REG - Clarke(T.) PLC - Half Yearly Report <Origin Href="QuoteRef">CTO.L</Origin> - Part 1

TclarkeAnnouncement

04/08/2015 07:00

RNS Number : 9453U
Clarke(T.) PLC
04 August 2015
TClarke plc
Interim Results for the six months ended 30 June 2015
TClarke plc, the Building Services Group, announces its interim results for the six months ended 30th June 2015.
Business Highlights:
 320 million forward order book, up 16% on the same time last year (30thJune 2014:275m).
 Onsite works to commence on the large London schemes at Rathbone Square, Principal Place and London Wall Place.
 75 New apprentices begin training across the UK from September.
 TClarke North West to move to larger premises.
 
Financial Highlights:
 Group revenue
112.0m(30thJune2014:109.8m)
 Underlying operating profit
1.4m (30th June 2014: 1.1m)
 Underlying operating profit margin
1.3% (30thJune 2014: 1.1%)
 Profit before taxation
0.9m(30thJune2014: 0.2m)
 Profit before taxmargin
0.9% (30thJune 2014: 0.2%)
 Earnings per share
1.74p(30thJune2014:0.32p)
 Earnings per share - underlying
1.96p(30thJune2014:1.58p)
 Interim dividend per share
0.5p(2014: 0.5p)
New contracts secured since our previous announcement include: 
 Beaufort Park, Residential Block G for St George (part of Berkeley Group).
 Bird and Bird fit out, London.
 Cambourne Primary School.
 Chiswick Park Building 7, London.
 Irvine Leisure Centre, Ayrshire.
 John Bull Building, New Research Facility,Derriford,Plymouth.
 Lymm, New Fire Station and Safety Centre for Cheshire Fire and Rescue Service.
 Minerva Student accommodation, Cardiff.
 Newcastle Central Station, Metro Station Refurbishment.
 Scarborough Leisure Village.
 Stevenage Accelerator Building.
 Summit House, London.
 Sunderland University, Science Block.
 Temple Learning Academy, Leeds.
 TWI Training and Examination Services, Middleborough.
 Waitrose & John Lewis at Home, Basingstoke.
 Waitrose, Guildford. 
Mark Lawrence, Chief Executive commented:
"The Group looks forward to the improving market conditions particularly with our forward visibility for next year and beyond.
Our order book now stands at a strengthened 320m and provides a platform to grow the business and improve the profitability of the Group." 
-ends-
Date 4th August 2015
For further information contact:
TClarke plc
Mark Lawrence
Martin Walton
Group Chief Executive
Finance Director
Tel: 020 7997 7400
Tel: 020 7997 7400
www.tclarke.co.uk
N+1 Singer (Financial Adviser and Broker)
Sandy Fraser
Nick Owen
Tel: 020 7496 3000
www.nplus1singer.com
Broker Profile
Simon Courtenay
Harry Rippon
Tel: 020 3763 3400
www.broker-profile.com
Trading
The trading performance for the period to 30 June 2015 has remained in line with the Board's expectations and demonstrates an improving trend in our performance. The underlying operating profit for the six months was 1.4m (30th June 2014: 1.1m), with revenues of 112.0m (30th June2014:109.8m) as operating margins increased to 1.3% (30th June2014: 1.1%). 
Our net debt as at 30th June 2015 was 8.7m (30th June 2014: 4.3m) as the Group invested in its engineering resources to ensure the delivery of the enhanced order book. In total we had 13m facilities available which have been renewed and increased by a further 3m. The net debt position is expected to improve during the second half of the year as the larger schemes in London come on stream.
The Board proposes a maintained interim dividend of 0.5p (2014: 0.5p). This will be paid on 9th October 2015 to shareholders on the register at 11th September 2015. 
Order Book
We are pleased to report that our forward order book now stands at 320 millionagainst 275 million as at the same time last year. Overall the Group has secured92% of its target revenues for 2015 and 155 million for delivery in 2016.
The Group's forward order book from July 2015 breaks down as follows:
July - December 2015
108m
Secured to date 2016
155m
Secured to date 2017 - 2021
57m
Secured forward order book
320m
2015 will see the remainder of those contracts that were secured during the recession work their way through to completion. This provides confidence in the Group's results for future years which is supported by the pipeline of new contracts which we have secured over the past twelve months. 
Demand for our services continues to be strong, and the strength of the order book reinforces the Board's belief that our reputation, experience and level of resources will drive opportunities for TClarke; we continue to see our clients taking advantage by "locking in" our directly employed skilled operatives and engineering teams at a far earlier stage of the procurement process. The signs of improvement in our London markets continue to be seen and we expect to see further opportunities for margin growth next year and beyond in our wider markets across all our UK locations.


