TIDMMRX
RNS Number : 2423S
Metalrax Group PLC
07 September 2010
Metalrax Group PLC
Interim Report - 2010
Financial Highlights - 26 weeks ended 4 July 2010
Results in brief
+----------------------------+----------+------------+---------+------------+---------+
| | | 2010 | 2010 | 2009 | 2009 |
+----------------------------+----------+------------+---------+------------+---------+
| | | Continuing | Total | Continuing | Total |
| | | activities | Group | activities | Group |
| | | | | | |
| | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
| External revenues (GBP'm) | | 29.3 | 29.3 | 30.0 | 31.4 |
+----------------------------+----------+------------+---------+------------+---------+
| Gross margins | | 26.3% | 26.3% | 22.3% | 30.8% |
+----------------------------+----------+------------+---------+------------+---------+
| Operating profit/(loss) | | 0.6 | 0.6 | (0.6) | (1.4) |
| before exceptional items*, | | | | | |
| share option costs and | | | | | |
| goodwill impairment | | | | | |
| (GBP'm) | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
| Loss before taxation | | (0.5) | (0.5) | (2.6) | (12.0) |
| (GBP'm) | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
| Basic loss per 5p Ordinary | | (0.32p) | (0.32p) | (2.08p) | (9.92p) |
| share | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
| Adjusted basic | | 0.08p | 0.08p | (0.68p) | (1.39p) |
| profit/(loss) per 5p | | | | | |
| Ordinary share** | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
| Cash generated from/(used | | | 0.6 | | (3.0) |
| in) operating activities | | | | | |
| (GBP'm) | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
| Net debt (GBP'm) | | | 12.7 | | 15.0 |
+----------------------------+----------+------------+---------+------------+---------+
| Gearing | | | 81.9% | | 96.2% |
+----------------------------+----------+------------+---------+------------+---------+
| Dividends paid per 5p | | | nil | | nil |
| Ordinary share | | | | | |
+----------------------------+----------+------------+---------+------------+---------+
* Exceptional items (note 5) are items of income and expenditure that, in the
judgement of management, should be disclosed separately on the basis that they
are material, either by their nature or their size, to the understanding of the
financial statements and where not to do so would distort the comparability of
financial performance between periods.
** Adjusted earnings is after the add back of exceptional items, share option
costs, goodwill amortisation and debt issue cost amortisation (see note 9).
Highlights
· Operating profit increase a result of:
o improving gross margins - gross margins in the continuing group increased
year on year by 4.0% to 26.3% (2009: 22.3%), mainly from manufacturing
efficiencies and reduced costs; and
o overhead reduction - overheads reduced by GBP1.7m being the result of
focussed management action across the continuing group.
· Both of our Divisions have reported an improved performance from the
corresponding period in 2009. Both Divisions are now operating at break-even or
better.
· Cash generated from operating activities of GBP0.6m remains strong (2009:
GBP3.0m outflow). Net debt at GBP12.7m is up slightly from GBP12.2m at 31
December 2009 primarily the result of working capital investment.
Andrew Walker, Chairman, said:
"The Board expects to exceed market expectations for the current year although
the level to which year-end results could be exceeded will be tempered by the
impacts of any economic slow-down or 'double dip', government spending cuts and
reductions in USA spend on hospitals related to healthcare reforms."
+-------------------------------------------+-----------------+
| Metalrax Group PLC | +44 (0) 845 030 |
| | 3300 |
+-------------------------------------------+-----------------+
| Andrew Richardson, Chief Executive | |
| Officer | |
+-------------------------------------------+-----------------+
| | |
+-------------------------------------------+-----------------+
| | |
+-------------------------------------------+-----------------+
| Arden Partners plc | |
+-------------------------------------------+-----------------+
| Steve Douglas | +44 (0) 121 423 |
| | 8943 |
+-------------------------------------------+-----------------+
| Matthew Armitt | +44 (0) 20 7614 |
| | 5924 |
+-------------------------------------------+-----------------+
| | |
+-------------------------------------------+-----------------+
Chairman's Statement
Introduction
I joined the Board in August of this year when the economic outlook was
improving and we are now beginning to see the results of the focus on improved
margins and cash generation which will facilitate debt reduction.
Results
Operating profits (before exceptional items, share option costs and goodwill
impairment) from continuing activities saw a swing of GBP1.2m, up from a loss of
GBP0.6m in the first half of 2009 to a profit of GBP0.6m for the first half of
2010. This continues the improving trend in the results of the Group first
demonstrated in the second half of 2009 when operating profits (on the same
basis) were GBP0.4m.
Revenues in continuing operations reduced by 2.3% compared to 2009, which is a
performance that needs to improve. I am encouraged by the strong growth in the
order books, which are up 8% over June 2009 and up 22% since the start of the
year. Gross margin in the continuing operations increased by 4 percentage points
to 26.3% (2009: 22.3%) and this improvement, combined with a GBP1.7m reduction
in overheads, contributed to a significant improvement in return on sales to
1.7%, compared to a loss on sales of 7.3% in 2009. The overall impact results in
a loss before tax from continuing activities of GBP0.5m (2009: GBP2.6m loss).
The basic loss per 5p ordinary share of 0.32p compares to a basic loss per 5p
ordinary share of 9.92p for the first half of 2009.
Cash generated from operating activities improved by GBP3.6m to GBP0.6m compared
to a 2009 half year cash outflow of GBP3.0m. Net debt at the half year was
GBP12.7m compared to a 2009 half year position of GBP15.0m and 2009 year end
position of GBP12.2m. The GBP0.5m increase in net debt at the half year reflects
an investment in working capital of GBP0.9m, offset by GBP0.4m of net cash
generated after interest costs.
Dividend
The Group's policy is to make dividend payments that are covered 2.0 to 2.5
times by earnings and in light of the Group's loss after tax and interest of
GBP0.4m, there will be no dividend payment in respect of the period ended 4 July
2010.
Outlook
I am encouraged by the first half performance in terms of cash generation and
profitability. Looking at the strengthening of our order books, I hope to report
further progress during the second half when we announce our results for the
full year. Taking these factors into account, the Board expects to exceed market
expectations for the current year. The level to which year-end results could be
exceeded will be tempered by the impacts of any economic slow-down or 'double
dip', government spending cuts and reductions in USA spend on hospitals related
to healthcare reforms.
AJ Walker
Chairman
7 September 2010
Chief Executive's Review
Overview
The first half of 2010 was the start of a new phase for me where, for the first
time since I took control, I am leading a Group focusing on profitable growth
and debt reduction rather than dealing with issues in non-core and/or loss
making businesses. Our banking facilities, secured in October 2009, are in place
for three years, which means that the senior management team has spent their
time concentrating on the ongoing businesses rather than on our funding
position. In the first half, we have expended significant resource to improve
our sales management processes to enable us to drive future sales growth more
consistently. We remain minutely focused on cash, an imperative shared by every
business. We have changed senior management in two of our nine businesses,
further raising the calibre of the Group's people and have commenced leadership
development across the Group for the senior managers to further promote
increased performance.
In 2010, our key objectives are:
· cash generation with the objective of minimising borrowings and reducing
gearing; and
· profit growth.
