Final Results
Chamberlin & Hill PLC
07 June 2007
CHAMBERLIN & HILL plc
FINAL RESULTS
Chamberlin & Hill plc ('Chamberlin & Hill', the 'Company' or the 'Group')
announces its audited results for the year ended 31 March 2007.
Financial highlights:
• Underlying operating profit of £1.1m * (2006:£2.4m)
• Underlying earnings per share of 10.5p * (2006: 21.5p)
• Dividend maintained at 11.85p for the year (2006: 11.85p)
• Dividend yield of 6.0% (2006: 5.6%)
• Underlying return on equity of 7.1% * (2006: 11.7%)
Year to Year to
31 March 31 March
2007 2006
£000 £000
Turnover 39,188 41,435
Underlying operating profit * 1,132 2,398
Operating (loss)/profit (809) 2,502
(Loss)/profit before taxation (831) 2,368
Underlying earnings per share * 10.5p 21.5p
Basic (loss)/earnings per share (4.4)p 22.5p
Dividends per share (paid and proposed) 11.85p 11.85p
* Figures stated before non-recurring operating costs of £0.8m (as set out in
the Business Review), exceptional costs of £1.1m and £0.4m of tax credits.
Chamberlin & Hill plc
Tom Brown, Chairman 01922 707100
Tim Hair, Chief Executive 01922 707100
Teather & Greenwood Limited
Tom Hulme, NOMAD 020 7426 9000
Chairman's Statement
During the last year Chamberlin & Hill entered a new phase in its development.
The appointment of Tim Hair as Chief Executive, together with Mark Bache as
Finance Director, completed the planned evolution of the executive Board, while
the appointment of Alan Howarth as a director in January 2007 completed the
non-executive side too. We have a substantially new team, which is already
engaging with the opportunities to progress in both strategic and operational
areas.
Results & Dividend
As expected, revenues were down slightly on the previous year at £39.2million
(2006: £41.4 million), following the closure of the Bloxwich foundry and the
planned exit of the Group from certain low margin contracts.
During the year we advised that the new executive team had identified a number
of issues, largely relating to balance sheet items, and these have been
addressed in the financial statements. Profit before tax excluding exceptional
items (PBTE) decreased to £0.3 million (2006: £2.3 million), after a charge to
trading of £0.8 million for non-recurring and largely non-cash legacy costs.
These non-recurring costs are further detailed in the Business Review. The
underlying PBTE was therefore £1.1million. Earnings per share before all one-off
costs fell to 10.5p (2006: 21.5p).
Exceptional costs in the year totalled £1.1m, principally due to the completion
of the Bloxwich closure, restructuring at PFP, and to further consequences of
the review by the new executive team.
The Group's balance sheet remains strong. Net debt at the year-end was £0.2
million (2006: net cash of £0.6 million) after capital expenditure of £1.6
million. This represents a gearing of 1.8%.
The Board is confident in the future of the Group, and is recommending an
unchanged final dividend of 8.0p per share (11.85p total for the year), payable
on 27 July 2007 to shareholders on the register at the close of business on 6
July 2007.
Progress
Consolidation of the light castings business into the Walsall foundry has
created a business focussed on complex high-volume castings, which are typically
for the automotive supply chain. Integration of the Bloxwich work has been
completed, and as expected operating margins have been improved by the
consolidation.
Previous plans to close our Leicester foundry and relocate the work to
Scunthorpe have been reappraised, with the result that we now intend to continue
operating Russell Ductile (heavy castings) on both sites. The performance of
this business in the year has been disappointing but new leadership is in place
and, following progress in the fourth quarter, we expect significant
improvements in the coming year.
Our engineering businesses have continued to progress. At Fred Duncombe a new
Managing Director has been appointed, and a factory reorganisation has released
a freehold property which was sold just after the year end, giving rise to an
exceptional profit of £0.5m. A significant strategic reappraisal at PFP led to
the decision to exit a low margin product line and refocus the business. Both
businesses are now focussed on achieving organic growth in the current year.
