Half-year Report

TYMAN PLC

("Tyman" or the "Group" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016

Tyman plc, a leading international supplier of engineered components to the door and window industry, announces unaudited interim results for the six months ended 30 June 2016.

Financial highlights

(1) CC LFL = Constant Currency Like for Like (see definition on page 18)

Statutory financial highlights

Business highlights

· Strong Revenue and Operating Profit growth in the period

· Good first half cash generation with tight control over working capital

· Continued improvement in margins and returns on capital employed

· Acquisitions of Giesse and Response Electronics completed; Bilco completed post period end

· US markets continuing to grow and AmesburyTruth well positioned for second half

· Schlegel International performance significantly improved, reflecting strong initial contribution from Giesse

· ERA first half trading in line with expectations despite market uncertainties

Louis Eperjesi, Chief Executive, commented:

"The first half of 2016 has seen further progress made by Tyman, together with the achievement of two key strategic goals - the acquisition of a high quality hardware brand in Europe and an increase in our future exposure to the North American commercial market.

"The Group delivered a strong trading performance in the first half with encouraging growth in North America, continued improvement in Europe and the Middle East - assisted by the initial contribution from Giesse - and a solid performance in the UK.

"We are pleased with the progress made to date with the integrations of Giesse, Response and Bilco into the Group and the positive responses to their respective changes of ownership.

"We remain optimistic about the prospects for growth in the United States in both Residential and Commercial markets for the second half of the year. Following the EU Referendum the outlook for UK and European markets in the near term is less certain; however Tyman remains well positioned to make progress, even in uncertain markets, and we will continue to deploy our self help strategy and look to exploit opportunities as they arise."

Tyman will host an analyst and investor presentation at 09.30 a.m. today, Tuesday 26 July 2016, at the offices of MHP Communications, 6 Agar Street, London, WC2N 4HN.

The presentation will be webcast at the Group's website, www.tymanplc.com, and the audio conference call details are set out below. Presentation slides will be made available at the Group's website shortly before the start of the presentation.

Conference Call Dial In Details

Forthcoming dates

Notes to editors

Tyman plc is a leading international supplier of engineered components to the door and window industry. The Group's three Divisions - AmesburyTruth, ERA and Schlegel International - are market leaders in their respective geographies.

Following the acquisitions of Bilco, Giesse and Response the Group employs over 3,500 people and operates facilities in 19 countries worldwide. Tyman is listed on the London Stock Exchange under the ticker TYMN.

Further information on the Group and the Group's products is available at www.tymanplc.com.

results overview

In the first half of 2016 Tyman delivered a strong trading performance against a backdrop of variable market conditions. In North America, US markets performed well however conditions in Canada remained challenging. Schlegel International continued to see consistent improvement in its EMEAI markets with Latin American and Asia Pacific markets more variable. In the UK, as expected, the overall market was broadly flat in the first half.

Revenue in the period was £201.0 million (H1 2015: £175.4 million) an increase of 14.6 per cent. on a reported basis and 3.8 per cent on a constant currency, like for like basis.

Underlying Operating Profit increased to £27.2 million (H1 2015: £22.2 million), an increase of 22.3 per cent. on a reported basis and 8.7 per cent. on a constant currency, like for like basis. The Group's Underlying Operating Margin increased by 85 bps to 13.5 per cent. (H1 2015: 12.7 per cent.) with each of the Divisions improving their ongoing Underlying Operating Margin period on period.

Underlying Earnings Per Share increased by 29.0 per cent. to 10.01 pence (H1 2015: 7.76 pence) reflecting contributions from acquisitions and improved profitability, partially offset by the increase in the Group's forecast Underlying effective tax rate for the full year to 31.0 per cent..

During the period the Group completed two acquisitions, Response Electronics in ERA and Giesse in Schlegel International, and announced the acquisition of Bilco in AmesburyTruth which completed on 1 July 2016.

Leverage at the period end of 1.81x was in line with twelve months ago; although the period end calculation was performed prior to completion of the acquisition of Bilco. Underlying net indebtedness of £144.9 million at 30 June 2016 included £18.6 million of net cash receipts from the placing of ordinary shares in Tyman announced on 15 June 2016. Pro forma Leverage on 1 July 2016, following the acquisition of Bilco, was 2.35x and Leverage is projected to reduce over the second half of the year towards the Group's year end target range of 1.5x to 2.0x.

Operating Cash Conversion in the twelve months to 30 June 2016 was strong at 96.9 per cent. (LTM to H1 2015: 87.4 per cent.) despite the significant levels of capital investment made by the Group over the past year.

An interim dividend for the 2016 year of 3.00 pence per share (H1 2015: 2.66 pence per share) will be paid on 1 September 2016 to shareholders on the register at close of business on 5 August 2016.

EU Referendum impact

The full impact of the EU Referendum on consumer confidence and end market demand in 2016 remains unclear; however Tyman's preliminary view of the potential impact on the Group is set out below.

In aggregate, cross border trading between the Group's businesses located in the UK and those located in the rest of the EU amounts to approximately £12.0 million.