Overall we saw a 2.3% decline in continuing sales but I am encouraged by the
double digit growth in our order books since the end of 2009, as well as strong
sales growth amongst several of our engineering businesses. I am pleased with
our continuing operations' gross margin growth of 4 points to 26.3% as well as
the GBP1.7m reduction in overheads from 29.7% of sales in the first half of 2009
to 24.6% of sales in the first half of 2010. I am also pleased to report there
have been no exceptional costs in the first half of 2010, compared to GBP9.5m in
the first half of 2009 and GBP1.8m in the first half of 2008.
Review of Business Operations
Specialist Engineering
It is interesting that several of our engineering businesses are achieving sales
growth in excess of 20%. These are the businesses that supply components for
industrial and vehicular applications. Some of the Group's businesses have
experienced sales decline of a similar order. These are the late economic cycle
businesses that supply products used towards the end of construction projects. I
believe they are now experiencing the downturn that most engineering businesses
faced last year. Overall revenues from the continuing Specialist Engineering
businesses are broadly level at GBP19.5m compared to the GBP19.9m in the first
half of 2009. Gross margin in this division increased across all operations, up
4.7 points to 28.1%, resulting in an increase of GBP0.9m to GBP5.5m gross
profit. Operating profit increased significantly to GBP1.4m for the period
compared to a GBP0.3m operating loss in the first half of 2009.
The continuing specialist engineering division comprises seven businesses that
operate across a broad variety of sectors and contribute 67% to continuing Group
revenues.
Two of the businesses, Toolspec and Weston Body Hardware have exposure to the
automotive and off-highway sectors. They had very difficult trading periods in
2009 as a result of the downturn in these sectors. As stated in our 2009
reports, we believe that our cost base restructuring in these businesses
combined with successful retraining, new customers, products and market sectors
meant that they were well placed to take advantage of any recoveries in their
core markets when it came. This has been proved by the first half results where
we saw revenue growth in excess of 20% in both businesses.
Cooper Coated Coil, our specialist coatings business has completed its
relocation and now operates from one site where the new coating line which was
completed at the end of 2008 is now running well. Growth this year is volume
driven (rather than input price driven) with a satisfactory increase in gross
margin reflecting the improved plant performance.
For the first time under our ownership, Post Glover LifeLink, which supplies
medical electrical and safety equipment had a difficult trading period where we
saw a reduction in first half sales compared to prior year. The order book is
72% higher than at the 2009 half year but the business is still experiencing
delays in hospital new build and refurbishment programmes, which is impacting
new orders and revenues. Post Glover LifeLink's Isolated Power Systems are
installed after a hospital is constructed or refurbished, which we believe
explains the slow down towards the end of the economic slump. They are
increasing their focus on their laboratory products as this will help offset
slippage in hospital installations. Despite the impact of these delays, early
recognition of the slow down with swift management actions to reduce costs meant
that the profit budget was met.
Consumer Durables
The consumer durables division consists of two businesses; George Wilkinson
International, whose main revenues are derived from sales of bakeware to the
large UK retailers, and Samuel Groves who provide bakeware and cookware into the
professional catering markets as well as some retail. Turnover for the division
declined by 3.0% to GBP9.7m mainly as a result of cessation of low margin
product lines. Profitability has increased. Gross margin improvements and
overhead reductions resulted in breakeven at the operating profit level (before
exceptional items, share option costs and goodwill impairment) which is an
improvement from the GBP0.3m loss in the first half of 2009. We have initiated
programmes to realise synergies across the two businesses in areas such as
sourcing and key account management. Operating profit is also breakeven after
exceptional items and share option costs compared to a GBP1.0m loss in the first
half of 2009.
Financial Review
Results
The operating profit before exceptional items, share option costs and goodwill
impairment increased by GBP1.2m to GBP0.6m compared to a GBP0.6m loss in the 26
weeks period to 5 July 2009. After exceptional items, share option costs and
goodwill impairment, operating profit was GBP0.5m, which is a significant
improvement on the GBP2.2m loss reported for the first half of 2009. The loss
after taxation was GBP0.4m which is an improvement of GBP11.5m compared to the
GBP11.9m loss reported in 2009. There are no exceptional costs in the first half
of 2010 compared to GBP9.5m for the same period in 2009 (see note 5).
Gross margin in our continuing operations at 26.3% compared to 22.3% prior year
is a reflection of margin improvements in nearly all of our operating units
which mainly results from innovation, better purchasing, manufacturing
management and tighter cost control.
The loss for the period includes GBP0.4m (2009: GBPnil) of debt issue cost
amortisation, which has been added back along with share options of GBP0.1m
(2009 GBP0.1m) to arrive at the adjusted earnings per share for the period of
0.08p for the Group (2009: loss per share 1.39p).
Balance Sheet
Bank borrowings, net of cash, have reduced year on year to GBP14.6m (June 2009:
GBP15.0m). The increase in net debt (Bank borrowings less unamortised debt
issue costs of GBP1.9m) from GBP12.2m the end of 2009 to GBP12.7m at June 2010
results from GBP0.5m of cash outflow from a working capital investment of
GBP0.9m in anticipation of improving order books, offset by GBP0.4m of net cash
generated after interest costs.
The pension deficit has increased by GBP1.3m to GBP5.9m at 4 July 2010 (31
December 2009: GBP4.6m). The increase in deficit principally relates to the
decrease in the discount rate assumption in line with the underlying movement in
government bonds. A triennial valuation of the pension scheme is due on 1
January 2011.
Financial risks
The principal risks and uncertainties are unchanged from the Annual Report at 31
December 2009, being macro-economic climate and competition, raw material input
prices, treasury risk and pension risk. Further detail is set out on pages 14
and 15 of the Annual report for the year ended 31 December 2009.
