REG - Clarke(T.) PLC - Half-year Report <Origin Href="QuoteRef">CTO.L</Origin> - Part 2
08/08/2017 07:06
- Part 2: For the preceding part double click ID:nRSH3349Na
external operations 142.9 66.8 50.2 18.7 - 278.6 Underlying profit from operations 3.5 1.0 1.8 0.6 - 6.9
Non-recurring costs (2.3) - (2.3) Amortisation of intangibles - - (0.2) - - (0.2) Profit from operations 1.2 1.0 1.6 0.6 - 4.4 Finance income - - 0.1 - (0.1) - Finance
costs (0.8) - - - 0.1 (0.7) Profit before tax 0.4 1.0 1.7 0.6 - 3.7 Taxation expense (0.8) Profit for the period from continuing operations 2.9 Assets 57.8 43.9 22.5
10.0 (21.7) 112.5 Liabilities (53.4) (31.5) (13.1) (4.7) 4.3 (98.4) Net assets 4.4 12.4 9.4 5.3 17.4 14.1
31st December 2016
London & South East£m
Central & South West£m
North£m
Scotland£m
Unallocated & elimination£m
Total£m
Total revenue
142.9
67.9
53.6
21.0
-
285.4
Inter segment revenue
-
(1.1)
(3.4)
(2.3)
-
(6.8)
Revenue from external operations
142.9
66.8
50.2
18.7
-
278.6
Underlying profit from operations
3.5
1.0
1.8
0.6
-
6.9
Non-recurring costs
(2.3)
-
(2.3)
Amortisation of intangibles
-
-
(0.2)
-
-
(0.2)
Profit from operations
1.2
1.0
1.6
0.6
-
4.4
Finance income
-
-
0.1
-
(0.1)
-
Finance costs
(0.8)
-
-
-
0.1
(0.7)
Profit before tax
0.4
1.0
1.7
0.6
-
3.7
Taxation expense
(0.8)
Profit for the period from continuing operations
2.9
Assets
57.8
43.9
22.5
10.0
(21.7)
112.5
Liabilities
(53.4)
(31.5)
(13.1)
(4.7)
4.3
(98.4)
Net assets
4.4
12.4
9.4
5.3
17.4
14.1
Note 3 - Non-recurring costs
In the second half of the year ended 31st December 2016 the Group uncovered
financial irregularities within the accounting function of a wholly owned
subsidiary, DG Robson Mechanical Services Limited ('DGR'). £2.9m of cash was
misappropriated over a number of years, of which £1.9m has been expensed in
2016 and £1.0m had been charged to the income statement in previous years
within cost of sales and administrative expenses. The 2016 expense was
separately disclosed as a non-recurring item in the financial statements for
the year ended 31 December 2016, and the results for the six months ended 30th
June 2016 have been re-presented to disclose separately the funds
misappropriated in that period. Results prior to and including 2015 have not
been restated as the impact cumulatively and in each year was not considered
to be material.
The Group engaged expert professional advisers to assist in the investigation
and recovery of the stolen funds. The cost of the investigation have also been
included disclosed as non-recurring costs.
Note 4 - Taxation expense
The effective income tax rate applied for the period is 20.0% (30th June 2016:
20.0%).
Note 5 - Discontinued operations
Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Revenue - 2.5 4.5
Cost of sales - (2.5) (5.1)
Gross loss - - (0.6)
Administrative expenses - (0.1) -
Loss before taxation - (0.1) (0.6)
Taxation - - 0.1
Loss for the financial period - (0.1) (0.5)
The Group's activities in Bristol and Cardiff were discontinued in the year
ended 31st December 2015. The Group incurred further losses in the year ended
31 December 2016 closing out its contractual commitments in respect of these
offices.
Note 6 - Earnings per share
A. Basic earnings per share
The earnings per share represent the profit for the period divided by the
weighted average number of ordinary shares in issue.
Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Earnings:
Profit / (loss) attributable to owners of the Company
Continuing operations 1.6 1.3 2.9
Discontinued operations - (0.1) 0.5)
Profit attributable to equity holders of the parent 1.6 1.2 2.4
Weighted average number of ordinary shares (000s) 41,685 41,764 41,613
B. Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The company has three categories of dilutive
potential ordinary shares: share options granted under the Savings Related
Share Option Scheme, and conditional share awards and options granted under
the Equity Incentive Plan. Further details of these schemes are given in note
20 of the 2016 annual report and financial statements.
Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Earnings:
Profit / (loss) attributable to owners of the Company
Continuing operations 1.6 1.3 2.9
Discontinued operations - (0.1) (0.5)
1.6 1.2 2.4
Weighted average number of ordinary shares in issue (000s) 41,685 41,764 41,613
Adjustments
Savings Related Share Options (000s) 209 526 170
Equity Incentive Plan
Conditional share awards (000s) 649 636 854
Options (000s) - - 447
Weighted average number of ordinary shares for diluted earnings per share (000s) 42,543 42,926 43,084
C. Underlying earnings per share
Underlying earnings per share represents the profit for the period from
continuing operations adjusted for amortisation of intangible assets and
non-recurring costs and the tax effects of these items, divided by the
weighted average number of ordinary shares in issue. Underlying earnings is
the basis on which the performance of the operating divisions is measured.