The significant majority of the Group's earnings are generated outside of the EU. The revenues and costs attributable to these earnings are principally derived in US dollars or currencies closely linked to the US dollar and so broadly benefit from a natural hedge.

If the recent weakening of sterling is sustained the Group's US and European businesses, which have been enlarged in 2016 through acquisition, would benefit the Group in terms of translated Underlying Operating Profit. This would be offset in part by the unhedged transactional impact of weaker sterling on the ERA Division earnings and increases to interest charges on borrowings made in currencies other than sterling.

If current sterling exchange rates were broadly to prevail for the remainder of the year, assuming no material deterioration in end markets, a 1c movement on the US Dollar would impact the Group's 2016 Underlying profit before taxation by approximately £0.14 million and a 1c movement on the Euro by approximately £0.03 million.

Outlook

In US residential, year on year growth in new build permits and starts for single family homes means that AmesburyTruth expects continued growth from the new build market in the second half of the year, underpinned by further growth in repair and remodelling. Canadian residential markets are likely to remain challenging for AmesburyTruth over the balance of the year.

AmesburyTruth's offering into the commercial market in the second half will be bolstered by an initial six month contribution from Bilco. Bilco has traded ahead of 2015 in the year to date and has a promising order pipeline.

Following the EU Referendum there is some uncertainty surrounding prospects for the UK market in the near term. The Division expects to see a further slowdown in UK construction markets in the second half and ERA's core expectation for 2017 is that markets will be flat to down with the likelihood of further cost inflation coming through if sterling remains weak.

ERA will continue to deploy its self help strategy in the UK and remains committed to its new product development pipeline as well as to profitable improvements in UK market share with particular focus on distribution. Where necessary ERA will seek to offset the impact of input cost inflation through a combination of price increases and cost reductions.

Provided that European markets continue their gradual recovery, Schlegel International would expect to see further growth in the second half with Giesse continuing to make a healthy contribution to the Division. In any event, growth for Schlegel International over the rest of the year is expected to be at a slightly moderated pace than was seen in H1 2016 due to certain commercial projects not repeating and distributors now having largely restocked.

Integration initiatives continue and Schlegel International remains confident that the synergy target of at least €4.0 million relating to the Giesse acquisition will be delivered from 2018.

Overall the Group remains optimistic about the prospects for growth in the United States in both Residential and Commercial markets for the second half of the year. Following the EU Referendum the outlook for UK and European markets in the near term is less certain; however Tyman remains well positioned to make progress, even in uncertain markets, and the Group will continue to deploy its self help strategy and look to exploit opportunities as they arise.

OPERATIONAL REVIEW

AMESBURYTRUTH

(1) H1 2015 comparatives for Underlying Operating Profit have been restated per the RNS announcement dated 9 February 2016. A reconciliation of historic operating segment data may be found at the Group website

Markets

In the US residential market, seasonally adjusted permits, starts and completions for single family homes were higher at the period end when compared with June 2015; with double digit percentage increases in single family starts and completions. Since the start of the year, single family starts and completions have increased modestly. Multifamily, in which the Division has proportionally lower exposure, has seen significant declines in H1 2016 compared with H1 2015 in each of permits, starts and completions and a continued decline in permitting in 2016 to date. Overall this market mix shift is beneficial to AmesburyTruth.

The JCHS estimate that overall homeowner improvements and repairs increased in the first half by around 4.1 per cent. and the LIRA trend remains positive for the balance of the year.

The commercial sector of the US construction market has been softer in 2016 to date compared with H1 2015, principally due to a number of large commercial projects not repeating year on year; however momentum in non-residential building picked up towards the end of the first half.

Excluding major projects, the value of total construction starts put in place in the US in H1 2016 was broadly flat with H1 2015.

The Canadian market has seen increasing levels of new build starts in 2016 with continued emphasis on multifamily; however starts remain significantly below the levels they were twelve months ago.

Performance and Business developments

AmesburyTruth's Revenue increased by 4.9 per cent. in dollar terms to US$181.7 million (H1 2015: US$173.3 million). Reported Revenue translated into Sterling increased by 11.5 per cent. to £126.8 million (H1 2015: £113.7 million) benefiting from the strengthening of the US Dollar in the period and the consolidation of Giesse North America for four months.

Underlying Operating Profit increased by 9.2 per cent. to US$31.2 million (H1 2015 Restated: US$28.6 million) and Underlying Operating Margin improved from 16.5 per cent. to 17.2 per cent.. Reported Operating Profit translated into sterling increased by 16.0 per cent. to £21.8 million (H1 2015: £18.8 million). Results continue to benefit from progress made over the last 18 months with pricing initiatives in the Division. Order books at the half year were approximately 2.5 per cent. ahead of order books at H1 2015.

Revenue generated in the US in the period was approximately 6.2 per cent. ahead of the same period last year and sales into Canada, which comprised just over 10 per cent. of AmesburyTruth's first half revenue, declined by around 4.7 percent. reflecting the general market backdrop and relative strength of the US Dollar. There was continued strong growth, from a low base, of export sales of AmesburyTruth product beyond North America.

