Interim Results

RNS Number : 8588X

Avingtrans PLC

22 February 2012

 



Avingtrans plc

("Avingtrans" or the "Group")

Interim results for the six months ended 30 November 2011

Avingtrans plc, which designs, manufactures and supplies critical components and associated services to the medical, energy, industrial and global aerospace sectors, today announces its interim results for the six months ended 30 November 2011. 

·     Revenue increased by 20% to £20.2m (H1 2011: £16.9m)

·     Order book remains close to record levels

·     EBITDA improved by 26% to £1.8m (H1 2011: £1.5m)

·     Fully diluted, adjusted¹ EPS of 3.0 pence per share (H1 2011: 1.8 pence per share)

·     As anticipated, cash generated from operations decreased to £0.1m (H1 2011: £0.9m)

·     Gearing increased to 34% (2011 year end: 29%)

·     Commitment to an enhanced dividend on achieving final results this year

¹ - fully diluted earnings per share adjusted to add back amortisation and exceptional items

Operational highlights

The Group businesses produced a string of highlights, including the following:

·     Sigma produced strong growth in the first half, with the Aerospace division growing 30%;

·     Sigma's recent new long term contract win with Goodrich (£3m) promises further long term key account development in civil aerospace

·     C&H grew robustly and added a further Rolls Royce site as a key customer in the period

·     Sigma Composites agreed an acquisition in the Aerospace composites market, augmenting existing competencies and product set

·     Metalcraft saw revenue expand by 14% in the first half

·     Crown's markets remained difficult and further cost cutting is underway to minimise harmful effects pending market restart.

·     Jena Tec has seen on-going strength in Europe despite the economic uncertainty and robust growth in the USA, achieving record turnover and profits in H1, with revenue up 22%.

Commenting on the results, Roger McDowell, Chairman, said:

"Aldous Huxley once said that "the only completely consistent people are the dead". Nevertheless, Chairmen of smaller quoted companies crave a degree of consistency on behalf of shareholders. Therefore, it is pleasing to report on a largely consistent first half, in line with market expectations. Steadily building on the improving position of last year, we continued to see the majority of our markets being reasonably resilient. This is particularly pleasing given the volatile economic backdrop we have been working against. We have built on the existing customer base and signed up important new customers - eg Goodrich - from whom we foresee substantial new business emerging. Therefore, our consistent strategic direction is producing the expected returns and we expect this to continue for the rest of the year.

In consequence, we have concluded that we can commit to the payment of an enhanced dividend with the final results this year. Our loyal band of steadfast investors will, we hope, cheer this steady progress."

Enquiries:

Avingtrans plc                                                          tel. [phone]          

Roger McDowell, Chairman

Steve McQuillan, Chief Executive Officer

Stephen King, Chief Financial Officer

FinnCap Ltd                                                             tel. [phone]

Marc Young / Henrik Persson - Corporate Finance

Brian Patient / Victoria Bates - Corporate Broking

Newgate Threadneedle                                           tel. [phone]

Guy McDougall / Josh Royston

About Avingtrans plc:

Avingtrans has become a significant organisation in the design, manufacture and supply of critical components and associated services to global industrial markets from three divisions: aerospace, energy and medical and industrial products.

Aerospace

Sigma Precision Components Ltd - UK and China

Sigma Precision Components is a market leader in rigid and flexible pipe assemblies and components for prestigious aerospace customers such as Rolls Royce, Messier Dowty and Meggitt. Sigma also manufactures precision prismatic components for the aerospace industry from its purpose-built facilities in the UK and Chengdu, China. Sigma Composites - UK Sigma Composites manufactures composite parts and provides machining services to high technology customers in Aerospace, F1/Motorsport and industrial markets.  Operating from facilities in Buckingham in the UK the company can provide rapid response variable needs as demanded by F1/Motorsport, but also technically-demanding Aerospace components to full AS9100 (Rev C) quality requirements.

