6th Jun 2006 07:03
Hampson Industries PLC06 June 2006 Embargoed: For Release 7.00 am, 6 June 2006 HAMPSON INDUSTRIES PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2006 Hampson Industries PLC, announces preliminary results under IFRS for the yearended 31 March 2006: Highlights • Sales increased 34%, Trading Profit* up 155% • Trading Profit* ahead of consensus; net debt lower than expectations • Gross pension deficit reduced 65% to £1.0m • Coast & Lamsco acquisitions integrated and performing ahead of expectations • Diversified income from niche high-growth segments • Significant investment for future growth • Orderbook at record levels • Intention to re-establish dividends in 2006/07 2006 2005 Change % Sales £104.5m £77.8m +34Trading Profit* £8.3m £3.3m +155Profit Before Tax* £5.4m £1.8m +199Earnings per Share* 5.38p 2.26p +138Cash inflow from operating activities £4.5m £3.3mNet Debt £61.7m £29.8m \* Trading Profit, Profit Before Tax and Earnings per Share are all stated toreflect the continuing operations of the Group before exceptional items,amortisation of intangible assets on acquisition and impairment charges Commenting on the year, Chairman Tony Gilroy, said: "Good progress was achieved in 2005/06. Our carefully targeted investments andacquisition of niche businesses with outstanding capabilities will help us meetthe future needs of the Aerospace sector and build a strong platform forcontinuing growth. From this platform we will continue to pursue appropriateopportunities for organic, as well as external growth, from which we believe wecan deliver real, long-term value for our shareholders." Further information: Kim Ward, Chief Executive +44 (0)1384 472941Howard Kimberley, Finance Director +44 (0)1384 472946Jonathan Gollins, Financial Village +44 (0)2075 209395 www.hampsongroup.com Chairman's Statement Performance In 2005/06 we continued to execute our growth strategy focused on Aerospace andAutomotive businesses, whilst at the same time restructuring, where necessary,to strengthen and improve the competitiveness and performance of our existingbusinesses. Over the last eighteen months, the customer balance and product portfolio of theGroup has been transformed. The strategic acquisitions of Texstars, CoastComposites and Lamsco have given us a much more significant US Aerospacefootprint. As a result, in 2006/07, we expect almost half of our sales to begenerated by our US subsidiaries. These carefully selected acquisitions havealso opened access to the largest military market in the world, brought us anunrivalled blue chip customer base in airframe manufacture and provided us withadvanced new manufacturing processes and technologies that are helping toreposition our business. Our acquisitions have also brought us the benefit ofgreater diversification in revenues from strong niche business in high-margin,high-growth market segments with opportunities to cross sell to a sharedcustomer base. I am pleased to report that each of our recent acquisitions has beensuccessfully integrated into the Hampson Group and is performing ahead of ourexpectations. Coast Composites is the largest supplier of large, close tolerancetooling systems for aerostructures manufactured out of composite materials inthe US and the acquisition of Lamsco provides us with a world number oneposition in the niche market for laminated shims and related components. During the year, we continued to invest extensively in new, best-in-classfacilities to support new business and in particular, the introduction of theEclipse 500 Very Light Jet, the largest contract ever won by the Group, whichbegins production manufacture in 2006/07. After a slightly slower thananticipated start, construction of our new manufacturing facility in India isalso now well advanced with production set to commence towards the end of thefirst half of the current financial year. Our businesses overall have made very good progress in both sales and tradingprofit, where we recorded our best results in this decade by far. In Automotive,our profits continue to increase with sales growth of 10%. Our Aerospace businesses generated improved profits with the upturn in the civilmarket and the contribution of our three recent US acquisitions. However,overall results were held back by the continuing adverse performance of ourlarger UK-based structures and components businesses, and in particular ourAerospace Machining operations where we had to deal with the disruptive effectsof continuing new programme development, a significant increase in input costs,and the dilutive impact of certain legacy contracts that have been yieldingnegative returns. Action has now been taken to address this unacceptableposition and we are starting to see the impact of improved results early in thecurrent financial year. Results Our sales, at £104m, were 34% higher than in the previous year. Earningsattributable to shareholders before exceptional items and amortisation ofintangibles on acquisition were £3.5m, compared with £1.0m in the previous year.Earnings per share on the same basis amounted to 5.38p compared with 2.26p in2004/05. Dividend No dividend has been declared in respect of the year ended 31 March 2006.However, in view of the improving profitability of the Group, and subject toprevailing market conditions, the Board intends to recommend the payment of amodest dividend out of 2006/07 earnings. In order to balance expected cashflowsof