TIDMKGP
RNS Number : 9528P
Kingspan Group PLC
26 August 2014
KINGSPAN GROUP PLC
HALF-YEARLY FINANCIAL REPORT
for the period ended 30(th) June 2014
KINGSPAN GROUP PLC
RESULTS FOR THE HALF YEAR 30 JUNE 2014
Kingspan the global leader in high performance insulation,
building fabric, and solar integrated building envelopes issues its
half-yearly financial report for the period ended 30 June 2014.
Highlights:
Financial Highlights:
-- Revenue up 4% to EUR889.3m, (pre-currency, up 5%).
-- Trading profit up 24% to EUR69.2m, (pre-currency up 24%).
-- Group trading margin of 7.8%, an increase of 120bps versus the same period in 2013.
-- Net debt of EUR113.4m (H1 2013: EUR165.1m). Net debt to EBITDA of 0.7x (H1 2013: 1.1x).
-- Basic EPS up 27% to 29.2 cent (H1 2013: 23.0 cent).
-- Interim dividend per share up 14% to 6.25 cent (H1 2013: 5.5 cent).
-- Increase in ROCE by 160 bps to 12.4% (H1 2013: 10.8%).
Operational Highlights:
-- Good performance overall with sales levelling off in quarter
two following a strong and unseasonal quarter one.
-- Insulated Panels sales up 9% and trading profit up 30%,
reflecting continuing penetration gains, a positive business mix,
and some improvement in end markets in certain regions.
-- Insulation Boards sales up 1% and trading profit up 32%, with
a good performance in the UK in particular and an improved business
mix. The Group's new facility in the Eastern region of Germany was
fully commissioned in the second quarter.
-- Environmental sales were flat overall and have stabilised.
-- Access Floor sales were down 11%, with weak US office
activity offsetting a good performance in UK office volumes.
Summary Financials:
H1'14 H1'13 Change
EURm EURm
---------------------- ------ ------ --------
Revenue 889.3 851.5 +4%
EBITDA 88.9 75.7 +17%
Trading Profit* 69.2 55.8 +24%
Trading Margin 7.8% 6.6% +120bps
EPS (cent per share) 29.2 23.0 +27%
---------------------- ------ ------ --------
*Operating profit before amortisation of intangibles
Gene Murtagh, Chief Executive of Kingspan commented:
"Kingspan has delivered strong growth in profitability,
notwithstanding a tougher EU construction sector in the second
quarter, and a global economic recovery that remains weak. Our
order book carried good momentum into the second half of the year,
driven by continued growth in the demand for low energy
buildings."
For further information contact:
Murray Consultants Tel: +353 (0) 1 4980 300
Douglas Keatinge
Business Review
Kingspan recorded a positive start to the first six months of
2014 resulting in sales revenue of EUR889.3m and a trading profit
of EUR69.2m, an increase of 4% and 24% respectively. Quarter one
activity, in particular, showed a significant improvement over the
same period in 2013, followed by a second quarter sales trend that
eased towards mid-year.
UK revenue, representing 38% of Group sales, grew materially in
the first half in the Insulated Panels, Insulation Boards and
Access Floors businesses as general building activity continued to
recover in the region. The trading environment in many of our other
markets has been quite mixed with the Benelux and France remaining
under some macro-economic pressure despite being enhanced by an
unseasonably mild first quarter. The German market was stable, as
was the Gulf region. The performance in Turkey was quite weak as a
result of recent political instability there. North American
non-residential activity was reasonably stable where our Insulated
Panels business continued to gain from further penetration growth
although this was countered somewhat by stubbornly weak office
construction in that region.
Earlier this month we announced that we had entered into an
agreement with Pactiv LLC to acquire its US building insulation
business, which manufactures and sells a range of XPS insulation
products throughout the USA under the GreenGuard(R) brand, for a
total consideration of US$72.0m plus US$10.0m of working capital.
This is a new and exciting frontier for Kingspan's Insulation Board
business in North America with particular exposure to the
residential sector. It provides a tremendous opportunity to build
upon the growing success of our existing Insulated Panel business
throughout the region at a time when North America's focus on
energy efficiency and security is at an all-time high.
Insulated Panels
H1 '14 H1 '13 Change
EURm EURm
---------------- ------- ------- -------
Turnover 526.1 482.5 +9%(1)
Trading Profit 43.7 33.5 +30%
Trading Margin 8.3% 6.9%
---------------- ------- ------- -------
(1) Comprising volume +7%, price/mix +2%, currency impact -1% and acquisitions +1%
UK
The majority of non-residential end-market applications for
Insulated Panels in the UK showed considerable improvement over the
same period in 2013, driven by a number of large scale retail and
manufacturing projects which combined to drive sales volumes up on
prior year. Our Kingspan Energy business, which delivers rooftop
solar solutions, also continued to gain traction and is on target
to deliver revenue in excess of EUR30m in its first full year.
Benchmark architectural specifications are well up on prior year
and should deliver an improved second half sales performance.
Mainland Europe and the Middle East
In Germany, Poland and Hungary the Group's combined sales volume
grew by mid-single digit percentages in the first half, even after
a sustained concentration on margin led to slight revenue
contraction in some products. There was solid progress in the
Nordics region where high performance insulation and building
envelopes are gaining a sustainable foothold. Volumes in the
Benelux region showed marginal gains, although order intake was
down slightly. Overall market penetration of insulated panels grew
again in France although this was countered by less buoyant
commercial & industrial and cold storage end markets. Volumes
in Turkey were impacted by recent political unrest and were in
stark contrast to a strong performance in our business in the wider
Middle East and Gulf regions.
North America
In the early part of the year the prolonged cold spell in the
North East impacted upon sales volumes although order intake has
been consistently strong. This clearly demonstrates the continuing
growth in market acceptance of low energy building fabrics with an
orderbook ending the period at a record high, and second half
volumes are expected to trend positively.
Australasia
As a market, notwithstanding the difference in scale, Australia
is evolving along similar lines to the US, showing compelling
growth in high performance building solutions. Volumes were well up
on prior year for the same period, and order intake grew
substantially, albeit compared to what was a slow start to
2013.
Ireland
Activity continues to improve in Ireland where both sales volume
and order intake grew substantially over 2013.
Insulation Boards
H1'14 H1 '13 (2) Change
EURm EURm
---------------- ------ ----------- --------
Turnover 221.1 218.8 +1% (1)
Trading Profit 17.7 13.4 +32%
Trading Margin 8.0% 6.1%
---------------- ------ ----------- --------
(1) Comprising volume -2%, price/mix +2% and currency impact +1%
(2) Restated to reflect adoption of IFRS 11 'Joint Arrangements'
UK
Revenue grew strongly in the first half of 2014, particularly in
the first quarter, as the general economy and new house
construction remain on a path of recovery. Growth has abated
somewhat in recent months, although sales of Kooltherm(R) have been
robust, and margins have benefitted considerably from this dynamic.
