TIDMALU
RNS Number : 5139V
Alumasc Group PLC
31 January 2017
IMMEDIATE RELEASE 31 January 2017
THE ALUMASC GROUP PLC - INTERIM RESULTS ANNOUNCEMENT
Alumasc (ALU.L), the premium building products, systems and
solutions group, announces interim results for the six months ended
31 December 2016.
Half year financial highlights
Half year to 31 December 2016 2015 % change
--------------------------------- ---- ---- --------
Revenue (GBPm) 50.7 43.5 +17%
Underlying profit before tax
(GBPm)* 4.1 4.0 +2%
Underlying earnings per share
(pence)* 9.1 8.9 +2%
Profit before tax (GBPm) 3.6 3.4 +6%
Basic earnings per share (pence) 8.2 7.6 +8%
Dividends per share (pence) 2.85 2.70 +5.6%
Net cash at 31 December (GBPm) 5.2 0.5
--------------------------------- ---- ---- --------
(*) Underlying profits and earnings per share are stated prior
to the deduction of brand amortisation charges of GBP0.1 million
(2015/16: GBP0.1 million), IAS 19 pension costs of GBP0.4 million
(2015/16: GBP0.7 million) and, in 2015/16, profit from discontinued
operations of GBP0.2 million.
Key points
-- Alumasc's strategy is delivering continued outperformance of the UK construction market.
-- The group's fifth consecutive first half year of earnings growth.
-- Strong revenue growth reflects progress in all operating segments.
-- Lower group margins reflect increased imported materials
costs and continued investment to support growth.
-- Benefits of pricing actions and operational gearing will see margins stronger in H2.
-- Solar Shading & Screening achieved 46% revenue growth to
GBP11.1m with operating profit up 37% to GBP0.6m after GBP0.7m
additional annualised investment in people. Levolux is experiencing
strong demand in North America and will benefit from completed
contracts in H2.
-- Roofing & Walling revenue rose 13% to GBP20.9m. Roofing
traded at record levels with margins reflecting increased imported
materials costs which will be partially recovered in H2. Facades
benefited from insulation refurbishment activity in Scotland.
Growth in new build was not enough to offset falls in funded
refurbishment activity in England and Wales. Divisional operating
profit was down 8% to GBP1.6m. Selling price increases are expected
to improve divisional margins in H2.
-- Water Management revenue was up 6% to GBP14.9m, driven
principally by Gatic exports and sales of drainage systems under
the Alumasc Water Management Solutions brand. Increases in imported
materials and steel costs reduced margins in H1, with operating
profit down 15% to GBP1.6m, although strong order books and selling
price increases will benefit H2.
-- Housebuilding & Ancillary Products increased revenue by
8% to GBP4.4m and operating profit by 22% to GBP0.7m, reflecting a
positive performance from Timloc's enlarged product range,
including "Above the Roofline", and management actions to improve
operating margins. Timloc's new purpose-built factory at Goole is
on schedule for completion in the Autumn.
Paul Hooper, Chief Executive, commented:
"Group order books currently stand at GBP27.6 million, close to
record levels. The majority of this relates to Levolux and to
construction projects that are for the most part due to complete
prior to the financial year end, which we expect will benefit
profit and margin recognition in the second half year. Elsewhere we
expect the group's positive trading momentum to continue in the
remainder of the financial year. Therefore, the Board's
expectations for full year performance remain unchanged.
