TIDMDWHT
RNS Number : 8526O
Dewhurst PLC
04 June 2020
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Dewhurst plc (the "Group")
Interim Results for the 6 months ended 31 March 2020
Directors' Interim Report
FIRST HALF
Despite the ongoing difficult circumstances in world markets
resulting from the COVID-19 pandemic, we are pleased to report a
similar level of sales and profits for the first half of the
current financial year compared to the same period last year.
Overall, Group revenue on continuing operations increased by 1% to
GBP28.2 million (2019: GBP27.8 million) and adjusted operating
profit (before acquired intangible amortisation) decreased 2% to
GBP3.4 million (2019: GBP3.5 million). Profit before tax decreased
3% to GBP2.5 million (2019: GBP2.6 million) but earnings per share
improved slightly to 20.8p (2019: 20.4p).
There was good growth in sales in the Lift and Transportation
Divisions offset by a significant reduction in keypad demand. A
proportion of the fall in keypad demand was predicted as a result
of the model changeover at a key customer, however the downturn was
more severe than expected. The growth in Lift Division sales was
split about 40% UK and 60% overseas, with A&A leading the
growth in the UK and ERM and P&R overseas. In transportation,
TMP had a strong first half, continuing the progress made in last
year's second half. First half currency movements reduced Group
revenue by around GBP0.4 million primarily as a result of the
weakening of the Australian Dollar.
The Group balance sheet remains strong with cash at the period
end of GBP15.1 million (2019: GBP6.2 million). Since 31 March 2019,
the Group has received GBP7.5 million on the divestment of TVC but
spent GBP1.0 million towards developing Dupar's new property.
OUTLOOK
The COVID-19 pandemic only had a minor impact on our results in
the first half, but the Board expect there to be a significant
impact on the second half. The UK has probably been our most
seriously impacted market to date and the only country in which we
were temporarily forced to close a factory. This is now operational
again, but we have furloughed or laid-off staff in a number of
locations and this will continue while demand is lower than normal.
Unfortunately, it is difficult to predict the path of the recovery
as it is affected by many factors outside our control. Australia
has been our most resilient market to date and we expect Australian
demand to bounce back reasonably quickly, although there will
likely be longer term impacts. Elsewhere the recovery is likely to
be more gradual. However, the Group has a strong financial base to
absorb the level of short-term difficulty we are currently
experiencing and will look to take advantage of any appropriate
opportunities that arise.
DIVIDS
The Directors have declared an interim dividend of 3.75p per
ordinary share (2019: 3.75p) which amounts to GBP315,000 (2019:
GBP315,000). The interim dividend is payable on 18 August 2020 and
will be posted on 13 August 2020 to shareholders appearing in the
Register on 10 July 2020 (ex-dividend date being 9 July 2020).
The Directors have given due consideration to what might be an
appropriate level of dividend in these exceptional circumstances.
Given the current outlook and the relatively modest cash impact of
our interim dividend compared to our cash balances we have decided
to proceed with that dividend at the same level as last year.
However, as outlined above, the main impact of the COVID-19
pandemic is expected to be felt in the second half and it may not
be sustainable to maintain Dewhurst's dividend policy for the year
ending 30 September 2020. The Board will make a decision on this at
the normal time on the announcement of our full year results.
A final 2019 dividend of 9.25p (2018: 9.00p) which amounted to
GBP778,000 (2018: GBP758,000) was approved at the AGM held on 18
February 2020 and was paid on 26 February 2020 to members on the
register at 17 January 2020.
