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Alumasc Group Plc (ALU)

  Print          Annual reports

Tuesday 02 February, 2016

Alumasc Group Plc

Half Yearly Report

RNS Number : 7066N
Alumasc Group PLC
02 February 2016
 

 

IMMEDIATE RELEASE

 2 February 2016

 

 

THE ALUMASC GROUP PLC - INTERIM RESULTS ANNOUNCEMENT

 

Alumasc (ALU.L), the premium building and engineering products group, announces interim results for the six months ended 31 December 2015.

 

Half year financial highlights

 

Half year to 31 December

2015

2014

% change

 

Continuing operations:

 

 

 

 

 

 

 

Order book at 31 December (£m)

27.4

19.2

+42%

 

 

 

 

Revenue (£m)

43.5

45.2

-4%

 

 

 

 

Underlying profit before tax (£m)*

4.0

3.7

+8%

 

 

 

 

Underlying earnings per share (pence)*

8.9

8.1

+10%

 

 

 

 

Profit before tax (£m)

3.2

2.9

+12%

 

Total group (including discontinued operations):

 

 

 

 

 

 

 

Basic earnings per share (pence)

7.6

6.6

+15%

 

 

 

 

Dividends per share (pence)

2.7

2.5

+8%

 

 

 

 

Net cash/(debt) at 31 December (£m)

0.5

(7.7)

 

 

* Underlying profits and earnings per share from continuing operations are stated prior to the deduction of brand amortisation charges of £0.1 million (2014: £0.1 million) and IAS19 pension costs of £0.7 million (2014: £0.7 million).

 

Key points

·      Alumasc's strategy is to focus on premium Building Products & Solutions and the Board believes there are numerous exciting organic and synergistic growth opportunities to capitalise on Alumasc's market leading positions in niche segments.

·      In line with this strategic goal and further to last year's disposal of loss-making APC, the Board has initiated a process for the disposal of Dyson Diecastings, the group's last remaining Engineering Products business.

·      Excluding two exceptionally large projects (Kitimat and Chiswick Park) completed last year, Building Products achieved 4% growth in underlying revenues with operating margins up to 10.8%, enabling divisional operating profit to rise 3% to £4.7m. 

·      Building Products order books rose to £27.4m at 31 December 2015 (30 June 2015: £24.0m; 31 December 2014: £19.2m).  Most of the increase relates to Levolux and will benefit the group's 2016/17 financial year and beyond.

·      Solar Shading & Screening saw Levolux establish a sustainable and growing business in North America and its UK business is being expanded to supply bespoke balconies to prestigious housing and commercial developments. Levolux's order book increased 28% to £19.9m. Financial performance as expected with operating profit up 20% to £462k on sales down 7% to £7.6m.   

·      Roofing & Walling revenue down 12% to £18.4m, in part reflecting last year's Kitimat project. Performance earlier in the financial year was impacted by delays to refurbishment projects caused by short-term factors in the wider contractual chain. The reduction in Green Deal funding is being offset by developing new build business including the Alumasc Ventilated System.  Operating profit down 32% to £1.8m.  

·      Water Management operating profit up 64% to £1.9m on revenue up 8% to £14m with financial performance benefiting from the holistic approach to sales and customer service following the introduction of AWMS last July. Particularly strong performances came from Alumasc Rainwater and Gatic Slotdrain in domestic markets; new products (including Gatic Filcoten and Harmer SML Below Ground); and Gatic access covers, including some recovery of demand in South-East Asia.  Relocation to new site in Kettering delayed 6 to 12 months.

·      Housebuilding & Ancillary Products operating profit up 33% to £573k on revenue up 9% to £4.1m.  Timloc delivered another record first half performance and, in order to facilitate future growth, will relocate to new leased premises in the Goole area over the next 12 to 18 months.

 

Paul Hooper, Chief Executive, commented:

 

"Alumasc is pleased to announce earnings growth for the fourth consecutive first half year.

 

With the group expected to benefit from its normal seasonal trading bias in favour of the second half of the financial year, the Board's previous expectations for the group's full year performance remain unchanged.

 

Against a background of further UK growth in demand for premium building products for sustainable building, and with growing order books and continuing success in developing our overseas presence, Alumasc is well positioned to make further progress beyond this financial year."

