REG - Alumasc Group Plc - Half-year Results
04/02/2025 07:15
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RNS Number : 7405V Alumasc Group PLC (The) 04 February 2025
Tuesday 4 February 2025
The Alumasc Group plc
Interim results
Strong momentum continuing, driven by organic and inorganic growth
Alumasc (ALU.L) (the 'Company' or the 'Group'), the sustainable building
products, systems and solutions Group is pleased to announce its results for
the six months ended 31 December 2024.
Record H1 performance demonstrates the strength of the business model and
progress against strategic initiatives
· Group revenue up by 20% to £57.4m (H1 FY24: £47.8m), with organic
growth in all three divisions
o Strong performance in Water Management, with revenues up 34% to £29.6m
(H1 FY24: £22.0m) on increased export sales, including accelerated deliveries
to Hong Kong airport project
o ARP Group ('ARP'), acquired in December 2023, contributed £5.7m to Water
Management revenue, while developing cross-selling and purchasing synergies
o Building Envelope division grew robustly, with revenues up 8% to £20.2m
(H1 FY24: £18.7m)
o Housebuilding Products revenue grew 6% to £7.5m (H1 FY24: £7.1m)
· Underlying* profit before tax grew strongly, up 19% to a record
£7.5m (H1 FY24: £6.3m), with organic growth in all three divisions
· Statutory profit before tax of £6.5m (H1 FY24: £5.6m)
· Group underlying* operating margin of 14.1% (H1 FY24: 14.1%)
o Water Management 15.8% (H1 FY24: 16.0%)
o Building Envelope 12.5% (H1 FY24: 12.8%)
o Housebuilding Products 25.0% (H1 FY24: 24.5%)
· Progress towards 15-20% medium term underlying* operating margin
target expected in H2, with efficiencies from strategic decision to move
manufacturing of access covers to Halstead and further ARP synergies
· Expect minimal impact from increases in Employers' National
Insurance and National Living Wage, with an estimated annual cost increase of
around £0.6m from April 2025
· Increased interim dividend per share: 3.50p (H1 FY24: 3.45p)
· Strong balance sheet and cash generation to support investment
plans, with net bank debt reduced to £4.6m (December 2023: £7.4m; June 2024:
£7.2m) due to 127% cash conversion of underlying profit
· Further improvements in defined benefit pension scheme funding
position ahead of March 2025 triennial review - IAS 19 surplus of £3.3m
(December 2023: £4.8m deficit; June 2024: £0.8m surplus) and scheme
approaching self sufficiency
Outlook
· The Group is well-positioned to continue to outperform the UK
general construction market through revenue growth initiatives, product
innovation and customer service, while investing selectively in overseas
markets to drive export growth
· With its long-standing focus on sustainability, Alumasc is
strategically positioned to capitalise on the shift toward sustainable
construction and green buildings, through both its internal actions and
product portfolio development
The Board continues to remain confident both in the Group achieving its
expectations for the year to June 2025, and in the significant opportunities
available over the medium and longer term.
Commenting on the interim results, Paul Hooper, Chief Executive of Alumasc
said:
"We are pleased to report a record first half, driven by both organic and
inorganic growth. Group revenue grew by 20% compared to the prior period,
which is a particularly impressive result given the challenging market
environment.
All three divisions have demonstrated continued growth in revenue,
highlighting the resilience of our business model. This performance reflects
execution of, and focus on, our four strategic pillars: accelerating organic
revenue growth; enhancing efficiency and margins; advancing sustainable
products; and making value-enhancing investments.
We've also made significant progress in expanding our presence in export
markets, which should benefit future periods' revenues and profits. We are
particularly excited about the performance of ARP Group, who have exceeded
expectations since joining the Group in December 2023. We are confident that
we will continue to see synergies and efficiencies come through in the second
half.
We remain confident in both the quality of our businesses and in our capacity
to deliver our ambitious growth plans, supported by our strong positions in
higher growth sustainability-driven markets, and have a clear line of sight to
delivery of significant shareholder value."
* a reconciliation of underlying to statutory profit is provided in note 4.
Enquiries:
The Alumasc Group plc +44 (0) 1536 383844
Paul Hooper, Chief Executive
Simon Dray, Group Finance Director
Peel Hunt (Broker)
Mike Bell, Ed Allsop +44 (0) 20 7418 8831
Cavendish Capital Markets Ltd (Nominated Adviser)
Julian Blunt, Edward Whiley + 44 (0) 207 220 0500
Camarco (Financial PR) alumasc@camarco.co.uk (mailto:alumasc@camarco.co.uk)
Ginny Pulbrook + 44 (0) 203 757 4992
Tilly Butcher
Rosie Driscoll
REVIEW OF INTERIM RESULTS
Group Performance Summary
We are pleased to report strong Group financial results for the six months
ended 31 December 2024. Group revenue was £57.4m (H1 FY24: £47.8m), 20%
ahead of the prior period, and underlying* profit before tax grew by 19% to a
record £7.5m (H1 FY24: £6.3m).
