REG - Essentra plc - Results for the Half Year Ended 30 June 2014 <Origin Href="QuoteRef">ESNT.L</Origin> - Part 1
06/09/2014 22:41
For best results when printing this announcement, please click on the link
below:
http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20140731:nRSe7975Na
RNS Number : 7975N
Essentra plc
31 July 2014
For immediate release 31 July 2014
ESSENTRA PLC
("the Company")
A leading international supplier of speciality plastic, fibre, foam &
packaging components
RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2014
HY 2014: CONTINUED DELIVERY OF BALANCED, PROFITABLE GROWTH
WELL PLACED TO ACHIEVE VISION 2015 OBJECTIVES IN 2014
HY 2014 highlights:
· Revenue up 20% at constant FX (like-for-like1 +9%) to £431m.
· Accelerating momentum in Q2, with like-for-like1 revenue growth of 10%.
· Adjusted operating profit2 up 14% (constant FX) to £69m.
· Adjusted EPS2 ahead 15% (constant FX) to 20.3p.
· Improvement in net working capital to 13.9% of revenue (better by 70bps,
constant FX).
· Tax rate reduced by 200bps to 25.4%.
· Net debt of £224m (FY 2013: £217m), with strong cash flow generation
offset by higher dividend payments.
· 19% increase in the half year dividend to 5.7p per share.
Results at a glance:
HY 2014 HY 2013 % change Actual FX % change Constant FX
Revenue £431.1m £384.6m +12 +20
Operating profit - adjusted2 £69.0m £65.2m +6 +14
Pre-tax profit - adjusted2 £64.2m £60.3m +6 +16
Net income - adjusted2 £47.9m £43.8m +9 +20
Earnings per share - adjusted2 20.3p 19.4p +5 +15
Dividend per share 5.7p 4.8p +19 +19
Operating profit £54.0m £50.3m +7 +18
Net income £35.8m £31.6m +13 +28
Basic earnings per share 15.2p 13.9p +9 +23
1 Adjusted for the impact of acquisitions, disposals and foreign exchange (see
page 2)
2 Before intangible amortisation and exceptional operating items
Commenting on today's results, Colin Day, Chief Executive, said:
"With like-for-like revenue growth of 9% and adjusted EPS ahead 15% at
constant exchange, Essentra had a strong first half. Revenue and profit
momentum improved in the second quarter, underpinned by more sizeable business
wins and the successful commercialisation of new product initiatives, and
supported by further cost reduction and efficiency programmes. In addition,
the integration of recent acquisitions, the delivery of synergy savings and
the transition to the new organisational structure are proceeding well and are
ahead of expectations.
Shortly after the end of the period we successfully refinanced - and increased
- our banking facilities, at more favourable rates. This reinforces
Essentra's stated objective of complementing our underlying performance with
value-creating acquisitions, and provides the Company with even greater
flexibility to pursue strategic opportunities which may arise in the future.
Given these interim results, Essentra intends to deliver further balanced,
profitable growth in 2014, and thus achieve its Vision 2015 objectives of at
least mid single-digit like-for-like revenue growth and double-digit adjusted
EPS growth at constant exchange."
Basis of Preparation
The term "constant FX" describes the performance of the business on a
comparable basis, after adjusting for the impact of foreign exchange.
The term "like-for-like" ("LFL") describes the performance of the business on
a comparable basis, adjusting for the impact of acquisitions, disposals and
foreign exchange. The HY 2014 LFL results are adjusted for Contego Healthcare
Limited ("Contego", acquired on 30 April 2013), Mesan Kilit A.S. ("Mesan",
acquired on 30 December 2013) and Kelvindale Products Pty Ltd ("Kelvindale",
acquired on 12 May 2014). The impact of Dakota Packaging Limited ("Dakota",
acquired on 7 November 2013) is not excluded from the LFL results from 30
April 2014, as it is no longer separately identifiable having been fully
integrated into the healthcare packaging business.
The term "adjusted" excludes the impact of intangible amortisation and
exceptional operating items, less any associated tax relief. In HY 2014,
intangible amortisation was £8.7m (HY 2013: £5.6m), and there was an
exceptional pre-tax charge of £6.3m (HY 2013: £9.3m) mainly relating to
integration and restructuring costs arising from the afore-mentioned
acquisitions.
