REG - Melrose Ind PLC - Half-year Report <Origin Href="QuoteRef">MRON.L</Origin> - Part 2
28/07/2016 07:07
- Part 2: For the preceding part double click ID:nRSb4562Fa
Merger reserve,
Capital redemption reserve and Other reserves balances have been
restated to reflect the nominal share capital and reserves position of the new
parent company as if it had been the holding company during all
periods presented. The overall impact on net equity is £nil (note 1).
Melrose Industries PLC
Condensed Consolidated Statement of Changes in Equity
Issued share capital£m Merger reserve£m Other reserves£m Hedging reserve£m Translation reserve£m Retained earnings£m Equity attributable to owners of the parent£m Non-controllinginterests£m Total equity£m
At 1 January 2015 (audited) 263.8 2,500.9 (2,329.9) (0.5) (130.7) 1,267.5 1,571.1 2.6 1,573.7
Profit for the period - - - - - 57.2 57.2 0.5 57.7
Other comprehensive income/(expense) - - - 0.5 (94.1) 26.7 (66.9) (0.1) (67.0)
Total comprehensive income/(expense) - - - 0.5 (94.1) 83.9 (9.7) 0.4 (9.3)
Return of capital - - - - - (200.4) (200.4) - (200.4)
Dividends paid - - - - - (52.7) (52.7) (0.1) (52.8)
Credit to equity for equity-settled share-based payments - - - - - 2.0 2.0 - 2.0
Purchase of non-controlling interests - - - - - (0.1) (0.1) (1.4) (1.5)
At 30 June 2015(1)(unaudited) 263.8 2,500.9 (2,329.9) - (224.8) 1,100.2 1,310.2 1.5 1,311.7
Profit for the period - - - - - 1,349.9 1,349.9 0.4 1,350.3
Other comprehensive income - - - - 187.0 24.2 211.2 0.3 211.5
Total comprehensive income - - - - 187.0 1,374.1 1,561.1 0.7 1,561.8
Dividends paid - - - - - (27.9) (27.9) (0.3) (28.2)
Capital reduction (253.8) - - - - 253.8 - - -
Credit to equity for equity-settled share-based payments - - - - - 2.0 2.0 - 2.0
Disposal of non-controlling interests - - - - - - - (1.9) (1.9)
At 31 December 2015 (audited) 10.0 2,500.9 (2,329.9) - (37.8) 2,702.2 2,845.4 - 2,845.4
Loss for the period - - - - - (8.8) (8.8) - (8.8)
Other comprehensive (expense)/income - - - (0.6) 25.5 3.5 28.4 - 28.4
Total comprehensive (expense)/income - - - (0.6) 25.5 (5.3) 19.6 - 19.6
Return of capital - (2,388.5) - - - - (2,388.5) - (2,388.5)
Dividends paid - - - - - (3.8) (3.8) - (3.8)
Credit to equity for equity-settled share-based payments - - - - - 2.0 2.0 - 2.0
At 30 June 2016 (unaudited) 10.0 112.4 (2,329.9) (0.6) (12.3) 2,695.1 474.7 - 474.7
(1) In accordance with IFRS 3, the Issued share capital, Merger reserve,
Capital redemption reserve and Other reserves balances have been
restated to reflect the nominal share capital and reserves position of the new
parent company as if it had been the holding company during all
periods presented. The overall impact on net equity is £nil (note 1).
Notes to the condensed financial statements
1. Corporate information
The interim financial information for the six months ended 30 June 2016 has
been reviewed by the auditor, but not audited. The information for the year
ended 31 December 2015 shown in this report does not constitute statutory
accounts for that year as defined in section 434 of the Companies Act 2006. A
copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditor has reported on those accounts. Their
report was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
As described in the Group's 2015 Annual Report a new holding company for the
Group was introduced and became effective on 19 November 2015 and comparative
figures were restated as a consequence of applying reverse acquisition
principles. The Issued share capital, Merger reserve, Capital redemption
reserve and Other reserves balances at 30 June 2015 have been restated in
these interim financial statements to reflect the reserves position of the
Group as if the new Melrose Industries PLC company had been the parent company
during all periods presented.
