REG - Tyman PLC - Half-year Report
26/07/2022 07:00
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RNS Number : 6884T Tyman PLC 26 July 2022
TYMAN PLC
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022
Tyman plc (TYMN.L) announces results for the six months ended 30 June 2022.
Summary Group Results
£m unless stated H1 2022 H1 2021 LFL((1))
Change vs 2021
Revenue 360.0 312.5 +15% +11%
Adjusted operating profit* 49.3 47.8 +3% -1%
Adjusted operating margin* 13.7% 15.3% -160bps -170bps
Operating profit 40.8 39.0 +5%
Adjusted profit before taxation* 45.4 43.4 +5%
Profit before taxation 37.4 34.3 +9%
Adjusted EPS* 17.6p 17.1p +3%
Basic EPS 14.6p 13.5p +8%
Dividend per share 4.2p 4.0p +5%
Leverage((2)) 1.1x 0.9x +0.2x
Return on capital employed* 13.9% 15.5% -150bps
* Alternative performance measures. These "Adjusted" metrics are before
amortisation of acquired intangible assets, impairment of goodwill and
acquired intangible assets and exceptional items. These measures provide
additional information to shareholders on the underlying performance of the
business and are used consistently through the statement. Further details
can be found on page 39.
(1) LFL = constant currency like-for-like (see APMs on page 39)
(2) Leverage is calculated in accordance with the debt covenant
methodology (see APMs on page 39)
Highlights:
• Robust first half trading against an exceptionally strong
comparative period, consistent with full year expectations
• LFL revenue growth of 11% driven by pricing actions
• LFL adjusted profit decline of only 1%, reflecting a lag in price
recovery of further input cost inflation
• On a reported basis, revenue and operating profit increased by 15%
and 5% respectively
• Performance achieved despite ongoing industry-wide supply chain
challenges and labour constraints
• LFL adjusted operating margin decline reflected the dilutive
impact of the pass-through of cost inflation
• Good progress with our strategic initiatives, underpinned by
strong recognition of our sustainability performance
• Innovative sustainability-linked US Private Placement refinancing
completed in H1
• Interim dividend increase of 5%, reflecting confidence in the
Group's growth prospects
Jo Hallas, Chief Executive Officer, commented: "Tyman traded robustly in the
first half of the year against an exceptionally strong comparative period,
with pricing actions taken to mitigate further cost inflation.
We will continue to focus on taking market share and enhancing our operational
platform to improve productivity and working capital management.
Notwithstanding a more challenging market in the second half, our flexible
cost base will allow us to adapt to potential changes in demand, and full year
adjusted operating profit is expected to be in line with market
expectations(1) excluding the benefit of foreign exchange.
We are reassured by long-term structural industry growth drivers remaining
favourable. Our resilient business model and strategic initiatives continue to
position Tyman well for future growth, building on our portfolio of
differentiated products, market-leading brands and deep customer
relationships."
(1) Company compiled analyst consensus of £93.4m, with a range of £91.8
million - £96.0 million. Details can be found at:
https://www.tymanplc.com/investor-relations/analysts-consensus
(https://www.tymanplc.com/investor-relations/analysts-consensus)
26 July 2022
Enquiries
Tyman plc 020 7976 8000
Jo Hallas - Chief Executive Officer investor.relations@tymanplc.com
Jason Ashton - Chief Financial Officer
Matt Jones - Head of Investor Relations
MHP Communications 020 3128 8404
Reg Hoare / Rachel Farrington / Matthew Taylor tyman@mhpc.com
Analyst and investor presentation
Tyman will host an analyst and investor presentation at 9.30 a.m. today,
Tuesday 26 July 2022, which will be webcast at:
https://stream.brrmedia.co.uk/broadcast/62c8413bd161177b4578b3f8
The audio conference call details are:
Number +44 (0) 330 165 4012
Confirmation code 2978937
Notes to editors
Tyman (TYMN: LSE) is a leading international supplier of engineered
fenestration components and access solutions to the construction industry. The
company designs and manufactures products that enhance the comfort,
sustainability, security, safety and aesthetics of residential homes and
commercial buildings. Tyman's portfolio of leading brands serve their markets
through three divisions: Tyman North America, Tyman UK and Ireland and Tyman
International. Headquartered in London, the Group employs approximately 4,300
people with facilities in 16 countries worldwide. Further information is
available at www.tymanplc.com (http://www.tymanplc.com/) .
Overview of results
Performance in H1 2022
The Group's trading performance in the first half has been robust against an
exceptionally strong comparative period. LFL revenue growth of 11% largely
reflected the benefit of pricing actions implemented to recover further input
cost inflation. Volume growth continues to be constrained by industry-wide
supply chain issues and labour shortages that took effect from May 2021,
although these issues are progressively improving. Revenue for the period of
£360.0 million (H1 2021: £312.5 million) grew by 15% on a reported basis
compared to H1 2021, with the LFL growth supplemented by a 4% benefit from
foreign exchange movements.
Underlying demand in most of the Group's major markets started the year
strongly, driven by favourable long-term structural trends and supported by a
continuation of the COVID-19 related trends that have led to increased RMI
activity. Government fiscal stimulus programmes, notably in Italy, have also
boosted both residential and commercial activity. Since May, when consumers
began to come under pressure from significant cost-of-living increases and
rising interest rates, demand levels began to moderate in certain markets, as
evidenced by leading market indicators for the Group.
The Group has remained agile in implementing pricing actions, but the
inevitable, albeit reducing, lag in offsetting input cost inflation
contributed to a slight decline in LFL adjusted operating profit of 1%.
Moreover, the pass-through of cost inflation has a dilutive impact on
operating profit margins, leading to an adjusted operating margin decrease of
160bps to 13.7%. Adjusted operating profit increased by 3%, reflecting the
favourable impact of foreign exchange movements.
Industry-wide supply chain challenges pressures have persisted, and the Group
has continued to implement measures to increase capacity and productivity,
including a range of capital investments. High levels of inflation, together
with the need to maintain supply chain resilience, also led to a significantly
higher than normal seasonal inventory build. Combined with the slight decline
in LFL adjusted operating profit and the impact of foreign exchange, partially
offset by a reduction in intangible assets through amortisation, the Group's
return on capital employed reduced by 150bps to 13.9%.
An interim dividend of 4.2 pence per share will be paid on 9 September 2022 to
shareholders on the register at close of business on 5 August 2022. This
represents growth of 5% compared to H1 2021, in line with the Group's
progressive dividend policy and reflecting confidence in the Group's growth
prospects.
Health and safety
The health and safety of our people is the Group's top priority, with this
culture being embedded through the 'safety is our first language' engagement
programme. The lost time incident frequency rate ('LTIFR') excluding COVID-19
cases was 1.2 incidents per million hours worked, a 14% improvement compared
to the H1 2021 LTIFR of 1.4. Including COVID-19 cases, the LTIFR decreased to
2.9 (H1 2021: 5.7).
Strategic progress
The Group has continued to progress its Focus, Define, Grow strategy, which is
underpinned by the three sustainability pillars of Sustainable Operations,
Sustainable Culture and Sustainable Solutions.
Within the Focus strategic pillar, the projects to optimise the distribution
footprint in the western US and to consolidate the three legacy commercial
access solutions businesses in the UK onto a single site are well advanced.
Capital investment to increase capacity and address bottlenecks in the seals
manufacturing facilities in the UK and North America are also progressing
well. Further investment to enhance factory automation in the Italy and UK is
planned during the remainder of 2022. Efforts to harmonise and rationalise the
North American product portfolio are delivering positive results, reducing
complexity for customers and improving working capital management. The
programme to roll-out a global ERP template has commenced, with the first two
North American sites going live in March. This programme will enable enhanced
customer service levels, greater efficiencies and improved decision-making.
Progress has also been made with the Sustainable Operations activities. Solar
panels have been installed at a major UK site, and similar opportunities are
being assessed at sites in Mexico and Italy. Our Science Based Target work is
progressing, with an analysis of the carbon footprint across our value chain
having been completed and detailed plans being developed to reduce the carbon
footprint of our purchased raw materials (Scope 3 emissions), where
opportunities exist to increase recycled content and optimise product designs.
Within the Define strategic pillar, work continued to embed the 'One Tyman'
culture, and to expand the 'Tyman Excellence System' for the development and
deployment of best practice. Under Lean Excellence, the Group held its first
cross-divisional Kaizen week at the Budrio site, creating stronger awareness
and engagement with lean across site representatives from around the world. As
part of the Sustainability Excellence work, a database has been developed to
facilitate the sharing of best practice for reducing energy, water and waste,
designing sustainable products, and transitioning to sustainable packaging.
Several Sustainable Culture initiatives were progressed: a groupwide employee
engagement survey was completed, and an ethics leadership course is being
rolled-out to support the Group's Code of Business Ethics. Our businesses take
pride in positively contributing to society and, in June, ninety volunteers
from our Budrio site worked with charity Rise Against Hunger to pack food kits
for Ukrainian refugees.
Activities to Grow market share continue to yield positive results. In North
America, further net customer wins were achieved by continuing to work closely
with customers in support of their growth plans. In our international markets,
strong progress was made in growing partnerships with systems houses,
supported also by our customer service levels relative to competitors.
