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for the period - - - - - - - 52,212 52,212
Other comprehensive income and expense:
Exchange differences on translation of foreign operations - - - - - 57,825 - - 57,825
Actuarial losses on defined benefit pension plans - - - - - - - (45,838) (45,838)
Effective portion of changes in fair value of cash flow hedges - - - - (453) - - - (453)
Tax relating to components of other comprehensive income and expense - - - - 91 - - 9,168 9,259
Total other comprehensive income and expense - - - - (362) 57,825 - (36,670) 20,793
Dividends paid - - - - - - - (29,609) (29,609)
Share-based payments charge - - - - - - 3,110 - 3,110
Deferred tax on share-based - - - - - - (127) - (127)
payment transactions
Excess tax deductions related to share-based payments on exercised awards - - - - - - - 1,159 1,159
Performance share plan awards vested - - 3,323 - - - (6,633) - (3,310)
At 1 October 2016 (unaudited) 37,965 23,608 (4,896) 185 (972) 133,212 (9,481) 510,947 690,568
Own shares are ordinary shares in Halma plc purchased by the Company and held to fulfil the Company's obligations under the Company's share plans. As at 1 October 2016 the number of treasury shares held was 462,188 (3 October 2015: 940,421; 2 April 2016: 940,421) and the number of shares held by the Employee Benefit Trust was 262,417 (3 October 2015: 89,198; 2 April 2016: 311,444).
For the 27 weeks ended 3 October 2015
Share capital £000 Share premiumaccount £000 Ownshares £000 Capital redemption reserve £000 Hedging reserve £000 Translation reserve£000 Other reserves £000 Retained earnings £000 Total £000
At 28 March 2015 (audited) 37,965 23,608 (8,450) 185 171 45,329 (4,073) 454,213 548,948
Profit for the period - - - - - - - 50,218 50,218
Other comprehensive income and expense:
Exchange differences on translation of foreign operations - - - - - (14,096) - - (14,096)
Exchange losses transferred to Income Statement on disposal of operation - - - - - 22 - - 22
Actuarial gains on defined benefit pension plans - - - - - - - 13,122 13,122
Effective portion of changes in fair value of cash flow hedges - - - - (343) - - - (343)
Tax relating to components of other comprehensive income and expense - - - - 80 - - (2,625) (2,545)
Total other comprehensive income - - - - (263) (14,074) - 10,497 (3,840)
and expense
Dividends paid - - - - - - - (27,630) (27,630)
Share-based payments charge - - - - - - 1,952 - 1,952
Deferred tax on share-based - - - - - - (575) - (575)
payment transactions
Excess tax deductions related to share-based payments on exercised awards - - - - - - - 1,476 1,476
Purchase of Employee Benefit Trust shares - - (1,216) - - - - - (1,216)
Performance share plan awards vested - - 3,214 - - - (5,691) - (2,477)
At 3 October 2015 (unaudited) 37,965 23,608 (6,452) 185 (92) 31,255 (8,387) 488,774 566,856
For the 53 weeks ended 2 April 2016
Share capital £000 Share premiumaccount £000 Ownshares £000 Capital redemption reserve £000 Hedging reserve £000 Translation reserve£000 Other reserves £000 Retained earnings £000 Total £000
At 28 March 2015 (audited) 37,965 23,608 (8,450) 185 171 45,329 (4,073) 454,213 548,948
Profit for the period - - - - - - - 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 operation - - - - - 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 and expense - - - - 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 payments 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 (audited) 37,965 23,608 (8,219) 185 (610) 75,387 (5,831) 523,855 646,340
Consolidated Cash Flow Statement
Notes Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
Net cash inflow from operating activities 8 70,345 61,886 149,273
Cash flows from investing activities
Purchase of property, plant and equipment (10,728) (8,244) (22,418)
Purchase of computer software (702) (778) (1,669)
Purchase of other intangibles (209) (81) (535)
Proceeds from sale of property, plant and equipment 287 468 2,364
Proceeds from sale of capitalised development costs - - 166
Development costs capitalised (4,814) (3,990) (8,579)