Notwithstanding the ongoing economic uncertainties arising from
the UK's intended exit from the European Union and the current
weakness in Sterling, latest industry forecasts continue to
anticipate modest growth in the UK construction market over the
next few years. All of Alumasc's chosen specialist markets continue
to benefit from one or more of the long term strategic growth
drivers of energy management, water management, bespoke solutions
and ease of construction. This, when combined with an encouraging
pipeline of enquiries and quotations including for large
international projects at Levolux and Gatic in particular, gives
the board confidence that Alumasc should continue to make good
progress beyond the current 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
Performance Overview
Alumasc is pleased to announce the fifth consecutive first half
year of earnings growth:
-- Group revenues advanced by 17% to GBP50.7 million (2015/16:
GBP43.5 million), with all operating segments continuing to grow
strongly;
-- Sales to domestic markets grew by 9% to GBP43.2 million. This
compares with UK construction market growth of around 1% in the
period, providing further evidence of the higher than industry
average growth rates generated by Alumasc's specialist systems and
solutions, with over two thirds of the group's business now focused
on managing the scarce resources of water and energy in the built
environment;
-- Export sales almost doubled to GBP7.5 million, led by
continued penetration of the North American market for bespoke
architectural, shading and screening solutions by Levolux; and
increased sales of specialist access covers and civil drainage
systems by Gatic in a number of countries;
-- Group operating margins reduced from 9.5% to 8.2%, mainly
reflecting the increased cost of imported materials following the
depreciation of Sterling over the last six months. In light of the
investment already made by the group in resource and capability to
support the continued expansion of the business, margins are
expected to be higher in the second half year as the benefit of
selling price increases and operational gearing, driven by the
strong growth in revenues, is realised;
-- Underlying profit before tax (stated prior to IAS 19 pension
charges, amortisation of acquired brands and discontinued
operations in 2015/16) increased to GBP4.1 million from GBP4.0
million in the first half of last year, and underlying earnings per
share increased to 9.1 pence (2015/16: 8.9 pence). A full
reconciliation of underlying to statutory profit before tax is
shown in note 4; and
-- Statutory profit before tax and basic earnings per share
improved to GBP3.6 million from GBP3.4 million and to 8.2 pence
from 7.6 pence, respectively, reflecting the better underlying
results and lower IAS 19 pension charges.
Cash generation in Alumasc remains strong, underpinned by EBITDA
of GBP4.8 million in the period. However, there was a net cash
outflow in the first six months of the financial year of GBP3.4
million reflecting working capital absorption to support the
significant growth in revenues and the expected un-wind of cash
received last year in advance of profit recognition on construction
contracts.
At 31 December 2016 Alumasc had net cash resources on its
balance sheet of GBP5.2 million (31 December 2015: GBP0.5 million).
The group intends to use these funds in the planned re-location and
expansion of Timloc, the group's house building products business,
in Autumn 2017, and of Alumasc Water Management Solutions, expected
in 2019.
Strategic development
Encouraged by the group's first half performance both in the UK
and internationally, the Board is working with divisional
management teams to identify further initiatives to accelerate the
profitable growth of the business by continuing to increase
revenues faster than UK construction market growth and focus on
margin improvement.
The Board believes Alumasc has significant UK growth potential
in all its divisions, with further opportunities to expand
internationally through Levolux and Alumasc's Water Management
business in particular.
In addition, operating and EBITDA margin improvement will be
driven through a combination of:
-- continued product, system and service innovation;
-- a more focused programme of capital investment including the
modernisation and upgrade of plant, equipment and tooling;
-- efficiencies derived from the planned relocation and
expansion of the Timloc and Alumasc Water Management Solutions
businesses in the next 2-3 years, which will benefit once higher
initial property costs have been absorbed;
-- using the group's cash resources to flex working capital
ratios where needed to take advantage of procurement opportunities;
and
-- the benefits of operational gearing, particularly at Levolux,
which is beginning to generate double digit operating margins on a
run rate basis.
Should the right opportunities arise at the right price, Alumasc
intends to supplement this organic growth potential through
selective complementary acquisitions and, following the divestment
of non-core businesses in recent years, more senior management time
is now being devoted to this area.
Operational review
(a) Solar Shading and Screening
Revenue GBP11.1 million (2015/16: GBP7.6 million)
Underlying operating profit GBP0.6 million (2015/16: GBP0.5
million)
Underlying operating margin 5.7% (2015/16: 6.1%)
The enlarged Levolux business, which now encompasses an
established North American presence and a UK Balconies and
Balustrading business in addition to the original UK Solar Shading
operation, increased revenues by 46% in the period, benefiting as
expected from the high order book at the beginning of the period.
