REG - Spirax-Sarco Engng - 2016 Half Year Results <Origin Href="QuoteRef">SPX.L</Origin> - Part 2
09/08/2016 07:06
- Part 2: For the preceding part double click ID:nRSI5936Ga
362.8 441.0 0.9 441.9
Profit for the period - - - 39.4 39.4 - 39.4
Other comprehensive (expense)/income:
Foreign exchange translation differences - - (18.3) - (18.3) - (18.3)
Remeasurement gain on post-retirement benefits - - - 1.3 1.3 - 1.3
Deferred tax on remeasurement gain on post-retirement benefits - - - (1.0) (1.0) - (1.0)
Total other comprehensive income/(expense) for the period - - (18.3) 0.3 (18.0) - (18.0)
Total comprehensive income/(expense) for the period - - (18.3) 39.7 21.4 - 21.4
Contributions by and distributions to owners of the Company:
Dividends paid - - - (34.1) (34.1) (0.1) (34.2)
Special dividend accrued - - - (91.0) (91.0) - (91.0)
Equity settled share plans net of tax - - - 1.3 1.3 - 1.3
Issue of share capital 0.1 1.8 - - 1.9 - 1.9
Employee Benefit Trust Shares - - 1.6 - 1.6 - 1.6
Balance at 30th June 2015 19.7 66.9 (23.2) 278.7 342.1 0.8 342.9
For the year ended 31st December 2015 Share Capital £m Share Premium Account £m Other Reserves £m Retained earnings £m Equity shareholders' funds £m Non-controlling interest £m Total equity £m
Balance at 1st January 2015 19.6 65.1 (6.5) 362.8 441.0 0.9 441.9
Profit for the year - - - 96.6 96.6 0.1 96.7
Other comprehensive (expense)/income:
Foreign exchange translation differences - - (14.1) - (14.1) - (14.1)
Remeasurement loss on post-retirement benefits - - - 5.7 5.7 - 5.7
Deferred tax on remeasurement loss on post-retirement benefits - - - (0.6) (0.6) - (0.6)
Total other comprehensive income/(expense) for the year - - (14.1) 5.1 (9.0) - (9.0)
Total comprehensive income/(expense) for the year - - (14.1) 101.7 87.6 0.1 87.7
Contributions by and distributions to owners of the Company:
Dividends paid - - - (140.3) (140.3) (0.2) (140.5)
Equity settled share plans net of tax - - - 2.6 2.6 - 2.6
Issue of share capital 0.1 4.6 - - 4.7 - 4.7
Employee Benefit Trust Shares - - 1.9 - 1.9 - 1.9
Balance at 31st December 2015 19.7 69.7 (18.7) 326.8 397.5 0.8 398.3
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes Six monthsto 30th June2016 £m Six monthsto 30thJune2015 £m Year ended31st December2015 £m
Cash flows from operating activities
Profit before taxation 73.4 57.3 139.7
Depreciation, amortisation and impairment 15.3 16.6 29.3
Profit on disposal of fixed assets - - (0.5)
Share of profit of Associates - (0.2) -
Acquisition, disposal and closure of businesses 0.1 1.8 2.0
Equity settled share plans 1.3 1.5 3.3
Net finance expense 1.3 0.6 1.5
Operating cash flow before changes in working capital and provisions 91.4 77.6 175.3
Change in trade and other receivables (0.1) 9.9 (1.9)
Change in inventories (2.6) (4.9) 3.5
Change in provisions and post-retirement benefits 2.7 (0.6) 0.7
Change in trade and other payables (2.4) (5.0) (2.6)
Cash generated from operations 89.0 77.0 175.0
Interest paid (0.6) (0.7) (1.3)
Income taxes paid (27.3) (24.2) (43.4)
Net cash from operating activities 61.1 52.1 130.3
Cash flows from investing activities
Purchase of property, plant & equipment (14.1) (11.3) (26.0)
Proceeds from sale of property, plant & equipment 0.7 1.2 2.4
Sale of businesses - 6.5 13.3
Purchase of software and other intangibles (2.3) (2.0) (4.8)
Development expenditure capitalised (1.1) (1.3) (2.4)
Acquisition of businesses (0.1) (7.1) (23.6)
Bank deposits - 24.6 24.3
Interest received 0.7 1.4 2.1
Net cash used in investing activities (16.2) 12.0 (14.7)
Cash flows from financing activities
Proceeds from issue of Share Capital 1.0 1.9 4.7
Repaid borrowings 8 (20.4) (57.0) (79.4)
New borrowings 8 0.3 0.8 81.3
Change in finance lease liabilities 8 (0.2) (0.2) (0.4)
Dividends paid (including minorities) (35.5) (34.2) (140.5)
Net cash used in financing activities (54.8) (88.7) (134.3)
Net change in cash and cash equivalents 8 (9.9) (24.6) (18.7)
Net cash and cash equivalents at beginning of period 8 95.9 117.5 117.5
Exchange movement 8 6.7 (6.4) (2.9)
Net cash and cash equivalents at end of period 8 92.7 86.5 95.9
Borrowings and finance leases 8 (72.1) (33.0) (91.1)
Net Cash at the end of the period 8 20.6 53.5 4.8
8
20.6
53.5
4.8
NOTES TO THE ACCOUNTS
1. BASIS OF PREPARATION
Spirax-Sarco Engineering plc is a company domiciled in the UK. The Condensed
Consolidated Interim Financial Statements of Spirax-Sarco Engineering plc and
its subsidiaries (the Group) for the six months ended 30th June 2016 have been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU. The accounting policies applied are consistent with those set out in
the 2015 Spirax-Sarco Engineering plc Annual Report.
