REG - Halma PLC - Half-year Report <Origin Href="QuoteRef">HLMA.L</Origin> - Part 2
21/11/2017 07:05
- Part 2: For the preceding part double click ID:nRSU0273Xa
- (265)
Tax relating to components of other comprehensive income and expense - - - - 51 - - (667) (616)
Total other comprehensive income and expense - - - - (214) (36,687) - 2,839 (34,062)
Dividends paid - - - - - - - (31,733) (31,733)
Share-based payments charge - - - - - - 3,532 - 3,532
Deferred tax on share-based - - - - - - (563) - (563)
payment transactions
Excess tax deductions related to share-based payments on exercised awards - - - - - - - 1,135 1,135
Performance share plan awards vested - - 3,594 - - - (6,940) - (3,346)
At 30 September 2017 (unaudited) 37,965 23,608 (3,669) 185 140 113,510 (10,294) 613,870 775,315
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 30 September 2017 the number of treasury shares held was 3,990 (1 October 2016: 462,188; 1 April 2017: 462,188) and the number of shares held by the Employee Benefit Trust was 421,991 (1 October 2016: 262,417 and 1 April 2017: 512,417).
For the 26 weeks to 1 October 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 2 April 2016 (audited) 37,965 23,608 (8,219) 185 (610) 75,387 (5,831) 523,855 646,340
Profit 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 payment transactions - - - - - - (127) - (127)
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
For the 52 weeks to 1 April 2017
Share capital £000 Share premiumaccount £000 Ownshares £000 Capital redemption reserve £000 Hedgingreserve£000 Translation reserve£000 Other reserves £000 Retained earnings £000 Total £000
At 2 April 2016 (audited) 37,965 23,608 (8,219) 185 (610) 75,387 (5,831) 523,855 646,340
Profit for the period - - - - - - - 129,689 129,689
Other comprehensive income and expense:
Exchange differences on translation of foreign operations - - - - - 74,810 - - 74,810
Actuarial losses on defined benefit pension plans - - - - - - - (31,059) (31,059)
Effective portion of changes in fair value of cash flow hedges - - - - 1,197 - - - 1,197
Tax relating to components of other comprehensive income and expense - - - - (233) - - 6,082 5,849
Total other comprehensive income and expense - - - - 964 74,810 - (24,977) 50,797
Dividends paid - - - - - - - (49,788) (49,788)
Share-based payments charge - - - - - - 6,076 - 6,076
Deferred tax on share-based payment transactions - - - - - - 65 - 65
Excess tax deductions related to share-based payments on exercised awards - - - - - - - 1,135 1,135
Purchase of Own shares - - (2,368) - - - - - (2,368)
Performance share plan awards vested - - 3,324 - - - (6,633) - (3,309)
At 1 April 2017 (audited) 37,965 23,608 (7,263) 185 354 150,197 (6,323) 579,914 778,637
Consolidated Cash Flow Statement
Notes Unaudited 6 months to 30 September 2017£000 Unaudited 26 weeks to 1 October 2016£000 Audited 52 weeks to 1 April2017 £000
Net cash inflow from operating activities 8 76,025 70,345 172,493
Cash flows from investing activities
Purchase of property, plant and equipment (9,134) (10,728) (21,875)
Purchase of computer software (972) (702) (2,479)
Purchase of other intangibles (117) (209) (281)
Proceeds from sale of property, plant and equipment 1,177 287 1,495
Development costs capitalised (5,034) (4,814) (10,731)
Interest received 106 96 211
Acquisition of businesses, net of cash acquired 10 (17,086) (148) (9,972)
Net cash used in investing activities (31,060) (16,218) (43,632)
Cash flows from financing activities
Dividends paid (31,733) (29,609) (49,788)
Purchase of Own shares - - (2,368)
Interest paid (3,545) (3,489) (7,023)
Loan arrangement fee paid - - (2,656)
Proceeds from bank borrowings 30,748 - -
Repayment of bank borrowings (33,300) - (54,761)
Net cash used in financing activities (37,830) (33,098) (116,596)
Increase in cash and cash equivalents 7,135 21,029 12,265
Cash and cash equivalents brought forward 65,637 49,526 49,526
Exchange adjustments (1,106) 3,713 3,846
Cash and cash equivalents carried forward 71,666 74,268 65,637
Unaudited 6 months to30 September 2017£000 Unaudited 26 weeks to 1 October 2016£000 Audited 52 weeks to 1 April2017 £000
Reconciliation of net cash flow to movement in net debt
Increase in cash and cash equivalents 7,135 21,029 12,265
Net cash outflow from repayment of bank borrowings 2,552 - 54,761
Loan notes repaid in respect of acquisitions 161 241 241
Exchange adjustments 5,604 (11,873) (16,991)
15,452 9,397 50,276
Net debt brought forward (196,442) (246,718) (246,718)
Net debt carried forward (180,990) (237,321) (196,442)
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 6 months to 30 September 2017, was approved by the Directors on 21 November 2017. Effective from this financial year, the Group changed its reporting basis from weeks to calendar months. The Half Year Report is prepared for the 6 month period to 30 September 2017 and the Annual Report will be prepared for the year to 31 March 2018. For the current
financial year, 26 weeks is equivalent to 6 months so there is no difference between presentation on a weekly or calendar months basis. Basis of preparationThe 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 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 52 weeks to 1 April 2017, with the exception of the policy for taxes on income, which in the interim period is accrued using the effective tax rate that would be applicable to expected total income for the financial year. The figures shown for the 52 weeks to 1 April 2017 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. Standards and interpretations not yet
