Interim Results
SIG PLC
13 September 2006
P R E S S R E L E A S E
13 September 2006
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
SIG plc is the market leading specialist supplier of insulation, roofing and
commercial interiors products in Europe.
• SIG reports strong sales and profits across all regions.
• Sales increased by 15.6% to £889m (2005: £769m). Like for like sales growth
(i.e. excluding the impact of acquisitions made in 2005 and 2006) was 6.7%.
o UK and Ireland sales increased 17.1% to £605.1m (2005: £516.7m).
o Mainland Europe sales increased 11.0% to £245.5m (2005: £221.1m).
o USA sales increased 22.7% to £38.4m (2005: £31.3m).
• Underlying* operating profit increased 27.8% to £55.9m (2005: £43.8m).
o UK and Ireland underlying operating profit increased 27.4% to £48.0m
(2005: £37.7m).
o Mainland Europe underlying operating profit increased 19.3% to £8.5m
(2005: £7.1m).
o USA underlying operating profit increased by 67.0% to £2.3m
(2005: £1.4m).
• Underlying profit before tax was up 22.7% to £49.7m (2005: £40.5m) and
underlying basic earnings per share increased by 24.7% to 27.8p (2005:
22.3p).
• Profit before tax was up 21.6% to £47.9m (2005: £39.4m) and basic earnings
per share increased by 24.1% to 26.8p (2005: 21.6p).
• Interim dividend per share has been increased 17% to 6.2p (2005: 5.3p).
• So far in 2006, SIG has completed twelve acquisitions, with combined
annual sales of c.£115m, for a total consideration of £49m.
* Where reference is made to 'underlying' this should be taken as meaning before
the amortisation of acquired intangibles, goodwill impairment and hedge
ineffectiveness.
Les Tench, Chairman, commented:
'The first six months of 2006 has been a period of continued expansion and solid
growth throughout the Group. Strong like for like increases in sales and
operating profit across all the geographic regions in which the Group trades
were supplemented by the positive impact of businesses acquired in 2005 and
during the period.
We are focused on achieving sustainable long term growth through a programme of
investments in existing businesses, and the acquisition of carefully targeted
complementary businesses. The company continues to strengthen its position in
its key markets, and is well positioned to benefit from future opportunities.
Trading since the end of June has been in line with expectations, and the Board
is confident that further progress will be made in 2006.'
Enquiries:
David Williams, Chief Executive SIG plc today 020 7251 3801
Gareth Davies, Finance Director thereafter 0114 285 6300
Gordon Simpson/Kirsty Flockhart Finsbury 020 7251 3801
Full Interim Results information is available on www.sigplc.co.uk. An interview
with David Williams, Chief Executive is now available on SIG's website and
www.cantos.com
Chairman's Statement
The first six months of 2006 has been a period of continued expansion and solid
growth throughout the Group.
Strong like for like increases in sales and operating profit across all the
geographic regions in which the Group trades were supplemented by the positive
impact of businesses acquired in 2005 and during the period.
Results
For the six months to 30 June 2006, compared with the corresponding period in
2005:
Sales
• Total sales were £889m, up £120m (15.6%) over the first half of 2005
(£769m).
• Like for like sales growth, i.e. excluding the impact of acquisitions
completed after 1 January 2005, was £51m, an increase of 6.7%.
• Foreign currency exchange rate movements compared to 2005 were minimal,
adding less than £5m to Group sales. Sales growth on a constant currency
basis was 15.0%.
• Like for like sales growth was achieved in all countries in which the
Group has trading operations, and in all principal business streams.
Profits
• Underlying* operating profit was £55.9m, an increase of £12.1m (27.8%)
over the £43.8m in the first half of 2005.
• Underlying* profit before tax increased by £9.2m (22.7%) to £49.7m
(2005: £40.5m).
• Net finance charges before hedge ineffectiveness were £6.2m (up from £3.3m
for the first half of 2005) reflecting the expenditure on acquisitions
and increased Euro interest rates since June 2005.
• Profit before tax increased by £8.5m, up 21.6% to £47.9m (2005: £39.4m).
* Where reference is made to 'underlying' this should be taken as meaning before
the amortisation of acquired intangibles, goodwill impairment and hedge
ineffectiveness.
Earnings per Share
• Underlying basic earnings per share were 27.8p, up 5.5p (24.7%) on the
22.3p in the first half of 2005.
• Basic earnings per share increased by 5.2p to 26.8p (2005: 21.6p), an
increase of 24.1%.
