For immediate release |
27 August 2015 |
CHURCHILL CHINA plc
("Churchill China" or the "Company" or the "Group")
INTERIM RESULTS
For the six months ended 30 June 2015
Churchill China plc (AIM: CHH), the manufacturer and global distributor of performance ceramic and related products to hospitality and retail markets, is pleased to announce its interim results for the six months ended 30 June 2015.
Key Highlights:
· Group revenue up 3% to £21.4m (2014: £20.9m)
- Hospitality revenue growth 6%
· Operating profit up 12% to £1.6m (2014: £1.4m)
· Profit before tax up 12% to £1.6m (2014: £1.4m)
· Basic earnings per share up 14% to 11.4p (2014: 10.0p)
· Interim dividend up 10% to 5.6p (2014: 5.1p)
· Cash and deposit balances of £8.7m (June 2014: £8.5m)
Alan McWalter, Chairman of Churchill China, commented:
Churchill has continued to perform well and I am pleased to report a good performance in the first six months of the year. We have delivered further growth against strong comparative figures and the Hospitality business has again achieved a record performance.
We are confident that the continued growth of our markets and the strength of our position within them will enable us to meet our expectations for the full year.
For further information, please contact:
Churchill China plc |
Tel: 01782 577566 |
David O'Connor / David Taylor |
|
|
|
Buchanan |
Tel: 020 7466 5000 |
Mark Court / Sophie Cowles / Jane Glover |
|
|
|
N+1 Singer |
Tel: 020 7496 3000 |
Richard Lindley / James White |
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|
Our interim results will be available today on the Company's website: www.churchill1795.com. Copies of the Interim Report will be sent to shareholders in due course.
CHAIRMAN'S STATEMENT
Introduction
Churchill has continued to perform well and I am pleased to report a good performance in the first six months of the year. We have delivered further growth against strong comparative figures and the Hospitality business has again achieved a record performance. This progress has been achieved from our target markets and from new product ranges, in line with the strategy we have developed. We have also continued to invest in the long term future of our business through market development and new manufacturing capacity.
Financial Review
Total revenues increased by 3% to £21.4m (2014: £20.9m).
Gross margins have remained comparable to the first half of 2014 with the adverse effect of the strengthening of sterling against the euro being offset by increased operating efficiencies. On a constant currency basis revenue would have been £0.5m higher had exchange rates remained at 2014 levels. Operating profit was impacted by £0.3m on the same basis. We have retained tight control of overheads.
Operating profit increased by 12% to £1.6m (2014: £1.4m). Operating margins improved to 7.2% (2014: 6.6%).
Earnings before interest, tax, depreciation and amortisation increased by 4% to £2.3m (2014: £2.2m).
Profit before tax rose by 12% to £1.6m (2014: £1.4m), largely arising from the improved operating performance.
Earnings per share improved by 14% to 11.4p (2014: 10.0p).
Operating cash inflow was lower than in previous years, largely as a result of increased working capital requirements. Following the strong demand experienced in the second half of 2014, we rebuilt inventory levels to support our service promise. Operating cash generation was £0.4m (2014: £2.7m). At the end of the period, net cash and deposit balances were £8.7m (June 2014: £8.5m).
We continue to invest in our core business. Capital investment was £0.6m (2014: £1.1m) with this further expenditure mainly focussed on our manufacturing unit in Stoke on Trent. This spend delivers additional capacity to produce added value products and will be followed by further investment in the UK over the remainder of 2015 and 2016.
Dividend
The Board is declaring a 0.5p increase in the interim dividend to 5.6p per share (2014: 5.1p). This increase reflects our policy of linking dividends to increased profitability whilst maintaining appropriate levels of dividend cover. The interim dividend will be paid on 1 October 2015 to shareholders on the register on 11 September 2015.
Markets
Hospitality
Total sales to our Hospitality customers increased by £1.0m (6%). Contribution to Group operating profits rose by 6% to £2.9m from £2.7m.
We continue to make steady progress in the UK where we enjoy a leading position in a growing market. We have delivered a good performance against strong comparative figures that included a significant benefit from an installation contract in the first half of last year. This performance reflects the progress achieved in a number of market segments.
