REG - Goodwin PLC - Half-year Report <Origin Href="QuoteRef">GDWN.L</Origin> - Part 1

GoodwinAnnouncement

16/12/2016 12:35

RNS Number : 1030S
Goodwin PLC
16 December 2016
GOODWIN PLC
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year ended 31st October 2016
CHAIRMAN'S STATEMENT 
The pre-tax profit for the Group for the first six month period ending 31st October 2016 was 6.05 million (2015:6.03 million).
The current workload stands at 84 million and sales orders despatched up to 31st October were 69.9 million (2015:61.2 million) but the margins are lower due to the increased competition in the tighter market.
Growth areas in the refractory products continue to provide good opportunity whilst a better base load within the longer term defence work has given some reassurance in comparison to the continued low new project and procurement activity within the oil, gas and mining industries.
Some cost cutting has taken place during the period but the total number employed remains at just over 1,200, in part due to growth in our new products produced by Dupr Minerals and Goodwin Refractory Services, helped by the Group's presence in China, Thailand, India, Korea and Brazil.
Cash flow, credit insurance and political risk together with foreign exchange timings are areas of risk which continue to require careful attention. With our capital expenditure very much reduced, other than customer project financed development we are restricting expenditure.
With the likely continued low oil and gas and metal ore prices and thus constrained profitability and capital expenditure by our oil, gas and mining customer base, it would be unrealistic to expect any significant recovery / improvement in pre-tax profitability until after 2018. Indeed, if it were not for the diversity provided by our refractory division, life would be much more difficult.
As in the five downturns over the past 35 years, we are making good use of this quieter trading time by working hard obtaining approvals and bringing our new products to market, such as our axial piston shut off and control valves, our new range of duplex and high impact resistant carbon steels as well as products that use our AVD vermiculite dispersions, such as fire extinguishers, lithium battery transport bags and fire resistant paints. For all the mentioned products we have patents applied for and they should provide the Group with a sound base to start growing again, such that we can be as proud of the next twenty years as we have been of the past twenty.
J. W. Goodwin
Chairman 16th December 2016
Management report
The turnover for the first six months of this new financial year increased by 14.2%. The pre-tax profit has increased by 0.3% in the first half of the financial year.
The further depressed state of capital expenditure on oil, gas and mining projects will be a challenge to our mechanical engineering companies in 2017. The markets for the refractory engineering division as a whole remain stable. 
Financial Highlights

Six months ended
Year Ended

31st October 
2016
31st October 2015
30th April 
2016

'm
'm
'm

Unaudited
Unaudited
Audited 
Consolidated Results



Revenue
69.9
61.2
123.5
Operating profit
6.5
6.2
12.7
Profit before tax
6.0
6.0
12.3
Profit after tax
4.2
4.8
8.9