 

Enquiries:

 

The Alumasc Group plc

01536 383844

Paul Hooper (Chief Executive)

Andrew Magson (Finance Director)




Glenmill Partners Limited

07771 758517

Simon Bloomfield

 

 

REVIEW OF INTERIM RESULTS

 

Overview and highlights

 

Alumasc is pleased to announce earnings growth for the fourth consecutive first half year:

 

·      Underlying earnings per share from continuing operations advanced by 10% to 8.9 pence per share (2014: 8.1 pence) and basic earnings per share grew by 15% to 7.6 pence (2014: 6.6 pence).

·      These improved results were driven by continued profitable growth in Alumasc's water management and housebuilding products businesses, lower financing charges and the successful disposal of the loss making Alumasc Precision Components business in June 2015.

·      Cash remains well controlled and the group continues to be free of any net indebtedness. Net cash at 31 December 2015 was £0.5 million (30 June 2015: net cash of £0.9 million; 31 December 2014 net debt of £7.7 million).

·      Building products order books rose to £27.4 million at 31 December 2015 (30 June 2015: £24.0 million; 31 December 2014: £19.2 million). Most of the increase relates to Levolux and will benefit the group's 2016/17 financial year and beyond.

·      In view of all the above, the Board has decided to increase the interim dividend by 8% to 2.7 pence per share (2014: 2.5 pence).

 

Strategic development

 

The group's strategy for future growth is to position Alumasc as a focused supplier of premium building products and solutions, particularly those which add value in conserving and managing the scarce resources of energy and water in the built environment. The Board believes there are numerous exciting organic and synergistic growth opportunities which have been identified to capitalise on Alumasc's market leading positions in niche segments.

 

In line with this strategic goal, and further to the successful disposal of Alumasc Precision Components last summer, the Board has initiated a sale process for the group's last remaining Engineering Products business, Dyson Diecastings ("Dyson"). Accordingly, Dyson has been treated as a discontinued operation in this interim statement.

 

Operating Review

 

(a)   Continuing operations - Building products

 

UK demand for Alumasc's building products continues to grow. While headline divisional revenues were 4% lower than in the first half of the prior year at £43.5 million, order books grew from £24.0 million to £27.4 million in the period under review. We also continue to develop export markets. Reported revenues for the half year reflect the non-repeat of the two exceptionally large projects, Kitimat and Chiswick Park building 7 ("CP7"), that benefited the first half of the previous financial year, and delays to a number of projects in our roofing and walling business. When Kitimat and CP7 are excluded from prior period comparators, our remaining building products revenues were ahead on a like-for-like basis by around 4%.

 

Divisional operating margins improved to 10.8% compared to 10.1% in the first half of the last financial year, reflecting a combination of the resolution of the operational and capacity issues described in this report a year ago and the benefit of operational gearing following further growth in our water management and housebuilding products businesses. This enabled divisional operating profits to grow by 3% to £4.7 million.

 

Solar shading and screening

 

Levolux's principal achievements in the first half of the financial year were the delivery of a substantial increase in its order book, further establishing a sustainable and growing business in North America and developing an exciting business to supply bespoke balconies to prestigious housing and commercial developments. The order book grew from £15.6 million at 30 June 2015 to £19.9 million at 31 December 2015, and order intake over the last 12 months of £23.0 million has been higher than that ever previously achieved by the business and significantly higher than revenues over the last twelve months of £15.4 million. Some £11.4 million of the order book is expected to convert into revenue in the 2016/17 financial year and beyond, including the £3 million project announced in October to screen a power plant on the eastern seaboard of the USA, Levolux's largest order so far in North America. The developing balconies business is complementary to the existing solar shading and control business, building on Levolux's strengths of design, project management and delivery whilst leveraging existing sales channels and supply chains.

 

In the absence of work on any large projects in the period under review, Levolux's trading performance in the first half of this financial year was satisfactory, delivering slightly higher profits from slightly lower revenues when compared to the same period a year ago, reflecting good project execution and a higher number of project completions in the period under review. 

 

Roofing & walling

 

These businesses again performed strongly by historical standards. However, as expected, it was not possible to improve on last year's record results in the absence of a replacement for the large Kitimat smelter refurbishment contract in Canada.  Performance in the earlier part of the financial year was affected by delays to a number of refurbishment projects caused by short-term factors in the wider contractual chain beyond Alumasc's control. Alumasc Facades is also being impacted by lower housing refurbishment work in England and Wales as Green Deal funding comes to an end and therefore continues to develop its new build business. Specification banks for the recently launched Alumasc Ventilated System are promising and continue to grow.