new investment projects, this is expected to be paid as a final dividend andis intended to mark the resumption of a progressive policy thereafter. Pensions With the introduction of International Financial Reporting Standards ("IFRS")there has been increased focus on the liabilities faced by many UK engineeringcompanies as a result of their defined benefit pension schemes. By earlyadoption of the previous Financial Reporting Standard ("FRS17"), we have alwaystaken care to ensure full transparency in the disclosure of our own pensionliabilities, which we have been managing carefully for many years. Despite theadverse impact of declining real interest rates and increased longevity, duringthe year we reduced our overall net deficit by £1.9m (65%) through increasingthe funding contributions we make and by taking other prudent measures to reduceour continuing exposure. The net deficit on the Group's defined benefit pensionschemes stood, as a result, at just £1m as at 31 March 2006, equivalent to lessthan 0.7% of our equity market capitalisation at that date. The Future Good progress was achieved in 2005/06. Our carefully targeted investments andacquisition of niche businesses with outstanding capabilities will help us meetthe future needs of the Aerospace sector and build a strong platform forcontinuing growth. From this platform we will continue to pursue appropriateopportunities for organic, as well as external growth, from which we believe wecan deliver real, long-term value for our shareholders. Tony Gilroy6 June 2006 Chief Executive's Statement Significant Progress With sales increased by a third and trading profit more than doubled, the yearended 31 March 2006 has been one of significant progress for the Hampson Group.As well as continued growth in Automotive and increased sales in Aerospace, theGroup's revenue base has been strengthened through diversification into newmaterial and process technologies and niche product segments. These include;advanced new transparency and composite products for US military fighter,transport and helicopter programmes, composite structures for commercialairframe applications, close-tolerance tooling systems for major composite aerostructures and a range of shim products for Boeing's family of single andwide-bodied commercial aircraft. Strategic Objectives Our prime strategic objective is to deliver attractive returns to ourshareholders. Our strategy to achieve this is based on combining investment forlong-term organic growth with carefully targeted acquisitions of highperformance businesses operating in market segments where our existing knowledgeand positioning provides opportunity to create additional value. Our strategy has two platforms for growth. Firstly, the specialist market forsmall, precision components for primarily automotive applications where ourability to produce difficult-to-manufacture parts in medium to high volume attolerances measured in microns provides us with a competitive differentiator.Our core market within this arena is that for components for turbo chargers forpassenger car and commercial vehicle applications. Progressively tightening fuelemission regulations continue to be a major driver of the growth of penetrationof turbo chargers across all types of vehicle applications. The current highprice of oil is set to add a further stimulus to demand for more fuel efficientvehicles which typically require the use of one, if not more, turbo chargers. Inthis regard, the North American and Asian vehicle markets provide us withsignificant opportunity for further growth as Western Europe starts to mature. Our new green-field facility in Bangalore, India is nearing completion and thiswill provide us with a further 50,000 sq ft of capacity to service these growthmarkets at a very competitive manufacturing cost. In order to capitalise to thefullest extent possible, our shareholding in this venture has increased to 94%as of 24 May 2006. Manufacturing is expected to commence at the end of the firsthalf of our current financial year. Our second growth platform is our Aerospace businesses. Here, we have combinedinvestment in advanced new production processes to provide us with competitiveadvantage in the machining and fabrication of metal structures, with anacquisition focus that has taken us into more specialist, higher value-addedprocesses linked to the progressively increasing use of composite materials inaerospace manufacture. This has brought us important positions on some of theworld's most advanced military and commercial aerospace programmes, whilst atthe same time diluting our historic dependence on make-to-print manufacture outof traditional alloyed materials where the scope for adding differentiatablevalue is more limited and margin pressures remain greatest. An important element of our growth strategy in Aerospace is the continuedparticipation in the Very Light Jet ("VLJ") sector that we identified severalyears ago as potentially representing one of the most important evolutionarychanges in the market for regional air travel. Our participation as one of thekey aero structure providers on the prestigious Eclipse 500 VLJ programme hashelped us secure a further contract worth an estimated US$75m for Texstars,supplying composite components and assemblies. We are delighted to have securedthis additional contract which is a prime example of the cross-business leveragethat is a key element of our overall