REG - Norcros PLC - Preliminary Results <Origin Href="QuoteRef">MSTL.L</Origin> <Origin Href="QuoteRef">NXR.L</Origin> - Part 2
16/07/2015 11:29
- Part 2: For the preceding part double click ID:nRSR4905Qa
the Company's shareholders (3.1) (2.8)
Net cash used in financing activities (15.7) (9.5)
Net increase/(decrease) in cash at bank and in hand and bank overdrafts 0.6 (1.9)
Cash at bank and in hand and bank overdrafts at the beginning of the year 3.7 6.4
Exchange movements on cash and bank overdrafts (0.1) (0.8)
Cash at bank and in hand and bank overdrafts at end of the year 4.2 3.7
Cash at bank and in hand and bank overdrafts at the end of the year comprises:
Cash at bank and in hand and bank overdrafts per the balance sheet 4.2 3.2
Cash at bank and in hand included within assets classified as held-for-sale - 0.5
4.2 3.7
The net increase in cash at bank and in hand and bank overdrafts in the year
from discontinued operations included in the above was £3.9m (2014: decrease
of £0.3m).
Consolidated statement of changes in equity
Year ended 31 March 2015
Ordinary Retained
share Share Translation earnings/
capital premium reserve (losses) Total
£m £m £m £m £m
At 1 April 2012 5.8 0.2 5.8 59.3 71.1
Comprehensive income:
Profit for the year - - - 5.6 5.6
Other comprehensive expense:
Actuarial loss on retirement benefit obligations - - - (8.8) (8.8)
Foreign currency translation adjustments - - (4.8) - (4.8)
Total other comprehensive expense - - (4.8) (8.8) (13.6)
Transactions with owners:
Shares issued - 0.3 - - 0.3
Dividends paid - - - (2.5) (2.5)
Share option schemes and warrants - - - 0.7 0.7
At 31 March 2013* 5.8 0.5 1.0 54.3 61.6
Comprehensive income:
Profit for the year - - - 8.7 8.7
Other comprehensive expense:
Actuarial gain on retirement benefit obligations - - - 6.2 6.2
Foreign currency translation adjustments - - (9.5) - (9.5)
Total other comprehensive (expense)/income - - (9.5) 6.2 (3.3)
Transactions with owners:
Shares issued - 0.4 - - 0.4
Dividends paid - - - (2.8) (2.8)
Share option schemes and warrants - - - 0.9 0.9
At 31 March 2014 5.8 0.9 (8.5) 67.3 65.5
Notes to the preliminary statement
Year ended 31 March 2015
1. Basis of preparation
Norcros plc ("the Company") and its subsidiaries (together "the Group")
principal activities are the development, manufacture and marketing of home
consumer products in the UK and South Africa. The Company is a public limited
company which is listed on the London Stock Exchange market of listed
securities is incorporated and domiciled in the UK. The address of its
registered office is Ladyfield House, Station Road, Wilmslow, SK9 1BU.
The financial information presented in this preliminary announcement is
extracted from, and is consistent with, the Group's audited financial
statements for the year ended 31 March 2015. The financial information set out
above does not constitute the Company's statutory financial statements for the
periods ended 31 March 2015 or 31 March 2014 but is derived from those
financial statements. Statutory financial statements for 2015 will be
delivered following the Company's annual general meeting. The auditors have
reported on those financial statements; their report was unqualified and did
not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The Group's results have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
2. Segmental reporting
The Group operates in two main geographical areas: the UK and South Africa.
All inter-segment transactions are made on an arm's length basis. The chief
operating decision maker (being the Board) assesses performance and allocates
resources based on geography and accordingly segments have been determined on
this basis. Corporate costs are allocated to segments on the basis of external
turnover.
Continuing operations - year ended 31 March 2015
South
UK Africa Group
£m £m £m
Revenue 149.1 73.0 222.1
Underlying operating profit 13.8 3.2 17.0
IAS 19R administrative expenses (1.7) - (1.7)
Acquisition related costs (2.2) - (2.2)
Exceptional operating items (2.3) (0.2) (2.5)
Operating profit 7.6 3.0 10.6
Finance income (net) 0.4
Profit before taxation 11.0
Taxation (2.9)
Profit for the year from continuing operations 8.1
Net debt (14.2)
Segmental assets 124.3 54.4 178.7
Segmental liabilities (110.8) (15.2) (126.0)
Additions to property, plant and equipment 3.8 3.1 6.9
Proceeds from disposals of property, plant and equipment 0.4 - 0.4
Proceeds from disposals of investment property (net) 6.1 - 6.1
Loss on disposal of property, plant and equipment (0.1) - (0.1)
Depreciation 4.0 2.0 6.0
Revenues of £34.2m (2014: £35.9m) are derived from a single customer. These
revenues are attributable to the UK segment.
