REG - Avon Rubber PLC - Half-year Report <Origin Href="QuoteRef">AVON.L</Origin> - Part 2
16/05/2017 07:05
- Part 2: For the preceding part double click ID:nRSP1960Fa
Defined benefit pension scheme costs relate to administrative expenses of the
scheme which is closed to future accrual. £0.5m of other finance expense
relating to the pension scheme is also treated as an adjustment (31 March
2016: £0.3m, 30 September 2016: £0.7m).
The 2016 loss for the year from discontinued operations related to
dilapidations costs of former leased premises of a business which was disposed
of in 2006.
7. Finance income and costs
Half year to31 Mar 2017 Half year to31 Mar 2016 Year to30 Sep 2016
£m £m £m
Interest payable on bank loans and overdrafts (0.1) (0.1) (0.2)
Other finance expense
Half year to31 Mar 2017 Half year to31 Mar 2016 Year to30 Sep 2016
£m £m £m
Net interest cost: UK defined benefit pension scheme (0.5) (0.3) (0.7)
Provisions: Unwinding of discount (0.1) (0.1) -
(0.6) (0.4) (0.7)
8. Taxation
Half year to31 Mar 2017 Half year to31 Mar 2016 Year to30 Sep 2016
£m £m £m
United Kingdom (1.3) (1.3) (2.7)
Overseas (0.7) 1.2 3.6
Underlying tax (charge)/credit (2.0) (0.1) 0.9
Effect of exceptional items 0.6 0.6 0.9
Statutory tax (charge)/credit (1.4) 0.5 1.8
The statutory effective tax rate for the period is a charge of 16% (31 March
2016: credit of 8%, 30 September 2016: credit of 11%).
The underlying 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 19% (31 March 2016:
1%, 30 September 2016: 4% credit).
9. Dividends
On 2 February 2017, the shareholders approved a final dividend of 6.32p per
qualifying ordinary share in respect of the year ended 30 September 2016. This
was paid on 17 March 2017 absorbing £1.9m of shareholders' funds.
The Board of Directors has declared an interim dividend of 4.11p (2016: 3.16p)
per qualifying ordinary share in respect of the year ended 30 September 2017.
This will be paid on 8 September 2017 to shareholders on the register at the
close of business on 11 August 2017. In accordance with accounting standards,
this dividend has not been provided for. It will be recognised in
shareholders' funds in the year to 30 September 2017 and is expected to absorb
£1.2m (2016: £1.0m) of shareholders' funds.
10. Earnings per share
Basic earnings per share is based on a profit attributable to ordinary
shareholders of £7.5m (2016: £6.6m) and 30,410,000 (2016: 30,248,000) ordinary
shares being the weighted average number of shares in issue during the
period.
Underlying earnings per share is based on a profit attributable to ordinary
shareholders of £8.7m (2016: £8.7m) after adding back amortisation of acquired
intangible assets, exceptional items and defined benefit pension scheme
costs.
The Company has 463,000 (1.5%) (2016: 587,000 (1.9%)) potentially dilutive
ordinary shares in respect of the Performance Share Plan.
11. Provisions for liabilities and charges
Property obligations £m
Balance at 30 September 2016 2.5
Payments in the period (0.3)
Unwinding of discount 0.1
Balance at 31 March 2017 2.3
Property obligations include an onerous lease provision and obligations
relating to former premises of the Group which are subject to dilapidation
risks. Property provisions are subject to uncertainty in respect of the
utilisation, non-utilisation, or subletting of surplus leasehold property and
the final negotiated settlement of any dilapidation claims with landlords.
12. Share capital
Half year to 31 Mar 2017 Half year to31 Mar 2016 Year to30 Sep 2016
Number of shares (thousands) 31,023 31,023 31,023
Ordinary shares (£m) 31.0 31.0 31.0
Share premium (£m) 34.7 34.7 34.7
During the period 100,000 ordinary shares with a nominal value of £1 each were
purchased by the Avon Rubber p.l.c. Employer Share Ownership Trust at a cost
of £1,027,000 and 253,000 ordinary shares of £1 each were awarded in relation
to the 2016 annual incentive plan.