Sales into the residential sector in the period increased by 5.2 per cent compared with the same period last year and commercial sales (which benefitted from the addition of Giesse to the range) increased by 24.3 per cent.. Door hardware sales increased by 6.4 per cent. compared with the same period last year.

The Division has continued to make progress with the North American footprint project and during the first half construction commenced on the new AmesburyTruth facility in Sioux Falls, South Dakota which will be one of the four centres of excellence. The extension to the Juarez facility in Mexico is now complete and equipment has started to be transferred to Mexico from a number of US sites with output levels gradually increasing over the period.

Acquisition of Bilco

During the period, AmesburyTruth announced the US$71.0 million acquisition of Bilco, a North American manufacturer of engineered access and egress products for the commercial and residential markets. Bilco will form the core of AmesburyTruth's new commercial division which will be responsible for AmesburyTruth's commercial sector activities in North America. In 2015 Bilco recorded sales of US$54.3 million. The acquisition completed on 1 July 2016.

The acquisition of Bilco is in line with the Group's strategy to develop and extend AmesburyTruth's product portfolio into the commercial sector through a combination of new product development and targeted acquisitions.

North American outlook

In US residential, year on year growth in new build permits and starts for single family homes means that AmesburyTruth expects continued growth from the new build market in the second half of the year, underpinned by further growth in repair and remodelling. Canadian residential markets are likely to remain challenging for AmesburyTruth over the balance of the year.

AmesburyTruth's offering into the commercial market in the second half will be bolstered by an initial six month contribution from Bilco. Bilco has traded ahead of 2015 in the year to date and has a promising order pipeline.

The Group remains optimistic about the prospects for growth in the US in both Residential and Commercial markets for the second half of the year.

ERA

(1) Ongoing restated H1 2015 comparatives after excluding EWS H1 2015 Revenue (£8.2 million) and Underlying Operating Profit (£0.9 million). Statutory H1 2015 comparatives, which include EWS, are Revenue £42.0 million and Underlying Operating Profit £6.1 million.

H1 2015 comparatives for Revenue and Underlying Operating Profit have been restated per the RNS announcement dated 9 February 2016. A reconciliation of historic operating segment data may be found at the Group website

Market

As expected the UK market remained relatively subdued in the first half with limited growth in new build and flat to down RMI. Overall, the Division believes the market was broadly flat in the period.

Performance and business developments

ERA's like for like Revenue increased marginally to £35.4 million (H1 2015 ongoing restated: £33.8 million) and like for like Underlying Operating Profit increased by 10.9 per cent. to £5.8 million (H1 2015 ongoing restated: £5.2 million).

ERA saw improved trading into the distribution sector in the UK in the first six months with new listings won with a number of customers. Performance into OEM was broadly flat, reflecting strong comparatives in the first half of 2015 following the successful launch of the bi-fold hardware range. The Division continues to make encouraging progress in both sectors with the products launched in 2015 such as the Invincible cylinder lock. Unhedged landed costs of Far Eastern manufactured components increased significantly in the first quarter due to sterling weakness and a UK price increase was implemented in the period as a consequence. Since the period end unhedged landed costs have increased still further and July pricing is approximately 12.1 per cent. ahead of December 2015.

Ventrolla, the Division's sash window refurbishment business, continues to make progress with Revenue in the period increasing some 7.2 per cent. compared with H1 2015 and with a strong order book at the half year. In April the Staffordshire and Shropshire franchise was acquired and Ventrolla now holds nine of the 15 UK regions as direct operations.

Acquisition of Response

On 3 March 2016, ERA acquired Response Electronics. Response is a specialist sales, marketing and distribution business focussed on wireless alarms, electronic access and smart home products.

The integration of Response into ERA is proceeding according to plan with the Division's electromechanical offerings now consolidated under a common branding hierarchy and a new distribution agreement signed with Lightwave RF. Response was broadly break even in the period under ownership.

UK outlook

Following the EU Referendum there is some uncertainty surrounding prospects for the UK market in the near term. The Division expects to see a further slowdown in UK construction markets in the second half and ERA's core expectation for 2017 is that markets will be flat to down with the likelihood of further cost inflation coming through if sterling remains weak.

ERA remains well positioned to make progress even in uncertain markets. The Division will continue to deploy its self help strategy in the UK and remains committed to its new product development pipeline and to profitable improvements in UK market share with particular focus on distribution. Where necessary ERA will seek to offset the impact of input cost inflation through a combination of price increases and cost reductions.

SCHLEGEL INTERNATIONAL (INCORPORATING GIESSE)

(1) H1 2015 comparatives for Revenue and Underlying Operating Profit have been restated per the RNS announcement dated 9 February 2016. A reconciliation of historic operating segment data may be found at the Group website

Markets

During the period, EMEAI markets continued to improve with most Continental European markets showing period on period growth. Markets in the Gulf region remain firm despite the impact of lower oil prices on domestic economies.

