Interim Results

RNS Number : 2648S

API Group PLC

29 November 2012

 



Press Release

29 November 2012

API Group plc

("API" or the "Group")

Interim Results

API Group plc (AIM:API), a leading manufacturer of specialist foils and packaging materials, announces its interim results for the six months ended 30 September 2012.

Financial Highlights

·	Revenues marginally up on last year at £58.8m (2011: £58.5m)
·	Operating profits before exceptional items increased by 33% to £5.0m (2011: £3.8m)
·	Net operating margin improved to 8.5% (2011: 6.4%)
·	Profit before tax up 29% to £3.7m (2011: £2.9m)
·	Basic earnings per share 39% higher at 5.0p (2011: 3.6p)
·	Net debt of £5.2m compared to £10.0m at 30 September 2011
·	Shipments on major Laminates supply contract now expected to commence in final quarter
·	Formal sale process continues; discussions being held with a number of interested parties

Commenting on the results, API's Chief Executive, Andrew Turner said:

"Whilst growth in the period was modest compared to the last two years, it is encouraging that underlying demand for API products remains robust and the Group has been able to deliver another substantial improvement in profitability. 

"Despite challenging economic conditions, the Board's expectations for the full year remain substantially unchanged, with management's primary focus on the conversion of a number of specific sales opportunities, as well as the successful execution of key capital expenditure projects designed to enhance our product and service offering to customers."

- Ends -

For further information:

API Group plc
Andrew Turner, Group Chief Executive	Tel: [phone]
Chris Smith, Group Finance Director	www.apigroup.com

Numis Securities (Broker)
James Serjeant	Tel: [phone]
	www.numis.com

Cairn Financial Advisers (Nominated Adviser)
Tony Rawlinson / Avi Robinson	Tel: [phone]
	www.cairnfin.com

Media enquiries:

Abchurch
Henry Harrison-Topham / Sarah Hollins / Quincy Allan	Tel: [phone]
[e-mail]	www.abchurch-group.com

REPORT ON THE INTERIM RESULTS

FOR THE SIX MONTH PERIOD ENDED 30 SEPTEMBER 2012

Group revenues for the six months to 30 September 2012 were £58.8m; 0.4% ahead of the first half of last year (£58.5m) and 6.1% higher than the preceding six months (£55.4m).  Whilst underlying volumes grew by 3.9%, the impact on revenues was largely offset by movement in exchange rates affecting Euro denominated sales.  Compared to the second half of last year, volumes were up 10.0%, with changes in exchange rates again pegging back revenue growth to 6.1%.

Added value margins improved across the business due to lower raw material costs and, after three successive half-years of recovery, have now been restored to the levels immediately prior to the unprecedented rises in polyester film and solvent prices which hit the industry in early 2011.  With production costs held flat, in spite of higher volumes, incremental added value translated directly to the gross profit line which improved by 2.0% to 25.6%.

Overall selling, general and administration costs were also substantially unchanged on prior year, so that £1.2m of the £1.3m increase in gross profit was converted to operating profit.

Operating profits before exceptional items reached £5.0m; a margin on sales of 8.5%, an increase of £1.2m (+33%) over the first half of last year and a £1.9m improvement on the preceding six months.

At divisional level, three of the Group's four business units contributed higher profits.  Laminates performed particularly strongly, with operating profits ahead by £1.3m despite delays in the start-up of its major new supply contract.  Both Foils businesses made encouraging progress, with Americas profits higher by £0.3m and Europe by £0.4m.  As expected, volumes at Holographics suffered from the completion of a large joint project with Laminates.  Shipments to third party customers were also lower, leading to a reversal in operating profits at that division of £0.9m.

The income statement includes exceptional items for the first time in over two years; comprising costs associated with the Group sale process of £0.2m and reorganisation costs at Foils Europe of £0.2m.

The Group's net financing costs at the interim stage were £0.9m, unchanged on the same period last year.  Cash interest costs were lower by 13%, offset by higher pension running costs.