Financial
• Balance sheet gearing was 65% at 30 June 2006, compared to 60% at 31
December 2005.
• Interest cover continues to be healthy at 9 times (30 June 2005: 13
times).
Dividend
An interim dividend of 6.2p per share has been declared, an increase of 17.0% on
the 5.3p interim dividend paid for the first half of 2005.
This dividend is covered 4.3 times.
The dividend is payable on 27 November 2006, to shareholders on the register at
27 October 2006.
Trading Review
UK & Ireland (68% of Group sales)
Total sales in the UK and Ireland increased by £88m to £605.1m, up 17.1% on H1
2005 (£516.7m).
Sales growth on a like for like basis was 4.8%.
Operating profit increased by £10.3m to £48.0m, up 27.4% on 2005 (£37.7m) and
the net operating margin increased to 7.9% (2005: 7.3%).
This strong performance was achieved against the background of the following
market conditions:
Overall construction activity, which is the main external factor influencing the
Group, is estimated to have been very slightly up on the first half of 2005.
This small increase came from non-residential new build and renovation
programmes, where SIG is particularly strong. Within the non-residential sector,
commercial office construction grew. Public sector construction, which is
heavily influenced by the long term government commitment to rebuild and replace
schools and hospitals throughout the UK, is believed to have been flat compared
with prior year. The release of new work of this type so far in 2006 has been at
a lower level than industry expectations.
In the residential building sector, new construction activity continued at
similar levels to 2005, and the market for upgrading and renovation of existing
homes remained sluggish.
Market demand for thermal insulation materials was similar to prior year, and
average prices declined due to oversupply in the market arising from increased
manufacturing capacity. After three years of very strong growth in demand, the
market for upgrading of insulation in existing dwellings began to level off
during the first half of 2006. Demand is heavily driven by grants and subsidies
both from government agencies and from the energy producers, and whilst the long
term prospects are very good, in the short term certain key schemes are
beginning to wind down.
Demand for roofing materials continued to be adversely affected by reduced
activity in the housing RM&I market, and by the reduced number of 'conventional'
semi-detached and detached homes under construction.
The range of commercial interiors and specialist construction products sold by
SIG are more commonly sold to non-residential rather than residential
construction sites, and therefore demand has been slightly stronger in the first
six months of 2006.
Against this background of mixed market conditions, results in the first half of
2006 benefited from a range of internal growth and development initiatives, as
outlined below.
Businesses acquired in 2005 and so far in 2006 have integrated well into the
Group, and together, contributed strongly to the growth achieved.
The range of products sold has been further expanded, and certain products newly
introduced as a result of recent acquisitions have been migrated into existing
core operations.
Largely as a result of the acquisition programme, the number of trading sites in
the UK and Ireland increased by 38 to 375 at 30 June 2006 (31 December 2005:
337). This expansion increases the customer base, and improves the Group's
capability to meet customer service demands.
Actions taken as part of our ongoing continuous improvement programme, and the
positive impact of higher margin businesses acquired in 2005 enabled the gross
and net operating margins to be increased in the period, compared with the first
six months of 2005.
Mainland Europe (28% of Group sales)
Sales in the first half of 2006 increased by £24.4m to £245.5m, up 11.0% on H1
2005 (£221.1m).
Operating profit increased by £1.4m to £8.5m (2005: £7.1m), an increase of
19.3%.
Management actions and initiatives increased the net operating margin to 3.5%
(2005: 3.2%).
Exchange rate movements compared to prior year had a very small positive impact
on the results, adding £2.7m to sales and less than £100k to operating profit.
On a constant currency basis, sales growth was 9.8%, and operating profit growth
18.3%.
On a like for like constant currency basis, sales growth was 7.6% and operating
profit growth 13.7%. These are very encouraging growth figures, and are believed
to represent progress at a significantly greater rate than market demand.
In Germany and Austria sales grew by 8.8% in Euros. After a slow start to 2006,
construction activity strengthened in more recent months. Operating profit
declined slightly due to a reduction in the gross margin, as a result of changes
in the product mix together with generally weaker prices in the market.
In France, sales in Euros increased by 5.9%, and operating profits were
substantially increased, with market demand strong and pricing positive.
In Benelux, the good progress reported in 2005 continued in 2006, with sales in
Euros up 26.7% and operating profit strongly ahead of prior year.
