Half Yearly Results

RNS Number : 8979T

Chamberlin PLC

26 November 2013

 



CMH

CHAMBERLIN PLC

("Chamberlin" or "the Group")

Half Year Results

For the six months to 30 September 2013

Key Points

·      Senior management team appointed in September 2013 - focused on rationalising cost and formulating a strategic growth plan

·      Revenues down 14% to £19.5m (2012: £22.6m) - reflecting the difficult market conditions across foundry activities

·      Underlying loss before tax of £639,000 (2012: profit of £914,000)

Statutory loss before tax of £1,162,000 (2012: profit of £786,000)

·      Cash outflow from operations of £336,000 (2012: cash generation of £1,531,000)

·      Net debt at 30 September 2013 of £2,336,000 (2012: £887,000)

·      Diluted underlying loss per share of 6.8p (2012: earnings per share of 8.1p)

Statutory basic loss per share of 11.9p (2012: earnings per share of 7.6p)

·      Interim dividend suspended until justified by trading performance of the Group (2012: 1.25p)

·      Board expects H2 performance to show an improvement on H1

# - All underlying figures are stated before net financing costs on pension obligations, administration costs of the pension scheme, exceptional costs, share-based payment costs and associated tax impact.

Chairman, Keith Butler-Wheelhouse, commented, 

"Results for the six months to 30 September 2013 principally reflect the tough market conditions experienced by our foundry businesses with revenues 14% lower than prior year, with the consequent adverse impact on profitability.

We appointed a new executive team in September which is focused on rationalising cost and formulating a strategic growth plan.  In addition, the new executive team is currently reviewing the management capability with a view to reorganising and strengthening the team where appropriate.  The teams at each site are now focused on reducing costs in line with lower levels of revenue to ensure improved financial performance.  New investment has further driven operational improvement.

Recent operational performance indicates that the underlying loss before tax in the second half should show a reduction against the first half." 

Enquiries

Chamberlin plc Kevin Nolan, Chief Executive David Roberts, Finance Director		T: 020 3178 6378 (today) / 01922 707100
Charles Stanley Securities                                                (Nominated Adviser and Broker) Russell Cook / Carl Holmes		T: 020 7149 6000
Biddicks (Financial PR) Katie Tzouliadis / Deborah Walter		T: 020 3178 6378

CHAIRMAN'S STATEMENT

Introduction

Chamberlin's results for the first half of the financial year, which show revenue down 14% and the Group moving into a loss position reflects the difficult conditions in the foundry division, especially in the medium and heavy casting business.  The performance at the light castings operation at Walsall was more resilient with revenues only marginally lower year-on-year.  The Group's engineering businesses, which account for 25% of Group sales, delivered an increase in revenues. 

The new executive team, appointed in September 2013, is evaluating the necessary actions to return the foundry division back to profitability and have taken action.

Results

Revenues for the six months to 30 September 2013 were 14% down on the same period last year at £19.5m (2012: £22.6m). As a result, the Group generated an underlying loss before tax of £639,000 (2012: profit of £914,000).  Diluted underlying loss per share was 6.8p (2012: earnings per share of 8.1p).  All underlying figures are stated before net financing costs on pension obligations, administration costs of the pension scheme, exceptional costs, share-based payment costs and associated tax impact.

On a statutory basis, loss before tax was £1,162,000 (2012: profit of £786,000) and the diluted loss per share was 11.9p (2012: earnings per share of 6.9p).

Chamberlin incurred cash outflows in the six months under review due to poor operational performance.  Operating cash outflow was £336,000 (2012: inflow of £1,531,000).  Our overdraft and net borrowings at 30 September 2013 increased to £2,336,000 (30 September 2012: £887,000 and 31 March 2013: £981,000). The Group's borrowings continue to be financed by a £5.0m overdraft facility with HSBC.

Dividend

The Board has decided to suspend the payment of an interim dividend until payment of the dividend is justified by the trading performance of the Group.

Operations

The reduction in profitability has resulted principally from a decline in revenues in our foundries, especially at our Scunthorpe and Leicester facilities.

Complex castings for the turbo charger industry continue to be an important area of focus for our business, and our Walsall foundry, which produces high volume light castings, is a well-established supplier of bearing housings for both passenger and commercial diesel turbo chargers.  Revenues at the foundry in the six months to 30 September are marginally down on prior year.