Whilst this led to an increase in underlying operating profit of
37% in the first half, the full benefit of this growth will not be
realised until the second half of the current financial year when a
number of construction contracts that were in their relatively
early stages at 31 December 2016 are due to complete. As a result,
we expect both profits and margins to be weighted towards the
second half.
Approximately GBP0.7 million of annualised people cost,
including international sales managers, designers, project managers
and operational resources, have been added to support growth. We
have doubled our own directly employed sales resources focused on
the North American market from two to four over the last twelve
months.
Order intake, enquiry and tender levels remain strong for both
domestic and export markets.
(b) Roofing & Walling
Revenue GBP20.9 million (2015/16: GBP18.4 million)
Underlying operating profit GBP1.6 million (2015/16: GBP1.7
million)
Underlying operating margin 7.8% (2015/16: 9.5%)
Alumasc Roofing traded at new record levels of revenue and
profit during the period and momentum going into the second half
year is strong. Our strategy for growth, through enhancements made
to our range of flat roofing solutions and extending our UK
geographical presence by continuing to attract high quality
technical sales resources, continues to bear fruit. Operating
margins were impacted by a rise on the cost of imported materials
and sales mix in the period.
Alumasc Facades continued to perform well in its exterior wall
insulation refurbishment business in Scotland, underpinned by
ongoing funding support from the Scottish government's HEEPS
scheme. Refurbishment activity in England and Wales was lower than
a year ago due to funding cuts to the ECO and Green Deal schemes
which took place in November 2015. The business continues to invest
in growing its new build presence, including through innovative
solutions such as the Alumasc Base Coat and the Alumasc Ventilated
System. However, initial successes in these areas were not
sufficient to offset the fall in refurbishment activity.
Selling price increases already in place are expected to improve
divisional margins in the second half year.
(c) Water Management
Revenue GBP14.9 million (2015/16: GBP14.0 million)
Operating profit GBP1.6 million (2015/16: GBP1.9 million)
Operating margin 10.9% (2015/16: 13.6%)
Divisional revenue growth of 6% was driven principally by
increased export sales of Gatic systems and higher sales of
building drainage systems including new products introduced under
the Alumasc Water Management Solutions brand over the last year.
Profitability was impacted by a combination of cost inflation from
imported materials, significant increases in steel costs due to the
global increase in steel prices following removal of surplus
industry capacity last year and sales mix in the first half year.
Again, selling price increases already implemented should mitigate
some of this margin pressure in the second half of the year.
Order books across the division remain strong and Gatic's order
books are at record levels, including a number of large
international projects which are expected to benefit the second
half year.
(d) Housebuilding & Ancillary Products
Revenue GBP4.4 million (2015/16: GBP4.1 million)
Operating profit GBP0.7 million (2015/16: GBP0.6 million)
Operating margin 15.8% (2015/16: 14.0%)
Timloc continues to make good progress. The sales team has been
strengthened, the "Above the Roofline" product range launched last
year is performing well and cost inflationary pressures have been
mitigated through a combination of management actions including
purchasing and supply chain initiatives and operational
efficiencies. Revenue growth of 8% also enabled the business to
better leverage fixed costs, improving operating margins.
Timloc's new purpose built leasehold manufacturing and
warehousing facility is now under construction and scheduled to be
operational in the Autumn. This will allow the business to further
expand and provide additional manufacturing flexibility.
Balance sheet and pensions
Shareholders' funds of GBP16.6 million were a little higher at
31 December 2016 than they were at 30 June 2016 with retained
profit over the last six months more than offsetting an increase in
net of tax pension obligations calculated under IAS 19. Post tax
return on investment remains strong at 23.0% (2015/16: 22.3%) and
well above the group's weighted average cost of capital.