The new product development pipeline remains healthy and includes developing
Sustainable Solutions to grow the proportion of revenue from positive impact
products, such as a low-cost watertight sidewalk door to protect against
flooding. Various initiatives are also underway across the Group to improve
the sustainability of packaging (for example, new packaging designs have been
finalised to eliminate plastic clam-shell packs for UK retail hardware sales)
and reduce the use of hazardous substances in production (for example, by
eliminating chromium 6 from the supply chain and reducing lead content).
The Group's commitment to achieving its sustainability targets was
demonstrated with the issue of innovative sustainability-linked US Private
Placement notes during the first half. The financing includes economic
incentives for the achievement of three sustainability performance targets
which align with Tyman's sustainability roadmap.
It was also pleasing to see that the Group's progress towards its 2030
sustainability roadmap received recognition from several rating agencies
during the period, with MSCI awarding Tyman an AA "leader" rating, and both
S&P Global and Sustainalytics ranking Tyman in the top 20% of building
products peers globally.
The Group continues to prepare itself for a disciplined return to M&A, and
the initiatives described above to strengthen our operational platform
combined with the Tyman Excellence System should facilitate greater synergy
extraction from acquired businesses in the future.
Outlook
The positive long-term structural growth drivers for the Group remain intact,
including favourable housing market fundamentals, increasing regulation, a
focus on sustainability and technological innovation. The recent deterioration
in leading macroeconomic indicators signals a more challenging market outlook;
however, the agility of our business model and flexibility in our cost base
will enable us to adapt to any potential changes in demand, as has been
demonstrated in the past.
The Group will continue to focus on taking market share, through executing
well with customers, launching innovative new products, and expanding its
channels and markets. Activities to enhance supply chain and manufacturing
efficiency and resilience are expected to improve productivity and working
capital management.
Overall, full year adjusted operating profit is expected to be in line with
market expectations excluding the benefit of foreign exchange.
The Group is well positioned for future growth, benefiting from long-term
structural industry growth drivers, our resilient business model and
strategic initiatives, whilst building on our portfolio of differentiated
products, market-leading brands and deep customer relationships. We remain
confident in our ability to deliver our medium-term margin targets in a more
normalised market environment.
Jo Hallas
Chief Executive Officer
Tyman North America
£m except where stated H1 2022 H1 2021 Change LFL
Revenue 229.5 191.6 +20% +12%
Adjusted operating profit 32.6 34.0 -4% -10%
Adjusted operating profit margin 14.2% 17.7% -350bps -350bps
Markets
The US residential housing market began 2022 robustly, supported by the
limited supply of homes, favourable demographics and a continuation of
pandemic-driven trends of nesting and urban flight. US housing starts grew 6%
in the first half, although single family starts, to which the division has
proportionally higher exposure, declined by 2%. Residential housing permits, a
key leading indicator, are up 4%, although single family permits declined 4%.
According to LIRA (Leading Indicator of Replacement Activity), US repair and
remodelling spend grew 14% in the first half of 2022, reflecting the
significant inflation of building material and labour costs. The NAHB RMI
(Remodelling Market Index) posted a Q2 reading of 77, down from 86 in Q1, with
the survey showing a significant drop-off in enquiries.
The US commercial market remained resilient in the first half of 2022.
Non-residential building starts grew by 13% in the period, although
environmental public works, to which the access solutions business is
particularly exposed, declined by 4%.
In Canada, single family housing starts declined by 12% in the first half of
the year, impacted by rising inflation and interest rates.
Business performance and developments
LFL revenue grew by 12% in H1 2022, largely reflecting the benefit of pricing
actions implemented to recover cost inflation, with volumes broadly flat
against a very strong comparative period. Volume continues to be constrained
by the industry-wide supply chain and labour availability issues that began in
mid-2021. Reported revenue growth of 20% reflected the impact of foreign
exchange.
Shipping rates and operational efficiency also continued to be impacted by
supply chain and labour shortages, offsetting the benefits of continuous
improvement activities. In addition, there continues to be a lag in the
recovery of input cost inflation via pricing actions, although this time lag
is shortening as inflation moderates. The combination of the above factors
against a strong comparator period contributed to a decline in LFL adjusted
operating profit of 10%. On a reported basis, adjusted operating profit
declined by 4% reflecting the impact of foreign exchange. The pass-through of
cost inflation has a dilutive impact on operating profit margins, leading to a
LFL adjusted operating margin decrease of 350bps to 14.2%.
The division continued to work closely with customers to monitor demand levels
and ensure their continuity of supply. This strong customer engagement,
coupled with ongoing efforts to increase capacity, enabled the division to
take market share, with the division winning net annualised new business of c.
US$3m during H1.
The focus on raising operating efficiency and service levels continued,
including activities directed at increasing capacity, optimising the
distribution network and driving lean excellence. Workforce stability improved
during the first half due to increased engagement efforts, recruitment
programmes, hiring incentives and wage increases. The roll-out of a new ERP
system to enable more streamlined ordering processes for customers and
efficiency gains commenced with the implementation of the first two sites.
Activities to optimise the US distribution footprint continued, with the
Western US distribution centre location selected and operations planned to
start at the end of 2022.
Efforts continued to harmonise and rationalise the division's product
portfolio, with work now moving to the casement and hinged patio door product
groups. Notably, the completed sliding patio door project has already
delivered a significant reduction in SKUs relating to single point locks,
which will reduce complexity for customers and improve the division's working
capital management.
New product development
New product development continues to be a key enabler of growth. The enhanced
Pinnacle balance is gaining good traction across multiple customers and
delivering on plan. This is primarily due to its innovative design, which
allows customers to use one balance configuration across multiple window
lines, significantly reducing SKUs and window frame material requirements. The
acoustical smoke vent has industry-leading sound insulation qualities and has
been particularly well received by the school sector. Customer specific
solutions in the patio door, casement and seals product categories have also
been progressed in the period.
A focus in the second half of the year will be the launch of the entry price
point sliding patio door roller and handle solution, redesigned to compete
more effectively in a price sensitive sector of the growing vinyl market,
giving consumers an affordable patio door solution that is corrosion resistant
and aesthetically appealing.
Outlook
The underlying fundamentals of the US housing market remain strong, with years
of supply lagging demand creating a significant housing deficit. In the repair
and remodelling market, LIRA projects 17% growth in spend in the second half
of 2022, reflecting higher building materials and labour costs. Nevertheless,
short-term risks to demand exist as rising inflation and interest rates are
expected to constrain market activity as the second half of 2022 progresses.
The division will continue to monitor cost inflation and implement pricing
actions accordingly.
Against this backdrop, the division will continue its focus on self-help
initiatives that are already underway and aimed at taking market share,
expanding margins and reducing working capital.
Tyman UK & Ireland
£m except where stated H1 2022 H1 2021 Change LFL
Revenue 53.7 54.3 -1% -1%
Adjusted Operating Profit 7.7 7.8 -1% -1%
Adjusted Operating Margin 14.3% 14.3% - -
Markets
Activity in the UK residential RMI market continued to moderate in the first
half of 2022, impacted by the pressure on household incomes from rising
inflation. Post pandemic, having recovered at a slower rate than the
residential market, the infrastructure and commercial construction markets
have been more resilient during 2022 and continued to grow.
The IHS Markit / CIPS UK Construction PMI signalled good growth for much of
the first half of 2022, maintaining a reading above 56 from January through
May, although in June it fell to 52.6, with residential activity showing an
overall downturn for the first time since May 2020.
Business performance and developments
Revenue decreased by 1% in H1 2022 on a LFL and reported basis against a very
strong comparative period in 2021. Growth in revenue in the commercial access
solutions business together with the benefit of pricing actions was offset by
a decline in hardware volumes, reflecting the softening in the residential RMI
market.
In the hardware business, actions taken in 2021 to provide cover against
supply chain disruption have enabled the reduction in the use of costly
expedited and alternative freight services, as well as mitigating the impact
of ongoing regional lockdowns in China, in turn improving our customer service
levels. The business was able to continue passing on material and transport
cost inflation through pricing actions.
In Access 360, the division's commercial access solutions business, sales grew
modestly in the first half, reflecting the return of the two re-certified core
product lines suspended in 2021. Work continues to optimise the business, with
an integrated ERP system launched in the first half, and the consolidation of
the three heritage Access 360 sites (Profab, Howe Green and Bilco) into a
single highly automated facility due for completion by the end of 2022.
LFL and reported adjusted operating profit decreased by 1%, with the impact of
lower hardware volumes and input cost inflation largely offset by pricing
actions.
As part of the groupwide sustainability roadmap, the hardware business has
continued its development of sustainable packaging solutions and the
elimination of hazardous substances from products, with projects to reduce
plastic in retail packaging and eliminate chromium 6+ from decorative hardware
well progressed.
New product development
The business launched several new products in the period aimed at broadening
its certified products portfolio, including a BSI Kitemark certified door
handle and 3-star Sold Secure cylinders to offer enhanced security, giving
increased peace of mind to consumers. Additional releases included a
collection of designer levers targeted at commercial and high-end residential
projects, and a hands-free hardware range that allows doors to be operated
with the forearm to reduce the spread of viruses and bacteria.
A key focus for the second half will be the launch of Touchkey®, an
innovative smart security door locking system that can be accessed via key,
fingerprint, Bluetooth or remotely. Touchkey® will provide more entry modes
than any other existing solution, allowing users to enter their home without
the need for a key, which is especially beneficial for residents with
restricted mobility. The combination of a lock, cylinder and handle will have
the BSI IoT Kitemark certification to ensure peace of mind to the end user.