During the year the Board concluded that AIM offered a more appropriate market
given Chamberlin & Hill's size and strategy. The move from the Official List
was successfully completed in November 2006 and I am pleased to note that since
the move to AIM liquidity has been maintained.
Pensions
In valuing its final salary pension scheme the Group has had to adopt updated
mortality tables to reflect the increasing longevity of the general population.
As a consequence the deficit has increased to £2.2 million (2006: £0.5 million).
Strategy
Chamberlin & Hill has traditionally focussed on cast iron foundries with
secondary activities in engineering, historically with a link to castings.
Although we expect our foundry businesses to remain attractive in coming years,
we recognise that the Group must develop to meet future threats and
opportunities. The Board has concluded that it is desirable to re-balance the
Group by expanding our engineering activities, largely by acquisition, creating
a more broadly based engineering Group. Further detail on our strategic
thinking appears in the Business Review.
Proposed change of name
Given the new phase that the Group is entering, the above strategy and the split
of Chamberlin & Hill Castings Ltd away from its parent company in 2006, the
directors believe it would be beneficial to change the name of the Group to
Chamberlin plc. A resolution supporting this change will be proposed at the AGM.
Outlook
Last year was one of transition, and our intention is now to build on the hard
work that has been done to achieve a result that moves us a step closer to the
level which we believe is commensurate with the size and potential of the
current group. Demand is currently robust across most of the group, and present
trading is in line with management expectations.
We will also seek opportunities to develop the group strategically, but we will
do this with great care and will only commit to opportunities which we are
confident fit our criteria.
Tom Brown
Chairman
7 June 2007
Business Review
Finance
The reported profit before tax and exceptional items (PBTE) for the year was
£0.3 million, as shown in the Income Statement. This is however after charges
to trading for one-off costs of £0.8 million, and consequently the underlying
PBTE was £1.1 million. These non-recurring costs resulted from a comprehensive
review of the balance sheet and the Group's financial policies carried out by
our new executive team, which identified a number of issues which were
individually minor and are predominantly of a non-cash nature. These
non-recurring costs do not meet the definition of exceptional items but relate
to the reassessment of previous accounting estimates across all subsidiaries
predominantly in the area of provisions for stock and credit notes and fixed
asset write downs. Given their non-recurring nature and their impact on the 2007
results, the non-recurring costs have been separately identified within the
financial highlights.
Exceptional items in the year totalled £1.1 million. The majority resulted from
the completion of the Bloxwich closure, re-structuring at PFP and the revised
integration plans for Leicester and Scunthorpe, with the transfer to AIM
comprising the remainder.
The Group's balance sheet remains strong with net equity of £10.9 million and a
closing overdraft of £0.2 million, representing gearing of 1.8%.
Operations
Foundries
The foundry operating organisation was changed at the start of the year,
creating two focussed subsidiaries and separating the operations from the PLC
legal entity for the first time in our history. This structure has provided a
clear management organisation for the foundries, defining responsibilities and
creating increased local ownership of the results. Overall foundry sales
reduced to £31.3 million (2006: £33.6 million) and although much of this
reduction was the planned result of the Bloxwich closure, a significant part was
due to poor performance in the Russell Ductile business.
Chamberlin & Hill Castings
Located in Walsall, this business is our high-volume foundry whose customers are
predominantly in the automotive supply chain. We are pleased to report that the
business has enjoyed strong demand for its products, especially turbocharger
castings, throughout the past year. Although foundry operating margins have been
under pressure from raw material and energy price rises during the year, good
recovery through pricing has been achieved. Operating margins in the first half
were depressed by integration of work following the closure of the Bloxwich
site, but recovered in the second half as expected.
Chamberlin & Hill Castings has recently started implementation of lean
manufacturing techniques and exited from its remaining low-volume work. As a
result it is expected to deliver improved operating efficiencies in the coming
year. However, recent movements in the exchange rate will result in an adverse
effect on margins as sales in Euros account for 50% of Walsall activity.
