REG - Avon Rubber PLC - Final Results <Origin Href="QuoteRef">AVON.L</Origin> - Part 2
16/11/2016 07:05
- Part 2: For the preceding part double click ID:nRSP2612Pa
20,215
Amortisation of acquired intangibles (384) (659) (1,043)
Exceptional items and acquisition costs (209) (180) (215) (604)
Defined benefit pension scheme credit 318 318
Segment result 15,320 5,594 (2,028) 18,886
Finance income 45 45
Finance costs (192) (192)
Other finance expense (901) (901)
Profit before taxation 15,320 5,594 (3,076) 17,838
Taxation (2,672) (2,672)
Profit for the year from continuing operations 15,320 5,594 (5,748) 15,166
Discontinued operations - loss for the year (1,500) (1,500)
Profit for the year 15,320 5,594 (7,248) 13,666
Segment assets 59,487 42,645 6,444 108,576
Segment liabilities 8,378 10,336 47,658 66,372
Other segment items
Capital expenditure
- intangible assets 2,800 146 15 2,961
- property, plant and equipment 1,320 1,902 - 3,222
3. Adjustments and discontinued operations
2016 2015
£'000 £'000
Amortisation of acquired intangible assets 3,307 1,043
Recruitment costs - 215
Integration costs 506 -
Acquisition costs - 389
Defined benefit pension scheme administration costs 320 350
Defined benefit pension scheme settlement gain - (668)
4,133 1,329
2016 2015
£'000 £'000
Loss on discontinued operations 346 1,500
The tax impact of the above is a £nil reduction in tax payable (2015: £nil).
The deferred tax impact gives rise to a credit to the income statement of
£924,000 (2015: £253,000).
The recruitment costs in 2015 relate to the recruitment of main Board
Directors.
The integration costs relate to the acquisition of the Argus thermal imaging
camera business and the relocation of the manufacturing to our Melksham, UK
site.
The acquisition costs in 2015 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 £346,000 (2015:
£1,500,000) relates to dilapidations costs of former leased premises of a
business which was disposed of in 2006.
4. Taxation
2016 2015
£'000 £'000
United Kingdom 2,943 (578)
Overseas (4,767) 3,250
(1,824) 2,672
Deferred tax on the amortisation of acquired intangible assets 924 253
Adjusted tax (credit)/charge (900) 2,925
The effective tax rate for the year is a credit of 11% (30 September 2015: 15%
charge).
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 a credit of 4% (30
September 2015: 15%).
5. Dividends
On 29 January 2016, the shareholders approved a final dividend of 4.86p per
qualifying ordinary share in respect of the year ended 30 September 2015. This
was paid on 18 March 2016, absorbing £1,473,000 of shareholders' funds.
On 28 April 2016, the Board of Directors declared an interim dividend of 3.16p
(2014: 2.43p) per qualifying ordinary share in respect of the year ended 30
September 2016. This was paid on 5 September 2016 absorbing £957,000 (2015:
£732,000) of shareholders' funds.
After the balance sheet date the Board of Directors proposed a final dividend
of 6.32p per qualifying ordinary share in respect of the year ended 30
September 2016, which will absorb an estimated £1,915,000 of shareholders'
funds. Subject to shareholder approval, the dividend will be paid on 17 March
2017 to shareholders on the register at the close of business on 17 February
2017. 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.