Construction activity in Poland increased, and sales were up by 16.6% in local
currency. In comparison with a small operating loss reported in the first half
of 2005, a small operating profit was achieved in the first half of 2006.
The total number of trading sites in Mainland Europe increased by 2 to 141 at 30
June 2006, compared with 139 at 31 December 2005. Again, this represents further
growth and market penetration by SIG.
USA (4% of Group sales)
Against the background of strong market conditions, sales increased by £7.1m to
£38.4m, (2005: £31.3m), an increase of 22.7%, entirely on a like for like basis.
Operating profit rose by £0.9m to £2.3m (2005: £1.4m), an increase of 67.0%.
Results in Dollars on a like for like basis are sales growth of 18.4%, and
operating profit up 61.2%.
Whilst sales in the first three months were positively affected by some one-off
reconstruction work in the Southern States arising from the hurricane damage to
petrochemical and other industrial processing facilities in that area, the
underlying improvement in market demand was reflected in strong growth in the
second quarter.
Market Price Inflation
After a period of strong price inflation in 2004 and 2005, the overall impact of
price increases in 2006 has been around 2%. This is in line with internal
expectations, and is close to the long range average price inflation in the
products and markets served by SIG.
This average figure takes into account the price deflation on a year on year
basis of a number of products, most notably certain insulation materials in the
UK.
Acquisitions
SIG has had another successful period of acquiring businesses in related and
complementary markets in order to broaden the Group's activities, strengthen the
core businesses, and increase the range of growth opportunities for the future.
So far in 2006, we have completed twelve acquisitions, with combined annual
sales of c.£115m. Total consideration for these acquired businesses is £49m,
including assumed debt.
These are broadly spread across the markets served by SIG, and comprise seven in
roofing and related building plastics, (one in Germany, six in the UK), three in
insulation (one in France, two in the UK) and one in both specialist
construction products and commercial interiors (both UK).
In June 2006, we acquired a UK distributor of roofline and building plastics
that is loss making. With 27 trading sites this acquisition significantly
extends our market coverage in this product sector and we are confident that
this business will be returned to profitability. As indicated in the Trading
Statement released on 11 July 2006, it is anticipated that restructuring costs
will be taken over the remainder of 2006 in connection with this acquisition.
These are not expected to exceed £1m.
Prospects
Market conditions in the key countries and product sectors which are important
to SIG are not expected to change significantly during the remainder of 2006.
We are focused on achieving sustainable long term growth through a programme of
investments in existing businesses, and the acquisition of carefully targeted
complementary businesses. The company continues to strengthen its position in
its key markets, and is well positioned to benefit from future opportunities.
The acquisitions made in 2005 impacted chiefly on the second half year, and for
this reason the year on year comparators for the six month period beginning 1
July are more demanding than those for the first six months.
Trading since the end of June has been in line with expectations, and the Board
is confident that further progress will be made in 2006.
Consolidated Income Statement
for the six months ended 30 June 2006
Unaudited six months ended 30 June 2006 Unaudited six months ended 30 June 2005
------------------------------------------ -------------------------------------------
Before Amortisation of Total Before Amortisation of Total
amortisation of acquired amortisation of acquired
acquired intangibles, acquired intangibles,
intangibles, goodwill intangibles, goodwill
goodwill impairment and goodwill impairment and
impairment and hedge impairment and hedge
hedge ineffectiveness* hedge ineffectiveness*
ineffectiveness* ineffectiveness*
Continuing Note £000's £000's £000's £000's £000's £000's
Operations
------------------ ---- ---------- ---------- --------- ---------- ---------- ---------
Revenue 2 888,987 - 888,987 769,074 - 769,074
Operating profit 2 55,892 (2,969) 52,923 43,748 (1,359) 42,389
Finance income 2,785 1,170 3,955 3,385 250 3,635