The group has now concluded the formal triennial valuation as at
31 March 2016 of its legacy defined benefit pension obligations on
a technical provisions basis, a more prudent valuation methodology
than that used for accounting purposes. On this basis of valuation,
the pension deficit was calculated to be GBP33.0 million and is to
be recovered over a period of ten years, with Alumasc making annual
cash contributions of GBP3.2 million (previously GBP3.0 million),
to include scheme running costs. This outcome is in line with the
expectations set out in our 2016 Annual Report.
Outlook
Group order books currently stand at GBP27.6 million, close to
record levels. The majority of this relates to Levolux and to
construction projects that are for the most part due to complete
prior to the financial year end, which we expect will benefit
profit and margin recognition in the second half year. Elsewhere we
expect the group's positive trading momentum to continue in the
remainder of the financial year. Therefore, the Board's
expectations for full year performance remain unchanged.
Notwithstanding the ongoing economic uncertainties arising from
the UK's intended exit from the European Union and the current
weakness in Sterling, latest industry forecasts continue to
anticipate modest growth in the UK construction market over the
next few years. All of Alumasc's chosen specialist markets continue
to benefit from one or more of the long term strategic growth
drivers of energy management, water management, bespoke solutions
and ease of construction. This, when combined with an encouraging
pipeline of enquiries and quotations including for large
international projects at Levolux and Gatic in particular, gives
the board confidence that Alumasc should continue to make good
progress beyond the current financial year.
Dividend
In view of all the above the Board has decided to increase the
interim dividend by 5.6% to 2.85 pence per share (2015/16: 2.7
pence) to be paid on 7 April 2017 to shareholders on the register
at 24 February 2017.
Paul Hooper, Chief Executive
31 January 2017
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
for the half year to 31 December 2016
Half year Half year Year
to 31 to 31 December to 30
December 2015 June
2016 2016
(Unaudited) (Unaudited) (Audited)
Continuing operations: Notes GBP'000 GBP'000 GBP'000
Revenue 5 50,743 43,468 92,233
Cost of sales (34,898) (28,904) (61,434)
----------- --------------- ---------
Gross profit 15,845 14,564 30,799
Net operating expenses (11,837) (10,849) (23,101)
Operating profit 5 4,008 3,715 7,698
Finance expenses 7 (403) (473) (939)
----------- --------------- ---------
Profit before taxation 3,605 3,242 6,759
Tax expense 8 (704) (663) (1,581)
----------- --------------- ---------
Profit for the period 2,901 2,579 5,178
Discontinued operations:
Profit after taxation for
the period from discontinued
operations 6 - 132 1,306
Profit for the period 2,901 2,711 6,484
=========== =============== =========
Other comprehensive income
Items that will not be recycled
to profit or loss:
Actuarial (loss)/gain on defined
benefit pensions 2 (1,663) 542 (3,412)
Tax on actuarial loss/(gain)
on defined benefit pensions 8 50 (517) 240
(1,613) 25 (3,172)
----------- --------------- ---------
Items that are or may be recycled
subsequently to profit or
loss:
Effective portion of changes
in fair value of cash flow
hedges (20) 170 (22)
Exchange differences on retranslation
of foreign operations 41 (4) 1
Tax on cash flow hedge 8 4 (35) (1)
25 131 (22)
----------- --------------- ---------
Other comprehensive (loss)/profit
for the period, net of tax (1,588) 156 (3,194)
----------- --------------- ---------
Total comprehensive profit
for the period, net of tax 1,313 2,867 3,290
=========== =============== =========
Earnings per share Pence Pence Pence
Basic earnings per share
- Continuing operations 8.2 7.2 14.5
- Discontinued operations - 0.4 3.7
11 8.2 7.6 18.2
=========== =============== =========
Diluted earnings per share
- Continuing operations 8.0 7.0 14.3
- Discontinued operations - 0.4 3.6
11 8.0 7.4 17.9
=========== =============== =========
Reconciliations of underlying to statutory profits and earnings
per share are provided in notes 4 and 11 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
at 31 December 2016
31 December 31 December 30 June
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and
