiaries, joint ventures andassociates.
The total movement on goodwill set off against revenue reserves during the period amounts to €1,496,000 (see note 32).
The Group profit and loss account reserves of €68,808,000 are stated after the deduction of €16,582,000 relating to ordinary €6 cents shares inFyffes plc held by the company and by a subsidiary company.
65Fyffes plc Annual Report 2000
Notes (continued)
30 Shareholders' funds
31 December 31 October
2000 1999
Group €'000 €'000
Equity 186,433 207,968
Non-equity (see note below) 69,580 76,942
256,013 284,910
Company
Equity 162,930 195,024
Non-equity (see note below) 69,580 76,942
232,510 271,966
The non-equity interest of €69,580,000 (1999 : €76,942,000) relates to the €10.4753 cents (net) convertible cumulative preference shares of
€1.2697381 each and the related share premium which must be shown separately under Financial Reporting Standard No. 4, Capital
Instruments. These shares will be converted into ordinary shares by November 2001.
31 Minority interests
31 December 31 October
2000 1999
Group €’000 €'000
Equity 38,214 35,832
Non-equity 5 5
38,219 35,837
66 Fyffes plc Annual Report 2000
Notes (continued)
32 Acquisitions and disposals/terminations
(a) Subsidiary undertakings
A summary of the effect of acquisitions of subsidiaries during the period is as follows:
Book value at Fair value Fair value
acquisition adjustments to the Group
€'000 €'000 €'000
Tangible assets 132 - 132
Stock 81 - 81
Debtors 738 - 738
Creditors (481) - (481)
Deferred taxation assets 3,521 (3,521) -
Minority interests (74) - (74)
Net assets acquired 3,917 (3,521) 396
Goodwill capitalised (note 14) 1,335
1,731
Satisfied by:
Cash 1,731
The principal acquisitions during the period were:
Company Share of net assets acquired Date of acquisition
Fruites D’or (Spain) 50% 25 January 2000
Eurobanan Norte (Spain) 100% 21 July 2000
The fair value adjustment above arises from the alignment of the accounting policies of the acquired subsidiary with those of the Group.
All goodwill in relation to acquisitions during the period has been capitalised in accordance with FRS10 (see note 14).
67Fyffes plc Annual Report 2000
32 Acquisitions and disposals/terminations (continued)
A summary of the effect of disposals and termination of activities of subsidiaries during the period is as follows:
€'000
Tangible assets 2,358
Stock 64
Debtors 196
Creditors (391)
Minority interests (1,059)
1,168
Goodwill on disposal 20
Loss on disposal/termination of activities (note 8) (1,484)
(296)
Satisfied by:
Cash and overdrafts in disposed subsidiaries 108
Subsidiary becoming an associate 696
Cash outflow from termination of subsidiary activities (1,100)
(296)
During the period the Group reduced its holding in D&F Farms Limited in Belize from 50% to 40%. The remaining 40% was subsequently
disposed of prior to the period end. The Group also terminated the activities of a number of specialised distribution businesses in the UK in
the period.
The cumulative amount of goodwill, resulting from acquisitions and disposals which has been set against revenue reserves at 31 December
2000 amounts to €222,066,000 (1999 - €220,570,000).
The movement on goodwill set off against revenue reserves relates principally to revisions to goodwill on past acquisitions due, inter alia, to
deferred consideration adjustments of €1,637,000 less goodwill (previously written off on the acquisition of subsidiary, joint venture and
associated undertakings) now written back to the profit and loss on the disposal of these entities in the current period of €141,000, including
€20,000 relating to subsidiaries (as above).
(b) Joint venture and associated undertakings
€’000
Proceeds on disposal of associated undertakings 1,219
Expenditure in respect of termination of joint venture undertakings (3,152)
Net cash outflow on disposal/termination of joint venture and associated undertakings (1,933)
Notes (continued)
68 Fyffes plc Annual Report 2000
Notes (continued)
33 Commitments and contingencies
(a) Capital commitments
The directors have authorised capital expenditure of €26,600,000 at the balance sheet date (1999 - €39,000,000). Capital expenditure
contracted for at 31 December 2000 amounted to €4,473,000 (1999: €3,918,000).
