Half-year report
Thursday 31 August 2023
HALF-YEARLY FINANCIAL REPORTfor the half year
ended 30 June 2023
Irish Continental Group plc (ICG), the leading
Irish-based maritime transport group, reports its financial
performance for the half-year ended 30 June 2023.
This half-yearly financial report references
Alternative Performance Measures (APMs) which are not defined under
International Financial Reporting Standards and which are explained
in the Appendix to the half-year result.
Highlights
Financial summary |
|
|
|
HY 2023* |
HY 2022** |
Change % |
Revenue |
€264.0m |
€263.1m |
+0.3% |
EBITDA*** |
€49.0m |
€47.3m |
+3.6% |
Operating
profit |
€16.2m |
€17.4m |
(6.9%) |
Profit before
tax |
€14.0m |
€15.4m |
(9.1%) |
Basic earnings
per share |
7.50c |
8.00c |
(6.3%) |
Interim
dividend |
4.87c |
4.64c |
+5.0% |
Net
debt*** |
€164.5m |
€154.5m |
+6.5% |
Net debt (pre-IFRS 16)*** |
€116.6m |
€105.9m |
+10.1% |
* HY 2023: Half Year up to 30 June 2023, ** HY 2022: Half Year
up to 30 June 2022*** Additional information in relation to these
APMs is disclosed in the Appendix
Volume movements |
|
|
|
HY
2023’000 |
HY
2022’000 |
Change % |
Cars |
229.1 |
214.2 |
+7.0% |
RoRo freight |
348.2 |
330.2 |
+5.5% |
Containers
shipped (teu*) |
142.3 |
169.3 |
(15.9%) |
Port lifts |
152.5 |
164.9 |
(7.5%) |
*teu: twenty-foot equivalent units
The HY 2023 result is reported against the
background of the continued return towards pre-pandemic travel
patterns after the disruption caused by Covid-19 and our continued
expansion on the Dover – Calais route. The Group has continued to
focus on strategic development and has maintained a strong
liquidity position.
Key highlights in HY
2023 include;
- Group revenue
generated totalling €264.0 million, €0.9 million more than HY
2022.
- Operating profit
generated was €16.2 million, compared to an operating profit of
€17.4 million in HY 2022.
- EBITDA generated of
€49.0 million, €1.7 million more than HY 2022.
- Gross cash balances
of €35.0 million (31 December 2022: €39.0 million).
- Net debt at €164.5
million, €6.6 million lower than at the beginning of the year.
- The Directors have
declared an interim dividend of 4.87 cent per share (2022: 4.64
cent) payable on 6 October 2023 to shareholders on the register on
15 September 2023.
- In May 2023, the
Group chartered the Oscar Wilde cruise ferry (ex Tallink Star) for
an initial 20 month period with further extension options. The
vessel entered service on the Rosslare – Pembroke route, replacing
the Blue Star 1.
- Further investment
in environmentally friendly port equipment at Dublin Ferryport
Terminals with final commissioning of new heavy plant machinery
including a new ship-to-shore crane.
Commenting on the results, Chairman John B.
McGuckian noted;
“HY 2023 has been a successful period for the
Group. We have benefited from the continued normalisation in
passenger travel levels post pandemic in all our markets, growth in
our Roll on Roll off (RoRo) freight carryings and the strengthening
of our position on the Dover – Calais route.
This continued return of passenger travel
alongside the continued support of our freight customers on both
our old and new routes resulted in the highest ever revenue levels
in the Ferries Division. This has been partially offset by a
reduction in revenues in the Container and Terminal Division which
has been impacted by a significant drop in container volumes due
primarily to a weakness in the deep sea market. Despite this, the
Group reports a record level of revenue in the period of €264.0
million.
In May of this year, the Group took delivery of
the Oscar Wilde. The Group signed a long term charter agreement for
a firm period of 20 months with the opportunity to extend the
charter by 2 + 2 years. The agreement also gives the Group purchase
options over the vessel. The vessel entered service on the Rosslare
– Pembroke route for the summer season. With the largest duty-free
shopping space for any cruise ferry on the Irish Sea of 17,000
square feet, it is ideally suited to allow the Group to benefit
from the return of duty-free shopping on the Irish Sea.
In addition to this investment, we have
continued the expansion and modernisation of our container
terminals with the latest automated and environmentally friendly
equipment as part of a Terminal electrification programme. The
final crane in this programme is due to become operational next
month. Since the start of the year, we have commissioned five new
remote controlled semi-automated rubber-tyred gantries (RTGs) and
one new ship-to-shore crane. In our Dublin Terminal, 80% of our
cranes are now powered by electricity generated from renewable
resources.
While the strong revenue performance in the
Ferries Division has continued year to date, we remain cautious
over the timing of a recovery in container shipping volumes and the
impact of potential cost increases arising out of environmental
levies. Nevertheless, given the strength of our business model, our
balance sheet and the diversity of our income flows we remain
confident about our future prospects.’’
Enquiries: |
|
Eamonn Rothwell, Chief Executive Officer |
Tel: +353 1 607 5628 Email: info@icg.ie |
David Ledwidge, Chief Financial Officer |
Tel: +353 1 607 5628 Email: info@icg.ie |
Media enquiries: |
|
|
Q4 Public Relations |
Tel: +353 1 475 1444 Email: press@q4pr.ie |
|
Results
Financial Highlights |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022* |
Revenue |
€264.0m |
€263.1m |
+0.3% |
€584.9m |
EBITDA |
€49.0m |
€47.3m |
+3.6% |
€127.2m |
Operating profit |
€16.2m |
€17.4m |
(6.9%) |
€66.7m |
* FY 2022 = Year End up to 31 December 2022
The Group recorded revenue of €264.0 million
compared with €263.1 million in HY 2022, an increase of 0.3%.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) were €49.0 million compared with €47.3 million in HY 2022.
Group fuel costs decreased by €9.0 million (15.5%) to €49.0 million
from €58.0 million. Operating profit was €16.2 million compared
with a €17.4 million in HY 2022. A profit before tax of €14.0
million is reported compared with a profit before tax of €15.4
million in HY 2022.
There was a net finance charge of €2.2 million
(2022: €2.0 million) which includes net bank interest payable of
€2.2 million (2022: €1.4 million), lease interest €0.7 million
(2022: €0.7 million) and net pension interest income of €0.7 (2022:
€0.1 million). The tax charge amounted to €1.1 million (2022: €0.9
million). Basic EPS was 7.5c compared with 8.0c in HY 2022.
Adjusted Basic EPS amounted to 7.1c versus 8.0c for HY 2022.
Operational Review
Ferries Division
Financial Summary |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Revenue* |
€179.8m |
€167.9m |
+7.1% |
€399.9m |
EBITDA |
€33.3m |
€29.8m |
+11.7% |
€95.7m |
Operating profit |
€5.3m |
€5.7m |
(7.0%) |
€46.4m |
* Includes intersegment revenue of €16.7 million (HY 2022: €15.2
million) (FY 2022: €35.3 million)
The division comprises Irish Ferries, a leading
provider of passenger and freight ferry services between Ireland /
UK, Ireland / France and the UK / France as well as the chartering
of vessels.
Revenue in the division was €179.8 million
(2022: €167.9 million) while EBITDA was €33.3 million (2022: €29.8
million). Operating profit was €5.3 million compared to €5.7
million in HY 2022.
The performance of the ferries operations in HY
2023 was significantly improved on HY 2022 as travel patterns
continued to return towards pre-pandemic levels after the
disruption caused by Covid-19 across 2020 and 2021. The impact of
the Dover – Calais operations, can also be seen in the result for
the period as the service operated with three vessels in HY 2023
versus 2.5 vessels in HY 2022.
Revenue - Total |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Passenger |
€66.6m |
€58.5m |
+13.8% |
€162.7m |
Freight |
€87.7m |
€85.5m |
+2.6% |
€184.7m |
Charter |
€24.7m |
€23.3m |
+6.0% |
€51.1m |
Other |
€0.8m |
€0.6m |
+33.3% |
€1.4m |
Total |
€179.8m |
€167.9m |
+7.1% |
€399.9m |
Volumes - Total |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Car volumes
(‘000) |
229.1 |
214.2 |
+7.0% |
573.4 |
Passenger volumes
(‘000) |
1,091.9 |
894.4 |
+22.1% |
2,315.0 |
RoRo freight volumes (‘000) |
348.2 |
330.2 |
+5.5% |
696.6 |
In HY 2023, total cars carried were 229,100, up
7.0% on the same period in HY 2022. Total passenger carryings were
1,091,900, an increase of 22.1% on HY 2022. This increase in
carryings reflects the continued return to normal travel patterns
which commenced in the prior year and the impact of a three ship
operation on the Dover – Calais route. Passenger revenues increased
by 13.8% over HY 2022.
Freight carryings in HY 2023 were 348,200 units,
an increase of 5.5% over HY 2022. The increase in carryings
reflects the impact of increased tonnage on the Dover – Calais
route. Freight revenues increased by 2.6% compared with HY
2022.
The division owns eight container vessels, five
of which are chartered intra division and three chartered
externally to third parties. Charter revenue increased by 6.0% over
the prior period. Charter revenue also includes earnings from the
long term receivable relating to the bareboat hire purchase
contract arising from the disposal of the GNV Allegra in a prior
period.
Costs |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Depreciation and
amortisation |
€28.0m |
€24.1m |
+16.2% |
€49.3m |
Employee benefits
expense |
€10.5m |
€9.5m |
+10.5% |
€21.0m |
Other operating costs |
€136.0m |
€128.6m |
+5.8% |
€283.2m |
Total operating costs |
€174.5m |
€162.2m |
+7.6% |
€353.5m |
Costs in the division increased by €12.3 million
in HY 2023 compared to HY 2022. This increase was principally
attributable to the operational costs associated with the Dover –
Calais route due to a third vessel in operation for the full six
months in 2023. Total divisional fuel cost decreased to €41.9
million in HY 2023 from €48.3 million in HY 2022 due to lower
global fuel prices over the period.