equipment 5,202 5,310 5,250
Goodwill 16,488 16,488 16,488
Other intangible assets 2,459 2,802 2,642
Financial asset investments 17 17 17
Deferred tax assets 3,915 3,509 4,080
----------------- ------------- -----------
28,081 28,126 28,477
Current assets
Inventories 10,613 9,686 10,238
Trade and other receivables 20,803 14,915 19,759
Cash and cash equivalents 6,109 5,404 10,540
Assets classified as
held for sale - 3,978 -
----------------- ------------- -----------
37,525 33,983 40,537
Total assets 65,606 62,109 69,014
----------------- ------------- -----------
Liabilities
Non-current liabilities
Interest bearing loans
and borrowings (923) (4,893) (1,908)
Employee benefits payable (23,031) (19,492) (22,668)
Provisions (898) (1,129) (1,064)
Deferred tax liabilities (446) (415) (508)
----------------- ------------- -----------
(25,298) (25,929) (26,148)
Current liabilities
Trade and other payables (22,326) (16,832) (25,351)
Provisions (514) (396) (478)
Corporation tax payable (534) (574) (188)
Derivative financial
liabilities (289) (77) (269)
Liabilities classified
as held for sale - (1,018) -
----------------- ------------- -----------
(23,663) (18,897) (26,286)
Total liabilities (48,961) (44,826) (52,434)
----------------- ------------- -----------
Net assets 16,645 17,283 16,580
================= ============= ===========
Equity
Called up share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own
shares (640) (968) (931)
Hedging reserve (237) (63) (221)
Foreign currency reserve 91 45 50
Profit and loss account
reserve 12,469 13,307 12,720
Total equity 16,645 17,283 16,580
================= ============= ===========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2016
Half year Half year Year
to to to
31 December 31 December 30 June
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Operating activities
Operating profit 4,008 3,715 7,698
Adjustments for:
Depreciation 474 431 931
Amortisation 206 194 364
Gain on disposal of property,
plant and equipment - (3) (11)
(Increase)/decrease in inventories (375) 157 (400)
(Increase)/decrease in receivables (1,044) 3,936 (804)
(Decrease)/increase in trade
and other payables (3,098) (4,944) 2,958
Movement in provisions (130) (101) (84)
Cash contributions to retirement
benefit schemes (1,542) (1,250) (2,500)
Share based payments 50 123 181
------------- ------------- -----------
Cash (absorbed)/generated
by operating activities
of continuing operations (1,451) 2,258 8,333
Operating profit from discontinued
operations - 167 27
Depreciation and amortisation - 70 141
Movement in working capital
from discontinued operations - 26 15
------------- ------------- -----------
Cash generated by operating
activities of discontinued
operations - 263 183
Tax paid (201) (401) (980)
Net cash (outflow)/inflow
from operating activities (1,652) 2,120 7,536
------------- ------------- -----------
Investing activities
Purchase of property, plant
and equipment - continuing
operations (476) (520) (869)
Purchase of property, plant
and equipment - discontinued
operations - (97) (148)
Payments to acquire intangible
fixed assets (11) (160) (255)
Proceeds from sales of property,
plant and equipment - 18 21
Proceeds from sale of business
activity - - 4,474
Net cash (outflow)/ inflow
from investing activities (487) (759) 3,223
------------- ------------- -----------
Financing activities
Interest paid (35) (112) (221)
Equity dividends paid (1,349) (1,248) (2,208)
Draw down of amounts borrowed - 5,000 -
Repayment of amounts borrowed (1,000) (5,000) (3,000)
Refinancing costs - (119) (119)
Acquisition of own shares - (452) (759)
Proceeds on exercise of
share based incentives 51 64 147
Net cash outflow from financing
activities (2,333) (1,867) (6,160)
------------- ------------- -----------
Net (decrease)/increase
in cash and cash equivalents (4,472) (506) 4,599
Net cash and cash equivalents
brought forward 10,540 5,914 5,914
Effect of foreign exchange
rate changes 41 (4) 27
Net cash and cash equivalents
carried forward 12 6,109 5,404 10,540
============= ============= ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2016
Capital Hedging Foreign Profit
reserve currency and loss
Share Share - account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2016 4,517 445 (931) (221) 50 12,720 16,580
Profit for the period - - - - - 2,901 2,901
Exchange differences on retranslation
of foreign operations - - - - 41 - 41