(b) Subsidiary undertakings
In order to avail of the exemption under Section 17 of the Companies (Amendment) Act, 1986 the holding company has guaranteed the
liabilities of certain of its subsidiary undertakings registered in Ireland. As a result the following subsidiary undertakings have been
exempted from the provisions of Section 7 of the Companies (Amendment) Act, 1986:
Bolanpass Limited Jack Dolan Limited
Backhouse Supermarkets Limited Jahno Limited
Banana Importers of Ireland Limited J. Lightfoot & Son Limited
Bernard Dempsey & Co. Limited J. Lightfoot (Market) Limited
Brinton Investments Limited Kinsealy Farms Limited
Charles McCann Group Limited Lanpak Fruit Limited
Ebbtide Limited McCann Nurseries Limited
Elders & Fyffes Investments Motcombe Limited
Elk Products (1975) Limited Melvich Limited
Everfresh Limited Millerton Limited
Florexport (Ireland) Limited Munster Fruit & Produce Limited
FII (Market) Limited Negev Limited
FII (Export) Limited Old Kinsealy Limited
FII Fruit Importers of Ireland Limited Optiplex Limited
FII Banana Processing Limited Philip Lenehan Limited
Fyffes Bananas North America Limited Premier Fruit Company Limited
Fyffes Group Procurement Limited Shiel & Byrne Limited
Fyffes Group Ireland Limited Southern Fruit Suppliers (Waterford) Limited
Fyffes Banana Processing Limited Spilsby Limited
Fyffes Secretarial Services Limited Swords Business Park Limited
Fyffes Investment Holdings Tropical Fruit Company (Cork) Ltd
Green Ace Producer Group Limited Tropical Fruit Company (Ireland) Ltd
Helston Securities Limited Uniplumo (Ireland) Limited
Humbolt Limited United Fruit Importers (1975) Limited
Huntroyde Limited Waddel Limited
Irish Elk Products (1975) Limited Waterford Fruit (Wholesale) Limited
The holding company has guaranteed the borrowings of subsidiary undertakings in the amount of €179,458,000 (1999 - €179,377,000).
69Fyffes plc Annual Report 2000
Notes (continued)
33 Commitments and contingencies (continued)
(c) Guarantees
(i) Fyffes plc together with the governments of the Windward Islands has guaranteed the bank borrowings of Windward Island Banana
Development and Export Company (Wibdeco) which were used to fund Wibdeco’s equity investment in the joint venture companies set
up by Fyffes plc and Wibdeco to acquire the banana business of Geest plc in January 1996. At 31 December 2000 the amount of these
borrowings was €9,414,000 (1999: €12,316,000).
Fyffes plc and Wibdeco have jointly and severally indemnified Geest plc and the providers of the loan finance to the joint venture
companies against any one of the joint venture companies failing to meet its obligations under the bareboat charter agreements relating
to the two island class ships which were taken over under the acquisition. The total amount due under the bareboat charter agreements at
31 December 2000 was US$75,493,000 (€80,410,000) (1999: US$78,549,000, €74,737,000). The two island class ships are currently time
chartered to a third party.
At 31 October 1999 Fyffes plc had indemnified Geest plc for all claims which may arise under the performance guarantees which Geest plc
has provided to the financiers of the island class ships. Under the indemnification agreement, Fyffes plc held €38,545,000 at 31 October
1999 in an escrow account as a security deposit. Following agreement with Geest plc, during the financial period, the funds in this escrow
account were released.
(ii) Fyffes plc has issued counter indemnities in the amount of €2,072,000 (1999: €8,956,000) as security for bank guarantees issued in respect
of deferred consideration which may become payable in connection with the acquisition of certain subsidiary undertakings and certain
loan notes issued in respect of previous acquisitions.