Operating Review
HY 2014 revenue increased 12.1% (+20.3% at constant exchange) to £431.1m, with
LFL growth of 8.6% supported by continued product innovation, improved
marketing effectiveness and investment in both existing and new geographical
markets.
Ongoing volume leverage, operational initiatives and successful pricing
programmes to mitigate input cost increases were offset by the mix effect of
the very strong growth in lower margin Filter Products and inventory
destocking in the higher margin Porous Technologies division. Acquisitions
also had a dilutive impact such that, in total, the gross margin declined
190bps (-230bps at constant exchange), to 34.0%.
On an adjusted basis, operating profit was ahead 5.8% (+14.3% at constant
exchange) at £69.0m, equating to a 100bps decrease in the margin to 16.0%
(-80bps at constant exchange). As anticipated, the successful delivery of
synergy savings and continued cost efficiencies were offset by a one-off
charge relating to the closure of a Filter Products facility in Italy.
Operating profit as reported was £54.0m, +7.4% versus last year (+18.4% at
constant exchange), including intangible amortisation of £8.7m and an
exceptional pre-tax charge of £6.3m mainly relating to integration and
restructuring costs arising from recent acquisitions.
Net finance expense was broadly unchanged at £4.8m (HY 2013: £4.9m), and the
effective tax rate on profit before tax (before exceptional operating items)
reduced to 25.4% (HY 2013: 27.4%).
On an adjusted basis, net income of £47.9m was up 9.4% (+19.7% at constant
exchange) and earnings per share growth was 4.6% (+14.6% at constant exchange)
to 20.3p. On a reported basis, net income was £35.8m, an increase of 13.3%
(+27.7% at constant exchange), with earnings per share up 9.4% versus HY 2013
at 15.2p (+22.6% at constant exchange).
Business Review
Summary growth in revenue by division
% growth LFL Acquisitions / Disposals Foreign Exchange Total Reported
Component & Protection Solutions +8 +6 -7 +7
Porous Technologies -7 -2* -6 -15
Packaging & Securing Solutions -1 +48 -5 +42
Filter Products +22 - -13 +9
Other +11 - -4 +7
Total Company +9 +11 -8 +12
* Transfer of intercompany revenue
The following review is given at constant exchange rates and on an adjusted
basis, unless otherwise stated.
Component & Protection Solutions
HY 2014£m % growth Actual FX % growth Constant FX
Revenue 123.8 +7.1% +13.7%
Operating profit 32.5 +14.0% +21.2%
Operating margin 26.3% +160bps +170bps
Revenue increased 13.7% to £123.8m. Adjusting for the acquisition of Mesan in
December 2013 and of Kelvindale in May 2014, LFL growth was 7.5% and was
supported by a more encouraging market backdrop and the roll out of new
distribution sites, as well as new business wins and range consolidation
opportunities.
In Components, the result reflected a better trading environment in Europe, as
well as the benefits of migrating five operating businesses to a single
Essentra Components brand. Additionally, the transition to a more regional
organisational structure during 2014 has already resulted in incremental
growth opportunities, in terms of incorporating both cleanroom wipes and
further speciality tapes products in the extensive catalogue range. Sites in
Thailand, Romania and Mexico were launched during the period, and the
recently-established facilities in Memphis and Greensboro, US both performed
well: in addition, the performance of the recently-acquired Mesan business is
in line with expectations, and a Components catalogue featuring 28,000
products is already being marketed to Mesan's customers. New distribution
centres were also opened in Singapore and in Louisville, US: with these
centres already holding almost 10,000 and 30,000 SKUs respectively, they are
both well-positioned to provide customers with even better, and more
comprehensive, service in their respective geographical regions.
Pipe Protection Technologies recorded a strong result versus the prior year
with encouraging growth across all sites, benefiting from improved market
conditions, new business wins and successful product roll out. In particular,
the innovative and industry-compliant MaxX range of thread protectors
continued to perform well, boosted by the recent launch of a "liftable"
variant which better serves drilling wellsite applications that require
protectors which allow pipes to be lifted individually onto the drilling
floor.
Operating profit grew 21.2% to £32.5m, equating to a 170bps uplift in the
margin. This improvement was driven by savings from the ongoing consolidation
of the Components' site footprint and further operating and process
efficiencies.
On 12 May 2014, the acquisition of 100% of the share capital of Kelvindale was
completed, a leading manufacturer and distributor of an extensive range of
plastic protection and finishing products in Australia. Since then,
approximately 12,000 Essentra Components products have been launched on
Kelvindale's website, and the integration to date is in line with
expectations.
