TIDMLWB
RNS Number : 2198Z
Low & Bonar PLC
04 February 2014
Low & Bonar PLC
("Low & Bonar" or "the Group")
Final Results for the year ended 30 November 2013
MOMENTUM REGAINED, CONFIDENT OF FURTHER PROGRESS
Low & Bonar PLC ("Low & Bonar" or "the Group"), the
international performance materials group, today announces its
final results for the year ended 30 November 2013.
Highlights
Continuing operations
2013 2012 Actual Constant
currency(1)
Revenue GBP403.1m GBP380.5m +5.9% +2.8%
Operating margin (2) 8.0% 8.0% -
PBTA (2) GBP26.1m GBP 24.5m +6.5% +2.7%
Profit before taxation GBP17.8m GBP6.1m
(statutory) (3)
Adjusted earnings per
share (2) 6.2p 6.3p -0.8%
Dividend per share 2.6p 2.4p +8.3%
Return on capital (4) 16.8% 17.2% -40bps
-- Strong second half performance resulted in another year of sales and profit growth
-- Further investments made to enhance the Group's strategic positioning and growth prospects
-- Dividend increase of 8% reflecting the Board's confidence in the coming year
(1) (Constant currency is calculated by retranslating
comparative period results at current period exchange rates)
(2) (Profit before tax, amortisation and non-recurring
items)
(3) (After amortisation and non-recurring items)
(4) (Last 12 months operating profit as a percentage of
operating capital employed)
Martin Flower, Chairman, said:
"These are good results during a period of continued
macroeconomic challenge in Europe and poor weather in the first
half of the year, providing further evidence of the quality and
resilience of our business and its growth prospects.
The Group has continued to make investments to drive future
growth: extending its product range in attractive segments with the
acquisition of Texiplast, and increasing its geographic reach.
These investments are already contributing to the current year and
further underpin the Board's confidence in a continuation of cash
generative, profitable growth."
4 February 2014
For further information, please contact:
Low & Bonar PLC 020 7535 3180
Steve Good, Group Chief Executive
Mike Holt, Group Finance Director
Instinctif Partners 020 7457 2020
Matthew Smallwood
Helen Tarbet
CHAIRMAN's STATEMENT
I am pleased to report that the Group had a strong second half
and delivered another year of profit growth.
Profit before tax, amortisation and non-recurring items on a
constant currency basis increased by 2.7% on revenues up 2.8% on
last year. The second half of the year saw like-for-like revenues
increase by 5.1% and pre-tax profits by 16.6% against a background
of continuing macroeconomic weakness in Europe which accounts for
about two thirds of Group sales. Including Texiplast, reported
sales increased by 6.3% and pre-tax profits by 19.1% in the second
half. Demand for our products remains robust and reflects the
diversity and strength of our niche market positions and
products.
Profit before tax, amortisation and non-recurring items rose
6.5% to GBP26.1m (2012: GBP24.5m). Earnings per share were broadly
unchanged at 6.2 pence (2012: 6.3 pence) taking into account the
10% share placing in September. Statutory profit before tax from
continuing operations was GBP17.8m (2012: GBP6.1m) after
non-recurring charges of GBP2.7m (2012: GBP12.6m) and an
amortisation charge of GBP5.6m (2012: GBP5.8m). Non-recurring
charges in 2013 principally relate to costs associated with
acquiring Texiplast and starting-up our geotextile joint venture,
Bonar Natpet, in Saudi Arabia.
Investing to drive future growth
During the year, the Group has made further investments
totalling GBP21.2m to support management initiatives for future
growth.
To drive growth within the Group's civil engineering sector, we
acquired Texiplast, a manufacturer of soil reinforcement,
separation, filtration and erosion control products for a net cash
payment of EUR18.9m (GBP15.9m) on 6 September. The acquisition of
Texiplast, which is performing well, enables Bonar to become a more
integrated provider of solutions for civil engineering projects,
provides sales leverage for the extended product range and improves
access to Texiplast's principal Central and Eastern European
markets. We continue to seek other investment opportunities,
including those outside of Europe.
The Group invested GBP11.3m (2012: GBP13.2m) in property, plant
and equipment during the year to support volume growth in key
markets. In addition, the Group's joint venture in Saudi Arabia,
Bonar Natpet, began manufacturing from its new factory. The joint
venture, which will supply geotextiles to the fast growing Middle
East civil engineering market, will gradually build sales during
2014. We are also planning to make further capital investments in
Asia in the coming year.
We have continued to invest in organisational capability,
particularly within sales and marketing in Bonar, both in North
America and Asia. We have also strengthened the leadership team in
Technical Coated Fabrics to support its strategy of driving growth
through expansion in attractive niche markets and operational
efficiency. Both of these investments are now delivering
benefits.
Share placing
The Group successfully completed a placing of ordinary shares
representing 10% of its share capital on 11 September raising
GBP20m. The proceeds funded the acquisition of Texiplast and will
provide the Group with the flexibility and headroom to continue to
pursue its growth ambitions.
Yarns
Although conditions remain tough within the artificial grass
yarns market, we are pleased that actions taken to reduce costs and
improve performance have produced a small, but encouraging, profit
this year. Further actions are being taken to improve performance
within the Yarns business.
Increased Dividend
To reflect the Board's continuing confidence in the Group's
future, we are proposing a final dividend payment of 1.75 pence per
share (2012: 1.6 pence). Subject to shareholders' approval at the
Annual General Meeting in March, the dividend will be paid on 17
April 2014 to members registered as of 21 March 2014. The proposed
full year dividend of 2.6 pence per share (2012: 2.4 pence per
share) is covered 2.4 times (2012: 2.6 times) by earnings before
amortisation and non-recurring items.
People
Our key asset is our people. Our current and future success
rests entirely with them. I believe that Low & Bonar has a
highly skilled and motivated team, which is ambitious to achieve
further success. I would like to take this opportunity to thank
them for their hard work during a challenging year.
As separately announced today, Steve Good has informed the Board
of his intention to retire from full time executive roles. A search
for a new Chief Executive has begun. Steve will remain in his
current role until the second half of the year before handing over
to his successor.
Outlook
The Group has continued to make investments to drive future
growth: extending its product range in attractive segments with the
acquisition of Texiplast, and increasing its geographic reach.
These investments are already contributing to the current year and
further underpin the Board's confidence in a continuation of cash
generative, profitable growth.
Martin Flower
4 February 2014
Business Review
Low & Bonar PLC is an international performance materials
group using proprietary technologies to engineer polymers for a
wide range of applications in niche industrial markets.
