REG - Spirax-Sarco Engng - Final Results 2015 <Origin Href="QuoteRef">SPX.L</Origin> - Part 3
03/03/2016 07:11
- Part 3: For the preceding part double click ID:nRSC8722Qb
Amounts arising in respect of the year
Interim dividend for the year ended 31st December 2015 of 20.8p (2014: 19.5p) per share 15,229 14,755
Proposed final dividend for the year ended 31st December 2015 of 48.2p (2014: 45.0p) per share 35,301 34,134
Proposed special dividend for the year ended 31st December 2015 of nil (2014: 120.0p) - 91,024
50,530 139,913
7.ANALYSIS OF CHANGES IN NET CASH
At1st Jan 2015£'000 Cash flow £'000 Exchangemovement£'000 At31st Dec. 2015£'000
Current portion of long term borrowings (298) (298)
Non-current portion of long term borrowings (49,096) (80,673)
Short term borrowing (40,070) (10,130)
Total borrowings (89,464) (91,101)
Comprising:
Borrowings (88,637) (1,824) (190) (90,651)
Finance Leases (827) 377 (450)
(89,464) (1,447) (190) (91,101)
Cash and cash equivalents 117,981 (15,173) (2,973) 99,835
Bank overdrafts (461) (3,478) 28 (3,911)
Net cash and cash equivalents 117,520 (18,651) (2,945) 95,924
Bank deposits 24,437 (24,293) (144) -
Net cash 52,493 (44,391) (3,279) 4,823
£449,000 of cash was acquired as part of the purchase of Asepco and VCE.
8.RETURN ON CAPITAL EMPLOYED
Return on capital employed is one of the Group's key performance indicators,
but is a non-statutory measure. An analysis of the components is as follows:
Capital Employed 2015£'000 2014£'000
Property, plant and equipment 169,948 176,668
Prepayments 5,516 402
Inventories 92,502 98,007
Trade receivables 152,082 155,696
Other current assets 20,431 23,973
Tax recoverable 9,394 4,420
Trade and other payables (84,347) (90,754)
Current tax payable (21,050) (22,175)
Capital employed 344,476 346,237
Average capital employed 345,357 345,358
Operating profit 142,809 148,095
Adjustments (note 2) 9,628 4,855
Adjusted operating profit 152,437 152,950
Return on capital employed 44.1% 44.3%
44.3%
9.PURCHASE OF BUSINESSES
2015
Book Value £'000 Fair valueadjustment£'000 Acquisitions Fair value £'000
Non-current assetsProperty, plant and equipment 645 - 645
Intangibles - 12,269 12,269
645 12,269 12,914
Current assetsInventoriesTrade receivablesOther receivablesCash 3,528823327449 ---- 3,528823327449
Total assets 5,772 12,269 18,041
Current liabilitiesTrade payables Other payables and accrualsDeferred tax 432160- --3,555 4321603,555
Total liabilities 592 3,555 4,147
Total net assetsGoodwill 5,180 8,714 13,89411,222
Total 25,116
Satisfied by
Cash paid 23,766
Deferred consideration 1,350
25,116
Cash outflow for acquired businesses in the Cash Flow
Cash paid for businesses acquired in the periodLess cash acquiredDeferred consideration for businesses acquired in prior years 23,766(449) 242
Net cash outflow 23,559
1. The acquisition of the Asepco Corporation, a company specialising in the
design and production of high purity tank and process valves and magnetically
driven mixers for the Biopharmaceutical industry based in the USA was
completed on 8th April 2015. The acquisition method of accounting has been
used. Consideration of £7,005,000 was paid on completion with a further
£221,000 deferred. Separately identified intangibles are recorded as part of
the fair value adjustment. The goodwill recognised represents the skilled
workforce acquired and the synergies that can be achieved by being part of the
Spirax Group. 100% of voting rights were acquired. Goodwill arising is not
expected to be tax deductible. Asepco has generated £4,300,000 of revenues
and £700,000 of pre-tax profit since acquisition. Had the acquisition been
made on the 1st January 2015, the revenue and pre-tax profit would have been
approximately a third higher than the figures disclosed above.
2. The acquisition of Valve and Control Engineering Ltd., specialising in
boiler services and certifications, based in the UK was completed on 14th
April 2015. The acquisition method of accounting has been used.
Consideration of £407,000 was paid during the year with a further £350,000
deferred. This payment is dependent on future performance. Separately
identified intangibles are recorded as part of the fair value adjustment. The
goodwill recognised represents the skilled workforce acquired and the
opportunity to sell to a wider customer base. Goodwill arising is not
expected to be tax deductible. The business has been merged into the steam
specialties UK Sales operation and the revenue and pre-tax profit contributed
were immaterial in 2015.
3. The acquisition of manufacturing and distribution rights of MasoSine
Pumps in Japan was completed on 1st July 2015. The acquisition method of
accounting has been used. Consideration of £2,054,000 was paid on completion
with a further £779,000 deferred. This payment is dependent on satisfactory
compliance with agreed conditions. Separately identified intangibles are
recorded as part of the fair value adjustment. The goodwill recognised
represents the skilled workforce acquired and the opportunity to sell direct
to the Japanese market. Goodwill arising is not expected to be tax
deductible. The acquisition has generated £850,000 of revenue and £100,000 of
pre-tax profit since acquisition. Had the acquisition been made on 1st
January 2015, the revenue and pre-tax profit would have been approximately
double the figures disclosed above.