Container and Terminal Division
Financial Highlights |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Revenue* |
€101.5m |
€111.0m |
(8.6%) |
€221.5m |
EBITDA |
€15.7m |
€17.5m |
(10.3%) |
€31.5m |
Operating profit |
€10.9m |
€11.7m |
(6.8%) |
€20.3m |
* Includes intersegment revenue of €0.6 million (HY 2022: €0.6
million) (FY 2022: €1.2 million)
Operational Highlights |
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Volumes |
’000 |
’000 |
|
‘000 |
Containers shipped
(teu) |
142.3 |
169.3 |
(15.9%) |
322.6 |
Port lifts |
152.5 |
164.9 |
(7.5%) |
319.6 |
The Container and Terminal Division includes the
intermodal shipping line Eucon as well as the division’s
strategically located container terminals in Dublin and
Belfast.
Revenue in the division decreased by 8.6% to
€101.5 million (2022: €111.0 million), EBITDA decreased to €15.7
million (2022: €17.5 million), while operating profit decreased to
€10.9 million (2022: €11.7 million).
Total containers shipped by Eucon were down
15.9% at 142,300 teu (2022: 169,300 teu). This decrease was driven
by weak export and import levels in China and the continued effect
of over stocking following the Covid-19 pandemic and subsequent
supply chain difficulties. Fuel costs decreased to €7.1 million
from €9.7 million in HY 2022 due to a fall in global fuel prices as
well as reduced consumption. In spite of persistent inflationary
pressure, other costs decreased in line with the fall in volumes
and core fleet reduction from to six to five vessels.
Containers handled at our container terminals in
Dublin and Belfast fell 7.5% to 152,500 lifts (2022: 164,900
lifts). Dublin Ferryport Terminals’ activity was down 5.0%, and
lifts at Belfast Container Terminal were down 11.4%.
Statement of Financial Position
A summary Statement of Financial Position as at 30 June 2023 is
presented below:
|
|
|
|
30 Jun 2023 |
30 Jun 2022 |
31 Dec 2022 |
|
€m |
€m |
€m |
Property, plant
and equipment and intangible assets |
365.5 |
371.4 |
364.2 |
Right-of-use
assets |
47.8 |
47.7 |
41.4 |
Long term
receivable |
9.0 |
12.1 |
10.5 |
Retirement benefit
surplus |
41.2 |
31.2 |
33.6 |
Other assets |
96.1 |
103.1 |
85.2 |
Cash and bank balances |
35.0 |
38.6 |
39.0 |
Total assets |
594.6 |
604.1 |
573.9 |
Non-current borrowings |
144.3 |
137.2 |
160.4 |
Non-current lease
liabilities |
33.2 |
31.4 |
30.7 |
Retirement benefit
obligations |
0.3 |
0.9 |
0.4 |
Other non-current
liabilities |
5.6 |
2.5 |
4.7 |
Current
borrowings |
7.3 |
7.3 |
7.3 |
Current lease
liabilities |
14.7 |
17.2 |
11.7 |
Other current liabilities |
125.8 |
156.5 |
97.9 |
Total liabilities |
331.2 |
353.0 |
313.1 |
Total equity |
263.4 |
251.1 |
260.8 |
Total equity and liabilities |
594.6 |
604.1 |
573.9 |
The analysis of key movements in the period
since 31 December 2022 is set out below.
The principal movements in property, plant and
equipment and intangible assets relate to acquisition of new plant
at Dublin Ferryport Terminals and scheduled replacement expenditure
less depreciation charge in the period. The movement in
right-of-use assets mainly relates to depreciation charges offset
by the addition of the Oscar Wilde cruise ferry. The long-term
receivable relates to deferred sales proceeds receivable under the
hire purchase sale agreement entered into on the sale of a surplus
vessel in a prior period.
The increase in other current assets is
attributable to increased trade debtors relating to higher freight
revenues and the seasonal increase in tourism debtors and to
prepayments on asset purchases. The increase in other current
liabilities mainly relates to the seasonal increase in passenger
deferred revenue balances.
The assumptions used to measure pension
obligations were reviewed against the background of market
conditions as at 30 June 2023. This review resulted in a change in
discount and inflation rate assumptions while other assumptions
were retained at 31 December 2022 levels. A net actuarial gain of
€6.8 million arose in HY 2023, driven primarily by increases in the
value of assets.
Shareholders’ equity increased to €263.4 million
from €260.8 million over the period. The movements primarily
comprised of the profit for the financial period of €14.0 million,
net actuarial gains of €6.8 million arising on retirement benefit
schemes less payment of the 2022 final dividend of €16.8
million.
Cash Flow
and Financing
A summary of cash flows in the half year to 30 June 2023 is
presented below:
|
|
|
|
HY 2023 |
HY 2022 |
FY 2022 |
|
€m |
€m |
€m |
Operating
profit |
16.2 |
17.4 |
66.7 |
Depreciation and amortisation |
32.8 |
29.9 |
60.5 |
EBITDA* |
49.0 |
47.3 |
127.2 |
Working capital movements |
23.2 |
23.4 |
1.2 |
Retirement
benefit scheme movements |
0.2 |
0.6 |
1.1 |
Share-based
payment expense |
1.6 |
0.7 |
3.0 |
Other movements |
(0.5) |
- |
(0.5) |
Cash generated from operations |
73.5 |
72.0 |
132.0 |
Interest paid |
(2.8) |
(1.6) |
(4.0) |
Tax paid |
(0.9) |
(0.8) |
(1.7) |
Capital expenditure excluding strategic capital expenditure |
(16.0) |
(10.3) |
(18.3) |
Free cash flow before strategic
capital
expenditure* |
53.8 |
59.3 |
108.0 |
Strategic capital expenditure |
(13.6) |
(51.6) |
(57.4) |
Free cash flow after strategic capital
expenditure* |
40.2 |
7.7 |
50.6 |
Proceeds on disposal of property, plant and equipment |
1.5 |
1.5 |
3.0 |
Share issue |
0.1 |
0.1 |
0.1 |
Settlement of
employee equity plans through market purchases |
(3.1) |
(2.9) |
(2.9) |
Lease inception
costs |
(1.2) |
- |
- |
Dividends
paid |
(16.8) |
- |
(24.2) |
Share buyback |
- |
(17.0) |
(49.2) |
Net cash flows |
20.7 |
(10.6) |
(22.6) |
Opening net
debt |
(171.1) |
(142.2) |
(142.2) |
Lease liability
non-cash movements |
(14.3) |
(1.5) |
(6.2) |
Translation / other |
0.2 |
(0.2) |
(0.1) |
Closing net debt |
(164.5) |
(154.5) |
(171.1) |
*Additional information in relation to these Alternative
Performance Measures (APMs) is disclosed in the Appendix.
The Group funds its activities from a
combination of cash generated from day-to-day operating activities
and borrowings, including revolving credit facilities, term loans,
loan notes and leasing arrangements. Net debt at 30 June 2023
decreased to €164.5 million from €171.1 million at 31 December
2022.
Cash generated from operations in the period
amounted to €73.5 million, a €1.5 million improvement on the prior
period. Total capital expenditure including intangibles amounted to
€29.6 million. Overall, there were net cash inflows of €20.7
million which were offset by lease liability movements which
resulted in the net debt at 30 June 2023 reducing to €164.5
million.
An analysis of the movements in net debt are set out in the
table below.
Net debt |
|
|
|
|
|
Cash€m |
Origination
Fees€m |
Bank Loans & Loan
Notes€m |
Lease Liabilities€m |
Net Debt€m |
At 31 December
2022 |
39.0 |
0.5 |
(168.2) |
(42.4) |
(171.1) |
Lease liability
non-cash movements |
- |
- |
- |
(14.3) |
(14.3) |
Cash flows |
(4.5) |
- |
16.2 |
9.0 |
20.7 |
Translation / other |
0.5 |
(0.1) |
- |
(0.2) |
0.2 |
At 30 June
2023 |
35.0 |
0.4 |
(152.0) |
(47.9) |
(164.5) |
The borrowing facilities available to the Group at 30 June 2023
were as follows;
Borrowing Facilities |
|
|
|
|
Facility |
Committed |
Committed facilities
drawn |
Committed facilities undrawn |
|
€m |
€m |
€m |
€m |
Revolving
credit |
125.0 |
75.0 |
49.5 |
25.5 |
Private
placement |
253.1 |
50.0 |
50.0 |
- |
Bank loans |
52.5 |
52.5 |
52.5 |
- |
Lease
liabilities |
47.9 |
47.9 |
47.9 |
- |
Overdraft and other |
15.4 |
15.4 |
- |
15.4 |
|
493.9 |
240.8 |
199.9 |
40.9 |
At 30 June 2023, the Group had total lending
facilities of €493.9 million available, of which €240.8 million
were committed facilities. €199.9 million of the committed
facilities were drawn. In addition to the committed lines of
credit, the Group had arranged uncommitted facilities of €253.1
million with utilisation dates expiring within two years.
Dividend
The Company paid a final dividend in respect of
financial year 2022 of 9.45 cent per ordinary share on 9 July 2023
to shareholders on the register at the close of business on 19 May
2023. The total amount paid was €16.8 million.
The Directors have declared an interim dividend
of 4.87 cent per share (2022: 4.64 cent) payable on 6 October 2023
to shareholders on the register on 15 September 2023. The estimated
amount payable will be €8.3 million.
Fuel
|
|
|
|
|
HY 2023 |
HY 2022 |
Change % |
FY 2022 |
Fuel costs |
€49.0m |
€58.0m |
(15.5%) |
€124.0m |
Group fuel costs in the first half of 2023
amounted to €49.0 million (2022: €58.0 million). The movement in
fuel costs was due to a reduction in average global fuel prices
versus the same period last year.
The Group has in place fuel surcharge mechanisms
for freight customers, which mitigate the effects of euro movements
in fuel costs. The Group has invested in exhaust gas cleaning
systems (EGCS) on three of its cruise ferries and five of its
container vessels, all of which are operated on Group services.
EGCS allow the consumption of lower cost fuels while meeting all
current emission regulations. Other vessels are required to consume
higher cost fuels to meet the same regulations.
While the Group complies with all current fuel
and emissions regulations, the Group notes new regulations being
considered at both the EU and global level in response to climate
change concerns. While the Company acknowledges the role it must
play in protecting the environment, the level of surcharges may
have to be adjusted to pass any increased compliance costs through
the supply chain.