By Order of the Board
J C SINCLAIR
Finance Director & Secretary
3 June 2020
Dewhurst plc
The unaudited consolidated statement of comprehensive income,
statement of financial position, statement of changes in equity and
cash flow statement of Dewhurst plc and its subsidiaries for the
half-year ended 31 March 2020, as compared with the corresponding
half-year ended 31 March 2019 and the year ended 30 September 2019,
shows the following results:
Consolidated statement of comprehensive income
Half year Half year Year
ended ended ended
31 March 31 March 30 Sept
2020 2019 2019
Continuing operations GBP000's GBP000's GBP000's
-------------------------------------------------- ----------- ------------- ---------
Revenue 28,172 27,791 56,446
Operating costs (25,597) (25,141) (51,052)
-------------------------------------------------- ----------- ------------- ---------
Adjusted operating profit 3,409 3,484 7,700
Pension charge - GMP equalisation - - (639)
Amortisation of acquired intangibles (834) (834) (1,667)
-------------------------------------------------- ----------- ------------- ---------
Operating profit 2,575 2,650 5,394
Finance income 34 13 34
Finance costs (135) (109) (184)
-------------------------------------------------- ----------- ------------- ---------
Profit before taxation 2,474 2,554 5,244
Taxation Est. (727) Est. (841) (2,149)
-------------------------------------------------- ----------- ------------- ---------
Profit for the financial period 1,747 1,713 3,095
-------------------------------------------------- ----------- ------------- ---------
Discontinued profits (net of tax) - 391 7,079
Profit for the financial period 1,747 2,104 10,174
Other comprehensive income:
Actuarial gains/(losses) on the defined
benefit pension scheme Est. (619) Est. (2,831) (4,559)
Deferred tax effect 118 481 775
Current tax effect Est. 87 Est. 106 314
Total that will not be subsequently reclassified
to income statement (414) (2,244) (3,470)
Exchange differences on translation of
foreign operations (1,483) (446) 308
Total that may be subsequently reclassified
to income statement (1,483) (446) 308
-------------------------------------------------- ----------- ------------- ---------
Other comprehensive income/(expense) for
the period, net of tax (1,897) (2,690) (3,162)
-------------------------------------------------- ----------- ------------- ---------
Total comprehensive income for the period (150) (586) 7,012
-------------------------------------------------- ----------- ------------- ---------
Profit for the period attributable to:
Equity shareholders of the company 1,565 1,931 9,780
Non-controlling interests 182 173 394
-------------------------------------------------- ----------- ------------- ---------
1,747 2,104 10,174
-------------------------------------------------- ----------- ------------- ---------
Total comprehensive income for the period
attributable to:
Equity shareholders of the company (214) (732) 6,620
Non-controlling interests 64 146 392
(150) (586) 7,012
-------------------------------------------------- ----------- ------------- ---------
Basic and diluted earnings per share -
continuing 20.78p 20.35p 32.09p
-------------------------------------------------- ----------- ------------- ---------
Dividends per share 3.75p 3.75p 13.00p
-------------------------------------------------- ----------- ------------- ---------
Dewhurst plc
Consolidated statement of financial position
Half year Half year Year
ended ended ended
31 March 31 March 30 Sept
2020 2019 2019
GBP000's GBP000's GBP000's
------------------------------------------- ---------- ---------- ---------
Non-current assets
Goodwill 9,332 8,505 9,719
Other intangibles 1,995 3,675 2,831
Property, plant and equipment 15,338 13,162 13,225
Deferred tax asset 2,700 2,101 2,198
------------------------------------------- ---------- ---------- ---------
29,365 27,443 27,973
Current assets
Inventories 5,602 6,640 6,010
Trade and other receivables 12,556 13,656 10,993
Cash and cash equivalents 15,097 6,249 16,980
------------------------------------------- ---------- ---------- ---------
33,255 26,545 33,983
------------------------------------------- ---------- ---------- ---------
Total assets 62,620 53,988 61,956
------------------------------------------- ---------- ---------- ---------
Current liabilities
