REG - 600 Group PLC - Final Results <Origin Href="QuoteRef">SIXH.L</Origin> - Part 2
01/09/2016 07:07
- Part 2: For the preceding part double click ID:nRSA6271Ia
working capital and provisions 3,025 3,020
Decrease in trade and other receivables 463 203
Decrease/(increase) in inventories 106 (1,051)
Decrease in trade and other payables (1,682) (1,626)
Restructuring and redundancy expenditure (807) (170)
Employee benefits contributions (130) -
Cash generated in operations 975 376
Interest paid (964) (414)
Income tax paid (3) (205)
Net cash flows from operating activities 8 (243)
Cash flows from investing activities
Interest received 10 2
Proceeds from sale of property, plant and equipment - 460
Purchase of TYKMA Inc. (1,378) (3,802)
Investment in Prophotonix - (1,147)
Purchase of property, plant and equipment (1,522) (944)
Development expenditure capitalised (297) (299)
Refinancing expenditure - (487)
Net cash flows from investing activities (3,187) (6,217)
Cash flows from financing activities
Proceeds from issue of ordinary shares 275 1,145
Proceeds from issue of Loan Notes 806 7,694
Net Repayment of external borrowing 1,883 (2,505)
Net Finance lease income/(expenditure) 67 (107)
Net cash flows from financing activities 3,031 6,227
Net decrease in cash and cash equivalents (148) (233)
Cash and cash equivalents at the beginning of the period 902 1,149
Effect of exchange rate fluctuations on cash held 11 (14)
Cash and cash equivalents at the end of the period 765 902
Notes relating to the financial information
Basis of preparation
The Financial information set out in this preliminary announcement does not
constitute the company's Consolidated Financial Statements for the financial
years ended 2 April 2016 or 28 March 2015 but are derived from those Financial
Statements. Statutory Financial Statements for 2015 have been delivered to the
Registrar of Companies and those for 2016 will be delivered following the
company's AGM. The Auditors KPMG LLP have reported on those financial
statements. Their reports were unqualified, did not draw attention to any
matters by way of emphasis without qualifying their report and did not contain
statements under Section 498(2) or (3) of the Companies Act 2006 in respect of
the Financial Statements for 2016 or 2015.
The Statutory accounts are available on the Company's web site and will be
posted to shareholders who have requested a copy and thereafter by request to
the company's registered office.
1. 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 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
53 Weeks ended 2 April 2016 Machinetools& precisionengineeredcomponents Industrial laser systems Head Office& unallocated Total
Segmental analysis of revenue £000 £000 £000 £000
Revenue from external customers 32,127 13,142 - 45,269
Inter-segment revenue - - - -
Total segment revenue 32,127 13,142 - 45,269
Less: inter-segment revenue - - - -
Total revenue 32,127 13,142 - 45,269
Segmental analysis of operating profit/(loss) before Special Items 2,073 1,179 (896) 2,356
Special Items 282 (3,212) (590) (3,520)
Group profit/(loss) from operations 2,355 (2,033) (1,486) (1,164)
Other segmental information:
Reportable segment assets 26,630 5,970 44,172 76,772
Reportable segment liabilities (22,078) (3,048) (10,806) (35,932)
Fixed asset additions 605 1,214 - 1,819
Depreciation and amortisation 293 457 - 750
1. Segment information (CONTINUED)
52 Weeks ended 28 March 2015 Machinetools& precisionengineeredcomponents Industrial laser systems Head Office& unallocated Total
Segmental analysis of revenue £000 £000 £000 £000
Revenue from external customers 34,747 9,047 - 43,794
Inter-segment revenue - 182 - 182
Total segment revenue 34,747 9,229 - 43,976
Less: inter-segment revenue - (182) - (182)
Total revenue 34,747 9,047 - 43,794
Segmental analysis of operating profit/(loss) before Special Items 2,931 304 (771) 2,464
Special Items 1,965 (772) (235) 958
Group profit/(loss) from operations 4,896 (468) (1,006) 3,422
Other segmental information:
Reportable segment assets 29,443 6,622 35,432 71,497
Reportable segment liabilities (19,614) (2,619) (14,538) (36,771)
Fixed asset additions 919 353 - 1,272
Depreciation and amortisation 305 278 - 583
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 2016 2015
£000 % £000 %
Gross sales revenue:
UK 14,851 32.8 20,806 47.5
North America 28,936 63.9 21,083 48.1
Australasia 1,482 3.3 1,905 4.4
Total Revenue 45,269 100.0 43,794 100.0
1. Segment information (CONTINUED)
Segmental analysis by destination:
2016 2015
£000 % £000 %
Gross sales revenue:
UK 8,498 18.8 8,043 18.4
Other European 5,905 13.0 7,045 16.1
North America 27,291 60.3 24,087 55.0
Africa 162 0.4 187 0.4
Australasia 1,438 3.2 1,709 3.9
Central America 163 0.4 148 0.3
Middle East 733 1.6 893 2.1
Far East 1,079 2.3 1,682 3.8
45,269 100.0 43,794 100.0
There are no customers that represent 10% or more of the Group's revenues.
