REG - Halma PLC - Final Results <Origin Href="QuoteRef">HLMA.L</Origin> - Part 4
14/06/2016 07:06
- Part 4: For the preceding part double click ID:nRSN0651Bc
they face; and
3. the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 14 June 2016 and is signed on its behalf by:
A J WilliamsChief Executive K J ThompsonFinance Director
Results for the 53 weeks to 2 April 2016
Consolidated Income Statement
53 weeks to 2 April 2016 52 weeks to 28 March 2015
Notes Beforeadjustments*£000 Adjustments* (note 2)£000 Total Beforeadjustments*£000 Adjustments*(note 2)£000 Total£000
£000
Continuing operations
Revenue 2 807,805 - 807,805 726,134 - 726,134
Operating profit 173,225 (30,282) 142,943 158,500 (21,437) 137,063
Share of results of associate (159) - (159) 64 - 64
Profit on disposal of operations 9 - 556 556 - 1,430 1,430
Finance income 3 217 - 217 167 - 167
Finance expense 4 (7,269) - (7,269) (5,113) - (5,113)
Profit before taxation 166,014 (29,726) 136,288 153,618 (20,007) 133,611
Taxation 5 (36,373) 8,926 (27,447) (35,706) 6,096 (29,610)
Profit for the year attributable to equity shareholders 2 129,641 (20,800) 108,841 117,912 (13,911) 104,001
Earnings per share 6
From continuing operations
Basic 34.26p 28.76p 31.17p 27.49p
Diluted 28.76p 27.48p
Dividends in respect 7
of the year
Paid and proposed (£000) 48,472 45,229
Paid and proposed per share 12.81p 11.96p
* Adjustments include the amortisation of acquired intangible assets; acquisition items; profit or loss on disposal of operations; and the associated taxation thereon.
Consolidated Statement of Comprehensive Income and Expenditure
53 weeks to 2 April 2016£000 52 weeks to28 March2015£000
Profit for the year 108,841 104,001
Items that will not be reclassified subsequently to the Consolidated Income Statement:
Actuarial gains/(losses) on defined benefit pension plans 8,841 (34,795)
Tax relating to components of other comprehensive income that will not be reclassified (2,304) 6,791
Items that may be reclassified subsequently to the Consolidated Income Statement:
Effective portion of changes in fair value of cash flow hedges (990) 71
Exchange gains on translation of foreign operations and net investment hedge 30,036 30,900
Exchange losses transferred to Income Statement on disposal of operation 22 189
Tax relating to components of other comprehensive income that may be reclassified 209 (23)
Other comprehensive income for the year 35,814 3,133
Total comprehensive income for the year attributable to equity shareholders 144,655 107,134
The exchange gain of £30,036,000 (2015: gain of £30,900,000) includes gains of £9,336,000 (2015: gains of £862,000) which relate to net investment hedges as described in the Annual Report and Accounts 2016.
Consolidated Balance Sheet
2 April 2016£000 28 March 2015£000
Non-current assets
Goodwill 544,259 406,190
Other intangible assets 231,753 138,691
Property, plant and equipment 96,562 86,303
Interest in associate 3,722 4,236
Deferred tax asset 44,424 28,596
920,720 664,016
Current assets
Inventories 105,318 79,734
Trade and other receivables 183,619 156,464
Tax receivable 190 20
Cash and bank balances 53,938 41,230
Derivative financial instruments 1,131 1,069
344,196 278,517
Total assets 1,264,916 942,533
Current liabilities
Trade and other payables 122,791 102,717
Borrowings 4,748 1,705
Provisions 4,437 11,746
Tax liabilities 15,158 12,405
Derivative financial instruments 2,196 636
149,330 129,209
Net current assets 194,866 149,308
Non-current liabilities
Borrowings 295,908 140,419
Retirement benefit obligations 52,323 66,790
Trade and other payables 10,153 3,756
Provisions 18,510 1,549
Deferred tax liabilities 92,352 51,862
469,246 264,376
Total liabilities 618,576 393,585
Net assets 646,340 548,948
Equity
Share capital 37,965 37,965
Share premium account 23,608 23,608
Own shares* (8,219) (8,450)
Capital redemption reserve 185 185
Hedging reserve (610) 171
Translation reserve 75,387 45,329
Other reserves (5,831) (4,073)
Retained earnings 523,855 454,213
Shareholders' funds 646,340 548,948
* Referred to in prior years as Treasury shares
Consolidated Statement of Changes in Equity
Share capital Share premium account Own shares Capital redemption reserve Hedgingreserve*£000 Translation reserve*£000 Other reserves Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
At 28 March 2015 37,965 23,608 (8,450) 185 171 45,329 (4,073) 454,213 548,948
Profit for the year - - - - - - - 108,841 108,841
Other comprehensive income and expense:
Exchange differences on translation of foreign operations - - - - - 30,036 - - 30,036
Exchange losses transferred to Income Statement on disposal of operations - - - - - 22 - - 22
Actuarial gains on defined benefit pension plans - - - - - - - 8,841 8,841
Effective portion of changes in fair value of cash flow hedges - - - - (990) - - - (990)
Tax relating to components of other comprehensive income - - - - 209 - - (2,304) (2,095)
Total other comprehensive income and expense - - - - (781) 30,058 - 6,537 35,814
Dividends paid - - - - - - - (46,473) (46,473)
Share-based payment charge - - - - - - 3,845 - 3,845
Deferred tax on share-based payment transactions - - - - - - 109 - 109
Excess tax deductions related to share-based payments on exercised awards - - - - - - - 737 737
Purchase of Own shares** - - (3,003) - - - - - (3,003)
Performance share plan awards vested** - - 3,234 - - - (5,712) - (2,478)
At 2 April 2016 37,965 23,608 (8,219) 185 (610) 75,387 (5,831) 523,855 646,340
* The presentation of the Hedging and Translation reserves, which were previously netted, has been amended to show the two reserves and their movements in the year separately. The comparatives have been adjusted to reflect this amended presentation. There has been no impact on Shareholders' funds in either year.
