REG - Alumasc Group Plc - Interim results
08/02/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220208:nRSH9481Aa&default-theme=true
RNS Number : 9481A Alumasc Group PLC 08 February 2022
Tuesday 8 February 2022
The Alumasc Group plc
Interim results
On track to deliver Full Year expectations
Alumasc (ALU.L) the sustainable building products, systems and solutions Group
today announces results for the six months ended 31 December 2021.
Commenting on the interim results, Paul Hooper, Chief Executive of Alumasc
said:
"The Alumasc Group reported a solid performance during the first half and is
on track to deliver its expectations for the full year. Although there were
some headwinds experienced due to Covid-19 driven contract delays and cost
inflation across the industry during the period, the business performed well
and has good momentum going into the second half.
Alumasc is at the forefront of providing high-quality, low carbon, sustainable
products, systems and solutions, the majority of which manage the scarce
resources of water and energy and improve quality of life for the
owner/occupier in the built environment. Our commitment to sustainable
business is evidenced by Timloc, our housebuilding products business, becoming
the first building products manufacturer in the UK to be carbon neutral across
its operations.
I am therefore delighted that Alumasc's green credentials have been recognised
by the award of the London Stock Exchange Green Economy Mark in November 2021
and that we are well on the way to becoming a market leader in the provision
of sustainable building products."
Financial Overview: Solid underlying performance
Half year to 31 December 2021 2020
Revenue (£m) 46.3 45.6
Underlying profit before tax (£m) 5.3 6.0
Underlying operating margin (%) ((1)) 11.9 13.6
Underlying earnings per share (pence)( ) 11.8 13.4
EBITDA (£m) ((2)) 6.8 7.4
Statutory profit before tax (£m) 5.1 5.5
Basic earnings per share (pence) 11.2 12.2
Dividends per share (pence) 3.35 3.25
Net bank debt at 31 December (£m) 4.1 0.2
A reconciliation of underlying to statutory profit is provided in note 4 to
the interim financial statements.
((1) ) Underlying operating margin: Underlying operating profit as a
percentage of revenue.
((2) ) EBITDA: Underlying operating profit before interest, tax, depreciation
and amortisation.
· Group revenues of £46.3m, were 1.6% (£0.7m) ahead of H1 FY21
(£45.6m, which benefited from some £2.5m of business delayed from FY20 by
Covid-19). Excluding this, sales growth was 7.5%.
· Export sales grew by 41% to £8.7 million and represented 19% of
total Group revenue (H1 FY21: 13%).
· The strength of our brand positioning and customer relationships
allowed the successful pass-through of input cost inflation. As a result,
gross margin was only slightly diluted at 34.6% (H1 FY21: 36.7%).
· Underlying operating margin remained strong at 11.9% (H1 FY21:
13.6%), with statutory operating margin of 11.7% (H1 FY21: 12.9%), after
absorbing the lower gross margin as well as the resumption of business
development costs which had been curtailed by the Covid-19 restrictions.
Structural cost savings of £3.1m p.a., achieved over the previous two years,
remain.
· The Group is selectively investing in opportunities to accelerate
growth.
· Underlying profit before tax was £5.3m (H1 FY21: £6.0m); with
statutory profit before tax of £5.1m (H1 FY21: £5.5m).
· Net bank debt at 31 December was £4.1m (31 December 2020: £0.2m net
bank debt). During the period the Group repaid £0.8m of VAT and pension
liabilities deferred from FY20 under the Group's Covid-19 cash conservation
measures. In addition, the Group actively increased its stock holdings to
maintain customer service and mitigate price increases, in response to the
global supply chain challenges and raw material cost inflation.
· The defined benefit pension scheme deficit was further reduced during
the first half to £2.5m (30 June 2021: £4.6m), mainly as a result of deficit
reduction payments and asset performance.
· The Board plans to pay an interim dividend of 3.35p per share in
April 2022. This represents an increase of 3.1% on the previous interim
dividend, and reflects the encouraging first half performance and Board's
confidence in the strength of the Group's strategy and its future prospects.
Divisional Overview
· Water Management Division made a record profit of £4.1m, 17.6% ahead
of H1 FY21. Revenues were 18.9% ahead, with strong export and online sales
growth. Operating margins remained in line with the prior period at 18%,
driven by volume growth and cost savings.
· The Building Envelope Division reported a reduced revenue and
delivered a profit of £0.9m (5% operating margin), £1.6m below H1 FY21.
