REG - Essentra plc - Essentra plc Half Year 2017 Results <Origin Href="QuoteRef">ESNT.L</Origin> - Part 2
28/07/2017 07:06
- Part 2: For the preceding part double click ID:nRSb3655Ma
(39.6)
Other comprehensive income (0.3) 90.0 (11.8) 1.1 79.0
Total comprehensive income for the year - - - - (0.3) 90.0 (52.1) 1.8 39.4
Shares options exercised 2.3 - 2.3
Share option expense 2.0 - 2.0
Tax relating to share-based incentives (2.0) - (2.0)
Dividends paid (54.0) (0.2) (54.2)
At 31 December 2016 66.0 298.1 0.1 (132.8) (0.3) 68.6 295.7 7.3 602.7
Condensed consolidated statement of cash flows
Six monthsended Six monthsended Year ended
Note 30 Jun 2017 30 Jun 2016 31 Dec 2016
£m £m £m
Operating activities
Profit / (loss) for the period 127.2 34.1 (39.6)
Adjustments for:
Income tax expense 29.7 8.5 (7.6)
Net finance expense 5.5 7.0 12.5
Intangible amortisation 11.5 15.9 33.4
Exceptional operating items (128.3) 4.6 133.7
Depreciation 18.2 16.0 34.3
Share option expense - 3.3 2.0
Other movements (1.7) (0.1) 13.3
(Increase)/decrease in inventories (9.0) 2.8 10.9
(Increase)/decrease in trade and other receivables (0.8) 6.9 36.9
Decrease in trade and other payables (2.3) (36.6) (46.1)
Cash outflow in respect of exceptional operating items (14.9) (7.2) (10.6)
Adjustment for pension contributions - 0.5 0.8
Movement in provisions (1.0) (2.9) (3.5)
Cash inflow from operating activities 34.1 52.8 170.4
Income tax paid (17.9) (8.5) (17.4)
Net cash inflow from operating activities 16.2 44.3 153.0
Investing activities
Interest received 0.2 0.2 0.7
Acquisition of property, plant and equipment (18.6) (24.0) (42.8)
Proceeds from sale of property, plant and equipment 1.0 5.7 8.4
Payments for intangible assets - - (3.9)
Acquisition of businesses net of cash acquired - (0.1) (0.1)
Proceeds from sale of businesses net of cash disposed 211.9 - -
Net cash inflow/(outflow) from investing activities 194.5 (18.2) (37.7)
Financing activities
Interest paid (5.7) (6.7) (12.0)
Dividends paid to equity holders (37.7) (37.5) (54.0)
Dividends paid to non-controlling interests - - (0.2)
Repayments of short-term loans (64.5) - -
Repayments of long-term loans (233.1) - (298.6)
Proceeds from long-term loans 128.0 49.7 274.0
Proceeds from sale of employee trust shares 0.3 2.2 2.3
Net cash (outflow)/inflow from financing activities (212.7) 7.7 (88.5)
Net (decrease)/increase in cash and cash equivalents (2.0) 33.8 26.8
Net cash and cash equivalents at the beginning of the period 60.7 30.2 30.2
Net (decrease)/increase in cash and cash equivalents (2.0) 33.8 26.8
Net effect of currency translation on cash and cash equivalents (0.6) 2.6 3.7
Net cash and cash equivalents at the end of the period 7 58.1 66.6 60.7
Notes
1. Basis of preparation
The condensed set of financial statements has been prepared in accordance with
the accounting policies set out in the 2016 Annual Report which comply with
International Financial Reporting Standards as adopted by the EU and also in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU and
the Disclosure and Transparency Rules ('DTR') of the Financial Conduct
Authority. The preparation of the condensed set of financial statements
requires management to make estimates and assumptions that affect the
reporting amounts of revenues, expenses, assets and liabilities at 30 June
2017. If in the future such estimates and assumptions, which are based on
management's best judgement at the date of the condensed set of financial
statements, deviate from the actual circumstances, the original estimates and
assumptions will be modified as appropriate in the period in which the
circumstances change.
In the view of the Directors, the Group has adequate resources to continue its
activities for the foreseeable future and therefore it is appropriate to
continue to adopt the going concern basis in the preparation of the condensed
set of financial statements.
