TIDMSIXH
RNS Number : 2812V
600 Group PLC
20 July 2018
The 600 Group PLC
Full Year Results for the year ended 31 March 2018
"A Year of Transformation"
The 600 Group PLC ("the Group"), the AIM listed distributor,
designer and manufacturer of industrial products (AIM: SIXH), today
announces its full year results for the year ended 31 March
2018.
Highlights:
-- Double digit increases in revenues, pre special items
operating earnings and pre tax and special items income
-- Buy out of UK pension liabilities of $266m agreed
-- Cash surplus (net of tax) estimated at between $4m and $5m
after buy out and scheme wind up to be repaid to Company
-- Reintroduction of Dividend with maiden payment of 0.5p being recommended to shareholders
-- ProPhotonix shares sold for $2m generating $1.3m profit
-- Equity raise of $1.4m September 2017 eliminated UK working
capital borrowing and introduced new institutional shareholders to
the register
-- Order books stable and industry forecasts improving
-- UK restructuring being undertaken to reduce capex requirement and improve margins further
-- Re-launch of " Colchester Machine Tool Solutions"
-- New product launches planned for second half of current year
The Board has determined to change the presentational currency
to US dollars. Approximately two thirds of revenues are in dollars
and a great proportion of expenditure is either in dollars or
currency tied to the dollar.
Commenting today, Paul Dupee, Executive Chairman of The 600
Group PLC said:
"This has been a very successful year for the company.
Throughout the year we have been working with the pension trustee
to negotiate the possible buy out of the group pension scheme, and
I'm delighted to report that we have now achieved this. The
consequences to the Group are significant as we are released from
the financial and regulatory constraints related to the scheme, and
will be able to use the net proceeds to reduce Group debt.
The efforts of the last few years can be seen across all our
divisions resulting in double-digit growth in both revenues and
earnings (before special items). Looking forward, we expect to
improve even further as we achieve cost savings in our UK
operations and begin to see the benefits of the improved range of
machines and engineering solutions being developed throughout the
Group.
Financially, we are more robust because of the steps we took
last year to raise additional working capital and realise our
investment in ProPhotonix.
We go into this new financial year with great confidence and I
am delighted that this has given us the opportunity to reinstate
paying a dividend to shareholders for the first time in many
years."
SUMMARY OF FINANCIAL RESULTS FY18 FY17
$m $m
Revenues 66.01 58.79
Underlying Operating profit* 4.23 3.83
Bank and other interest* (1.18) (1.18)
Underlying Profit before taxation* 3.05 2.65
Special items (net) 0.82 1.38
Profit before taxation 3.87 4.03
Taxation(charge (0.82) (1.46)
Total profit for the year 3.05 2.57
Earnings per share
Underlying basis* 3.20c / (2.46p) 2.68c / (2.15p)
Total for the year 2.80c / (2.16p) 2.46c / (1.97p)
* From continuing activities, before special items
More Information on the group can be viewed at:
www.600group.com
Enquiries:
The 600 Group PLC Tel: 01924 415000
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Paul Dupee, Executive Chairman
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Neil Carrick, Finance Director
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Spark Advisory Partners Limited Tel: 020 3368 3553
(NOMAD)
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Matt Davis/ Miriam Greenwood
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Cadogan PR Limited (Financial Tel: 020 7499 5002 / 07771 713608
PR)
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Alex Walters
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WH Ireland (Broker) Tel: 020 7220 1666
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Adam Pollock / Tim Feather
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The results for the 2018 fiscal year have been most satisfactory
and in line with the Board's expectations. Revenues, operating
earnings (before special items) and pre-tax income (before special
items) all had double digit percentage increases. Our order books
remained steady throughout the year and remain so today.
The period since we last reported annual results has seen a
number of developments that will have a significant impact on the
group now and in the future.
In the Machine Tool division, the decision has been made to
further rationalise UK operations. We are very efficient at product
development, engineering and distribution and will continue to
focus on these core strengths. The sale of surplus assets resulting
from our rationalisation decisions should produce more than
sufficient funds to cover the costs of the re-organisation. The
resulting lowering of our fixed cost base and reduced forward
capital expenditure requirements will benefit both cash flow and
operating margins.
In the Industrial Laser division, the integration of TYKMA
Electrox has been completed and all manufacturing operations are
now being performed at the expanded Chillicothe, Ohio facility. The
UK and European support operations have been consolidated with the
UK Machine Tool division which will result in reduced headcount,
tighter inventory control and a more integrated sales force to
capitalise on the inherent synergies in our customer base.
After reviewing our current results, the Board has determined to
change our presentational currency to US dollars. Approximately two
thirds of our revenues are in dollars and a great proportion of our
expenditure is either in dollars or currency tied to the dollar.
The fluctuation in Sterling in the last few years has made it
difficult to accurately measure our performance when reporting in
Sterling and this change will make it more efficient for the Board
and shareholders in analysing our financial results going
forward.
We have also significantly strengthened our financial team in
the last year in both the UK and the US and as a result have seen
better, more efficient and timely reporting and forecasting.
Certainly, the most profound change has been the recent
development surrounding the buy-out of the scheme liabilities of
our UK defined benefit Pension Scheme. Just a few years ago the
Scheme was in deficit by all measures with a buyout deficit of some
GBP51 million ($71million). At one point a prominent portfolio
manager observed that the Scheme effectively controlled the
company. In a sense he was correct as there were undertakings and
security arrangements in place which severely limited our
flexibility. I'm delighted to say that the Scheme Trustee, working
in tandem with the Company, have agreed for the pension scheme
liabilities with a 31 March 2018 value of $272 million (GBP194
million) covering some 2,000 pensioners and 800 deferred members to
be entirely transferred to Pension Insurance Corporation Plc. Once
the buy-out is completed and the scheme is wound up, expected later
this year, all surplus funds remaining will be returned to the 600
Group less a statutory 35% tax charge. The total net amount payable
to the Company is currently estimated to be between $4 million and
$5 million (GBP3 million and GBP4 million).
Dividend
As a result of the good operational performance, the reasonable
current commercial outlook and particularly the resolution of the
Pension Scheme, the Board has determined to resume payment of a
dividend and are recommending a pay-out of 0.5p per share payable
on 28 September 2018, to shareholders on the register at 31 August
2018.