Alumasc Roofing performed well against a prior half year which included
significant business delayed from FY20. Levolux's performance was affected by
Covid-19 in its core UK and USA markets, resulting in delays in orders, and it
reported a loss for H1 FY22 of £1.0m (H1 FY21: £0.2m profit). With its
restructured cost base and improved capability, Levolux is well placed to
recover as commercial market activity resumes.
· Housebuilding Products Division grew its revenue by 6.4%,
representing a very commendable performance given a challenging environment of
inflationary pressures and supply-side constraints holding back site activity.
Housebuilding Products continued to deliver the highest return on sales in the
Group, with a 19% operating margin (H1 FY21: 22%).
Outlook
· Good momentum across the majority of the Group's businesses, and a
growing pipeline of opportunities at Levolux.
· A strong balance sheet and cash position allows investment to
accelerate future growth.
· The business is on track to deliver against its full year
expectations and looks forward to the future with confidence.
Enquiries:
The Alumasc Group plc +44 (0) 1536 383844
Paul Hooper, CEO
Simon Dray, Group Finance Director
Peel Hunt (Broker)
Mike Bell +44 (0) 20 7418 8831
finnCap (NOMAD)
Julian Blunt + 44 (0)207 220 0561
Camarco alumasc@camarco.co.uk (mailto:alumasc@camarco.co.uk)
Ginny Pulbrook + 44 (0)203 757 4992
Rosie Driscoll + 44 (0)203 757 4981
REVIEW OF INTERIM RESULTS
Chief Executive's Statement
The first half of the 2021/22 financial year saw strong sales momentum across
most markets and the effective management of ongoing, industry-wide, supply
chain and inflationary pressures.
In our Annual Report and Accounts 2021 we indicated that we estimated that
circa £2.5m sales had been carried forward from the lockdown affected prior
year, most of this helping to boost the prior year first half performance.
Excluding this from the comparator, underlying sales growth in H1 FY22 was
£3.2m (7.5%). Price rises and surcharges, necessary to pass through the
sustained increase in cost prices, were responsible for £1.9m (4.4%) of this.
The remaining 3.1% increase in revenue includes reduced volumes at Levolux;
revenue growth in the other businesses was closer to 10%.
In particular, our Water Management Division had an excellent first half year,
increasing its revenue by 19% (£3.6m) to £22.8m, a great effort and assisted
by increased export sales and, in particular, the start of the shipments to
Hong Kong's Chek Lap Kok Airport, illustrating the global reputation of our
water management products. Our Roofing business did very well to almost fully
offset the delayed revenues from lockdown and a significant contract which
both benefited H1 FY21. In addition, our Housebuilding Products Division's
revenue grew by 6% and was assisted once again by new product launches.
Group export sales grew by 41% to £8.7 million and represented 19% of total
revenue (H1 FY21: 13%).
Levolux's performance was affected by Covid-19 (in the UK and USA) resulting
in delays in orders. It reported a loss for H1 FY22 of £1.0m (H1 FY21: £0.2m
profit). However Levolux, with its restructured cost base and improved
capability, is well placed to recover as commercial market activity resumes.
Enquiry levels are increasing and we anticipate an improved order intake in
the second half.
Operational Review
Water Management
H1 FY22 H1 FY21
Revenue £22.8m £19.2m
Underlying operating profit £4.1m £3.5m
Underlying operating margin 18.1% 18.3%
Operating profit £4.1m £3.5m
Alumasc Water Management Division delivered another strong and record
performance in the first half year, significantly increasing underlying
operating profit. The drivers of the 18% improvement in operating profit to
£4.1 million (18.1% operating margin) were the continued control of operating
costs while accompanied by a significant revenue increase of £3.6m (19%)
which saw market share growth, particularly within the civil drainage and
roofline markets.
Within this the E-Commerce business, Rainclear, returned another significant
revenue increase, this time of 18%, following new product launches. Gatic
Slotdrain performed very strongly in H1 FY22, and was successful in winning
several new larger car parks work and new Amazon facilities, including one in
Valencia, Spain. A Slotdrain project was completed for a highway in Costa
Rica. Although activity was quiet at airports in the UK, the first shipments
to Chek Lap Kok's Airport Runway 3 were made in the second quarter.
Alumasc Water Management Solutions performed very well, with successful market
and sales initiatives benefiting in particular sales of its Alumasc Rainwater
and Skyline brands.