Organic revenue growth - excluding the contribution from ARP, acquired in late
December 2023 - was 8%. This included 43% growth in export revenues, driven by
faster-than-expected call-offs from the significant project at Chek Lap Kok
airport in Hong Kong as well as the recent investments in overseas sales
capability. Domestic revenues grew by 3% in the period, an encouraging
performance given the challenging market conditions, in which overall new UK
activity was estimated** to have declined by 5% in 2024 and UK newbuild
housing work by 7%.
This performance further demonstrates the resilience of the business model and
was once again underpinned by progress against our strategic initiatives:
continuing to build our position as a market leader in sustainable building
materials, accelerating organic growth and driving margin improvement, and
continuing to invest in our future growth while making value-accretive
acquisitions. All of this positions the Group well for when its commercial
markets fully recover.
* a reconciliation of underlying to statutory profit is provided in note 4
** Experian UK Construction Forecast, Winter 2024
Operational Review
It is very pleasing to report that once again all three divisions grew revenue
and operating profit over the prior period.
Water Management
H1 FY25 H1 FY24
Revenue £29.6m £22.0m
Underlying* operating profit £4.7m £3.5m
Underlying* operating margin 15.8% 16.0%
Operating profit £3.8m £3.2m
* prior to restructuring costs of £0.7m (H1 FY24: £0.3m) and amortisation of
acquired intangible assets of £0.2m (H1 FY24: £nil)
Water Management grew its revenue by £7.6m (34%), underpinned by 8.5% organic
growth and a £5.7m contribution from ARP. The division broadly maintained
its operating margin despite a difficult UK market background, and its
underlying operating profit grew by £1.2m (34%), with 11% organic growth and
23% from ARP. This represents a positive and encouraging performance for the
Water Management division.
Organic growth was driven by very strong export revenues of £7.6m, 42% ahead
of the prior period (H1 FY24: £5.4m). While faster-than-expected call-offs of
Gatic access covers from the concourse and apron project works at Chek Lap Kok
airport in Hong Kong were a significant contributor, there were also notable
orders from Changi Airport (Singapore), Rijeka Port (Croatia) and Oxagon Port
T2 at Neom (Saudi Arabia). The benefit of the division's recent investment in
overseas sales resource is becoming evident, with a growing pipeline of
opportunities, and several orders from new geographical territories are
expected to crystallise in the coming months.
Excluding the contribution from ARP, UK revenues were resilient and only
marginally behind the prior period at £16.3m (H1 FY24: £16.6m). The first
shipments of the new Halstead-manufactured access covers were made in the
period, to Heathrow Airport. These are manufactured to much more exacting
tolerances than previously achievable and were very well received by the
customer. We were very pleased with the performance of ARP, acquired in
December 2023. It has exceeded expectations to date, with all targets
achieved, and the full amount of the final £750,000 earnout was paid to its
former owners in January 2025.
As previously announced, the decision was taken to close our Dover facility at
the end of December, to concentrate manufacturing of our Gatic access covers
into the recently upgraded facility based at our site in Halstead, Essex.
With the new equipment in place and manufacturing having already commenced,
precision engineered products are achievable combined with an anticipated
annual saving of circa £800k p.a. We would like to take the opportunity to
recognise the fantastic attitude and loyalty of the Dover workforce, who
remained hard working, committed and professional and enabled an efficient
transfer of the manufacturing operations.
These efficiencies, together with purchasing synergies from the ARP
acquisition, are expected to be realised in the second half of the year,
helping to support the division's growth and margin ambitions in the face of
persistently tough market conditions.
Building Envelope
H1 FY25 H1 FY24
Revenue £20.2m £18.7m
Underlying* operating profit £2.5m £2.4m
Underlying* operating margin 12.5% 12.8%
Operating profit £2.5m £2.4m
* no adjustments in H1 FY25 or H1 FY24
The Building Envelope division grew revenues by 8% in the first half year to
£20.2m. The business continues to focus on expanding its product ranges into
the metal roofing and standing seam markets, whilst improving its
sustainability offer to satisfy the growing demand for higher environmental
performance levels and rigorous compliance testing. Further developments in
cold liquid systems continue to enhance the division's product range, as does
the increasing demand for non-combustible insulation offers.
This strategy has improved the division's traction with larger projects, along
with new overseas opportunities, particularly in the data centre markets.
Additional sales staff have been employed to increase our coverage. The
division's trainee programme, started some years ago, continues to develop
young talent within the industry and will help underpin our future growth
ambitions.