 

Water Management

 

Alumasc's water management businesses grew both revenues and profits strongly, including benefiting from the more holistic approach to sales and customer service following the introduction of the Alumasc Water Management Solutions ("AWMS") umbrella brand last July. In particular, there were strong performances from Alumasc Rainwater and a much better first half than last year in domestic markets for Gatic Slotdrain. New products introduced during the period, including Gatic Filcoten and Harmer SML Below Ground, performed well and these should continue to gain traction.  In addition, Gatic's access covers business performed well, including some recovery of demand in South-East Asia.

 

Plans to relocate Alumasc's rainwater & drainage businesses to a new site in the Kettering area have been delayed by 6 to 12 months due to issues with the initially preferred relocation site. A number of alternative options are being evaluated.

 

Housebuilding & ancillary products

 

Timloc delivered another record first half performance, benefiting from growing demand, an expanding product range and operational efficiencies. Further new products that will enable us to leverage existing sales channels are being planned for launch later in the year. As part of previously announced plans to facilitate future growth, Timloc will relocate to new leased premises in the Goole area over the next 12 to 18 months.

 

(b)   Discontinued operation - Dyson Diecastings

 

This was a difficult period for UK based die-casters supplying international OEMs in automotive and off highway diesel markets, characterised by slowing growth rates in developing markets, impacting the construction and mining equipment sub-sectors in particular and resulting in significant customer de-stocking. Against this background, Dyson, with its diversified customer base and focus on precision engineered, smaller die-cast and machined parts for niche applications, performed relatively well, with half year revenues down by 11% to £3.5 million and operating profits lower by £0.1 million at £0.2 million. The recently strengthened management team continues to develop opportunities for new work, whilst improving operational efficiencies.

 

In view of the success of Alumasc's strategy to increase its focus on building products activities over recent years and the successful sale last year of Alumasc Precision Components, Dyson's sister business, the Board believes that Dyson's future would be better served under different ownership. Accordingly, this business is now being actively marketed for sale. 

 

Cash flow, pensions and balance sheet

 

Cash management in Alumasc continues to be a key area of focus, and the group ended 2015 with net cash resources of £0.5 million (30 June 2014: net cash of £0.9 million; 31 December 2014: net debt of £7.7 million). There was a modest net cash outflow of £0.5 million in the six months to 31 December 2015 reflecting some investment in working capital to support anticipated growth and the purchase of £0.4 million of Alumasc shares by the group's employee share trust. Capital expenditure of £0.8 million in the period related mainly to routine replacement of assets and the completion of work on new business systems at Levolux and Timloc, both of which were successfully introduced in the period. The lower average level of net debt experienced in the half year under review resulted in a reduction in the group's interest costs on borrowings to £0.1 million from £0.3 million in the first six months of the prior financial year.  Given the delay to the investment in the new Kettering property described above, the group is now unlikely to incur any significant net indebtedness for another 12 months.

 

The group's pension deficit measured for accounting purposes under IAS19 was £19.5 million at 31 December 2015, an improvement on the 30 June 2015 position of £20.9 million mainly due to lower long term inflation expectations. The deficit remains high by historical standards due to continued low discount rates that are used to discount future pension payments into present values. The company's current obligations to make deficit funding contributions to its legacy defined benefit pension schemes will be re-assessed following the forthcoming triennial valuation due in March 2016.

 

There have been no significant changes to the group's balance sheet in the period under review. Shareholders' funds increased over the six months to 31 December 2015 to £17.3 million from £15.9 million at 30 June 2015, mainly reflecting retained post tax profits.

 

Outlook

 

With the group expected to benefit from its normal seasonal trading bias in favour of the second half of the financial year, the Board's previous expectations for the group's full year performance remain unchanged.

 

More broadly, against a background of further UK growth in demand for premium building products for sustainable building, and with growing order books and continuing success in developing our overseas presence, Alumasc is well positioned to make further progress beyond this financial year.