Building Envelope
H1 FY22 H1 FY21
Revenue £17.8m £21.1m
Underlying operating profit £0.9m £2.5m
Underlying operating margin 4.9% 12.0%
Operating profit £0.8m £2.4m
The Building Envelope Division had a reduced revenue in both parts of its
division and produced a profit of £0.9m (5% operating margin), £1.6m below
H1 FY21, largely reflecting the result at Levolux, discussed below.
The Roofing business performed ahead of internal expectations in both its
newbuild and refurbishment markets, against a comparative that included a
large one-off contract as well as significant sales delayed from the prior
year. It has benefited significantly from the recruitment of high quality
sales people who have improved sales in regions that had been weaker in the
past. The Covid-19 impact also meant that there was more external work carried
out on roofing than on internal refurbishment for Academies. The Roofing
business continues to focus on high end specification offers supported by the
highest standards, with a customer focused service level which delivers low
carbon systems combined with safety in installation; all supported by
long-term warranties. This has allowed the business to increase market share
in its core sectors.
Covid-19 also played a part in slowing down newbuild commercial market
projects, which particularly affected Levolux. This depressed the order intake
in the first half to a position significantly lower than was anticipated, and
led to a £1.0m loss at the half year, compared to a £0.2m profit in H1 FY21.
However, levels of customer enquiries are increasing and the business is
actively pursuing several significant opportunities. With its streamlined
operating structure and improved capability, Levolux is well positioned to
benefit as market activity resumes.
Specification sales opportunities are growing from the new integrated Building
Envelope sales approach with an increasing number of combined project wins
taking place.
Housebuilding Products
H1 FY22 H1 FY21
Revenue £5.7m £5.3m
Underlying operating profit £1.1m £1.2m
Underlying operating margin 19.3% 22.2%
Operating profit £1.1m £1.1m
Timloc, our Housebuilding Products business, continued to perform well. Its
industry leading next day delivery service and continued introduction of new
products underpins this performance.
This Division, representing 12% of Group's revenues, grew its revenue by
£0.4m (6.4%). This was a very commendable performance in a challenging
environment in which housebuilding activity on sites was frequently
interrupted by commodity product and labour shortages and inflationary
pressures. Despite these, Housebuilding Products maintained its strong returns
with a 19% (H1 FY21: 22%) operating margin. New product introductions,
outstanding service and rigorous cost controls contributed significantly to
this performance. The achievement of 100% On Time In Full ('OTIF') delivery
performance was, once again, appreciated by its customers.
New products such as meter boxes, fire rated stop socks, non-combustible
InvisiWeep, and the relaunch of the Cavity Closer range all had a positive
impact on the business. Ongoing investment in new equipment with much improved
energy efficiency, delivering excellent pay-backs, has made a significant
contribution in the reduction of the Group's carbon footprint. Timloc became
the first building products manufacturer in the UK to source all its energy
from renewable sources. In addition, it has become the first building products
manufacturer in the UK to become carbon neutral across its operations.
Strategic Overview
The significant improvement in the Group's performance across the last two
years emanate from the execution of the Group's strategy which includes the
stated objectives of:
Short-term:
· Continuing to simplify, streamline and reduce fixed costs across the
Group.
· Recovery of Levolux's financial performance.
Long-term:
· Drive organic growth across the Group.
· Continual efficiency improvements.
· Geographical expansion within selected territories.
· New product development focused on environmental and sustainable
solutions.
· Bolt-on M&A to expand products and markets.
· Use of sustainable materials with recycled and fully recyclable
materials.
We have managed to streamline the business and have removed £3.1m p.a. of
structural costs in the last two years, with no reduction in capacity or
capability. Of this, £2.5m of costs were removed from Levolux, to ensure the
business' cost base is efficient and provides a good platform for profitable
growth as the order book pipeline and future opportunities are executed.
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 2% revenue
increase, including the 41% growth in export revenue, is testament to that.
Alumasc is also in a very strong position to benefit from the move towards
sustainable construction and green buildings, both in terms of its own actions
and through the development of its portfolio of products to manage energy
consumption in buildings, to produce a greener built environment, and to
manage the scarce resource of water. 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's Net Zero planning is underway.
In recognition of its portfolio of environmental solutions and contribution to
the global green economy, Alumasc was very pleased to be a recipient of the
coveted London Stock Exchange Green Economy Mark in November 2021.