Forward currency contracts have now been put in place to cover 80% of our
expected Euro exposure, and this will be updated on a rolling basis.
Russell Ductile Castings
Operating from sites in Scunthorpe and Leicester, Russell Ductile produces low
volume castings across a wide size range, with particular expertise in complex
shapes and specialist cast iron metallurgy. Following the acquisition of the
Leicester business in 2004, integration plans were developed and the Scunthorpe
site was placed under the control of the Leicester management. Unfortunately
this arrangement proved unsatisfactory, and both operations suffered from poor
quality and delivery performance during the first half.
Following a review by the Chief Executive, we announced in our Interim Statement
that Leicester could continue as a profitable low-overhead operation for some
time to come, hence saving the capital project to relocate its equipment to
Scunthorpe. A new Managing Director was appointed in November, and other key
managers replaced in the final quarter. Improvement actions, including the exit
of loss-making contracts, are underway and following performance improvements
customer confidence is being rebuilt and new business won.
Demand for castings remains positive, especially in the middle of the size
range, and although earnings at Russell Ductile during the year have been badly
affected we expect profitability to improve in 2008. Inevitably the early
months will be at lower margins until the improvements take their full effect.
Engineering
Fred Duncombe
Located in Cannock this business produces Exidor branded emergency exit
equipment and other architectural hardware. Although sales have been flat good
margins have been maintained and initiatives to launch a new product range,
increase sourcing from low cost countries, and re-organise the factory have been
completed. A new Managing Director has been appointed and we anticipate that
increased emphasis on sales will deliver profitable growth in the coming year.
Petrel
Previously trading as PFP Electrical Products, this business was restructured in
the fourth quarter, leading to the disposal of its socket box and conduit
product lines which were under severe threat from low cost sources and in
terminal decline for UK producers. Our Petrel brand is well established in the
UK hazardous area electrical market and the business now trades under that name.
Now focussed on this technically demanding business, Petrel is working to grow
its sales by expanding product ranges and improving customer service, with
encouraging initial results.
Strategy
Chamberlin & Hill started life as a cast iron foundry, and throughout its
history has remained a foundry dominated business. In the past this strategy
has served the Group well, and our foundries remain profitable and
cash-generative businesses. In the longer term however we must recognise that
there are a number of potential threats to UK foundries. These include
competition from low cost countries, currently constrained by the highly
engineered nature of our cast products; the increasing weight of environmental
legislation in the UK; and potential difficulty in attracting the next
generation of employees into heavy industry. We have therefore concluded that
Chamberlin & Hill must create a strategy that reduces its reliance on foundries
and evolve into a more broadly based engineering Group.
Success in UK engineering industry has not been easy to achieve in recent years,
but its requirements can be simply stated. A successful UK-based engineering
business must do difficult things and must do them well.
We define 'difficult things' as activities with high engineering content,
delivering products or processes with the following types of characteristic:
• High specification and demanding applications
• High entry barriers and well defended intellectual property
• Constant product development influencing customers designs
• Customer or regulatory approval difficult and/or expensive
• High degree of process know-how
• Difficult to replicate or transfer
• Serious consequences for product failure
• Demanding logistics requiring closeness to the customer
These characteristics provide a strong base, but to take profitable advantage of
them it is essential that a business is properly managed and performs well.
This means delivering outstanding customer service, notably in delivery and
quality performance; pro-active product and technology development; a
competitive cost position; 'Lean manufacturing' activity in all areas; and a
rigorous and analytically driven financial environment.
We believe that an engineering business that can meet the 'difficult things,
done well' challenge will provide a profitable future for its shareholders, and
intend to make this the core of our strategy for the future. The four existing
Group businesses all operate in difficult product or process areas, and although
performance has been below standard in some respects, improvement activity is
underway.