acquisition strategy. We expect the Eclipse500 to receive its final certification from the FAA by late June 2006, and thebenefit of our investment to be realised over the years to come. In themeantime, all of our aerospace businesses are benefiting from the cyclicalrebound in demand for commercial aircraft and there are currently no indicationsof an end to this cycle of increased demand. Operations Highlights of our operational performance in 2005/06 include exceptional returnsfrom our newly acquired businesses and recovery in margins at our Automotivebusiness, following the restructuring in the previous year. These strong resultsmore than offset the disappointing results from our Aerospace Structures and Components businesses, where we have continued to restructure and put in placethe mechanisms to deliver improved results in 2006/07. A more detailed FinancialReview is set out below. Management and Employee Resources The year ended 31 March 2006 has seen significant strengthening of themanagement team at Hampson, both within our operating businesses and also ourcentral team. In June 2005, we were delighted to welcome Greg Frye as CEO ofTexstars. In June 2005 Scott Wargo was appointed to run our new Eclipsemanufacturing assembly facility. Both Greg and Scott have brought with themsignificant aerospace experience gained at the highest level and are deployingthis to great effect within the businesses that they are managing. In December2005, we announced the appointments of Brendan Johnston and Tim Hayter asManaging Director of our Aerospace Machining facilities and Group ChiefOperating Officer, respectively. Also in December we were delighted to welcome Jerry Anthony and his team fromCoast Composites and Glad Baldwin and his team from Lamsco to the Hampson Group.Both Jerry and Glad are seasoned aerospace executives and have alreadycontributed substantially with their teams in the short period they have beenwith us. As well as building a new management and operational team to run our recentlycommissioned Eclipse facilities, we have also established a new team, underGeneral Manager, Harish Pant, to manage and operate our new green-field facilityin India. Group resources have also been strengthened with the appointment of a dedicatedCompany Secretary and Business Development Director to oversee the continuedstrategic development of the Group and ensure our growth momentum is maintained. As with any Group, we are only as good as the dedication, enthusiasm andprofessionalism of our employees. The achievements we have accomplished in 2005/06 are a testament to the endeavours and commitment of all of our people and inthis regard my thanks are placed on record for their contribution. In themeantime, the calibre of our expanded team provides me with the confidence thatwe will continue to achieve our strategic objectives for the year ahead andbeyond. Development and Investment 2005/06 was a record year of capital investment for Hampson. In addition to ouracquisition investment, the Group incurred £8m on capital expenditure and afurther £5m on the cost of development projects. Our investment in new equipment is substantially all growth related. During theyear we acquired seven high speed CNC machine tools that provide us with acompetitive advantage in aluminium machining. In our Automotive Division, weincurred capital expenditure of £2.9m to improve capacity and enable us tomanufacture small components in medium to high volume at significantly improvedtolerances. Development continues in the electron beam welding and balancing ofshaft and wheel assemblies for a number of customers, and advanced newmanufacturing processes and systems have been developed for our new facility inIndia in conjunction with the Kaizen Institute. At Texstars, our technology inthe development of advanced transparencies for military aircraft canopies hasbeen successfully developed into transparent armour panels for ground basedvehicles with anti-ballistic properties. Coating technology has also continuedto be developed to improve the service life and technological performance ofaircraft canopies on targeted new programmes. Our principal focus of investment has, of course, been directed at the Eclipseprogramme where we commissioned dedicated new facilities in Wigan, UK and Texas,USA, together with some of the most advanced equipment presently used inairframe component manufacture. Customers Diversification of the Group's revenue base has been further enhanced in 2005/06with the acquisitions of Coast Composites and Lamsco. Five years ago, the Grouphad a high dependency on a single customer, accounting for circa 35% of theGroup's total revenue. Today, the Group's largest single customer does notaccount for more than 10% of the Group's sales and within that account, there isdiversification across product types, programmes and facilities. Where possible, we continue to seek to enhance relationships with our keycustomers through long term agreements which provide certainty and commitmentfor mutual benefit to both parties,. Where long term agreements cannot beobtained, we seek to earn a fair return for work we carry out commensurate withthe degree of complexity, level of investment and risks required to deliver therequirements of that customer. Social and Environmental Four years ago we embarked on a project targeted at the introduction ofISO14001. Since the start of that project, new practices and