Outlook
The UK RMI market is expected to remain challenging in the remainder of 2022,
with rising inflation and interest rates impacting consumer confidence. The
CPA forecasts UK private housing RMI output to decline by 3% in 2022, compared
to their flat growth forecast at the start of the year. Against this backdrop,
the hardware business will continue to focus on new product development and
enhancing its supply chain resilience, whilst implementing further pricing
actions as required.
The commercial access solutions business is expected to experience more
favourable market conditions, benefitting from continued investment in
infrastructure and industrial sectors, which the CPA forecasts to be the
fastest growing UK construction markets in 2022. The continued work to
optimise the Access 360 business is expected to further enhance the division's
performance in the second half.
Tyman International
£m except where stated H1 2022 H1 2021 Change LFL
Revenue 76.8 66.6 +15% +17%
Adjusted operating profit 14.0 10.5 +34% +37%
Adjusted operating profit margin 18.3% 15.7% +260bps +270bps
Markets
Market demand was strong during the first half of the year across the
division's key markets. However, momentum slowed in May and June as the
uncertain macroeconomic environment began to weigh on consumer confidence. The
Eurozone Construction PMI fell to 47.0 in June, signalling a contraction in
construction output, having started the year at a healthy level of 56.6, which
was the highest reading since January 2018.
The Construction PMI for Italy, the division's largest market, has remained
above the Eurozone average throughout the period and peaked at a record high
of 68.5 in February 2022, boosted by government fiscal stimulus measures.
Since May, the Italian PMI has also slowed markedly, falling to 50.4 in June
which points to only marginal construction output growth.
Elsewhere, there were favourable market conditions in several key territories
for the division, most notably in Australia and the GCC cluster, although the
Chinese market was impacted by the widespread regional lockdowns in response
to the resurgence of COVID-19.
Business performance and developments
The division delivered LFL revenue growth of 17% in H1 against what was a very
strong comparative period. The drivers of this were buoyant market conditions,
together with further share gains and price realisation. Share growth was
achieved through continued momentum with channel partnerships and new product
development, alongside rigorous supply chain and capacity management. Growth
was delivered in most key markets, with strong growth in Italy, the division's
largest market, reflecting underlying market demand, pricing actions and
significant share gains. Reported revenue growth of 15% reflected the impact
of foreign exchange.
Pricing actions have been implemented to recover further input cost inflation.
Combined with the strong volume growth and its beneficial effect on fixed cost
absorption, this resulted in LFL adjusted operating profit growth of 37%,
whilst LFL adjusted operating margins expanded by 270bps to 18.3%. On a
reported basis, adjusted operating profit increased by 34% reflecting the
impact of foreign exchange.
The division has managed these buoyant activity levels and global supply chain
disruptions effectively. Seals manufacturing has continued to be capacity
constrained and a third new Q-Lon urethane line has recently been installed
and commissioned, further to the two lines added in 2021. Progress has also
continued with the programme to drive greater levels of automation in the
Budrio hardware manufacturing facility. These investments are set to complete
by the end of the year and will lead to improvements in safety, efficiency and
throughput.
The strategic initiative to develop system house partnerships continued to
gain traction during the first half, notably in Europe and the GCC. This
channel now represents 24% of the division's revenue, up from 21% in the first
half of 2021, with revenue from this channel growing by 40% in H1 2022.
In light of Russia's invasion of Ukraine, and as previously reported, business
with Russia and Belarus was discontinued from February 2022; these markets
accounted for c. 1% of Group revenue in 2021.
New product development
New product development continues to enhance our value proposition to
customers by focussing on the key trends of aesthetics, safety and
sustainability. A new mechanism for tilt and turn applications, with a
limiting arm safety feature, was launched to increase the safety of windows on
high-rise buildings where strong winds are prevalent. The Reguitti Kora range
of door handles has been extended to the timber market.
To support the growth of the systems house channel the division is currently
working closely with eleven system house partners to develop customised
solutions for them based on its pull and slide system, with four of these due
to launch in the coming months.
Outlook
Recent Construction PMI data suggests that the market outlook is likely to
become more challenging in the second half of the year, as rising inflation
and interest rates weigh on consumer confidence in many markets.
Given this more uncertain environment, the priorities remain to exploit share
growth opportunities through new product launches and channel expansion
activities, while maintaining margins. The division will continue to execute
the various strategic initiatives in place to improve its financial and
operational resilience, including the automation of hardware manufacturing
operations, optimisation of the seals manufacturing footprint, and instilling
a culture of lean excellence.
FINANCIAL REVIEW
Income statement
Revenue and profit
Reported revenue in the period increased by 15.2% to £360.0 million
(H1 2021: £312.5 million), largely reflecting price increases of £23.1
million and tariffs and surcharges of £12.8 million to recover significant
input cost inflation. Reported revenue also benefitted from favourable foreign
exchange movements of £12.1 million. On a LFL basis, revenue increased 10.9%
compared to 2021.
Selling, general and administrative expenses increased to £75.6 million (H1
2021: £70.0 million), driven largely by outbound freight, salary and other
cost inflation, as well as some increased investment to support significantly
higher volumes in the International division, and an adverse foreign exchange
impact of £1.3 million.
Operating profit increased by 4.6% to £40.8 million (H1 2021: £39.0
million). This was driven by the benefits of the pricing actions, net
productivity improvements of £1.0 million, and favourable foreign exchange
movements of £2.0 million, offset by significant materials, freight, and
other cost inflation of £37.1 million. Adjusted operating profit increased by
3.1% to £49.3 million (H1 2021: £47.8 million), reflecting a slightly lower
amortisation charge on acquired intangible assets. Operating margin decreased
by 120 bps to 11.3% (H1 2022: 12.5%) and adjusted operating profit margin
decreased by 160 bps to 13.7% (H1 2021: 15.3%), largely as a result of the
dilutive effect of pass-through pricing to recover cost inflation. On a LFL
basis, adjusted operating profit decreased 1%.
Reported profit before taxation increased by 9.0% to £37.4 million (H1 2021:
£34.3 million), as a result of the higher operating profit and a reduction in
net finance costs due to the refinancing completed at more favourable interest
rates, as well as a gain on revaluation of derivative instruments. Adjusted
profit before tax increased by 4.6% to £45.4 million (H1 2021: £43.4
million), with the gain on revaluation of derivative instruments excluded from
this measure. On a LFL basis, this increased 0.6%, reflecting the benefit of
foreign exchange.
Materials and input costs
£m except where stated FY 2021 Materials((1)) Average((2)) Spot((3))
Aluminium 17.0 +77.4% +44.3%
Polypropylene 37.8 +24.4% +8.5%
Stainless steel 76.5 +43.0% +24.9%
Zinc 31.4 +37.6% +29.2%
Far East components((4)) 44.6 +9.7% +11.3%
(1) FY 2021 materials cost of sales for raw materials, components and
hardware for overall category. Only major materials categories are presented
(2) Average H1 2022 tracker price compared with average H1 2021 tracker
price
(3) Spot tracker price as at 30 June 2022 compared with spot tracker price
at 30 June 2021
(4) Pricing on a representative basket of components sourced from the Far
East by the UK & Ireland division
Both spot and average prices across all categories rose significantly in H1
2022. Price increases and surcharges have been implemented to recover cost
increases. Due to the magnitude and frequency of these increases, as well as
customer pricing mechanisms, there is an inevitable timing lag in recovery,
albeit this lag is reducing.
Finance costs
Net finance costs decreased to £3.4 million (H1 2021: £4.7 million).
Interest payable on bank loans, private placement notes and overdrafts
decreased to £2.9 million (H1 2021: £3.1 million), predominantly reflecting
a lower weighted average interest rate following repayment of $55 million of
USPP notes in November 2021 and refinancing at more favourable interest rates
completed in April 2022, partially offset by the unfavourable impact of
foreign exchange. Interest on lease liabilities of £1.2 million was in line
with the previous period (H1 2021: £1.2 million).
Net finance costs in the period also benefited from a gain on revaluation of
derivative instruments of £0.7 million due to the movement in foreign
exchange rates. Non-cash charges included in net finance costs included
amortisation of capitalised borrowing costs of £0.2 million (H1 2021: £0.3
million).
Taxation
The Group reported an income tax charge of £9.0 million (H1 2021: £8.0
million), comprising a current tax charge of £11.0 million (H1 2021: £10.3
million) and a deferred tax credit of £2.0 million (H1 2021: credit of £2.3
million), representing an effective tax rate of 24.1% (H1 2021: 23.3%). The
adjusted effective tax rate was 24.4% (H1 2021: 23.3%). The increase in the
effective tax rate reflects a higher proportion of profits generated in
jurisdictions with higher tax rates, predominantly in Europe. This is the
Group's current best estimate of the effective tax rate for the 2022 full
year.
During the period, the Group paid corporation tax of £10.0 million (H1 2021:
£9.2 million). The increase is a result of the timing of payments on account.
Earnings per share
Basic earnings per share increased by 8.4% to 14.6 pence (H1 2021: 13.5
pence), and adjusted earnings per share increased to 17.6 pence (H1 2021: 17.1
pence), reflecting the increase in profit after tax and a reduction in the
weighted average number of shares following the purchase of 2.0 million shares
for the EBT. There is no material difference between these calculations and
the fully diluted earnings per share calculations
Cash generation, funding and liquidity
Cash and cash conversion
£m H1 2022 H1 2021
Net cash from operating activities 17.7 24.1
Add: Pension contributions 0.1 0.4
Add: Income tax paid 10.0 9.2
Less: Purchases of property, plant and equipment (9.0) (5.5)
Less: Purchases of intangible assets (2.1) (1.5)
Add: Proceeds on disposal of PPE - 0.7
Exceptional cash costs - 0.2
Operational cash flow* 16.7 27.6
Less: Pension contributions (0.1) (0.4)
Less: Income tax paid (10.0) (9.2)
Less: Net interest paid (3.3) (4.4)
Less: Exceptional cash costs - (0.2)
Free cash flow* 3.3 13.4
* Alternative performance measures, details of which can be found on
page 39.
