TIDMHYD
RNS Number : 3413Y
Hydro International PLC
08 September 2015
08 September
Embargoed until 07:00
Hydro International plc
("Hydro" or the "Group" or the "Company")
Unaudited Interim Results
Hydro International (AIM: HYD), a leading provider of
environmentally sustainable and innovative products and services
for the control and treatment of water, announces its unaudited
interim results for the six months ended 30 June 2015.
Financial Highlights
2015 2014
Group revenue GBP17.4m GBP13.1m
Adjusted operating
profit margin * 4.5% 0.7%
Adjusted profit before GBP0.80m GBP0.09m
taxation *
Profit before taxation GBP0.73m GBP0.02m
Net cash ** GBP2.8m GBP1.4m
------------------------ --------- ---------
* excluding amortisation of acquired intangible assets
** cash and cash equivalents, less borrowings
Operational Highlights
-- Financial improvement in H1 driven by positive trading
conditions in the Stormwater divisions and delivery against a
strong opening order book in Americas Wastewater
-- AMEA division secured GBP2.0m Vortex Drop(TM) Shaft order for
the major Doha Industrial Area Development project in Qatar
-- Delays in the award of major Wastewater projects impacts
order intake across the Group, particularly in the UK through the
transition from AMP5 to AMP6
-- Profitable growth funding the Group's ongoing programme of
strategic investments, including:
- Continuing expansion of the Group's service capability in core
markets, including the acquisition of the operating assets and
brand of Settled Solids Management in Americas Wastewater
- Continuing extension of the Group's global product range
- Continuing recruitment to enhance organisational competence
-- Net cash increased as working capital tied up in long-term projects released
Ian Griffiths, Chairman of Hydro International plc,
commented:
"The 2015 interim results reflect the continued progress being
made with the implementation of the Group's strategy, including a
programme of investments aimed at improving our systems and
business processes and bringing in high-quality people to deliver
our strategy on the ground."
Michael Jennings, Chief Executive of Hydro International plc,
further commented:
"Profitable growth in the UK and US has underpinned the results
achieved with both the Americas divisions achieving record sales
and profit for the period. Our growing presence in Asia, Middle
East and Africa (AMEA) is also starting to deliver with strong
order intake in H1.
The Group's steadily improving financial performance, even while
investment continues, gives confidence for the full year outlook as
well as for growth prospects for 2016 and beyond."
For further information please contact:
Hydro International Arden Partners Newgate Capital
plc plc Markets
Tel.+44 (0)1275 Tel. +44 (0)20 Tel. +44 (0)20
878371 7614 5917 7653 9850
Michael Jennings, Steven Douglas Tim Thompson
Chief Executive
Tony Hollox, Chief James Felix Robyn McConnachie
Financial Officer
Bob Huxford
About Hydro International
Hydro International plc (AIM: HYD) (Hydro) is a global supplier
of environmentally sustainable products and innovative solutions
for the control and treatment of stormwater, wastewater and
combined sewer overflows. Hydro's products use a range of advanced
technologies including award-winning advanced vortex technology.
Headquartered in Clevedon, North Somerset, Hydro also operates in
the UK from offices in Ely, Cambridgeshire, as well as across the
US from bases in Portland, Maine and Hillsboro, Oregon. The Group
has a growing presence outside its core North American and UK
markets in territories including: Ireland, the Middle East, Mexico,
Brazil, Russia, the European Union, China, Malaysia, Singapore,
Korea, Australia and New Zealand.
Please visit the website for further information
www.hydro-int.com.
Interim Management Report to the members of Hydro International
plc
Group results
The Group's steadily improving financial performance, even while
investment continues in our programme of growth initiatives, gives
confidence for the full year outlook as well as for growth
prospects for 2016 and beyond.
Strong trading in the Group's Stormwater divisions, coupled with
delivery against the substantial Americas Wastewater closing order
book from 2014, helped first half-year revenues increase by 32% to
GBP17.4m (H1 2014: GBP13.1m). The Group's business model, including
outsourced product fabrication, is highly geared to sales volumes
and consequently profitability for the period showed a strong gain
against the equivalent period in 2014, with adjusted profit before
tax increasing to GBP0.80m (H1 2014: GBP0.09m). Whilst trading
conditions were strong in the Stormwater divisions, the Wastewater
businesses experienced challenges with order intake during the
period, principally due to the timing of projects experiencing
delays relative to expectations. This challenge particularly
affected the Europe Wastewater business, where the change in the UK
water industry from AMP5 to AMP6 at the end of March 2015 has
created a hiatus in project flow across the wider equipment supply
industry. By contrast the AMEA division showed strong order intake,
including a major GBP2m order in Qatar for delivery during 2015.