Despite some training and testing costs required to comply with the Building
Safety Act 2022, the Building Envelope division's underlying operating profit
came in 6% ahead of the prior year. With the investments made in technical
sales capability and delivering more sustainable solutions, the business is
well placed to continue to outperform the prevailing market.
Housebuilding Products
H1 FY25 H1 FY24
Revenue £7.5m £7.1m
Underlying* operating profit £1.9m £1.7m
Underlying* operating margin 25.0% 24.5%
Operating profit £1.9m £1.7m
* no adjustments in H1 FY25 or H1 FY24
The housebuilding market remained challenging in the period, with subdued
demand conditions, elevated borrowing costs and weak consumer confidence.
Against this market backdrop, our Housebuilding Products company Timloc
continued to grow both its revenues (+6%) and its underlying operating profit
(+8%). New product introductions took further market share, underpinned by
Timloc's industry-leading next day service and low carriage-paid order values.
Further new product introductions are planned for the second half of the year
which should support future sales revenue growth.
Continued focus and investment in automation, energy efficient moulding
machines and rigorous cost controls, have all contributed to the achievement
of a record underlying operating margin of 25.0%.
Timloc's focus on sustainability including the introduction of its first
environmental product declarations (EPDs) leaves it well positioned to support
the housebuilders' drive to build lower carbon homes and meet the current
underlying demand for new houses when market conditions improve.
Strategic Overview
The Group's performance reflects further progress on delivering the Group's
strategy:
· Accelerating sales growth
· Driving margin improvement
· Championing sustainable building products
· Value-enhancing investment
The Group has continued to progress its long-term strategy to deliver
profitable growth through leveraging its strong strategic positions in
sustainable building products, and to outperform the UK construction market
while continuing development of export markets. The Group's outperformance
compared to the UK construction market and the growth in its exports revenue
is testament to that. Exports continued to grow, and accounted for 14% of
total Group revenue in the six months to December 2024 (H1 FY24: 12%).
The Group's strong margins are as a result of our range of environmental
solutions and market-leading customer service, supported by disciplined cost
management and a relentless focus on efficiency. Further operating margin
growth towards our targeted 15-20% range will be assisted in the second half
by purchasing synergies from the ARP acquisition and efficiencies arising from
the relocation of Gatic access covers manufacturing to the Halstead facility.
Alumasc is also in a very strong position to benefit from the move towards
sustainable construction and green buildings: both from its own actions; and
through the development of its portfolio of products to manage energy
consumption in buildings, and to improve climate resilience within the built
environment through effective water management systems. Many internal
initiatives have also been taken to act in an environmentally sustainable
manner, including the sourcing of electricity from renewable sources for 100%
of the Group's supply.
The Group has continued to invest in organic value-enhancing opportunities,
including improving sales coverage in Building Envelope, expanding the
overseas sales team in Water Management, and further enhancing efficiency and
new product development capability in Housebuilding Products.
Cash flow and net debt
£m H1 FY25 H1 FY24
Underlying operating profit 8.1 6.7
Depreciation/underlying amortisation 1.5 1.5
Share-based payments 0.2 0.1
Working capital inflow 1.1 1.7
Underlying operating cash flow 10.9 10.0
Pension deficit funding (0.6) (0.6)
Cash generated by underlying operating activities 10.3 9.4
Operating cash conversion 127% 140%
Non-underlying cash flows (0.5) (0.5)
Cash generated by operating activities 9.8 8.9
Capital expenditure (2.0) (1.5)
Interest (0.6) (0.3)
Tax (1.2) (1.7)
Lease principal repaid (0.4) (0.5)
Other cash flows (0.2) (0.1)
Free cash flow 5.4 4.8
Acquisition of businesses - (6.5)
Purchase of own shares (0.1) (0.4)
Dividend payments (2.6) (2.5)
Decrease/(increase) in net bank debt 2.7 (4.6)
£m December 2024 December 2023
Net bank debt 4.6 7.4
Lease liabilities 5.3 4.8
Total (IFRS 16) net debt 9.9 12.2
The Group's underlying operating cash flow was £10.9m, 9% higher than H1
FY24, after a £1.1m inflow from working capital (H1 FY24: £1.7m inflow).
Average trade working capital as a percentage of sales for the period was
14.8% (H1 FY24: 16.7%), as strong working capital management mitigated the
pressure caused by higher sales volumes and some extended lead times arising
from the ongoing Red Sea crisis.
After pension deficit funding of £0.6m (H1 FY24: £0.6m), cash generated by
underlying operating activities was £10.3m (H1 FY24: £9.4m), representing
127% (H1 FY24: 140%) of underlying operating profit, against a Group target of
at least 100%.