2.SPECIAL ITEMS
In order for users of the financial statements to better understand the
underlying performance of the Group the Board have separately disclosed
transactions which by virtue of their size or incidence, are considered to be
one off in nature. In addition the charge for share based payments,
amortisation of intangible assets acquired and non cash pension transactions
have also been separately identified.
Special items include acquisition costs, gains and losses on the sale of
properties and assets, exceptional costs relating to reorganisation,
redundancy and restructuring, asset impairments, legal disputes and inventory,
asset and intangibles impairments.
2016 2015
£000 £000
Items included in operating profit:
Pensions credit (940) (2,347)
Property valuation adjustment - 462
Redundancy and reorganisation 1,729 434
Impairment of intangible assets 2,390 -
Acquisition costs 197 335
Share option costs 64 131
Amortisation of intangible assets acquired 80 27
3,520 (958)
Items included in financial (income)/expense:
Pensions interest on surplus (1,171) (857)
Amortisation of loan note expenses 150 155
(1,021) (702)
Items included in contingent consideration settlement:
TYKMA deferred consideration settlement (2,032) -
(2,032) -
During the year the Group incurred further costs with regard to the
acquisition of TYKMA Inc. Property disposals in both the UK and US and the
revaluation of properties led to losses. Reorganisation and restructuring
costs were principally related to the integration of TYKMA Inc. and the
Electrox Laser marking division.
The pension credit relates to liability reduction exercises undertaken by the
trustees of the main scheme including pensions increase exchange.
During the prior year the Group incurred costs with regard to the abortive
acquisition of the Group by Qinddao D&D Investment Group Co. Ltd. Costs were
also incurred with regard to the granting of share options.
The contingent consideration settlement of £2.03m related to the acquisition
of the final 20% of TYKMA Inc.