Financial Review
The Group's underlying tax rate was 19.4%, marginally below H1 FY21 (19.6%).
Underlying earnings per share for the period were 11.8p, 11.9% lower than H1
FY21 (13.4p), reflecting the lower underlying profit before tax. Basic
earnings per share were 11.2p (H1 FY21: 12.2p).
Cash flows and net debt
H1 FY22 H1 FY21
£m
£m
EBITDA * 6.8 7.4
Change in working capital (1.8) 0.9
Deferred VAT paid (0.6) (0.6)
Operating cash flow 4.4 7.7
Capital expenditure (1.4) (1.0)
Interest (0.2) (0.1)
Tax (1.3) 0.4
Pension deficit funding (1.3) (1.3)
Lease payments (0.4) (0.4)
Dividend payments (2.2) (0.7)
Purchase of own shares (0.4) -
Sub total (2.8) 4.6
Non-underlying payments (0.3) (0.4)
Net cash flow (3.1) 4.2
Net bank debt at 31 December 4.1 0.2
* EBITDA: Underlying operating profit before interest, tax, depreciation and
amortisation
The Group's operating cash inflow was £4.4m (H1 FY21: £7.7m), which included
a £0.6m (H1 FY21: £0.6m) repayment to HMRC for VAT deferred during the
initial Covid-19 lockdown. The cash outflow into working capital was £1.8m
(H1 FY21: £0.9m inflow), including a £2.6m outflow into inventory, resulting
from higher cost prices and increased stock holdings to maintain continuity of
supply and secure pricing on committed orders; and a net inflow of £0.8m from
other working capital lines. Average trade working capital as a percentage of
sales for the half year was 15.5% (H1 FY21: 14.9%).
Capital expenditure was £1.4m (H1 FY21: £1.0m), representing 111% of
depreciation (H1 FY21: 87%). Principal investments were made on
capacity/capability upgrades (£0.4m), tooling for new products (£0.4m) and
system upgrades (£0.2m).
Tax paid of £1.3m reflected higher payments on account in respect of FY21 and
FY22. The prior half year included £0.4m of tax refunded from FY19.
The £1.3m (H1 FY21: £1.3m) of pension fund payments included the final
£0.2m (H1 FY21: £0.2m) of payments deferred under the Group's Covid-19 cash
conservation measures.
After the £2.2m (H1 FY21: £0.7m) payment of the prior year final dividend,
£0.4m (H1 FY21: £nil) of own share purchases to fulfil the vesting of
employee share awards, and £0.6m (H1 FY21: £0.5m) of lease and interest
payments, net bank debt at December 2021 was £4.1m (December 2020: £0.2m).
Pensions and net assets
The Group's pension deficit reduced further to £2.5m at December 2021 (June
2021: £4.6m, December 2020: £12.8m), as a result of the £1.3m of deficit
repair payments, investment gains and the effect of higher bond yields, which
offset an increase in the inflation rate assumption. The scheme's next
triennial actuarial valuation is scheduled for 31 March 2022, and the Group
expects to conclude ongoing funding discussions with the scheme trustees prior
to publication of its full year results later this year.
Group net assets increased in the period by £2.2m to £38.3m, as a result of
the profit retained after dividend payments and the further reduction in the
pension deficit. Post tax return on investment (rolling twelve month
underlying operating profit divided by capital invested) was 17.8% (December
2021: 13.9%, June 2021: 19.8%).
Interim Dividend
The Board has decided to declare an increased interim dividend of 3.35p per
ordinary share, payable on 6 April 2022 to shareholders on the register on 25
February 2022.
The Board
A new Non-Executive Director, Karen McInerney, joined us at the start of the
second half year. Karen, a Chartered Accountant, is currently the Group
Financial Controller at Computacenter plc, a FTSE 250 company. Karen took on
the chairmanship of the Audit Committee, which was relinquished by Vijay
Thakrar on his appointment as Chairman of The Alumasc Group.
Vijay became Chairman following the retirement of John McCall in December
2021. John served as Chairman and Chief Executive on the buy-out of Alumasc
from Consolidated Goldfields in 1984, remaining as Chief Executive until 2003
and continued as Chairman until his retirement. The Group is indebted to John
for his wise counsel across the many years. We also said goodbye to Jon Pither
who retired having served for 29 years as a non-executive director. Once
again, the Group is indebted to Jon's wise and sometimes iconoclastic counsel.