South American markets were more variable. Following the relaxation of exchange controls at the end of 2015 the Argentine market saw strong growth in the first quarter along with significant price inflation; however growth rates moderated towards the end of the period. The Brazilian market has continued to contract in 2016.

In Asia Pacific, Chinese markets continue to grow, albeit at a slower pace than in recent years and Australian new build markets have trended marginally upwards in the first six months.

Performance and business development

Schlegel International's reported Revenue nearly doubled to £38.9 million (H1 2015: £19.7 million) reflecting the initial contribution and strong sales performance from Giesse in the first four months of ownership. On a constant currency like for like basis, Revenue in the period decreased by 4.2 per cent., principally due to the phased ramp up of activity following the consolidation of European pile weatherstrip manufacture at the Schlegel plant in Newton Aycliffe and weak market conditions in Brazil.

Underlying Operating Profit and Margin on both a reported and constant currency like for like basis were higher than in the comparative period, reflecting the structurally higher profitability of the Giesse products and somewhat improved performance of the seals business.

Order books for the enlarged Division on a like for like basis at the half year were slightly behind prior year due to order phasing.

The strong sales performance for the Division as a whole is attributable to a number of factors, including market recovery in parts of Europe and the Middle East and market share gains in a number of territories. The more project based nature of commercial markets means the Giesse business displays more variable demand patterns than the Schlegel business and a number of projects landed in the first half of the year which are not expected to repeat in the second half. In addition, the general market recovery in Europe has led to restocking by certain distribution clients which again is unlikely to repeat in the second half.

In aggregate*, by Region, EMEAI recorded Revenue growth in the period of approximately 8.2 per cent with the Middle East showing notable period on period growth and continued encouraging growth in Northern and Southern European end markets.

Latin America recorded high levels of local currency Revenue growth with performance in Argentina enhanced by significant local price inflation and distributor restocking, somewhat offset by continued declines in volumes in Brazil. The devaluation of the Argentine Peso and, to a lesser extent, the Brazilian Real meant that when translated into Sterling, Revenue in the LATAM region declined period on period.

Asia Pacific recorded a marginal Revenue decline period on period overall, principally due to a slow first quarter in China, although demand improved as the half went on.

* period on period growth for the combined Schlegel and Giesse businesses for H1 2016 compared withH1 2015.

Integration of Giesse into Schlegel International

The €78.9 million acquisition of Giesse, an Italian based manufacturer of hardware for aluminium windows and doors, by Schlegel International completed on 7 March 2016. 

The integration of Giesse into Schlegel International is proceeding according to plan with the Divisional headquarters now located in Bologna and good progress made in terms of branding, identity and reporting.

The Giesse North America facility in Blountville, Tennessee closed on 30 June 2016 with all Giesse product for the North American market now being distributed from the AmesburyTruth Sioux Falls facility. The closures of the Schlegel Italy facility in Milan and the Schlegel Spain warehouse in Barcelona have also been announced with the businesses being relocated by the year end to the Giesse facilities in Bologna and Barcelona.

The formal transfer of the Giesse Gulf Trade and assets to Schlegel International is on target to complete by 30 September 2016. As the economic risks and rewards of ownership were transferred to Schlegel International at completion of the acquisition, the results of the Giesse Gulf business have been consolidated in the Group's first half results.

Outlook

Provided that European markets continue their gradual recovery, Schlegel International would expect to see further growth in the second half with Giesse continuing to make a healthy contribution to the Division. In any event, growth for Schlegel International over the rest of the year is expected to be at a slightly moderated pace than was seen in H1 2016 due to certain commercial projects not repeating and distributors now having largely restocked.

Integration initiatives continue and the Division remains confident that the synergy target of at least €4.0 million relating to the Giesse acquisition will be delivered from 2018.

FINANCIAL REVIEW

Revenue and profit

Reported Group Revenue in the period increased by 14.6 per cent. to £201.0 million (H1 2015: £175.4 million). On a constant currency, like for like basis, Group Revenue increased by approximately 3.8 per cent. period on period.

Underlying Administrative Expenses increased to £44.9 million (H1 2015: £36.0 million), reflecting the enlarged size of the Group. Corporate costs in the period increased to £3.7 million (H1 2015: £3.4 million).

Underlying Operating Profit increased by 22.3 per cent. to £27.2 million (H1 2015: £22.2 million), and by 8.7 per cent. on a constant currency like for like basis. The Group's Underlying Operating Margin improved by 85 bps to 13.5 per cent. (H1 2015: 12.7 per cent.).

Underlying Profit before Taxation increased by 33.3 per cent. to £24.5 million (H1 2015: £18.4 million) and increased by 18.9 per cent. on a constant currency like for like basis, in part due to revaluation of fair value currency hedges at the period end. Reported Profit before Taxation increased by 1.5 per cent. to £7.8 million (H1 2015: £7.7 million).

Materials and input costs

H1 2016 saw the first signs of cost inflation returning to certain commodity markets although prices remain significantly below previous peaks. During the first half, LME aluminium pricing rose by 6.8 per cent. and European polypropylene has trended upwards. In North America, there was modest cost deflation overall for zinc and steel in the period.

