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RHL - Redhall News Story

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Last Trade - 23/05/19

Sector
Industrials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £37.8m
Position in Universe th / 1826

Redhall Group PLC - Preliminary Results - Part 2

Wed 9th December, 2015 7:00am
- Part 2: For the preceding part double click  ID:nRSI4353Ia 

 Cost of sales                                                        (21,222)  (41,488)  
 Gross profit                                                         2,910     4,528     
 Administrative expenses                                              (3,899)   (6,155)   
 Adjusted operating loss before exceptionals                          (989)     (1,627)   
 Exceptional items                                                    (2,958)   (2,307)   
                                                                                          
 Operating loss before impairment and loss on disposal of operations  (3,947)   (3,934)   
 Impairment                                                           -         -         
 Loss on disposal of operations                                       (5,147)   (203)     
 Operating loss and loss before taxation                              (9,094)   (4,137)   
 Taxation credit/(charge)                                             25        (88)      
 Loss after taxation from discontinued operations                     (9,069)   (4,225)   
 
 
During the period, discontinued operations contributed a net outflow of £4.37m (2014: £0.63m outflow) to the Group's
operating cash flows and a net inflow of £5.09m (2014: £0.03m outflow) to investing activities. There were no cash flows
from financing activities. 
 
The adjusted operating loss before exceptionals is stated after amortisation of acquired intangible assets of £120,000
(2014: £180,000). 
 
 Geographical segments                                                                                 
 2015                                                                                2014            
                                                                                             
 Revenue by destination                                                              £000    £000      
                                                                                                     
 United Kingdom                                                                      23,302  44,574    
 Other European Union countries                                                      -       -         
 Other overseas locations                                                            830     1,442     
                                                                                     24,132  46,016    
 All of the Group's assets and capital expenditure originate in the United Kingdom.                    
 Analysis of revenue by category                                                                       
                                                                                     2015    2014      
                                                                                     £000    £000      
 Sales of goods manufactured by the Group                                            -       -         
 Sales of services                                                                   24,132  46,016    
                                                                                                       
                                                                                     24,132  46,016    
                                                                                                       
 
 
Practically all of the Group's revenue is considered to be contract revenue as defined by IAS11. 
 
4. Disposal of subsidiary company 
 
On 13 May 2015, the Group sold Redhall Engineering Solutions Limited to Cape plc for an enterprise value of £6.0m. The
business is classified as a discontinued operation. 
 
                                                     £000     
 Property, plant and equipment                       701      
 Amounts recoverable on contracts                    3,096    
 Trade debtors                                       2,946    
 Prepayments and other debtors                       211      
 Deferred tax asset                                  455      
 Trade creditors                                     (1,670)  
 Accruals and other creditors                        (2,575)  
 Net assets sold                                     3,164    
 Goodwill and intangible assets at date of disposal  7,097    
 Loss on disposal                                    (5,147)  
 Proceeds, less costs of disposal                    141      
                                                              
 Debts assumed by purchaser                          (5,255)  
 
 
5. Financial income and expenses 
 
                                         2015     2014       
 Financial income                        £000     £000       
                                                           
 Interest income                         -        4          
 Financial expenses                                          
 Interest on bank loans and overdrafts   (1,262)  (1,641)    
 Net finance expense on pension scheme*  (149)    (151)      
                                                             
                                         (1,411)  (1,792)    
                                                             
 
 
* Includes £89,000 of pension administration expenses paid for by the Company (2014: £98,000). 
 
6. Tax expense 
 
                                                                            2015      2014       
 (a) Recognised in the income statement                                     £000      £000       
                                                                                               
 Current tax credit:                                                                             
 Current year                                                               -         -          
 Recovery of tax that relates to prior year                                 -         -          
 Current tax credit                                                         -         -          
                                                                                                 
 Deferred tax credit                                                        (583)     (251)      
 Effect of change of tax rate                                               9         16         
 Prior years                                                                (2)       150        
 Deferred tax credit                                                        (576)     (85)       
 Tax credit in the income statement                                         (576)     (85)       
                                                                            2015      2014       
 (b) Reconciliation of the effective tax rate                               £000      £000       
                                                                                               