Capital Expenditure
3.2
5.8
12.1








Earnings per share (Basic and Diluted)
54.53p
68.01p
122.75p




Turnover
Revenue of 69,889,000 for the half year represents a 14.2% increase over the 61,220,000 achieved during the same period last year.
Profit Before Tax
Profit before tax for the six months of 6,047,000 is up 0.3% from the 6,028,000 achieved for the same six month period last year. 
Risks and Uncertainties
The Group, mainly through its centralised management structure, makes best endeavours to have in place internal control procedures to identify and manage the key risks and uncertainties affecting the Group. We would refer you to page 6 of the Group annual accounts to 30th April 2016, which describes the principal risks and uncertainties, and to note 20 (page 47), which describes in detail the key financial risks and uncertainties affecting the business such as credit risk and foreign exchange risk.
Judging the future relationship of the major currency pairs of the US Dollar, Sterling and the Euro continues to be a challenge.
Report on Expected Developments
This report describes the expected developments of the Group during the year ended 30th April 2017. The report may contain forward-looking statements and information based on current expectations, and assumptions and forecasts made by the Group. These expectations and assumptions are subject to various known and unknown risks, uncertainties and other factors, which could lead to substantial differences between the actual future results, financial performance and the estimates and historical results given in this report. Many of these factors are outside the Group's control. The Group accepts no liability 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.
2017/16 Outlook
The mechanical engineering division companies, with the exception of Easat Radar Systems, are seeing their order backlog go down as it is likely to continue to do so in the calendar year 2017. Goodwin International, which had the highest activity level in value terms in the oil and gas industry, has in part mitigated the severe purchasing activity decline in this sector by winning significant levels of business in the nuclear engineering sector, that has business to place for the next ten years. The hardest hit company is the foundry, Goodwin Steel Castings. Whilst over the past three years it has done better than most other competitive foundries worldwide, it is now short of order input and as such is looking to ramp up new business for submarines in the UK and USA, following Goodwin's recent approval to produce HY80 cast material.
Going concern
The Group cash flow has deteriorated since the start of the new financial year. It is not unusual for the Group to see a deteriorating cash flow picture in the first half of the financial year due to the impact of dividend payments, working capital movements and our capital expenditure programmes.
Whilst the reduced level of capital expenditure, as referred to within the Chairman's Statement, has been helpful for cash flow in the first half of this financial year, the impact has been offset by the currency effects of Brexit and associated timing issues related to our foreign exchange hedge trades.
The Group's bank facilities have coped and are coping well with these temporary timing issues. We expect the position to reverse in the second half of the financial year as we rebalance our positions with customer currency inflows.
Responsibility statement of the Directors in respect of the half-yearly financial report
The Directors confirm to the best of their knowledge that 1) this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that 2) the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (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 4.2.8R (being related party transactions that have taken place in the first six months of the 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).
J. W. Goodwin
Chairman 16th December 2016
Condensed consolidated income statement 
for the half year to 31st October 2016

Unaudited
Half Year to
31st October
2016
Unaudited
Half Year to
31st October
2015
Audited
Year Ended
30th April
2016
'000
'000
'000
Continuing operations
Revenue
69,889
61,220
123,539
Cost of sales
(51,442)
(43,966)
(89,196)
Gross profit
18,447
17,254
34,343

Distribution expenses
(1,731)
(1,571)
(3,311)
Administrative expenses
(10,210)
(9,463)
(18,284)
Operating profit
6,506
6,220
12,748

Financial expenses
(560)
(357)
(775)
Share of profit of associate companies
101
165
341
Profit before taxation
6,047
6,028
12,314
Tax on profit 
(1,829)
(1,202)
(3,376)
Profit after taxation
4,218
4,826
8,938
Attributable to:
Equity holders of the parent 
3,927
4,897
8,838
Non-controlling interests 
291
(71)
100

Profit for the period
4,218
4,826
8,938
Basic and diluted earnings per ordinary share (note 7)
54.53p
68.01p
122.75p
Condensed consolidated statement of comprehensive income
for the half year to 31st October 2016







Unaudited 
Half Year 
to 
31st 
October 
2016

Unaudited 
Half Year to 
31st October 
2015

Audited 
Year 
Ended 
30th 
April 
2016

'000

'000

'000






Profit for the period
4,218

4,826

8,938






Other comprehensive expense











Items that are or may be reclassified subsequently to the income statement





Foreign exchange translation differences
5,796

(1,529)

279
Effective portion of changes in fair value of cash flow hedges
(15,696)

272

(728)
Change in fair value of cash flow hedges transferred to the income statement
(608)

(190)

(1,923)
Tax on items that are or may be reclassified subsequently to the income statement
2,765

(16)

516






Other comprehensive expense
for the period, net of income tax
(7,743)

(1,463)

(1,856)






Total comprehensive income for the period
(3,525)

3,363

7,082






Attributable to:





Equity holders of the parent
(4,618)

3,550

7,018
Non-controlling interests
1,093

(187)

64













(3,525)

3,363

7,082








Condensed consolidated statement of changes in equity
for the half year to 31st October 2016

Share capital
Translation
reserve
Cash flow hedging reserve
Retained earnings
Total
attributable to
equity holders of the
parent
Non- controlling interests
Total equity

'000
'000
'000
'000
'000
'000
'000
Half year to 31st October 2016 (Unaudited)







Balance at 1st May 2016
720
(1,041)
(594)
87,209
86,294
3,823
90,117
Total comprehensive income:







Profit
-
-
-
3,927
3,927
291
4,218
Other comprehensive income:







Foreign exchange translation difference
-
4,994
-
-
4,994
802
5,796
Net movements on cash flow hedges
-
-
(13,539)
-
(13,539)
-
(13,539)
Total comprehensive income for the period
-
4,994
(13,539)
3,927
(4,618)
1,093
(3,525)
Dividends paid
-
-
-
(3,114)
(3,114)
(339)
(3,453)








Balance at 31st October 2016
720
3,953
(14,133)
88,022
78,562
4,577
83,139
























Half year to 31st October 2015 (Unaudited)







Balance at 1st May 2015
720
(1,356)
1,541
81,836
82,741
3,781
86,522
Total comprehensive income:







Profit
-
-
-
4,897
4,897
(71)
4,826
Other comprehensive income:







Foreign exchange translation difference
-
(1,413)
-
-
(1,413)
(116)
(1,529)
Net movements on cash flow hedges
-
-
66
-
66
-
66
Total comprehensive income for the period
-
(1,413)
66
4,897
3,550
(187)
3,363
Purchase of non-controlling interest without a change in control
-
-
-
(479)
(479)
149
(330)
Dividends paid
-
-
-
(3,049)
(3,049)
(158)
(3,207)








Balance at 31st October 2015 
720
(2,769)
1,607
83,205
82,763
3,585
86,348
























Year ended 30th April 2016 
(Audited)







Balance at 1st May 2015 
720
(1,356)
1,541
81,836
82,741
3,781
86,522
Total comprehensive income:







Profit
-
-
-
8,838
8,838
100
8,938
Other comprehensive income:







Foreign exchange translation difference
-
315
-
-
315
(36)
279
Net movements on cash flow hedges
-
-
(2,135)
-
(2,135)
-
(2,135)
Total comprehensive income for the period
-
315
(2,135)
8,838
7,018
64
7,082
Transactions with owners of the Company recognised directly in equity:





174
174
Purchase of non-controlling interest without a change in control
-
-
-
(360)
(360)
-
(360)
Dividends paid
-
-
-
(3,105)
(3,105)
(196)
(3,301)








Balance at 30th April 2016 
720
(1,041)
(594)
87,209
86,294
3,823
90,117








Condensed consolidated balance sheet
as at 31st October 2016
Unaudited
as at
31st October
2016
Unaudited
as at
31st October
2015

Audited
as at
30th April
2016
'000
'000
'000
Non-current assets
Property, plant and equipment
65,207
58,456
62,530
Investments in associates
2,032
1,580
1,640
Intangible assets
18,584
15,470
17,565

 
 


85,823
75,506
81,735

 
 

Current assets
Inventories
43,605
34,617
35,631
Trade and other receivables
32,819
27,539
33,792
Derivative financial assets
1,235
3,843
2,107
Cash and cash equivalents
5,269
5,188
4,970

 
 

82,928
71,187
76,500

 
 

Total assets
168,751
146,693
158,235

 
 

Current liabilities
Bank overdrafts
9,347
11,409
5,383
Interest-bearing loans and borrowings 
3,074
2,243
3,148
Trade and other payables
26,647
25,579
32,608
Deferred consideration
500
500
500
Derivative financial liabilities
13,293
1,563
2,818
Liabilities for current tax
2,234
1,075
1,785
Warranty provision
132
95
151

 
 


55,227
42,464
46,393

 
 

Non-current liabilities
Interest-bearing loans and borrowings
29,571
14,053
18,497
Warranty provision
296
337
179
Deferred tax liabilities
518
3,491
3,049

 
 


30,385
17,881
21,725

 
 

Total liabilities
85,612
60,345
68,118

 
 

Net assets
83,139
86,348
90,117

 
 

Equity attributable to equity holders of the parent
Share capital
720
720
720
Translation reserve
3,953
(2,769)
(1,041)
Cash flow hedge reserve 
(14,133)
1,607
(594)
Retained earnings
88,022
83,205
87,209

 
 

Total equity attributable to equity holders of the parent
78,562
82,763
86,294
Non-controlling interests 
4,577
3,585
3,823

