Interim Results

RNS Number : 8106W
Headlam Group PLC
24 August 2015
 

24 August 2015

Headlam Group plc

("Headlam" or "the group")

Interim Results for the six month period ended 30 June 2015

Headlam Group plc (LSE: HEAD), Europe's leading floorcoverings distributor, announces its Interim Financial Results for the six months ended 30 June 2015.

Financial highlights

·      Revenue up 4.0% to £313.5 million (H1 2014: £301.6 million)

 

·      Operating profit up 14.9% to £13.0 million (H1 2014: £11.3 million)

 

·      Earnings per share up 14.7% to 11.7 pence (H1 2014: 10.2 pence)

 

·      Interim dividend up 15.4% to 6.00 pence (H1 2014: 5.20 pence)

 

·      Net funds of £26.0 million as at 30 June 2015 (30 June 2014: £11.7 million)

Operational highlights

·      Further gains achieved in UK market share with like-for-like revenues increasing by 5.4%, exceeding the forecast market growth of 3.4% (Source: AMA Research Limited 2014)

 

·      Number of UK businesses increased to 56 with the acquisition of Matty's Wholesale Carpets in 2015

 

·      Clerkenwell showroom opened to assist Headlam Corporate to target the specified commercial flooring market

 

·      Continental European markets, representing 12.4% of half year group revenues, remain challenging

 

Tony Brewer, Headlam's Group Chief Executive, said:

"The first half results underline the growing momentum in the UK market and particularly in our business.  The group's UK residential business has performed well and the slightly stronger like-for-like growth across our commercial activities points towards improving confidence in the wider business community.

 

"The positive trading outcome for the first half has continued during the first eight weeks of the second half. Subject to the important final quarter of the year, the group expects to announce results for the full year to 31 December 2015 slightly ahead of the Board's internal expectations."

 

Enquiries:

Headlam Group plc            

Tony Brewer, Group Chief Executive                                Tel: 01675 433000

Stephen Wilson, Group Finance Director                                      

 

Investec Bank plc (Joint Corporate Broker)                    Tel: 020 7597 4000

Garry Levin / David Flin / Josh Levy

 

Arden Partners plc (Joint Corporate Broker)                  Tel: 0121 423 8900

Jonathan Keeling / Steve Douglas

 

Buchanan                                                                              Tel: 020 7466 5000

Mark Court / Helen Chan
 

Notes for Editors

 

About Headlam

Headlam is engaged in the marketing, supply and distribution of an extensive range of floorcovering products. The group's activities and facilities are located throughout the UK, France, Switzerland and the Netherlands.

 

The group's operations are focused on providing customers, principally independent floorcovering retailers and contractors, with a comprehensive and up to date range of competitively priced floorcovering products supported by a next day delivery service.

 

The approach provides Headlam's suppliers with an opportunity to achieve extensive market access backed by cost effective distribution.

 

In order to offer this level of service to its customers and suppliers, Headlam has developed a diverse and autonomous operating structure that includes 56 businesses across the UK and a further five in continental Europe all trading under their individual brands.

 

The autonomous operating structure is a key contributor to the group's success, presenting experienced management teams with an opportunity to develop the individual identity, market presence and profitability of the business for which they are responsible.

 

Each business is supported by the group's continued commitment to investment in people, product, operating infrastructure and IT. This commitment has underpinned the group's overall development and enabled Headlam to establish itself as Europe's leading floorcovering distributor.

