REG - Andrews Sykes Group - Half-year Report <Origin Href="QuoteRef">ANSY.L</Origin> - Part 1

Andrews SykesAnnouncement

29/09/2016 07:06

RNS Number : 1396L
Andrews Sykes Group PLC
29 September 2016
Andrews Sykes Group plc
Interim Financial Statements 2016
Summary of results
for the six months ended 30 June 2016

(Unaudited)

6 months ended
30 June 2016
6 months ended
30 June 2015

'000
'000



Revenue from continuing operations
30,287
28,240
EBITDA* from continuing operations
8,799
7,293
Operating profit
6,395
4,973
Inter-company foreign exchange gains and losses
1,062
(355)
Profit for the financial period
6,195
3,732
Basic earnings per share (pence)
14.66p
8.83p
Interim dividends declared per equity share (pence)
11.90p
11.90p
Net funds
15,392
13,505



* Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-recurring items.
For further information please contact:
Andrews Sykes Group plc
Paul Wood, Group Managing Director
Andy Phillips, Group Chief Financial Officer
+44 (0)1902 328700 
GCA Altium (NOMAD)
Paul Lines
Adam Sivner
+44 (0)845 505 4300
Arden Partners plc (Broker)
Steve Douglas
+44 (0) 20 7614 5920


Chairman's Statement
Overview
The group produced a successful result for the first half of 2016, once again the winter months created some good opportunities for our heating and boiler hire products. Overall, the group's revenue for the six months ended 30 June 2016 was 30.3 million, an increase of 2.1 million compared with the same period last year. As a consequence operating profit increased by 1.4 million from 5.0 million in the first half of 2015 to 6.4 million for the six months ended 30 June 2016.
The group continues to be profitable and cash generative. Cash generated from operations was 7.1 million (2015: 5.0 million) and net funds increased by 0.8 million from 14.6 million as at 31 December 2015 to 15.4 million as at 30 June 2016 this was after paying the 2015 final dividend of 11.9 pence per share, or 5.0 million in total, during the period.
Management continue to safeguard the operational structure of the business. Cash spent on new plant and equipment, primarily hire fleet assets, amounted to 2.2 million and a further 0.7 million from stock was also added to the hire fleet. We have continued our policy of pursuing organic growth within our market sectors and start up costs of the new businesses discussed in previous Strategic Reports continue to be expensed as incurred. Continuing investment in both our existing core businesses and the ongoing development of new operations and income streams will ensure that we remain in a strong position and will safeguard profitability into the future.
Operations review
Our main hire and sales business segment in the UK and Europe continued to expand during first half of 2016. Our pumping activity has increased when compared to 2015 and, despite a mild winter, our heating products have maintained revenue levels. Demand for our air conditioning products was in line with previous years. 
Our operations across the Benelux region have continued a strong recovery with growth on last year's performance being recorded. Our recently established businesses in France, Switzerland and Luxembourg continue to trade in line with our expectations.
Andrews Air Conditioning & Refrigeration, our UK air conditioning installation business, produced an operating profit of 0.1 million. 
Khansaheb Sykes, our long established business based in the UAE, had a strong start to the year, with improvements in our traditional pump hire activities. The climate rental division also continues to make a positive contribution. Overall, the operating profit of Khansaheb Sykes was 0.3 million ahead of the same period last year.
Profit for the financial period and Earnings per Share
Profit before tax was 7.5 million (2015: 4.7 million) reflecting both the above 1.4 million increase in operating profit and a significant improvement in net finance income and costs, also of 1.4 million, compared with the same period in 2015. This improvement was primarily due to a net inter-company foreign exchange gain of 1.1 million compared with a loss of 0.3 million in 2015 which in turn was mainly due to the weakening of Sterling.
The total tax charge increased by 0.4 million from 0.9 million for the six months ended 30 June 2015 to 1.3 million for the current six month period. The effective tax rate decreased from 20.2% for the six months ended 30 June 2015 to 17.7% in the current period. The rate for the current period is less than the standard UK corporation tax rate of 20% which is mainly due to (i) the utilisation of off balance sheet overseas tax losses due, in part, to overseas foreign exchange gains and (ii) the effect of profits being made in lower tax regions overseas. A reconciliation of the theoretical corporation tax charge based on the accounts profit multiplied by the UK annualised corporation tax rate of 20% and the actual tax charge is given in note 4 of these interim accounts.
Profit after tax was 6.2 million (2015: 3.7 million) and consequently the basic earnings per share increased by 5.83 pence, or 66%, from 8.83 pence for the first half of 2015 to 14.66 pence for the period under review. There were no share buy-backs in the period.