Interest received 96 128 217
Acquisition of businesses, net of cash acquired 10 (148) (12,902) (202,575)
Disposal of operation, net of cash disposed - 908 907
Net cash used in investing activities (16,218) (24,491) (232,122)
Financing activities
Dividends paid (29,609) (27,630) (46,473)
Purchase of Own shares - (1,216) (3,003)
Interest paid (3,489) (1,589) (4,149)
Loan arrangement fee paid - - (770)
Proceeds from bank borrowings - 87,000 74,788
Repayment of bank borrowings - - (97,000)
Proceeds from issue of loan notes - - 167,473
Net cash (used in)/from financing activities (33,098) 56,565 90,866
Increase in cash and cash equivalents 21,029 93,960 8,017
Cash and cash equivalents brought forward 49,526 39,525 39,525
Exchange adjustments 3,713 231 1,984
Cash and cash equivalents carried forward 74,268 133,716 49,526
Unaudited 1 October 2016£000 Unaudited 3 October 2015£000 Audited2 April 2016£000
Reconciliation of net cash flow to movement in net debt
Increase in cash and cash equivalents 21,029 93,960 8,017
Net cash (inflow)/outflow from (drawdown)/repayment of bank borrowings - (87,000) 22,212
Proceeds from issue of loan notes - - (167,473)
Loan notes issued in respect of acquisitions* - (263) (288)
Loan notes repaid in respect of acquisitions* 241 368 367
Exchange adjustments (11,873) 442 (8,659)
9,397 7,507 (145,824)
Net debt brought forward (246,718) (100,894) (100,894)
Net debt carried forward (237,321) (93,387) (246,718)
* Of the £577,000 loan notes outstanding at the prior period end £241,000 was converted at par into cash on 14 May 2016. The remaining loan notes are outstanding. The loan notes, which attract interest of 1%, are convertible into cash by the holder at par on each anniversary of the acquisition date until 14 May 2019.
Notes to the Condensed Financial Statements
1 Basis of preparation General informationThe Half Year Report, which includes the Interim Management Report and Condensed Financial Statements for the 26 weeks to 1 October 2016, was approved by the Directors on 22 November 2016. The Report has been prepared in accordance with International Accounting Standard 34, applying the accounting policies and presentation that were applied in the preparation of the Group's statutory accounts for the 53 weeks to 2 April 2016. The figures shown for the 53 weeks to
2 April 2016 are based on the Group's statutory accounts for that period and do not constitute the Group's statutory accounts for that period as defined in Section 434 of the Companies Act 2006. These statutory accounts, which were prepared under International Financial Reporting Standards, have been filed with the Registrar of Companies. The audit report on those accounts was not qualified, did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying
the report, and did not contain statements under Sections 498 (2) or (3) of the Companies Act 2006. The Report has been prepared solely to provide additional information to shareholders as a body to assess the Board's strategies and the potential for those strategies to succeed. It should not be relied on by any other party or for any other purpose. The Report contains certain forward-looking statements which have been made by the Directors in good faith using information available up until the date they
approved the Report. Forward-looking statements should be regarded with caution as by their nature such statements involve risk and uncertainties relating to events and circumstances that may occur in the future. Actual results may differ from those expressed in such statements, depending on the outcome of these uncertain future events. The Directors believe the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of reasonably possible
changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities, which includes a £550m five-year Revolving Credit Facility completed on 4 November 2016 of which £428m remains undrawn at the date of this report. With this in mind, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in
preparing the half year Condensed Financial Statements.