CH Precision Finishers Ltd - UK

C&H provides final polishing and specialist finishing on aeroengine turbine blades, compressor blades and vanes for the power generation industries, operating from two strategically located centres to offer a local service to the UK aerospace industry.

Energy and Medical

Stainless Metalcraft Ltd - UK and China

Provider of safety-critical equipment for the energy, medical, science and research communities, worldwide, specialising in precision pressure and vacuum vessels and associated sub-assemblies and systems.

Crown International  Ltd - UK

Designs and manufactures market-leading pole and support systems for roadside signage and safety cameras, rail track signalling and gantries.

Industrial products

Jena Tec UK, Germany, USA and China

From specially equipped factories in Germany and the UK, Jena Tec designs, manufactures and services Precision Ballscrews, Spindles and Linear Motion actuation systems for automation and control of CNC machines and precision instrumentation.

Chairman's Statement

As befits an international precision engineering group, I'm pleased to be reporting on a first half precisely in line with expectations. There's a lot to be said for predictability and we continue to deliver as we have said we would. As far as we are able, we have insulated ourselves from the regional volatility in Europe's economy and perennial pricing and commodity risks to allow us to keep delivering consistent results.

We have certainly been boosted by the tailwind of a burgeoning civil aerospace sector, but other prospects have been diligently nurtured to give us a breadth of growth opportunities in most of our markets. We have seen solidity in Europe, coupled with encouraging growth in the USA and Asia.

Our target structural growth markets - Aerospace, Energy, Medical and Specialist Industrial - have all yielded good prospects and confirmed new deals. The only blot on the landscape has been Crown, which has suffered, along with other players in the transport infrastructure market. As a result, we have made further cost cuts and plan to exit leased facilities in Bristol to reduce overheads further.

Like last year, the Industrial Products division has had a strong first half and now has been joined by the Aerospace division in producing double digit EBIT margin consistently. The Energy and Medical division recovery is also progressing, albeit held back by the travails at Crown and somewhat slower than anticipated progress on next generation MRI systems. As last year, we anticipate a stronger second half at Metalcraft. In the first half, our confidence was buoyant enough to persuade the Board to commit to £1.2m of additional capital spend, spread across all three divisions, but with a concentration in Aerospace, commensurate with market conditions. We were pleased to agree new finance facilities in China worth over US $1m with HSBC in the period

As I have commented before, Avingtrans is generally agnostic towards market conditions in the UK as many of our customers are global blue chip OEMs. With the US market now showing signs of a uniform recovery and Asia continuing to provide opportunities for growth, we believe that our international platform is stable and appropriately anchored to support group enlargement. Commodity costs remain somewhat volatile, but not unduly so and we have agreements in place to buffer the business from these movements.

Post half year end, we announced an important new three-year, £3m contract with Goodrich in the aerospace sector, adding them to other members of our blue chip customer base, also including Rolls Royce, Eaton, GE and Meggitt. Energy and Medical and Industrial Products also kept growing key accounts - for example, Cummins at Metalcraft and Nissan at Jena Tec. The stable order book enabled us to keep hiring and developing the future skills we need for continued Group expansion.

Once more, our first half revenues were over 20% ahead of the corresponding period in the previous year and new contracts are still ramping up. Therefore, we believe that the business is well positioned both for the remainder of this financial year and into the new year commencing in June.

Acquisition opportunities continue to be carefully evaluated. We are delighted announce the agreed acquisition of the assets and intellectual property rights of the "Composites Engineering Group", to be known henceforward as Sigma Composites. We believe this will significantly strengthen our offering in Aerospace, as composites continue to expand in importance in that sector, as well as others.

Precision engineering requires diligent, capable people and our talented employees have once more demonstrated their determination to succeed in a demanding environment. I thank all of our people for their fastidious and unswerving efforts to build a better business that employees and shareholders can be proud of.