In the reporting period, the Group did not
engage in financial derivative trading to hedge its fuel costs.
Strategic Developments
EU Emissions Trading
System
We are entering a period of further regulatory
change on environmental matters which will have a meaningful impact
on the Group’s operations and costs. These changes are emanating
from the EU, International Maritime Organization and international
financial reporting standard setters.
The EU regulations are primarily focused on
increasing the cost of inputs and outputs of carbon and are broadly
known as the “Fit for 55” Regulations.
The first of these EU regulations to come into
effect is the gradual introduction of shipping emissions from
January 2024 into the scope of the EU Emissions Trading System (EU
ETS). All of these regulations and their phasing are subject to
change as politicians weigh up the benefits of these initiatives
against their social and economic cost and the trade-offs with
other societal objectives.
The EU ETS begins with the phasing of 40% of
emissions in scope in 2024, 70% in 2025 and then full scope from
2026 onwards.
In respect of a UK ETS, the introduction of a
similar scheme is still being finalised and we expect a similar
initial implementation from 2026 onwards. Consequently, initially
emissions will only be within scope for half of voyages between the
EU and the UK due to the UK’s later implementation timeline.
As the quantity of available European ETS
offsets (EU Allowance “EUA”) are set by the EU and subsequent
pricing will depend on demand, it is very difficult to determine
what these additional costs will be. Funds raised by the EU could,
in theory, be channelled back into the shipping sector to provide
support with decarbonisation projects. The costs of these ETSs will
increase the cost of transporting passengers and cargo to the
islands of Britain and Ireland which will be passed on to
customers. This is what happened when lower sulphur emission
regulations were introduced in recent years.
Seafarers’ legislation and proposed
voluntary charters
To ensure equitable regulations in international
shipping, it is crucial that oversight is maintained at an EU and
International Labour Organisation level. This prevents market
distortions and upholds a level playing field. Upholding
international principles and centuries of precedent remains pivotal
for a stable maritime regulatory environment.
Recent legislative changes, like the UK's
minimum wage equivalent requirement in territorial waters and
France's intended implementation of minimum wages and regulated
roster patterns for specific routes, raise concerns and carry
protectionist undertones. France's approach may conflict with EU
legislation, and cuts across various freedoms established in the
Treaty of the Functioning of the European Union (TFEU). In
addition, both the French and UK Governments have also introduced
voluntary charters with additional local employment protection
objectives.
Container Volumes
We have been impacted by the weak deep-sea
market in the first half of the year. This has resulted in a
material drop in volumes in our Container and Terminal Division.
This is a result of continued weak export and import levels in
China and the continued effect of over stocking following the
Covid-19 pandemic and subsequent supply chain difficulties. Our
flexible business model has allowed us to adjust our shipping
capacity to match the current demand situation.
Sustainability
We have continued to make significant progress
on our Terminal electrification programme. The final crane in this
programme is due to become operational in September. Since the
start of the year, we have commissioned five new remote controlled
semi-automated rubber-tyred gantries and one new ship-to-shore
crane. Of the heavy equipment at our Dublin Terminal, 80% is now
powered by electricity generated from renewable resources. The
finalisation of this phase of the project represents a significant
milestone in achieving our Net Zero 2030 goal for our terminal
operations and represents the cumulation of significant investment
for the group of approximately €26.5 million over the last number
of years.
In our industry, there continues to be a
significant level of regulation change. These changes are coming
from the EU, UK and the International Maritime Organisation (IMO).
We closely monitor the impact these regulations will have on our
operations. For the first-time shipping will be included in the EU
Emission Trading System (EU ETS) commencing from 2024. These carbon
taxes will significantly increase operational costs once fully
implemented over the transition period to 2026, we expect to pass
on these additional costs as a carbon tax surcharge to our
customers.
Operationally, we continue to support a number
of feasibility studies relating to new technologies that are
designed to improve our ships efficiency.
Related Party Transactions
There were no related party transactions in the
half year that have materially affected the financial position or
performance of the Group in the period other than in respect of
remuneration paid to key management personnel.
Principal Risks and
Uncertainties
The Group has a risk management structure in
place which is designed to identify, manage and mitigate the
threats to the business on an ongoing basis. The principal risks
and uncertainties faced by the Group as set out in detail on pages
65 to 69 of the 2022 Annual Report are categorised as: commercial
and market, economic and political, business continuity, health and
safety, operational compliance, environmental protection, human
capital, information security and cyber threats, financial loss,
fraud, volatility, retirement benefit scheme and financial
compliance.
These risks areas remain the most likely risks
to affect the Group during the second half of the financial year
and the Group will actively manage these and all other risks
through its risk management structure.
Going Concern
After making enquiries, the Directors have
reasonable expectation that the Group has adequate resources to
continue in operational existence for a period of at least 12
months. In forming this view the Directors have considered the
future cash requirements of the Group’s business in the context of
the economic environment over the next 12 months, the principal
risks and uncertainties facing the Group, the Group’s budget plan
and the medium term strategy of the Group, including capital
investment plans. The future cash requirements have been compared
to bank facilities which are available or expected to be available
to the Group on normal commercial terms. On this basis the
Directors continue to adopt the going concern basis in preparing
this half-year financial report.
Events after the Reporting Period
There have been no material events affecting the
Company since 30 June 2023.
Current Trading and Outlook
Trading volumes in the period 1 July to 26
August 2023 are as follows:
H2 2023 Trading to
date |
|
|
|
1/7/23 –
26/8/23 |
1/7/22 –
26/8/22 |
Change % |
Volumes |
’000 |
’000 |
|
Cars |
214.1 |
181.1 |
18.2% |
RoRo freight
units |
112.5 |
112.5 |
- |
Containers
shipped (teu) |
41.8 |
50.7 |
(17.6%) |
Port lifts |
47.1 |
49.2 |
(4.3%) |
Cumulatively to 26 August 2023, trading volumes
are:
FY 2023 Trading to
date |
|
|
|
1/1/23 –
26/8/23 |
1/1/22 –
26/8/22 |
Change % |
Volumes |
’000 |
’000 |
|
Cars |
443.2 |
395.3 |
+12.1% |
RoRo freight
units |
460.7 |
442.7 |
+4.1% |
Containers
shipped (teu) |
184.1 |
220.0 |
(16.3%) |
Port lifts |
199.6 |
214.1 |
(6.8%) |
The trading performance for the year to date
across the Ferries Division has been strong with growth in both car
and RoRo freight units. The performance of the Container and
Terminal Division has been disappointing with a material fall in
container volumes. Despite significant cost pressures in both
divisions, we have managed to maintain and grow profitability at an
EBITDA level.
The Ferries Division has benefited from both the
continued return to more normalised levels of passenger traffic and
a bedded in three vessel service on the Dover – Calais route. Car
volumes have increased by 12.1% year to date, and improved over the
peak summer season with growth of 18.2% since 30 June.
Freight RoRo has grown at the strong level of
4.1% year to date. Volumes have remained steady since 30 June,
suggesting a slowdown in volume growth in H2 to date, however we
note that the same period in the prior year was particularly strong
due to competitor disruption on the Dover – Calais route.
Taking the above into account, trading in the
key summer months of July and August was in line with expectations
in the Ferries Division.
The Container and Terminal Division has seen a
worsening of the weak volume trends experienced in the first half
of the year, with container volumes down 16.3% year to date and
down 17.6% since 30 June. Port lifts have declined 6.8% year to
date and 4.3% since 30 June.
We have used our flexible business model in the
Container and Terminal Division to materially reduce costs by
matching our shipping capacity to the current demand situation.
This has allowed us to maintain profitability at acceptable levels.
We remain hopeful of an increase in export and import levels in
China in the second half of the year and an end to the current
levels of overstocking following the pandemic and subsequent supply
chain issues.
Auditor Review
This half-yearly financial report has not been
audited or reviewed by the auditors of the Group.
Forward-Looking Statements
This report contains certain forward-looking
statements. These statements are made by the Directors in good
faith based on the information available to them up to the time of
their approval of this report. These forward-looking statements
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any
such forward-looking information.
This report has been prepared for the Group as a
whole and therefore gives greater emphasis to those matters which
are significant to Irish Continental Group plc and its subsidiaries
when viewed as a whole.
Website
This half-yearly financial report is available
on the Group’s website www.icg.ie.
John B. McGuckianChairman
30 August 2023
RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the
Half-Yearly Financial Report in accordance with the Transparency
(Directive 2004/109/EC) Regulations 2007 (as amended), the related
Transparency Rules of the Central Bank of Ireland and IAS 34,
‘Interim Financial Reporting’ as adopted by the European Union.
Each of the Directors confirm that to the best
of their knowledge and belief:
- the Group Condensed
Financial Statements for the half year ended 30 June 2023 have been
prepared in accordance with the International Accounting Standard
applicable to interim financial reporting (IAS 34 Interim Financial
Reporting) adopted pursuant to the procedure provided for under
Article 6 of the Regulation (EC) No. 1606/2002 of the European
Parliament and the Council of 19 July 2002;
- the Interim
Management Report includes a fair review of the important events
that have occurred during the first six months of the financial
year, their impact on the Group Condensed Financial Statements for
the half year ended 30 June 2023, and a description of the
principal risks and uncertainties for the remaining six months;
and
- the Interim
Management Report includes a fair review of related party
transactions that have occurred during the first six months of the
current financial year and that have materially affected the
financial position or the performance of the Group during that
period, and any changes in the related parties transactions
described in the last Annual Report that could have a material
effect on the financial position or performance of the Group in the
first six months of the current financial year.