Our strategy for the coming years will be to enhance shareholder value through
the acquisition of engineering companies that operate in demanding areas and
have the potential for growth and performance improvement under our ownership,
while continuing to respond to attractive bolt on opportunities that enhance
current activities, We will particularly look for acquisitions where the
technology is rooted in mechanical engineering, with English as the working
language and which are easily reached from our UK base. We would expect to
avoid the upper tiers of the automotive supply chain, and will concentrate on
opportunities that will make a significant addition to the Group.
Summary
Although the past year has been challenging, Chamberlin & Hill has emerged
stronger, with upgraded management at all levels, improved systems and controls
and a clear strategy for the future supported by a strong balance sheet. We
believe that current progress can be sustained, and that, given the right
opportunities, considerable strategic development can be anticipated.
Tim Hair Mark Bache
Chief Executive Finance Director
7 June 2007 7 June 2007
Consolidated Income Statement
for the year ended 31 March 2007
2007 2006
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
£000 £000 £000 £000 £000 £000
Revenue 39,188 - 39,188 41,435 - 41,435
Cost of sales (33,007) - (33,007) (33,515) - (33,515)
Gross profit 6,181 - 6,181 7,920 - 7,920
Other operating (5,849) (1,141) (6,990) (5,522) 104 (5,418)
(expenses)/income
Operating (loss)/profit 332 (1,141) (809) 2,398 104 2,502
from continuing
operations
Finance revenue 90 - 90 1 - 1
Finance costs (112) - (112) (135) - (135)
(Loss)/profit from 310 (1,141) (831)
continuing operations
before tax 2,264 104 2,368
Tax credit/(expense) 292 216 508 (679) (31) (710)
(Loss)/profit for the 602 (925) (323)
year from continuing
operations 1,585 73 1,658
(Loss)/earnings per
share
basic
underlying 8.1p (4.4)p 21.5p 22.5p
diluted
diluted underlying 8.0p (4.4)p 21.5p 22.4p
Consolidated Statement of Recognised Income and Expense
for the year ended 31 March 2007
2007 2006
£000 £000
Actuarial (losses)/gains on pension assets and (2,132) 1,141
liabilities
Deferred tax credit/(charge) on actuarial (losses)/gains 640 (342)
Net (expense)/income recognised directly in equity (1,492) 799
(Loss)/ profit for the year (323) 1,658
Total recognised income and expense for the year (1,815) 2,457
attributable to equity holders of the parent company
Parent Company Statement of Recognised Income and Expense
in the year ended 31 March 2007
2007 2006
£000 £000
Actual (losses)/gains on pension assets and liabilities (2,132) 1,141
Deferred tax credit/(charge) on actuarial (losses)/gains 640 (342)
Net income/(expense) recognised directly in equity (1,492) 799
(Loss)/profit for the year (1,025) 42
Total recognised income and expense for the year
attributable to equity holders of the parent company (2,517) 841
Consolidated Balance Sheet
at 31 March 2007
31 March 31 March
2007 2006
£000 £000
Non-current assets
Property, plant and equipment 7,954 8,206
Intangible assets 453 483
Deferred tax assets 975 497
9,382 9,186
Current assets
Inventories 4,746 5,308
Trade and other receivables 7,370 7,942
Income taxes receivable 70 -
Cash and cash equivalents - 593
Assets held for resale 219 -
12,405 13,843
Total assets 21,787 23,029
Current liabilities
Financial liabilities 209 -
Trade and other payables 7,738 7,501
Income taxes payable - 237
7,947 7,738
Non current liabilities
Deferred tax 663 1,262
Defined benefit pension scheme
deficit 2,235 487
2,898 1,749
Total Liabilities 10,845 9,487
Capital and reserves
Called up share capital 1,854 1,840
Share premium account 828 743
Capital redemption reserve 109 109
Retained earnings 8,151 10,850
Total equity 10,942 13,542
Total equity and liabilities 21,787 23,029
Tim Hair )
) Directors
Mark Bache )
The accounts were approved by the Board of Directors on 7 June 2007
Parent Company Balance Sheet
at 31 March 2007
31 March 31 March
2007 2006
£000 £000
Non current assets
Property, plant and equipment 1,112 1,085
Intangible assets 7 10
Investments 7,159 7,159
Deferred tax assets 881 447
9,159 8,701
Current assets
Trade and other receivables 52 35
Amounts due from subsidiary companies 3,874 5,041
3,926 5,076
Total assets 13,085 13,777
Current liabilities
Financial liabilities 1,415 1,290
Trade and other payables 183 119