On 18 December 2015 the Group disposed of Prelok. The comparative information
for the period ended 30 June 2015 in these interim financial statements has
been restated to include the results and cash flows of Prelok within
discontinued operations, and exclude them from continuing operations. Prelok
was previously disclosed within the Energy segment.
2. Summary of significant accounting policies
The interim financial information for the six months ended 30 June 2016, which
has been approved by a committee of the Board of Directors on 28 July 2016 has
been prepared on the basis of the accounting policies set out in the Group's
2015 Annual Report and financial statements on pages 96 to 105. The Group's
2015 Annual Report and financial statements can be found on the Group's
website www.melroseplc.net. These interim financial statements should
therefore be read in conjunction with the 2015 information. The accounting
policies used in the preparation of the interim financial information have
been consistently applied to all periods presented. The annual financial
statements are prepared in accordance with IFRS as adopted by the European
Union. These interim financial statements have been prepared in accordance
with IAS 34: "Interim Financial Reporting" as adopted by the European Union.
Adoption of new accounting standards
The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective. The Group has adopted relevant
standards and amendments with no material impact on its results, assets and
liabilities.
Going concern
The Group's business activities in the period, together with the factors
likely to affect its future development, performance and position are set out
in the Chief Executive's review.
Except for the risks that will be considered in respect of the proposed
acquisition of Nortek, Inc. (note 12) the Group's principal risks and
uncertainties are unchanged from 2015, as discussed in the Finance Director's
review. These are set out in more detail on pages 30 to 35 in the Group's
Annual Report for the year ended 31 December 2015.
After making appropriate enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future, a period of not less than twelve months
from the date of this report. Accordingly, they continue to adopt the going
concern basis in preparing these interim financial statements.
3. Segment information
Segment information is presented in accordance with IFRS 8: "Operating
segments" which requires operating segments to be identified on the basis of
internal reports about components of the Group that are regularly reported to
the Group's Board in order to allocate resources to the segments and assess
their performance. The Group's only reportable operating segment under IFRS 8
is the Energy segment which includes the Brush business, a specialist supplier
of energy industrial products to the global market.
In addition, there are two central cost centres which are also separately
reported to the Board. The central corporate cost centre which contains the
Melrose Group head office costs and the central long term incentive plan
("LTIP") cost centre which contains the costs associated with the five year
Melrose Incentive Plan (granted on 11 April 2012) and the divisional
management LTIPs that relate to the Energy segment.
During the period ended 30 June 2016, the Group completed an internal
reorganisation that caused the composition of its reportable segments to
change. Certain entities, acquired with FKI, previously reported within the
central corporate cost centre were transferred into the Energy segment. The
comparative information has been restated accordingly.
All continuing revenue in these interim financial statements relates to the
Energy segment.
The Group's geographical segments are determined by the location of the
Group's non-current assets and, for revenue, the location of external
customers.
The following tables present the results and certain asset and liability
information regarding the Group's operating segments and central cost centres
for the six month period ended 30 June 2016 and comparative periods. Note 4
gives details of exceptional costs.
Segment results
Segment profit
Notes 6 months ended 30 June 2016£m Restated(1) 6 months ended Restated(2) year ended 31 December 2015£m
30 June 2015£m
Continuing operations
Energy 12.6 15.3 40.2
Central - corporate (6.7) (7.4) (14.4)
Central - LTIPs(3) (2.0) (2.0) (5.0)
Headline(4) operating profit 3.9 5.9 20.8
Intangible asset amortisation (4.2) (4.1) (8.1)
Exceptional operating costs 4 (9.2) (5.2) (7.9)
Operating (loss)/profit (9.5) (3.4) 4.8
Finance costs (1.2) (15.6) (45.6)
Finance income 1.5 5.4 10.1
Loss before tax (9.2) (13.6) (30.7)
Tax 5 0.4 1.3 14.4
Profit for the period from discontinued operations - 70.0 1,424.3
(Loss)/profit for the period (8.8) 57.7 1,408.0
(1) Restated following an internal reorganisation that caused the composition
of reportable segments to change and to include the results of Prelok
within discontinued operations (note 1).
(2) Restated following an internal reorganisation that caused the composition
of reportable segments to change.
(3) Long Term Incentive Plans.
(4) Before exceptional costs, exceptional income and intangible asset
amortisation.