 

 

For further detail on our business please visit: www.headlam.com

 

 

 

Chairman's Statement

 

Earnings and dividend

 

UK operations

Business performance

Acquisitions and investment

Customers

 

Continental Europe

 

 

 

Financials

 

Cash flow

 

 

 

£000

 

 

 

 

Cash flow first half of 2014

(7,535)

 

 

 

 

 

Cash flow from operating activities

2,063

 

Working capital

1,234

 

Dividends

(499)

 

Taxation

 

350

 

Capital expenditure

2,301

 

Acquisitions

(1,978)

 

Movement in net debt

5,010

 

Other

 

40

 

 

 

8,521

 

 

 

 

Cash flow first half of 2015

986

             

 

 

 

Changes in net funds

 

 

At

1 January

2015

£000

 

Cash

flows

£000

 

Translation

differences

£000

At

30 June

2015

£000

 

 

 

 

 

Cash at bank and in hand

47,589

1,389

83

49,061

Bank overdraft

-

(403)

10

(393)

 

 

 

 

 

 

47,589

986

93

48,668

 

 

 

 

 

Debt due within one year

(204)

-

18

(186)

 

 

 

 

 

Debt due after one year

(22,818)

80

243

(22,495)

 

 

 

 

 

 

24,567

1,066

354

25,987

Principal risks and uncertainties

 

The board has ultimate responsibility for identifying and managing the effect of risk and uncertainty on the group's business, results and financial condition.  Whilst the board maintains a policy of continuous identification and review, it nevertheless recognises that a number of risks and uncertainties lie beyond its control.

 

Currently, the key risks and uncertainties, which are or have potential to affect the group's operations are, market demand, competition, credit risk, IT failure, people, pension costs, legislation and regulation.  The potential impact and mitigation of these risks and uncertainties are discussed in more detail on pages 28 and 29 of the 2014 Annual Report and Accounts.

 

Outlook

 

The first half results underline the growing momentum in the UK market and particularly in our business.  The group's UK residential business has performed well and the slightly stronger like-for-like growth across our commercial activities points towards improving confidence in the wider business community.

 

The positive trading outcome for the first half has continued during the first eight weeks of the second half. Subject to the important final quarter of the year, the group expects to announce results for the full year to 31 December 2015 slightly ahead of the Board's internal expectations.

 

 

Condensed Consolidated Interim Income Statement

Unaudited

 

 

 

Note

Six months ended

30 June

2015

£000

Six months ended

30 June

2014

£000

 

Year ended

31 December 2014

£000

 

 

 

 

 

Revenue

2

313,546

301,580

635,242

Cost of sales

 

(220,428)

(212,104)

(444,702)

Gross profit

 

93,118

89,476

190,540

Distribution expenses

 

(59,165)

(58,515)

(117,458)

Administrative expenses

 

(20,931)

(19,630)

(41,620)

Operating profit

2

13,022

11,331

31,462

Finance income

3

115

126

819

Finance expenses

3

(789)

(698)

(1,981)

Net finance costs

 

(674)

(572)

(1,162)

Profit before tax

 

12,348

10,759

30,300

Taxation

4

(2,500)

(2,313)

(6,515)

Profit for the period attributable to the equity

 shareholders

 

2

 

9,848

 

8,446

 

23,785

 

 

 

 

 

Dividend paid per share

6

17.50p

15.30p

15.30p

 

 

 

 

 

Earnings per share

 

 

 

 

Basic

5

11.7p

10.2p

28.6p

 

 

 

 

 

Diluted

5

11.7p

10.0p

28.5p

 

All group operations during the financial periods were continuing operations.

 

 

 

Condensed Consolidated Interim Statement of Comprehensive Income

Unaudited

 

 

 

Six months

 ended

30 June

 2015

£000

Six months

 ended

30 June

 2014

£000

 

Year ended

31 December

 2014

£000

Profit for the period attributable to the equity

  shareholders

 

9,848

 

8,446

 

23,785

 

 

 

 

Other comprehensive income:

 

 

 

Items that will never be reclassified to profit or loss

 

 

 

Re-measurement of defined benefit plans

2,039

(1,391)

(8,900)

Related tax

(396)

291

1,789

 

1,643

(1,100)

(7,111)

Items that are or may be reclassified to profit or loss

 

 

 

Foreign exchange translation differences arising on

  translation of overseas operations

 

