REG - Assoc British Enging - Half-year Report
27/05/2022 10:15
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RNS Number : 0774N Associated British Engineering PLC 27 May 2022
ASSOCIATED BRITISH ENGINEERING PLC
INTERIM REPORT
FOR THE SIX MONTHS ENDED
31 MARCH 2022
ASSOCIATED BRITISH ENGINEERING PLC
INTERIM REPORT
FOR THE SIX MONTHS ENDED 31 MARCH 2022
CONTENTS PAGE
Chairman's statement 1
Responsibility statement 2
Group income statement 3
Group statement of comprehensive income 4
Group interim balance sheet 5
Group interim statement of changes in shareholders' equity 6
Group interim cash flow statement 7 - 8
Notes to the interim report 9 - 15
ASSOCIATED BRITISH ENGINEERING PLC
CHAIRMAN'S STATEMENT
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2022
SUMMARY OF RESULTS Six months to Six months to
31 March 31 March
2022 2021
£'000 £'000
Revenue - -
Loss before tax (14) (49)
Earnings per share
Basic (0.7p) (2.3p)
Diluted (0.7p) (2.3p)
You will see from our financial numbers and balance sheet that in the period
there was a loss of £29k that covered company expenses before an unrealised
foreign exchange gain on US dollar cash balances held of £15k.
The investments had gained in value during the first six months of 2021, but
fell back in the seconds half of 2021 and the beginning of 2022. The Company
started the process of realising its investments in early 2021. It is expected
that these and any future capital gains will be tax free due to inherited
capital gains tax losses so no provision has been made for any tax payments.
The Board will take the opportunity to liquidate investments and invest for
future growth when suitable opportunities occur.
Your Company is now in a position to talk to potential acquisitions without
having to consider the impact of the pension fund and related historical
deficits. The Board is now committed to using all its efforts to identifying
and acquiring a new business with growth potential and hopefully showing
profits for our group and a financial return for our patient shareholders.
The Board continues to review options for the future development of the Group.
Rupert Pearce Gould and Colin Weinberg
Chairmen
26 May 2022
1
ASSOCIATED BRITISH ENGINEERING PLC
RESPONSIBILITY STATEMENT
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2022
The Directors of the Company confirm to the best of their knowledge that:
a) the Interim Report has been prepared in accordance with IAS 34;
b) the Interim Report includes a fair view of the information required by
DTR 4.2.7R, being an indication of the important events that have occurred
during the first six months of the financial year and a description of the
principal risks and uncertainties for the remaining six months of the year;
and
c) the Interim Report includes a fair review of the information required
by DTR 4.2.8R, being disclosure of related party transactions that have taken
place in the first six months of the current financial year and that have
materially affected the financial position or performance of the group during
that period; and any changes in the related party transactions described in
the latest annual financial statements that could do so.
By order of the Board
Rupert Pearce Gould and Colin Weinberg
Chairmen
26 May 2022
2
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2022
Six months to Six months to
31 March 31 March
2022 2021
£'000 £'000
REVENUE - -
Operating costs (29) (50)
OPERATING LOSS (29) (50)
Other income - 1
Unrealised gain in value of US dollar balance 15 -
LOSS BEFORE TAXATION (14) (49)
Taxation - -
LOSS FOR THE PERIOD FROM CONTINUOUS OPERATIONS
(14) (49)
TOTAL LOSS FOR THE PERIOD (14) (49)
LOSS PER SHARE ON LOSS FOR THE PERIOD ATTRIBUATABLE TO EQUITY HOLDERS OF THE (0.7p) (2.3p)
PARENT COMPANY
Loss for the period attributable to:
Owners of the company (14) (49)
(14) (49)
3
ASSOCIATED BRITISH ENGINEERING PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 MARCH 2022
Six months to Six months to
31 March 2022 31 March
2021
£'000 £'000
Loss for the period (14) (49)
Other comprehensive income
Gain on available for sale financial asset
Gains released to Retained Earnings (265) 143
Unrealised gains (*) - 373
Other comprehensive income for the period (265) 516
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (279) 467
Total comprehensive income attributable to:
Owners of the Company (279) 467
Non-controlling interests - -
(279) 467
(*) = Items which may subsequently be reclassified to the Income Statement.
All activities are classified as continuing.