Net cash from operating activities decreased to £17.7 million (H1 2021:
£24.1 million). Operational cash flow in the period decreased by 39.6% to
£16.7 million, primarily due to an increase in the working capital outflow
from £24.9 million in H1 2021 to £32.3 million in H1 2022, as a result of a
higher seasonal build to meet demand and protect against supply chain
disruption, with this being magnified by significant material cost inflation
and the translational impact of foreign exchange. Capital expenditure has also
increased due to catch up of expenditure deferred from 2021 and investment to
support strategic initiatives. Operating cash conversion in H1 2022 was 34%
(H1 2021: 58%).
Free cash flow in the period was £3.3 million, compared to £13.4 million in
H1 2021, as a result of a significantly lower operational cash flow and higher
income tax payments on accounts, offset slightly by lower interest payments
and pension contributions.
Debt facilities
Bank and US private placement facilities available to the Group, as at 30 June
2022, were as follows:
Facility Maturity Currency Committed Uncommitted
2018 Facility Feb 2024 Multicurrency £240.0m £70.0m
5.37 % USPP Nov 2024 US$ US$45.0m -
3.51 % USPP April 2029 US$ US$40.0m
3.62 % USPP April 2032 US$ US$35.0m
In April 2022, the Group issued $75 million of sustainability-linked US
Private Placement notes. US$40 million of the notes have a maturity of 7 years
and a base coupon rate of 3.51%, and US$35m have a maturity of 10 years and a
base coupon rate of 3.62%. The Notes incorporate three sustainability
performance targets which align with Tyman's sustainability roadmap:
· Reduction in Tyman's Scope 1 and 2 emissions by a series of
milestones, including a reduction of 50% by 2026 and carbon neutrality by 2030
(relative to 2019 baseline)
· Submission of Tyman's Scope 3 target to the Science Based Target
initiative (SBTi) for verification by February 2023
· Participation in CDP in 2022 and annually thereafter
This incentive mechanism results in a modest reduction or increase in the
coupon rate depending on performance against these targets.
Liquidity
At 30 June 2022 the Group had gross outstanding borrowings (including lease
liabilities and bank overdrafts) of £269.5 million (H1 2021: £208.8
million), cash balances of £86.7 million (H1 2021: £61.1 million) and
committed but undrawn facilities of £140.5 million (H1 2021: £153.1
million). This provides immediately available liquidity of £203.8 million (H1
2021: £214.2 million). The Group also has potential access to the uncommitted
£70.0 million accordion facility.
Net debt at the period end was £182.0 million (H1 2021: £146.8 million).
Adjusted net debt, which excludes lease liabilities of £56.9 million and
unamortised finance arrangement fees of £0.6 million, increased to £125.7
million (H1 2021: £95.9 million), reflecting the significant increase in
working capital and adverse foreign exchange movements.
Covenant performance
At 30 June 2022 Test Performance ((1)) Headroom ((2)) Headroom ((2))
Leverage < 3.0x 1.1x £65.9m 62.7%
Interest Cover > 4.0x 19.3x £89.0m 84.7%
(1) Calculated covenant performance consistent with the Group's banking
covenant test (banking covenants exclude impact of IFRS 16).
(2) The approximate amount by which adjusted EBITDA would need to decline
before the relevant covenant is breached. See APMs on pages 39 to 42.
At the half year, the Group retained significant headroom on its banking
covenants. Leverage at the period end was 1.1x (H1 2021: 0.9x), reflecting the
increase in net debt. Interest cover at the period end was 19.3x (H1 2021:
15.8x), largely reflecting the lower interest expense.
Balance sheet - assets and liabilities
Working capital
£m FY 2021 Mvt FX H1 2022
Inventories 137.8 20.9 11.2 169.9
Trade receivables 69.9 18.2 5.4 93.5
Trade payables (78.4) (8.8) (5.9) (93.1)
Trade working capital 129.3 30.3 10.7 170.3
Trade working capital at the half year, net of provisions, was £170.3 million
(H1 2021: £118.8 million; FY 2021: £129.3 million). The trade working
capital build to the half year at average exchange rates was £30.3 million
(H1 2021: £28.4 million).
The inventory build at average exchange rates was £20.9 million (H1 2021:
£27.9 million). Inventory levels remain elevated in order to meet demand,
protect against supply chain disruption and de-risk key material availability.
The inventory build was also magnified by the impact of material cost
inflation. Trade receivables and trade payables increased in the period due to
the increased trading activity and the effect of pricing and inflation.
Trade working capital increased by a further £10.7 million due to foreign
exchange movements.
Capital expenditure
Gross capital expenditure increased to £11.1 million (H1 2021: £7.0 million)
or 1.7x depreciation (H1 2021: 1.1x), reflecting remaining catch up of
expenditure deferred from 2021, and investment in new product development,
operational excellence, and systems upgrades. Capital expenditure for the full
year is expected to be at the lower end of the range guided at the year end of
£25 - £30 million.
Balance sheet - equity
Shares in issue
At 30 June 2022, the total number of shares in issue was 196.8 million (H1
2021: 196.8 million) of which 0.5 million shares were held in treasury (H1
2021: 0.5 million).
Employee Benefit Trust purchases
At 30 June 2022, the EBT held 2.6 million shares (H1 2021: 0.8 million).
During the period, the EBT purchased 2.0 million shares in Tyman plc at a
total cost of £6.6 million (H1 2021: 0.1 million shares at a total cost of
£0.3 million).
Other financial matters
Return on capital employed
ROCE decreased by 150 bps to 13.9% (H1 2021: 15.5%) as a result of the
slightly lower adjusted operating profit, significantly higher average working
capital, and the impact of foreign exchange movements on capital employed,
offset by a reduction in the carrying value of intangible assets through
amortisation.
Currency
The principal foreign currencies that impact the Group's results are the US
dollar and the Euro. In H1 2022, Sterling was weaker against the US dollar and
slightly stronger against the Euro when compared with the average exchange
rates in H1 2022.
Translational exposure
Currency US$ Euro Other Total
% mvt in average rate -6.4% 3.1%
£m Revenue impact((1)) 14.4 (1.6) 0.2 13.0
£m Profit impact ((1)(2)) 1.8 (0.3) - 1.5
1c decrease impact ((3)) £209k £75k
(1) Calculated based on H1 2022 financial information
(2) Adjusted Operating Profit impact
(3) Defined as the approximate favourable translation impact of a 1c
decrease in the Sterling exchange rate of the respective currency on the
Group's Adjusted Operating Profit
The net effect of currency translation caused revenue and adjusted operating
profit from ongoing operations to increase by £13.0 million and £1.5 million
respectively compared with H1 2021.
Transactional exposure
Divisions that purchase or sell products in currencies other than their
functional currency will potentially incur transactional exposures. For
purchases by the UK & Ireland division from the Far East, these exposures
are principally Sterling/US dollar or Chinese renminbi.
The Group's policy is to recover adverse transactional currency movements
through price increases or surcharges. Divisions typically buy currency
forward to cover expected future purchases for up to six months. The objective
is to achieve an element of certainty in the cost of landed goods and to allow
sufficient time for any necessary price changes to be implemented.
The gain on foreign exchange derivatives in H1 2022 is £0.7 million (H1 2021:
minimal). The Group's other transactional exposures generally benefit from the
existence of natural hedges and are immaterial.
Principal risks and uncertainties
The Board has reviewed the Group's principal risks and concluded these remain
consistent with those disclosed in the Annual Report and Accounts for the year
ended 31 December 2021. As part of this review, the Board has considered the
impact of the increasingly uncertain macro-economic environment and the impact
of changing geo-political circumstances, including the impact of the war in
Ukraine.
Jason Ashton
Chief Financial Officer
Tyman plc
Condensed consolidated income statement
Note Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Revenue 3 360.0 312.5 635.7
Cost of sales (243.6) (203.5) (424.0)
Gross profit 116.4 109.0 211.7
Administrative expenses (75.6) (70.0) (138.6)
Operating profit 40.8 39.0 73.1
Analysed as:
Adjusted((1)) operating profit 3 49.3 47.8 90.0
Exceptional items 4 - 0.1 0.6
Amortisation of acquired intangible assets 9 (8.5) (8.9) (17.5)
Operating profit 40.8 39.0 73.1
Finance income 5 0.9 - -
Finance costs 5 (4.3) (4.7) (9.1)
Net finance costs 5 (3.4) (4.7) (9.1)
Profit before taxation 37.4 34.3 64.0
Income tax charge 6 (9.0) (8.0) (14.4)
Profit for the period attributable to shareholders of the Company 28.4 26.3 49.6
Basic earnings per share 7 14.6p 13.5p 25.4p
Diluted earnings per share 7 14.5p 13.4p 25.3p
Non-GAAP alternative performance measures((1))
Adjusted((1)) operating profit 49.3 47.8 90.0
Adjusted((1)) profit before taxation 45.4 43.4 81.5
Basic Adjusted((2)) earnings per share 7 17.6p 17.1p 32.1p
Diluted Adjusted((2)) earnings per share 7 17.6p 17.0p 32.0p
(1) Before amortisation of acquired intangible assets, impairment of
goodwill and acquired intangible assets, and exceptional items. See
definitions on page 39 for non-GAAP alternative performance measures.