 

Paul Hooper, Chief Executive

2 February 2016

 


CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

for the half year to 31 December 2015

 

 

 

 

 

Half year to 31 December 2015

 

Half year to 31 December 2014

 

Year to 30 June 2015

 

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

Continuing operations:

Notes

 

£'000

 

£'000

 

£'000


 

 

 

 

 

 

 

     Revenue

4

 

43,468

 

45,179

 

90,295

     Cost of sales

 

 

(28,904)

 

(31,104)

 

(60,741)

     Gross profit

 

 

14,564

 

14,075

 

29,554

 

 

 

 

 

 

 

 

     Net operating expenses

 

 

(10,849)

 

(10,508)

 

(21,963)

 

 

 

 

 

 

 

 

     Operating profit

4

 

3,715

 

3,567

 

7,591

 

 

 

 

 

 

 

 

     Finance income

6

 

-

 

2

 

5

     Finance expenses

6

 

(473)

 

(664)

 

(1,308)

     Profit before taxation

 

 

3,242

 

2,905

 

6,288

 

 

 

 

 

 

 

 

     Tax expense

8

 

(663)

 

(744)

 

(1,483)

     Profit for the period

 

 

 

2,579

 

 

2,161

 

 

4,805

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

Profit/(loss) after taxation for the period from discontinued operations

 

5

 

 

132

 

 

206

 

 

(429)

 

 

 

 

 

 

 

 

Profit for the period

 

 

2,711

 

2,367

 

4,376

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items that will not be recycled to profit or loss:

 

 

 

 

 

 

 

Actuarial gain/(loss) on defined benefit pensions

 

2

 

 

542

 

 

(4,334)

 

(4,726)

Tax on actuarial (gain)/loss on defined benefit pensions

 

 

(517)

 

815

 

945

 

 

 

25

 

(3,519)

 

(3,781)

Items that are or may be recycled subsequently to profit or loss:

 

 

 

 

 

 

 

Effective portion of changes in fair value of cash flow hedges

 

 

 

170

 

 

34

 

(179)

Exchange differences on retranslation of foreign operations

 

 

(4)

 

20

 

17

Tax on cash flow hedge

 

 

(35)

 

(5)

 

43

 

 

 

131

 

49

 

(119)

 

 

 

 

 

 

 

 

Other comprehensive profit/(loss) for the period, net of tax

 

 

156

 

(3,470)

 

(3,900)

Total comprehensive profit/(loss) for the period, net of tax

 

 

 

2,867

 

(1,103)

 

476

 

 

 

 

 

 

 

 

Earnings per share

 

 

Pence

 

Pence

 

Pence

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

 

-  Continuing operations

 

 

7.2

 

6.0

 

13.5

-  Discontinued operations

 

 

0.4

 

0.6

 

(1.2)

 

11

 

7.6

 

6.6

 

12.3

Diluted earnings per share

 

 

 

 

 

 

 

-  Continuing operations

 

 

7.0

 

5.9

 

13.3

-  Discontinued operations

 

 

0.4

 

0.6

 

(1.2)

 

11

 

7.4

 

6.5

 

12.1

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

at 31 December 2015

 





31 December

31 December

30 June





2015

(Unaudited)

2014

(Unaudited)

2015

(Audited)





£'000

£'000

£'000

Assets







Non-current assets






Property, plant and equipment


5,310

7,457

7,473

Goodwill




16,488

16,488

16,488

Other intangible assets


2,802

2,818

2,831

Financial asset investments



17

17

17

Deferred tax assets



3,509

4,285

4,187





28,126

31,065

30,996

Current assets






Inventories



9,639

10,259

10,592

Biological assets


47

144

75

Trade and other receivables


14,915

18,468

20,317

Cash and cash equivalents


5,404

3,205

5,914

Derivative financial assets


-

29

-

Assets classified as held for sale


3,978

9,799

-





33,983

41,904

36,898






Total assets



62,109

72,969

67,894







Liabilities






Non-current liabilities





Interest bearing loans and borrowings


(4,893)

(10,918)

-

Employee benefits payable


(19,492)

(21,418)

(20,935)

Provisions




(1,129)

(954)

(1,224)

Deferred tax liabilities


(415)

(1,267)

(390)





(25,929)

(34,557)

(22,549)

Current liabilities






Interest bearing loans and borrowings


-

-

(5,000)

Trade and other payables


(16,832)

(18,966)

(23,338)

Provisions




(396)

(681)

(402)

Corporation tax payable



(574)

(417)

(429)

Derivative financial liabilities


(77)

(34)

(247)

Liabilities classified as held for sale


(1,018)

(3,346)

-





(18,897)

(23,444)

(29,416)








Total liabilities



(44,826)

(58,001)

(51,965)








Net assets



17,283

14,968

15,929








Equity







Called up share capital


4,517

4,517

4,517

Share premium



445

445

445

Capital reserve - own shares


(968)

(618)

(618)

Hedging reserve



(63)

(33)

(198)