(132)

 

(548)

 

(742)

Effective portion of changes in fair value of cash flow hedges

(14)

(15)

(177)

Transfers to profit or loss on cash flow hedges

63

67

132

Related tax

(12)

(13)

18

 

(95)

(509)

(769)

 

 

 

 

Other comprehensive income/(expense) for the period

1,548

(1,609)

(7,880)

 

 

 

 

Total comprehensive income attributable to the equity shareholders for the period

 

11,396

 

6,837

 

15,905

 

 

 

Condensed Consolidated Interim Statement of Financial Position

Unaudited

 

 

 

 

At

30 June

2015

£000

At

30 June

2014

£000

At

31 December 2014

£000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

102,581

104,434

103,461

Intangible assets

 

10,013

10,013

10,013

Deferred tax assets

 

2,509

2,393

2,726

 

 

115,103

116,840

116,200

Current assets

 

 

 

 

Inventories

 

122,598

120,624

116,569

Trade and other receivables

 

119,714

113,525

118,816

Cash and cash equivalents

 

49,061

40,819

47,589

 

 

291,373

274,968

282,974

Total assets

 

406,476

391,808

399,174

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Bank overdraft

 

(393)

(925)

-

Other interest-bearing loans and borrowings

 

(2,681)

(210)

(204)

Trade and other payables

 

(179,283)

(169,024)

(166,266)

Employee benefits

 

(2,980)

(2,887)

(2,933)

Income tax payable

 

(5,514)

(5,687)

(6,073)

 

 

(190,851)

(178,733)

(175,476)

Non-current liabilities

 

 

 

 

Other interest-bearing loans and borrowings

 

(20,000)

(28,030)

(22,818)

Employee benefits

 

(15,842)

(13,096)

(18,803)

 

 

(35,842)

(41,126)

(41,621)

Total liabilities

 

(226,693)

(219,859)

(217,097)

Net assets

 

179,783

171,949

182,077

 

 

 

 

 

Equity attributable to equity holders

 

 

 

 

of the parent

 

 

 

 

Share capital

 

4,268

4,268

4,268

Share premium

 

53,512

53,512

53,512

Other reserves

 

(1,632)

(5,165)

(1,786)

Retained earnings

 

123,635

119,334

126,083

Total equity

 

179,783

171,949

182,077

 

Condensed Consolidated Interim Statement of Changes in Equity

Unaudited

 

 

 

Share

capital

£000

 

Share

premium

£000

Capital

redemption

reserve

£000

 

Translation

reserve

£000

Cash flow

hedging

reserve

£000

 

Treasury

reserve

£000

 

Retained

earnings

£000

 

Total

equity

£000

 

 

 

 

 

 

 

 

 

Balance at

  1 January 2014

 

4,268

 

53,512

 

88

 

6,165

 

(87)

 

(10,908)

 

124,465

 

177,503

Profit for the period attributable to the equity shareholders

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

8,446

 

 

8,446

Other comprehensive income

-

-

-

(548)

52

-

(1,113)

(1,609)

Total comprehensive income for the period

 

-

 

-

 

-

 

(548)

 

52

 

-

 

7,333

 

6,837

 

 

 

 

 

 

 

 

 

Transactions with equity shareholders, recorded directly in equity

 

 

 

 

 

 

 

 

Share-based payments

-

-

-

-

-

-

233

233

Share options exercised by employees

 

-

 

-

 

-

 

-

 

-

 

73

 

(10)

 

63

Deferred tax on share options

-

-

-

-

-

-

2

2

Dividends to equity holders

-

-

-

-

-

-

(12,689)

(12,689)

Total contributions by and distributions to equity shareholders

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

73

 

 

(12,464)

 

 

(12,391)

Balance at

  30 June 2014

 

4,268

 

53,512

 

88

 

5,617

 

(35)

 

(10,835)

 

119,334

 

171,949

 