(iii) Fyffes plc has issued a counter indemnity for a maximum of €2,130,000 in respect of a bank guarantee securing the bank borrowings of
NAFSA S.A., in Chile, a joint venture company in which the Group has a 50% interest. A counter guarantee has been received from Borg
Produce (a company which has an interest in the NAFSA joint venture) for 50% of the amounts outstanding. At 31 December 2000 the
bank borrowings in NAFSA covered by this guarantee and counter indemnity were €1,917,000.
(d) Contingencies
From time to time the Group is involved in claims and legal actions which arise in the normal course of business. Based on information
currently available to the company and legal advice, the directors do not believe such litigation will, individually or in the aggregate, have
a material adverse effect on the financial statements of the Group.
34 Pensions
The Group operates a number of externally funded defined benefit and defined contribution pension schemes. The schemes are set up under
trusts and the assets of the schemes are therefore held separately from those of the Group.
The pension cost charged to the profit and loss account for the period was €4,117,000 (1999 - €3,507,000) . Contributions to the schemes are
made in accordance with the actuaries’ recommended contribution rates and are based on the most recent actuarial valuations which were
completed for the main Group schemes within the last three years. The actuarial methods used were the attained age method and the
projected unit credit method.
The assumptions which most significantly affect the incidence of pension costs are those relating to the rate of return on the investments of
the schemes and the rate of increase in salaries and pensions. For the main Group schemes the rate by which the long term investment
return is assumed to exceed the rate of increase in salaries is 1.5% per annum. In addition, appropriate allowance has been made for pension
increases in accordance with the rules of the schemes.
At the dates of the most recent actuarial valuations the market value of these schemes' assets was €192,505,000 (1999 - €141,637,000) and this
amount was more than sufficient to meet the liability for benefits under the valuation methods for service to the valuation date and based on
salaries projected to retirement or earlier exit. The actuarial reports are not available for public inspection. However, the results of valuations
are advised to members of the schemes.
70 Fyffes plc Annual Report 2000
Notes (continued)
35 Related party transactions
Transactions with joint ventures and associates
The Group trades in the normal course of its business with its joint ventures and associates. A summary of transactions with these related
parties during the period ended 31 December 2000 is as follows:-
Sales Sales Purchases Purchases
2000 1999 2000 1999
€’000 €’000 €’000 €’000
Joint ventures:
Windward Isles Banana Company Holdings (Jersey) Ltd 21,130 26,185 49 1,997
Capespan International Holdings Ltd 1,430 - 50,050 -
Other 2,712 15,377 22,961 27,526
Associates 3,111 1,417 2,123 1,046
28,383 42,979 75,183 30,569
The amounts due from and to joint ventures and associates at the period end are disclosed in notes 18 and 19 respectively.
Connected individual
During the period a payment of €171,000 was made to the company secretary, Mr Philip Halpenny, in connection with the disposal of certain
property in Ireland by a subsidiary company, in which he was a former minority shareholder.
Development property joint venture
During the financial period the Group set up a joint venture undertaking with a third party property development company, Lagan
Developments Limited, in order to develop certain land attached to one of its depots in Ireland. The development property company acquired
a small portion of the Fyffes land directly from the Group for a consideration of €1,900,000 and both parties subsequently contributed equal
parcels of land into the joint venture.
This joint venture undertaking subsequently obtained direct bank financing, secured on the land, a portion of which was paid to the Group in
respect of the land it contributed to the joint venture.
Coplaca
Coplaca is a co-operative of banana growers in the Canary Islands and owns 50% of the share capital of EurobananCanarias SA, the other 50%
being owned by the Group. During the period EurobananCanarias SA purchased goods and services from Coplaca in the normal course of its
business which are not material in relation to the sales and purchases of the Group. At 31 December 2000 the net amount due to Coplaca by
EurobananCanarias SA was €5,460,000 (1999: €5,116,000).