(2) Before amortisation of acquired intangible assets, impairment of goodwill
and acquired intangible assets, exceptional items, gains and losses on the
fair value of derivative financial instruments, amortisation of borrowing
costs, and the associated tax effect. See definitions on page 39 for non-GAAP
alternative performance measures.
Tyman plc
Condensed consolidated statement of comprehensive income
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Profit for the period 28.4 26.3 49.6
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations 0.1 1.5 1.6
Total items that will not be reclassified to profit or loss 0.1 1.5 1.6
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 41.8 (5.1) 2.4
Total items that may be reclassified to profit or loss 41.8 (5.1) 2.4
Other comprehensive income/(expense) for the period 41.9 (3.6) 4.0
Total comprehensive income for the period attributable to shareholders of the 70.3 22.7 53.6
Company
Items in the statement above are disclosed net of tax.
Tyman plc
Condensed consolidated statement of changes in equity
Share Treasury Translation Retained Total
capital
reserve
reserve
earnings
equity
£m
£m
£m
£m
£m
At 1 January 2021 (audited) 9.8 (3.4) 46.8 389.9 443.1
Total comprehensive (expense)/income - - (5.1) 27.8 22.7
Profit for the period - - - 26.3 26.3
Other comprehensive (expense)/income - - (5.1) 1.5 (3.6)
Transactions with owners - 0.7 - (8.2) (7.5)
Share-based payments((1)) - - - 0.6 0.6
Dividends paid - - - (7.8) (7.8)
Issue of own shares from EBT - 1.0 - (1.0) -
Purchase of own shares for EBT - (0.3) - - (0.3)
At 30 June 2021 (unaudited) 9.8 (2.7) 41.7 409.5 458.3
Total comprehensive income - - 7.5 23.4 30.9
Profit for the period - - - 23.3 23.3
Other comprehensive income - - 7.5 0.1 7.6
Transactions with owners - 0.1 - (6.9) (6.8)
Share-based payments((1)) - - - 1.0 1.0
Dividends paid - - - (7.8) (7.8)
Issue of own shares from EBT - 0.1 - (0.1) -
At 31 December 2021 (audited) 9.8 (2.6) 49.2 426.0 482.4
Total comprehensive income - - 41.8 28.5 70.3
Profit for the period - - - 28.4 28.4
Other comprehensive income - - 41.8 0.1 41.9
Transactions with owners - (6.1) - (16.7) (22.8)
Share-based payments((1)) - - - 1.0 1.0
Dividends paid - - - (17.2) (17.2)
Issue of own shares from EBT - 0.5 - (0.5) -
Purchase of own shares for EBT - (6.6) - - (6.6)
At 30 June 2022 (unaudited) 9.8 (8.7) 91.0 437.8 529.9
(1) Share-based payments include a tax debit of £Nil (six months ended 30
June 2021: £Nil; year ended 31 December 2021: tax credit of £0.3 million)
Tyman plc
Condensed consolidated balance sheet
Note 30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£m
£m
£m
TOTAL ASSETS
Non-current assets
Goodwill 8 397.8 357.2 363.3
Intangible assets 9 64.7 74.5 66.8
Property, plant and equipment 10 71.3 58.4 63.5
Right of use assets 53.2 49.8 52.0
Financial assets at fair value through profit or loss 14 1.2 1.1 1.1
Derivative financial instruments 14 0.3 - -
Deferred tax assets 13.0 15.8 12.6
601.5 556.8 559.3
Current assets
Inventories 169.9 110.6 137.8
Trade and other receivables 107.7 83.8 81.0
Cash and cash equivalents 15 86.7 61.1 58.1
364.3 255.5 276.9
TOTAL ASSETS 965.8 812.3 836.2
LIABILITIES
Current liabilities
Trade and other payables (130.3) (98.4) (112.8)
Derivative financial instruments 14 - (0.2) (0.3)
Borrowings 11 (23.4) (39.8) (0.1)
Lease liabilities (6.4) (5.0) (6.0)
Current tax liabilities (6.9) (7.7) (6.0)
Provisions (1.2) (1.4) (1.4)
(168.2) (152.5) (126.6)
Non-current liabilities
Borrowings 11 (188.4) (116.3) (149.0)
Lease liabilities (50.5) (46.8) (48.8)
Deferred tax liabilities (19.7) (24.4) (20.5)
Retirement benefit obligations (4.1) (6.3) (4.0)
Provisions (4.8) (7.2) (4.8)
Other payables (0.2) (0.5) (0.1)
(267.7) (201.5) (227.2)
TOTAL LIABILITIES (435.9) (354.0) (353.8)
NET ASSETS 529.9 458.3 482.4
EQUITY
Capital and reserves attributable to owners of the Company
Share capital 12 9.8 9.8 9.8
Treasury reserve (8.7) (2.7) (2.6)
Translation reserve 91.0 41.7 49.2
Retained earnings 437.8 409.5 426.0
TOTAL EQUITY 529.9 458.3 482.4
Tyman plc
Condensed consolidated cash flow statement
Note Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Cash flow from operating activities
Profit before taxation 3 37.4 34.3 64.0
Adjustments 15 22.7 24.3 47.4
Changes in working capital:
Inventories (20.9) (27.9) (54.0)
Trade and other receivables (20.4) (12.5) (9.1)
Trade and other payables 9.0 15.5 29.2
Pension contributions (0.1) (0.4) (2.8)
Income tax paid (10.0) (9.2) (17.7)
Net cash from operating activities 17.7 24.1 57.0
Cash flow from investing activities
Purchases of property, plant and equipment 10 (9.0) (5.5) (16.1)
Purchases of intangible assets 9 (2.1) (1.5) (4.5)
Proceeds on disposal of PPE - 0.7 0.8
Interest received 0.1 - -
Net cash used in investing activities (11.0) (6.3) (19.8)
Cash flow from financing activities
Interest paid (3.4) (4.4) (8.8)
Dividends paid (17.2) (7.8) (15.6)
Purchase of own shares for EBT (6.6) (0.3) (0.3)
Refinancing costs paid (0.2) - -
Proceeds from drawdown of borrowings 82.3 - 40.0
Repayments of borrowings (56.3) (9.2) (57.8)
Principal element of lease payments (3.3) (3.2) (6.2)
Net cash used in financing activities (4.7) (24.9) (48.7)
Net increase/(decrease) in cash and cash equivalents and bank overdrafts 2.0 (7.1) (11.5)
Exchange gains/(losses) on cash 3.2 (1.5) (0.1)
Cash and cash equivalents at start of period 58.1 69.7 69.7
Cash and cash equivalents and bank overdrafts at the end of period 15 63.3 61.1 58.1
( )
Tyman plc
Notes to the condensed consolidated financial statements
1. General information
Tyman plc is a leading international supplier of engineered fenestration
components and access solutions to the construction industry. The Group
designs and manufactures products that enhance the comfort, sustainability,
security, safety and aesthetics of residential homes and commercial buildings.
Tyman serves its markets through three regional divisions. Headquartered in
London, the Group employs approximately 4,300 people with facilities in 16
countries worldwide.
Tyman is a public limited company listed on the London Stock Exchange,
incorporated and domiciled in the United Kingdom. The address of the Company's
registered office is 29 Queen Anne's Gate, London, SW1H 9BU.
These interim financial statements were approved for issue on 25 July 2022 and
have been reviewed, not audited, by Deloitte, the Group's auditors.
These interim financial statements do not comprise statutory accounts within
the meaning of Section 434 of the Companies Act 2006. Statutory accounts for
the year ended 31 December 2021 were approved by the Board of Directors on 3
March 2022 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under Section 498 of the
Companies Act 2006.
The financial information for the year ended 31 December 2021 is extracted
from the Group's consolidated financial statements for that year.
2. Accounting policies and basis of preparation
2.1 Basis of preparation
The condensed consolidated interim financial statements for the half-year
reporting period ended 30 June 2022 have been prepared in accordance with the
UK-adopted International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority. The interim report does not include all
of the notes of the type normally included in an annual financial report.
Accordingly, this report should be read in conjunction with the annual
financial statements for the year ended 31 December 2021, which has been
prepared in accordance with UK-adopted international accounting standards and
with the requirements of Companies Act 2006, and any public announcements made
by Tyman plc during the interim reporting period.
2.2 Changes in accounting policies and disclosures
2.2.1 New accounting standards effective in period
The accounting standards that became applicable in the period did not impact
on the Group's accounting policies and did not require retrospective
adjustments.
2.2.2 New, revised and amended accounting standards not yet effective
None of the standards which have been issued by the IASB but are not yet
effective are expected to have a material impact on the Group.
2.3 Going concern
The Group's business activities, financial performance and position, together
with factors likely to affect its future development and performance are
described in the overview of results on pages 3 to 5 and principal risks and
uncertainties on page 18.
As at 30 June 2022, the Group had net cash and cash equivalents of £63.3
million and an undrawn RCF available of £140.5 million, giving liquidity
headroom of £203.8 million. The Group also has potential access to an
uncommitted accordion facility of £70 million.