appliedAt the date of authorisation of this Half Year Report, the following Standards and Interpretations that are potentially relevant to the Group, and which have not been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU): - IFRS 9 'Financial Instruments: Classification and measurement' - effective for accounting periods beginning on or after 1 January 2018.- IFRS 15 'Revenue from Contracts with Customers' -
effective for accounting periods beginning on or after 1 January 2018.- IFRS 16 'Leases' - effective for accounting periods beginning on or after 1 January 2019.- Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions - effective for accounting periods beginning on or after 1 January 2018.- Annual Improvements 2014-2016 Cycle - effective for accounting periods beginning on or after 1 January 2018.- IFRIC Interpretation 22: Foreign Currency
Transactions and Advance Consideration - effective for accounting periods beginning on or after 1 January 2018.- IFRIC Interpretation 23: Uncertainty over Income Tax Treatments - effective for accounting periods beginning on or after 1 January 2019.- Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures - effective for accounting periods beginning on or after 1 January 2019. The Directors anticipate that the adoption of these Standards and Interpretations in future periods
will have no material impact on the financial statements of the Group with the exception of IFRS 9 'Financial Instruments', IFRS 15 'Revenue from Contracts with Customers', and IFRS 16 'Leases' where our review of the impact is ongoing as described below. (a) IFRS 15 'Revenue from Contracts with Customers'For the Group, transition to IFRS 15 will take effect from 1 April 2018. The half year results for FY18/19 will be IFRS 15 compliant with the first Annual Report published in accordance with IFRS 15 being
the 31 March 2019 report. The Group plans to adopt a fully retrospective transition approach and so comparatives for the year ended 31 March 2018 will be restated. IFRS 15 sets out the requirements for recognising revenue from contracts with customers. The standard requires entities to apportion revenue earned from contracts to individual promises, or performance obligations, on a stand-alone selling price basis, based on a five-step model. The Group is making good progress in quantifying the full impact of
this standard. Having performed an impact assessment in FY16/17, during the first half of FY17/18 the Group has been working through a comprehensive transition exercise at each of its subsidiaries. The autonomous nature of the Group means that each subsidiary sets its own terms and conditions and operating procedures and as such this was the appropriate level for the transition exercise. The transition exercise has involved scoping the Group's revenues to identify revenue streams with like commercial terms
and performing sample contract reviews to determine the appropriate revenue recognition under IFRS 15. To ensure a consistent approach to the exercise and consistent judgements, the exercise has been supported from the centre through setting the approach to transition, and providing appropriate tools and guidance, including a revised Group Accounting Manual. The review and conclusion of this exercise is ongoing, including reviewing the consistency of judgements between companies and review by the Group's
auditor. Based on the initial views of the companies we do not expect there to be a material change in the timing or quantum of revenue recognition. The following areas of potential differences were identified from our initial impact assessment which are being investigated as part of our transition exercise: - Certain companies across the Group provide a product which involves an element of customisation. Currently under IAS 18 the revenue recognition for such product is at a point in time on transfer
of the risk and reward of the transaction to the customer. IFRS 15 requires that for such transactions, where certain criteria are met, revenue is recognised over time. Based on the review of specific contract terms against the requirements of IFRS 15 we do not currently expect the criteria of IFRS 15 to be met and as such do not expect there to be material change in the timing or quantum of revenue recognition in relation to these arrangements.- Certain companies across the Group arrange shipping and
handling on behalf of their customers but, based on assessment of all terms and conditions, determine control of goods to pass on despatch. Accordingly shipping and handling is a separate performance obligation under IFRS 15 and revenue is only recognised when the performance obligation is fulfilled. Having reviewed the terms of the arrangements we do not currently expect there to be a material change in the timing or quantum of revenue recognition.- Many of our companies have warranty arrangements
with their customers. Having reviewed the details of the warranty arrangements, these have been determined to be of an assurance nature and as such there is no material change in accounting required by IFRS 15.- Many of the companies have variable consideration arrangements with their customers. Having reviewed the details of these arrangements against IFRS 15 and current accounting practices, we do not currently expect there to be a material change in the timing or quantum of revenue recognition.-
