REG - Porvair PLC - Results for the year ended 30 November 2017 <Origin Href="QuoteRef">PORV.L</Origin> - Part 2
29/01/2018 07:05
- Part 2: For the preceding part double click ID:nRSc1238Da
(318) (426)
Exchange differences (2,910) (18) 33 (69) (2,964)
Net book amount at 30 November 2017 56,309 158 232 528 57,227
At 30 November 2017 Goodwill Development expenditure capitalised Software capitalised Trademarks, knowhow and other intangibles Total
£'000 £'000 £'000 £'000 £'000
Cost 74,936 774 1,325 1,854 78,889
Accumulated amortisation and impairment (18,627) (616) (1,093) (1,326) (21,662)
Net book amount 56,309 158 232 528 57,227
6. Trade and other payables
Amounts falling due within one year: 2017£'000 2016£'000
Trade payables 9,503 9,144
Taxation and social security 814 626
Other payables 2,318 61
Accruals and deferred income 15,101 16,042
At 30 November 27,736 25,873
7. Construction contracts
2017£'000 2016£'000
Amounts due from contract customers included in trade receivables 834 827
Contracts in progress at 30 November:
Amounts due from contract customers included in other receivables 211 300
Amounts due to contract customers included in accruals and deferred income (8,210) (8,208)
Net amounts due to contract customers (7,999) (7,908)
Contract costs incurred plus recognised profits less recognised losses to date 45,165 44,854
Less: progress billings (53,164) (52,762)
Contracts in progress at 30 November (7,999) (7,908)
8. Borrowings
On 24 May 2017, the Group agreed a new five year revolving credit facility of
E23 million (£20 million) with Barclays Bank plc and Svenska Handelsbanken AB
(publ). The Group also has a £2.5 million overdraft facility provided by
Barclays Bank plc.
At 30 November 2017, the Group had E19.6 million of unused facilities (2016:
$20 million of unused facilities) and an unutilised overdraft facility of £2.5
million (2016: £2.5 million).
9. Provisions
Dilapidations Warranty Total
£'000 £'000 £'000
At 1 December 2016 164 2,360 2,524
Utilised in the year - (223) (223)
Charged to the consolidated income statement:
Unwinding of discount 14 - 14
Unused amounts reversed - (920) (920)
At 30 November 2017 178 1,217 1,395
Current - 1,217 1,217
Non-current 178 - 178
At 30 November 2017 178 1,217 1,395
Provisions arise from a discounted dilapidations provision for leased
property, which is expected to reverse in 2023 and sale warranties which are
utilisable before 2020.
10. Share capital and premium
Number of shares Ordinary shares Share premium account Total
Thousands £'000 £'000 £'000
At 1 December 2016 45,308 906 35,513 36,419
Issue of shares on exercise of share options 333 7 318 325
At 30 November 2017 45,641 913 35,831 36,744
In June 2017, 178,030 ordinary shares of 2 pence each were issued on the
exercise of Long Term Share Plan share options for cash consideration of
£4,000. In February, March and October 2017, 155,465 ordinary shares of 2
pence each were issued on the exercise of Save As You Earn share options for
cash consideration of £321,000.
In January 2016, 308,200 ordinary shares of 2 pence each were issued on the
exercise of Long Term Share Plan share options for a cash consideration of
£6,000. In July 2016, 25,000 ordinary shares of 2 pence each were issued on
exercise of EMI share options for a cash consideration of £18,000. In October
and November 2016, 150,928 ordinary shares of 2 pence each were issued on the
exercise of Save As You Earn share options for a cash consideration of
£140,000.
The Group uses an Employee Benefit Trust (EBT) to purchase shares in the
Company to satisfy entitlements, granted since the Company's AGM in 2015,
under the Group's Long Term Incentive Plan and Save As You Earn schemes.
During the year the Group purchased 92,000 ordinary shares (2016: 20,000) of 2
pence for a total consideration of £475,000 (2016: £77,000). The cost of the
shares held by the EBT is deducted from retained earnings. The EBT is
financed by a repayable on demand loan from the Group of £552,000 (2016:
£77,000). As at 30 November 2017 the EBT held a total of 112,000 ordinary
shares of 2 pence (2016: 20,000) at a cost of £552,000 (2016: £77,000) and a
market value of £521,000 (2016: £84,000).
11. Acquisition
On 4 April 2017 the Group, through its subsidiary Porvair Corporation,
purchased the share capital of J. G. Finneran Associates, Inc. ("JGF"), a
manufacturer of products for the laboratory filtration, sample preparation and
chromatography consumables market, based in the USA. The total consideration
is $12,532,000 (£10,069,000); $6,532,000 (£5,248,000) of this was paid on 4
April 2017, with the balance being contingent and due for payment in two equal
instalments, one and two years after the purchase date. The contingent
consideration is estimated based on the forecast performance of the acquired
business in its first two years of ownership by the Group. Management has
forecast that payment of the maximum contingent consideration, $6,000,000
(£4,432,000), is the most probable outcome. A reduction in the annual
operating profit by $100,000 (£78,000), which is considered a reasonable
possible alternative, would reduce the liability by $375,000 of the first
instalment and $200,000 of the second instalment. The direct costs of
acquisition, which have been charged to the income statement, were $459,000
(£356,000). In the period since acquisition, the business has contributed
$8,212,000 (£6,381,000) sales and $1,110,000 (£862,000) operating profit to
the Group results. If JGF had been consolidated from 1 December 2016, the
consolidated income statement would show proforma revenue of £119,473,000 and
operating profit of £12,751,000.