UK Far East Components saw a significant increase in the unhedged landed cost of products in the first quarter which has been addressed through a price increase. Since the period end unhedged landed costs have increased still further and July pricing is approximately 12.1 per cent. ahead of December 2015. The current weakness of sterling, if sustained, is likely to lead to further cost increases in UK imports coming through over the balance of the year.

Exceptional items

As announced in March 2015 and reported in previous periods, footprint restructuring principally relates to costs incurred in the first half directly attributable to the ongoing North American footprint project. The Group expects the North American footprint project will conclude by 2020.

M&A and integration costs of £1.6 million relate to legal, financial, taxation and consultancy costs associated with the three acquisitions that were announced during the period together with certain costs incurred in connection with the integration of the acquired businesses.

The write off of Giesse inventory fair value adjustment of £4.1 million is a non-cash adjustment relating to the IFRS requirement that finished goods held in inventory must be revalued to their market value on acquisition. As the Group expects substantially all of the inventory acquired on acquisition will be sold in the current financial year, this uplift in the book value is considered to be of a one off nature and is of a magnitude that would distort the underlying trading result of Giesse in the period. This treatment of finished goods acquired on acquisition has been consistently applied to each of the Group's acquisitions in recent years.

Profit on disposal of business relates to the net deferred consideration for EWS received in the period.

Exceptional items comprise £2.4 million of costs cash settled in H1 2016 (H1 2015: £0.6 million), £4.2 million of non cash costs (H1 2015: £Nil) and cash receipts of £0.25 million (H1 2015: £Nil).

These items are regarded by the Group as exceptional as they are significant and non-recurring in nature.

Finance costs

Interest payable on bank loans, private placement senior notes and overdrafts increased to £3.4 million (H1 2015: £3.1 million) and interest income from short term bank deposits increased marginally.

Non cash movements charged to the finance costs line in the period include amortisation of capitalised borrowing costs of £0.2 million (H1 2015: £0.2 million) and revaluation of fair value currency hedges at the period end which moved from a £0.7 million debit at H1 2015 to a £0.7 million credit at H1 2016.

Taxation

The Group reported an income tax charge on profit before taxation of £2.5 million (H1 2015: £2.6 million) of which the Underlying tax charge was £7.6 million (H1 2015: £5.3 million). This represents an effective Underlying tax rate of 31.0 per cent. which is the Group's current best estimate of the Underlying tax rate for the full year (H1 2015: 29.0 per cent.). During the period the Group paid £4.4 million (H1 2015: £2.2 million) of corporate taxes with the increase principally attributable to the timing of US taxation payments on account.

Earnings per share

Basic Earnings Per Share increased by 3.0 per cent. to 3.13 pence (H1 2015: 3.04 pence) and Underlying Earnings Per Share increased by 29.0 per cent. to 10.01 pence (H1 2015: 7.76 pence). There is no material difference between these calculations and the fully diluted Earnings Per Share calculations.

Shares in issue

On 21 June 2016 the Group issued 8,478,128 shares by way of a placing with institutional investors. The total number of shares in issue at 30 June was accordingly 178.6 million (H1 2015: 170.1 million). The basic weighted average number of shares in issue for the half year used in EPS calculations was 168.9 million (H1 2015: 168.2 million) and the fully diluted weighted average number of shares was 169.3 million (H1 2015: 169.5 million).

EB Trust Purchases

On 9 March 2016, the EB Trust purchased 658,976 shares in Tyman plc at a total cost of £1.9 million in order to satisfy certain share awards that vested in March of this year and share awards expected to vest in future periods. As at 30 June 2016 the EB Trust held 989,780 shares in the Group.

Working capital

The trade working capital build to the half year at average exchange rates was £10.0 million (H1 2015 restated: £17.5 million), an improvement on the Group's target coming into the year. The period on period improvement is somewhat enhanced due to the timing of US payment runs at the half year. Substantially all of the trade working capital build is expected to unwind over the balance of the year. The inventory build to the half year at average exchange rates was £5.5 million (H1 2015 restated: £6.0 million).

Trade working capital, net of provisions, on the balance sheet at the half year was £94.2 million (H1 2015: £68.2 million). The fair value of trade working capital acquired on the acquisitions of Response and Giesse was £21.5 million.

Capital expenditure

Gross capital expenditure increased to £9.0 million in the period (H1 2015: £5.2 million) or 1.73x depreciation (H1 2015: 1.23x) as the Group continued the programme of targeted capital investment across each of the Divisions. Intangible capital expenditure in the period was £1.4 million (H1 2015: £1.2 million) principally as a result of the continuing investment in the AmesburyTruth ERP system.

Liquidity

At 30 June 2016 the Group had gross outstanding borrowings of £249.1 million (H1 2015: £136.1 million), cash balances of £105.6 million (H1 2015: £32.0 million) and committed but undrawn facilities of £14.5 million (H1 2015: £105.3 million) as well as potential access to the uncommitted £60.0 million accordion facility.