Sales commissions and other third-party sales acquisition costs resulting directly from securing contracts with customers are required to be recognised as an asset under IFRS 15 and recognised over the associated contract period where such contract is more than one year in length. Having reviewed the nature of the arrangements we do not currently expect there to be a change in the current accounting. (b) IFRS 9 'Financial Instruments'For the Group, transition to IFRS 9 will take effect from 1 April
2018. The half year results for FY18/19 will be IFRS 9 compliant with the first Annual Report published in accordance with IFRS 9 being the 31 March 2019 report. There is no requirement to restate comparatives. IFRS 9 provides a new expected losses impairment model for financial assets, including trade receivables, and includes amendments to classification and measurement of financial instruments. During this half year the Group has undertaken a high-level review of the impact of this new standard on its
financial statements. The Group's use of financial instruments is limited to short-term trading balances such as receivables and payables, borrowings and derivatives used for hedging foreign exchange risks. We therefore expect that the impact of this standard will be limited to classification of financial instruments and the measurement of impairment of short-term financial assets using the expected losses impairment model. Through the second half of the year we will be working to establish an appropriate
impairment model and accompanying processes to be applied to receivables by our companies. However, the nature of the financial assets is such that we do not expect there will be a material change in level of impairment recognised compared to that based on current procedures. (c) IFRS 16 'Leases'For the Group, transition to IFRS 16 will take effect from 1 April 2019. The half year results for FY19/20 will be IFRS 16 compliant with the first Annual Report published in accordance with IFRS 16 being for the
year ending 31 March 2020. IFRS 16 provides a single model for lessees which recognises a right of use asset and lease liability for all leases which are longer than one year or which are not classified as low value. The distinction between finance and operating leases for lessees is removed. The Group is currently assessing the impact of the new standard. The most significant impact currently identified will be that the Group's land and buildings leases will be brought on to the balance sheet. Further
assessment of other leases is currently ongoing. The Group's future lease commitments for land and buildings as at 1 April 2017, which provides an indicator of the value to be brought on to the balance sheet, was £45m. Going concernThe 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 (RCF) completed in November 2016 of which £477m remains undrawn at the date of this report. The RCF was extended to November 2022 following the period end. 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 6 months to 30 September 2017, was
approved by the Directors on 21 November 2017. Effective from this financial
year, the Group changed its reporting basis from weeks to calendar months. The
Half Year Report is prepared for the 6 month period to 30 September 2017 and
the Annual Report will be prepared for the year to 31 March 2018. For the
current financial year, 26 weeks is equivalent to 6 months so there is no
difference between presentation on a weekly or calendar months basis.
Basis of preparation
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
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 52 weeks to 1 April
2017, with the exception of the policy for taxes on income, which in the
interim period is accrued using the effective tax rate that would be
applicable to expected total income for the financial year. The figures shown
for the 52 weeks to 1 April 2017 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.
Standards and interpretations not yet applied
At the date of authorisation of this Half Year Report, the following Standards
and Interpretations that are potentially relevant to the Group, and which have
not been applied in these financial statements, were in issue but not yet
effective (and in some cases had not yet been adopted by the EU): - IFRS
9 'Financial Instruments: Classification and measurement' - effective for
accounting periods beginning on or after 1 January 2018.- IFRS 15
'Revenue from Contracts with Customers' - effective for accounting periods
beginning on or after 1 January 2018.- IFRS 16 'Leases' - effective for
accounting periods beginning on or after 1 January 2019.- Amendments to
IFRS 2: Classification and Measurement of Share-based Payment Transactions -
effective for accounting periods beginning on or after 1 January 2018.-
Annual Improvements 2014-2016 Cycle - effective for accounting periods
beginning on or after 1 January 2018.- IFRIC Interpretation 22: Foreign
Currency Transactions and Advance Consideration - effective for accounting
periods beginning on or after 1 January 2018.- IFRIC Interpretation 23:
Uncertainty over Income Tax Treatments - effective for accounting periods
beginning on or after 1 January 2019.- Amendments to IAS 28: Long-term
Interests in Associates and Joint Ventures - effective for accounting periods
beginning on or after 1 January 2019. The Directors anticipate that the
adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group with the exception of
IFRS 9 'Financial Instruments', IFRS 15 'Revenue from Contracts with
Customers', and IFRS 16 'Leases' where our review of the impact is ongoing as
described below.
