TIDMELCO
RNS Number : 8012S
Eleco PLC
29 September 2014
29 September 2014
ELECO plc
("ELECO" or "the Company")
Results for the six months ended 30 June 2014
"ELECO recovery begins: refinanced, re-banked and back to
profit"
Performance from Continuing Operations
-- Group turnover from continuing operations up was 4% higher at
GBP8.6m (2013 restated: GBP8.3m) despite an adverse foreign
exchange impact of GBP497,000 due to the weakness of the Euro and
Swedish Krona against Sterling in the period.
-- Group operating profit of continuing operations was
GBP676,000 (2013: restated: GBP399,000), an increase of 69 per cent
after development costs expensed of GBP1.1m (2013: GBP1.3m);
development costs totalling GBP313,000 were capitalised in the
period, pursuant to IAS 38 (2013: Nil).
-- Profit before tax of continuing operations for the six month
period was substantially higher at GBP530,000 (2013 restated:
GBP230,000).
-- Earnings per share of continuing operations, basic and
diluted were 0.7p (2013 restated: 0.3p).
-- EBITDA from continuing operations was GBP1.0m (2013 restated:
GBP0.7m), an increase of 43 per cent.
Refinancing and Re-banking
-- 3,028,405 Ordinary Shares of 10p each of ELECO were issued by
way of subscription at 20.75p per share in June 2014 and raised
GBP628,394 of equity capital. An additional 11,180,483 Ordinary
Shares of 10p each of ELECO were subsequently issued by way of
subscription also at 20.75p each and raised GBP2,319,948 of equity
capital. The total number of Ordinary Shares issued by share
subscription was 14,208,888 and the total amount raised was
GBP2,948,342, which was used to reduce bank borrowings.
-- The refinancing and re-banking of ELECO's UK operations with
Barclays Bank was completed in the period under review on
significantly more favourable terms than our previous banking
arrangements with Lloyds Banking Group and as a consequence, ELECO
is already benefiting from substantially reduced financing costs
due to its significantly reduced gearing and cost of funds.
-- Group net bank borrowings at 30 June 2014 were GBP3.3m (31
December 2013: GBP4.3m) and are forecast to reduce to GBP2.2m on 1
October 2014.
-- Proposals for the necessary restructuring of ELECO's balance
sheet, which would be an essential pre-requisite to permitting a
resumption of dividend payments when appropriate, will shortly be
put to shareholders for their approval.
Executive Chairman, John Ketteley commented:
"The pressures of having to deal with the restructuring and
refinancing of ELECO are now behind us and ELECO has emerged as a
profitable specialist provider of software and technology to the
construction industry in the UK, Germany and Sweden, where its
development teams and operational centres of excellence are
located."
"I am pleased to say that with the support of our shareholders,
together with the positive approach of Barclays Bank, we have been
able to complete our restructuring and re-banking, which has
significantly strengthened our finances. We have also put
considerable effort into improving our software offering across the
Group. In the UK, we are launching the Asta's new Powerproject BIM
programme, which has been very well received in pre-launch
demonstrations and trials; in Germany we shall shortly be marketing
Arcon(R) Next Generation, a 3D architectural visualisation software
programme, which has a 3D printing capability; and in Sweden,
Consultec ByggProgram is nearing completion of a comprehensive
overhaul and upgrade of its market leading Bidcon(R),estimation
software programme. Sentiment in the UK market for our software
products continues to improve; and our German and Swedish
colleagues have recently reported some improvement in sentiment in
their respective markets."
"Despite the difficulties that confronted the Group in the past
few years, our software interests have been consistently profitable
and following the successful restructuring and refinancing of the
Group earlier this year and the positive approach we received from
our bankers, Barclays Bank, together with support from our
shareholders, customers and employees, I believe that ELECO is now
well placed to realise its full potential."