 

 

 

 

 

 

 

 

Balance at

  1 July 2014

 

4,268

 

53,512

 

88

 

5,617

 

(35)

 

(10,835)

 

119,334

 

171,949

Profit for the period attributable to the equity shareholders

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

15,339

 

 

15,339

Other comprehensive income

-

-

-

(194)

(97)

-

(5,980)

(6,271)

Total comprehensive income for the period

 

-

 

-

 

-

 

(194)

 

(97)

 

-

 

9,359

 

9,068

 

 

 

 

 

 

 

 

 

Transactions with equity shareholders, recorded directly in equity

 

 

 

 

 

 

 

 

Share-based payments

-

-

-

-

-

-

459

459

Share options exercised by employees

 

-

 

-

 

-

 

-

 

-

 

3,735

 

(2,770)

 

965

Current tax on share options

-

-

-

-

-

-

183

183

Deferred tax on share options

-

-

-

-

-

-

(547)

(547)

Total contributions by and distributions to equity shareholders

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

3,735

 

 

(2,675)

 

 

1,060

Balance at

  31 December 2014

 

4,268

 

53,512

 

88

 

5,423

 

(132)

 

(7,100)

 

126,018

 

182,077

 

 

 

 

 

 

Condensed Consolidated Interim Statement of Changes in Equity continued

Unaudited

 

 

 

 

Share

capital

£000

 

Share

premium

£000

Capital

redemption

reserve

£000

 

Translation

reserve

£000

Cash flow hedging reserve £000

 

Treasury

reserve

£000

 

Retained

earnings

£000

 

Total

equity

£000

 

 

 

 

 

 

 

 

 

Balance at

  1 January 2015

 

4,268

 

53,512

 

88

 

5,423

 

(132)

 

(7,100)

 

126,018

 

182,077

Profit for the period attributable to the equity shareholders

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

9,848

 

 

9,848

Other comprehensive income

-

-

-

(132)

49

-

1,631

1,548

Total comprehensive income for the period

 

-

 

-

 

-

 

(132)

 

49

 

-

 

11,479

 

11,396

 

 

 

 

 

 

 

 

 

Transactions with equity shareholders, recorded directly in equity

 

 

 

 

 

 

 

 

Share-based payments

-

-

-

-

-

-

557

557

Share options exercised by employees

 

-

 

-

 

-

 

-

 

-

 

172

 

(19)

 

153

Deferred tax on share options

-

-

-

-

-

-

255

255

Dividends to equity holders

-

-

-

-

-

-

(14,655)

(14,655)

Total contributions by and distributions to equity shareholders

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

172

 

 

(13,862)

 

 

(13,690)

Balance at

  30 June 2015

 

4,268

 

53,512

 

88

 

5,291

 

(83)

 

(6,928)

 

123,635

 

179,783

 

 

 

 

 

 

Condensed Consolidated Interim Cash Flow Statements

Unaudited

 

 

 

 

Six months ended

30 June 2015

£000

Six months ended

30 June 2014

£000

Year ended

31 December

 2014

£000

Cash flows from operating activities

 

 

 

 

Profit before tax for the period

 

12,348

10,759

30,300

Adjustments for:

 

 

 

 

Depreciation, amortisation and impairment

 

2,422

2,380

4,900

Finance income

 

(115)

(126)

(819)

Finance expense

 

789

698

1,981

Profit on sale of property, plant and equipment

 

(8)

(14)

(30)

Share-based payments

 

233

692

Operating profit before changes in working capital and other payables

 

15,993

13,930

37,024

Change in inventories

 

(5,506)

(5,409)

(1,514)

Change in trade and other receivables

 

(725)

5,406

(143)

Change in trade and other payables

 

3,965

(3,497)

2,656

Cash generated from the operations

 

13,727

10,430

38,023

Interest paid

 

(461)

(429)

(1,477)

Tax paid

 

(3,020)

