Interim Results

RNS Number : 5111H

Renew Holdings PLC

20 May 2014

 



Renew Holdings plc

("Renew" or the "Group" or the "Company")

Interim Results

Renew (AIM: RNWH), the Engineering Services Group supporting UK infrastructure, announces record interim results for the six months ended 31 March 2014, achieving strong growth in both operating profit and revenue and reporting a strong cash position.

In line with the Company's progressive dividend policy, the interim dividend has increased by 36% to 1.50p (H1 2013: 1.10p).

Financial Highlights

	H1 2014	H1 2013
Revenue	£225.8m	£152.4m	+48%
Adjusted operating profit*	£7.8m	£4.9m**	+59%
Adjusted operating margin*	3.4%	3.2%
Adjusted profit before tax*	£7.6m	£4.6m**	+65%
Adjusted earnings per share*	9.80p	5.79p**	+69%
Interim dividend per share	1.50p	1.10p	+36%

*Adjusted results are shown prior to amortisation charges

**Restated to reflect IAS 19 (2011)      

Operational Highlights

·     Engineering Services revenue up 53% to £169.2m , (H1 2013: £110.4m)

·     Engineering Services operating profit prior to amortisation up 59% to £7.8m (H1 2013 £4.9m)

·     £8.1m cash and no debt at 31 March 2014 (2013: net debt £3.2m)

·     Order book up 18% to £427m at 31 March 2014 (H1 2013: £361m)

·     17% increase in Engineering Services order book to £306m (H1 2013: £261m)

·     Interim dividend increased by 36% to 1.50p (H1 2013: 1.10p)

Post Period End Highlights

·     Entry into the growing wireless telecoms infrastructure market through successful acquisition of Clarke Telecom Limited

R J Harrison OBE, Chairman said: "I am pleased to announce another record set of interim results for the Group. The Group has achieved excellent underlying organic growth together with good cash generation. Our strategy continues to deliver shareholder value and we have built upon this robust financial performance with the acquisition of Clarke Telecom. The strong order book justifies the Board's confidence that the Group will meet market expectations for the full financial year."

Enquiries:

Renew Holdings plc	Tel: [phone]
Brian May, Chief Executive
John Samuel, Group Finance Director
Numis Securities Limited	Tel: [phone]
Stuart Skinner (Nominated Adviser)
James Serjeant (Corporate Broker)
Walbrook PR	Tel: [phone] or [e-mail]
Paul McManus	Mob: [phone]
Bob Huxford	Mob: [phone]

Chairman's statement

The first half of 2014 has again seen the Group deliver record interim results, achieving strong growth in both operating profit and revenue. These results are a positive reflection on the Group's long term strategy of providing engineering services in regulated markets which benefit from established spending plans.

Results

Group operating profit, prior to amortisation charges, increased by 59% to £7.8m (2013: £4.9m), on revenue up 48% to £225.8m (2013: £152.4m). Operating margin improved to 3.4% (2013: 3.2%) with adjusted earnings per share increasing by 69% to 9.80p (2013: 5.79p). 

Engineering Services revenue grew by 53% to £169.2m (2013: £110.4m), representing 75% of Group revenue. Operating profit prior to amortisation charges increased by 59% to £7.8m (2013: £4.9m) with an operating margin of 4.6% (2013: 4.4%).

Specialist Building maintained its operating profit at £1.0m (2013: £1.0m) on increased revenue of £56.6m (2013: £42.0m). In Specialist Building, the Board's emphasis is on maintaining its level of operating profit and managing risk.

Dividend

In line with its progressive policy, the Board is increasing the interim dividend by 36% to 1.50p per share (2013: 1.10p) which will be paid on 7 July 2014 to shareholders on the register at 6 June 2014.

Order book

The Group's order book at 31 March 2014 was £427m (2013: £361m), an increase of 18%. The Engineering Services order book grew by 17% to £306m (2013: £261m). The Group's expected revenue for the second half of the financial year is fully secured.

Acquisition of Clarke Telecom Ltd

Subsequent to the period end, the Group announced the £17m acquisition of Clarke Telecom Limited ("CTL"). CTL is a leader in the wireless telecoms infrastructure delivery market, a field which is enjoying strong structural growth. CTL will enhance the Group's operating margin in Engineering Services as we progress towards our target of 5%. 

Cash

The Group had no bank debt at 31 March 2014 and a strong cash position of £8.1m (31 March 2013: net debt £3.2m). On 28 April 2014, the Group deployed £5m of cash to part fund the acquisition of CTL with the remaining £12m consideration being funded by a four year term loan. The Board expects further strong cash generation from operating activities in the second half of the financial year.