A nominal tax charge of under £0.1m (2011: £0.2m) was made up of current and deferred tax charges totalling £0.9m offset by additional recognition of tax losses in the UK and US.

Profit after tax was 39% higher at £3.7m (2011: £2.6m) and basic earnings per share was also 39% ahead of last year at 5.0p (2011: 3.6p).

REVIEW OF OPERATIONS

Laminates

Laminates put in another impressive performance driven by growth of 9.6% year-on-year and 11.7% compared to last year's second half, with sales reaching a record £30.3m for the six month period.  The tobacco and health & beauty sectors contributed equally to incremental sales, with health & beauty sales ahead 73%.

Gross margin improved by 3.4% due primarily to lower raw material costs and favourable mix, whilst production costs increased just 5% to accommodate 12% higher volumes including a contribution to improved productivity from the newly-commissioned laminator.

After an increase in distribution and selling overheads of £0.1m to cope with the growth in activity levels, operating profits rose by £1.3m to £4.1m, with an operating margin of 13.4%.  Compared to the previous six month period, profits were ahead by £1.2m and operating margin by 2.7%.

The exceptional Laminates performance was delivered despite further delays in the start-up of shipments on the previously-announced major new supply contract.  Whilst good progress continues to be made in optimising the product specification to meet stringent customer requirements, the project is not now expected to contribute incremental revenues until late in the final quarter of the financial year.

Foils Europe

This half year was the first reporting period for the new management team at Foils Europe.  Despite revenues 13% lower at £13.2m, operating profits were ahead £0.4m at £0.7m.

Volumes were down just 0.7% compared with the previous six months but 6.2% year-on-year, mainly as a result of a reduced take-up of lower-priced / spot sales opportunities in France and 'UK Export' markets.  Sales in other key territories were flat or experienced a modest decline reflecting weaker demand in the Euro-zone and Asia-Pacific.

The impact of lower sales was fully offset by an improvement in added value margin as a result of lower raw material costs.  Margins have now returned to the levels  immediately before the escalation in polyester film and solvent costs which occurred early in 2011.

With unchanged added value, the business focus was on cost reduction, including a streamlining of the sales and distribution organisation.  As a result, production and overhead costs were lower by £0.4m.  Associated one-off reorganisation costs of £0.2m were charged to exceptional items in the Group income statement.

The pre-exceptional operating profit of £0.7m represents an encouraging turn-around from the £0.15m reported for the preceding six month period and equates to an operating margin of 5.4%.

Foils Americas

Reported revenues for Foils Americas declined 1.6% year-over-year to £12.3m and were 3.7% lower on a constant exchange rate basis.  Compared to a weak second half last year, reported sales were ahead 12.6%.  The level of foil shipments for use in metallic pigments has been a key factor affecting the pattern of sales over the last two years.  Whilst volumes were 24% lower year-on-year, underlying demand in this sector remains positive and a recently-signed long term supply agreement with a major customer should improve the consistency of future sales.  Volumes in the core packaging and graphics sectors reflected the improvement in the US economy, with sales up 11% compared to the same period last year.

As in the European foils business, added value and gross margins recovered strongly due to lower raw material costs, although the impact was somewhat mitigated at the gross margin level by less favourable sales mix and charges to production costs for sales from stock.

After higher overhead costs for variable pay, recruitment and general expenses, operating profit came in at £1.0m; £0.3m higher than the interim stage last year, £0.5m up on the prior six months and representing an operating margin of 8.4%.

Holographics

After a strong 2011/12, Holographics revenues, at £5.0m, retreated by 27% compared to the first half last year and 19% versus the prior six months due to lower volumes of decorative films and foils supplied to sister companies within the Group and reduced order levels for security and authentication products from external customers. 