Foreign currency reserve



45

52

49

Profit and loss account reserve



13,307

10,605

11,734

Total equity



17,283

14,968

15,929


CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

for the half year to 31 December 2015

 




Half year to

Half year to

Year to




31 December

31 December

30 June





2015

(Unaudited)

2014

(Unaudited)

2015

(Audited)





£'000

£'000

£'000

Operating activities





Operating profit


3,715

3,567

7,591

Adjustments for:






Depreciation



431

433

905

Amortisation


194

184

332

Gain on disposal of property, plant and equipment


(3)

(4)

(14)

Decrease/(increase) in inventories


129

(880)

(1,216)

Decrease in biological assets


28

27

96

Decrease/(increase) in receivables


3,936

(597)

(1,963)

(Decrease)/increase in trade and other payables


(4,944)

(809)

2,510

Movement in provisions


(101)

367

358

Cash contributions to retirement benefit schemes


(1,250)

(1,250)

(2,500)

Share based payments


123

27

300

Cash generated from continuing operations




2,258

1,065

6,399








Operating profit/(loss) from discontinued operations


167

(724)

(896)

Depreciation and amortisation




70

506

1,050

Movement in working capital from discontinued operations


26

180

526

Cash generated/(absorbed) from/(by) discontinued operations


263

(38)

680








Tax paid




(401)

(456)

(907)

Net cash inflow from operating activities


2,120

571

6,172







Investing activities






Purchase of property, plant and equipment


(617)

(587)

(1,114)

Payments to acquire intangible fixed assets


(160)

(232)

(322)

Proceeds from sales of property, plant and equipment


18

4

60

Proceeds from sale of business activity


-

1,408

6,168

Interest received


-

2

5

Net cash (outflow)/ inflow from investing activities


(759)

595

4,797







Financing activities






Interest paid



(112)

(207)

(408)

Equity dividends paid



(1,248)

(998)

(1,889)

Draw down of amounts borrowed


5,000

1,000

-

Repayment of amounts borrowed


(5,000)

-

(5,000)

Refinancing costs


(119)

-

-

Purchase of own shares


(388)

-

-

Net cash outflow from financing activities


(1,867)

(205)

(7,297)








Net (decrease)/increase in cash and cash equivalents

 

(506)

961

3,672








Net cash and cash equivalents brought forward

5,914

2,224

2,224

Effect of foreign exchange rate changes


(4)

20

18

Net cash and cash equivalents carried forward

 

5,404

3,205

5,914



















CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the half year to 31 December 2015

 

 

Share

Share

Capital reserve -

 

 

 

Hedging

 

 

Foreign

currency

 

Profit

and loss account

 

 

capital

premium

own shares

reserve

reserve

reserve

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

At 1 July 2015

4,517

445

(618)

(198)

49

11,734

15,929

Profit for the period

-

-

-

-

-

2,711

2,711

Exchange differences on retranslation of foreign operations

-

-

-

-

(4)

-

 

(4)

Net gain on cash flow hedges

-

-

-

170

-

-

170

Tax on derivative financial liability

-

-

-

(35)

-

-

(35)

Actuarial gain on defined benefit pension schemes, net of tax

-

-

-

-

-

25

 

25

Dividends

-

-

-

-

-

(1,248)

(1,248)

Share based payments

-

-

-

-

-

123

123

Acquisition of own shares

-

-

(350)

-

-

-

(350)

Exercise of share based incentives

-

-

-

-

-

(38)

(38)

At 31 December 2015

4,517

445

(968)

(63)

45

13,307

17,283

 

 







 

Share

Share

Capital reserve -

 

 

Hedging

 

 Foreign

currency

Profit

and loss account


 

capital

premium

own shares

reserve

reserve

reserve

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

At 1 July 2014

4,517

445

(618)

(62)

32

12,728

17,042

Profit for the period

-

-

-

-

-

2,367

2,367

Exchange differences on retranslation of foreign operations

-

-

-

-

20

-

 

20

Net gain on cash flow hedges

-

-

-

34

-

-

34

Tax on derivative financial liability

-

-

-

(5)

-

-

(5)

Actuarial loss on defined benefit pension schemes, net of tax

-

-

-

-

-

(3,519)

 

(3,519)

Dividends

-

-

-

-

-

(998)

(998)

Share based payments

-

-

-

-

-

27

27

At 31 December 2014

4,517

445

(618)

(33)

52

10,605

14,968


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year to 31 December 2015

 

1. Basis of preparation

The condensed consolidated interim financial statements of The Alumasc Group plc and its subsidiaries have been prepared on the basis of International Financial Reporting Standards (IFRS), as adopted by the European Union, that are effective at 31 December 2015.