AJ Richardson
Group Chief Executive
7 September 2010
Condensed consolidated income statement
26 weeks ended 4 July 2010
+---------------------------+----------+-----------+-----------+------------+
| | | 26 weeks | 26 weeks | Year ended |
| | | ended 4 | ended 5 | 31 |
| | | July | July | December |
| | | 2010 | 2009 | 2009 |
| | | Unaudited | Unaudited | Audited |
+---------------------------+----------+-----------+-----------+------------+
| Continuing operations | Note | GBP'm | GBP'm | GBP'm |
+---------------------------+----------+-----------+-----------+------------+
| Revenue | 4 | 29.3 | 30.0 | 61.2 |
+---------------------------+----------+-----------+-----------+------------+
| Cost of sales | | (21.6) | (23.3) | (46.6) |
+---------------------------+----------+-----------+-----------+------------+
| Gross profit | | 7.7 | 6.7 | 14.6 |
+---------------------------+----------+-----------+-----------+------------+
| Distribution costs | | (2.9) | (2.9) | (5.8) |
+---------------------------+----------+-----------+-----------+------------+
| Administrative expenses | | (4.3) | (6.0) | (11.5) |
+---------------------------+----------+-----------+-----------+------------+
| Operating profit/(loss) | 4 | 0.6 | (0.6) | (0.2) |
| before exceptional items, | | | | |
| share option costs and | | | | |
| goodwill impairment | | | | |
+---------------------------+----------+-----------+-----------+------------+
| Exceptional items* | 4, 5 | - | (0.9) | (1.6) |
+---------------------------+----------+-----------+-----------+------------+
| Goodwill impairment | 4 | - | (0.6) | (0.6) |
+---------------------------+----------+-----------+-----------+------------+
| Share option costs | 4 | (0.1) | (0.1) | (0.3) |
+---------------------------+----------+-----------+-----------+------------+
| Operating profit/(loss) | 4 | 0.5 | (2.2) | (2.7) |
+---------------------------+----------+-----------+-----------+------------+
| Finance expense before | 7 | (0.6) | (0.4) | (0.8) |
| debt issue cost | | | | |
| amortisation | | | | |
+---------------------------+----------+-----------+-----------+------------+
| Debt issue cost | 7 | (0.4) | - | (0.2) |
| amortisation | | | | |
+---------------------------+----------+-----------+-----------+------------+
| Total finance expense | 7 | (1.0) | (0.4) | (1.0) |
+---------------------------+----------+-----------+-----------+------------+
| Loss before taxation | | (0.5) | (2.6) | (3.7) |
+---------------------------+----------+-----------+-----------+------------+
| Taxation credit | 8 | 0.1 | 0.1 | 0.1 |
+---------------------------+----------+-----------+-----------+------------+
| Loss after taxation | | (0.4) | (2.5) | (3.6) |
+---------------------------+----------+-----------+-----------+------------+
| Loss from discontinued | 6 | - | (9.4) | (7.9) |
| activities | | | | |
+---------------------------+----------+-----------+-----------+------------+
| Loss for the period | | (0.4) | (11.9) | (11.5) |
+---------------------------+----------+-----------+-----------+------------+
| Loss for the period | | (0.4) | (11.9) | (11.5) |
| attributable to equity | | | | |
| shareholders of the | | | | |
| parent | | | | |
+---------------------------+----------+-----------+-----------+------------+
| | | | pps | pps |
| | | pps | | |
+---------------------------+----------+-----------+-----------+------------+
| Basic and diluted loss | 9 | (0.32) | (9.92) | (9.62) |
| per share | 9 | (0.32) | (2.08) | (2.96) |
| - Continuing | 9 | - | (7.84) | (6.66) |
| - Discontinued | | | | |
+---------------------------+----------+-----------+-----------+------------+
Exceptional items (note 5) are items of income and expenditure that, in the
judgement of management, should be disclosed separately on the basis that they
are material, either by their nature or their size, to the understanding of the
financial statements and where not to do so would distort the comparability of
the financial performance between periods.
Condensed consolidated statement of comprehensive income
26 weeks ended 4 July 2010
+---------------------------------------+---------+--+--------+--+--------+-+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 |
| | Unaudited | Unaudited | Audited |
+---------------------------------------+------------+-----------+----------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+-----------+-+
| Loss for the period | (0.4) | (11.9) | (11.5) | |
| Other comprehensive income | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| Loss on property devaluation | - | (2.8) | (2.6) | |
| Actuarial loss on defined benefit | (1.1) | (1.1) | (1.4) | |
| pension scheme | 0.1 | (0.6) | (0.4) | |
| Exchange differences | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| Tax relating to components of other | 0.3 | 0.7 | 0.8 | |
| comprehensive income | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| Other comprehensive income for the | (0.7) | (3.8) | (3.6) | |
| period | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| Total comprehensive income for the | (1.1) | (15.7) | (15.1) | |
| period | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| Attributable to equity shareholders | (1.1) | (15.7) | (15.1) | |
| of the parent | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| | | | | | | |
+---------------------------------------+---------+--+--------+--+--------+-+
Condensed consolidated balance sheet
As at 4 July 2010
+-----------------------------+---------+-----------+-----------+----------------------+-+
| | | 4 July | 5 July | 31 |
| | | 2010 | 2009 | December |
| | | Unaudited | Unaudited | 2009 |
| | | | | Audited |
+-----------------------------+---------+-----------+-----------+------------------------+
| | Note | GBP'm | GBP'm | GBP'm | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Non-current assets | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Goodwill | | 7.0 | 7.0 | 7.0 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Other intangible assets | | 0.6 | 0.6 | 0.6 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Property, plant and | | 20.0 | 21.1 | 20.7 | |
| equipment | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Deferred tax asset | | 0.3 | 1.8 | - | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| | | 27.9 | 30.5 | 28.3 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Current assets | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Inventories | | 8.7 | 9.6 | 7.2 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Trade and other receivables | | 11.2 | 12.8 | 12.8 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Current tax asset | | 0.1 | - | 0.2 | |
| Cash | | 0.9 | - | 2.5 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| | 11 | 20.9 | 22.4 | 22.7 | |
| Assets held for sale - | | 0.6 | 0.4 | - | |
| properties and equipment | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Total assets | | 49.4 | 53.3 | 51.0 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Current liabilities | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Bank borrowings | | (3.2) | (15.0) | (4.7) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Trade and other payables | | (13.0) | (15.0) | (13.9) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Current tax payable | | - | (0.1) | - | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Provisions | | (0.4) | (0.5) | (0.2) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| | | (16.6) | (30.6) | (18.8) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Non-current liabilities | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Employee benefits | 12 | (5.9) | (4.1) | (4.6) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Deferred tax liabilities | | - | (1.8) | - | |
| Bank loans | | (10.4) | - | (10.0) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Provisions | | (1.0) | (1.2) | (1.1) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| | | (17.3) | (7.1) | (15.7) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Total liabilities | | (33.9) | (37.7) | (34.5) | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Net assets | | 15.5 | 15.6 | 16.5 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Equity | | | | | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Share capital | 10 | 6.0 | 6.0 | 6.0 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Share premium account | | 2.7 | 2.7 | 2.7 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Capital redemption reserves | | 0.3 | 0.3 | 0.3 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Revaluation reserve | | 4.2 | 3.9 | 4.2 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Other reserve | | 0.7 | 0.3 | 0.6 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Retained earnings | | 1.6 | 2.4 | 2.7 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
| Total equity | | 15.5 | 15.6 | 16.5 | |
+-----------------------------+---------+-----------+-----------+----------------------+-+
Condensed consolidated statement of changes in equity
26 weeks ended 4 July 2010
Attributable to equity shareholders of the parent
+----------------+-------+--+---------+-------+-----+---------+------------+----------+---------+
| | | | | |
+----------------+-------+------------+-------+-------------------------------------------------+
| | | Share | | | Capital | | |
| | Share | Premium | Revaluation | Other | Redemption | Retained | |
| | Capital | Account | Reserve | Reserve | reserve | Earnings | Total |
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Loss for the | - | - | - | - | - | (0.4) | (0.4) |
| period | | | | | | | |
| Other | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Losses on | | | | | | | |
| property | - | - | - | - | - | - | - |
| revaluation | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Exchange | - | - | - | - | - | 0.1 | 0.1 |
| differences | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Actuarial | | | | | | | |
| loss on | | | | | | | |
| defined | - | - | - | - | - | (1.1) | (1.1) |
| benefit | | | | | | | |
| pension | | | | | | | |
| schemes | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Tax relating | | | | | | | |
| to | | | | | | | |
| components | | | | | | | |
| of other | - | - | - | - | - | 0.3 | 0.3 |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| | | | | | | | |
| Total | | | | | | | |
| comprehensive | - | - | - | - | - | (1.1) | (1.1) |
| income for | | | | | | | |
| the period | | | | | | | |
| Transactions | | | | | | | |
| with owners | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Credit to | | | | | | | |