(3,370)

(6,357)

Additional contributions to defined benefit plan

 

(1,447)

(1,495)

(2,996)

Net cash flow from operating activities

 

8,799

5,136

27,193

Cash flows from investing activities

 

 

 

 

Proceeds from sale of property, plant and equipment

 

119

115

92

Interest received

 

95

161

846

Acquisition of subsidiaries, net of cash acquired

 

(1,978)

-

(331)

Acquisition of property, plant and equipment

 

(1,768)

(4,065)

(5,668)

Net cash flow from investing activities

 

(3,532)

(3,789)

(5,061)

Cash flows from financing activities

 

 

 

 

Proceeds from the issue of treasury shares

 

153

63

1,028

Repayment of borrowings

 

(79)

(5,089)

(10,210)

Dividends paid

 

(4,355)

(3,856)

(12,689)

Net cash flow from financing activities

 

(4,281)

(8,882)

(21,871)

Net increase/(decrease) in cash and cash equivalents

 

986

(7,535)

261

Cash and cash equivalents at 1 January

 

47,589

47,477

47,477

Effect of exchange rate fluctuations on cash held

 

93

(48)

(149)

Cash and cash equivalents at end of period

 

48,668

39,894

47,589

 

 

Notes to the Condensed Consolidated Interim Financial Statements

Unaudited

 

1 BASIS OF REPORTING

 

Reporting entity

Headlam Group plc the "company" is a company incorporated in the UK.  The Condensed Consolidated Interim Financial Statements consolidate those of the company and its subsidiaries which together are referred to as the "group" as at and for the six months ended 30 June 2015. 

 

The Consolidated Financial Statements of the group as at and for the year ended 31 December 2014 are available upon request from the company's registered office or the website.

 

The comparative figures for the financial year ended 31 December 2014 are not the group's statutory accounts for that financial year. Those accounts have been reported on by the group's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2)or(3) of the Companies Act 2006.

 

These Condensed Consolidated Interim Financial Statements have not been audited or reviewed by the auditor pursuant to the Auditing Practices Board's Guidance on Financial Information.

 

Statement of compliance

These Condensed Consolidated Interim Financial Statements have been prepared and approved by the directors in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and International Accounting Standard IAS 34 Interim Financial Reporting as adopted by the EU.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the Consolidated Financial Statements of the group as at and for the year ended 31 December 2014.

 

These Condensed Consolidated Interim Financial Statements were approved by the board of directors on

24 August 2015.

 

Significant accounting policies

As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the group's published Consolidated Financial Statements for the year ended

31 December 2014, except as explained below.

 

Impacts of standards and interpretations in issue but not yet effective

The following standards and interpretations, which were not effective as at 30 June 2015 and have not been early adopted by the group, will be adopted in future accounting periods:

 

·      IFRS 9 - Financial Instruments

·      IFRS 14 - Regulatory Deferral Accounts

·      Annual improvements to IFRSs 2010-2012

·      Annual improvements to IFRSs 2011-2013

·      Amendments to IFRS 11 - Accounting for Acquisitions of Interests in Joint Operations

·      Amendments to IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation  

·      IFRS 15 - Revenue Recognition

 

The Directors anticipate that adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the group.

 

 

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements continued

Unaudited

 

 

1 BASIS OF REPORTING - continued

 

Going concern

The group's business activities, together with the factors likely to affect its future development, performance and position are described in the Chairman's Statement.

 

The directors have reviewed current performance and forecasts, combined with borrowing facilities and expenditure commitments, including capital expenditure, pensions and proposed dividends. After making enquiries, the directors have a reasonable expectation that the group has adequate financial resources to continue its current operations, including contractual and commercial commitments for the foreseeable future.  For these reasons, the going concern basis has been adopted in preparing the financial statements.

