Half Yearly Report

RNS Number : 9544W

Associated British Engineering PLC

30 November 2010

 



 

 

 

 

 

 

ASSOCIATED BRITISH ENGINEERING PLC

INTERIM REPORT

FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2010

ASSOCIATED BRITISH ENGINEERING PLC

INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

CONTENTS                                                                                                                                                                                Page

Chairman's statement                                                                                                                                                                      1

Responsibility statement                                                                                                                                                                 2

Group income statement                                                                                                                                                                 3

Group interim balance sheet                                                                                                                                                           4

Group interim statement of changes in shareholders' equity                                                                                                   5

Group interim cash flow statement                                                                                                                                               6

Notes to the interim report                                                                                                                                                         7 - 14

ASSOCIATED BRITISH ENGINEERING PLC

CHAIRMAN'S STATEMENT

INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

SUMMARY OF RESULTS
	Six months to 30 September 2010 £'000	Six Months to 30 September 2009 £'000	Year to  31 March 2010 £'000
Revenue	2,153	1,406	3,366
Profit/(loss) before Tax	341	(43)	471
Earnings/(loss) per Share
Basic	26p	(3p)	38p
Diluted	26p	(3p)	38p

The result for the six month period to 30 September 2010 is a pre tax profit of £341,000. This is an improvement in the performance of the Group. The result is due to a better start to the trading year at our only operating subsidiary, British Polar Engines Limited ('BPE') which has experienced an increase in orders over the summer months as our announcements have indicated. Whilst this is a very good result and I sincerely hope this continues for the remainder of the year, it is important to note that in the past trading has been extremely volatile and largely unpredictable due to rapid changes in demand

BPE is now meeting its revised statutory obligation concerning its contributions to the Pension Fund which, as reported in the annual accounts, is now in respect of the BPE section of the fund only. The current deficit in the BPE Pension Fund is £2,270,000. There is a triennial valuation of the Fund due in the current financial year.

The cumulative outstanding Preference Share dividends now stand at £542,000 (Sep 2009: £490,000). Your Board of directors is actively seeking ways to resolve the outstanding preference issue and hope that this might be resolved before the end of the financial year.

The Board continues to keep central costs at a low level and also continues in its quest to identify a suitable corporate transaction to take the Group forward. It is with great relief that, following the resolution of the Pension Fund matter, the Board is now able to focus its full attention on core activities and build upon the ongoing strong performance of BPE. My co-directors and I are very grateful for the patience of shareholders.

The principal risks and uncertainties for the remaining six months of the financial year are detailed in note 3 of the interim report.

D A H Brown

Chairman

ASSOCIATED BRITISH ENGINEERING PLC

RESPONSIBILITY STATEMENT

INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

The Directors of the Company confirm to the best of their knowledge that:

a)     the Interim Report has been prepared in accordance with IAS 34;

b)    the Interim Report includes a fair view of the information required by DTR 4.2.7R, being an indication of the important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year; and

c)     the Interim Report includes a fair review of the information required by DTR 4.2.8R, being disclosure of related party transactions and changes therein since the last Annual Report

By order of the Board

D A H Brown

Chairman

ASSOCIATED BRITISH ENGINEERING PLC

GROUP INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

		Six months to	Six months to	Year to
		30 September	30 September	31 March
		2010	2009	2010
		£'000	£'000	£'000
REVENUE		2,153	1,406	3,366
Operating costs		(1,811)	(1,450)	(2,717)
		----------------	----------------	-------------
OPERATING PROFIT/(LOSS)		342	(44)	649
Finance expense		(1)	-	(200)
Finance income		-	1	22
		-------------	-------------	-------------
PROFIT/(LOSS) BEFORE TAXATION		341	(43)	471
Taxation		(2)	-	23
		-------------	-------------	-------------
PROFIT/(LOSS) FOR PERIOD		339	(43)	494
		======	======	======

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

		Six months to	Six months to	Year to
		30 September	30 September	31 March
		2010	2009	2010
		£'000	£'000	£'000
Profit/(loss) for the year		339	(43)	494
		------------	------------	------------
Other comprehensive income
Actuarial losses on retirement benefit obligation		-	-	(815)
		------------	------------	------------
TOTAL COMPREHENSIVE INCOME/(EXPENSE)
FOR THE YEAR		339	(43)	(321)
		======	======	======
EARNINGS PER SHARE ON PROFIT FOR THE
YEAR ATTRIBUTABLE TO EQUITY HOLDRS OF
THE PARENT COMPANY
BASIC AND DILUTED		26p	(3p)	38p

All activities are classified as continuing.