2016 2015
Weighted average number of ordinary shares in issue used in basic calculations (thousands) 30,276 30,107
Potentially dilutive shares (weighted average) (thousands) 612 830
Fully diluted number of ordinary shares (weighted average) (thousands) 30,888 30,937
2016 2016 Basic eps 2016 Diluted eps 2015 2015 Basic eps 2015 Diluted eps
£'000 pence pence £'000 pence pence
Profit attributable to equity shareholders of the Company 18,279 60.4 59.2 13,666 45.4 44.2
Loss from discontinued operations 346 1.1 1.1 1,500 5.0 4.8
Profit from continuing operations 18,625 61.5 60.3 15,166 50.4 49.0
Adjustments 3,851 12.7 12.5 1,730 5.7 5.6
Profit excluding loss from discontinued operations, amortisation of acquired intangibles assets, exceptional items, acquisition costs and defined benefit pension scheme costs 22,476 74.2 72.8 16,896 56.1 54.6
7. Provisions for liabilities and charges
Facility Property
relocation obligations Total
£'000 £'000 £'000
Balance at 1 October 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
Unwinding of discount - 33 33
Payments in the year - (100) (100)
Balance at 30 September 2016 - 2,500 2,500
8. Share capital
2016 2015
Number of shares (thousands) 31,023 31,023
Ordinary shares (£'000) 31,023 31,023
9. Cash generated from operations
2016 2015
£'000 £'000
Continuing operations
Profit for the year 18,625 15,166
Adjustments for:
Taxation (1,824) 2,672
Depreciation 5,891 4,684
Amortisation of intangible assets 6,461 3,411
Defined benefit pension scheme costs/(credit) 320 (318)
Finance income (11) (45)
Finance costs 165 192
Other finance expense 675 901
Loss on disposal of intangibles 5 -
Loss on disposal of property, plant and equipment 73 7
Movement in respect of employee share scheme 83 85
Increase in inventories (422) (1,264)
(Increase)/decrease in receivables (677) 4,225
Increase/(decrease) in payables and provisions 3,333 (6,855)
Cash generated fromcontinuing operations 32,697 22,861
Discontinued operations
Loss for the year (346) (1,500)
Increase/(decrease) in payables and provisions 29 (29)
Cash used indiscontinued operations (317) (1,529)
Cash generated from operations 32,380 21,332
Cash flows relating to the discontinued operations are as follows:
Cash flows from operating activities (317) (1,529)
Cash used in discontinued operations (317) (1,529)
10. Analysis of net cash/(debt)
This note sets out the calculation of net cash/(debt), a measure considered
important in explaining our financial position.
At 1 Oct Cash flow Exchangemovements At 30 Sept
2015 2016
£'000 £'000 £'000 £'000
Cash at bank and in hand 332 4,037 126 4,495
Overdraft - - - -
Net cash and cash equivalents 332 4,037 126 4,495
Debt due in less than 1 year (2,350) 247 (396) (2,499)
Debt due in more than 1 year (11,143) 11,726 (583) -
(13,161) 16,010 (853) 1,996
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 2019. 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 2016 and 2015.
InterPuls S.p.A has a fixed term loan of E2.5m which was due for renewal on 31
October 2016. This facility is priced on EURIBOR plus margin of 1.3%.
11. Exchange rates
The following significant exchange rates applied during the year.
Average rate Closing rate Average rate Closing rate
2016 2016 2015 2015
US Dollar 1.423 1.296 1.542 1.517
Euro 1.282 1.161 1.351 1.359
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. Acquisition
On 8 October 2015 the Group acquired the trade and assets of the Argus thermal
imaging business from e2v technologies plc for consideration of £3.3m. Based
in Chelmsford UK, Argus is a leading designer and manufacturer of thermal
imaging cameras for the first responder and fire markets and further
strengthens the Group's product range and distribution capability in these
markets.
The book value of the assets acquired was £1.0m and after accounting policy
adjustments and fair value adjustments of £1.8m, goodwill of £0.5m was
recognised reflecting sales synergies from integration of distribution
channels, access to new markets and the workforce of the acquired business.
Total
£'000
Intangible assets recognised on acquisition 2,277
Deferred tax associated with the initial recognition of intangible assets (455)
Other net assets 991
Goodwill 487
Cash consideration settled at completion 3,300
13. Annual Report & Accounts
Copies of the Directors' report and the audited financial statements for the
year ended 30 September 2016 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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