People
On behalf of the Board, I would like to thank all our employees
for their ongoing support, commitment and dedication to The 600
Group which has been important in continuing the improvement in our
businesses. I look forward to working with them again in the coming
year.
Outlook
Trading and order intake in the period since the FY18 financial
year end has remained stable. We continue to seek opportunities to
leverage our industry-recognised brands and expand our worldwide
distribution network. The introduction of new products to widen the
customer base remains a clear focus for our management teams in
both divisions. Industry forecasts of growth for both divisions
have improved during the year but as always remain subject to
uncertain international influences and world events. The Board
continues to believe the strategy of brand promotion and investment
in new products and new markets will lead to continued market share
growth in the future.
Paul Dupee
Executive Chairman
20 July 2018
Our businesses
The 600 Group PLC ("the Group") is a leading engineering group
with a world class reputation in the design and distribution of
machine tools, precision engineered components and the design,
manufacture and distribution of industrial laser systems. The Group
operates these businesses from locations in North America, Europe
and Australia selling into more than 100 countries worldwide.
During the 52 week period ended 31 March 2018 28% of revenues
came from the sale of metal turning machine tools, with a further
19% from other machine tools and 11% from the sale of precision
engineered components for machine tools. Sales of Industrial laser
equipment amounted to 29% of revenues with the remaining 13% of
revenues being from after sales support, spare parts and services
from both divisions.
Group businesses serve customers across a broad range of
industry sectors, from niche markets for technical education of
young engineering apprentices through to high volume production of
automotive, aerospace and defence equipment. A high proportion of
revenue is derived from sales via third party distribution
channels, in respect of which it is more difficult to track the
industry dispersion of end-user customers.
The Group benefits from a high degree of loyalty and repeat
business via a large number of established distributors in many
countries and territories but with no major concentrations. In the
year ended 31 March 2018 the top 20 customers, of which 17 were
distributors, contributed less than 26% of revenues, the same
percentage as the previous year.
Revenues
Revenues are generated across many diverse geographical
territories:
Percentage of worldwide revenues 2018 2017
(by destination) % %
United States of America 65 64
United Kingdom 15 15
Europe (excluding UK) 11 12
Rest of the World 9 9
Total 100 100
Macroeconomic and industry trends
Machine tools and precision engineered components
The worldwide machine tool industry was estimated by Oxford
Economics at nearly $79bn in annual sales in its Spring 2018
report. The market continues to be driven by the investment
intentions of manufacturers and is sensitive to changes in the
economic and financial climate. Demand responds to economic trends
and typically lags the main cycle of the economy.
The global market is dominated by China with consumption of
$30bn but this is largely served domestically with China also being
the largest producer. The USA is the second largest consumer of
machine tools at $8.8bn followed by Germany at $6.8bn.
The report indicated growth of over 7% globally in 2017 and
expects the market for machine tools to remain healthy during 2018
at over 6%. Within our main markets the expectations were for the
USA to remain close to 8% growth with Europe at just over 8% for
2018.
Industrial laser systems
Industry use of industrial lasers for material processing has
continued to expand worldwide. Laser systems have now become a
mainstream manufacturing process covering the areas of laser
machining, including cutting and drilling, marking, ablation and a
host of other niche applications.
Industry spending for the entire global industrial laser market
continues to increase and reached a new estimated high of $4.6bn in
2017. Growth in the overall market is estimated to rise by about 7%
in 2018. The laser marking and micro-materials subset is smaller
than the macro-materials processing but is still solidly producing
mid-single digit growth. This growth is underpinned by enhanced
performance in the speed, cost and quality of the systems being
implemented compared to other techniques as well as by legislative
changes driving a requirement for greater traceability.
Our main markets
The main markets we operate in are the USA, Europe and Australia
and these have generally stabilised following the volatility of the
prior year which contained both the Brexit vote result and the US
presidential elections. Order books have now returned to more
normal levels and are on a par with the previous year although we
have seen a market trend in both divisions for shorter lead times
for our standard equipment with the expectation it is delivered in
four to six weeks or less.
Whilst there remains concerns associated with the UK leaving the
EU, we believe The 600 Group has a relatively low exposure to these
risks given only 11% of Group sales were to EU countries excluding
the UK and US Dollar income the Group generates provides a natural
currency hedge against the majority of our purchases which are in
US Dollars.
In addition, over 13% of our total revenues are derived from the
supply of spare parts and services and this revenue stream is not
dependent on achieving new sales but on servicing our existing
installed base of machines.
Activity in the 2017/18 financial year
Machine tools and precision engineered components
This division operates from sites in the UK, USA, and Australia
and provides solutions for metal processing through the design and
development of machine tools sold under the brand names Colchester,
Harrison and Clausing and the design and supply of precision
engineering components under the brand names Pratt Burnerd and
Gamet. There are also spares, accessories and service operations
which support the significant number of machines sold over the
Group's long history of supplying quality equipment. Sales are made
worldwide, with direct sales operations and distribution in North
America, Europe, and Australia and a network of distributors in all
other key end-user markets.
The machine tools division produced double digit growth of
11.6%, which was despite an under performance in the first half of
the financial year in the UK business. The second half of the
financial year saw a significant improvement in the UK operation
with a 27% increase in revenue over the prior year's second half
performance and operating profits in this six month period
outperforming the prior full year.
The UK machine tools operation has undergone some restructuring
during the year with further outsourcing of operations and some
changes to the distribution network and management team. The
consequent reduction in overheads will underpin further growth
potential in the new financial year.
The UK business re-launch as "Colchester Machine Tool Solutions"
has given fresh impetus to the revised management team and the
business is developing new distributor relationships and expanding
both its direct sales force in the UK and its spares and service
operation.
The US machine tool business has recovered well from market
uncertainty created by the presidential elections and increased
revenues by over 10%. New product launches and the increased
activity of the Kondia business, acquired in the previous year,
have helped improve the top line and more new products are planned
for the current financial year. The range of USA produced machines
continues to expand and sales to Mexico and Canada continue to
grow.
The Australian machine tools business, whilst relatively small,
has shown a significant increase in activity and returned to
profitable trading. A review of the business in Australia and the
wider South east Asia, where the Group's machine tool brands remain
well know with a good installed base, is taking place with a view
to improving this operation further.