Revenues at the Scunthorpe foundry, which produces heavy castings, were adversely affected by market softening in power, construction and mining sectors.  More encouragingly, our drive to develop new business is yielding some positive results and we have been successful in developing and launching new products. New product revenues for the six months to 30 September 2013 accounted for 27.7% of Scunthorpe revenues (2012: 0.2%). 

The foundry at Leicester, which produces medium castings, also suffered from lower demand and, in addition, revenue from new product introduction was not realised.  The business was also adversely impacted by key plant downtime.  The management has taken a number of steps to improve Leicester's operational performance.

Our engineering businesses continue to make steady progress with revenues higher than the same period last year.

Board Appointments

In September 2013, we were delighted to welcome Kevin Nolan and David Roberts to the Board as Chief Executive and Finance Director respectively.

Kevin Nolan has 30 years' senior level experience in the engineering sector and joins Chamberlin from global materials engineering group, Wall Colmonoy Ltd, where he was Managing Director. He previously worked for Doncasters Group Ltd, the international engineering group which manufactures precision components and assemblies where he successfully led the expansion of a number of the group's business units and latterly was appointed Divisional Managing Director of Doncasters' largest division, Doncasters Turbine Airfoils and Structural Castings Division. 

David Roberts has substantial experience in senior financial roles within the manufacturing and engineering sectors. He was previously at Titanium Metals Corporation, a global producer of titanium melted and mill products, where he was European Finance Director. Before this, he worked for Britax International plc as Divisional Finance Director of Rear Vision Systems, a supplier of original equipment exterior mirrors for passenger cars and light trucks to automotive manufacturers worldwide.

The Company announced earlier this year that Tim Hair was planning to stand down as Chief Executive.  Following Kevin's appointment Tim Hair resigned from the Board.  We thank Tim for his substantial contribution as Chief Executive over the past seven years and wish him the best in his future endeavours.

Outlook

The new management team appointed in September 2013 is evaluating the necessary actions to return the Leicester and Scunthorpe operations to profitable growth and has already instituted a number of measures to achieve this, which are yielding benefits.  They are also currently reviewing the subsidiary management capability, with a view to reorganising and strengthening the team where appropriate, and are focused on rationalising cost.

Strategically, our plan for Chamberlin is to concentrate management effort on increasing sales in the existing businesses to maximise the use of our capacity and the new executive team is undertaking an analysis of new business opportunities to refine and support the Board's strategic growth plans.

The Group's recent operational performance is in line with a reduction in the loss before tax for the Group in the second half against the first half position.

Keith Butler-Wheelhouse

Chairman

26 November 2013

Consolidated Income Statement

for the six months ended 30 September 2013

Note		Unaudited six months ended 30 September 2013			Unaudited six months ended 30 September 2012 As restated*			Year ended 31 March 2013 As restated*
		Underlying	# Non-underlying	Total	Underlying	# Non-underlying	Total	Underlying	# Non-underlying	Total
		£000	£000	£000	£000	£000	£000	£000	£000	£000
Revenue		19,487	-	19,487	22,588	-	22,588	42,266	(69)	42,197
Cost of sales		(16,821)	-	(16,821)	(18,177)	-	(18,177)	(34,146)	-	(34,146)
Gross profit		2,666	-	2,666	4,411	-	4,411	8,120	(69)	8,051
Other operating expenses	7	(3,274)	(443)	(3,717)	(3,477)	(60)	(3,537)	(6,798)	(278)	(7,076)
Operating (loss)/profit		(608)	(443)	(1,051)	934	(60)	874	1,322	(347)	975
Finance costs	3	(31)	(80)	(111)	(20)	(68)	(88)	(41)	(135)	(176)
(Loss)/profit before tax		(639)	(523)	(1,162)	914	(128)	786	1,281	(482)	799
Tax credit/(expense)	4	95	120	215	(203)	31	(172)	(167)	115	(52)
(Loss)/profit for the period from continuing operations attributable to equity holders of the Parent Company		(544)	(403)	(947)	711	(97)	614	1,114	(367)	747
(Loss)/earnings per share:
Basic	5			(11.9)p			7.6p			9.2p
Underlying	5	(6.8)p			8.9p			14.0p
Diluted	5			(11.9)p			6.9p			8.8p
Diluted underlying	5	(6.8)p			8.1p			13.4p

^# Non- underlying items represent ineffective hedge costs, exceptional costs as disclosed in note 7, administration costs of the pension scheme and net financing costs on pension obligations, share based payment costs and associated tax impact of these items.