Trade and other payables 8,117 7,890 8,180
Lease liabilities 353 - -
Current tax liabilities 15 304 249
Short-term provisions 300 310 277
------------------------------------------- ---------- ---------- ---------
8,785 8,504 8,706
Non-current liabilities
Retirement benefit obligation 10,615 9,902 10,570
Lease liabilities 1,644 - -
------------------------------------------- ---------- ---------- ---------
Total liabilities 21,044 18,406 19,276
------------------------------------------- ---------- ---------- ---------
Net assets 41,576 35,582 42,680
------------------------------------------- ---------- ---------- ---------
Equity
Share capital 841 840 841
Share premium account 157 157 157
Capital redemption reserve 296 297 296
Translation reserve 909 1,545 2,274
Retained earnings 38,167 31,540 37,847
------------------------------------------- ---------- ---------- ---------
Total attributable to equity shareholders
of the company 40,370 34,379 41,415
------------------------------------------- ---------- ---------- ---------
Non-controlling interests 1,206 1,203 1,265
------------------------------------------- ---------- ---------- ---------
Total equity 41,576 35,582 42,680
------------------------------------------- ---------- ---------- ---------
Dewhurst plc
Consolidated statement of changes in equity
For the period ended 31 March 2020
Share Share Capital Translation Retained Non Total
capital premium redemption reserve earnings controlling equity
account reserve interest
GBP(000) GBP(000) GBP(000) GBP(000) GBP(000) GBP(000) GBP(000)
--------------------------- ----------- --------- ------------- -------------- --------- ------------ --------------
At 30 September 2019 841 157 296 2,274 37,847 1,265 42,680
--------------------------- ----------- --------- ------------- -------------- --------- ------------ --------------
IFRS 16 transition impact
(see notes) - - - - (53) - (53)
At 1 October 2019 841 157 296 2,274 37,794 1,265 42,627
Profit for the period - - - - 1,565 182 1,747
Other comprehensive income
and expense
Exchange differences
on
translation of foreign
operations - - - (1,365) - (118) (1,483)
Actuarial gains/(losses)
on defined benefit
pension
scheme - - - - (619) - (619)
Tax on items taken
directly
to equity (Est.) - - - - 87 - 87
Deferred tax effect - - - - 118 - 118
Total comprehensive income - - - (1,365) 1,151 64 (150)
Dividends paid - - - - (778) (123) (901)
At 31 March 2020 841 157 296 909 38,167 1,206 41,576
--------------------------- ----------- --------- ------------- -------------- --------- ------------ --------------
For the period ended 31 March 2019
Share Share Capital Translation Retained Non Total
capital premium redemption reserve earnings controlling equity
account reserve interest
GBP(000) GBP(000) GBP(000) GBP(000) GBP(000) GBP(000) GBP(000)
--------------------------- ----------- --------- ------------- -------------- ---------- ------------ --------------
At 30 September 2018 842 157 295 1,964 32,693 1,057 37,008
--------------------------- ----------- --------- ------------- -------------- ---------- ------------ --------------
Profit for the period - - - - 1,931 173 2,104
Other comprehensive income
and expense
Exchange differences
on
translation of foreign
operations - - - (419) - (27) (446)
Actuarial gains/(losses)
on defined benefit
pension
scheme - - - - (2,831) - (2,831)
Tax on items taken
directly
to equity (Est.) - - - - 106 - 106
Deferred tax effect - - - - 481 - 481
Total comprehensive income - - - (419) (313) 146 (586)
Shares repurchased (2) - 2 - (82) - (82)
Dividends paid - - - - (758) - (758)
At 31 March 2019 840 157 297 1,545 31,540 1,203 35,582
--------------------------- ----------- --------- ------------- -------------- ---------- ------------ --------------
For the year ended 30 September 2019
Share Share Capital Translation Retained Non Total
capital premium redemption reserve earnings controlling equity
account reserve interest
GBP(000) GBP(000) GBP(000) GBP(000) GBP(000) GBP(000) GBP(000)
--------------------------- ----------- --------- ------------- -------------- ---------- ------------ --------------
At 30 September 2018 842 157 295 1,964 32,693 1,057 37,008
--------------------------- ----------- --------- ------------- -------------- ---------- ------------ --------------