The supply and distribution agreement with our Indian partners
for the manufacture and supply of machine tools and their
manufacture and distribution under licence is now in operation and
provides a hedge against our dependency on Taiwanese produced
machine tools. We continue to work with our partners on new
products to increase market coverage of our brands.
The financial results of these activities, on an underlying
basis excluding special items, were as follows:
2018 2017
$ 000 $ 000
Revenues 45,222 40,530
Underlying operating
profit* 2,904 2,574
Underlying operating
margin* 6.4% 6.4%
*underlying figures before special items. See note 3 and note
11.
Industrial laser systems
The integration of our industrial laser systems manufacturing
facilities into the expanded site in Ohio, USA has now been
completed. The UK spares and service operation is being integrated
into the machine tools operation in Heckmondwike with the closure
of the Letchworth operation. The business remains committed to the
UK and European markets and we believe these are better serviced
from the more substantial machine tools UK operation with which it
already shares some common customers and distributors.
The division is building upon its increased profile in the
marketplace following the integration of TYKMA ELECTROX.
Revenues increased 14% over the previous year and the division
continues to develop new products and has launched a number of
innovative new technologies with further planned product releases
in the current financial year.
The joint TYKMA ELECTROX brand now provides laser solutions
which includes marking, engraving and micro-material processing.
Each end user or distributor is free to choose among our brands
which combined creates an enhanced product portfolio for solving an
expanded number of applications. These industrial laser systems are
sold for a variety of applications to provide solutions to an ever
increasing market diversification in the manufacturing industry
among both small and large multi-national corporate customers.
The increased requirement for traceability of all production
items underpins the growth of this industry and forecasters
continue to predict growth in this activity as these products
replace traditional stamping, ink and dot peen systems. Continued
support from legislation mandating increased traceability continues
to be a positive driver for individual component
identification.
Results for the financial year, on an underlying basis excluding
special items, were as follows:
2018 2017
$ 000 $ 000
Revenues 20,792 18,260
Underlying operating profit* 2,867 2,491
Underlying operating margin* 13.8% 13.6%
*underlying figures before special items. See note 3 and 11.
Group Results
Revenue from continuing operations increased by 12.3% to $66m
(2017: $58.8m) with double digit growth from both divisions.
Group profit before tax was $3.87m (2017: $4.04m) and the
underlying profit (before special items) was up 15% to $3.05m
(2017: $2.65m).
Special items
During the financial year, the Group undertook a number of
transactions, which, in the opinion of the directors, should be
reported separately for a better understanding of the underlying
trading performance of the Group. These underlying figures are used
by the Board to monitor business performance, form the basis of
bonus incentives and are used for the purposes of the bank
covenants.
These non GAAP measures are explained in note 11 alternative
performance measures and set out in note 3. All special items are
taken into account in the GAAP figures in the Income Statement
A credit of $1.74m (2017: credit of $1.89m) is recorded in
financial income in respect of the final salary pension scheme. No
cash was paid to or received from the scheme in respect of this
transaction which arises as a pension accounting entry under the
required standard due to the surplus in the scheme recorded in the
balance sheet.
In addition, in 2017 a credit of $0.8m was included as a result
of work by the Trustees of the UK pension scheme and the Group in
reducing pension liabilities. As a result of the changes in the USA
to the rates of taxation, a significant charge of $0.6m has been
made to adjust the deferred taxation assets.
An additional credit of $1.26m is recorded this year as a result
of the sale of the Group's holding in ProPhotonix Ltd at the end of
August 2017. This generated $1.97m of cash which was used to pay
down UK debt.
Redundancy and restructuring costs were incurred on the overhead
and operating cost reduction in the UK machine tools business
including the further outsourcing of operations and in industrial
lasers on the closure of Letchworth and the move of the spares and
service operation in the UK into the machine tools operation which
amounted to $1.8m (2017 $0.83m).
In addition, share option costs, amortisation of intangible
assets and amortisation of loan note costs all of which are
non-cash costs to the Group in the year have been included in
special items.
Taxation
The current year underlying trading resulted in a credit of
$0.44m (2017: credit of $0.15m) for taxation. The UK businesses
continue to benefit from substantial previous tax losses and no
taxation is payable in the UK. There are substantial unrecorded
deferred tax assets in the UK which are released onto the balance
as existing recorded losses are utilised which will help maintain a
lower tax charge. There remains an unrecognised deferred tax asset
of over $3.6m in addition to the recognised asset of $2.96m in
respect of UK tax losses at the year end. The US businesses are
subject to taxation on their profits at the new rate of 21% (2017:
34%) although the rate applicable for the 2017/18 year was a
composite rate of 31%.
Deferred taxation is provided on the UK pension credits at a
rate of 35%, being the rate applicable to any refund from a pension
scheme and is included in special items.
Following the changes in the USA to the rates of taxation, a
significant charge of $0.6m has been made to adjust the deferred
taxation assets. This charge has been shown in special items.
Net profit and earnings per share
The total profit attributable to equity holders of the parent
for the current financial year amounted to $3.05m (2017: $2.57m)
with underlying profit of $3.48m (2017: $2.80m).
Underlying earnings from continuing operations before special
items and related taxation were 3.20cents (equivalent to 2.46p) per
share (2017: 2.68cents, equivalent to 2.15p) and basic earnings per
share were 2.80cents (equivalent to 2.16p) (2017: 2.46cents,
equivalent to 1.97p) see note 7.
Financial position and utilisation of resources
Cash flow
Cash generated from operations before working capital movements
was $4.0m (2017: $3.8m)
Stock levels have increased in line with the increased activity
but also to support the new product launches and the increasing
market demands for shorter lead time. The UK machine tool operation
has taken advantage of the greater liquidity to obtain improved
terms with overseas suppliers and reduce bank trade finance costs
but this has added about $0.7m to stock in transit.
$0.86m was expended on redundancy and restructuring costs at
Electrox, and UK machine tools with the balance of the cash cost
falling into the 2018/19 financial year.
Interest paid was in line with previous years at $1.2m with the
largest component being interest on the GBP8.5m ($11.9m) 8% loan
notes.
Capital expenditure largely consisted of demonstration and
showroom equipment for the new facility in Chillicothe and these
machines generally turn over regularly.
The net proceeds of $1.97m from the ProPhotonix sale were
received in September 2017 and were used to pay down UK bank
debt.