Continuing operations - year ended 31 March 2014*
South
UK Africa Group
£m £m £m
Revenue 148.0 70.7 218.7
Underlying operating profit 14.2 1.9 16.1
IAS 19R administrative expenses (1.4) - (1.4)
Acquisition related costs (0.7) - (0.7)
Exceptional operating items (1.6) 0.4 (1.2)
Operating profit 10.5 2.3 12.8
Finance costs (net) (7.0)
Profit before taxation 5.8
Taxation 4.3
Profit for the year from continuing operations 10.1
Net debt (26.9)
Segmental assets 125.3 50.7 176.0
Segmental liabilities (100.9) (13.9) (114.8)
Additions to property, plant and equipment 2.5 1.8 4.3
Proceeds from disposals of property, plant and equipment - 1.4 1.4
Loss on disposal of property, plant and equipment - (0.1) (0.1)
Depreciation 4.0 1.9 5.9
*The prior year comparatives have been restated to reflect the revised
presentation of acquisition related costs (see note 8).
3. Acquisition related costs and exceptional operating items
An analysis of acquisition related costs and exceptional operating items is
shown below.
2015 2014
Acquisition related costs £m £m
Deferred remuneration1 1.1 0.3
Intangible asset amortisation2 0.3 0.4
Staff costs and advisory fees3 0.8 -
2.2 0.7
1 In accordance with IFRS 3R, a significant proportion of deferred
consideration payable to the former shareholders of Vado is required to be
treated as remuneration, and, accordingly, is expensed to the income statement
as incurred.
2 As a result of the acquisition of Vado, the Group has recognised an
intangible asset which is subject to a non-cash amortisation charge.
3 Costs of maintaining an in-house acquisitions department and professional
advisory fees incurred in connection with the Group's business combination
activities.
2015 2014
Exceptional operating items £m £m
Profit on disposal of residual property1 (0.4) (0.5)
Sheffield lease surrender2 2.5 -
Loss on disposal of property portfolio3 1.5 -
Legal costs4 0.3 0.2
Pension scheme settlement gain5 (1.7) -
Restructuring costs6 0.3 1.5
2.5 1.2
1 A profit of £0.4m was generated in the year following the sale of a small
parcel of land in Braintree, UK, which had a net book value of £nil. During
the previous year the Group disposed of a residual manufacturing facility in
South Africa, generating a profit of £0.5m.
2 The Group acquired the freehold and exited its onerous lease in connection
with the Orgreave Drive, Sheffield, property in November 2014 for total
consideration of £3.4m, of which £2.5m was the cost of surrendering the lease
and has been recognised as an exceptional operating item. The remaining £0.9m
related to the purchase of the freehold.
3 The Group's remaining freehold surplus property portfolio was sold to Clowes
Developments (UK) Ltd for net proceeds of £6.1m, being consideration of £6.5m
net of £0.4m costs. This transaction included the property in Sheffield,
amongst others, and led to a loss on disposal of £1.5m.
4 Legal costs related to the contractual dispute with a subsidiary of Wm
Morrison Supermarkets plc regarding the Highgate site in Tunstall, UK.
5 During the year the Group undertook a liability management exercise in
connection with its principal UK defined benefit pension scheme. This
resulted in a settlement gain of £1.7m in the year, net of costs of £0.7m.
6 Restructuring costs related to redundancies and asset write-downs following
the implementation of a programme of restructuring initiatives throughout the
Group's business units.
4. Finance income and costs
2015 2014
£m £m
Finance costs
Interest payable on bank borrowings 1.2 1.5
Amortisation of costs of raising debt finance 0.1 0.3
Movement on fair value of derivatives - 3.7
Unwind of discount on property lease provisions 0.1 0.2
Finance costs 1.4 5.7
Exceptional finance costs1 0.4 -
Total finance costs 1.8 5.7
Finance income
Movement on fair value of derivative financial instruments (3.3) -
Total finance income (3.3) -
Net finance (income)/costs (1.5) 5.7
1 Following the refinancing of the Group's UK banking facilities in July 2014,
the unamortised costs relating to the previous facility were written off in
full.