Specifications for Optim-R(R), our next generation insulation
board, have been growing steadily from a standing start earlier in
the year.
Mainland Europe
Despite the prevailing weakness in the Dutch economy, sales
improved in the first six months driven by penetration growth and
helped to an extent by an unseasonably mild first quarter. Revenue
has also grown in Germany, the Nordics and Central Europe, which
are now being supported by our recently commissioned facility in
the eastern region of Germany. Penetration of modern insulation
materials is relatively low in the Nordics and Central Europe but
these markets are showing clear and emerging signs of adapting to
rigid insulation as an efficient solution to increasingly stringent
building energy codes. These regions will become an increasing
focus for Kingspan in time.
Australasia
In recent years, Kooltherm(R) has been growing its position in
Australia, and select SEA markets, and sales revenue in the first
half increased further. It is our ambition to develop ongoing
demand to a level that requires a local manufacturing presence by
2016. Volume growth thus far has been trending on target to achieve
this goal.
Ireland
Whilst market volumes in Ireland have been improving gradually,
from its low recent base, pricing remains under significant
pressure. Our focus has been to drive conversion to Kooltherm(R)
which has been key in improving the profitability of our business
in the region even though it has been at the expense of volume in
the current year.
Access Floors
H1 '14 H1 '13 Change
EURm EURm
---------------- ------- ------- ---------
Turnover 70.5 78.9 -11% (1)
Trading Profit 7.6 8.1 -6%
Trading Margin 10.8% 10.3%
---------------- ------- ------- ---------
(1) Comprising volume +3%, price/mix -12% and currency impact -2%
Access Floors demand is derived primarily from office
construction activity, datacentre, and education applications.
A significant proportion of our sales revenue is in North
America where office starts remain at all time lows, weighing
heavily on the overall divisional sales volume. The project
pipeline, a barometer for medium term activity, has been improving
steadily and augurs well for late 2015 and beyond. In the nearer
term, we expect office applications to remain unexciting, balanced
to an extent by stable datacentre activity.
In contrast to North America, office construction in the UK has
improved markedly as has Kingspan's volume into this segment. This
trend is likely to continue over the coming twelve months as
London's skyline, in particular, continues to evolve.
Environmental
H1 '14 H1 '13
EURm EURm
---------------- ------- -------
Turnover 71.6 71.3
Trading Profit 0.2 0.8
Trading Margin 0.3% 1.1%
---------------- ------- -------
Sales of Environmental products remained stable in the first
half across the UK, Ireland and Mainland Europe. In the second
quarter, revenue from our Water Solutions business showed
improvement in the UK following a slower start to the year
resulting from an unusually wet season. Hot water products were
down slightly with new home construction assisting demand although
this was offset by intense competition and a structured volume
decline in the more traditional copper vessel market.
Our KW15 microwind offering was launched in the second quarter
and inquiries have accelerated in recent months. Deliveries
commenced during the third quarter and should compensate for
ongoing weakness in the Solar Thermal market, where volumes have
been under pressure in recent years.
In all, this division is positioned to deliver gradual
performance improvement into the future.
Financial Review
Overview of results
Group revenue increased by 4% to EUR889.3m (H1 2013: EUR851.5m)
and trading profit increased by 24% to EUR69.2m (H1 2013:
EUR55.8m). This represented a 5% increase in sales and a 24%
increase in trading profit on a constant currency basis. The
Group's trading margin increased by 120bps to 7.8% (H1 2013: 6.6%).
The amortisation charge in respect of intangibles was EUR2.2m
compared to EUR1.9m in the first half of 2013 with the increase
reflecting intangible assets acquired in respect of Dri-Design in
February 2014. Group operating profit after amortisation grew 24%
to EUR67.0m. Profit after tax was EUR50.0m compared to EUR39.2m in
the first half of 2013 driven, in the main, by the growth in
trading profit. Basic EPS for the period was 29.2 cent,
representing an increase of 27% on the first half of 2013 (H1 2013:
23.0 cent).
The Group's underlying sales and trading profit performance by
division is set out below:
Sales Underlying Currency Acquisition Total
------------------- ----------- --------- ------------ ------
Insulated Panels +9% -1% +1% +9%
Insulation Boards 0% +1% - +1%
Access Floors -9% -2% - -11%
Environmental -2% +2% - -
Group +4% -1% +1% +4%
----------- --------- ------------ ------
The Group's trading profit measure is earnings before interest,
tax and amortisation of intangibles:
Trading Profit Underlying Currency Acquisition Total
------------------- ----------- --------- ------------ ------
Insulated Panels +30% -2% +2% +30%
Insulation Boards +30% +2% - +32%
Access Floors -6% - - -6%
Environmental n/a n/a n/a n/a
Group +23% 0% +1% +24%
----------- --------- ------------ ------
Change in accounting policy and reclassification
IFRS 11 'Joint Arrangements' has been adopted as required by
IFRS for the half year ended 30 June 2014. All comparatives have
been restated accordingly. Further details are set out in note
14.
Finance costs
Finance costs for the year were modestly higher than the same
period last year at EUR7.0m (H1 2013: EUR6.8m). Finance costs
include a non-cash charge of EUR0.1m (H1 2013: EUR0.2m) in respect
of the Group's legacy defined benefit pension schemes. A net
non-cash charge of EUR0.1m was recorded in respect of swaps on the
Group's USD private placement notes (H1 2013: credit of EUR0.2m).
The Group's net interest expense on borrowings (bank and loan
notes) was EUR7.0m compared to EUR7.3m in the first half of 2013.
This decrease reflects a reduction in the floating interest rates
on the floating portion of the USD private placements and a
reduction in commitment fees on the Group's revolving credit
facility following its re-negotiation in March 2014.
Taxation
The tax charge for the first half of the year was EUR10.1m (H1
2013: EUR7.9m) which represents an effective tax rate of 16.2% on
earnings before amortisation (H1 2013: 16%).
Retirement benefits
The Group has two legacy defined benefit schemes which are
closed to new members and to future accrual. In addition, the Group
has assumed a defined benefit obligation in respect of certain
current and former employees of ThyssenKrupp Construction acquired
during 2012. The net pension liability in respect of all the
Group's defined benefit obligations was EUR6.4m as at 30 June 2014
(30 June 2013: EUR11.3m).