Outlook
The Group has entered the second half of the year with good momentum, and a
growing pipeline of opportunities within Levolux that should come to fruition
once activity resumes within the commercial market. Challenges are likely to
remain around Covid-19 precautions, supply chain delays and input cost
inflation, but we are confident in the resilience of our businesses. We
believe our strong positions in sustainable building products will remain a
key driver of future growth, and our strong balance sheet will allow us to
continue to invest in opportunities to accelerate this.
Accordingly the Board confirms it remains on track to deliver full year
results in line with its expectations.
Paul Hooper, Chief Executive
8 February 2022
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the half year to 31 December 2021
Half year to 31 December 2021 Half year to 31 December 2020 Year to
30 June 2021
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 46,269 - 46,269 45,551 - 45,551 90,465
Cost of sales (30,257) - (30,257) (28,851) - (28,851) (57,950)
Gross profit 16,012 - 16,012 16,700 - 16,700 32,515
Net operating expenses
Net operating expenses before non-underlying items
(10,489) - (10,489) (10,497) - (10,497) (21,511)
IAS 19 past service pension cost 4 - - - - (150) (150) (150)
Other non-underlying items 4 - (119) (119) - (178) (178) (296)
Net operating expenses (10,489) (119) (10,608) (10,497) (328) (10,825) (21,957)
Operating profit 4, 5 5,523 (119) 5,404 6,203 (328) 5,875 10,558
Finance expenses 6 (265) (67) (332) (251) (134) (385) (757)
Profit before taxation 5,258 (186) 5,072 5,952 (462) 5,490 9,801
Tax expense 7 (1,020) (34) (1,054) (1,167) 33 (1,134) (2,215)
Profit for the period 4,238 (220) 4,018 4,785 (429) 4,356 7,586
Other comprehensive income:
Items that will not be recycled to profit or loss:
Actuarial gain on defined benefit pensions, net of tax 10,393
821
4,373
Items that are or may be recycled subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges, net of tax (385)
83 (300)
Exchange differences on retranslation of foreign operations
10 (41) (46)
93 (341) (431)
Other comprehensive gain for the period, net of tax 914 4,032 9,962
Total comprehensive profit for the period, net of tax 4,932 8,388 17,548
Earnings per share: Pence Pence Pence
Basic earnings per share 10 11.2 12.2 21.2
Diluted earnings per share 10 11.0 12.1 20.8
Alternative Performance Measures:
Underlying earnings per share (pence) 10 11.8 13.4 23.7
Full reco0nciliations of underlying to statutory profits and earnings per
share are provided in notes 4 and 10 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
at 31 December 2021
31 December 31 December 30 June
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment - owned assets 12,368 11,210 11,734
Property, plant and equipment - right of use assets 5,081 5,474 5,469
Goodwill 18,705 18,705 18,705
Other intangible assets 3,152 3,389 3,321
Deferred tax assets 630 2,441 1,145
39,936 41,219 40,374
Current assets
Inventories 13,488 9,779 10,871
Trade and other receivables 14,369 14,987 18,617
Contract assets 2,526 2,416 2,772
Cash at bank 11 2,878 19,759 4,999
33,261 46,941 37,259
Total assets 73,197 88,160 77,633
Liabilities
Non-current liabilities
Interest bearing loans and borrowings 11 (6,963) (19,935) (5,936)
Lease liability (4,475) (4,914) (4,811)
Employee benefits payable (2,520) (12,847) (4,581)
Provisions (1,251) (1,028) (1,267)
Deferred tax liabilities (1,010) (1,203) (966)
(16,219) (39,927) (17,561)
Current liabilities
Trade and other payables (16,289) (17,194) (20,266)
Contract liabilities (160) (662) (745)
Lease liability (1,145) (670) (795)
Provisions (471) (1,172) (834)
Corporation tax payable (419) (758) (1,019)
Derivative financial liabilities (165) (163) (268)
(18,649) (20,619) (23,927)
Total liabilities (34,868) (60,546) (41,488)
Net assets 38,329 27,614 36,145
Equity
Called up share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own shares (435) (416) (406)
Hedging reserve (134) (132) (217)
Foreign currency reserve 65 60 55
Profit and loss account reserve 33,871 23,140 31,751
Total equity 38,329 27,614 36,145
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2021
Half year to Half year to Year to