procedures havebeen progressively implemented to enhance accreditations of our existing sitesto at least ISO14001 - 2004 standard and to achieve ISO approval at newlyacquired businesses as soon as is reasonably practical. These initiatives havecontinued in 2005/06. We are aware of our corporate social responsibilities andseek to discharge these in the most effective manner possible taking intoaccount our obligations to our stakeholders. Outlook With three acquisitions successfully completed within the last eighteen monthsand all of our core markets in strength, the Group is now very well positionedwith our annualised order book standing at record levels. This comprises anencouraging blend of continuing growth on existing programmes, new programmescoming into production phase, and in particular, the anticipated move into fullproduction phase of the Eclipse 500 VLJ. The core market for turbo charger components and assemblies served by theGroup's Automotive Division continues to signal overall growth. Whilst WesternEuropean markets are now showing signs of maturity, significant further growthis projected by our major customers in North American and Asian markets whereour sales teams have been strengthened. In the Specialist Engineering markets, there are now signs of recovery of demandfollowing a period of weakness over the previous three years and whilst this isexpected to be modest, a gradual reduction in reliance on glass containermanufacturing markets is being made possible through new work we have secured inagritechnical and practice ordnance applications. Both Coast Composites and Lamsco are expected to continue to contribute stronglyto the Group's results in 2006/07 as demand for their products remains at highlevels. The civil and general aviation markets overall continue to strengthen andcustomer delivery requirements in 2006/07 imply a further increase in demand forthe products we manufacture. We also expect 2006/07 to generate improved marginsin our UK Aerospace businesses as development projects come to an end and thebenefits of improved operating efficiencies and other management actions startto contribute. With the full year impact of the 2005/06 acquisitions and the expected increasein volumes from our existing aerospace customers, the Group is not dependent onthe Eclipse programme alone to maintain its growth momentum. This importantprogramme, will, however, have a direct bearing on the rate of our sales growthin the current financial year and our ability to achieve our challenginginternal growth targets will depend on our customer's ability to manage its ownrate of production increase. 2006/07 will also see the commissioning and commencement of production of ournew facility in Bangalore. We estimate this site will take around twelve monthsto achieve break-even and we look forward to a growing positive contribution toour results thereafter. In conclusion, 2005/06 was a year of significant and exciting achievement forthe Hampson Group and one which sets the foundation for further strong growth in2006/07. We are confident we are pursuing the right strategy and have the rightteams in place to achieve our objective of building sustainable, attractivereturns for our shareholders. Kim Ward6 June 2006 Financial Review Sales Group sales rose by 34% to £104.5m, including a combined three monthcontribution from Coast Composites and Lamsco of £8.9m. With the exception of a broadly flat outturn from the Specialist Engineeringbusinesses, each reporting segment generated improved revenues. WithinAutomotive, sales yet again increased, albeit at the more measured rate of 10%as a result of slightly lower demand towards the end of the third and into thefinal quarter of 2005/06. Orders are now showing signs of recovery in the newfinancial year. The Aerospace Components and Structures businesses generated a £5.2m (11.4%)increase in sales to £50.9m. This included a £2.0m contribution from Lamsco overthe three month period since its acquisition. The Composites and Transparencies segment generated the most significant growth,with sales improved £19.6m as a result of a full year's contribution fromTexstars and the inclusion of three months' trading from Coast Composites fromthe date of acquisition. Trading Profit* Group trading profit* improved by £5.1m over the year, despite a disappointing overall result by the Aerospace Components and Structures businesses. The weakertrading performance was at the Group's larger UK machining and fabrication facilities and was a result, primarily, of ongoing development costs associated with new programmes, higher energy and raw material costs and the continuing impact of legacy contracts yielding negative returns due to previous price reductions provided to customers. The development burden is now reducing and with revised pricing structures now in place, 2006/07 will see improved returns in these businesses. Composites and Transparencies generated very strong trading results reflectingprogressively increasing demand for these higher value added products. We expectthis trend to continue. Profits in the Automotive Division were held back in the previous year as aresult of production bottlenecks and process inefficiencies associated withactivity levels in the period. Restructuring towards the end of that year andinto the first half of the year ended 31 March 2006 has addressed these issues,resulting in a 38% increase in trading profit