71Fyffes plc Annual Report 2000
Notes (continued)
36 Derivative and other financial instruments
The Group’s treasury activities are undertaken to finance its operations and reduce the various financial risks arising from those operations.
The policies under which these activities are managed are set out on page 20. The numerical disclosures related to the Group’s financial
assets, liabilities and derivative instruments which may be entered into in connection with the management of these assets and liabilities are
set out below under the relevant risk category or activity.
(a) Interest rate risk profile
2000 2000 2000 2000 1999
Preference Financial Financial
Shares Liabilities Assets Net Net
Group €’000 €’000 €’000 €’000 €’000
Denominated in Euro currencies
Interest rate fixed (65,149) (16,441) - (81,590) (78,485)
Interest rate floating - (137,613) 137,932 319 20,379
Interest free - (5,628) 33,411 27,783 10,922
Total (65,149) (159,682) 171,343 (53,488) (47,184)
Denominated in Sterling
Interest rate fixed - (18,429) 41,940 23,511 41,971
Interest rate floating - (86,173) 170,109 83,936 54,187
Interest free - (101) 5,938 5,837 5,925
Total - (104,703) 217,987 113,284 102,083
Denominated in US Dollars
Interest rate fixed - (1,102) - (1,102) (801)
Interest rate floating - (2,991) 3,736 745 36,893
Interest free - (251) 1,026 775 -
Total - (4,344) 4,762 418 36,092
Denominated in other currencies
Interest rate fixed - - 2,248 2,248 5,745
Interest rate floating - (12,130) 7,601 (4,529) (5,795)
Interest free - - 928 928 14
Total - (12,130) 10,777 (1,353) (36)
Grand Total (65,149) (280,859) 404,869 58,861 90,955
In accordance with the definitions set out in FRS 13 ‘Derivatives and Other Financial Instruments: Disclosures’ financial liabilities comprise
bank loans and overdrafts, finance lease liabilities, Fyffes plc preference shares, and sundry creditors falling due after more than one year,
including deferred acquisition consideration and government grants. Financial assets comprise cash at bank and bank deposits together with
trade investments and sundry debtors due after more than one year. Sundry debtors and creditors falling due within one year are not
included.
72 Fyffes plc Annual Report 2000
Notes (continued)
36 Derivative and other financial instruments (continued)
The Group’s floating rate financial assets and liabilities primarily bear interest rates based on EURIBOR rates fixed for periods ranging from
one to twelve months and LIBOR rates ranging from one to twelve months.
The weighted average interest rates of fixed rate instruments are as follows:
Liabilities Assets
Euro Denominated * 7.61% NM
GBP Denominated 6.68% 5.71%
USD Denominated 6.60% NM
Denominated in other currencies NM 6.94%
NM - Not sufficiently material
* Includes €10.4753 cents convertible cumulative preference shares of €1.2697381 each which pay a fixed rate dividend of 8.25%.
The weighted average period for which these rates are fixed is as follows:
Liabilities Assets
Euro Denominated 1.1 years NM
GBP Denominated 1.8 years 1.5 years
USD Denominated 11 years NM
Denominated in other currencies NM 9.5 years
NM - Not sufficiently material
The non interest bearing financial assets and liabilities primarily comprise trade investments and certain sundry debtors and creditors, due
after more than one year.
The maturity profile of the Group’s financial liabilities, split between preference shares and other (consisting primarily of bank loans and
overdrafts) is as follows:
2000 1999
Preference shares Other Total Total
€’000 €’000 €’000 €’000
Within one year (or on demand) 65,149 142,292 207,441 172,786
Between one and two years - 70,406 70,406 120,061
Between two and five years - 64,121 64,121 26,816
After five years - 4,040 4,040 3,025
Total 65,149 280,859 346,008 322,688
At 31 December 2000 the Group had available undrawn committed banking facilities amounting to €72.0 million (1999: €61.6 million), the
majority of which expire within one year.
