REG - Norcros PLC - Results for the year ended 31 March 2016 <Origin Href="QuoteRef">NXR.L</Origin> - Part 2
14/06/2016 07:06
- Part 2: For the preceding part double click ID:nRSN0653Ba
- (0.9)
Purchase of property, plant and equipment and intangible assets (6.6) (7.0)
Acquisition of subsidiary undertakings (including payment of deferred consideration) net of cash acquired (23.6) (0.5)
Disposal of subsidiary undertakings net of cash divested - 3.8
Net cash (used in)/generated from investing activities (30.2) 1.9
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 0.1 0.2
Drawdown/(repayment) of borrowings 17.0 (12.1)
Costs of raising debt finance - (0.7)
Dividends paid to the Company's shareholders (3.6) (3.1)
Net cash generated from/(used in) financing activities 13.5 (15.7)
Net (decrease)/increase in cash at bank and in hand and bank overdrafts (0.1) 0.6
Cash at bank and in hand and bank overdrafts at the beginning of the year 4.2 3.7
Exchange movements on cash and bank overdrafts (1.0) (0.1)
Cash at bank and in hand and bank overdrafts at the end of the year 3.1 4.2
The net change in cash at bank and in hand and bank overdrafts in the year
from discontinued operations included in the above was £nil (2015: increase of
£3.9m).
Consolidated statement of changes in equity
Year ended 31 March 2016
Ordinary Retained
share Share Treasury Translation earnings/
capital premium reserve reserve (losses) Total
£m £m £m £m £m £m
At 1 April 2014 5.8 0.9 - (8.5) 67.3 65.5
Comprehensive income:
Profit for the year - - - - 8.2 8.2
Other comprehensive expense:
Actuarial loss on retirement benefit obligations - - - - (18.8) (18.8)
Foreign currency translation adjustments - - - (0.6) - (0.6)
Total other comprehensive expense - - - (0.6) (18.8) (19.4)
Transactions with owners:
Shares issued 0.2 0.1 (0.1) - - 0.2
Dividends paid - - - - (3.1) (3.1)
Share option schemes and warrants - - - - 1.3 1.3
At 31 March 2015 6.0 1.0 (0.1) (9.1) 54.9 52.7
Comprehensive income:
Profit for the year - - - - 13.0 13.0
Other comprehensive expense:
Actuarial loss on retirement benefit obligations - - - - (9.7) (9.7)
Foreign currency translation adjustments - - - (6.1) - (6.1)
Total other comprehensive expense - - - (6.1) (9.7) (15.8)
Transactions with owners:
Shares issued 0.1 0.1 (0.1) - - 0.1
Dividends paid - - - - (3.6) (3.6)
Share option schemes and warrants - - 0.2 - 1.0 1.2
At 31 March 2016 6.1 1.1 - (15.2) 55.6 47.6
Notes to the preliminary statement
Year ended 31 March 2016
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 2016. The financial information set out
above does not constitute the Company's statutory financial statements for the
periods ended 31 March 2016 or 31 March 2015 but is derived from those
financial statements. Statutory financial statements for 2016 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 2016
South
UK Africa Group
£m £m £m
Revenue 163.0 72.9 235.9
Underlying operating profit 17.2 4.1 21.3
IAS 19R administrative expenses (1.7) - (1.7)
Acquisition related costs (5.2) - (5.2)
Exceptional operating items 2.3 - 2.3
Operating profit 12.6 4.1 16.7
Finance costs (net) (1.3)
Profit before taxation 15.4
Taxation (2.4)
Profit for the year from continuing operations 13.0
Net debt (32.5)
Segmental assets 163.1 49.7 212.8
Segmental liabilities (149.3) (15.9) (165.2)
Additions to property, plant and equipment 3.8 2.4 6.2
Loss on disposal of property, plant and equipment (0.1) - (0.1)
Depreciation 3.8 1.7 5.5
Revenues of £31.4m (2015: £34.2m) are derived from a single customer. These
revenues are attributable to the UK segment.
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 costs (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 property, plant and equipment 6.1 - 6.1
Loss on disposal of property, plant and equipment (0.1) - (0.1)
Depreciation 4.0 2.0 6.0
3. Acquisition related costs and exceptional operating items
An analysis of acquisition related costs and exceptional operating items is
shown below.
2016 2015
Acquisition related costs £m £m
Deferred remuneration1 2.5 1.1
Intangible asset amortisation2 0.9 0.3
Staff costs and advisory fees3 1.8 0.8
5.2 2.2
1 In accordance with IFRS 3R, a proportion of deferred consideration
payable to the former shareholders of Vado and Croydex is required to be
treated as remuneration, and, accordingly, is expensed to the Income Statement
as incurred.
2 Non-cash amortisation charges in respect of intangible assets recognised
following the acquisitions of Vado and Croydex.
3 Costs of maintaining an in-house acquisitions department and
professional advisory fees incurred in connection with the Group's business
combination activities. In the year to 31 March 2016 this included £0.8m and
£0.2m in connection with the acquisitions of Croydex and Abode respectively.
2016 2015
Exceptional operating items £m £m
Legal claim1 (1.9) 0.3
Pension scheme settlement gain2 (0.4) (1.7)
Profit on disposal of residual property3 - (0.4)
Sheffield lease surrender4 - 2.5
Loss on disposal of property portfolio5 - 1.5
Restructuring costs6 - 0.3
(2.3) 2.5
1 A legal claim relating to the land at the Highgate site in Tunstall, UK,
was settled in the year. Under the terms of the settlement with Wm Morrison
Supermarkets plc, the Group received a payment of £2.0m. Costs in connection
with the claim of £0.1m were incurred in the year (2015: £0.3m).
