Double-digit growth
The group reports PBT of £49.7m vs our forecast of £47.2m. This is an 8.8% increase on FY18 (+10.2% on constant currency). EPS was up a similar amount at 46p (+8.7%) and the full-year dividend was held at 21.4p (this is below our forecast, but in a world of cancelled dividends understandable). The main drivers of the results was a 10% increase in revenue to just over £1.8bn, with a strong performance from the UK where the group now packs 100% of Tesco red meat and the new facility in Brisbane which was ramping up volume in 2019.
Debt rises, but still comfortable
Group net debt was £88.2m (pre-IFRS 16) which was a c £60m increase yoy, reflecting the cash flow for capex on the new expansion projects mentioned above. This is lower vs our expectations and represents 1.1x EBITDA. It will rise this year on a planned JV buyout (c£50m), but this can be comfortably accommodated.
Encouraging outlook
The outlook says the business is trading in line with the Board’s expectations. COVID-19 is creating some uncertainties in the business, but it has coped well so far. FY20E projected growth is underpinned by growth projects put in place 1-2 years ago – i.e. the build-up of Brisbane and the new site in New Zealand, but today the group also announces a new business win in Belgium (with Delhaize) which will commence in September 2020.