| equity for | | | | | | | |
| equity-settled | - | - | - | 0.1 | - | - | 0.1 |
| share option | | | | | | | |
| costs | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Balance at 1 | | | | | | | |
| January 2010 | 6.0 | 2.7 | 4.2 | 0.6 | 0.3 | 2.7 | 16.5 |
| | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| Balance at 4 | | | | | | | |
| July 2010 | 6.0 | 2.7 | 4.2 | 0.7 | 0.3 | 1.6 | 15.5 |
| (Unaudited) | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| | | | | | | | |
+----------------+----------+---------+-------------+---------+------------+----------+---------+
| | | | | | | | | | |
+----------------+-------+--+---------+-------+-----+---------+------------+----------+---------+
Condensed consolidated statement of changes in equity (continued)
26 weeks ended 5 July 2009
Attributable to equity shareholders of the parent
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | Share | | | Capital | | |
| | Share | Premium | Revaluation | Other | Redemption | Retained | |
| | Capital | Account | Reserve | Reserve | reserve | Earnings | Total |
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Loss for the | - | - | - | - | - | (11.9) | (11.9) |
| period | | | | | | | |
| Other | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Losses on | | | | | | | |
| property | - | - | (2.8) | - | - | - | (2.8) |
| revaluation | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Exchange | - | - | - | - | - | (0.6) | (0.6) |
| differences | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Actuarial | | | | | | | |
| loss on | | | | | | | |
| defined | - | - | - | - | - | (1.1) | (1.1) |
| benefit | | | | | | | |
| pension | | | | | | | |
| schemes | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Tax relating | | | | | | | |
| to | | | | | | | |
| components | | | | | | | |
| of other | - | - | 0.4 | - | - | 0.3 | 0.7 |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | | | | | | |
| Total | | | | | | | |
| comprehensive | - | - | (2.4) | - | - | (13.3) | (15.7) |
| income for | | | | | | | |
| the period | | | | | | | |
| Transactions | | | | | | | |
| with owners | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Credit to | | | | | | | |
| equity for | | | | | | | |
| equity-settled | - | - | - | 0.1 | - | - | 0.1 |
| share option | | | | | | | |
| costs | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Balance at 1 | | | | | | | |
| January 2009 | 6.0 | 2.7 | 6.3 | 0.2 | 0.3 | 15.7 | 31.2 |
| | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Balance at 5 | | | | | | | |
| July 2009 | 6.0 | 2.7 | 3.9 | 0.3 | 0.3 | 2.4 | 15.6 |
| (Unaudited) | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
Condensed consolidated statement of changes in equity (continued)
Year ended 31 December 2009
Attributable to equity shareholders of the parent
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | Share | | | Capital | | |
| | Share | Premium | Revaluation | Other | Redemption | Retained | |
| | Capital | Account | Reserve | Reserve | reserve | Earnings | Total |
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Loss for the | - | - | - | - | - | (11.5) | (11.5) |
| period | | | | | | | |
| Other | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Losses on | | | | | | | |
| property | - | - | (2.6) | - | - | - | (2.6) |
| revaluation | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Exchange | - | - | - | - | - | (0.4) | (0.4) |
| differences | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Actuarial | | | | | | | |
| loss on | | | | | | | |
| defined | - | - | - | - | - | (1.4) | (1.4) |
| benefit | | | | | | | |
| pension | | | | | | | |
| schemes | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Tax relating | | | | | | | |
| to | | | | | | | |
| components | | | | | | | |
| of other | - | - | 0.3 | - | - | 0.5 | 0.8 |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Total | | | | | | | |
| comprehensive | | | | | | | |
| income for | - | - | (2.3) | - | - | (12.8) | (15.1) |
| the period | | | | | | | |
| Transactions | | | | | | | |
| with owners | | | | | | | |
| Transfer | - | - | 0.2 | - | - | (0.2) | - |
| between | | | | | | | |
| reserves | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Credit to | | | | | | | |
| equity for | | | | | | | |
| equity-settled | - | - | - | 0.4 | - | - | 0.4 |
| share option | | | | | | | |
| costs | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Balance at 1 | | | | | | | |
| January 2009 | 6.0 | 2.7 | 6.3 | 0.2 | 0.3 | 15.7 | 31.2 |
| | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Balance at | | | | | | | |
| 31 December | 6.0 | 2.7 | 4.2 | 0.6 | 0.3 | 2.7 | 16.5 |
| 2009 | | | | | | | |
| (Audited) | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
Condensed consolidated cash flow statement
26 weeks ended 4 July 2010
+---------------------------------------+---------+--+--------+--+--------+--+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 |
| | Unaudited | Unaudited | Audited |
+---------------------------------------+------------+-----------+-----------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+-----------+--+
| Operating profit/(loss) from | 0.5 | (2.2) | (2.7) | |
| continuing activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Operating loss from discontinued | - | (9.4) | (7.9) | |
| activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Depreciation | 0.8 | 0.9 | 1.8 | |
+---------------------------------------+---------+-----------+-----------+--+
| Impairment losses | - | 9.1 | 8.9 | |
+---------------------------------------+---------+-----------+-----------+--+
| Share option costs | 0.1 | 0.1 | 0.3 | |
+---------------------------------------+---------+-----------+-----------+--+
| Exchange loss | 0.1 | 0.5 | 0.6 | |
+---------------------------------------+---------+-----------+-----------+--+
| (Increase)/decrease in inventories | (1.5) | 1.1 | 3.6 | |
+---------------------------------------+---------+-----------+-----------+--+
| Decrease in trade and other | 1.6 | 5.2 | 5.2 | |
| receivables | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Decrease in trade and other payables | (0.9) | (7.5) | (8.7) | |
+---------------------------------------+---------+-----------+-----------+--+
| Increase/(decrease) in provisions | 0.1 | (0.2) | (0.5) | |
+---------------------------------------+---------+-----------+-----------+--+
| Other non-cash movements | - | - | (0.1) | |
+---------------------------------------+---------+-----------+-----------+--+
| Cash generated from/(used in) | 0.8 | (2.4) | 0.5 | |
| operations | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Interest paid | (0.4) | (0.4) | (0.5) | |
+---------------------------------------+---------+-----------+-----------+--+
| Tax recovered/(paid) | 0.2 | (0.2) | (0.5) | |
+---------------------------------------+---------+-----------+-----------+--+
| Net cash generated from/(used in) | 0.6 | (3.0) | (0.5) | |
| operating activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Investing activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Purchase of property, plant and | (0.7) | (0.5) | (1.0) | |
| equipment | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Proceeds from sale of property, plant | - | 0.8 | 1.6 | |
| and equipment | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Proceeds from sale of businesses | - | 0.2 | 0.2 | |
+---------------------------------------+---------+-----------+-----------+--+
| Net cash (used in)/from investing | (0.7) | 0.5 | 0.8 | |
| activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Financing activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Equity dividends paid | - | - | - | |
| Debt issue costs | - | - | (2.2) | |
+---------------------------------------+---------+-----------+-----------+--+
| New bank borrowings | - | - | 19.1 | |
+---------------------------------------+---------+-----------+-----------+--+
| Repayment of bank borrowings | (1.5) | - | (11.4) | |
+---------------------------------------+---------+-----------+-----------+--+
| Net cash (used in)/from financing | (1.5) | - | 5.5 | |
| activities | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Net (decrease)/increase in cash and | (1.6) | (2.5) | 5.8 | |
| cash equivalents | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Cash and cash equivalents at | 2.5 | (3.3) | (3.3) | |
| beginning of period | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| Cash and cash equivalents at end of | 0.9 | (5.8) | 2.5 | |
| period | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| | | | | |
+---------------------------------------+---------+-----------+-----------+--+
| | | | | | | |
+---------------------------------------+---------+--+--------+--+--------+--+
Condensed consolidated net debt statement
26 weeks ended 4 July 2010
The movement in net debt in the period was analysed as follows:
+---------------------------------------+---------+--+--------+--+-------+--+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 |
| | Unaudited | Unaudited | Audited |
+---------------------------------------+------------+-----------+----------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+----------+--+
| Net (decrease)/increase in cash in | (1.6) | (2.5) | 5.8 | |
| the period | | | | |
+---------------------------------------+---------+-----------+----------+--+
| Non-cash changes - amortisation of | (0.4) | - | (0.2) | |
| debt issue costs | | | | |
+---------------------------------------+---------+-----------+----------+--+
| New bank borrowings | - | - | (19.1) | |
+---------------------------------------+---------+-----------+----------+--+
| Debt issue costs | - | - | 2.4 | |
+---------------------------------------+---------+-----------+----------+--+
| Repayment of bank borrowings | 1.5 | - | 11.4 | |
+---------------------------------------+---------+-----------+----------+--+
| Movement in net debt in the period | (0.5) | (2.5) | 0.3 | |
+---------------------------------------+---------+-----------+----------+--+
| Opening net debt | (12.2) | (12.5) | (12.5) | |
+---------------------------------------+---------+-----------+----------+--+
| Closing net debt | (12.7) | (15.0) | (12.2) | |
+---------------------------------------+---------+-----------+----------+--+
| | | | | | | |
+---------------------------------------+---------+--+--------+--+-------+--+
Notes to the condensed set of interim financial information
26 weeks ended 4 July 2010
1 General information
The company is a public limited company incorporated and domiciled in the UK.
