REG - Avon Rubber PLC - Final Results <Origin Href="QuoteRef">AVON.L</Origin> - Part 2
17/11/2015 13:01
- Part 2: For the preceding part double click ID:nRSQ0190Ga
(771) (67) (4,127)
Amortisation of development costs and software (1,670) (94) (9) (1,773)
Segment result before amortisation of acquired intangibles, exceptional items and defined benefit pension scheme costs 13,583 5,735 (2,315) 17,003
Amortisation of acquired intangibles (261) (261)
Exceptional items (2,017) (2,017)
Defined benefit pension scheme costs (400) (400)
Segment result 11,305 5,735 (2,715) 14,325
Finance income 1 1
Finance costs (275) (275)
Other finance expense (187) (187)
Profit before taxation 11,305 5,735 (3,176) 13,864
Taxation (3,053) (3,053)
Profit for the year 11,305 5,735 (6,229) 10,811
Segment assets 52,128 13,501 6,157 71,786
Segment liabilities 12,011 1,946 32,813 46,770
Other segment items
Capital expenditure
- intangible assets 2,725 337 - 3,062
- property, plant and equipment 1,898 1,825 8 3,731
3. Adjustments and discontinued operations
2015 2014
£'000 £'000
Amortisation of acquired intangible assets 1,043 261
Relocation of Lawrenceville facility - 2,017
Recruitment costs 215 -
Acquisition costs 389 -
Defined benefit pension scheme administration costs 350 400
Defined benefit pension scheme settlement gain (668) -
1,329 2,678
2015 2014
£'000 £'000
Loss on discontinued operations 1,500 -
The tax impact of the above is a £0.25m reduction in overseas tax (2014:
£0.45m).
The recruitment costs relate to the recruitment of main Board Directors.
The acquisition costs relate to legal and professional fees on the acquisition
of Hudstar Systems Inc. and InterPuls S.p.A.
Defined benefit pension scheme costs relate to administrative expenses of the
scheme which is closed to future accrual. The defined benefit pension scheme
settlement gain arose following a trivial commutation exercise.
The loss for the year on discontinued operations of £1.5m relates to
dilapidations costs of former leased premises of a business which was disposed
of in 2006.
4. Taxation
2015 2014
£'000 £'000
United Kingdom (578) -
Overseas 3,250 3,053
2,672 3,053
Effect of exceptional items 253 450
Adjusted tax charge 2,925 3,503
The effective tax rate for the year is 15% (30 September 2014: 22%).
The adjusted effective tax rate, where the tax charge and the profit before
taxation are adjusted for exceptional items, the amortisation of acquired
intangibles and defined benefit pension scheme costs is 15% (30 September
2014: 21%).
5. Dividends
On 29 January 2015, the shareholders approved a final dividend of 3.74p per
qualifying ordinary share in respect of the year ended 30 September 2014. This
was paid on 20 March 2015 absorbing £1,127,000 of shareholders' funds.
On 29 April 2015, the Board of Directors declared an interim dividend of 2.43p
(2014: 1.87p) per qualifying ordinary share in respect of the year ended 30
September 2015. This was paid on 4 September 2015 absorbing £732,000 (2014:
£560,000) of shareholders' funds.
After the balance sheet date the Board of Directors proposed a final dividend
of 4.86p per qualifying ordinary share in respect of the year ended 30
September 2015, which will absorb an estimated £1,464,000 of shareholders'
funds. Subject to shareholder approval, the dividend will be paid on 18 March
2016 to shareholders on the register at the close of business on 19 February
2016. In accordance with accounting standards this dividend has not been
provided for and there are no corporation tax consequences.
6. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares in
issue during the year, excluding those held in the employee share ownership
trust. The company has dilutive potential ordinary shares in respect of the
Performance Share Plan. Adjusted earnings per share adds back to profit the
effect of the amortisation of acquired intangible assets, exceptional items,
acquisition costs and defined benefit pension scheme costs.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2015 2014
Weighted average number of ordinary shares in issue used inbasic calculations (thousands) 30,107 29,871
Potentially dilutive shares (weighted average) (thousands) 830 979
Fully diluted number of ordinary shares(weighted average) (thousands) 30,937 30,850
2015 2015 2015 2014 2014 2014
Basic eps Diluted eps Basic eps Diluted eps
£'000 pence pence £'000 pence pence
Profit attributable to equity shareholders of the Company 13,666 45.4 44.2 10,811 36.2 35.0
Loss from discontinued operations 1,500 5.0 4.8 - - -
Profit from continuing operations 15,166 50.4 49.0 10,811 36.2 35.0
Adjustments 1,730 5.7 5.6 2,240 7.5 7.3
Profit excluding loss from discontinued operations, amortisation of acquired intangibles assets, exceptional items, acquisition costs and defined benefit pension scheme costs 16,896 56.1 54.6 13,051 43.7 42.3
7. Provisions for liabilities and charges
Facility Property
relocation obligations Total
£'000 £'000 £'000
Balance at 1 October 2013 - 2,613 2,613
Charged in the year 1,637 1,632 3,269
Unwinding of discount - 175 175
Payments in the year (1,191) (1,056) (2,247)
Exchange difference 8 1 9
Balance at 30 September 2014 454 3,365 3,819
Charged in the year - 1,500 1,500
Unwinding of discount - 247 247
Payments in the year (485) (2,545) (3,030)
Exchange difference 31 - 31
Balance at 30 September 2015 - 2,567 2,567
8. Share capital
2015 2014
Number of shares (thousands) 31,023 31,023
Ordinary shares (£'000) 31,023 31,023
9. Cash generated from operations
2015 2014
£'000 £'000
Continuing operations
Profit for the year 15,166 10,811
Adjustments for:
Taxation 2,672 3,053
Depreciation 4,684 4,127
Amortisation of intangible assets 3,411 2,034
Defined benefit pension scheme (credit)/cost (318) 400
Finance income (45) (1)
Finance costs 192 275
Other finance expense 901 187
Loss on disposal of intangibles - 149
Loss on disposal of property, plant and equipment 7 209
Movement in respect of employee share scheme 85 88
(Increase)/decrease in inventories (1,264) 370
Decrease in receivables 4,225 1,479
(Decrease)/increase in payables and provisions (6,855) 2,336
Cash generated fromcontinuing operations 22,861 25,517
Discontinued operations
Loss for the Year (1,500) -
Decrease in payables and provisions (29) -
Cash used indiscontinued operations (1,529) -
Cash generated from operations 21,332 25,517
Cash flows relating to the discontinued operations are as follows:
Cash flows from operating activities (1,529) -
Cash used in discontinued operations (1,529) -
10. Analysis of net (debt)/cash
This note sets out the calculation of net (debt)/cash, a measure considered
important in explaining our financial position.
At 1 Oct Cash flow Acquisitions Exchangemovements At 30 Sept
2014 2015
£'000 £'000 £'000 £'000 £'000
Cash at bank and in hand 2,925 (2,710) 20 97 332
Overdraft - 8 (8) - -
Net cash and cash equivalents 2,925 (2,702) 12 97 332
Debt due in less than 1 year - 100 (2,324) (126) (2,350)
Debt due in more than 1 year - (10,705) (277) (161) (11,143)
2,925 (13,307) (2,589) (190) (13,161)
On 9 June 2014 the Group agreed new bank facilities with Barclays Bank and
Comerica Bank. The combined facility comprises a revolving credit facility of
$40m and expires on 30 November 2018. This facility is priced on the dollar
LIBOR plus a margin of 1.25% and includes financial covenants which are
measured on a quarterly basis. The Group was in compliance with its financial
covenants during 2015 and 2014.
InterPuls S.p.A has a fixed term loan of E2.5m which expires on 31 December
2015. This facility is priced on EURIBOR plus margin of 0.9%.
11. Exchange rates
The following significant exchange rates applied during the year.
Average rate Closing rate Average rate Closing rate
2015 2015 2014 2014
US Dollar 1.542 1.517 1.654 1.631
Euro 1.351 1.359 1.221 1.281
Fair value of financial instruments
The fair value of forward exchange contracts is determined by using valuation
techniques using year-end spot rates, adjusted for the forward points to the
value date of the contract.
12. Acquisitions
On 19 June 2015, the Group completed the acquisition of 100% of the share
capital of Hudstar Systems Inc. for £3.2m in cash, with deferred contingent
consideration of up to £0.3m. The book value of the assets acquired was £0.4m
and after accounting policy adjustments and fair value adjustments of £2.0m,
goodwill of £1.1m was recognised reflecting control over key technology and
the workforce of the acquired business.
On 5 August 2015, the Group acquired 100% of the share capital and shareholder
loan notes of InterPuls S.p.A. for cash consideration of £18.0m. The book
value of the assets acquired was £6.0m and after accounting policy adjustments
and fair value adjustments of £10.9m, goodwill of £1.1m was recognised
reflecting sales synergies from integration of distribution channels, access
to new markets and the workforce of the acquired business.
Hudstar InterPuls Total
£'000 £'000 £'000
Intangible assets recognised on acquisition 3,323 16,826 20,149
Deferred tax associated with the initial recognition of intangible assets (1,163) (5,599) (6,762)
Other net assets 261 5,642 5,903
Goodwill 1,100 1,101 2,201
Consideration 3,521 17,969 21,490
13. Post balance sheet event
On 8 October 2015 the Group acquired the trade and assets of the Argus thermal
imaging business from e2v technologies plc for consideration of £3.5m.
Based in Chelmsford UK, Argus is a leading designer and manufacturer of
thermal imaging cameras for the first responder and fire markets.
14. Annual Report & Accounts
Copies of the Directors' report and the audited financial statements for the
year ended 30 September 2015 will be posted to shareholders who have elected
to receive a copy and may also be obtained from the Company's registered
office at Hampton Park West, Semington Road, Melksham, Wiltshire, SN12 6NB,
England. Full audited financial statements will be available on the Company's
website at www.avon-rubber.com.
This information is provided by RNS
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