These Condensed Consolidated Interim Financial Statements do not include all
the information required for full annual statements and should be read in
conjunction with the 2015 Annual Report. The comparative figures for the year
ended 31st December 2015 do not constitute the Group's statutory Financial
Statements for that financial year as defined in Section 434 of the Companies
Act 2006. The statutory Consolidated Financial Statements for Spirax-Sarco
Engineering plc in respect of the year ended 31st December 2015 have been
reported on by the Company's auditor and delivered to the registrar of
companies. The report of the auditor was (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006. The
Consolidated Financial Statements of the Group in respect of the year ended
December 2015 are available upon request from Mr A. J. Robson, General Counsel
and Company Secretary, Charlton House, Cheltenham, Gloucestershire, GL53 8ER,
United Kingdom or on www.spiraxsarcoengineering.com.
The Condensed Consolidated Interim Financial Statements for the six months
ended 30th June 2016, which have not been audited or reviewed by the auditor,
were authorised by the Board on 8th August 2016.
The Half Year Report and Interim Financial Statements (Half Year Report) has
been prepared solely to provide additional information to shareholders as a
body to assess the Group's strategies and the potential for those strategies
to succeed. This Half Year Report should not be relied upon by any other
party or for any other purpose.
GOING CONCERN
Having made enquiries and reviewed the Group's plans and available financial
facilities, the Board has a reasonable expectation that the Group has adequate
resources to continue its operational existence for the foreseeable future.
For this reason, it continues to adopt the going concern basis in preparing
the Condensed Consolidated Interim Financial Statements. There are no key
sensitivities identified in relation to this conclusion.
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
There are a number of new standards, amendments to standards and
interpretations that are not yet effective for the period ended 30th June 2016
and have, therefore, not been applied in preparing these Condensed
Consolidated Interim Financial Statements. None of these are anticipated to
have a significant impact on the Consolidated Income Statement or Consolidated
Statement of Financial Position.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of Interim Financial Statements, in conformity with adopted
IFRS, requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amount of
assets and liabilities, income and expense. Actual results may differ from
these estimates. In preparing these Condensed Consolidated Interim Financial
Statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the Consolidated Financial Statements for
the year ended 31st December 2015.
The Directors have considered the facts and circumstances as at 30th June 2016
and concluded that there are no indicators of impairments that require an
impairment review to be undertaken on goodwill at the Interim Statement of
Financial Position date. The annual impairment review will be undertaken
later in 2016 consistent with the timing in previous years.
CAUTIONARY STATEMENTS
This Half Year Report contains forward-looking statements. These have been
made by the Directors in good faith based on the information available to them
up to the time of their approval of this Report. The Directors can give no
assurance that these expectations will prove to have been correct. Due to the
inherent uncertainties, including both economic and business risk factors
underlying such forward-looking information, actual results may differ
materially from those expressed or implied by these forward-looking
statements. The Directors undertake no obligation to update any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
· this Condensed set of Interim Financial Statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
· the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the Condensed Financial Statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year.
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year that have materially affected the financial position or
performance of the entity during that period, and any changes in the related
party transactions described in the last annual report that could do so.