For further information please
contact:
ELECO plc http://www.eleco.com
John Ketteley, Executive Chairman Tel: 0207 422 8000
Nick Caw, Chief Executive Tel: 0207 422 8000
Peckwater PR
Tarquin Edwards Tel: 07879 458 364 / 0207 808
7340
Cenkos Securities plc
Nicholas Wells / Callum Davidson Tel: 0207 397 8900
Chairman's statement
Revenue from our software interests amounted to GBP8.6m in the
six months ended 30 June 2014 compared with GBP8.3m for the
comparable period last year, a rise of 4 per cent., despite a
significant weakening in the exchange rate of the Swedish Krona and
the Euro against Sterling in the period under review. Adjusting for
the adverse foreign exchange impact of GBP497,000, Group revenue at
constant exchange rates would have been GBP9.1m.
Software development costs in the period under review increased
to GBP1.39m, of which GBP313,000 of costs were capitalised in
compliance with International Accounting Standard 38. Of the amount
capitalised GBP252,000 relates to our latest Asta Powerproject BIM
software and the balance of GBP61,000 relates to the Arcon Next
Generation architectural 3D visualisation software. The Asta
Powerproject BIM software programme has already been extensively
demonstrated and reviewed by Asta User Groups across the UK. It has
been very well received and will be launched on the market by Asta
in the last quarter of 2014. I would like to thank all my
colleagues who have been involved in the development of this
outstanding programme for their contribution to the project and its
development. It is anticipated that Arcon Next Generation
architectural 3D visualisation software will be launched later this
year and both programmes will be demonstrated at the upcoming Bau
Show in Munich.
It was vital that such an important new product would satisfy
our customers' requirements and therefore, before starting its
development, Asta took extensive soundings from our customers to
ascertain exactly what they needed in the new Asta Powerproject BIM
programme in the new "BIM Environment". Thus Asta's UK customers
and partners played a very important role in the development of
Asta Powerproject BIM and I very much hope that Asta will have
succeeded in meeting their requirements. I would also like to take
this opportunity to thank those customers and partners, who
provided Asta with constructive comments, views and support
throughout the Asta Powerproject BIM development process, for their
invaluable input. Likewise, I would like also to thank our German
colleagues and customers for their respective contributions to the
development of Arcon Next Generation, the latest version of this
market leading 3D architectural visualisation software in Germany,
which we shall also be launching in other markets worldwide as well
as in its home market.
Profits in our UK software operations in the period under review
were higher than those in the comparable period last year, although
profits in the period of our Swedish and German-based software
businesses were lower partly due to weaker demand in their
respective markets, and partly due to the continuing weakness of
the Swedish Krona and the Euro against Sterling in the period.
Group operating profit in the period under review amounted to
GBP676,000 (2013: GBP399,000) after development cost expensed of
GBP1.1m (2013: GBP1.3m). Pursuant to IAS 38, product development
costs of GBP313,000 in the period were capitalised (2013: nil).
Group Operating profit at constant exchange rates would have been
GBP687,000 compared with Group operating profit as reported of
GBP676,000.
Refinancing
I am pleased to report that the UK Group's re-banking with
Barclays Bank was successfully completed during the period under
review. The new facilities provide ELECO with a platform from which
its businesses can grow in line with ELECO's strategy. In addition,
the share subscription process was completed in August and raised a
total of GBP2.95m of additional equity funding from the issue of
new shares. To date, these funds have been used to reduce the level
of the Group's borrowings and its financing costs.
Balance Sheet Reconstruction Proposal
Shareholders will shortly receive a Notice of a General meeting
setting out proposals for a Scheme to restructure the Company's
Balance Sheet and reserves, for their consideration, and if thought
fit, their approval. Subject to approval by the necessary majority
of Shareholders in General Meeting, the Scheme will then be
submitted to the Court for its approval, which if granted, would
permit the resumption of dividends payments, as and when
appropriate,
Dividends
As mentioned above, the Board will not be in a position to
declare or recommend the payment of dividends until the Balance
Sheet Reconstruction Proposals have been approved by Shareholders
and approved by the Court. However, on the basis that the proposals
are approved and become effective, it would be the Board's
intention to resume the payment of dividends when it considers it
to be appropriate and prudent to do so. It would be the Board's
intention on the resumption of dividend payments to indicate the
policy that it intends to adopt regarding the future recommendation
or payment of dividends to shareholders.