We have invested significantly in sales and market development which has allowed us to achieve further growth in export markets. In the first half of the year, Europe produced a strong performance with sales 9% ahead of 2014, despite the considerable headwind from the weaker euro. Underlying sales growth in constant currency terms in Europe was over 20%. Other export markets also benefitted from additional focus and resource and recorded double digit revenue growth overall. These markets remain at an early stage of development for us, but we are pleased with the progress we have made and the opportunities we have generated.
Much of our success in export markets can be attributed to a strong programme of new product development. The hand crafted Stonecast range has performed particularly well in the first half year as we have added additional colours to the existing product range.
Retail
Results from our Retail business again reflected the prioritisation of resources towards Hospitality. Revenue declined by £0.5m to £3.6m, in line with our expectations. The effect on profitability of this reduction was again largely mitigated by cost reductions. Contribution to Group profit fell marginally to £0.2m (2014: £0.2m).
Our Retail operation is performing in line with our strategic objectives and has been repositioned in its markets. We remain clear that it provides a valuable contribution to the Group's overall future performance.
Operations
Manufacturing and logistics operations have continued to deliver well against high expectations. The strong trading at the end of 2014 and consequent impact on inventory levels has necessitated higher output levels across our operations to maintain the high service levels required by the Hospitality market. At the same time we have continued to introduce new products and have commissioned two major capital projects increasing our UK capacity in key areas. We have reached the half year well positioned to meet the expected seasonal increase in demand in the second half year.
People
We continue to invest in the development of our workforce at all levels. Increased skills and wider flexibility amongst our staff remain important components of our strategy.
As announced in July 2015, we are pleased to welcome James Roper to the Board as Sales and Marketing Director. James' appointment reflects the increased focus we have given to market and product development in recent years and we expect that his knowledge and experience will bring further balance to the Board.
Prospects
Our business continued to perform well in the first half of 2015. Despite the forecast impact of stronger sterling and other external factors, we have delivered an increase in profitability, built upon the growth and resilience of our Hospitality business.
We are pleased with the platform that the work carried out in the first six months of the year gives us for future development in the short and medium term. We continue to meet a number of milestones in relation to the evolution and implementation of our strategy. These include further sales and market development, new product introductions and investment in our manufacturing operations
We are confident that the continued growth of our markets and the strength of our position within them will enable us to meet our expectations for the full year.
Alan McWalter
Chairman
27 August 2015
Churchill China plc
Consolidated Income Statement
For the six months ended 30 June 2015
|
|
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
Six months to 30 June 2015 £000 |
|
Six months to 30 June 2014 £000 |
|
Twelve months to 31 December 2014 £000 |
|
Note |
|
|
|
|
|
Revenue |
|
21,449 |
|
20,871 |
|