OperationalReview
The Group is managed in four operational areas, London & South, Central & West, North and Scotland, providing nationwide coverage from 16 locations across the UK, the majority of which trade under the TClarke brand. 
We continue to focus on repeat customers and framework contracts in key sectors, improving the operational focus of our business. 
Planning for the next generation, we are pleased to have recruited 75 new apprentices who will have the best opportunity to achieve recognised qualifications whilst at the same time gaining practical, hands-on work experience with the potential to develop a lifelong career with us here at TClarke.
TClarke - London & South

30/06/2015 (m)
30/6/2014 (m)
Revenue
57.8
42.9
Underlying operating profit
 1.2
(0.4)
Underlying operating profit margin
 2.3%
 (0.8)%
Order book
210
170
The London and South Division remains the largest of our four operating divisions and includes our combined M&E London business as well as Colchester, Harlow (Manufacturing Facility) and Sittingbourne. 96% of targeted revenues for 2015 are now secured. 
As previously noted excellent progress has been made promoting our combined TClarke M&E offering in London. New projects where combined M&E packages have been secured include Chiswick Park Building 7, additional work packages for Selfridges and Summit House (a commercial office development).
It is exciting that a number of the larger schemes that we have secured are now at the stage where our onsite activities can commence and generate meaningful revenues; these include Angel Court, Mizuho Bank, Principal Place, Rathbone Square, and London Wall Place. These new projects complement the other key schemes where we are already on site including BBC Television Centre; Bloomberg London; Project Nova; Ruskin Square, Croydon; South Bank Tower; Tate Modern; and Victoria Underground Station. 
We are currently bidding in limited competition for a number of other London schemes where we expect decisions will be made before the end of the year.
TClarke - Central & West

30/06/2015 (m)
30/6/2014 (m)
Revenue
30.7
37.8
Underlying operating profit
(0.6)
 0.5
Underlying operating profit margin
 (2.0)%
 1.2%
Order book
43
50
Our offices at Bristol, Cardiff, Derby, Huntingdon, Peterborough, Plymouth and St Austell, which were formally part of our South Division, now form our Central and West Division. 84% of targeted revenues for 2015 are now secured. 
Our Cardiff business has suffered a disappointing performance due to a challenging student accommodation project which is finally due to close out in October and revenues for 2015 have been affected by the same principal contractor withdrawing from a secured project on which we were partnering with them.
Elsewhere across the division good progress is being made securing projects across a number of our target sectors both with existing clients and with new client opportunities. We are particularly encouraged at the larger projects that we are now securing in the South West. 
TClarke - North

30/06/2015 (m)
30/6/2014 (m)
Revenue
17.4
20.5
Underlying operating profit
0.7
 0.9
Underlying operating profit margin
 4.1%
 4.3%
Order book
43
35
The North Division operates from three locations, Accrington, Leeds, and Newcastle. 95% of targeted revenues for 2015 are now secured. 
Our team at TClarke North West is based at Accrington and will shortly relocate to larger offices at Ackhurst Business Park in Chorley. This new office is ideally located to service our current client base and will also assist with our growth aspirations for the wider North West. 
Two significant FM contract wins for the Division demonstrate that our nationwide FM coverage and capabilities are being recognised. The two contracts mean that we now provide FM services for 500 care homes and 60 office buildings nationwide, operated from a single hotline service in Leeds. 
We continue to work extensively for BAE at Warton and Samlesbury and continue to pursue additional opportunities at Barrow-in-Furness.
TClarke - Scotland