The comparative figures for the financial year ended 31 December 2016 are not
the Company's statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditor and delivered to the Registrar of
Companies. The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under Section 498(2) or (3) of the Companies Act 2006.
For the purpose of the condensed set of financial statements 'Essentra' or
'the Group' means Essentra plc ('the Company') and its subsidiaries.
On 25 August 2016, Essentra entered into a sale and purchase agreement with
Filtration Group to dispose of the Group's entire operations in Porous
Technologies. The transaction completed on 6 March 2017. The results of Porous
Technologies are presented as results from a discontinued operation in the
consolidated income statement, and the comparative information has been
re-presented accordingly. The assets and liabilities of Porous Technologies at
31 December 2016 are presented as held for sale on that balance sheet date.
Income tax expense is recognised based upon the best estimate of the weighted
average income tax rate on profit before tax and exceptional items expected
for the full financial year, taking into account the weighted average rate for
each jurisdiction.
2. Segment analysis
The operating segments are as follows:
Component Solutions consists of the Components business, the Extrusion
business, the Pipe Protection Technologies business and a Security business.
The Components business is a global market leading manufacturer and
distributor of plastic injection moulded, vinyl dip moulded, and metal items.
The Extrusion business is a leading custom profile extruder located in The
Netherlands which offers a complete design and production service. The Pipe
Protection Technologies business specialises in the manufacture of high
performance innovative products from commodity resins to engineering-grade
thermoplastics and polymer alloys for use in a range of end-markets. The
Security business has been at the forefront of ID technology for over 30
years, and has access to the widest portfolio of products and services,
including printers, software and consumables from leading manufacturers.
Health & Personal Care Packaging consists of the Health & Personal Care
Packaging business, Consumer Packaging business and the Speciality Tapes
business. Health & Personal Care Packaging is a leading global provider of
packaging and authentication solutions to a diversified blue-chip customer
base in the pharmaceutical and health and personal care markets. Consumer
Packaging is a leading global manufacturer and supplier of pressure sensitive
tear tape, labels, closures and seals to the consumer and specialist packaging
sectors. The Speciality Tapes business has expertise in coating multiple
adhesive systems in numerous technologies.
The Filter Products business is the only global independent provider of
filters and related solutions to the tobacco industry, and supplies not only
standard filters but also special variants which provide innovative solutions
that meet the consumer-driven demands of the sector against a backdrop of
ongoing legislative changes.
On 25 August 2016, Essentra entered into a sale and purchase agreement with
Filtration Group to dispose of the Group's entire operations in Porous
Technologies. The transaction completed on 6 March 2017. The results of
Porous Technologies are presented as results from a discontinued operation in
the consolidated income statement, and the comparative information has been
re-presented accordingly. The assets and liabilities of Porous Technologies
at 31 December 2016 were presented as held for sale at that balance sheet
date. No finance income or expense related to discontinued operations, and
the income tax expense related to discontinued operations amounted to £25.5m
(2016 FY: £2.2m).
2. Segment analysis (continued)
The adjusted operating profit / (loss) presented for each operating segment
includes the effect of allocation of certain functional costs such as finance,
human resources, legal and IT, as well as costs relating to management of the
divisions and regions based on an internal management methodology. Therefore
for continuing operations, the adjusted operating profit presented below of
£43.1m (six months ended 30 June 2016: £60.7m; year ended 31 December 2016
£110.4m) differs from the amount presented as operating profit before
intangible amortisation and exceptional operating items of £42.8m (six months
ended 30 June 2016: £59.8m; year ended 31 December 2016: £108.7m) as a result
of costs allocated to Porous Technologies of £0.3m (six months ended 30 June
2016: £0.9m; year ended 31 December 2016: £1.7m) under the internal management
methodology.