Outlook

The regulated markets in which the Group operates provide good visibility of opportunities and a strong pipeline of work. During the first half of the financial year our Rail business experienced very high levels of demand, partly due to the necessary emergency repair works following the very bad weather conditions which caused substantial damage to the rail network most notably in the South West of England.

The consequence of this is that the Board considers that our first half results may prove to be slightly higher than those we will report in the second half, both in revenue and operating profit. The excellent underlying organic growth achieved in the first half, subsequent acquisitive growth and strong order book gives the Board great confidence that the Group will meet market expectations for the full financial year.  

R J Harrison OBE

Chairman

20 May 2014

Chief Executive's review

Engineering Services

Renew delivers multidisciplinary Engineering Services supporting critical infrastructure assets in the UK. Operating in the regulated Energy, Environmental and Infrastructure markets our services are delivered by our directly employed highly skilled workforce through local, independently branded businesses. We have strong client relationships built through responsiveness in our target markets which have high barriers to entry. We focus on providing essential asset support in markets which have long term established spending plans. The majority of our work is within our clients' ongoing operating expenditure budgets providing good visibility of spending. Much of our work is undertaken through asset renewal and maintenance framework agreements.  

During the first half of the year, Engineering Services revenue grew by 53% to £169.2m (2013: £110.4m), representing 75% of Group revenue. Operating profit prior to amortisation charges increased by 59% to £7.8m (2013: £4.9m) with an operating margin of 4.6% (2013: 4.4%).

At 31 March 2014 the Engineering Services order book was £306m (2013: £261m), an increase of 17%.

Energy

The majority of activity in Nuclear is undertaken on the Sellafield site where we have seen record revenue in the period with a number of work programmes accelerating spending together with market share gains. We remain the largest mechanical and electrical contractor at Sellafield, where our integrated offering focuses on providing support for the care and maintenance of operational plant associated with waste treatment or reprocessing, decommissioning, demolition and clean-up of redundant facilities.

Work under the current Multi Discipline Site Works framework, which commenced in April 2013, has seen an increase in activity over the period and provides good visibility of future opportunities. The framework is expected to deliver work packages of up to £280m over four years where our focus is on Production Operations Support.

The Group is well positioned on eight additional nuclear licensed sites. At Springfields, we have experienced substantial activity growth and our recent appointment to lead the new waste processing facility project has broadened our service offering at this site which also continues to present a range of ongoing decommissioning opportunities.

In renewables, we continue to provide maintenance services for onshore wind turbine facilities and we have successfully broadened this service offering into the offshore wind turbine maintenance market.

Environmental

The Group works for a number of clients in the Water sector providing infrastructure development and engineering services including sewer maintenance, clean and wastewater rehabilitation, strategic water mains maintenance, trunk mains cleaning and general utility infrastructure services.

For Northumbrian Water, work continued under the AMP 5 Major Waste Water project framework as well as on our non-discretionary maintenance and trunk mains cleaning frameworks where we have seen good progress and the award of a further framework during the period. In addition to continued workload from our framework with Wessex Water we have also been awarded two projects on their Water Supply Grid Improvement scheme.

Recent weather events have seen flood protection and alleviation schemes given higher priority with an increase in spending through a number of established frameworks for the Environment Agency.

Our relationship with the Environment Agency was strengthened with our appointment as sole supplier to the £10m four year MEICA framework for the Northern Region.

Infrastructure

In Rail, the Group provides national off-track civil, mechanical and electrical engineering services to Network Rail, where we continue to focus on delivering planned and reactive infrastructure maintenance, refurbishment and renewal services.

As the only national provider of engineering maintenance services for Network Rail, we undertake the majority of our work under the Buildings and Civils Delivery Partnership and Asset Management frameworks where we experienced substantial increases in activity during the period. 

Working across all ten Network Rail routes, our national 24 hour emergency response services saw substantial demand during the period. Our business responded admirably to support our customer and I would like to take this opportunity to congratulate and thank all of our staff who were involved. Emergency works included the high profile repairs to the Great Western Mainline railway infrastructure at Dawlish following storm damage. The work was completed on time and the line re-opened on schedule. That project plus other emergency works have resulted in our Rail business experiencing higher levels of activity than are likely to be recorded in the second half of the financial year.