Profit for the year - - - - 9,780 394 10,174
Other comprehensive income
and expense
Exchange differences
on
translation of foreign
operations - - - 310 - (2) 308
Actuarial gains/(losses)
on defined benefit
pension
scheme - - - - (4,559) - (4,559)
Tax on items taken
directly
to equity - - - - 314 - 314
Deferred tax effect - - - - 775 - 775
Total comprehensive income - - - 310 6,310 392 7,012
Share repurchase (1) - 1 - (82) - (82)
Dividends paid - - - - (1,074) (184) (1,258)
At 30 September 2019 841 157 296 2,274 37,847 1,265 42,680
--------------------------- ----------- --------- ------------- -------------- ---------- ------------ --------------
Dewhurst plc
Consolidated cash flow statement
Half year Half year Year
ended ended ended
31 March 31 March 30 Sept
2020 2019 2019
GBP000's GBP000's GBP000's
--------------------------------------------- ---------- ---------- ---------
Cash flows from operating activities
Operating profit - continuing operations 2,575 2,650 5,394
Operating profit - discontinued operations - 521 1,077
--------------------------------------------- ---------- ---------- ---------
Operating profit 2,575 3,171 6,471
Depreciation and amortisation 1,550 1,343 2,857
Additional contributions to pension scheme (552) (666) (1,800)
Exchange adjustments (91) (162) 111
(Profit)/loss on disposal of property,
plant and equipment (16) (14) (13)
--------------------------------------------- ---------- ---------- ---------
3,466 3,672 7,626
(Increase)/decrease in inventories 408 (361) (838)
(Increase)/decrease in trade and other
receivables (1,563) 264 888
Increase/(decrease) in trade and other
payables (63) (295) 617
Increase/(decrease) in provisions 23 6 46
--------------------------------------------- ---------- ---------- ---------
Cash generated from operations 2,271 3,286 8,339
Interest paid (39) - (1)
Tax paid (946) (1,003) (1,911)
--------------------------------------------- ---------- ---------- ---------
Net cash from operating activities 1,286 2,283 6,427
--------------------------------------------- ---------- ---------- ---------
Cash flows from investing activities
Acquisition of business and assets (624) - -
Proceeds on disposal of a subsidiary (net
of cash disposed) - - 7,514
Proceeds from sale of property, plant
and equipment 16 14 57
Purchase of property, plant and equipment (1,158) (4,571) (5,233)
Development costs capitalised - - (41)
Interest received 34 13 34
--------------------------------------------- ---------- ---------- ---------
Net cash generated from/(used in) investing
activities (1,732) (4,544) 2,331
--------------------------------------------- ---------- ---------- ---------
Cash flows from financing activities
Purchase of own shares - (82) (82)
Repayment of lease liabilities (227) - -
Dividends paid (901) (758) (1,258)
Net cash used in financing activities (1,128) (840) (1,340)
--------------------------------------------- ---------- ---------- ---------
Net increase/(decrease) in cash and cash
equivalents (1,574) (3,101) 7,418
--------------------------------------------- ---------- ---------- ---------
Cash and cash equivalents at beginning
of period 16,980 9,440 9,440
Exchange adjustments on cash and cash
equivalents (309) (90) 122
--------------------------------------------- ---------- ---------- ---------
Cash and cash equivalents at end of period 15,097 6,249 16,980
--------------------------------------------- ---------- ---------- ---------
These half-year abbreviated financial statements are unaudited
and do not constitute statutory accounts within the meaning of
Section 435 of the Companies Act 2006. The results for the year
ended 30 September 2019 set out above are abridged. Full accounts
for that year reported under IFRS, on which the auditors of the
Company made an unqualified report have been delivered to the
Registrar of Companies.
The presentation of these Interim Financial Statements is
consistent with the 2019 Financial Statements and its accounting
policies except for the impact of changes in accounting policy
relating to IFRS 16 'Leases' which is disclosed further in the
notes below. Where necessary comparative information has been
reclassified or expanded from the 2019 Interim Financial Statements
to take into account any presentational changes made in the 2019
Financial Statements or in these Interim Financial Statements.