June 2017
Component Solutions Health & Personal Care Packaging Filter Products Eliminations Central Services1 Total continuing operations Discontinued operations Total
£m £m £m £m £m £m £m £m
External revenue 173.6 212.3 136.7 - - 522.6 15.7 538.3
Intersegment revenue 0.3 1.1 - (1.4) - - - -
Total revenue 173.9 213.4 136.7 (1.4) - 522.6 15.7 538.3
Adjusted operating profit/(loss)2 29.8 4.7 16.1 - (7.5) 43.1 2.5 45.6
Segment assets 200.1 249.3 172.7 - 15.7 637.8 - 637.8
Intangible assets 174.8 382.3 0.1 - - 557.2 - 557.2
Unallocated items 3 - - - - 82.9 82.9 - 82.9
Total assets 374.9 631.6 172.8 - 98.6 1,277.9 - 1,277.9
Segment liabilities 45.3 90.2 49.8 - 17.6 202.9 6.6 209.5
Unallocated items 3 - - - - 409.1 409.1 - 409.1
Total liabilities 45.3 90.2 49.8 - 426.7 612.0 6.6 618.6
June 2016
Component Solutions Health & Personal Care Packaging Filter Products Eliminations Central Services1 Total continuing operations Discontinued operations Total
£m £m £m £m £m £m £m £m
External revenue 146.5 215.4 132.8 - - 494.7 50.5 545.2
Intersegment revenue 0.5 1.3 0.1 (1.9) - - - -
Total revenue 147.0 216.7 132.9 (1.9) - 494.7 50.5 545.2
Adjusted operating profit/(loss)2 26.4 22.1 20.1 - (7.9) 60.7 9.4 70.1
Segment assets 191.1 258.8 175.9 - 12.9 638.7 76.1 714.8
Intangible assets 172.3 513.3 - - - 685.6 54.7 740.3
Unallocated items 3 - - - - 105.7 105.7 - 105.7
Total assets 363.4 772.1 175.9 - 118.6 1,430.0 130.8 1,560.8
Segment liabilities 40.4 99.4 54.9 - 14.6 209.3 14.8 224.1
Unallocated items 3 - - - - 673.9 673.9 - 673.9
Total liabilities 40.4 99.4 54.9 - 688.5 883.2 14.8 898.0
December 2016
Component Solutions Health & Personal Care Packaging Filter Products Eliminations Central Services1 Total continuing operations Discontinued operations Total
£m £m £m £m £m £m £m £m
External revenue 301.8 427.6 269.1 - - 998.5 105.2 1,103.7
Intersegment revenue 0.8 2.6 0.1 (3.5) - - - -
Total revenue 302.6 430.2 269.2 (3.5) - 998.5 105.2 1,103.7
Adjusted operating profit/(loss)2 54.4 34.5 37.5 - (16.0) 110.4 21.5 131.9
Segment assets 188.4 253.7 170.4 - 10.4 622.9 72.9 695.8
Intangible assets 190.2 391.4 0.1 - - 581.7 51.1 632.8
Unallocated items 3 - - - - 76.9 76.9 6.7 83.6
Total assets 378.6 645.1 170.5 - 87.3 1,281.5 130.7 1,412.2
Segment liabilities 41.9 96.9 54.0 - 17.6 210.4 14.4 224.8
Unallocated items 3 - - - - 566.6 566.6 18.1 584.7
Total liabilities 41.9 96.9 54.0 - 584.2 777.0 32.5 809.5
2. Segment analysis (continued)
1 Central Services includes executive and non-executive management, group
finance, tax, treasury, legal, group assurance, human resources, information
technology, corporate development, corporate affairs and other services
provided centrally to support the operating segments
2 Operating profit before intangible amortisation and exceptional items
3 The unallocated assets relate to income and deferred tax assets, retirement
benefit assets, derivatives and cash and cash equivalents. The unallocated
liabilities relate to interest bearing loans and borrowings, retirement
benefit obligations, derivatives, deferred tax liabilities and income tax
payable. Intersegment transactions are carried out on an arm's length basis
3. Exceptional items
Six monthsended30 Jun 2017£m Six monthsended30 Jun 2016£m Yearended31 Dec 2016£m
Exceptional operating items (including discontinued operations)
(Gains)/losses and transaction costs relating to acquisitions and disposals of businesses1:
- continuing operations 1.2 0.2 0.3
- discontinued operations (Porous Technologies) (134.7) - 4.7
Acquisition integration and restructuring costs2 - continuing operations - 4.2 4.5
Other3 - continuing operations 5.2 0.2 124.2
(128.3) 4.6 133.7
1 Gains/losses and transaction costs relating to acquisitions and disposals of
businesses are made up of £134.7m net gain on disposal of the Porous
Technologies business and £1.2m net loss on disposal of the Health & Personal
Care Packaging business in Bristol. Costs incurred during the year ended 31
December 2016 related to £0.3m in respect of the acquisition of Kamsri
Printing & Packaging PVT. Ltd based in India, and £4.7m costs in relation to
the disposal of Porous Technologies (including costs incurred on corporate
reorganisation carried out as part of the closing conditions to complete the
transaction, and cost of a claim settlement associated with the exit from
Porous Technologies). Costs incurred during the period ended 30 June 2016
related to the acquisition of Kamsri Printing & Packaging PVT. Ltd.