Net loss on cash flow hedges - - - (20) - - (20)
Tax on derivative financial
liability - - - 4 - - 4
Actuarial loss on defined
benefit pension schemes,
net of tax - - - - - (1,613) (1,613)
Dividends - - - - - (1,349) (1,349)
Share based payments - - - - - 50 50
Exercise of share based incentives - - 291 - - (240) 51
At 31 December 2016 4,517 445 (640) (237) 91 12,469 16,645
======= ======= ========== ======== ========== ========== =======
Capital Hedging Foreign Profit
reserve currency and loss
Share Share - account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 - - (452) - - - (452)
Exercise of share based incentives - - 102 - - (38) 64
At 31 December 2015 4,517 445 (968) (63) 45 13,307 17,283
======= ======= ========== ======== ========== ========== =======
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
for the half year to 31 December 2016
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
2016.
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 2016 and in
accordance with IAS 34 "Interim Financial Reporting".
The consolidated financial statements of the group as at and for
the year ended 30 June 2016 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
2016 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
2016 and the six month period ended 31 December 2015 show Dyson
Diecastings as a discontinued operation due to the sale of the
business on 30 June 2016.
The condensed consolidated interim financial statements for the
half year ended 31 December 2016 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 2016.
These condensed consolidated interim financial statements were
approved by the Board of Directors on
31 January 2017.
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 2016.
During the six months ended 31 December 2016, management
reassessed and updated its estimates in respect of retirement
benefit obligations based on market data available at 31 December
2016. The resulting impact was a GBP1.7 million pre-tax actuarial
loss, calculated using IAS 19 conventions, recognised in the six
month period to 31 December 2016.
3. Risks and uncertainties
A summary of the group's principal risks and uncertainties was
provided on pages 22 and 23 of Alumasc's Report and Accounts 2016.
The Board considers these risks and uncertainties remain relevant
to the current financial year.
Specific matters relating to the group's performance in the
second half year are:
- changes, beyond Alumasc's control, to the phasing and timing
of completion of large construction contracts, particularly at
Levolux and Gatic, could impact timing of profit recognition and
cash flows;
- the level of Euro and US Dollar exchange rates impacts the
cost of imported materials and margin. Further depreciation of
Sterling against the Euro in particular would put pressure on
margins and vice-versa; and
- the European Union is currently in the early stages of
conducting an industry-wide review of whether additional customs
duties should be applied to certain products including some of
those imported by our Water Management business. It is too early to
assess the likely outcome of the review and its potential impact on
the business should any changes be made.
4. Underlying to statutory profit reconciliation
Half year Half year
to 31 to 31 Year to
December December 30 June
Profit before tax 2016 2015 2016
GBP'000 GBP'000 GBP'000
Underlying profit before tax 4,082 4,003 8,261
Less: Brand amortisation (134) (134) (268)
Less: IAS 19 pension scheme
administration costs - (278) (510)
Less: IAS 19 net pension scheme
finance costs (343) (349) (724)
Profit before tax - continuing
operations 3,605 3,242 6,759
Discontinued operations - 167 928
Profit before tax 3,605 3,409 7,687
========= ========= ========
Half year Half year
to 31 to 31 Year to
December December 30 June
Operating profit 2016 2015 2016
GBP'000 GBP'000 GBP'000
Underlying operating profit 4,142 4,127 8,476
Less: Brand amortisation (134) (134) (268)
Less: IAS 19 pension scheme
administration costs - (278) (510)
Operating profit - continuing
operations 4,008 3,715 7,698
Discontinued operations - 167 27
Operating profit 4,008 3,882 7,725
========= ========= ========
Following the 2016 triennial review and agreement of the revised
deficit recovery plan, pension scheme administration costs are now
paid directly by the pension schemes rather than being reimbursed
by the company.