 
 

Total equity
83,139
86,348
90,117

 
 

Condensed consolidated cash flow statement
for the half year ended 31st October 2016

Unaudited
Half Year to
31st October
2016
Unaudited
Half Year to
31st October
2015
Audited
Year Ended
30th April
2016
'000
'000
'000
Cash flow from operating activities



Profit from continuing operations after tax
4,218
4,826
8,938
Adjustments for:



 Depreciation
2,718
2,401
4,748
 Amortisation of intangible assets
393
184
583
 Impairment of intangible assets
-
-
340
 Gain arising on bargain purchase
-
-
(143)
 Financial expense
560
357
775
 (Profit) / loss on sale of property, plant and equipment
(2)
3
(456)
 Share of profit of associate companies
(101)
(165)
(341)
 Tax expense
1,829
1,202
3,376

 
 
 
Operating profit before changes in working capital and provisions
9,615
8,808
17,820
 Increase in trade and other receivables
(2,972)
(1,496)
(5,707)
 Increase in inventories
(6,167)
(2,085)
(2,357)
 Decrease in trade and other payables
 (excluding payments on account)
(5,732)
(2,630)
(1,453)
(Decrease) / increase in payments on account
(1,207)
1,532
5,402

 
 
Cash (outflow) / inflow from operations
(6,463)
4,129
13,705
 Interest paid
(469)
(329)
(703)
 Corporation tax paid
(1,460)
(1,653)
(3,058)
 Interest element of finance lease obligations
(91)
(28)
(20)

 
 
Net cash from operating activities
(8,483)
2,119
9,924

 
 
 
Cash flow from investing activities
 Proceeds from sale of property, plant and equipment
79
47
968
 Acquisition of intangible assets
(60)
(3,500)
(4,319)
 Acquisition of property, plant and equipment
(3,218)
(6,015)
(7,707)
R&D expenditure capitalised
(354)
-
(1,430)
 Acquisition of subsidiary
-
(1,667)
(2,005)
 Additional payment for existing subsidiary
-
(383)
(330)
 Additional investment in associate companies
-
(60)
(30)
 Dividends received from associate company
-
-
173

 
 
Net cash outflow from investing activities
(3,553)
(11,578)
(14,680)

 
 
 
Cash flows from financing activities
 Payment of capital element of finance lease obligations
(466)
(158)
(274)
 Dividends paid
(3,114)
(3,049)
(3,105)
 Dividends paid to non-controlling interests
(339)
(158)
(196)
 Proceeds from loans and committed facilities
11,459
-
3,305
 Repayment of loans and committed facilities
(21)
(1,000)
(3,000)
Finance fees
-
-
(100)

 
 
Net cash inflow / (outflow) from financing activities
7,519
(4,365)
(3,370)

 
 
Net decrease in cash and cash equivalents
(4,517)
(13,824)
(8,126)




 Opening cash and cash equivalents
(413)
7,732
7,732
 Effect of exchange rate fluctuations on cash held
852
(129)
(19)

 
 
Closing cash and cash equivalents
(4,078)
(6,221)
(413)
 