 

The condensed consolidated interim financial statements have been prepared using the accounting policies set out in the statutory accounts for the financial year to 30 June 2015 and in accordance with IAS34 "Interim Financial Reporting".

 

The consolidated financial statements of the group as at and for the year ended 30 June 2015 are available on request from the company's registered office at Burton Latimer, Kettering, Northants, NN15 5JP or at the website www.alumasc.co.uk.

 

The comparative figures for the financial year ended 30 June 2015 are not the company's statutory accounts for that financial year but have been extracted from those accounts. Those accounts have been reported on by the company's auditors and delivered to the registrar of companies. The report of the auditors 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.

 

The comparative figures for the financial year ended 30 June 2015 and the six month period ended 31 December 2014 have been re-classified to show Dyson Diecastings as a discontinued operation.

 

The condensed consolidated interim financial statements for the half year ended 31 December 2015 are not statutory accounts and have been neither audited nor reviewed by the group's auditors.  They do not contain all of the information required for full financial statements, and should be read in conjunction with the consolidated financial statements of the group as at and for the year ended 30 June 2015. 

 

These condensed consolidated interim financial statements were approved by the Board of Directors on

2 February 2016.

 

On the basis of the group's financing facilities and current financial plans and sensitivity analyses, the Board is satisfied that the group has adequate resources to continue in operational existence for twelve months from the date of signing this report and accordingly continues to adopt the going concern basis in preparing these condensed consolidated interim financial statements.

 

2. Estimates

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

 

Except as described below, in preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 June 2015.

 

During the six months ended 31 December 2015, management reassessed and updated its estimates in respect of retirement benefit obligations based on market data available at 31 December 2015.  The resulting impact was a £0.5 million pre-tax actuarial gain, calculated using IAS19 conventions, recognised in the six month period to 31 December 2015.

 

3. Risks and Uncertainties

A summary of the group's principal risks and uncertainties was provided on pages 16 and 17 of Alumasc's Report and Accounts 2015. The Board considers these risks and uncertainties remain relevant to the current financial year.

 

Alumasc can experience changes to the timing of construction projects, including those installed by third parties, that are beyond the group's control. Such changes could impact the timing of revenue and profit recognition in the second half year.

Alumasc is in discussions with a number of parties to sell the Dyson Diecastings business. Current expectations are that the carrying value of the business of £3.0 million will be recovered on sale. However, depending on the final outcome agreed, sales proceeds could differ from the book value at 31 December 2015.

 

4. Segmental analysis - continuing operations

Since Alumasc's Report and Accounts 2015, the operating segments of The Alumasc Group have been re-aligned to reflect changes to internal management responsibilities. Dyson Diecastings, as a discontinued operation, has also now been excluded from this disclosure. The segmental analysis of comparative data for the periods ending 31 December 2014 and 30 June 2015 have therefore been re-presented.

 

 

 

External

 

Inter-segment

 

Revenue

Total

Segmental Operating

Result

 

£'000

£'000

£'000

£'000

Half Year to 31 December 2015

 

 

 

 

 

 

 

 

 

Solar Shading & Screening

7,620

-

7,620

462

Roofing & Walling

18,409

2

18,411

1,755

Water Management

13,342

688

14,030

1,907

Housebuilding & Ancillary Products

4,097

-

4,097

573

Sub-total

43,468

690

44,158

4,697

 

 

 

 

 

Elimination/Unallocated costs

-

(690)

(690)

(570)

 

 

 

 

 

Total

43,468

-

43,468

4,127

 

 

 

 

 

 

 

 

 

£'000






Segmental operating result

 

 

 

4,127

Brand amortisation

 

 

 

(134)

IAS 19 pension scheme administration costs

 

 

 

(278)






Total operating profit from continuing operations

 

 

 

3,715

 

 

 

 

 

 

External

 

Inter-segment

 

Revenue

Total

Segmental Operating

Result

 

£'000

£'000

£'000

£'000

Half Year to 31 December 2014 (re-stated)

 

 

 

 

 

 

 

 

 

Solar Shading & Screening

8,159

-

8,159

386

Roofing & Walling

20,870

5

20,875

2,589

Water Management

12,383

584

12,967

1,161

Housebuilding & Ancillary Products

3,767

-

3,767

432

Sub-total

45,179

589

45,768

4,568

 