The closing Group order book at 30 June 2015 was GBP13.8m (31
December 2014: GBP13.7m).
The Group has continued to make good progress with its programme
of investments aimed at providing a broad and sustainable platform
for future business growth. Over the period, these investments
included territorial expansion (including the appointment of
additional business development personnel in Dubai), further
product range development (including the launch of a stormwater
'dry screening' product in the US), significant enhancements to our
after-sales service resources (including the acquisition of the
operating assets and brand of Settled Solids Management), and the
continuation of the implementation of new Group-wide business
systems, which has now been successfully implemented in the Europe
Stormwater division. The cost of these investments is reflected in
administrative expenses, which increased by GBP1.5m, to GBP7.4m (H1
2014: GBP5.9m). GBP1.2m of this increase relates to our investment
in high quality individuals across all areas of the Group's
operations.
During the period the Group has generated taxable profits in the
US and taxable losses in the UK. As we experienced during 2014,
this imbalance in profitability across the Group's major areas of
operation has distorted the effective tax rate. As a consequence of
this distortion, the Group is reporting an overall tax charge of
GBP0.54m on the consolidated profit before tax for the period of
GBP0.73m (H1 2014: tax charge of GBP0.11m on consolidated profit
before tax for the period of GBP0.02m). The effective tax rate is
anticipated to remain higher than would otherwise be expected for
the full year in 2015, before returning to more typical levels with
the return to profits in the Group's UK-based businesses in future
years.
Net assets at 30 June 2015 reduced against the level at 31
December 2014 by GBP0.4m to GBP14.6m (H1 2014: GBP13.2m). The
profit after tax for the period of GBP0.2m was offset by a loss on
US Dollar denominated assets of GBP0.1m, share based payment
expenses of GBP0.1m, and the dividend payment of GBP0.5m to
shareholders in June 2015.
Net cash generated from operations for the period was GBP2.1m
(H1 2014: GBP0.9m outflow). As in previous periods the principal
impact on cash generation was the timing of receipts and payments
on the larger contracts typically seen in the Group's Wastewater
divisions. During the period the Group made capital repayments
totalling GBP0.1m against borrowing facilities, and a further
GBP0.3m was paid to acquire the operating assets and brand of
Settled Solids Management by the Americas Wastewater business. Net
corporation tax payments of GBP0.4m (H1 2014: GBP0.1m refund) were
made during the period. Along with the payment of the final
dividend of GBP0.5m in respect of the year ended 31 December 2014,
these were the principal movements in cash balances, which
increased by GBP0.4m over the period. Net cash at the period end
was GBP2.8m (H1 2014: GBP1.4m, FY 2014: GBP2.3m).
Business operating review
Note: In the following divisional analysis, segment profit
excludes central Group costs and amortisation of acquired
intangible assets
Americas Wastewater
2015 2014
Segment revenue GBP7.7m GBP5.0m
Segment profit GBP2.33m GBP1.20m
*
* - excluding amortisation of acquired intangible assets
The Americas Wastewater division performed strongly during the
period as it delivered on the strong order book in place at the end
of 2014. Whilst the level of enquiries and bids remains
encouraging, the division has experienced delays in order placement
throughout 2015. Consequently the order book at 30 June 2015 closed
GBP2.4m down on the 2014 year-end figure of GBP9.3m.
The division made significant progress in developing its service
capability during the period, with the expansion of the core
service team and, in January, the acquisition of the operating
assets and brand of Settled Solids Management (SSM). SSM is a
specialist provider of services, based around a patented Vertical
Grit Separator system, to remove sand and grit from wastewater
treatment plants. First orders were received during the period.
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The division also made progress with diversification beyond its
traditional municipal markets for wastewater grit removal into
wider industrial applications, with two orders for grit removal in
a dairy farm application received during the period. Dedicated
sales personnel have been appointed to develop the division's
approach to industrial markets, which along with the drinking water
sector, is considered a key opportunity for future growth.