Amounts due to subsidiary companies 2,467 1,477
4,065 2,886
Non-current liabilities
Amounts due to subsidiary companies 66 66
Deferred tax 497 814
Defined benefit pension scheme 2,235 487
deficit
2,798 1,367
Total Liabilities 6,863 4,253
Capital and reserves
Called up share capital 1,854 1,840
Share premium account 828 743
Capital redemption reserve 109 109
Retained earnings 3,431 6,832
Total equity 6,222 9,524
13,085 13,777
Tim Hair )
) Directors
Mark Bache )
The accounts were approved by the Board of Directors on 7 June 2007
Consolidated Cash Flow Statement
for the year ended 31 March 2007
Year ended Year ended
31 March 31 March
2007 2006
Operating activities £000 £000
Operating (loss)/profit (809) 2,502
Adjustments for:
Depreciation of property, plant and 1,166 1,526
equipment
Amortisation of software 23 27
Amortisation of development costs 34 -
Loss/(profit) on disposal of property, plant 373 (1,040)
and equipment
Share based payments (6) 19
Special pension contribution - (1,500)
Other pension contributions in excess of (384) (192)
Income Statement charge
Operating cash flow before movements in working capital 397 1,342
Decrease/(increase) in inventories 562 (253)
Decrease/(increase) in receivables 572 1,383
Increase/(decrease) in payables 237 (49)
Cash generated from operations 1,768 2,423
UK Corporation Tax paid (237) (823)
Net cash flow from operating activities 1,531 1,600
Investing activities
Interest received - 1
Purchase of property, plant and (1,625) (1,415)
equipment
Purchase of software (27) (28)
Development expenditure capitalised - (229)
Disposal of plant and equipment 119 1,713
Net cash flow from investing activities (1,533) 42
Financing activities
Interest paid (111) (64)
Pension element of finance income/(costs) 90 (71)
Equity dividends paid (878) (872)
Issue of shares (including premium) 99 -
Net cash flow from financing activities (800) (1,007)
Net (decrease)/increase in cash and cash equivalents (802) 635
Cash and cash equivalents at the start of the year 593 (42)
Cash and cash equivalents at the end of the year (209) 593
Cash and cash equivalents comprise:
Cash and cash equivalents - 593
Financial liabilities (209) -
(209) 593
Parent Company Cash Flow Statement
for the year ended 31 March 2007
Year ended Year ended
31 March 31 March
2007 2006
Operating activities £000 £000
Operating (loss)/profit (825) 194
Adjustments for
Depreciation of property, plant and 54 852
equipment
Amortisation of software 3 11
Profit on disposal of property, plant (2) (1029)
and equipment
Share based payments (6) 19
Special pension contribution - (1,500)
Other pension contributions in excess (384) (192)
of Income
Statement charge
Operating cash flow before movements in working capital (1,160) (1,645)
Decrease in inventories - 333
Decrease in receivables 1,150 2,498
Increase in payables 1,054 352
Cash generated from operations 1,044 1,538
Group relief surrendered for nil consideration (289) (1)
Net cash flow from operating activities 755 1,537
Investing activities
Interest received - 1
Purchase of property, plant and (96) (383)
equipment
Purchase of software - (19)
Development expenditure capitalised - (130)
Disposal of plant and equipment 17 1,678
Disposal of foundry business to - (942)
subsidiary
Net cash flow from investing activities (79) 205
Financing activities
Interest paid (112) (64)
Pension element of finance income/(costs) 90 (71)
Equity dividends paid (878) (872)
Issue of shares (including premium) 99 -
Net cash flow from financing activities (801) (1,007)
Net increase/(decrease) in cash and cash equivalents (125) 735
Cash and cash equivalents at the start of the year (1,290) (2,025)
Cash and cash equivalents at the end of the year (1,415) (1,290)
Cash and cash equivalents comprise:
Cash and cash equivalents - -
Financial liabilities (1,415) (1,290)
(1,415) (1,290
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1 Authorisation of financial statements and statement of compliance
with IFRS
The Group's and Company's financial statements of Chamberlin & Hill plc (the '
Group' or the 'Company') for the year ended 31 March 2007 were authorised for
issue by the board of the directors on 7 June 2007 and the balance sheets were
signed on the board's behalf by Tim Hair and Mark Bache. The Company is a
public limited company incorporated and domiciled in England & Wales. The
Company's ordinary shares are traded on the AIM market of the London Stock
Exchange.