30/06/2015 (m)
30/6/2014 (m)
Revenue
6.9
9.8
Underlying operating profit
0.1
0.2
Underlying operating profit margin
 0.7%
 2.4%
Order book
24
20
In Scotland, we operate from our main office in Falkirk and a regional office in Aberdeen. 86% of targeted revenues for 2015 are now secured. 
Whilst the period has seen a slightly quieter first half to the year than we expected, we do believe that the team will benefit from an active second half particularly in the residential sector, its area of greatest strength where TClarke Scotland remains the contractor of choice to the leading house builders in the Scottish market.
TClarke Scotland continues to seek opportunities in the wider M&E sector having recently secured a project at Hunterston Power station on the west coast of Scotland. Intelligent Buildings is also gathering significant momentum with a number of key contracts secured on group projects.
Cash flow
The first half of the year saw a significant cash outflow, due to a number of projects let during the recession at highly competitive margins now nearing completion together with investment in our overhead to enhance our capabilities as the order book continues to strengthen. We expect cash flow to improve during the second half of the year as final accounts are closed out, retention payments released and on site activities commence on the larger London schemes that we have recently secured.
To support the growth of the business our banking facilities comprised a 5 million revolving credit facility committed to 31st March 2017 and an 8 million overdraft facility. The latest annual review of the overdraft facility was successfully completed in July 2015 and a further 3 million working capital facility arranged. The Group also has available bonding facilities of 17.5 million. 


Board Changes
David Henderson has informed the Board of TClarke that he wishes to spend more time on his other business activities and as a result of this decision will be stepping down from his role as Chairman and leave the business on 30th September 2015. 
Following this decision the Nominations Committee is pleased to announce that Iain McCusker, currently our Senior Independent Director, has been appointed Non-executive Chairman with effect from 1st October 2015. Iain has a solid understanding of the TClarke business having joined the Board in 2009. David is committed to working with Iain for a smooth transition.
Summary and Outlook
The recovery in our markets is clearly being driven from London, our strong order book providing a platform to grow the business and improve the profitability of the Group. 
The Board looks forward to 2016 and beyond with renewed confidence.


Condensed consolidated income statement









Unaudited

Unaudited

Audited





6 Months to

6 Months to

12 Months to





30 06 2015

30 06 2014

31 12 2014





m

m

m










Revenue




112.0

109.8 

227.5
Cost of sales



(98.8)

(98.1)

(203.8)
Gross profit



13.2

11.7

23.7
Other operating income


-

-

0.1
Administrative expenses:







Amortisation of intangible assets


(0.1)

(0.1)

(0.2)
Non-recurring costs


-

(0.6)

(1.2)
Other administrative expenses


(11.8)

(10.5)

(22.4)
Total administrative expenses


(11.9)

(11.2)

(23.8)
Profit from operations


1.3

0.5

-
Finance income


-

- 

0.1
Finance costs


(0.4)

(0.3)

(0.8)
Profit / (loss) before taxation


0.9

0.2

(0.7)
Taxation




(0.2)

(0.1)

0.1
Profit / (loss) for the period 



0.7

0.1

(0.6)
Earnings / (loss) per share:









Attributable to owners of TClarke plc:







Basic




1.74p

0.32p

(1.58)p 
Diluted




1.70p

0.30p

(1.58)p 




















Condensed consolidated statement of comprehensive income

















Unaudited

Unaudited

Audited





6 Months to

6 Months to

12 Months to





30 06 2015

30 06 2014

31 12 2014





m

m

m









Profit / (loss) for the period


0.7

0.1

(0.6)