Americas Stormwater
2015 2014
Segment revenue GBP3.5m GBP2.0m
Segment profit GBP0.34m GBP0.12m
The Americas Stormwater division has continued the growth seen
during 2014, with orders and revenue increasing by 22% and 65%
respectively over the comparable period in constant currency terms.
In addition to the continued development of sales channels,
including the establishment of new regional distribution partners,
the division has continued to expand the product range. The market
launch of the First Defense High Capacity(R) in 2014 has been a
significant contributor to increased stormwater separator sales and
the first order has been received for the newly introduced Hydro
DryScreen, a product that captures leaf litter and other debris
from stormwater flows.
The division also took first steps toward the establishment of a
service offering to customers in support of its products. A Field
Service Technician was appointed during the period and a
partnership forged with a regional maintenance partner to ensure a
sufficiently wide level of initial territorial coverage. Expansion
into the industrial sector has also been progressing, with a
significant increase in the number of industrial projects in the
order pipeline, following the appointment of a business development
manager to focus on applications in industrial markets, initially
in California.
Europe Wastewater
2015 2014
Segment revenue GBP2.5m GBP2.5m
Segment loss GBP(0.07)m GBP(0.06)m
The change in the UK from Asset Management Programme (AMP) 5 to
AMP6 at the end of March 2015 has created a hiatus in project order
intake during the first half-year of 2015, with a number of
significant opportunities moving out in timing. Whilst progress is
expected during H2, anticipating the timing of these projects
remains difficult, with little visibility provided by the UK water
companies on their detailed investment plans.
In contrast to the challenges with projects, the division saw a
62% increase in revenues from service-related operations. The
ongoing development of the division's service operations has
continued during the period, with additional resources deployed to
meet the demand being driven by an increased focus and investment
by the UK water companies, under AMP6, in the maintenance of
existing assets and reduced whole-life costs.
Building on the work performed during 2014, the division has
made good progress with its strategy to introduce the Group's
advanced grit management products, which form the base of the
Americas Wastewater division, to the UK market. A pilot Headcell(R)
unit was installed at a site operated by Anglian Water, enabling
them to undertake full trials of the technology. Feedback on the
trial unit has been positive and it is hoped that this will provide
a platform for further progress, both with Anglian Water and other
UK water companies.
Europe Stormwater
2015 2014
Segment revenue GBP3.6m GBP2.7m
Segment profit GBP0.43m GBP0.18m
The Europe Stormwater division continued to see strong growth
during the period, reflecting improved trading conditions in UK and
Irish construction markets and market share growth through
expansion of both product range and the scope of sales distribution
partnerships in the UK.
The division has also broadened the scope of its services to
include specialist capability in water pollution management. A
newly formed team now provide customers with the capability to
assess, model, and ultimately manage surface water run-off through
containment and treatment on industrial sites with a critical
pollution risk.
AMEA (Asia, Middle East & Africa)
2015 2014
Segment revenue GBP0.0m GBP1.0m
Segment (loss)/profit GBP(0.38)m GBP0.06m
The AMEA division received GBP2.7m of orders during the latter
part of H1, but not in time to generate revenue during the period.
The orders received during H1, however, will be delivered during
H2.
The AMEA business has continued to focus on developing and
progressing significant opportunities in the Middle East. The case
for investment in the territory was demonstrated by the receipt, in
May 2015, of a GBP2m order for Hydro Vortex Drop(TM) Shaft for the
major Doha Industrial Area Development project in Qatar. The order
pipeline in the Middle East remains strong and a second regional
sales resource has been appointed in Dubai.
Each of the division's four major international regions (the
Middle East, China, Asia Pacific and Emerging countries) are
starting to contribute thanks to the development work being done by
each of our Regional Business Managers in territory. We now have 16
distribution partners in place covering 12 different countries.
Outlook
As previously reported in the 2014 Annual Report, the Group's
financial progress during 2015 will be constrained by the
investments we are making in the critical people, systems, products
and processes required to implement our strategy to build long-term
growth based on sustainable sources of revenue from the many
opportunities available in our markets.
While trading in the Group's Stormwater divisions has provided a
stronger start to 2015 than historically expected, the benefit of
this trading has been mitigated in part by the challenges with
order intake in the Europe and Americas Wastewater divisions.