The Directors of Spirax-Sarco Engineering plc on 8th August 2016 are the same
as those listed in the 2015 Annual Report on pages 68 and 69 with the
exception of David Meredith who retired at the conclusion of the AGM on 10th
May 2016 and Kevin Boyd who was appointed on 11th May 2016.
N. J. Anderson
Group Chief Executive
8th August 2016
K. J. Boyd
Group Finance Director
8th August 2016
On behalf of the Board
2. SEGMENTAL REPORTING
As required by IFRS 8, Operating Segments, the following segmental information
is presented in a consistent format with management information considered by
the Board.
Analysis by location of operation
Six months to 30th June 2016 Grossrevenue £m Inter-segmentrevenue £m Revenue £m Totaloperatingprofit £m Adjustedoperatingprofit £m Adjustedoperatingmargin %
Europe, Middle East & Africa 130.1 (18.0) 112.1 22.8 23.1 20.6%
Asia Pacific 83.7 (1.7) 82.0 17.8 18.1 22.0%
Americas 64.9 (3.3) 61.6 12.4 13.4 21.7%
Steam Specialties business 278.7 (23.0) 255.7 53.0 54.6 21.3%
Watson-Marlow 88.3 - 88.3 27.8 29.0 32.9%
Corporate expenses (6.1) (6.1)
367.0 (23.0) 344.0 74.7 77.5 22.5%
Intra-Group (23.0) 23.0
Total 344.0 - 344.0 74.7 77.5 22.5%
Net finance expense (1.3) (1.3)
Profit before tax 73.4 76.2
Six months to 30th June 2015 Grossrevenue £m Inter-segmentrevenue £m Revenue £m Totaloperatingprofit £m Adjustedoperatingprofit £m Adjustedoperatingmargin %
Europe, Middle East & Africa 128.6 16.8 111.8 20.7 21.3 19.0%
Asia Pacific 76.5 2.2 74.3 15.2 15.5 20.9%
Americas 64.0 2.9 61.1 7.3 11.7 19.3%
Steam Specialties business 269.1 21.9 247.2 43.2 48.5 19.6%
Watson-Marlow 72.8 - 72.8 20.7 21.8 29.9%
Corporate expenses (4.5) (4.5)
341.9 21.9 320.0 59.4 65.8 20.6%
Intra-Group (21.9) (21.9)
Total 320.0 - 320.0 59.4 65.8 20.6%
Net finance expense (0.6) (0.6)
Share of profit/(loss) of Associates (1.5) 0.3
Profit before tax 57.3 65.5
Year ended 31st December 2015 Grossrevenue £m Inter-segmentrevenue £m Revenue £m Totaloperatingprofit £m Adjustedoperatingprofit £m Adjustedoperatingmargin %
Europe, Middle East & Africa 253.7 34.3 219.4 41.4 42.7 19.5%
Asia Pacific 176.3 4.5 171.8 44.2 44.7 26.0%
Americas 128.9 5.5 123.4 21.6 27.1 22.0%
Steam Specialties business 558.9 44.3 514.6 107.2 114.5 22.3%
Watson-Marlow 152.6 - 152.6 45.6 47.9 31.4%
Corporate expenses (10.0) (10.0)
711.5 44.3 667.2 142.8 152.4 22.8%
Intra-Group (44.3) (44.3)
Total 667.2 - 667.2 142.8 152.4 22.8%
Net finance expense (1.5) (1.5)
Share of profit/(loss) of Associates (1.6) 0.2
Profit before tax 139.7 151.1
Non-operational items
The Group uses adjusted figures as key performance measures in addition to
those reported under adopted IFRS. The Group's management believes these
measures provide valuable additional information for users of the Financial
Statements in understanding the Group's performance. Adjusted operating
profit excludes certain non-operational items which are analysed below:
Six months to30th June2016 £m Six months to30th June 2015 £m Year ended31st December 2015 £m
Amortisation and impairment of acquisition-related intangible assets (2.7) (2.2) (4.7)
Loss on closure of USA metering unit - (3.8) (3.8)
Profit on disposal of M&M less recycled exchange losses - - (0.3)
Acquisition and disposal costs (0.1) (0.4) (0.8)
Total non-operational items (2.8) (6.4) (9.6)
Share of profit of Associates
An analysis of the share of profit of Associates is shown below:
Six months to30th June 2016 £m Six months to30th June 2015 £m Year ended31st December 2015 £m