ELECO Retirement and Benefits Scheme
In the period since my last statement, the Group has
de-recognised the pension scheme liability related to the ELECO
Retirement and Benefits Scheme ("ERBS") and related deferred tax
asset from the Group balance sheet, which has resulted in an
increase in the Group net assets of GBP6.9m compared to 31 December
2013.
The ERBS is currently in an assessment period with the Pension
Protection Fund ("PPF") after which, in the absence of unforeseen
circumstances, the ERBS would transfer to the PPF and members of
the ERBS would be entitled to PPF compensation. The ERBS liability
is recognised as a contingent liability as at 30 June 2014, pending
confirmation that the ERBS has completed its PPF assessment period
and the PPF has assumed liability for paying compensation to the
members.
New Director
I would like to take this opportunity to welcome Nick Caw, as
our newly appointed Chief Executive Officer, who joins us from
Microsoft UK. He previously worked with us at ELECO for a number of
years and during that period, he was an important contributor to
the formation of our successful software interests. We welcome him
back and wish him well in his endeavours.
Outlook
The pressures of having to deal with the restructuring and
refinancing are now behind us and ELECO has emerged as a profitable
specialist provider of software and technology to the construction
industry in the UK, in Germany and in Sweden, where its development
teams and operational centres of excellence are located. Sentiment
in our market in the UK continues to improve and our German and
Swedish colleagues have also recently reported some improvement in
sentiment in their respective markets.
Despite the difficulties that confronted the Group in the past
few years, our software interests have been consistently profitable
and following the successful restructuring and refinancing of the
Group earlier this year and the positive response we received from
our bankers, Barclays Bank, together with support from our
shareholders, customers and employees, I believe that ELECO is now
well placed to realise its full potential.
John Ketteley
Executive Chairman
29 September 2014
Condensed Consolidated Income Statement
for the financial period ended 30 June 2014
six months to 30 June Year Ended
-----------------------------
2013 31 December
(unaudited
2014 - (restated)
(unaudited) restated) 2013
Notes GBP'000 GBP'000 GBP'000
--------------------------------- ------ ------------ ----------- ------------
Continuing operations
Revenue 3 8,617 8,299 16,318
Cost of
sales (1,356) (1,215) (2,189)
Gross profit 7,261 7,084 14,129
Administrative
expenses (6,585) (6,685) (13,148)
Profit from operations 4 676 399 981
Finance income 5 2 3 10
Finance
cost 5 (142) (167) (367)
Profit before tax 536 235 624
Tax (97) (57) (174)
Profit for the financial
period from continuing
operations 439 178 450
Profit/(loss) for the financial
period from discontinued
operations 6 5,960 (3,644) (10,668)
Profit/(Loss) for the financial
period 6,399 (3,466) (10,218)
--------------------------------- ------ ------------ ----------- ------------
Attributable to:
Equity holders
of the parent 6,399 (3,466) (10,218)
--------------------------------- ------ ------------ ----------- ------------
Profit per share - basic
and diluted
Continuing operations 7 0.7 p 0.3 p 0.8 p
Discontinued operations
before exceptionals 7 (0.4) p (6.1) p (17.9) p
0.3 p (5.8) p (17.1) p
Discontinued operations
exceptionals 7 10.4 p - p - p
Total operations 10.7 p (5.8) p (17.1) p
--------------------------------- ------ ------------ ----------- ------------
Condensed Consolidated Statement of Comprehensive Income
for the financial period ended 30 June 2014
6 months to 30 June
-------------------------
2013 Year Ended
(unaudited
2014 - 31 December
(unaudited) restated) 2013
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ----------- ------------
Profit/(loss)
for the period 6,399 (3,466) (10,218)
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss:
Actuarial loss on retirement
benefit obligation - (354) (787)
Deferred tax on retirement
benefit obligation - 81 159
Other gains/(losses) on retirement
benefit obligation - 303 (350)
Disposal of subsidiaries (162) - -
(162) 30 (978)
Items that will be reclassified