Dividends
The final dividend of 11.90 pence per ordinary share for the year ended 31 December 2015 was approved by members at the AGM held on 21 June 2016. Accordingly on 24 June 2016 the company made a total dividend payment of 5,029,000 which was paid to shareholders on the register as at 27 May 2016.
The board continues to adopt the policy of returning value to shareholders whenever possible. The group remains profitable, cash generative and financially strong. Accordingly the board has decided to declare an interim dividend for 2016 of 11.90 pence per share which in total amounts to 5,029,000. This will be paid on 2 November 2016 to shareholders on the register as at 7 October 2016. The shares will go ex-dividend on 6 October 2016.
Bank loan agreement
During the period, and in accordance with the agreed repayment profile, the group repaid the third annual instalment of 1 million that was due for payment on 30 April 2016. The remaining loan balance of 5 million is due for repayment in full on 30 April 2017 and therefore this amount has been included within current liabilities as at 30 June 2016. The group intends to finance this loan repayment by a new loan of the same amount and management have already commenced negotiations with the banks to secure this position.
Outlook
Trading in the third quarter to date has continued to be positive. After a slow start to the summer Europe has experienced above average temperatures during September which continue to stimulate high demand for air conditioning products. Once again activity in the Middle East has remained consistent through the summer period, with trading levels ahead of last year in both Sharjah and Abu Dhabi. 
The board remains cautiously optimistic that the group will return an improved performance for the full year. 
JG Murray
Chairman
28 September 2016




Consolidated income statement
for the 6 months ended 30 June 2016 (unaudited)

6 months ended
30 June 
2016
'000

6 months ended
30 June 
2015
'000

 12 months 
 ended 
 31 December 
 2015
 '000
Continuing operations











Revenue
30,287

28,240

60,058
Cost of sales
(12,692)

(12,602)

(25,284)






Gross profit
17,595

15,638

34,774






Distribution costs
(5,772)

(5,343)

(10,828)
Administrative expenses
(5,428)

(5,322)

(10,738)






Operating profit
6,395

4,973

13,208






EBITDA*
Depreciation and impairment losses
Profit on the sale of plant and equipment
8,799
(2,702)
298

7,293
(2,531)
211

17,701
(4,959)
466
Operating profit
6,395

4,973

13,208












Finance income
145

145

280
Finance costs
(73)

(84)

(164)
Intercompany foreign exchange gains and losses
1,062

(355)

43
Profit before taxation
7,529

4,679

13,367






Taxation
(1,334)

(947)

(2,567)






Profit for the financial period
6,195

3,732

10,800






There were no discontinued operations in either of the above periods










Earnings per share from continuing operations










Basic and diluted (pence)
14.66p

8.83p

25.55p






Dividends paid during the period per equity share (pence)
11.90p

11.90p

23.80p






Proposed dividend per equity share (pence)
11.90p

11.90p

11.90p
* Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-
recurring items.


Consolidated balance sheet
as at 30 June 2016 (unaudited)



30 June 2016

30 June 2015

31 December 2015



 '000

 '000

 '000
Non-current assets







Property, plant and equipment


18,604

16,187

17,750
Lease prepayments


49

51

50
Trade investments


164

164

164
Deferred tax asset


482

495

282
Retirement benefit pension surplus


1,512

1,695

2,443



20,811

18,592

20,689








Current assets







Stocks


5,709

5,002

4,199
Trade and other receivables


16,052

15,031

16,584
Overseas tax (denominated in Euros)


-

195

17
Cash and cash equivalents


20,590

19,697

20,715



42,351

39,925

41,515








Current liabilities







Trade and other payables


(11,414)