Finance costs (9,019) - (9,019) (6,657) - (6,657)
------------------ ---- ---------- ---------- --------- ---------- ---------- ---------
Profit before tax 49,658 (1,799) 47,859 40,476 (1,109) 39,367
Income tax expense 3 (15,374) 540 (14,834) (13,045) 333 (12,712)
------------------ ---- ---------- ---------- --------- ---------- ---------- ---------
Profit after tax 34,284 (1,259) 33,025 27,431 (776) 26,655
------------------ ---- ---------- ---------- --------- ---------- ---------- ---------
Attributable to:
Equity holders of
the Company 33,914 (1,259) 32,655 27,063 (776) 26,287
Minority interests 370 - 370 368 - 368
------------------ ---- ---------- ---------- --------- ---------- ---------- ---------
Earnings per share
Basic earnings
per share 4 27.8p (1.0p) 26.8p 22.3p (0.7p) 21.6p
Diluted earnings
per share 4 27.4p (1.1p) 26.3p 21.9p (0.6p) 21.3p
------------------ ---- ---------- ---------- --------- ---------- ---------- ---------
Audited year ended 31 December 2005
--------------------------------------------------
Before Amortisation of Total
amortisation of acquired
acquired intangibles,
intangibles, goodwill
goodwill impairment and
impairment and hedge
hedge ineffectiveness*
ineffectiveness*
Continuing Operations Note £000's £000's £000's
------------------ ---- ---------- ---------- ----------
Revenue 2 1,639,332 - 1,639,332
Operating profit 2 102,103 (9,342) 92,761
Finance income 6,691 1,880 8,571
Finance costs (14,521) - (14,521)
------------------ ---- ---------- ---------- ----------
Profit before tax 94,273 (7,462) 86,811
Income tax expense 3 (29,211) 542 (28,669)
------------------ ---- ---------- ---------- ----------
Profit after tax 65,062 (6,920) 58,142
------------------ ---- ---------- ---------- ----------
Attributable to:
Equity holders
of the Company 64,106 (6,920) 57,186
Minority interests 956 - 956
------------------ ---- ---------- ---------- ----------
Earnings per share
Basic earnings per share 4 52.7p (5.7p) 47.0p
Diluted earnings per
share 4 51.9p (5.6p) 46.3p
------------------ ---- ---------- ---------- ----------
* Amortisation of acquired intangibles, goodwill impairment and hedge
ineffectiveness have been disclosed separately in order to give an indication
of the underlying earnings of the Group.
Consolidated Statement of Recognised Income and Expense
for the six months ended 30 June 2006
Unaudited six Unaudited six Audited year
months ended months ended ended
30 June 2006 30 June 2005 31 December
Restated 2005
£000's £000's £000's
----------------------------------- --------- --------- ---------
Profit after tax 33,025 26,655 58,142
Exchange difference on
retranslation of foreign currency
goodwill and intangibles 10 (1,498) (725)
Exchange difference on
retranslation of foreign currency
net investments (excluding goodwill
and intangibles) 320 (4,868) (1,669)
Exchange difference on foreign
currency borrowings (1,756) 4,871 1,111
Tax credit/(charge) on exchange
difference arising on foreign
currency borrowings 333 (1,647) (639)
Deferred tax credit on
share options 558 405 596
Fair value movement on interest
rate swaps 700 - -
Actuarial loss on defined
benefit pension schemes - - (1,885)
Deferred tax movement associated
with actuarial loss - - 563
Transitional adjustment to adopt
IAS 32 and IAS 39 at 1 January 2005 - (6,625) (6,625)
Recognition of deferred tax assets
on certain transitional adjustments
at 1 January 2005 - 3,869 3,869
----------------------------------- --------- --------- ---------
Total recognised income and
expense for the period 33,190 21,162 52,738
----------------------------------- --------- --------- ---------
Attributable to:
Equity holders of the Company 32,820 20,794 51,782
Minority interests 370 368 956
----------------------------------- --------- --------- ---------
33,190 21,162 52,738
----------------------------------- --------- --------- ---------
In the second half of 2005, in light of further guidance from the UK tax
authorities regarding the tax treatment of IFRS transitional adjustments relating
to derivative financial instruments and foreign currency exchange differences, a
deferred tax asset of £3.869m was booked as at 1 January 2005. As a result the
Consolidated Statement of Recognised Income and Expense has been restated for the
period ended 30 June 2005. This adjustment was already reflected in the results
reported for the year ended 31 December 2005 and therefore no restatement is
necessary in respect of that period. Further details of this restatement are
provided in Note 9.