subsequently to profit or loss:
Translation differences
on foreign operations 39 2 (7)
Other comprehensive income
net of tax (123) 32 (985)
Total comprehensive income for
the period 6,276 (3,434) (11,203)
-------------------------------------- ------------ ----------- ------------
Attributable
to:
Equity holders
of the parent 6,276 (3,434) (11,203)
-------------------------------------- ------------ ----------- ------------
Condensed Consolidated Statement of Changes in Equity
for the financial period ended 30 June 2014
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
At 1 January 2014 6,066 6,396 4,086 (221) (358) (18,322) (2,353)
Issue of share capital 303 325 - - - - 628
Transactions with owners 303 325 - - - - 628
--------- --------- --------- ------------ --------- ---------- ---------
Profit for the period - - - - - 6,399 6,399
Other comprehensive income:
Disposal of subsidiaries - - - - - (162) (162)
Exchange differences on
translation of net investments
in foreign operations - - - 39 - - 39
Total comprehensive income
for the period - - - 39 - 6,237 6,276
--------- --------- --------- ------------ --------- ---------- ---------
At 30 June 2014 (unaudited) 6,369 6,721 4,086 (182) (358) (12,085) 4,551
========= ========= ========= ============ ========= ========== =========
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
At 1 January 2013 6,066 6,396 7,371 (214) (358) (10,411) 8,850
Transactions with owners - - - - - - -
--------- --------- --------- ------------ --------- ---------- ---------
Loss for the period - - - - - (3,466) (3,466)
Other comprehensive income:
Actuarial loss on defined
benefit pension scheme
net of tax and other scheme
losses - - - - - 30 30
Exchange differences on
translation of net investments
in foreign operations - - - 2 - - 2
Total comprehensive income
for the period - - - 2 - (3,436) (3,434)
--------- --------- --------- ------------ --------- ---------- ---------
At 30 June 2013 (unaudited) 6,066 6,396 7,371 (212) (358) (13,847) 5,416
========= ========= ========= ============ ========= ========== =========
Share Share Merger Translation Other Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- --------- ------------ --------- ---------- ---------
At 1 January 2013 6,066 6,396 7,371 (214) (358) (10,411) 8,850
Reclassification of merger
reserve on business disposals - - (3,285) - - 3,285 -
Transactions with owners - - (3,285) - - 3,285 -
--------- --------- --------- ------------ --------- ---------- ---------
Loss for the period - - - - - (10,218) (10,218)
Other comprehensive income:
Actuarial loss on defined
benefit pension scheme
net of tax and other scheme
losses - - - - - (978) (978)
Exchange differences on
translation of net investments
in foreign operations - - - (7) - - (7)
Total comprehensive income
for the period - - - (7) - (11,196) (11,203)
--------- --------- --------- ------------ --------- ---------- ---------
At 31 December 2013 6,066 6,396 4,086 (221) (358) (18,322) (2,353)
========= ========= ========= ============ ========= ========== =========
Condensed Consolidated Balance Sheet
at 30 June 2014
30 June
--------------------------
2014 2013 31 December
(unaudited) (unaudited) 2013
Notes GBP'000 GBP'000 GBP'000
------------------------------- ------ ------------ ------------ ------------
Non-current assets
Goodwill 10,620 12,676 10,690
Other intangible
assets 1,601 1,743 1,462
Property, plant and equipment 617 6,218 589
Deferred tax assets 9 - 1,538 1,548
Total non-current assets 12,838 22,175 14,289
------------------------------- ------ ------------ ------------ ------------
Current assets
Inventories 23 903 17
Trade and other receivables 2,592 5,324 4,447
Current tax assets 116 157 281
Cash and cash equivalents 1,127 1,170 770
Other current assets - 800 474
Assets of disposal
group 764 - 3,459
Total current assets 4,622 8,354 9,448
------------------------------- ------ ------------ ------------ ------------
Total assets 17,460 30,529 23,737
------------------------------- ------ ------------ ------------ ------------
Current liabilities
Bank overdraft 8 (3,329) (3,425) (3,783)
Borrowings 8 (1,125) (400) (1,325)
Obligations under finance
leases (222) (234) (247)
Trade and other payables (2,034) (4,466) (3,214)
Provisions (302) (255) (786)