ASSOCIATED BRITISH ENGINEERING PLC                                                                       Company number: 00110663

GROUP INTERIM BALANCE SHEET

30 SEPTEMBER 2010

	At 30 September	At 30 September	At 31 March
	2010	2009	2010
	£'000	£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment	114	160	137
	-------------	-------------	-------------
Current assets
Inventories	1,235	1,345	1,416
Trade and other receivables	521	641	620
Held for trading investments	124	98	129
Cash and cash equivalents	3,638	2,444	2,915
	-------------	-------------	-------------
	5,518	4,528	5,080
	-------------	-------------	-------------
Total assets	5,632	4,688	5,217
	======	======	======
EQUITY AND LIABILITIES
Called up share capital	2,627	2,627	2,627
Share premium account	5,038	5,038	5,038
Other reserve	11	11	11
Retained earnings	(4,981)	(5,042)	(5,320)
	-------------	-------------	-------------
Equity attributable to the Company's Equity shareholders	2,695	2,634	2,356
	-------------	-------------	-------------
LIABILITIES
Non-current liabilities
Retirement benefit obligation	2,227	1,418	2,227
Obligations under finance leases	-	-	-
	-------------	-------------	-------------
	2,227	1,418	2,227
	-------------	-------------	-------------
Current liabilities
Trade and other payables	704	595	632
Obligations under finance leases	1	-	1
Current tax liabilities	25	41	1
	-------------	-------------	-------------
	710	636	634
	-------------	-------------	-------------
Total liabilities	2,937	2,054	2,861
	-------------	-------------	-------------
Total equity and liabilities	5,632	4,688	5,217
	======	======	======

 

ASSOCIATED BRITISH ENGINEERING PLC

GROUP INTERIM STATEMENT OF CHANGES IN EQUITY

	Share Capital	Share Premium	Other Reserve	Retained Earnings	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 April 2009	2,627	5,038	11	(4,999)	2,677
Loss for the period	-	-	-	(43)	(43)
	-------------	---------------	---------------	--------------	--------------
Balance at 30 September 2009	2,627	5,038	11	(5,042)	2,634
Profit for the period	-	-	-	537	537
Other comprehensive income for the period
Actuarial losses in defined benefit plan	-	-	-	(815)	(815)
	--------------	--------------	--------------	--------------	---------------
Balance at 1 April 2010	2,627	5,038	11	(5,320)	2,356
Profit for the period	-	-	-	339	339
	-------------	---------------	---------------	--------------	--------------
Balance at 30 September 2010	2,627	5,038	11	(4,981)	2,695
	=======	=======	=======	=======	=======

ASSOCIATED BRITISH ENGINEERING PLC

GROUP INTERIM CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

	Six months to	Six months to	Year to
	30 September 2010	30 September 2009	31 March  2010
	£'000	£'000	£'000
Cash flows from operating activities
Cash generated from operations	737	(52)	428
Interest received	-	1	22
Interest paid	(1)	-	(2)
	---------------	---------------	--------------
Net cash from operating activities	736	(51)	448
	---------------	---------------	--------------
Cash flows from investing activities
Purchase of property, plant and equipment	(13)	(3)	(16)
Purchase of investments held for trading	-	(7)	(33)
	---------------	---------------	--------------
Net cash used in investing activities	(13)	(10)	(38)
	---------------	---------------	--------------
Cash flows from financing activities
Net change in obligations under finance leases	-	(1)	(1)
	---------------	---------------	--------------
Net cash used in financing activities	-	(1)	(1)
	---------------	---------------	--------------
Net increase/(decrease) in cash and cash equivalents	723	(62)	409
Cash and cash equivalents at beginning of year	2,915	2,506	2,506
	---------------	---------------	--------------
Cash and cash equivalents at end of year	3,638	2,444	2,915
	=======	=======	=======