Net borrowings
Group net debt at 31 March 2018 reduced to $15.6m (2017: $17.1m)
and comprised net bank and finance lease indebtedness of $4.3m
(2017: $7.2m) and the amount outstanding on the loan notes of
$11.3m (2017: $9.8m). The amount outstanding on the loan notes has
increased due to the exchange rate effect of re-translation into
Dollars and a small movement due to the amortisation of costs. The
loan notes are shown net of un-amortised costs and amounts
disclosed in equity reserve which amount to $0.6m in the current
financial year (2017: $0.8m).
Repayments of $0.85m were made on term facilities in the period
reducing these to $1.68m.
Working capital facilities were renewed with both HSBC and Bank
of America during the year and the Group maintains a mixture of
term loans and revolving working capital facilities with maturities
between 1 and 3 years. Headroom on bank facilities was $8m at the
year-end (2017: $4m) and all financial covenants in place were met
during the year.
The GBP8.5m ($11.9m) 8% loan notes with a maturity of February
2020 also entitle holders to warrants of equal value to subscribe
for new ordinary shares at 20p.
Gearing amounted to 27% of aggregate net assets (2017: 27%)
Going concern
The Board has assessed the Group's funding and liquidity
position. The Directors confirm that, after having made appropriate
enquiries, they have a reasonable expectation that the Group and
the Company have adequate resources to continue operations for the
foreseeable future. Accordingly, the Directors continue to adopt
the going concern basis in preparation of the financial
statements.
Retirement benefits
The accounting surplus on the UK scheme at 31 March 2018 was
$54.3m (2017: $65.7m). This surplus has been calculated in
accordance with the scheme rules and recognised accounting
requirements.
The accounting figures are calculated using prescribed methods
and in particular use corporate bond rates to value the scheme
liabilities whereas the trustees use a much more prudent gilts only
basis of valuation when considering the Actuarial valuation.
On 17 July 2018 a contract was signed securing the buy-out of
the schemes liabilities (see note 13).
The buy-out of the scheme involves securing individual annuity
contracts for each member with an insurance company and passes all
future risks to the insurance company. The cost of achieving this
is usually higher than either the accounting basis or the schemes
funding basis reflecting the insurer's capital requirements to meet
inherent risks of investment returns and life expectancy over the
lifetime of the members. The scheme actuary estimated a deficit of
over GBP51m ($71m) on this buy-out basis even as late as the
actuarial valuation of 2013.
The buy out of the scheme has been possible due to improvements
in insurers pricing, the trustees hedging strategy, good investment
returns and the hard work of the Trustees and Company in reducing
scheme liabilities and costs whilst providing members with greater
flexibility in the way in which they can take their benefits. The
final agreement was secured after a long period of negotiation and
an open market tender process with the market leaders in the
industry.
The effect of the completion of this transaction on the Group
balance sheet will be to eliminate the accounting surplus and
associated deferred taxation liabilities and recognise the net
(after tax) cash, currently estimated at between $4m and $5m (GBP3m
and 4m), to be received from the scheme on closure (the final sum
will remain uncertain until the scheme is finally wound up, which
is expected towards the end of 2018). It should be noted that the
scheme is held on the subsidiary company 600 UK limited balance
sheet and as such the transaction will not affect the holding
company reserves.
In accordance with the current legislation on taxation of
pension surplus returns to a company, deferred taxation has been
provided for on the pension entries at 35% as opposed to the normal
19% rate in the accounting entries. 35% tax will be deducted from
the gross refund before the Trustees pay funds to the Company.
The US retiree health scheme and pension fund deficits reduced
slightly during the year due to changes in actuarial assumptions to
$1.2m (2017: $1.3m). The only funding of these benefits during the
year was the payment of an insurance premium in respect of the
retiree health scheme.
Consolidated income statement
For the 52-week period ended
31 March 2018
Before After Before After
Special Special Special Special Special Special
Items Items Items Items Items Items
52 weeks 52 weeks 52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
31 Mar 31 Mar 31 Mar 1 April 1 April 1 April
2018 2018 2018 2017 2017 2017
Notes $000 $000 $000 $000 $000 $000
------------------------------- ----- -------- -------- -------- -------- -------- --------
Continuing
Revenue 1 66,014 - 66,014 58,790 - 58,790
Cost of sales (42,972) (764) (43,736) (38,252) (147) (38,399)
------------------------------- ----- -------- -------- -------- -------- -------- --------
Gross profit/(loss) 23,042 (764) 22,278 20,538 (147) 20,391
Net operating expenses 3 (18,812) (1,126) (19,938) (16,706) (66) (16,772)
Operating profit/(loss) 3 4,230 (1,890) 2,340 3,832 (213) 3,619
Financial income 4 - 1,741 1,741 4 1,891 1,895
Financial expense 4 (1,182) (290) (1,472) (1,183) (295) (1,478)
Profit on ProPhotonix disposal 3 - 1,256 1,256 - - -
Profit/(loss) before tax 3,048 817 3,865 2,653 1,383 4,036
Income tax (charge)/credit 5 436 (1,252) (816) 147 (1,609) (1,462)
------------------------------- ----- -------- -------- -------- -------- -------- --------
Profit/(loss) for the period
from continuing operations
attributable to the equity
holders of the parent 3,484 (435) 3,049 2,800 (226) 2,574
Basic earnings per share 7 3.20c (0.40)c 2.80c 2.68c (0.22)c 2.46c
Diluted earnings per share 7 3.18c (0.40)c 2.78c 2.68c (0.22)c 2.46c
Consolidated statement of comprehensive income
For the 52-week period ended 31 March 2018
52-week 52-week
period ended period
ended
31 March 1 April
2018 2017
$000 $000
----------------------------------------------------- ------------ ---------
Profit for the period 3,049 2,574
Other comprehensive income/(expense)
Items that will not be reclassified to the Income
Statement:
Release of available for sale reserve on ProPhotonix
disposal (1,465) -
Remeasurement of defined benefit asset (19,659) 10,495
Deferred taxation 6,852 (3,673)
----------------------------------------------------- ------------ ---------
Total items that will not be reclassified to
the Income Statement: (14,272) 6,822
----------------------------------------------------- ------------ ---------
Items that are or may in the future be reclassified
to the Income Statement:
Foreign exchange translation differences 4,109 (4,779)
Fair valuation of investments - 1,446
Total items that are or may in the future be
reclassified to the Income Statement: 4,109 (3,333)
----------------------------------------------------- ------------ ---------
Other comprehensive income / (costs) for the
period, net of income tax (10,163) 3,489
Total comprehensive income for the period (7,114) 6,063
----------------------------------------------------- ------------ ---------
Attributable to:
Equity holders of the Parent Company (7,114) 6,063