Sales and profit momentum resumed in second half
2013 2012 Actual Constant
GBPm GBPm currency(1)
Revenues from external customers
Bonar 245.6 238.7 +2.9% -0.3%
Technical Coated Fabrics 124.7 115.3 +8.2% +4.9%
Yarns 32.8 26.5 +23.8% +21.4%
403.1 380.5 +5.9% +2.8%
Group operating margin (2) 8.0% 8.0%
(1) (Constant currency is calculated by retranslating
comparative period results at current period exchange rates)
(2) (Before amortisation and non-recurring items)
It is pleasing to report strong sales and profit growth in both
Technical Coated Fabrics and Yarns, where management actions are
now beginning to deliver real improvement in these businesses
including market share gains. Bonar faced difficult market
conditions in Europe particularly during the first half of the year
and a constrained recovery in the second half within Civil
Engineering.
After a difficult first half, due to abnormal weather conditions
across Europe which saw sales decline by 4.2% within Europe and
1.1% overall, sales for the second half were 5.1% ahead of last
year on a like-for-like constant currency basis and 6.3% ahead
including an in-line fourth quarter contribution of GBP2.5m from
our recently acquired geosynthetic business in Slovakia, Texiplast.
This resulted in like-for-like constant currency sales growth of
2.1% for the year as a whole, 2.8% up on last year with the
inclusion of Texiplast.
Group operating margins for the year were unchanged at 8.0%, but
comfortably ahead during the second half of the year at 9.9% (H2
2012: 9.1%). Margins in the second half were buoyed by a small
profit within Yarns and generally better volumes throughout the
Group, particularly in North America and Europe, offsetting further
investment in organisational capability.
Investing and building for the future
The Group has continued to make investments to accelerate
growth, increase capability and create a stronger business. As with
last year, there have been three areas of focus: bolt-on
acquisitions to expand either the Group's product range or its
geographic reach; capital expenditure; and investing in people and
organisational change.
On 6 September 2013, we announced the acquisition of Texiplast
for EUR18.9m (GBP15.9m). Texiplast manufactures high strength
geosynthetic products for demanding applications in the Civil
Engineering market such as soil reinforcement, separation,
filtration and erosion control. The acquisition extends our
technology base and product range within civil engineering and
enables a stronger solution sell within this important market for
the Group. It also provides sales synergies for both Texiplast's
products and Bonar's existing products and strengthens our position
in the growing Central and East European market. Texiplast is
performing in line with our expectations and is being integrated
within the Bonar division.
We have made further capital investments to increase capacity
and capability for target growth markets within Bonar and to
improve operational efficiency within Technical Coated Fabrics.
Full year expenditure was GBP11.3m of which GBP5.3m was on
expansion. In addition, our Saudi Arabian joint venture with
NATPET, Bonar Natpet, has begun manufacturing products for the
Civil Engineering market in the Middle East and will provide a
strong platform to access this fast growing market over the next
two years.
The merger and reorganisation of Colbond and Fabrics, the two
major businesses within the former Performance Technical Textiles
division, to create Bonar has been completed, increasing its scope
and scale to grow more globally. The enlarged business is organised
regionally with global business roles directing overall strategy
for our key civil engineering, flooring and building &
industrial markets. In January 2013, the merged business was
re-branded 'Bonar'. Bonar has a clear opportunity to leverage its
successful European business and expertise in other regions and
this organisational change is designed to accelerate this
development and put it on a clear path to globalisation. In July
2013, the second phase was completed with regional management teams
established for EMEA, North America and Asia accountable for the
execution of the key market strategies. A new sales and logistics
organisation was set up during the year in Shanghai, China to
augment our focus in Asia, particularly in the fast growing
Flooring market.
The Group therefore enters the new year in a much stronger
position strategically, both in terms of market positioning and
organisational capability and with capacity to deliver a year of
significant progress. The successful share placing in September
also provides the financial headroom and flexibility to continue to
pursue growth opportunities.
Bonar
Our Bonar division supplies products such as geosynthetics,
carpet tile backing, agrotextiles and construction fibres to the
civil engineering, flooring, transport, industrial and construction
sectors.
2013 2012 Actual Constant
currency(1)
Revenue GBP245.6m GBP238.7m +2.9% -0.3%
Operating profit
(2) GBP23.0m GBP25.0m -8.0% -11.5%
Operating margin
(2) 9.4% 10.5%
(1) Constant currency is calculated by retranslating comparative
period results at current period exchange rates
(2) Before amortisation and non-recurring items
Reported sales were 2.9% above last year. Sales on a constant
currency basis, including a GBP2.5m contribution from Texiplast,
were flat. First half sales were 5.3% lower than last year on a
like-for-like basis, due to the abnormal weather conditions across
Europe affecting civil engineering and building products markets
which were both nearly 10% down and account for about 50% of
divisional sales. Second half sales on a like-for-like basis were
2.2% ahead of last year as Civil Engineering (+2.6%) and Building
Products (+8.9%) sales recovered, albeit the recovery within Civil
Engineering was constrained by inventory shortages and extended
lead-times. A maiden contribution from Texiplast advanced civil
engineering sales by a further 5.2% in the second half, in line
with our expectations. The acquisition provides a strong platform
for future growth. Building product sales were strong in the USA
with increased demand within the residential property market
offsetting softness in the European commercial market.
Underlying sales to the Flooring market were steady throughout
the year. North American and Asian volumes continue to grow;
however demand has been lacklustre in Europe. Automotive sales were
disappointing, down 5.6% on last year, as a key customer switched
sourcing on one of its platforms part-way through the year.
Industrial markets were mixed. Good progress continued in new
filtration applications; however, this was offset by a more subdued
agricultural screens market.
The integration of the Colbond and Fabrics commercial activities
was completed during the year creating a new 'go-to-market'
organisation. The focus is now on accelerating growth, particularly
outside of Europe. The division continues to seek investment
opportunities in the USA and has recently set-up a new sales team
and warehousing in Shanghai, China to support and drive growth in
Asia, with a particular focus on China, Taiwan, Malaysia and
Australia.
Our joint venture geotextile plant in Saudi Arabia began
manufacturing shortly before year-end. Utilisation is expected to
gradually build up during the upcoming year and the joint venture
is expected to make a small but positive profit contribution.
Importantly, the ramp up will free up much needed capacity within
Europe to support growth in civil engineering. Capital expenditure
totalled GBP7.5m within Bonar, which included GBP2.5m on extending
capacity and GBP2.9m relating to health and safety projects.
Accident rates have reduced significantly this year and, whilst
there remains some way to go to achieve all of our objectives, this
year's progress has been excellent.
Bonar remains well positioned to grow in its European markets
and continues to invest to accelerate its exposure to markets
outside Europe, where significant growth opportunities exist for
its products and technologies.