Free cashflow
Free cashflow H1'14 H1'13
EUR'm EUR'm
-------------------------------- ------- -------
EBITDA* 88.9 75.7
Movement in working capital (29.5) (40.2)
Net capital expenditure (21.0) (18.2)
Pension contributions (1.2) (1.3)
Finance costs paid (7.6) (6.3)
Income taxes paid (6.0) (5.3)
Other including non-cash items 5.1 5.4
------- -------
Free cashflow 28.7 9.8
------- -------
*Earnings before finance costs, income taxes, depreciation and
amortisation
Working capital increased by EUR29.5m in the first half of 2014
(in H1 2013 it increased by EUR40.2m). The Group typically
increases working capital in the first half reflecting seasonal
variability associated with trading patterns and the timing of
significant purchases for steel and chemicals. The average working
capital to sales % was 12.7% in H1 2014 compared to 12.8% in H1
2013.
Net Debt
Net debt increased by EUR6.7m during the first half to EUR113.4m
(31 December 2013: EUR106.7m). This is analysed in the table
below:
Movement in net debt H1'14 H1'13
EUR'm EUR'm
----------------------------------- -------- --------
Free cashflow 28.7 9.8
Acquisitions (23.4) -
Share issues 4.3 1.5
Dividends paid (14.6) (12.3)
-------- --------
Cashflow movement (5.0) (1.0)
Exchange movements on translation (1.7) 1.1
-------- --------
Decrease / (Increase) in net
debt (6.7) 0.1
Net debt at start of year (106.7) (165.2)
-------- --------
Net debt at end of period (113.4) (165.1)
-------- --------
Financing
The Group funds itself through a combination of equity and debt.
Debt is funded through a combination of a syndicated bank facility
and private placement loan notes. The primary debt facility is a
revolving credit facility of EUR300m, originally entered into in
April 2012 and amended in March 2014, with a syndicate of
international banks. The facility, which was undrawn at the period
end, was favourably amended from a pricing perspective with the
term extended to March 2019. The Group has two US Private Placement
loan notes for $400m, in aggregate, of which $158m matures in 2015,
$42m in 2017 with the balance of $200m maturing in 2021. The
weighted average maturity of debt facilities at year end was 4.3
years (June 2013: 4.3 years).
The Group has significant available undrawn facilities and cash
balances which provide appropriate headroom for potential
development opportunities.
Related Party Transactions
There were no changes in related party transactions from the
2013 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year.
Principal Risks & Uncertainties
Details of the principal risks and uncertainties facing the
Group can be found in the 2013 Annual Report. These risks, namely
volatility in the macro environment, failure to innovate, product
failure, business interruption (including IT continuity), credit
risks and credit control, remain the most likely to affect the
Group in the second half of the current year. The Group actively
manages these and all other risks through its control and risk
management processes.
Dividend
The Board has declared an interim dividend of 6.25 cent per
ordinary share, an increase of 14% on the 2013 interim dividend of
5.5 cent per share. The interim dividend will be paid on 26
September 2014 to shareholders on the register on the record date
of 5 September 2014.
Outlook
The pace of economic recovery in the markets we serve,
notwithstanding some exceptions, has been glacial at best and
clearly not helped by the prevailing geo-political disquiet in some
markets. Building activity more particularly, which began the year
with positive momentum in many of our markets, has eased in more
recent months and we anticipate that trend to remain through the
second half of the year.
Against that backdrop, order intake at our larger businesses,
most notably in the UK, North America, and Australia has been
strong in the first half, which bodes well for the latter part of
2014 in those markets. Less positive has been the activity in some
Continental European markets, which could impact the topline growth
of the Group, although margins can still be expected to
improve.
Overall, Kingspan remains well poised to advance in a medium to
longer term environment that is likely to experience improvements
in both building activity and methods, sustained by the drive
towards achieving a more energy efficient living and working
environment.
RESPONSIBILITY STATEMENT
Directors' Responsibility Statement in respect of the
half-yearly financial report for the six months ended 30 June
2014
Each of the directors of Kingspan Group plc confirm our
responsibility for preparing the half-yearly financial report in
accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007, the Transparency Rules of the Republic of
Ireland's Financial Regulator and with IAS 34 "Interim Financial
Reporting" as adopted by the EU. We confirm that to the best of our
knowledge:
a) the condensed consolidated Half-yearly Financial Statements
comprising the condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the
condensed consolidated statement of financial position, the
condensed consolidated statement of changes in equity, the
condensed consolidated statement of cash flows and related notes
have been prepared in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007, the Transparency Rules of the
Republic of Ireland's Financial Regulator and with IAS 34 "Interim
Financial Reporting" as adopted by the EU.
b) The interim management report includes a fair review of the
information required by:
i) Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
ii) Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
On behalf of the Board
Gene Murtagh Geoff Doherty
Chief Executive Officer Chief Financial Officer
26 August 2014 26 August 2014
Kingspan Group plc
Condensed consolidated income statement (unaudited)
for the half year ended 30 June 2014
6 months 6 months
ended ended
30 June 2014 30 June
2013
Note EUR'000 EUR'000
Revenue 4 889,303 851,527
Cost of Sales (648,624) (631,338)
------------- ----------
Gross Profit 240,679 220,189
Operating Costs, excluding intangible
amortisation (171,476) (164,384)
------------- ----------
Trading Profit 4 69,203 55,805
Intangible amortisation (2,211) (1,897)
------------- ----------
Operating Profit 66,992 53,908
Finance expense 6 (7,147) (7,217)
Finance income 6 191 399
------------- ----------
Profit for the period before income
tax 60,036 47,090
Income tax expense 7 (10,085) (7,853)
------------- ----------
Net Profit for the period 49,951 39,237
------------- ----------
Attributable to owners of Kingspan
Group plc 49,880 38,824
Attributable to non-controlling
interests 71 413
------------- ----------
49,951 39,237
------------- ----------
Earnings per share for the period
Basic 11 29.2c 23.0c
Diluted 11 28.6c 22.5c
Kingspan Group plc
Condensed consolidated statement of comprehensive income
(unaudited)
for the half year ended 30 June 2014
6 months 6 months
ended ended
30 June 30 June
2014 2013
EUR'000 EUR'000
Net profit for financial period 49,951 39,237
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations 21,882 (22,101)
Net change in fair value of cash flow hedges
reclassified to income statement (59) (194)
Effective portion of changes in fair value
of cash flow hedges (2,347) 2,451
Income taxes relating to changes in fair 313 -