* restated for a change in accounting policy as a result of the implementation of IAS 19 Employee Benefits (revised)

Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2013

	Unaudited six months ended  30 September 2013		Unaudited six months ended 30 September 2012 As restated		Year ended 31 March  2013 As restated
		£000		£000		£000
(Loss)/profit for the period		(947)		614		747
Other comprehensive income
Reclassification for cash flow hedges included in sales		131		(249)		(199)
Deferred tax on movements in cash flow hedges		(26)		60		47
Movements in fair value on cash flow hedges taken to other comprehensive income		248		174		(229)
Deferred tax on movements in cash flow hedges		(56)		(40)		55
Net other comprehensive income/(expense) to be reclassified to profit or loss in subsequent periods		297		(55)		(326)
Actuarial gains/(losses) on pension assets and liabilities		8		(294)		(996)
Deferred tax on actuarial losses		(2)		71		204
Current tax relating to actuarial losses on pension scheme		-		-		35
Movement on deferred tax on actuarial losses relating to tax rate change		(116)		(33)		(41)
Net other comprehensive income/(expense) not to be reclassified to profit or loss in subsequent periods		(110)		(256)		(798)
Other comprehensive income/(expense) for the period net of tax		187		(311)		(1,124)
Total comprehensive (expense)/ income for the period attributable to equity holders of the Parent Company		(760)		303		(377)

Consolidated Balance Sheet

At 30 September 2013

		Unaudited 30 September 2013		Unaudited 30 September 2012		31 March 2013
		£000		£000		£000
Non-current assets
Property, plant and equipment		8,416		8,137		8,199
Intangible assets		508		660		620
Deferred tax assets		1,103		1,157		1,158
		10,027		9,954		9,977
Current assets
Inventories		3,615		3,575		3,331
Trade and other receivables		7,392		8,071		8,072
		11,007		11,646		11,403
Total assets		21,034		21,600		21,380
Current liabilities
Financial liabilities		2,336		887		981
Trade and other payables		7,266		7,744		7,931
Provisions		26		-		26
Current tax		95		281		95
		9,723		8,912		9,033
Non-current liabilities
Defined benefit pension scheme deficit		3,864		3,282		3,913
Deferred tax liabilities		66		110		141
		3,930		3,392		4,054
Total liabilities		13,653		12,304		13,087
Capital and reserves
Share capital		1,990		1,987		1,990
Share premium		1,269		1,269		1,269
Capital redemption reserve		109		109		109
Hedging reserve		145		119		(152)
Retained earnings		3,868		5,812		5,077
Total equity		7,381		9,296		8,293
Total equity and liabilities		21,034		21,600		21,380

 Consolidated Cash Flow Statement

for the six months ended 30 September 2013

		Unaudited six months ended 30 September 2013		Unaudited six months ended 30 September 2012 As restated		Year ended 31 March 2013 As restated
		£000		£000		£000
Operating activities
(Loss)/profit for the period before tax		(1,162)		786		799
Adjustments for:
Net finance costs excluding pensions		31		20		41
Depreciation of property, plant and equipment		613		576		1,190
Amortisation of software		50		53		102
Amortisation of development costs		62		29		49
Profit on disposal of property plant  and equipment		(1)		(11)		(13)
Share based payments		2		(2)		(69)
Difference between pension contributions paid and amounts recognised in the Income Statement		(17)		(27)		(144)
(Increase)/decrease in inventories		(284)		271		515
Decrease in receivables		761		813		757
Decrease in payables		(391)		(977)		(993)
Increase in provisions		-		-		26
Net cash (out)/in flow from operating activities		(336)		1,531		2,260
Investing activities
Purchase of property, plant and equipment		(847)		(632)		(1,353)
Purchase of software		-		(41)		(60)
Development costs		-		(59)		(69)
Disposal of property, plant and equipment		18		51		98
Net cash outflow from investing activities		(829)		(681)		(1,384)
Financing activities
Interest paid		(31)		(20)		(41)
Dividends paid		(159)		(159)		(258)
Net cash outflow from financing activities		(190)		(179)		(299)
Net (decrease)/increase in financial liabilities		(1,355)		671		577
Financial liabilities at the start of the period		(981)		(1,558)		(1,558)
Financial liabilities at the end of the period		(2,336)		(887)		(981)
Financial liabilities compromise:
Bank overdraft		(2,336)		(887)		(981)