Roger McDowell

Chairman

22 February 2012

Business Review

Group Performance

Revenue: Maintaining Growth

The buoyant civil aerospace market helped to boost our first half revenues and other markets generally followed suit, albeit at a slower pace. The exception was again at Crown, where the moribund state of the transport infrastructure market depressed results and further cost cutting is in progress. Nevertheless, all three divisions are able to report growth and the combination of new business and a dynamic market lifted Aerospace into the top slot for revenue improvement. Consequently, first half revenue increased by 20% to £20.2m (2011: £16.9m).

Profit: Margins Stable

There was some softening of gross margins in the half, down slightly to 27.7% (2011: 28.8%). However, this is mainly a mix effect and the result of some one-off costs at Metalcraft and Jena Tec. The increasing sales lifted EBITDA, which improved by 26% to £1.8m (2011: £1.5m).

Earnings per Share (EPS): A Pleasing Trend

Adjusted diluted earnings per share for the period ending 30 November 2011 was 3.0 pence per share (2011: 1.8 pence per share) based on weighted average number of shares of 25,969,275 (2011: 25,551,520).

Funding and Liquidity: Debt remains under control, investment increasing

The net cash flow from operations decreased to £0.1m (2011: £0.9m). The reduction was mainly driven by our increasing sales and the working capital requirements associated with this change, together with the often seen cash outflow associated with Metalcraft projects.

Net indebtedness at 30 November 2011 stood at £8.0m, some £1.4m higher than at the year end (31 May 2011: £6.6m). Balance sheet gearing was 34%, up from 29% at 31 May 2011. Whilst this is the first increase for some years, we feel that it is fully justified, as it represents on-going investment in the future secured business and prospects of all the main group companies.

Dividend: Progressive policy persists

The Board believes it is still prudent to preserve cash in the business, due to on-going market uncertainties. However, we expect to be in a position to pay an enhanced final dividend this financial year, subject to our full year financial results.

Operations

Aerospace Division (Sigma and C&H)

The civil aerospace market is in a purple patch and Boeing announced just last week that the Asia-Pacific market is expected to order aircraft worth some $1.5tn over the next 20 years, with India and China among the world's fastest-growing aviation markets. Boeing has forecast air traffic in the region will grow by 6.7% per year during the same period. With Rolls Royce planning to double its revenues over the next decade, the barometer is set fair for a prolonged, stable growth period in this sector.

Sales in the division are up by 30% in comparison with the prior year. Notably, the first half saw our Sigma Precision Components business grow appreciably in the UK and China, bolstered by the December 2011 announcement of a £3m, three year contract win with Goodrich. The order book is at a record level and we are optimistic about the relationships with our key customers. Discussions are on-going with both existing and new customers regarding contract extensions and potential further long term agreements.

There is rising intercompany trade between Sigma in China and Sigma in the UK, resulting in a tightly operating internal supply chain that is improving our efficiency and providing us with a differentiator that our OEM clients value highly. China is now consistently generating profits now and the UK's increased output is showing through in Aerospace operating margins, which broke into double digits for the first time in the period.

Sigma has now joined the Rolls Royce "journey to excellence" programme, with the objective of turning the business into a world-class lean manufacturing aerospace operation. Compatible initiatives with other customers are also helping to drive our continuous improvement efforts.

We were delighted in the first half to reach an agreement with HSBC about new lending facilities in China, with an initial limit in excess of $1m, which will help to complete the population of our Chengdu factory with new equipment, improving our utilisation and efficiency still further. Already in the second half, additional machine deliveries have been completed, contributing to increased output.

C&H is the most consistent performer in the whole group and had yet another good six months. The additional equipment we installed at the end of the last financial year is now fully utilised, providing additional services for Rolls Royce and other customers. This allowed C&H to grow steadily and paved the way for additional growth in the second half and on into FY13. Supplementary service integration may permit us to cultivate a wider clientele for C&H in due course.

