Annual Report 2014

NOTES

Forming part of the financial statements

16. TRADE & OTHER RECEIVABLES
17. TRADE & OTHER PAYABLES
18. PROVISIONS
19. INTEREST BEARING LOANS & BORROWINGS
20. ANALYSIS OF NET DEBT

16. TRADE & OTHER RECEIVABLES

 

Group

Company

 

2014

2013

2014

2013

 

€m

€m

€m

€m

 

Amounts falling due within one year:

Trade receivables

118.8

78.0

-

-

Advances to customers

8.4

6.9

-

-

Prepayments and other receivables

12.4

11.2

-

-

 

139.6

96.1

-

-

Amounts falling due after one year:

Advances to customers

40.9

31.3

-

-

Amounts due from Group undertakings

-

-

50.5

47.8

 

40.9

31.3

50.5

47.8

 

Total

180.5

127.4

50.5

47.8

The aged analysis of trade receivables and advances to customers analysed between amounts that were neither past due nor impaired and amounts past due at 28 February 2014 and 28 February 2013 were as follows:

 

Gross

Impairment

Gross

Impairment

 

2014

2014

2013

2013

 

€m

€m

€m

€m

 

Group

Neither past due nor impaired

141.9

-

113.7

-

 

Past due

Past due 0-30 days

12.0

(0.8)

3.0

(0.8)

Past due 31-120 days

16.3

(1.3)

2.4

(2.1)

Past due 121-365 days

4.9

(4.9)

1.2

(1.2)

Past due more than one year

1.5

(1.5)

2.2

(2.2)

 

Total

176.6

(8.5)

122.5

(6.3)

All trade & other receivables and advances to customers are monitored on an on-going basis for evidence of impairment and assessments are undertaken for individual accounts. A provision for impairment is created where the Group expects it may not be able to collect all amounts due in accordance with the original terms of the agreement with the customer. Balances included in the impairment provision are generally written off when there is no expectation of recovery. The increase in the value of trade receiveables past due reflects the change in customer profile on acquisition of the Gleeson wholesaler business.

Trade receivables are on average receivable within 47 days (2013: 42 days) of the balance sheet date, are unsecured and are not interest-bearing. All advances to customers acquired on acquisition of the Tennent’s business were recorded at fair value. An impairment provision is created in relation to advances to customers considered receivable in a period outside that originally contracted. The movement in the allowance for impairment in respect of trade receivables and advances to customers during the year was as follows:-

 

2014

2013

 

€m

€m

 

Group

At beginning of year

6.3

7.6

Recovered during the year

(0.5)

(0.2)

Provided during the year

4.0

2.0

Written off during the year

(1.7)

(2.9)

Translation adjustment

0.4

(0.2)

 

At end of year

8.5

6.3

17. TRADE & OTHER PAYABLES

 

Group

Company

 

2014

2013

2014

2013

 

€m

€m

€m

€m

 

Trade payables

74.5

42.6

-

-

Payroll taxes & social security

3.0

2.4

-

-

VAT

8.7

5.3

-

-

Excise duty

17.4

13.3

-

-

Deferred consideration re acquisition of business

4.4

0.5

-

-

Accruals

63.3

60.0

0.9

0.7

Amounts due to Group undertakings

-

-

129.2

98.7

 

Total

171.3

124.1

130.1

99.4

The Group’s exposure to currency and liquidity risk related to trade & other payables is disclosed in note 23.

Company

The Company has entered into financial guarantee contracts to guarantee the indebtedness of the liabilities of certain of its subsidiary undertakings. As at 28 February 2014, the Directors consider these to be in the nature of insurance contracts and do not consider it probable that the Company will have to make a payment under these guarantees and as such discloses them as a contingent liability as detailed in note 26.