73Fyffes plc Annual Report 2000
Notes (continued)
36 Derivative and other financial instruments (continued)
(b) Currency analysis
The balance sheets of various subsidiary companies include monetary assets and liabilities denominated in currencies other than the
operating currencies of those subsidiaries. After taking into account any currency hedges in place these balance sheet currency exposures at
31 December 2000 can be summarised as follows:
Currency of denomination of asset/liability
EUR GBP USD Other Total
€’000 €’000 €‘000 €’000 €’000
Monetary assets 32,585 51,775 54,538 2,368 141,266
Monetary liabilities (20,110) (23,747) (45,670) (3,753) (93,280)
Net 12,475 28,028 8,868 (1,385) 47,986
(c) Hedging activities
The Group enters a variety of derivative instruments on a non-speculative basis in order to manage its currency and interest rate risks. These
instruments are predominantly forward purchases and sales of foreign currency. Certain of these derivative instruments are accounted for
under hedge accounting whereby changes in the fair value of these instruments are not recognised in the financial statements until the hedge
position matures. Unrecognised gains and losses on the instruments can be summarised as follows:
Total net
Gains Losses gains/(losses)
€’000 €’000 €’000
Unrecognised gains/(losses) on hedges at beginning of period 40 (747) (707)
Gains/(losses) arising in previous years which were recognised in current period (40) 747 707
Gains/(losses) relating to previous years which were not recognised in the current period - - -
Gains/(losses) arising in the current period which were not recognised in the current period 232 (72) 160
Unrecognised gains/(losses) on hedges at end of period 232 (72) 160
Of which:
Gains/(losses) expected to be recognised in the next financial year 217 (69) 148
(d) Fair value adjustments
With the exception of the unrecognised gains/losses on hedges in note 36(c) above and the market value of listed investments in note 16, the
fair values of the Group’s financial assets and liabilities are not considered to be materially different to their book value. In addition, Fyffes plc
€10.4753 cents convertible cumulative preference shares had a market price on the Irish Stock Exchange at 31 December 2000 of €1.00 giving
a total market value of €51,309,000 on that date.
37 Comparative amounts
Comparative amounts have been regrouped, where necessary, on the same basis as those for the current period.
38 Approval of financial statements
The directors approved the financial statements on 21 March 2001.
74 Fyffes plc Annual Report 2000
Principal subsidiaries, joint ventures and associates at 31 December 2000
The principal areas of operation are the countries of incorporation.
Subsidiaries Principal activity Group share %
Incorporated in Ireland
Fyffes Group Ireland Limited (1)* Fresh produce distributor 100
Banana Importers of Ireland Limited (1)* Fresh produce distributor 95
Bernard Dempsey & Co Limited (1)* Fresh produce distributor 100
Jack Dolan Limited (1)* Investment holding company 100
Green Ace Producer Group Limited (1) Fresh produce distributor 92
Kinsealy Farms Limited (1)* Fresh produce distributor 100
Allegro Limited (1)* Consumer goods distributor 90
Fyffes International Holdings Limited (1)* Investment holding company 100
Uniplumo (Ireland) Limited (2)* Cultivation and distribution of houseplants 90
Sunpak & Mayfield Fresh Produce Limited (3)* Fresh produce distributor 100
Hugh McNulty (Wholesale) Limited (4)* Fresh produce distributor 50
Universal Fruit (5) Fresh produce procurement 100
The registered offices of the above are:
(1) 1 Beresford Street, Dublin 7.
(2) Kenmare, Co. Kerry.
(3) 90 South Mall, Cork.
(4) 39/40 Upper Mount Street, Dublin 2.
(5) 4 Shannon Business Park, Shannon, Co. Clare.