Porous Technologies
HY 2014£m % growth Actual FX % growth Constant FX
Revenue 44.4 -14.5% -8.7%
Operating profit 6.7 -48.5% -44.7%
Operating margin 15.1% -990bps -980bps
Revenue decreased 8.7% to £44.4m. Adjusting for the transfer of a portion of
intercompany revenue to the Filter Products division, LFL growth was -7.3%.
Growth of 17% in cleanroom wipes (c. 23% divisional revenue) was driven by
further success in globalising the product line, while an increase of 7% in
healthcare (c. 23% divisional revenue) was led by wound care and products
using porous plastics. Household products & personal care (together c. 9%
divisional revenue) rose 26%, driven in particular by new business wins in air
care with multinational customers.
Writing instruments (c. 32% divisional revenue) was broadly unchanged, with
new sales of nibs to global customers offset by the impact of a strong
back-to-school period in the US in the prior year comparative period. As
anticipated, the result in printer systems (c. 13% divisional revenue)
declined -52% owing to inventory destocking with a major global OEM, where
performance is expected to improve in the second half of the year.
Operating profit decreased 44.7% to £6.7m and the margin declined by -980bps.
Continued efficiency initiatives were offset by the mix effect of the
afore-mentioned inventory destocking, with the margin expected to return
towards more normalised levels in the second half of the year with the
anticipated recovery in sales.
Packaging & Securing Solutions
HY 2014£m % growth Actual FX % growth Constant FX
Revenue 108.6 +42.0% +47.0%
Operating profit 18.3 +35.6% +40.0%
Operating margin 16.9% -70bps -80bps
Revenue increased 47.0% to £108.6m. Adjusting for the healthcare packaging
acquisitions of Contego and Dakota with effect from 30 April 2014, LFL growth
was -1.2%.
The result in Packaging showed a positive performance in leaflets to the
healthcare industry, and was supported by recent new business wins with major
multinational customers. Successful product launches (such as AquaSense
innovative labels and Re:Close resealable tape) further contributed, and the
performance in card solutions was also encouraging. These factors were offset
by tear tape sales to the tobacco industry, where market conditions remain
challenging.
Growth in Speciality Tapes was driven by a strong contribution from the
expanding Express footprint in North America, including the
recently-established sites in Jacksonville and Greensboro, US. Further to the
recent expansion of hot melt capability at the Chicago, US facility, Finger
Lift tape performed particularly well, supported by the Foam and Duraco Red
tape ranges.
During the period, labels manufacturing was relocated to a new,
state-of-the-art facility in Newport, UK, which will provide the best
operational footprint and necessary space for the future development of this
key product line. In addition, the healthcare packaging operations in Ireland
were consolidated into the single facility in Dublin, and the site in
Waterford was closed and subsequently sold: further to this move, the
businesses are no longer separately identifiable.
Operating profit increased 40.0% to £18.3m, with the margin down -80bps to
16.9%. Successful delivery of healthcare acquisition synergies, combined with
continued cost savings and efficiency initiatives, were offset by the mix
effect of the decline in tobacco packaging.
Filter Products
HY 2014£m % growth Actual FX % growth Constant FX
Revenue 141.7 +9.4% +22.1%
Operating profit 19.8 +10.0% +23.2%
Operating margin 14.0% +10bps +10bps
Revenue increased 22.1% to £141.7m. Underlying volumes were ahead of the
prior year period, with Asia accounting for 58% of volumes in HY 2014 (HY
2013: 63%).
The result in special filters was particularly strong, boosted by ongoing
proprietary innovations and the successful commercialisation of recent
contract wins. Among the new product launches and development initiatives
during the period were a new four-segment filter which provides even greater
filtration flexibility, as well as a unique plugwrap material that disperses
in water at least three times faster than standard alternatives thus enabling
the manufacture of more environmentally-friendly filters. Joint development
activity with multinational customers continued to increase, and the division
filed five new patent and trademark applications to help support its future
innovation capabilities.
Leveraging its extensive experience and expanded portfolio of accredited
testing methods, the Scientific Services laboratory in Jarrow, UK, performed
well, in particular in the field of e-cigarettes.
As part of its commitment to ensuring a flexible and competitive manufacturing
base, the division opened a second facility in India with its joint venture
partner, ITC. Production in Hungary increased, and further manufacturing
capacity for special filters was added at the recently-opened site in Dubai.