On behalf of the Board
Eamonn
RothwellDirector |
David
LedwidgeDirector |
30 August 2023
CONDENSED CONSOLIDATEDINCOME
STATEMENTFOR THE HALF YEAR ENDED 30 JUNE 2023
|
Notes |
HY 2023 |
HY 2022 |
FY 2022 |
|
|
Unaudited |
Unaudited |
Audited |
|
|
€m |
€m |
€m |
Revenue |
4 |
264.0 |
263.1 |
584.9 |
|
|
|
|
|
Depreciation and
amortisation |
|
(32.8) |
(29.9) |
(60.5) |
Employee benefits
expense |
|
(13.0) |
(12.1) |
(26.8) |
Other operating expenses |
|
(202.0) |
(203.7) |
(430.9) |
Operating profit |
|
16.2 |
17.4 |
66.7 |
|
|
|
|
|
Finance
income |
|
0.7 |
0.1 |
0.1 |
Finance costs |
|
(2.9) |
(2.1) |
(4.3) |
|
|
|
|
|
Profit before taxation |
|
14.0 |
15.4 |
62.5 |
|
|
|
|
|
Income tax expense |
|
(1.1) |
(0.9) |
(2.7) |
|
|
|
|
|
Profit for the financial period: all
attributable to equity holders of the parent |
4 |
12.9 |
14.5 |
59.8 |
|
|
|
|
|
|
|
|
|
|
Earnings
per ordinary share– expressed in cent per share |
|
|
|
|
|
|
|
|
|
Basic |
6 |
7.5c |
8.0c |
33.6c |
Diluted |
6 |
7.5c |
7.9c |
33.2c |
CONDENSED CONSOLIDATED STATEMENTOF
COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 30 JUNE
2023
|
|
HY 2023 |
HY 2022 |
FY 2022 |
|
|
Unaudited |
Unaudited |
Audited |
|
Notes |
€m |
€m |
€m |
Profit for the financial
period |
|
12.9 |
14.5 |
59.8 |
|
|
|
|
|
Items
that may be reclassified subsequently to profit or
loss: |
|
|
|
|
Exchange
differences on translation of foreign operations |
|
1.7 |
(1.0) |
(2.5) |
Items
that will not be reclassified subsequently to profit or
loss: |
|
|
|
|
Actuarial gain on
defined benefit pension schemes |
13 |
6.8 |
25.5 |
29.4 |
Deferred tax on defined benefit pension schemes |
|
(0.6) |
(1.2) |
(2.4) |
|
|
|
|
|
Other comprehensive income for the financial
period |
|
7.9 |
23.3 |
24.5 |
|
|
|
|
|
Total comprehensive income for the financial period: all
attributable to equity holders of the parent |
|
20.8 |
37.8 |
84.3 |
CONDENSED CONSOLIDATED STATEMENTOF
FINANCIAL POSITIONAS AT 30 JUNE 2023
|
|
30 Jun 23 |
30 Jun 22 |
31 Dec 22 |
|
|
Unaudited |
Unaudited |
Audited |
|
Notes |
€m |
€m |
€m |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Property, plant and
equipment |
7 |
363.5 |
369.5 |
362.3 |
Right-of-use
assets |
8 |
47.8 |
47.7 |
41.4 |
Intangible
assets |
|
2.0 |
1.9 |
1.9 |
Long term
receivable |
9 |
9.0 |
12.1 |
10.5 |
Retirement benefit
surplus |
13 |
41.2 |
31.2 |
33.6 |
Deferred tax asset |
|
0.1 |
0.1 |
0.1 |
|
|
463.6 |
462.5 |
449.8 |
|
|
|
|
|
Current
assets |
|
|
|
|
Inventories |
|
4.3 |
5.9 |
5.2 |
Trade and other
receivables |
|
91.7 |
97.1 |
79.9 |
Cash and cash equivalents |
10 |
35.0 |
38.6 |
39.0 |
|
|
131.0 |
141.6 |
124.1 |
|
|
|
|
|
Total assets |
|
594.6 |
604.1 |
573.9 |
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
Equity |
|
|
|
|
Share capital |
|
11.1 |
11.6 |
11.1 |
Share premium |
|
20.6 |
20.5 |
20.5 |
Other reserves |
|
(7.0) |
(9.5) |
(8.2) |
Retained earnings |
|
238.7 |
228.5 |
237.4 |
Equity attributable to equity holders |
|
263.4 |
251.1 |
260.8 |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Borrowings |
10 |
144.3 |
137.2 |
160.4 |
Lease
liabilities |
10 |
33.2 |
31.4 |
30.7 |
Deferred tax
liabilities |
|
4.6 |
2.4 |
3.6 |
Provisions |
|
1.0 |
0.1 |
1.1 |
Retirement benefit obligations |
13 |
0.3 |
0.9 |
0.4 |
|
|
183.4 |
172.0 |
196.2 |
|
|
|
|
|
Current
liabilities |
|
|
|
|
Borrowings |
10 |
7.3 |
7.3 |
7.3 |
Lease liabilities |
10 |
14.7 |
17.2 |
11.7 |
Trade and other
payables |
|
124.5 |
137.3 |
96.2 |
Dividend
payable |
|
- |
16.1 |
- |
Provisions |
|
1.3 |
3.1 |
1.7 |
|
|
147.8 |
181.0 |
116.9 |
|
|
|
|
|
Total liabilities |
|
331.2 |
353.0 |
313.1 |
|
|
|
|
|
Total equity and liabilities |
|
594.6 |
604.1 |
573.9 |
CONDENSED CONSOLIDATED STATEMENTOF
CHANGES IN EQUITYFOR THE HALF YEAR ENDED 30 JUNE 2023
(UNAUDITED)
|
|
|
|
Share |
|
|
|
|
Share |
Share |
Capital |
Options |
Translation |
Retained |
|
|
Capital |
Premium |
Reserve |
Reserve |
Reserve |
Earnings |
Total |
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
Balance at 1 January
2023 |
11.1 |
20.5 |
8.6 |
6.3 |
(23.1) |
237.4 |
260.8 |
|
|
|
|
|
|
|
|
Profit for the
financial period |
- |
- |
- |
- |
- |
12.9 |
12.9 |
Other comprehensive income |
- |
- |
- |
- |
1.7 |
6.2 |
7.9 |
Total
comprehensive income for the financial period |
- |
- |
- |
- |
1.7 |
19.1 |
20.8 |
|
|
|
|
|
|
|
|
Employee share-based
payments expense |
- |
- |
- |
1.6 |
- |
- |
1.6 |
Share issue |
- |
0.1 |
- |
- |
- |
- |
0.1 |
Dividends |
- |
- |
- |
- |
- |
(16.8) |
(16.8) |
Settlement of
share options through market purchase |
- |
- |
- |
- |
- |
(3.1) |
(3.1) |
Transfer to
retained earnings on exercise of options |
- |
- |
- |
(2.1) |
- |
2.1 |
- |
Total movements in the financial period |
- |
0.1 |
- |
(0.5) |
1.7 |
1.3 |
2.6 |
Balance at 30
June 2023 |
11.1 |
20.6 |
8.6 |
5.8 |
(21.4) |
238.7 |
263.4 |
FOR THE HALF YEAR ENDED 30 JUNE 2022 (UNAUDITED)
|
|
|
|
Share |
|
|
|
|
Share |
Share |
Capital |
Options |
Translation |
Retained |
|
|
Capital |
Premium |
Reserve |
Reserve |
Reserve |
Earnings |
Total |
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
Balance at 1 January
2022 |
11.9 |
20.4 |
7.8 |
4.7 |
(20.6) |
225.5 |
249.7 |
|
|
|
|
|
|
|
|
Profit for the
financial period |
- |
- |
- |
- |
- |
14.5 |
14.5 |
Other comprehensive income |
- |
- |
- |
- |
(1.0) |
24.3 |
23.3 |
Total
comprehensive income for the financial period |
- |
- |
- |
- |
(1.0) |
38.8 |
37.8 |
|
|
|
|
|
|
|
|
Employee
share-based payments expense |
- |
- |
- |
0.7 |
- |
- |
0.7 |
Share issue |
- |
0.1 |
- |
- |
- |
- |
0.1 |
Share buyback |
(0.3) |
- |
0.3 |
- |
- |
(18.2) |
(18.2) |
Dividends |
- |
- |
- |
- |
- |
(16.1) |
(16.1) |
Settlement of
share options through market purchase |
- |
- |
- |
- |
- |
(2.9) |
(2.9) |
Transfer to
retained earnings on exercise of options |
- |
- |
- |
(1.4) |
- |
1.4 |
- |
Total movements in the financial period |
(0.3) |
0.1 |
0.3 |
(0.7) |
(1.0) |
3.0 |
1.4 |
Balance at 30 June
2022 |
11.6 |
20.5 |
8.1 |
4.0 |
(21.6) |
228.5 |
251.1 |
CONDENSED CONSOLIDATED STATEMENTOF
CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER
2022 (AUDITED)
|
|
|
|
Share |
|
|
|
|
Share |
Share |
Capital |
Options |
Translation |
Retained |
|
|
Capital |
Premium |
Reserve |
Reserve |
Reserve |
Earnings |
Total |
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
Balance at 1 January
2022 |
11.9 |
20.4 |
7.8 |
4.7 |
(20.6) |
225.5 |
249.7 |
|
|
|
|
|
|
|
|
Profit for the
financial period |
- |
- |
- |
- |
- |
59.8 |
59.8 |
Other comprehensive income |
- |
- |
- |
- |
(2.5) |
27.0 |
24.5 |
Total comprehensive income for the financial
period |
- |
- |
- |
- |
(2.5) |
86.8 |
84.3 |
|
|
|
|
|
|
|
|
Employee
share-based payments expense |
- |
- |
- |
3.0 |
- |
- |
3.0 |
Share issue |
- |
0.1 |
- |
- |
- |
- |
0.1 |
Dividends |
- |
- |
- |
- |
- |
(24.2) |
(24.2) |
Share buyback |
(0.8) |
- |
0.8 |
- |
- |
(49.2) |
(49.2) |
Settlement of
employee equity plans through market purchase |
- |
- |
- |
- |
- |
(2.9) |
(2.9) |
Transfer to
retained earnings on exercise of options |
- |
- |
- |
(1.4) |
- |
1.4 |
- |
Total movements in the financial period |
(0.8) |
0.1 |
0.8 |
1.6 |
(2.5) |
11.9 |
11.1 |
Balance at 31
December 2022 |
11.1 |
20.5 |
8.6 |
6.3 |
(23.1) |
237.4 |
260.8 |
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWSFOR THE HALF YEAR ENDED 30 JUNE
2023
|
|
HY 2023 |
HY 2022 |
FY 2022 |
|
|
Unaudited |
Unaudited |
Audited |
|
Notes |
€m |
€m |
€m |
|
|
|
|
|
Profit for
the financial year |
|
12.9 |
14.5 |
59.8 |
Adjustments
for: |
|
|
|
|
Finance costs
(net) |
|
2.2 |
2.0 |
4.2 |
Income tax
expense |
|
1.1 |
0.9 |
2.7 |
Retirement benefit
scheme movements |
14 |
0.2 |
0.6 |
1.1 |
Depreciation of
property, plant and equipment |
|
23.3 |
18.9 |
38.5 |
Amortisation of
intangible assets |
|
0.2 |
0.2 |
0.4 |
Depreciation of
right-of-use assets |
|
9.3 |
10.8 |
21.6 |
Share-based
payment expense |
|
1.6 |
0.7 |
3.0 |
Decrease in
provisions |
|
(0.5) |
- |
(0.5) |
Working capital movements |
14 |
23.2 |
23.4 |
1.2 |
Cash generated from operations |
|
73.5 |
72.0 |
132.0 |
Income taxes paid |
|
(0.9) |
(0.8) |
(1.7) |
Interest paid |
|
(2.8) |
(1.6) |
(4.0) |
Net cash inflow from operating activities |
|
69.8 |
69.6 |
126.3 |
|
|
|
|
|
Cash flow
from investing activities |
|
|
|
|
Proceeds on
disposal of property, plant and equipment |
|
1.5 |
1.5 |
3.0 |
Purchases of
property, plant and equipment and intangible assets |
14 |
(29.6) |
(61.9) |
(75.7) |
Lease inception
costs |
|
(1.2) |
- |
- |
|
|
|
|
|
Net cash outflow from investing activities |
|
(29.3) |
(60.4) |
(72.7) |
|
|
|
|
|
Cash flow
from financing activities |
|
|
|
|
Share buyback |
|
- |
(17.0) |
(49.2) |
Dividends |
5 |
(16.8) |
- |
(24.2) |
Repayment of lease
liabilities |
14 |
(9.0) |
(10.4) |
(21.0) |
Proceeds on issue of
ordinary share capital |
|
0.1 |
0.1 |
0.1 |
Repayments of bank
loans |
|
(16.2) |
(3.8) |
(7.6) |
Drawdown of bank
loans |
|
- |
25.0 |
52.0 |
Settlement of employee equity plans through market purchases |
|
(3.1) |
(2.9) |
(2.9) |
|
|
|
|
|
Net cash
outflow from financing activities |
|
(45.0) |