Incorporated in the United Kingdom
Frank E Benner Limited (6) Fresh produce distributor 100
Daniel P Hale and Co Limited (6) Fresh produce distributor 100
Fyffes Group Limited (7) Fresh produce distributor 100
W J Pearson & Sons Limited (7) Fresh produce distributor 100
Padwa Group Limited (7) Fresh produce distributor 100
E & F Lines Limited (7) Shipping 100
FII Holdings Limited (7)* Investment holding company 100
James Lindsay & Son plc (8) Fresh produce distributor 100
The registered offices of the above are:
(6) Balmoral Market, Balmoral Road, Belfast BT12.
(7) Houndmills Industrial Estate, Houndmills Road, Basingstoke, Hampshire RG21 6XL.
(8) Fruit Market, Chesser Avenue, Edinburgh EH14 1TT.
75Fyffes plc Annual Report 2000
Principal subsidiaries, joint ventures and associates at 31 December 2000
Subsidiaries Principal activity Group share %
Incorporated in the Netherlands
Velleman & Tas International B.V. (9) Fresh produce distributor 100
Anaco International B.V. (10) Fresh produce distributor 50
Greeve Citrus B.V. (11) Fresh produce distributor 50
The registered offices of the above are:
(9) Marconistraat 19, 3029 AE Rotterdam.
(10) Postbus 31, 2685 ZG Poeldijk.
(11) Groenteveiling Westland, Poeldijk, Postbus 214, 2680, AE Monster.
Incorporated in France
Sofiprim S.A. Fresh produce distributor 50
The registered office is 45, Rue d’Avignon, Fruileg 677, 94574 Rungis Cedex, France.
Incorporated in Spain
EurobananCanarias S.A. (12) Fresh produce distributor 50
Angel Rey S.A. (13)** Fresh produce distributor 70
Frutas IRU S.A. (14) *** Fresh produce distributor 50
The registered offices of the above are:
(12) Avenida Francisco La Roche, 38801 Santa Cruz de Tenerife.
(13) Mercamadrid, Nave D, Puestos 47 y 49, 28018 Madrid.
(14) Puestos 326-328, Mercabilbao, 48970 Basauri, Vizcaya, Spain.
** Owned by EurobananCanarias S.A.
*** Owned by Angel Rey S.A.
Incorporated in Denmark
Brdr Lembcke A.S. Fresh produce distributor 50
The registered office is Gronttorvet, 220, Copenhagen.
Incorporated in Germany
J. A. Kahl (GmbH & Co) Munich Fresh produce distributor 100
Fyffes GmbH* Investment holding company 100
The registered office of both entities is Bauernbrauweg 1, 8000 Munich.
76 Fyffes plc Annual Report 2000
Principal subsidiaries, joint ventures and associates at 31 December 2000
Subsidiaries Principal activity Group share %
Incorporated in Italy
Peviani Spa Fresh produce distributor 50
The registered office is Via Maspero, 20, 1 - 20137, Milan.
Incorporated in Jersey
Fyffes Windward Holdings Limited * Investment holding company 100
The registered office is Huguenot House, 28 La Motte Street, St. Helier.
Incorporated in the United States of America
Fyffes Inc. Fresh produce distributor 100
The registered office is 10100 West Sample Road, Suite 405, Coral Springs, Florida, 33065 USA.
Big River LLC Manufacture and distribution of packaging and consumables 50
The registered office is 4915 I55 North, Suite 208 - B, Jackson, Mississippi 39326-2812 USA.
Joint ventures Principal activity Group share %
Incorporated in the United Kingdom
Windward Isles Banana Company (UK) Limited Investment holding company 50
The registered office is The Windward Terminal, Herbert Walker Avenue, Southampton.
Capespan International Holdings Limited Fresh produce distribution 50
The registered office is Farnham Royal, Buckinghamshire, SL2 3RQ.
Incorporated in Jersey
Windward Isles Banana Company Holdings (Jersey)
Limited Investment holding company 50
The registered office is 31 The Parade, St. Helier.
Associates Principal activity Group share %
Incorporated in Belize
Toledo Enterprises Limited Port operations 50
The registered office is at Big Creek, Independence, Stann Creek District, Belize.
All shareholdings in subsidiaries, joint ventures and associates consist of ordinary shares.