The conclusion of a major joint project with Laminates accounted for £1.1m of the decline in sales, whilst the anticipated compensating growth with security customers failed to materialise due to delays in converting pipeline opportunities.  As a result, last year's strong business development momentum stalled, compounded by a reduction in shipments on established contracts of 8% or £0.3m.

Added value margin improved, due primarily to lower material prices, and unit management responded to the lower volumes by curtailing production costs by £0.4m.  Nevertheless, with the decline in sales contribution, operating profit fell to £0.1m, compared to £0.9m at the interim stage last year and £0.7m in the previous six months.

Holographics is the current focus of the Group's capital expenditure program with over £3m allocated to projects to strengthen the business's offering to the security and authentication market, including a site refurbishment and security upgrade at Salford and equipment to extend the range of security features.  In November 2012, the business entered into a joint venture agreement with the aim of developing an industry-leading capability in the field of holographic origination and optical authentication technology.

CASH FLOW AND BORROWINGS

Operating cash flow from operations of £2.7m compared to £1.1m for the same period last year was a result of higher cash profits and improved working capital efficiency.  Measured by reference to the trailing three month sales, working capital as a percentage of sales reduced to 10.5% compared with 11.9% at September 2011, primarily as a result of more favourable mix.   

Higher capital expenditure of £3.0m (2011: £1.2m) was a result of three key projects; the customer-led, new machine installation at Laminates, Holographics site / security upgrade to strengthen the business's offering to the authentication market and a new ERP system which is being introduced in the Foils businesses.  Second half expenditure is expected to be at broadly similar levels.

Group net debt of £5.2m compares to £10.0m twelve months ago and £3.6m at 31 March 2012.  Gearing at 30 September 2012 was 22% versus 49% one year earlier and the ratio of the Group's net debt to trailing 12 month EBITDA reduced to 0.5x compared to 1.0x at the interim stage last year.

The Group's main lending arrangements are with Barclays Bank plc in the UK and Wells Fargo in the US.  As at 30 September 2012, the UK facilities extend to 1 July 2013 and the US facilities to 31 October 2013.  In the light of the ongoing sale process, outline agreements have been reached with both lenders to extend facilities by a further 12 months on terms which will, in the meantime, lower the Group's overall cost of borrowing.

PENSION DEFICIT

The IAS 19 valuation of the UK and US defined benefit pension schemes increased to £9.3m, from £8.6m at 31 March 2012 and £6.9m at 30 September 2011.  Net of associated deferred tax assets, the deficit is now valued at £7.2m compared to £5.1m at September last year and £6.5m at March 2012.

The £0.7m increase in the pension deficit since March 2012 is a consequence of a slightly less favourable balance of assumptions affecting the liability valuation and a flat investment performance during the period.  In the year since September 2011, the exceptional decline in bond yields has increased the valuation of scheme liabilities by £11.0m.  This has been partially offset by the impact of reduced inflation assumptions (£4.7m) and an increase in scheme assets due to strong investment performance (£3.6m).

SALE PROCESS

On 26 September 2012 the Board announced the commencement of a formal sale process in respect of the Group.  Further to the expiry of the initial deadline at the end of October 2012, the Board can confirm that a number of indicative offers have been received and that the Company and its advisers are in discussions with a number of parties.  As the next stage, due diligence information and management presentations are being provided with a view to securing revised proposals for the Board's further consideration.

The Board reserves the right to alter any aspect of the formal sale process or to terminate it at any time and in such cases will make an announcement as appropriate.  The Board also reserves the right to reject any approach or terminate discussions with any interested party or participant at any time.  There can be no certainty that any offer will be made for the Company, or even proposed, or as to the level of any proposal or offer that may be made.

OUR PEOPLE

The Board wishes to express its appreciation to the whole API team for their contribution.  It is noteworthy that significant progress continues to be made in enhancing both financial performance and the business's long term prospects in spite of the uncertainty surrounding the outcome of the ongoing sale process.