5. Segmental analysis - continuing operations
In accordance with IFRS 8 Operating Segments, the segmental
analysis below follows the group's internal management reporting
structure.
Segmental
operating
Revenue result
--------------------------------
External Inter-segment Total
GBP'000 GBP'000 GBP'000 GBP'000
Half Year to 31 December
2016
Solar Shading & Screening 11,144 - 11,144 631
Roofing & Walling 20,875 10 20,885 1,621
Water Management 14,312 587 14,899 1,619
Housebuilding & Ancillary
Products 4,412 4 4,416 697
-------- ------------- ------- ----------
Sub-total 50,743 601 51,344 4,568
Elimination/Unallocated
costs - (601) (601) (426)
Total 50,743 - 50,743 4,142
======== ============= ======= ==========
GBP'000
Segmental operating result 4,142
Brand amortisation (134)
Total operating profit from
continuing operations 4,008
==========
Segmental
operating
Revenue result
--------------------------------
External Inter-segment Total
GBP'000 GBP'000 GBP'000 GBP'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
======== ============= ======= ==========
GBP'000
Segmental operating result 4,127
Brand amortisation (134)
IAS 19 pension scheme administration
costs (278)
Total operating profit from
continuing operations 3,715
==========
Segmental
operating
Revenue result
--------------------------------
External Inter-segment Total
GBP'000 GBP'000 GBP'000 GBP'000
Full Year to 30 June 2016
Solar Shading & Screening 17,359 - 17,359 954
Roofing & Walling 40,045 6 40,051 3,959
Water Management 26,269 1,299 27,568 3,489
Housebuilding & Ancillary
Products 8,560 10 8,570 1,420
-------- ------------- ------- ----------
Sub-total 92,233 1,315 93,548 9,822
Elimination/Unallocated
costs - (1,315) (1,315) (1,346)
Total 92,233 - 92,233 8,476
======== ============= ======= ==========
GBP'000
Segmental operating result 8,476
Brand amortisation (268)
IAS 19 pension scheme administration
costs (510)
Total operating profit
from continuing operations 7,698
==========
6. Discontinued operations
All results for the six month period to 31 December 2016 are
derived from continuing building product operations. The results of
Dyson Diecastings, an Engineering Products business disposed of on
30 June 2016 are presented in prior year comparatives as a
discontinued operation, with details provided below:
Half Year Full Year
to 31 December to 30
2015 June 2016
GBP'000 GBP'000
Revenue 3,465 6,556
--------------- ----------
Operating profit 167 27
Net gain on disposal
of discontinued operations - 901
Tax (charge)/credit (35) 378
Profit after taxation 132 1,306
=============== ==========
7. Finance expenses
Half year Half year Year
to to to
31 December 31 December 30 June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Finance costs - Bank overdrafts 12 14 43
- Revolving credit facility 48 110 172
------------ ------------ --------
60 124 215
- IAS 19 net pension
scheme finance costs 343 349 724
403 473 939
------------ ------------ --------
8. Tax expense
Half year Half year Year
to 31 to 31 to 30
December December June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Current tax:
UK corporation tax
- continuing operations 546 545 1,433
- discontinued operations - (4) (697)
Overseas tax - 4 5
Amounts over provided in previous
years - - (2)
Total current tax 546 545 739
Deferred
tax:
Origination and reversal of
temporary differences:
* continuing operations 198 150 247
* discontinued operations - 39 319
Amounts over provided in previous
years - - (48)
Rate change adjustment (40) (36) (54)
Total deferred tax 158 153 464
Total tax expense 704 698 1,203
---------- ---------- --------
Tax charge on continuing operations 704 663 1,581
Tax charge/(credit) on discontinued
operations - 35 (378)
Total tax expense 704 698 1,203
---------- ---------- --------
Tax recognised in other comprehensive
income:
Deferred tax:
Actuarial (losses)/gains on
pension schemes (50) 517 (240)
Cash flow hedges (4) 35 1
Tax (credited)/charged to
other comprehensive income (54) 552 (239)
Total tax charge in the statement
of comprehensive income 650 1,250 964
----- ------ ------
9. Dividends
The directors have approved an interim dividend per share of
2.85p (2015/16: 2.7p) which will be paid on 7 April 2017 to
shareholders on the register at the close of business on 24
February 2017. The cash cost of the dividend is expected to be
GBP1.0 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 3.8p in respect of the 2015/16
financial year was paid at a cash cost of GBP1.3 million during the
six months to 31 December 2016.