44,518 |
|
|
|
|
|
|
|
Operating profit |
1 |
1,549 |
|
1,380 |
|
4,249 |
|
|
|
|
|
|
|
Share of results of associate company |
|
75 |
|
68 |
|
116 |
Finance income |
2 |
41 |
|
34 |
|
76 |
Finance costs |
2 |
(84) |
|
(75) |
|
(124) |
|
|
|
|
|
|
|
Profit before income tax |
|
1,581 |
|
1,407 |
|
4,317 |
|
|
|
|
|
|
|
Income tax expense |
3 |
(341) |
|
(315) |
|
(901) |
|
|
|
|
|
|
|
Profit for the period |
|
1,240 |
|
1,092 |
|
3,416 |
|
|
|
|
|
|
|
|
|
Pence per Share |
|
Pence per share |
|
Pence per share |
|
|
|
|
|
|
|
Basic earnings per ordinary share |
4 |
11.4 |
|
10.0 |
|
31.2 |
|
|
|
|
|
|
|
Diluted basic earnings per ordinary share |
4 |
11.2 |
|
9.8 |
|
30.8 |
All the above figures relate to continuing operations
Churchill China plc
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2015
|
|
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
Six months to 30 June 2015 £000 |
|
Six months to 30 June 2014 £000 |
|
Twelve months to 31 December 2014 £000 |
|
|
|
|
|
|
|
Other comprehensive income/(expense) Items that will not be reclassidied to profit and loss: Actuarial gain on retirement benefit obligations |
|
- |
|
- |
|
(1,850) |
Items that will not be reclassified to profit and loss |
|
|
|
|
|
|
Exchange differences |
|
(3) |
|
(8) |
|
17 |
|
|
|
|
|
|
|
Other comprehensive expense |
|
(3) |
|
(8) |
|
(1,833) |
|
|
|
|
|
|
|
Profit for the period |
|
1,240 |
|
1,092 |
|
3,416 |
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
1,237 |
|
1,084 |
|
1,583 |
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
Equity holders of the Company |
|
1,237 |
|
1,084 |
|
1,583 |
|
|
|
|
|
|
|
All the above figures relate to continuing operations
Churchill China plc
Consolidated Balance Sheet
as at 30 June 2015
|
Unaudited |
|
Unaudited |
|
Audited |
|
30 June |
|
30 June |
|
31 December |
|
2015 |
|
2014 |
|
2014 |
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Non Current assets |
|
|
|
|
|
Property, plant and equipment |
14,026 |
|
14,013 |
|
14,258 |
Intangible assets |
53 |
|
67 |
|
63 |
Investment in associate |
1,171 |
|
1,048 |
|
1,096 |
Deferred income tax assets |
1,002 |
|
804 |
|
1,117 |
|
16,252 |
|
15,932 |
|
16,534 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Inventories |
8,942 |
|
8,625 |
|
8,274 |
Trade and other receivables |
8,457 |
|
8,312 |
|
8,255 |
Other financial assets |
2,250 |
|
1,500 |
|
1,500 |
Cash and cash equivalents |
6,421 |
|
6,996 |
|
8,961 |
|
26,070 |
|
25,433 |
|
26,990 |
|
|
|
|
|
|
Total assets |
42,322 |
|
41,365 |
|
43,524 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
(7,516) |
|
(8,180) |
|
(8,676) |
Current income tax liabilities |
(490) |
|
(676) |
|
(698) |
|
|
|
|
|
|
Total current liabilities |
(8,006) |
|
(8,856) |
|
(9,374) |
|
|
|
|
|
|
Non current liabilities |
|
|
|
|
|
Retirement benefit obligations |
(4,715) |
|
(2,989) |
|
(4,674) |
Deferred income tax liabilities |
(1,070) |
|
(1,090) |
|
(1,070) |
|
|
|
|
|
|
Total non current liabilities |
(5,785) |
|
(4,079) |
|
(5,744) |
|
|
|
|
|
|
Total liabilities |
(13,791) |
|
(12,935) |
|
(15,118) |
|
|
|
|
|
|
Net assets |
28,531 |
|
28,430 |
|
28,406 |
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
Issued share capital |
1,101 |
|
1,096 |
|
1,096 |
Share premium account |
2,348 |
|
2,348 |
|
2,348 |
Treasury shares |
(10) |
|
(134) |
|
(224) |
Retained earnings |
23,740 |
|
23,732 |
|
23,654 |
Other reserves |
1,352 |
|
1,388 |
|
1,532 |
|
28,531 |
|
28,430 |
|
28,406 |
Churchill China plc
Consolidated Statement of Changes in Equity
as at 30 June 2015
|
Retained Earnings £000 |
|
Share capital £000 |
|
Share premium £000 |
|
Treasury shares £000 |
|
Other reserves £000 |
|