4. The acquisition of the steam distribution business from our Colombian
distributor Casaval S.A. was completed on 25th September 2015. The
acquisition method of accounting has been used. Consideration of £6,623,000
was paid on completion for the distribution rights and a further £1,935,000
for inventory. Separately identified intangibles are recorded as part of the
fair value adjustment. The goodwill recognised represents the opportunity to
sell a wider range of the Group's products direct to the Colombian market and
the opportunity to cooperate with Casaval in the future for mutual benefit.
Goodwill arising is not expected to be tax deductible. The business was
merged with our existing export business into Colombia and the additional
revenue and pre-tax profit were immaterial in 2015.
5. The acquisition of the business and assets of Flow Smart Inc., a company
specialising in the design and manufacture of high purity sanitary gaskets,
silicone transfer tubing and reinforced silicone hoses for the bioprocessing
and pharmaceutical industries was completed on 24th November 2015. The
acquisition method of accounting has been used. Consideration of £5,742,000
was paid on completion. Separately identified intangibles are recorded as
part of the fair value adjustment. The goodwill recognised represents the
skilled workforce and the opportunity to achieve synergies from being part of
a larger Group. Goodwill arising is not expected to be tax deductible. The
acquisition has generated £300,000 of revenue and £100,000 of pre-tax profit
since acquisition. Had the acquisition been made on 1st January 2015, the
revenue and pre-tax profit would have been approximately twelve times the
figures disclosed above.
£538,000 of acquisition costs were incurred in relation to these acquisitions.
The acquired intangibles relate to customer relations, technology based
assets and marketing based assets.
10.BASIS OF PREPARATION
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31st December 2015 or 31st
December 2014. Statutory accounts for 2014, which were prepared under
accounting standards adopted by the EU, have been delivered to the registrar
of companies and those for 2015 will be delivered following the Company's
Annual General Meeting. The auditors have reported on these accounts; their
report was (i) unqualified, (ii) did not include any references to any matters
to which the auditors drew attention by way of emphasis without qualifying and
(iii) did not contain statements under sections 498(2) or (3) of the Companies
Act 2006.
If approved at the annual general meeting on 10th May 2016, the final dividend
will be paid on 27th May 2016 to shareholders on the register at 29th April
2016. No scrip alternative to the cash dividends is being offered.
Copies of the Annual Report will be sent on 18th March 2016 to shareholders
who have requested a hard copy and can be obtained from our registered office
at Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER.
The report is also available on our website at
www.SpiraxSarcoEngineering.com.
11.RESPONSIBILITY statement OF THE DIRECTORS ON THE ANNUAL REPORT
The responsibility statement below has been prepared in connection with the
company's full annual report for the year ending 31st December 2015. Certain
parts thereof are not included within this announcement.
We confirm to the best of our knowledge:
· The financial statements, prepared in accordance with IFRS as adopted by
the European Union, give a true and fair view of the assets, liabilities,
financial position and profit and loss of the company and the undertakings
included in the consolidation taken as a whole; and
· The strategic report 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 they face; and
· The annual report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary to assess
the Company's performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on 2nd
March 2016 and is signed on its behalf by:
N J Anderson Chief Executive D J Meredith Finance Director
12.Cautionary statement
All statements other than statements of historical fact included in this
document, including, without limitation, those regarding the financial
condition, results, operations and businesses of Spirax-Sarco Engineering plc
and its strategy, plans and objectives and the markets and economies in which
it operates, are forward-looking statements. These forward-looking statements
which reflect management's assumptions made on the basis of information
available to it at this time, involve known and unknown risks, uncertainties
and other important factors which could cause the actual results, performance
or achievements of Spirax-Sarco Engineering plc or the markets and economies
in which we operate to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Spirax-Sarco Engineering plc and its directors accept no liability
to third parties in respect of this report save as would arise under English
law. Accordingly, any liability to a person who has demonstrated reliance on
any untrue or misleading statement or omission shall be determined in
accordance with schedule 10A of the Financial Services and Markets Act 2000.
It should be noted that schedule 10A contains limits on the liability of the
directors of Spirax-Sarco Engineering plc so that their liability is solely to
Spirax-Sarco Engineering plc.
13.EXCHANGE RATE IMPACTS
Whilst not an IFRS disclosure or part of the audited accounts, set out below
is an additional disclosure that highlights the movements in a selection of
average exchange rates between 2015 and 2014.
Average exchange rates to sterling have been as follows:
Average2015 Average2014 Change%
Bank of England sterling index 91.4 87.1 -5
US$ 1.53 1.65 +8
Euro 1.38 1.24 -10
RMB 9.60 10.15 +6
Won 1,728 1,734 -
Real 5.11 3.88 -24
Argentine Peso 14.28 13.32 -7
Australian $ 2.04 1.83 -10
Rouble 94.70 64.13 -32
Rand 19.57 17.85 -9
Turkish Lira 4.15 3.60 -13
This information is provided by RNS
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