REG - 600 Group PLC - Half-year Report <Origin Href="QuoteRef">SIXH.L</Origin> - Part 2

600Announcement

20/11/2017 07:05

- Part 2: For the preceding part double click  ID:nRST8689Wa 

          168          
 Pensions credit                             -                  -              (647)        
 Amortisation of intangible assets acquired  19                 20             41           
 Other special items                         273                -              709          
 Profit on sale of ProPhotonix               (970)              -              -            
 Associated taxation on special items        233                264            1,287        
 Underlying earnings before tax              828                756            2,240        
 Underlying earnings after tax               828                736            2,122        
 
 
 Underlying Earnings Per Share  0.79p  0.71p  2.15p  
                                                     
 
 
8. RECONCILIATION OF NET CASH FLOW TO NET DEBT 
 
                                                   30 September2017  1 October2016  1 April2017  
                                                   £000              £000           £000         
 Increase/(decrease) in cash and cash equivalents  (536)             233            291          
 (decrease)/Increase in debt and finance leases    1,911             168            532          
 (decrease)/Increase in net debt from cash flows   1,375             401            823          
 Net debt at beginning of period                   (13,661)          (13,886)       (13,886)     
 Loan costs amortisation and adjustments           (91)              (82)           (168)        
 Exchange effects on net funds                     267               (771)          (430)        
 Net debt at end of period                         (12,110)          (14,338)       (13,661)     
 
 
9. Analysis of net DEBT 
 
                                                                                       At        Exchange/                       At            
                                                                                       1 April   Reserve                         30 September  
                                                                                       2017      movement     Other  Cash flows  2017          
                                                                                       £000      £000         £000   £000        £000          
 Cash at bank and in hand                                                              981       (50)         -      (536)       395           
 Short term deposits (included within cash and cash equivalents on the balance sheet)  100       -            -      -           100           
                                                                                       1,081     (50)         -      (536)       495           
 Debt due within one year                                                              (5,427)   243          -      1,603       (3,581)       
 Debt due after one year                                                               (1,277)   67           -      279         (931)         
 Loan Notes due after one year                                                         (7,867)   -            (91)   -           (7,958)       
 Finance leases                                                                        (171)     7            -      29          (135)         
 Total                                                                                 (13,661)  267          (91)   1,375       (12,110)      
 
 
10. Employee benefits 
 
The Group has defined benefit pension schemes in the UK and USA. The assets of
these schemes are held in separate trustee-administered funds. In addition,
the Group operates a retirement healthcare benefit scheme for certain of its
retired employees in the USA, which is also treated as a defined benefit
scheme. The principal scheme is the UK defined benefit pension plan. 
 
The UK scheme was closed to future accrual of benefits at 31 March 2013.  The
latest actuarial valuation of the UK scheme to 31 March 2016 was signed in
October 2017 at which time there was an estimated surplus of £12.2m based on
the prudent Technical Provisions basis of valuation. Consequently there
continues to be no requirement for any cash funding from the Company and
various options for the scheme are being investigated. 
 
 Value of UK and USA scheme assets and liabilities for the purposes of IAS 19  30 September2017  1 October2016  1 April2017  
                                                                               £000              £000           £000         
 Opening Fair value of schemes assets                                          245,367           220,208        220,208      
 Experience adjustments in the period                                          (12,991)          30,900         25,159       
 Closing Fair value of schemes assets                                          232,376           251,108        245,367      
                                                                                                                             
 Opening present value of schemes liabilities                                  193,898           179,271        179,271      
 Experience adjustments in the period                                          (6,187)           37,906         14,627       
 Closing present value of schemes liabilities                                  187,711           217,177        193,898      
                                                                                                                             
 Surplus recognised under IAS 19                                               44,665            33,931         51,469       
 
 
The principal assumptions used for the purpose of the IAS 19 valuation for the
UK scheme compared to the 2017 year end were as follows: 
 
                                                            30 September2017  1 April2017  
                                                            UK scheme         UK scheme    
                                                            % p.a.            % p.a.       
 Inflation under RPI                                        3.25              3.25         
 Inflation under CPI                                        2.15              2.15         
 Rate of increase to pensions in payment - LPI 5%           3.15              3.15         
 Discount rate for scheme liabilities and return on assets  2.65              2.55         
 
 
11. FAIR VALUE 
 
The group considers that the carrying amount of the following financial assets
and financial liabilities are 
 
a reasonable approximation of their fair value: 
 
Trade and other receivables 
 
Cash and cash equivalents 
 
Trade and other payables 
 
Loans and other borrowings 
 
12. Disposal of ProPhotonix 
 
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 £1.5m 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 £622,000 has been transferred from retained earnings to
the available for sale reserve. The revised available for sale carrying amount
has then been recycled as part of the profit on disposal of £970,000. 
 
13. Principal Risks and Uncertainties 
 
The principal risks and uncertainties affecting the Group remain those set out
in the 2017 Annual Report. Those which are most likely to impact the
performance of the Group in the remaining period of the current financial year
are the exposure to increased input costs, the dependence on a relatively
small number of key vendors in the supply chain and a downturn in its
customers' end markets particularly in North America and Europe. 
 
This information is provided by RNS
The company news service from the London Stock Exchange