Our market leading capabilities in tunnel maintenance and refurbishment for Network Rail saw the successful completion of schemes at Holme Tunnel and Whiteball Tunnel during the period.

Specialist Building

Specialist Building revenue was 35% higher than a year ago at £56.6m (2013: £42.0m) with operating profit maintained at £1.0m (2013: £1.0m). The forward order book increased by 21% to £121m (2013: £100m).

In High Quality Residential, we are experiencing increased demand and the Group's expertise in the challenging temporary structural works required by many projects provides a differentiator in this market. 

The New Build Affordable Housing market in the South East remains strong and stable with our established relationships providing access to an advertised spend of £700m per annum.

Strategy

In line with the Group's strategy, our range of services in the infrastructure market has been extended since the period end with the acquisition of Clarke Telecom Limited ("CTL"). CTL is a leading provider in its market and delivers all aspects of wireless telecoms infrastructure including site acquisition and design, construction, installation and site optimisation. CTL also carries out site maintenance and decommissioning and has relationships with all of the UK's cellular network operators and major network equipment manufacturers. The wireless telecoms market has excellent growth opportunities with increasing demand for mobile internet access, voice and data communications including the roll out of 4G infrastructure.

Whilst continuing to develop organic growth in Engineering Services, the Group continues to look for earnings enhancing, complementary acquisitions to improve and expand our range of services.

Brian May

Chief Executive

20 May 2014

Group income statement

for the six months ended 31 March 2014

		Before amortisation of intangible assets	Amortisation of intangible assets (see Note 3)	Six months ended 31 March		Before exceptional items and amortisation of intangible assets	Exceptional items and amortisation of intangible assets (see Note 3)	Year ended 30 September
		2014	2014	2014	2013* (Restated**)	2013 (Restated**)	2013	2013 (Restated**)
	Note	Unaudited £000	Unaudited £000	Unaudited £000	Unaudited £000	Audited £000	Audited £000	Audited £000
Group revenue from continuing activities	2	225,795	-	225,795	152,411	334,649	15,412	350,061
Cost of sales		(200,218)	-	(200,218)	(131,159)	(296,232)	(14,408)	(310,640)
Gross profit		25,577	-	25,577	21,252	38,417	1,004	39,421
Administrative expenses		(17,811)	(750)	(18,561)	(16,583)	(27,585)	(968)	(28,553)
Operating profit	2	7,766	(750)	7,016	4,669	10,832	36	10,868
Finance income		74	-	74	18	25	-	25
Finance costs		(149)	-	(149)	(193)	(362)	-	(362)
Other finance (expense)/income  - defined benefit pension schemes		(61)	-	(61)	(150)	42	-	42
Profit before income tax	2	7,630	(750)	6,880	4,344	10,537	36	10,573
Income tax expense	4	(1,678)	188	(1,490)	(1,062)	(1,778)	(9)	(1,787)
Profit for the period from continuing activities		5,952	(562)	5,390	3,282	8,759	27	8,786
Loss for the period from discontinued operation				(18)	(105)			(315)
Profit for the period attributable to equity holders of the parent company				5,372	3,177			8,471
Basic earnings per share from continuing activities	5			8.87p	5.48p			14.64p
Diluted earnings per share from continuing activities	5			8.75p	5.24p			14.49p
Basic earnings per share	5			8.84p	5.30p			14.12p
Diluted earnings per share	5			8.72p	5.08p			13.97p
Proposed dividend	6			1.50p	1.10p			3.60p

*Operating profit for the six months ended 31 March 2013 is after charging £250,000 of amortisation cost. (See Note 3)

** Comparative figures have been restated to reflect IAS 19 (2011).  Details are set out in Note 1.

Group statement of comprehensive income

for the six months ended 31 March 2014

		Six months ended		Year ended
		31 March		30 September
		2014	2013	2013
			(Restated**)	(Restated**)
		Unaudited	Unaudited	Audited
		£000	£000	£000
Profit for the period attributable to equity holders of the parent company		5,372	3,177	8,471
Items that will not be reclassified to profit or loss:
Movements in actuarial deficit		-	-	(6,769)
Movement on deferred tax relating to the defined benefit pension schemes		-	-	1,429
Total items that will not be reclassified to profit or loss		-	-	(5,340)
Items that are or may be reclassified subsequently to profit or loss:
Exchange movement in reserves		(246)	715	(24)
Total items that are or may be reclassified subsequently to profit or loss		(246)	715		(24)
Total comprehensive income for the period attributable to equity holders of the parent company		5,126	3,892		3,107