Share of adjusted profit - 0.3 0.2
Non-operational items
Amortisation and impairment of acquisition-related intangible assets - (0.1) (0.1)
Final adjustment to previous tangible asset impairment write offs - 0.1 0.1
Exchange translation differences recycled under IAS 21 - (1.8) (1.8)
Total non-operational items - (1.8) (1.8)
Total Associates - (1.5) (1.6)
Net assets
At 30th June 2016 At 30th June 2015 At 31st December 2015
Assets £m Liabilities £m Assets £m Liabilities £m Assets £m Liabilities £m
Europe, Middle East & Africa 196.8 (115.6) 196.0 (96.0) 182.8 (91.2)
Asia Pacific 152.8 (27.6) 122.8 (18.1) 140.3 (30.4)
Americas 112.2 (43.9) 94.2 (21.4) 102.4 (24.0)
Watson-Marlow 136.5 (19.8) 110.1 (18.8) 123.9 (14.0)
598.3 (206.9) 523.1 (154.3) 549.4 (159.6)
Liabilities (206.9) (154.3) (159.6)
Special dividend - (91.0) -
Deferred tax 23.6 19.3 15.3
Current tax payable (5.1) (7.7) (11.6)
Net cash 20.6 53.5 4.8
Net assets 430.5 342.9 398.3
Capital additions, depreciation and amortisation
Six months to30th June 2016 Six months to30th June 2015 Year ended31st December 2015
Capital additions £m Depreciation and amortisation £m Capital additions £m Depreciation and amortisation £m Capital additions £m Depreciation and amortisation £m
Europe, Middle East & Africa 5.3 5.8 6.0 5.7 13.0 11.1
Asia Pacific 7.6 3.3 2.0 2.9 11.0 5.5
Americas 2.6 2.6 1.7 4.8 10.4 4.9
Watson-Marlow 2.0 3.6 5.2 3.2 11.9 7.3
Group total 17.5 15.3 14.9 16.6 46.3 28.8
Capital additions include property, plant and equipment at 30th June 2016 of
£14.1m; at 30th June 2015 of £8.8m; and at 31st December 2015 of £26.3m; and
other intangible assets at 30th June 2016 of £3.4m; at 30th June 2015 of
£6.1m; and at 31st December 2015 of £20.0m of which at 30th June 2016 £nil; at
30 June 2015 £2.9m and 31st December 2015 £12.8m relates to acquired
intangibles from acquisitions in the period.
3. NET FINANCING INCOME AND EXPENSE
Six monthsto 30th June2016 £m Six monthsto 30th June2015 £m Year ended31st December 2015 £m
Financial expenses
Bank and other borrowing interest payable (0.6) (0.7) (1.3)
Net interest on pension scheme liabilities (1.3) (1.3) (2.3)
(1.9) (2.0) (3.6)
Financial income
Bank interest receivable 0.6 1.4 2.1
Net financing expense (1.3) (0.6) (1.5)
Net pension scheme financial expense (1.3) (1.3) (2.3)
Net bank interest - 0.7 0.8
Net financing expense (1.3) (0.6) (1.5)
(1.3)
(0.6)
(1.5)
4. TAXATION
Taxation has been estimated at the rate expected to be incurred in the full
year
Six monthsto 30th June2016 £m Six monthsto 30th June2015 £m Year ended31st December 2015 £m
UK corporation tax 1.1 0.4 0.9
Foreign taxation 22.4 18.8 43.6
Deferred taxation (1.6) (1.3) (1.5)
Total Taxation 21.9 17.9 43.0
21.9
17.9
43.0
5. EARNINGS PER SHARE
Six monthsto 30th June2016 Six monthsto 30th June2015 Year ended31st December2015
Profit attributable to equity shareholders (£m) 51.4 39.4 96.5
Weighted average shares in issue (million) 73.3 75.5 74.3
Dilution (million) 0.3 0.3 0.3
Diluted weighted average shares in issue (million) 73.6 75.8 74.6
Basic earnings per share 70.2p 52.2p 129.9p
Diluted earnings per share 70.0p 52.0p 129.4p
Adjusted profit attributable to equity shareholders (£m) 53.5 45.7 105.9
Basic adjusted earnings per share 73.1p 60.5p 142.6p
Diluted adjusted earnings per share 72.8p 60.2p 141.9p
60.2p
141.9p
The dilution is in respect of unexercised share options and the Performance
Share Plan.