Underlying Net Debt at the period end was £144.9 million (H1 2015: £105.9 million) included £18.6 million of net cash receipts from the placing of ordinary shares in Tyman announced on 21 June 2016. Under IFRS, which reduces gross debt by the unamortised portion of finance arrangement fees, net debt at 30 June was £143.5 million (H1 2015: £104.1 million).

Cash balances at the half year were high due to the drawdown of facilities to acquire Bilco. On 1 July 2016 the Group completed the acquisition of Bilco for an Enterprise Value of US$71.0 million (approximately £53.0 million).

Cash and cash conversion

The Group generated Operational Cash Flow in the period of £15.5 million, an increase of 238.7 per cent., (H1 2015: £4.6 million) after adding back £4.3 million (H1 2015: £1.6 million) of exceptional costs cash settled in the period, £2.1 million of which were accrued in prior years.

Operating Cash Conversion in the twelve months to 30 June 2016 was strong at 96.9 per cent. (LTM to H1 2015: 87.4 per cent.) despite the significant levels of capital investment made in the business over the past year.

Covenant performance

Covenant performance calculated consistent with the Group's banking covenant tests

At the half year, the Group retained significant headroom on its banking covenants, however the Leverage test benefitted from the inclusion of £18.6 million of net cash receipts from the placing of ordinary shares in Tyman in cash balances. If these net cash receipts are added back, Leverage at the half year would have been 2.07x.

Pro forma Leverage on 1 July 2016, following the acquisition of Bilco, was 2.35x and Leverage is projected to reduce over the second half of the year towards the Group's year end target range of 1.5x to 2.0x.

Summary 2016 guidance

Summary guidance for the year remains unchanged from that given at the time of the 2015 full year results other than:

Bilco will contribute six months of trading to the Group in the second half of the year.

Interest payable on borrowings for the full year is now expected to be in the range £8.0 - £9.0 million.

Exceptional costs in aggregate are unchanged at between £9.0 and £11.0 million with the majority of these costs expected to be cash settled in 2016. In addition there will be a non-cash exceptional charge for inventory fair value adjustment in respect of the Giesse and Bilco acquisitions.

Total capital expenditure for the year for the Group, including footprint projects and Bilco, is now expected to be in the lower range of £17.0 - £20.0 million due to phasing of investment projects.

The weighted average number of share in issue for the full year is expected to be 173.0 million (basic) and 173.4 million (diluted). For the full year 2017 the weighted average number of shares in issue is expected to be 177.1 million (basic) and 177.4 million (diluted).

Principal Risks and Uncertainties

The Group's principal risks are identified in the Group's Report and Accounts for the year ended 31 December 2015 which is available at the Group's website. In the opinion of the Directors the principal risks and uncertainties remain as set out in the 2015 Report and Accounts, other than in the following categories.

Business Integration

Business Integration was not considered to be a principal risk for the Group at 31 December 2015 given that the Group had not made an acquisition since the January 2014 acquisition of Vedasil and by the 2015 year end had successfully completed the integrations of Truth and Vedasil. To date in 2016 the Group has acquired Giesse, Response and Bilco. Accordingly Business Integration is again considered by the Board to be a principal risk facing the Group.

Risk Description

Acquisitions are an important element of the Group's strategy and the Group expects that it will continue to make acquisitions in the future. Acquisitions will impact the future performance of the Group and may impact the risk profile of the Group. The subsequent integration of acquisitions involves further risks such as the diversion of management, disruption of operations and the retention of key personnel in the acquired business.

Mitigation

Acquisitions bring with them management challenges and elevated risk along with opportunities. The Group manages these challenges and risks through its clear acquisition criteria, its due diligence process and a commitment to the full integration of every business that is acquired over an appropriate period. Each acquisition is discussed and reviewed by the Board at regular intervals during the diligence process and following completion.

For significant acquisitions, the integration process is overseen by the Executive Directors and supported by dedicated project teams that include specialised management from the wider Group. The Group's internal audit programme and post-acquisition analysis of systems and controls in acquired businesses helps to establish best practice in governance and control procedures.

Impact of the EU Referendum Result on Principal Risk Factors

Market Conditions

Market conditions were considered by the Board to be a principal risk for the Group at 31 December 2015 however the trend attached to this risk at the time was considered by the Board to be neutral. Following the EU Referendum, the Board is now of the opinion that the risk trend for Market Conditions has increased due to the uncertainty that surrounds the direct and indirect impact of the EU Referendum results on UK and European markets.

Raw Material Costs and Supply Chain Failures

Raw Material Costs and Supply Chain Failures were considered by the Board to be a principal risk for the Group at 31 December 2015 however the trend attached to this risk at the time was considered by the Board to be neutral. Following the EU Referendum, and the resultant increased volatility seen in foreign exchange markets, the Board is now of the opinion that the risk trend for Raw Material Costs and Supply Chain Failures has increased because of the potential impact of exchange rate volatility on imported products.