31 December 31 December 30 June
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Operating activities
Operating profit 5,404 5,875 10,558
Adjustments for:
Depreciation 1,166 1,056 2,146
Amortisation 174 157 361
Loss/(gain) on disposal of property, plant and equipment 17 3 (16)
IAS 19 past service pension cost - 150 150
(Increase)/decrease in inventories (2,617) (1,183) (2,275)
Decrease/(increase) in receivables 4,494 (1,133) (5,119)
(Decease)/increase in trade and other payables (4,278) 2,516 5,287
Movement in provisions (379) (176) (275)
Cash contributions to retirement benefit schemes (1,307) (1,307) (2,614)
Share based payments 50 100 397
Cash generated by operating activities 2,724 6,058 8,600
Tax (paid)/received (1,320) 409 (161)
Net cash inflow from operating activities 1,404 6,467 8,439
Investing activities
Purchase of property, plant and equipment (1,361) (804) (1,666)
Payments to acquire intangible fixed assets (5) (194) (330)
Proceeds from sales of property, plant and equipment - 41 46
Net cash outflow from investing activities (1,366) (957) (1,950)
Financing activities
Bank interest paid (141) (141) (207)
Equity dividends paid (2,233) (715) (1,878)
Draw down/(repayment) of amounts borrowed 1,000 - (14,000)
Principal paid on lease liabilities (352) (340) (692)
Interest paid on lease liabilities (83) (90) (178)
Purchase of own shares (430) - -
Exercise of share based payments 70 - -
Refinancing costs - - (65)
Net cash outflow from financing activities (2,169) (1,286) (17,020)
Net (decrease)/increase in cash at bank and bank overdrafts (2,131) 4,224 (10,531)
Net cash at bank and bank overdraft brought forward 4,999 15,576 15,576
Net (decrease)/increase in cash at bank and bank overdraft (2,131) 4,224 (10,531)
Effect of foreign exchange rate changes 10 (41) (46)
Net cash at bank and bank overdraft carried forward 11 2,878 19,759 4,999
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2021
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 2021 4,517 445 (406) (217) 55 31,751 36,145
Profit for the period - - - - - 4,018 4,018
Exchange differences on retranslation of foreign operations - - - - 10 - 10
Net gain on cash flow hedges - - - 103 - - 103
Tax on derivative financial liability - - - (20) - - (20)
Share based payments - - - - - 50 50
Actuarial gain on defined benefit pension schemes, net of tax - - - - - 616 616
Own shares used to satisfy exercise of share awards - - 402 - - - 402
Acquisition of own shares - - (431) - - - (431)
Exercise of share based incentives - - - - - (331) (331)
Dividends - - - - - (2,233) (2,233)
At 31 December 2021 4,517 445 (435) (134) 65 33,871 38,329
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 2020 4,517 445 (416) 168 101 15,026 19,841
Profit for the period - - - - - 4,356 4,356
Exchange differences on retranslation of foreign operations - - - - (41) - (41)
Net loss on cash flow hedges - - - (370) - - (370)
Tax on derivative financial liability - - - 70 - - 70
Share based payments - - - - - 100 100
Actuarial gain on defined benefit pension schemes, net of tax - - - - - 4,373 4,373
Dividends - - - - - (715) (715)
At 31 December 2020 4,517 445 (416) (132) 60 23,140 27,614
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year to 31 December 2020
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 2021.
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 2021 and in accordance with AIM Rule 18, and the
same accounting policies will be adopted in the 2022 annual financial
statements.
The consolidated financial statements of the Group as at and for the year
ended 30 June 2021 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 2021 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
(http://localhost:49152/NXT/gateway.dll?f=LinkXHitList$LinkXHitList_vpc=first$LinkXHitList_vps=1$LinkXHitList_sel=path$LinkXHitList_xsl=UK_ARO_Querylink.xsl$vid=assursrc:all$bpVID=yes$LinkXHitList_x=Advanced$LinkXHitList_q=%5bfield%20targetid:'UK_XLNUK_HMSO_CA_2006_SECT498'%5d$LinkXHitList_md=targetid=UK_XLNUK_HMSO_CA_2006_SECT498)
(2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements for the half year
ended 31 December 2021 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 2021.