Energy and Medical Division (Metalcraft and Crown)

Sales in the division were up by 8% versus the corresponding half last year. This was quite pleasing, especially since the next generation MRI business is growing more slowly than anticipated at Metalcraft. Crown's performance continues to disappoint due to the on-going weakness in the transport infrastructure market. The higher divisional revenues were driven by increased project workload and this is a welcome return. Although the margin impact of this business was mixed in the first half, we anticipate improvement in the second half. Metalcraft was also lifted by growing sales to Cummins - up by some 12% versus the first half of the prior year, as we shadowed their growth story successfully. Metalcraft's transition for Cummins was recognised by the award of supplier of the year at an event in the first half.

Market conditions in the core Energy and Medical sectors remain sound, albeit less buoyant than aerospace. In addition to the growth with Cummins, we have seen further small contract wins in the nuclear and renewable sectors, with customers like Sellafield and Converteam. Nuclear new build remains a tantalising longer term prospect and Metalcraft is very well placed in this supply chain with all of the main players. Meanwhile, we go on with the development of our nuclear skills through the decommissioning route.

The diagnostic imaging sector of the medical market continued to grow steadily and we profited from growth with smaller customers in this area - eg Agilent and AMS. As before, the more telling impact on Metalcraft is the lead up to the next generation MRI product from Siemens. The ramp up towards production has been slower than anticipated, but other business with Siemens has compensated for the shortfall, though the overall margin mix was not favourable in the period. As previously explained, this new product is expected to generate revenues of up to £5m per annum for Metalcraft once full production volume is reached.

Metalcraft Chengdu is proceeding towards increased output for Siemens and AMS as required and we expect the unit to break even this year, despite a slower ramp-up than previously foreseen. We are able to scale Metalcraft's China operations more easily than we did with Sigma in the initial stages and we have also learned some valuable lessons from our previous start up.

Crown's path in the first six months was familiar and frustrating. The UK transport infrastructure market is at a low ebb in relation to our products and enticing international prospects have drifted out further. Crown therefore made a loss in the half which held back the divisional result. In turn, the immediate prospects precipitated further cost cutting on our part and the decision to exit two leased facilities in the Bristol area, leaving just one small facility extant by year end. Operations are therefore at their minimum configuration, optimised for a later reboot, pending the outcome of several key decisions at home and abroad during the course of 2012.

Industrial Products Division (Jena Tec)

Whilst we could not hope to reproduce the sales growth experienced in the first half of last year, the 22% increase in sales for Jena Tec (compared to H1 2011) was a commendable first half performance and the sustained double digit EBIT margin was particularly pleasing. We believe that industrial supply chains have normalised once more, following the disruptive effects of the Japanese tsunami last year, so this solid growth position is sustainable. Although margins were slightly below the peak of H1 last year, this was mainly down to a combination of some smaller one-off costs and the proactive pursuit of efficiency gains through lean production implementation, which continues in the second half.

Output from our facility in Germany is approaching record levels and the market recovery in the USA was robust enough in the first half for us to take the proactive decision to invest in a small facility in the Michigan area, in support of continued business expansion there. Modest capital spend at the Michigan plant will focus on final product configuration to customer specifications, shortening the supply cycle and providing an important adjunct to our service and support operations in the USA.

Targeted enhancements in capital equipment in Germany and the UK have focused on new customer capabilities and the additional capacity is almost fully committed over the coming 12 months already, particularly to customers requiring precision miniature ballscrew assemblies. The increase in sales comes from a mix of existing and new clients, with some of the new customers promising to become material in the next financial year. It is pleasing to note that key account relationships with E.ON, Ford and Nissan continued to develop positively in the first half. Jena Tec's focus on vertical integration - eg valve actuation - is partly responsible for the new business wins, but it is a combination of quality, product range, distribution and vertical integration that is producing the benefits we are seeing currently.