4
ASSOCIATED BRITISH ENGINEERING PLC
Company Number: 00110663
GROUP INTERIM BALANCE SHEET
AS AT 31 MARCH 2022
At At
31 March 31 March
2022 2021
£'000 £'000
ASSETS
Non-current assets
Available for sale financial assets 154 622
154 622
Current assets
Trade and other receivables 21 99
Cash and cash equivalents 470 383
491 482
Total assets 645 1,104
EQUITY AND LIABILITIES
Called up share capital 51 51
Deferred shares 2,594 2,594
Share premium account 5,370 5,370
Other components of equity 11 11
Fair value reserve 95 558
Revaluation reserve 15 -
Retained earnings (7,526) (7,526)
Equity attributable to the Company's Equity Shareholders
610 1,058
Non-controlling interests - -
610 1,058
LIABILITIES
Non-current liabilities - -
- -
Current liabilities
Trade and other payables 35 46
35 46
Total liabilities 35 46
Total equity and liabilities 645 1,104
5
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 MARCH 2022
Available
for sale Unrealised exchange Attributable to owners
Share Share Premium Deferred Shares Other Reserve Financial rate Retained Earnings of parent
Capital assets reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2021 51 5,370 2,594 11 558 - (7,526) 1,058 1,058
Profit for the period - - - - - - (38) (38) (38)
Other comprehensive income
Unrealised gain on Available
For Sale Financial Assets (*) - - - - (131) - (131) (131)
Realised gain on Available
For Sale Financial Assets - - - - (67) 67 - -
Balance at 1 October 2021 51 5,370 2,594 11 360 - (7,497) 889 889
Loss for the period - - - - - - (29) (29) (29)
Other comprehensive income
Realised gain on Available
For Sale Financial Assets
Fair Value adjustments - - - - (265) (265) (265)
Realised gains - - - - - -
Exchange rate gain on US $ - - - - - 15 - 15 15
Balance at 31 March 2022 51 5,370 2,594 11 95 15 (7,526) 610 610
6
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INTERIM CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2022
Six months to Six months to
31 March 2022 31 March
2021
£'000 £'000
Cash flows from operating activities
Cash used in operations (19) (110)
Taxation - -
Net cash used in operating activities (19) (110)
Cash flows from investing activities
Sale proceeds of investments held for sale - 307
Net cash used in investing activities - 307
Net (decrease)/increase in cash and cash equivalents (19) 197
Cash and cash equivalents at beginning of period 489 186
Cash and cash equivalents at end of period 470 383
7
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INTERIM CASH FLOW STATEMENT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
CASH FLOW FROM OPERATING ACTIVITIES Six months to Six months to
31 March 2022 31 March 2021
£'000 £'000
Loss before taxation (29) (49)
Adjustments for:
Unrealised foreign exchange gain 15 -
Changes in working capital:
Increase in trade and other receivables - (75)
(Decrease)/increase in payables (5) 14
(19) (110)
Taxes paid - -
Cash used in operations (19) (110)
8
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 31 MARCH 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company is incorporated in the United Kingdom under the Companies Act
2006.
This unaudited Group Interim Report has been prepared in accordance with IAS
34 Interim Financial Reporting and the disclosure requirements of the Listing
Rules. The policies set out below have been consistently applied to all
periods presented.
This Group Interim Report is not audited.
These financial statements are for the period 1 October 2021 to 31 March 2022.
The results for the period ended 30 September 2021 have been extracted from
the statutory consolidated financial statements of Associated British
Engineering Plc, which are prepared in accordance with IFRS, as adopted by the
EU.
NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
The following standards and amendments to existing standards became effective
from 1 January 2021 and are applicable for the current reporting period:
· Amendments to IAS 1, Presentation of Financial Statements. The
amendments clarify the basis used for the classification of current and
non-current liabilities.
· Amendments to IAS 8, Accounting policies, Changes in Accounting
Estimates and Errors. The amendments introduce the definition of an accounting
estimate and include other amendments to IAS 8 to distinguish changes in
accounting estimates from changes in accounting policies.
· Amendments to IAS 37, Provisions, Contingent Liabilities and
Contingent Assets. The amendments clarify the costs that should be included
when assessing whether a contract is onerous.
The adoption of the above new and revised standards had no impact on the
financial statements of the Group for the period ended 31 March 2022.
The following amendments to existing standards have been issued, but will
become effective for annual periods beginning on or after 1 January 2022.
· IFRS 1, IFRS 9, IFRS 16 and IAS 41 Annual Improvements to
IFRS Standards 2018-2020
· IAS 1 Disclosure of Accounting policies
· IAS 8 Definition of Accounting Estimates
· IAS 12 Deferred Tax related to Assets and Liabilities arising
from a single transaction
9
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
GOING CONCERN
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairmen's
statement on page 1. The financial position of the Group, its cash flows and
liquidity position are described in the financial statements.
The Company has sufficient financial resources. As a consequence, the
Directors believe the Company is well placed to manage its business risks
successfully, including the impact of Covid-19 and Brexit. The Directors
regularly review the forecasts.