Cash generated from operating activities was £9.8m (H1 FY24: £8.9m), after
non-underlying cash flows of £0.5m (H1 FY24: £0.5m). A further £0.3m of
non-underlying cashflows are expected be incurred in the second half of FY25
to complete the closure of the Water Management facility in Dover. These
non-underlying costs are expected to be offset by the planned sale of the
freehold Dover land and buildings, for which marketing has commenced.
Capital expenditure of £2.0m (H1 FY24: £1.5m) was 133% (H1 FY24: 100%) of
depreciation. This included £0.4m of investments to complete the access cover
manufacturing facility at our site in Halstead, Essex, along with £0.7m of
spend at Timloc to support its efficiency and innovation activities.
Interest payments were £0.6m (H1 FY24: £0.3m), higher due to the increased
debt following the acquisition of ARP in December 2023, and tax payments were
£1.2m (H1 FY24: £1.7m), reflecting catch-up payments in H1 FY24 in respect
of prior year liabilities.
The Group's free cash flow - cash generated for acquisitions, funding returns
to shareholders or for reducing debt - was £5.4m, a 10% increase on H1 FY24
(£4.8m).
After a £2.6m (H1 FY24: £2.5m) outflow to pay the prior year's final
dividend, own share purchases of £0.1m (H1 FY24: £0.4m) to fulfil the
vesting of employee share options and, in the prior period, a net £6.5m
outflow on the acquisition of ARP, the Group's net bank debt reduced by £2.7m
(H1 FY24: increased by £4.6m).
Net bank debt at December 2024 was £4.6m (December 2023: £7.4m),
representing gearing of 0.3x (H1 FY24: 0.5x), comfortably within our bank
covenant of less than 2.5x.
Pension deficit and net assets
The Group's IAS 19 pension surplus at December 2024 was £3.3m (December 2023:
£4.8m deficit; June 2024: £0.8m surplus), an increase of £2.5m since June
2024 due to higher bond yields reducing liabilities, investment gains on the
scheme's growth assets, and the Group's deficit repair contributions. The
scheme is now approaching a self-sufficient position - where the scheme can
follow a low-risk investment strategy with minimum ongoing Group support - and
the Group is continuing its de-risking and funding dialogue with the scheme's
trustees ahead of the next triennial review in March 2025.
Group net assets increased to £37.4m (December 2023: £26.3m, June 2024:
£33.5m), primarily as a result of the retained profits after dividend
distributions and actuarial gains on the pension asset.
Interim Dividend
The Board has declared an increased interim dividend of 3.50p (H1 FY24: 3.45p)
per ordinary share, payable on 8 April 2025 to shareholders on the register on
21 February 2025.
Outlook
As commented on in the trade and financial press, UK construction industry
conditions remain challenging, with the timing of a broad-based recovery
uncertain in the short-term. Although there are some positive signs
emerging, the Group will continue to focus on outperforming underlying markets
through its strong alignment with long term environmental growth drivers in
construction, product innovation and customer service, and will continue to
invest in selected overseas markets to drive export growth.
While the increases in Employers' National Insurance and National Living Wage,
announced in the October 2024 Budget, are expected to add an annualised
c.£0.6m to costs from April 2025, the Group has demonstrated its ability over
recent years to maintain revenue growth, mitigate cost increases and grow
margins through structural cost reductions and efficiency gains and, where
necessary, pricing adjustments. Consequently, the Board does not expect these
to have a significant impact on the Group's profitability.
The Board continues to remain confident both in the Group achieving its
expectations for the year to June 2025, and in the significant opportunity
available to the Group over the medium and longer term.
