NOTES

Forming part of the financial statements

 

6. FINANCE INCOME AND EXPENSE
2013 2012
€m €m
   

Recognised in income statement

   

Finance income:

   

Interest income on bank deposits

(0.1) (0.7)
 

Total finance income

(0.1) (0.7)
 

Finance expense:

 

Interest expense on interest bearing bank borrowings

4.0 2.4

Expense arising on interest rate swaps designated as cash flow hedges against interest exposure

- 2.5

Ineffective portion of change in fair value of cash flow hedges

- (0.1)

Unwinding of discount on provisions

1.0 1.0
 

Total finance expense

5.0 5.8
 

Net finance expense

4.9 5.1
2013 2012
€m €m
   

Recognised directly in other comprehensive income

 

Effective portion of change in fair value of cash flow hedges

0.3 (1.1)

Fair value of foreign exchange cash flow hedges transferred to income statement

1.7 0.1

Fair value of interest rate swap cash flow hedges transferred to income statement

- 2.4

Deferred tax on cash flow hedges recognised directly in other comprehensive income

(0.3) (0.1)

Foreign currency translation differences arising on foreign currency borrowings

 

designated as net investment hedges

(3.2) 1.7

Foreign currency translation differences arising on the net investment in foreign operations

(8.1) 3.6

Foreign currency reserve recycled to income statement on disposal of foreign currency subsidiary (note 8)

- 0.7
 

Net (expense)/income recognised directly in other comprehensive income

(9.6) 7.3
7. INCOME TAX
2013 2012
€m €m

(a) Analysis of charge in year recognised in the income statement

 

Current tax:

 

Irish corporation tax

5.2 5.3

Foreign corporation tax

8.6 2.6

Adjustment in respect of previous years

(0.3) (0.2)
 

13.5 7.7

Deferred tax:

 

Irish

2.8 4.5

Foreign

(0.6) 1.2
 

2.2 5.7
 

Total income tax expense recognised in income statement

15.7 13.4
 

Relating to continuing operations

 

- continuing operations before exceptional items

16.0 13.8

- continuing operations exceptional items

(0.3) (0.4)
 

Total

15.7 13.4

The tax assessed for the year is different from that calculated at the standard rate of corporation tax in the Republic of Ireland,
as explained below.

2013 2012
€m €m
   

Profit before tax from continuing operations

104.4 110.9

Foreign currency reserve recycled to the income statement (note 8)

- (0.7)

Loss on disposal of discontinued operations (note 8)

- (1.1)
 

104.4 109.1
 

Tax at standard rate of corporation tax in the Republic of Ireland of 12.5%

13.1 13.6
 

Actual tax charge is affected by the following:

 

Expenses not deductible for tax purposes

1.0 0.7

Adjustments in respect of prior years

(0.3) (0.2)

Differences in effective tax rates on overseas earnings

1.5 0.8

Non tax deductible loss

- 0.2

Other differences

0.4 (1.7)
 

Total income tax

15.7 13.4

(b) Deferred tax recognised directly in other comprehensive income

2013 2012
€m €m
   

Deferred tax arising on movement in defined benefit pension obligations

(1.6) (2.4)

Deferred tax arising on movement in derivatives designated as cash flow hedges

0.3 0.1
 

(1.3) (2.3)

(c) Factors that may affect future charges

Future income tax charges may be impacted by changes to the corporation tax rates and/or changes to corporation tax legislation in force in the jurisdictions in which the Group operates. One such example is the proposed reduction in the UK corporation tax rate to 20% on 1 April 2015. Future income tax charges may be affected by any adoption or implementation of the current draft EU Directive and proposal in relation to the Common Consolidated Corporate Tax Base “CCCTB” which seeks to alter the existing system of allocating a group’s taxable profits between different territories.

8. DISCONTINUED OPERATIONS

During the prior financial year, on 30 June 2011, the Group completed the disposal of its Northern Ireland wholesaling business (Quinns of Cookstown) to Britvic Northern Ireland Limited for a consideration of €4.8m (£4.3m). The directors, exercising judgement, and having considered IFRS 5 Non-current Assets Held for Sale and Discontinued Operations para 32, classified the Group’s disposed Northern Ireland wholesaling business as a discontinued operation.

In line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, depreciation was not charged on property, plant & equipment held in this business from the date the assets were classified as ‘held for sale’ and the business was presented as a discontinued operation and shown separately from continuing operations.

Results of discontinued operations

2013 2012
Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 5) Total items (note 5) Total
€m €m €m €m €m €m
           

Revenue

- - - 5.2 - 5.2
     

Net revenue

- - - 5.2 - 5.2

Expenses, net

- - - (5.3) 0.1 (5.2)
     

Operating (loss)/profit

- - - (0.1) 0.1 -

Income tax expense

- - - - - -
     

(Loss)/profit from discontinued operations

- - - (0.1) 0.1 -

Foreign currency reserve recycled to the income statement on disposal

- - - - (0.7) (0.7)

Loss on sale of discontinued operations

- - - - (1.1) (1.1)
     

Loss from discontinued operations

- - - (0.1) (1.7) (1.8)

The exceptional operating profit before tax of €0.1m in the prior year related to a curtailment gain following the disposal of the Group’s Northern Ireland wholesaling business (Quinns of Cookstown) while the loss on discontinued operations of €1.1m related to a €0.1m profit arising on the disposal of the Group’s Northern Ireland wholesaling business to Britvic Northern Ireland Limited on 30 June 2011 for a gross consideration of €4.8m (£4.3m) and a loss of €1.2m in relation to a working capital settlement to reflect ‘normalised’ working capital’ as set out in the Sale and Purchase Agreement following the FY2011 disposal of the Group’s Spirits & Liqueurs business.