6. DIVIDENDS
Six monthsto 30th June2016 £m Six monthsto 30th June2015 £m Year ended31st December 2015 £m
Amounts paid in the period:
Final dividend for the year ended 31st December 2015 of 48.2p (2014: 45.0p) per share 35.4 34.1 34.1
Special dividend for the year ended 31st December 2014 of 120.0p (2013: nil) per share - - 91.0
Interim dividend for the year ended 31st December 2015 of 20.8p (2014: 19.5p) per share - - 15.2
Total dividends paid 35.4 34.1 140.3
Amounts arising in respect of the period:
Interim dividend for the year ended 31st December 2016 of 22.5p (2015: 20.8p) per share 16.5 15.2 15.2
Final dividend for the year ended 31st December 2015 of 48.2p (2014: 45.0p) per share - - 35.4
Total dividends arising 16.5 15.2 50.6
15.2
50.6
The interim dividend for the year ended 31st December 2016 was approved by the
Board after the 30th June 2016. It is therefore not included as a liability
in these Interim Condensed Consolidated Financial Statements. No scrip
alternative to the cash dividend is being offered in respect of the 2016
interim dividend.
7. POST-RETIREMENT BENEFITS
The Group is accounting for pension costs in accordance with IAS 19. The
disclosures shown here are in respect of the Group's Defined Benefit
Obligations. Other plans operated by the Group were either Defined
Contribution plans or were deemed immaterial for the purposes of IAS 19
reporting. Full IAS 19 disclosure for the year ended 31st December 2015 is
included in the Group's Annual Report.
The amounts recognised in the balance sheet are as follows:
At 30th June 2016 £m At 30th June 2015 £m At 31st December2015 £m
Retirement benefit liability recognised in the balance sheet (113.8) (75.0) (73.7)
Related deferred tax asset 27.3 16.9 18.0
Net pension liability (86.5) (58.1) (55.7)
8. ANALYSIS OF CHANGES IN NET CASH
At 1st Jan2016 £m Cash flow £m Exchangemovement £m At 30th June 2016 £m
Current portion of long-term borrowings (0.3) (0.3)
Non-current portion of long-term borrowings (80.7) (66.1)
Short-term borrowing (10.1) (5.7)
Total borrowings (91.1) 20.3 (1.3) (72.1)
Comprising:
Borrowings (90.6) 20.1 (1.3) (71.8)
Finance leases (0.5) 0.2 - (0.3)
(91.1) 20.3 (1.3) (72.1)
Cash and cash equivalents 99.8 1.4 7.8 109.0
Bank overdrafts (3.9) (11.3) (1.1) (16.3)
Net cash and cash equivalents 95.9 (9.9) 6.7 92.7
Net cash 4.8 10.4 5.4 20.6
9. CAPITAL EMPLOYED
The Board uses certain non-statutory measures to help it effectively monitor
the performance of the Group. Capital employed is a key measure.
At 30th June2016 £m At 30th June2015 £m At 31st December 2015 £m
Property, plant and equipment 185.3 164.7 169.9
Prepayments 5.7 0.5 5.5
Inventories 104.1 98.8 92.5
Trade receivables 160.7 133.2 152.1
Other current assets 25.2 25.0 20.4
Tax recoverable 9.3 4.6 9.5
Capital employed element of business held for sale - 4.6 -
Trade, other payables and current provisions (90.8) (76.3) (84.3)
Current tax payable (14.4) (12.3) (21.1)
Capital employed 385.1 342.8 344.5
344.5
10. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
Note.
Full details of the Group's other related party relationships, transactions
and balances are given in the Group's Financial Statements for the year ended
31st December 2015. There have been no material changes in these
relationships in the period up to the end of this report.
No related party transactions have taken place in the first half of 2016 that
have materially affected the financial position or the performance of the
Group during that period.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table compares amounts and fair values of the Group's financial
assets and liabilities:
At 30th June 2016 At 30th June 2015 At 31st December 2015
CarryingValue £m FairValue £m CarryingValue £m FairValue £m CarryingValue £m FairValue £m
Financial assets
Cash and cash equivalents 109.0 109.0 86.6 86.6 99.8 99.8
Trade and other receivables 172.9 172.9 142.4 142.4 162.5 162.5
Total financial assets 281.9 281.9 229.0 229.0 262.3 262.3
Financial liabilities
Bank loans 71.8 71.8 32.3 32.3 90.6 90.6
Finance lease obligations 0.3 0.3 0.6 0.6 0.5 0.5
Bank overdrafts 16.3 16.3 0.2 0.2 3.9 3.9
Derivative financial liabilities 2.6 2.6 - - 0.2 0.2
Trade payables 23.2 23.2 20.9 20.9 24.0 24.0
Other payables 29.2 29.2 23.9 23.9 27.3 27.3
Total financial liabilities 143.4 143.4 77.9 77.9 146.5 146.5
There are no other assets or liabilities measured at fair value on a recurring
or non-recurring basis for which fair value is disclosed.