Other comprehensive income / (expense):
Items that will not be reclassified to profit or loss






Actuarial gain / (loss) on defined benefit pension scheme
0.6

(0.6)

(4.2)
Other comprehensive income / (expense) for the period, net of tax
0.6

(0.6)

(4.2)
Total comprehensive income / (expense) for the period

1.3

(0.5)

(4.8)


Condensed consolidated statement of financial position


Unaudited

Unaudited

Audited

30 06 2015

30 06 2014

31 12 2014

m

m

m
Non-current assets 





Intangible assets
23.1

23.3

23.2
Property, plant and equipment
4.8

5.3

5.0
Deferred taxation
2.8

1.9

2.9

30.7

30.5

31.1
Current assets





Inventories
0.4

0.4

0.4
Amounts due from customers under construction contracts
33.3

27.3

26.7
Trade and other receivables
32.5

37.5

34.7
Cash and cash equivalents
0.5

0.7

10.3

66.7

65.9

72.1
Total assets
97.4

96.4

103.2






Current liabilities





Borrowings
(4.2)

(5.0)

-
Amounts due to customers under construction contracts
(0.6)

(2.7)

(2.9)
Trade and other payables
(52.2)

(53.2)

(59.6)
Current tax liabilities
(0.2)

(0.5)

(0.1)
Obligations under finance leases
-

-

(0.1)

(57.2)

(61.4)

(62.7)






Net current assets
9.5

4.5

9.4






Non-current liabilities





Bank loans
(5.0)

-

(5.0)
Other payables
(0.3)

-

(0.3)
Retirement benefit obligation
(15.7)

(11.7)

(16.3)

(21.0)

(11.7)

(21.6)






Total liabilities
(78.2)

(73.1)

(84.3)






Net assets
19.2

23.3

18.9
Equity attributable to owners of the parent





Share capital
4.2

4.1

4.1
Share premium
3.1

3.1

3.1
ESOT share reserve
(0.1)

-

(0.1)
Revaluation reserve
0.8

0.8

0.8
Retained earnings
11.2

15.3

11.0
Total equity
19.2

23.3

18.9



Condensed consolidated statement of cash flows


Unaudited
Unaudited

Audited

6 Months to
6 Months to

12 Months to

30 06 2015
30 06 2014

31 12 2014

 m
 
 m

m






Net cash (used in) / generated by operating activities (see note 6)
(12.8)

(4.6)

5.0
Investing activities





Interest received
-

-

0.1
Purchase of property, plant and equipment
(0.2)

(0.3)

(0.5)
Receipts on disposal of property, plant and equipment
0.1

0.5

0.9
Net cash generated by / (used in) investing activities
(0.1)

0.2

0.5
Financing activities





Borrowings
-

5.0

5.0
Equity dividends paid
(1.1)

(0.9)

(1.1)
Acquisition of shares by ESOT
(0.4)

-

(0.1)
Disposal of shares by ESOT
0.4

-

-
Net cash generated by / (used in) financing activities
(1.1)

4.1

3.8
Net (decrease) / increase in cash and cash equivalents
(14.0)

(0.3)

9.3
Cash and cash equivalents at beginning of period
10.3

1.0

1.0
Cash and cash equivalents at end of period (see note 6)
(3.7)

0.7

10.3
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2015


Share capital
Share premium
ESOT share reserve
Revaluation reserve
Retained earnings
Total

m
m
m
m
m
m







At 1st January 2015
4.1
3.1
(0.1)
0.8
11.0
18.9
Comprehensive income






Profit for the period
-
-
-
-
0.7
0.7
Other comprehensive income:







Actuarial gain on retirement benefit obligation
-
-
-
-
0.7
0.7

Deferred income tax on actuarial gain on retirement benefit obligation
-
-
-
-
(0.1)
(0.1)