The Group is subject to leverage and interest cover covenants tested in June
and December and had significant headroom on both covenants at 30 June 2022.
The Group has £65.9 million of EBITDA headroom on the leverage covenant
(62.7%) and £89.0 million on the interest cover covenant (84.7%).
The Group has modelled covenant compliance and liquidity headroom based on the
latest forecast for the remainder of 2022 and 2023 and would retain
significant headroom throughout the period to 31 December 2023.
Having considered the financial performance and position for the period ended
30 June 2022, current trading, the latest forecast financial information and
our main business risks as disclosed on pages 3 to 5, the Directors are
satisfied that the Group has sufficient resources to continue in operation for
the foreseeable future, a period of not less than 12 months from the date of
this report. Accordingly, the consolidated financial information has been
prepared on a going concern basis.
2.4 Accounting policies
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period. Taxes on income in
the interim periods are accrued using tax rates that would be applicable to
expected total annual profit or loss.
2.5 Accounting judgements and estimates
The preparation of financial statements requires management to exercise
judgement in applying the Group's accounting policies. It also requires the
use of certain critical accounting estimates and assumptions that affect the
reported amounts of assets, liabilities, income and expenses. Actual amounts
may differ from these estimates.
In preparing these 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 applied to the
consolidated financial statements for the year ended 31 December 2021.
3. Segment reporting
Segment information
The reporting segments reflect the manner in which performance is evaluated
and resources are allocated. The Group operates through three clearly defined
divisions: Tyman North America, Tyman UK & Ireland and Tyman
International.
North America comprises all the Group's operations within the US, Canada and
Mexico. UK & Ireland comprises the Group's UK and Ireland hardware
business, together with Access 360. International comprises the Group's
remaining businesses outside the US, Canada, Mexico and the UK (although
includes the two UK seal manufacturing plants). Centrally incurred functional
costs that are directly attributable to a division are allocated or recharged
to the division. All other centrally incurred costs and eliminations are
disclosed as a separate line item in the segment analysis.
Each reporting segment broadly represents the Group's geographical focus,
being the North American, UK and International operations respectively. In the
opinion of the Board, there is no material difference between the Group's
operating segments and segments based on geographical splits. Accordingly, the
Board does not consider geographically defined segments to be reportable.
The following tables present Group revenue and profit information for the
Group's reporting segments, which have been generated using the Group
accounting policies, with no differences of measurement applied, other than
those noted above.
3.1 Revenue
Six months ended Six months ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
£'m
£'m
Segment revenue Inter-segment revenue External revenue Segment revenue Inter-segment revenue External revenue
North America 230.8 (1.3) 229.5 192.7 (1.1) 191.6
UK & Ireland 53.8 (0.1) 53.7 54.5 (0.2) 54.3
International 78.2 (1.4) 76.8 68.2 (1.6) 66.6
Total revenue 362.8 (2.8) 360.0 315.4 (2.9) 312.5
Year ended
31 December 2021 (audited)
£'m
Segment revenue Inter-segment revenue External revenue
North America 400.5 (2.8) 397.7
UK & Ireland 106.2 (0.4) 105.8
International 135.2 (3.0) 132.2
Total revenue 641.9 (6.2) 635.7
Included within the International segment is revenue attributable to the UK of
£13.2 million (six months ended 30 June 2021: £11.2 million; year ended 31
December 2021: £22.3 million).
3.2 Profit before taxation
Note Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
North America 32.6 34.0 65.1
UK & Ireland 7.7 7.8 14.8
International 14.0 10.5 19.5
Operating segment result 54.3 52.3 99.4
Centrally incurred costs (5.0) (4.5) (9.4)
Adjusted operating profit 49.3 47.8 90.0
Exceptional items 4 - 0.1 0.6
Amortisation of acquired intangible assets 9 (8.5) (8.9) (17.5)
Operating profit 40.8 39.0 73.1
Net finance costs 5 (3.4) (4.7) (9.1)
Profit before taxation 37.4 34.3 64.0
4. Exceptional items
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£'m
£'m
£'m
Footprint restructuring - credits - 0.1 0.3
M&A and integration - - 0.6
Impairment charge - - (1.9)
Impairment credits - - 1.6
Impairment - net - - (0.3)
- 0.1 0.6
There are no exceptional items in the six months ended 30 June 2022.
Footprint restructuring
The footprint restructuring credit in 2021 relates to release of an excess
provision made in previous years related to the streamlining of the
International footprint. The classification as exceptional is consistent with
the original charge.
M&A and integration
M&A and integration credits recognised in the year ended 31 December 2021
related to the release of provisions made as part of the business combination
accounting for previous acquisitions, which are no longer required.
Impairment
The impairment charge in the year ended 31 December 2021 related to impairment
of certain of the Group's intangible assets following the decision to commence
a multi-year ERP upgrade. The impairment credit related to the release of a
portion of provisions made in 2019 against inventory and other assets
associated with the new door seals product in North America, which is no
longer required.
5. Finance income and costs
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Finance income
Interest income from short term deposits 0.2 - -
Gain on revaluation of derivative instruments 0.7 - -
0.9 - -
Finance costs
Interest payable on bank loans, private placement notes and overdrafts (2.9) (3.1) (5.9)
Interest on lease liabilities (1.2) (1.2) (2.5)
Amortisation of borrowing costs (0.2) (0.3) (0.5)
Pension interest cost - (0.1) (0.1)
Loss on revaluation of derivative instruments - - (0.1)
(4.3) (4.7) (9.1)
Net finance costs (3.4) (4.7) (9.1)
6. Taxation
The Group reported an income tax charge to the income statement of £9.0
million (H1 2021: £8.0 million), comprising a current tax charge of £11.0
million (H1 2021: £10.3 million) and a deferred tax credit of £2.0 million
(H1 2021: credit of £2.3 million).
The tax charge has been calculated using an effective tax rate of 24.1% (H1
2021: 23.3%) based on tax rates substantively enacted at 30 June 2022. The
adjusted effective tax rate was 24.4% (H1 2021: 23.3%). This is the Group's
current best estimate of the effective tax rate for the 2022 full year.
Deferred tax balances have been calculated at the substantively enacted rates
they are expected to unwind at in their respective territories. In the UK,
legislation to increase the standard rate of corporation tax to 25% from 1
April 2023 was substantively enacted in the Finance Act 2021 on 10 June 2021,
and consequently deferred tax reflects this.
Income tax recognised in the statement of other comprehensive income was
£Nil. The tax credit of £0.6 million in H1 2022 related to an actuarial gain
on the defined benefit pension plan.
During the period, the Group paid corporation tax of £10.0 million (H1 2021:
£9.2 million). The increase is a result of the timing on payments on
account.
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Current taxation
Current tax on profit for the period (11.2) (10.3) (18.8)
Prior year adjustments 0.2 - 1.5
Total current taxation (11.0) (10.3) (17.3)
Deferred taxation
Origination and reversal of temporary differences 1.9 2.4 2.2
Tax rate change adjustment - (0.1) 0.4
Prior year adjustments 0.1 - 0.3
Total deferred taxation 2.0 2.3 2.9
Income tax charge in the income statement (9.0) (8.0) (14.4)
Income tax charge in the statement of other comprehensive income - (0.6) (0.3)
Total current taxation (11.0) (10.3) (17.2)
Total deferred taxation 2.0 2.3 2.5
Total taxation (9.0) (8.6) (14.7)
7. Earnings per share
7.1 Basic and diluted earnings per share
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
Profit for the period (£'m) 28.4 26.3 49.6
Basic earnings per share 14.6p 13.5p 25.4p
Diluted earnings per share 14.5p 13.4p 25.3p
Basic earnings per share amounts are calculated by dividing net profit for the
period attributable to ordinary equity holders by the weighted average number
of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the net profit
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the period plus the weighted average number
of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
7.2 Weighted average number of shares
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
m
m
m
Weighted average number of shares ((1)) 196.8 196.8 196.8
Treasury and Employee Benefit Trust shares (2.2) (1.5) (1.4)
Weighted average number of shares - basic 194.6 195.3 195.4
Effect of dilutive potential ordinary shares ((2)) 0.7 0.7 0.7
Weighted average number of shares - diluted 195.3 196.0 196.1
(1) Including treasury shares
(2) LTIP awards and options
7.3 Non-GAAP alternative performance measure: Adjusted earnings per share
The Group presents an adjusted earnings per share measure which excludes the
impact of exceptional items, certain non-cash finance costs, amortisation of
acquired intangible assets and certain non-recurring items. Adjusted earnings
per share has been calculated using the adjusted profit after taxation and
using the same weighted average number of shares in issue as the earnings per
share calculation. See reconciliation below.
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Profit before taxation 37.4 34.3 64.0
Exceptional items - (0.1) (0.6)
(Gain)/loss on revaluation of fair value hedge (0.7) - 0.1
Amortisation of borrowing costs 0.2 0.3 0.5
Amortisation of acquired intangible assets 8.5 8.9 17.5
Adjusted profit before taxation 45.4 43.4 81.5
Income tax charge (9.0) (8.0) (14.4)
Add back: Adjusted tax effect((1)) (2.1) (2.1) (4.4)
Adjusted profit after taxation 34.3 33.3 62.7
((1)) Tax effect of exceptional items, amortisation of borrowing costs,
amortisation of acquired intangible assets, and gain or loss on revaluation of
fair value hedge.