2 Acquisition integration and restructuring costs were incurred during 2016 in
respect of:
· additional integration costs (primarily employee costs directly
associated with the restructuring activities, costs of site closures and
directly attributable costs of sites which businesses are transferred into
under the integration plan) in relation to the ongoing integration of the
Clondalkin SPD business (year ended 31 December 2016: £4.5m; period ended 30
June 2016: £3.8m) offset with the gain on disposal of certain properties which
were acquired with that business (year ended 31 December 2016: £1.7m; period
ended 30 June 2016: £1.3m); and
· the costs associated with the closure of the Components site at Xiamen,
China, and integration of those operations into other sites in Asia as part of
the Components Asia restructuring programme following the Abric acquisition
(year ended 31 December 2016 and period ended 30 June 2016: £1.7m).
3 Other exceptional items in 2017 relate to the strategic review undertaken
during the period and associated reorganisation cost, including senior
management restructuring. Other exceptional items in the year ended 31
December 2016 related to:
· £123.9m impairment loss in relation to the Health & Personal Care
strategic business unit;
· further costs of £2.7m associated with the closure of the Filters site
in Jarrow and integration of previous Jarrow operations into the Hungary site
offset with the net release of property provisions of £1.3m on the disposal of
certain properties in Filtration Products (including a £0.5m loss of property
disposal in Porous Technologies); and
· the release of a provision of £1.1m for contingent deferred
consideration in relation to a prior period acquisition.
Other exceptional items in the period ended 30 June 2016 relate to the costs
associated with the closure of the Filters site in Jarrow, integration of
previous Jarrow operations into the Hungary site offset with the net release
of property provisions and the release of the contingent deferred
consideration in relation to a prior period acquisition.
4. Earnings per share
Six months ended Six months ended Year ended
30 Jun 2017 30 Jun 2016 31 Dec 2016
£m £m £m
Earnings: Continuing operations
Earnings/(loss) attributable to equity holders of Essentra plc 14.6 27.4 (51.7)
Adjustments
Amortisation of acquired intangible assets 11.5 14.6 30.2
Exceptional operating items 6.4 4.2 128.5
17.9 18.8 158.7
Tax relief on adjustments (3.3) (4.1) (30.8)
Adjusted earnings 29.2 42.1 76.2
Earnings: Discontinued operations
Earnings attributable to equity holders of Essentra plc 112.0 6.4 11.4
Adjustments
Amortisation of acquired intangible assets - 1.3 2.7
Exceptional operating items (134.7) 0.4 5.2
(134.7) 1.7 7.9
Tax charge/(relief) on adjustments 25.0 - (0.7)
Adjusted earnings 2.3 8.1 18.6
Weighted average number of shares
Basic weighted average ordinary shares outstanding (million) 261.5 260.9 261.1
Dilutive effect of employee share option plans (million) 1.4 2.8 -
Diluted weighted average ordinary shares (million) 262.9 263.7 261.1
Earnings per share: Continuing operations (pence)
Basic earnings/(loss) per share 5.6p 10.5p (19.8)p
Adjustment 5.6p 5.6p 49.0p
Basic adjusted earnings per share 11.2p 16.1p 29.2p
Diluted earnings/(loss) per share 5.6p 10.4p (19.8)p
Diluted adjusted earnings per share 11.1p 16.0p 29.2p
Earnings per share: Discontinued operations (pence)
Basic earnings per share 42.8p 2.5p 4.4p
Adjustment (41.9)p 0.6p 2.7p
Basic adjusted earnings per share 0.9p 3.1p 7.1p
Diluted earnings per share 42.6p 2.4p 4.4p
Diluted adjusted earnings per share 0.9p 3.0p 7.1p
Earnings per share: Total Group (pence)
Basic earnings/(loss) per share 48.4p 13.0p (15.4)p
Adjustment (36.3)p 6.2p 51.7p
Basic adjusted earnings per share 12.1p 19.2p 36.3p
Diluted earnings/(loss) per share 48.2p 12.8p (15.4)p
Diluted adjusted earnings per share 12.0p 19.0p 36.3p
Adjusted earnings per share is provided to reflect the underlying earnings
performance of Essentra.