Current tax liabilities (5) (111) (49)
Accruals and deferred
income (5,157) (5,449) (5,643)
Liabilities of disposal
group - - (2,694)
Total current liabilities (12,174) (14,340) (17,741)
------------------------------- ------ ------------ ------------ ------------
Non-current liabilities
Borrowings 8 - (3,600) -
Obligations under finance
leases (265) (204) (195)
Deferred tax liabilities (192) (122) (149)
Non-current provisions (177) (70) (195)
Other non-current liabilities (101) (94) (72)
Retirement benefit obligation 9 - (6,683) (7,738)
Total non-current liabilities (735) (10,773) (8,349)
------------------------------- ------ ------------ ------------ ------------
Total liabilities (12,909) (25,113) - (26,090)
------------------------------- ------ ------------ ------------ ------------
Net assets 4,551 5,416 (2,353)
=============================== ====== ============ ============ ============
Equity
Share capital 6,369 6,066 6,066
Share premium account 6,721 6,396 6,396
Merger reserve 4,086 7,371 4,086
Translation reserve (182) (212) (221)
Other reserve (358) (358) (358)
Retained earnings (12,085) (13,847) (18,322)
Equity attributable to shareholders
of the parent 4,551 5,416 (2,353)
======================================= ============ ============ ============
Condensed Consolidated Statement of Cash Flows
for the financial period ended 30 June 2014
6 months to 30
June Year Ended
--------------------------
2014 2013 31 December
(unaudited) (unaudited) 2013
Notes GBP'000 GBP'000 GBP'000
------------------------------------ ------ ------------ ------------ ------------
Cash flows from operating
activities
Profit/(loss) before tax (including
discontinued operations) 306 (1,256) (4,751)
Net finance costs 146 390 622
Depreciation and impairment
charge 101 493 869
Amortisation and impairment
charge 245 243 514
Loss on sale of property,
plant and equipment 3 169 210
(Decrease)/increase in provisions (501) (8) 648
Cash generated/(used) in operations
before working capital movements 300 31 (1,888)
Decrease in trade and other
receivables 1,019 276 769
Increase in inventories and
work in progress (8) (578) (4)
(Decrease)/increase in trade and
other payables (172) 501 (234)
Net (Increase)/decrease in discontinued
operations working capital (101) - 1,730
Cash generated/(used) in
operations 1,038 230 373
Interest
paid (174) (90) (297)
Interest received 3 3 2
Net income tax received/(paid) 57 (208) (464)
Net cash inflow/(outflow) from operating
activities 924 (65) (386)
-------------------------------------------- ------------ ------------ ------------
Net cash used in investing
activities
Purchase of intangible
assets (391) (48) (78)
Purchase of property, plant
and equipment (17) (59) (287)
Acquisition of subsidiary
undertakings net of cash
acquired - (82) (110)
Proceeds from sale of property,
plant, equipment and intangible
assets 15 503 3,047
Sale of businesses net of
expenses - 160 274
Net cash (outflow)/inflow from investing
activities (393) 474 2,846
-------------------------------------------- ------------ ------------ ------------
Net cash used in financing
activities
Proceeds from new
bank loan - 4,000 4,000
Repayment of bank
loans (200) (2,925) (5,600)
Repayments of obligations under
finance leases (91) (155) (259)
Issue of share capital 7 628 - -
Net cash inflow/(outflow) from financing
activities 337 920 (1,859)
-------------------------------------------- ------------ ------------ ------------
Net increase in cash and
cash equivalents 868 1,329 601
------------------------------------ ------ ------------ ------------ ------------
Cash and cash equivalents at beginning
of period (3,013) (3,613) (3,613)
Effects of changes in foreign
exchange rates (57) 29 (1)
Cash and cash equivalents
at end of period (2,202) (2,255) (3,013)
------------------------------------ ------ ------------ ------------ ------------
Cash and cash equivalents
comprise:
Cash and short term
deposits 1,127 1,170 770
Bank overdrafts (3,329) (3,425) (3,783)
(2,202) (2,255) (3,013)
------------------------------------ ------ ------------ ------------ ------------
Notes to the Condensed Consolidated Interim Financial
Statements
1. General information
The company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is 66
Clifton Street, London, EC2A 4HB.