Outlook

Customer relationships are strong, supply chains are robust and systemic risks, particularly in respect of commodity pricing, are under control. Therefore, we remain positive about our future prospects and look forward with confidence over the remainder of this financial year and the next. Our continuing focus on key account development, targeted acquisitions, capital investment and implementation of lean manufacturing across all of the businesses will shield the Group from future cost pressures and underpin our quality and delivery performance to our customers. Apart from Crown, our businesses are largely unaffected by UK government spending constraints, being dependent on positive progress in the structurally important global Energy, Aerospace and Medical markets.

Our precise and consistent strategic direction is producing on-going new business wins that support our results in this financial year and beyond. The quality of our customer base remains strong. Our focus on differentiated, highly engineered product niches offers a degree of protection to cyclical markets and our international spread reduces the impact of regional weaknesses in the global economy. We remain well placed to benefit from consolidation in our markets as global industrial markets recover.

Metalcraft, Sigma and Jena Tec are becoming internationally recognised brands, promising our blue chip customers quality and sought after value-added capabilities that will deliver superior, consistent margin growth for Avingtrans in the coming financial period.

Roger McDowell                    Steve McQuillan                                 Stephen King

Chairman                                Chief Executive Officer                      Chief Financial Officer

22 February 2012                      22 February 2012                                  22 February 2012

Consolidated Income Statement (Unaudited)

for the six months ended 30 November 2011

	6 months to	6 months to	Year to
	30 Nov 2011	30 Nov 2010	31 May 2011
	£'000	£'000	£'000
Revenue	20,244	16,852	36,260
Cost of sales	(14,644)	(11,994)	(25,609)
Gross profit	5,600	4,858	10,651
Distribution costs	(608)	(548)	(1,209)
Administrative expenses	(3,908)	(3,555)	(7,540)
Share based payment expense	(21)	(17)	(28)
Restructuring costs	-	(5)	(5)
Amortisation of intangibles from business combinations	(69)	(69)	(137)
Operating profit	994	664	1,732
Finance income	2	-	-
Finance costs	(150)	(154)	(310)
Profit before taxation	846	510	1,422
Taxation  (Note 3)	(163)	(148)	(161)
Profit for the financial period	683	362	1,261
Earnings per share :
Total and continuing operations
- Basic	2.7p	1.4p	4.9p
- Diluted	2.6p	1.4p	4.9p

Consolidated statement of comprehensive income (Unaudited)

for the six months ended 30 November 2011

	6 months to	6 months to	Year to
	30 Nov 2011	30 Nov 2010	31 May 2011
	£'000	£'000	£'000
Profit for the period	362	362	1,261
Exchange differences on translation of foreign operations	92	(108)	(117)
Total comprehensive income for the period	454	254	1,144

Consolidated cash flow statement (Unaudited)

for the six months ended 30 November 2011

	6 months to	6 months to	Year to
	30 Nov 2011	30 Nov 2010	31 May 2011
	£'000	£'000	£'000
Operating activities
Cash flows from operating activities	134	892	2,984
Finance costs paid	(150)	(154)	(310)
Income tax (paid)/repaid	(171)	97	(37)
Net cash (outflow)/inflow from operating activities	(187)	835	2,637
Investing activities
Finance income	2	-	-
Purchase of intangible assets	(466)	(112)	(353)
Purchase of property, plant and equipment	(1,175)	(373)	(982)
Proceeds from sale of property, plant and equipment	1	35	72
Net cash used in investing activities	(1,638)	(450)	(1,263)
Financing activities
Shares issued	280	-	-
Repayments of borrowings	(477)	(336)	(661)
Repayments of obligations under finance leases	(339)	(525)	(957)
Borrowings raised	588	402	1,071
Net cash inflow/(outflow) from financing activities	52	(459)	(547)
Net (decrease)/increase in cash and cash equivalents	(1,773)	(74)	827
Cash and cash equivalents at beginning of period	(564)	(1,279)	(1,279)
Effect of foreign exchange rate changes	110	(48)	(112)
Cash and cash equivalents at end of period	(2,227)	(1,401)	(564)