 
Notes
to the condensed consolidated financial statements
1 Reporting entity
Goodwin PLC (the "Company") is a company incorporated in England. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2016 comprise the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").
The audited consolidated financial statements of the Group as at and for the year ended 30 April 2016 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke on Trent ST1 3NR or via the Company's web site: www.goodwin.co.uk.
2 Statement of compliance
These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted in the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 30th April 2016.
The comparative figures for the financial year ended 30th April 2016 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors 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.
The Audit Committee has reviewed these unaudited condensed consolidated interim financial statements and has advised the Board of Directors that, taken as a whole, they are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's half year performance. These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 16th December 2016.
3 Significant accounting policies
The accounting policies applied by the Group in these unaudited condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements as at and for the year ended 30th April 2016. New standards to be adopted in the current year as below, effective for annual periods beginning on or after 1st January 2016, are not expected to have a significant impact on the financial statements.
 Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets: Clarification of acceptable Methods of Depreciation and Amortisation (effective for annual periods beginning on or after 1st January 2016)
 Accounting for Acquisitions of Interests in Joint Operations - Amendments to IFRS 11 (effective for annual periods beginning on or after 1st January 2016)
 Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38. (effective for annual periods beginning on or after 1st January 2016)
 Equity Method in Separate Financial Statements - Amendments to IAS 27 (effective for annual periods beginning on or after 1st January 2016)
 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28 (effective for annual periods beginning on or after 1st January 2016)
 Annual Improvements to IFRSs - 2012-2014 Cycle (effective for annual periods beginning on or after 1st January 2016)
 Applying the Consolidation Exception - Amendments to IFRS 10, IFRS 12 and IAS 28 (effective for annual periods beginning on or after 1st January 2016)
 Annual Improvements to IFRSs - 2012-2014 Cycle Investment entities (effective for annual periods beginning on or after 1st January 2016)
 Investment entities: Applying the Consolidation Exception - Amendments to IFRS 10, IFRS 12 and IAS 28 (effective for annual periods beginning on or after 1st January 2016)
 Disclosure Initiative - Amendments to IAS 1 (effective for annual periods beginning on or after 1st January 2016)
 IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1st January 2016)
 IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1st January 2016)
New IFRS standards, amendments and interpretations not adopted
The IASB and IFRIC have issued additional standards and amendments which are effective for periods starting after the date of these financial statements. The following standards and amendments have not yet been adopted by the Group:
 IFRS 15 Revenue from Contracts with Customers (not yet endorsed. IASB effective date for annual periods beginning on or after 1st January 2017)
 Disclosure Initiative - Amendments to IAS 7 (not yet endorsed. IASB effective date 1st January 2017)
 IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1st January 2018)
 IFRS 16 Leases (not yet endorsed. IASB effective date 1st January, 2019)
4 Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these unaudited consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 30th April 2016.
The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.
5 Business Segments
Products and services from which reportable segments derive their revenues
In accordance with the requirements of IFRS8 "Operating Segments" the Group's reportable segments based on information reported to the Group's Board of Directors for the purposes of resource allocation and assessment of segment performance are as follows:
 Mechanical Engineering  - casting, machining and general engineering
 Refractory Engineering - powder manufacture and mineral processing
Information regarding the Group's operating segments is reported below.
Segment revenues and profits





Mechanical Engineering
Refractory Engineering
Sub Total

Unaudited
Unaudited
Audited
Unaudited
Unaudited
Audited
Unaudited
Unaudited
Audited

Half Year Ended 31st October 2016 
Half Year Ended 
31st 
October 
2015
Year 
Ended 
30th 
April 
2016
Half Year Ended 
31st 
October 2016
Half Year Ended 
31st 
October 
2015
Year 
Ended 
30th 
April 
2016
Half Year Ended 
31st 
October 2016
Half Year Ended 
31st 
October 
2015
Year 
Ended 
30th 
April 
2016

000
000
000
000
000
000
000
000
000
Revenue









External sales
50,262
44,816
88,747
19,627
16,404
34,792
69,889
61,220
123,539
Inter-segment sales
13,910
7,526
18,248
2,988
1,965
4,534
16,898
9,491
22,782

 
 
 
 
Total revenue
64,172
52,342
106,995
22,615
18,369
39,326
86,787
70,711
146,321

 



Reconciliation to consolidated revenues:







Inter-segment sales






(16,898)
 (9,491)
(22,782)





 
 
 
Consolidated revenue for the period




69,889
61,220
123,539





 
 
 





Mechanical Engineering
Refractory Engineering
Sub Total

Unaudited
Unaudited
Audited
Unaudited
Unaudited
Audited
Unaudited
Unaudited
Audited

Half Year Ended 
31st 
October 2016 
Half Year Ended 
31st October 2015
Year 
Ended 
30th 
April 
2016
Half Year Ended 
31st 
October 2016
Half Year Ended 
31st 
October 
2015
Year 
Ended 
30th 
April 
2016
Half Year Ended 
31st 
October 2016
Half Year Ended 
31st 
October 
2015
Year 
Ended 
30th 
April 
2016