The company is listed on the Alternative Investment Market
("AIM")
The condensed consolidated interim financial information does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The Group's consolidated financial statements
for the year ended 31 December 2013 have been filed and the
auditors' report was not qualified and did not contain a statement
under section 498(2) or section 498(3) of the Companies Act
2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the
six months to 30 June 2014 have been prepared in accordance with
the accounting policies which will be applied in the twelve months
financial statements to 31 December 2014. These accounting policies
are drawn up in accordance with International Accounting Standards
(IAS) and International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board and as
adopted for use in the European Union that are effective at 30 June
2014.
The condensed consolidated interim financial statements are
unaudited and have not been subject to review. They do not include
all the information and disclosures required in the annual
financial statements, and therefore should be read in conjunction
with the Group's published financial statements as at 31 December
2013.
In accordance with IFRS 5, the prior year comparative figures
for the six months to 30 June 2013 and the year ended 31 December
2013 have been restated to reflect discontinued operations reported
in the Group's consolidated financial statements for the six months
to 30 June 2014. The comparative figures for the year ended 31
December 2013 are not the Company's statutory accounts for that
period but have been extracted from these accounts.
The Directors, having considered the Group's current financial
resources, have concluded that they are adequate for the Group's
present requirements. Thus the condensed consolidated interim
financial information has been prepared on the going concern
basis.
New accounting standards and interpretations are effective for
the first time in the current period but have had no impact on the
results or financial position of the Group. Furthermore, new
standards, new interpretations and amendments to standards and
interpretations that have been issued but are not effective for the
current period have not been adopted early.
Estimates
Application of the Group's accounting policies in preparing the
condensed consolidated interim financial statements requires
management to make judgements and estimates that affect the
reported amount of assets and liabilities, revenues and expenses.
Actual results may ultimately differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty have changed to those that applied to the
consolidated financial statements for the year ended 31 December
2013. This change relates to de-recognition of the retirement
benefit obligation and the associated deferred tax asset during the
six months to 30 June 2014.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
provided on page 19 of the 2013 report and accounts. The Board
considers these risks and uncertainties are still relevant to the
current financial year and the impact of changes in the UK economy
is reviewed in the Chairman's Statement contained in this
report.
3. Revenue
Revenue from continuing operations disclosed in the income
statement is analysed as follows:
Year ended
six months to 30 June 31 December
------------------------
2014 2013 2013
GBP'000 GBP'000 GBP'000
----------------------------------- ----------- ----------- ------------
Licence sales 2,246 2,033 4,003
Recurring maintenance and support
revenue 3,657 3,683 7,319
Services income 2,714 2,583 4,996
8,617 8,299 16,318
----------- ----------- ------------
4. Segmental information
Operating segments
The Group comprises of software business activity only and as
such the information is presented in line with management
information.
Year ended
six months to 30 June 31 December
------------------------
2014 2013 2013
Software Software Software
GBP'000 GBP'000 GBP'000
Revenue 8,617 8,299 16,318
------------------------------- ----------- ----------- ------------
Adjusted operating profit 2,001 1,861 3,955
Product development (1,080) (1,265) (2,598)
Amortisation of intangible
assets (245) (197) (376)
Operating profit 676 399 981
Net finance cost (140) (164) (357)
Segment profit before
tax 536 235 624
Tax (97) (57) (174)
-------------------------------
Segment profit after
tax 439 178 450
------------------------------- ----------- ----------- ------------
Development costs capitalised (313) - -
------------------------------- ----------- ------------
Total development costs (1,393) (1,265) (2,598)
------------------------------- ----------- ----------- ------------
Development project costs are expensed as incurred unless they
meet the accounting policy requirements for capitalisation. The
projects capitalised in the six months to 30 June 2014 are
explained in the Chairman's Statement and the accounting policy
requirements are set out on page 34 of the 2013 report and
accounts.