Technical Coated Fabrics
Our Technical Coated Fabrics division, Mehler Texnologies (MTX),
supplies products such as side curtains for lorry trailers,
advertising banners, tensioned structures, awnings, marquees and
tarpaulins to the print, architectural and transport markets.
2013 2012 Actual Constant
currency(1)
Revenue GBP124.7m GBP115.3m +8.2% +4.9%
Operating profit (2) GBP12.1m GBP10.7m +13.1% +13.2%
Operating margin (2) 9.7% 9.3%
(1) Constant currency is calculated by retranslating comparative
period results at current period exchange rates
(2) Before amortisation and non-recurring items
Sales on a constant currency basis grew by 4.9%. Sales were
better than last year in all major sectors and margins improved by
40bps to 9.7% with constant currency operating profits growing by
13.2%. The rate of sales growth was particularly strong in the
second half of the year (+6.1%). Improved margins reflect increased
volumes, but more importantly management's focus on margins within
the trailer and niche industrial markets.
In the Transport sector, sales to the trailer side curtain
market advanced 7.1% due to share gains and increased activity in
the new truck market. Sales in the Industrial sector were also
strong, up 6.7% on last year with growth in container applications
and increased demand in higher-end print applications, whilst
competition from low-cost Asian competitors continued to take
uncontested share gains in low-end applications. In the Leisure
sector, sales to boat and pool applications were also lower as
these markets continue to suffer from reduced discretionary
spending; Southern Europe was, as expected, particularly weak. The
division has continued to build its capability to directly service
regions outside of Europe with new investments having been made to
accelerate progress in India, Brazil and the USA. Capital
expenditure totalled GBP4.6m and included GBP2.0m on improving
manufacturing capability.
Further progress has been made in improving operating
efficiencies, a key focus of the leadership team. Despite
significant improvements in the management of health and safety
risks, accident rates increased. Health and safety related capital
expenditure was GBP0.9m.
The division has attractive growth opportunities in
Architectural, Industrial and other niches and this, combined with
a commitment to operational excellence, will drive further
improvements in the growth and quality of earnings.
Yarns
Our Yarns division supplies yarns used in the manufacture of
artificial grass in sports and landscaping applications as well as
yarns used as a backing material in the manufacture of woven
carpets.
2013 2012 Actual Constant
currency(1)
Revenue GBP32.8m GBP26.5m +23.8% +21.4%
Operating profit/(loss) GBP0.5m GBP(1.8)m
(2)
Operating margin (2) 1.5% (6.8)%
(1) Constant currency is calculated by retranslating comparative
period results at current period exchange rates
(2) Before amortisation and non-recurring items
The business, which represents 8% of Group sales, made
significant progress this year. Sales volumes increased by 24%
partly through slightly easier, although still tough, market
conditions but mainly through share gains. Sales to the USA and the
Middle East were particularly strong. Actions taken last year to
reduce costs across the business added to operational leverage to
deliver a small operating profit of GBP0.5m. We are continuing to
work on additional measures to improve performance and the Group is
confident that the business will make further progress in 2014.
FINANCIAL REVIEW
Pre-tax profit
Profit before tax, amortisation and non-recurring items from
continuing operations increased by 6.5% to GBP26.1m (2012:
GBP24.5m), an increase of 2.7% on a constant currency (underlying)
basis. Operating profits were 5.6% higher than last year at
GBP32.2m (2012: GBP30.5m) including a contribution of GBP0.4m from
Texiplast, acquired on 6 September 2013. On an underlying basis,
operating profits were 1.9% ahead. Statutory profit before tax was
GBP17.8m (2012: GBP6.1m) after a net non-recurring charge of
GBP2.7m (2012: GBP12.6m) and a GBP5.6m charge for amortisation
(2012: GBP5.8m).
Non-recurring items
The Group incurred GBP0.9m of costs in connection with its
acquisition of Texiplast and GBP0.1m in relation to potential
acquisitions. In 2012, costs of GBP0.7m were incurred in relation
to acquisitions, mainly in respect of the acquisition of Xeroflor.
A further GBP1.2m (2012: GBP0.2m) of non-recurring costs arose in
relation to the start-up of the Group's joint venture, Bonar
Natpet, which was commissioned during the second half of the year.
This included GBP0.6m (2012: GBPnil) of the Group's share of costs
borne by the joint venture.
Other non-recurring costs related to the set-up of a new legal
entity, sales office and warehousing facility in China (GBP0.3m)
and the integration of the Group's principal Performance Technical
Textile operations into a single global business, Bonar, which
began last year (GBP0.2m (2012: GBP0.5m)).
The carrying value of assets within each Cash Generating Unit
has been reviewed and no impairment or write-back has been booked.
Last year, an impairment charge of GBP11.2m was booked against the
assets within the Yarns business.
Taxation
The overall tax charge on the profit before tax was GBP5.0m
(2012: GBP4.7m). The tax charge on profit from continuing
operations before amortisation and non-recurring items was GBP6.8m
(2012: GBP6.4m), a rate of 26.0% (2012: 26.0%). The full effective
tax rate during 2013 was 27.9% (2012: 77.5%), substantially lower
than last year due to the non-deductible asset impairment arising
in 2012. Prior year adjustments increased the tax rate by 1.2%
(2012: reduced by 2.3%) and relate primarily to changing estimates
in respect of earlier years. The tax rate on profit from continuing
operations before amortisation and non-recurring items for 2014 is
expected to be marginally higher than 2013 due principally to
recent legislative changes in the Netherlands.
Acquisitions
On 6 September 2013, the Group acquired the trade and assets of
Texiplast for a net cash consideration of EUR18.9m (GBP15.9m). The
fair value of assets totalled GBP10.2m including marketing and
customer relationship intangible assets of GBP0.7m. Goodwill
arising on the acquisition was GBP5.7m. Texiplast's business has
been integrated into our Bonar segment, and contributed GBP2.5m and
GBP0.4m to the Group's sales and operating profit before
amortisation and non-recurring items for the year respectively.
The acquisition was funded by a 10% placing of ordinary shares,
which raised GBP19.8m net of costs. The placing also provides
flexibility and headroom for the Group to pursue its growth
ambitions.
Cash
Overall net debt increased to GBP86.8m from GBP82.6m at November
2012. Cash inflow from operations was GBP39.6m (2012: GBP40.3m)
excluding a shareholder loan of GBP9.1m to the Group's 50/50 Saudi
Arabian joint venture, Bonar Natpet. Since year-end, GBP6.0m has
been repaid and the balance of the loan is expected to be repaid in
the coming year.