18. PROVISIONS

 

Onerous

 

Restructuring

lease

Other

Total

Total

 

2014

2014

2014

2014

2013

 

€m

€m

€m

€m

€m

 

At beginning of year

0.4

11.0

0.8

12.2

17.3

Translation adjustment

-

0.6

-

0.6

(0.2)

Additional cost of brand

-

-

-

-

0.4

Charged during the year

6.7

-

-

6.7

1.6

Released during the year

-

(0.3)

(0.6)

(0.9)

(0.4)

Unwind of discount on provisions

-

0.9

-

0.9

1.0

Utilised during the year

(5.9)

(2.1)

-

(8.0)

(7.5)

At end of year

1.2

10.1

0.2

11.5

12.2

Current

2.7

2.8

Non-current

8.8

9.4

11.5

12.2

Restructuring
The closing restructuring provision and current year charge primarily relate to severance costs arising from the Group’s reorganisation programme in Ireland following the current year acquisition of Gleeson and some cost cutting initiatives undertaken at the Group’s manufacturing facilities. The provision is expected to be fully utilised in the next financial year.

Onerous leases
The onerous lease provision relates to two onerous leases in relation to warehousing facilities acquired as part of the acquisition of the Gaymers cider business in 2010. These onerous leases expire in 2017 and 2026 respectively. The Group also had an onerous lease, which expired during the current financial year, in relation to the consolidation of the Group’s Dublin offices into a single location in 2009. This resulted in a release of €0.3m to the income statement in the current financial year (note 6).

Other
Other provisions relate to a provision for the Group’s exposure to employee and third party insurance claims. Under the terms of employer and public liability insurance policies, the Group bears a portion of the cost of each claim up to the specified excess. The provision is calculated based on the expected portion of settlement costs to be borne by the Group in respect of specific claims arising before the balance sheet date. In the prior year, other provisions also included a litigation provision of €0.6m; the related legal issue was resolved during the year and the provision was released back to the income statement.

19. INTEREST BEARING LOANS & BORROWINGS

Group

 

2014

2013

 

€m

€m

 

Non-current liabilities

Unsecured bank loans repayable by one repayment on maturity

307.9

244.4

 

Current liabilities

Unsecured bank loans

0.1

-

 

 

Total borrowings

308.0

244.4

Unamortised issue costs are netted against outstanding non-current bank loans and are being amortised to the income statement over the remaining life of the 2012 multi-currency facility. The value of unamortised issue costs at 28 February 2014 was €1.7m (2013: €2.2m)

Terms and debt repayment schedule

2014

2013

 

Nominal

Carrying

Carrying

 

rates of

Year of

value

value

 

Currency

interest

maturity

€m

€m

 

Unsecured bank loans repayable by one repayment on maturity

Multi

Euribor/Libor + 1.70%

2017

309.6

246.6

Unsecured bank loans repayable in FY 2015

Euro

Euribor + 8.52%

2014

0.1

-

 

309.7

246.6

Debt on acquisition

During the current financial year, the Group acquired debt of €47.9m on acquisition of Gleeson (€22.6m relating to a term loan and €25.3m relating to a full recourse trade debtor factoring arrangement); the term loan was repaid immediately post closing of the transaction. The trade debtor factoring arrangement was repaid in full and cancelled on 30 June 2013; the outstanding balance on acquisition with respect to this arrangement was €25.3m and this increased to €31.2m, before being settled in full by the Group.

In addition, the Group acquired debt of €3.6m on the acquisition of Biofun, of which €3.5m was repaid during the financial year with the remaining outstanding debt of €0.1m classified within current liabilities. The outstanding debt as at 28 February 2014 was fully repaid and cancelled on 21 March 2014.

Borrowing facilities

The Group manages its borrowing requirements by entering into committed loan facility agreements.