CASH FLOW FROM OPERATING ACTIVITIES	Six months to	Six months to	Year to
	30 September 2010	30 September 2009	31 March  2010
	£'000	£'000	£'000
Net profit/(loss)	341	(43)	471
Adjustments for:
Depreciation	36	36	72
Profit on disposal of investments held for trading	-	(23)	-
Interest income	-	(1)	(22)
Interest expense	1	-	2
Pension scheme interest expense	-	-	198
Cash paid in excess of current pensions service cost	-	-	(203)
Changes in working capital:
Decrease/(increase) in inventories	181	42	(29)
Decrease/(increase) in trade and other receivables	99	(81)	(60)
Increase in payables	74	18	52
Decrease/(increase) in investments	5	-	(40)
Taxes paid	-	-	(13)
	---------------	---------------	--------------
Cash generated from operations	737	(52)	428
	=======	=======	=======

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	BASIS OF PREPARATION This Group interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the disclosure requirements of the Listing Rules.  The policies set out below have been consistently applied to all periods presented. The results for the year ended 31 March 2010 have been extracted from the statutory consolidated financial statements of Associated British Engineering Plc, which are prepared in accordance with IFRS, as adopted by the EU. GOING CONCERN The financial statements have been prepared on the going concern basis.  Based on the group's budgets and cash forecasts, the board considers that the group has sufficient resources to meet all necessary outgoings and to enable it to continue in operational existence for the foreseeable future. BASIS OF CONSOLIDATION The Group interim report incorporates the financial statements of Associated British Engineering plc and its subsidiary undertakings to 30 September each year. All inter-company balances and transactions have been eliminated in full. The Group interim report includes the results of subsidiaries acquired or disposed of during the year from or to the effective date of acquisition or disposal. REVENUE RECOGNITION Revenue is measured at the fair value of the consideration receivable by the Group for goods supplied and services provided, excluding value added tax and trade discounts. Revenue from the sale of spare parts is recognised when the goods are dispatched or, if under a bill and hold arrangement, when they are available for dispatch to a specific customer. Revenue from the sale of engines is recognised in accordance with the performance of contractual terms and specifically when the engines have been satisfactorily tested in accordance with contractual terms. ACCOUNTING ESTIMATES AND JUDGEMENTS Management are required, in accordance with IFRS, to exercise judgement and to make estimates and assumptions regarding the application of accounting policies and the resulting effect on reported amounts of assets, liabilities, income and expenses. These estimates and assumptions are based on historical experience and a review of current conditions prevailing at the time but actual results may differ from these estimates. Any such revision is recognised in the financial statements in the period in which the change in circumstance is detected. Accounting Judgements The key areas where management have exercised judgement in the period, and the thought process undertaken, are as follows: Pension Scheme The Directors are in regular contact with the Trustees of the pension scheme in connection with the following areas where judgement is exercised: the assumptions underpinning the actuarial valuation, continued negotiations regarding the various schemes and in relation to the payment plan. The Directors then assess the relevant estimates and assumptions made to ensure that all statutory obligations are met, where possible.

Preference shares

The Group is funded by a combination of equity and debt instruments, the latter representing 555,000 7% £1 cumulative preference shares and 157,395 8% £1 cumulative redeemable preference shares.

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT (continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

         Accounting Judgements (continued)

Preference shares

International Financial Reporting Standards require these instruments to be carried at their fair value and as there is no expectation that these preference shares will be redeemed the Directors consider the fair value to be £Nil. The Directors have also exercised judgement by discounting the cash flows associated with the dividend arrears of £542,000 to £Nil.

            Accounting Estimates

The accounting estimate having an impact on carrying amounts of assets and liabilities in the reporting period is as follows:

Inventories

Inventories held by the Group consist of raw material (mainly components), work in progress (manufactured engine parts) and finished goods (both purchased and manufactured engine parts). A specific provision is made, on a 100% basis, for all stock lines that are obsolete or slow moving for periods in excess of four years. A provision of between 5% and 50% is made over all stock lines that have not moved for one, two and three years.

The directors review their assumptions and accounting estimates, along with the accounting policies adopted in preparing these financial statements, on a regular basis and recognise any change in variables in the period in which circumstances change.