In accordance with their responsibilities, the Directors of the company have
considered the appropriateness of the going concern basis, which has been used
in the preparation of these financial statements. The Directors have prepared
trading and cash flow forecasts for the Company, which takes into account the
future performance of the Company and consider the impact of the Covid-19
pandemic. The forecasts, including allowance for reasonable changes in trading
performance indicate that the Company should be able to operate for at least
12 months from the approval of these financial statements.
The forecasts for the 12 months from approval of these financial statements
have been considered. As a result of the above assessment, the Directors have
a reasonable expectation that the Company has adequate resources to continue
in operational existence for a minimum period of 12 months from the date of
signing these financial statements. Thus, they are adopting the going concern
basis in preparing the annual financial statements.
BASIS OF CONSOLIDATION
The Group Interim Report incorporates the financial statements of Associated
British Engineering Plc and its subsidiary undertakings for the six months to
31 March 2022. All inter-company balances and transactions have been
eliminated in full. The Group Interim Report includes the results of
subsidiaries acquired or disposed of during the year from or to the effective
date of acquisition or disposal.
A subsidiary is an entity controlled, either directly or indirectly, by
the Company, where control is the power to govern the financial and
operating policies of the entity so as to obtain benefit from its activities.
The acquisition method of accounting is used to account for acquisition of
subsidiaries by the Group. The cost on an acquisition is measured as the
fair value of the assets given, equity instruments issued, and liabilities
incurred or assumed at the date of exchange. Acquisition costs are expensed in
the consolidated income statement for the period in which they are incurred.
The consolidated financial statements consist of the results of the
following entities:
Entity
Summary
Description
Associated British Engineering Plc (ABE)
Holding Company
Akoris Trading Ltd (AT)
Trading Company
REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration receivable by the
Group for goods supplied and services provided, excluding value added tax and
trade discounts.
10
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ACCOUNTING ESTIMATES AND JUDGEMENTS
Management are required, in accordance with IFRS, to exercise judgement and to
make estimates and assumptions regarding the application of accounting
policies and the resulting effect on reported amounts of assets, liabilities,
income, and expenses. These estimates and assumptions are based on historical
experience and a review of current conditions prevailing at the time but
actual results may differ from these estimates. Any such revision is
recognised in the financial statements in the period in which the change in
circumstance is detected.
Accounting Judgements
The key areas where management have exercised judgement in the period, and the
thought process undertaken, are as follows:
Deferred taxation
Judgement is applied by management in determining the extent to which the
recovery of carried forward tax losses is probable for the purpose of meeting
the criteria for recognition as deferred tax assets.
TAXATION
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax payable is based on the taxable profit or loss for the period.
Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other periods and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. The deferred tax is
not accounted for if it arises from initial recognition of an asset or
liability in a transaction, other than a business combination, that at the
time of the transaction affects neither accounting nor taxable profit nor
loss. Deferred tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the balance sheet date and are expected to
apply when the related deferred tax asset is realised or the deferred tax
liability is settled.
Deferred tax is provided on temporary differences arising on investments in
subsidiaries, except where the timing of reversal of the temporary differences
is controlled by the Group and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets are recognised
to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
FOREIGN CURRENCIES
The functional and presentational currency of the parent company and its
subsidiaries is UK Pound Sterling, rounded to the nearest thousand.
Transactions in currencies other than the functional currency are translated
at the rate ruling at the date of the transaction. At each balance sheet date,
monetary assets and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the balance sheet date. Any gains
or losses arising are taken to the income statement.
11
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, demand deposits, and other
short-term highly liquid investments that have maturities of three months or
less from inception, are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value.
FINANCIAL INSTRUMENTS
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into.
Where the contractual obligations of financial instruments (including share
capital) are equivalent to a similar debt instrument, those financial
instruments are classed as financial liabilities and are presented as such in
the balance sheet. Finance costs and gains or losses relating to financial
liabilities are included in the income statement. Finance costs are
calculated so as to produce a constant rate of charge on the outstanding
liability. Where none of the contractual terms of share capital meet the
definition of a financial liability then this is classed as an equity
instrument. Dividends and distributions relating to equity instruments are
debited direct to equity.
Trade and other receivables
Trade and other receivables are originally recognised at fair value.
Subsequent measurement is at amortised cost using the effective interest rate
method. A provision against trade receivables is made when there is objective
evidence that the group will not be able to collect all amounts due to it in
accordance with the original terms of those receivables.
Trade and other payables
Trade and other payables are originally recognised at fair value, net of
transaction costs. Subsequent measurement is at amortised cost using the
effective interest rate method.