Trade working capital as a percentage of sales increased from
22% last year to 23%, contributing to a cash outflow into working
capital of GBP4.8m (2012: GBP4.3m) excluding the joint venture
loan.
During the year, the Group spent GBP15.9m (2012: GBP8.6m) on
acquisitions and joint ventures, GBP11.3m (2012: GBP13.2m) on
property, plant and equipment and GBP2.1m (2012: GBP1.0m) on
intangible assets. Excluding replacement and health & safety
capital expenditure, the amount invested in equipment to support
future growth was GBP5.3m (2012: GBP9.5m).
The analysis of the Group's net debt is as follows:
2013 2012
GBPm GBPm
-------------------------- ------- -------
Cash and cash equivalents 17.9 26.9
Total bank debt (104.7) (109.5)
-------------------------- ------- -------
Net bank debt (86.8) (82.6)
-------------------------- ------- -------
The gearing ratio of total net debt to EBITDA was unchanged at
1.9 times.
Pensions
The charges for pensions are calculated in accordance with the
requirement of IAS 19 Employee Benefits. During the year, the
Group's UK defined benefit scheme continued to adopt a lower risk
investment strategy in which the interest rate and inflation risks
were more closely hedged and the exposure to equities was held at
27% of the scheme's assets (2012: 25%). The UK scheme deficit has
reduced to GBP3.8 m (2012: GBP15.1m), principally due to the
outperformance of the scheme's assets against their expected
return. The deficit in the Group's overseas schemes in Belgium,
Germany and the USA reduced to GBP8.9 m (2012: GBP9.7m).
Return on capital
The Group's return on operating capital employed at the year end
was 16.8% (2012: 17.2%).
Earnings per share
Earnings per share before amortisation and non-recurring items
were marginally lower than last year at 6.2 pence per share (2012:
6.3 pence) due to a higher number of shares following the share
placing in September. The weighted average number of shares was
301.0 million (2012: 288.4 million).
Dividends
Taking into account performance during the second half of the
year and our confidence in the future prospects of the Group, the
Board is recommending a final dividend of 1.75 pence per share
(2012: 1.6 pence), increasing the full year dividend to 2.6 pence
per share (2012: 2.4 pence). Subject to shareholders' approval at
the Annual General Meeting in March, the dividend will be paid on
17 April 2014 to members registered as of 21 March 2014. The
proposed full year dividend is covered 2.4 times by earnings before
amortisation and non-recurring items.
Risks and Uncertainties
Global economic activity risks Mitigating strategy
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The Group may be adversely Local operating management monitor their
affected by global economic own markets and are empowered to respond
conditions, particularly in quickly to changing conditions. Production
its principal markets in mainland costs may be quickly flexed to balance
Europe and North America. The production with demand, including the use
volatility of international of short-time working arrangements where
markets could result in reduced available. Further actions, such as reducing
levels of demand for the Group's the Group's cost base and cancelling or
products, a greater risk of delaying capital investment plans, are
customers defaulting on payment available to allow continued profitability
terms, supply chain risk and and cash generation in the face of a sustained
a higher risk of inventory reduction in volumes.
obsolescence.
The Group also has a broad base of customers.
Group policies ensure customers are given
an appropriate level of credit based on
their trading history and financial status,
and a prudent approach is adopted towards
credit control. Credit insurance is used
where available.
Procurement management mitigates supply
chain risk by identifying and qualifying
alternative sources of key raw materials.
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Growth strategy risks Mitigating strategy
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The Board believes that growth, The current focus of the Group is on profitable,
both organic and through acquisitions, cash-generative organic growth supplemented
is a fundamental part of its by acquisitions where appropriate.
strategy for the Group. The
Board reviews such growth opportunities The senior management team is experienced
on an ongoing basis and its and has successfully executed and integrated
acquisition strategy is based several acquisitions and joint ventures
on appropriate acquisition in the past. Acquisitions are made subject
targets being available and to clearly defined criteria in existing
on acquired companies being or adjacent segments whose products and
integrated rapidly and successfully technologies are well understood, and only
into the Group. after extensive pre-acquisition due diligence.
Acquisition proposals are supported by
a detailed post-acquisition integration
plan that is rigorously managed through
to completion.
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Organic growth/competition Mitigating strategy
risks
---------------------------------------- --------------------------------------------------
The markets in which the Group The Group has chosen to operate in attractive
operates are competitive with niche markets within the technical textile
respect to price, geographic industry, using proprietary technology
distinction, functionality, to manufacture products which are important
brand recognition and the effectiveness determinants of the performance and/or
of sales and marketing. efficiency of our customers' final product
or process.
Significant resources are dedicated to
developing and maintaining strong relationships
with our customers, and to developing new
and innovative products which meet their
precise needs.
The Board believes that these factors maintain
the Group's strong competitive position.
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Cyber security risks Mitigating strategy
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Disruption to or penetration The Group has business continuity measures
of our information technology in place to minimise the impact of any
platforms could have a material disruption to its operations. The Group's
adverse effect on the Group. information technology resources are continuously
monitored and maintained by appropriately
trained staff and safeguards are in place
to provide security of our networks and
data.
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Business continuity risks Mitigating strategy
---------------------------------------- --------------------------------------------------
The occurrence of major operational The Group has business continuity/disaster
problems could have a material recovery plans in place to minimise the
adverse effect on the Group. impact of any disruption to its operations
These may include risks of and has process controls and proactive
fire or major environmental maintenance programmes designed to avoid
damage. problems arising. These are supportedby
regular site visits from risk management
and internal audit staff, and training
programmes provided by the Health, Safety
and Environment Committee.
Where appropriate, risks are partially
transferred through insurance programmes.
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Raw material pricing risks Mitigating strategy
--------------------------------------- ---------------------------------------------------
The Group's profitability The Group has a good level of expertise
can be affected by the purchase in polymer purchasing and uses a number
price of its key raw materials of suppliers to ensure a balance between
and its ability to reflect competitive pricing and continuity of supply.
any changes through its
selling prices. The Group's The Group's focus on operating efficiencies
main raw materials are polypropylene, and the strength of its product propositions
polyester, nylon, polyethylene has in the past allowed the effect of raw
and PVC. The prices of these material cost increases to be successfully
raw materials are volatile, mitigated.
and they are influenced
ultimately by oil prices
and the balance of supply
and demand for each polymer.
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Employee risks Mitigating strategy
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The Group is reliant on Employee retention and development is a
its ability to attract, key feature in ensuring the continued success
develop and retain key employees. of the Group. Employees are recruited and
regularly appraised against a formal job
specification. Formal policies cover all
material aspects of employment and we are
committed to high standards of health and
safety at work, effective communication
with employees and employee development.