Consequently the Group's results are expected to be more evenly
weighted across the year than in previous years.
The progress of our strategic initiatives is encouraging and
looking beyond the current year we see considerable opportunities
for the Group to deliver improving profitability.
Other Financial Matters
Foreign currency
The Group is exposed to the risk of fluctuating exchange rates
through transactions undertaken, and accounting balances held, in
foreign currencies. Certain wastewater products sold into the UK
and Irish markets are sourced from Sweden, and stormwater storage
products are also purchased from Germany and France. To mitigate
this exposure, the Group may enter into forward purchase
arrangements, resulting in minor foreign exchange gains or losses
as the Kronor and Euro currencies move against Sterling. Equally,
the movement in the value of the US Dollar against Sterling gives
rise to foreign exchange gains or losses on significant US Dollar
denominated assets. The overall impact of this, together with gains
and losses associated with other currencies, was to debit the
income statement with net losses totalling GBP78,000 (H1 2014:
GBP45,000 loss).
Key performance indicators
In addition to the statutory revenue and profit measures, we
monitor our performance in implementing our strategy with reference
to progress in the financial highlights listed above and those
shown in the "Measuring Our Performance" section on page 12 of the
Annual Report 2014.
Segmental results for the six months ended 30 June 2015
A summary of the key financial results by segment is disclosed
in note 2 to the condensed financial statements.
Dividend and dividend policy
In line with our current policy, no interim dividend has been
proposed or approved by the Board for the period.
A final dividend of 3.6p per share (GBP519,000) in respect of
the year ended 31 December 2014, as recommended by the Board of
Directors subsequent to the year-end, was approved at the AGM and
paid during the period.
Principal risks and uncertainties
The principal risks and uncertainties which could affect the
Group for the remainder of the financial year remain those detailed
on page 22 of the Annual Report 2014, a copy of which is available
at www.hydro-int.com. In addition, the Outlook section of this
Interim Management Report provides a commentary concerning the
remainder of the financial year.
Going concern
A full commentary on the risks affecting the Group's liquidity
and details of the Group's borrowing facilities are outlined on
page 29 of the Annual Report 2014.
The Group remained in compliance with banking covenants as at 30
June 2015.
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
Group should be able to operate within the level of its current
financial facilities. Accordingly, and after making enquiries, the
directors have concluded that the Group has adequate resources to
continue in operational existence for the foreseeable future.
By order of the Board
Michael Jennings
Chief Executive
7 September 2015
Hydro International plc
Condensed Group Income Statement unaudited
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for the six months ended 30 June 2015
6 months 6 months Year ended
ended ended 31 December
Continuing operations Note 30 June 30 June 2014
2015 2014 GBP000
GBP000 GBP000
---------------------------- ------- --------- ---------- -------------
Revenue (2) 17,362 13,122 32,163
Cost of sales (9,244) (7,236) (17,589)
Gross profit 8,118 5,886 14,574
Administrative expenses (7,411) (5,862) (12,821)
Operating profit
before amortisation
of acquired intangibles 783 93 1,894
Amortisation of
acquired intangibles (76) (69) (141)
---------------------------- ------- --------- ---------- -------------
Operating profit 707 24 1,753
Net finance income/(costs) (3) 20 (5) (28)
Profit before tax 727 19 1,725
Tax (4) (544) (106) (746)
---------------------------- ------- --------- ---------- -------------
Profit/(loss) for
the period from
continuing operations 183 (87) 979
---------------------------- ------- --------- ---------- -------------
Basic earnings/(loss) (5) 1.27p (0.60)p 6.80p
per ordinary share
Diluted earnings/(loss) (5) 1.21p (0.60)p 6.59p
per ordinary share
---------------------------- ------- --------- ---------- -------------
Condensed Group Statement of Comprehensive Income unaudited
for the six months ended 30 June 2015
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 GBP000
GBP000 GBP000
-------------------------- --------- --------- -------------
Profit/(loss) for the
period
Exchange losses on 183 (87) 979
translation of foreign
operations (110) (216) (397)
-------------------------- --------- --------- -------------
Total comprehensive
income for the period 73 (303) 582
-------------------------- --------- --------- -------------
Hydro International plc
Condensed Group Balance Sheet unaudited
30 June 2015
30 June 30 June 31 December
2015 2014 2014
GBP000 GBP000 GBP000
------------------------------ -------- -------- ------------
ASSETS Non-current
assets
Intangible assets -
Goodwill
Intangible assets -
Other 4,911 4,557 4,911
Property, plant and
equipment 2,458 2,168 2,278