(10,716)

(11,090)
Current tax liabilities


(1,345)

(1,149)

(1,306)
Overseas tax (denominated in euros)


(44)

-

-
Bank loans


(4,985)

(980)

(980)
Obligations under finance leases


(129)

(101)

(101)
Provisions


-

(2)

-



(17,917)

(12,948)

(13,477)








Net current assets


24,434

26,977

28,038








Total assets less current liabilities


45,245

45,569

48,727








Non-current liabilities







Bank loans


-

(4,985)

(4,995)
Obligations under finance leases


(84)

(126)

(81)



(84)

(5,111)

(5,076)








Net assets


45,161

40,458

43,651








Equity







Called-up share capital


423

423

423
Share premium


13

13

13
Retained earnings


41,096

38,331

40,987
Translation reserve


3,374

1,436

1,973
Other reserves


245

245

245








Surplus attributable to equity holders of the parent
45,151

 40,448

43,641








Minority interest


10

10

10








Total equity


45,161

40,458

43,651


Consolidated cash flow statement
for the six months ended 30 June 2016 (unaudited)

6 months 
 ended 
 30 June 
 2016

 6 months 
 ended 
 30 June 
 2015
 12 months 
 ended 
 31 December 
 2015

 '000

 '000

 '000
Cash flows from operating activities





Cash generated from operations
7,111

4,996

14,623
Interest paid
(66)

(86)

(155)
Net UK corporation tax paid
(941)

(951)

(1,881)
Overseas tax paid
(263)

(190)

(463)






Net cash inflow from operating activities 
5,841

3,769

12,124






Investing activities





Sale of property, plant and equipment
415

335

711
Purchase of property, plant and equipment
(2,237)

(1,711)

(5,234)
Interest received
124

100

197
Net cash outflow from investing activities
(1,698)

(1,276)

(4,326)






Financing activities





Loan repayments
(1,000)

(1,000)

(1,000)
Finance lease capital repayments
(53)

(49)

(94)
Equity dividends paid
(5,029)

(5,029)

(10,058)
Net cash outflow from financing activities
(6,082)

(6,078)

(11,152)






Net decrease in cash and cash equivalents
(1,939)

(3,585)

(3,354)






Cash and cash equivalents at the beginning of the period
20,715

24,077

24,077
Effect of foreign exchange rate changes
1,814

(795)

(8)






Cash and cash equivalents at end of the period
20,590

19,697

20,715





Reconciliation of net cash flow to movement in net funds in the period








Net decrease in cash and cash equivalents
(1,939)

(3,585)

(3,354)
Net cash outflow from the decrease in debt
1,053

1,049

1,094
Non-cash movement re the new financial leases
(84)

-

-
Non-cash movements re costs of raising loan finance 
(10)

(10)

(20)
Decrease in net funds during the period
(980)

(2,546)

(2,280)
Opening net funds at the beginning of the period
14,558

16,846

16,846
Effect of foreign exchange rate changes
1,814

(795)

(8)
Closing net funds at the end of the period
15,392

13,505

14,558








Consolidated statement of comprehensive total income (CSOCTI)
for the six months ended 30 June 2016 (unaudited)

6 months 
ended
30 June
2016
6 months 
ended
30 June
2015
12 months 
ended
31 December
2015

'000
'000
'000




Profit for the financial period
6,195
3,732
10,800

 
 
 
Other comprehensive income/ (charges): 







Items that may be reclassified to profit and loss:



Currency translation differences on foreign currency net investments
1,401
(712)
(175)




Items that will never be reclassified to profit and loss:



Remeasurement of defined benefit liabilities and assets
(1,305)
416
1,157
Related deferred tax
248
(83)
(207)

 
 
 
Other comprehensive income/(charges) for the period net of tax
344
(379)
775

 
 
 
Total comprehensive income for the period
6,539
3,353
11,575

 
 
 