Geographical segments
Segment revenue by geographical segment represents revenue from
external customers based on the geographical location of the
customer.
Year ended
six months to 30 June 31 December
------------------------
2014 2013 2013
GBP'000 GBP'000 GBP'000
---------------- ----------- ----------- ------------
UK 2,124 1,800 3,598
Scandinavia 4,350 4,364 8,333
Germany 1,111 1,215 2,428
Rest of Europe 829 768 1,666
Rest of World 203 152 293
8,617 8,299 16,318
----------- ----------- ------------
5. Net finance (cost)/income
Finance income and costs from continuing operations is set out
below:
Year ended
six months to 30
June 31 December
-------------------
2014 2013 2013
GBP'000 GBP'000 GBP'000
------------------------------------- --------- -------- ------------
Finance income
Bank and other interest receivable 2 3 10
Finance costs
Bank overdraft and loan interest (134) (156) (350)
Finance leases and hire purchase
contracts (8) (11) (17)
Total net finance
cost (140) (164) (357)
------------------------------------- --------- -------- ------------
6. Discontinued operations
Non-recurring corporate overhead costs which are attributable to
the restructuring of the Group in the six months to 30 June 2014
are reported under discontinued operations.
The de-recognition of the pension scheme liability related to
the he ELECO Retirement and Benefits Scheme (ERBS) and the
associated deferred tax is reported under discontinued operations
as an exceptional item. Further information on the ERBS is set out
in note 9 and on page 51 of the 2013 report and accounts.
The results from discontinued operations which have been
included in the income statement are set out below:
Year ended
6 months to 30 June 31 December
----------------------
2014 2013 2013
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ---------- ------------
Revenue - 8,391 16,144
Cost of sales - (7,219) (13,154)
Gross profit - 1,172 2,990
Distribution costs - (694) (1,211)
Administrative expenses (224) (1,858) (4,524)
Other operating costs - (268) (1,279)
Loss on re-measurement - - (1,471)
Operating loss (224) (1,648) (5,495)
Finance cost (6) (228) (264)
loss before tax (230) (1,876) (5,759)
Taxation on discontinued operations - - 26
Loss for the period from discontinued
operations (230) (1,876) (5,733)
--------------------------------------- ---------- ---------- ------------
Loss on business disposals
after tax - (1,768) (4,935)
--------------------------------------- ---------- ---------- ------------
Loss for the period from discontinued
operations before exceptionals (230) (3,644) (10,668)
--------------------------------------- ---------- ---------- ------------
Exceptional items net of tax 6,190 - -
Net profit/(loss) for the period
from discontinued operations 5,960 (3,644) (10,668)
======================================= ========== ========== ============
The net profit from de-recognition of the pension scheme
liability related to the ERBS and associated deferred tax included
in the income statement is set out below:
Year ended
six months to 30 June 31 December
------------------------
2014 2013 2013
GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ------------
Retirement benefit obligation 7,738 - -
Profit before tax 7,738 - -
Deferred
tax (1,548) - -
Profit after tax 6,190 - -
------------------------------ ----------- ----------- ------------
7. Earnings per share
The calculations of the earnings per share are based on the
total loss after tax attributable to ordinary equity shareholders
of the Company and the weighted average number of shares in issue
for the reporting period.
The impact of de-recognition of the pension scheme liability and
associated deferred tax in the period on the calculation of the
earnings per share is reported as an exceptional item in the table
below.