OUTLOOK

Consistent with last year, the Board is anticipating a slightly weaker second half, with full year results substantially unchanged on previous expectations.

After such a strong interim performance, Laminates has experienced some weakening of demand in the third quarter with the balance of the year predicated on the revised timetable for the ramp-up of volumes on the new supply contract.

Both Foils Europe and Holographics are expecting higher activity levels in the second half due, respectively, to a partial recovery of previous volume losses and more favourable timing of orders on existing supply contracts.  In addition, both businesses have an encouraging pipeline of new sales opportunities.

Whilst the Group is far from insulated from the general economic climate, it continues to demonstrate an ability to make progress in the face of challenging market conditions.

GROUP INCOME STATEMENT

for the six months ended 30 September 2012

		Unaudited	Unaudited	Audited
		6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
	Note	£'000	£'000	£'000
Continuing operations
Revenue	2	58,782	58,545	113,935
Cost of sales		(43,726)	(44,752)	(87,149)
Gross profit		15,056	13,793	26,786
Distribution costs		(2,104)	(2,067)	(3,886)
Administrative expenses (excluding exceptional items)		(7,939)	(7,961)	(16,022)
Operating profit before exceptional items	2	5,013	3,765	6,878
Exceptional items	3	(394)	-	-
Operating profit from continuing operations		4,619	3,765	6,878
Finance revenue	4	2	7	13
Finance costs	4	(889)	(884)	(1,832)
		(887)	(877)	(1,819)
Profit from continuing operations before taxation		3,732	2,888	5,059
Tax expense	5	(48)	(246)	(105)
Profit for the period attributable to equity holders of the Parent		3,684	2,642	4,954
Earnings per share (pence)
Basic earnings per share on profit for the period	6	5.0	3.6	6.7
Diluted earnings per share on profit for the period	6	4.8	3.5	6.4

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September 2012

		Unaudited	Unaudited	Audited
		6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
		£'000	£'000	£'000
Profit for the period		3,684	2,642	4,954
Exchange differences on retranslation of foreign operations		(192)	186	(4)
Change in fair value of effective cash flow hedges		279	462	937
Actuarial (losses)/gains on defined benefit pension plans		(1,094)	2,410	300
Tax on items relating to components of other comprehensive income		63	(627)	(419)
Other comprehensive income for the period, net of tax		(944)	2,431	814
Total comprehensive income for the period attributable to equity holders of the Parent		2,740	5,073	5,768

GROUP BALANCE SHEET

at 30 September 2012

		Unaudited	Unaudited	Audited
		30 September 2012	30 September 2011	31 March 2012
	Note	£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment		19,389	17,239	17,936
Intangible assets - goodwill		5,188	5,188	5,188
Trade and other receivables		-	59	32
Deferred tax assets		5,498	4,684	5,230
		30,075	27,170	28,386
Current assets
Trade and other receivables		15,960	17,631	15,485
Inventories		12,929	11,913	12,237
Other financial assets		693	172	474
Cash and short-term deposits	7	6,342	3,185	10,068
		35,924	32,901	38,264
Total assets		65,999	60,071	66,650
Liabilities
Current liabilities
Trade and other payables		20,116	18,547	22,261
Financial liabilities	8	10,934	3,695	4,522
Income tax payable		454	378	307
		31,504	22,620	27,090
Non-current liabilities
Financial liabilities	8	655	9,767	9,237
Deferred tax liabilities		359	238	307
Provisions		73	81	76
Deficit on defined benefit pension plans	10	9,271	6,943	8,618
		10,358	17,029	18,238
Total liabilities		41,862	39,649	45,328
Net assets		24,137	20,422	21,322
Equity
Called up share capital		767	766	767
Share premium		7,136	7,136	7,136
Other reserves		8,816	8,816	8,816
Foreign exchange reserve		63	445	255
Retained earnings		7,355	3,259	4,348
Total shareholders' equity		24,137	20,422	21,322