000
000
000
000
000
000
000
000
000
Profits









Segment result 
including associates
4,798
5,355
10,961
2,241
1,616
4,211
7,039
6,971
15,172

 



Group administration costs




(604)
(586)
(2,083)
Group finance and treasury costs




(376)
(357)
(775)
Consolidation adjustments




(12)
-
-





 
 
 
Consolidated profit before tax for the period




6,047
6,028
12,314
Tax




(1,829)
(1,202)
(3,376)





 
 
 
Consolidated profit after tax for the period




4,218
4,826
8,938





 
 
 
Segmental assets and liabilities

Segmental total assets
Segmental total liabilities
Segmental net assets


 








Unaudited
Unaudited
Audited
Unaudited
Unaudited
Audited
Unaudited
Unaudited
Audited

Half Year Ended
31st
October 2016
'000
Half Year 
Ended 
31st 
October
2015
'000
Year 
Ended 
30th 
April
2016
'000
Half Year Ended 
31st 
October 2016
'000
Half Year Ended 
31st 
October 
2015
'000
Year 
Ended 
30th 
April 
2016
'000
Half Year Ended 
31st 
October 2016
'000
Half Year Ended 
31st 
October 
2015
'000
Year 
Ended 
30th 
April
2016
'000
Mechanical Engineering
93,637
71,353
82,569
70,179
50,452
65,432
23,458
20,901
17,137
Refractory Engineering
44,726
39,158
43,207
26,998
20,265
28,455
17,728
18,893
14,752

 
 
 
 
 
 
 
 
 
Sub total reportable segment
138,363
110,511
125,776
97,177
70,717
93,887
41,186
39,794
31,889

 
 
 
 
 
 



Goodwin PLC (the Company) net assets




68,467
66,491
71,620
Elimination of Goodwill PLC investments




(22,441)
(24,764)
(22,441)
Goodwill




9,689
9,288
8,994
Hedge reserve consolidation adjustments




(14,133)
1,607
(594)
Other consolidation adjustments




371
(6,068)
649







 
 
 
Consolidated total net assets




83,139
86,348
90,117







 
 
 
Segmental property, plant and equipment (PPE) capital expenditure





Goodwin PLC




2,095
3,221
5,633
Mechanical Engineering




737
1,485
3,405
Refractory Engineering




386
1,091
3,030







 
 
 





3,218
5,797
12,068







 
 
 
Geographical segments

Half Year Ended 31st October 2016
Half Year Ended 31st October 2015

Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited

Revenue
Operational assets
Non- current assets
PPE 
Capital expenditure
Revenue
Operational assets
Non- current assets
PPE 
Capital expenditure

'000
'000
'000
'000
'000
'000
'000
'000









UK
11,352
52,149
70,611
2,631
15,193
65,166
64,065
4,708
Rest of Europe
15,031
10,646
2,480
265
11,825
5,254
762
 98
USA
3,919
-
-
-
5,890
-
-
-
Pacific Basin
20,615
14,564
5,825
63
15,941
11,935
5,813
532
Rest of World
18,972
5,780
6,907
259
12,371
3,993
4,866
459

 
 
 
 
 
 
 
 
Total
69,889
83,139
85,823
3,218
61,220
86,348
75,506
5,797

 
 
 
 
 
 
 
 











Year Ended 30th April 2016





Audited
Revenue
Audited
Operational assets
Audited
Non- current assets
Audited
PPE 
Capital expenditure





'000
'000
'000
'000









UK




36,776
66,292
69,383
9,771
Rest of Europe




21,656
8,035
1,120
453
USA




13,974
-
-
-
Pacific Basin




26,958
11,497
5,610
708
Rest of World




24,175
4,293
5,622
1,136





 
 
 
 
Total




123,539
90,117
81,735
12,068





 
 
 
 