for the division in 2005/06, on sales 10% higher. The Specialist Engineering businesses continued to see a weak first half demandfor glass container manufacturing products leaving profits for the year as awhole slightly lower than in the previous period. Demand conditions in thissector are now showing some signs of recovery and improved margins are thereforeexpected in 2006/07. \* Trading Profit is defined as Operating Profit before restructuring andrationalisation charges, impairment charges and amortisation of intangibleassets on acquisition. The Board considers that this additional measure ofprofit provides the best view of the underlying trading performance of the Groupand that it is therefore helpful to highlight it accordingly. Restructuring and Rationalisation Charges The Group incurred restructuring and rationalisation charges of almost £0.9m.These costs were incurred as a result of management action to improveprofitability at the Group's largest Aerospace facilities in the UK (£0.4m), tocomplete the 2004/05 restructuring programme at the Automotive division (£0.1m)and to reduce the cost base of the Specialist Engineering businesses, in linewith lower demand levels (£0.2m). Also included was a charge of £0.1m relating to refinancing fees. We are confident that these actions will contribute to improved trading results in each of the divisions concerned in 2006/07. Impairment Charges The Board maintains a policy of continued review of its accounting policies andprocesses to ensure these remain most appropriate and relevant. More stringentcriteria have been applied to the determination for accounting purposes of thecarrying value of certain assets and as a result, non-cash impairment charges of£1.9m have been taken to reduce the value of inventories, £0.2m to reduce thecarrying value of certain fixed assets, and £0.1m in respect of a tradereceivable balance due to a counterparty credit default. Amortisation of Intangible Assets on Acquisition IFRS requires the identification and valuation of intangible assets arising onacquisition where these are deemed either to be "separable" or to arise fromcontractual or other legal rights. This represents a significant change fromprevious generally accepted accounting principles whereby such items were deemedto form part of goodwill. In accordance with requirement of InternationalAccounting Standard 38 and International Financial Reporting Standard 3, theGroup has identified intangible assets amounting to £2.7m on the acquisition ofTexstars in the year ended 31 March 2005 and a further £7.4m on the acquisitionsof Coast Composites and Lamsco in the year ended 31 March 2006. Amortisation ofthese assets of £1.5m has been charged in the year ended 31 March 2006 (2005:£0.4m). Had the Group been reporting under the previous framework of generallyaccepted accounting principles, no such charge would have arisen. Operating Profit Operating profit amounted to £3.7m (2004/05: £2.2m) reflecting the movementsdiscussed above. Financing Costs The Group incurred net financing costs of £2.9m, compared with £1.5m in theprior year. The increase is due to the higher level of net borrowings arising asa result of the acquisitions of Coast Composites and Lamsco in 2005/06. Netfinancing costs were covered 2.9 times by Trading Profit (2004/05: 2.2 times). Profit Before Tax Total profit before tax excluding restructuring and rationalisation charges,impairment charges and amortisation of intangible assets on acquisition, was£3.6m higher than the prior year, at £5.4m. After including all of the aboveitems, the result before taxation was a profit for the year of £0.8m, in linewith the prior year. Taxation The tax charge for the year was £0.4m (2004/05: £0.5m). The relatively higheffective rate of taxation on profits for the year reflects in part the factthat a greater proportion of the Group's profits have been earned in the US,where the effective rate of tax is on average some ten percentage points higherthan in the UK. Earnings Per Share Earnings per share before exceptional items and amortisation of intangibleassets on acquisition improved by 138% to 5.38p (2004/05: 2.26p). Basic earningsper share, calculated after deducting restructuring and rationalisation charges,impairment charges and amortisation of intangible assets on acquisition, were0.59p (2004/05: 0.76p). Cash Flow The year has seen further considerable investments in key aerospace programmes,as well as the acquisition of Coast Composites Inc. and Lamsco West Inc. Cashgenerated from operations was £1.3m higher at £4.5m, with an overall increase incash of £3.5m over the year. Acquisitions Net expenditure on acquisitions in the year was £44m. £28m was spent on theacquisition of Coast Composites and a further £15m was spent on the acquisitionof Lamsco. A further £0.7m in total was spent on additional costs in relation tothe prior year acquisition of Texstars Inc and subscription for additionalshares in Hampson Maini Engineering Private Limited. Net Borrowings At the end of the year the Group had net debt of £61.7m, an increase of £31.9mcompared to the previous year. Shareholders' Equity At the end of the year, Shareholders' equity stood at £72.4m, an increase of£36.2m, compared with the previous year. With authority from shareholdersobtained at an Extraordinary General Meeting on 15 December 2005, the Groupraised approximately £32.3m net of expenses by way of a placing of 161,904,760new