Consolidated Statement of Changes in Equity

for the six months ended 30 September 2013

	Share capital	Share premium	Capital redemption reserve	Hedging reserve	Retained earnings As restated	Attributable to equity holders of the parent As restated
	£000	£000	£000	£000	£000	£000
At 1 April 2012	1,987	1,269	109	174	5,504	9,043
Profit for the period	-	-	-	-	607	607
Other comprehensive income for the period net of tax	-	-	-	(55)	(249)	(304)
Total comprehensive income	-	-	-	(55)	358	303
Dividends paid	-	-	-	-	(159)	(159)
Share based payments	-	-	-	-	7	7
Deferred tax on employee share options	-	-	-	-	102	102
At 30 September 2012	1,987	1,269	109	119	5,812	9,296
Profit for the period	-	-	-	-	126	126
Other comprehensive income for the period net of tax	-	-	-	(271)	(535)	(806)
Total comprehensive income	-	-	-	(271)	(409)	(680)
Shares issued on exercise of share options	3	-	-	-	(3)	-
Dividends paid	-	-	-	-	(99)	(99)
Share based payments	-	-	-	-	(18)	(18)
Deferred tax on employee share options	-	-	-	-	(206)	(206)
At 1 April 2013	1,990	1,269	109	(152)	5,077	8,293
Loss for the period	-	-	-	-	(947)	(947)
Other comprehensive income for the period net of tax	-	-	-	297	(110)	187
Total comprehensive income	-	-	-	297	(1,057)	(760)
Dividends paid	-	-	-	-	(159)	(159)
Share based payments	-	-	-	-	2	2
Deferred tax on employee share options	-	-	-	-	5	5
At 30 September 2013	1,990	1,269	109	145	3,868	7,381

Independent review report to Chamberlin plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2013 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity and the related notes 1 to 9. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules issued by the London Stock Exchange which require that it is presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements having regard to the accounting standards applicable to such annual financial statements.  

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2013 is not prepared, in all material respects, in accordance with the accounting policies outlined in note 1, which comply with IFRSs as adopted by the European Union and in accordance with the AIM Rules issued by the London Stock Exchange.

Ernst & Young LLP,

Birmingham

26 November 2013

Notes to the interim financial statements

1              General information and accounting policies

This Interim Financial Report is unaudited, but has been reviewed by the Company's auditor having regard to the International Standard on Review Engagements (UK & Ireland) 2410 "Review of Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board for use in the UK. A copy of their unmodified review report is attached.

The interim condensed consolidated financial statements do not comprise the Group's statutory accounts as defined by section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 March 2013 were approved by the board of directors on 21 May 2013 and were filed at Companies House.  The auditor's report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.  

Basis of preparation

The annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

Accounting policies

The principal accounting policies, comply with IFRS, applied in preparing the Interim Financial Statements, and are consistent with the policies set out in the Annual Report and Accounts for the year ended 31 March 2013.

The Group has applied IAS 1 Presentation of Items of Other Comprehensive Income which has introduced a grouping of items presented in other comprehensive income (OCI). The amendment affected presentation only and had no impact on the Group's financial position or performance. 

The Group has applied IAS 19 Employee Benefits (revised) with effect from 1 April 2013. This has resulted in prior period restatements of the finance cost of the pension scheme and a reclassification of defined benefit scheme administration costs into non-underlying other operating expenses from non-underlying finance costs. As administrative costs of the pension scheme were included in the net finance income/expense of the pension scheme under the former IAS 19 they were previously excluded from underlying items. Management considers that users of the financial statements will continue to focus on the performance of the Group excluding these costs. Therefore the definition of underlying profit which previously referred to the finance income/expense on the defined benefit pension scheme has been amended to exclude these administrative costs.

In the six months ended 30 September 2012 £62,000 of pension scheme service costs have been reclassified and an additional £29,000 pension scheme finance cost has been charged. In the year ended 31 March 2013 £125,000 of pension scheme administration costs have been reclassified and an additional £60,000 pension scheme finance cost has been charged. The adoption of IAS 19 Employee Benefits (revised) has not had an impact on the balance sheet reported at 30 September 2012 or 31 March 2013.

The Group has applied IFRS 13 Fair Value Measurement. IFRS 13 does notchange when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not impacted the fair value measurements carried out by the Group. All hedge contracts are shown at fair value, having an asset fair value of £153,000.

Share based payments are now shown within other operating expenses rather than shown separately within the Consolidated Income Statement, resulting in the elimination of the trading profit sub-total, as the directors believe this is more appropriate.