The address of its registered office is Ardath Road, Kings Norton, Birmingham,
B38 9PN.
The company is listed on the Alternative Investment Markets ("AIM").
This condensed consolidated interim financial information was approved for issue
on 7 September 2010.
This condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act 2006.
The statutory accounts of Metalrax Group PLC for the year ended 31 December
2009, which received an unqualified report, and contained no emphasis of matter
paragraph and no statement under section 498 of the Companies Act 2006 from the
auditors, have been filed with the Registrar of Companies.
The condensed consolidated interim financial information has been reviewed, not
audited.
2 Basis of preparation
The condensed consolidated interim financial information for the 26 weeks ended
4 July 2010 has been prepared in accordance with the AIM Rules and in accordance
with International Accounting Standard 34 'Interim Financial Reporting' (IAS 34)
as adopted by the European Union.
The condensed set of consolidated interim financial information should be read
in conjunction with the annual financial statements for the year ended 31
December 2009, which have been prepared in accordance with IFRS as adopted by
the European Union.
The condensed consolidated financial information have been prepared on the going
concern basis, which assumes that the Group will continue to be able to meet its
liabilities as they fall due for the foreseeable future.
3 Accounting policies
The condensed consolidated interim financial information has been prepared on
the basis of the accounting policies expected to apply for the financial year to
31 December 2010 applicable to the Group under IFRS. The following new standards
and interpretations are effective for the year ending 31 December 2010 although
they do not have a material effect;
· Amendment to IAS 27 - 'Consolidated and Separate Financial Statements'
· Amendment to IAS 39 - 'Eligible Hedged Items'
· Amendment to IFRS 2 - 'Group Cash-Settled Share-Based Payment
Transactions'
· Revision to IFRS 3 - 'Business Combinations'
· Improvements to IFRSs (April 2009)
· Amendments to IFRIC 9 and IAS 39 -'Embedded Derivatives'
· IFRIC 17 - 'Distributions of Non-Cash Assets to Owners'
· IFRIC 18 - 'Transfers of Assets from Customers'
3 Accounting policies (continued)
The following new standards, new interpretations and amendments to standards and
interpretations have been issued but are not effective for the financial year
beginning 1 January 2010 and have not been early adopted:
· IFRS 9, 'Financial instruments'
· Revised IAS 24, 'Related party disclosures'
· 'Classification of rights issues' (Amendment to IAS 32)
· 'Prepayments of a minimum funding requirement' (Amendments to IFRIC 14)
· IFRIC 19, 'Extinguishing financial liabilities with equity instruments'
· Improvements to International Financial Reporting Standards 2010
The financial information has been prepared under the historical cost convention
as modified by the revaluation of properties.
+--------------+
| The |
| preparation |
| of |
| financial |
| information |
| in |
| conformity |
| with |
| generally |
| accepted |
| accounting |
| principles |
| requires |
| the use of |
| certain |
| critical |
| accounting |
| estimates. |
| It also |
| requires |
| management |
| to exercise |
| judgement |
| in the |
| process of |
| applying |
| the Group's |
| accounting |
| policies. |
| The areas |
| involving a |
| higher |
| degree of |
| judgement |
| or |
| complexity, |
| or areas |
| where |
| assumptions |
| and |
| estimates |
| are |
| significant |
| to the |
| condensed |
| consolidated |
| interim |
| financial |
| information |
| are |
| disclosed |
| within the |
| Group's |
| accounting |
| policies as |
| disclosed in |
| the IFRS |
| financial |
| statements |
| for the year |
| ended 31 |
| December |
| 2009. |
| |
| The same |
| accounting |
| policies, |
| presentation |
| and methods |
| of |
| computation |
| are followed |
| in the |
| condensed |
| set of |
| financial |
| information |
| as applied |
| in the |
| Group's |
| latest |
| annual |
| audited |
| financial |
| information. |
+--------------+
4 Segmental information
The Group has two divisions - Specialist Engineering and Consumer Durables.
These segments are consistent with information reported to the Group's Chief
Executive, being the Chief Operating Decision Maker, for the purpose of resource
allocation and performance assessment. The principal activities of the two
divisions are as follows:
Specialist Engineering - a variety of precision manufacturing activities that
incorporate value adding technology for unique applications in the medical,
specialist metal coating and premium automotive sectors.
Consumer Durables - manufactures and markets bakeware and associated ranges of
kitchen accessories to both the retail and commercial markets in the UK and
abroad.
The accounting policies of the reportable segments are the same as the Group's
accounting policies which are described in the Group's latest annual financial
statements. Segment result represents the profit or loss achieved by each
segment without allocation of share option costs, central administration costs
including directors' salaries, investment revenue and finance costs, and income
tax expense.