Ordinary shares at 21p per share. All of the company's existing and unissuedshares were then consolidated in the ratio of 1 Ordinary share of 25p for every5 Ordinary shares of 5p. International Financial Reporting Standards Extracted information from the full year Financial Statements included hereinhas been drawn up and reported on for the first time under IFRS as endorsed bythe European Union. Comparative figures for 2004/05 have been restatedaccordingly, but have not been audited. Cautionary Statement The Chairman's Statement, Chief Executive's Statement and Financial Reviewpresented herewith contain forward looking statements that are subject to riskfactors associated with, amongst other things, the economic and businesscircumstances occurring from time to time in the countries and sectors in whichthe Group operates. It is believed that the expectations reflected in thesestatements are reasonable but they may be affected by a wide range of variableswhich could cause actual results to differ materially from those currentlyanticipated. Howard Kimberley6 June 2006 At a Board Meeting of Hampson Industries PLC it was recommended that no finaldividend be paid on the Company's Ordinary share capital, making a totaldividend of nil for the year (2005: nil). The results for the year are asfollows: Consolidated Income StatementFor the year ended 31 March 2006 ------------------------ Before Exceptional Total exceptional items and items and amortisation of amortisation of intangibles* intangibles* £'000 £'000 £'000--------------------- ---------- ---------- -------- Continuing operations--------------------- ---------- ---------- --------Revenue 104,456 - 104,456--------------------- ---------- ---------- -------- Operating profit 8,326 (4,629) 3,697--------------------- ---------- ---------- --------Analysed as:Trading profit 8,326 - 8,326Restructuring and rationalisation charges - (879) (879)Impairment charges - (2,222) (2,222)Amortisation of intangibleassets on acquisition - (1,528) (1,528)--------------------- ---------- ---------- -------- Interest payable (3,305) - (3,305)Interest receivable 492 - 492Other net financing charges (101) - (101)--------------------- ---------- ---------- --------Profit before taxation 5,412 (4,629) 783Taxation (404)--------------------- ---------- ---------- --------Profit after taxation 379--------------------- ---------- ---------- --------Discontinued operationsPost tax results from discontinuedoperations (28)--------------------- ---------- ---------- --------Profit for the financial year 351Profit attributable to minority interests ---------------------- ---------- ---------- --------Profit attributable to equity shareholders 351--------------------- ---------- ---------- -------- Earnings per 25p ordinary share--------------------- ---------- ---------- --------Earnings per share before exceptionalitems and amortisation of intangibles* 5.38pBasic 0.59pDiluted 0.58p--------------------- ---------- ---------- -------- * Amortisation of intangibles attributable to amortisation of intangible assets on acquisition. Consolidated Income StatementFor the year ended 31 March 2005 ------------------------ Before Exceptional Total exceptional items and items and amortisation of amortisation of intangibles* intangibles* £'000 £'000 £'000--------------------- ---------- ---------- --------Continuing Operations--------------------- ---------- ---------- --------Revenue 77,762 - 77,762--------------------- ---------- ---------- -------- Operating profit 3,266 (1,018) 2,248--------------------- ---------- ---------- --------Analysed as:Trading profit 3,266 - 3,266Restructuring and rationalisation charges - (572) (572)Impairment charges - - -Amortisation of intangibleassets on acquisition - (446) (446)--------------------- ---------- ---------- -------- Interest payable (1,351) - (1,351)Interest receivable 43 - 43Other net financing charges (150) - (150)--------------------- ---------- ---------- --------Profit before taxation 1,808 (1,018) 790Taxation (514)--------------------- ---------- ---------- --------Profit after taxation 276--------------------- ---------- ---------- --------Discontinued operationsPost tax results fromdiscontinued operations (129)--------------------- ---------- ---------- --------Profit for the financial year 147Loss attributable to minority interests 59--------------------- ---------- ---------- --------Profit attributable to equityshareholders 206--------------------- ---------- ---------- -------- Earnings per 25p ordinary share--------------------- ---------- ---------- --------Earnings per share before exceptional items and amortisation of intangibles 2.26pBasic 0.76pDiluted 0.75p--------------------- ---------- ---------- -------- * Amortisation of intangibles attributable to amortisation of intangible assetson acquisition. Consolidated Balance SheetAs at 31 March 2006 2005 £'000 £'000------------------------------- ------- -------AssetsNon-current assetsGoodwill 57,824 18,876Intangible assets 15,723 4,489Property, plant and equipment 39,409 29,026Deferred tax asset 284 1,030------------------------------- ------- ------- 113,240 53,421------------------------------- ------- -------Current assetsInventories 24,393 18,483Trade and other receivables 31,227 19,191Financial assets - derivatives 802 -Cash and cash equivalents 6,776 3,227------------------------------- ------- ------- 63,198 