Consolidated Balance Sheet
as at 30 June 2006
Unaudited Unaudited Audited
30 June 30 June 31 December
2006 2005 2005
Restated
£000's £000's £000's
--------------------------- --------- -------- ---------
Non-current assets
Property, plant and equipment 108,947 91,078 102,093
Goodwill 174,465 138,013 164,675
Intangible assets 51,558 38,355 49,252
Deferred tax assets 20,495 25,729 21,085
--------------------------- --------- -------- ---------
355,465 293,175 337,105
--------------------------- --------- -------- ---------
Current assets
Inventories 145,012 118,021 128,101
Trade receivables 327,943 307,540 281,053
Other receivables 28,388 22,516 21,745
Derivative financial instruments 1,163 1,069 -
Cash and cash equivalents 39,579 22,975 32,120
--------------------------- --------- -------- ---------
542,085 472,121 463,019
--------------------------- --------- -------- ---------
Total assets 897,550 765,296 800,124
--------------------------- --------- -------- ---------
Current liabilities
Trade and other payables 272,327 250,358 224,859
Obligations under finance leases and hire
purchase agreements 770 918 756
Bank overdrafts 1,516 4,168 3,211
Bank loans 132,107 63,574 95,148
Derivative financial instruments 601 158 -
Loan notes 5,244 - 2,253
Current tax liabilities 22,918 22,056 25,483
Provisions 2,438 1,639 2,252
--------------------------- --------- -------- ---------
437,921 342,871 353,962
--------------------------- --------- -------- ---------
Non-current liabilities
Obligations under finance leases and hire
purchase agreements 859 799 838
Bank loans 506 874 521
Derivative financial instruments 32,415 30,289 28,376
Loan notes 66,344 75,029 75,740
Deferred tax liabilities 7,576 14,456 7,507
Other payables 2,327 4,192 2,159
Retirement benefit obligations 27,676 24,707 26,987
Provisions 12,301 8,233 13,695
--------------------------- --------- -------- ---------
150,004 158,579 155,823
--------------------------- --------- -------- ---------
Total liabilities 587,925 501,450 509,785
--------------------------- --------- -------- ---------
Net assets 309,625 263,846 290,339
--------------------------- --------- -------- ---------
Capital and reserves
Called up share capital 12,226 12,148 12,189
Share premium account 18,269 16,980 17,883
Capital redemption reserve 347 347 347
Special reserve 22,113 22,113 22,113
Share option reserve 1,825 966 1,375
Hedging and translation reserve (3,375) (3,502) (2,282)
Retained profits 257,377 214,196 237,515
--------------------------- --------- -------- ---------
Attributable to equity holders of the
Company 308,782 263,248 289,140
--------------------------- --------- -------- ---------
Minority interests 843 598 1,199
--------------------------- --------- -------- ---------
Total equity 309,625 263,846 290,339
--------------------------- --------- -------- ---------
Consolidated Cash Flow Statement
for the six months ended 30 June 2006
Unaudited Unaudited Audited
30 June 30 June 31 December
2006 2005 2005
Note £000's £000's £000's
------------------------------------ ---- --------- -------- ---------
Net cash flow from operating
activities
Cash inflow from operating activities 6 43,617 47,190 113,581
Borrowing costs paid (7,287) (4,768) (11,511)
Interest received 1,084 1,803 3,518
Income tax paid (18,049) (7,454) (21,850)
------------------------------------ ---- --------- -------- ---------
Net cash inflow from operating
activities 19,365 36,771 83,738
------------------------------------ ---- --------- -------- ---------
Cash flows from investing
activities
Purchase of property, plant and
equipment (16,312) (14,236) (33,576)
Proceeds from sale of property, plant
and equipment 802 1,033 2,098
Purchase of businesses (14,937) (46,476) (83,482)
------------------------------------ ---- --------- -------- ---------
Net cash used in investing activities (30,447) (59,679) (114,960)
------------------------------------ ---- --------- -------- ---------
Cash flows from financing activities
Proceeds from issue of ordinary share
capital 423 196 1,140
Capital element of finance lease
rental payments (414) (702) (1,306)
Repayment of loans (2,268) (15,446) (22,020)
New loans 37,162 53,641 84,511
Dividends paid to equity holders of
the Company (14,051) (11,412) (17,861)
Payments to minority shareholder (726) (572) (572)
------------------------------------ ---- --------- -------- ---------
Net cash generated from financing
activities 20,126 25,705 43,892
------------------------------------ ---- --------- -------- ---------
Increase in cash and cash equivalents
in the period 7 9,044 2,797 12,670
------------------------------------ ---- --------- -------- ---------
Cash and cash equivalents at
beginning of period 28,909 16,501 16,501
Effect of foreign exchange rate 110 (491) (262)
changes
------------------------------------ ---- --------- -------- ---------
Cash and cash equivalents at end of
period 38,063 18,807 28,909
------------------------------------ ---- --------- -------- ---------
Notes to the Interim Financial Information
1 Basis of preparation of interim financial information
The interim financial information was approved by the Board of Directors on 12
September 2006. The financial information set out in the Interim Report is
unaudited.