LEASED ASSETS

Leases of property, plant and equipment, where the Group has substantially all the risks and rewards of ownership, are classified as finance leases. An asset held under a finance lease is capitalised at lease inception at the lower of the asset's fair value and the present value of the minimum lease payments. Obligations related to finance leases, net of finance charges in respect of future periods, are included as appropriate within borrowings. The interest element of the finance cost is charged to the income statement over the life of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant or equipment is depreciated on the same basis as owned plant and equipment or over the life of the lease, if shorter.

Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Operating lease rentals (net of any related lease incentives) are charged against profit on a straight line basis over the period of the lease.

INVENTORIES AND IMPAIRMENT OF INVENTORIES

Inventories of raw materials, work in progress and finished goods are valued at the lower of cost and net realisable value.  Work in progress and finished goods include an appropriate allocation of overheads.

Cost is calculated on a first in, first out basis. Net realisable value is the estimated selling price in the normal course of business, less estimated costs of completion and provision is made for obsolete, slow moving and defective inventories.

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT (continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less depreciation and any impairment in value.  Freehold land is not depreciated. Depreciation is calculated to write down the cost of all property, plant and equipment, less its residual value, by annual instalments over their expected useful lives on the following bases:

Freehold buildings                  5 per cent

Plant and machinery               7½- 33⅓ per cent

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term of the relevant lease.  The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised as income.

The carrying values of plant and machinery are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.  If any such indication exists, and where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to their recoverable amounts.

TAXATION

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year.  Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.  The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

FOREIGN CURRENCIES

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.  Monetary assets and liabilities in foreign currencies are translated at the exchange rates ruling at the balance sheet date.  All exchange differences are dealt with through the income statement.

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT(continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (continued)

RETIREMENT BENEFIT COSTS

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.  Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Group's obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.

For defined benefit retirement schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.  Actuarial gains and losses are recognised in full in the period in which they occur.  They are recognised outside the group income statement and presented in the group statement of comprehensive income in accordance with the provisions stated within IAS 19 'Employee benefits'. 

Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets.  Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

The Group recognises the actuarial losses and gains immediately within the Statement of Comprehensive Income in accordance with provisions stated within IAS 19 "Employee Benefits".

CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with a maturity of three months or less which are subject to an insignificant risk of changes in value.

FINANCIAL INSTRUMENTS

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities and are presented as such in the balance sheet. 

Finance costs and gains or losses relating to financial liabilities are included in the income statement.  Finance costs are calculated so as to produce a constant rate of charge on the outstanding liability. Where none of the contractual terms of share capital meet the definition of a financial liability then this is classed as an equity instrument.  Dividends and distributions relating to equity instruments are debited direct to equity.

Trade and other receivables

Trade and other receivables are originally recognised at fair value. Subsequent measurement is at amortised cost using the effective interest rate method. A provision against trade receivables is made when there is objective evidence that the group will not be able to collect all amounts due to it in accordance with the original terms of those receivables.

Trade payables

Trade payables are originally recognised at fair value, net of transaction costs.  Subsequent measurement is at amortised cost using the effective interest rate method.

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT (continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (continued)

FINANCIAL INSTRUMENTS (continued)

Investments in securities

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, with all transaction costs being written off to the income statement.

Investments are classified as either held for trading or available-for-sale and are measured at subsequent reporting dates at fair value.  Gains and losses arising from changes in fair value of financial assets held for trading are included in the income statement for the period. 

CUMULATIVE PREFERENCE SHARES

Cumulative preference shares are measured subsequent to initial recognition at amortised cost using the effective interest rate method.  Where the group revises its estimates of cash payments, the carrying amount of the financial liability is adjusted to reflect actual and revised estimated cash flows.  The group recalculates the carrying amount by computing the present value of the estimated future cash flows at the financial instruments' original effective interest rate.  The adjustment is recognised as income or expense in the income statement.

SHARE BASED PAYMENTS AND SHARE OPTIONS

Former employees of the Group have received remuneration in the form of share based payment transactions, whereby employees render services in exchange for rights over shares ('equity settled transactions').  The cost of these transactions is measured by reference to their fair value at the date at which the options are granted.  The fair value is determined by using the Black-Scholes Option pricing model.  There has been no change recognised with respect to the share options as all those in issue fall outside the scope of IFRS 2, having been granted before November 2002.