----------------------------------------------------- ------------ ---------
Consolidated statement of financial
position
As at 31 March 2018
As at As at As at
notes 31 March 2018 1 April 2017 2 April
2016
$000 $000 $000
------------------------------------ ----- ------------- ------------ --------
Non-current assets
Property, plant and equipment 4,111 4,668 4,590
Goodwill 10,329 10,329 10,329
Other Intangible assets 407 382 457
Investments - 2,068 704
Deferred tax assets 5,102 4,359 5,438
Employee benefits 54,319 65,677 59,559
74,268 87,483 81,077
------------------------------------ ----- ------------- ------------ --------
Current assets
Inventories 19,597 15,935 15,994
Trade and other receivables 10,266 9,312 9,608
Assets classified as held for sale - - 2,837
Cash and cash equivalents 8 1,676 1,352 1,086
------------------------------------ ------------ --------
31,539 26,599 29,525
------------------------------------ ----- ------------- ------------ --------
Total assets 105,807 114,082 110,602
------------------------------------ ----- ------------- ------------ --------
Non-current liabilities
Employee benefits (1,225) (1,289) (1,469)
Loans and other borrowings 9 (12,251) (11,552) (16,143)
Deferred tax liabilities (19,020) (22,770) (20,629)
------------------------------------ ----- ------------- ------------ --------
(32,496) (35,611) (38,241)
------------------------------------ ----- ------------- ------------ --------
Current liabilities
Trade and other payables (9,205) (6,801) (8,965)
Taxation (291) - -
Provisions (53) (486) (603)
Loans and other borrowings 9 (5,025) (6,890) (4,647)
(14,574) (14,177) (14,215)
------------------------------------ ----- ------------- ------------ --------
Total liabilities (47,070) (49,788) (52,456)
------------------------------------ ----- ------------- ------------ --------
Net assets 58,737 64,294 58,146
------------------------------------ ----- ------------- ------------ --------
Shareholders' equity
Called-up share capital 1,746 1,629 1,629
Share premium account 2,885 1,484 1,484
Revaluation reserve 759 797 1,806
Available for sale reserve - 1,446 -
Equity reserve 201 201 201
Translation reserve (4,565) (6,724) (2,830)
Retained earnings 57,711 65,461 55,856
------------------------------------ ----- ------------- ------------ --------
Total equity 58,737 64,294 58,146
------------------------------------ ----- ------------- ------------ --------
Consolidated statement
of changes in equity
As at 31 March 2018
Ordinary Share Available
share premium Revaluation for sale Translation Equity Retained
capital account reserve reserve reserve reserve Earnings Total
$000 $000 $000 $000 $000 $000 $000 $000
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
At 2 April 2016 1,629 1,484 1,806 (924) (2,830) 201 56,780 57,952
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
At 2 April 2016 as
restated* 1,629 1,484 1,806 - (2,830) 201 55,856 58,146
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
Profit for the period - - - - - - 2,574 2,574
Other comprehensive
income:
Foreign currency
translation - - (120) - (3,894) - (765) (4,779)
Net defined benefit
asset mvmt - - - - - - 10,495 10,495
Fair valuation of
Investments - - - 1,446 - - - 1,446
Transfer on revalued
properties - - (889) - - - 889 -
Deferred tax - - - - - - (3,673) (3,673)
Total comprehensive
income - - (1,009) 1,446 (3,894) - 9,520 6,063
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
Transactions with
owners:
Credit for share-based
payments - - - - - - 85 85
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
Total transactions with
owners - - - - - - 85 85
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
At 1 April 2017 1,629 1,484 797 1,446 (6,724) 201 65,461 64,294
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
Profit for the period - - - - - 3,049 3,049
Other comprehensive
income:
Foreign currency
translation - - (38) 19 2,159 - 1,969 4,109
Net defined benefit
asset mvmt - - - - - - (19,659) (19,659)
ProPhotonix disposal - - - (1,465) - - - (1,465)
Deferred tax - - - - - - 6,852 6,852
Total comprehensive
income - - (38) (1,446) 2,159 - (7,789) (7,114)
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
Transactions with
owners:
Share capital subscribed
for 117 1,401 - - - - - 1,518
Credit for share-based
payments - - - - - - 39 39
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
Total transactions with
owners 117 1,401 - - - - 39 1,557
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
At 31 March 2018 1,746 2,885 759 - (4,565) 201 57,711 58,737
------------------------ -------- ------- --------------------- ---------------------- --------------------- ------------- ----- ------------- -------------
*see note 12 ProPhotonix disposal
52-week 52-week
period ended period ended
31 March 1 April
2018 2017
$000 $000
---------------------------------------------------- ------------ ------------
Cash flows from operating activities
Profit for the period 3,049 2,574
Adjustments for:
Amortisation of development expenditure 71 73
Depreciation 596 566
Net financial income (269) (417)
Net pension credit - (809)
Non-cash special Items 991 262
Profit on disposal of Prophotonix (1,256) -
Equity share option expense 39 85
Income tax expense/(credit) 816 1,462
---------------------------------------------------- ------------ ------------
Operating cash flow before changes in working
capital and provisions 4,037 3,796
(Increase) in trade and other receivables (445) (188)
(Increase) in inventories (2,970) (1,755)
Decrease/(increase) in trade and other payables 1,169 (1,576)
Employee benefits contributions (143) (150)
Cash generated in operations 1,648 127
Interest paid (1,183) (1,183)
Income tax received/( paid) - 110
---------------------------------------------------- ------------ ------------
Net cash flows from operating activities 465 (946)
Cash flows from investing activities
Interest received - 4
Proceeds from sale of property, plant and equipment 285 2,613
Sale of investment in Prophotonix 1,972 -
Purchase of property, plant and equipment (694) (612)
Development and trademarks expenditure capitalised (87) (28)
Net cash flows from investing activities 1,476 1,977
---------------------------------------------------- ------------ ------------
Cash flows from financing activities
Proceeds from issue of ordinary shares 1,517 -
Repayment of external borrowing (2,985) (3,141)
Proceeds from external borrowing - 2,593
Net finance lease income/(expenditure) (56) (116)
---------------------------------------------------- ------------ ------------
Net cash flows from financing activities (1,524) (664)
---------------------------------------------------- ------------ ------------
Net increase in cash and cash equivalents 417 367
Cash and cash equivalents at the beginning
of the period 1,352 1,086
Effect of exchange rate fluctuations on cash
held (93) (101)
---------------------------------------------------- ------------ ------------
Cash and cash equivalents at the end of the
period 1,676 1,352
---------------------------------------------------- ------------ ------------
1.Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance with the International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards
Board (IASB), as adopted for use by the European Union (EU)
effective at 31 March 2018, and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