Total £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2014 |
23,697 |
|
1,096 |
|
2,348 |
|
(41) |
|
1,332 |
|
28,432 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Profit for the period |
1,092 |
|
- |
|
- |
|
- |
|
- |
|
1,092 |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Depreciation transfer - gross |
6 |
|
- |
|
- |
|
- |
|
(6) |
|
- |
Depreciation transfer - tax |
(1) |
|
- |
|
- |
|
- |
|
1 |
|
- |
Currency translation |
- |
|
- |
|
- |
|
- |
|
(8) |
|
(8) |
Total comprehensive income |
1,097 |
|
- |
|
- |
|
- |
|
(13) |
|
1,084 |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
Dividends |
(1,062) |
|
- |
|
- |
|
- |
|
- |
|
(1,062) |
Share based payment |
- |
|
- |
|
- |
|
- |
|
69 |
|
(93) |
Treasury Shares |
- |
|
- |
|
- |
|
(93) |
|
- |
|
69 |
Total transactions with owners |
(1,062) |
|
- |
|
- |
|
(93) |
|
69 |
|
(1,086) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2014 |
23,732 |
|
1,096 |
|
2,348 |
|
(134) |
|
1,388 |
|
28,430 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Profit for the period |
2,324 |
|
- |
|
- |
|
- |
|
- |
|
2,324 |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Depreciation transfer - gross |
6 |
|
- |
|
- |
|
- |
|
(6) |
|
- |
Depreciation transfer - tax |
(1) |
|
- |
|
- |
|
- |
|
1 |
|
- |
Remeasurement of post employment |
|
|
|
|
|
|
|
|
|
|
|
benefit obligations - net |
(1,850) |
|
- |
|
- |
|
- |
|
- |
|
(1,850) |
Currency translation |
- |
|
- |
|
- |
|
- |
|
25 |
|
25 |
Total comprehensive income |
479 |
|
- |
|
- |
|
- |
|
20 |
|
499 |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
Dividends |
(557) |
|
- |
|
- |
|
- |
|
- |
|
(557) |
Share based payment |
- |
|
- |
|
- |
|
- |
|
124 |
|
124 |
Treasury shares |
- |
|
- |
|
- |
|
(90) |
|
- |
|
(90) |
Total transactions with owners |
(557) |
|
- |
|
- |
|
(90) |
|
124 |
|
(523) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2014 |
23,654 |
|
1,096 |
|
2,348 |
|
(224) |
|
1,532 |
|
28,406 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Profit for the period |
1,240 |
|
- |
|
- |
|
- |
|
- |
|
1,240 |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Depreciation transfer - gross |
6 |
|
- |
|
- |
|
- |
|
(6) |
|
- |
Depreciation transfer - tax |
(1) |
|
- |
|
- |
|
- |
|
1 |
|
- |
Currency translation |
- |
|
- |
|
- |
|
- |
|
(3) |
|
(3) |
Total comprehensive income |
1,245 |
|
- |
|
- |
|
- |
|
(8) |
|
1,237 |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
Dividends |
(1,200) |
|
- |
|
- |
|
- |
|
- |
|
(1,200) |
Proceeds of share issue |
- |
|
5 |
|
- |
|
- |
|
- |
|
5 |
Share based payment |
250 |
|
- |
|
- |
|
- |
|
(172) |
|
78 |
Treasury shares |
(209) |
|
- |
|
- |
|
214 |
|
- |
|
5 |
Total transactions with owners |
(1,159) |
|
5 |
|
- |
|
214 |
|
(172) |
|
(1,112) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2015 |
23,740 |
|
1,101 |
|
2,348 |
|
(10) |
|
1,352 |
|
28,531 |
Churchill China plc
Consolidated Cash Flow Statement
for the six months ended 30 June 2015
|
Unaudited |
|
Unaudited |
|
Audited |
|
Six months to |
|
Six months to |
|
Twelve months to |
|
30 June 2015 |
|
30 June 2014 |
|
31 December 2014 |
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities |
|
|
|
|
|
Cash generated from operations (note 5) |
355 |
|
2,728 |
|
6,903 |
Interest received |
41 |
|
34 |
|
76 |
Interest paid |
- |
|
- |
|
(5) |
Income tax paid |
(434) |
|
(254) |
|
(688) |
|
|
|
|
|
|
Net cash (used by) / generated from operating activities |
(38) |
|
2,508 |
|
6,286 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchases of property, plant and equipment |
(584) |
|
(1,076) |
|
(2,238) |
Proceeds on disposal of property, plant and equipment |
28 |
|
41 |
|
57 |
Purchases of intangible assets |