 Loss before tax - continuing operations                                    (3,643)   (1,628)    
 Loss before tax - discontinued operations                                  (9,094)   (4,137)    
 Loss before tax                                                            (12,737)  (5,765)    
 Tax at standard rate of UK corporation tax of 20.5% (2014: 22.0%)          (2,611)   (1,268)    
 Expenses not deductible for tax purposes                                   131       21         
 Income not taxable for tax purposes                                        -         (8)        
 Tax losses not recognised                                                  1,065     1,008      
 Adjustments in relation to prior periods                                   (2)       150        
 Change in tax rate                                                         11        20         
 Non deductible loss on disposal of investment                              830       45         
 Tax losses previously not recognised                                       -         (53)       
 Tax credit in the income statement                                         (576)     (85)       
                                                                                                 
 Tax credit in the income statement - continuing operations                 551       173        
 Tax credit in the income statement - discontinued operations               25        (88)       
                                                                            2015      2014       
                                                                            £000      £000       
 (c) Deferred tax (credit)/charge recognised in other comprehensive income                       
 Actuarial losses                                                           (102)     (119)      
 Revaluation of property                                                    -         (2)        
 Effect of tax rate change on revaluation of property                       -         -          
 Accelerated capital allowances                                             1         4          
                                                                            (101)     (117)      
                                                                                                 
 (d) Deferred tax credit recognised directly in equity                                           
                                                                                                 
 Share options                                                              -         -          
                                                                                                 
 
 
7. Deferred tax assets and liabilities 
 
Recognised deferred tax assets and liabilities 
 
The net deferred tax liability at the year-end and movement during the year is analysed as follows: 
 
                                                                    Credit/(charge) to                                                              
                                 Balance as at                      Credit/(charge)     Disposal of         Balance as at                         
                                 Consolidated                                           
                                 1 October 2014   Income Statement  directly to equity  investment          30 September 2015                     
                                 £000                               £000                £000                £000               £000                 
 Accelerated capital allowances  196                                124                 (1)                 (149)              170                  
 Short term timing differences   56                                 (20)                -                   (6)                30                   
 Losses                          508                                320                 -                   (300)              528                  
 Buildings                       (275)                              115                 -                   -                  (160)                
 Intangible assets               (892)                              89                  -                   -                  (803)                
 Retirement benefits             339                                (52)                102                 -                  389                  
                                 (68)                               576                 101                 (455)              154                  
                                 Balance as at                      Credit/(charge) to  (Charge)/credit     Disposal of        Balance as at        
                                 Consolidated                                           
                                 1 October 2013                     Income Statement    directly to equity  investment         30 September 2014    
                                 £000                               £000                £000                £000               £000                 
 Accelerated capital allowances  121                                79                  (4)                 -                  196                  
 Short term timing differences   208                                (152)               -                   -                  56                   
 Losses                          400                                108                 -                   -                  508                  
 Buildings                       (284)                              7                   2                   -                  (275)                
 Intangible assets               (992)                              100                 -                   -                  (892)                
 Retirement benefits             277                                (57)                119                 -                  339                  
                                 (270)                              85                  117                 -                  (68)                 
 
 
Unrecognised deferred tax assets 
 
Deferred tax assets have not been recognised on tax losses of £16,300,000 (2014: £20,600,000) as their recovery is
insufficiently certain in the longer term. £14,500,000 are related to the discontinued site services segment. 
 
Effect of reduction in the main rate of Corporation tax 
 
Reductions in the UK corporation tax rate from 23% to 21% (effective 1 April 2014) and 20% (effective from 1 April 2015)
were substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1
April 2020) were substantively enacted on 26 October 2015. The deferred tax balances have been calculated based on the rate
of 20% which was substantively enacted at the balance sheet date. 
 
8. Loss per share 
 
Basic and diluted loss per share 
 
The calculation of the basic loss per share of 24.57p (30 September 2014: loss per share 14.29p) is based on 49,491,094
shares (30 September 2014: 39,751,863) being the weighted average number of shares in issue throughout the period and on a
loss of £12,161,000 (30 September 2014: loss of £5,680,000). 
 
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of
calculating the diluted loss per share for both the year ended 30 September 2015 and 30 September 2014 are identical to
those used for the basic loss per share. This is because the exercise of share options would have the effect of reducing
the loss per share and is, therefore, not a dilution under the terms of IAS33. The dilutive potential ordinary shares are
therefore not included in the table below. At 30 September 2015 there were 250,000 outstanding options under relevant
schemes and 18.5m shares under option to funds managed by Henderson. These may impact dilutive earnings per share in
future. 
 