(9.0) |
(52.8) |
|
|
|
|
|
Net (decrease) /
increase in cash and cash equivalents |
|
(4.5) |
0.2 |
0.8 |
Cash and cash
equivalents at the beginning of the period |
|
39.0 |
38.5 |
38.5 |
Effect of foreign exchange rate changes |
|
0.5 |
(0.1) |
(0.3) |
|
|
|
|
|
Cash and cash equivalents at the end of the
period |
10 |
35.0 |
38.6 |
39.0 |
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTSFOR THE HALF YEAR ENDED 30
JUNE 2023
1. General information
The Group Condensed Financial Statements are
considered non-statutory financial statements for the purposes of
the Companies Act 2014 and in compliance with section 340(4) of
that Act we state that:
- the Group Condensed
Financial Statements for the half year ended 30 June 2023 have been
prepared to meet our obligation to do so under the Transparency
(Directive 2004/109/EC) Regulations 2007 (as amended);
- the Group Condensed
Financial Statements for the half year ended 30 June 2023 do not
constitute the statutory financial statements of the Group;
- the figures
disclosed relating to 31 December 2022 have been derived from the
statutory financial statements for the financial year ended 31
December 2022 which were audited, received an unqualified audit
report and have been filed with the Registrar of Companies;
and
- the interim figures
included in the Group Condensed Financial Statements for the half
year ended 30 June 2023 and the comparative amounts for the half
year ended 30 June 2022 have been neither audited nor reviewed by
the auditors of the Group.
2. Accounting policies
The Group Condensed Financial Statements for the
six months ended 30 June 2023 have been prepared in accordance with
the Transparency (Directive 2004/109/EC) Regulations 2007 (as
amended), the Central Bank (Investment Market Conduct) Rules 2019
and with IAS 34 ‘Interim Financial Reporting’ as adopted by the
European Union.
The accounting policies and methods of
computation applied in preparing these Group Condensed Financial
Statements are consistent with those set out in the Group Annual
Report for the financial year ended 31 December 2022, which is
available at www.icg.ie.
Amendments to accounting standards IAS 1, IFRS
17, IAS 8, IAS 12 and IFRS 16 became effective for the Group
commencing 1 January 2023. The adoption of these amendments did not
have a material impact on these financial statements. Information
about the impact of new accounting standards that are not effective
for the current reporting period are set out on page 131 of the
Group's Annual Report for the year ended 31 December 2022.
3. Critical Accounting
Estimates and Judgements
In the application of the Group’s accounting
policies, the Directors are required to make judgements, estimates
and assumptions about the carrying amounts of assets and
liabilities. In preparing these Condensed Financial Statements, the
approach to the making of these judgements, estimates and
assumptions is consistent with that used in the Group Annual Report
for the financial year ended 31 December 2022. Key sources of
estimation uncertainty relate to post-employment benefits and
assessment of useful lives for property, plant and equipment.
Critical accounting judgements are made in respect of identifying
indications of impairment and adoption of the going concern
assumption.
In relation to the valuation of retirement
benefit obligations set out in note 13 to these Condensed
Consolidated Financial Statements there have been changes made to
the discount rate and inflation assumptions compared to those used
at 31 December 2022 which have resulted in a material reduction in
the valuation of retirement benefit obligations reflected through
an actuarial credit which together with experience adjustments on
both scheme obligations and assets resulted in a €6.8 million
actuarial gain being recorded in the Statement of Comprehensive
Income. Other than noted in the foregoing, there have been no
material changes to key estimates that had previously been made in
the prior year financial statements to 31 December 2022.
Impairment
At 31 December 2022, the Group reported that it
had performed an assessment of possible indicators of impairment
with a focus on the economic performance of assets, technological
developments, new rules and regulations including environmental
regulation, shipbuilding costs and carrying value versus market
capitalisation. The Group noted at that time that container vessel
charter rates had declined in the final quarter of 2022, a trend
which continued into early 2023. This was assessed as an indicator
of impairment and on that basis the Group undertook an exercise to
assess the recoverable amount of its fleet assets based on the
conditions existing at 31 December 2022. The Group performed a fair
value less cost of disposal assessment but acknowledging the
limitations of the independent valuations supplemented that
exercise with a value in use assessment. On consideration of the
results of these assessments the Directors concluded that no
provision for impairment against the carrying value of its fleet
assets was required at 31 December 2022.
At 30 June 2023, the Group has performed an
updated assessment of possible indicators of impairment. In
considering economic performance, the Group notes that the
half-year result to 30 June 2023 was broadly aligned with the base
scenario used for the value in use exercise at 31 December 2022.
The Group was also satisfied that there was no indication of
declines in the market value of vessels more than expected from
normal use. The Group has also considered the potential impacts of
the latest developments and clarifications in likely environmental
requirements particularly around the EU Fit for 55 initiatives and
updated IMO proposals, in particular the EU Emission Trading Scheme
due to commence from 1 January 2024. The Group, as with the
previous costs associated with IMO2020 and SECA regulations, will
be passing the increased costs of new regulations to our customers.
Following these considerations, the Group concluded that no
indicators of impairment existed at 30 June 2023 and a
recoverability assessment for impairment purposes was not
required.
Going Concern
The Company had previously reported in its 2022
Annual Report that the Directors had considered a number of trading
scenarios. The base scenario had assumed a moderate level of growth
across the Group’s businesses whereas the downside scenario had
assumed lower levels of activity related to macro-economic
uncertainty around growth rates in the economies in which we
provide services together with inflationary pressures. The Group
has extended the outlook period for these projections to August
2024 based on economic conditions existing at 30 June 2023, the
principal risks and uncertainties facing the Group, the Group’s
budget plan and the medium term strategy of the Group, including
capital investment plans. These projections indicate that the Group
expects to generate sufficient cash from operations to enable it to
retain sufficient liquidity to operate and meet its financial
obligations for at least the period up to August 2024. The
Directors therefore considered it appropriate to continue to adopt
the going concern assumption in the preparation of these Condensed
Financial Statements.
4. Segmental
information
The Board is deemed the chief operating decision
maker within the Group. For management purposes, the Group is
currently organised into two operating segments; Ferries and
Container and Terminal. These segments are the basis on which the
Group reports internally and are the only two revenue generating
segments of the Group.
The Ferries segment derives its revenue from the
operation of combined RoRo passenger ferries and the chartering of
vessels. The Container and Terminal segment derives its revenue
from the provision of door-to-door and feeder LoLo freight
services, stevedoring and other related terminal services.
Segment information about the Group’s operations
is presented below.
i) Revenue Analysis
By business segment:
|
HY 2023 |
HY 2022 |
FY 2022 |
|
€m |
€m |
€m |
Ferries |
|
|
|
Passenger |
66.6 |
58.5 |
162.7 |
Freight |
87.7 |
85.5 |
184.7 |
Charter |
24.7 |
23.3 |
51.1 |
Other |
0.8 |
0.6 |
1.4 |
|
179.8 |
167.9 |
399.9 |
Container and Terminal |
|
|
|
Freight |
101.5 |
111.0 |
221.5 |
|
|
|
|
Inter-segment revenue |
(17.3) |
(15.8) |
(36.5) |
Total |
264.0 |
263.1 |
584.9 |
Travel patterns continued to return towards pre-pandemic levels
after the disruption caused by Covid-19 across 2020 and 2021. HY
2023 also shows the results of our Dover – Calais operations
operating with three vessels for the full period for the first
time.
As revenues are recognised over short time
periods of no more than days, a key determinant to categorising
revenues is whether they principally arise from a business to
customer (passenger contracts) or a business to business
relationship (freight and charter contracts) as this impacts
directly on the uncertainty of cash flows. On this basis, revenue
by business segment is a reasonable approximation of revenue
disaggregation.