The Group's interim financial information has been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted for use in the
European Union and in accordance with the accounting policies included in the
Annual Report for the year ended 31 December 2005, which have been applied
consistently throughout the current and preceding periods.
The interim financial information does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985. The interim results to 30
June 2006 and 2005 are neither audited nor reviewed. The financial information
for the full preceding year is based on the statutory accounts for the
financial year ended 31 December 2005. Those accounts, upon which the auditors
issued an unqualified opinion, have been delivered to the Registrar of
Companies. The auditors' report contained no statement under Section 237(2) or
237(3) of the Companies Act 1985.
2 Segmental information
The Group is managed and organised in three geographies: UK & Ireland, Mainland
Europe and the USA. These geographies are the basis on which the Group reports
its primary segment information. Segment information about these geographies is
presented below:
Unaudited six months ended Unaudited six months ended
30 June 2006 30 June 2005
------------------------------------ --------------------------------------
UK & Mainland USA Total UK & Mainland USA Total
Ireland Europe Ireland Europe
Restated Restated Restated Restated
£000's £000's £000's £000's £000's £000's £000's £000's
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Revenue 605,133 245,454 38,400 888,987 516,705 221,075 31,294 769,074
Result
Segment result before amortisation
of acquired intangibles and goodwill
impairment loss 48,041 8,521 2,295 58,857 37,700 7,141 1,374 46,215
Amortisation of acquired intangibles (2,891) (78) - (2,969) (1,331) (28) - (1,359)
Goodwill impairment loss - - - - - - - -
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Segment result 45,150 8,443 2,295 55,888 36,369 7,113 1,374 44,856
Parent Company costs (2,965) (2,467)
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Operating profit 52,923 42,389
Net finance costs (5,064) (3,022)
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Profit before tax 47,859 39,367
Income tax expense (14,834) (12,712)
Minority interests (370) (368)
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Retained profit 32,655 26,287
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Balance sheet
Assets
Segment assets 670,118 191,563 31,186 892,867 537,637 190,145 28,021 755,803
Unallocated assets 4,683 9,493
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Consolidated total assets 897,550 765,296
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Liabilities
Segment liabilities 280,099 68,800 6,128 355,027 247,741 78,439 5,352 331,532
Unallocated liabilities 232,898 169,918
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Consolidated total liabilities 587,925 501,450
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Other segment information
Capital expenditure on:
Property, plant and equipment 12,825 3,239 248 16,312 11,124 2,892 220 14,236
Intangible assets 4,727 548 - 5,275 24,821 179 - 25,000
Goodwill 9,541 239 - 9,780 25,899 175 - 26,074
Non-cash expenditure:
Depreciation 8,044 2,447 195 10,686 6,688 2,342 257 9,287
Amortisation of acquired intangibles 2,891 78 - 2,969 1,331 28 - 1,359
Goodwill impairment loss - - - - - - - -
------------------------------------ --------- --------- -------- --------- --------- --------- --------- ---------
Audited year ended 31 December 2005
--------------------------------------------------
UK & Mainland USA Total
Ireland Europe
£000's £000's £000's £000's
------------------------------------ --------- --------- --------- ---------
Revenue 1,098,055 473,393 67,884 1,639,332
Result
Segment result before amortisation
of acquired intangibles and
goodwill impairment loss 84,359 19,612 3,008 106,979
Amortisation of acquired intangibles (3,630) (58) - (3,688)
Goodwill impairment loss (5,654) - - (5,654)
------------------------------------ --------- --------- --------- ---------
Segment result 75,075 19,554 3,008 97,637
Parent Company costs (4,876)
------------------------------------ --------- --------- --------- ---------
Operating profit 92,761
Net finance costs (5,950)
------------------------------------ --------- --------- --------- ---------
