REG - 600 Group PLC - Final Results <Origin Href="QuoteRef">SIXH.L</Origin> - Part 2
04/07/2017 07:05
- Part 2: For the preceding part double click ID:nRSD9997Ja
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
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 2017 2016
£000 % £000 %
Gross sales revenue:
UK 11,705 24.9 14,851 32.8
North America 33,354 70.9 28,936 63.9
Australasia 1,973 4.2 1,482 3.3
Total Revenue 47,032 100.0 45,269 100.0
1. Segment information (CONTINUED)
Segmental analysis by destination:
2017 2016
£000 % £000 %
Gross sales revenue:
UK 7,193 15.3 8,498 18.8
Other European 5,783 12.3 5,905 13.0
North America 29,732 63.3 27,291 60.3
Africa 141 0.3 162 0.4
Australasia 1,804 3.8 1,438 3.2
Central America 140 0.3 163 0.4
Middle East 431 0.9 733 1.6
Far East 1,808 3.8 1,079 2.3
47,032 100.0 45,269 100.0
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
2017 2016
£000 £000
Items included in cost of sales:
Stock write-offs (118) (894)
(118) (894)
Items included in operating profit:
Pensions credit 647 940
Refinancing costs (54) -
Redundancy and reorganisation (622) (835)
Profit on sale of property 114 -
Impairment of intangible assets - (2,390)
Acquisition costs (29) (197)
Share option charge (68) (64)
Amortisation of intangible assets acquired (41) (80)
(53) (2,626)
2. SPECIAL ITEMS (continued)
Items included in financial (income)/expense:
Pensions interest on surplus 1,445 1,171
Amortisation of loan note expenses (168) (150)
1,277 1,021
Items included in contingent consideration settlement:
TYKMA deferred consideration settlement - 2,032
- 2,032
Total special items before tax 1,106 (467)
Income tax credit on special items (1,287) 72
Total special items after tax (181) (395)
Special items are disclosed separately on the basis that this presentation
gives a clearer picture of the underlying performance of the Group. Special
items comprise two elements:
- Items which are expected to be one-off in nature and are
considered significant to the result of the group or one of its reporting
segments; and
- Non-cash items which, given the scale of our current activities,
represent a disproportionate share of the Group's result. Examples include
the credit arising on the pension surplus share based payments and the
amortisation of intangible assets.
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. Redundancy exercises were carried out in the UK during the year.
Property disposals in the UK also resulted in the profit of £114k. Costs were
also incurred relating to the refinancing carried out in the UK during the
year.
Costs were also incurred with regard to the granting of share options.
3. Financial income and expense
2017 2016
£000 £000
Bank and other interest 3 10
Interest on pensions surplus 1,445 1,171
Financial income 1,448 1,181
Bank overdraft and loan interest (173) (155)
Other loan interest (761) (721)
Other finance charges - (3)
Finance charges on finance leases (12) (11)
Amortisation of shareholder loan expenses (168) (150)
Financial expense (1,114) (1,040)
4. Taxation
2017 2016
£000 £000
Current tax:
Corporation tax at 20% (2016: 20%):
- current period - -
Overseas taxation:
- current period - 53
Total current tax charge - 53
Deferred taxation:
- current period (695) 79
- prior period (adjustments to the capital allowance pools in the UK and overseas) (474) 5
Total deferred taxation credit/(charge) (1,169) 84
Taxation charged to the income statement (1,169) 137
Tax reconciliation
The tax charge assessed for the period is higher than the standard rate of
corporation tax in the UK of 20% (2016: lower than standard rate of 20%). The
differences are explained below:
2017 2016
£000 % £000 %
Profit before tax 3,228 1,009
Profit before tax multiplied by the standard rate of corporation tax
in the UK of 20% (2016: 20%) 646 20.0 202 20.0
Effects of:
-income not taxable and/or expenses not deductible (423) (13.1) (205) (20.3)
- overseas tax rates 17 0.5 19 1.9
- pension fund surplus taxed at higher rate 129 4.0 321 31.8
- property disposals - - (52) (5.2)
- state taxes 17 0.5 75 7.4
- deferred tax prior period adjustment 474 14.7 (5) (0.5)
- tax not recognised on losses/(unrecognised losses utilised) 309 9.6 (600) (59.4)
- impact of rate change - - 108 10.7
Taxation charged/(credited) to the income statement 1,169 36.2 (137) (13.6)
5. Earnings per share
The calculation of the basic earnings per share of 1.97p (2016: 1.26p) is