1,871 1,558 1,714
Deferred tax assets 198 397 260
Trade receivables 639 1,304 602
------------------------------ -------- -------- ------------
10,077 9,984 9,765
Current assets
Inventories 1,301 989 779
Trade and other receivables 10,822 10,495 13,602
Current tax asset 215 167 132
Cash and cash equivalents 3,382 2,165 2,991
------------------------------ -------- -------- ------------
15,720 13,816 17,504
Total assets 25,797 23,800 27,269
------------------------------ -------- -------- ------------
LIABILITIES
Current liabilities
Trade and other payables 8,551 8,163 9,773
Current tax payable 352 520 102
Borrowings 199 184 201
Obligations under finance
leases 23 - -
Derivative financial
instruments - - 24
9,125 8,867 10,100
Non-current liabilities
Deferred tax liability 1,566 1,172 1,672
Borrowings 398 550 503
Obligations under finance
leases 76 - -
2,040 1,722 2,175
Total liabilities 11,165 10,589 12,275
Net assets 14,632 13,211 14,994
------------------------------ -------- -------- ------------
EQUITY
Called up share capital 721 720 721
Share premium account 1,073 1,035 1,073
Foreign currency translation
reserve 292 (211) 402
Retained earnings 12,546 11,667 12,798
------------------------------ -------- -------- ------------
Total equity 14,632 13,211 14,994
------------------------------ -------- -------- ------------
Hydro International plc
Condensed Group Statement of Changes in Equity unaudited
for the six months ended 30 June 2015
Foreign
Issued Share currency Retained
capital premium reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
1 January 2014 720 1,035 5 12,315 14,075
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Currency
translation
difference - - (216) - (216)
Loss for the
period - - - (87) (87)
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Comprehensive
income - - (216) (87) (303)
Share based
payments - - - (43) (43)
Dividends paid - - - (518) (518)
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
30 June 2014
(unaudited) 720 1,035 (211) 11,667 13,211
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Currency
translation
difference - - 613 - 613
Profit for the
period - - - 1,066 1,066
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Comprehensive
income - - 613 1,066 1,679
Equity shares
issued 1 38 - - 39
Share based
payments - - - 65 65
31 December
2014 721 1,073 402 12,798 14,994
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Currency
translation
difference - - (110) - (110)
Profit for the
period - - - 183 183
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Comprehensive
profit - - (110) 183 73
Equity shares
issued - - - - -
Share based
payments - - - 84 84
Dividends paid - - - (519) (519)
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
30 June 2015
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(unaudited) 721 1,073 292 12,546 14,632
---------------- ------------------- ------------------- -------------------------- ------------------- -----------------
Hydro International plc
Condensed Group Cash Flow Statement unaudited
for the six months ended 30 June 2015
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2015 2014 2014
Note GBP000 GBP000 GBP000
------------------------------------------------ --------- --------- -------------
Cash generated/(expended)
from operations (6) 2,087 (948) 897
Interest paid (31) (7) (16)
Corporation tax (payments)/receipts (403) 53 (435)
Net cash from operating
activities 1,653 (902) 446
------------------------------------------------ --------- --------- -------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (209) (151) (441)
Purchase of patents and
trademarks (159) (57) (113)
Purchase of software
assets (101) (305) (392)
Capitalised product development
expenditure (93) (27) (132)
Acquisition of goodwill
* (41) - -
Interest received 27 2 12
Net cash used in investing
activities (576) (538) (1,066)
------------------------------------------------ --------- --------- -------------
Cash flows from financing
activities
Proceeds from the issue
of shares to shareholders - - 39
Repayment of borrowings (102) (93) (190)
Dividends paid to shareholders (519) (518) (518)
------------------------------------------------ --------- --------- -------------
Net cash expended from
financing activities (621) (611) (669)
------------------------------------------------ --------- --------- -------------
Net decrease in cash
and cash equivalents 456 (2,051) (1,289)
Cash and cash equivalents
at the beginning of the
period 2,991 4,249 4,249
Exchange (losses)/gains
on cash and cash equivalents (65) (33) 31
------------------------------------------------ --------- --------- -------------
Cash and cash equivalents
at the end of the period 3,382 2,165 2,991
------------------------------------------------ --------- --------- -------------
* - Relates to the acquisition of the operating assets and brand
of Settled Solids Management
Hydro International plc
Notes to the condensed financial statements unaudited
for the six months ended 30 June 2015
1. Basis of preparation
The condensed financial statements for the six months ended 30
June 2015 were approved by the directors on 7 September 2015.