3. Financial income and expense
2016 2015
£000 £000
Bank and other interest 10 2
Interest on pensions surplus 1,171 857
Financial income 1,181 859
Bank overdraft and loan interest (155) (174)
Shareholder loan interest - (238)
Other loan interest (721) (22)
Other finance charges (3) -
Finance charges on finance leases (11) (17)
Amortisation of shareholder loan expenses (150) (155)
Financial expense (1,040) (606)
4. Taxation
2016 2015
£000 £000
Current tax:
Corporation tax at 20% (2015: 21%):
- current period - -
Overseas taxation:
- current period 53 (339)
Total current tax charge 53 (339)
Deferred taxation:
- current period 79 (1,060)
- prior period 5 74
Total deferred taxation credit/(charge) 84 (986)
Taxation credited/ (charged) to the income statement 137 (1,325)
Tax reconciliation
The tax charge assessed for the period is lower than the standard rate of
corporation tax in the UK of 20% (2015: 21%). The differences are explained
below:
2016 2015
£000 % £000 %
Profit before tax 1,009 3,675
Profit before tax multiplied by the standard rate of corporation tax
in the UK of 20% (2015: 21%) 202 20.0 772 21.0
Effects of:
- income not taxable and/or expenses not deductible (205) (20.3) 252 6.9
- overseas tax rates 19 1.9 114 3.1
- pension fund surplus taxed at higher rate 321 31.8 454 12.3
- property disposals (52) (5.2) - -
- state taxes 75 7.4
- deferred tax prior period adjustment (5) (0.5) (74) (2.0)
- (unrecognised losses utilised)/tax not recognised on losses (600) (59.5) (193) (5.2)
- impact of rate change 108 10.7 - -
Taxation (credited)/charged to the income statement (137) (13.6) 1,325 36.1
5. Earnings per share
The calculation of the basic earnings per share of 1.26p (2015: 2.66p) is
based on the earnings for the financial period attributable to the Parent
Company's shareholders of a profit of £1,157,000 (2015: £2,333,000) and on the
weighted average number of shares in issue during the period of 91,684,103
(2015: 87,771,514). At 2 April 2016, there were 6,150,000 (2015: 9,900,000)
potentially dilutive shares on option with a weighted average effect of
583,333 (2015: 2,783,270) shares giving a diluted profit per share of 1.25p
(2015: 2.58p)
2016 2015
Weighted average number of shares
Issued shares at start of period 89,607,957 84,430,346
Effect of shares issued in the year 2,076,146 3,341,168
Weighted average number of shares at end of period 91,684,103 87,771,514
£000 £000
Total post tax earnings 1,146 2,350
Share Option Costs 64 131
Pensions Interest (1,171) (857)
Amortisation of Shareholder loan expenses 150 155
Pensions credit (940) (2,347)
Credit on settling deferred consideration (2,032) -
Impairment of intangible assets 2,390 -
Amortisation of intangible assets acquired 80 27
Property sales and revaluation - 462
Other special items 1,729 434
Acquisition costs 197 335
Associated Taxation (72) 1,159
Underlying Earnings before tax 1,476 2,015
Underlying Earnings after tax 1,541 1,849
Underlying EPS 1.69p 2.09p
6. Cash and cash equivalents
2016 2015
£000 £000
Cash at bank 665 802
Short-term deposits 100 100
Cash and cash equivalents per statement of financial position and per cash flow statement 765 902
7. RECONCILIATION OF NET CASH FLOW TO NET DEBT
2016 2015
£000 £000
Decrease in cash and cash equivalents (148) (233)
Increase in debt and finance leases (2,757) (5,200)
Increase in net debt from cash flows (2,905) (5,433)
Net debt at beginning of period (10,798) (5,308)
Shareholder loan issue costs amortisation (110) 701
Cash and debt through acquisitions - (697)
Exchange effects on net funds (73) (61)
Net debt at end of period (13,886) (10,798)
8. Analysis of net DEBT
At At
29 March Exchange 2 April
2015 movement Other Cash flows 2016
£000 £000 £000 £000 £000
Cash at bank and in hand 802 11 - (148) 665
Term deposits (included within cash and cash equivalents on the balance sheet) 100 - - - 100
902 11 - (148) 765
Debt due within one year (3,206) (82) - 174 (3,114)
Debt due after one year (1,539) - - (2,057) (3,596)
Loan notes due after one year (6,783) - (110) (806) (7,699)
Finance leases (172) (2) - (68) (242)
Total (10,798) (73) (110) (2,905) (13,886)
9. ACQUISITION
There were no acquisitions in the current year. During the prior year the
Group acquired 80% of the issued share capital of TYKMA Inc, a US laser
marking company. There have been no changes in the year to the fair value of
net assets acquired, and therefore no change in the goodwill arising of
£7,144,000.
The acquisition of TYKMA Inc. included contingent consideration relating to
put and call options between the group and the vendor which had a fair value
at March 2015 of £4.1m. During the year the fair value was remeasured to £2.1m
and was settled at this amount. The settlement comprised of US$1.8m and the
issue of 12m ordinary shares in the Group with a value at that time of £0.9m.
The fair value gain of £2,032,000 has been included as a special item given
its size and nature.
This information is provided by RNS
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