 

 

 

 

Elimination/Unallocated costs

-

(589)

(589)

(597)

 

 

 

 

 

Total

45,179

-

45,179

3,971

 

 

 

 

 

 

 

 

 

£'000






Segmental operating result

 

 

 

3,971

Brand amortisation

 

 

 

(134)

IAS 19 pension scheme administration costs

 

 

 

(270)






Total operating profit from continuing operations

 

 

 

3,567

 

 

External

 

Inter-segment

 

Revenue

Total

Segmental Operating

Result

Full Year to 30 June 2015 (re-stated)

 

 

 

 

 

 

 

 

 

Solar Shading & Screening

16,007

-

16,007

929

Roofing & Walling

40,577

8

40,585

4,461

Water Management

25,935

1,109

27,044

3,272

Housebuilding & Ancillary Products

7,776

-

7,776

1,137

Sub-total

90,295

1,117

91,412

9,799

 

 

 

 

 

Elimination/Unallocated costs

-

(1,117)

(1,117)

(1,485)

 

 

 

 

 

Total

90,295

-

90,295

8,314

 

 

 

 

 

 

 

 

 

£'000

 

 

 

 

 

Segmental operating result

 

 

 

8,314

Brand amortisation

 

 

 

(268)

IAS 19 pension scheme administration costs

 

 

 

(455)

 

 

 

 

 

Total operating profit from continuing operations

 

 

 

7,591

 

5. Discontinued operations

 

 

Alumasc Precision

Components

 

 

Pendock

Profiles

Dyson Diecastings

 

 

 

Total

 

£'000

£'000

£'000

£'000

Half Year to 31 December 2015

 

 

 

 

 

 

 

 

 

Revenue

-

-

3,465

3,465

 

 

 

 

 

Operating profit

-

-

167

167

Tax charge

-

-

(35)

(35)

 

 

 

 

 

Profit after taxation

-

-

132

132

 

 

 

Alumasc Precision

Components

 

 

Pendock

Profiles

Dyson Diecastings

 

 

 

Total

 

£'000

£'000

£'000

£'000

Half Year to 31 December 2014 (re-stated)

 

 

 

 

 

 

 

 

 

Revenue

10,269

785

3,816

14,870

 

 

 

 

 

Operating (loss)/profit

(1,117)

55

338

(724)

Gain on disposal of discontinued operation

-

770

-

770

Tax credit/(charge)

246

(12)

(74)

160

 

 

 

 

 

(Loss)/profit after taxation

(871)

813

264

206

 

 

 

Alumasc Precision

Components

 

 

Pendock

Profiles

Dyson Diecastings

 

 

 

Total

 

£'000

£'000

£'000

£'000

Full Year to 30 June 2015 (re-stated)

 

 

 

 

 

 

 

 

 

Revenue

16,672

785

7,787

25,244

 

 

 

 

 

Operating (loss)/profit

(1,659)

55

708

(896)

(Loss)/gain on disposal of discontinued operations

(1,340)

770

-

(570)

Tax credit/(charge)

1,205

(12)

(156)

1,037

 

 

 

 

 

(Loss)/profit after taxation

(1,794)

813

552

(429)

 

6. Net finance costs


Half year to

Half year to

Year to




31 December

31 December

30 June




2015

2014

2015




£'000

£'000

£'000







Finance income - Bank interest

-

(2)

(5)

 

Finance costs     - Bank loans and overdrafts

14

24

85

                         - Revolving credit facility

110

240

512


124

264

597

                        

- IAS19 net pension scheme finance  costs

349

400

711


473

664

1,308

 

7. Reported to underlying profit reconciliation

 

 

Half year to 31 December 2015

 

Half year to 31 December 2014

(re-stated)

Year to 30 June 2015

(re-stated)

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Reported profit before tax

3,242

2,905

6,288

 

 

 

 

Add: Brand amortisation

134

134

268

Add: IAS19 pension scheme administration costs

278

270

455

Add: IAS19 net pension scheme finance costs

349

400

711

 

 

 

 

Underlying profit before tax

4,003

3,709

7,722

 

8. Tax expense






 












Half year to 31 December 2015

Half year to 31 December 2014

Year to 30 June 2015






(re-stated)

(re-stated)





£'000

£'000

£'000








Current tax:





UK corporation tax - continuing operations


545

553

922

 - discontinued operations


(4)

(104)

(81)