Group statement of changes in equity

for the six months ended 31 March 2014

	Called up	Share	Capital	Cumulative	Share based	Retained	Total
	share	premium	redemption	translation	payments	earnings	equity
	capital	account	reserve	adjustment	reserve	(Restated**)	Unaudited
	£000	£000	£000	£000	£000	£000	£000
At 1 October 2012	5,990	5,893	3,896	775	289	(7,949)	8,894
Transfer from income statement for the period						3,177	3,177
Dividends paid						(1,258)	(1,258)
Recognition of share based payments					53		53
Exchange differences				715			715
At 31 March 2013	5,990	5,893	3,896	1,490	342	(6,030)	11,581
Transfer from income statement for the period						5,294	5,294
Dividends paid						(659)	(659)
New shares issued	150						150
Recognition of share based payments					48		48
Exchange differences				(739)			(739)
Actuarial losses recognised in pension schemes						(6,769)	(6,769)
Movement on deferred tax relating to the pension schemes						1,429	1,429
At 30 September 2013	6,140	5,893	3,896	751	390	(6,735)	10,335
Transfer from income statement for the period						5,372	5,372
Dividends paid						(1,538)	(1,538)
New shares issued	12	49					61
Recognition of share based payments					(187)		(187)
Exchange differences				(246)			(246)
At 31 March 2014	6,152	5,942	3,896	505	203	(2,901)	13,797

Group balance sheet

at 31 March 2014

		31 March		30 September
		2014	2013	2013
			(Restated**)
		Unaudited	Unaudited	Audited
		£000	£000	£000
Non-current assets
Intangible assets
- goodwill		33,060	26,918	33,060
- other		3,209	2,000	3,959
Property, plant and equipment		9,638	4,433	8,680
Retirement benefit assets		1,062	3,253	962
Deferred tax assets		2,819	2,535	3,051
		49,788	39,139	49,712
Current assets
Inventories		2,920	9,449	3,195
Trade and other receivables		94,130	64,229	75,868
Current tax assets		1,243	834	1,007
Cash and cash equivalents		8,123	1,812	5,348
		106,416	76,324	85,418
Total assets		156,204	115,463	135,130
Non-current liabilities
Obligations under finance leases		(1,779)	(548)	(1,984)
Retirement benefit obligations		(2,172)	(569)	(3,545)
Deferred tax liabilities		(1,036)	(1,039)	(1,036)
Provisions		(628)	(566)	(628)
		(5,615)	(2,722)	(7,193)
Current liabilities
Borrowings		-	(5,000)	(2,500)
Trade and other payables		(131,860)	(94,483)	(112,329)
Obligations under finance leases		(2,410)	(577)	(1,509)
Current tax liabilities		(2,418)	(934)	(1,160)
Provisions		(104)	(166)	(104)
		(136,792)	(101,160)	(117,602)
Total liabilities		(142,407)	(103,882)	(124,795)
Net assets		13,797	11,581	10,335
Share capital		6,152	5,990	6,140
Share premium account		5,942	5,893	5,893
Capital redemption reserve		3,896	3,896	3,896
Cumulative translation adjustment		505	1,490	751
Share based payments reserve		203	342	390
Retained earnings		(2,901)	(6,030)	(6,735)
Total equity		13,797	11,581	10,335

