- Part 2: For the preceding part double click ID:nRSJ9603Ga
reductions in inflation assumptions and an improvement of
£5.6m in underlying asset values.
The Hill & Smith Executive Pension Scheme and the Hill & Smith Pension Scheme
(the 'Schemes') remain the largest employee benefit obligations within the
Group. In common with many other UK companies, the Schemes are mature having
significantly more pensioners and deferred pensioners than active
participating members. The Schemes are closed to new members, with future
accruals ceasing in the Executive Scheme in December 2011 and in the Main
Scheme in November 2012. The IAS19 deficit of the Schemes as at 31 December
2014 was £17.7m (2013: £17.6m). The Group has agreed deficit recovery plans in
place that require cash contributions over and above the current service
accrual amounting to £2.5m for the three years to April 2016, followed by
payments of £2.3m for a further seven years.
Deficit contributions of £3.6m in 2014 include an additional £1.1m
crystallising on cessation of trade in businesses sold or closed. The date of
the next triennial review is 5 April 2015. The Group is actively engaged in
dialogue with the Trustees with respect to management, funding and investment
strategy.
Acquisitions
On 11 July 2014 the Group acquired the trade and certain assets of Variable
Message Signs Limited, a manufacturer and distributor of electronic variable
message signs for the UK road and rail markets, for £0.3m including costs and
the assumption of outstanding debt. The business will be merged with the
Group's existing variable message sign business, Techspan Systems, to create
the UK market leader in this sector. The combined business will be known as
Variable Message Signs.
Disposals
On 18 August 2014 the Group disposed of its interests in the non-core
businesses of Bromford Iron & Steel Company Limited, a producer of rolled
steel, and JA Envirotanks, a small niche market supplier of storage tanks for
industrial applications. Total consideration was £1.3m, of which £0.5m is
deferred for a period of up to two years, resulting in a loss on disposal of
£3.8m.
On 23 April 2014 the Group disposed of its interest in Staco Redman Limited, a
small producer of steel floor grating, for a consideration of £0.3m resulting
in a profit on disposal of £0.1m.
Treasury management
All treasury activities are co-ordinated through a central treasury function,
the purpose of which is to manage the financial risks of the Group and to
secure short and long term funding at the minimum cost to the Group. It
operates within a framework of clearly defined board-approved policies and
procedures, including permissible funding and hedging instruments, exposure
limits and a system of authorities for the approval and execution of
transactions. It operates on a cost centre basis and is not permitted to make
use of financial instruments or other derivatives other than to hedge
identified exposures of the Group. Speculative use of such instruments or
derivatives is not permitted. Liquidity, interest rate, currency and other
financial risk exposures are monitored weekly. The overall indebtedness of the
Group is reported on a daily basis to the Finance Director.
Going concern
The Directors have assessed the future funding requirements of the Group and
the Company and compared them to the level of committed available borrowing
facilities. The assessment included a review of both divisional and Group
financial forecasts, financial instruments and hedging arrangements, for the
15 months from the balance sheet date. Major assumptions have been compared to
external reference points such as infrastructure spend forecasts across our
chosen market sectors, Government spending plans on road infrastructure, zinc,
steel price and economic growth forecasts. The forecasts show that the Group
will have sufficient headroom in the foreseeable future and the likelihood of
breaching banking covenants in this period is considered to be remote.
Having undertaken this work, the Directors are of the opinion that the Group
has adequate committed resources to fund its operations for the foreseeable
future and so determine that it is appropriate for the Financial Statements to
be prepared on a going concern basis.
Derek Muir Mark Pegler
Group Chief Executive Group Finance Director
10 March 2015
Year ended 31 December 2014
Consolidated Income Statement
2014 2013
Notes Underlying £m Non- Total £m Underlying £m Non-underlying*£m Total £m
underlying*
£m
Revenue 1, 2 454.7 - 454.7 444.5 - 444.5
Trading profit 49.2 - 49.2 44.5 - 44.5
Amortisation of acquisition intangibles 3 - (2.1) (2.1) - (2.2) (2.2)
Business reorganisation costs 3 - (2.6) (2.6) - (9.2) (9.2)
Loss on disposal of subsidiaries 3 - (3.7) (3.7) - - -
Acquisition costs 3 - (0.1) (0.1) - (0.4) (0.4)
Profit on sale of properties 3 - 0.4 0.4 - 1.8 1.8
Operating profit 1, 2 49.2 (8.1) 41.1 44.5 (10.0) 34.5
Financial income 4 0.5 - 0.5 0.7 - 0.7
Financial expense 4 (3.7) (1.0) (4.7) (4.0) (0.6) (4.6)
Profit before taxation 46.0 (9.1) 36.9 41.2 (10.6) 30.6
Taxation 5 (11.1) 1.5 (9.6) (9.9) 2.3 (7.6)
Profit for the year attributable to owners of the parent 34.9 (7.6) 27.3 31.3 (8.3) 23.0
Basic earnings per share 6 45.0p 35.1p 40.4p 29.6p
Diluted earnings per share 6 44.4p 34.7p 39.8p 29.2p
Dividend per share - Interim 7 6.4p 6.0p
Dividend per share - Final proposed 7 11.6p 10.0p
Total 7 18.0p 16.0p
* The Group's definition of non-underlying items is included in note 1 'Basis
of Preparation'.