a) Segment revenues and results:
26 weeks to 4 July 2010
+---------------+-------------+----------+----------+------------+--------------+--------+
| | Continuing businesses | | |
+---------------+------------------------------------------------+--------------+--------+
| | Specialist | Consumer | Central | Total | Discontinued | Total |
| | Engineering | Durables | Services | Continuing | Businesses | Group |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Total | 21.7 | 9.7 | 0.1 | 31.5 | - | 31.5 |
| revenues | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Inter-segment | (2.2) | - | - | (2.2) | - | (2.2) |
| revenues | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Revenue | 19.5 | 9.7 | 0.1 | 29.3 | - | 29.3 |
| from | | | | | | |
| external | | | | | | |
| customers | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Gross | 5.5 | 2.1 | 0.1 | 7.7 | - | 7.7 |
| profit | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Gross | 28.1% | 21.7% | 100.0% | 26.3% | - | 26.3% |
| margin | | | | | | |
| (%) | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Operating | 1.4 | - | (0.8) | 0.6 | - | 0.6 |
| profit/(loss) | | | | | | |
| before | | | | | | |
| exceptional | | | | | | |
| items, share | | | | | | |
| option costs | | | | | | |
| and goodwill | | | | | | |
| impairment | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Exceptional | - | - | - | - | - | - |
| items | - | - | (0.1) | (0.1) | - | (0.1) |
| Share | | | | | | |
| option | | | | | | |
| costs | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Goodwill | - | - | - | - | - | - |
| impairment | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Operating | 1.4 | - | (0.9) | 0.5 | - | 0.5 |
| profit/(loss) | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Finance | | | | | | (1.0) |
| expense | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Loss | | | | | | (0.5) |
| before | | | | | | |
| taxation | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Taxation | | | | | | 0.1 |
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| Loss | | | | | | (0.4) |
| after | | | | | | |
| taxation | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
| | | | | | | |
+---------------+-------------+----------+----------+------------+--------------+--------+
4 Segmental information (continued)
a) Segment revenues and results (continued):
26 weeks to 5 July 2009
+----------------------------------------------------------------------------------------+
| Continuing businesses |
| Specialist Consumer Central Total Discontinued Total |
| Engineering Durables Services Continuing Businesses Group |
| GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm |
| Total 21.6 10.0 0.1 31.7 1.6 33.3 |
| revenues |
| Inter-segment (1.7) - - (1.7) (0.2) (1.9) |
| revenues |
| Revenue 19.9 10.0 0.1 30.0 1.4 31.4 |
| from |
| external |
| customers |
| Gross 4.6 2.0 0.1 6.7 (0.3) 6.4 |
| profit |
| Gross 23.4% 20.2% 100.0% 22.3% (21.4%) 20.2% |
| margin |
| (%) |
| Operating 0.5 (0.3) (0.8) (0.6) (0.8) (1.4) |
| profit/(loss) |
| before |
| exceptional |
| items, share |
| option costs |
| and goodwill |
| impairment |
| Exceptional (0.8) (0.1) - (0.9) (8.6) (9.5) |
| items - - (0.1) (0.1) - (0.1) |
| Share |
| option |
| costs |
| Goodwill - (0.6) - (0.6) - (0.6) |
| impairment |
| Operating (0.3) (1.0) (0.9) (2.2) (9.4) (11.6) |
| loss |
| Finance (0.4) - (0.4) |
| expense |
| Loss (2.6) (9.4) (12.0) |
| before |
| taxation |
| Taxation 0.1 - 0.1 |
| Loss (2.5) (9.4) (11.9) |
| after |
| taxation |
| |
| Year |
| ended |
| 31 Continuing businesses |
| December |
| 2009 |
| |
| Specialist Consumer Central Total Discontinued Total |
| Engineering Durables Services Continuing Businesses Group |
| GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm |
| Total 43.3 22.0 0.2 65.5 2.1 67.6 |
| revenues |
| Inter-segment (4.1) (0.1) (0.1) (4.3) (0.4) (4.7) |
| revenues |
| Revenue 39.2 21.9 0.1 61.2 1.7 62.9 |
| from |
| external |
| customers |
| Gross 9.5 5.0 0.1 14.6 (0.5) 14.1 |
| profit |
| Gross 24.2% 22.6% 100.0% 23.8% (29.4%) 22.3% |
| margin |
| (%) |
| Operating 1.6 0.3 (2.1) (0.2) (0.4) (0.6) |
| profit/(loss) |
| before |
| exceptional |
| items, share |
| option costs |
| and goodwill |
| impairment |
| Exceptional (0.4) (0.4) (0.8) (1.6) (7.5) (9.1) |
| items |
| Share - - (0.3) (0.3) - (0.3) |
| option |
| costs |
| Goodwill - (0.6) - (0.6) - (0.6) |
| impairment |
| Operating 1.2 (0.7) (3.2) (2.7) (7.9) (10.6) |
| profit/(loss) |
| Finance (1.0) - (1.0) |
| expense |
| Loss (3.7) (7.9) (11.6) |
| before |
| taxation |
| Taxation 0.1 - 0.1 |
| Loss (3.6) (7.9) (11.5) |
| after |
| taxation |
| |
+----------------------------------------------------------------------------------------+
b) Segment assets/(liabilities)
+--------------+--------+-----------+-----------+----------+
| |
+----------------------------------------------------------+
| | | 4 July | 5 July | 31 |
| | | 2010 | 2009 | December |
| | | Unaudited | Unaudited | 2009 |
| | | GBP'm | GBP'm | Audited |
| | | | | GBP'm |
+--------------+--------+-----------+-----------+----------+
| | | 22.4 | 26.7 | 25.1 |
| Specialist | | | | |
| Engineering | | | | |
+--------------+--------+-----------+-----------+----------+
| Consumer | | 14.0 | 18.0 | 17.1 |
| Durables | | | | |
+--------------+--------+-----------+-----------+----------+
| Central | | 13.6 | 5.1 | 4.3 |
| Services | | | | |
+--------------+--------+-----------+-----------+----------+
| Discontinued | | 1.9 | 2.5 | 1.9 |
| Businesses | | | | |
+--------------+--------+-----------+-----------+----------+
| | | | | |
+--------------+--------+-----------+-----------+----------+
| Total | | 51.9 | 52.3 | 48.4 |
| segment | | | | |
| gross | | | | |
| assets | | | | |
+--------------+--------+-----------+-----------+----------+
| Unallocated | | (36.4) | (36.7) | (31.9) |
| assets and | | | | |
| liabilities | | | | |
+--------------+--------+-----------+-----------+----------+
| Consolidated | | 15.5 | 15.6 | 16.5 |
| total net | | | | |
| assets | | | | |
+--------------+--------+-----------+-----------+----------+
The unallocated assets and liabilities include debt, taxation, pensions and
deferred taxation.
5 Exceptional items
+---------------------------------------+---------+--+--------+--+--------+-+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 |
| | Unaudited | Unaudited | Audited |
+---------------------------------------+------------+-----------+----------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+-----------+-+
| | | | | |
+---------------------------------------+---------+-----------+-----------+-+
| Reorganisation/restructuring costs | - | 0.4 | 1.0 | |
+---------------------------------------+---------+-----------+-----------+-+
| Provision for Hidrosib SA losses | - | 0.3 | 6.4 | |
+---------------------------------------+---------+-----------+-----------+-+
| Impairment of non-current assets | - | 8.1 | 1.0 | |
+---------------------------------------+---------+-----------+-----------+-+
| Onerous lease costs | - | - | 0.2 | |
+---------------------------------------+---------+-----------+-----------+-+
| Property devaluations | - | 0.7 | 0.5 | |
+---------------------------------------+---------+-----------+-----------+-+
| Total exceptional items | - | 9.5 | 9.1 | |
+---------------------------------------+---------+-----------+-----------+-+
| | | | | | | |
+---------------------------------------+---------+--+--------+--+--------+-+
Impairment of assets incurred in the prior period relate to Hidrosib SA, which
was put into administration in July 2009 (GBP7.2m), and asset impairments at
Commercial Bearings (GBP0.5m) and BSC Diecasting (GBP0.4m) prior to disposal.