The Financial information set out in this preliminary
announcement does not constitute the company's Consolidated
Financial Statements for the financial years ended 31 March 2018 or
1 April 2017 but is derived from those Financial Statements.
Statutory Financial Statements for 2017 have been delivered to the
Registrar of Companies and those for 2018 will be delivered
following the company's AGM.
The Auditors, KPMG LLP for 2017 and BDO LLP for 2018, have
reported on those financial statements. Their reports were
unqualified, did not draw attention to any matters by way of
emphasis without qualifying their reports and did not contain
statements under Section 498(2) or (3) of the Companies Act
2006.
The Statutory accounts will be available on the Company's
website and will be posted to shareholders who have requested a
copy and thereafter by request to the company's registered
office.
After reviewing current results, the Board has determined to
change presentational currency to US dollars. Approximately two
thirds of our revenues are in dollars and a great proportion of
expenditure is either in dollars or currency tied to the dollar.
The fluctuation in Sterling in the last few years has made it
difficult to accurately measure performance when reporting in
Sterling and this change will make it more efficient for the Board
and shareholders in analysing financial results going forward.
2. Segment information
IFRS 8 - "Operating Segments" requires operating segments to be
identified on the basis of internal reporting about components of
the Group that are regularly reviewed by the chief operating
decision maker to allocate resources to the segments and to assess
their performance. The chief operating decision maker has been
identified as the Executive Directors. The Executive Directors
review the Group's internal reporting in order to assess
performance and allocate resources.
The Executive Directors consider there to be two continuing
operating segments being machine tools and precision engineered
components and industrial laser systems.
The Executive Directors assess the performance of the operating
segments based on a measure of underlying operating profit/(loss).
This measurement basis excludes the effects of Special Items from
the operating segments. Head Office and unallocated represent
central functions and costs.
The following is an analysis of the Group's revenue and results
by reportable segment:
Continuing
52 Weeks ended 31 March 2018 Machine
tools
& precision Industrial
engineered laser Head Office
components systems & unallocated Total
Segmental analysis of revenue $000 $000 $000 $000
-------------------------------- ------------ --------------- --------------- ---------------
Total revenue 45,222 20,792 - 66,014
-------------------------------- ------------ --------------- --------------- ---------------
Segmental analysis of operating
profit/(loss) before Special
Items 2,904 2,867 (1,541) 4,230
-------------------------------- ------------ --------------- --------------- ---------------
Special Items (883) (767) (240) (1,890)
-------------------------------- ------------ --------------- --------------- ---------------
Group operating profit/(loss) 2,021 2,100 (1,781) 2,340
-------------------------------- ------------ --------------- --------------- ---------------
Other segmental information:
Reportable segment assets 40,320 9,867 55,620 105,807
Reportable segment liabilities (28,153) (5,826) (13,091) (47,070)
Fixed asset additions 146 544 4 694
Depreciation and amortisation 362 294 - 656
2. Segment information (CONTINUED)
52 Weeks ended 1 April 2017 Machine
tools
& precision Industrial
engineered laser Head Office
components systems & unallocated Total
Segmental analysis of revenue $000 $000 $000 $000
-------------------------------------- ---------------------- --------------- ------------------- ----------------
Total revenue 40,530 18,260 - 58,790
-------------------------------------- ---------------------- --------------- ------------------- ----------------
Segmental analysis of operating
profit/(loss)
before Special Items 2,574 2,491 (1,233) 3,832
-------------------------------------- ---------------------- --------------- ------------------- ----------------
Special Items 864 (839) (238) (213)
-------------------------------------- ---------------------- --------------- ------------------- ----------------
Group operating profit/(loss) 3,438 1,652 (1,471) 3,619
-------------------------------------- ---------------------- --------------- ------------------- ----------------
Other segmental information:
Reportable segment assets 36,429 9,555 68,098 114,082
Reportable segment liabilities (33,199) (4,719) (11,870) (49,788)
Fixed asset additions 144 496 - 640
Depreciation and amortisation 370 269 - 639
Inter-segment pricing is determined on an arm's length basis.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
Segment capital expenditure is the total cost incurred during
the period to acquire segment assets that are expected to be used
for more than one period.
Geographical segmental analysis of revenue is shown by origin
and destination in the following two tables:
Segmental analysis by origin 2018 2017
---------------- ---- --------------
$000% $000%
-------------------------------------- ------- ------ ----------- ------
Gross sales revenue:
-------------------------------------- ------- ------- ----------- -------
UK 15,500 23.5 14,631 24.9
North America 47,262 71.6 41,693 70.9
Australasia 3,252 4.9 2,466 4.2
Total Revenue 66,014 100.0 58,790 100.0
-------------------------------------- ------- ------- ----------- -------
Segmental analysis by destination:
2018 2017
------------------------ ------- ----------------
Gross sales revenue: $000% $000%
-------------------------------------- --------------- ------ ---------------- ------
UK 10,035 15.2 8,991 15.3
Other European 7,411 11.2 7,229 12.3
North America (USA) 42,768 64.9 37,165 63.3
Africa 738 1.1 176 0.3
Australasia 3,136 4.8 2,255 3.8
Central America 26 0.0 175 0.3
Middle East 97 0.1 539 0.9
Far East 1,803 2.7 2,260 3.8
-------------------------------------- --------------- ---------------- -------
66,014 100.0 58,790 100.0
-------------------------------------- --------------- ------- ---------------- -------
There are no customers that represent 10% or more of the Group's
revenues.