Adjusted earnings per share 
 
The Directors believe that helpful additional earnings per share calculations are earnings per share on adjusted bases
(i.e. based on profit before exceptional items and amortisation of acquired intangible assets and on a fully taxed basis).
The basic and adjusted weighted average numbers of shares and the adjusted earnings have been calculated as follows: 
 
                                                                2015        2014          
                                                                Number      Number        
 Basic weighted average number of shares                        49,491,094  39,751,863    
 Dilutive potential ordinary shares arising from share options  -           -             
 Adjusted weighted average number of shares                     49,491,094  39,751,863    
 Earnings:                                                      £000        £000          
                                                                                        
 Loss before tax                                                (12,737)    (5,765)       
 Exceptional items                                              9,345       3,620         
 Amortisation of acquired intangible assets                     441         501           
 Adjusted loss before tax                                       (2,951)     (1,644)       
 Tax at 20.5% (2014: 22.0%)                                     605         362           
 Adjusted loss after tax                                        (2,346)     (1,282)       
 Adjusted, fully taxed basic loss per share                     (4.74)p     (3.23)p       
 Adjusted, fully taxed diluted loss per share                   (4.74)p     (3.23)p       
 Continuing operations                                                                    
 £000                                                           £000                    
                                                                            
 Loss before tax                                                (3,643)     (1,628)       
 Exceptional items                                              1,240       1,110         
 Amortisation of acquired intangible assets                     321         321           
 Adjusted loss before tax                                       (2,082)     (197)         
 Tax at 20.5% (2014: 22.0%)                                     427         43            
 Adjusted loss after tax                                        (1,655)     (154)         
 Adjusted, fully taxed diluted loss per share                   (3.34)p     (0.39)p       
 Discontinued operations                                                                  
 £000                                                           £000                    
                                                                            
 Loss before tax                                                (9,094)     (4,137)       
 Exceptional items                                              8,105       2,510         
 Amortisation of acquired intangible assets                     120         180           
 Adjusted loss before tax                                       (869)       (1,447)       
 Tax at 20.5% (2014: 22.0%)                                     178         318           
 Adjusted loss after tax                                        (691)       (1,129)       
 Adjusted, fully taxed diluted loss per share                   (1.40)p     (2.84)p       
 
 
9. Retirement benefit obligation 
 
The Group sponsors a defined benefit pension scheme in the United Kingdom, the Booth Industries Group PLC Staff Pension and
Life Assurance Scheme ("the Booth Scheme") and operates a small number of defined contribution pension schemes and makes
contributions to personal pension plans. 
 
a) Defined benefit scheme 
 
Pension benefits are linked to the members' final pensionable salaries and service at their retirement date (or date of
leaving if earlier). The scheme is closed to new entrants. The scheme is governed by a Board of Trustees who meet on a
quarterly basis. The Group has opted to recognise all actuarial gains and losses immediately through the Consolidated
Statement of Comprehensive Income. 
 
The most recent formal actuarial valuation, which was completed prior to 30 September 2014, was carried out as at 6 April
2012. The results of this valuation have been updated to 30 September 2015 by an independent qualified actuary. The
assumptions used were as follows: 
 
 Assumptions                                                                                                        
 The following were the principle actuarial assumptions at the reporting date:                                      
 2015                                                                           2014                              
                                                                                                 
 Discount rate                                                                  3.70%            3.90%              
 Retail Prices Index (RPI) inflation                                            2.90%            3.10%              
 Consumer Prices Index (CPI) inflation                                          1.90%            2.10%              
 Salary increases                                                               1.90%            2.60%              
 Rate of increases to pensions in payment subject to inflationary increases:    2.80%                               
 - RPI capped at 5% pa                                                          3.00%                             
 - RPI capped at 2.5% pa                                                        2.20%            2.30%              
 - CPI capped at 3% pa                                                          1.70%            1.90%              
 - CPI capped at 5% pa with minimum 3% pa                                       3.10%            3.10%              
 Rate of increase for deferred pensioners                                       1.90%            2.10%              
 Mortality basis:                                                               S2 PA CMI 2014                      
 Before retirement                                                              S1 PA CMI 2013                    
                                                                                (year of birth)  (year of birth)    
                                                                                + 2 years        + 2 years          
 After retirement                                                               S2 PA CMI 2014   S1 PA CMI 2013     
                                                                                (year of birth)  (year of birth)    
                                                                                + 2 years        + 2 years          
                                                                                                                    
 
 
 Asset class                 2015                         2014          
              Market value   % of total     Market value  % of total    
              scheme assets  scheme assets                
              £000                          £000                        
 Equities     9,657          48%            10,265        51%           
 Bonds        4,452          22%            4,406         22%           
 Gilts        3,747          19%            3,560         18%           
 Property     1,877          9%             1,672         8%            
 Cash         307            2%             253           1%            
 Total        20,040         100%           20,156        100%          
 
 
The actual return on the scheme assets for the year ended 30 September 2015 was £431,000 (2014: £1,252,000). 
 