 

Bank facilities at 30 June 2015

 

 

Committed credit facilities

Uncommitted credit facilities

 

Total facilities

 

£ million

£ million

£ million

Drawn funds

22.7

0.3

23.0

Undrawn funds

20.0

41.2

61.2

 

42.7

41.5

84.2

 

£2.7 million of the amount drawn down under committed credit facilities was utilised by the group to fund the investment in its Dutch freehold property.  This amount has been shown as a current liability at 30 June 2015 as it will be repaid in full during the second half of 2015.

 

Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

 

In preparing these Condensed Consolidated Interim Financial Statements, the significant judgements made by management in applying the group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements as at and for the year ended 31 December 2014.

 

Risks and uncertainties

The risk factors which could cause the group's results to differ materially from expected results and the result of the board's review of those risks are set out in the Chairman's Statement.
 

Notes to the Condensed Consolidated Interim Financial Statements continued

Unaudited

 

2 SEGMENT REPORTING

 

The group has 56 operating segments in the UK and five operating segments in Continental Europe.  Each segment represents an individual trading operation and each operation is wholly aligned to the sales, marketing, supply and distribution of floorcovering products.  The operating results of each operation are regularly reviewed by the Chief Operating Decision Maker, which is deemed to be the Group Chief Executive.  Discrete financial information is available for each segment and used by the Group Chief Executive to assess performance and decide on resource allocation. 

 

The operating segments have been aggregated to the extent that they have similar economic characteristics, with relevance to products and services, type and class of customer, methods of sale and distribution and the regulatory environment in which they operate.  The group's internal management structure and financial reporting systems differentiate the operating segments on the basis of the differing economic characteristics in the UK and Continental Europe and accordingly present these as two separate reportable segments.  This distinction is embedded in the construction of operating reports reviewed by the Group Chief Executive, the board and the executive management team and forms the basis for the presentation of operating segment information given below.

 

 

UK

Continental Europe

Total

 

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

 

30 June

2015

£000

 

30 June

2014

£000

31

December

2014

£000

Revenue

 

 

 

 

 

 

 

 

 

External revenues

274,587

257,770

548,393

38,959

43,810

86,849

313,546

301,580

635,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reportable segment operating profit

 

13,786

 

11,356

 

30,695

 

206

 

614

 

1,183

 

13,992

 

11,970

 

31,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reportable segment assets

 

247,961

 

232,288

 

256,274

 

30,720

 

32,590

 

34,444

 

278,681

 

264,878

 

290,718

 

 

 

 

 

 

 

 

 

 

Reportable segment liabilities

 

(154,039)

 

(144,868)

 

(151,566)

 

(15,254)

 

(16,213)

 

(14,568)

 

(169,293)

 

(161,081)

 

(166,134)

 

During the periods shown above there have been no inter-segment revenues for the reportable segments (2014: £nil).

 

Reconciliations of reportable segment profit, assets and liabilities and other material items:

 

 

 

 

 

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

Profit for the period

 

 

 

 

 

 

Total profit for reportable segments

 

 

13,992

11,970

31,878

Unallocated expense

 

 

 

(970)

(639)

(416)

 

 

 

 

 

 

 

Operating profit

 

 

 

13,022

11,331

31,462

 

 

 

 

 

 

 

Finance income

 

 

 

115

126

819

Finance expense

 

 

 

(789)

(698)

(1,981)

 

 

 

 

 

 

 

Profit before taxation

 

 

 

12,348

10,759

30,300

Taxation

 

 

 

(2,500)

(2,313)

(6,515)

 

 

 

 

 

 

 

Profit for the period

 

 

 

9,848

8,446

23,785

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements continued

Unaudited

 

 

2 SEGMENT REPORTING - continued

 

 

 

 

 

 

 

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

Assets

 

 

 

 

 

Total assets for reportable segments

 

278,681

264,878

290,718

Unallocated assets:

 

 

 

 

 

Properties, plant and equipment

 

 

95,403

96,449

91,493

Deferred tax assets

 