(5) |
|
(20) |
|
(42) |
|
|
|
|
|
|
Net cash used in investing activities |
(561) |
|
(1,055) |
|
(2,223) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Issue of ordinary shares |
10 |
|
- |
|
- |
Purchase of treasury shares |
- |
|
(93) |
|
(183) |
Dividends paid |
(1,200) |
|
(1,062) |
|
(1,619) |
Sale of other financial assets |
1,500 |
|
1,000 |
|
1,000 |
Purchase of other financial assets |
(2,250) |
|
(1,500) |
|
(1,500) |
|
|
|
|
|
|
Net cash used in financing activities |
(1,940) |
|
(1,655) |
|
(2,302) |
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
(2,539) |
|
(202) |
|
1,761 |
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
8,961 |
|
7,199 |
|
7,199 |
|
|
|
|
|
|
Exchange losses on cash and cash equivalents |
- |
|
(1) |
|
1 |
|
|
|
|
|
|
Cash and cash equivalents at the end of the period |
6,422 |
|
6,996 |
|
8,961 |
|
|
|
|
|
|
1. Segmental analysis
For the six months ended 30 June 2015
|
Hospitality |
|
Retail |
|
Unallocated |
|
Total |
|
£000 |
|
£000 |
|
£000 |
|
£000 |
6 months to 30 June 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
17,849 |
|
3,600 |
|
- |
|
21,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to group overheads excluding depreciation |
3,383 |
|
325 |
|
(1,360) |
|
2,348 |
Depreciation |
(563) |
|
(116) |
|
(120) |
|
(799) |
Operating profit |
2,820 |
|
209 |
|
(1,480) |
|
1,549 |
|
|
|
|
|
|
|
|
Share of results of associate company |
|
|
|
|
|
|
75 |
Finance income |
|
|
|
|
|
|
41 |
Finance costs |
|
|
|
|
|
|
(84) |
|
|
|
|
|
|
|
|
Profit before income tax |
|
|
|
|
|
|
1,581 |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
(341) |
|
|
|
|
|
|
|
|
Profit for the period |
|
|
|
|
|
|
1,240 |
|
|
|
|
|
|
|
|
6 months to 30 June 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
16,793 |
|
4,078 |
|
- |
|
20,871 |
|
|
|
|
|
|
|
|
Contribution to group overheads excluding depreciation |
3,313 |
|
359 |
|
(1,423) |
|
2,249 |
Depreciation |
(652) |
|
(113) |
|
(104) |
|
(869) |
|
|
|
|
|
|
|
|
Operating profit |
2,661 |
|
246 |
|
(1,527) |
|
1,380 |
|
|
|
|
|
|
|
|
Share of results of associated company |
|
|
|
|
|
|
68 |
Finance income |
|
|
|
|
|
|
34 |
Finance costs |
|
|
|
|
|
|
(75) |
|
|
|
|
|
|
|
|
Profit before income tax |
|
|
|
|
|
|
1,407 |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
(315) |
|
|
|
|
|
|
|
|
Profit for the period |
|
|
|
|
|
|
1,092 |
|
|
|
|
|
|
|
|
12 months to 31 December 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
35,999 |
|
8,519 |
|
- |
|
44,518 |
|
|
|
|
|
|
|
|
Contribution to group overheads excluding depreciation |
7,779 |
|
1,183 |
|
(3,086) |
|
5,876 |
Depreciation |
(1,190) |
|
(224) |
|
(213) |
|
(1,627) |
|
|
|
|
|
|
|
|
Operating profit |
6,589 |
|
959 |
|
(3,299) |
|
4,249 |
|
|
|
|
|
|
|
|
Share of results of associated company |
|
|
|
|
|
|
116 |
Finance income |
|
|
|
|
|
|
76 |
Finance costs |
|
|
|
|
|
|
(124) |
|
|
|
|
|
|
|
|
Profit before income tax |
|
|
|
|
|
|
4,317 |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
(901) |
|
|
|
|
|
|
|
|
Profit for the period |
|
|
|
|
|
|
3,416 |
2. Finance income and costs
|
Unaudited |
|
Unaudited |
|
Audited |
|
Six months to |
|
Six months to |
|
Twelve months to |
|
30 June 2015 |
|
30 June 2014 |
|
31 December 2014 |
|
£000 |
|
£000 |
|
£000 |
Finance income |
|
|
|
|
|
Other interest receivable |
41 |
|
34 |
|
76 |
|
|
|
|
|
|
Finance income |
41 |
|
34 |
|
76 |
|
|
|
|
|
|
Finance costs |
|
|
|
|
|
Interest on pension scheme |
(84) |
|
(75) |
|
(119) |
Other interest payable |
- |
|
- |
|
(5) |
|
|
|
|
|
|
Finance costs |
(84) |
|
(75) |
|
(124) |
|
|
|
|
|
|
|
|
|
|
|
|
The interest cost arising on pension schemes is a non cash item.