3. SPECIAL ITEMS
In order for users of the financial statements to better
understand the underlying performance of the Group the Board have
separately disclosed significant costs associated with the ongoing
restructuring of the Group and associated redundancy costs incurred
in the year. In addition, the non cash charges for share based
payments, amortisation of intangible assets acquired and
amortisation of loan note costs. Non cash pension transactions have
also been separately identified.
Special items
2018 2017
$000 $000
---------------------------------------------- ------- ------
Items included in cost of sales:
Reorganisation and redundancy (764) (147)
---------------------------------------------- ------- ------
(764) (147)
------
Items included in operating profit:
Pensions credit - 809
Refinancing costs - (68)
Redundancy and reorganisation (1,036) (778)
Profit on sale of property - 143
Acquisition costs - (36)
Share option charge (39) (85)
Amortisation of intangible assets acquired (51) (51)
------- ------
(1,126) (66)
---------------------------------------------- ------- ------
Items included in financial income/(expense):
Pensions interest on surplus 1,741 1,891
---------------------------------------------- ------- ------
Amortisation of loan note expenses (243) (210)
Interest on pensions deficit (47) (85)
---------------------------------------------- ------- ------
(290) (295)
---------------------------------------------- ------- ------
Profit on disposal of ProPhotonix Ltd 1,256 -
----------------------------------------- ----- -------
Total special items before tax 817 1,383
----------------------------------------- ----- -------
Taxation effect of rate range in the USA (630) -
----------------------------------------- ----- -------
Income tax on special items (622) (1,609)
----------------------------------------- ----- -------
Total special items after tax (435) (226)
----------------------------------------- ----- -------
During the year the Group incurred further costs with regard to
the reorganisation of TYKMA Inc and the integration of the Electrox
Laser marking division spares and service into the UK machine tools
operation. In addition redundancy exercises were carried out in the
UK machine tools operation during the year.
The Group also realised a profit on the disposal of its entire
holding in ProPhotonix Ltd.
Costs were also incurred with regard to the granting of share
options and amortisation.
4. Financial income and expense
2018 2017
$000 $000
------------------------------------------ ------- -------
Bank and other interest - 4
Interest on employee benefit surplus 1,741 1,891
------------------------------------------ ------- -------
Financial income 1,741 1,895
------------------------------------------ -------
Bank overdraft and loan interest (234) (216)
Other loan interest (925) (951)
Other finance charges (8) -
Finance charges on finance leases (15) (16)
Interest on employee benefit liabilities (47) (85)
Amortisation of shareholder loan expenses (243) (210)
Financial expense (1,472) (1,478)
------------------------------------------ ------- -------
5. Taxation
2018 2017
$000 $000
----------------------------------------------------------- ----- -------
Current tax:
Corporation tax at 19% (2017: 20%):
- current period - -
Overseas taxation:
- current period (340) -
----------------------------------------------------------- ----- -------
Total current tax charge (340) -
----------------------------------------------------------- ----- -------
Deferred taxation:
- current period 252 (869)
- effect of rate change in USA (630) -
- prior period (adjustments to the capital allowance pools
in the UK and overseas) (98) (593)
----------------------------------------------------------- ----- -------
Total deferred taxation credit/(charge) (476) (1,462)
----------------------------------------------------------- ----- -------
Taxation charged to the income statement (816) (1,462)
----------------------------------------------------------- ----- -------
The rate for tax in the USA was changed from 34% to 21% during
the year requiring a remeasurement of deferred tax assets in the
USA.
Tax reconciliation
The tax charge assessed for the period is higher than (2017:
higher than) the standard rate of corporation tax in the UK of 19%
(2017: 20%). The differences are explained below:
2018 2017
---------------- --------------
$000% $000 %
-------------------------------------------- ------- ------ ------------ -----------------
Profit before tax 3,865 4,036
-------------------------------------------- ------- ------- ------------ -----------------
Profit before tax multiplied by the standard
rate of corporation tax
in the UK of 19% (2017: 20%) 734 19.0 807 20.0
Effects of:
-income not taxable and/or expenses not
deductible 338 8.7 (527) (13.1)
- overseas tax rates 58 1.5 21 0.5
- pension fund surplus taxed at higher
rate 97 2.5 161 4.0
- state taxes 52 1.4 21 0.5
- deferred tax prior period adjustment 98 2.5 593 14.7
- tax not recognised on losses -- 386 9.6
- Recognition of tax losses not previously
recognised (864) (22.4) - -
- Utilisation of tax losses (327) (8.4) - -
- impact of rate change in the USA 630 16.3 - -
-------------------------------------------- ------- ------- ------------ -----------------
Taxation charged to the income statement 816 21.1 1,462 36.2
-------------------------------------------- ------- ------- ------------ -----------------
6. Dividends
No dividend was declared or paid in the period (2017: no
dividend paid).
A final dividend of 0.5p has been proposed, payable on 28
September 2018 to holders on the register at 31 August 2018.