10. Share Based Payments
During the period the group awarded 120,000 options (2015/16:
180,000) under the Executive Share Option Scheme ("ESOS"). These
options have an exercise price of 157.5p and require certain
criteria to be fulfilled before vesting. 40,000 existing options
(2015/16: 80,000) were exercised during the period and 50,000
existing options lapsed (2015/16: none).
Total awards granted under the group's Long Term Incentive Plans
("LTIP") amounted to 256,299 (2015/16: 194,413). LTIP awards have
no exercise price but are dependent on certain vesting criteria
being met. 154,661 existing LTIP awards (2015/16: nil) were
exercised during the period and 103,008 existing LTIP awards lapsed
(2015/16: none).
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 Half
year year Year
to 31 to 31 to
December December 30 June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Profit attributable to equity
holders of the parent - continuing 2,901 2,579 5,178
Profit attributable to equity
holders of the parent - discontinued - 132 1,306
Net profit attributable to
equity holders of the parent 2,901 2,711 6,484
---------- ---------- -------------
Half Half
year year Year
to 31 to 31 to
December December 30 June
2016 2015 2016
000s 000s 000s
Basic weighted average number
of shares 35,577 35,646 35,618
Dilutive potential ordinary
shares - employee share options 535 903 520
Diluted weighted average
number of shares 36,112 36,549 36,138
------------ ------------ -------------
Calculation of underlying earnings per share
from continuing operations:
Half Half
year year Year
to 31 to 31 to
December December 30 June
2016 2015 2016
GBP'000 GBP'000 GBP'000
Profit before taxation from
continuing operations 3,605 3,242 6,759
Add: brand amortisation 134 134 268
Add: IAS 19 pension scheme
administration costs - 278 510
Add: IAS 19 net pension scheme
finance costs 343 349 724
Underlying profit before
taxation 4,082 4,003 8,261
Tax at underlying group tax
rate of 20.6%
(2015/16 first half year:
21%; full year: 20.8%) (841) (841) (1,718)
Underlying profit after tax
from continuing operations 3,241 3,162 6,543
------------ ------------ -------------
Weighted average number of
shares 35,577 35,646 35,618
------------ ------------ -------------
Underlying earnings per share
from continuing operations 9.1p 8.9p 18.4p
------------ ------------ -------------
12. Movement in cash net of borrowings
Cash and Bank Net cash
bank overdrafts loans
GBP'000 GBP'000 GBP'000
At 1 July 2015 5,914 (5,000) 914
Cash flow movements (506) - (506)
Non-cash movements - 107 107
Effect of foreign
exchange rates (4) - (4)
At 31 December 2015 5,404 (4,893) 511
================ ======= =========
Cash and Bank Net cash
bank overdrafts loans
GBP'000 GBP'000 GBP'000
At 1 July 2016 10,540 (1,908) 8,632
Cash flow movements (4,472) 1,000 (3,472)
Non-cash movements - (15) (15)
Effect of foreign
exchange rates 41 - 41
At 31 December 2016 6,109 (923) 5,186
================ ======= =========
13. 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 2016. Related party information is disclosed in
note 30 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 IAS 34 "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 Guidance 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 Guidance 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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