Profit before tax 86,811
Income tax expense (28,669)
Minority interests (956)
------------------------------------ --------- --------- --------- ---------
Retained profit 57,186
------------------------------------ --------- --------- --------- ---------
Balance sheet
Assets
Segment assets 587,710 179,100 31,535 798,345
Unallocated assets 1,779
------------------------------------ --------- --------- --------- ---------
Consolidated total assets 800,124
------------------------------------ --------- --------- --------- ---------
Liabilities
Segment liabilities 238,255 54,200 6,327 298,782
Unallocated liabilities 211,003
------------------------------------ --------- --------- --------- ---------
Consolidated total liabilities 509,785
------------------------------------ --------- --------- --------- ---------
Other segment information
Capital expenditure on:
Property, plant and equipment 24,802 8,448 326 33,576
Intangible assets 37,543 689 - 38,232
Goodwill 56,107 1,474 - 57,581
Non-cash expenditure:
Depreciation 16,537 4,781 501 21,819
Amortisation of acquired intangibles 3,630 58 - 3,688
Goodwill impairment loss 5,654 - - 5,654
------------------------------------ --------- --------- --------- ---------
3 Income tax expense
The income tax expense comprises:
Unaudited six Unaudited six Audited year
months ended months ended ended
30 June 30 June 31 December
2006 2005 2005
£000's £000's £000's
---------------------------------------- -------- -------- --------
UK taxation 10,161 8,224 20,032
Overseas taxation 4,673 4,488 8,637
---------------------------------------- -------- -------- --------
Total income tax expense for the period 14,834 12,712 28,669
---------------------------------------- -------- -------- --------
4 Earnings per share
The calculations of earnings per share are based on the following profits and
numbers of shares:
Basic and diluted Basic and diluted before amortisation of
acquired intangibles, goodwill impairment
and hedge ineffectiveness
-------------------------------------- ---------------------------------------------
Unaudited six Unaudited Audited Unaudited six Unaudited six Audited year
months ended six months year ended months ended months ended ended
ended
30 June 30 June 31 December 30 June 30 June 31 December
2006 2005 2005 2006 2005 2005
£000's £000's £000's £000's £000's £000's
------------------------- --------- --------- --------- --------- --------- ---------
Profit after tax 33,025 26,655 58,142 33,025 26,655 58,142
Minority interests (370) (368) (956) (370) (368) (956)
Amortisation of acquired
intangibles - - - 2,969 1,359 3,688
Goodwill impairment loss - - - - - 5,654
Hedge ineffectiveness - - - (1,170) (250) (1,880)
Tax relating to the
amortisation of acquired
intangibles and hedge
ineffectiveness - - - (540) (333) (542)
------------------------- --------- --------- --------- --------- --------- ---------
32,655 26,287 57,186 33,914 27,063 64,106
------------------------- --------- --------- --------- --------- --------- ---------
Weighted average number of shares: Unaudited six Unaudited six Audited year
months ended months ended ended
30 June 30 June 31 December
2006 2005 2005
Number Number Number
------------------------------- ------------ ------------ ------------
For basic earnings per share 122,040,935 121,430,203 121,625,474
Exercise of share options 1,926,741 2,207,254 1,970,146
------------------------------- ------------ ------------ ------------
For diluted earnings per share 123,967,676 123,637,457 123,595,620
------------------------------- ------------ ------------ ------------
Unaudited six Unaudited six Audited year
months ended months ended ended
30 June 30 June 31 December
2006 2005 2005
------------------------------- ------------ ------------ ------------
Earnings per share
- Basic earnings per share 26.8p 21.6p 47.0p
- Diluted earnings per share 26.3p 21.3p 46.3p
------------------------------- ------------ ------------ ------------
- Basic earnings per share 27.8p 22.3p 52.7p
- Diluted earnings per share 27.4p 21.9p 51.9p
------------------------------- ------------ ------------ ------------
Earnings per share before amortisation of acquired intangibles, goodwill
impairment and hedge ineffectiveness is presented in order to give an
indication of the underlying performance of the Group.