Total assets Total liabilities
30 June Restated(1) 30 June Restated(2) 31 December 2015£m 30 June Restated(1) 30 June Restated(2) 31 December 2015£m
2016£m 2015£m 2016£m 2015£m
Continuing operations
Energy 547.4 509.7 525.0 114.5 137.8 123.2
Central - corporate 70.6 63.2 2,463.8 27.5 841.1 18.2
Central - LTIPs(3) - - - 1.3 1.0 2.0
Total continuing operations 618.0 572.9 2,988.8 143.3 979.9 143.4
Discontinued operations - 2,456.2 - - 737.5 -
Total 618.0 3,029.1 2,988.8 143.3 1,717.4 143.4
(1) Restated following an internal reorganisation that caused the composition
of reportable segments to change and to include the total assets and
total liabilities of Prelok within discontinued operations (note 1).
(2) Restated following an internal reorganisation that caused the composition
of reportable segments to change.
(3) Long Term Incentive Plans.
Capital expenditure(1) Depreciation(1)
6 months ended Restated(2) 6 months ended Restated(3) year ended 31 December 2015£m 6 months ended Restated(2) 6 months ended Restated(3) year ended 31 December 2015£m
30 June 30 June 30 June 30 June
2016£m 2015£m 2016£m 2015£m
Continuing operations
Energy 2.3 13.1 16.8 4.3 3.7 7.8
Central - corporate - - - 0.1 0.2 0.3
Total continuing operations 2.3 13.1 16.8 4.4 3.9 8.1
Discontinued operations - 17.1 39.9 - 11.9 11.9
Total 2.3 30.2 56.7 4.4 15.8 20.0
(1) Including computer software and development costs.
(2) Restated following an internal reorganisation that caused the composition
of reportable segments to change and to include the capital
expenditure(1) and depreciation(1) of Prelok within discontinued operations
(note 1).
(3) Restated following an internal reorganisation that caused the composition
of reportable segments to change.
Geographical information
The Group operates in various geographical areas around the world. The Group's
country of domicile is the UK and the Group's revenues and non-current assets
in Europe and North America are also considered to be material.
The Group's revenue from external customers and information about its segment
assets (non-current assets excluding deferred tax assets and non-current trade
and other receivables) by geographical location are detailed below:
Revenue(1) from external customers Non-current assets
6 months ended Restated(2) 6 months ended Year ended 31 December 2015£m 30 June Restated(2) 31 December 2015£m
30 June 30 June 2016£m 30 June
2016£m 2015£m 2015£m
UK 33.4 44.4 83.2 185.6 192.5 189.3
Europe 27.1 27.4 66.3 163.0 143.3 146.9
North America 23.7 22.1 57.4 27.1 20.3 23.6
Other 20.5 22.5 54.2 28.1 26.6 26.1
Total continuing operations 104.7 116.4 261.1 403.8 382.7 385.9
Discontinued operations - 542.6 1,109.8 - 0.4 -
Total 104.7 659.0 1,370.9 403.8 383.1 385.9
(1) Revenue is presented by destination.
(2) Restated to include the revenue from external customers and non-current
assets of Prelok within discontinued operations (note 1).
4. Exceptional costs
Exceptional costs 6 months ended 30 June 2016£m Restated(1) 6 months ended 30 June 2015£m Year ended
31 December 2015£m
Continuing operations
Acquisition and disposal costs 7.3 0.2 0.3
Restructuring costs 1.9 5.0 7.6
Total exceptional costs 9.2 5.2 7.9
(1) Restated to include the results of Prelok within discontinued operations
(note 1).
During the six months ended 30 June 2016, the Group incurred £7.3 million of
deal fees (period to 30 June 2015: £0.2 million) predominantly relating to
services provided in respect of the proposed acquisition of Nortek Inc.
("Nortek"). It is expected that this transaction will complete in late August
or early September 2016. Should the deal not complete, as a consequence of
Nortek receiving and accepting a superior offer before 7 August 2016, Nortek
will pay a break fee of $50 million which will cover the entire committed
costs incurred up to the date the superior offer is accepted and therefore,
under this scenario, there will be no resulting net cost to Melrose.
In addition, £1.9 million (period to 30 June 2015: £5.0 million) of costs were
incurred in respect of restructuring projects in Brush to further align the
cost base with the revenue in this business.