** The purchase of Employee Benefit Trust shares/treasury shares and performance share plan awards vested were shown net in Own shares in prior years, as were the share-based payments charge and performance share plan awards vested in Other reserves. The prior year comparative has been adjusted to show these gross amounts. There has been no impact on
Shareholders' funds in either year.
Own shares are ordinary shares in Halma plc purchased by the Company and held to fulfil the Company's obligations under the Group's share plans. At 2 April 2016 the number of treasury shares held was 940,421 (2015: 1,371,785) and the number of shares held by the Employee Benefit Trust was 311,444 (2015: nil). The market value of Own shares was £11,417,000 (2015: £9,616,000). The Translation reserve is used to record the difference arising from the retranslation of the financial statements of foreign
operations. The Hedging reserve is used to record the portion of the cumulative net change in fair value of cash flow hedging instruments that are deemed to be an effective hedge.The Capital redemption reserve was created on repurchase and cancellation of the Company's own shares. The Other reserves represent the provision for the value of the Group's equity-settled share plans.
Share capital Share premium account Own shares Capital redemption reserve Hedgingreserve*£000 Translationreserve*£000 Other reserves Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
At 29 March 2014 37,902 22,778 (7,054) 185 123 14,240 (2,745) 420,571 486,000
Profit for the year - - - - - - - 104,001 104,001
Other comprehensive income and expense:
Exchange differences on translation of foreign operations - - - - - 30,900 - - 30,900
Exchange losses transferred to Income Statement on disposal of operations - - - - - 189 - - 189
Actuarial losses on defined benefit pension plans - - - - - - - (34,795) (34,795)
Effective portion of changes in fair value of cash flow hedges - - - - 71 - - - 71
Tax relating to components of other comprehensive income - - - - (23) - - 6,791 6,768
Total other comprehensive income and expense - - - - 48 31,089 - (28,004) 3,133
Share options exercised 63 830 - - - - - - 893
Dividends paid - - - - - - - (43,399) (43,399)
Share-based payment charge - - - - - - 3,828 - 3,828
Deferred tax on share-based payment transactions - - - - - - 291 - 291
Excess tax deductions related to share-based payments on exercised awards - - - - - - - 1,044 1,044
Purchase of treasury shares** - - (6,843) - - - - - (6,843)
Performance share plan awards vested** - - 5,447 - - (5,447) - -
At 28 March 2015 37,965 23,608 (8,450) 185 171 45,329 (4,073) 454,213 548,948
* The presentation of the Hedging and Translation reserves, which were previously netted, has been amended to show the two reserves and their movements in the year separately. There has been no impact on Shareholders' funds in either year.
** The purchase of Employee Benefit Trust shares/treasury shares and performance share plan awards vested were shown net in Own shares in prior years, as were the share-based payments charge and performance share plan awards vested in Other reserves. There has been no impact on Shareholders' funds in either year.
