REG - Costain Group PLC - Half-year Report <Origin Href="QuoteRef">COSG.L</Origin> - Part 2
24/08/2016 07:06
- Part 2: For the preceding part double click ID:nRSX9568Ha
1,316.5
Group operating profit/(loss) (11.1) 50.9 (0.5) (6.1) 33.2
Share of results of JVs and associates 0.3 - (0.4) - (0.1)
Profit/(loss) from operations before other items (10.8) 50.9 (0.9) (6.1) 33.1
Other items:
Amortisation of acquired intangible (2.2) (1.0) - - (3.2)
Employment related and other deferred consideration (0.4) - - - (0.4)
Profit/(loss) from operations (13.4) 49.9 (0.9) (6.1) 29.5
Net finance expense (3.5)
Profit before tax 26.0
4. Net finance expense
Finance expense includes the interest cost on the net liabilities of the
pension scheme of £0.6 million (2015 half-year £0.6 million, 2015 year £1.3
million).
5. Taxation
Half-year ended 30 June,year ended 31 December 2016Half-year 2015Half-year 2015Year
£m £m £m
UK taxation (0.7) - (2.4)
Deferred tax (0.9) (1.5) (1.4)
Income tax expensed in the condensed consolidated income statement (1.6) (1.5) (3.8)
Effective tax rate 14.2% 15.0% 14.6%
The tax charge is represented by the estimate of the effective tax rate for
the period.
6. Earnings per share
The calculation of earnings per share is based on profit for the period of
£9.7 million (2015 half-year £8.5 million, 2015 year £22.2 million) and the
number of shares set out below:
2016Half-year 2015Half-year 2015Year
m m m
Weighted average number of shares for basic earnings per share calculation 102.3 101.4 101.7
Dilutive potential ordinary shares arising from employee share schemes 3.2 3.3 2.8
Weighted average number of shares for fully diluted earnings per share calculation 105.5 104.7 104.5
7. Dividends
Dividend per share pence Half-year ended 30 June 2016 Half-year ended 30 June 2015 Year ended 31 December 2015
£m £m £m
Final dividend for the year ended 31 December 2014 6.25 - 6.3 6.3
Interim dividend for the year ended 31 December 2015 3.75 - - 3.9
Final dividend for the year ended 31 December 2015 7.25 7.4 - -
Amount recognised as distributions to equity holders in the period 7.4 6.3 10.2
Dividends settled in shares (0.3) (0.4) (0.8)
Dividends settled in cash 7.1 5.9 9.4
The proposed interim dividend of 4.3 pence (2015: 3.75 pence) has not been
included as a liability in these interim financial statements because it had
not been approved at the period end date. The dividend totalling £4.4 million
will be paid on 21 October 2016 to shareholders on the register at the close
of business on 16 September 2016. A scrip dividend alternative will be
offered.
8. Non-current assets
During the interim period, the Group spent £1.0 million on plant and equipment
and £0.1 million on software and development (2015 half-year £0.4 million on
plant and equipment and £0.4 million on software and development, 2015 year
£1.7 million on plant and equipment, £0.3m on land and buildings and £0.2
million on software and development).
9. Retirement benefit obligations
2016Half-year 2015Half-year 2015Year
£m £m £m
Present value of defined benefit obligations (762.3) (704.5) (687.4)
Fair value of scheme assets 704.9 667.5 650.7
Recognised liability for defined benefit obligations (57.4) (37.0) (36.7)
Movement in present value of defined benefit obligations: 2016Half-year 2015Half-year 2015Year
£m £m £m
Opening balance 687.4 701.0 701.0
Interest cost 12.8 12.3 24.6
Remeasurements 77.3 6.9 (6.0)
Benefits paid (15.2) (15.7) (32.2)
Closing balance 762.3 704.5 687.4
Movement in fair value of scheme assets: 2016Half-year 2015Half-year 2015Year
£m £m £m
Opening balance 650.7 659.3 659.3
Interest income 12.2 11.7 23.3
Remeasurements 49.6 6.3 (9.3)
Contributions by employer 7.6 5.9 9.6
Benefits paid (15.2) (15.7) (32.2)
Closing balance 704.9 667.5 650.7
The following actuarial assumptions have been used in the IAS 19 valuations of
the Group's defined benefit pension scheme, which was closed to new members in
May 2005 and to future accrual in September 2009 (expressed as weighted
averages):
2016Half-year 2015Half-year 2015Year
% % %
Discount rate 2.90 3.70 3.80
Future pension increases 2.70 3.05 2.95
Inflation assumption 2.70 3.10 3.00
The discount rate, inflation and pension increase and mortality assumptions
have a significant effect on the amounts reported. Changes in these
assumptions would have the following effects on the Group's defined benefit
scheme:
Pension liability
£m
Increase discount rate by 0.25%, decreases pension liability by 30.4
Decrease inflation (and pension increases) by 0.25%, decreases pension liability by 26.7
Increase life expectancy by one year, increases pension liability by 24.6
10. Share capital
Issued capital as at 30 June 2016 amounted to £51.4 million (2015 half-year
£51.0 million, 2015 year-end £51.1 million) and comprised 102,813,520 ordinary
shares of 50 pence each.