The underlying profit for the period is calculated as follows:
Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Profit from continuing operations attributable to owners of the company 1.6 1.3 2.9
Adjustments:
Amortisation of intangible assets 0.1 0.1 0.2
Non-recurring costs 0.4 0.5 2.3
Tax effect of adjustments (0.1) (0.1) (0.5)
Underlying profit after tax from continuing operations 2.0 1.8 4.9
Weighted average number of ordinary shares in issue (000s) 41,764 41,764 41,613
Adjustments
Savings Related Share Options (000s) 209 526 170
Equity Incentive Plan
Conditional share awards (000s) 649 636 854
Options (000s) - - 447
Weighted average number of ordinary shares for diluted earnings per share (000s) 42,543 42,926 43,084
Underlying earnings per share 4.80p 4.73p 11.60p
Diluted underlying earnings per share 4.71p 4.60p 11.20p
Note 7 - Interim dividend
An interim dividend of 0.6p per share (2016: 0.5p) was approved by the board
on 7th August 2017 and has not been included as a liability as at 30th June
2017. The shares will go ex-dividend on 7th September 2017 and the dividend
will be paid on 6th October 2017 to shareholders on the register as at 8th
September 2017. A dividend reinvestment plan is available for shareholders.
Those shareholders who have not elected to participate in this plan, and who
would like to participate with respect to the 2017 interim dividend, may do so
by contacting Capita Registrars on 0871 664 0300. The last day for election
for the interim dividend reinvestment is 13th September 2017 and any requests
should be made in good time ahead of that date.
Dividends paid in period Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Final dividends in respect of previous year 1.1 1.1 1.1
Interim dividend in respect of the current year - - 0.2
Dividends recognised in the period 1.1 1.1 1.3
Note 8 - Notes to the consolidated statement of cash flows
A. - Reconciliation of operating profit to net cash from operating activities Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Profit from operations
Continuing operations 2.4 2.1 4.4
Discontinued operations - (0.1) (0.6)
Depreciation charges 0.2 0.2 0.5
Profit on sale of property, plant and equipment - (0.1) (0.1)
Equity settled share based payment expense 0.2 0.1 0.1
Amortisation of intangible assets 0.1 0.1 0.2
Defined benefit pension scheme charge / (credit) 0.1 (0.2) (0.7)
Operating cash flows before movements in working capital 3.0 2.1 3.8
Decrease / (increase) in inventories - - (0.2)
Decrease / (increase) in contract balances 0.3 2.2 3.5
Decrease / (Increase) in trade and other receivables (2.9) (2.1) (5.5)
(Decrease) / increase in trade and other payables (4.9) (6.4) 3.1
Cash (used in) / generated by operations (4.5) (4.2) 4.7
Corporation tax paid (0.2) - (0.5)
Interest paid (0.1) (0.1) (0.2)
Net cash (used in) / generated by operating activities (4.8) (4.3) 4.0
B. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and other short-term highly
liquid investments that are readily convertible into cash, less bank
overdrafts.
C. Borrowings
The Group had drawn down £3m of its £10m committed three year Revolving Credit
Facility at 30th June 2017.
Note 9 - Related party transactions
Transactions between the company and its subsidiary undertakings, which are
related parties, have been eliminated on consolidation and are not disclosed
in this note. Full disclosure of the Group's other related party transactions
is given in Note 23 to the Group's financial statements for the year ended
31st December 2016. There have been no material changes in these relationships
in the six months ended 30th June 2017 that have materially affected the
financial position or performance of the Group during that period.
Note 10 - Pension commitments
The present value of the defined benefit retirement benefit scheme and the
related past and current service costs were measured using the projected unit
credit method. The amount included in the statement of financial position
arising from the Group's obligations in respect of its defined benefit
retirement benefit scheme is as follows:
Unaudited30 06 2017£m Unaudited30 06 2016£m Audited31 12 2016£m
Present value of defined benefit obligations 56.9 52.4 53.3
Fair value of scheme assets (34.6) (30.5) (32.7)
Deficit in scheme recognised in the statement of financial position 22.3 21.9 20.6
Key assumptions used:
Rate of increase in salaries 2.70% 2.20% 2.60%
Rate of increase of pensions in payment 3.10% 2.70% 3.05%
Discount rate 2.75% 3.20% 2.80%
Inflation assumption 3.40% 2.90% 3.30%
Mortality assumptions (years): Unaudited30 06 2017 Unaudited30 06 2016 Audited31 12 2016
Life expectancy at age 65 for current pensioners:
Men 21.9 23.7 21.9
Women 23.2 25.1 23.1
Life expectancy at age 65 for future pensioners(current age 45)
Men 24.3 25.1 24.2
Women 25.8 26.6 25.7
Statement of Directors' responsibilities
The Directors confirm that the condensed interim financial statements have
been prepared in accordance with International Accounting Standard 34 'Interim
Financial Reporting' as adopted by the European Union and that the interim
management report includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the year; and
· material related party transactions in the first six months and any
material changes in the related party transactions described in the last
annual report.
On behalf of the Board
Iain McCusker - Chairman
Mark Lawrence - Chief Executive
Martin Walton - Finance Director
8th August 2017
This information is provided by RNS
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