Dewhurst plc
Notes - New Accounting standards and policies
With effect from 1 October 2019 the Group has adopted the
following new accounting standard:
IFRS 16 'Leases'
The Group has adopted IFRS 16 from 1 October 2019 for the first
time and applied the modified retrospective approach. IFRS 16
provides a single on-balance sheet accounting model for lessees
which recognises a right-of-use asset, representing its right to
use the underlying asset, and lease liability, representing its
obligations to make payment in respect of the use of the underlying
asset. The distinction between finance and operating leases for
lessees is removed. Comparatives for the prior period have not been
restated and the adjustments arising from the new leasing standard
are therefore recognised in the opening balance sheet on 1 October
2019 as follows:
1 Oct 2019
GBP000's
---------------------------------------------------------- -----------
Non-current assets
Property, plant and equipment (right of use assets) 2,146
---------------------------------------------------------- -----------
Total assets 2,146
---------------------------------------------------------- -----------
Current liabilities
Lease liabilities (448)
Non-current liabilities
Lease liabilities (1,751)
---------------------------------------------------------- -----------
Total liabilities (2,199)
---------------------------------------------------------- -----------
Total movement in retained earnings as at 1 October 2019 (53)
---------------------------------------------------------- -----------
On adoption of IFRS 16, the Group recognised liabilities for
leases which had been classified as operating leases under previous
accounting standards. The lease liability has been measured at the
present value of the remaining lease payments, discounted using the
incremental borrowing rate as at 1 October 2019. The weighted
average lessee's incremental borrowing rate applied to the lease
liabilities on 1 October 2019 was 3.5%.
Practical expedients applied
In applying IFRS 16 for the first time, the Group has used the
following practical expedients permitted by the standard:
- Relied on previous assessments of whether leases are
onerous
- Excluded initial direct costs for the measurement of
right-of-use assets at the date of the initial application
- Applied the transition relief to long-term leases ending
within 12 months of the date of initial application of the
standard
- Applied the transition relief exempting short-term leases and
low value leases.
- Used hindsight in determining the lease term where the
contract contains options to extend or terminate the lease
1 Oct 2019
GBP000's
------------------------------------------------------------------ -----------
Operating lease commitments as disclosed at 30 September
2019 1,747
Reconciling items
- Effect of discounting (at incremental borrowing rate
as at 1 October 2019) (286)
- Long-term leases ending within 12 months recognised
on a straight-line basis as expense (27)
- Low-value leases recognised on a straight-line basis
as expense (113)
- Recognition difference on new leases and extension assumptions 878
------------------------------------------------------------------ -----------
Lease liability recognised as at 1 October 2019 2,199
------------------------------------------------------------------ -----------
Impact on the income statement
The impact on the income statement for the six months ended 31
March 2020 is to increase operating profit by approximately GBP37k
and increase finance costs by GBP39k resulting in a decrease in
profit before tax of GBP2k. The impact on the income statement for
the year ended 30 September 2020 is expected to increase operating
profit by approximately GBP74k and increase finance costs by GBP78k
resulting in a decrease in profit before tax of GBP4k.
I mpact on the cash flow statement
There has been a change to the classification of cash flows in
the cash flow statement with operating lease payments previously
categorised as net cash used in operations now being split between
the principal element, included as repayment of lease liabilities
within financing activities and the interest element, included as
interest paid. In the six months to 31 March 2020 there are GBP266k
of lease payments within financing activities comprising GBP227k of
repayment of lease liabilities and GBP39k of interest paid.
Accounting policy
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, comprising the initial amount of the lease
liability plus any initial direct costs incurred and an estimate of
costs to restore the underlying asset, less any lease incentives
received. The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to the earlier
of the end of the useful life of the asset or the end of the lease
term.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the incremental borrowing rate. The lease
liability is measured at amortised cost using the effective
interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or a rate or a
change in the Group's assessment of whether it will exercise an
extension or termination option. When the lease liability is
remeasured, a corresponding adjustment is made to the right-of-use
asset.
Payments associated with long-term leases with less than 12
months from the date of application, short-term leases or low-value
assets are recognised on a straight-line basis as an expense in the
income statement. Short-term leases are leases with a lease term of
12 months or less. Low-value assets mostly comprise of IT equipment
and small items of office furniture.
For further details please contact:
Dewhurst Plc Tel: +44 (0) 208 744 8200
Richard Dewhurst, Chairman
Jared Sinclair, Finance Director
www.dewhurst.plc.uk
Cantor Fitzgerald Europe Tel: +44 (0) 207 894 7000
David Foreman / Will Goode (Corporate Finance)
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END
IR GZGGVFFNGGZM
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