For the year ended 31 December 2016, the employee share options are not
considered as dilutive, as they would increase loss per share from continuing
operations.
The basic weighted average number of ordinary shares in issue excludes shares
held in treasury and shares held by an employee benefit trust.
5. Property, plant and equipment
During the period, the additions of land and buildings, plant and machinery
and fixtures, fittings and equipment amounted to £17.2m (six months ended 30
June 2016: £22.5m; year ended 31 December 2016: £40.3m).
Land and buildings, plant and machinery and fixtures, fittings and equipment
with a net book value of £0.2m (six months ended 30 June 2016: £4.1m; year
ended 31 December 2016: £7.2m) were disposed of for proceeds of £1.0m (six
months ended 30 June 2016: £5.7m; year ended 31 December 2016: £8.4m).
6. Retirement benefit obligations
Movement in pension net assets/(liabilities) during the period
30 Jun 2017 30 Jun 2016 31 Dec 2016
£m £m £m
Movements
Beginning of period (23.4) (0.8) (0.8)
Service cost (0.7) (0.9) (1.7)
Employer contributions 0.7 0.4 1.0
Return on plan assets excluding amounts in net finance income 4.9 16.3 24.0
Actuarial losses arising from changes in financial assumptions (2.8) (22.6) (45.5)
Actuarial gains arising from change in demographic assumptions - - 3.4
Actuarial gains arising from experience adjustment 2.3 1.4 1.3
Net finance cost (0.5) (0.1) (0.2)
Benefits paid - - -
Business disposal 0.3 - -
Currency translation 1.4 (3.1) (4.9)
End of period (17.8) (9.4) (23.4)
At 31 December 2016, Porous Technologies had retirement benefit obligations of
(£0.3m) which are presented as liabilities in disposal group held for sale.
The principal defined benefit schemes were reviewed by independent qualified
actuaries as at 30 June 2017. The assets of the schemes have been updated to
the balance sheet date to take account of the investment returns achieved by
the schemes and the level of contributions. The liabilities of the schemes at
the balance sheet date have been updated to reflect latest discount rates and
other assumptions as well as the level of contributions. The principal
assumptions used by the independent qualified actuaries were as follows:
Europe
30 Jun 2017 30 Jun 2016 31 Dec 2016
Rate of increase in pensions
At RPI capped at 5% 3.10% 2.90% 3.30%
At CPI capped at 5% 2.20% 1.90% 2.40%
At CPI minimum 3%, capped at 5% 3.10% 3.10% 3.20%
At CPI capped at 2.5% 1.90% 1.70% 2.00%
Discount rate 2.60% 3.20% 2.70%
Inflation rate - RPI 3.20% 2.90% 3.40%
Inflation rate - CPI 2.20% 1.90% 2.40%
US
30 Jun 2017 30 Jun 2016 31 Dec 2016
Rate of increase in salaries n/a 3.00% n/a
Discount rate 3.84% 3.70% 4.15%
7. Analysis of net debt
30 Jun 2017 31 Dec 2016
£m £m
Cash at bank and in hand 34.1 34.0
Short-term deposits and investments 24.0 26.7
Cash and cash equivalents 58.1 60.7
Debt due within one year (0.6) (65.1)
Debt due after one year (269.7) (374.9)
Loan receivable (arising from the disposal of Porous Technologies) 5.0 -
Net debt (207.2) (379.3)
At 31 December 2016, Porous Technologies had cash and cash equivalents of
£6.7m which are presented as assets in disposal group held for sale.
At 30 June 2017, the Group's committed facilities primarily comprised a series
of US$80m US Private Placement Loan Notes from various financial institutions
and syndicated multi-currency 5-year revolving credit facilities of £271.0m
and E167.5m from its banks. At 30 June 2017, the available bank facilities
totalled £417.9m (31 December 2016: £414.2m) of which £208.8m (31 December
2016: £311.0m) was drawn down and £209.1m (31 December 2016: £103.2m) was
undrawn.