The Group operates in the above principal locations. In presenting the information on geographical segments, revenue is based on the location of its customers and assets on the location of the assets.
6.Dividends
The Directors do not propose the payment of an interim dividend.
Unaudited
Unaudited
Audited
Half Year to
31st October
2016
Half Year to
31st October
2015
Year Ended
30th April
2016
000
000
000
Equity Dividends Paid:
Ordinary dividends paid during the period in respect of the year ended 30th April 2016: (42.348p per share)
3,049
-
-
Ordinary dividends paid during the period in respect of the year ended 30th April 2015: (42.348p per share)
-
3,049
3,049
_____
_____
_____
Total dividends paid during the period
3,049
3,049
3,049
_____
_____
_____
7.  Earnings per share
The calculation of the basic earnings per ordinary share is based on the number of ordinary shares in issue during all periods of 7,200,000 and on the profit for the six months attributable to ordinary shareholders of 3,927,000 (six months to 31st October 2015: 4,897,000).
8.  Capital Management, issuance and repayment of debt
At 31st October 2016 the capital utilised was 115,785,000as shown below:
Unaudited
as at
31st October
2016
Unaudited
as at
31st October
2015
Audited
as at
30th April
2016
'000
'000
'000

Cash and cash equivalents
(5,269)
(5,188)
(4,970)
Finance leases
3,878
407
4,339
Bank loans and committed facilities
28,767
15,889
17,306
Bank overdrafts
9,347
11,409
5,383
Deferred consideration
500
500
500

 
 
Net debt
37,223
23,017
22,558

 
 
Total equity attributable to equity holders of the parent
78,562
82,763
86,294

 
 
Capital
115,785
105,780
108,852

 
 
9.  Property, Plant and Equipment
Fixed asset additions were 3,218,000during the six month period to 31st October 2016 (2015: 5,797,000), with the Group progressing on its capital projects. Other movements in fixed assets were: depreciation of 2,718,000 (2015: 2,401,000); an increase due to the effect of exchange adjustments of 2,254,000 (2015: decrease of 588,000); disposals of 77,000 ( 2015: 50,000) and an acquisition of Nil (2015: 39,000).
10. Intangible assets
During the six month period to 31st October 2016, intangible assets were increased by 414,000 (2015: 3,500,000), via acquisitions of Nil (2015: 1,405,000) and by additions to goodwill of 70,000 (2015: 53,000). The current period goodwill addition relates to additional deferred tax liabilities in existing subsidiaries; the prior half year addition was an increased interest in existing subsidiaries by virtue of a minority dividend having been paid. Intangible assets have been reduced by amortisation of 393,000 (2015: 184,000) and increased by exchange adjustments of 928,000 (2015: decreased by 169,000).
11. Hedge reserve
The Group is exposed to sales and purchases in foreign currency and in order to mitigate the foreign exchange risk, the Group at its discretion uses hedges where deemed appropriate by the Board. The majority of the Group's hedging activity is in relation to UK subsidiary sales contracts in US Dollars and Euros. Since the UK took the decision to leave the EU on the 23rd June 2016, Sterling has depreciated against all major currencies including the US Dollar and the Euro. As at the 31st October 2016, the cash flow hedge reserve is significantly negative which reflects the marked to market values of currencies sold to / purchased from the banks in relation to the Group's underlying currency sales and purchase requirements and does not impact on the reported profits of the Group.
12. Total financial assets and financial liabilities
The table below sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying values/fair values at 31st October 2016. The fair values of all financial assets and financial liabilities are not materially different to the carrying values.
Carrying value/
Fair value
000
Financial assets
Cash and cash equivalents
5,269
Receivables
Trade receivables
28,534
Other receivables
4,285
Designated cash flow hedge relationships
Derivative financial assets designated and effective
 as cash flow hedging instruments
1,235
Total financial assets
39,323
Financial liabilities
Financial liabilities at amortised cost
Bank overdraft
9,347
Trade payables
12,916
Other payables
13,731
Deferred consideration
500
Finance lease liabilities
3,878
Bank loans
28,767
Corporation tax
2,234
Designated cash flow hedge relationships
Derivative financial liabilities designated and
 effective as cash flow hedging instruments
13,293
Total financial liabilities
84,666
Derivative financial assets and financial liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below*. All other financial assets and financial liabilities fair values are determined using Level 3 inputs.
*IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy: 
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; 
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); 
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

This information is provided by RNS
The company news service from the London Stock Exchange
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