Hedge activities

At 30 September 2013 the Group held 16 foreign currency forward contracts designated as hedges of expected future sales to customers in Europe for which the Group has highly probable forecasted transactions

Going concern

After making appropriate enquiries, the directors consider that the Group has adequate resources to continue in operation for the foreseeable future.  In forming this view the directors have reviewed internal cashflow and profit forecasts in conjunction with the available headroom on the overdraft facility, renewable in May 2014.  For this reason, they continue to adopt the going concern basis in preparing the accounts.

2              Segmental analysis

For management purposes, the Group is organised into two operating divisions: Foundries and Engineering. The operating segments reporting format reflects the Group's management and internal reporting structures.

	Segmental revenue					Segmental operating  profit
	Unaudited  6 months ended 30 Sep 2013 £000	Unaudited 6 months ended 30 Sep 2012 £000		Year ended 31 March 2013 £000		Unaudited 6 months ended 30 Sep 2013 £000	Unaudited 6 months ended 30 Sep 2012 As restated £000	Year ended 31 March 2013 As restated £000
Foundries	14,766	18,231		33,674		(282)	1,225	1,709
Engineering	4,721	4,357		8,523		241	239	331
Segmental results	19,487	22,588		42,197		(41)	1,464	2,040
Reconciliation of reported segmental operating (loss)/profit to (loss)/profit before tax
Segmental operating (loss)/ profit						(41)	1,464	2,040
Shared costs						(633)	(590)	(843)
Exceptional costs						(377)	-	(222)
Net finance costs						(111)	(88)	(176)
(Loss)/profit before tax						(1,162)	786	799

The Foundries segment is a supplier of iron castings, in raw or machined form, to a variety of industrial customers who incorporate the castings into their own products or carry out further machining or assembly operations on the castings before selling them on.  The Engineering segment provides manufactured and imported products to distributors and end-users. The products fall into the categories of door hardware, hazardous area lighting and control gear and cable management.

Financing and income tax are managed on a Group basis and are not allocated to operating segments.

3              Finance income and costs

	Unaudited six months ended 30 September 2013	Unaudited six months ended 30 September 2012 As restated	Year ended 31 March 2013 As restated
	£000	£000	£000
Interest on bank overdraft	(31)	(20)	(41)
Net interest on net defined benefit liability	(80)	(68)	(135)
	(111)	(88)	(176)

4              Income tax expense

An effective rate of tax for the six months to 30 September 2013 of 19% (30 September 2012: 22%) has been used in these interim statements.

The effective rate of tax is lower than the standard rate because of the change in the corporation tax rate being applied to deferred tax assets, and non deductible expenses for tax purposes. The 2012 effective rate of tax was lower than the standard rate because of prior period research and development tax claims.

The corporation tax rate fell from 24% for the year ended 31 March 2013 to 23% for the year ended 31 March 2014. The corporation tax rate will fall to 21% from 1 April 2014, and to 20% from 1 April 2015, rate changes which were substantively enacted on 2 July 2013. It is not anticipated that the subsequent reduction to 20% will have a material effect on the Company's future current or deferred tax charges.

5              (Loss)/earnings per share

The calculation of (loss)/earnings per share is based on the profit attributable to shareholders and the weighted average number of ordinary shares in issue. In calculating the diluted earnings per share, adjustment has been made for the dilutive effect of outstanding share options. Underlying (loss)/earnings per share, which excludes net financing cost of pension obligation, administration costs of the pension scheme and share based compensation, less related tax thereon, as analysed below, has been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group.

	Unaudited six months ended 30 September 2013	Unaudited six months ended 30 September 2012 As restated	Year ended 31 March 2013 As restated
	£000	£000	£000
(Loss)/earnings for basic earnings per share	(947)	614	747
Ineffective hedges	-	-	69
Taxation on ineffective hedges	-	-	(17)
Exceptional costs	377	-	222
Taxation effect of exceptional costs	(87)		(53)
Net financing cost on pension obligation	80	68	135
Taxation effect of pension obligation	(18)	(16)	(32)
Service cost on pension obligation	64	62	125
Taxation effect of service cost of pension obligation	(15)	(15)	(30)
Share based payments charge/(credit)	2	(2)	(69)
Taxation effect of share based payments	-	-	17
(Loss)/earnings for underlying earnings per share	(544)	711	1,114

	Unaudited six months ended 30 September 2013	Unaudited six months ended 30 September 2012	Year ended 31 March 2013
	000	000	000
Weighted average number of ordinary shares	7,958	7,950	7,950
Adjustment to reflect dilutive shares under option	-	818	349
Diluted weighted average number of ordinary shares	7,958	8,768	8,299

As at 30 September 2013 there is no adjustment for the 235,483 shares under option as they are required to be excluded from the weighted average number of shares for diluted (loss)/earnings per share as they are anti-dilutive for the period then ended.