8. Acquisitions and disposals
Disposal of Porous Technologies
On 25 August 2016, Essentra entered into a sale and purchase agreement with
Filtration Group to dispose of the Group's entire operations in Porous
Technologies. The transaction completed on 6 March 2017. The results of
Porous Technologies up to the date on which the transaction completed are
presented as results from a discontinued operation in the consolidated income
statement, and the comparative information has been re-presented accordingly.
The assets and liabilities of Porous Technologies were presented as held for
sale on the balance sheet as at 31 December 2016. No finance income or
expense related to discontinued operations, and the income tax expense related
to discontinued operations amounted to £25.5m (six months ended 30 June 2016:
£2.2m).
Included within exceptional operating items is a profit arising from the
movement in foreign exchange reserve of £26.3m, reclassified and reported in
the Group income statement.
The results of continuing and discontinued operations are as follows:
Period ended 30 June 2017
Continuing operations Discontinued operations Total Group
£m £m £m
External revenue 522.6 15.7 538.3
External expenses (479.8) (12.9) (492.7)
Operating profit before intangible amortisation and exceptional operating items 42.8 2.8 45.6
Amortisation of acquired intangible assets (11.5) - (11.5)
Exceptional operating items (6.4) 134.7 128.3
Operating profit 24.9 137.5 162.4
Finance income 0.3 - 0.3
Finance expense (5.8) - (5.8)
Profit before tax 19.4 137.5 156.9
Income tax expense (4.2) (25.5) (29.7)
Profit after tax 15.2 112.0 127.2
Basic earnings per share 5.6p 42.8p 48.4p
Basic adjusted earnings per share 11.2p 0.9p 12.1p
Diluted earnings per share 5.6p 42.6p 48.2p
Diluted adjusted earnings per share 11.1p 0.9p 12.0p
8. Acquisitions and disposals (continued)
Period ended 30 June 2016
Continuing operations Discontinued operations Total Group
£m £m £m
External revenue 494.7 50.5 545.2
External expenses (434.9) (40.2) (475.1)
Operating profit before intangible amortisation and exceptional operating items 59.8 10.3 70.1
Amortisation of acquired intangible assets (14.6) (1.3) (15.9)
Exceptional operating items (4.2) (0.4) (4.6)
Operating profit 41.0 8.6 49.6
Finance income 0.8 - 0.8
Finance expense (7.8) - (7.8)
Profit before tax 34.0 8.6 42.6
Income tax expense (6.3) (2.2) (8.5)
Profit after tax 27.7 6.4 34.1
Basic earnings per share 10.5p 2.5p 13.0p
Basic adjusted earnings per share 16.1p 3.1p 19.2p
Diluted earnings per share 10.4p 2.4p 12.8p
Diluted adjusted earnings per share 16.0p 3.0p 19.0p
Year ended 31 December 2016
Continuing operations Discontinued operations Total Group
£m £m £m
External revenue 998.5 105.2 1,103.7
External expenses (889.8) (82.0) (971.8)
Operating profit before intangible amortisation and exceptional operating items 108.7 23.2 131.9
Amortisation of acquired intangible assets (30.2) (2.7) (32.9)
Exceptional operating items (128.5) (5.2) (133.7)
Operating (loss)/profit (50.0) 15.3 (34.7)
Finance income 2.1 - 2.1
Finance expense (14.6) - (14.6)
(Loss)/profit before tax (62.5) 15.3 (47.2)
Income tax credit/(expense) 11.5 (3.9) 7.6
(Loss)/profit after tax (51.0) 11.4 (39.6)
Basic (loss)/earnings per share (19.8)p 4.4p (15.4)p
Basic adjusted earnings per share 29.2p 7.1p 36.3p
Diluted (loss)/earnings per share (19.8)p 4.4p (15.4)p
Diluted adjusted earnings per share 29.2p 7.1p 36.3p
The results from discontinued operations are attributable entirely to the
equity holders of Essentra plc. The earnings per share of discontinued
operations are disclosed in note 4.