Group cashflow statement

for the six months ended 31 March 2014

	Six months ended		Year ended
	31 March		30 September
	2014	2013	2013
		(Restated**)	(Restated**)
	Unaudited	Unaudited	Audited
	£000	£000	£000
Profit for the period from continuing operating activities	5,390	3,282	8,786
Amortisation of intangible assets	750	250	500
Depreciation	1,185	513	1,288
Profit on sale of property, plant and equipment	(143)	(27)	(110)
Decrease in inventories	79	192	6,466
(Increase)/decrease in receivables	(18,337)	9,949	2,093
Increase/(decrease) in payables	19,471	(10,047)	1,936
Current service cost in respect of defined benefit pension scheme	29	26	53
Cash contribution to defined benefit schemes	(1,473)	(1,433)	(2,946)
(Credit)/expense in respect of share options	(187)	53	101
Finance income	(74)	(18)	(25)
Finance costs and expense	210	343	320
Interest paid	(149)	(193)	(362)
Income taxes paid	(236)	-	(429)
Income tax expense	1,490	1,062	1,787
Net cash inflow from continuing operating activities	8,005	3,952	19,458
Net cash outflow from discontinued operating activities	(18)	(105)	(220)
Net cash inflow from operating activities	7,987	3,847	19,238
Investing activities
Interest received	74	18	25
Proceeds on disposal of property, plant and equipment	188	40	1,854
Purchases of property, plant and equipment	(600)	(52)	(705)
Acquisition of subsidiaries net of cash acquired	-	-	(9,384)
Net cash (outflow)/inflow from investing activities	(338)	6	(8,210)
Financing activities
Dividends paid	(1,538)	(1,258)	(1,917)
Issue of Ordinary Shares	61	-	150
Loan repayments	(2,500)	(2,500)	(5,000)
Repayment of obligations under finance leases	(892)	(338)	(958)
Net cash outflow from  financing activities	(4,869)	(4,096)	(7,725)
Net increase/(decrease) in continuing cash and cash equivalents	2,798	(138)	3,523
Net decrease in discontinued cash and cash equivalents	(18)	(105)	(220)
Net increase/(decrease) in cash and cash equivalents	2,780	(243)	3,303
Cash and cash equivalents at the beginning of the period	5,348	2,040	2,040
Effect of foreign exchange rate changes	(5)	15	5
Cash and cash equivalents at the end of the period	8,123	1,812	5,348
Bank balances and cash	8,123	1,812	5,348

NOTES TO THE ACCOUNTS

Note 1 - Basis of preparation

(a) The consolidated interim financial report for the six months ended 31 March 2014 and the equivalent period in 2013 have not been audited or reviewed by the Group's auditor. They do not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. They have been prepared under the historical cost convention and on a going concern basis in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. This interim financial report does not comply with IAS34 "Interim Financial Reporting", which is not currently required to be applied for AIM companies.  This interim report was approved by the Directors on 20 May 2014.

(b) The accounts for the year ended 30 September 2013 were prepared under IFRS and have been delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498(2) or (3) of the Companies Act 2006. In this report, the comparative figures for the year ended 30 September 2013 have been audited. The comparative figures for the period ended 31 March 2013 are unaudited.

(c) For the year ending 30 September 2014, there are no new accounting standards, which have been adopted by the EU, applied and implemented for this interim financial report.

For this interim financial report however, the amended IAS 19 (2011) applies for accounting periods beginning on or after 1 January 2013 which impacts the Group's 2014 results.  The 2013 comparative results have been amended to reflect this change in accounting policy which is required by changes to the standard.  The principal adjustments are:

-       Pension scheme administration costs are now reported within central administration costs (March 2013: £263,000, September 2013: £400,000).  Previously these costs were reported within the total of contributions paid to the scheme by the employer and as a deduction from the expected return on assets.

-       Expected return on assets is replaced by interest on the assets calculated using the IAS 19 discount rate.  This reduces the interest charge for the year ended 30 September 2013 by £274,000 from a £232,000 charge to a £42,000 credit.

** indicates where adjustments to previously reported results have been made as a consequence of implementing IAS 19 (2011).

(d) The Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. 

This interim statement is being sent to all shareholders and is also available upon request from the Company Secretary, Renew Holdings plc, Yew Trees, Main Street North, Aberford, West Yorkshire LS25 3AA, or via the website www.renewholdings.com.

Note 2 - Segmental analysis

Operating segments have been identified based on the internal reporting information provided to the Group's Chief Operating Decision Maker. From such information, Engineering Services and Specialist Building have been determined to represent operating segments.

			Six months ended 31 March							Year ended 30 September
			2014			2013				2013
			Unaudited			Unaudited				Audited
Revenue is analysed as follows:			£000			£000				£000
Engineering Services			169,190			110,372				232,371
Specialist Building			56,605			42,039				102,521
Inter segment revenue			-			-				(246)
Segment revenue			225,795			152,411				334,646
Central activities			-			-				3
Group revenue before exceptional items			225,795			152,411				334,649
Exceptional revenue			-			-				15,412
Group revenue from continuing operations			225,795			152,411				350,061
	Before amortisation of intangible assets 2014 Unaudited	Amortisation of intangible assets 2014 Unaudited	Six months ended 31 March				Before exceptional items and amortisation of intangible assets 2013 (Restated**) Audited	Exceptional items and amortisation of intangible assets 2013 Audited			Year Ended 30 September 2013 (Restated**) Audited
			2014 Unaudited	2013* (Restated**) Unaudited
	£000	£000	£000	£000			£000	£000			£000
Analysis of operating  profit
Engineering Services	7,764	(750)	7,014	4,645			10,646	(500)			10,146
Specialist Building	1,005	-	1,005	994			2,083	(3,539)			(1,456)
Segment operating profit	8,769	(750)	8,019	5,639			12,729	(4,039)			8,690
Central activities	(1,003)	-	(1,003)	(970)			(1,897)	4,075			2,178
Operating profit	7,766	(750)	7,016	4,669			10,832	36			10,868
Net financing expense	(136)	-	(136)	(325)			(295)	-			(295)
Profit before income tax	7,630	(750)	6,880	4,344			10,537	36			10,573