Overseas tax

4

2

11

Amounts under provided in previous years

-

-

39

Total current tax


545

451

891








Deferred tax:






Origination and reversal of temporary differences:




-       continuing operations

150

189

543

-       discontinued operations

39

(56)

(956)

Amounts over provided in previous years

-

-

(56)

Rate change adjustment

(36)

-

24

Total deferred tax

153

133

(445)















Total tax expense

698

584

446





Tax charge on continuing operations

663

744

1,483

Tax charge/(credit) on discontinued operations

35

(160)

(1,037)

Total tax expense

698

584

446








Tax recognised in other comprehensive income:




Deferred tax:




Actuarial gains/(losses) on pension schemes

517

(815)

(945)

Cash flow hedges

35

5

(43)

Tax charged/(credited) to other comprehensive income

552

(810)

(988)








Total tax charge/(credit) in the statement of comprehensive income

1,250

(226)

(542)

 

9. Dividends

The directors have approved an interim dividend per share of 2.7p (2014: 2.5p) which will be paid on 7 April 2016 to shareholders on the register at the close of business on 4 March 2016.  The cash cost of the dividend is expected to be £1.0 million.  In accordance with IFRS accounting requirements, as the dividend was approved after the balance sheet date, it has not been accrued in the interim consolidated financial statements.  A final dividend per share of 3.5p in respect of the 2014/15 financial year was paid at a cash cost of £1.2 million during the six months to 31 December 2015.

 

10. Share Based Payments

During the period, the group awarded 180,000 options (2014: none) under the Executive Share Option Scheme ("ESOS"). These options have an exercise price of 188p and require certain criteria to be fulfilled before vesting. 80,000 existing options (2014: none) were exercised during the period and no ESOS options (2014: 164,000) lapsed during the period.

 

Total awards granted under the group's Long Term Incentive Plans ("LTIP") amounted to 194,413 (2014: nil).   LTIP awards have no exercise price but are dependent on certain vesting criteria being met.  During the period no existing LTIP awards lapsed (2014: 259,328).

 

11. Earnings per share

Basic earnings per share is calculated by dividing the net profit for the period attributable to ordinary equity shareholders of the parent by the weighted average number of ordinary shares in issue during the period.

 

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity shareholders of the parent by the weighted average number of ordinary shares in issue during the period, after allowing for the exercise of outstanding share options. The following sets out the income and share data used in the basic and diluted earnings per share calculations:

 


Half year to     31 December 2015

Half year to     31 December 2014

(re-stated)

Year to

30 June

2015

(re-stated)


£'000

£'000

      £'000





Profit attributable to equity holders of the parent - continuing

2,579

2,161

4,805

Profit/(loss) attributable to equity holders of the parent - discontinued

132

206

(429)

Net profit attributable to equity holders of the parent

2,711

2,367

4,376

 

 


Half year to     31 December 2015

Half year to     31 December 2014

Year to

30 June

2015


        000s

        000s

000s





Basic weighted average number of shares

35,646

35,648

35,648

Dilutive potential ordinary shares - employee share options

903

546

567

Diluted weighted average number of shares

36,549

36,194

36,215





 

Calculation of underlying earnings per share:



Half year to     31 December 2015

Half year to     31 December 2014

(re-stated)

Year to

30 June

2015

(re-stated)


£'000

£'000

      £'000





Reported profit before taxation from continuing operations

3,242

2,905

6,288

Add: brand amortisation

134

134

268

Add: IAS19 pension scheme administration costs

278

270

455

Add: IAS19 net pension scheme finance costs

349

400

711





Underlying profit before taxation

4,003

3,709

7,722

Tax at underlying group rate of 21.0%

(2014: 22%; 2014/15: 22%)

(841)

(816)

(1,699)

Underlying earnings

3,162

2,893

6,023





Underlying earnings per share

8.9p

8.1p

16.9p

 

12. Related party disclosure

The group has a related party relationship with its directors and with its UK pension schemes.  There has been no material change in the nature of the related party transactions described in the Report and Accounts 2015.  Related party information is disclosed in note 31 of that document.   

 

Responsibility Statement

 

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

 

a) the condensed consolidated interim financial statements have been prepared in accordance with IAS34 "Interim Financial Reporting" as adopted by the EU; and

 

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

·      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

·      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 group during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

On behalf of the Board

 

 

 

 

 

 

 

 

G P Hooper                                                           A Magson             

Chief Executive                                                     Group Finance Director


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