5. Tax
Analysis of the (credit)/charge in the period: 6 months ended 30 June 2016£m Restated(1)6 months ended 30 June 2015£m Yearended
31 December 2015£m
Continuing operations
Current tax (1.4) (1.2) 2.9
Deferred tax 1.0 (0.1) (17.3)
Total income tax credit from continuing operations (0.4) (1.3) (14.4)
(1) Restated to include the results of Prelok within discontinued operations
(note 1).
The effective tax rate in respect of headline profit/(loss) before tax on
continuing activities for the half year is 31.0% (period to 30 June 2015:
11.6%). The headline tax charge on continuing activities has been calculated
by applying the expected rate for the full year to the headline profit before
tax of £4.2 million (period to 30 June 2015: loss of £4.3 million), giving a
headline tax charge of £1.3 million (period to 30 June 2015: credit of £0.5
million).
The headline tax charge on continuing activities of £1.3 million (period to 30
June 2015: credit of £0.5 million) has been decreased by a deferred tax credit
on intangible asset amortisation of £0.8 million (period to 30 June 2015: £0.8
million) and a tax credit on exceptional costs of £0.9 million (period to 30
June 2015: £nil) to give a total tax credit of £0.4 million on continuing
activities (period to 30 June 2015: credit of £1.3 million).
In addition to the amount charged to the Income Statement, a charge of £1.7
million (period to 30 June 2015: charge of £0.2 million) has been recognised
directly in the Statement of Comprehensive Income. This represents a tax
credit of £0.2 million (period to 30 June 2015: charge of £0.2 million) in
respect of movements on cash flow hedges and a tax charge of £1.9 million
(period to 30 June 2015: £nil) in respect of the remeasurement of retirement
benefit obligations.
6. Earnings per share
Earnings attributable to owners of the parent 6 months ended 30 June 2016£m Restated(1)6 months ended 30 June 2015£m Year ended
31 December 2015£m
(Loss)/profit for the purposes of earnings per share (8.8) 57.2 1,407.1
Less: profit for the period from discontinued operations - (69.5) (1,423.4)
Earnings for basis of earnings per share from continuing operations (8.8) (12.3) (16.3)
(1) Restated to include the results of Prelok within discontinued operations
(note 1).
6 months ended 30 June 2016 6 months ended 30 June 2015 Year ended
31 December 2015
Number Number Number
Weighted average number of ordinary shares for the purposes of basic earnings per share (million) 271.2 1,016.4 1,005.9
Further shares for the purposes of diluted earnings per share (million)(1) 18.6 16.4 20.7
Weighted average number of ordinary shares for the purposes of diluted earnings per share (million) 289.8 1,032.8 1,026.6
(1) The results for 30 June 2016 are a loss and therefore in accordance with
IAS 33: "Earnings per share" there is no dilution. However, the dilutive
number of shares for the period 30 June 2016 are shown for illustrative
purposes only.
On 20 February 2015 the number of ordinary shares in issue was consolidated in
a ratio of 13 for 14, which reduced the number of ordinary shares in issue
from 1,071.8 million to 995.2 million.
On 28 January 2016 the number of ordinary shares in issue was consolidated in
a ratio of 7 for 48, which reduced the number of ordinary shares in issue from
995.2 million to 145.1 million.
Earnings per share 6 months ended 30 June 2016pence Restated(1)6 months ended 30 June 2015pence Yearended
31 December 2015pence
Basic earnings per share
From continuing operations (3.2) (1.2) (1.6)
From continuing and discontinued operations (3.2) 5.6 139.9
Diluted earnings per share
From continuing operations (3.2) (1.2) (1.6)
From continuing and discontinued operations (3.2) 5.5 137.1
(1) Restated to include the results of Prelok within discontinued operations
(note 1).
7. Dividends
6 months ended30 June 2016£m 6 months ended 30 June2015£m Year ended 31 December2015£m
Final dividend for the year ended 31 December 2014 paid of 5.3p - 52.7 52.7
Interim dividend for the year ended 31 December 2015 paid of 2.8p - - 27.9
Final dividend for the year ended 31 December 2015 paid of 2.6p 3.8 - -
Total dividends paid 3.8 52.7 80.6
A 2016 interim dividend of 1.4p per ordinary share totalling £2.0 million was
declared by the Board on 28 July 2016 and, in accordance with IAS 10: "Events
after the reporting period", has not been included as a liability as at 30
June 2016.
