REG - Avingtrans PLC - Final Results <Origin Href="QuoteRef">AVG.L</Origin> - Part 2

AvingtransAnnouncement

29/10/2014 07:05

- Part 2: For the preceding part double click  ID:nRSA0730Ta 

interest, tax, depreciation and amortisation ('EBITDA')  5,608  3,625  
 
 
5,608 
 
3,625 
 
The Directors believe that the above adjusted earnings are a more appropriate
reflection of the Group performance and should not adjust for the £2,615,000
bargain purchase on acquisition which offset the expected losses at Maloney
Metalcraft in the period since acquisition. 
 
3             Taxation 
 
               2014   2013   
               £'000  £'000  
                             
 Current tax   (214)  145    
 Deferred tax  (174)  (108)  
               (388)  37     
 
 
37 
 
Notes to the Preliminary Statement (continued) 
 
31 May 2014 
 
4             Earnings per ordinary share 
 
                                                  2014        2013        
                                                  Number      Number      
                                                                          
 Weighted average number of shares - basic        27,363,979  26,463,694  
 Share option adjustment                          716,303     737,649     
 Weighted average number of shares - diluted      28,080,282  27,201,343  
                                                  2014        2013        
                                                  £'000       £'000       
                                                                          
 Earnings from continuing operations              2,914       1,300       
 Share-based payments                             46          40          
 Restructuring costs                              269         -           
 Start up costs - China                           318         -           
 Acquisition costs                                171         288         
 Amortisation of acquisition related intangibles  137         283         
 Adjusted earnings from continuing operations     3,855       1,911       
 From continuing operations:                                              
 Basic earnings per share                         10.6p       4.9p        
 Adjusted basic earnings per share                14.1p       7.2p        
 Diluted earnings per share                       10.4p       4.8p        
 Adjusted diluted earnings per share              13.7p       7.0p        
                                                                            
 
 
 Earnings from discontinued operations  -  6,197  
 From discontinued operations:                    
 Basic earnings per share               -  23.4p  
 Diluted earnings per share             -  22.8p  
 
 
22.8p 
 
 Earnings attributable to shareholders               2,914  7,497  
 Share-based payments                                46     40     
 Restructuring costs                                 269    -      
 Start up losses - China                             318    -      
 Acquisition costs                                   171    288    
 Amortisation of acquisition related of intangibles  137    283    
 Adjusted earnings attributable to shareholders      3,855  8,108  
                                                                   
 Basic earnings per share                            10.6p  28.3p  
 Adjusted basic earnings per share                   14.1p  30.6p  
 Diluted earnings per share                          10.4p  27.6p  
 Adjusted diluted earnings per share                 13.7p  29.8p  
 
 
29.8p 
 
Notes to the Preliminary Statement (continued) 
 
31 May 2014 
 
5              Acquisitions 
 
Business combinations - Maloney Metalcraft Limited 
 
On 3 July 2013 the Group acquired 100 percent of the issued share capital of
Maloney Metalcraft Limited (formerly Exterran (UK) Limited). The provisional
net assets at the date of acquisition were as follows: 
 
 Fair value of assets and liabilities acquired       £'000    
                                                              
 Property, plant and equipment                       664      
 Inventories                                         888      
 Trade and other receivables                         2,924    
 Current tax asset                                   189      
 Cash and cash equivalents                           2,398    
 Trade and other payables (including provisions)     (3,905)  
 Deferred tax                                        (184)    
 Net assets                                          2,974    
 Intangibles assets identified                       -        
 Goodwill                                            -        
                                                     2,974    
                                                              
 Fair value of consideration transferred:                     
 Cash                                                -        
 Retention bonuses accounted for as consideration    359      
 Consideration                                       359      
                                                              
 Cash acquired                                       (2,398)  
 Acquisition costs charged to expenses               171      
 Net cash paid relating to the acquisition           1,868    
 
 
Net cash paid relating to the acquisition 
 
1,868 
 
Cash of £1 was paid for the share capital of Exterran (UK) Limited.
Consideration also includes £359k relating to contractual retention bonuses as
set out in the SPA that under IFRS 3 have been accounted for as consideration
for the assets acquired. 
 
The acquisition of this business resulted in a gain on purchase as a
consequence of buying the business in a distressed state. The gain on bargain
purchase is separately presented in the income statement before operating
profit.  Also as a result of the distressed state in which the business was in
at the date of purchase and following a review of the assets acquired, the
Directors consider that no intangible assets of any value have been acquired. 
 
The acquired entity incurred a loss after tax of £2,195,000 for the 11 months
from 3 July 2013 to the reporting date. If it had been acquired on 1 June
2013, revenue for the Group would have been £7,070,000 and loss after tax for
the year would have increased by £205,000. 
 
Acquisition costs arising from this transaction of £171,000 have been included
in administration expenses before operating profit. 
 
 Since acquisition Maloney Metalcraft contributed the following to the Group's cashflows:    2014     
                                                                                             £'000    
                                                                                                      
 Operating cashflows                                                                         (2,237)  
 Investing activities                                                                        (247)    
                                                                                                      
                                                                                                      
 Notes to the Preliminary Statement (continued)31 May 2014                                            
 
 
6             Events after the balance sheet date 
 
On 11 August 2014 Sigma Precision Components UK limited completed the
acquisition of certain of the assets of RMDG limited for £1,100,000 plus
professional costs. In its previous financial year RMDG had turnover of
£3,327,000 and a loss before tax of £398,000 after exceptional restructuring
costs of £275,000. 
 
7             Net Debt and gearing 
 
 The gearing ratio at the year-end is as follows:  2014      2013      
                                                   £'000     £'000     
                                                                       
 Debt                                              (10,790)  (11,486)  
 Cash and cash equivalents                         7,204     8,881     
 Ring fenced cash                                  -         (286)     
 Net debt                                          (3,586)   (2,891)   
                                                                       
 Equity                                            32,655    30,515    
 Net debt to equity ratio                          11.0%     9.5%      
 
 
11.0% 
 
9.5% 
 
8             Preliminary statement 
 
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 30 September 2014.  It is not the Group's statutory
accounts within the meaning of Section 434 of the Companies Act 2006. 
 
The statutory accounts for the two years ended 31 May 2014 and 2013 received
audit reports which were unqualified and did not contain statements under
s498(2) or (3) of the Companies Act 2006.  The statutory accounts for the year
ended 31 May 2013 have been delivered to the Registrar of Companies but the 31
May 2014 accounts have not yet been filed. 
 
9             Annual report and Accounts 
 
The Report and Accounts for the year ended 31 May 2014 will be available on
the Group's website www.avingtrans.plc.uk on or around 8 October 2014. 
Further copies will be available from the Avingtrans' registered office: 
 
Precision House, Derby Road, Sandiacre, Nottingham, NG10 5HU. 
 
10           Annual General Meeting 
 
The Annual General Meeting of the Group will be held at The Holiday Inn,
Bostocks Lane, Sandiacre, Nottingham NG10 5NL at 11.00 a.m. on 12 November
2014 
 
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