* Subsidiary undertakings owned directly by Fyffes plc.
77Fyffes plc Annual Report 2000
Notice of Annual General Meeting Fyffes plc period ended 31 December 2000
Notice is hereby given that the Annual General Meeting of Fyffes plc will be held at the Burlington Hotel, Dublin 4 on Monday, 18 June2001 at 10.30 a.m. for the following purposes:-
1. To receive and consider Statements of Account for the fourteen months ended 31 December 2000 and the Reports of the directors andauditors thereon.
2. To confirm the interim dividend and declare a final dividend of €3.2549 cents per share on the ordinary shares for the fourteen monthperiod ended 31 December 2000.
3. By separate resolutions to re-elect as directors the following who retire in accordance with the Articles of Association and being eligibleoffer themselves for re-election:-
(A) N. V. McCann(B) J. F. Gernon(C) G. B. Scanlan
4. To authorise the directors to fix the remuneration of the auditors for the year ending 31 December 2001.
As special business to consider and, if thought fit, pass the following resolutions:-
5. As ordinary resolutions:
"That the directors are hereby unconditionally authorised to exercise all the powers of the company to allot relevant securities (within themeaning of Section 20 of the Companies (Amendment) Act, 1983) up to an aggregate nominal amount of €5,878,514 provided that thisauthority shall expire at the earlier of the close of business on the date of the next Annual General Meeting after the passing of thisresolution or the day which is 18 calendar months after the date of passing of this resolution, provided however that the company maybefore such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and thedirectors may allot relevant securities in pursuance of such offer or agreement as if the authority hereby conferred had not expired."
6. As special resolutions:
(A) "That pursuant to Article 6(d) of the Articles of Association and Section 24 of the Companies (Amendment) Act, 1983 thedirectors are hereby empowered to allot equity securities (as defined by Section 23 of that Act) for cash pursuant to theauthority to allot relevant securities conferred on the directors by resolution 5 above in the notice of this meeting as if sub-section (1) of the said Section 23 did not apply to any such allotment provided that this power shall be limited to the mattersprovided for in Article 6(d)(i) to (ii) of the Articles of Association and subject to the other restrictions contained in Article 6(d)."
(B) "That the company and/or any subsidiary (as defined by Section 155 of the Companies Act, 1963) of the company is herebygenerally authorised to make market purchases (as defined by Section 212 of the Companies Act, 1990) of shares of any classin the company ("shares") on such terms and conditions and in such manner as the directors may determine from time totime but subject to the provisions of the Companies Act, 1990 and to the following restrictions and provisions:-
(a) The maximum number of ordinary shares (as defined in the Articles of Association of the company) authorisedto be acquired pursuant to this resolution shall not exceed 29,395,508;
(b) the maximum number of 8.25% preference shares (as defined in the Articles of Association of the company)authorised to be acquired pursuant to this resolution shall be 5,130,912 provided that such authorisation shallonly take effect with the sanction of a special resolution passed at a separate general meeting of the holders of the8.25% preference shares;
(c) the minimum price which may be paid for any share shall be an amount equal to the nominal value thereof;
(d) the maximum price which may be paid for any share (a "relevant share") shall be an amount equal to 105% ofthe average of the five amounts resulting from determining whichever of the following (i), (ii) or (iii) specifiedbelow in relation to the shares of the same class as the relevant share shall be appropriate for each of the fivebusiness days immediately preceding the day on which the relevant share is purchased, as determined from theinformation published in the Irish Stock Exchange Daily Official List reporting the business done on each ofthose five business days:
78 Fyffes plc Annual Report 2000
(i) if there shall be more than one dealing reported for the day, the average of the prices at which suchdealings took place; or
(ii) if there shall be only one dealing reported for the day, the price at which such dealing took place; or(iii) if there shall not be any dealing reported for the day, the average of the high and low market guide
prices for that day;
and if there shall be only a high (but not a low) or a low (but not a high) market guide price reported, or if thereshall not be any market guide price reported, for any particular day then that day shall not count as one of thesaid five business days for the purposes of determining the maximum price. If the means of providing theforegoing information as to dealings and prices by reference to which the maximum price is to be determined isaltered or is replaced by some other means, then a maximum price shall be determined on the basis of theequivalent information published by the relevant authority in relation to dealings on the Irish Stock Exchange orits equivalent;
(e) the authority hereby granted shall expire at the close of business on the date of the next Annual General Meetingof the company or the day which is 18 calendar months after the date of passing of this resolution, whichever isthe earlier, unless previously varied, revoked or renewed by special resolution in accordance with the provisionsof Section 215 of the Companies Act, 1990. The company or any such subsidiary may enter before such expiryinto a contract for the purchase of shares which would or might be executed wholly or partly after such expiryand may complete any such contract as if the authority conferred hereby had not expired."