8. Retirement benefit obligations
The defined benefit obligations in the UK relate to the Brush Group (2013)
Pension Plan ("Brush UK") and in the US relate to the Brush Aftermarket North
America, Inc. Group Pension Plan ("Brush US"). The amount recognised in the
Balance Sheet in respect of these plans is as follows:
30 June 2016 31 December 2015
Brush UK Brush US Total Brush UK Brush US Total
£m £m £m £m £m £m
Present value of defined benefit obligations (226.0) (193.6) (419.6) (195.7) (165.0) (360.7)
Fair value of plan assets 245.5 168.1 413.6 197.1 146.4 343.5
Net surplus/(deficit) 19.5 (25.5) (6.0) 1.4 (18.6) (17.2)
The valuations of these plans have been updated at 30 June 2016 by independent
actuaries to reflect updated assumptions regarding discount rates, inflation
rates and asset values. These assumptions were as follows:
30 June 2016 31 December 2015
Brush UK Brush US Brush UK Brush US
% p.a. % p.a. % p.a. % p.a.
Rate of increase in salaries n/a n/a n/a n/a
Rate of increase in pensions in payment 2.8 n/a 3.0 n/a
Discount rate 2.8 3.3 3.7 4.1
RPI inflation assumptions 2.8 n/a 3.0 n/a
CPI inflation assumptions 1.7 n/a 1.9 n/a
In addition, the defined benefit plan assets and liabilities have been updated
to reflect the contributions made to the defined benefit plans during the
period to 30 June 2016. These contributions include £8.8 million contributed
early to the Brush UK Plan following an agreement with the Trustees.
Consequently, no further contributions are expected to be made during the
remainder of the current year or in the year ending 31 December 2017. Annual
contributions to the Brush US Plan are approximately £0.1 million per annum.
9. Financial instruments
The table below sets out the Group's accounting classification of each
category of financial assets and liabilities and their fair values as at 30
June 2016, 31 December 2015 and 30 June 2015:
Current£m Non-current£m Total£m
30 June 2016
Financial assets
Cash and cash equivalents 51.4 - 51.4
Net trade receivables 49.1 - 49.1
Derivative financial assets:
Foreign currency forward contracts 1.2 - 1.2
Financial liabilities
Derivative financial liabilities:
Foreign currency forward contracts (2.4) - (2.4)
Other financial liabilities (79.5) - (79.5)
31 December 2015
Financial assets
Cash and cash equivalents 2,451.4 - 2,451.4
Net trade receivables 57.3 - 57.3
Derivative financial assets:
Foreign currency forward contracts 1.2 - 1.2
Financial liabilities
Derivative financial liabilities:
Foreign currency forward contracts (1.5) - (1.5)
Other financial liabilities (70.3) - (70.3)
30 June 2015
Financial assets
Cash and cash equivalents 45.6 - 45.6
Net trade receivables 53.5 - 53.5
Derivative financial assets:
Foreign currency forward contracts 2.3 - 2.3
Interest rate swaps 5.3 - 5.3
Net assets held for sale 1,718.3 - 1,718.3
Financial liabilities
Interest-bearing loans and borrowings (1.2) (786.7) (787.9)
Derivative financial liabilities:
Foreign currency forward contracts (4.5) - (4.5)
Interest rate swaps (3.0) (2.2) (5.2)
Other financial liabilities (91.7) - (91.7)
The fair value of the derivative financial instruments are derived from inputs
other than quoted prices that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices) and
they are therefore categorised within level 2 of the fair value hierarchy set
out in IFRS 13: "Fair value measurement". The Group's policy is to recognise
transfers into and out of the different fair value hierarchy levels at the
date of the event or change in circumstances that caused the transfer to
occur. There have been no transfers between levels in the period.