1 Basis of preparation
General information
The Half Year Report, which includes the Interim Management Report and
Condensed Financial Statements for the 26 weeks to 1 October 2016, was
approved by the Directors on 22 November 2016. The Report has been prepared in
accordance with International Accounting Standard 34, applying the accounting
policies and presentation that were applied in the preparation of the Group's
statutory accounts for the 53 weeks to 2 April 2016. The figures shown for the
53 weeks to 2 April 2016 are based on the Group's statutory accounts for that
period and do not constitute the Group's statutory accounts for that period as
defined in Section 434 of the Companies Act 2006. These statutory accounts,
which were prepared under International Financial Reporting Standards, have
been filed with the Registrar of Companies. The audit report on those accounts
was not qualified, did not include a reference to any matters to which the
Auditor drew attention by way of emphasis without qualifying the report, and
did not contain statements under Sections 498 (2) or (3) of the Companies Act
2006. The Report has been prepared solely to provide additional information to
shareholders as a body to assess the Board's strategies and the potential for
those strategies to succeed. It should not be relied on by any other party or
for any other purpose. The Report contains certain forward-looking statements
which have been made by the Directors in good faith using information
available up until the date they approved the Report. Forward-looking
statements should be regarded with caution as by their nature such statements
involve risk and uncertainties relating to events and circumstances that may
occur in the future. Actual results may differ from those expressed in such
statements, depending on the outcome of these uncertain future events. The
Directors believe the Group is well placed to manage its business risks
successfully. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the Group should
be able to operate within the level of its current committed facilities, which
includes a £550m five-year Revolving Credit Facility completed on 4 November
2016 of which £428m remains undrawn at the date of this report. With this in
mind, the Directors have a reasonable expectation that the Company and Group
have adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern basis in
preparing the half year Condensed Financial Statements.
2 Segmental analysis Sector analysisThe Group has four main 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 market characteristics. These segments are consistent with the internal reporting as reviewed by the Chief Executive.
Sector analysis
The Group has four main 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 market characteristics. These segments are consistent with the
internal reporting as reviewed by the Chief Executive.
Segment revenue and results
Revenue (all continuing operations)
Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
Process Safety 76,743 77,773 155,467
Infrastructure Safety 147,988 122,411 264,843
Medical 118,664 92,297 198,715
Environmental & Analysis 98,797 87,243 188,928
Inter-segmental sales (71) (67) (148)
Revenue for the period 442,121 379,657 807,805
Inter-segmental sales are charged at prevailing market prices and have not been disclosed separately by segment as they are not considered material. The Group does not analyse revenue by product group. Revenue derived from the rendering of services was £14,034,000 (27 weeks to 3 October 2015: £12,165,000; 53 weeks to 2 April 2016: £25,134,000). All revenue was otherwise derived from the sale of products.
Profit (all continuing operations)
Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
Segment profit before allocation of adjustments*
Process Safety 17,395 19,090 39,557
Infrastructure Safety 31,991 24,591 56,167
Medical 28,876 24,579 51,695
Environmental & Analysis 16,022 14,767 34,527
94,284 83,027 181,946
Segment profit after allocation of adjustments*
Process Safety 15,491 17,393 36,095
Infrastructure Safety 29,735 23,707 50,965
Medical 18,933 18,826 34,747
Environmental & Analysis 11,720 12,689 30,413
Segment profit 75,879 72,615 152,220
Central administration costs (5,763) (5,449) (8,880)
Net finance expense (4,891) (2,921) (7,052)
Group profit before taxation 65,225 64,245 136,288
Taxation (13,013) (14,027) (27,447)
Profit for the period 52,212 50,218 108,841
* Adjustments include the amortisation of acquired intangible assets, acquisition items and profit or loss on disposal of operations and restructuring. The accounting policies of the reportable segments are the same as the Group's accounting policies. For acquisitions after 3 April 2010, acquisition transaction costs and adjustments to contingent purchase consideration are recognised in the Consolidated Income Statement. Segment profit before these acquisition costs, the amortisation of acquired
intangible assets and the profit or loss on disposal of continuing operations and restructuring 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:
Unaudited for the 26 weeks ended 1 October 2016
Acquisition items
Amortisation of acquired intangibles£000 Transaction costs £000 Adjustments to contingent consideration £000 Release of fair value adjustments to inventory£000 Totalamortisationcharge andacquisitionitems£000 Disposal ofoperations and restructuring£000 Total £000
Process Safety (1,904) - - - (1,904) - (1,904)
Infrastructure Safety (2,256) - - - (2,256) - (2,256)
Medical (8,815) - (338) (790) (9,943) - (9,943)
Environmental & Analysis (2,217) - 15 - (2,202) (2,100) (4,302)
Total Segment & Group (15,192) - (323) (790) (16,305) (2,100) (18,405)
The £338,000 charge to contingent consideration comprises a credit arising from a revision to the estimate of the payable for Value Added Solutions LLC (VAS) by £339,000 from £704,000 (US$1,000,000) to £411,000 (US$535,000) with exchange differences of £46,000, offset by a £677,000 charge arising from changes in the discount rate along with exchange differences on the payable for Visiometrics S.L. (Visiometrics) which is denominated in Euros. The £790,000 charge relates to the release of the remaining fair
value adjustments on revaluing the inventory of CenTrak on acquisition in the prior year. The £2,100,000 charge relates to inventory and fixed asset write downs and severance costs arising on the restructuring of non-core operations in one of the Group's subsidiaries.