We empower our people to take initiative,
to think and act for themselves.
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Funding risks Mitigating strategy
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The Group, like many other The Group manages its capital to safeguard
companies, is dependent its ability to continue as a going concern,
on its ability to both service to optimise its capital structure and to
its existing debts, and provide sufficient liquidity to support
to access sufficient funding its operations and the Board's strategic
to refinance its liabilities plans. The Group's borrowing requirements
when they fall due and to are regularly reforecast to ensure funding
provide sufficient capital is in place to support its operations and
to finance its growth strategy. growth plans. Compliance with the covenants
associated with these facilities is closely
monitored.
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Treasury risks Mitigating strategy
--------------------------------------- ---------------------------------------------------
Foreign exchange is the Group policy aims to naturally hedge transactional
most significant treasury foreign exchange risks by buying and selling
risk for the Group. in the same currency. Policy in relation
to residual risk ensures treasury activities
The reported value of profits are focused on the management of risk with
earned by the Group's overseas high quality counterparties; no speculative
entities is sensitive to transactions are undertaken. The Group uses
the strength of Sterling, financial instruments to manage the exposures
particularly against the that may arise from its business operations
Euro and, to a lesser extent, as a result of movements in financial markets.
the US Dollar. The Group
is exposed to a lesser extent
to other treasury risks
such as interest rate risk
and counterparty credit
risk.
--------------------------------------- ---------------------------------------------------
Pension funding risks Mitigating strategy
--------------------------------------- ---------------------------------------------------
The Group may be required The main Group scheme is closed to new members
to increase its contributions and to future benefit accrual; and assumptions,
into its defined benefit including funding rates, are set in line
pension schemes to cover with the actuaries' recommendations. Regular
funding shortfalls. The dialogue takes place with pension fund trustees
funding may be affected and the Board regularly discusses pension
by poor investment performance fund strategy.
of pension fund investments,
changes in the discount
rate applied and longer
life expectancy of members.
--------------------------------------- ---------------------------------------------------
Laws and regulations risks Mitigating strategy
--------------------------------------- ---------------------------------------------------
The Group's operations are The Group's policy manuals ensure all applicable
subject to a wide range legal and regulatory requirements are met
of laws and regulations, or exceeded in all territories in which
including employment, environmental it operates, and ongoing programmes and
and health and safety legislation, systems monitor compliance and provide training
along with product liability for relevant employees.
and contractual risks.
Product liability risks are managed through
stringent quality control procedures covering
review of goods on receipt and prior to
despatch and all manufacturing processes.
Insurance cover, appropriate for the nature
of the Group's business and its size, is
maintained. The Group also seeks to minimise
risks through its terms and conditions of
trading.
--------------------------------------- ---------------------------------------------------
Responsibility statement of the Directors on the Annual Report
and Accounts
The responsibility statement below has been prepared in
connection with the Company's full Annual Report and Accounts for
the year ended 30 November 2013. Certain parts thereof are not
included within this Preliminary Announcement.
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with IFRS,
as adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit of the company
and the undertakings included in the consolidation taken as a
whole; and
* the Strategic Report includes a fair review of the
development and performance of the business and the
position of the company and undertakings included in
the consolidation taken as a whole, together with a
description of the principal risks and uncertainties
that they face.
Directors
The Directors of the Company are:
Martin Flower, Chairman
Steve Good, Chief Executive Officer
Mike Holt, Group Finance Director
Steve Hannam, Non-Executive Director
Trudy Schoolenberg, Non-Executive Director
John Sheldrick, Non-Executive Director
Related party transactions
There are no related party transactions requiring
disclosure.
Steve Good Mike Holt
4 February 2014 4 February 2014
Forward looking statements
This announcement includes statements that are, or may be deemed
to be, "forward looking statements". These forward looking
statements can be identified by the use of forward looking
terminology, including, but not limited to, the terms "believes",
"estimates", "anticipates", "expects", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward looking
statements include matters that are not historical facts.
By their nature, forward looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Forward
looking statements are not guarantees of future performance. The
Group's actual results of operations, financial condition and
liquidity may differ materially from the impression created by the
forward looking statements contained in this announcement. In
addition, even if the results of operations, financial condition,
and liquidity are consistent with the forward looking statements
contained in this announcement, those results or developments may
not be indicative of results or developments in subsequent periods.
Important factors that could cause these differences include, but
are not limited to: changes in the competitive framework in which
the Group operates and its ability to retain market share; the
Group's ability to generate growth or profitable growth; the
Group's ability to generate sufficient cash to service its debt;
the Group's ability to control its capital expenditure and other
costs; significant changes in exchange rates, interest rates and
tax rates; significant technological and market changes; future
business combinations or dispositions; and general local and global
economic, political, business and market conditions. In light of
these risks, uncertainties and assumptions, the events described in
the forward looking statements in this announcement may not
occur.
Other than in accordance with its legal or regulatory
obligations, the Group does not undertake any obligation to update
or revise publicly any forward looking statement, whether as a
result of new information, future events or otherwise.