These condensed consolidated interim financial statements were approved by the
Board of Directors on
8 February 2022.
The Group performed ahead of the Base Case trading scenario modelled as part
of the 30 June 2021 year end Going Concern review, and also compared to the
stress testing performed in relation to additional National lockdowns. 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 2021, namely the valuation of
defined benefit pension obligations, the valuation of the Group's acquired
goodwill and the recognition of revenue and profit on contracts with customers
where revenue is recognised over time.
During the six months ended 31 December 2021, management reassessed and
updated its estimates in respect of retirement benefit obligations based on
market data available at 31 December 2021. The resulting impact was a £0.8
million pre-tax actuarial gain, calculated using IAS 19 conventions,
recognised in the six month period to 31 December 2021.
3. Risks and uncertainties
A summary of the Group's principal risks and uncertainties was provided on
pages 46 to 49 of Alumasc's Report and Accounts for the year ended 30 June
2021. 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:
- Continued global economic uncertainty surrounding the Covid-19
pandemic;
- The impact of disruption to our customers' operations from
shortages of building materials, labour and road haulage, and delays in the
global container shipping industry;
- Prolonged period of bad weather impacting the Group's
construction markets; and
- Potential impact of the current geopolitical uncertainty
globally.
4. Underlying to statutory profit reconciliation
Profit before tax Half year to 31 December 2021 Half year to 31 December 2020 Year to 30 June
2021
£'000 £'000 £'000
Underlying profit before tax 5,258 5,952 10,515
Brand amortisation (119) (119) (238)
IAS 19 net pension scheme finance costs (67) (134) (268)
IAS 19 past service cost in respect of GMP equalisation - (150) (150)
Restructuring & relocation costs - (59) (58)
Statutory profit before tax 5,072 5,490 9,801
Operating profit Half year to 31 December 2021 Half year to 31 December 2020 Year to 30 June
2021
£'000 £'000 £'000
Underlying operating profit 5,523 6,203 11,004
Brand amortisation (119) (119) (238)
IAS 19 past service cost in respect of GMP equalisation - (150) (150)
Restructuring & relocation costs - (59) (58)
Statutory operating profit 5,404 5,875 10,558
In the presentation of underlying profits, management treats the amortisation
of acquired brands and IAS 19 pension costs consistently as non-underlying
items because they are material non-cash and non-trading items that typically
would be excluded in assessing the value of the business.
In addition, management presented the following items as non-underlying in the
prior period, as they are non-recurring items that are judged to be
significant enough to affect the understanding of the underlying trading
performance of the business:
- One-off costs of material restructuring and relocation of
separate businesses within the Group in 2020/21;
- One-off IAS 19 past service pension cost relating to Guaranteed
Minimum Pension ("GMP") equalisation between men and women, following a High
Court decision on 20 November 2020; and
- One-off deferred tax rate change adjustment charge of £319k
relating to the increase in main rate of UK corporation tax from 19% to 25%
with effect from 1 April 2023.
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 2021 Half year to 31 December 2020 Year to 30 June
2021
£'000 £'000 £'000
Water Management 22,783 19,160 38,370
Building Envelope 17,817 21,064 41,022
Housebuilding Products 5,669 5,327 11,073
Group Revenue 46,269 45,551 90,465
Operating profit Half year to 31 December 2021 Half year to 31 December 2020 Year to 30 June
2021
£'000 £'000 £'000
Water Management 4,118 3,501 6,115
Building Envelope 881 2,519 4,255
Housebuilding Products 1,096 1,184 2,552
Unallocated central costs (572) (1,001) (1,918)
Underlying operating profit 5,523 6,203 11,004
Non-underlying items (119) (328) (446)
Statutory operating profit 5,404 5,875 10,558
6. Finance expenses
Half year to Half year to Year to
31 December 31 December 30 June
2021 2020 2021
£'000 £'000 £'000
Finance costs - Bank overdrafts 19 8 24
- Revolving credit facility 163 153 287
- Interest on lease 83 90 178
liabilities
265 251 489
- IAS 19 net pension scheme 67 134 268
finance costs
332 385 757
7. Tax expense
Half year to 31 December 2021 Half year to 31 December 2020 Year to 30 June
2021
£'000 £'000 £'000
Current tax:
UK corporation tax 671 652 1,443
Overseas tax 54 29 46
Amounts under provided in previous years - - 23
Total current tax 725 681 1,512
Deferred tax:
Origination and reversal of temporary differences 329 450 405
Amounts under/(over) provided in previous years - 3 (21)
Rate change adjustment - - 319
Total deferred tax 329 453 703
Total tax expense 1,054 1,134 2,215
Deferred tax recognised in other comprehensive income:
Actuarial gains on pension schemes 205 1,026 2,099
Cash flow hedges 20 (70) (90)
Tax charged to other comprehensive income 225 956 2,009
Total tax charge in the statement of comprehensive income 1,279 2,090 4,224
8. Dividends
The Directors have approved an interim dividend per share of 3.35 pence
(2020/21: 3.25 pence) which will be paid on 6 April 2022 to shareholders on
the register at the close of business on 25 February 2022. The cash cost of
the dividend is expected to be £1,202,000. In accordance with accounting
requirements, 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 6.25 pence in respect of the 2020/21