By geographic origin of booking:
|
HY 2023 |
HY 2022 |
FY 2022 |
|
€m |
€m |
€m |
Ireland |
90.0 |
87.2 |
202.4 |
United Kingdom |
59.1 |
64.4 |
142.2 |
Netherlands |
48.6 |
47.9 |
99.7 |
Belgium |
20.1 |
24.0 |
47.7 |
France |
10.3 |
7.6 |
20.2 |
Poland |
7.3 |
7.6 |
18.8 |
Austria |
4.9 |
5.2 |
10.8 |
Other |
23.7 |
19.2 |
43.1 |
|
264.0 |
263.1 |
584.9 |
No single external customer in the current or
prior financial periods amounted to 10 per cent of the Group’s
revenues.
ii) Profit for the
financial year
|
Ferries |
Container and
Terminal |
Group Total |
|
HY
2023€m |
HY
2022€m |
FY 2022€m |
HY
2023€m |
HY
2022€m |
FY 2022€m |
HY
2023€m |
HY
2022€m |
FY 2022€m |
Operating
profit |
5.3 |
5.7 |
46.4 |
10.9 |
11.7 |
20.3 |
16.2 |
17.4 |
66.7 |
Finance income |
0.7 |
0.1 |
0.1 |
- |
- |
- |
0.7 |
0.1 |
0.1 |
Finance costs |
(2.2) |
(1.5) |
(3.1) |
(0.7) |
(0.6) |
(1.2) |
(2.9) |
(2.1) |
(4.3) |
Profit before tax |
3.8 |
4.3 |
43.4 |
10.2 |
11.1 |
19.1 |
14.0 |
15.4 |
62.5 |
Income tax expense |
(0.3) |
(0.1) |
(1.3) |
(0.8) |
(0.8) |
(1.4) |
(1.1) |
(0.9) |
(2.7) |
Profit for the financial
year |
3.5 |
4.2 |
42.1 |
9.4 |
10.3 |
17.7 |
12.9 |
14.5 |
59.8 |
iii) Statement of Financial Position
|
Ferries |
Container and
Terminal |
Group Total |
|
30 Jun 23€m |
30 Jun
22€m |
31 Dec
22€m |
30 Jun 23€m |
30 Jun
22€m |
31 Dec
22€m |
30 Jun 23€m |
30 Jun
22€m |
31 Dec
22€m |
Assets |
|
|
|
|
|
|
|
|
|
Segment assets |
447.8 |
446.2 |
422.5 |
111.8 |
119.3 |
112.4 |
559.6 |
565.5 |
534.9 |
Cash and cash equivalents |
31.9 |
36.8 |
34.5 |
3.1 |
1.8 |
4.5 |
35.0 |
38.6 |
39.0 |
Consolidated total assets |
479.7 |
483.0 |
457.0 |
114.9 |
121.1 |
116.9 |
594.6 |
604.1 |
573.9 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Segment
liabilities |
98.8 |
100.2 |
66.7 |
32.9 |
42.5 |
36.3 |
131.7 |
142.7 |
103.0 |
Borrowings and lease liabilities |
156.6 |
154.9 |
174.6 |
42.9 |
38.1 |
35.5 |
199.5 |
193.0 |
210.1 |
Consolidated total
liabilities* |
255.4 |
255.1 |
241.3 |
75.8 |
80.6 |
71.8 |
331.2 |
335.7 |
313.1 |
* Consolidated total Group liabilities for HY 2022 exclude €17.3
million of liabilities relating to dividends payable of €16.1
million and share buyback consideration accrued of €1.2 million
which are not allocated at a divisional level (HY 2023: €nil; FY
2022: €nil).
iv) Seasonality
Group revenue and profit before tax is weighted
towards the second half of the year principally due to passenger
revenue patterns in the Ferries Division whereas operating costs
are more evenly distributed over the year.
5. Dividends
paid
|
HY 2023 |
HY
2022 |
FY 2022 |
|
€m |
€m |
€m |
Interim dividend
(RE current financial year) |
- |
- |
8.1 |
Final dividend (RE prior financial year) |
16.8 |
- |
16.1 |
Total dividends paid in period |
16.8 |
- |
24.2 |
The Company paid a final dividend in respect of
financial year 2022 of 9.45 cent per ordinary share on 9 July 2023
to shareholders on the register at the close of business on 19 May
2023. The total amount paid was €16.8 million.
The Directors have declared an interim dividend
of 4.87 cent per share (2022: 4.64 cent) payable on 6 October 2023
to shareholders on the register on 15 September 2023.
6. Earnings per share
|
HY 2023 |
HY 2022 |
FY 2022 |
Number of shares |
‘000 |
‘000 |
‘000 |
Shares in issue at
the beginning of the year |
170,823 |
182,795 |
182,795 |
Effect of shares
issued during the year |
41 |
10 |
23 |
Effect of share buybacks and cancellation in the year |
- |
(1,627) |
(5,044) |
Weighted average number of ordinary shares for the purpose of basic
earnings per share |
170,864 |
181,178 |
177,774 |
Dilutive effect of employee equity plans where vesting conditions
not met |
2,261 |
1,869 |
2,363 |
Weighted average number of ordinary shares for the purposes
of diluted earnings per share |
173,125 |
183,047 |
180,137 |
The denominator for the purposes of calculating
both basic and diluted earnings per share has been adjusted to
reflect shares issued during the period and excludes treasury
shares. The dilutive impact of contingently issuable shares on the
weighted average number of ordinary shares for the purposes of
diluted earnings per share in HY2022 has been corrected resulting
in an adjustment to the previously reported diluted earnings per
share of 0.1 cent per share.
Profit attributable to
ordinary shareholders
The calculation of the basic and diluted
earnings per share attributable to the ordinary equity holders of
the parent is based on the following data:
|
HY 2023 |
HY 2022 |
FY 2022 |
Earnings |
€m |
€m |
€m |
Earnings for the
purpose of basic and diluted earnings per share – Profit for the
financial period attributable to equity holders of the parent |
12.9 |
14.5 |
59.8 |
Effect of net interest income on defined benefit pension
schemes |
(0.7) |
(0.1) |
(0.1) |
Earnings for the purpose of adjusted earnings per
share |
12.2 |
14.4 |
59.7 |
|
|
|
|
|
Cent |
Cent |
Cent |
Basic earnings per share |
7.5 |
8.0 |
33.6 |
Diluted earnings per share |
7.5 |
7.9 |
33.2 |
Adjusted basic earnings per share |
7.1 |
8.0 |
33.6 |
Adjusted diluted earnings per share |
7.0 |
7.9 |
33.1 |
7. Property, plant and
equipment
|
Assets under construction |
Vessels |
Plant, Equipment and Vehicles |
Land and Buildings |
Total |
|
€m |
€m |
€m |
€m |
€m |
Cost |
|
|
|
|
|
At 31 December
2022 |
4.6 |
534.1 |
65.5 |
28.3 |
632.5 |
Additions |
3.8 |
19.5 |
1.7 |
0.7 |
25.7 |
Disposals |
- |
(5.4) |
(0.3) |
- |
(5.7) |
Reclassification |
(8.3) |
8.3 |
(2.4) |
- |
(2.4) |
Currency adjustment |
- |
1.7 |
0.1 |
- |
1.8 |
At 30 June
2023 |
0.1 |
558.2 |
64.6 |
29.0 |
651.9 |
|
|
|
|
|
|
Accumulated
depreciation |
|
|
|
|
|
At 31 December
2022 |
- |
213.8 |
45.5 |
10.9 |
270.2 |
Charge for
period |
- |
21.4 |
1.6 |
0.3 |
23.3 |
Disposals |
- |
(5.4) |
(0.3) |
- |
(5.7) |
Currency adjustment |
- |
0.5 |
0.1 |
- |
0.6 |
|
|
|
|
|
|
At 30 June
2023 |
- |
230.3 |
46.9 |
11.2 |
288.4 |
|
|
|
|
|
|
Carrying amount |
|
|
|
|
|
At 30 June
2023 |
0.1 |
327.9 |
17.7 |
17.8 |
363.5 |
At 31 December 2022 |
4.6 |
320.3 |
20.0 |
17.4 |
362.3 |
At 30 June 2022 |
2.0 |
335.0 |
14.8 |
17.7 |
369.5 |
8.
Right-of-use
assets
|
Vessels |
Plant, Equipment and Vehicles |
Land and Buildings |
Total |
|
€m |
€m |
€m |
€m |
Cost |
|
|
|
|
At 31 December
2022 |
49.2 |
15.2 |
34.1 |
98.5 |
Additions |
15.5 |
0.2 |
- |
15.7 |
Disposals |
(23.6) |
(0.5) |
- |
(24.1) |
Currency adjustment |
- |
- |
0.2 |
0.2 |
|
|
|
|
|
At 30 June
2023 |
41.1 |
14.9 |
34.3 |
90.3 |
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
At 31 December
2022 |
41.7 |
7.1 |
8.3 |
57.1 |
Charge for
period |
7.0 |
1.2 |
1.1 |
9.3 |
Disposals |
(23.6) |
(0.5) |
- |
(24.1) |
Currency adjustment |
- |
- |
0.2 |
0.2 |
|
|
|
|
|
At 30 June
2023 |
25.1 |
7.8 |
9.6 |
42.5 |
|
|
|
|
|
Carrying amount |
|
|
|
|
At 30 June
2023 |
16.0 |
7.1 |
24.7 |
47.8 |
At 31 December 2022 |
7.5 |
8.1 |
25.8 |
41.4 |
At 30 June 2022 |
13.1 |
7.6 |
27.0 |
47.7 |
Additions of right-of-use assets include €1.2 million (2022:
€nil) of directly attributable costs relating to new leases
commenced in the period.