Cash flows from discontinued operations

2013 2012
€m €m
   

Net cash outflow from operating activities

- (1.0)

Net cash inflow from investing activities

- 4.7
 

Net cash inflow from discontinued operations

- 3.7

Effect of disposal on the financial position of the Group

NI
wholesaling
business
2013 2012
€m €m
   

Property, plant & equipment

- 0.9

Inventories

- 1.2

Trade & other receivables

- 2.5
 

Net assets and liabilities disposed of

- 4.6
 

Consideration receivable

- 4.8

Costs of disposal payable

- (0.1)
 

Net proceeds receivable

- 4.7
 

Profit on disposal of net assets and liabilities

- 0.1
 

Gain on sale of discontinued operations

- 0.1

Working capital settlement - Spirits & Liqueurs

- (1.2)
 

Loss from discontinued operations

- (1.1)
9. DIVIDENDS
2013 2012
€m €m
   

Dividends paid:

   

Final: paid 4.5c per ordinary share in July 2012 (2012: 3.3c paid in July 2011)

15.0 10.7

Interim: paid 4.0c per ordinary share in December 2012 (2012: 3.67c paid in December 2011)

13.4 12.0
   

Total equity dividends

28.4 22.7
   

Settled as follows:

   

Paid in cash

21.2 18.5

Accrued with respect to LTIP (Part I) dividend entitlements

0.1 -

Scrip dividend

7.1 4.2
   

28.4 22.7

The Directors have proposed a final dividend of 4.75 cent per share (2012: 4.5 cent), to ordinary shareholders registered at the close of business on 24 May 2013, which is subject to shareholder approval at the Annual General Meeting, giving a proposed total dividend for the year of 8.75 cent per share (2012: 8.17 cent). Using the number of shares in issue at 28 February 2013 and excluding those shares for which it is assumed that the right to dividend will be waived, this would equate to a distribution of €16.2m.

Dividends of 8.5 cent per ordinary share were recognised as a deduction from the retained income reserve in the year ended
28 February 2013 (2012: 6.97 cent).

Dividends declared after the balance sheet date are not recognised as a liability at the balance sheet date.

10. EARNINGS PER ORDINARY SHARE

Denominator computations

Number Number
‘000 ‘000
   

Number of shares at beginning of year

339,275 337,196

Shares issued in lieu of dividend

1,934 1,370

Issue of new shares following acquisition of subsidiary

1,422 -

Shares issued in respect of options exercised

1,701 709
   

Number of shares at end of year

344,332 339,275
   
   

Weighted average number of ordinary shares (basic)*

329,067 325,509

Adjustment for the effect of conversion of options

7,135 8,294
   

Weighted average number of ordinary shares, including options (diluted)

336,202 333,803

* excludes 8.3m treasury shares (2012: 12.4m)

 
     

Profit attributable to ordinary shareholders

2013 2012
€m €m
   

Earnings as reported

88.7 95.7

Adjustment for exceptional items, net of tax (note 5)

4.3 (3.5)
   

Earnings as adjusted for exceptional items, net of tax

93.0 92.2

Basic earnings per share

Cent Cent

Basic earnings per share

27.0 29.4

Adjusted basic earnings per share

28.3 28.3
 

Diluted earnings per share

 

Diluted earnings per share

26.4 28.7

Adjusted diluted earnings per share

27.7 27.6
   

Continuing operations

€m €m

Earnings from continuing operations as reported

88.7 97.5

Adjustment for exceptional items, net of tax (note 5)

4.3 (5.2)
   

Earnings from continuing operations as adjusted for exceptional items, net of tax

93.0 92.3
   

Basic earnings per share

Cent Cent

Basic earnings per share

27.0 30.0

Adjusted basic earnings per share

28.3 28.3
   

Diluted earnings per share

   

Diluted earnings per share

26.4 29.2

Adjusted diluted earnings per share

27.7 27.6
   

Discontinued operations

€m €m

Earnings from discontinued operations as reported

- (1.8)

Adjustment for exceptional items, net of tax (note 5)

- 1.7
   

Earnings from discontinued operations as adjusted for exceptional items, net of tax

-

(0.1)

   

Basic earnings per share

Cent Cent

Basic earnings per share

- (0.6)

Adjusted basic earnings per share

- -
   

Diluted earnings per share

   

Diluted earnings per share

- (0.5)

Adjusted diluted earnings per share

- -
   

Basic earnings per share is calculated by dividing the profit attributable to the ordinary shareholders by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased/issued by the Company and held as treasury shares (at 28 February 2013: 8.3m shares; at 29 February 2012: 12.4m shares).

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period of the year that the options were outstanding.

Employee share options, which are performance-based, are treated as contingently issuable shares because their issue is contingent upon satisfaction of specified performance conditions in addition to the passage of time. In accordance with IAS 33 Earnings per Share, these contingently issuable shares (totalling 1,927,156 at 28 February 2013 and 53,643 at 29 February 2012) are excluded from the computation of diluted earnings per share where the vesting conditions would not have been satisfied as at the end of the reporting period. Vesting of certain Interests awarded under the Joint Share Ownership Plan (totalling nil at 28 February 2013 and 375,000 at 29 February 2012) are also contingent upon satisfaction of specified performance conditions and these have also been excluded from the computation of diluted earnings per share.

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