based on the earnings for the financial period attributable to the Parent
Company's shareholders of a profit of £2,059,000 (2016: £1,157,000) and on the
weighted average number of shares in issue during the period of 104,357,957
(2016: 91,684,103). At 1 April 2017, there were 6,650,000 (2016: 6,150,000)
potentially dilutive shares on option with a weighted average effect of
303,255 (2016: 583,333) shares giving a diluted earnings per share of 1.96p
(2016: 1.25p)
2017 2016
Weighted average number of shares
Issued shares at start of period 104,357,957 89,607,957
Effect of shares issued in the year - 2,076,146
Weighted average number of shares at end of period 104,357,957 91,684,103
£000 £000
Total post tax earnings 2,059 1,146
Share Option Costs 68 64
Pensions Interest (1,445) (1,171)
Amortisation of Shareholder loan expenses 168 150
Pensions credit (647) (940)
Credit on settling deferred consideration - (2,032)
Impairment of intangible assets - 2,390
Amortisation of intangible assets acquired 41 80
Other special items 680 1,729
Acquisition costs 29 197
Associated Taxation 1,287 (72)
Underlying Earnings after tax 2,240 1,541
Underlying Earnings before tax 2,122 1,476
Underlying EPS 2.15p 1.69p
6. Cash and cash equivalents
2017 2016
£000 £000
Cash at bank 981 665
Short-term deposits 100 100
Cash and cash equivalents per statement of financial position and per cash flow statement 1,081 765
7. RECONCILIATION OF NET CASH FLOW TO NET DEBT
2017 2016
£000 £000
Increase/(decrease) in cash and cash equivalents 291 (148)
Decrease/(increase) in debt and finance leases 532 (2,757)
Decrease/(increase) in net debt from cash flows 823 (2,905)
Net debt at beginning of period (13,886) (10,798)
Shareholder loan issue costs amortisation (168) (110)
Exchange effects on net funds (430) (73)
Net debt at end of period (13,661) (13,886)
8. Analysis of net DEBT
At At
3 April Exchange 1 April
2016 movement Other Cash flows 2017
£000 £000 £000 £000 £000
Cash at bank and in hand 665 25 - 291 981
Term deposits (included within cash and cash equivalents on the balance sheet) 100 - - - 100
765 25 - 291 1,081
Debt due within one year (3,114) (239) - (2,074) (5,427)
Debt due after one year (3,596) (194) - 2,513 (1,277)
Loan notes due after one year (7,699) - (168) - (7,867)
Finance leases (242) (22) - 93 (171)
Total (13,886) (430) (168) 823 (13,661)
9. ACQUISITION
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.
During the prior year the final 20% of the issued share capital of TYKMA Inc.
was acquired. The original acquisition of 80% of the issued share capital of
TYKMA Inc. included put and call options for the remaining 20% between the
group and the vendor which had a value at March 2015 of £4.1m. During the
prior year the 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 gain of £2,032,000 was
included as a special item given its size and nature.
10. 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 refererence 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 2, and are disclosed separately on the
basis that this presentation gives a clearer picture of the underlying
performance of the group. Special items comprise two elements:
- Items which are expected to be one-off in nature and are
considered significant to the result of the group or one of its reporting
segments; and
- Non-cash items which, given the scale of our current activities,
represent a disproportionate share of the Group's result. Examples include
the credit arising on the pension surplus share based payments and the
amortisation of intangible assets.
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 /(loss) 2,894 (1,164)
Special items included in cost of sales (see note 2) 118 894
Special items included in net operating expenses (see note 2) 53 2,626
Underlying operating profit 3,065 2,356
Underlying profit / (loss) for the period
Profit for the period 2,059 1,146
Special items included in cost of sales (see note 2) 118 894
Special items included in net operating expenses (see note 2) 53 2,626
Special items included in Financial income (1,445) (1,171)
Special items included in Financial expense 168 150
Contingent consideration settlement - (2,032)
Special items included in income tax charge /(credit) 1,287 (72)
Underlying profit for the period 2,240 1,541
Underlying EPS
A reconciliation of underlying EPS is included in note 5
This information is provided by RNS
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