Following a review of its geographic footprint, the division took the decision
to close its facility in Italy.
Operating profit grew 23.2% to £19.8m, with the margin up 10bps to 14.0%.
Continued successful productivity and efficiency initiatives were partially
offset by a one-off cost of the afore-mentioned site closure, from which
significant savings are anticipated in the second half of the year.
Other
HY 2014£m % growth Actual FX % growth Constant FX
Revenue 13.0 +6.6% +10.5%
Operating profit 0.9 - +10.5%
Operating margin 6.9% -50bps +0bps
Revenue from Essentra Extrusion increased 10.5% to £13.0m, supported by new
business wins and a more encouraging market backdrop. Operating profit rose
10.5% to £0.9m with the margin unchanged versus the prior year period, as cost
savings initiatives were largely offset by ongoing investment in future
revenue growth opportunities.
Financial Review
Foreign exchange rates. Movements in exchange rates relative to sterling
affect actual results as reported. The constant exchange rate basis adjusts
the comparative to exclude such movements, to show the underlying growth of
the Company.
The principal exchange rates for Essentra in HY 2014 were:
Average Closing
HY 2014 HY 2013 HY 2014 HY 2013
US$:£ 1.67 1.55 1.71 1.52
E:£ 1.22 1.18 1.25 1.17
Re-translating at HY 2014 average exchange rates decreases the prior year
revenue and adjusted operating profit by £26.4m and £4.9m respectively.
Net finance expense. Net finance expense of £4.8m was broadly unchanged
versus HY 2013, and is broken down as follows:
£m HY 2014 HY 2013
Net interest charged on net debt 4.8 4.5
Amortisation of bank fees 0.4 0.5
IAS 19 pension finance credit (0.4) (0.1)
Total net interest expense 4.8 4.9
Positive numbers represent net finance expense, negative numbers reflect net
finance income
Tax. The effective tax rate on profit before tax (before exceptional
operating items) was 25.4% (HY 2013: 27.4%).
Net working capital. Net working capital is defined as Inventories plus Trade
& Other Receivables less Trade & Other Payables, adjusted to exclude Deferred
Consideration Receivable / Payable, Interest Accruals, Capital Payables and
Other Normalising Items ("Adjustments").
£m HY 2014 HY 2013
Inventories 84.6 87.1
Trade & other receivables 163.3 151.7
Trade & other payables (139.5) (130.1)
Adjustments 7.0 4.1
Net working capital 115.4 112.8
The net working capital / revenue ratio was 13.9% (HY 2013: 14.6%, at constant
FX).
Cash flow. Operating cash flow increased 14.7% to £34.3m. Free cash flow of
£19.0m was £7.2m higher than HY 2013 (+61.0%).
£m HY 2014 HY 2013
Operating profit - adjusted 69.0 65.2
Depreciation 15.0 12.4
Share option expense / other movements 1.1 2.7
Change in working capital (37.2) (24.6)
Net capital expenditure (13.6) (25.8)
Operating cash flow - adjusted 34.3 29.9
Tax (10.3) (10.7)
Net interest paid (4.7) (4.5)
Pension obligations (0.3) (2.9)
Free cash flow - adjusted 19.0 11.8
Net debt. Net debt at the end of the period was £223.8m, a £6.7m increase
from 1 January 2014, primarily due to the impact of higher dividend payments.
£m HY 2014
Net debt as at 1 January 2014 217.1
Free cash flow (19.0)
Dividends 24.8
Acquisitions 2.6
Foreign exchange (4.6)
Other 2.9
Net debt as at 30 June 2014 223.8
The Company's financial ratios remain strong. The ratio of net debt to EBITDA
as at 30 June 2014 was 1.4x (31 December 2013: 1.3x) and interest cover was
13.3x (31 December 2013: 13.0x).
Pensions. As at 30 June 2014, the Company's IAS 19 pension asset was £7.9m
(HY 2013: £9.0m) and the associated deferred tax liability was £0.6m (HY 2013:
£2.5m deferred tax asset). The pension asset has been calculated after
updating the asset values and certain assumptions as at 30 June 2014.
Dividends. The Board of Directors has approved an interim dividend of 5.7
pence per 25 pence ordinary share (HY 2013: 4.8 pence), an increase of 18.8%.
