REG - Carr's Group PLC - Final Results <Origin Href="QuoteRef">CARRC.L</Origin> - Part 2
13/11/2017 07:05
- Part 2: For the preceding part double click ID:nRSM2416Wa
Profit before taxation (before amortisation and non-recurring items) 11,403
Amortisation and non-recurring items (1,401)
Profit before taxation from continuing operations 10,002
1 Earnings before interest, tax, depreciation and amortisation (and before
profit/(loss) on the disposal of property, plant and
equipment)
2. Segmental information (continued)
The segmental information for the year ended 3 September 2016 is as follows:
Agriculture £'000 Engineering £'000 Group£'000
Total segment revenue 284,836 30,192 315,028
Inter segment revenue (63) (58) (121)
Revenue from external customers 284,773 30,134 314,907
EBITDA1 12,931 3,555 16,486
Depreciation of property, plant and equipment (2,539) (1,043) (3,582)
Depreciation of investment property (6) - (6)
Profit on the disposal of property, plant and equipment 12 72 84
Operating profit (before amortisation and non-recurring items) 10,398 2,584 12,982
Amortisation and non-recurring items (212)
Operating profit 12,770
Finance income 236
Finance costs (1,009)
11,997
Share of post-tax profit of associate 1,239
Share of post-tax profit of joint ventures 842
Profit before taxation (before amortisation and non-recurring items) 14,290
Amortisation and non-recurring items (212)
Profit before taxation from continuing operations 14,078
1 Earnings before interest, tax, depreciation and amortisation (and before
profit/(loss) on the disposal of property, plant and
equipment)
3. Amortisation and non-recurring items
2017 2016
£'000 £'000
Amortisation of intangible assets 124 205
Goodwill impairment 1,700 -
Business combination expenses 1,349 7
Release of contingent consideration (2,090) -
Restructuring costs 112 -
Loss on property disposal 206 -
1,401 212
3. Amortisation and non-recurring items (continued)
An impairment of £1.7 million was recognised in the year against the carrying
value of goodwill in respect of the Chirton Engineering acquisition in 2014.
Business combination expenses of £1.3 million, primarily related to the
acquisitions of NuVision Engineering, Inc. and STABER GmbH, were charged to
the income statement. Contingent consideration of £2.1 million that will not
be payable on the acquisition of Chirton Engineering was credited to the
income statement. Restructuring costs of £0.1 million comprise redundancy
costs. A loss of £0.2 million was incurred on the disposal of a property that
was no longer required following the relocation of one of its Agriculture
business stores.
4. Taxation
2017 2016
£'000 £'000
Continuing operations
(a) Analysis of the charge in the yearCurrent tax:UK corporation tax Current year Adjustment in respect of prior yearsForeign tax Current year Adjustment in respect of prior years 887(144) 591(8) 952173 680-
Group current tax 1,326 1,805
Deferred tax:Origination and reversal of timing differences Current year Adjustment in respect of prior years 442(61) 1,177(75)
Group deferred tax 381 1,102
Tax on profit from ordinary activities 1,707 2,907
Continuing operations
(b) Factors affecting tax charge for the yearThe tax assessed for the year is lower (2016: higher) than the rate of corporation tax in the UK of 19.58% (2016: 20%). The differences are explained below:
Profit before taxation 10,002 14,078
Tax at 19.58% (2016: 20%)Effects of: Tax effect of share of profit in associates and joint ventures Tax effect of expenses that are not allowable in determining taxable profit Tax effect of non-taxable income Effects of different tax rates of foreign subsidiaries Effects of changes in tax rates Adjustment in respect of prior years 1,958 (551)494(418)473(36)(213) 2,816 (416)-(105)704(190)98
Total tax charge for the year 1,707 2,907
The tax effect of expenses that are not allowable in determining taxable
profit includes the non-recurring items of goodwill impairment and business
combination expenses (note 3). These have been treated as disallowable for
tax purposes.
The tax effect of non-taxable income includes the release of contingent
consideration in respect of the Chirton Engineering acquisition in 2014 (note
3).
5. Discontinued operations
In the prior year Carr's Group plc disposed of its entire shareholding in
Carr's Flour Mills Ltd for a gross consideration of £36m on a cash and debt
free basis, less costs to sell.
An analysis of the result of discontinued operations, and the gain recognised
on the re-measurement to fair value less costs to sell, is as follows:
2017 2016
£'000 £'000
Revenue - 71,440
Expenses - (67,950)
Profit before taxation of discontinued operations - 3,490
Taxation - (712)
Profit after tax of discontinued operations - 2,778
Pre-taxation gain recognised on the measurement to fair value less costs to sell - 39
Taxation - -
After taxation gain recognised on the measurement to fair value less costs to sell - 39
Profit for the year from discontinued operations - 2,817
6. Earnings per ordinary share
Basic earnings per share are based on profit attributable to shareholders and
on a weighted average number of shares in issue during the year of 91,355,427
(2016: 90,087,357). The calculation of diluted earnings per share is based on
92,125,320 shares (2016: 92,034,155).