Year ended
six months to 30 June 31 December
----------------------------------
2014 2013 2013
-------------------------------------- ------------- --------------- ----------------
Continuing operations GBP439,000 GBP178,000 GBP450,000
Discontinued operations before
exceptionals GBP(230,000) GBP(3,644,000) GBP(10,668,000)
GBP209,000 GBP(3,466,000) GBP(10,218,000)
Discontinued operations exceptionals GBP6,190,000 - -
-------------
Total operations profit/(loss)
after taxation GBP6,399,000 GBP(3,466,000) GBP(10,218,000)
-------------------------------------- ------------- --------------- ----------------
Weighted average number of
shares in issue in the period 59,812,119 59,761,646 59,761,646
Dilutive effect
of share options - - -
Number of shares for diluted
earnings per share 59,812,119 59,761,646 59,761,646
-------------------------------------- ------------- --------------- ----------------
Earnings/(loss) per share -
basic and diluted
Continuing operations 0.7 p 0.3 p 0.8 p
Discontinued operations before
exceptionals (0.4) p (6.1) p (17.9) p
0.3 p (5.8) p (17.1) p
-------------------------------------- ------------- --------------- ----------------
Discontinued operations exceptionals 10.4 p - p - p
-------------------------------------- ------------- --------------- ----------------
Total operations 10.7 p (5.8) p (17.1) p
-------------------------------------- ------------- --------------- ----------------
On 28 June 2014, 3,028,405 new ordinary shares were issued at a
price of 20.75p per share. This was the first stage of two share
subscriptions and raised GBP628,000. There were no outstanding
share options at 30 June 2014 and therefore no dilution effect on
the basic earnings per share.
8. Borrowings
The bank loans and overdrafts are repayable as follows:
at 30 June at 30 June at 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
In one year
or less 4,454 3,825 5,108
Between one and two
years - 400 -
Between two and five
years - 3,200 -
More than five years - - -
4,454 7,425 5,108
---------------------- ----------- ----------- ---------------
9. Retirement benefit obligation
ELECO plc recently operated one defined benefit scheme in the
UK, the ELECO Retirement and Benefits Scheme (ERBS).
On 6 January 2014, an Administrator was appointed to Bell &
Webster Concrete Limited, the last remaining trading Statutory
Employer of the Pension Scheme. On 9 June 2014 the Official
Receiver was appointed to the other dormant companies which were
Statutory Employers of the Pension Scheme and these companies
together with Bell & Webster Concrete Limited are no longer
consolidated in the results of the ELECO Group at 30 June 2014.
Consequently, the pension scheme liability attributable to all
these companies together with the associated deferred tax has been
de-recognised from the Group balance sheet at 30 June 2014 and
reported in discontinued operations on the income statement.
Further information on the ERBS is set out on page 51 of the 2013
report and accounts.
10. Contingent liabilities
It is the Group's policy to make specific provisions at the
balance sheet date for all liabilities which, in the opinion of the
Directors, represent a present obligation and outflow of resources
to be probable at the balance sheet date.
The ERBS is currently in an assessment period with the Pension
Protection Fund (PPF) after which, in the absence of unforeseen
circumstances, the ERBS would transfer to the PPF and members of
the ERBS would be entitled to PPF compensation. The ERBS liability
is recognised as a contingent liability at 30 June 2014, pending
confirmation that the ERBS has completed its PPF assessment period
and the PPF has assumed liability for paying compensation to the
members.
The Directors have considered all the facts surrounding the
de-recognition of the pension scheme together with open claims and
any pending litigation against the Group at 30 June 2014 and
concluded that no material loss is likely to accrue from any such
un-provided claims.
11. Related Party Disclosures
Transactions between Group undertakings, which are related
parties, have been eliminated on consolidation and are not
disclosed in this note.
The Directors of the Company had no material transactions with
the Company during the six months to 30 June 2014, other than a
result of service agreements. An amount of GBP18,000 (2013:
GBP18,000) was paid to JHB Ketteley &Co Limited under a lease
for occupation by the Group of 66 Clifton Street, London, EC2A 4HB
and GBP3,000 (2013: GBP3,000) for a contribution to the office
costs at Burnham-on-Crouch.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR MMGZLMRRGDZZ
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