40,901------------------------------- ------- -------Total assets 176,438 94,322------------------------------- ------- -------LiabilitiesCurrent liabilitiesTrade and other payables (29,875) (21,916)Current tax liabilities (35) (169)Provisions (2,197) (673)------------------------------- ------- ------- (32,107) (22,758)------------------------------- ------- -------Non-current liabilitiesFinancial liabilities- Borrowings (66,890) (31,491)Deferred tax liability (3,569) (74)Provisions - (135)Retirement benefit liabilities (1,391) (3,543)------------------------------- ------- ------- (71,850) (35,243)------------------------------- ------- -------Total liabilities (103,957) (58,001)------------------------------- ------- -------Net assets 72,481 36,321------------------------------- ------- ------- Shareholders' equityCalled up share capital 21,870 13,775Reserves 50,571 22,605------------------------------- ------- -------Shareholders' equity 72,441 36,380------------------------------- ------- ------- Total shareholders' equity 72,441 36,380Minority interest in equity 40 (59)------------------------------- ------- -------Total equity 72,481 36,321------------------------------- ------- ------- The financial statements were approved by the Board of Directors on 6 June 2006and were signed on its behalf by: J A GilroyChairman H F KimberleyFinance Director Consolidated Cash Flow StatementAs at 31 March 2006 2005 £'000 £'000-------------------------- ------ ------Cash flows from operating activitiesCash generated from operations 4,516 3,280Interest received 265 48Interest paid (2,867) (1,072)Finance lease interest payments (256) (190)Tax paid (708) (61)------------------------- ------ ------Net cash from operating activities 950 2,005------------------------- ------ ------Cash flows from investing activitiesAcquisitions (44,170) (24,218)Disposals - 100Dividends received - -Purchase of property, plant and equipment (8,521) (3,293)Proceeds on sale of property, plant and equipment 44 -Development costs (4,831) (1,893)------------------------- ------- -------Net cash used in investing activities (57,478) (29,304)------------------------- ------- -------Cash flows from financing activitiesNet proceeds from issue of ordinary share capital 32,331 24,832New borrowings 64,839 4,000Finance lease principal payments (1,934) (1,671)Repayments of loans (29,000) (11)Loan repaid as part of acquisition (6,304) -------------------------- ------- -------Net cash flow used in financing activities 59,932 27,150------------------------- ------- -------Currency variations on cash and cash equivalents 145 (28)------------------------- ------- -------Increase/(decrease) in cash and cash equivalents 3,549 (177)------------------------- ------- -------Cash and cash equivalents at the beginning of the period 3,227 3,404------------------------- ------- -------Cash and cash equivalents at the end of the period 6,776 3,227------------------------- ------- ------- Statement of Recognised Income and Expense 2006 2005 £'000 £'000---------------------------- ------ ------Currency variations 2,750 6Actuarial gains on retirement benefit scheme - gross 827 116Deferred taxation related thereto (275) (35)---------------------------- ------ ------Net gains not recognised in income statement 3,302 87Profit for the financial period 351 206---------------------------- ------ ------Total recognised income for the year 3,653 293---------------------------- ------ ------ Attributable to:- Equity shareholders 3,653 352- Minority interests - (59)---------------------------- ------ ------ 3,653 293---------------------------- ------ ------ NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The figures and financial information for the year ended 31 March, 2006 do notconstitute the full statutory financial statements for the year. The statutoryfinancial statements for the year ended 31 March, 2005 have been filed with theRegistrar of Companies. 2. Segmental analysis Aerospace Composites components and Specialist CorporateFor the year and trans- enginee- and ended structures parencies Automotive ring unallocated Total31 March 2006 £'000 £'000 £'000 £'000 £'000 £'000------------- --------- --------- -------- --------- --------- ------Continuing operations:Segment revenue 50,863 24,409 20,812 8,372 - 104,456------------- --------- --------- -------- --------- --------- ------Segment tradingprofit/(loss) 259 5,037 3,297 353 (620) 8,326------------- --------- --------- -------- --------- --------- ------Restructuring andrationalisationcharges (401) - (104) (183) (191) (879) Impairmentcharges (2,119) - (102) - (1) (2,222) Amortisation ofintangible assets on acquisition (266) (1,262) - - - (1,528)------------- --------- --------- -------- --------- --------- ------Segment operatingprofit/(loss) (2,527) 3,775 3,091 170 (812) 3,697 Net interestand finance costs - - - - (2,914) (2,914)------------- --------- --------- -------- --------- --------- ------Profit/(loss)before taxation (2,527) 3,775 3,091 170 (3,726) 783 Taxation - - - - (404) (404)------------- --------- --------- -------- --------- --------- ------Profit/(loss)for the year (2,527) 3,775 3,091 170 (4,130) 379------------- --------- --------- -------- --------- --------- ------Discontinuedoperations: ------------- --------- --------- -------- --------- --------- ------Post tax results from discontinuedoperations - - - - (28) (28)------------- --------- --------- -------- --------- --------- ------Profit