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The Company's financial
statements have been prepared in accordance with IFRS as adopted by the European
Union and as applied in accordance with the provisions of the Companies Act
1985.
The financial information set out in this announcement does not constitute the
statutory accounts of the Group for the years to 31 March 2007 or 31 March 2006
but is derived from the 2007 Annual Report and Accounts. The Annual Report and
Accounts for 2006 have been delivered to the Registrar of Companies and the
Group Annual Report and Accounts for 2007 will be delivered to the Registrar of
Companies in due course. The auditors, Ernst & Young LLP, have reported on the
accounts for the year to 31 March 2007 and have given an unqualified report
which does not contain a statement under Section 237(2) or 237(3) of the
Companies Act 1985. The accounts for the year ended 31 March 2006 also received
an unqualified audit report from Ernst & Young LLP.
2 Summary of significant accounting policies
Basis of preparation
The consolidated financial statements are presented in sterling and all values
are rounded to the nearest thousand pounds (£000) except when otherwise
indicated. The Company has taken advantage of the exemption provided under
section 230 of the Companies Act 1985 not to publish its individual income
statement and related notes.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Chamberlin & Hill plc and its subsidiaries as at 31 March each year. The
financial statements of subsidiaries are prepared for the same reporting year as
the parent company, using consistent accounting policies. All inter-company
balances and transactions, including unrealised profits arising from intra-group
transactions, have been eliminated in full. Subsidiaries are consolidated from
the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
3. SEGMENTAL ANALYSIS
For management purposes, the Group is organised into two operating divisions:
Foundries and Engineering, which are the primary segments for reporting
purposes. The secondary segmental format is geographical.
The Foundries segment is a supplier of iron castings, in raw or machined form,
to a variety of industrial customers who incorporate the castings into their own
products or carry out further machining or assembly operations on the castings
before selling them on to such customers.
The Engineering segment provides manufactured and imported products to
distributors and end-users. The products fall into the categories of door
hardware, hazardous area lighting and control gear.
Transfer prices between business segments are set on an arms length basis in a
manner similar to transactions with third parties.
The Group's geographical segments are determined by the location of the Group's
customers. The Group's assets and costs incurred are all located within the
United Kingdom.