financial year was paid at a cash cost of £2,233,000 during the six months to
31 December 2021.
9. Share Based Payments
During the period the Group awarded 160,000 options (2020/21: 170,000) under
the Executive Share Option Scheme ("ESOS"). These options have an exercise
price of 226 pence and require certain criteria to be fulfilled before
vesting. 78,810 existing options were exercised during the period (2020/21:
none) and 41,190 existing options lapsed (2020/21: 120,000).
Total awards granted under the Group's Long Term Incentive Plans ("LTIP")
amounted to 214,020 (2020/21: 265,760). LTIP awards have no exercise price but
are dependent on certain vesting criteria being met. 228,511 existing LTIP
awards were exercised during the period (2020/21: none) and 109,713 existing
LTIP awards lapsed (2020/21: 257,688).
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 2020 Year to
2021 30 June
2021
£'000 £'000 £'000
Net profit attributable to equity holders of the parent 4,018 4,356 7,586
000s 000s 000s
Basic weighted average number of shares 35,821 35,764 35,766
Dilutive potential ordinary shares - employee share options 549 169 637
Diluted weighted average number of shares 36,370 35,933 36,403
Half year to 31 December Half year to 31 December 2020 Year to
2021 30 June
2021
Pence Pence Pence
Basic earnings per share 11.2 12.2 21.2
Diluted earnings per share 11.0 12.1 20.8
Calculation of underlying earnings per share:
Half year to 31 December Half year to 31 December 2020 Year to
2021 30 June
2021
£'000 £'000 £'000
Reported profit before taxation 5,072 5,490 9,801
Brand amortisation 119 119 238
IAS 19 net pension scheme finance costs 67 134 268
Pension GMP equalisation - 150 150
Restructuring & relocation costs - 59 58
Underlying profit before taxation 5,258 5,952 10,515
Tax at underlying Group tax rate of 19.4% (1,020) (1,167) (2,050)
(2020/21 first half year: 19.6%; full year: 19.5%)
Underlying earnings 4,238 4,785 8,465
Weighted average number of shares 35,821 35,764 35,766
Underlying earnings per share 11.8p 13.4p 23.7p
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 2021 4,999 (5,936) (937) (5,606) (6,543)
Cash flow movements (2,131) (1,000) (3,131) 352 (2,779)
Non-cash movements - (27) (27) (366) (393)
Effect of foreign exchange rates 10 - 10 - 10
At 31 December 2021 2,878 (6,963) (4,085) (5,620) (9,705)
Cash at
bank /bank overdrafts Bank loans Net bank cash/(debt) Lease liabilities Total borrowings
£'000 £'000 £'000 £'000 £'000
At 1 July 2020 15,576 (19,909) (4,333) (5,924) (10,257)
Cash flow movements 4,224 - 4,224 340 4,564
Non-cash movements - (26) (26) - (26)
Effect of foreign exchange rates (41) - (41) - (41)
At 31 December 2020 19,759 (19,935) (176) (5,584) (5,760)
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 2021.
Responsibility Statement
The Directors confirm that, to the best of their knowledge, the condensed
consolidated interim financial statements have been prepared in accordance
with Alternative Investment Market ("AIM") Rule 18.
On behalf of the Board
Paul
Hooper
Simon
Dray
Chief
Executive
Group Finance Director
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BKOBNFBKDPBKRecent news on Alumasc
See all newsREG - Alumasc Group Plc - Holding(s) in Company
AnnouncementREG - Alumasc Group Plc - Director/PDMR Shareholding
AnnouncementREG - Alumasc Group Plc - Director/PDMR Shareholding
AnnouncementREG - Alumasc Group Plc - Interim results
AnnouncementREG - Alumasc Group Plc - Notice of Interim Results
Announcement