Funding and Financial Risks

Funding and Financial Risks were considered by the Board to be a principal risk for the Group at 31 December 2015 however the trend attached to this risk at the time was considered by the Board to be neutral. Following the EU Referendum, and the resultant increased volatility seen in financing markets, the Board is now of the opinion that the risk trend for Funding and Financial Risks has increased because of the potential impact of exchange rate volatility on covenant measures and facility headroom and the potential impact of restricted access to financing markets.

The Group faces many other risks which, while important and subject to regular review by the executive directors and divisional management teams, have been assessed as less significant and are not listed here.

26 July 2016

Definitions

The following definitions apply throughout this document, unless the context otherwise requires.

Where appropriate "Underlying" is defined as the relevant metric before Amortisation of acquired intangible assets, deferred tax on Amortisation of acquired intangible assets, Impairment of acquired intangible assets, Impairment of goodwill, Exceptional items, Unwinding of discount on provisions, Amortisation of borrowing costs (including accelerated amortisation) and the associated tax effects.

Glossary of Terms

Exchange Rates

The following foreign exchange rates have been used in the financial information to translate amounts into Sterling:

Roundings

Percentage numbers have been calculated using figures rounded to the nearest thousand from the financial statements, which may lead to small differences in some figures and percentages quoted.

Tyman plc

Group income statement

Six months ended 30 June 2016

1. Before amortisation of acquired intangible assets, deferred taxation on acquired intangible assets, impairment of acquired intangible assets, impairment of goodwill, exceptional items, unwinding of discount on provisions, amortisation of borrowing costs and the associated tax effect (see definition on page 18).

The notes on pages 26 to 38 are an integral part of these Interim Financial Statements.

Tyman plc

Group statement of comprehensive income

Six months ended 30 June 2016

Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in note 6.

The notes on pages 26 to 38 are an integral part of these Interim Financial Statements.

Tyman plc

Group statement of changes in equity

Six months ended 30 June 2016

1. Other reserves are non-distributable capital reserves which arose from previous acquisitions.

2. Share-based payments include a deferred tax debit of £Nil (six months ended 30 June 2015: £Nil; year ended 31 December 2015: £0.4 million).

3. On 21 June 2016 the Group issued 8,478,128 shares by way of a placing with institutional investors.

The notes on pages 26 to 38 are an integral part of these Interim Financial Statements.

Tyman plc

Group balance sheet

As at 30 June 2016

The notes on pages 26 to 38 are an integral part of these Interim Financial Statements.

Tyman plc

Group cash flow statement

Six months ended 30 June 2016

The notes on pages 26 to 38 are an integral part of these Interim Financial Statements.

Tyman plc

Notes to the Interim Financial Statements

Six months ended 30 June 2016

1. General information

Tyman plc ("the Company") and its subsidiaries (together, "the Group") is a leading international manufacturer and supplier of engineered components to the door and window industry.

Tyman plc is a public limited company listed on the London Stock Exchange, incorporated and domiciled in England and Wales. The address of the Company's registered office is 29 Queen Anne's Gate, London, SW1H 9BU.

These condensed consolidated interim financial statements ("Interim Financial Statements") were approved for issue on 26 July 2016.

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 2015 were approved by the Board of Directors on 8 March 2016 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.

These Interim Financial Statements have been reviewed, not audited.

The financial information for the year ended 31 December 2015 is extracted from the Group's consolidated financial statements for that year.

2. Basis of preparation and accounting policies

2.1 Basis of preparation

The Interim Financial Statements for the six months ended 30 June 2016 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. The Interim Financial Statements should be read in conjunction with the annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

2.2 Changes in accounting policy and disclosures

2.2.1 New, revised and amended EU endorsed accounting standards

There were no new or amended accounting standards relevant to the Group's results that are effective for the first time in 2016 that have a material impact on the Group's consolidated financial statements.

2. Basis of preparation and accounting policies (continued)

2.2.2 New, revised and amended accounting standards not yet effective

The following new, revised and amended accounting standards are subject to EU endorsement and effective for annual periods beginning after 1 January 2017, and have not been applied in preparing these Interim Financial Statements:

· IFRS 9, 'Financial instruments', effective 1 January 2018;

· IFRS 15, 'Revenue from contracts with customers', effective 1 January 2018;

· IFRS 16, 'Leases', effective 1 January 2019.

The Board is assessing the impact that the adoption of these standards may have on the financial statements of the Group. No other issued standard or interpretation would be expected to have a material impact on the Group.

2.3 Going concern

The Directors are confident, on the basis of current financial projections and the banking facilities available to the Group, and after considering sensitivities, that the Company and the Group have sufficient resources for their operational needs that will enable the Group to remain in compliance with its financial covenants in its bank facilities for at least the next 12 months. Accordingly, the Directors continue to adopt the going concern basis in preparing the Interim Financial Statements.

2.4 Accounting policies

The accounting policies adopted are consistent with those of the previous financial year. 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 2015.

In addition, judgements involved in acquisition accounting were also applied in estimating fair value, particularly in relation to identifiable intangible assets, which require the estimate of the useful economic life of each asset and the future cash flows expected to arise from each asset and to apply a suitable discount rate. There have been no changes in significant estimates.