6              Pensions

The Group operates a defined benefit pension scheme and a number of defined contribution pension schemes on behalf of its employees.  For defined contribution schemes, contributions paid in the period are charged to the income statement.  For the defined benefit scheme, actuarial calculations are performed in accordance with IAS 19 in order to arrive at the amounts to be charged in the income statement and recognised in the statement of comprehensive income.  The defined benefit scheme is closed to new entrants and future accrual.

Under IAS 19, the Company recognises all movements in the actuarial funding position of the scheme in each period.  This is likely to lead to volatility in shareholders' equity from period to period.

The IAS 19 figures are based on a number of actuarial assumptions as set out below, which the actuaries have confirmed they consider appropriate.  The projected unit credit actuarial cost method has been used in the actuarial calculations.

	30 September 2013	30 September 2012	31 March 2013
Salary increases	n/a	n/a	n/a
Pension increases (post 1997)	2.5%	2.5%	3.2%
Discount rate	4.3%	4.4%	4.2%
Inflation assumption - RPI	3.2%	2.5%	3.3%
Inflation assumption - CPI	2.1%	1.7%	2.2%

The demographic assumptions used for 30 September 2013, were the same as used in 31 March 2013, 30 September 2012 and the last full actuarial valuation performed as at 1 April 2010. Currently the triennial valuation as at 1 April 2013 is in progress.

The defined benefit scheme funding has changed under IAS 19 as follows:

Funding status	Unaudited  6 months to 30 September 2013 £000	Unaudited  6 months to 30 September 2012 £000	Year to 31 March 2013 £000
Scheme assets at end of period	12,768	12,545	13,137
Benefit obligations at end of period	(16,632)	(15,828)	(17,050)
Deficit in scheme	(3,864)	(3,283)	(3,913)
Related deferred tax asset	773	755	900
Net pension liability	(3,091)	(2,528)	(3,013)

The decrease in the net pension liability is mainly due to a decrease in the value of liabilities as a consequence of a reduction in the discount rate and inflation assumptions.

 7              Exceptional costs and non-underlying items

	Unaudited six months ended 30 September 2013	Unaudited six months ended 30 September 2012 As restated	Year ended 31 March 2013 As restated
	£000	£000	£000
Removal of former Finance Director	-	-	186
Legal costs relating to subsidiary back pay claim	-	-	36
Prior CEO leaving costs	377	-	-
Exceptional costs	377	-	222
Share based payment charge/(credit)	2	(2)	(69)
Defined benefit pension scheme administration costs	64	62	125
Non-underlying other operating expenses	443	60	278

Taxation
- tax effect of non-underlying other operating expenses	(102)	(11)	(59)
	(102)	(11)	(59)

On 11 December 2012 the Company removed Mark Bache as Finance Director. Costs associated with his removal include a payment under an employment settlement agreement in March 2013, legal costs associated with his removal and costs associated with the recruitment of a successor.

Legal costs are in relation to a dispute for back pay at Russell Ductile Castings Limited and comprise the amount offered to settle the dispute along with legal costs incurred to date and expected future legal costs expected to be incurred.

Prior CEO leaving costs relate to contractual payments to be made to the former CEO, Tim Hair, and costs associated with the recruitment of the current CEO, Kevin Nolan.

8              Dividends

	Unaudited six months ended 30 September 2013	Unaudited six months ended 30 September 2012	Year ended 31 March 2013
Paid equity dividends on ordinary shares
2012 final dividend of 2.0p per share (2011: 1.0p per share)	-	159	159
2013 interim dividend of 1.25p per share (2012: 1.0p per share)	-	-	99
2013 final dividend of 2.0p per share (2012: 2.0p per share)	159	-	-
	159	159	258

The Board has suspended the payment of an interim dividend until justified by the trading performance of the Group.

9              Interim report

Copies of this interim results statement will be available on the Group's website, www.chamberlin.co.uk, and from the Group's headquarters at Chuckery Road, Walsall, West Midlands, WS1 2DU.

 

END

 

 

IR FEFFAIFDSEDF