Total other comprehensive income
-
-
-
-
0.6
0.6
Total comprehensive income 
-
-
-
-
1.3
1.3
Transactions with owners






Dividends paid
-
-
-
-
(1.1)
(1.1)
Shares issued
0.1
-
-
-
-
0.1
Shares acquired by ESOT
-
-
(0.4)
-
-
(0.4)
Shares distributed by ESOT
-
-
0.4
-
-
-
Total transactions with owners
0.1
-
-
-
(1.1)
(0.9)
At 30th June 2015
4.2
3.1
(0.1)
0.8
11.2
19.2


Condensed consolidated statement of changes in equity
For the six months ended 30th June 2014


Share capital
Share premium
ESOT share reserve
Revaluation reserve
Retained earnings
Total

m
m
m
m
m
m
At 1st January 2014
4.1
3.1
-
0.8
16.7
24.7
Comprehensive income






Profit for the period
-
-
-
-
0.1
0.1
Other comprehensive income:







Actuarial loss on retirement benefit obligation
-
-
-
-
(0.8)
(0.8)

Deferred income tax credit on actuarial loss on retirement benefit obligation
-
-
-
-
0.2
0.2
Total other comprehensive expense
-
-
-
-
(0.6)
(0.6)
Total comprehensive expense 
-
-
-
-
(0.5)
(0.5)
Transactions with owners






Dividends paid
-
-
-
-
(0.9)
(0.9)
Total transactions with owners
-
-
-
-
(0.9)
(0.9)
At 30th June 2014
4.1
3.1
-
0.8
15.3
23.3
Condensed consolidated statement of changes in equity
For the year ended 31st December 2014


Share capital
Share premium
ESOT share reserve
Revaluation reserve
Retained earnings
Total

m
m
m
m
m
m
At 1st January 2014
4.1
3.1
-
0.8
16.7
24.7
Comprehensive income






Loss for the year
-
-
-
-
(0.6)
(0.6)
Other comprehensive income:







Actuarial loss on retirement benefit obligation
-
-
-
-
(5.3)
(5.3)

Deferred income tax credit on actuarial loss on retirement benefit obligation
-
-
-
-
1.2
1.2

Effect of change in rate of tax
-
-
-
-
(0.1)
(0.1)
Total other comprehensive expense
-
-
-
-
(4.2)
(4.2)
Total comprehensive expense 
-
-
-
-
(4.8)
(4.8)
Transactions with owners






Share based payment credit
-
-
-
-
0.2
0.2
Shares acquired by ESOT
-
-
(0.1)
-
-
(0.1)
Dividends paid
-
-
-
-
(1.1)
(1.1)
Total transactions with owners
-
-
(0.1)
-
(1.1)
(1.1)
At 31st December 2014
4.1
3.1
(0.1)
0.8
11.0
18.9