10. Notes to the Cash Flow Statement
6 months Restated(1)6 months Year ended 31 December
ended30 June ended30 June 2015£m
2016£m 2015£m
Reconciliation of headline(2)operating profit to cash generated by continuing operations
Headline(2) operating profit from continuing operations 3.9 5.9 20.8
Adjustments for:
Depreciation of property, plant and equipment 4.1 3.7 7.6
Amortisation of computer software and development costs 0.3 0.2 0.5
Restructuring costs paid and movements in other provisions (3.1) (17.9) (28.8)
Defined benefit pension contributions paid (8.8) (2.7) (5.1)
Increase in inventories (3.9) (14.0) (9.9)
Decrease in receivables 6.7 6.9 10.8
Decrease in payables (6.0) (4.6) (12.3)
Tax paid (0.1) (1.7) (2.8)
Interest paid (0.9) (6.4) (38.6)
Acquisition costs (0.3) - -
Net cash used in operating activities from continuing operations (8.1) (30.6) (57.8)
(1) Restated to include the cash flows of Prelok within discontinued
operations (note 1).
(2) Before exceptional costs, exceptional income and intangible asset
amortisation.
Cash flow from discontinued operations 6 months Restated(1)6 months Year ended 31 December
ended30 June ended30 June 2015£m
2016£m 2015£m
Cash generated from discontinued operations - 85.4 172.9
Defined benefit pension contributions paid - (15.2) (30.1)
Tax paid - (10.0) (51.2)
Interest paid - (1.2) (1.6)
Acquisition costs - (0.1) (0.8)
Net cash from operating activities from discontinued operations - 58.9 89.2
Purchase of property, plant and equipment - (13.0) (26.0)
Proceeds from disposal of property, plant and equipment - 1.6 1.7
Purchase of computer software and developments costs - (6.0) (15.5)
Acquisition of subsidiaries and non-controlling interests - (1.5) -
Purchase of non-controlling interests - - (1.5)
Dividends received from joint ventures - 1.7 2.2
Dividends paid to non-controlling interests - (0.1) (0.4)
Interest received - 0.2 0.8
Net cash used in investing activities from discontinued operations - (17.1) (38.7)
Net cash used in financing activities from discontinued operations - - -
(1) Restated to include the cash flows of Prelok within discontinued
operations (note 1).
11. Return of capital
Following the sale of Elster, the Company announced a Return of Capital of 240
pence per ordinary share totalling £2,388.5 million.
'B' shares with a total value of £2,388.5 million were created on 26 January
2016 resulting in a corresponding reduction in the Merger reserve. The 'B'
shares were cancelled on 27 January 2016 and capital return payments
representing the nominal value of the 'B' shares (240 pence each) were made to
shareholders on 5 February 2016.
Alongside the capital return, on 28 January 2016 the number of ordinary shares
in issue was consolidated in a ratio of 7 for 48 in order to maintain
comparability of the Company's share price before and after the capital
return. On 28 January 2016 the number of ordinary shares in issue became
145,134,353 each with a nominal value of 48/7 pence.
12. Post Balance Sheet events
On 6 July 2016, Melrose Industries PLC announced that it had reached an
agreement with Nortek, Inc. ("Nortek") on the terms of a recommended cash
offer for the entire issued share capital of Nortek. To finance the
acquisition, a 12 for 1, fully underwritten Rights Issue is expected to be
completed and as a result, 1,741,612,236 New Melrose shares will be issued to
raise approximately £1,611 million (net of expenses).
Nortek is a leading diversified global manufacturer of innovative air
management, security, home automation and ergonomic and productivity
solutions.
In July 2016, the Group agreed a new five year banking facility for the
purpose of financing the acquisition of Nortek. The new facility, totalling
$1,250 million, is split into a $350 million term loan and a $900 million
revolving credit facility. The term loan and revolving credit facility will be
used to finance the existing indebtedness of Nortek and to finance the
enlarged Group's working capital requirements.
Transaction costs relating to the Nortek acquisition, which include equity
raising fees, debt arrangement fees and other costs of acquisition, are
expected to be approximately £75 million. In addition costs are expected to be
incurred in respect of hedging the Sterling value of the US Dollar acquisition
price and the makewhole cost of repaying Nortek's debt. Should the deal not
complete, as a consequence of Nortek receiving and accepting a superior offer
before 7 August 2016, Nortek will pay a break fee of $50 million which will
cover the entire committed costs incurred up to that date and therefore, under
this scenario, there will be no resulting net cost to Melrose. Costs
contingent on the acquisition and Rights Issue have not been accrued at the
half year in compliance with IAS 37: "Provisions, Contingent Liabilities and
Contingent Assets".
This information is provided by RNS
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