(a) IFRS 15 'Revenue from Contracts with Customers'
For the Group, transition to IFRS 15 will take effect from 1 April 2018. The
half year results for FY18/19 will be IFRS 15 compliant with the first Annual
Report published in accordance with IFRS 15 being the 31 March 2019 report.
The Group plans to adopt a fully retrospective transition approach and so
comparatives for the year ended 31 March 2018 will be restated. IFRS 15 sets
out the requirements for recognising revenue from contracts with customers.
The standard requires entities to apportion revenue earned from contracts to
individual promises, or performance obligations, on a stand-alone selling
price basis, based on a five-step model. The Group is making good progress in
quantifying the full impact of this standard. Having performed an impact
assessment in FY16/17, during the first half of FY17/18 the Group has been
working through a comprehensive transition exercise at each of its
subsidiaries. The autonomous nature of the Group means that each subsidiary
sets its own terms and conditions and operating procedures and as such this
was the appropriate level for the transition exercise. The transition exercise
has involved scoping the Group's revenues to identify revenue streams with
like commercial terms and performing sample contract reviews to determine the
appropriate revenue recognition under IFRS 15. To ensure a consistent approach
to the exercise and consistent judgements, the exercise has been supported
from the centre through setting the approach to transition, and providing
appropriate tools and guidance, including a revised Group Accounting Manual.
The review and conclusion of this exercise is ongoing, including reviewing the
consistency of judgements between companies and review by the Group's auditor.
Based on the initial views of the companies we do not expect there to be a
material change in the timing or quantum of revenue recognition. The following
areas of potential differences were identified from our initial impact
assessment which are being investigated as part of our transition exercise: -
Certain companies across the Group provide a product which involves an
element of customisation. Currently under IAS 18 the revenue recognition for
such product is at a point in time on transfer of the risk and reward of the
transaction to the customer. IFRS 15 requires that for such transactions,
where certain criteria are met, revenue is recognised over time. Based on the
review of specific contract terms against the requirements of IFRS 15 we do
not currently expect the criteria of IFRS 15 to be met and as such do not
expect there to be material change in the timing or quantum of revenue
recognition in relation to these arrangements.- Certain companies across
the Group arrange shipping and handling on behalf of their customers but,
based on assessment of all terms and conditions, determine control of goods to
pass on despatch. Accordingly shipping and handling is a separate performance
obligation under IFRS 15 and revenue is only recognised when the performance
obligation is fulfilled. Having reviewed the terms of the arrangements we do
not currently expect there to be a material change in the timing or quantum of
revenue recognition.- Many of our companies have warranty arrangements
with their customers. Having reviewed the details of the warranty
arrangements, these have been determined to be of an assurance nature and as
such there is no material change in accounting required by IFRS 15.-
Many of the companies have variable consideration arrangements with their
customers. Having reviewed the details of these arrangements against IFRS 15
and current accounting practices, we do not currently expect there to be a
material change in the timing or quantum of revenue recognition.- Sales
commissions and other third-party sales acquisition costs resulting directly
from securing contracts with customers are required to be recognised as an
asset under IFRS 15 and recognised over the associated contract period where
such contract is more than one year in length. Having reviewed the nature of
the arrangements we do not currently expect there to be a change in the
current accounting.
(b) IFRS 9 'Financial Instruments'
For the Group, transition to IFRS 9 will take effect from 1 April 2018. The
half year results for FY18/19 will be IFRS 9 compliant with the first Annual
Report published in accordance with IFRS 9 being the 31 March 2019 report.
There is no requirement to restate comparatives. IFRS 9 provides a new
expected losses impairment model for financial assets, including trade
receivables, and includes amendments to classification and measurement of
financial instruments. During this half year the Group has undertaken a
high-level review of the impact of this new standard on its financial
statements. The Group's use of financial instruments is limited to short-term
trading balances such as receivables and payables, borrowings and derivatives
used for hedging foreign exchange risks. We therefore expect that the impact
of this standard will be limited to classification of financial instruments
and the measurement of impairment of short-term financial assets using the
expected losses impairment model. Through the second half of the year we will
be working to establish an appropriate impairment model and accompanying
processes to be applied to receivables by our companies. However, the nature
of the financial assets is such that we do not expect there will be a material
change in level of impairment recognised compared to that based on current
procedures.