Cashflows from operating activities (Unaudited)

for the six months ended 30 November 2011

	6 months to	6 months to	Year to
	30 Nov 2011	30 Nov 2010	31 May 2011
	£'000	£'000	£'000
Profit before income tax	846	510	1,422
Adjustments for:
Depreciation of property, plant and equipment	594	581	1,153
Amortisation of intangible assets	247	207	421
Profit on disposal of property, plant and equipment	(1)	(34)	(72)
Finance income	(2)	-	-
Finance expense	150	154	310
Share based payment charge	21	17	28
Changes in working capital
(Increase)/decrease in inventories	(943)	(989)	(1,121)
(Increase)/decrease in trade and other receivables	(1,343)	(204)	(1,384)
Increase/(decrease) in trade and other payables	561	645	2,217
Other non cash charges	4	5	10
Cashflows from operating activities	134	892	2,984

Summarised consolidated balance sheet (Unaudited)

at 30 November 2011

	30 Nov	30 Nov	31 May
	2011	2010	2011
	£'000	£'000	£'000
Non current assets
Goodwill	10,242	10,242	10,242
Other intangible assets	2,201	1,954	1,983
Property, plant and equipment	10,529	9,860	9,983
Investment property	600	600	600
Deferred tax	39	38	39
Investments	219	219	219
	23,830	22,913	23,066
Current assets
Inventories	8,756	8,154	7,820
Trade and other receivables	10,213	7,669	8,854
Current tax asset	37	15	122
Cash and cash equivalents	2,168	1,711	1,716
	21,174	17,549	18,512
Total assets	45,004	40,462	41,578
Current liabilities
Trade and other payables	(8,886)	(7,130)	(8,310)
Obligations under finance leases	(912)	(772)	(871)
Borrowings	(4,671)	(3,776)	(2,754)
Current tax liabilities	(709)	(670)	(804)
Total current liabilities	(15,178)	(12,348)	(12,739)
Non-current liabilities
Borrowings	(3,001)	(3,269)	(3,139)
Obligations under finance leases	(1,619)	(1,387)	(1,565)
Deferred tax	(1,272)	(1,393)	(1,277)
Deferred consideration	-	(108)	-
Total non-current liabilities	(5,892)	(6,157)	(5,981)
Total liabilities	(21,070)	(18,505)	(18,720)
Net assets	23,934	21,957	22,858
Equity
Share capital	1,302	1,274	1,274
Share premium account	9,786	9,534	9,534
Capital redemption reserve	814	814	814
Merger reserve	402	402	402
Translation reserve	603	520	511
Other reserves	180	180	180
Retained earnings	10,847	9,233	10,143
Equity attributable to owners of the Company	23,934	21,957	22,858

Consolidated statement of changes in equity (Unaudited)

at 30 November 2011

	Share  capital account	Share  premium account	Capital  redemp- tion  reserve	Merger  reserve	Trans- lation  reserve	Other  reserves	Retained  earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 June 2010	1,274	9,534	814	402	628	180	8,854	21,686
Share-based payments	-	-	-	-	-	-	17	17
Transactions with owners	-	-	-	-	-	-	17	17
Profit for the period	-	-	-	-	-	-	362	362
Other comprehensive income
Exchange rate gain	-	-	-	-	(108)	-	-	(108)
Total comprehensive income for the year	-	-	-	-	(108)	-	362	254
At 30 Nov 2010	1,274	9,534	814	402	520	180	9,233	21,957
At 1 Dec 2010	1,274	9,534	814	402	520	180	9,233	21,957
Share-based payments	-	-	-	-	-	-	11	11
Transactions with owners	-	-	-	-	-	-	11	11
Profit for the period	-	-	-	-	-	-	899	899
Other comprehensive income
Exchange rate loss	-	-	-	-	(9)	-	-	(9)
Total comprehensive income for the year	-	-	-	-	(9)	-	899	890
At 31 May 2010	1,274	9,534	814	402	511	180	10,143	22,858
At 1 June 2011	1,274	9,534	814	402	511	180	10,143	22,858
Shares issued	28	252	-	-	-	-	-	280
Share-based payments	-	-	-	-	-	-	21	21
Transactions with owners	28	252	-	-	-	-	21	301
Profit for the period	-	-	-	-	-	-	683	683
Other comprehensive income
Exchange rate loss	-	-	-	-	92	-	-	92
Total comprehensive income for the year	-	-	-	-	92	-	683	775
At 30 Nov 2011	1,302	9,786	814	402	603	180	10,847	23,934