*Operating profit for the six months ended 31 March 2013 is after charging £250,000 of amortisation cost. There were no exceptional items reported in the six months ended 31 March 2013.

Note 3 - Exceptional items and amortisation of intangible assets

	Six months ended				Year ended
	31 March				30 September
	2014		2013		2013
	Unaudited		Unaudited		Audited
	£000		£000		£000
Redundancy and restructuring costs	-		-		272
Provision against amounts recoverable on old building contracts	-		-		2,767
Costs related to exceptional storm damage on a building contract	-		-		500
Lewis acquisition costs	-		-		196
Profit arising from sale of land	-		-		(9,190)
Write down of land stock in the USA	-		-		4,919
Total gains arising from exceptional items	-		-		(536)
Amortisation of intangible assets	750		250		500
	750		250		(36)
Amortisation of intangible assets relates to the acquisition of:
Amalgamated Construction Ltd	250		250		500
Lewis Civil Engineering Ltd	500		-		-
	750		250		500

Note 4 - Income tax expense

	Six months ended		Year ended
	31 March		30 September
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£000	£000	£000
Current tax:
UK corporation tax on profits for the period	(1,258)	(668)	(858)
Adjustments in respect of previous periods	-	-	10
Total current tax	(1,258)	(668)	(848)
Deferred tax	(232)	(394)	(982)
Income tax expense	(1,490)	(1,062)	(1,830)
Deferred tax in respect of discontinued operation	-	-	43
Income tax in respect of continuing activities	(1,490)	(1,062)	(1,787)

Note 5 - Earnings per share                          

Six months ended 31 March												Year ended 30 September
		2014				2013							2013
		Unaudited					(Restated**) Unaudited						(Restated**) Audited
	Earnings	EPS	DEPS		Earnings		EPS		DEPS			Earnings	EPS		DEPS
	£000	Pence	Pence		£000		Pence		Pence			£000	Pence		Pence
Earnings before exceptional items and amortisation	5,952	9.80	9.66		3,469		5.79		5.54			8,759	14.60		14.45
Exceptional items and amortisation	(562)	(0.93)	(0.91)		(187)		(0.31)		(0.30)			27	0.04		0.04
Basic earnings per share - continuing operations	5,390	8.87	8.75		3,282		5.48		5.24			8,786	14.64		14.49
Loss for the period from discontinued operation	(18)	(0.03)	(0.03)		(105)		(0.18)		(0.16)			(315)	(0.52)		(0.52)
Basic earnings per share	5,372	8.84	8.72		3,177		5.30		5.08			8,471	14.12		13.97
Weighted average number of shares		60,766	61,594				59,899		62,593				59,998			60,624

The dilutive effect of share options is to increase the number of shares by 828,000 (March 2013: 2,694,000; September 2013: 626,000) and reduce the basic earnings per share by 0.12p (March 2013: 0.22p; September 2013: 0.15p).  On 3 February 2014 114,280 new Ordinary shares of 10p each were issued following the exercise of share options bringing the total number in issue to 61,517,948.

Note 6 - Dividends

The proposed interim dividend is 1.50p per share (2013: 1.10p).  This will be paid out of the Company's available distributable reserves to shareholders on the register on 6 June 2014, payable on 7 July 2014. In accordance with IAS 1, dividends are recorded only when paid and are shown as a movement in equity rather than as a charge in the income statement.

Note 7 - Acquisition of subsidiary

On 29 April 2014 the Company announced that it had agreed to acquire the entire issued share capital of Clarke Telecom Limited ("Clarke"), an engineering services business focused in the wireless telecoms infrastructure market, for a cash consideration of £17m.  £11.9m of the total consideration was paid on 28 April 2014 and a further £5.1m will be paid at the end of May 2014.  The acquisition was funded from the Group's cash resources and a four year loan of £12m provided by HSBC Bank plc.  Further information on the acquisition will be included in the annual report and accounts for the year ending 30 September 2014.

 

END

 

 

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