5. Non-GAAP measures
Consolidated Income Statement
The Directors believe that underlying profit before taxation and underlying
earnings provide shareholders with additional useful information on the
underlying performance of the Group. Underlying profit before taxation is
defined as profit before taxation, IAS 19R administrative expenses,
acquisition related costs, exceptional operating items, amortisation of costs
of raising finance, net movement on fair value of derivative financial
instruments, discounting of property lease provisions and finance costs
relating to pension schemes.
2015 2014
£m £m
Profit before taxation from continuing operations 11.0 5.8
Adjusted for:
- IAS 19R administrative expenses 1.7 1.4
- acquisition related costs (see note 3) 2.2 0.7
- exceptional operating items (see note 3) 2.5 1.2
- amortisation of costs of raising finance 0.1 0.3
- amortisation of costs of raising finance - exceptional 0.4 -
- net movement on fair value of derivative financial instruments (3.3) 3.7
- discount on property lease provisions 0.1 0.2
- IAS 19R finance cost 1.1 1.3
Underlying profit before taxation 15.8 14.6
Taxation attributable to underlying profit before taxation (2.8) 2.4
Underlying earnings 13.0 17.0
EBITDA is a measure commonly used by investors and financiers to assess
business performance. Underlying EBITDA has been provided which reflects
EBITDA as adjusted for IAS 19R administrative expenses, acquisition related
costs and exceptional operating items. The Directors consider that this
measure provides shareholders with additional useful information on the
performance of the Group.
2015 2014
£m £m
Operating profit from continuing operations 10.6 12.8
Adjusted for:
- depreciation 6.0 5.9
- IAS 19R administrative expenses 1.7 1.4
- acquisition related costs (see note 3) 2.2 0.7
- exceptional operating items (see note 3) 2.5 1.2
Underlying EBITDA 23.0 22.0
Consolidated Cash Flow Statement
Underlying operating cash flow is defined as cash generated from continuing
operations before cash outflows from exceptional items and acquisition related
costs and pension fund deficit recovery contributions. The Directors believe
that underlying operating cash flow provides shareholders with additional
useful information on the underlying cash generation of the Group.
2015 2014
£m £m
Cash generated from continuing operations (see note 7) 16.1 13.9
Adjusted for:
- cash flows from exceptional items and acquisition related costs (see note 7) 4.7 4.4
- pension fund deficit recovery contributions (see note 7) 2.1 2.0
Underlying operating cash flow 22.9 20.3
Consolidated Balance Sheet
Underlying capital employed is used to calculate underlying return on capital
employed, one of the Group's key performance indicators, and reflects the
value of the assets used to generate underlying operating profit from
continuing operations. Consequently, adjustments are made to remove assets and
liabilities that do not impact underlying operating profit from continuing
operations and to remove the average impact of exchange rate movements.
2015 2014
£m £m
Net assets 52.7 65.5
Adjusted for:
- assets and associated liabilities classified as held-for-sale - (4.3)
- pension scheme liability (net of associated tax) 35.4 17.4
- cash and cash equivalents (5.6) (3.9)
- financial liabilities - borrowings 19.8 31.3
Capital employed 102.3 106.0
- foreign exchange adjustment 0.1 (0.2)
Underlying capital employed 102.4 105.8
6. Earnings per share
Basic and diluted earnings per share
Basic EPS is calculated by dividing the profit attributable to shareholders by
the weighted average number of ordinary shares in issue during the year,
excluding those held in the Norcros Employee Benefit Trust.
For diluted EPS, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all potential dilutive ordinary shares. At 31
March 2015 the potential dilutive ordinary shares amounted to 23,032,985
(2014: 24,374,489) as calculated in accordance with IAS 33.
The calculation of EPS is based on the following profits and numbers of
shares:
2015 2014
£m £m
Profit for the year from continuing operations 8.1 10.1
Profit/(loss) for the year from discontinued operations 0.1 (1.4)
Profit for the year 8.2 8.7
2015 2014
Number Number
Weighted average number of shares for basic earnings per share 592,231,354 583,950,031
Share options and warrants 23,032,985 24,374,489
Weighted average number of shares for diluted earnings per share 615,264,339 608,324,520
2015 2014
Basic earnings per share:
From continuing operations 1.4p 1.7p
From discontinued operations - (0.2p)
From profit for the year 1.4p 1.5p
Diluted earnings per share:
From continuing operations 1.3p 1.6p
From discontinued operations - (0.2p)
From profit for the year 1.3p 1.4p
Basic and diluted underlying earnings per share
Basic and diluted underlying earnings per share has also been provided which
reflects underlying earnings from continuing operations divided by the
weighted average number of shares set out above.