The information for the year ended 31 December 2014 does not
constitute statutory accounts as defined in section 435 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor's
report on those accounts was not qualified, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
The condensed set of financial statements has been prepared on a
going concern basis using accounting policies consistent with
International Financial Reporting Standards (IFRSs) and in
accordance with International Accounting Standard (IAS) 34 "Interim
Financial Reporting". The same accounting policies, presentation
and methods of computation are followed in the condensed set of
financials as applied in the Group's latest annual audited
financial statements, which are prepared in accordance with IFRSs
as adopted by the European Union.
2. Segmental analysis of results
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the Board of Directors to allocate resources
to the segments and to assess their performance. Information
reported to the Group's Board of Directors for the purpose of
resource allocations and assessment of segment performance is more
specifically focused on the destination of products sold by the
operating divisions and the combination of business activity as
detailed above and the destination of the product. The Group's
reportable segments under IFRS 8 are therefore as follows:
Americas Europe AMEA (Asia, Middle
East and Africa)
- Wastewater - Wastewater - Wastewater
- Stormwater - Stormwater - Stormwater
Information regarding the Group's operating segments is reported
below.
6 months
6 months ended Year ended
ended 30 June 31 December
30 June 2015 2014 2014
GBP000 GBP000 GBP000
----------------- ----------------- ----------------- -------------------
Segment revenue
Americas
Wastewater 7,664 4,973 12,217
Stormwater 3,531 1,952 5,746
----------------- ----------------- ----------------- -------------------
11,195 6,925 17,963
----------------- ----------------- ----------------- -------------------
Europe
Wastewater 2,517 2,480 5,776
Stormwater 3,612 2,728 6,410
----------------- ----------------- ----------------- -------------------
6,129 5,208 12,186
----------------- ----------------- ----------------- -------------------
AMEA
Wastewater - 506 645
Stormwater 38 483 1,369
----------------- ----------------- ----------------- -------------------
38 989 2,014
----------------- ----------------- ----------------- -------------------
Consolidated 17,362 13,122 32,163
----------------- ----------------- ----------------- -------------------
Hydro International plc
Notes to the condensed financial statements unaudited
for the six months ended 30 June 2015
2 Segmental analysis of results (continued)
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2015 2014 2014
GBP000 GBP000 GBP000
---------------------------- --------- --------- ----------------------------
Segment profit
Americas
Wastewater 2,334 1,203 3,348
Stormwater 335 118 687
---------------------------- --------- --------- ----------------------------
2,669 1,321 4,035
---------------------------- --------- --------- ----------------------------
Europe
Wastewater (71) (55) 245
Stormwater 430 177 767
---------------------------- --------- --------- ----------------------------
359 122 1,012
---------------------------- --------- --------- ----------------------------
AMEA
Wastewater (199) 87 5
Stormwater (180) (30) 251
---------------------------- --------- --------- ----------------------------
(379) 57 256
---------------------------- --------- --------- ----------------------------
Group (1,866) (1,407) (3,409)
---------------------------- --------- --------- ----------------------------
Consolidated 783 93 1,894
---------------------------- --------- --------- ----------------------------
Amortisation of acquired
intangibles
Americas Wastewater (76) (69) (141)
---------------------------- --------- --------- ----------------------------
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Operating profit 707 24 1,753
---------------------------- --------- --------- ----------------------------
Net finance income/(costs) 20 (5) (28)
---------------------------- --------- --------- ----------------------------
Profit before tax 727 19 1,725
---------------------------- --------- --------- ----------------------------
Taxation (544) (106) (746)
---------------------------- --------- --------- ----------------------------
Profit/(loss) after
tax 183 (87) 979
---------------------------- --------- --------- ----------------------------
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit represents the
profit earned by each segment without allocation of amortisation of
intangibles, central administration costs including director's
salaries, investment revenue and finance costs, and income tax
expense. This is the measure reported to the Group's Board of
Directors for the purpose of resource allocation and assessment of
segment performance.