Unaudited for the 27 weeks ended 3 October 2015
Acquisition items
Amortisation of acquired intangibles£000 Transaction costs £000 Adjustments to contingent consideration £000 Release of fair value adjustments to inventory£000 Total amortisation charge and acquisition items £000 Disposal of operations and restructuring£000 Total £000
Process Safety (1,697) - - - (1,697) - (1,697)
Infrastructure Safety (411) (148) (325) - (884) - (884)
Medical (6,217) (114) (14) - (6,345) 592 (5,753)
Environmental & Analysis (2,078) - - - (2,078) - (2,078)
Total Segment & Group (10,403) (262) (339) - (11,004) 592 (10,412)
The transaction costs arose on the acquisitions of VAS, £114,000; and Firetrace USA LLC, £148,000. The £325,000 charge to contingent consideration related to the revision of the estimate of the remaining payable for Advanced Electronics Limited. The £592,000 profit on disposal relates to the disposal of 8.8% of the Group's ownership interest in Optomed Oy on 26 August 2015.
Audited for the 53 weeks ended 2 April 2016
Acquisition items
Amortisation of acquired intangibles£000 Transaction costs £000 Adjustments to contingent consideration £000 Release of fair value adjustments to inventory£000 Totalamortisationcharge andacquisitionitems£000 Disposal ofoperations and restructuring£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 prior year acquisitions of Firetrace in the Infrastructure Safety sector and VAS, Visiometrics and CenTrak in the Medical sector. The £1,542,000 charge comprised changes in estimate of the deferred contingent consideration payable for Advanced Electronics in the Infrastructure Safety sector, ASL, a prior acquisition, in the Environmental & Analysis sector, and foreign exchange movements on the Visiometrics payable in the Medical sector. The Advanced payable was
settled in full in the period. The release of fair value adjustments to inventory related to the acquisitions of Firetrace and CenTrak. The £590,000 profit on disposal relates to the disposal of 8.8% of the Group's ownership interest in Optomed Oy on 26 August 2015. The total assets and liabilities of all four segments have not been disclosed as there have been no material changes to those disclosed in the Annual Report and Accounts 2016.