Paul Hooper, Chief
Executive
Simon Dray, Group Finance Director
4 February 2025
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the half year to 31 December 2024
Half year to 31 December 2024 Half year to 31 December 2023 Year to
30 June 2024
Underlying Non-underlying Underlying Non-underlying
Total Total Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 5 57,356 - 57,356 47,812 - 47,812 100,724
Cost of sales (35,777) - (35,777) (29,864) - (29,864) (62,444)
Gross profit 21,579 - 21,579 17,948 - 17,948 38,280
Net operating expenses
Net operating expenses before non-underlying items
(13,471) - (13,471) (11,211) - (11,211) (24,043)
Non-underlying items 4 - (902) (902) - (584) (584) (1,041)
Net operating expenses (13,471) (902) (14,373) (11,211) (584) (11,795) (25,084)
Operating profit 4, 5 8,108 (902) 7,206 6,737 (584) 6,153 13,196
Net finance costs 6 (629) (50) (679) (460) (104) (564) (1,461)
Profit before taxation 4 7,479 (952) 6,527 6,277 (688) 5,589 11,735
Tax expense 7 (1,787) 156 (1,631) (1,594) 109 (1,485) (2,987)
Profit/(loss) for the period 5,692 (796) 4,896 4,683 (579) 4,104 8,748
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Actuarial gain/(loss) on defined benefit pensions, net of tax 3,083
1,472 (739)
Items that are or may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges, net of tax (38)
44 (46)
Exchange differences on retranslation of foreign operations
21 (31) (30)
65 (77) (68)
Other comprehensive gain/(loss) for the period, net of tax 1,537 (816) 3,015
Total comprehensive profit for the period, net of tax 6,433 3,288 11,763
Earnings per share: Pence Pence Pence
Basic earnings per share 10 13.6 11.4 24.3
Diluted earnings per share 10 13.3 11.3 24.1
Reconciliations of underlying to statutory profit and earnings per share are
provided in notes 4 and 10 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
at 31 December 2024
31 December 31 December 30 June
2024 2023 2024
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment - owned assets 16,328 14,584 15,670
Property, plant and equipment - right of use assets 5,125 4,517 5,569
Goodwill 12,678 13,493 12,678
Other intangible assets 6,430 5,292 6,621
Employee benefit asset 3,308 - 794
Deferred tax assets - 1,203 -
43,869 39,089 41,332
Current assets
Inventories 12,950 12,952 13,153
Trade and other receivables 18,817 18,350 21,518
Cash at bank 11 6,581 7,186 6,410
38,348 38,488 41,081
Total assets 82,217 77,577 82,413
Liabilities
Non-current liabilities
Interest bearing loans and borrowings 11 (11,157) (14,556) (13,662)
Lease liability 11 (4,320) (3,979) (4,769)
Employee benefit obligations - (4,812) -
Provisions (1,946) (1,503) (1,880)
Deferred tax liabilities (4,709) (2,865) (3,772)
(22,132) (27,715) (24,083)
Current liabilities
Trade and other payables (19,025) (18,154) (21,519)
Lease liability 11 (976) (836) (1,078)
Provisions (318) (776) (307)
Corporation tax payable (1,593) (1,005) (1,052)
Deferred consideration (750) (2,700) (755)
Derivative financial liabilities (22) (91) (81)
(22,684) (23,562) (24,792)
Total liabilities (44,816) (51,277) (48,875)
Net assets 37,401 26,300 33,538
Equity
Share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own shares (183) (378) (321)
Hedging reserve (16) (68) (60)
Foreign currency reserve 189 167 168
Profit and loss account reserve 32,449 21,617 28,789
Total equity 37,401 26,300 33,538
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2024
Half year to Half year to Year to
31 December 31 December 30 June
2024 2023 2024
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Operating activities
Operating profit 7,206 6,153 13,196
Adjustments for:
Depreciation 1,436 1,319 2,663
Amortisation 332 124 478
Loss on disposal of property, plant and equipment 2 15 4
Decrease/(increase) in inventories 203 127 (199)
Decrease in receivables 3,266 4,334 610
(Decrease)/increase in trade and other payables (2,327) (2,728) 470
Movement in provisions 76 14 (78)
Cash contributions to retirement benefit schemes (600) (600) (1,200)
Share based payments 150 138 251
Cash generated by operating activities 9,744 8,896 16,195
Tax paid (1,224) (1,674) (2,073)
Net cash inflow from operating activities 8,520 7,222 14,122
Investing activities
Purchase of property, plant and equipment (1,935) (1,274) (3,131)
Payments to acquire intangible fixed assets (141) (243) (505)
Proceeds from sales of property, plant and equipment 4 - 8
Acquisition of subsidiary (5) (8,679) (10,730)
Cash acquired on acquisition of subsidiary - 2,223 2,223
Net cash outflow from investing activities (2,077) (7,973) (12,135)
Financing activities
Bank interest paid (492) (269) (909)
Equity dividends paid (2,625) (2,482) (3,724)
(Repayment)/draw down of amounts borrowed (2,500) 5,700 4,700
Refinancing costs (79) (78) (78)
Principal paid on lease liabilities (436) (419) (837)
Interest paid on lease liabilities (66) (88) (176)
Purchase of own shares (272) (480) (647)
Exercise of share options 177 89 129
Net cash (outflow)/inflow from financing activities (6,293) 1,973 (1,542)
Net increase in cash at bank and bank overdrafts 150 1,222 445
Net cash at bank and bank overdrafts brought forward 6,410 5,995 5,995
Net increase in cash at bank and bank overdrafts 150 1,222 445
Effect of foreign exchange rate changes 21 (31) (30)
Net cash at bank and bank overdrafts carried forward 11 6,581 7,186 6,410
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2024
Share Share Capital reserve - Profit
Foreign and loss account
Hedging currency
capital premium own shares reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 July 2024 4,517 445 (321) (60) 168 28,789 33,538