The interim dividend will be paid on 30 October 2014 to equity holders on the
share register on 26 September 2014: the ex-dividend date will be 24
September. Essentra operates a Dividend Re-Investment Programme ("DRIP"),
details of which are available from the Company's Registrars, Computershare
Investor Services PLC.
Board changes. With effect from the closure of the Company's Annual General
Meeting ("AGM") on 29 April 2014, Paul Drechsler stepped down as the Senior
Independent Non-Executive Director, as Chairman of the Remuneration Committee
and also as a member of the various Board Committees. While Paul is no longer
considered as independent, in accordance with the Corporate Governance Code,
he will continue to serve as a Non-Executive Director.
Following the AGM, Terry Twigger became the Senior Independent Non-Executive
Director, and Lorraine Trainer became the Chairman of the Remuneration
Committee.
Treasury policy and controls. Essentra has a centralised treasury function to
manage funding, liquidity and exposure to interest rate and foreign exchange
risk. Treasury policies are approved by the Board and cover the nature of the
exposure to be hedged, the types of derivatives that may be employed and the
criteria for investing and borrowing cash. Essentra uses derivatives only to
manage currency and interest rate risk arising from the underlying business
activities. No transactions of a speculative nature are undertaken. The
treasury function is subject to periodic independent reviews by the Group
Assurance department. Underlying policy assumptions and activities are
reviewed by the Treasury Committee.
Controls over exposure changes and transaction authenticity are in place, and
dealings are restricted to those banks with the relevant combination of
geographical presence, expertise and suitable credit rating.
Foreign exchange risk. The majority of Essentra's net assets are in
currencies other than sterling. The Company's normal policy is to reduce the
translation exposure and the resulting impact on shareholders' funds through
measures such as borrowing in those currencies in which the Group has
significant net assets. As at 30 June 2014, Essentra's US dollar-denominated
assets were approximately 48% hedged by its US dollar-denominated borrowings,
while its euro-denominated assets were approximately 51% hedged by its
euro-denominated borrowings.
The majority of Essentra's transactions are carried out in the functional
currencies of its operations, and therefore transaction exposure is limited.
However, where such exposure does occur, Essentra uses forward foreign
currency contracts to hedge its exposure to movements in exchange rates on its
highly probably forecast foreign currency sales and purchases over a period of
up to 18 months.
Management of principal risks. The management of risk underpins the Company's
Vision 2015 strategy, focusing on the challenges which arise in the
international environment in which Essentra conducts business and reflecting
the Company's appetite for risk in the delivery of its business objectives.
As such, risks are continuously monitored, associated action plans are
reviewed, appropriate contingencies are provisioned and information is
reported through established management control procedures.
The Company is subject to the general risks and uncertainties which impact
other international organisations, including political instability in the
countries in which the Company operates and sources raw materials, the impact
of natural disasters and changes in general economic conditions, including
currency and interest rate fluctuations, tax regimes and raw material costs.
The principal risks and uncertainties which the Board believes are specific to
Essentra are summarised below and are set out in full, together with the
associated risk management response, on pages 40-43 of the Company's 2013
Annual Report.
Disruption to infrastructure
A catastrophic loss of the use of all or a portion of any of Essentra's
manufacturing or distribution facilities could adversely affect the Company's
ability to meet the demands of its customers.
Emerging technology and competition pressures
Essentra faces pressure from direct competitors, as well as competition from
alternative technologies.
Failure to drive business development
There can be no assurance that the Company will develop, complete and
integrate current and new suitable products and expand further through
start-up operations.
Mergers and acquisitions
The rate of any future acquisition integration may in part be dependent on the
success of identifying the correct acquisitions and having sufficient
resources available for integration.
Customer concentration
In some of Essentra's businesses, the customer base is relatively
concentrated. In addition, trends in certain markets, particularly in the oil
and gas industry, may reduce the demands for the Company's products.
Key raw material supply
Some of Essentra's businesses are dependent on the availability of specialist
raw materials or components which are incorporated into the Company's
products.
Intellectual property development and protection
A key component of Essentra's future success is the ability to develop new and
innovative products and services.
Relationship with the tobacco industry
A substantial part of Essentra's business relates to the supply of filter
products and packaging solutions to manufacturers in the tobacco industry.
Talent management
Essentra's international operations are dependent on existing key executives
and certain other employees in order to sustain, develop and grow its
businesses.