2015 2014
£m £m
Underlying earnings (see note 5) 13.0 17.0
2015 2014
Basic underlying earnings per share 2.2p 2.9p
Diluted underlying earnings per share 2.1p 2.8p
In 2014 the Company recognised further deferred tax assets totalling £4.4m.
Excluding the impact of this, underlying basic earnings per share would have
been 2.2p in 2014 and underlying diluted earnings per share would have been
2.1p in 2014.
7. Consolidated cash flow statement
(a) Cash generated from operations
The analysis of cash generated from operations split by continuing and
discontinued operations is given below.
Continuing operations
2015 2014
£m £m
Profit before taxation 11.0 5.8
Adjustments for:
- IAS 19R administrative expenses included in the Income Statement 1.7 1.4
- acquisition related costs included in the Income Statement 2.2 0.7
- exceptional items included in the Income Statement 2.5 1.2
- cash flows from exceptional items and acquisition related costs (4.7) (4.4)
- depreciation 6.0 5.9
- difference between current service costs and normal cash contributions - (0.1)
- pension fund deficit recovery contributions (2.1) (2.0)
- loss on disposal of property, plant and equipment 0.1 0.1
- finance costs 1.8 5.7
- finance income (3.3) -
- IAS 19R finance cost 1.1 1.3
- share-based payments 1.3 0.9
Operating cash flows before movement in working capital 17.6 16.5
Changes in working capital:
- increase in inventories (2.0) (5.7)
- increase in trade and other receivables (1.4) (1.9)
- increase in trade and other payables 1.9 5.0
Cash generated from continuing operations 16.1 13.9
Discontinued operations
2015 2014
£m £m
Profit before taxation - 0.2
Adjustments for:
- depreciation - 0.1
Operating cash flows before movement in working capital - 0.3
Changes in working capital:
- decrease/(increase) in inventories 0.4 (0.4)
- increase in trade and other receivables (0.1) (0.2)
- decrease in trade and other payables (0.2) -
Cash generated from/(used in) discontinued operations 0.1 (0.3)
Cash generated from operations 16.2 13.6
(b) Outflow related to exceptional items and acquisition related costs
This includes expenditure charged to exceptional provisions relating to
onerous lease costs, acquisition related costs (excluding deferred
remuneration) and other business rationalisation and restructuring costs.
(c) Analysis of net debt
Cash includedwithin assetsheld-for-sale Net cash Borrowings Net debt
£m £m £m £m
At 1 April 2013 - 6.4 (37.1) (30.7)
Cash flow (0.3) (1.6) 6.9 5.0
Reclassification to assets held-for-sale 1.0 (1.0) - -
Other non-cash movements - - (0.4) (0.4)
Exchange movement (0.2) (0.6) - (0.8)
At 31 March 2014 0.5 3.2 (30.6) (26.9)
Cash flow (0.5) 1.1 12.1 12.7
Other non-cash movements - - 0.1 0.1
Exchange movement - (0.1) - (0.1)
At 31 March 2015 - 4.2 (18.4) (14.2)
Other non-cash movements principally relate to the movement in the costs of
raising debt finance in the year.
8. Restatement of prior year comparatives
The Group has reclassified certain costs related to business combination
activities in line with emerging market practice such that they are now
presented as a separate line entitled "Acquisition related costs" in the
Consolidated Income Statement. In order to effect fair comparison, the
results for the year ended 31 March 2014 have been restated to conform to this
style of presentation.
2014 as previously reported £m IAS 19Radministrativeexpenses£m Deferredremuneration£m Amortisation of intangibles£m 2014 asrestated£m
Underlying operating profit 16.1 - - - 16.1
Non-underlying operating items (1.8) 1.4 - 0.4 -
IAS 19R administrative expenses - (1.4) - - (1.4)
Acquisition related costs - - (0.3) (0.4) (0.7)
Exceptional operating items (1.5) - 0.3 - (1.2)
Operating profit 12.8 - - - 12.8
The restatement has no impact on the Consolidated Balance Sheet or
Consolidated Cash Flow Statement.
This information is provided by RNS
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