6 months ended 6 months ended Year ended
30 June 2015 30 June 2014 31 December 2014
GBP000 GBP000 GBP000
--------------------------------------------- -------------------------- --------------- ------------------
Segment gross assets
Americas
Wastewater 14,044 12,407 13,359
Stormwater 2,077 1,572 1,943
--------------------------------------------- -------------------------- --------------- ------------------
16,121 13,979 15,302
--------------------------------------------- -------------------------- --------------- ------------------
Europe
Wastewater 4,934 5,087 5,716
Stormwater 2,800 3,096 3,138
--------------------------------------------- -------------------------- --------------- ------------------
7,734 8,183 8,854
--------------------------------------------- -------------------------- --------------- ------------------
Group (including International) 1,942 1,638 3,113
--------------------------------------------- -------------------------- --------------- ------------------
Consolidated 25,797 23,800 27,269
--------------------------------------------- -------------------------- --------------- ------------------
For the purposes of monitoring segment performance and allocating resources between segments,
the Board of Directors monitor the tangible, intangible and financial assets attributable
to each segment. All assets are allocated to reportable segments with the exception of other
financial assets (except for trade and other receivables) and tax assets.
Hydro International plc
Notes to the condensed financial statements unaudited
for the six months ended 30 June 2015
2 Segmental analysis of results (continued)
6 months ended 6 months ended Year ended
30 June 2015 30 June 2014 31 December 2014
GBP000 GBP000 GBP000
--------------------------------------------- -------------------------- --------------- --------------------
Segment capital expenditure
Americas
Wastewater 268 25 50
Stormwater 14 16 130
--------------------------------------------- -------------------------- --------------- --------------------
282 41 180
--------------------------------------------- -------------------------- --------------- --------------------
Europe
Wastewater 12 41 84
Stormwater 7 25 69
--------------------------------------------- -------------------------- --------------- --------------------
19 66 153
--------------------------------------------- -------------------------- --------------- --------------------
Group (including International) 358 433 745
--------------------------------------------- -------------------------- --------------- --------------------
Consolidated 659 540 1,078
--------------------------------------------- -------------------------- --------------- --------------------
Segment depreciation and amortisation
Americas
Wastewater 44 26 55
Stormwater 27 13 37
--------------------------------------------- -------------------------- --------------- --------------------
71 39 92
--------------------------------------------- -------------------------- --------------- --------------------
Europe
Wastewater 16 12 27
Stormwater 9 2 8
--------------------------------------------- -------------------------- --------------- --------------------
25 14 35
--------------------------------------------- -------------------------- --------------- --------------------
Group 137 131 366
--------------------------------------------- -------------------------- --------------- --------------------
Amortisation of acquired intangibles
Americas Wastewater 76 69 141
--------------------------------------------- -------------------------- --------------- --------------------
Consolidated 309 253 634
--------------------------------------------- -------------------------- --------------- --------------------
3. Net finance costs
6 months 6 months
ended ended Year ended
31 December
30 June 2015 30 June 2014 2014
GBP000 GBP000 GBP000
------------------------------ ------------- ------------- -------------
Bank deposit interest
receivable 2 2 11
Other interest receivable 1 - 1
Derivative financial
instruments 24 - -
Finance revenue 27 2 12
------------------------------ ------------- ------------- -------------
On bank loans and overdrafts (7) (7) (16)
Derivative financial
instruments - - (24)
Finance costs (7) (7) (40)
------------------------------ ------------- ------------- -------------
Net finance costs 20 (5) (28)
------------------------------ ------------- ------------- -------------
Hydro International plc
Notes to the condensed financial statements unaudited
for the six months ended 30 June 2015
4. Income tax charge
Income tax expense is recognised based on management's best
estimate of the annual income tax rate expected for each operating
entity within the Group for the full financial year.
During the period the Group has generated taxable profits in the
US and taxable losses in the UK. As we experienced during 2014,
this imbalance in profitability across the Group's major areas of
operation has distorted the Group's effective tax rate. The
effective tax rate is anticipated to remain higher than would
otherwise be expected for the full year in 2015 before returning to
more typical levels with the profitable growth of the business in
future years.
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September 08, 2015 02:01 ET (06:01 GMT)
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