Compliance risk - laws and regulations
Risk related to regulatory and legislative changes involves the possible
inability of the Company to comply with current, changing or new legislation /
regulation.
2014 Outlook
Essentra intends to deliver further balanced growth in 2014, and thus achieve
its Vision 2015 objectives of at least mid single-digit like-for-like revenue
growth and double-digit adjusted EPS growth at constant exchange.
Vision 2015
Essentra's Vision 2015 strategy seeks to maximise shareholder value through
the delivery of balanced profitable growth in both its existing and future
opportunity markets and technologies. The strategy also calls for strong
conversion of profit into cash and a progressive dividend policy. The Company
looks to complement this balanced organic growth with value-adding
acquisitions.
Enquiries
Essentra plcJoanna Speed, Corporate Affairs DirectorTel: +44 (0)1908 359100 BuchananRichard OldworthHelen ChanTel: +44 (0)20 7466 5000
Presentation
1. A copy of these results is available on www.essentra.com
2. A live audiocast of today's presentation of these results to investors
and analysts will start at 08:30 (UK time) on www.essentra.com/webcasts.aspx.
The audiocast can also be accessed using the following details.
Dial-in number: +44 (0)20 3427 1915 (UK / international participants)+1 212 444 0412 (US participants)
Toll-free number: 0800 279 4992 (UK participants)+1 877 280 1254 (US participants)
PIN code: 8068280
A recording of the audiocast will be made available on the website later in
the day. A replay will additionally be available as follows:
Replay number: +44 (0)20 3427 0598 (UK / international participants)+1 347 366 9565 (US participants)
Toll-free number: 0800 358 7735 (UK participants)+1 866 932 5017 (US participants)
Replay access code: 8068280
Replay available: For 7 days
Cautionary forward looking statement
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 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
Company accepts no obligation to revise or update these forward-looking
statements publicly or adjust them to future events of developments, whether
as a result of new information, future events or otherwise, except to the
extent legally required.
Notes to Editors
Essentra plc is a FTSE 250 company and a leading international supplier of
speciality plastic, fibre, foam and packaging products. Through its four
principal operating divisions, Essentra focuses on the light manufacture and
distribution of high volume, essential components which serve customers in a
wide variety of end-markets and geographies.
Component & Protection Solutions
The Components business is a global market leading manufacturer and
distributor of plastic injection moulded, vinyl dip moulded and metal items.
Operating units in 26 countries serve a very broad industrial base of
customers with a rapid supply of primarily plastic products for a variety of
applications in industries such as equipment manufacturing, automotive,
fabrication, electronics and construction.
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. Locations in four countries, combined with a wide distributor
network, serve customers around the world.
Porous Technologies
A global market leading developer and manufacturer of custom fluid handling
components, engineered from a portfolio of technologies that includes bonded
and non-woven fibre, polyurethane foam and porous plastic. Representing
leading innovations used in healthcare, consumer and industrial applications,
its enabling components are found in a wide range of products from medical
diagnostics tests to advanced wound care pads, inkjet printer cartridges,
writing instruments, clean room wipes and air fresheners. Customers in over 56
countries are served from six manufacturing facilities with research and
development centres supporting the division globally.
Packaging & Securing Solutions
A leading global provider of packaging and securing solutions to a diversified
blue-chip customer base. The division focuses on delivering value adding
innovation, quality and service to customers through a range of cartons,
tapes, leaflets, foils and labels for the healthcare, consumer and specialist
packaging, point of sale and paper & board industries. The division is also a
leading supplier of authentication technologies and identity solutions.
Customers in over 100 countries are served from facilities operating in ten
countries.
Filter Products
The only global independent cigarette filter supplier. The nine worldwide
locations, including a UK-based research facility and three regional
development centres provide a flexible infrastructure strategically positioned
to serve the tobacco industry. The division supplies a wide range of value
adding high quality innovative filters, packaging solutions to the roll your
own sector and analytical laboratory services for ingredient measurement for
the industry.
Other
The Extrusion business is a leading custom profile extruder located in The
Netherlands and offers a complete design and production service. One of the
first companies to extrude plastics in 1956, it is now one of Europe's most
advanced suppliers of co-extrusions and tri-extrusions to all branches of
industry.
Headquartered in the United Kingdom, Essentra's global network extends to 33
countries and includes c. 5,700 employees, 42 principal manufacturing
facilities, 64 sales & distribution operations and 5 research & development
centres. For further information, please visit www.essentra.com.