Notes to the condensed consolidated financial statements for the six months to 30th June 2015
Note 1 - Basis of preparation
TClarke plc (the 'company') is a company incorporated and domiciled in the United Kingdom. The consolidated interim financial statements comprise the condensed financial statements of the company and its subsidiaries (together the 'Group'). 
These interim financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34) as adopted by the European Union, and the Disclosure and Transparency Rules ('DTR') of the Financial Services Authority. They do not include all the information required for the full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 31st December 2014.
The information for the year ended 31st December 2014 do not constitute statutory accounts but have been extracted from the Group's statutory accounts for that year. The statutory accounts for the year ended 31st December 2014 have been delivered to the Registrar of Companies and a copy has been made available on the company's website at www.tclarke.co.uk. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The interim financial statements have not been audited or reviewed by the company's auditors.
Accounting policies
Except as described below, the financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31st December 2014.
Taxes on income in the interim periods are accrued using the estimated effective tax rate that would be applicable to expected total annual earnings.
Estimates and financial risk management
The preparation of interim financial statements requires the directors to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities at the reporting date and the amounts of revenue and expense incurred during the period that may not be readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. 
In preparing these interim financial statements, the significant judgements made by the directors in applying the Group's accounting policies and the key sources of uncertainty together with the Group's financial risk management objectives and policies were the same as those that applied to the financial statements as at and for the year ended 31st December 2014. The principal risks and uncertainties continue to be those which are set out on pages 32 - 34 of the Group's annual report and accounts for the year ended 31st December 2014, under the following headings: Market conditions; Reputation; Winning new work; Contract delivery; Resources; Health and safety; Pensions; Credit and counterparty risk; Liquidity risk; and Legal and Regulatory risk. 
Going concern
Our banking facilities comprised a 5 million revolving credit facility committed to 31st March 2017 and an 8 million overdraft facility. The Group draws on the overdraft facility as and when needed to meet working capital requirements. As with all such facilities the overdraft is subject to annual review and is repayable on demand. The latest annual review was successfully completed in July 2015 and the bank has made available a further short-term 3 million working capital facility. 
To support the Group' operations we also have available bonding facilities of 17.5 million, of which 10.1 million is currently unutilised.
After making appropriate enquiries the directors are satisfied that the company and group have adequate resources to continue their operations for the foreseeable future. Accordingly the directors continue to adopt the going concern basis in preparing the financial statements.
Note 2 - Segmental information
The Group provides electrical and mechanical contracting and related services to the construction industry and end users.
For management and internal reporting purposes the Group is organised geographically into four regional divisions; London and South (which includes the Group's central operating costs), Central and West, North, and Scotland, reporting to the Chief Executive, who is the chief operating decision maker. The London and South, and Central and West, divisions were previously combined into a single 'South' division. The comparative figures have been restated.
All assets and liabilities of the Group have been allocated to segments, apart from the retirement benefit obligation and tax assets and liabilities.
30th June 2015 
London & South
m
Central & West
m
North
m
Scotland
m
Unallocated & elimination
m
Total
m
Total revenue
57.8
30.7
17.4
6.9
-
112.8
Inter segment revenue
-
-
-
(0.8)
-
(0.8)
Revenue from external operations
57.8
30.7
17.4
6.1
-
112.0







Underlying profit from operations
1.2
(0.6)
0.7
0.1
-
1.4
Amortisation of intangibles
-
-
(0.1)
-
-
(0.1)
Profit from operations
1.2
(0.6)
0.6
0.1
-
1.3
Finance costs
(0.4)
-
-
-
-
(0.4)
(Loss) / profit before tax
0.8
(0.6)
0.6
0.1
-
0.9
Taxation expense





(0.2)
Profit for the period from 
continuing operations





0.7







Assets
47.6
29.7
19.2
8.2
(7.3)
97.4
Liabilities
(42.2)
(18.1)
(8.2)
(4.3)
(5.4)
(78.2)
Net assets
5.4
11.6
11.0
3.9
(12.7)
19.2


30th June 2014 (Restated)
London & South 
m
Central & West
m
North
m
Scotland
m
Unallocated & elimination
m
Total
m
Total revenue
42.9
37.8
20.5
9.8
-
111.0
Inter segment revenue
-
(1.0)
-
(0.2)
-
(1.2)
Revenue from external operations
42.9
36.8
20.5
9.6
-
109.8







Underlying profit from operations
(0.4)
0.5
0.9
0.2
-
1.2
Amortisation of intangibles
-
-
(0.1)
-
-
(0.1)
Exceptional claim settlement costs*
(0.5)
-
-
(0.1)
-
(0.6)
Profit from operations
(0.9)
0.5
0.8
0.1
-
0.5
Finance costs
(0.3)
-
-
-
-
(0.3)
(Loss) / profit before tax
(1.2)
0.5
0.8
0.1
-
0.2
Taxation expense