value of cash flow hedges
Items that will not be reclassified to
profit or loss
Actuarial losses on defined benefit pension - -
schemes
Income taxes relating to actuarial losses - -
on defined benefit pension schemes
Total comprehensive income for the period 69,740 19,393
--------- ---------
Attributable to owners of Kingspan Group
plc 69,592 18,913
Attributable to non-controlling interests 148 480
--------- ---------
69,740 19,393
--------- ---------
Kingspan Group plc
Condensed consolidated statement of financial position
(unaudited)
as at 30 June 2014
At 30 June At 30 June At 31 December
2014 2013 2013
(Restated)* (Restated)*
Note EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Goodwill 398,945 375,793 368,464
Other intangible assets 19,215 18,206 16,204
Property, plant and equipment 12 494,931 494,136 487,751
Investment in joint ventures 8,972 8,359 8,323
Derivative financial instruments 1,471 10,971 674
Retirement benefit assets 7,315 3,276 6,099
Deferred tax assets 7,103 9,071 6,615
----------- ------------- ---------------
937,952 919,812 894,130
Current assets
Inventories 228,049 204,024 190,370
Trade and other receivables 390,689 361,466 308,132
Derivative financial instruments 45 3,999 26
Cash and cash equivalents 9 192,711 135,855 196,587
----------- ------------- ---------------
811,494 705,344 695,115
Non-current assets classified - 388 -
as held for sale
----------- ------------- ---------------
811,494 705,732 695,115
----------- ------------- ---------------
Total assets 1,749,446 1,625,544 1,589,245
----------- ------------- ---------------
Liabilities
Current liabilities
Trade and other payables 373,523 333,064 285,501
Provisions for liabilities 37,138 38,573 39,936
Derivative financial instruments 5,018 - 2,359
Deferred contingent consideration 7,159 484 7,474
Interest bearing loans and
borrowings 4,300 4,121 6,947
Current income tax liabilities 39,040 45,282 37,313
----------- ------------- ---------------
466,178 421,524 379,530
Non-current liabilities
Retirement benefit obligations 13,722 14,602 13,837
Provisions for liabilities 16,385 20,862 17,289
Interest bearing loans and
borrowings 296,971 310,681 290,730
Derivative financial instruments 3,303 - 4,481
Deferred tax liabilities 24,675 24,936 23,756
Deferred contingent consideration 5,193 7,379 -
----------- ------------- ---------------
360,249 378,460 350,093
----------- ------------- ---------------
Total liabilities 826,427 799,984 729,623
----------- ------------- ---------------
Net Assets 923,019 825,560 859,622
----------- ------------- ---------------
Equity
Share capital 22,914 22,695 22,747
Share premium 47,235 41,937 43,145
Capital redemption reserve 723 723 723
Treasury shares (30,707) (30,707) (30,707)
Other reserves (105,400) (113,614) (126,152)
Retained earnings 980,248 897,163 942,008
----------- ------------- ---------------
Equity attributable to owners
of Kingspan Group plc 915,013 818,197 851,764
Non-controlling interests 8,006 7,363 7,858
----------- ------------- ---------------
Total Equity 923,019 825,560 859,622
----------- ------------- ---------------
* IFRS 11 'Joint Arrangements' has been adopted as required by IFRS
for the half year ended 30 June 2014. The comparatives for the half
year ended 30 June 2013 and for the year ended 31 December 2013
have been restated (refer to note 14).
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited)
For the half year ended 30 June 2014
Share Total
Capital Cash based attributable Non-
Share Share redemption Treasury Translation flow payment Revaluation Retained to owners controlling Total
capital premium reserve shares reserve hedging reserve reserve Earnings of the interests equity
reserve parent
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1 January
2014 22,747 43,145 723 (30,707) (148,047) (682) 21,864 713 942,008 851,764 7,858 859,622
--------- --------- ------------ ----------- ------------- ---------- --------- ------------- ---------- ------------- ------------- ----------
Transactions with owners recognised
directly in equity
Shares issued 167 4,090 - - - - - - - 4,257 - 4,257
Employee share based
compensation - - - - - - 3,957 - - 3,957 - 3,957
Exercise or lapsing of share
options - - - - - - (2,917) - 2,917 - - -
Dividends - - - - - - - - (14,557) (14,557) - (14,557)
Transactions with
non-controlling
interests:
Dividends paid to - - - - - - - - - - - -
non-controlling
interests
--------- --------- ------------ ----------- ------------- ---------- --------- ------------- ---------- ------------- ------------- ----------
Transactions with owners 167 4,090 - - - - 1,040 - (11,640) (6,343) - (6,343)
--------- --------- ------------ ----------- ------------- ---------- --------- ------------- ---------- ------------- ------------- ----------
Total comprehensive income
for
the period
Profit for the period - - - - - - - - 49,880 49,880 71 49,951
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Cash flow hedging
in
equity
- current year - - - - - (2,347) - - - (2,347) - (2,347)
- reclassification
to profit - - - - - (59) - - - (59) - (59)
- tax impact - - - - - 313 - - - 313 - 313
Exchange differences on
translating
foreign operations - - - - 21,805 - - - - 21,805 77 21,882
Items that will not be reclassified to profit or loss
Defined benefit pension - - - - - - - - - - - -
scheme
Income taxes relating to - - - - - - - - - - - -
actuarial
gains/(losses) on defined
benefit
pension scheme
Total comprehensive income
for
the period - - - - 21,805 (2,093) - - 49,880 69,592 148 69,740
--------- --------- ------------ ----------- ------------- ---------- --------- ------------- ---------- ------------- ------------- ----------
Balance at 30 June
2014 22,914 47,235 723 (30,707) (126,242) (2,775) 22,904 713 980,248 915,013 8,006 923,019
--------- --------- ------------ ----------- ------------- ---------- --------- ------------- ---------- ------------- ------------- ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (unaudited)
For the half year ended 30 June 2013
Share Total
Capital Cash based attributable Non-
Share Share redemption Treasury Translation flow payment Revaluation Retained to owners controlling Total
capital premium reserve shares reserve hedging reserve reserve Earnings of the interests equity
reserve parent
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1
January
2013 22,542 40,570 723 (30,707) (116,884) 97 24,013 713 865,196 806,263 7,115 813,378
--------- --------- ------------ ----------- ------------- --------- --------- ------------- ---------- ------------- ------------- ----------
Transactions
with owners
recognised
directly in
equity
Shares issued 153 1,367 - - - - - - - 1,520 - 1,520
Employee share
based
compensation - - - - - - 3,773 - - 3,773 - 3,773
Exercise or
lapsing of share
options - - - - - - (5,415) - 5,415 - - -
Dividends - - - - - - - - (12,272) (12,272) - (12,272)
Transactions with
non-controlling
interests:
Dividends paid to
non-controlling
interests - - - - - - - - - - (232) (232)
--------- --------- ------------ ----------- ------------- --------- --------- ------------- ---------- ------------- ------------- ----------
Transactions with
owners 153 1,367 - - - - (1,642) - (6,857) (6,979) (232) (7,211)
--------- --------- ------------ ----------- ------------- --------- --------- ------------- ---------- ------------- ------------- ----------