 

2,509

2,393

2,726

Cash and cash equivalents

 

 

29,883

28,088

14,237

 

 

 

 

 

 

Total assets

 

 

406,476

391,808

399,174

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Total liabilities for reportable segments

 

(169,293)

(161,081)

(166,134)

Unallocated liabilities:

 

 

 

 

 

Employee benefits

 

 

(18,822)

(15,983)

(21,736)

Other interest-bearing loans and borrowings

 

 

(22,681)

(28,240)

(23,022)

Income tax payable

 

 

(5,514)

(5,687)

(6,073)

Proposed dividend

 

 

(10,300)

(8,833)

-

Derivative liabilities

 

 

(83)

(35)

(132)

 

 

 

 

 

 

Total liabilities

 

 

(226,693)

(219,859)

(217,097)

 

 

 

 

 

 

 

 

 

 

 

UK

 

Continental Europe

Reportable segment

total

 

 

Unallocated

 

Consolidated total

 

£000

£000

£000

£000

£000

Other material items 30 June 2015

 

 

 

 

 

Capital expenditure

1,142

309

1,451

317

1,768

Depreciation

1,147

261

1,408

1,014

2,422

 

 

 

 

 

 

Other material items 30 June 2014

 

 

 

 

 

Capital expenditure

1,986

182

2,168

1,897

4,065

Depreciation

1,107

286

1,393

987

2,380

 

 

 

 

 

 

Other material items 31 December 2014

 

 

 

 

 

Capital expenditure

2,586

421

3,007

2,661

5,668

Depreciation

2,260

567

2,827

1,998

4,825

Amortisation

-

-

-

75

75

 

In the UK the group's freehold properties are held within Headlam Group plc and a rent is charged to the operating segments for the period of use.  Therefore the operating reports reviewed by the Group Chief Executive show all the UK properties as unallocated and the operating segments report a segment result that includes a property rent.  This is reflected in the above disclosure.

 

Each segment is a continuing operation.

Notes to the Condensed Consolidated Interim Financial Statements continued

Unaudited

 

 

2 SEGMENT REPORTING - continued

 

The Group Chief Executive, the board and the senior executive management team have access to information that provides details on revenue by principal product group for the two reportable segments, as set out in the following table:

 

 

UK

Continental Europe

Total

 

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

 

30 June

2015

£000

 

30 June

2014

£000

31 December

2014

£000

Revenue

 

 

 

 

 

 

 

 

 

Residential

189,972

178,268

378,910

19,345

19,917

43,415

209,317

198,185

422,325

Commercial

84,615

79,502

169,483

19,614

23,893

43,434

104,229

103,395

212,917

 

 

 

 

 

 

 

 

 

 

 

274,587

257,770

548,393

38,959

43,810

86,849

313,546

301,580

635,242

 

 

3 FINANCE INCOME AND EXPENSE

 

 

Six months

 ended

30 June

2015

£000

Six months

 ended

30 June

2014

£000

 

Year ended

31 December 2014

£000

Interest income:

 

 

 

Bank interest

115

29

693

Other

-

97

126

Finance income

115

126

819

 

 

 

 

Interest expense:

 

 

 

Bank loans, overdrafts and other financial expenses

(356)

(361)

(1,323)

Net change in fair value of cash flow hedges transferred from equity

(63)

(67)

(132)

Net interest on defined benefit plan obligation

(310)

(270)

(526)

Other

(60)

-

-

Finance expenses

(789)

(698)

(1,981)

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements continued

Unaudited

 

 

4 TAXATION

 

The group's consolidated effective tax rate in respect of continuing operations for the six months ended 30 June 2015 was 20.25% (for the six months ended 30 June 2014: 21.5%; for the year ended 31 December 2014: 21.5%).