6 Discontinued Operations
In recent years, the Group has undertaken a review of its underperforming
businesses and has taken actions to close or sell those businesses in the prior
periods. The businesses that are no longer part of the Group, but were reported
in the 2009 comparatives are:
+-----------------------+------------------------+---------------+
| BSC (Diecasting) | Sold | April 2009 |
| Hidrosib SA | Administration/sold | July |
| Commercial Bearings | Sold | 2009/March |
| | | 2010 |
| | | July 2009 |
| | | |
+-----------------------+------------------------+---------------+
+--------------------------+-+-------+---------------------------+----------+
| | | | | Year |
| | | 26 | 26 weeks | ended |
| | | weeks | ended 5 | 31 |
| | | ended | July | December |
| | | 4 | 2009 | 2009 |
| | | July | GBPm | GBPm |
| | | 2010 | | |
| | | GBPm | | |
+--------------------------+-+-------+---------------------------+----------+
| | | | | |
+--------------------------+-+-------+---------------------------+----------+
| Revenue | | - | 1.4 | 1.7 |
+--------------------------+-+-------+---------------------------+----------+
| Cost of sales | | - | (1.7) | (1.4) |
+--------------------------+-+-------+---------------------------+----------+
| Gross (loss)/profit | | - | (0.3) | 0.3 |
+--------------------------+-+-------+---------------------------+----------+
| Administrative expenses | | - | (0.5) | (0.7) |
+--------------------------+-+-------+---------------------------+----------+
| Exceptional costs | | - | (8.6) | (7.5) |
+--------------------------+-+-------+---------------------------+----------+
| Goodwill impairment | | - | - | - |
+--------------------------+-+-------+---------------------------+----------+
| Loss before tax of | | - | (9.4) | (7.9) |
| discontinued operations | | | | |
+--------------------------+-+-------+---------------------------+----------+
| Attributable tax expense | | - | - | - |
+--------------------------+-+-------+---------------------------+----------+
| Loss after tax of | | - | (9.4) | (7.9) |
| discontinued items | | | | |
+--------------------------+-+-------+---------------------------+----------+
| Pre tax loss of disposal | | - | - | - |
| group | | | | |
+--------------------------+-+-------+---------------------------+----------+
| Taxation | | - | - | - |
+--------------------------+-+-------+---------------------------+----------+
| After tax loss of | | - | (9.4) | (7.9) |
| disposal group | | | | |
+--------------------------+-+-------+---------------------------+----------+
| Loss for the period from | | - | (9.4) | (7.9) |
| discontinued operations | | | | |
+--------------------------+-+-------+---------------------------+----------+
| | | | | |
+--------------------------+-+-------+---------------------------+----------+
The effect of discontinued operations on segment results is disclosed in note 4.
Central costs that would previously have been allocated to these closed or
disposed businesses have not been allocated in the results presented on the
basis that these costs remain part of the continuing central services.
7 Finance expense
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 Audited |
| | Unaudited | Unaudited | |
+---------------------------------------+------------+------------+---------------------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+------------+------------+
| Interest payable on bank loans and | 0.4 | 0.2 | 0.4 | |
| overdrafts | 0.4 | - | 0.2 | |
| Amortisation of debt issue costs | | | | |
+---------------------------------------+---------+-------------+------------+----------+
| Net finance cost of defined benefit | 0.2 | 0.2 | 0.4 | |
| pension schemes | | | | |
+---------------------------------------+---------+-------------+------------+----------+
| Total finance expenses | 1.0 | 0.4 | 1.0 | |
+---------------------------------------+---------+-------------+------------+----------+
| | | | | | | | | |
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
8 Taxation credit
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 Audited |
| | Unaudited | Unaudited | |
+---------------------------------------+------------+------------+---------------------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+------------+------------+
| Current tax charge | - | 0.1 | 0.2 | |
+---------------------------------------+---------+-------------+------------+----------+
| Prior period adjustments to tax | (0.1) | - | (0.2) | |
+---------------------------------------+---------+-------------+------------+----------+
| Deferred tax credit | - | (0.2) | (0.1) | |
+---------------------------------------+---------+-------------+------------+----------+
| Income tax credit | (0.1) | (0.1) | (0.1) | |
+---------------------------------------+---------+-------------+------------+----------+
| | | | | | | | | |
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
The current tax charge for the period is based on the estimated weighted average
corporation tax rate for the full year of 25.8%.
A number of changes to the UK Corporation Tax system were announced in the 2010
Budget Report which have been enacted in the 2010 Finance Act. The impact of
these is not considered to be material to the future tax charge in the
UK.
Further changes were announced in the UK Government's Emergency
Budget on 22 June 2010. This included a reduction in the main corporation tax
rate from the current 28% to 24% comprising a 1% per annum reduction over the
course of a four year period commencing from 1 April 2011. In addition, the
rates of capital allowances on assets in the main and special pools are expected
to fall from 20% to 18% and from10% to 8% respectively from 1 April 2012. The
Directors are in the process of evaluating the impact these changes will have on
future tax charges.
9 Loss per ordinary share
The basic and diluted loss per share is calculated based on the loss for the
period and the adjusted basic and diluted loss per share is calculated based on
an adjusted profit/(loss) after tax as calculated below. The adjusted
profit/(loss) after tax adds back non-trading items to give an underlying
earnings measure of the Group's performance. The weighted average number of
shares used in the basic and diluted loss per share calculation is 119,897,298
(5 July and 31 December 2009: 119,897,298).
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 Audited |
| | Unaudited | Unaudited | |
+---------------------------------------+------------+------------+---------------------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+------------+------------+
| Loss for the period | (0.4) | (11.9) | (11.5) | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back exceptional items | - | 9.5 | 9.1 | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back share option costs | 0.1 | 0.1 | 0.3 | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back goodwill impairment | - | 0.6 | 0.6 | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back debt issue cost amortisation | 0.4 | - | 0.2 | |
+---------------------------------------+---------+-------------+------------+----------+
| Adjusted profit/(loss) after tax | 0.1 | (1.7) | (1.3) | |
+---------------------------------------+---------+-------------+------------+----------+
| | (0.32) | (9.92) | (9.62) | |
| Basic and diluted loss per 5p | | | | |
| ordinary share (pence per share) | | | | |
+---------------------------------------+---------+-------------+------------+----------+
| Adjusted basic and diluted loss per | 0.08 | (1.39) | (1.29) | |
| 5p ordinary share (pence per share) | | | | |
+---------------------------------------+---------+-------------+------------+----------+
| | | | | | | | | |
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
Loss per ordinary share for Continuing operations
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
| | 26 weeks | 26 weeks | Year |
| | ended | ended | ended 31 |
| | 4 July | 5 July | December |
| | 2010 | 2009 | 2009 Audited |
| | Unaudited | Unaudited | |
+---------------------------------------+------------+------------+---------------------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+------------+------------+
| Loss for the period | (0.4) | (2.5) | (3.6) | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back exceptional items | - | 0.9 | 1.6 | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back share option costs | 0.1 | 0.1 | 0.3 | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back goodwill impairment | - | 0.6 | 0.6 | |
+---------------------------------------+---------+-------------+------------+----------+
| Add back debt issue cost amortisation | 0.4 | - | 0.2 | |
+---------------------------------------+---------+-------------+------------+----------+
| Adjusted profit/(loss) after tax | 0.1 | (0.9) | (0.9) | |
+---------------------------------------+---------+-------------+------------+----------+
| | (0.32) | (2.08) | (2.96) | |
| Basic and diluted loss per 5p | | | | |
| ordinary share (pence per share) | | | | |
+---------------------------------------+---------+-------------+------------+----------+
| Adjusted basic and diluted loss per | 0.08 | (0.68) | (0.90) | |
| 5p ordinary share (pence per share) | | | | |
+---------------------------------------+---------+-------------+------------+----------+
| | | | | | | | | |
+---------------------------------------+---------+--+--------+-+-+--------+-+----------+
There is no dilution in the loss per share calculation at 4 July 2010. Diluted
earnings per share is disclosed when a Company could be called upon to issue
shares that would decrease net profit or increase net loss per share. It would
be inappropriate to assume that option holders would act irrationally in
exercising out-of-the-money options when the Company has made a loss and
therefore the existing options have no dilutive effect in the current period.