Profit for the period - - - - - 4,896 4,896
Exchange differences on retranslation of foreign operations - - - - 21 - 21
Net gain on cash flow hedges - - - 59 - - 59
Tax on derivative financial liability - - - (15) - - (15)
Share based payments - - - - - 150 150
Actuarial gain on defined benefit pension schemes, net of tax - - - - - 1,472 1,472
Acquisition of own shares - - (273) - - - (273)
Own shares used to satisfy exercise of share awards - - 411 - - - 411
Exercise of share-based incentives - - - - - (233) (233)
Dividends - - - - - (2,625) (2,625)
At 31 December 2024 4,517 445 (183) (16) 189 32,449 37,401
Share Share Capital
reserve - Profit
Foreign and loss account
Hedging currency
capital premium own shares reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 July 2023 4,517 445 (577) (22) 198 21,186 25,747
Profit for the period - - - - - 4,104 4,104
Exchange differences on retranslation of foreign operations - - - - (31) - (31)
Net loss on cash flow hedges - - - (61) - - (61)
Tax on derivative financial liability - - - 15 - - 15
Share based payments - - - - - 138 138
Actuarial loss on defined benefit pension schemes, net of tax - - - - - (739) (739)
Acquisition of own shares - - (480) - - - (480)
Own shares used to satisfy exercise of share awards - - 679 - - - 679
Exercise of share-based incentives - - - - - (590) (590)
Dividends - - - - - (2,482) (2,482)
At 31 December 2023 4,517 445 (378) (68) 167 21,617 26,300
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year to 31 December 2024
1. Basis of preparation
The condensed consolidated interim financial statements of The Alumasc Group
plc and its subsidiaries have been prepared in accordance with International
Financial Reporting Standards (IFRS) in conformity with the requirements of
the Companies Act 2006 that are effective at 31 December 2024.
The condensed consolidated interim financial statements have been prepared
using the accounting policies set out in the statutory accounts for the
financial year to 30 June 2024 and in accordance with AIM Rule 18, and the
same accounting policies will be adopted in the 2025 annual financial
statements.
The consolidated financial statements of the Group as at and for the year
ended 30 June 2024 are available on request from the Company's registered
office at Burton Latimer, Kettering, Northants, NN15 5JP or on the website
www.alumasc.co.uk (http://www.alumasc.co.uk) .
The comparative figures for the financial year ended 30 June 2024 are not the
Company's statutory accounts for that financial year but have been extracted
from those accounts. Those accounts have been reported on by the Company's
auditors and delivered to the registrar of companies. The report of the
auditors was (i) unqualified, (ii) did not include a reference to any matters
to which the auditors drew attention by way of emphasis without qualifying
their report, and (iii) did not contain a statement under section 498
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(2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements for the half year
ended 31 December 2024 are not statutory accounts and have been neither
audited nor reviewed by the Group's auditors. They do not contain all of the
information required for full financial statements, and should be read in
conjunction with the consolidated financial statements of the Group as at and
for the year ended 30 June 2024.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 4 February 2025.
The Group performed ahead of the Base Case trading scenario modelled as part
of the 30 June 2024 year end Going Concern review, and also ahead of the
stress testing performed. On the basis of the Group's financing facilities and
current financial plans and sensitivity analyses, the Board is satisfied that
the Group has adequate resources to continue in operational existence for
twelve months from the date of signing this report and accordingly continues
to adopt the going concern basis in preparing these condensed consolidated
interim financial statements.
2. Estimates
The preparation of condensed consolidated interim financial statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amount of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
Except as described below, in preparing these condensed consolidated interim
financial statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated financial
statements as at and for the year ended 30 June 2024, namely the valuation of
defined benefit pension obligations and the valuation of the Group's acquired
goodwill.
During the six months ended 31 December 2024, management reassessed and
updated its estimates in respect of retirement benefit obligations based on
market data available at 31 December 2024. The resulting impact was a £2.0
million pre-tax actuarial gain, calculated using IAS 19 conventions,
recognised in the six month period to 31 December 2024.
3. Risks and uncertainties
A summary of the Group's principal risks and uncertainties was provided on
pages 47 to 50 of Alumasc's Report and Accounts for the year ended 30 June
2024. The Board considers these risks and uncertainties remain relevant to the
current financial year.
Specific risks and uncertainties relating to the Group's performance in the
second half year are:
- Inflation and interest rates, and their impact on the Group's
construction markets;
- Prolonged periods of bad weather which may impact the Group's
construction markets; and
- Potential impacts on customer demand or our supply chain from
the current global geopolitical environment.