Cash flows of discontinued operations are as follows:
Six months ended 30 Jun 2017 Year ended 31 Dec 2016
£m £m
Net cash (outflow)/inflow from operating activities (16.7) 23.0
Net cash inflow/(outflow) from investing activities 211.3 (1.0)
Net cash flows for the year 194.6 22.0
The cumulative income or expenses included in other comprehensive income
relating to Porous Technologies amounted to a net loss of £25.1m (2016 FY:
£18.1m). The £211.3m net cash from investing activities is made up of
disposal proceeds of £215.3m less cash disposed of £3.9m, and £0.1m cash
outflow relating to acquisition of property, plant and equipment.
2016 acquisition: Kamsri
The Group acquired the pharmaceutical assets of Kamsri Printing & Packaging
PVT. Ltd ("Kamsri") based in India in January 2016. This acquisition was not
material.
9. Dividends
Per share Total
Six months ended 30 Jun 2017 Six months ended 30 Jun 2016 Yearended 31 Dec 2016 Six months ended 30 Jun 2017 Six months ended 30 Jun 2016 Year ended 31 Dec 2016
p p p £m £m £m
2016 interim: paid 30 October 2016 6.3 6.3 16.5 16.5
2016 final: paid 2 May 2017 14.4 37.7
2017 interim:payable 30 October 2017 6.3 16.5
6.3 6.3 20.7 16.5 16.5 54.2
The interim dividend for 2017 of 6.3p per 25p ordinary share will be paid on
30 October 2017 to equity holders on the share register on 29 September 2017.
In the table above, each dividend is shown in the period that it is
attributable to. For accounting purpose, dividends are recognised in the
period in which they are approved by the shareholders of the Company (final
dividend) or paid (interim dividend).
10. Related party transactions
Other than the compensation of key management, Essentra has not entered into
any material transactions with related parties since the last Annual Report.
11. Financial instruments
Essentra held the following financial instruments at fair value at 30 June
2017. The only financial instrument with fair value determined by reference
to significant unobservable inputs, which is classified as level 3 in the fair
value hierarchy, is the deferred contingent consideration of £0.9m primarily
relating to the acquisition of Kamsri and Abric (31 Dec 2016: deferred
contingent consideration of £1.3m primarily relating to the acquisition of
Kamsri, Specialty Plastics and Abric). The fair value of the deferred
contingent consideration is estimated based on an assessment of the likely
outcome of the acquired business' financial performance. The other financial
instruments included in the table below are determined to be level 2 in the
fair value hierarchy. There have been no transfers between levels of the fair
value hierarchy. There are no non-recurring fair value measurements.
30 Jun 2017 31 Dec 2016
£m £m
Financial assets
Derivatives 0.3 1.2
Financial liabilities
Derivatives (1.0) (1.7)
Deferred contingent consideration (0.9) (1.3)
Total (1.6) (1.8)
Essentra had US dollar and euro denominated borrowings which it designated as
hedges of its net investments in subsidiary undertakings. The exchange gains
of £3.4m (2016: £40.8m loss) on the US dollar borrowings and the losses of
£3.3m (2016: £16.1m) on the euro borrowings were recognised in other
comprehensive income.
12. Subsequent events
On 27 July 2017, Essentra announced that is entering into consultation
regarding the proposal to cease the production of folding cartons for the
consumer goods industry at Newport, UK and, as a consequence, to close its
cartons facility. If the proposal is confirmed, the production of folding
cartons in Newport will cease by the end of 2017. The proposed closure of IP5
is expected to result in an exceptional charge of approximately £35m in the
second half of 2017, of which approximately £13m represents a non-cash
charge.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
• 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 entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Paul Forman Stefan
Schellinger
Chief Executive Group
Finance Director
28 July 2017
Independent review report to Essentra plc
Report on the condensed consolidated financial statements
Our conclusion
We have reviewed Essentra plc's Condensed consolidated financial statements
(the "interim financial statements") in the half-yearly report of Essentra plc
for the 6 month period ended 30 June 2017. Based on our review, nothing has
come to our attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements, comprise:
· the Condensed consolidated balance sheet as at 30 June 2017;
· the Condensed consolidated income statement and condensed consolidated
statement of comprehensive income for the period then ended;
· the Condensed consolidated statement of cash flows for the period then
ended;
· the Condensed consolidated statement of changes in equity for the
period then ended; and
· the explanatory
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