Since there are no other diluting future share issues, diluted loss per share
equals basic loss per share for the current period. There were no potential
diluting future shares in the previous year or period.
10 Share capital
+----------------------------------+-----------+-----------+----------+
| | | 5 | |
| | 4 July | July | 31 |
| | 2010 | 2009 | December |
| | Unaudited | Unaudited | 2009 |
| | | | Audited |
| | | | |
+----------------------------------+-----------+-----------+----------+
| | GBP'm | GBP'm | GBP'm |
+----------------------------------+-----------+-----------+----------+
| Authorised | | | |
+----------------------------------+-----------+-----------+----------+
| 140,000,000 (2009: 140,000,000) | 7.0 | 7.0 | 7.0 |
| ordinary shares of 5p each | | | |
+----------------------------------+-----------+-----------+----------+
| Called up, issued and fully paid | | | |
+----------------------------------+-----------+-----------+----------+
| 119,897,298 (2009: 119,897,298) | 6.0 | 6.0 | 6.0 |
| ordinary shares of 5p each | | | |
+----------------------------------+-----------+-----------+----------+
11 Assets held for sale
At the balance sheet date, these assets are properties available for sale where
contracts have subsequently been exchanged prior to reporting. The GBP0.6m net
disposal proceeds will be used to repay GBP0.6m of the senior debt facility.
12 Pensions
The valuation of the Group's pension scheme obligation has been updated using an
IAS19 valuation as at 4 July 2010, to reflect current market discount rates,
current market values of investment and actual investment returns. The amounts
included in the balance sheet arising from the Group's pension obligations in
respect of defined benefit schemes are as follows:
+---------------------------------------+---------+--+--------+--+----------+-+
| | | 5 July | |
| | 4 July | 2009 | 31 |
| | 2010 | Unaudited | December |
| | Unaudited | | 2009 |
| | | | Audited |
| | | | |
+---------------------------------------+------------+-----------+------------+
| | GBP'm | GBP'm | GBP'm | |
+---------------------------------------+---------+-----------+-------------+-+
| Total market value of plan assets | 8.1 | 10.3 | 10.5 | |
+---------------------------------------+---------+-----------+-------------+-+
| Present value of scheme liabilities | (14.0) | (14.4) | (15.1) | |
+---------------------------------------+---------+-----------+-------------+-+
| Pension scheme liability | (5.9) | (4.1) | (4.6) | |
+---------------------------------------+---------+-----------+-------------+-+
| | | | | | | |
+---------------------------------------+---------+--+--------+--+----------+-+
The major assumptions used by the Actuary were:
+------------------------------------+-----------+-----------+------------+
| | | 5 July | 31 |
| | 4 July | 2009 | December |
| | 2010 | Unaudited | 2009 |
| | Unaudited | | Audited |
| | | | |
+------------------------------------+-----------+-----------+------------+
| | % | % | % |
+------------------------------------+-----------+-----------+------------+
| Inflation | 3.25 | 3.40 | 3.40 |
+------------------------------------+-----------+-----------+------------+
| Rate of increase in salaries | 3.25 | 3.40 | 3.90 |
+------------------------------------+-----------+-----------+------------+
| Pension increases, subject to LPI | 3.25 | 3.40 | 3.40 |
+------------------------------------+-----------+-----------+------------+
| Discount rate | 5.3 | 6.2 | 5.7 |
+------------------------------------+-----------+-----------+------------+
| Return on plan assets | 5.2 | 4.7 | 5.2 |
+------------------------------------+-----------+-----------+------------+
13 Related party transactions
All intra-group transactions have been eliminated on consolidation at 4 July
2010. There have been no other related party transactions in the period from 1
January 2010 to 7 September 2010.
14 Principal risks and uncertainties
The principal risks and uncertainties which could affect the Group for the
remainder of the financial year are consistent with those detailed on pages 14
and 15 of the Annual Report and Accounts for the year ended 31 December 2009, a
copy of which is available at www.Metalraxgroup.co.uk, and are:
· Economic risk
· People risk
· Operational risk
· Pensions risk
· Financial risk
The Company regularly assesses these risks together with the associated
mitigating factors listed in the 2009 Annual Report. The levels of activity in
the Group's markets and the level of financial liquidity and flexibility
continue to be the areas designated as appropriate for added management focus.
The Outlook section of this half yearly report provides a commentary concerning
the remainder of the financial year.
Forward-looking
statements
Certain statements in this interim results announcement are
forward-looking statements. By their nature, forward-looking statements involve
a number of risks, uncertainties or assumptions that could cause actual results
or events to differ materially from those expressed or implied by the
forward-looking statements. These risks, uncertainties or assumptions could
adversely affect the outcome and financial effects of the plans and events
described herein. Forward-looking statements contained in this interim results
announcement regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the future. You
should not place undue reliance on forward-looking statements, which speak only
as of the date of this interim results announcement. Except as required by law,
the Company is under no obligation to update or keep current the forward-looking
statements contained in this interim results announcement or to correct any
inaccuracies which may become apparent in such forward-looking statements.
Independent review report to Metalrax Group plc
Introduction
We have
been engaged by the company to review the condensed set of financial information
in the half-yearly financial report for the 26 weeks ended 4 July 2010, which
comprises the condensed consolidated income statement, the condensed
consolidated statement of comprehensive income, the condensed consolidated
balance sheet, the condensed consolidated statement of changes in equity, the
condensed consolidated cash flow statement, the condensed consolidated net debt
statement and related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial information.
Directors' responsibilities
The
half-yearly financial report is the responsibility of, and has been approved by,
the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM Rules for Companies which require
that the financial information must be presented and prepared in a form
consistent with that which will be adopted in the company's annual financial
statements.
As disclosed in note 2, the annual financial statements of
the group are prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial information included in this half-yearly
financial report has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the
company a conclusion on the condensed set of financial information in the
half-yearly financial report based on our review. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
the AIM Rules for Companies and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of
review
We conducted our review in accordance with International Standard on
Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial
Information Performed by the Independent Auditor of the Entity' issued by the
Auditing Practices Board for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on
our review, nothing has come to our attention that causes us to believe that the
condensed set of financial information in the half-yearly financial report for
the 26 weeks ended 4 July 2010 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, "Interim Financial
Reporting", as adopted by the European Union, and the AIM Rules for
Companies.
PricewaterhouseCoopers LLP
Chartered Accountants
Birmingham
7
September 2010
a) The maintenance and integrity of the Metalrax Group Plc website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
b)
Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSEFWMFSSESU
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