Year ended 31 December 2014
Consolidated Statement of Comprehensive Income
Notes 2014£m 2013 £m
Profit for the year 27.3 23.0
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of overseas operations 1.2 (1.6)
Exchange differences on foreign currency borrowings denominated as net investment hedges (0.1) (0.7)
Effective portion of changes in fair value of cash flow hedges (0.1) -
Transfers to the income statement on cash flow hedges 0.3 0.4
Taxation on items that may be reclassified to profit or loss 5 - (0.1)
Items that will not be reclassified subsequently to profit or loss
Actuarial loss on defined benefit pension schemes (3.6) (5.8)
Taxation on items that will not be reclassified to profit or loss 5 0.8 0.4
Other comprehensive income for the year (1.5) (7.4)
Total comprehensive income for the year attributable to owners of the parent 25.8 15.6
Year ended 31 December 2014
Consolidated Statement of Financial Position
Notes 2014 £m 2013 £m
Non-current assets
Intangible assets 126.1 126.7
Property, plant and equipment 128.7 111.9
Other receivables 0.3 -
255.1 238.6
Current assets
Assets held for sale 1.5 -
Inventories 57.9 55.1
Trade and other receivables 92.7 91.2
Cash and cash equivalents 8 6.7 10.0
158.8 156.3
Total assets 2 413.9 394.9
Current liabilities
Trade and other liabilities (87.7) (85.0)
Current tax liabilities (8.9) (7.5)
Provisions for liabilities and charges (1.4) (3.5)
Interest bearing borrowings (1.1) (0.8)
(99.1) (96.8)
Net current assets 59.7 59.5
Non-current liabilities
Other liabilities (0.2) (0.1)
Provisions for liabilities and charges (2.8) (2.8)
Deferred tax liability (7.6) (9.5)
Retirement benefit obligation (21.1) (20.2)
Interest bearing borrowings (101.6) (96.4)
(133.3) (129.0)
Total liabilities (232.4) (225.8)
Net assets 181.5 169.1
Equity
Share capital 19.5 19.4
Share premium 31.7 31.5
Other reserves 4.5 4.5
Translation reserve 0.9 (0.2)
Hedge reserve (0.4) (0.6)
Retained earnings 125.3 114.5
Total equity 181.5 169.1
Approved by the Board of Directors on 10 March 2015 and signed on its behalf
by:
D W Muir
Director
M Pegler
Director
Year ended 31 December 2014
Consolidated Statement of Changes in Equity
Notes Share capital £m Share premium£m Otherreserves†£m Translation reserves £m Hedge reserves£m Retained earnings£m Totalequity£m
At 1 January 2013 19.3 29.6 4.5 2.1 (0.9) 107.8 162.4
Comprehensive income
Profit for the year - - - - - 23.0 23.0
Other comprehensive income for the year - - - (2.3) 0.3 (5.4) (7.4)
Transactions with owners recognised directly in equity
Dividends 7 - - - - - (11.6) (11.6)
Credit to equity of share-based payments - - - - - 0.4 0.4
Tax taken directly to the Consolidated Statement of Changes in Equity 5 - - - - - 0.3 0.3
Shares issued 0.1 1.9 - - - - 2.0
At 31 December 2013 19.4 31.5 4.5 (0.2) (0.6) 114.5 169.1
Comprehensive income
Profit for the year - - - - - 27.3 27.3
Other comprehensive income for the year - - - 1.1 0.2 (2.8) (1.5)
Transactions with owners recognised directly in equity
Dividends 7 - - - - - (12.4) (12.4)
Credit to equity of share-based payments - - - - - 0.9 0.9
Satisfaction of long term incentive payments - - - - - (1.0) (1.0)
Own shares acquired by employee benefit trust - - - - - (1.4) (1.4)
Tax taken directly to the Consolidated Statement of Changes in Equity 5 - - - - - 0.2 0.2
Shares issued 0.1 0.2 - - - - 0.3
At 31 December 2014 19.5 31.7 4.5 0.9 (0.4) 125.3 181.5
† Other reserves represent the premium on shares issued in exchange for shares
of subsidiaries acquired and £0.2m (2013: £0.2m) capital redemption reserve.
During the year the Group purchased 230,000 of its own shares, which are held
in an employee benefit trust for the purposes of settling awards granted to
employees under equity-settled share based payment plans. The cost of these
shares, amounting to £1.4m, is included within retained earnings at 31
December 2014.
Year ended 31 December 2014
Consolidated Statement of Cash Flows
2014 2013
Notes £m £m £m £m
Profit before tax 36.9 30.6
Add back net financing costs 4 4.2 3.9
Operating profit 2 41.1 34.5
Adjusted for non-cash items:
Share-based payments 1.2 0.5
Loss on disposal of subsidiaries 3.7 -
Gain on disposal of non