(C) "That, subject to the passing of resolution 6(B), for the purposes of Section 209 of the Companies Act, 1990 the reissue pricerange at which any treasury shares (as defined by the said Section 209) for the time being held by the company may bereissued off-market shall be as follows:-
(a) The maximum price at which a treasury share may be reissued off-market shall be an amount equal to 120 percent of the "appropriate price"; and
(b) the minimum price at which a treasury share may be reissued off-market shall be an amount equal to 95 per centof the appropriate price.
For the purposes of this resolution the expression "appropriate price" shall mean the average of the five amounts resultingfrom determining whichever of the following (i), (ii) or (iii) specified below in relation to shares of the class of which suchtreasury share is to be reissued shall be appropriate in respect of each of the five business days immediately preceding the dayon which the treasury share is reissued, as determined from information published in the Irish Stock Exchange Daily OfficialList reporting the business done in each of those five business days:-
(i) if there shall be more than one dealing reported for the day, the average of the prices at which suchdealings took place; or
(ii) if there shall be only one dealing reported for the day, the price at which such dealing took place; or(iii) if there shall not be any dealing reported for the day, the average of the high or low market guide
prices for the day;
and if there shall be only a high (but not a low) or a low (but not a high) market guide price reported, or if there shall not beany market guide price reported, for any particular day then that day shall not count as one of the said five business days forthe purposes of determining the appropriate price. If the means of providing the foregoing information as to dealings andprices by reference to which the appropriate price is to be determined is altered or is replaced by some other means, then theappropriate price shall be determined on the basis of the equivalent information published by the relevant authority inrelation to dealings on the Irish Stock Exchange or its equivalent.
The authority hereby conferred shall expire at the close of business on the day of the next Annual General Meeting of thecompany or the day which is 18 calendar months after the date of passing of this resolution, whichever is the earlier, unlesspreviously varied or renewed in accordance with the provisions of Section 209 of the Companies Act, 1990."
Philip Halpenny, Secretary
1 Beresford Street, Dublin 714 May, 2001
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Notes:
1. Any member entitled to attend and vote at the meeting is entitled to appoint a proxy (who need not be a member of the company) to attend, speak andvote in his/her place. Completion of a form of proxy will not affect the right of a member to attend, speak and vote at the meeting in person.
2. To be valid, forms of proxy duly signed together with the power of attorney or such other authority (if any) under which they are signed (or a certifiedcopy of such power or authority) must be lodged with the company's registrar, Computershare Services (Ireland) Limited, P.O. Box 954, Sandyford,Dublin 18 by not later than 10.30 a.m. on Saturday, 16th June 2001.
3. The company, pursuant to Regulation 14 of the Companies Act, 1990 (Uncertified Securities) Regulations, 1996, specifies that only those shareholdersregistered in the register of members of the company as at 6.00pm on Saturday 16th June 2001 (or in the case of an adjournment as at 48 hours before thetime of the adjourned meeting) shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their names at the time.Changes to entries in the register after that time will be disregarded in determining the right of any person to attend and/or vote at the meeting.