7. Earnings per share
The calculation of the basic earnings per share of 2.80c (2017:
2.46c) is based on the earnings for the financial period
attributable to the Parent Company's shareholders of a profit of
$3,049,000 (2017: $2,574,000) and on the weighted average number of
shares in issue during the period of 108,902,335 (2017:
104,357,957). At 31 March 2018, there were 6,650,000 (2017:
6,650,000) potentially dilutive shares on option with a weighted
average effect of 790,601 (2017: 303,255) shares giving a diluted
earnings per share of 2.78c (2017: 2.46c)
2018 2017
----------------------------------------------------------- ----------- -----------
Weighted average number of shares
Issued shares at start of period 104,357,957 104,357,957
Effect of shares issued in the year 4,544,378 -
----------------------------------------------------------- ----------- -----------
Weighted average number of shares at end of period 108,902,335 104,357,957
----------------------------------------------------------- ----------- -----------
Weighted average number of the 6,650,000 (2017: 6,650,000)
potentially dilutive shares 790,601 303,255
----------------------------------------------------------- ----------- -----------
Total Weighted average diluted shares 109,692,936 104,661,212
----------------------------------------------------------- ----------- -----------
Total post tax earnings 3,049 2,574
Basic EPS 2.80c 2.46c
Diluted basic EPS 2.78c 2.46c
Underlying earnings $000 $000
------------------------------------------- ------- ---------
Total post tax earnings 3,049 2,574
Share Option Costs 39 85
Pensions Interest (1,694) (1,806)
Amortisation of Shareholder loan expenses 243 210
Pensions credit - (809)
Amortisation of intangible assets acquired 51 51
Profit on disposal of ProPhotonix Ltd (1,256) -
Other special items 1,800 850
Acquisition costs - 36
Tax effect of rate change in USA 630 -
Tax on special items 622 1,609
Underlying Earnings after tax 3,484 2,800
------------------------------------------- ------- -------
Underlying EPS 3.20c 2.68c
Underlying diluted EPS 3.18c 2.68c
8. Cash and cash equivalents
2018 2017
$000 $000
-------------------------------------------------------------- ----- -----
Cash at bank 1,536 1,227
Short-term deposits 140 125
-------------------------------------------------------------- ----- -----
Cash and cash equivalents per statement of financial position
and per cash flow statement 1,676 1,352
-------------------------------------------------------------- ----- -----
9. Loans and other borrowings
CURRENT: 2018 2017
$000 $000
--------------------------------- ----- -----
Bank loans 4,984 6,789
Obligations under finance leases 41 101
--------------------------------- ----- -----
5,025 6,890
--------------------------------- ----- -----
NON-CURRENT: 2018 2017
$000 $000
--------------------------------- ------ ------
Bank loans 842 1,598
8% Loan Notes 11,287 9,842
Obligations under finance leases 122 112
--------------------------------- ------ ------
12,251 11,552
--------------------------------- ------ ------
The $11.9m (GBP8.5m) of Loan Notes in place at the year-end were
issued in three tranches in February, March and August 2015 with
43.95m convertible warrants attached to them. These warrants allow
the holders to either convert the loan into shares or to purchase
shares at 20p for a cash consideration. The loan has both debt and
equity components and $195,000 is shown in equity reserve and the
balance after deduction of associated costs and amortisation of
$429,000, is shown in non current borrowings. Costs are amortised
to the income statement over the term of the loan. The loan notes
are repayable and the warrants expire both on 14 February 2020.
Facilities from HSBC include a $5m trade and invoice finance
facility, of which $0.5m had been utilised at the year-end, and a
mortgage for the Colchester property of $0.4m which will be repaid
on a monthly basis through to March 2020.
US Dollar denominated term loans of $0.6m and $0.5m are to be
repaid on a monthly basis through to March 2019 and April 2021
respectively in equal instalments with an interest rate of 2.25%
above base, with revolving credit loans in addition of $3.8m.
Given the nature of the Group's financial assets and
liabilities, it is the directors' opinion that there is no material
difference between their reported book values and estimated fair
values. The fair value of the Loan Notes is the book value less the
debt issue cost and equity element.
The above loans and borrowings are secured by way of fixed and
floating charges over the assets of the Company and its
subsidiaries.
10. Analysis of net DEBT
At At
1 April Exchange 31 March
2017 movement Other Cash flows 2018
$000 $000 $000 $000 $000
------------------------------------- -------- -------- ----- ---------- --------
Cash at bank and in hand 1,227 (108) - 417 1,536
Term deposits (included within cash
and cash equivalents on the balance
sheet) 125 15 - - 140
1,352 (93) - 417 1,676
Debt due within one year (6,789) (290) - 2,095 (4,984)
Debt due after one year (1,598) (134) - 890 (842)
Loan notes due after one year (9,842) (1,202) (243) - (11,287)
Finance leases (213) (6) - 56 (163)
Total (17,090) (1,725) (243) 3,458 (15,600)
------------------------------------- -------- -------- ----- ---------- --------
11. Alternative performance measures
The Directors assess the performance of the Group by a number of
measures and frequently present results on an 'underlying' basis,
which excludes special items. The Directors believe the use of
these 'non-GAAP measures' provide a better understanding of
underlying performance of the Group.
In the review of performance reference is made to 'underlying
profit' or 'profit before special items', and in the Consolidated
Income Statement the Group's results are analysed between Before
Special items and After Special items.
Special items are detailed in note 3 and are disclosed
separately on the basis that this presentation gives a clearer
picture of the underlying performance of the group.
These measures are used by the Board to assess performance, form
the basis of bonus incentives and are used in the Group's banking
covenants. In addition the Board makes reference to orders and
order book or backlog. This represents orders received from
customers for goods and services and the amount of such orders not
yet fulfilled.
Underlying operating profit
$000 $000
------------------------------------------------------- ------- ---------
Operating profit 2,340 3,619
Special items included in cost of sales (see note 3) 764 147
Special items included in net operating expenses (see
note 3) 1,126 66
------------------------------------------------------- ------- -------
Underlying operating profit 4,230 3,832
------------------------------------------------------- ------- -------
Underlying profit for the period
Profit for the period 3,049 2,574
Special items included in cost of sales (see note 3) 764 147
Special items included in net operating expenses (see
note 3) 1,126 66
Special items included in Financial income (1,741) (1,891)
Special items included in Financial expense 290 295
Profit on disposal of ProPhotonix (1,256) -
Tax effect of rate change in USA 630 -
Tax on special items 622 1,609
Underlying profit for the period 3,484 2,800
------------------------------------------------------- ------- -------
Underlying EPS
A reconciliation of underlying EPS is included in note
7
12. Prophotonix disposal
The Group disposed of its entire holding in ProPhotonix Limited
on 31 August 2017. The shareholding was originally acquired in a
share swap with institutional investors in August 2014 when 4.925m
shares were issued in exchange for 26.3% of ProPhotonix. Proceeds
of $1.97m gross were received which was used to reduce the UK
senior debt with HSBC.
On disposal management identified that a write down of the
carrying amount of the investment that occurred in 2015 should have
been recognised in the consolidated income statement rather than
the available for sale reserve. As a result, an amount of $924,000
has been transferred from retained earnings to the available for
sale reserve as at 2 April 2016. The restated available for sale
carrying amount after fair value movement from the start of the
year to the date of disposal has then been recycled as part of the
profit on disposal of $1,256,000.
13. Post balance sheet events
On 17 July 2018 the Trustee of the 600 Group Pension Scheme
signed a policy with Pension Insurance Corporation to buy out the
scheme liabilities for GBP200,600,000 ($266,000,000). Further
details on the transaction and the implications for the Group are
included in the Strategic report.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR GRGDRXSDBGIG
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