Condensed consolidated income statement
Six monthsended Six monthsended Year ended
Note 30 Jun 2014 30 Jun 2013 31 Dec 2013
£m £m £m
Revenue 2 431.1 384.6 798.1
Operating profit before intangible amortisation and exceptional operating items 69.0 65.2 130.4
Intangible amortisation (8.7) (5.6) (14.2)
Exceptional operating items 2 (6.3) (9.3) (19.2)
Operating profit 2 54.0 50.3 97.0
Finance income 0.4 0.3 1.0
Finance expense (5.2) (5.2) (11.6)
Profit before tax 49.2 45.4 86.4
Income tax expense (13.4) (13.8) (26.1)
Profit for the period 35.8 31.6 60.3
Attributable to:
Equity holders of Essentra plc 35.4 31.1 60.1
Non-controlling interests 0.4 0.5 0.2
Profit for the period 35.8 31.6 60.3
Earnings per share attributable to equity holders of Essentra plc:
Basic 3 15.2p 13.9p 26.3p
Diluted 3 14.8p 13.5p 25.7p
Condensed consolidated statement of comprehensive income
Six months ended 30 Jun 2014 Six months ended 30 Jun 2013 Yearended 31 Dec 2013
£m £m £m
Profit for the period 35.8 31.6 60.3
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit pension schemes (4.0) 13.9 11.2
Deferred tax credit/(expense) on remeasurement of defined benefit pension schemes 1.2 (3.9) (3.1)
(2.8) 10.0 8.1
Items that may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges:
Net change in fair value of cash flow hedges transferred to the income statement 0.1 0.1 0.1
Effective portion of changes in fair value of cash flow hedges 0.6 (0.3) (0.1)
Foreign exchange translation differences:
Attributable to equity holders of Essentra plc:
Arising on translation of foreign operations (14.7) 20.2 (14.7)
Arising on effective net investment hedges 5.1 (9.9) 0.2
Income tax (expense)/credit on effective net investment hedges (1.1) 2.3 -
Attributable to non-controlling interests - - (0.5)
(10.0) 12.4 (15.0)
Other comprehensive income for the period, net of tax (12.8) 22.4 (6.9)
Total comprehensive income for the period 23.0 54.0 53.4
Attributable to:
Equity holders of Essentra plc 22.6 53.5 53.7
Non-controlling interests 0.4 0.5 (0.3)
23.0 54.0 53.4
Condensed consolidated balance sheet
Note 30 Jun 2014 30 Jun 2013 31 Dec 2013
£m £m £m
Assets
Property, plant and equipment 4 207.6 225.0 213.7
Intangible assets 383.2 376.9 396.7
Deferred tax assets 5.4 7.5 6.4
Retirement benefit assets 5 25.1 29.5 21.9
Total non-current assets 621.3 638.9 638.7
Inventories 84.6 87.1 75.5
Income tax receivable 3.9 1.4 4.0
Trade and other receivables 163.3 151.7 140.7
Derivative assets 1.0 0.3 0.2
Cash and cash equivalents 6 35.5 46.4 44.1
Total current assets 288.3 286.9 264.5
Total assets 909.6 925.8 903.2
Equity
Issued capital 60.1 60.1 60.1
Merger relief reserve 136.4 136.4 136.4
Capital redemption reserve 0.1 0.1 0.1
Other reserve (132.8) (132.8) (132.8)
Cash flow hedging reserve 0.6 (0.3) (0.1)
Translation reserve (20.6) 17.2 (9.9)
Retained earnings 356.5 337.0 345.0
Attributable to equity holders of Essentra plc 400.3 417.7 398.8
Non-controlling interests 4.6 5.7 4.2
Total equity 404.9 423.4 403.0
Liabilities
Interest bearing loans and borrowings 6 258.1 254.8 254.7
Retirement benefit obligations 5 17.2 20.5 11.3
Provisions 2.6 2.9 3.1
Other financial liabilities 3.2 - 5.4
Deferred tax liabilities 42.3 50.0 47.1
Total non-current liabilities 323.4 328.2 321.6
Interest bearing loans and borrowings 6 1.2 3.8 6.5
Derivative liabilities 0.2 0.8 0.3
Income tax payable 28.7 20.2 24.4
Trade and other payables 139.5 130.1 135.1
Provisions 11.7 19.3 12.3
Total current liabilities 181.3 174.2 178.6