9. Lease
receivable
|
30 Jun 23 |
30 Jun 22 |
31 Dec 22 |
|
€m |
€m |
€m |
Operating
activities |
|
|
|
Current finance
lease receivable |
3.1 |
3.0 |
3.1 |
Non-current finance lease receivable |
9.0 |
12.1 |
10.5 |
Total |
12.1 |
15.1 |
13.6 |
Beginning of reporting period |
13.6 |
16.6 |
16.6 |
Amounts
received |
(1.8) |
(1.8) |
(3.6) |
Net benefit recognised in period |
0.3 |
0.3 |
0.6 |
End of reporting period |
12.1 |
15.1 |
13.6 |
The long term receivable relates to amounts due under a bareboat
hire purchase sale agreement for the disposal of the vessel GNV
Allegra in FY 2019. The deferred consideration has been treated as
a finance lease receivable at an amount equivalent to the net
investment in the lease. Capital amounts received in the financial
period are classified as net proceeds on disposal of property,
plant and equipment in the Condensed Consolidated Statement of Cash
Flows.
None of the lease receivable at 30 June 2023 was past due and,
taking into account the payment experience up to the date of
approval of these Condensed Financial Statements together with
retention of legal title, no provision for expected credit losses
was considered to be required.
10. Net
debt and borrowing facilities
i) The components of the Group’s net debt
position at the reporting date and the movements in the period are
set out in the following table:
|
Cash |
Bank loans |
Loan notes |
Lease
liabilities |
Origination fees |
Total |
|
€m |
€m |
€m |
€m |
€m |
€m |
At 1 January
2023 |
|
|
|
|
|
|
Current
assets |
39.0 |
- |
- |
- |
- |
39.0 |
Creditors due
within one year |
- |
(7.5) |
- |
(11.7) |
0.2 |
(19.0) |
Creditors due after one year |
- |
(110.7) |
(50.0) |
(30.7) |
0.3 |
(191.1) |
|
39.0 |
(118.2) |
(50.0) |
(42.4) |
0.5 |
(171.1) |
|
|
|
|
|
|
|
Movements
during the period |
|
|
|
|
|
|
Cash flow
changes |
|
|
|
|
|
|
Repayments |
- |
16.2 |
- |
9.0 |
- |
25.2 |
Other
movements |
(4.5) |
- |
- |
- |
- |
(4.5) |
Non cash flow
changes |
|
|
|
|
|
|
Amortisation |
- |
- |
- |
- |
(0.1) |
(0.1) |
Lease liabilities
recognised |
- |
- |
- |
(14.3) |
- |
(14.3) |
Currency adjustment |
0.5 |
- |
- |
(0.2) |
- |
0.3 |
|
4.0 |
16.2 |
- |
(5.5) |
(0.1) |
6.6 |
|
|
|
|
|
|
|
At 30 June
2023 |
|
|
|
|
|
|
Current
assets |
35.0 |
- |
- |
- |
- |
35.0 |
Creditors due
within one year |
- |
(7.5) |
- |
(14.7) |
0.2 |
(22.0) |
Creditors due after one year |
- |
(94.5) |
(50.0) |
(33.2) |
0.2 |
(177.5) |
|
35.0 |
(102.0) |
(50.0) |
(47.9) |
0.4 |
(164.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June
2022 |
|
|
|
|
|
|
Current
assets |
38.6 |
- |
- |
- |
- |
38.6 |
Creditors due
within one year |
- |
(7.5) |
- |
(17.2) |
0.2 |
(24.5) |
Creditors due after one year |
- |
(87.5) |
(50.0) |
(31.4) |
0.3 |
(168.6) |
|
38.6 |
(95.0) |
(50.0) |
(48.6) |
0.5 |
(154.5) |
ii) The maturity profile and available
borrowing and cash facilities available to the Group at 30 June
2023 are set out in the following table:
|
|
|
|
Maturity Profile |
|
Facility |
Undrawn |
On-hand / drawn |
Less than 1 year |
Between 1 – 2 years |
Between 2 – 5 years |
More than 5 years |
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
Cash |
- |
- |
35.0 |
- |
- |
- |
- |
Committed
lending facilities |
|
|
|
|
|
|
|
Bank
overdrafts |
15.4 |
15.4 |
- |
- |
- |
- |
- |
Bank loans |
127.5 |
25.5 |
102.0 |
7.5 |
57.0 |
22.5 |
15.0 |
Loan notes |
50.0 |
- |
50.0 |
- |
50.0 |
- |
- |
Leases |
47.9 |
- |
47.9 |
14.7 |
8.2 |
6.1 |
18.9 |
Origination fees |
(0.4) |
- |
(0.4) |
(0.2) |
(0.1) |
(0.1) |
- |
Committed lending facilities |
240.4 |
40.9 |
199.5 |
22.0 |
115.1 |
28.5 |
33.9 |
Uncommitted lending
facilities |
|
|
|
|
|
|
|
Bank loans |
50.0 |
|
|
|
|
|
|
Loan notes |
203.1 |
|
|
|
|
|
|
Uncommitted lending
facilities |
253.1 |
|
|
|
|
|
|
Bank overdrafts are stated net of trade
guarantee facilities utilised of €0.6 million.
At 30 June 2023 and the date of approval of
these Condensed Financial Statements, the Group satisfies the
conditions for drawing under the committed facilities.
Obligations under the Group borrowing facilities
have been cross guaranteed by the parent company and certain
subsidiaries but are otherwise unsecured except for lease
obligations which are secured by the lessors’ title to leased
assets.
11.
Tax
Corporation tax for the interim period is
estimated based on the best estimate of the weighted average annual
corporation tax rate expected to apply to each taxable entity for
the full financial year.
The Company and subsidiaries that are Irish
Resident for tax purposes have elected to be taxed under the Irish
tonnage tax scheme. Under the tonnage tax scheme, taxable profit on
eligible activities is calculated on a specified notional profit
per day related to the tonnage of the ships utilised.
12.
Financial instruments and risk management
The Group’s activities expose it to a variety of
financial risks, including market risk (such as interest rate risk,
foreign currency risk, commodity price risk), liquidity risk and
credit risk. The Group’s funding, liquidity and exposure to
interest and foreign exchange rate risks are managed by the Group’s
treasury and accounting departments. Treasury management practices
are used to manage these underlying risks.
These interim Condensed Financial Statements do
not include all financial risk management information and
disclosures required in the annual financial statements, and should
be read in conjunction with the 2022 Annual Report. There have been
no changes to the risk management procedures or policies since the
2022 year end.
i) Carrying value and fair value estimation of financial
assets and liabilities
The table below sets out the carrying value and fair values of
the Group’s financial assets and liabilities at the reporting
date.
|
30 Jun 23 |
30 Jun 22 |
31 Dec 22 |
|
Carrying value |
Fair value |
Carrying value |
Fair value |
Carrying value |
Fair value |
|
€m |
€m |
€m |
€m |
€m |
€m |
Financial
assets |
|
|
|
|
|
|
Lease
receivable |
12.1 |
12.1 |
15.1 |
14.5 |
13.6 |
13.6 |
Trade and other
receivables |
88.6 |
88.6 |
94.0 |
94.0 |
76.8 |
76.8 |
Cash and cash equivalents |
35.0 |
35.0 |
38.6 |
38.6 |
39.0 |
39.0 |
|
|
|
|
|
|
|
Total financial assets |
135.7 |
135.7 |
147.7 |
147.1 |
129.4 |
129.4 |
|
|
|
|
|
|
|
Financial
liabilities |
|
|
|
|
|
|
Borrowings |
151.6 |
143.2 |
144.5 |
136.4 |
167.7 |
169.0 |
Dividend
payable |
- |
- |
16.1 |
16.1 |
- |
- |
Trade and other payables |
84.3 |
84.3 |
92.5 |
92.5 |
79.7 |
79.7 |
Total financial liabilities |
235.9 |
227.5 |
253.1 |
245.0 |
247.4 |
248.7 |
ii) Fair value hierarchy
The Group has adopted the following fair value
measurement hierarchy for financial assets and liabilities:
- Level 1: quoted
(unadjusted) prices in active markets for identical assets and
liabilities.
- Level 2: other
techniques for which all inputs that have a significant effect on
the recorded fair value are observable, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
- Level 3: techniques
that use inputs which have a significant effect on the recorded
fair value that are not based on observable market data.
The Group did not hold any financial assets or
financial liabilities at the reporting dates required to be carried
at fair value in the Condensed Statement of Consolidated Financial
Position.
iii) Fair value of
financial assets and financial liabilities measured at amortised
cost
With the exception of the financial liabilities
related to borrowings set out in the table at (i) above it is
considered that the carrying amounts of financial assets and
financial liabilities recognised at amortised cost in these half
year financial statements approximate their fair values.
The fair value of borrowings are classified
within Level 3 of the fair value hierarchy. Fair value has been
estimated based on discounted cash flow analysis with the most
significant input being the discount rate reflecting the Group’s
own credit risk. The discount rate is derived from observable
market interest rates at the reporting date and observable credit
spread market movements since inception of the borrowings. For
lease liabilities the Group considers that the incremental
borrowing rate used to calculate the carrying value includes a fair
estimate of counterparty risk and the carrying value approximates
fair value.
iv) Derivative
financial instruments
At 30 June 2023, 31 December 2022, and 30 June
2022, the Group did not hold any positions relating to derivative
financial instruments.
13.
Retirement benefit schemes
The assumptions used to value pension
obligations were reviewed against the background of market
conditions as at 30 June 2023, leading to a change in discount and
inflation rate assumptions, while demographic and other assumptions
were retained at 31 December 2022 levels. Scheme assets have been
valued as per investment managers’ valuations at 30 June 2023. In
consultation with the actuary to the principal Group defined
benefit pension schemes, the discount rate used in relation to the
pension scheme liabilities is 3.60% for Euro liabilities (31
December 2022: 3.65%) and 5.20% for Sterling liabilities (31
December 2022: 4.75%).
At 30 June 2023, the Group’s total obligation in
respect of defined benefit schemes totals €91.4 million (31
December 2022: €91.6 million). The schemes held assets of €132.3
million (31 December 2022: €124.8 million), giving a net pension
surplus of €40.9 million (31 December 2022: €33.2 million).