In February 2012, the Group entered into a committed €250.0m multi-currency five year syndicated revolving loan facility with seven banks, namely Bank of Ireland, Bank of Scotland, Barclays Bank, Danske Bank, HSBC, Rabobank, and Ulster Bank, repayable in a single instalment on 28 February 2017. The facility agreement provided for a further €100.0m in the form of an uncommitted accordion facility which the Group successfully negotiated with the banks as committed in December 2012. The facility agreement permits the Group to avail of further financial indebtedness, excluding working capital and guarantee facilities, to a maximum value of €150.0m, subject to agreeing the terms and conditions with the lenders. Consequently the Group is permitted under the terms of the agreement, to have debt capacity of €500.0m of which €309.6m was drawn at 28 February 2014 (2013: €246.6m was drawn).

Under the terms of the agreement, the Group must pay a commitment fee based on 40% of the applicable margin on undrawn committed amounts and variable interest on drawn amounts based on variable Euribor/Libor interest rates plus a margin, the level of which is dependent on the net debt:EBITDA ratio, plus a utilisation fee, the level of which is dependent on percentage utilisation. The Group may select an interest period of one, two, three or six months.

There were no repayments under the Group’s committed loan facility agreement in the current year. During the previous financial year, the Group, using surplus cash resources, repaid and cancelled all funds (€60.0m) drawn under its maturing 2007 euro facility, it also repaid €5.2m ($7m) in January 2013 under its 2012 multi-currency facility.

All non-current bank loans are guaranteed by a number of the Group’s subsidiary undertakings. The facility agreement allows the early repayment of debt without incurring additional charges or penalties. All non current bank loans are repayable in full on change of control of the Group.

The Group’s multi-currency debt facility incorporates two financial covenants:

  • Interest cover: The ratio of EBITDA to net interest for a period of 12 months ending on each half year date will not be less than 3.5:1
  • Net debt/EBITDA: The ratio of net debt on each half year date to EBITDA for a period of 12 months ending on a half year date will not exceed 3.5:1

At year-end the Group had net debt of €145.2m, and a Net debt/ EBITDA ratio of 0.99:1 calculated in accordance with the terms of the Group’s revolving credit facility agreement.

Further information about the Group’s exposure to interest rate, foreign currency and liquidity risk is disclosed in note 23.

20. ANALYSIS OF NET DEBT

 

1 March

Translation

Debt arising

Cash

Non-cash

28 February

 

2013

adjustment

on acquisition

flow

changes

2014

 

€m

€m

€m

€m

€m

€m

 

Group

Interest bearing loans & borrowings

244.4

(7.3)

51.5

18.9

0.5

308.0

Cash & cash equivalents

(121.0)

(3.6)

-

(38.2)

-

(162.8)

 

123.4

(10.9)

51.5

(19.3)

0.5

145.2

 

 

1 March

Translation

Debt arising

Cash

Non-cash

28 February

 

2012

adjustment

on acquisition

flow

changes

2013

 

€m

€m

€m

€m

€m

€m

 

Group

Interest bearing loans & borrowings

60.0

0.6

-

183.2

0.6

244.4

Cash & cash equivalents

(128.3)

3.1

-

4.2

-

(121.0)

(68.3)

3.7

-

187.4

0.6

123.4

 

The non-cash change to the Group’s interest bearing loans and borrowings relate to the amortisation of issue costs.

 

1 March

Translation

Cash

Non-cash

28 February

 

2013

adjustment

flow

changes

2014

 

€m

€m

€m

€m

€m

 

Company

Cash & cash equivalents

(0.1)

-

(0.1)

-

(0.2)

 

The Company is an original borrower under the terms of the Group’s revolving credit facility but is not a borrower in relation to the Group’s drawn debt as at 28 February 2014. As outlined in further detail in note 26, the Company, together with a number of its subsidiaries, gave a letter of guarantee to secure its obligations in respect of debt drawn by the Group under the terms of the Group’s revolving credit facility agreement.

 

1 March

Translation

Cash

Non-cash

28 February

 

2012

adjustment

flow

changes

2013

 

€m

€m

€m

€m

€m

 

Company

Interest bearing loans & borrowings

60.0

-

(60.0)

-

-

Cash & cash equivalents

(9.3)

-

9.2

-

(0.1)

50.7

-

(50.8)

-

(0.1)