5 Consolidated statement of changes in equity
Unaudited six Unaudited six Audited
months ended months ended year ended
30 June 30 June 31 December
2006 2005 2005
Restated
£000's £000's £000's
------------------------------------- ---------- --------- ---------
Profit for the period 32,655 26,287 57,186
Dividends (14,051) (11,412) (17,861)
New share capital issued 423 196 1,140
Exchange difference on retranslation
of foreign currency goodwill and
intangibles 10 (1,498) (725)
Exchange difference on retranslation
of overseas net investments (excluding
goodwill and intangibles) 320 (4,868) (1,669)
Exchange difference on foreign
currency borrowings (1,756) 4,871 1,111
Tax credit/(charge) on exchange
difference arising on foreign
currency borrowings 333 (1,647) (639)
Deferred tax credit on share options 558 405 596
Fair value movement in interest
rate swaps 700 - -
Credit to share option reserve 450 327 736
Actuarial loss on defined benefit
pension schemes - - (1,885)
Deferred tax movement associated
with actuarial loss - - 563
Transitional adjustment to adopt IAS
32 and IAS 39 at 1 January 2005 - (6,625) (6,625)
Recognition of deferred tax assets on
certain transitional adjustments at
1 January 2005 - 3,869 3,869
------------------------------------- ---------- --------- ---------
Net addition to shareholders' funds 19,642 9,905 35,797
------------------------------------- ---------- --------- ---------
Opening shareholders' funds 289,140 253,343 253,343
------------------------------------- ---------- --------- ---------
Closing shareholders' funds 308,782 263,248 289,140
Amounts attributable to minority
interests 843 598 1,199
------------------------------------- ---------- --------- ---------
Total equity 309,625 263,846 290,339
------------------------------------- ---------- --------- ---------
6 Reconciliation of operating profit to cash inflow from operating activities
Unaudited six Unaudited six Audited
months ended months ended year ended
30 June 30 June 31 December
2006 2005 2005
£000's £000's £000's
-------------------------------------- ---------- --------- ---------
Operating profit 52,923 42,389 92,761
Depreciation charge 10,686 9,287 21,819
Amortisation of acquired intangibles 2,969 1,359 3,688
Goodwill impairment loss - - 5,654
Profit on sale of property,
plant and equipment (286) (362) (572)
Share-based payments 450 327 736
Increase in working capital (23,125) (5,810) (10,505)
-------------------------------------- ---------- --------- ---------
Cash inflow from operating activities 43,617 47,190 113,581
-------------------------------------- ---------- --------- ---------
7 Reconciliation of net cash flow to movements in net debt
Unaudited six Unaudited six Audited year
months ended months ended ended
30 June 30 June 31 December
2006 2005 2005
£000's £000's £000's
---------------------------------------- --------- -------- ---------
Increase in cash and cash equivalents
in the period 9,044 2,797 12,670
Cash outflow from movement in debt (34,480) (37,493) (61,185)
---------------------------------------- --------- -------- ---------
Increase in net debt resulting from
cash flows (25,436) (34,696) (48,515)
Debt acquired with acquisitions (263) (14,953) (21,270)
Non-cash items 1,223 427 (1,242)
IFRS transitional adjustment - (6,625) (6,625)
Exchange differences (421) 2,400 1,247
---------------------------------------- --------- -------- ---------
Increase in net debt in the period (24,897) (53,447) (76,405)
Net debt at beginning of period (174,723) (98,318) (98,318)
---------------------------------------- --------- -------- ---------
Net debt at end of period (199,620) (151,765) (174,723)
---------------------------------------- --------- -------- ---------
8 Interim dividend
An interim dividend of 6.2p per share (2005: 5.3p) has been declared.
In accordance with IAS 10 'Events after the balance sheet date', dividends
declared after the balance sheet date are not recognised as a liability in the
financial statements.
9 IFRS adjustment
On 9 March 2006, SIG plc published its 'Final Restatement of 2004 Financial
Information' document, which can be found on SIG's website: www.sigplc.co.uk.
Two additional transitional adjustments were made in this restatement document
from those made in the 'Preliminary Restatement of 2004 Financial Information'
document issued 14 September 2005. Although these additional adjustments were
reflected in the numbers reported for the year ended 31 December 2005, they were
not included in those reported for the period ended 30 June 2005.
The additional adjustments were as follows:
a) A deferred tax asset of £3.869m was booked as at 1 January 2005 and 30 June
2005 in relation to tax on certain transitional adjustments made on derivative
financial instruments and foreign currency exchange differences; and
b) Inventory was reduced by £2.800m as at 1 January 2004, 31 December 2004 and
30 June 2005 to take into account early settlement discounts in the valuation of
inventory.
The combined impact of the above adjustments is to increase net assets at 30
June 2005 by £1.069m. As a result, the Consolidated Balance Sheet, Consolidated
Statement of Recognised Income and Expense and the related notes have been
restated as at 30 June 2005 to reflect these adjustments. Neither of the
additional adjustments had any impact on the Consolidated Income Statement.
The impact of the adjustments at 30 June 2005 is as follows:
30 June 2005
as previously IFRS 30 June 2005
reported adjustment as restated
£000's £000's £000's
-------------------- --------- --------- ---------
Deferred tax assets 21,860 3,869 25,729
Inventories 120,821 (2,800) 118,021
Net assets 262,777 1,069 263,846
-------------------- --------- --------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
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