The Company announced on 20 May 2016 that shareholders had, pursuant to the
Scrip Dividend Scheme, elected to receive 114,972 ordinary shares of 50 pence
each in the Company in lieu of cash in respect of all or part of their final
dividend for the year ended 31 December 2015.
The Company operates a Long-Term Incentive Plan (LTIP), a Deferred Share Bonus
Plan and a Share Deferral Plan under which directors and senior employees can
receive awards of shares subject to defined performance targets being achieved
by the Group. Full details of these plans are disclosed in the annual
financial statements.
The 2013 LTIP award vested in May 2016 resulting in the issue of 598,131
ordinary shares. Full details will be disclosed in the annual financial
statements.
11. Related party transactions
Details of transactions between the Group and The Costain Pension Scheme are
included in Note 9. There have been no other changes in the nature of related
party transactions since the last annual financial statements as at and for
the year ended 31 December 2015.
12. Contingent liabilities
Group banking facilities and surety bond facilities are supported by cross
guarantees given by the Company and participating companies in the Group.
There are contingent liabilities in respect of performance bonds and other
undertakings, including joint arrangements, entered into and legal claims
arising all in the ordinary course of business. None are anticipated to result
in material liabilities except as already provided.
13. Post balance sheet events
On 5 July 2016, the Group purchased the share capital of Simulations Systems
Limited (SSL). The business provides innovative technology-based solutions,
primarily for the highways sector but with the potential for wider application
across the Group. SSL was acquired for a consideration of £17.0 million on a
debt free / cash free and normalised working capital basis. The consideration
includes £1.5 million deferred over three years, which is dependent on
continued further service and, in accordance with IFRS 3, will be expensed in
the income statement.
14. Cautionary forward-looking statements
These results contain forward-looking statements based on current expectations
and assumptions. Various known and unknown risks, uncertainties and other
factors may cause actual results to differ from any future results or
developments expressed or implied from the forward-looking statements. Each
forward-looking statement speaks only as of the date of this document. The
Group accepts no obligation to publicly revise or update these forward-looking
statements or adjust them to future events or developments, whether as a
result of new information, future events or otherwise, except to the extent
legally required.
Responsibility Statement of the Directors in respect of the interim financial
report
Each of the directors of Costain Group PLC confirms, to the best of his or her
knowledge, that:
• the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
• the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
On behalf of the Board
Paul Golby CBE - Chairman
Andrew Wyllie CBE - Chief Executive
23 August 2016
Independent review report to Costain Group PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2016 which comprises The Condensed consolidated income statement, the
Condensed consolidated statement of comprehensive income and expense, the
Condensed consolidated statement of changes in equity, the Condensed
consolidated statement of financial position, the Condensed consolidated cash
flow statement and the related explanatory notes. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority
("the UK FCA"). Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work,
for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
The annual financial statements of the Company are prepared in accordance with
IFRSs as adopted by the EU. The condensed set of financial statements included
in this half-yearly financial report has been prepared in accordance with IAS
34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2016 is not prepared, in all
material respects, in accordance with IAS 34 as adopted by the EU and the DTR
of the UK FCA.
Andrew Marshall
for and on behalf of KPMG LLP
Chartered Accountants
London
23 August 2016
Unsolicited mail
The Company is legally obliged to make its share register available to the
general public. Consequently, some shareholders may receive unsolicited mail,
including correspondence from unauthorised investment firms. Shareholders who
wish to limit the amount of unsolicited mail they receive can contact:
The Mailing Preference Service
Freepost 29 (LON20771)
London W1E 0ZT
Company's Registrar
The Company's Registrar is Equiniti, who are located at Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA. For enquiries regarding your
shareholding, please telephone 0371 384 2250. If you are calling from outside
the UK please telephone +44(0) 121 415 7047. Lines are open 08.30am to
05.30pm, Monday to Friday. You can also view up to date information about
your shareholdings by visiting the shareholder website at www.shareview.co.uk.
Please ensure that you advise Equiniti promptly of any change of name or
address.
Scrip dividend scheme
A scrip dividend alternative will be offered in respect of the interim
dividend, enabling shareholders to receive new ordinary shares instead of cash
if they so wish. Those shareholders who have already elected to join the scrip
dividend scheme will automatically have their interim dividend sent to them in
this form. Shareholders wishing to join the scheme for the interim dividend
(and all future dividends) should return their completed mandate form to the
Registrar, Equiniti, by 30 September 2016. Copies of the mandate form and the
scrip dividend brochure can be downloaded from the Company's website
www.costain.com or obtained from Equiniti by telephoning 0371 384 2268.
Dividend payments
If your dividend is not currently paid directly into your bank or building
society account and you would like to benefit from this service, please
contact Equiniti on 0371 384 2250 who will be pleased to assist. By receiving
your dividends in this way you can avoid the risk of cheques getting lost in
the post.
ShareGIFT
The Orr Mackintosh Foundation (ShareGift) operates a charity share donation
scheme for shareholders with small parcels of shares whose value makes it
uneconomic to sell them. Details of the scheme are available on the ShareGift
website www.sharegift.org and Equiniti can provide stock transfer forms on
request. Donating shares to charity in this way gives rise neither to a gain
nor a loss for Capital Gains Tax purposes. This service is completely free of
charge.
This information is provided by RNS
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