Notes to the consolidated interim financial statements
for the six months ended 30 June 2016
1 General information
Basis of preparation 
These interim financial statements have been prepared in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Companies Act 2006.
The information for the 12 months ended 31 December 2015 does not constitute the group's statutory accounts for 2015 as defined in Section 434 of the Companies Act 2006. Statutory accounts for 2015 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. These interim financial statements, which were approved by the Board of Directors on 28 September 2016, have not been audited or reviewed by the auditors.
The interim financial statement has been prepared using the historical cost basis of accounting except for:
(i) properties held at the date of transition to IFRS which are stated at deemed cost;
(ii) assets held for sale which are stated at the lower of fair value less anticipated disposal costs and carrying value; and
(iii) derivative financial instruments (including embedded derivatives) which are valued at fair value.
Functional and presentational currency
The financial statements are presented in pounds Sterling because that is the functional currency of the primary economic environment in which the group operates.
2 Accounting policies
These interim financial statements have been prepared on a consistent basis and in accordance with the accounting policies set out in the group's Annual Report and Financial Statements 2015.
3 Revenue
An analysis of the group's revenue is as follows:

6 months 
ended 
30 June 
2016 
'000

6 months 
ended 
30 June 
2015
'000

12 months 
ended 
31 December
2015 
'000
Continuing operations





Hire
25,450

22,996

49,910
Sales
2,806

3,186

5,993
Installations
2,031

2,058

4,155






Group consolidated revenue from the sale of goods and provision
of services
30,287

28,240

60,058
The geographical analysis of the group's revenue by origination is:

6 months 
ended
30 June 
 2016

6 months
ended 
30 June 
2015

12 months 
ended
31 December
2015

 '000

'000

'000






United Kingdom
20,172

19,239

39,830
Rest of Europe
4,787

3,989

9,925
Middle East and Africa
5,329

5,012

10,303







30,288

28,240

60,058


4 Taxation

6 months 
ended
30 June 
 2016

6 months
ended 
30 June 
2015

12 months 
ended
31 December
2015

 '000

'000

'000
Current tax





UK corporation tax at 20% (30 June 2015 and 31 December 2015: 20.25%)
980

779

2,043
Adjustments in respect of prior periods
-

-

(177)

980

779
 
1,866
Overseas tax
299

120

536
Adjustments to overseas tax in respect of prior periods
7

-

28
Total current tax charge
1,286

899

2,430






Deferred tax 





Deferred tax on the origination and reversal of temporary differences
48

48

12
Adjustments in respect of prior periods
-

-

125
Total deferred tax charge
48

48

137






Total tax charge for the financial period attributable to
continuing operations
1,334

947

2,567
The tax charge for the financial period can be reconciled to the profit before tax per the income statement multiplied by the effective standard annualised corporation tax rate in the UK of 20% (30 June 2015 and 31 December 2015:20.25%) as follows:

6 months 
ended
30 June 
2016

6 months 
ended
30 June 
2015

12 months 
ended
31 December
2015

'000

'000

 '000






Profit before taxation from continuing and total operations
7,529

4,679

13,367






Tax at the UK effective annualised corporation tax rate of 20%
 (30 June 2015 and 31 December 2015: 20.25%)
1,506

947

2,707
Effects of:





Expenses not deductible for tax purposes
45

58

86
Movement in overseas trading losses
(46)

122

88
Effect of different tax rates of subsidiaries operating abroad 
(175)

(180)

(331)
Effect of change in rate of corporation tax
(3)

-

41
Adjustments to tax charge in respect of previous periods
7

-

(24)
Total tax charge for the financial period
1,334

947

2,567






The total effective tax charge for the financial period represents the best estimate of the weighted average annual effective tax rate expected for the full financial year applying tax rates that have been substantively enacted by the balance sheet date. Accordingly UK corporation tax has been provided at 20%; the reduction to 20% for the tax years ending 31 March 2016 and 31 March 2017 having been substantially enacted on 2 July 2013. UK deferred tax has been provided at 19% being the rate substantially enacted at the balance sheet date at which the timing differences are expected to reverse.


5 Earnings per share
Basic earnings per share
The basic figures have been calculated by reference to the weighted average number of ordinary shares in issue and the earnings as set out below. There are no discontinued operations in any period.