3. Income tax expense
|
Unaudited |
|
Unaudited |
|
Audited |
|
Six months to |
|
Six months to |
|
Twelve months to |
|
30 June 2015 |
|
30 June 2014 |
|
31 December 2014 |
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
Current taxation |
226 |
|
366 |
|
822 |
Deferred taxation |
115 |
|
(51) |
|
79 |
|
|
|
|
|
|
Income tax expense |
341 |
|
315 |
|
901 |
4. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit after taxation of £1,240,000 (June 2014: £1,092,000, December 2014: £3,416,000) and on 10,914,230 (June 2014: 10,945,755, December 2014: 10,934,908) ordinary shares, being the weighted average number of ordinary shares in issue during the period.
Diluted basic earnings per ordinary share is based on the profit after taxation of £1,240,000 (June 2014: £1,092,000, December 2014: £3,416,000) and on 11,021,343 (June 2014: 11,116,239, December 2014: 11,105,668) ordinary shares, being the weighted average number of ordinary shares in issue during the period of 10,914,230 (June 2014: 10,945,755, December 2014 10,934,908) increased by 107,113 (June 2014: 170,484, December 2014: 170,760) shares, being the weighted average number of ordinary shares which would have been issued if the outstanding options to acquire shares in the Group had been exercised at the average price during the period.
5. Reconciliation of operating profit to net cash flow from operating activities
|
Unaudited |
|
Unaudited |
|
Audited |
|
Six months to |
|
Six months to |
|
Twelve months to |
|
30 June 2015 |
|
30 June 2014 |
|
31 December 2014 |
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
Cash flow from operating activities |
|
|
|
|
|
|
|
|
|
|
|
Operating profit |
1,549 |
|
1,380 |
|
4,249 |
Adjustments for |
|
|
|
|
|
Depreciation |
799 |
|
869 |
|
1,627 |
Loss on disposal of property, plant and equipment |
5 |
|
9 |
|
10 |
Charge for share based payment |
78 |
|
69 |
|
193 |
Decrease in retirement benefit obligations |
(43) |
|
- |
|
(672) |
Changes in working capital |
|
|
|
|
|
Inventory |
(669) |
|
144 |
|
495 |
Trade and other receivables |
(205) |
|
249 |
|
338 |
Trade and other payables |
(1,159) |
|
8 |
|
663 |
|
|
|
|
|
|
Cash inflow from operating activities |
355 |
|
2,728 |
|
6,903 |
6. Basis of preparation and accounting policies
The interim financial information for the period to 30 June 2015 has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The Company's statutory accounts for the year ended 31 December 2014, prepared in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards - IFRS), have been delivered to the Registrar of Companies; the report of the auditors on these accounts was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The interim financial statements have been prepared in accordance with IFRS as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS, under the historical cost convention as modified by the revaluation of land and buildings, available for sale financial assets, and financial assets and liabilities (including derivative instruments) at fair value through the profit and loss account. The same accounting policies, presentation and methods of computation are followed in the interim financial statements as were applied in the Group's last audited financial statements.