Investments in securities
Investments are recognised and derecognised on a trade date where a purchase
or sale of an investment is under a contract whose terms require delivery of
the investment within the timeframe established by the market concerned, and
are initially measured at fair value, with all transaction costs being written
off to the income statement as incurred. Investments are classified as
available for sale and are measured at subsequent reporting dates at fair
value. Gains and losses arising from changes in fair value of available for
sale financial assets are included in other comprehensive income for the
period. When the asset is disposed of or deemed to be impaired, the cumulative
gain or loss is
reclassified from equity reserve to income statement.
EQUITY AND RESERVES
Share capital represents the nominal value of shares that have been issued
except for the preference shares classified as debt. Deferred shares represent
shares arising from the sub-division of ordinary shares of £2.
Share premium includes any premiums received on issue of share capital.
Any transaction costs associated with the issuing of shares are deducted from
share premium, net of any related income tax benefits. Retained earnings
include all current and prior period retained profits and losses. Available
for sale reserve includes all gains and losses relating to Available for Sale
financial assets. Other reserves relate to movements not classified in any of
the reserves detailed above. Revaluation reserve includes all gains and losses
relating to Property, Plant and Equipment. All transactions with owners of the
parent are recorded separately within equity.
12
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLOICIES (continued)
SEGMENTAL REPORTING
The standard requires financial information to be disclosed in the
financial statements in the same format in which it is disclosed to the chief
operating decision-maker. The chief decision-maker has been identified as the
Board, at which level strategic decisions are made.
2. SEGMENTAL ANALYSIS
Six months to Six months to
31 March 2022 31 March
2021
£'000 £'000
United Kingdom - -
- -
All revenue originates in the United Kingdom.
In the periods ended 31 March 2022 and 31 March 2021, save for dollar bank
accounts, all of the assets held by the Group were located in the United
Kingdom and all capital expenditure was incurred within the United Kingdom
Operating segments
The following segment information has been prepared in accordance with IFRS 8,
"Operating Segments", which defines requirements for the disclosure of
financial information of an entity's operating segments.
The Board consider the Group on an individual company basis. Reports by
individual companies are used by the chief decision-maker in the Group.
Significant operating segments are Associated British Engineering Plc and
Akoris Trading Limited.
The Group's operations are located in the United Kingdom. Any transactions
between business units are on normal commercial terms and conditions.
Akoris Trading Limited is a commodity and natural resource trading, finance
and investment company.Associated British Engineering Plc is the Group's
holding company.
13
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
2. SEGMENTAL ANALYSIS (continued)
Associated British Engineering Plc
Akoris Trading Ltd
Consolidated
£'000 £'000
Six months to 31 March 2022
External sales - - -
Segment result (LBIT) (14) - (14)
Net finance expense -
Taxation -
Loss after tax (14)
Other information
Capital additions - - -
Balance sheet
Segment assets 617 28 645
Six months to 30 September 2021
External sales - - -
Segment result (LBIT) (37) (1) (38)
Net finance expenses -
Taxation -
Loss after tax (38)
Other information
Capital additions - - -
Balance sheet
Segment assets 900 29 929
14
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE INTERIM REPORT (continued)
FOR THE SIX MONTHS ENDED 31 MARCH 2022
3. PRINCIPAL RISKS AND UNCERTAINTIES
The main risks arising from the Group's financial instruments are market risk,
liquidity risk and credit risk. Market risk includes price commodity risk,
foreign exchange risk and interest rate risk. The Group has an exposure to
foreign exchange risk to the extent that investments may be priced in US
dollars or other currencies and has no loans, therefore limited exposure to
interest rate risk.
Cash and cash equivalents held at floating rates expose
the entity to cash flow risk. Interest rate risk is limited to the cash and
cash equivalents.
Based on the balance sheet value of cash and cash
equivalents, a 1% change in interest base rates would unlikely lead to any
material increase or decrease in income or equity.
The Board reviews and agrees policies for managing each of the above risks and
they are summarised below and in the accounting policies to the Group
financial statements. These policies have been consistently applied throughout
the period.
COMMODITY PRICE RISK
The Group holds no stock and as such has no exposure to commodities.
LIQUIDITY RISK
The Group's liquidity is dependent on the cash balances available and it is
the Group's policy to place surplus cash on deposit to ensure it has an
appropriate rate of return. The Board reviews an annual 12 month financial
projection as well as information regarding cash balances.
CREDIT RISK
The Group's principal financial assets are cash deposits, available for sale
financial assets and trade and other receivables. The credit risk associated
with the cash is limited as the counterparties have high credit ratings
assigned by international credit-rating agencies. The principal credit risk
arises therefore from its trade and other receivables and available for sale
financial assets.
15
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