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2012

	Equity share capital		Share premium		Other reserves		Foreign exchange reserve		Retained earnings		Total shareholders' equity
	£'000		£'000		£'000		£'000		£'000		£'000
At 1 April 2011	766		7,136		8,565		259		(1,433)		15,293
Profit for the period	-		-		-		-		2,642		2,642
Other comprehensive income for the period, net of tax	-		-		-		186		2,245		2,431
Shares acquired by Employee Benefit Trust	-		-		(11)		-		-		(11)
Transferred on exercise of share options	-		-		262		-		(262)		-
Share-based payments	-		-		-		-		67		67
Balance at 30 September 2011	766		7,136		8,816		445		3,259		20,422
Profit for the period	-		-		-		-		2,312		2,312
Other comprehensive income for the period, net of tax	-		-		-		(190)		(1,427)		(1,617)
Issue of shares	1		-		-		-		-		1
Shares acquired by the Company	-		-		-		-		(1)		(1)
Share-based payments	-		-		-		-		118		118
Tax relating to items accounted for directly through equity	-		-		-		-		87		87
Balance at 31 March 2012	767		7,136		8,816		255		4,348		21,322
Profit for the period	-		-		-		-		3,684		3,684
Other comprehensive income for the period, net of tax	-		-		-		(192)		(752)		(944)
Share-based payments	-		-		-		-		70		70
Tax relating to items accounted for directly through equity	-		-		-		-		5		5
Balance at 30 September 2012	767		7,136		8,816		63		7,355		24,137

GROUP CASH FLOW STATEMENT

For the six months ended 30 September 2012

				Unaudited	Unaudited	Audited
			6 months to 30 September 2012		6 months to 30 September 2011	Year to 31 March 2012
	Note			£'000	£'000	£'000
Operating activities
Group profit before tax from continuing operations				3,547	2,888	5,059
Adjustments to reconcile Group profit from continuing operations before taxation to net cash flow from operating activities:
Net finance costs				1,072	877	1,819
Depreciation of property, plant and equipment				1,013	1,212	2,368
Profit on disposal of property, plant and equipment				(2)	-	(2)
Movement in fair value foreign exchange contracts				(4)	(112)	(83)
Share-based payments				70	67	185
Difference between pension contributions paid and amounts recognised in the income statement				(848)	(776)	(1,539)
(Increase) / decrease in inventories				(783)	533	156
(Increase) / decrease in trade and other receivables				(656)	(719)	1,260
Decrease in trade and other payables				(1,538)	(3,669)	(304)
Movement in provisions				(3)	(4)	(9)
Cash generated from operations				1,868	297	8,910
Income taxes paid				(24)	(41)	(171)
Net cash flow from operating activities				1,844	256	8,739
Investing activities
Interest received				2	7	13
Purchase of property, plant and equipment				(2,999)	(1,192)	(2,736)
Sale of property, plant and equipment				7	-	5
Net cash flow from investing activities				(2,990)	(1,185)	(2,718)
Financing activities
Interest paid				(348)	(384)	(832)
Proceeds from share issues				-	-	1
Purchase of shares by Company				-	-	(1)
Purchase of shares by Employee Benefit Trust				-	(11)	(11)
New borrowings				-	-	1,913
Repayment of borrowings				(1,343)	(393)	(996)
Net cash flow from financing activities				(1,691)	(788)	74
(Decrease) / increase in cash and cash equivalents				(2,837)	(1,717)	6,095
Effect of exchange rates on cash and cash equivalents				(4)	(50)	8
Cash and cash equivalents at the beginning of the period				8,822	2,719	2,719
Cash and cash equivalents at the end of the period		7		5,981	952	8,822

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1 (a) Corporate information

The consolidated interim financial statements of API Group plc for the six months ended 30 September 2012 were authorised for issue in accordance with a resolution of the Directors on 28 November 2012.

API Group plc is a public limited company incorporated and domiciled in England and Wales.  The Company's shares are traded on the Alternative Investment Market of the London Stock Exchange.