(0.1)
Profit for the period from 
continuing operations





0.1







Assets
36.2
33.3
21.8
9.5
(4.4)
96.4
Liabilities
(30.8)
(20.1)
(10.7)
(5.5)
(6.0)
(73.1)
Net assets
5.4
13.2
11.1
4.0
(10.4)
23.3
31st December 2014 (Restated)
London & South
m
Central & West
m
North
m
Scotland
m
Unallocated & elimination
m
Total
m
Total revenue
94.5
74.8
43.4
18.3
-
231.0
Inter segment revenue
(0.6)
(1.1)
-
(1.8)
-
(3.5)
Revenue from external operations
93.9
73.7
43.4
16.5
-
227.5







Underlying profit from operations
(1.4)
0.6
1.6
0.6
-
1.4
Amortisation of intangibles
-
-
(0.2)
-
-
(0.2)
Exceptional claim settlement costs*
(1.1)
-
-
(0.1)
-
(1.2)
Profit from operations
(2.5)
0.6
1.4
0.5
-
-
Finance income
0.1
-
0.1
-
(0.1)
0.1
Finance costs
(0.9)
-
-
-
0.1
(0.8)
(Loss) / profit before tax
(3.3)
0.6
1.5
0.5
-
(0.7)
Taxation expense





0.1
Loss for the period from continuing operations





(0.6)







Assets
42.4
32.1
22.7
7.9
(1.9)
103.2
Liabilities
(38.9)
(19.8)
(11.2)
(4.1)
(10.3)
(84.3)
Net assets
5.4
13.2
11.1
4.0
(10.4)
23.3

* Further detail in respect of the exceptional legal costs is provided in the annual report and financial statements for the year ended 31st December 2014.


Note 3 - Taxation expense
The effective income tax rate applied for the period is 23.8% (30th June 2014: 34.9%).
Note 4 - 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. 

Unaudited
30 06 2015
m
Unaudited
30 06 2014
m
Audited
31 12 2014
m
Profit / (loss) attributable to equity holders of the parent
0.7
0.1
(0.6)
Weighted average number of ordinary shares (000s)
41,751
41,402
41,402
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 share options and conditional share awards granted under the Equity Incentive Plan. Further details of these schemes are given in note 19 of the 2014 annual report and financial statements.

Unaudited
30 06 2015
m
Unaudited
30 06 2014
m
Audited
31 12 2014
m
Profit / (loss) attributable to equity holders of the parent
0.7
0.1
(0.6)
Weighted average number of ordinary shares in issue (000s)
41,751
41,402
41,402
Adjustments



Savings Related Share Options (000s)
256
899
-
Equity Incentive Plan



 Conditional share awards (000s)
723
810
-
 Options (000s)
50
112
-
Weighted average number of ordinary shares for diluted earnings per share (000s)
42,780
43,223
41,402


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 (being exceptional claim settlement 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:

Unaudited
30 06 2015
m
Unaudited
30 06 2014
m
Audited
31 12 2014
m
Profit from continuing operations attributable to owners of the company
0.7
0.1
(0.6)
Adjustments:



Amortisation of intangible assets
0.1
0.1
0.2
Exceptional claim settlement costs
-
0.6
1.2
Tax effect of adjustments
-
(0.1)
(0.3)
Underlying profit after tax from continuing operations 
0.8
0.7
0.5
Weighted average number of ordinary shares in issue (000s)
41,751
41,402
41,402
Adjustments



Savings Related Share Options (000s)
256
899
825
Equity Incentive Plan



 Conditional share awards (000s)
723
810
968
 Options (000s)
50
112
71
Weighted average number of ordinary shares for diluted earnings per share (000s)
42,780
43,223
43,266
Underlying earnings per share
1.96p
1.58p
1.06p
Diluted underlying earnings per share
1.91p
1.52p
1.01p
Note 5 - Interim dividend
An interim dividend of 0.5p per share (2014: 0.5p) was approved by the board on 3rd August 2015 and has not been included as a liability as at 30th June 2015. The shares will go ex-dividend on 10th September 2015 and the dividend will be paid on 9th October to shareholders on the register as at 11th September 2015. 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 2015 interim dividend, may do so by contacting Capita Registrars on 0371 664 0381. The last day for election for the interim dividend reinvestment is 14th September 2015 and any requests should be made in good time ahead of that date.
Dividends paid in period
Unaudited
30 06 2015
m
Unaudited
30 06 2014
m
Audited
31 12 2014
m
Final dividends in respect of previous year
1.1
0.9
0.9
Interim dividend in respect of the current year
-
-
0.2
Dividends recognised in the period
1.1
0.9
1.1