2 In 2015 the Group undertook a number of liability management exercises
in connection with its principal UK defined benefit pension scheme. The net
impact of these exercises in 2015 was to reduce the net deficit by £1.7m with
a further £0.4m reduction arising in 2016.
3 A profit of £0.4m was generated in the prior year following the sale of
a small parcel of land in Braintree, UK, which had a net book value of £nil.
4 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.
5 In March 2015, 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.
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
2016 2015
£m £m
Finance costs
Interest payable on bank borrowings 0.9 1.2
Amortisation of costs of raising debt finance 0.2 0.1
Unwind of discount on property lease provisions - 0.1
Finance costs 1.1 1.4
Exceptional finance costs1 - 0.4
Total finance costs 1.1 1.8
Finance income
Movement on fair value of derivative financial instruments (1.2) (3.3)
Net finance income (0.1) (1.5)
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.
2016 2015
£m £m
Profit before taxation from continuing operations 15.4 11.0
Adjusted for:
- IAS 19R administrative expenses 1.7 1.7
- acquisition related costs (see note 3) 5.2 2.2
- exceptional operating items (see note 3) (2.3) 2.5
- amortisation of costs of raising finance 0.2 0.1
- amortisation of costs of raising finance - exceptional - 0.4
- net movement on fair value of derivative financial instruments (1.2) (3.3)
- discount on property lease provisions - 0.1
- IAS 19R finance cost 1.4 1.1
Underlying profit before taxation 20.4 15.8
Taxation attributable to underlying profit before taxation (3.1) (2.8)
Underlying earnings 17.3 13.0
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.
2016 2015
£m £m
Operating profit from continuing operations 16.7 10.6
Adjusted for:
- depreciation 5.5 6.0
- IAS 19R administrative expenses 1.7 1.7
- acquisition related costs (see note 3) 5.2 2.2
- exceptional operating items (see note 3) (2.3) 2.5
Underlying EBITDA 26.8 23.0
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.
2016 2015
£m £m
Cash generated from continuing operations (see note 7) 18.5 16.1
Adjusted for:
- cash flows from exceptional items and acquisition related costs (see note 7) (0.2) 4.7
- pension fund deficit recovery contributions (see note 7) 2.1 2.1
Underlying operating cash flow 20.4 22.9
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.
2016 2015
£m £m
Net assets 47.6 52.7
Adjusted for:
- pension scheme liability (net of associated tax) 45.7 35.4
- cash and cash equivalents (5.9) (5.6)
- financial liabilities - borrowings 38.4 19.8
Capital employed 125.8 102.3
- adjustment for acquisitions (3.1) 9.7
- foreign exchange adjustment 0.6 (2.8)
Underlying capital employed 123.3 109.2
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. The prior year
comparatives have been restated to reflect the 10:1 share consolidation which
took place on 29 September 2015.
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 2016 the potential dilutive ordinary shares amounted to 1,639,137 (2015:
2,303,299 as restated) as calculated in accordance with IAS 33.
The calculation of EPS is based on the following profits and numbers of
shares:
2016 2015
£m £m
Profit for the year from continuing operations 13.0 8.1
Profit for the year from discontinued operations - 0.1
Profit for the year 13.0 8.2
2016 Number 2015Number(restated)
Weighted average number of shares for basic earnings per share 60,590,559 59,223,135
Share options and warrants 1,639,137 2,303,299
Weighted average number of shares for diluted earnings per share 62,229,696 61,526,434
2016 2015(restated)
Basic earnings per share:
From continuing operations 21.4p 13.6p
From discontinued operations - 0.2p
From profit for the year 21.4p 13.8p
Diluted earnings per share:
From continuing operations 20.8p 13.1p
From discontinued operations - 0.2p
From profit for the year 20.8p 13.3p
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.
2016 2015
£m £m
Underlying earnings (see note 5) 17.3 13.0
2016 2015(restated)
Basic underlying earnings per share 28.5p 21.9p
Diluted underlying earnings per share 27.8p 21.1p
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
2016 2015
£m £m
Profit before taxation 15.4 11.0
Adjustments for:
- IAS 19R administrative expenses included in the Income Statement 1.7 1.7
- acquisition related costs included in the Income Statement 5.2 2.2
- exceptional items included in the Income Statement (2.3) 2.5
- finance costs included in the Income Statement 1.1 1.8
- finance income included in the Income Statement (1.2) (3.3)
- IAS 19R finance cost included in the Income Statement 1.4 1.1
- cash flows from exceptional items and acquisition related costs 0.2 (4.7)
- depreciation 5.5 6.0
- pension fund deficit recovery contributions (2.1) (2.1)
- loss on disposal of property, plant and equipment 0.1 0.1
- share-based payments 1.2 1.3
Operating cash flows before movement in working capital 26.2 17.6
Changes in working capital:
- increase in inventories (7.2) (2.0)
- increase in trade and other receivables (4.9) (1.4)
- increase in trade and other payables 4.4 1.9
Cash generated from continuing operations 18.5 16.1
Discontinued operations
2016 2015
£m £m
Profit before taxation - -
Adjustments for:
- depreciation - -
Operating cash flows before movement in working capital - -
Changes in working capital:
- decrease in inventories - 0.4
- increase in trade and other receivables - (0.1)
- decrease in trade and other payables - (0.2)
Cash generated from discontinued operations - 0.1
Cash generated from operations 18.5 16.2
(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 included
within assets
held-for-sale Net cash Borrowings Net debt
£m £m £m £m
At 1 April 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)
Cash flow - (0.1) (17.0) (17.1)
Other non-cash movements - - (0.2) (0.2)
Exchange movement - (1.0) - (1.0)
At 31 March 2016 - 3.1 (35.6) (32.5)
Other non-cash movements principally relate to the movement in the costs of
raising debt finance in the year.
This information is provided by RNS
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