Total
comprehensive
income for
the period
Profit for the
period - - - - - - - - 38,824 38,824 413 39,237
Other
comprehensive
income
Items that may be
reclassified
subsequently to
profit or loss
Cash flow hedging
in equity
- current year - - - - - 2,451 - - - 2,451 - 2,451
-
reclassification
to profit - - - - - (194) - - - (194) - (194)
Exchange
differences on
translating
foreign
operations - - - - (22,168) - - - - (22,168) 67 (22,101)
Items that will
not be
reclassified
subsequently to
profit or loss
Defined benefit - - - - - - - - - - - -
pension scheme
Income taxes - - - - - - - - - - - -
relating to
actuarial
gains/(losses) on
defined benefit
pension scheme
Total
comprehensive
income for
the period - - - - (22,168) 2,257 - - 38,824 18,913 480 19,393
--------- --------- ------------ ----------- ------------- --------- --------- ------------- ---------- ------------- ------------- ----------
Balance at 30
June
2013 22,695 41,937 723 (30,707) (139,052) 2,354 22,371 713 897,163 818,197 7,363 825,560
--------- --------- ------------ ----------- ------------- --------- --------- ------------- ---------- ------------- ------------- ----------
Kingspan Group plc
Condensed consolidated statement of changes in equity (audited)
For the financial year ended 31 December 2013
Share Total
Capital Cash Based attributable Non
Share Share Redemption Treasury Translation flow Payment Revaluation Retained to owners Controlling Total
Capital Premium Reserve Shares Reserve Hedging Reserve Reserve Earnings of the Interests Equity
Reserve parent
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1
January
2013 22,542 40,570 723 (30,707) (116,884) 97 24,013 713 865,196 806,263 7,115 813,378
-------- -------- ----------- ---------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Transactions with owners recognised directly in equity
Shares issued 205 2,575 - - - - - - - 2,780 - 2,780
Employee share
based
compensation - - - - - - 7,227 - - 7,227 - 7,227
Tax on employee
share
based
compensation - - - - - - (233) - 2,089 1,856 - 1,856
Exercise or
lapsing
of share options - - - - - - (9,143) - 9,143 - - -
Dividends - - - - - - - - (21,570) (21,570) - (21,570)
Transactions with
non-controlling
interests:
Buy out of
non-controlling
interests - - - - - - - - (1,515) (1,515) (27) (1,542)
Dividends paid to
non-controlling
interests - - - - - - - - - - (442) (442)
-------- -------- ----------- ---------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Transactions with
owners 205 2,575 - - - - (2,149) - (11,853) (11,222) (469) (11,691)
-------- -------- ----------- ---------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Total
comprehensive
income for the
year
Profit for the
year - - - - - - - - 87,643 87,643 1,513 89,156
Other
comprehensive
income
Items that may be reclassified subsequently to profit or loss
Cash flow hedging
in equity
- current year - - - - - (1,028) - - - (1,028) - (1,028)
-
reclassification
to profit - - - - - 152 - - - 152 - 152
- tax impact - - - - - 97 - - - 97 97
Exchange
differences
on translating
foreign
operations - - - - (31,163) - - - - (31,163) (301) (31,464)
Items that will not be reclassified subsequently to profit or loss
Defined benefit
pension
scheme - - - - - - - - 1,350 1,350 - 1,350
Income taxes
relating
to actuarial
gains/
(losses) on
defined
benefit pension
scheme - - - - - - - - (328) (328) - (328)
Total
comprehensive
income for the
year - - - - (31,163) (779) - - 88,665 56,723 1,212 57,935
-------- -------- ----------- ---------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Balance at 31
December
2013 22,747 43,145 723 (30,707) (148,047) (682) 21,864 713 942,008 851,764 7,858 859,622
-------- -------- ----------- ---------- ------------ -------- -------- ------------ --------- ------------- ------------ ---------
Kingspan Group plc
Condensed consolidated statement of cash flows (unaudited)
for the half year ended 30 June 2014
6 months 6 months
ended ended
30 June 2014 30 June
2013
(Restated)*
EUR'000 EUR'000
Operating activities
Profit for the period before income
tax 60,036 47,090
Depreciation of property, plant
and equipment and
amortisation of intangible assets 21,922 21,755
Employee equity-settled share options 3,957 3,773
Finance income (191) (399)
Finance expense 7,147 7,217
Non-cash items 1,739 1,917
Profit on sale of property, plant
and equipment (106) (104)
Change in inventories (33,539) (17,482)
Change in trade and other receivables (72,290) (63,638)
Change in trade and other payables 76,359 40,966
Pension contributions (1,227) (1,325)
---------- ---------
Cash generated from operations 63,807 39,770
Taxes paid (6,045) (5,298)
---------- ---------
Net cash flow from operating activities 57,762 34,472
---------- ---------
Investing activities
Additions to property, plant and
equipment (21,510) (18,612)
Proceeds from disposals of property,
plant and equipment 545 461
Purchase of subsidiary undertakings (23,404) -
Payment of deferred consideration (441) -
in respect of acquisitions
Interest received 191 329
---------- ---------
Net cash flow from investing activities (44,619) (17,822)
---------- ---------
Financing activities
Drawings / (Repayment) of bank loans (2,485) 505
Change in finance lease liability (135) (177)
Proceeds from share issues 4,257 1,520
Interest paid (7,832) (6,593)
Dividend paid to non-controlling
interest - (232)
Dividends paid (14,557) (12,272)
---------- ---------
Net cash flow from financing activities (20,752) (17,249)
---------- ---------
Decrease in cash and cash equivalents (7,609) (599)
Translation adjustment 3,733 (3,456)
Cash and cash equivalents at the
beginning of the period 196,587 139,910
---------- ---------
Cash and cash equivalents at the
end of the period 192,711 135,855
---------- ---------
Cash and cash equivalents at beginning
of period were made up of:
- Cash and cash equivalents 196,587 140,295
- Overdrafts - (385)
---------- ---------
196,587 139,910
---------- ---------
Cash and cash equivalents at end
of period were made up of:
- Cash and cash equivalents 192,711 135,855
- Overdrafts - -
---------- ---------
192,711 135,855
---------- ---------
* IFRS 11 'Joint Arrangements' has been adopted as required by
IFRS for the half year ended 30 June 2014. The comparatives for the
half year ended 30 June 2013 and for the year ended 31 December
2013 have been restated (refer to note 14).
Kingspan Group plc
Notes
forming part of the financial statements
1 Reporting entity
Kingspan Group plc ("the Company" or "the Group") is a public
limited company registered and domiciled in Ireland. The condensed
consolidated interim financial statements of the Company as at and
for the six months ended 30 June 2014 comprise the Company and its
subsidiaries (together referred to as the "Group") and the Group's
interests in jointly controlled entities.
The Group is primarily involved in the manufacture of high
performance insulation and building envelope solutions.
The financial information presented in the half-yearly report
does not represent full statutory accounts. Full statutory accounts
for the year ended 31 December 2013 prepared in accordance with
IFRS, as adopted by the EU, upon which the auditors have given an
unqualified audit report, are available on the Group's website
(www.kingspan.com).