IMPAIRMENT OF TANGIBLE ASSETS

At each balance sheet date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).  Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.   

Recoverable amount is the higher of fair value less costs to sell and value to use.  In assessing value in use the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. 

An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.  A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT (continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (continued)

            SEGMENTAL REPORTING

IFRS 8 "Operating Segments" was adopted by the Group during the year ended 31 March 2010.  The standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes and reported in a manner which is more consistent with information disclosed to the chief decision-maker.  The chief decision-maker has been identified as the Board, at which level strategic decisions are made.

2.         SEGMENTAL ANALYSIS

	The following table shows an analysis of the Group's external sales by geographical market:
		Six months to	Six months to	Year to
		30 September	30 September	31 March
		2010	2009	2010
		£'000	£'000	£'000
	United Kingdom	1,093	587	1,172
	Europe	689	348	1,266
	Middle East	34	68	74
	Far East and Australasia	161	321	649
	Africa	34	26	101
	North and South America	142	45	78
	Russia	-	11	26
		-------------	-------------	-------------
		2,153	1,406	3,366
		======	======	======

All of the above revenue arises from diesel and related engineering activities and originates in the United Kingdom.

In the periods detailed above all of the assets held by the group were located in the United Kingdom and all capital expenditure was incurred within the United Kingdom.

Operating segments

The following segment information has been prepared in accordance with IFRS 8, "Operating Segments", which defines requirements for the disclosure of financial information of an entity's operating segments.

The Board consider the Group on an individual company basis.  Reports by individual companies are used by the chief decision-maker in the Group.  Significant operating segments are Associated British Engineering Plc and British Polar Engines Limited.

The Group's operations are located in the United Kingdom.  Any transactions between business units are on normal commercial terms and conditions.

British Polar Engines Limited's activities consist of the manufacture and supply of diesel engines and spare parts for diesel engines together with associated repair work.

Associated British Engineering Plc is the group holding company.

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT (continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

2.       SEGMENTAL ANALYSIS (continued)

Six months to	Associated British Engineering Plc	British Polar Engines Ltd	Consolidated
30 September 2010	£'000	£'000	£'000
External sales	-	2,153	2,153
	----------	----------	-----------
Segment result (PBIT)	(144)	486	342
	----------	----------
Net finance expenses			(1)
Taxation			(2)
			--------
Profit after tax			339
			=====
Other information
Capital additions	-	13	13
Balance sheet
Segment assets	606	5,026	5,632
	=====	======	======

Six months to	Associated British Engineering Plc	British Polar Engines Ltd	Consolidated
30 September 2009	£'000	£'000	£'000
External sales	-	1,406	1,406
	----------	------------	-----------
Segment result (PBIT)	(62)	18	(44)
	----------	----------
Net finance expenses			1
Taxation			-
			--------
Profit after tax			(43)
			=====
Other information
Capital additions	2	1	3
Balance sheet
Segment assets	786	3,902	4,688
	=====	=====	=====

There were two customers who contributed more than 10% of the total group revenue for the six months ending 30 September 2010 (2009: one customer).

ASSOCIATED BRITISH ENGINEERING PLC

NOTES TO THE INTERIM REPORT (continued)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010

3.	PRINCIPAL RISKS AND UNCERTAINTIES
	In light of the industry in which BPE, our only trading subsidiary, operates in there are a number of risks and uncertainties which could have an impact on the performance of the Group for the remaining six months of the year. The key risks and uncertainties have been reflected in Note 1 to these accounts, Summary of Significant Accounting policies, with the following relating to the operational risks and uncertainties: ·      Dependency on key markets; ·      Timing and renewal of key contracts; ·      Foreign exchange risk; ·      Recruitment and retention of key employees; ·      Identification of acquisitions that fit the Group's strategy; ·      Compliance with laws and regulations The Directors meet on a regular basis to discuss these risks and uncertainties and appropriate actions are taken to mitigate these risks and to develop suitable strategies to protect the long term performance of the Group.

 

END

 

 

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