The principal activities of the Group are the manufacture and distribution of specialty foils, films and laminated materials.

(b) Basis of preparation

The interim consolidated financial statements of the Group for the six months ended 30 September 2012 have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union.

These interim consolidated financial statements are unaudited.  They do not constitute statutory accounts as defined in section 435 of the Companies Act 2006 and therefore do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's latest annual financial statements as at 31 March 2012 which were prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The audited annual financial statements for the year ended 31 March 2012, which represent the statutory accounts for that period have been filed with the Registrar of Companies.  The auditors reported on those accounts. Their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006.

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2012.

At 30 September 2012, the Group's UK borrowing facilities were due to expire on 1 July 2013 and the US facilities were due to expire on 31 October 2013.  In light of the current sale process, the Group has sought to extend both of these facilities by 12 months to 1 July 2014 and 31 October 2014 respectively.  Outline terms have been agreed and the process of finalising formal documentation is expected to be completed shortly.  Accordingly, and after making appropriate enquiries, the Directors consider that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.  The Directors therefore continue to adopt the going concern basis in preparing these financial statements.

2. SEGMENTAL INFORMATION

	Unaudited	Unaudited	Audited
	6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
Continuing operations	£'000	£'000	£'000
Total revenue by origin
Laminates	30,339	27,672	54,823
Foils Europe	13,196	15,170	29,158
Foils Americas	12,310	12,512	23,446
Holographics	4,989	6,848	13,015
	60,834	62,202	120,442
Inter-segmental revenue
Laminates	-	39	93
Foils Europe	490	495	980
Foils Americas	258	296	566
Holographics	1,304	2,827	4,868
	2,052	3,657	6,507

External revenue by origin
Laminates	30,339	27,633	54,730
Foils Europe	12,706	14,675	28,178
Foils Americas	12,052	12,216	22,880
Holographics	3,685	4,021	8,147
	58,782	58,545	113,935
Segment result
Operating profit
Laminates	4,063	2,792	5,704
Foils Europe	707	274	389
Foils Americas	1,030	688	1,173
Holographics	90	948	1,615
Segment result	5,890	4,702	8,881
Central costs	(877)	(937)	(2,003)
Total operating profit before exceptional items	5,013	3,765	6,878

3. EXCEPTIONAL ITEMS

	Unaudited	Unaudited	Audited
	6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
	£'000	£'000	£'000
Restructuring of operating businesses	(224)	-	-
Costs incurred in respect of corporate activities	(170)	-	-
	(394)	-	-

Restructuring of operating businesses

Redundancy and other costs associated with business restructuring in the Foils Europe business.

Costs incurred in respect of corporate activities

Fees incurred to date associated with the potential sale of the Company.

4. FINANCE REVENUE AND FINANCE COSTS

		Unaudited	Unaudited	Audited
		6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
		£'000	£'000	£'000
Finance revenue
Interest receivable on bank and other short term deposits		1	1	3
Other interest receivable		1	6	10
		2	7	13
Finance costs
Interest payable on bank loans and overdrafts		(463)	(486)	(1,045)
Other interest payable		(9)	(7)	(49)
Finance cost in respect of defined benefit pension plans		(417)	(391)	(738)
		(889)	(884)	(1,832)

5. TAXATION

		Unaudited		Unaudited	Audited
		6 months to 30 September 2012		6 months to 30 September 2011	Year to 31 March 2012
		£'000		£'000	£'000
Current income tax
UK corporation tax - current year charge		(198)		-	-
Overseas tax - current year charge		(14)		(57)	(101)
- adjustments in respect of prior-year tax charge			-	-	(19)
Total current income tax charge		(212)		(57)	(120)
Deferred tax
Origination and reversal of temporary differences		164		(189)	15
Total charge in the Income Statement		(48)		(246)	(105)