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
Basic adjusted earnings per share 17.6p 17.1p 32.1p
Diluted adjusted earnings per share 17.6p 17.0p 32.0p
8. Goodwill
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£m
£m
£m
Net book amount at the beginning of the period 363.3 361.9 361.9
Exchange difference 34.5 (4.7) 1.4
Net book amount at the end of the period 397.8 357.2 363.3
Goodwill is monitored principally on an operating segment basis and the net
book value of goodwill is allocated by CGU as follows:
30 June 2022 (unaudited) 30 June 2021 (unaudited) £m 31 December 2021 (audited)
£m
£m
North America 301.9 261.9 268.5
UK & Ireland 60.2 60.2 60.2
International 35.7 35.1 34.6
Net book amount at the end of the period 397.8 357.2 363.3
Impairment assessment
Intangible assets are tested annually for impairment or whenever events or
circumstances indicate that the carrying amount may not be recoverable. The
Directors have considered whether there are any impairment indicators at 30
June 2022. As a result of the current macro-economic environment, and in line
with peers in the building products sector, the Group's market capitalisation
has fallen significantly during the period. As this is one of the factors
considered to be an impairment indicator under IAS 36, a full impairment
review using a value in use calculation was performed at 30 June 2022.
The methodology used was in line with that described in the Group's 2021
Annual Report and Accounts, with cash flows reflecting the latest forecasts,
and sensitivity analysis performed on key assumptions. Although the value in
use for each CGU is lower than at 31 December 2021, primarily as a result of
higher discount rates applied, this remains significantly higher than the
carrying value of each CGU, and there were no reasonably possible changes in
assumptions that would give rise to impairment. Therefore, no impairment
charges were necessary in the period.
9. Intangible assets
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£m
£m
£m
Net book amount at the beginning of the period 66.8 84.1 84.1
Additions 2.1 1.5 4.5
Amortisation charge for the period (9.2) (9.5) (18.8)
Impairment charge - - (1.9)
Exchange difference 5.0 (1.6) (1.1)
Net book amount at the end of the period 64.7 74.5 66.8
The amortisation charge for the period includes £8.5 million relating to
amortisation of acquired intangible assets (six months ended 30 June 2021:
£8.9 million; year ended 31 December 2021: £17.5 million) and £0.7 million
relating to amortisation of other intangible assets (six months ended 30 June
2021: £0.6 million; year ended 31 December 2021: £1.3 million). The
amortisation charge for the period is included in administrative expenses in
the income statement.
10. Property, plant and equipment
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£m
£m
£m
Net book amount at the beginning of the period 63.5 60.7 60.7
Additions 9.0 5.5 16.0
Disposals - (0.9) (0.9)
Depreciation charge for the period (5.9) (5.7) (11.5)
Impairment charge for the period - (0.2) (0.2)
Exchange difference 4.7 (1.0) (0.6)
Net book amount at the end of the period 71.3 58.4 63.5
The depreciation charge for the period is included in administrative expenses
in the income statement.
11. Interest-bearing loans and borrowings
30 June 30 June 31 December 2021
2022 (unaudited) 2021 (unaudited) (audited)
£m
£m
£m
Current (23.4) (39.8) (0.1)
Non-current (188.4) (116.3) (149.0)
(211.8) (156.1) (149.1)
Current borrowings include the bank overdraft. See reconciliation in note 15.
Movements in interest-bearing loans and borrowings (excluding lease
liabilities) are analysed as follows:
Note 30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£m
£m
£m
Balance at the beginning of the period (149.1) (169.1) (169.1)
Refinancing costs paid 0.2 - -
Drawdown of borrowings (82.3) - (40.0)
Repayments of borrowings 56.3 9.2 57.8
Amortisation of borrowing costs (0.2) (0.3) (0.5)
Overdraft facility (23.4) - -
Exchange difference (13.3) 4.1 2.7
Balance at the end of the period (211.8) (156.1) (149.1)
In April 2022, the Group issued $75 million of sustainability-linked US
Private Placement notes. US$40 million of the notes have a maturity of 7 years
and a base coupon rate of 3.51%, and US$35m have a maturity of 10 years and a
base coupon rate of 3.62%. The notes incorporate three sustainability
performance targets, which would result in a modest reduction or increase in
the coupon rate depending on performance against these targets.
There were no defaults in the period under the terms of loan agreements. The
Group has significant headroom in both the leverage and interest cover
covenants.
The Group has the following undrawn committed multi-currency revolving credit
facility:
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£m
£m
£m
Floating rate
Expiry beyond 12 months (140.5) (155.5) (123.6)
The Group also has access to the uncommitted £70.0 million accordion facility
and at 30 June 2022 held aggregate cash balances of £63.3 million (30 June
2021: £61.1 million; 31 December 2021: £58.1 million).
12. Share capital
Number of shares Ordinary shares
'000
£m
At 30 June 2021, 31 December 2021 and 30 June 2022 196.8 9.8
13. Dividends
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021 (audited)
£'m
£'m
£'m
Amounts recognised as distributions to owners in the period:
Final dividend for the year ended 31 December 2021 of 8.9p (2020: 4.0p) 17.2 7.8 7.8
Interim dividend for the year ended 31 December 2021 of 4.0p - - 7.8
Total amounts recognised as distributions to owners in the period 17.2 7.8 15.6
Amounts not recognised in the financial statements:
Final dividend proposed for the year ended 31 December 2021 of 8.9p - - 17.4
Interim dividend proposed for the year ended 31 December 2022 of 4.2p (2021: 8.1 7.8 -
4.0p)
14. Financial risk management and financial instruments
14.1 Financial risk factors and fair value estimation
The Group is exposed to risks arising from the international nature of its
operations and the financial instruments which fund them, in particular to
foreign currency, interest rate and liquidity risks. Full details of the
Group's policies for managing these risks are disclosed in the Group's annual
financial statements for the year ended 31 December 2021.
Since the date of that report there have been no significant changes in:
· the nature of the financial risks to which the Group is
exposed;
· the Group's contractual cash outflows and the committed
facilities available to fund them, with the exception of the new USPP notes
issued as described in note 11; or
· difference between book value and fair value of any financial
instruments.
During the period, the Group entered into a fixed-to-fixed cross-currency
principal and interest rate swap. US$10 million of the proceeds from the USPP
notes was swapped for €5 million and £3.7 million in order to provide
funding to the Group's European and UK operations. This swap has been
designated in a cash flow hedge relationship with US$10 million of the USPP
debt to eliminate foreign exchange volatility. The principal and interest cash
flows on the USD receive leg of the swap perfectly match payments on the
designated amount of the USPP debt. The value of this swap at the balance
sheet date was negligible.
Derivatives shown at fair value in the Group's balance sheet therefore
comprise level 2 cross-currency interest rate swaps fair valued using forward
interest rates extracted from observable yield curves, and forward exchange
contracts fair valued by marking-to-market contracts at the period end rate.
The effects of discounting are generally insignificant for level 2
derivatives.
During the period the Group held no level 1 financial instruments, there were
no transfers between levels and no changes were made to valuation techniques.
The Group's other financial instruments are measured at amortised cost.
14.2 Level 2 and level 3 fair values
The Group has the following financial assets and liabilities categorised at
levels 2 and 3:
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021
£m
£m
(audited)
£m
Level 2
Derivative financial assets 0.3 - -
Derivative financial liabilities - (0.2) (0.3)
Level 3
Financial assets at fair value through profit or loss 1.2 1.1 1.1
14.3 Fair value of financial assets and liabilities measured at amortised cost
The fair values of borrowings are as follows:
30 June 2022 (unaudited) 30 June 2021 (unaudited) 31 December 2021
£m
£m
(audited)
£m
Current (6.4) (44.8) (6.1)
Non-current (187.7) (111.1) (197.8)
(194.1) (155.9) (203.9)
The fair values of trade and other receivables, cash and cash equivalents, and
trade and other payables approximate their carrying amounts.
15. Adjustments to cash flows from operating activities
The following non-cash and financing adjustments have been made to profit
before taxation to arrive at operating cash flow:
Note Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Net finance costs 5 3.4 4.7 9.1
Depreciation of PPE 10 5.9 5.7 11.5
Depreciation of right of use assets 3.7 3.5 7.0
Amortisation of intangible assets 9 9.2 9.5 18.8
Impairment of intangible assets 9 - - 1.9
Impairment of PPE 10 - 0.2 0.2
Loss on disposal of PPE - 0.1 0.2
Pension service costs and expected administration costs 0.1 0.2 0.1
Non-cash provision movements (0.3) (0.2) (2.4)
Share-based payments 0.7 0.6 1.0
22.7 24.3 47.4
15.1 Reconciliation of cash and cash equivalents and bank overdrafts at the
period end
Six months ended Six months ended Year ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
31 December 2021 (audited)
£m
£m
£m
Cash at bank and on deposit 86.7 61.1 58.1
Bank overdrafts (23.4) - -
Cash and cash equivalents and bank overdrafts at the end of the period 63.3 61.1 58.1
16. Capital commitments
At 30 June 2022, the Group has capital commitments of £0.8 million for the
purchase of property, plant and equipment and intangible assets (30 June 2021:
£8.1 million; 31 December 2021: £1.7 million).
17. Related party transactions
There were no material related party transactions requiring disclosure, other
than compensation of key management personnel which will be disclosed in the
Group's Annual Report and Accounts for the year ending 31 December 2022.