Consolidated Cash Flow Statement
Notes 53 weeks to 2 April 2016 52 weeks to
£000 28 March 2015
£000
Net cash inflow from operating activities 10 149,273 137,231
Cash flows from investing activities
Purchase of property, plant and equipment (22,418) (22,164)
Purchase of computer software (1,669) (1,021)
Purchase of other intangibles (535) (382)
Proceeds from sale of property, plant and equipment 2,364 1,411
Proceeds from sale of capitalised development costs 166 -
Development costs capitalised (8,579) (7,213)
Interest received 217 134
Acquisition of businesses, net of cash acquired 8 (202,575) (87,743)
Disposal of operations, net of cash disposed 9 907 4,248
Net cash used in investing activities (232,122) (112,730)
Financing activities
Dividends paid (46,473) (43,399)
Proceeds from issue of share capital - 893
Purchase of Own shares (3,003) (6,843)
Interest paid (4,149) (3,118)
Loan arrangement fee paid (770) -
Proceeds from bank borrowings 10 74,788 68,962
Repayment of bank borrowings 10 (97,000) (35,341)
Proceeds on issue of loan notes 10 167,473 -
Net cash generated from/(used in) financing activities 90,866 (18,846)
Increase in cash and cash equivalents 10 8,017 5,655
Cash and cash equivalents brought forward 39,525 33,126
Exchange adjustments 1,984 744
Cash and cash equivalents carried forward 49,526 39,525
Notes 53 weeks to 2 April 2016 52 weeks to 28 March 2015
£000 £000
Reconciliation of net cash flow to movement in net debt
Increase in cash and cash equivalents 8,017 5,655
Net cash outflow/(inflow) from repayment/(drawdown) of bank borrowings 10 22,212 (33,621)
Proceeds from issue of loan notes 10 (167,473) -
Net debt acquired - (468)
Loan notes issued in respect of acquisitions* (288) (657)
Loan notes repaid in respect of acquisitions* 367 2,731
Exchange adjustments (8,659) (38)
(145,824) (26,398)
Net debt brought forward (100,894) (74,496)
Net debt carried forward (246,718) (100,894)
* Of the £657,000 loan notes issued in the prior year £367,000 was converted at par into cash on 17 July 2015. New loan notes were issued totalling £288,000 on 15 April 2015, 8 July 2015 and 30 November 2015 in respect of the acquisition of Advanced Electronics Limited in the prior year. These loan notes, which attract interest at 1%, are convertible into cash at par on each anniversary of the acquisition date until 14 May 2019. A further £336,000 of loan notes outstanding at the balance sheet date were
converted at par into cash post year-end on 14 May 2016.
Notes to the Results 1 Basis of preparationGeneral Information The Results are based on the Company's financial statements which are prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union (EU) and therefore comply with Article 4 of the EU IAS legislation and with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS. The financial statements have also been prepared in accordance with IFRS and International
Financial Reporting Interpretations Committee (IFRIC) interpretations issued and effective at the time of preparing these accounts.With the exception of the new standards adopted in the year, as discussed below, there have been no significant changes in accounting policies from those set out in Halma plc's Annual Report and Accounts 2015. The accounting policies have been applied consistently throughout the years ended 2 April 2016 and 28 March 2015 other than those noted below.The financial information set
out in these Results does not constitute the Group's statutory accounts for the years ended 2 April 2016 and 28 March 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's Annual General Meeting. The auditor's reports on the 2015 and the 2016 accounts were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.The following Standards with an effective date of 1 January 2015 have been adopted without any significant impact on the amounts reported in these financial statements:IAS19 (amended) 'Defined Benefit Plans: Employee Contributions'Annual Improvements 2010-2012 Cycle, specifically amendments to IFRS 2 'Share Based Payments' and IFRS 8 'Operating Segments'Annual Improvements 2011-2013, specifically amendments to IFRS 3 'Business Combinations' and
IFRS 13 'Fair Value Measurement'These Results were approved by the Board of Directors on 14 June 2016.
Notes to the Results
1 Basis of preparationGeneral Information The Results are based on the Company's financial statements which are prepared
in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union (EU) and
therefore comply with Article 4 of the EU IAS legislation and with those parts of the Companies Act 2006 that are
applicable to companies reporting under IFRS. The financial statements have also been prepared in accordance with IFRS and
International Financial Reporting Interpretations Committee (IFRIC) interpretations issued and effective at the time of
preparing these accounts.With the exception of the new standards adopted in the year, as discussed below, there have been
no significant changes in accounting policies from those set out in Halma plc's Annual Report and Accounts 2015. The
accounting policies have been applied consistently throughout the years ended 2 April 2016 and 28 March 2015 other than
those noted below.The financial information set out in these Results does not constitute the Group's statutory accounts for
the years ended 2 April 2016 and 28 March 2015 but is derived from those accounts. Statutory accounts for 2015 have been
delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's Annual General
Meeting. The auditor's reports on the 2015 and the 2016 accounts were unqualified, did not draw attention to any matters by
way of emphasis without qualifying their report and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.The following Standards with an effective date of 1 January 2015 have been adopted without any
significant impact on the amounts reported in these financial statements:IAS19 (amended) 'Defined Benefit Plans: Employee
Contributions'Annual Improvements 2010-2012 Cycle, specifically amendments to IFRS 2 'Share Based Payments' and IFRS 8
'Operating Segments'Annual Improvements 2011-2013, specifically amendments to IFRS 3 'Business Combinations' and IFRS 13
'Fair Value Measurement'These Results were approved by the Board of Directors on 14 June 2016.