(c) IFRS 16 'Leases'
For the Group, transition to IFRS 16 will take effect from 1 April 2019. The
half year results for FY19/20 will be IFRS 16 compliant with the first Annual
Report published in accordance with IFRS 16 being for the year ending 31 March
2020. IFRS 16 provides a single model for lessees which recognises a right of
use asset and lease liability for all leases which are longer than one year or
which are not classified as low value. The distinction between finance and
operating leases for lessees is removed. The Group is currently assessing the
impact of the new standard. The most significant impact currently identified
will be that the Group's land and buildings leases will be brought on to the
balance sheet. Further assessment of other leases is currently ongoing. The
Group's future lease commitments for land and buildings as at 1 April 2017,
which provides an indicator of the value to be brought on to the balance
sheet, was £45m.
Going concern
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 (RCF) completed in
November 2016 of which £477m remains undrawn at the date of this report. The
RCF was extended to November 2022 following the period end. 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 6 months to 30 September 2017£000 Unaudited 26 weeks to 1 October 2016£000 Audited 52 weeks to 1 April2017 £000
Process Safety 88,794 76,743 167,007
Infrastructure Safety 167,923 147,988 315,219
Medical 133,270 118,664 260,576
Environmental & Analysis 116,513 98,797 219,118
Inter-segmental sales (171) (71) (258)
Revenue for the period 506,329 442,121 961,662
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 £23,399,000 (26 weeks to 1 October 2016: £14,034,000; 52 weeks to 1 April 2017: £39,011,000). All revenue was otherwise derived from the sale of products.
Profit (all continuing operations)
Unaudited 6 months to 30 September 2017£000 Unaudited 26 weeks to 1 October 2016£000 Audited 52 weeks to 1 April2017 £000
Segment profit before allocation of adjustments*
Process Safety 20,247 17,395 40,243
Infrastructure Safety 35,736 31,991 65,129
Medical 28,730 28,876 66,704
Environmental & Analysis 21,776 16,022 41,698
106,489 94,284 213,774
Segment profit after allocation of adjustments*
Process Safety 18,227 15,491 36,243
Infrastructure Safety 33,177 29,735 60,342
Medical 17,469 18,933 45,804
Environmental & Analysis 19,894 11,720 35,084
Segment profit 88,767 75,879 177,473
Central administration costs (7,112) (5,763) (10,484)
Net finance expense (4,836) (4,891) (9,286)
Group profit before taxation 76,819 65,225 157,703
Taxation (15,104) (13,013) (28,014)
Profit for the period 61,715 52,212 129,689
* Adjustments include the amortisation and impairment of acquired intangible assets; acquisition items; restructuring costs; and profit or loss on disposal of operations. 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
and impairment of acquired intangible assets, restructuring costs and the profit or loss on disposal of continuing operations 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 6 months to 30 September 2017
Acquisition items
Amortisation and impairment 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 (2,020) - - - (2,020) - (2,020)
Infrastructure Safety (2,456) (103) - - (2,559) - (2,559)
Medical (9,941) (826) (494) - (11,261) - (11,261)
Environmental & Analysis (2,899) (3) 1,121 (101) (1,882) - (1,882)
Total Segment & Group (17,316) (932) 627 (101) (17,722) - (17,722)
The transaction costs arose mainly on the acquisitions of CasMed NIBP and Cardios during the period. Further detail on the acquisitions is contained in note 10. The £627,000 adjustment to contingent consideration comprises a credit of £1,121,000 in Environmental & Analysis arising from a change in estimate of the payable for FluxData, Inc. (FluxData), a prior year acquisition, offset by £494,000 in Medical arising from exchange differences on the payables for Visiometrics S.L. (Visiometrics) which is
denominated in Euros and for Cardios which is denominated in Brazilian Reals. The £101,000 charge relates to the release of the remaining fair value adjustment on revaluing the inventory of FluxData on acquisition in the prior year.
Unaudited for the 26 weeks to 1 October 2016
Acquisition items
Amortisation and impairment 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 (1,904) - - - (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 offset by a £677,000 charge arising from changes in the discount rate along with exchange differences on the payable for Visiometrics which is denominated in Euros. The £790,000 charge relates to the release of the remaining fair value adjustment on revaluing the inventory of CenTrak Inc (CenTrak) on acquisition. 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, Pixelteq Inc (Pixelteq).
Audited for the 52 weeks ended 1 April 2017
Acquisition items
Amortisation and impairment 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 (4,000) - - - (4,000) - (4,000)
Infrastructure Safety (4,784) (3) - - (4,787) - (4,787)
Medical (30,702)
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