Consolidated Income Statement
for the year ended 30 November
2013 2012
Before Amortisation Before Amortisation
amortisation and amortisation and
and non-recurring and non- non-recurring
non- recurring items recurring items
items (note 6) Total items (note 6) Total
Note
GBPm GBPm GBPm GBPm GBPm GBPm
Continuing operations
Revenue 2 403.1 - 403.1 380.5 - 380.5
--------------- -------------- ------- ------------- -------------- -------
Operating profit
/ (loss) 2 32.2 (7.7) 24.5 30.5 (18.4) 12.1
Financial income 6.7 - 6.7 7.0 - 7.0
Financial expense (12.8) - (12.8) (13.0) - (13.0)
--------------- -------------- ------- ------------- -------------- -------
Net financing costs 3 (6.1) - (6.1) (6.0) - (6.0)
Share of results
of joint venture 6 - (0.6) (0.6) - - -
--------------- -------------- ------- ------------- -------------- -------
Profit/(loss) before
taxation 26.1 (8.3) 17.8 24.5 (18.4) 6.1
Taxation 4 (6.8) 1.8 (5.0) (6.4) 1.7 (4.7)
----- ----- ----- ----- ----------- -----
Profit/(loss) after
taxation 19.3 (6.5) 12.8 18.1 (16.7) 1.4
----- ----- ----- ----- ----------- -----
Profit/(loss) for
the year 19.3 (6.5) 12.8 18.1 (16.7) 1.4
----- ----- ----- ----- ----------- -----
Attributable to
Equity holders of
the Company 18.8 (6.5) 12.3 18.1 (16.7) 1.4
Non-controlling interest 8 0.5 - 0.5 - - -
----- ----- ----- ----- ----------- -----
19.3 (6.5) 12.8 18.1 (16.7) 1.4
----- ----- ----- ----- ----------- -----
Earnings per share 7
Continuing operations
and Total:
Basic 6.23p 4.08p 6.28p 0.47p
Diluted 6.09p 3.98p 6.08p 0.46p
Consolidated Statement of Other Comprehensive Income
for the year ended 30 November
2013 2012
GBPm GBPm
Note
Profit for the year
Other comprehensive income
Items that will not be reclassified subsequently
to profit or loss: 12.8 1.4
Actuarial gain / (loss) on defined benefit pension
schemes 9.3 (13.9)
Deferred tax on defined benefit pension schemes (0.3) 0.7
Items that may be reclassified subsequently to
profit or loss:
------ --------
Exchange differences on translation of foreign
operations, net of hedging 0.1 (8.3)
------ --------
Other comprehensive income for the year, net of
tax 9.1 (21.5)
------ --------
Total comprehensive income for the year 21.9 (20.1)
------ --------
Attributable to
Equity holders of the parent 21.5 (20.2)
Non-controlling interest 8 0.4 0.1
------ --------
21.9 (20.1)
------ --------
Consolidated Balance Sheet
as at 30 November
2013 2012
GBPm GBPm
Note
Non-current assets
Goodwill 81.2 74.2
Intangible assets 34.0 36.7
Property, plant and equipment 114.2 108.8
Investment in joint venture 4.7 5.3
Investment in associate 0.4 0.4
Deferred tax assets 3.1 3.3
---------- ---------
237.6 228.7
Current assets
Inventories 86.8 75.1
Trade and other receivables 81.7 69.3
Cash and cash equivalents 17.9 26.9
---------- ---------
Current liabilities 186.4 171.3
Interest-bearing loans and borrowings - -
Current tax liabilities 5.4 6.2
Trade and other payables 82.9 76.2
Provisions - 0.1
Derivative liabilities 0.1 -
---------- ---------
88.4 82.5
---------- ---------
Net current assets 98.0 88.8
---------- ---------
Total assets less current liabilities 335.6 317.5
Non-current liabilities
Interest-bearing loans and borrowings 104.7 109.5
Deferred tax liabilities 23.2 23.5
Post-employment benefits 12.7 24.8
Other payables 1.9 1.8
---------- ---------
142.5 159.6
----------
Net assets 193.1 157.9
---------- ---------
Equity attributable to equity holders
of the parent
Share capital 47.2 45.5
Share premium account 73.9 55.5
Translation reserve (36.9) (37.0)
Retained earnings 102.5 87.9
---------- ---------
Total equity attributable to
---------- ---------
Equity holders of the parent 186.7 151.9
---------- ---------
Non-controlling interest 8 6.4 6.0
---------- ---------
Total equity 193.1 157.9
---------- ---------
Consolidated Cash Flow Statement
for the year ended 30 November
2013 2012
GBPm GBPm
Profit for the year and from continuing operations 12.8 1.4
Adjustments for:
Depreciation 12.8 12.1
Impairment of non-current assets - 11.2
Amortisation 6.3 6.4
Income tax expense 5.0 4.7
Net financing costs 6.1 6.0
Share of results of joint venture 0.6 -
Partial EU fine refund - 2.2
Increase in inventories (7.3) (2.8)
Decrease / (Increase) in trade and other receivables 0.5 (1.6)
Short-term loan to joint venture (9.1) -
Increase in trade and other payables 2.0 0.1
Decrease in provisions (0.1) (0.4)
Loss / (gain) on disposal of non-current assets 0.3 (0.2)
Equity-settled share-based payment 0.6 1.2
------- ---------------
Cash inflow from operations 30.5 40.3
Interest received - 0.1
Interest paid (4.8) (4.9)
Tax paid (6.8) (3.9)
Pension cash contributions in excess of operating
charge (3.7) (3.9)
------- ---------------
Net cash inflow from operating activities 15.2 27.7
Acquisition of subsidiaries (15.9) (5.0)
Acquisition of property, plant and equipment (11.3) (13.2)
Equity investment in joint ventures - (5.3)
Prepaid participation in joint ventures - 1.7
Proceeds from disposal of non-current assets - 0.4
Intangible assets purchased (2.1) (1.0)
------- ---------------
Net cash outflow from investing activities (29.3) (22.4)
Proceeds of share issues from the share placing 19.8 -
Proceeds of other share issues to employees 0.1 0.2
Drawdown of borrowings - 9.1
Repayment of borrowings (8.5) (1.7)
Equity dividends paid (7.2) (6.3)
------- ---------------
Net cash inflow from financing activities 4.2 1.3
------- ---------------
Net cash (outflow) / inflow (9.9) 6.6
Cash and cash equivalents at start of year 26.9 20.9
Foreign exchange differences 0.9 (0.6)
Cash and cash equivalents at end of year 17.9 26.9
------- ---------------
Consolidated Statement of Changes in Equity
for the year ended 30 November
Equity
attributable
to equity Non-controlling Total
Share Share Translation Retained holders interest equity
capital premium reserve earnings of the
parent
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 December
2011 45.3 54.1 (28.6) 106.1 176.9 5.9 182.8
Total
comprehensive
income for the
year - - (8.4) (11.8) (20.2) 0.1 (20.1)
Dividends paid
to Ordinary
Shareholders - - - (6.3) (6.3) - (6.3)
Shares issued 0.2 1.4 - (1.3) 0.3 - 0.3
Share based
payment - - - 1.2 1.2 - 1.2
------------------ ---------- ---------- -------------- ----------- -------------- ------------------ ---------
Net increase
/ (decrease)
for the year 0.2 1.4 (8.4) (18.2) (25.0) 0.1 (24.9)
------------------ ---------- ---------- -------------- ----------- -------------- ------------------ ---------
At 30 November
2012 45.5 55.5 (37.0) 87.9 151.9 6.0 157.9
------------------ ---------- ---------- -------------- ----------- -------------- ------------------ ---------
Total comprehensive
income for the year
- - 0.1 21.4 21.5 0.4 21.9
Dividends paid
to
Ordinary
Shareholders - - - (7.2) (7.2) - (7.2)
---------- ---------- -------------- ----------- -------------- ------------------ ---------
Shares issued 1.7 18.4 - (0.2) 19.9 - 19.9
Share-based
payment - - - 0.6 0.6 - 0.6
Net increase
for the year 1.7 18.4 0.1 14.6 34.8 0.4 35.2
At 30 November
2013 47.2 73.9 (36.9) 102.5 186.7 6.4 193.1
---------- ---------- -------------- ----------- -------------- ------------------ ---------
Notes
1. Basis of preparation
The financial statements are presented in pounds sterling,
rounded to the nearest hundred thousand pounds. They are prepared
on the historical cost basis except for the revaluation to fair
value of certain financial instruments.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 30 November 2013
or 2012 but is derived from those accounts. Statutory accounts for
2012 have been delivered to the registrar of companies, and those
for 2013 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
2. Segmental information
The Group's principal activities are in the international
manufacturing and supply of those performance materials commonly
referred to as technical textiles. For the purposes of management
reporting to the chief operating decision maker, the Group is
organised into three reportable operating divisions: Bonar,
Technical Coated Fabrics and Yarns. Financial information for each
operating division is also available in a disaggregated form in
line with the identified cash generating units. Segment assets and
liabilities include items directly attributable to segments as well
as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly cash and cash equivalents,
interest-bearing loans, borrowings, goodwill and intangible assets,
derivative assets and liabilities, post-employment benefits and
corporate assets and expenses. Inter-segment sales are not
material.