13. Cash generated from operations
Half year to 31 Mar 2017 Half year to 31 Mar 2016 Year to30 Sep 2016
£m £m £m
Continuing operations
Profit for the period 7.5 6.6 18.6
Adjustments for:
Taxation 1.4 (0.5) (1.8)
Depreciation 3.1 2.8 5.9
Amortisation of intangible assets 3.9 3.1 6.4
Defined benefit pension scheme costs 0.2 0.2 0.3
Finance costs 0.1 0.1 0.2
Other finance expense 0.6 0.4 0.7
Movements in working capital and provisions 0.5 1.6 2.4
Other movements - 0.1 -
Cash generated from continuing operations 17.3 14.4 32.7
Analysed as:
Cash generated from continuing operations prior to the effect of exceptional operating items 17.0 14.7 33.1
Cash effect of exceptional operating items 0.3 (0.3) (0.4)
Cash used in discontinued operations - - (0.3)
Cash generated from operations 17.3 14.4 32.4
14. Analysis of cash and debt
As at30 Sep 2016 Cash Flow Exchange movements As at31 Mar 2017
£m £m £m £m
Cash at bank and in hand 4.5 10.2 0.1 14.8
Debt due in less than 1 year (2.5) 0.3 - (2.2)
2.0 10.5 0.1 12.6
Borrowing facilities
As at31 Mar 2017 As at31 Mar 2016 As at30 Sep 2016
£m £m £m
Total undrawn committed facilities 31.6 21.1 30.6
Bank loans and overdrafts utilised 2.2 8.6 2.5
Utilised in respect of guarantees 0.3 0.3 0.3
Total Group facilities (excluding accordion option of $35m) 34.1 30.0 33.4
All facilities are at floating interest rates.
On 9 June 2014 the Group agreed bank facilities with Barclays Bank and
Comerica Bank. The combined facilities comprise a revolving credit facility of
$40m with a $35m accordion option. The facilities expire on 30 November 2019.
This facility is priced on the dollar LIBOR plus 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 2017 and 2016.
InterPuls S.p.A has a fixed term loan of E2.5m which expires in August 2020.
This facility is priced on EURIBOR plus margin of 0.9%.
15. Exchange rates
The following significant exchange rates applied during the period.
Average rate Closing rate Average rate Closing rate Average rate Closing rate
H1 2017 H1 2017 H1 2016 H1 2016 FY 2016 FY 2016
US dollar 1.24 1.25 1.46 1.43 1.42 1.30
Euro 1.16 1.17 1.33 1.25 1.28 1.16
Fair value of financial instruments
The fair value of forward exchange contracts is determined by using valuation
techniques using period end spot rates, adjusted for the forward points to the
value date of the contract.
16. Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are described on
pages 28-31 of our Annual Report 2016 and remain unchanged at 31 March 2017.
They include: market threat, product development, talent management, business
interruption - supply chain, acquisition integration, quality risks and
product recall, customer dependency and non-compliance with legislation.
17. Related party transactions
There were no related party transactions during the period or outstanding at
the end of the period (2016: £nil).
CORPORATE INFORMATION
REGISTERED OFFICE
Corporate Headquarters
Hampton Park West
Semington Road
Melksham
Wiltshire
SN12 6NB
Registered in England and Wales No. 32965
V.A.T. No. GB 137 575 643
BOARD OF DIRECTORS
David Evans (Chairman)
Pim Vervaat (Non-Executive Director)
Chloe Ponsonby (Non-Executive Director)
Paul McDonald (Chief Executive Officer) - Appointed 15 February 2017
Paul Rayner (Interim Group Finance Director) - Appointed 1 December 2016
COMPANY SECRETARY
Miles Ingrey-Counter
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
REGISTRARS & TRANSFER OFFICE
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
BR3 4TU
Tel: 0871 664 0300
(calls cost 10p per minute plus network extras,
lines are open 8.30am-5.30pm Mon-Fri)
BROKERS
Arden Partners plc
SOLICITORS
TLT LLP
PRINCIPAL BANKERS
Barclays Bank PLC
Comerica Inc.
CORPORATE FINANCIAL ADVISER
Arden Partners plc
CORPORATE WEBSITE
www.avon-rubber.com
This information is provided by RNS
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