2 Basis of preparation
This Half-Yearly Financial Report is unaudited but has been
reviewed by the auditors.
(a) Statement of compliance
These condensed consolidated interim financial statements (the
Interim Financial Statements) have been prepared in accordance with
IAS 34 Interim Financial Reporting and do not include all of the
information required for full annual financial statements.
The Interim Financial Statements were approved by the Board of
Directors on 22 August 2014.
(b) Significant accounting policies
The accounting policies applied by the Group in the Interim
Financial Statements are the same as those applied by the Group in
its consolidated financial statements as at and for the year ended
31 December 2013, except for the adoption of IFRS 10 Consolidated
Financial Statements, IFRS 11 Joint Arrangements, IFRS 12
Disclosure of Interests in Other Entities, IFRIC 21 Levies and
amendments to IAS 27, IAS 28, IAS 32, IAS 36 and IAS 39.
The effect of the adoption of IFRS 11 is set out in note 14. The
adoption of other new standards and interpretations (as set out in
the 2013 Annual Report) that become effective in the current period
did not have any significant impact on the interim financial
statements.
Comparative information has been restated, where applicable to
be consistent.
The Income Statement has been expanded to include cost of sales,
gross profit and operating costs in order to assist the reader to
better understand the components of profit.
(c) Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing the Interim Financial Statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
as at and for the year ended 31 December 2013.
The Interim Financial Statements are available on the Group's
website (www.kingspan.com).
3 Reporting currency
The Interim Financial Statements are presented in euro which is
the functional currency of the Company and presentation currency of
the Group.
Results and cash flows of foreign subsidiary undertakings have
been translated into euro at the average exchange rates for the
period, as these approximate the exchange rates at the dates of the
transactions. The related assets and liabilities have been
translated at the closing rates of exchange ruling at the end of
the reporting period.
The following significant exchange rates were applied during the
period:
Average rate Closing rate
H1 2014 H1 2013 FY 2013 30.06.14 30.06.13 31.12.13
Euro =
Pound Sterling 0.822 0.851 0.849 0.800 0.850 0.833
US Dollar 1.371 1.314 1.329 1.362 1.304 1.377
Canadian Dollar 1.504 1.333 1.369 1.457 1.360 1.464
Australian Dollar 1.499 1.295 1.378 1.446 1.400 1.540
Czech Koruna 27.443 25.687 25.976 27.468 25.887 27.401
Polish Zloty 4.175 4.176 4.195 4.154 4.331 4.151
Hungarian Forint 306.79 296.09 296.87 308.55 295.39 297.08
4 Operating segments
The Group has the following four reportable segments:
Insulated Panels Manufacture of insulated panels, structural framing
and metal facades.
Insulation Boards Manufacture of rigid insulation boards, building
services insulation and engineered timber systems.
Environmental Manufacture of distributed energy, water and environmental
management solutions.
Access Floors Manufacture of raised access floors.
Analysis by class of
business
Segment revenue
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Total revenue - H1 2014 526.1 221.1 71.6 70.5 889.3
Total revenue - H1 2013
(restated)* 482.5 218.8 71.3 78.9 851.5
Segment result (profit before finance expense)
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Trading profit - H1
2014 43.7 17.7 0.2 7.6 69.2
Intangible amortisation (1.4) (0.7) (0.1) - (2.2)
----------------- ----------------- ------------------ ---------- ---------
Operating result - H1
2014 42.3 17.0 0.1 7.6 67.0
----------------- ----------------- ------------------ ----------
Net finance expense (7.0)
---------
Profit for the period before income tax 60.0
Income tax expense (10.1)
---------
Profit for the period
- H1 2014 49.9
---------
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Trading profit - H1
2013 33.5 13.4 0.8 8.1 55.8
Intangible amortisation (1.1) (0.7) (0.1) - (1.9)
----------------- ----------------- ------------------ ---------- ---------
Operating result - H1
2013 32.4 12.7 0.7 8.1 53.9
----------------- ----------------- ------------------ ----------
Net finance expense (6.8)
---------
Profit for the period before income tax 47.1
Income tax expense (7.9)
---------
Profit for the period
- H1 2013 39.2
---------
Segment assets and liabilities
Total Total
Insulated Insulation Access 30 June 30 June
Panels Boards Environmental Floors 2014 2013
EURm EURm EURm EURm EURm EURm
Assets - H1 2014 804.6 451.0 156.3 136.2 1,548.1
Assets - H1 2013
(restated)* 732.8 438.8 160.1 133.8 1,465.5
Derivative financial
instruments 1.5 15.0
Cash and cash
equivalents 192.7 135.9
Deferred tax asset 7.1 9.1
--------- ---------
Total assets 1,749.4 1,625.5
--------- ---------
Liabilities - H1
2014 (270.6) (105.2) (39.5) (25.4) (440.7)
Liabilities - H1
2013 (restated)* (250.4) (96.2) (37.6) (22.9) (407.1)
Interest bearing loans and borrowings (current
and non-current) (301.3) (314.8)
Derivative financial instruments (current and
non-current) (8.3) -
Deferred consideration (current and non-current) (12.4) (7.9)
Income tax liabilities (current and deferred) (63.7) (70.2)
--------- ---------
Total liabilities (826.4) (800.0)
--------- ---------
Other segment information
Insulated Insulation Access
Panels Boards Environmental Floors Total
EURm EURm EURm EURm EURm
Capital Investment -
H1 2014 11.0 8.7 1.1 0.7 21.5
Capital Investment -
H1 2013 11.1 8.1 1.1 0.8 21.1
Depreciation included
in segment
result - H1 2014 (11.5) (5.7) (1.6) (0.9) (19.7)
Depreciation included
in segment
result - H1 2013 (restated)* (11.5) (5.4) (1.8) (1.1) (19.8)
Non cash items included
in segment result - H1
2014 (2.0) (1.2) (0.4) (0.4) (4.0)
Non cash items included
in segment result -H1
2013 (2.8) (1.5) (0.8) (0.5) (5.6)
Analysis of segmental data by
geography
Republic United Rest
of Ireland Kingdom of Americas Others Total
EURm EURm Europe EURm EURm EURm
EURm
Income Statement
Items
Revenue - H1 2014 35.1 335.3 314.2 113.7 91.0 889.3
Revenue - H1 2013
(restated)* 36.0 290.7 316.6 119.8 88.4 851.5
Statement of Financial Position Items
Non current assets
- H1 2014 51.8 336.4 298.8 177.2 65.2 929.4
Non current assets
- H1 2013 54.9 321.7 304.1 159.2 60.3 900.2
Capital Investment
- H1 2014 1.1 6.0 10.7 2.0 1.7 21.5
Capital Investment
- H1 2013 1.2 7.9 9.2 2.3 0.5 21.1
In presenting information on the basis of geographic segments,
segment revenue is based on the geographic location of
customers.
