REG - Gooch & Housego PLC - Interim Report <Origin Href="QuoteRef">GHH.L</Origin> - Part 2

Gooch & HousegoAnnouncement

06/09/2014 02:05

- Part 2: For the preceding part double click  ID:nRSJ1990Ja 

               
 Final 2012 dividend paid in 2013 : 3.2p per share  -             -             712                       
                                                    950           712           1,229                     
 
 
9.      Borrowings 
 
The group's banking facilities with the Royal Bank of Scotland comprise an $18
million dollar denominated term loan (fully drawn down), a £3.1 million
sterling denominated term loan (fully drawn down).  The term loan balances at
31 March 2014 were $4.5 million and £1.8 million sterling respectively. 
 
In addition, the Company has an undrawn revolving credit facility of $8.0
million and a fully drawn capital expenditure facility of $8.0 million. 
 
All facilities are committed until April 2015 and attract an interest rate of
between 2.25% and 3.00% above LIBOR dependent upon the Company's leverage
ratio. 
 
10.     Called up share capital 
 
                                                            2014No.     2013No.     2014£'000  2013£'000  
 Allotted, issued and fully paidOrdinary share of 20p each  23,797,999  22,456,965  4,760      4,491      
 
 
11.     Derivative financial instruments 
 
                                  Half Year to   Half Year to   Full Year to  
                                  31 Mar 2014    31 Mar 2013    30 Sep 2013   
                                   (Unaudited)    (Unaudited)   (Audited)     
                                  £'000          £'000          £'000         
 Interest rate swap               96             166            103           
                                                                              
 Current liability portion        64             83             69            
 Non-current liability portion    32             83             34            
                                  96             166            103           
 
 
The notional principal amount of the outstanding interest swap contract at 31
March 2014 was $6.75 million (2013: $11.25 million).  The end date for the
interest rate swap is 1 April 2015.  At 31 March 2014, the fixed rate of the
interest rate swap was 2.14% and the floating rate was US dollar LIBOR. The
fair value of the swap is a mark to market calculation based on future
interest rate expectations over the life of the swap.  This is a level 2
method of determining fair value as defined by IFRS 7. 
 
12.    Acquisition of Spanoptic Limited 
 
On 15 October 2013, the Group completed the acquisition of the entire issued
share capital of Spanoptic Limited, a Glenrothes, Scotland based manufacturer
of precision optical components. 
 
The consideration for the acquisition was £6.6m, paid in cash on completion. 
 
The fair value of the assets acquired is summarised as follows: 
 
                                                Provisional fair value  
                                                £'000                   
 Property, plant and equipment                  3,575                   
 Intangible assets                              2,631                   
 Cash                                           1,006                   
 Trade and other receivables                    1,768                   
 Inventory                                      923                     
 Trade and other payables                       (866)                   
 Current and deferred tax liabilities           (1,141)                 
 Hire purchase and finance lease liabilities    (257)                   
 Net assets acquired                            7,639                   
 Consideration paid:                                                    
 Cash                                           6,600                   
 Gain on bargain purchase                       (1,039)                 
 
 
The fair value of the net assets acquired are provisional pending finalisation
of the fair value exercise in relation to those assets. 
 
The fair value of the intangible assets represents the estimated fair value of
Spanoptic's customer relationships and its brand.  These have been valued
using a discounted cash flow model. 
 
The gain on bargain purchase of £1.0 million has been credited to the income
statement. 
 
Post-acquisition, the acquired business contributed £3.4 million of revenue
and £0.5 million of profit after tax to the consolidated income statement. 
 
13.     Acquisition of Constelex Technology Enablers Limited 
 
On 26 November 2013, the Group completed the acquisition of the entire issued
share capital of Constelex Technology Enablers Limited, designer and
manufacturer of advanced photonic systems based in Athens, Greece. 
 
The consideration for the acquisition was E650,000 (£539,000), comprising
E400,000 (£333,000) in cash, followed by E250,000 (£207,000) in Gooch &
Housego shares when the activities are relocated to the UK. 
 
The fair value of the assets acquired is summarised as follows: 
 
                                         Provisional fair value  
                                         £'000                   
 Property, plant and equipment           18                      
 Intangible assets                       327                     
 Cash                                    401                     
 Trade and other receivables             813                     
 Trade and other payables                (1,202)                 
 Current and deferred tax liabilities    (65)                    
 Net assets acquired                     292                     
 Consideration paid:                                             
 Cash                                    333                     
 Deferred share consideration            207                     
 Total consideration                     540                     
 Goodwill                                248                     
 
 
The deferred share consideration is payable to the vendors when they relocate
to the UK.  E125,000 of the deferred consideration was issued on 24 February
2014. 
 
The fair value of the net assets acquired are provisional pending finalisation
of the fair value exercise in relation to those assets. 
 
The fair value of the intangible assets represents the estimated fair value of
future secured grant funding based on a discounted cash flow valuation. 
 
Goodwill reflects items not separately recognised. 
 
Post-acquisition, the acquired business contributed £96,000 of revenue and
£21,000 of profit after tax to the consolidated income statement. 
 
14.     Post balance sheet events 
 
On 16 April 2014, management announced the proposed closure of the Group's
Melbourne, Florida facility in connection with the consolidation of
acousto-optic development and manufacturing into two of the Group's existing
sites. 
 
The costs of the proposed closure will be recorded in the results for the
second half of 2014. 
 
On 31 May 2014 Terry Scribbins retired as Chief Operating Officer. 
 
This information is provided by RNS
The company news service from the London Stock Exchange