2013 Technical
Coated Fabrics Unallocated
GBPm Yarns Central Total
Continuing operations Bonar GBPm GBPm GBPm
GBPm
Revenue from external customers 245.6 124.7 32.8 - 403.1
------- --------------- ------- ------------- -------
Operating profit/(loss) before
amortisation and non-recurring
items 23.0 12.1 0.5 (3.4) 32.2
Amortisation of acquired intangible
assets (2.7) (2.9) - - (5.6)
------- --------------- ------- ------------- -------
Operating profit/(loss) before
non-recurring items 20.3 9.2 0.5 (3.4) 26.6
Non-recurring items (2.1) - - - (2.1)
------- --------------- ------- ------------- -------
Operating profit/(loss) 18.2 9.2 0.5 (3.4) 24.5
Financial Income 6.7
Financial Expense (12.8)
-------
Net financing costs (6.1)
-------
Share of results of joint venture (0.6)
-------
Profit before taxation 17.8
Taxation (5.0)
-------
Profit for the year - continuing
operations 12.8
-------
Reportable segment assets 168.1 86.5 27.7 - 282.3
Intangible assets and goodwill 115.2
Investment in joint venture 4.7
Investment in associate 0.4
Cash and cash equivalents 17.9
Other unallocated assets 3.5
-------
Total Group assets 424.0
-------
Reportable segment liabilities (52.2) (23.5) (8.5) - (84.2)
Loans and borrowings (104.7)
Post-employment benefits (12.7)
Derivative liabilities (0.1)
Other unallocated liabilities (29.2)
-------
Total Group liabilities (230.9)
-------
Other information
Additions to property, plant and
equipment 6.2 4.5 0.6 0.3 11.6
Additions to intangible assets
and goodwill 8.3 0.2 - - 8.5
Impairment to intangible assets, - - - - -
goodwill and property plant and
equipment
Depreciation 8.3 3.7 0.8 - 12.8
------------------------------------ ------- --------------- ------- ------------- -------
2012
Technical
Coated Fabrics Unallocated
Continuing operations Bonar GBPm Yarns Central Total
GBPm GBPm GBPm GBPm
Revenue from external customers 238.7 115.3 26.5 - 380.5
----------- ----------------- ----------- ----------------- ------------
Operating profit/(loss) before
amortisation and non-recurring
items 25.0 10.7 (1.8) (3.4) 30.5
Amortisation of acquired intangible
assets (3.0) (2.8) - - (5.8)
----------- ----------------- ----------- ----------------- ------------
Operating profit/(loss) before
non-recurring items 22.0 7.9 (1.8) (3.4) 24.7
Non-recurring items (0.8) - (11.2) (0.6) (12.6)
----------- ----------------- ----------- ----------------- ------------
Operating profit / (loss) 21.2 7.9 (13.0) (4.0) 12.1
Financial Income 7.0
Financial Expense (13.0)
------------
Net financing costs (6.0)
Profit before taxation 6.1
Taxation (4.7)
------------
Profit for the year from continuing 1.4
operations -
------------
Reportable segment assets 145.6 83.9 23.4 - 252.9
Intangible assets and goodwill
Investment in joint venture 110.9
Investment in associate 5.3
0.4
Cash and cash equivalents 26.9
3.6
------------
Other unallocated assets
------------
Total Group assets 400.0
------------
Reportable segment liabilities (49.0) (21.8) (6.2) - (77.0)
Loans and borrowings (109.5)
Post-employment benefits (24.8)
Other unallocated liabilities (30.8)
------------
Total Group liabilities (242.1)
------------
Other information
Additions to intangible assets
and goodwill 10.9 2.1 0.1 - 13.1
Additions to intangible assets
and goodwill 2.4 0.1 - - 2.5
Impairment to intangible assets,
goodwill and property plant
and equipment - - 11.2 - 11.2
Depreciation 7.4 3.5 1.2 - 12.1
------------------------------------ ----------- ----------------- ----------- ----------------- ------------
3. Financial income and financial expense
2013 2012
GBPm GBPm
Financial income
Interest income 0.1 0.1
Expected return on pension plan assets 6.6 6.9
------- -------
6.7 7.0
------- -------
Financial expense
Interest on bank overdrafts and loans (4.8) (4.9)
Interest payable on all other loans (0.1) -
Amortisation of bank arrangement fees (0.5) (0.5)
Interest on pension scheme liabilities (7.4) (7.8)
Amounts capitalised within property, plant and equipment - 0.2
------- -------
(12.8) (13.0)
------- -------
Net financing costs (6.1) (6.0)
------- -------
4. Taxation
2013 2012
Current Tax GBPm GBPm
UK corporation tax
Current year - -
Prior year - (0.2)
Overseas tax
Current year 6.3 5.5
Prior Year 0.2 (0.4)
------ ------
Total current tax 6.5 4.9
Deferred tax (1.5) (0.2)
Total tax charge in the income statement 5.0 4.7
------ ------
5. Dividends
Amounts recognised as distributions to equity shareholders in
the year were as follows:
2013 2012
GBPm GBPm
--------------------------------------------------- ---- ----
Final dividend for the year ended 30 November 2012
- 1.6 pence per share (2011: 1.4 pence per share) 4.7 4.0
Interim dividend for the year ended 30 November
2013 - 0.85 pence per share (2012: 0.8 pence per
share) 2.5 2.3
--------------------------------------------------- ---- ----
7.2 6.3
--------------------------------------------------- ---- ----
The Directors have proposed a final dividend in respect of the
financial year ended 30 November 2013 of 1.75 pence per share which
will absorb an estimated GBP5.7m of shareholders' funds. This has
not been provided for in these accounts because the dividend was
proposed after the year end. If it is approved by shareholders at
the Annual General Meeting of the Company to be held on 25 March
2014, it will be paid on 17 April 2014 to Ordinary Shareholders who
are on the register of members at close of business on 21 March
2014.