Total
£'000
Purchase consideration:
Cash paid 5,248
Contingent consideration provided 4,821
Total purchase consideration 10,069
Fair value of net assets acquired (2,693)
Goodwill 7,376
Recognised amounts of identifiable assets acquired and liabilities assumed Fair value
£'000
Property plant and equipment 324
Customer lists 415
Patents 71
Inventory 1,129
Trade receivables 1,069
Trade payables (167)
Other creditors (148)
Net assets acquired 2,693
Purchase consideration settled in cash 5,248
Cash outflow on acquisition 5,248
The goodwill is attributable to the non-contractual relationships and the
synergies between the business acquired and the existing operations of the
Group and the potential to develop the business further. The goodwill
recognised is attributable to the Microfiltration division and is not expected
to be deductible for income tax purposes. The purchase is accounted for as an
acquisition.
12. Deferred and contingent consideration on acquisitions
TEM Filter Company JG Finneran Associates Inc. Total
£'000 £'000 £'000
At 1 December 2016 696 - 696
Purchase consideration in the year - 10,069 10,069
Cash paid in the year (684) (5,248) (5,932)
Recognised in the income statement (20) - (20)
Exchange movements 8 (389) (381)
At 30 November 2017 - 4,432 4,432
Included within other payables 2017£'000 2016£'000
Deferred and contingent consideration - current 2,216 696
Deferred and contingent consideration - non-current 2,216 -
At 30 November 4,432 696
13. Cash generated from operations
2017£'000 2016£'000
Operating profit 12,339 10,669
Post-employment benefits (963) 23
Fair value movement of derivatives through profit and loss (1,461) 1,357
Share based payments 508 476
Depreciation, amortisation and impairment 3,228 2,553
Profit on disposal of property, plant and equipment - (12)
Operating cash flows before movement in working capital 13,651 15,066
Increase in inventories (523) (1,114)
Increase in trade and other receivables (287) (2,155)
Increase in payables 545 230
(Decrease)/increase in provisions (1,129) 1,337
Increase in working capital (1,394) (1,702)
Cash generated from operations 12,257 13,364
14. Alternative revenue measurement
2017 2016 Growth
Metals Filtration £'000 £'000 %
Revenue at constant currency 34,707 34,219 1
Exchange 3,141 526
Revenue as reported 37,848 34,745 9
Microfiltration
Underlying revenue 66,758 62,489 7
Acquisitions 8,535 2,636
Underlying revenue including acquisitions 75,293 65,125 16
Large projects 311 9,571
Revenue at constant currency 75,604 74,696 1
Exchange 2,971 (78)
Revenue as reported 78,575 74,618 5
Group
Underlying revenue 101,465 96,708 5
Acquisitions 8,535 2,636
Underlying revenue including acquisitions 110,000 99,344 11
Large projects 311 9,571
Revenue at constant currency 110,311 108,915 1
Exchange 6,112 448
Revenue as reported 116,423 109,363 6
Revenue at constant currency is derived from translating overseas subsidiaries
at budgeted fixed exchange rates. In 2017 and 2016 the rates used were $1.4:£
and E1.2:£.
15. Post balance sheet event - Acquisition of Rohasys B.V.
On 7 December 2017 the Group, through its subsidiary Seal Analytical Limited,
purchased 100% of the share capital of Rohasys B.V. in order to increase the
Group's offering in the laboratory market. The trade is the manufacture of
robotic sample handling systems and is based in the Netherlands. The total
maximum consideration is E3,470,000 (£3,050,000); E1,320,000 (£1,160,000) of
this was paid on the acquisition date, with the balance being contingent on
financial performance and due for payment over 4 years. The direct costs of
acquisition charged to the income statement were £35,000.
Total
£'000
Purchase consideration:
Cash paid 1,160
Provisional contingent consideration 1,890
Total provisional purchase consideration 3,050
The provisional contingent consideration is dependent on meeting sales targets
and will be settled in cash. Owing to the limited time between acquisition
and the presentation of these financial statements, the fair value of the
deferred consideration has not yet been determined, and an external valuation
exercise of identifiable assets and liabilities acquired has not been
completed; accordingly, these have not been presented. A full fair value
exercise of deferred consideration, and identifiable assets and liabilities
acquired will be performed within the measurement period, which ends on 6
December 2018.
16. Basis of preparation
The results for the year ended 30 November 2017 have been prepared in
accordance with International Financial Reporting Standards (IFRSs) as adopted
by the European Union as at 30 November 2017. The financial information
contained in this announcement does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The financial information
has been extracted from the financial statements for the year ended 30
November 2017, which have been approved by the Board of Directors and on which
the auditors have reported without qualification. The financial statements
will be delivered to the Registrar of Companies after the Annual General
Meeting. The financial statements for the year ended 30 November 2016, upon
which the auditors reported without qualification, have been delivered to the
Registrar of Companies.
17. Annual general meeting
The Company's Annual General Meeting will be held at 11.00 a.m. on Tuesday 17
April 2018 at
Buchanan, 107 Cheapside, London EC2V 6DN
.
18. Related parties
There were no related party transactions in the year ended 30 November 2017.
19. Responsibility Statement
Each of the Directors confirms that, to the best of their knowledge that:
· the financial statements, on which this announcement is based, have
been prepared in accordance with the applicable law and International
Financial Reporting Standards as adopted by the EU and give a true and fair
view of the assets, liabilities, financial position, and profit or loss of the
Company and the undertakings included in the consolidation taken as a whole;
and
· the review of the business includes a fair review of the development
and performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
The Directors of Porvair are listed in the Porvair Annual Report for the year
ended 30 November 2016. A list of current Directors is also maintained on the
Porvair website www.porvair.com.
Copies of full accounts will be sent to shareholders in March 2018. Additional
copies will be available from www.porvair.com.
This information is provided by RNS
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