Fair values of financial assets and financial liabilities
Fair values of financial assets and liabilities at 30th June 2016 are not
materially different from book values due to their size or the fact that they
were at short-term rates of interest. Fair values have been assessed as
follows:
Derivatives
Forward exchange contracts are marked to market by discounting the future
contracted cash flows using readily available market data.
Interest-bearing loans and borrowings
Fair value is calculated based on discounted expected future principal and
interest cash flows.
Finance lease liabilities
The fair value is estimated as the present value of future cash flows,
discounted at market interest rates for homogeneous lease agreements.
Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the
notional amount is deemed to reflect the fair value.
The Group uses forward currency contracts to manage its exposure to movements
in foreign exchange rates. The forward contracts are designated as hedge
instruments in a cash flow hedging relationship. At 30th June 2016 the Group
had contracts outstanding to purchase £14.0m with euros, £7.1m with US
dollars, £1.3m with Swiss francs, £0.9m with Korean won, £0.8m with Danish
krone, £0.6m with Japanese yen, £0.2m with Norwegian krone, £0.1m with Czech
koruna and E2.8m with US dollars. Derivative financial instruments are
measured at fair value. The fair value at the end of the reporting period is
a £2.6m liability (31st December 2015: £0.2m liability).
Financial instruments fair value disclosure
Fair value measurements are classified into three levels, depending on the
degree to which the fair value is observable.
· Level 1 fair value measurements are those derived from quoted prices in
active markets for identical assets and liabilities
· Level 2 fair value measurements are those derived from other observable
inputs for the asset or liability; and
· Level 3 fair value measurements are those derived from valuation
techniques using inputs that are not based on observable market data.
We consider that the derivative financial instruments fall into level 2.
There have been no transfers between levels during the period.
12. CAPITAL COMMITMENTS
Capital expenditure contracted for but not provided for at 30th June 2016 was
£4.0m (31st December 2015: £7.4m). All capital commitments related to
property, plant and equipment.
13. PURCHASE OF BUSINESSES
On 1st July we acquired the assets of Hiter Indústria e Comércio de Controles
Termo- Hidráulicos Ltda (Hiter), a process control valve manufacturer based in
Sorocaba, Brazil, for a total purchase consideration of £3.9 million which was
paid in cash from existing Group resources. At the date these Interim
Condensed Consolidated Financial Statements were authorised for issue, the
acquisition accounting had not been finalised but will be included and
disclosed in the 2016 Annual Report.
14. EXCHANGE RATES
Set out below is an additional disclosure (not required by IAS 34) that
highlights movements in a selection of average exchange rates between half
year 2016 and half year 2015.
AverageHalf year2016 AverageHalf year2015 Change %
Bank of England sterling index 86.5 90.6 +5%
US$ 1.42 1.53 +8%
Euro 1.29 1.36 +5%
Renminbi 9.33 9.53 +2%
Won 1,677 1,685 +0%
Real 5.26 4.53 -14%
Argentine Peso 20.38 13.49 -34%
Rouble 98.76 89.74 -9%
About Spirax Sarco
Spirax-Sarco Engineering plc is the world leader in each of its two
businesses, Spirax Sarco for steam specialties and Watson-Marlow Fluid
Technology Group for niche peristaltic pumps and associated fluid path
technologies. The steam specialties business provides a broad range of fluid
control products, engineered packages, site services and systems expertise for
a diverse range of industrial and institutional customers. The company helps
its customers to improve production efficiency, reduce energy costs, water
usage and emissions, improve product quality and enhance the safety of their
operations. Watson-Marlow Fluid Technology Group offers the ideal solution
for a wide variety of demanding fluid path applications with highly accurate,
controllable and virtually maintenance free pumps and associated technologies.
The Group is headquartered in Cheltenham, England, has strategically located
manufacturing plants around the world and employs approximately 4,900 people,
of whom over 1,300 are direct sales and service engineers. Its shares have
been listed on the London Stock Exchange since 1959 (symbol: SPX).
Further information can be found at www.spiraxsarcoengineering.com
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