The principal assumptions used for the purpose
of the actuarial valuations at 30 June 2023 were derived using
techniques consistent with those used for the assumptions for the
31 December 2022 valuations. The assumptions, which were set after
considering independent actuarial advice and which are reflective
of market conditions that existed at 30 June 2023, were as
follows:
|
30 Jun
23 |
30 Jun 22 |
31
Dec 22 |
|
Sterling |
Euro |
Sterling |
Euro |
Sterling |
Euro |
Discount rate |
5.20% |
3.60% |
3.65% |
3.40% |
4.75% |
3.65% |
Inflation rate |
2.95% |
2.40% |
3.60% |
2.30% |
2.90% |
2.50% |
Rate of increase of
pensions in payment |
2.20% - 3.35% |
1.40% |
2.20% - 3.40% |
1.30% |
2.20% - 3.30% |
1.50% |
Rate of pensionable salary increases |
1.20% |
0.00% - 1.35% |
1.10% |
0.00% - 1.30% |
1.15% |
0.00% - 1.40% |
The movements in the net surplus on the retirement benefit
schemes were as follows:
|
HY 2023 |
HY 2022 |
FY 2022 |
Movement in retirement benefit schemes net
surplus |
€m |
€m |
€m |
Opening
surplus |
33.2 |
5.3 |
5.3 |
Current service
cost |
(0.4) |
(0.9) |
(1.7) |
Employer
contributions paid |
0.2 |
0.3 |
0.6 |
Net interest
income |
0.7 |
0.1 |
0.1 |
Actuarial
gain |
6.8 |
25.5 |
29.4 |
Currency adjustment / other |
0.4 |
- |
(0.5) |
Net surplus |
40.9 |
30.3 |
33.2 |
|
|
|
|
Schemes in
surplus |
41.2 |
31.2 |
33.6 |
Schemes in deficit |
(0.3) |
(0.9) |
(0.4) |
Net surplus |
40.9 |
30.3 |
33.2 |
The movement in the net pension surplus since 31
December 2022 includes actuarial gains which are recognised in the
Condensed Consolidated Statement of Comprehensive Income.
|
HY 2023 |
HY 2022 |
FY 2022 |
Actuarial gains
recognised in the Condensed Consolidated Statement of
Comprehensive Income |
€m |
€m |
€m |
Return on scheme
assets excluding amounts recognised as finance income |
5.4 |
0.4 |
(18.7) |
Remeasurement
adjustments on scheme liabilities |
|
|
|
- Changes in
demographic assumptions |
- |
- |
- |
- Changes in
financial assumptions |
2.3 |
38.3 |
46.9 |
- Experience adjustments |
(0.9) |
(13.2) |
1.2 |
Actuarial gains
recognised in the Condensed Consolidated Statement of
Comprehensive Income |
6.8 |
25.5 |
29.4 |
The actuarial gain arising on scheme assets,
which are mainly invested across a number of equity and bond funds,
is reflective of market movements while there were also reductions
in liabilities attributable to the change in financial
assumptions.
No provision has been made against scheme
surpluses as the Group expect, having reviewed the rules of the
relevant schemes, that the surplus will accrue to the Group in the
future.
14.
Cash flow components
|
HY 2023 |
HY 2022 |
FY 2022 |
|
€m |
€m |
€m |
Pension
scheme movements |
|
|
|
Retirement
benefit obligations – current service cost |
0.4 |
0.9 |
1.7 |
Retirement benefit obligations – payments |
(0.2) |
(0.3) |
(0.6) |
Total retirement benefit scheme movements |
0.2 |
0.6 |
1.1 |
|
|
|
|
Repayments of lease liabilities |
|
|
|
Lease
payments |
(9.7) |
(11.1) |
(22.3) |
Interest element of lease payments |
0.7 |
0.7 |
1.3 |
Capital element of lease payments |
(9.0) |
(10.4) |
(21.0) |
|
|
|
|
Purchases
of property, plant and equipment and intangible
assets |
|
|
|
Purchases of
property, plant and equipment |
(25.7) |
(61.1) |
(74.4) |
Purchases of
intangible assets |
(0.3) |
(0.1) |
(0.4) |
Increase in capital asset prepayments |
(3.6) |
(0.7) |
(0.9) |
Total purchases of property, plant and equipment and
intangible assets |
(29.6) |
(61.9) |
(75.7) |
|
|
|
|
Changes
in working capital |
|
|
|
Decrease /
(increase) in inventories |
0.9 |
(2.1) |
(1.4) |
Increase in
receivables |
(5.8) |
(34.5) |
(17.0) |
Increase in payables |
28.1 |
60.0 |
19.6 |
Total working capital movements |
23.2 |
23.4 |
1.2 |
|
|
|
|
Share
buybacks |
|
|
|
Charge against
retained earnings |
- |
(18.2) |
- |
Amounts settled post period end |
- |
1.2 |
- |
Total cash payments in period |
- |
(17.0) |
- |
|
|
|
|
Share-based payments |
|
|
|
Share-based
payment expense** |
1.6 |
0.7 |
3.0 |
Settlement of employee equity plans through market purchases** |
(3.1) |
(2.9) |
(2.9) |
Net impact |
(1.5) |
(2.2) |
0.1 |
** In reporting HY2022, these amounts were offset within Cash
generated from operations. In HY2023, they have been represented
separately within Cash generated from operations and net cash
outflow from financing activities respectively.
At 30 June 2023 and 30 June 2022, the overall
working capital movements amounted to €23.2 million and €23.4
million respectively, which principally relate to seasonal working
capital inflows that are expected to unwind in the second half of
the year.
During the six months ended 30 June 2023, there
were no material changes to, or material transactions between Irish
Continental Group plc and its key management personnel or members
of their close family, other than in respect of remuneration. There
were no other material related party transactions in the
period.
15.
Related party transactions
Transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation.
16.
Contingent assets / liabilities
There have been no material changes in
contingent assets or liabilities as reported in the Group’s
financial statements for the year ended 31 December 2022.
17.
Composition of the entity
There have been no changes in the composition of
the entity during the half year ended 30 June 2023.
18.
Commitments
|
HY 2023 |
HY 2022 |
FY 2022 |
|
€m |
€m |
€m |
Commitments for the acquisition of property, plant and equipment –
approved and contracted for, but not accrued |
2.8 |
13.1 |
12.4 |
19. Events after the reporting
period
There have been no material events occurring
after the period ended 30 June 2023.
20. Board
approval
This interim report was approved by the Board of Directors of
Irish Continental Group plc on 30 August 2023.
APPENDIX: RECONCILIATION OF APMSFOR THE HALF
YEAR ENDED 30 JUNE 2023
Alternative Performance
Measures
Certain financial measures set out in our
Half-Yearly Financial Report to 30 June 2023 are not defined under
International Financial Reporting Standards (IFRS). Presentation of
these Alternative Performance Measures (APMs) provides useful
supplementary information which, when viewed in conjunction with
the Group’s IFRS financial information, allows for a more
meaningful understanding of the underlying financial and operating
performance of the Group. These non-IFRS measures should not be
considered as an alternative to financial measures as defined under
IFRS.
Descriptions of the APMs included in this report
are disclosed below.
EBITDA
EBITDA represents earnings before non-trading
items, interest, tax, depreciation and amortisation. As it
eliminates the effects of financing and depreciation decisions it
allows for the assessment of underlying cash profit generated from
operations.
|
Financial Statement Reference |
HY 2023 |
HY 2022 |
FY 2022 |
|
|
€m |
€m |
€m |
Operating
profit |
Condensed Consolidated Income Statement |
16.2 |
17.4 |
66.7 |
Depreciation and amortisation |
Condensed Consolidated Income Statement |
32.8 |
29.9 |
60.5 |
EBITDA |
|
49.0 |
47.3 |
127.2 |
Free Cash Flow
Free cash flow comprises Net Cashflow from
Operating Activities less capital expenditure. It is presented both
before and after strategic capital expenditure. Capital expenditure
comprises purchases of property, plant and equipment and intangible
assets. Strategic capital expenditure comprises expenditure on
vessels excluding annual overhaul and repairs, and other assets
with an expected economic life of over 10 years which increases
capacity or efficiency of operations.
It is presented as a measure of the availability
to the Group of funds for reinvestment or for return to
shareholders.
|
Financial Statement Reference |
HY 2023 |
HY 2022 |
FY 2022 |
|
|
€m |
€m |
€m |
Net cash inflow
from operating activities |
Condensed Consolidated Statement of Cash Flows |
69.8 |
69.6 |
126.3 |
Capital expenditure excluding strategic capital expenditure |
Condensed Consolidated Statement of Cash Flows |
(16.0) |
(10.3) |
(18.3) |
Free cash flow before strategic capital
expenditure |
|
53.8 |
59.3 |
108.0 |
Strategic capital expenditure |
Condensed Consolidated Statement of Cash Flows |
(13.6) |
(51.6) |
(57.4) |
Free cash flow after strategic capital
expenditure |
|
40.2 |
7.7 |
50.6 |
The total of the capital expenditure amounts set
out above in included as a single line item in the Condensed
Consolidated Statement of Cash Flows
Net Debt
Net debt comprises total borrowings and lease
liabilities included as current and non-current liabilities less
cash and cash equivalents.
Net debt is a measure of the Group’s ability to
repay its debts if they were to fall due immediately. Net debt
(pre-IFRS16) is a measure of net debt for banking covenant purposes
which excludes IFRS 16 lease liabilities.
|
Financial Statement Reference |
HY 2023 |
HY 2022 |
FY 2022 |
|
|
€m |
€m |
€m |
Net Debt |
Note 10 |
164.5 |
154.5 |
171.1 |
Current lease
liabilities |
Note 10 |
(14.7) |
(17.2) |
(11.7) |
Non-current lease liabilities |
Note 10 |
(33.2) |
(31.4) |
(30.7) |
Net Debt (pre-IFRS 16) |
|
116.6 |
105.9 |
128.7 |
Adjusted Basic EPS
Basic EPS is adjusted to exclude non-trading
items and net interest cost on defined benefit obligations.
Non-trading items are material non-recurring items that derive from
events or transactions that fall outside the ordinary activities of
the Group and which individually, or, if of a similar type, in
aggregate, are separately disclosed by virtue of their size or
incidence.
It is used as a key indicator of long-term
financial performance and value creation of a public listed
company.
The calculation of adjusted basic EPS is set out
at Note 6.
In addition to the above APMs, the Group
utilises additional APMs of Return on Average Capital Employed and
Schedule Integrity in relation to full year performance which are
not meaningful at the half year.
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