Notes to the half year statement

30 November 2011

1.         Basis of preparation

The Group's interim results for the six month period ended 30 November 2011 are prepared in accordance with the Group's accounting policies which are based on the recognition and measurement principles of International Financial Reporting Standards ('IFRS') as adopted by the EU and effective, or expected to be adopted and effective, at 31 May 2012. As permitted, this interim report has been prepared in accordance with the AIM rules and not in accordance with IAS34 'Interim financial reporting'.

These interim results do not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006 and are unaudited. The unaudited interim financial statements were approved by the Board of Directors on 21 February 2012 and will shortly be available on the Group's website at http://www.avingtrans.plc.uk/pages/reports.html.

The consolidated financial statements are prepared under the historical cost convention as modified to include the revaluation of financial instruments. The accounting policies used in the interim financial statements are consistent with IFRS and those which will be adopted in the preparation of the Group's annual report and financial statements for the year ended 31 May 2012. The statutory accounts for the year ended 31 May 2011, which were prepared under IFRS, have been filed with the Registrar of Companies. These statutory accounts carried an unqualified Auditors' Report and did not contain a statement under either Section 498(2) or (3) of the Companies Act 2006.

2.         Segmental analysis

	Aerospace	Energy and Medical	Industrial Products	Unallocated Central items	Total
	£'000	£'000	£'000	£'000	£'000
6 months ended 30 Nov 2011
Revenue	7,820	6,427	5,997	-	20,224
Operating profit/(loss)	804	(85)	610	(335)	994
Year  ended 31 May 2011
Revenue	12,711	12,963	10,586	-	36,260
Operating profit/(loss)	962	206	1,032	(468)	1,732
6 months ended 30 Nov 2010
Revenue	6,027	5,926	4,899	-	16,852
Operating profit/(loss)	506	(74)	538	(306)	664

3.         Taxation

The taxation charge is based upon the expected effective rate for the year ended 31 May 2012.

4.         Earnings per share

Basic earnings per share is based on the earnings attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the year.

For diluted earnings per share the weighted average number of ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares, being the CSOP and EMI share options.

	6 months to 30 Nov 2011 No	6 months to 30 Nov 2010 No	Year to 31 May 2011 No
Weighted average number of shares - basic	25,580,029	25,480,577	25,480,577
Share Option adjustment	389,246	70,943	232,427
Weighted average number of shares - diluted	25,969,275	25,551,520	25,713,004
	£'000	£'000	£'000
Earnings attributable to shareholders	683	362	1,261
Share based payments	21	17	28
Amortisation of intangibles	69	69	137
Adjusted earnings attributable to shareholders	773	448	1,426
Basic earnings per share	2.7p	1.4p	4.9p
Diluted earnings per share	2.6p	1.4p	5.6p
Adjusted basic earnings per share	3.0p	1.8p	4.9p
Adjusted diluted earnings per share	3.0p	1.8p	5.5p

The Directors believe that the above adjusted earnings per share calculation is a more appropriate reflection of the Group performance.

 

END

 

 

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