4. Underlying to statutory profit reconciliation
Profit before tax Half year to 31 December 2024 Half year to 31 December 2023 Year to 30 June
2024
£'000 £'000 £'000
Underlying profit before tax 7,479 6,277 12,971
Acquired intangible asset amortisation (212) (35) (239)
IAS 19 net pension scheme finance costs (50) (104) (195)
Acquisition costs - (259) (349)
Restructuring costs (690) (290) (453)
Reported profit before tax 6,527 5,589 11,735
Operating profit Half year to 31 December 2024 Half year to 31 December 2023 Year to 30 June
2024
£'000 £'000 £'000
Underlying operating profit 8,108 6,737 14,237
Acquired intangible asset amortisation (212) (35) (239)
Acquisition costs - (259) (349)
Restructuring costs (690) (290) (453)
Reported operating profit 7,206 6,153 13,196
The Group reports underlying profit and underlying earnings in addition to the
financial information presented under IFRS. The Board believes that underlying
profit and underlying earnings provide additional and consistent measures of
underlying performance by removing items that are not closely related to the
Group's day-to-day trading activities and which would typically be excluded in
assessing the value of the business.
Underlying profit and underlying earnings are used by the Board for internal
performance analysis, planning and employee compensation arrangements, and are
not defined terms under IFRS, and may therefore not be comparable with
similarly titled measures reported by other companies. They are therefore not
intended to be a substitute for, or superior to, IFRS measures of profit and
earnings.
In the presentation of underlying profits, management disclose the
amortisation of acquired intangible assets and IAS 19 pension costs
consistently as non-underlying items because they are material non-cash and
non-trading items that would typically be excluded in assessing the value of
the business.
In addition, management has presented the following specific items that arose
in H1 FY25 and H1 FY24 as non-underlying as they are non-recurring items that
are judged to be significant enough to affect the understanding of the
year-on-year evolution of the underlying trading performance of the business:
· One-off restructuring costs of £690,000 (H1 FY24: £290,000),
representing the costs of a restructuring of the Water Management division
including the planned closure of the division's site in Dover and relocation
of its activities to the division's site in Halstead, and a restructuring of
the division's sales and commercial teams. A further £0.1m is expected to be
incurred in the second half of FY25 to complete the project.
· Acquisition expenses of £nil (H1 FY24: £259,000), related to
professional fees incurred primarily in connection with the acquisition of ARP
Group, which completed in December 2023.
Impact on cashflow
Of the £952,000 (H1 FY24: £688,000) non-underlying items recognised,
£499,000 (H1 FY24: £549,000) were settled in cash. £191,000 (H1 FY24:
£nil) is due to be paid in the second half of the financial year, and
£262,000 (H1 FY24: £139,000) relates to non-cash amortisation of acquired
intangible assets and IAS 19 pension costs.
5. Segmental analysis
In accordance with IFRS 8 Operating Segments, the segmental analysis below
follows the Group's internal management reporting structure.
Revenue Half year to 31 December 2024 Half year to 31 December 2023 Year to 30 June
2024
£'000 £'000 £'000
Water Management 29,583 22,027 48,316
Building Envelope 20,239 18,680 37,602
Housebuilding Products 7,534 7,105 14,806
Group revenue 57,356 47,812 100,724
Operating profit Half year to 31 December 2024 Half year to 31 December 2023 Year to 30 June
2024
£'000 £'000 £'000
Water Management 4,684 3,521 7,628
Building Envelope 2,530 2,384 4,627
Housebuilding Products 1,887 1,741 3,750
Unallocated central costs (993) (909) (1,768)
Underlying operating profit 8,108 6,737 14,237
Non-underlying items (902) (584) (1,041)
Operating profit 7,206 6,153 13,196
Sales to external customers by geographical segment
United North Middle Far Rest of
Kingdom Europe America East East World Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Half year to 31 December 2024 49,271 1,746 7 232 5,813 287 57,356
Half year to 31 December 2023 42,154 1,453 10 401 3,197 597 47,812
6. Net finance costs
Half year to Half year to Year to
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Finance costs - Bank overdrafts 5 14 16
- Revolving credit facility 558 358 1,074
- Interest on lease 66 88 176
liabilities
629 460 1,266
- IAS 19 net pension scheme 50 104 195
finance costs
679 564 1,461
7. Tax expense
Half year to 31 December 2024 Half year to 31 December Year to 30 June
2023 2024
£'000 £'000 £'000
Current tax:
UK corporation tax 1,048 729 2,062
Overseas tax 148 138 200
Amounts under-provided in previous years - - (199)
Total current tax 1,196 867 2,063
Deferred tax:
Origination and reversal of temporary differences 435 618 639
Amounts over-provided in previous years - - 285
Total deferred tax 435 618 924
Total tax expense 1,631 1,485 2,987
Deferred tax recognised in other comprehensive income:
Actuarial gains/(losses) on pension schemes 491 (246) 1,029
Cash flow hedge 15 (15) (12)
Tax charged/(credited) to other comprehensive income 506 (261) 1,017
Total tax charge in the consolidated statement of comprehensive income
2,137 1,224 4,004
8. Dividends
The Directors have approved an interim dividend per share of 3.50 pence (FY24
interim dividend: 3.45 pence) which will be paid on 8 April 2025 to
shareholders on the register at the close of business on 21 February 2025. The
cash cost of the dividend is expected to be £1,248,000. As the dividend was
approved after the statement of financial position date, it has not been
accrued in the interim consolidated financial statements. A final dividend per
share of 7.30 pence in respect of the 2023/24 financial year was paid at a
cash cost of £2,625,000 during the six months to 31 December 2024.