Total liabilities 504.7 502.4 500.2
Total equity and liabilities 909.6 925.8 903.2
Condensed consolidated statement of changes in equity
Six months ended 30 June 2014
Issued capital Merger relief reserve Capital redemption reserve Other reserve Cash flow hedging reserve Translation reserve Retained earnings Non-controlling interests Total equity
£m £m £m £m £m £m £m £m £m
At 1 January 2014 60.1 136.4 0.1 (132.8) (0.1) (9.9) 345.0 4.2 403.0
Profit for the period 35.4 0.4 35.8
Other comprehensive income 0.7 (10.7) (2.8) - (12.8)
Total comprehensive income for the period 0.7 (10.7) 32.6 0.4 23.0
Purchase of employee trust shares (4.4) (4.4)
Shares options exercised 3.5 3.5
Share option expense 3.2 3.2
Tax relating to share-based incentives 1.4 1.4
Dividends paid (24.8) (24.8)
At 30 June 2014 60.1 136.4 0.1 (132.8) 0.6 (20.6) 356.5 4.6 404.9
Six months ended 30 June 2013
Issued capital Merger relief reserve Capital redemption reserve Other reserve Cash flow hedging reserve Translation reserve Retained earnings Non-controlling interests Total equity
£m £m £m £m £m £m £m £m £m
At 1 January 2013 54.8 - 0.1 (132.8) (0.1) 4.6 311.8 5.3 243.7
Profit for the period 31.1 0.5 31.6
Other comprehensive income (0.2) 12.6 10.0 - 22.4
Total comprehensive income for the period - - - - (0.2) 12.6 41.1 0.5 54.0
Issue of shares 5.3 136.4 141.7
Issue of shares to non-controlling interests 0.7 0.7
Purchase of employee trust shares (3.5) (3.5)
Shares options exercised 3.8 3.8
Share option expense 2.2 2.2
Tax relating to share-based incentives 1.6 1.6
Dividends paid (20.0) (0.8) (20.8)
At 30 June 2013 60.1 136.4 0.1 (132.8) (0.3) 17.2 337.0 5.7 423.4
Condensed consolidated statement of changes in equity (continued)
Year ended 31 December 2013
Issued capital Merger relief reserve Capital redemption reserve Other reserve Cash flow hedging reserve Translation reserve Retained earnings Non-controlling interests Total equity
£m £m £m £m £m £m £m £m £m
At 1 January 2013 54.8 - 0.1 (132.8) (0.1) 4.6 311.8 5.3 243.7
Profit for the year 60.1 0.2 60.3
Other comprehensive income - (14.5) 8.1 (0.5) (6.9)
Total comprehensive income for the year - - - - - (14.5) 68.2 (0.3) 53.4
Issue of shares 5.3 136.4 141.7
Issue of shares to non-controlling interests 1.5 1.5
Acquisition of non-controlling interests (0.6) (1.3) (1.9)
Purchase of employee trust shares (16.3) (16.3)
Shares options exercised 4.7 4.7
Share option expense 5.1 5.1
Tax relating to share-based incentives 3.3 3.3
Dividends paid (31.2) (1.0) (32.2)
At 31 December 2013 60.1 136.4 0.1 (132.8) (0.1) (9.9) 345.0 4.2 403.0
Condensed consolidated statement of cash flows
Six monthsended Six monthsended Year ended
Note 30 Jun 2014 30 Jun 2013 31 Dec 2013
£m £m £m
Operating activities
Profit for the period from continuing operations 35.8 31.6 60.3
Adjustments for:
Income tax expense 13.4 13.8 26.1
Net finance expense 4.8 4.9 10.6
Intangible amortisation 8.7 5.6 14.2
Exceptional operating items 6.3 9.3 19.2
Depreciation 15.0 12.4 26.7
Share option expense 3.2 2.2 5.1
Other movements (1.0) 1.9 (1.8)
(Increase)/decrease in inventories (10.6)
- More to follow, for following part double click ID:nRSe7975NbRecent news on Essentra
See all newsREG - Essentra plc - Company Secretary Change
AnnouncementREG - Essentra plc - Notice of Full Year 2025 Results
AnnouncementREG - Essentra plc - Transaction in Own Shares
AnnouncementREG - Essentra plc - Transaction in Own Shares
AnnouncementREG - Essentra plc - Transaction in Own Shares
Announcement