2 Segmental analysis Sector analysisThe Group has four reportable segments (Process Safety, Infrastructure Safety, Medical, and Environmental & Analysis), which are defined by markets rather than product type. Each segment includes businesses with similar operating and marketing characteristics. These segments are consistent with the internal reporting as reviewed by the Chief Executive.
Segment revenue and results Revenue(all continuing operations)
53 weeks to 2 April 2016 £000 52 weeks to28 March2015£000
Process Safety 155,467 158,372
Infrastructure Safety 264,843 234,063
Medical 198,715 169,333
Environmental & Analysis 188,928 164,412
Inter-segmental sales (148) (46)
Revenue for the year 807,805 726,134
Inter-segmental sales are charged at prevailing market prices and have not been disclosed separately by segment as they are not considered material. Revenue derived from the rendering of services was £25,134,000 (2015: £22,022,000). All revenue was otherwise derived from the sale of products.
Profit (all continuing operations)
53 weeks to 2 April 2016 52 weeks to
£000 28 March 2015
£000
Segment profit before allocation of adjustments*
Process Safety 39,557 44,772
Infrastructure Safety 56,167 49,992
Medical 51,695 45,385
Environmental & Analysis 34,527 27,403
181,946 167,552
Segment profit after allocation of adjustments*
Process Safety 36,095 40,280
Infrastructure Safety 50,965 49,585
Medical 34,747 31,981
Environmental & Analysis 30,413 25,699
Segment profit 152,220 147,545
Central administration costs (8,880) (8,988)
Net finance expense (7,052) (4,946)
Group profit before taxation 136,288 133,611
Taxation (27,447) (29,610)
Profit for the year 108,841 104,001
* Adjustments include the amortisation of acquired intangible assets; acquisition items; and profit or loss on disposal of operations.
The accounting policies of the reportable segments are the same as the Group's accounting policies. Acquisition transaction costs, adjustments to contingent consideration and release of fair value adjustments to inventory (collectively 'acquisition items') are recognised in the Consolidated Income Statement. Segment profit, before these acquisition items and the other adjustments, is disclosed separately above as this is the measure reported to the Chief Executive for the purpose of allocation of resources
and assessment of segment performance.These adjustments are analysed as follows:
53 weeks to 2 April 2016
Acquisition items
Amortisationof acquiredintangible assets£000 Transactioncosts£000 Adjustmentsto contingentconsideration £000 Release offair valueadjustmentsto inventory £000 Totalamortisationcharge andacquisitionitems£000 Disposal of operations (note 9) £000 Total£000
Process Safety (3,462) - - - (3,462) - (3,462)
Infrastructure Safety (2,398) (1,101) (827) (842) (5,168) (34) (5,202)
Medical (13,018) (2,926) (826) (768) (17,538) 590 (16,948)
Environmental & Analysis (4,225) - 111 - (4,114) - (4,114)
Total Segment & Group (23,103) (4,027) (1,542) (1,610) (30,282) 556 (29,726)
The transaction costs arose mainly on the acquisitions (see note 8) of Value Added Solutions, LLC (VAS), Firetrace USA, LLC (Firetrace), Visiometrics, S.L. (Visiometrics), and CenTrak Inc. (CenTrak), which were acquired on 19 May 2015, 5 October 2015, 16 December 2015 and 3 February 2016 respectively. The £827,000 charge in the Infrastructure Safety sector related to a revision in the estimate of the remaining contingent consideration payable on Advanced Electronics Limited (Advanced) acquired in the prior
year. The £826,000 charge in the Medical sector related to exchange differences arising on the revaluation of Visiometric's contingent consideration which is denominated in Euros. The remaining £111,000 credit to contingent consideration related to a revision in the estimate of the remaining payable on a prior year acquisition (ASL) from £197,000 to £86,000. The release of fair value adjustments to inventory arises from revaluing the inventories of Firetrace and CenTrak at acquisition. The £590,000 profit
on disposal in the Medical sector relates to the disposal of 8.8% of the Group's ownership interest in Optomed Oy on 26 August 2015. See note 9 for further details. The £34,000 loss on disposal of operations relates to warranty claims arising on the Monitor disposal in the prior year.
52 weeks to 28 March 2015
Acquisition items
Amortisationof acquiredintangible assets £000 Transactioncosts Adjustmentsto contingentconsideration Release offair valueadjustmentsto inventory £000 Totalamortisationcharge andacquisitionitems £000 Disposal ofoperations (note 9)£000 Total£000
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