Geographic information The Group's revenue from external customers (by location of customer) is as follows:
Revenue by destination
Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
United States of America 160,807 124,415 272,933
Mainland Europe 95,965 85,190 179,290
United Kingdom 72,901 71,520 144,821
Asia Pacific 69,686 59,736 124,992
Africa, Near and Middle East 26,742 25,419 55,712
Other countries 16,020 13,377 30,057
Group revenue 442,121 379,657 807,805
3 Finance income
Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
Interest receivable 96 128 217
4 Finance expense
Unaudited 26 weeks to 1 October 2016 £000 Unaudited 27 weeks to 3 October 2015 £000 Audited 53 weeks to 2 April2016 £000
Interest payable on loans and overdrafts 3,463 1,580 4,104
Amortisation of finance costs 325 265 561
Net interest charge on pension plan liabilities 832 1,008 2,013
Other interest payable 25 9 45
4,645 2,862 6,723
Fair value movement on derivative financial instruments 267 187 508
Unwinding of discount on provisions 75 - 38
4,987 3,049 7,269
5 Taxation
The total Group tax charge for the 26 weeks to 1 October 2016 of £13,013,000 (27 weeks to 3 October 2015: £14,027,000; 53 weeks to 2 April 2016: £27,447,000) comprises a current tax charge of £15,032,000 (27 weeks to 3 October 2015: £15,280,000; 53 weeks to 2 April 2016: £30,685,000) and a deferred tax credit of £2,019,000 (27 weeks to 3 October 2015: £1,253,000; 53 weeks to 2 April 2016: £3,238,000). The tax charge is based on the estimated effective tax rate for the year. The tax charge includes
£12,253,000 (27 weeks to 3 October 2015: £12,270,000; 53 weeks to 2 April 2016: £25,014,000) in respect of overseas tax.
6 Earnings per ordinary share
Basic and diluted earnings per ordinary share are calculated using the weighted average of 378,549,906 (3 October 2015: 378,390,374; 2 April 2016: 378,412,359) shares in issue during the period (net of shares purchased by the Company and held as treasury and Employee Benefit Trust shares). All remaining share options were exercised during the year ended March 2015, accordingly there are no dilutive potential ordinary shares. Adjusted earnings are calculated as earnings from continuing operations excluding
the amortisation of acquired intangible assets, acquisition items, profit or loss on disposal of operations and restructuring, and associated taxation thereon. The Directors consider that adjusted earnings represent a more consistent measure of underlying performance. A reconciliation of earnings and the effect on basic earnings per share figures is as follows:
Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
Earnings from continuing operations 52,212 50,218 108,841
Amortisation of acquired intangible assets (after tax) 10,383 7,351 16,102
Acquisition transaction costs (after tax) - 171 2,941
Release of fair value adjustments to inventory (after tax) 490 - 998
Adjustments to contingent consideration (after tax) 300 339 1,315
Loss/(profit) on disposal of operations and restructuring (after tax) 1,847 (592) (556)
Adjusted earnings 65,232 57,487 129,641
Per ordinary share
Unaudited 26 weeks to 1 October 2016pence Unaudited 27 weeks to 3 October 2015pence Audited 53 weeks to 2 April2016 pence
Earnings from continuing operations 13.79 13.27 28.76
Amortisation of acquired intangible assets (after tax) 2.74 1.94 4.26
Acquisition transaction costs (after tax) - 0.05 0.78
Release of fair value adjustments to inventory (after tax) 0.13 - 0.26
Adjustments to contingent consideration (after tax) 0.08 0.09 0.35
Loss/(profit) on disposal of operations and restructuring (after tax) 0.49 (0.16) (0.15)
Adjusted earnings 17.23 15.19 34.26
7 Dividends
Per ordinary share
Unaudited 26 weeks to 1 October 2016pence Unaudited 27 weeks to 3 October 2015pence Audited 53 weeks to 2 April2016 pence
Amounts recognised as distributions to shareholders in the period
Final dividend for the year to 2 April 2016 (28 March 2015) 7.83 7.31 7.31
Interim dividend for the year to 2 April 2016 - - 4.98
7.83 7.31 12.29
Dividends in respect of the period
Interim dividend for the year to 1 April 2017 (2 April 2016) 5.33 4.98 4.98
Final dividend for the year to 2 April 2016 - - 7.83
5.33 4.98 12.81
Unaudited 26 weeks to 1 October 2016£000 Unaudited 27 weeks to 3 October 2015£000 Audited 53 weeks to 2 April2016 £000
Amounts recognised as distributions to shareholders in the period
Final dividend for the year to 2 April 2016 (28 March
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