9. Share Based Payments
During the period the Group awarded 195,000 options (H1 FY24: 210,000) under
the Executive Share Option Scheme ("ESOS"). These options have an exercise
price of 307.0 pence and require certain criteria to be fulfilled before
vesting. 79,445 existing options were exercised during the period (H1 FY24:
90,000) and 17,868 options lapsed (H1 FY24: nil).
Total awards granted under the Group's Long Term Incentive Plans ("LTIP")
amounted to 189,006 (H1 FY24: 316,472). LTIP awards have no exercise price but
are dependent on certain vesting criteria being met. 118,119 existing LTIP
awards were exercised during the period (H1 FY24: 130,251) and 95,901 existing
LTIP awards lapsed (H1 FY24: 53,691).
10. Earnings per share
Basic earnings per share is calculated by dividing the net profit for the
period attributable to ordinary equity shareholders of the parent by the
weighted average number of ordinary shares in issue during the period. Diluted
earnings per share is calculated by dividing the net profit attributable to
ordinary equity shareholders of the parent by the weighted average number of
ordinary shares in issue during the period, after allowing for the exercise of
outstanding share options. The following sets out the income and share data
used in the basic and diluted earnings per share calculations:
Half year to 31 December Half year to 31 December 2023 Year to
2024 30 June
2024
£'000 £'000 £'000
Net profit attributable to equity holders 4,896 4,104 8,748
000s 000s 000s
Basic weighted average number of shares 35,996 35,942 35,964
Dilutive potential ordinary shares - employee share options 725 292 296
Diluted weighted average number of shares 36,721 36,234 36,260
Half year to 31 December Half year to 31 December 2023 Year to
2024 30 June
2024
Pence Pence Pence
Basic earnings per share 13.6 11.4 24.3
Diluted earnings per share 13.3 11.3 24.1
Calculation of underlying earnings per share:
Half year to 31 December Half year to 31 December 2023 Year to
2024 30 June
2024
£'000 £'000 £'000
Reported profit before taxation 6,527 5,589 11,735
Acquired intangible asset amortisation 212 35 239
IAS 19 net pension scheme finance costs 50 104 195
Restructuring & legal costs 690 290 453
Acquisition costs - 259 349
Underlying profit before taxation 7,479 6,277 12,971
Tax at underlying Group tax rate of 23.9% (1,787) (1,594) (3,308)
(2023/24 first half year: 25.4%; full year: 25.5%)
Underlying earnings 5,692 4,683 9,663
Weighted average number of shares 35,996 35,942 35,964
15.8p 13.0p 26.9p
Basic underlying earnings per share
Diluted underlying earnings per share 15.5p 12.9p 26.6p
11. Movement in borrowings
Cash at
bank /bank overdrafts Bank loans Net bank cash/(debt) Lease liabilities Total borrowings
£'000 £'000 £'000 £'000 £'000
At 1 July 2024 6,410 (13,662) (7,252) (5,847) (13,099)
Cash flow movements 150 2,579 2,729 436 3,165
Non-cash movements - (74) (74) 115 41
Effect of foreign exchange rates 21 - 21 - 21
At 31 December 2024 6,581 (11,157) (4,576) (5,296) (9,872)
Cash at
bank /bank overdrafts Bank Net bank cash/(debt) Lease liabilities Total borrowings
loans
£'000 £'000 £'000 £'000 £'000
At 1 July 2023 5,995 (8,848) (2,853) (5,234) (8,087)
Cash flow movements 1,222 (5,622) (4,400) 419 (3,981)
Non-cash movements - (86) (86) - (86)
Effect of foreign exchange rates (31) - (31) - (31)
At 31 December 2023 7,186 (14,556) (7,370) (4,815) (12,185)
12. Related party disclosure
The Group has a related party relationship with its Directors and with its UK
pension schemes. There has been no material change in the nature of the
related party transactions described in note 29 of Alumasc's Report and
Accounts for the year ended 30 June 2024.
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