Statement of Directors' responsibilities
Each of the Directors of Tyman plc confirms, to the best of his or her
knowledge, that:
· the Interim Financial Statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by the UK and
give a true and fair view of the assets, liabilities, financial position and
profit and loss of Tyman plc;
· the interim report includes a fair review of the information
required by:
· DTR 4.2.7R of the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the interim financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
· DTR 4.2.8R of the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
The Directors of Tyman plc are listed in the Group's Annual Report and
Accounts for the year ending 31 December 2021.
A list of the current Directors is maintained at the Tyman website:
www.tymanplc.com.
By order of the Board
Jo
Hallas
Jason Ashton
Chief Executive Officer Chief
Financial Officer
25 July 2022
Independent review report to Tyman plc
Conclusion
We have been engaged by Tyman plc ("the Company) to review the condensed set
of financial statements for Tyman plc and its subsidiaries (the "Group") in
the half-yearly financial report for the six months ended 30 June 2022 which
comprises the condensed consolidated balance sheet as at 30 June 2022 and the
condensed consolidated income statement, condensed consolidated statement of
comprehensive income, condensed consolidated statement of changes in equity
and condensed consolidated cashflow statement for the six-months period then
ended and related notes 1 to 17.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2022 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
As disclosed in note 2, the annual financial statements of the Group will be
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK), however future events or conditions may cause the Group to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditors responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the Group a conclusion on the condensed set of financial
statement in the half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Financial Reporting Council. Our work has been undertaken so that we might
state to the Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our review work, for this report, or for the conclusions
we have formed.
Deloitte LLP
Statutory Auditor
London, UK
25 July 2022
Alternative Performance Measures
The Group uses a number of Alternative Performance Measures (APMs). APMs
provide additional useful information to shareholders on the underlying
performance of the business. These APMs are consistent with how business
performance is measured internally by the Group, align with the Group's
strategy, and remuneration policies. These measures are not recognised under
IFRS and may not be comparable with similar measures used by other companies.
APMs are not intended to be superior to or a substitute for GAAP measures.
The following table summarises the key APMs used, why they are used by the
Group, and how they are calculated. Where appropriate, a reconciliation to the
nearest GAAP number is presented. Details of other APMs are included on the
Group's website.
Adjusted operating profit and adjusted operating margin
Definition
Operating profit before amortisation of acquired intangible assets, impairment
of goodwill and acquired intangible assets, and exceptional items.
Adjusted operating margin is calculated as adjusted operating profit divided
by revenue, expressed as a percentage.
Purpose
This measure is used to evaluate the trading operating performance of the
Group.
Exceptional items are excluded from this measure as they are largely one off
and non-trading in nature and therefore drawing these out aids the
understanding of performance.
Amortisation of acquired intangible assets is excluded from this measure as
this is a significant non-cash fixed charge that is not affected by the
trading performance of the business.
Impairment of acquired intangible assets and goodwill is excluded, as this can
be a significant non-cash charge.
Reconciliation/calculation
Adjusted operating profit is reconciled on the face of the income statement on
page 19.
Like-for-like or LFL revenue and adjusted operating profit
Definition
The comparison of revenue or operating profit, as appropriate, excluding the
impact of any acquisitions made during the current year and, for acquisitions
made in the comparative year, excluding from the current year result the
impact of the equivalent current year pre-acquisition period. For disposals,
results are excluded for the whole of the current and prior period. The prior
period comparative is retranslated at the current period average exchange
rate. The Group considers these amendments provide shareholders with a
comparable basis from which to understand the organic trading performance in
the year.
Purpose
This measure is used by management to evaluate the Group's organic growth in
revenue and adjusted operating profit, excluding the impact of M&A and
currency movements.
Reconciliation/calculation
Six months ended Six months ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
£'m
£'m
Reported revenue 360.0 312.5
Effect of exchange rates - 12.1
Like-for-like revenue 360.0 324.6
Adjusted operating profit 49.3 47.8
Effect of exchange rates - 2.0
Like-for-like adjusted operating profit 49.3 49.8
Adjusted profit before and after tax
Definition
Profit before amortisation of acquired intangible assets, impairment of
goodwill and acquired intangible assets, exceptional items, gains and losses
on the fair value of derivative financial instruments, amortisation of
borrowing costs, and the associated tax effects.
Purpose
This measure is used to evaluate the profit generated by the Group through
trading activities. The above items are excluded as they are of a non-trading
nature.
Reconciliation/calculation
An adjusted profit after tax reconciliation and the number of shares can be
found in note 7.
Adjusted earnings per share
Definition
Adjusted profit after tax divided by the basic weighted average number of
ordinary shares in issue during the year, excluding those held as treasury
shares.
Purpose
This measure is used to determine the improvement in earnings from trading
activities per share for the Group's shareholders.
Reconciliation/calculation
An adjusted profit after tax reconciliation and the number of shares can be
found in note 7.
Leverage
Definition
Adjusted net debt translated at the average exchange rate for the year divided
by adjusted EBITDA as defined in the lending agreements.
Purpose
This measure is used to evaluate the ability of the Group to generate
sufficient cash flows to cover its contractual debt servicing obligations.
Reconciliation/calculation
30 June 2022 (unaudited) 30 June 2021 (unaudited)
£'m
£'m
Adjusted net debt (at average exchange rate) 117.5 99.4
LTM adjusted EBITDA 105.0 110.4
Leverage 1.1x 0.9x
Net debt and adjusted net debt
Definition
Net debt
Interest-bearing loans and borrowings, including lease liabilities, net of
cash and cash equivalents.
Adjusted net debt
Net debt excluding lease liabilities and unamortised borrowing costs.
Purpose
This gives a measure of the gross amount owed to lenders, without the effect
of unamortised borrowing costs and lease liabilities.
Reconciliation/calculation
Six months ended Six months ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
£'m
£'m
Borrowings (268.7) (207.9)
Cash 86.7 61.1
Net debt (182.0) (146.8)
Lease liabilities 56.9 51.8
Unamortised borrowing costs (0.6) (0.9)
Adjusted net debt (125.7) (95.9)
Return on Capital Employed (ROCE)
Definition
LTM adjusted operating profit as a percentage of the last thirteen-month
average capital employed.
Purpose
This measure is used to evaluate how efficiently the Group's capital is being
employed to improve profitability.
Reconciliation/calculation
12 months ended 12 months ended
30 June 2022 (unaudited)
30 June 2021 (unaudited)
£'m
£'m
LTM adjusted operating profit 91.5 96.8
Last thirteen-month average capital employed 656.2 624.8
ROCE 13.9% 15.5%
Operating cash conversion and operational cash flow
Definition
Operational cash flow
Net cash generated from operations before income tax paid, exceptional costs
cash settled in the year and pension contributions, and after proceeds on
disposal of property, plant and equipment, payments to acquire property, plant
and equipment and payments to acquire intangible assets.
Adjusted operational cash flow
Operational cash flow, less lease payments.
Operating cash conversion
Operational cash flow divided by adjusted operating profit.
Purpose
These measures are used to evaluate the cash flow generated by the business
operations in order to pay down debt, return cash to shareholders and invest
in acquisitions.
Reconciliation/calculation
A reconciliation is included in the financial review on page 14.
DEFINITIONS AND GLOSSARY OF TERMS
Access 360 The Access Solutions business of ERA, constituting Bilco UK, Profab and Howe
Green
APM Alternative Performance Measure
bps Basis points
CDP Carbon Disclosure Project
CGU Cash Generating Unit
CIPS Chartered Institute of Purchasing and Supply
CPA Construction Products Association
EBITDA Earnings before Interest, Taxation, Depreciation and Amortisation
EBT Employee Benefit Trust
EPS Earnings per Share
ERP Enterprise Resource Planning
GCC The Cooperation Council for the Arab States of the Gulf
IASB International Accounting Standards Board
IFRS International Financial Reporting Standards
IHS Markit Investment research firm that provides stock index information
Interim Financial Statements The condensed consolidated interim financial statements of Tyman plc for the
six months ended 30 June 2022
Interim Report The interim report of Tyman plc for the six months ended 30 June 2022
IoT Internet of Things
LFL Like For Like
LIRA Leading Indicator of Replacement Activity
LTIFR Lost time incident frequency rate
LTM Last twelve months
M&A Mergers and acquisitions
MSCI Morgan Stanley Capital International
NAHB The National Association of Home Builders
NPD New product development
PMI Purchasing Managers' Index
PPE Property, plant and equipment
RCF Revolving credit facility
RMI Renovation, maintenance and improvement
SKU Stock keeping unit
Tyman Any references to Tyman, the Group, or the Company refer to Tyman plc and its
subsidiaries
USPP US private placement
EXCHANGE RATES
The following foreign exchange rates have been used in the financial
information to translate amounts into Sterling:
Closing Rates: H1 2022 H1 2021 FY 2021
US Dollars 1.2147 1.3836 1.3512
Euros 1.1624 1.1648 1.1912
Australian Dollars 1.7625 1.8431 1.8607
Canadian Dollars 1.5660 1.7151 1.7159
Brazilian Real 6.3258 6.8786 7.5285
Average Rates: H1 2022 H1 2021 FY 2021
US Dollars 1.2992 1.3882 1.3757
Euros 1.1877 1.1520 1.1631
Australian Dollars 1.8059 1.8003 1.8321
Canadian Dollars 1.6516 1.7313 1.7244
Brazilian Real 6.5993 7.4790 7.4216
ROUNDINGS
Percentage numbers have been calculated using unrounded figures, which may
lead to small differences in some figures and percentages quoted.
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