Segment assets are based on the geographic location of the
assets.
5 Seasonality of operations
Activity in the global construction industry is characterised by
cyclicality and is dependent to a significant extent on the
seasonal impact of weather in some of the Group's operating
locations. Activity is second half weighted.
6 Finance expense and finance income
6 months 6 months
ended ended
30 June 30 June
2014 2013
EUR'000 EUR'000
Finance expense
Bank loans 1,123 1,347
Private placement 5,869 5,956
Net defined benefit pension scheme 91 157
Fair value movement on derivative
financial instruments (1,760) (99)
Fair value movement on private placement
debt 1,824 (144)
--------- ---------------------------------
7,147 7,217
Finance income
Interest earned (191) (399)
Net finance cost 6,956 6,818
--------- ---------------------------------
No borrowing costs were capitalised during the period (H1 2013:
Nil).
7 Taxation
Taxation provided for on profits is EUR10.1m which represents
16.2% of the profit before tax and amortisation for the period (H1
2013: 16%). The full year effective tax rate in 2013 was 13.8%. The
taxation charge for the six month period is accrued using an
estimate of the applicable rate for the year as a whole.
8 Analysis of net debt
At At
30 June 30 June
2014 2013
EUR'000 (Restated)*
EUR'000
Cash and cash equivalents 192,711 135,855
Derivative financial instruments (4,852) 13,859
Current borrowings (4,300) (4,121)
Non-current borrowings (296,971) (310,681)
Total net debt (113,412) (165,088)
------------ -------------
Net debt, which is a non GAAP measure, is stated net of interest
rate and currency hedges which relate to hedges of debt. Foreign
currency derivatives which are used for transactional hedging are
not included in the definition of net debt.
9 Financial instruments
The following table outlines the components of net debt by
category:
Loans & Receivables Liabilities
& Other Financial at Fair Derivatives
Assets/(Liabilities) Value Designated Total
at Amortised through as Hedging Net Debt
Cost Profit Instruments by Category
EUR'm or EUR'm EUR'm
Loss
EUR'm
Assets:
Interest rate swaps - - 1.5 1.5
Cash at bank and in
hand 192.7 - - 192.7
---------------------- ------------ -------------- --------------
Total assets 192.7 - 1.5 194.2
---------------------- ------------ -------------- --------------
Liabilities:
Interest rate swaps - - (6.4) (6.4)
Private placement notes (177.2) (119.4) - (296.6)
Other bank loans (4.6) - - (4.6)
---------------------- ------------ -------------- --------------
Total liabilities (181.8) (119.4) (6.4) (307.6)
---------------------- ------------ -------------- --------------
At 30 June 2014 10.9 (119.4) (4.9) (113.4)
---------------------- ------------ -------------- --------------
Loans & Receivables Liabilities
& Other Financial at Fair Derivatives
Assets/(Liabilities) Value Designated Total
at Amortised through as Hedging Net Debt
Cost Profit Instruments by Category
EUR'm or EUR'm EUR'm
Loss
EUR'm
Assets:
Interest rate swaps - - 13.9 13.9
Cash at bank and in
hand 135.9 - - 135.9
---------------------- ------------ -------------- --------------
Total assets 135.9 - 13.9 149.8
---------------------- ------------ -------------- --------------
Liabilities:
Private placement notes (31.7) (278.8) - (310.5)
Other bank loans (4.4) - - (4.4)
---------------------- ------------ -------------- --------------
Total liabilities (36.1) (278.8) - (314.9)
---------------------- ------------ -------------- --------------
At 30 June 2013 (restated)* 99.8 (278.8) 13.9 (165.1)
---------------------- ------------ -------------- --------------
For information on the currency and maturity profile of net debt
please refer to note 21 in the 2013 annual report.
Fair Value of financial instruments carried at fair value
Financial instruments recognised at fair value are analysed
between those based on quoted prices in active markets for
identical assets or liabilities (Level 1), those involving inputs
other than quoted prices that are observable for the assets or
liabilities, either directly or indirectly (Level 2); and those
involving inputs for the assets or liabilities that are not based
on observable market data (Level 3). The following table sets out
the fair value of all financial instruments whose carrying value is
at fair value:
Level 1 Level 2 Level 3
30 June 30 June 30 June
2014 2014 2014
EUR'm EUR'm EUR'm
Financial assets
Interest rate swaps - 1.5 -
Foreign exchange contracts for
hedging - - -
Financial liabilities
Deferred contingent consideration - - (12.4)
Interest rate swaps - (6.4) -
Foreign exchange contracts for
hedging - (2.0) -
---------- --------- ---------
At 30 June 2014 - (6.9) (12.4)
---------- --------- ---------
Level 1 Level 2 Level 3
30 June 30 June 30 June
2013 2013 2013
EUR'm EUR'm EUR'm
Financial assets
Interest rate swaps - 13.9 -
Foreign exchange contracts for
hedging - 1.1 -
Financial liabilities
Deferred contingent consideration - - (7.9)
Interest rate swaps - - -
Foreign exchange contracts for
hedging - - -
---------- --------- ---------
At 30 June 2013 - 15.0 (7.9)
---------- --------- ---------
All derivatives entered into by the Group are included in level
2 and consist of foreign currency forward contracts, interest rate
swaps and cross currency interest rate swaps.
Where derivatives are traded either on exchanges or liquid
over-the-counter markets, the Group uses the closing price at the
reporting date. Normally, the derivatives entered into by the Group
are not traded in active markets. The fair values of these
contracts are estimated using a valuation technique that maximises
the use of observable market inputs, e.g. market exchange and
interest rates.
Deferred contingent consideration is included in level 3.
Further details on deferred contingent consideration is set out in
notes 20 and 24 of the 2013 Annual Report. The EUR4.9m increase in
deferred contingent consideration in the period since December 2013
arises from the Dri Design acquisition (see note 15), the effect of
movement in exchange rates and a small payment. The contingent
element is measured on a series of trading performance targets, and
is adjusted by the application of a range of outcomes and
associated probabilities.
During the period ended 30 June 2014, there were no significant
changes in the business or economic circumstances that affect the
fair value of financial assets and liabilities, no
reclassifications and no transfers between levels of the fair value
hierarchy used in measuring the fair value of the financial
instruments.
Fair Value of financial instruments at amortised cost
Except as detailed below, it is considered that the carrying
amounts of financial assets and financial liabilities recognised at
amortised cost in the condensed consolidated interim financial
statements approximate their fair values.
Private placement notes Carrying amount Fair value
EUR'm EUR'm
At 30 June 2014 296.6 313.3
At 30 June 2013 310.5 312.0
10 Dividends
A final dividend on ordinary shares of 8.5 cent per share in
respect of the year ended 31 December 2013 (31 December 2012:
7.25c) was paid on 15 May 2014.