During the year the Board declared a final dividend on Ordinary
Shares in respect of the year ended 30 November 2012 of 1.6 pence
per share, which was paid on 18 April 2013 to Ordinary Shareholders
on the register of members at close of business on 22 March
2013.
The Directors declared an interim dividend on Ordinary Shares in
relation to the year ended 30 November 2013 of 0.85 pence per
share, which was paid to Ordinary Shareholders on the register of
members at close of business on 30 August 2013.
6. Amortisation and non-recurring items
During the year the Group recognised significant non-recurring
items and amortisation of acquired intangible assets as detailed
below:
2013 2012
GBPm GBPm
------------------------------------------- ---- ----
Amounts charged to operating profit
Joint venture start-up costs 0.6 0.2
China office set-up costs 0.3 -
Acquisition related costs 1.0 0.7
Reorganisation costs 0.2 0.5
Impairment of assets - 11.2
Total non-recurring items 2.1 12.6
Amortisation of acquired intangible assets 5.6 5.8
------------------------------------------- ---- ----
Total charge to operating profit 7.7 18.4
------------------------------------------- ---- ----
Share of results of joint venture 0.6 -
------------------------------------------- ---- ----
Total charge to profit before tax 8.3 18.4
------------------------------------------- ---- ----
Current year
During the current year, the Group incurred GBP0.6m (2012:
GBP0.2m) of costs in respect of Bonar Natpet LLC, its joint venture
in Saudi Arabia; and GBP0.3m (2012: GBPnil) of initial costs in
respect of setting up a sales and distribution office in China.
The Group incurred GBP1.0m of costs in the period in connection
with the acquisition of Texiplast (see Note 9) and in connection
with another potential acquisition.
GBP0.2m (2012: GBP0.5m) of costs were incurred in relation to
the integration of the Group's principal Performance Technical
Textile operations into a single business, Bonar.
The Group also incurred a GBP0.6m loss (2012:GBPnil) in the year
from their share of the results of the joint venture, Bonar Natpet
LLC.
Prior year
During the prior year, the Group incurred GBP0.7m of costs in
the period in connection with the acquisition of the trade and
assets of Xero Flor International GmbH and in connection with
another potential acquisition.
In the year ended 30 November 2012, an impairment charge of
GBP11.2m was recognised against the carrying value of the Yarns
business, in response to deteriorating market conditions, of which
GBP8.4m was allocated against goodwill and GBP2.8m was allocated to
property, plant and equipment.
7. Earnings per share
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below:
2013 2012
Weighted
Weighted average
average number Per share
Earnings number of Per share Earnings of shares amount
GBPm shares (millions) amount pence GBPm (millions) pence
--------------------------- -------- ------------------ ------------- -------- ----------- ---------
Statutory - continuing and
total operations
Basic earnings per share
Earnings attributable to
Ordinary Shareholders 12.3 301.035 4.08 1.4 288.447 0.47
Effect of dilutive items
Share-based payment - 7.249 - 9.215
--------------------------- -------- ------------------ ------------- -------- ----------- ---------
Diluted earnings per share 12.3 308.284 3.98 1.4 297.662 0.46
--------------------------- -------- ------------------ ------------- -------- ----------- ---------
Before amortisation and
non-recurring items
Basic earnings per share
Earnings attributable to
Ordinary Shareholders 18.8 301.035 6.23 18.1 288.447 6.28
Effect of dilutive items
Share-based payment - 7.249 - 9.215
--------------------------- -------- ------------------ ------------- -------- ----------- ---------
Diluted earnings per share 18.8 308.284 6.09 18.1 297.662 6.08
--------------------------- -------- ------------------ ------------- -------- ----------- ---------
8. Non-controlling interest
2013 2012
GBPm GBPm
------------------------------- ----- ----
At 1 December 6.0 5.9
Share of profit after taxation 0.5 -
Exchange adjustment (0.1) 0.1
------------------------------- ----- ----
At 30 November 6.4 6.0
------------------------------- ----- ----
9. Business combination
On 6 September 2013 the Group acquired Texiplast a.s
("Texiplast"), a Slovakian producer of high strength geosynthetic
products serving the civil engineering market, on a cash-free
debt-free basis for a cash consideration of EUR18.9m
(GBP15.9m).
Costs of GBP0.9m relating to the acquisition have been charged
to non-recurring items. Results of the acquired business are
included within the results of the Bonar segment.
The acquired business contributed GBP2.5m to the Group's
consolidated revenue for the period and increased the Group's
consolidated profit before interest, tax, amortisation and
non-recurring items for the period by GBP0.4m. Had the business
been owned by the Group for the entire period, the contribution to
the Group's consolidated revenue and consolidated profit before
interest, tax, amortisation and non-recurring items would have been
GBP9.0m and GBP1.3m respectively.
In 2014, the Group expects to spend EUR1.5m on site clean-up
costs and environmental rectification work to ensure that the site
meets the Group's health, safety and environmental standards.
The provisional fair values of the identifiable assets and
liabilities acquired are as follows:
Book value Fair value Provisional
at acquisition adjustments fair value
GBPm GBPm GBPm
------------------------------------ --------------- ------------ -----------
Intangible assets
Marketing related - 0.3 0.3
Customer relationships - 0.4 0.4
Property, plant and equipment 4.7 1.8 6.5
Inventories 2.4 (0.3) 2.1
Trade and other receivables 2.1 - 2.1
Deferred tax liability (0.3) (0.5) (0.8)
Trade and other payables (0.4) - (0.4)
------------------------------------ --------------- ------------ -----------
Net assets acquired 8.5 1.7 10.2
Consideration
Cash consideration 15.9
Fair value of consideration 15.9
Goodwill arising on acquisition 5.7
------------------------------------ --------------- ------------ -----------
Goodwill on acquisition reflects synergies arising from extended
sales networks and enabling Bonar to develop a stronger solution
sell capability for demanding civil engineering applications.
On 1 March 2012 the Group acquired the trade and assets of Xero
Flor International GmbH ("Xeroflor"), an innovative business with a
strong position in the fast growing green roofing market, on a
cash-free debt-free basis for a cash consideration of EUR6.0m
(GBP5.0m). There have been no changes to the provisional fair value
of the acquired assets and liabilities in the current year.
10. Annual General Meeting
The Annual General Meeting will be held on 25 March 2014 at The
Pullman Hotel St Pancras, 100-110 Euston Road, London NW1 2AJ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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