9. Retirement benefit obligation (continued) 
 
Pension expense 
 
 Amounts recognised within administrative expenses within the income statement are:                
                                                                                                   
                                                                                     2015   2014   
                                                                                     £000   £000   
 Charge for current service cost                                                     (86)   (92)   
 Administration costs                                                                (50)   (15)   
                                                                                     (136)  (107)  
 
 
Following the 6 April 2012 valuation the Company agreed to pay annual contributions of 13.4% to 5 July 2013 and thereafter
at 17.6% of members' pensionable salaries each year plus deficit repair contributions of £334,184 pa increasing at 3% pa on
6 April 2013, 6 April 2014 and 6 April 2015 and then to increase at 5% pa from 6 April 2016 to 31 May 2026. Total employer
contributions in 2015 were £443,000 (2014: £444,000). 
 
 The amounts credited/(charged) to financial income and expense are:                
                                                                      2015   2014   
                                                                      £000   £000   
 Return on assets recorded as interest*                               687    748    
 Interest on pension scheme liabilities                               (836)  (899)  
 Net financial expense                                                (149)  (151)  
 
 
* Includes £89,000 of pension administration expenses paid for by the Company (2014: £98,000). 
 
Total actuarial gains and losses recognised in the consolidated statement of comprehensive income 
 
The cumulative actuarial loss recognised in the consolidated statement of comprehensive income from 1 October 2006 (being
the transition date to the adoption of International Financial Reporting Standards) is £2,780,000 (2014: loss £2,271,000). 
 
 Analysis of movement in retirement benefit obligation                   
                                                        2015    2014     
                                                        £000    £000     
 Retirement benefit obligation at start of the year     21,854  20,921   
 Current service cost                                   86      92       
 Interest cost on retirement benefit obligation         836     899      
 Contributions by employees                             28      31       
 Benefits paid and transfers out                        (968)   (1,090)  
 Actuarial losses                                       164     1,001    
 Retirement benefit obligation at end of year           22,000  21,854   
 
 
Change in fair value of scheme assets during the year 
 
                                        2015    2014     
                                        £000    £000     
 Fair value at start of the year        20,156  19,534   
 Interest income                        776     846      
 Actual return on assets less interest  (345)   406      
 Employer contributions                 443     444      
 Member contributions                   28      31       
 Benefits paid                          (968)   (1,090)  
 Administration costs                   (50)    (15)     
 Fair value at end of the year          20,040  20,156   
 
 
Sensitivity analysis 
 
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the percentage amounts shown below: 
 
                                           2015                          2014         
                          Change in        Change in        Change in    Change in    
 Assumption               defined benefit  defined benefit               
 assumption               obligation       assumption       obligation              
 Discount rate            +/- 0.5% pa      +/- 7%           +/- 0.5% pa  +/- 7%       
 RPI and CPI inflation    +/- 0.5% pa      +/- 3%           +/- 0.5% pa  +/- 3%       
 Future salary increases  +/- 0.5% pa      +/- 1%           +/- 0.5% pa  +/- 1%       
 Assumed life expectancy  + 1 year         + 3%             + 1 year     + 3%         
                                                                                      
 
 
b) Defined contribution schemes and personal pension plans 
 
The Group operates a small number of defined contribution pension schemes and contributes to a number of personal pension
plans. The total expense for these schemes during the year was £1,022,000 (2014: £897,000). 
 
10. Basis of preparation 
 
The financial information set out above for the years ended 30 September 2015 and 2014 ("the financial information"), has
been prepared with consistent accounting policies and in accordance with the International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU") and are effective at 30 September 2015. 
 
The financial information does not constitute the statutory financial statements (as defined by S434 of the Companies Act
2006) for those years. The 2015 financial statements, upon which the auditors issued an unqualified opinion and did not
contain a statement either under sections 498(2) or 498(3) of the Companies Act 2006, have not yet been delivered to the
Registrar. 
 
The 2014 financial statements have been delivered to the Registrar and included the auditors' report which was unqualified
and did not contain a statement either under sections 498(2) or 498(3) of the Companies Act 2006. 
 
The annual report and accounts for the year ended 30 September 2015 will be posted to shareholders who have requested them.
Copies will be available from the Company's registered office, 1 Red Hall Court, Wakefield WF1 2UN, and will be made
available on the Company's website at www.redhallgroup.co.uk. 
 
This information is provided by RNS
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