attributable to minorityinterests - - - - - -------------- --------- --------- -------- --------- --------- ------Net profit/(loss)attributableto equityshareholders (2,527) 3,775 3,091 170 (4,158) 351------------- --------- --------- -------- --------- --------- ------ Aerospace Composites components and Specialist CorporateFor the year and trans- enginee- and ended structures parencies Automotive ring unallocated Total31 March 2005 £'000 £'000 £'000 £'000 £'000 £'000------------- --------- --------- -------- --------- --------- ------Continuing operations:Segment revenue 45,676 4,858 18,921 8,307 - 77,762------------- --------- --------- -------- --------- --------- ------Segment tradingprofit/(loss) 631 782 2,392 504 (1,043) 3,266------------- --------- --------- -------- --------- --------- ------Restructuring andrationalisationcharges - - (402) (170) - (572) Impairment charges - - - - - - Amortisation of intangible assets onacquisition - (446) - - - (446)------------- --------- --------- -------- --------- --------- ------Segment operatingprofit/(loss) 631 336 1,990 334 (1,043) 2,248 Net interest and finance costs - - - - (1,458) (1,458)------------- --------- --------- -------- --------- --------- ------Profit before taxation 631 336 1,990 334 (2,501) 790 Taxation - - - - (514) (514)------------- --------- --------- -------- --------- --------- ------Profit/(loss)for the year 631 336 1,990 334 (3,015) 276------------- --------- --------- -------- --------- --------- ------Discontinued operations: ------------- --------- --------- -------- --------- --------- ------Post tax results from discontinuedoperations - - - - (129) (129)------------- --------- --------- -------- --------- --------- ------Loss attributableto minority interests - - - - 59 59------------- --------- --------- -------- --------- --------- ------Net profit/(loss)attributable toequity shareholders 631 336 1,990 334 (3,085) 206------------- --------- --------- -------- --------- --------- ------ 3. Exceptional items and amortisation of intangibles on acquisition Restructuring and rationalisation charges These exceptional items relate to the Group restructuring and rationalisationcosts - £0.9m (2005: £0.4m) and project costs associated with the establishmentof a new operation in India - £nil (2005: £0.2m). Impairment charges During the year the Group undertook a review of the utilisation and carryingvalues of certain assets. As a result of this £2.2m (2005: £nil) of impairmentcharges were incurred. Of this amount, £1.9m related to inventories, £0.2m related to tangible fixed assets, and £0.1m related to receivables. Amortisation of intangible assets on acquisition As required under IFRS3 'Business Combinations' and IAS38 'Intangible assets'intangible assets identified on acquisition have been amortised during the year- £1.5m (2005: £0.4m). Non-operating exceptional items Post tax non-operating exceptional items of £28,000 (2005: £129,000) wereincurred in relation to the discharge during the year of liabilities associatedwith a previously discontinued operation. 4. Taxation 2006 2005Analysis of charge in period £'000 £'000------------------------------------- ------- -------Current tax- Current year 69 (87)- Adjustments in respect of prior years 142 76------------------------------------- ------- ------- 211 (11)Deferred tax- Current year 155 610- Adjustment in respect of prior years 38 (85)------------------------------------- ------- ------- 193 525------------------------------------- ------- -------Total tax charge 404 514------------------------------------- ------- ------- 5. Dividends 2006 2005 £'000 £'000--------------------------- ------- -------Dividends on equity shares - -Dividends on preference shares - ---------------------------- ------- ------- - ---------------------------- ------- ------- 6. Earnings per share Earnings per share based on continuing activities before exceptional items andamortisation of intangibles on acquisition, which the directors consider gives auseful additional indication of the underlying performance, is calculated on theearnings of the year adjusted as follows: Earnings Earnings Earnings per Earnings per 25 pence 25 pence share share 2006 2005 2006 2005 £'000 £'000 pence pence ------------------------- --------- ------- ---------- ---------Continuing operations: Profit attributableto ordinary shareholders 379 335 0.59 0.76 Exceptional items andamortisation of intangibleassets on acquisition 4,629 1,018 7.18 2.29 Taxation on exceptionalitems and amortisationof intangible assets onacquisition (1,541) (350) (2.39) (0.79)------------------------- --------- ------- ---------- --------- 3,467 1,003 5.38 2.26------------------------- --------- ------- ---------- --------- 7. Other information The Group's financial statements for the year ended 31 March, 2006 will be sentto shareholders during the week commencing 17 July 2006. The Annual General Meeting will be held on Tuesday, 29 August, 2006. Group Headquarters and Registrars & Transfer Office:Registered Office:7 Harbour Buildings, Waterfront West Neville Registrars Limited, Neville HouseDudley Road, Brierley Hill, 18 Laurel Lane, HalesowenWest Midlands, DY5 1LN West Midlands, B63 3DA Tel: +44 (0) 1384 485345 Fax:+44 (0) 1384 472962 Website: www.hampsongroup.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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