(i) By business segment
Foundries Engineering Total
Continuing operations 2007 2006 2007 2006 2007 2006
£000 £000 £000 £000 £000 £000
Revenue
Total sales 31,287 33,815 7,901 7,800 39,188 41,615
Inter-segment sales - (180) - - - (180)
Sales to third parties 31,287 33,635 7,901 7,800 39,188 41,435
Profit
Trading profit 681 2,328 157 552 838 2,880
Shared costs (506) (482)
Exceptional items (1,141) 104
Operating (loss)/profit (809) 2,502
Net finance costs (22) (134)
(Loss)/profit before tax (831) 2,368
Tax credit/(expense) 508 (710)
(Loss)/profit for the year from (323) 1,658
continuing operations
Net assets
Segmental assets 14,665 16,091 5,788 5,682 20,453 21,773
Segmental liabilities (6,405) (6,428) (1,332) (1,149) (7,737) (7,577)
Segmental net assets 8,260 9,663 4,456 4,533 12,716 14,196
Unallocated net liabilities (1,774) (654)
Total net assets 10,942 13,542
Movements in fixed assets
Capital additions
Property, plant and equipment 1,345 1,134 280 281 1,625 1,415
Software 27 24 - 4 27 28
Development costs - 130 - 99 - 229
Depreciation and
amortisation
Property, plant and (925) (1,231) (241) (295) (1,166) (1,526)
equipment
Software (17) (17) (6) (10) (23) (27)
Unallocated net liabilities comprise goodwill, cash/overdraft, taxation, pension
provisions, deferred tax balances, and head office fixed assets.
(ii) By geographical segment
2007 2006
Revenue by location of customer £000 £000
United Kingdom 30,680 32,730
Rest of Europe 7,170 6,818
Other countries 1,338 1,887
39,188 41,435
4. OTHER OPERATING EXPENSES 2007 2006
£000 £000
Distribution costs 1,414 1,430
Administration and selling expenses 4,435 4,092
Operating expenses before exceptional items 5,849 5,522
Exceptional items (note 11) 1,141 (104)
Operating expenses 6,990 5,418
5. STAFF NUMBERS AND COSTS 2007 2006
Number Number
The average number of people employed by the Group during the year was:
Management and administration 84 88
Production 394 447
Total employees 478 535
The aggregate employment costs of these employees including severance costs in
wages and salaries of £224,000 (2006: £425,000) were as follows:-
2007 2006
£000 £000
Wages and salaries 12,715 13,407
Social security costs 1,354 1,261
Other pension costs 489 444
14,558 15,112
Directors' emoluments summary 2007 2006
£000 £000
Directors' emoluments 646 520
Aggregate gains made by directors on exercise of options 16 -
Notional cost of options granted to directors 10 19
Credit for surrendered options previously granted to directors (16) -
Number of directors accruing benefits under:
Defined benefit pension schemes - 1
Defined contribution pension schemes 3 2
6. FINANCE COSTS AND FINANCE REVENUE
2007 2006
£000 £000
Finance costs
Finance cost of pensions - (71)
Bank overdraft interest payable (112) (64)
(112) (135)
Finance revenue
Finance revenue from pensions 90 -
Bank interest receivable - 1
90 1
7. OPERATING PROFIT
2007 2006
This is stated after charging/(crediting): £000 £000
Profit on disposal of fixed assets 373 (1,040)
Depreciation of owned assets 1,166 1,526
Amortisation of software 23 27
Net loss on foreign currency 65 25
Cost of inventories recognised as expense 14,567 14,649
Exceptional severance payments and related costs 224 925
(note 11)
Stock written down 560 179
Auditors' remuneration:
-Group audit fees 20 38
-Audit fees in respect of subsidiaries 40 45
-Interim review fees 2 2
-Taxation advice fees 8 6
-Corporate finance fees 36 -
Research and development expenditure 42 40
Rentals under operating leases:
Hire of plant and equipment 92 116
Other 328 296
8. TAX (CREDIT)/EXPENSE REPORTED IN THE CONSOLIDATED INCOME STATEMENT
2007 2006
£000 £000
Current tax:
UK Corporation tax at 30% (2006: 30%) based on taxable profit for the year - 422
Prior year adjustment (70) -
(70) 422
Deferred Taxation:
Movement in the year (1,077) 630
Less element of movement shown in the Statement of Recognised Income and Expense
639 (342)
(438) 288
Tax (credit)/expense reported in the consolidated income statement (508) 710
Reconciliation of total tax charge
(Loss)/profit on ordinary activities before tax (831) 2,368