6 months ended 30 June 2016

Continuing
earnings
Number of
Shares

'000




Basic earnings/weighted average number of shares
6,195
42,262,082



Basic earnings per ordinary share (pence)
14.66p





6 months ended 30 June 2015

Continuing
earnings
Number of
shares

'000




Basic earnings/weighted average number of shares
3,732
42,262,082



Basic earnings per ordinary share (pence)
8.83p





 12 months ended 31 December 2015

Continuing
earnings
Number of
shares

'000




Basic earnings/weighted average number of shares
10,800
42,262,082



Basic earnings per ordinary share (pence)
25.55p

Diluted earnings per share
There were no dilutive instruments outstanding at 30 June 2016 or either of the comparative periods and, therefore, there is no difference in the basic and diluted earnings per share for any of these periods. There were no discontinued operations in any period.


6 Dividend payments
Dividends declared and paid on ordinary one pence shares during the 6 months ended 30 June 2016 were as follows:

Paid during the 6 months ended 30 June 2016

Pence per share
Total dividend
paid


'000



Final dividend for the year ended 31 December 2015 paid to members on the register on 27 May 2016 on 24 June 2016
11.90p
5,029



The above dividend was charged against reserves during the 6 months ended 30 June 2016.
On 28 September 2016 the directors declared an interim dividend of 11.90 pence per ordinary share which in total amounts to 5,029,000. This will be paid on 2 November 2016 to shareholders on the register on 7 October 2016 and will be charged against reserves in the second half of 2016.
Dividends declared and paid on ordinary one pence shares during the 6 months ended 30 June 2015 were as follows:

Paid during the 6 months ended 30 June 2015

Pence per share
Total dividend
declared


'000



Final dividend for the year ended 31 December 2014 paid to members on the register on 29 May 2015 on 19 June 2015 
11.90p
5,029



The above dividend was charged against reserves during the 6 months ended 30 June 2015.
Dividends declared and paid on ordinary one pence shares during the 12 month period ended 31 December 2015 were as follows:

Paid during the 12 months ended 
31 December 2015

Pence per share
Total dividend
paid


'000



Final dividend for the year ended 31 December 2014 paid to members on the register on 29 May 2015 on 19 June 2015 
11.90p
5,029
Interim dividend declared on 29 September 2015 and paid to shareholders on the register as at 9 October 2015 on 4 November 2015
11.90p
5,029

23.80p
10,058
The above dividends were charged against reserves during the 12 months ended 31 December 2015.


7 Retirement benefit obligations - Defined benefit pension scheme
The group closed the UK group defined benefit pension scheme to future accrual as at 29 December 2002. The assets of the defined benefit pension scheme continue to be held in a separate trustee administered fund.
As at 30 June 2016 the group had a net defined benefit pension scheme surplus, calculated in accordance with IAS 19 (revised) using the assumptions as set out below, of 1,512,000 (30 June 2015: 1,695,000; 31 December 2015: 2,443,000). The asset has been recognised in the financial statements as the directors are satisfied that it is recoverable in accordance with IFRIC 14.
Following the triennial recalculation of the funding deficit as at 31 December 2013 a revised schedule of contributions and recovery plan was agreed with the pension scheme trustees in June 2014. In accordance with this schedule of contributions, which is effective from 1 January 2014, the group made additional contributions in 2014 to remove the funding deficit calculated as at 31 December 2013 and this has now been eliminated. Throughout 2015 and 2016 to date the group has continued to make a contribution towards expenses of 10,000 per month. In addition the group made an additional voluntary contribution of 32,000 per month from January 2016 and this was increased to 80,000 per month from April 2016. The group expects to continue to make the current level of contributions until 31 March 2017 at which time they will cease pending a review of the position in conjunction with the December 2016 triennial funding valuation. 
Assumptions used to calculate the scheme surplus
A qualified independent actuary has updated the results of the December 2013 full actuarial valuation to calculate the surplus as disclosed below.
The major assumptions used to determine the present value of the scheme's defined benefit obligation were:

30 June 
2016
30 June
2015
31 December
2015
Rate of increase in pensionable salaries
Rate of increase in pensions in payment
Discount rate applied to scheme liabilities
Inflation assumption - RPI
Inflation assumption - CPI 
Percentage of members taking maximum tax free lump sum on retirement
N/A
2.90%
2.80%
2.90%
1.90%
90%
N/A
3.10%
3.60%
3.20%
2.20%
 
90%
N/A
3.00%
3.70%
3.00%
2.00%
90%
From 1 January 2011, the government amended the basis for statutory increases to deferred pensions and pensions in payment. Such increases are now based on inflation measured by the Consumer Price Index (CPI) rather than the Retail Price Index (RPI). Having reviewed the scheme rules and considered the impact of the change on this pension scheme, the directors consider that future increases to (i) all deferred pensions and (ii) Guaranteed Minimum Pensions accrued between 6 April 1988 and 5 April 1997 and currently in payment will be based on CPI rather than RPI. Accordingly, this assumption was adopted as at 31 December 2010 and subsequently.
Assumptions regarding future mortality experience are set based on advice in accordance with published statistics. The mortality table used at 30 June 2016 is 110% S2NA CMI2015 (30 June 2015: 110% S1NA CMI2014; 31 December 2015: 110% S2NA CMI2015) with a 1% per annum long term improvement for both males and females (30 June 2015: 1% males and females; 31 December 2015: 1% males and females).
The assumed average life expectancy in years of a pensioner retiring at the age of 65 given by the above tables is as follows:

30 June 
2016
30 June
2015
31 December
2015




Male, current age 45
Female, current age 45
22.6 years
24.9 years
22.5 years
25.2 years
22.6 years
24.9 years


Valuations
The fair value of the scheme's assets, which are not intended to be realised in the short term and may be subject to significant change before they are realised, and the present value of the scheme's liabilities, which are derived from cash flow projections over long periods and are inherently uncertain, were as follows:

30 June 
2016
'000

30 June
2015
'000

31 December
2015
'000






Total fair value of plan assets
40,768

38,385

37,734
Present value of defined benefit funded obligation calculated in
accordance with stated assumptions
(39,256)

(36,690)

(35,291)
Surplus in the scheme calculated in accordance with stated
assumptions recognised in the balance sheet
1,512

1,695

2,443
The movement in the fair value of the scheme's assets during the period was as follows: 

30 June
2016
 '000

30 June
2015
 '000

31 December
2015
'000






Fair value of plan assets at the start of the period
37,734

38,864

38,864
Expected return on pension scheme assets
688

649

1,298
Actual return less expected return on pension scheme assets
2,737

(359)

(895)
Employer contributions - normal 
396

60

120
Benefits paid 
(717)

(774)

(1,521)
Administration expenses charged in the income statement 
(70)

(55)

(132)
 





Fair value of plan assets at the end of the period
40,768

38,385

37,734






The movement in the present value of the defined benefit obligation during the period was as follows:

30 June 
2016

30 June 
2015

31 December 2015

'000

'000

'000






Present value of defined benefit funded at the beginning of the period
(35,291)

(37,611)

(37,611)
Interest on defined benefit obligation
(640)

(628)

(1,253)
Actuarial (loss) / gain recognised in the CSOCTI calculated in
accordance with stated assumptions
(4,042)

775

2,052
Benefits paid
717

774

1,521






Closing present value of defined benefit funded obligation calculated
in accordance with stated assumptions
(39,256)

(36,690)

(35,291)








Amounts recognised in the income statement
The amounts (charged) / credited in the income statement were:

 30 June
 2016

 30 June
 2015

31 December
 2015

 '000

 '000

 '000






Expected return on pension scheme assets 
688

649

1,298
Interest on pension scheme liabilities 
(640)

(628)

(1,253)
Net pension interest credit included within finance income 
48

21

45
Scheme administration expenses
(70)

(55)

(132)
Net pension charge in the income statement
(22)

(34)

(87)






Actuarial gains and losses recognised in the consolidated statement of comprehensive total income (CSOCTI)
The amounts (charged) / credited in the CSOCTI were:

30 June
2016

30 June
 2015

31 December
2015

 '000

 '000
 
 '000






Actual return less expected return on pension scheme assets
2,737

(359)

(895)
Experience gains and losses arising on plan obligation
281

123

371
Changes in demographic and financial assumptions underlying the
present value of plan obligations
(4,323)

652

1,681
Actuarial (loss) / gain calculated in accordance with stated assumptions
recognised in the CSOCTI
(1,305)

416

1,157






8 Called up share capital

30 June
2016

30 June
2015

31 December
2015

 '000

 '000

 '000
Issued and fully paid:





42,262,082 ordinary shares of one pence each (30 June 2015 and 31 December 2015: 42,262,082 ordinary shares of one pence each)
 423

 423

 423






The company did not buy back any shares for cancellation during the 6 months ended 30 June 2016 or either of the comparative periods. The company did not issue any shares in the period or either of the comparative periods. No share options were granted, forfeited or expired during any of the periods and there were no share options outstanding at any period end.
The company has one class of ordinary shares which carry no right to fixed income.


9 Cash generated from operations

6 months 
ended 
30 June 
2016

6 months
ended 
30 June 
2015

12 months 
ended 
31 December 2015

'000

'000

'000






Profit for the period attributable to equity shareholders
6,195

3,732

10,800
Adjustments for:





Taxation charge
1,334

947

2,567
Finance costs
1,135

84

164
Finance income
(1,207)

(145)

(280)
Inter-company foreign exchange gains and losses
(1,062)

355

(43)
Profit on the sale of property, plant and equipment
(298)

(211)

(466)
Depreciation
2,702

2,531

4,959






EBITDA*
8,799

7,293

17,701






Excess of normal pension contributions compared with service and 
administration expenses
(326)
(5)

12
Workings capital movements:





Stocks
(2,195)

(1,389)

(1,024)
Trade and other receivables 
508

(660)

(2,196)
Trade and other payables
325

(236)

139
Provisions
-

(7)

(9)






Cash generated from operations
7,111

4,996

14,623






* Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-recurring items.
10 Analysis of net funds

30 June
2016

30 June
2015

31 December
2015

'000

 '000

 '000






Cash and cash equivalents per cash flow statement
20,590

19,697

20,715






Bank loans
(4,985)

(5,965)

(5,975)
Obligations under finance leases
(213)

(227)

(182)
Gross debt
(5,198)

(6,192)

(6,157)
Net funds
15,392

13,505

14,558


11 Adoption of Financial Reporting Standards (FRS) 101 and 102 - Reduced disclosure framework for parent and UK subsidiary company accounts
The group's consolidated financial statements for the year ended 31 December 2016 will continue to be prepared in accordance with European Union endorsed International Financial Reporting Standards (IFRSs) on a consistent basis with the previous financial year.
Last year, the parent company accounts of Andrews Sykes Group plc were prepared in accordance with FRS 102 and the company elected to take advantage of the reduced disclosure framework permitted by paragraph 1.12 of that standard. The company intends to continue to take advantage of the reduced disclosure framework again this year. Paragraph 1.11 requires the company to give shareholders the opportunity to object to the adoption of the reduced disclosure framework within a reasonable specified timeframe. Accordingly any shareholder wishing to object to the adoption of the reduced disclosure framework set out in paragraph 1.12 of FRS 102 for the parent company accounts of Andrews Sykes Group plc should write to the Company Secretary at the company's registered office no later than 30 November 2016 setting out the reasons for any objection. Any letter received after that date will not be valid.
The group's UK subsidiary companies' accounts for the year ended 31 December 2016 will continue to be prepared in accordance with the reduced disclosure framework of either FRS 101 or FRS 102 depending upon the circumstances relevant to each subsidiary. 
12 Distribution of interim financial statements
Following a change in regulations in 2008, the company is no longer required to circulate this half year report to shareholders. This enables us to reduce costs associated with printing and mailing and to minimise the impact of these activities on the environment. A copy of the interim financial statements is available on the company's website, www.andrews-sykes.com.

This information is provided by RNS
The company news service from the London Stock Exchange
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IR DVLFLQKFFBBF