 

Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013. In the Budget on 8 July 2015, the Chancellor announced additional planned reductions to 18% by 2020. This will reduce the company's future current tax charge accordingly. The deferred tax asset at 30 June 2015 has been calculated based on the rate of 20% substantively enacted at the balance sheet date.

 

5 EARNINGS PER SHARE

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

 

Six months

 ended

30 June

2015

£000

Six months

 ended

30 June

2014

£000

 

Year ended

31 December 2014

£000

Earnings

 

 

 

Earnings for the purposes of basic and diluted earnings per share being profit attributable to equity holders of the parent

 

9,848

 

8,446

 

23,785

 

 

 

 

 

2015

2014

2014

Number of shares

 

 

 

Issued ordinary shares at end of period

85,363,743

85,363,743

85,363,743

Effect of shares held in treasury

(1,501,893)

(2,328,375)

(2,053,036)

 

 

 

 

Weighted average number of ordinary shares for the purposes of basic earnings per share

 

83,861,850

 

83,035,368

 

83,310,707

 

 

 

 

Effect of diluted potential ordinary shares:

 

 

 

Weighted average number of ordinary shares at period end

83,861,850

83,035,368

83,310,707

Dilutive effect of share options

402,528

1,072,187

264,178

 

 

 

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

 

84,264,378

 

84,107,555

 

83,574,885

 

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements continued

Unaudited

 

 

6 DIVIDENDS

 

Six months ended

30 June

2015

£000

Six months ended

30 June

2014

£000

 

Year ended

31 December 2014

£000

 

 

 

 

Interim dividend for 2014 of 5.20p paid 2 January 2015

4,355

-

-

Final dividend for 2014 of 12.30p proposed

10,300

-

-

Interim dividend for 2013 of 4.65p paid 2 January 2014

-

3,856

3,856

Final dividend for 2013 of 10.65p proposed

-

8,833

8,833

 

14,655

12,689

12,689

 

The final proposed dividend for 2014 of 12.30p per share was authorised by shareholders at the Annual General Meeting on 21 May 2015 and paid on 1 July 2015.  The final proposed dividend for 2013 of 10.65p per share was authorised by shareholders at the Annual General Meeting on 21 May 2014 and paid on 1 July 2014.

 

7 ACQUISITIONS

 

On 30 January 2015, a subsidiary company of Headlam Group plc entered into an agreement to acquire the business and certain assets of Matty's Wholesale Carpets (Matty's).  Matty's is a distributor of residential floorcovering to independent flooring retailers, principally in the Midlands.  Revenue for the calendar year 2014 was approximately £4.3 million. Consideration at completion amounted to £1.978 million, with net assets acquired of £1.228 million and goodwill of £0.75 million. Following completion, the autonomous sales and marketing identity of Matty's has been preserved and logistics are being provided by the group's existing facility in Coleshill.  The disclosures required by IFRS 3 will be shown in the Annual Report and Accounts for the group for the year ended 31 December 2015.

 

8 CAPITAL COMMITMENTS

 

As at 30 June 2015, the group had contractual commitments relating to the purchase of property, plant and equipment of £371,000 (30 June 2014: £198,000, 31 December 2014: £1,019,000). 

 

9 RELATED PARTIES

 

The group has a related party relationship with its subsidiaries and with its key management.  There have been no changes to the nature of related party transactions entered into since the last annual report.

 

10 SUBSEQUENT EVENTS

 

Management have given due consideration to any events occurring in the period from the reporting date to the date these Interim Financial Statements were authorised for issue and have concluded that there are no material adjusting or non-adjusting events to be disclosed in these Interim Financial Statements.

 

 

 

 

 

Statement of Directors' Responsibilities

 

 

 

We confirm to the best of our knowledge:

 

 

 

 

 

 

 

(a)   the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union;

 

(b)   the interim management report includes a fair review of the information required by:

 

(i) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

This report has been approved by the board of directors and signed on its behalf by

 

 

 

 

Tony Brewer

Chief Executive Officer

24 August 2015

 


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