Corporation tax (credit)/expense at standard rate of 30% (2006: 30%) on profit (249) 710
before tax
Adjusted by the effects of:
Expenses not deductible for tax purposes 41 11
Timing differences
-negative goodwill release - (31)
Prior year adjustments
-corporation tax (70) -
-deferred tax (230) 20
Total tax (credit)/expense reported in the income statement (508) 710
9. DIVIDENDS PAID AND PROPOSED
2007 2006
£000 £000
Paid equity dividends on ordinary shares
2006 final dividend of 8.00p (2005: 8.00p) per share 593 589
2007 interim dividend of 3.85p (2006: 3.85p) per share 285 283
878 872
Proposed final dividend subject to shareholder approval
2007 final dividend of 8.00p (2006: 8.00p)per share (not recognised as a
liability at 31 March 2007)
593 589
10. EARNINGS PER SHARE
The calculation of earnings per share is based on the profit attributable to
shareholders and the weighted average number of ordinary shares in issue. In
calculating the diluted earnings per share adjustment has been made for the
dilutive effect of outstanding share options. Underlying earnings per share,
which excludes operating exceptionals, as analysed below, has also been
disclosed as the Directors believe this allows a better assessment of the
underlying trading performance of the Group. Operating exceptionals comprise
severance payments and related costs associated with significant operational
restructuring.
2007 2006
£000 £000
(Loss)/earnings for basic earnings per share (323) 1,658
Operating exceptionals 1,141 (104)
Taxation effect of operating exceptionals (216) 31
Earnings for underlying earnings per share 602 1,585
2006 2006
£000 £000
Weighted average number of ordinary shares 7,402 7,360
Adjustment to reflect shares under options 144 28
Weighed average number of ordinary shares - fully diluted 7,546 7,388
11. EXCEPTIONAL ITEMS
2007 2006 2005
£000 £000 £000
Severance costs (224) (425) (325)
Other closure costs (495) (500) -
(Loss)/profit on sale of property, plant and equipment (302) 1,029 -
Costs of transfer to AIM (120) - 617
(1,141) 104 292
Severance costs in 2007 relate predominantly to redundancies resulting from the
closure of Bloxwich foundry (commenced in 2006), the exit from the Switch and
Socket business within Petrel and the transfer of certain production from
Leicester to Scunthorpe.
Other closure costs relate to site clearance and disposal of certain stocks at
below normal selling price, and the writing down of fixed assets and remaining
stocks to their net book realisable values.
The loss on disposal of equipment relates to the disposal of certain plant
following the reappraisal of the planned transfer of all Leicester operations to
Scunthorpe.
12. STATEMENT OF CHANGES IN EQUITY
Attributable to
equity holders
Capital of the parent
redemption
Share reserve Share premium Retained
capital earnings
£000 £000 £000 £000 £000
Group
Balance at 1 April 2005 1,840 109 743 9,246 11,938
Total recognised income and expense
for the year to 31 March 2006
- - - 2,457 2,457
Dividends paid - - - (872) (872)
Share based payments - - - 19 19
Balance at 31 March 2006 1,840 109 743 10,850 13,542
Total recognised income and expense
for the year to 31 March 2007
- - - (1,815) (1,815)
Dividends paid - - - (878) (878)
Share based payments - - - (6) (6)
Issue of shares 14 - 85 - 99
Balance at 31 March 2007 1,854 109 828 8,151 10,942
Share Premium Account
The share premium account balance included the proceeds that were above the
nominal value from issuance of the Company's equity share capital comprising 25p
shares.
Capital redemption reserve
The capital redemption reserve has arisen on the cancellation of previously
issued shares and represents the nominal value of those shares cancelled.
Retained earnings
Retained earnings include the accumulated profits and losses arising from the
Consolidated Income Statement and certain items from the Statement of Recognised
Income and Expense attributable to equity shareholders, less distributions to
shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 5 hours ago Banco Santander S.A.
- 6 hours ago Renew Holdings
- 6 hours ago Rotork
- 7 hours ago Zegona Communications
- 7 hours ago Unilever