Amortisation and non-recurring items that are charged or credited to profit do
not relate to the underlying profitability of the Group. Therefore an
adjusted earnings per share is presented as follows:
2017 2016
Earnings £'000 Earnings per share pence Earnings£'000 Earnings per share pence
Continuing operations
Earnings per share - basic 7,005 7.7 9,638 10.7
Amortisation and non-recurring items:
Amortisation of intangible assets 124 0.1 205 0.2
Goodwill impairment 1,700 1.9 - -
Business combination expenses 1,349 1.5 7 -
Release of contingent consideration (2,090) (2.3) - -
Restructuring costs 112 0.1 - -
Loss on property disposal 206 0.2 - -
Taxation effect of the above (88) (0.1) (47) -
Non-controlling interest in the above (175) (0.2) - -
Earnings per share - adjusted 8,143 8.9 9,803 10.9
Discontinued operations
Earnings per share - basic - - 2,817 3.1
Amortisation and non-recurring items:
Amortisation of intangible assets - - 14 -
Profit on disposal of subsidiary - - (39) -
Earnings per share - adjusted - - 2,792 3.1
Total earnings per share - adjusted 8,143 8.9 12,595 14.0
7. Cash generated from continuing operations
2017 2016
£'000 £'000
Continuing operations
Profit for the year 8,295 11,171
Adjustments for:
Tax 1,707 2,907
Tax credit in respect of R&D (129) (176)
Depreciation of property, plant and equipment 4,093 3,582
Depreciation of investment property 6 6
Goodwill impairment 1,700 -
Intangible asset amortisation 124 205
Loss/(profit) on disposal of property, plant and equipment 215 (84)
Loss on disposal of investment - 10
Release of contingent consideration (2,090) -
Business combination expenses 1,299 -
Amortisation of grants (53) (53)
Net fair value loss/(gain) on share based payments 485 (99)
Net foreign exchange differences (152) (383)
Net fair value (gains)/losses on derivative financial instruments in operating profit (17) 70
Interest income (176) (236)
Interest expense and borrowing costs 901 1,045
Share of profit from associates and joint ventures (2,813) (2,081)
Pension contributions - deficit reduction- ongoing -- (780)(108)
IAS19 income statement charge/(credit) excluding interest 59 (287)
Changes in working capital (excluding the effects of acquisitions and disposals):
Increase in inventories (2,379) (1,620)
Increase in receivables (383) (3,606)
Increase/(decrease) in payables 4,402 (3,226)
Cash generated from continuing operations 15,094 6,257
8. Pensions
The Group operates its current pension arrangements on a defined benefit and
defined contribution basis. The valuation of the defined benefit scheme under
the IAS19 accounting basis showed a surplus in the scheme at 2 September 2017
of £5.2m (2016: £0.3m).
In the year, the retirement benefit charge, excluding interest, in respect of
the Carr's Group Pension Scheme was £59,000 (2016: credit of £287,000). As a
result of the closure to future service accrual on 31 December 2015 a negative
past service cost, net of associated costs, of approximately £350,000 has been
recognised as a credit in the prior year income statement.
A Group subsidiary undertaking is a participating employer in a defined
benefit pension scheme of the associate, Carrs Billington Agriculture
(Operations) Ltd. The IAS19 accounting basis showed a deficit for that scheme
at 2 September 2017 of £2.3m (2016: £5.1m). The scheme is treated as a defined
contribution scheme by the Group, and its level of participation in the scheme
is estimated at 48.5%, which is based on its estimated share of the buyout
liabilities. Due to the fact that the sponsoring employer is an associate
company of the Group, 49% of the deficit calculated on an IAS19 accounting
basis is included in the Group's balance sheet within its 'Investment in
Associates'.
9. Analysis of changes in net cash/(debt)
At 4 September Cash OtherNon-Cash Exchange At 2 September
2016 Flow Changes Movements 2017
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 48,411 (24,868) - 344 23,887
Bank overdrafts (8,624) 3,351 - - (5,273)
39,787 (21,517) - 344 18,614
Loans and other borrowings:- current- non-current (12,376)(17,108) 3,506(3,592) (1,959)1,382 (122)(107) (10,951)(19,425)
Finance leases:
- current (642) 846 (1,040) - (836)
- non-current (1,517) - (24) - (1,541)
Net cash/(debt) 8,144 (20,757) (1,641) 115 (14,139)
10. The Board of Directors approved the preliminary announcement on 13
November 2017.
11. The Company intends to provide a Summary Report and Accounts to
shareholders by 6 December 2017. The full Report and Accounts will be
available upon request from the Company Secretary, Carr's Group plc, Old
Croft, Stanwix, Carlisle, CA3 9BA or alternatively on the Company's website:
www.carrsgroup.com
1 Underlying operating profit, underlying profit before taxation and adjusted
EPS are before charging amortisation of intangible assets and non-recurring
items
2 Department for Environment, Food and Rural Affairs, 2017
This information is provided by RNS
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