The Directors are proposing an interim dividend of 6.25 cent
(2013: 5.5 cent) per share in respect of 2014, which will be paid
on 26 September 2014 to shareholders on the register on the record
date of 5 September 2014.
11 Earnings per share
6 months 6 months
ended ended
30 June 30 June
2014 2013
EUR'000 EUR'000
The calculations of earnings per
share are based on the following:
Profit attributable to owners
of the Company 49,880 38,824
--------------- -----------
Number of Number
shares ('000) of
6 months shares
ended ('000)
30 June 6 months
2014 ended
30 June
2013
Weighted average number of ordinary
shares for
the calculation of basic earnings
per share 170,790 169,105
Dilutive effect of share options 3,605 3,440
--------------- -----------
Weighted average number of ordinary
shares
for the calculation of diluted
earnings per share 174,395 172,545
--------------- -----------
EUR cent EUR cent
Basic earnings per share 29.2 23.0
Diluted earnings per share 28.6 22.5
Adjusted basic (pre amortisation)
earnings per share 30.5 24.1
The number of options which are anti-dilutive and have therefore
not been included in the above calculations are 613,012 (H1 2013:
1,207,684).
12 Property, plant & equipment
At At At
30 June 30 June 31 Dec
2014 2013 2013
(Restated)* (Restated)*
EUR'000 EUR'000 EUR'000
Cost or valuation 1,116,647 1,111,551 1,084,016
Accumulated depreciation
and impairment charges (621,716) (617,415) (596,265)
------------ ------------- ---------------
Net carrying amount 494,931 494,136 487,751
------------ ------------- ---------------
Opening net carrying amount 487,680 503,761 503,761
Acquisitions through business
combinations 179 - (1,000)
Additions 21,343 21,105 43,770
Disposals (471) (359) (2,581)
Reanalysed from "held for
sale" - - 395
Depreciation charge (19,711) (19,808) (39,661)
Impairment charge (1,214) - (5,623)
Effect of movement in exchange
rates 7,125 (10,563) (11,310)
Closing net carrying amount 494,931 494,136 487,751
------------ ------------- ---------------
The disposals generated a profit of EUR0.1m (H1 2013: EUR0.1m
profit) which has been included within Operating Costs.
13 Reconciliation of net cash flow to movement in net debt
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2013
2014 2013
(Restated)* (Restated)*
EUR'000 EUR'000 EUR'000
(Decrease)/increase in cash
and bank overdrafts (7,610) (598) 60,876
(Increase)/decrease in debt 2,485 (505) (3,804)
(Increase)/decrease in lease
finance 135 177 423
------------ ------------- -------------
Change in net debt resulting
from cash flows (4,990) (926) 57,495
Translation movement - relating
to US dollar loans (6,188) 3,503 23,515
Translation movement - other 3,706 (3,475) (4,049)
Derivative financial instruments
movement 806 1,032 (18,485)
------------ ------------- -------------
Net movement (6,666) 134 58,476
Net debt at start of the
period (106,746) (165,222) (165,222)
------------ ------------- -------------
Net debt at end of the period (113,412) (165,088) (106,746)
------------ ------------- -------------
14 Change in accounting policy and reclassification
The Group adopted IFRS 11 'Joint Arrangements' from 1 January
2014 with retrospective application to 2013, as required by the
standard. Previously the Group reported its share of the results
from Joint Arrangements separately on each line of the Income
Statement and its share of the assets and liabilities separately on
each line of the Statement of Financial Position. The standard now
requires that the Group report only its share of the profit after
tax and the net investment in the Joint Arrangements. The share of
the profit after tax from Joint Arrangements for the half year
ending 30 June 2014 was EUR365,000 (half year ending 30 June 2013:
loss of EUR89,000). Due to the relative size of these amounts, the
share of results from Joint Arrangements has been included within
the Operating Costs line of the Income Statement. The adoption of
IFRS 11 on the individual line items in the Statement of Financial
Position and the Statement of Cash Flows is not material.
15 Acquisitions
On 28 February 2014 the Group acquired 95% of the share capital
in Dri-Design Inc., a high-end architectural facades business in
the US. This acquisition will allow the Group to expand its product
offering to customers in its Panels division. The provisional fair
value of the acquired assets and liabilities at that date are set
out below:
EUR'000
Non-current assets
Intangible assets 5,118
Property, plant and equipment 179
Deferred tax assets 485
Current assets
Inventories 954
Trade and other receivables 2,879
Current liabilities
Trade and other payables (2,107)
Provisions for liabilities (702)
---------
Total identifiable assets 6,806
Goodwill 21,761
---------
Total consideration 28,567
---------
Satisfied by:
Cash 23,404
Deferred contingent consideration 5,163
---------
28,567
---------
Since the valuation of the fair value of assets and liabilities
recently acquired is still in progress, the above values are
determined provisionally.
The acquired goodwill is attributable principally to the profit
generating potential of the business, together with cross-selling
opportunities and other synergies expected to be achieved from
integrating the acquired company into the Group's existing
business.
The gross value, before impairment provisions, of trade and
other receivables at acquisition was EUR4.4m. The deferred
contingent consideration includes a potential amount payable to the
former owners if certain trading targets are achieved and an
estimate for the buy-out of the non-controlling interest. There are
put and call option arrangements in place that are exercisable
between years 3 and 5 and are based on a multiple of EBITDA. As
these options are expected to be exercised, the Group has
consolidated the acquired entity as a 100% subsidiary.
In the post-acquisition period to 30 June 2014, the acquired
business contributed revenue of EUR5.4m and a trading profit of
EUR0.75m to the Group's results.
16 Capital and reserves
Issues of ordinary shares
1,283,257 ordinary shares (H1 2013: 1,176,516) were issued as a
result of the exercise of vested options arising from the Group's
share option schemes (see the 2013 Annual Report for full details
of the Group's share option schemes). Options were exercised at an
average price of EUR3.32 per option.
17 Significant events and transactions
There were no individually significant events or transactions in
the period which contributed to the material changes in the
Statement of Financial Position; the more significant movements are
described below:
-- the changes in Inventories, Trade & other receivables and
Trade & other payables reflect the normal business cycle;
-- the fair value of derivatives moved as a result of the
movements in the US dollar exchange rate against both sterling and
the euro; and
-- the positive currency translation movement of EUR21.8m
reflected in the Consolidated Statement of Comprehensive Income
reflects primarily the strengthening of sterling, partially offset
by the weakening of US dollars, Australian dollars and Canadian
dollars.
18 Related party transactions
There were no changes in related party transactions from the
2013 Annual Report that could have a material effect on the
financial position or performance of the Group in the first half of
the year.
19 Subsequent events
There have been no material events subsequent to 30 June 2014
which would require disclosure in this report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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