Note 6 - Notes to the consolidated statement of cash flows
A. - Reconciliation of operating profit to net cash from operating activities
Unaudited
30 06 2015
m
Unaudited
30 06 2014
m
Audited
31 12 2014
m
Profit from continuing operations
1.4
0.5
-
Depreciation charges
0.3
0.3
0.6
Equity settled share based payment expense
0.1
0.1
0.2
Amortisation of intangible assets
0.1
0.1
0.2
Defined benefit pension scheme credit
(0.2)
(0.3)
(0.4)
Profit on sale of fixed assets
-
(0.1)
(0.2)
Operating cash flows before movements in working capital
1.7
0.6
0.4
(Increase) / decrease in inventories
(0.1)
-
-
(Increase) / decrease in contract balances
(1.3)
(1.7)
(0.9)
(Increase) / decrease in debtors
(5.3)
(6.5)
(3.7)
(Decrease) / increase in creditors
(7.5)
2.8
9.5
Cash (used in) / generated by operations
(12.5)
(4.8)
5.3
Corporation tax paid
(0.2)
0.3
-
Interest paid
(0.1)
(0.1)
(0.3)
Net cash (used in) / generated by operating activities
(12.8)
(4.6)
5.0
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's 5m committed three year Revolving Credit Facility was fully drawn at 30 June 2015. 
Note 7 - 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 22 to the Group's financial statements for the year ended 31st December 2014. There have been no material changes in these relationships in the six months ended 30th June 2015 that have materially affected the financial position or performance of the Group during that period.


Note 8 - Pension commitments
The present value of the defined benefit pension scheme and the related past and current service costs were measured using the projected unit method. The amount included in the balance sheet arising from the Group's obligations in respect of its defined benefit retirement scheme is as follows:

Unaudited
30 06 2015
m
Unaudited
30 06 2014
m
Audited
31 12 2014
m
Present value of defined benefit obligations
44.8
39.0
44.5
Fair value of scheme assets
(29.1)
(27.3)
(28.2)
Deficit in scheme recognised in the statement of financial position
15.7
11.7
16.3
Key assumptions used:



Rate of increase in salaries
2.90%
3.45%
2.70%
Rate of increase of pensions in payment
3.20%
3.15%
3.00%
Discount rate
3.90%
4.45%
3.70%
Inflation assumption
3.40%
3.45%
3.20%




Mortality assumptions (years):
Unaudited
30 06 2015
Unaudited
30 06 2014
Audited
31 12 2014
Life expectancy at age 65 for current pensioners:



 Men
23.7
23.7
23.7
 Women
25.0
25.0
24.9
Life expectancy at age 65 for future pensioners
(current age 45)



 Men
25.0
24.9
25.0
 Women
26.5
26.4
26.4
Note 9 - Share capital
During the period under review the company allotted 427,897 ordinary shares of 10p each to the TClarke Employee Share Ownership Trust in connection with the exercise of options under the TClarke plc Savings Related Share Option Scheme.
Statement of directors' responsibilities
The directors confirm that the interim management report includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year) and DTR 4.2.8 (disclosure of related party transactions and changes therein). The directors also confirm that the interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and present a true and fair view of the assets, liabilities, financial position and profit of the Group.
On behalf of the Board
David Henderson - Chairman
Mark Lawrence - Chief Executive
Martin Walton - Finance Director
4th August 2015

This information is provided by RNS
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