6. EARNINGS PER SHARE

		Unaudited	Unaudited	Audited
		6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
		£'000	£'000	£'000
Net profit attributable to equity holders of the parent company - continuing operations		3,684	2,642	4,954
		Unaudited	Unaudited	Audited
		6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
		No	No	No
Basic weighted average number of ordinary shares		73,748,730	73,609,201	73,655,985
Dilutive effect of employee share options and contingent shares		3,614,250	1,283,688	3,972,039
Diluted weighted average number of ordinary shares		77,362,980	74,892,889	77,628,024

The basic weighted average number of shares excludes the 3,000,000 shares owned by the API Group plc No.2 Employee Benefit Trust (30 September 2011 and 31 March 2012: 3,000,000).  These contingent shares are included in the diluted weighted average number of shares.

	Unaudited	Unaudited	Audited
	6 months to 30 September 2012	6 months to 30 September 2011	Year to 31 March 2012
Earnings per share	pence	pence	pence
Continuing operations
Basic earnings per share	5.0	3.6	6.7
Diluted earnings per share	4.8	3.5	6.4

7. CASH AND CASH EQUIVALENTS

	Unaudited	Unaudited	Audited
	30 September 2012	30 September 2011	31 March 2012
	£'000	£'000	£'000
Cash and short-term deposits	6,342	3,185	10,068
Bank overdrafts	(361)	(2,233)	(1,246)
	5,981	952	8,822

8. FINANCIAL LIABILITIES

	Unaudited	Unaudited	Audited
	30 September 2012	30 September 2011	31 March 2012
	£'000	£'000	£'000
Current
Bank overdrafts	361	2,233	1,246
Current instalments on bank loans	10,527	1,239	3,196
Interest rate swaps	46	145	80
Forward currency exchange contracts	-	78	-
	10,934	3,695	4,522
Non-current
Non-current instalments due on bank loans	653	9,732	9,205
Interest rate swaps	2	34	32
	655	9,766	9,237

At 30 September 2012, the major part of the Group's borrowings was repayable within one year as the UK borrowing facilities were due to expire on 1 July 2013.  In addition, the US facilities were due to expire on 31 October 2013.  In light of the current sale process, the Group has sought to extend both of these facilities by 12 months to 1 July 2014 and 31 October 2014 respectively.  Outline terms have been agreed and the process of finalising formal documentation is expected to be completed shortly. 

9. CAPITAL COMMITMENTS

At 30 September 2012 there were contracted amounts not provided in these financial statements of £1,157,000 (30 September 2011: £1,329,000; 31 March 2012: £1,969,000).

10. DEFINED BENEFIT PENSION PLAN DEFICIT

		Unaudited	Unaudited	Audited
		30 September 2012	30 September 2011	31 March 2012
		£'000	£'000	£'000
United Kingdom
Fair value of scheme assets		72,671	67,341	73,266
Present value of scheme liabilities		(80,933)	(73,595)	(80,821)
		(8,262)	(6,254)	(7,555)
United States
Fair value of scheme assets		1,793	1,867	1,769
Present value of scheme liabilities		(2,802)	(2,556)	(2,832)
		(1,009)	(689)	(1,063)
Net pension liability		(9,271)	(6,943)	(8,618)
The movements in the net pension liability are as follows:
Opening liability		8,618	9,719	9,719
Net cost recognised in finance costs		417	391	738
Taken to Statement of Comprehensive Income		1,094	(2,410)	(300)
Contributions from and scheme expenses borne by employers		(848)	(776)	(1,539)
Exchange differences		(10)	19	-
Closing liability		9,271	6,943	8,618

The main assumptions used in valuing the present value of the scheme liabilities in the UK are as follows:

Rate of increases in pensions in payment and deferred pensions		1.60%	2.10%	2.20%
Inflation (CPI)		1.50%	2.10%	2.20%
Discount rate		4.40%	5.25%	4.85%

- Ends -

 

END

 

 

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