3. Segment reporting

The reporting segments reflect the manner in which performance is evaluated and resources are allocated. The Group operates through three clearly defined Divisions, namely: AmesburyTruth, ERA and Schlegel International.

As announced on 9 February 2016, the interim 2015 comparatives have been restated to reflect the change in the operating segment disclosure which reflects the Group's day-to-day operational and management structure.

Under the revised segmental analysis, ERA comprises the Group's UK and Ireland hardware business, together with Ventrolla. Schlegel International comprises all of the Group's other businesses outside of the US, Canada and Mexico including the two UK seal manufacturing plants previously reported as part of ERA. Tyman Sourcing Asia is reported through the ERA Division. No changes have been made to the AmesburyTruth segmental disclosure.

In addition, the Group's methodology for the allocation of certain centrally incurred functional costs was changed such that centrally incurred costs that are directly attributable to the Division are allocated or recharged to that Division. All other centrally incurred costs and eliminates are disclosed in a separate line item in the segmental analysis.

Each reporting segment broadly reflects 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 apart from those disclosed in notes 3.1 and 3.2. 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 product segments, which have been generated using the Group's accounting policies, with no differences in measurement applied, other than those noted above.

3.1 Revenue

Included within the Schlegel International segment is revenue generated by UK based businesses of £8.4 million (six months ended 30 June 2015 (restated): £6.1 million; year ended 31 December 2015: £12.0 million).

3.2 Result

4. Exceptional items

As reported in previous periods, footprint restructuring principally relates to costs incurred in the period directly attributable to the ongoing North American footprint project announced in March 2015. The Group expects the North American footprint project will conclude by 2020.

M&A and integration costs of £1.4 million relate to legal, financial, taxation and consultancy costs associated with the three acquisitions that were announced during the period together with certain costs incurred in connection with the integration of the acquired businesses.

The write off of Giesse inventory fair value adjustment of £4.1 million is a non-cash adjustment relating to the IFRS requirement that finished goods held in inventory must be revalued to their market value on acquisition. As the Group expects substantially all of the inventory acquired on acquisition will be sold in the current financial year, this uplift in the book value is considered to be of a one off nature and is of a magnitude that would distort the underlying trading result of Giesse in the period. This treatment of finished goods acquired on acquisition has been consistently applied to each of the Group's acquisitions in recent years.

4. Exceptional items (continued)

Profit on disposal of business relates to the net deferred consideration for EWS received in the period.

Exceptional items comprise £2.2 million of costs cash settled in the six months ended 30 June 2016 (six months ended 30 June 2015: £0.6 million; year ended 31 December 2015: £3.1 million), £4.1 million of non-cash costs (six months ended 30 June 2015: £Nil; year ended 31 December 2015: £4.5 million) and cash receipts of of £0.25 million (six months ended 30 June 2015: £Nil; year ended 31 December 2015: £0.2 million).

These items are regarded by the Group as exceptional as they are significant and non-recurring in nature.

5. Finance income and costs

6. Income tax charge

7. Earnings per share

7.1 Basic and diluted earnings per share

Basic earnings 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 net profit for the period 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 diluted potential ordinary shares into ordinary shares.

7.2 Weighted average number of shares

7.3 Non-GAAP measure: underlying earnings per share

The Group presents an underlying earnings per share measure which excludes the impact of exceptional items, certain non-cash finance costs, amortisation of acquired intangible assets, impairment of acquired intangible assets and certain non-recurring items. Underlying earnings per share has been calculated using the underlying profit before taxation and using the same weighted average number of shares in issue as the earnings per share calculation.

7.3 Non-GAAP measure: underlying earnings per share (continued)

Underlying profit after taxation is derived as follows:

Underlying earnings per share is summarised as follows:

8. Goodwill

* included in administrative expenses in the income statement

A review of the carrying amount of goodwill and intangible assets across the Group will be carried out at the year end. Economic conditions in European markets have gradually improved over the course of the last 12 months and the carrying amounts of goodwill and intangible assets in Schlegel International are considered to be sustainable based on current projections. If markets were to deteriorate, this could give a further impairment charge at a future date.

9. Intangible assets

* included in administrative expenses in the income statement

The amortisation charge for the period comprises £10.2 million relating to amortisation of acquired intangible assets (six months ended 30 June 2015: £9.9 million; year ended 31 December 2015: £19.6 million) and £0.4 million relating to amortisation of computer software (six months ended 30 June 2015: £0.2 million; year ended 31 December 2015: £0.4 million).

10. Property, plant and equipment

* included in administrative expenses in the income statement.

11. Interest-bearing loans and borrowings

Movements in interest-bearing loans and borrowings are analysed as follows:

There were no defaults in interest payments in the period under the terms of existing loan agreements.

The Group has the following undrawn committed multi-currency revolving credit facility:

The Group also has potential access to the uncommitted £60.0 million accordion facility and at 30 June 2016 held aggregate cash balances of £105.6 million (30 June 2015: £32.0 million; 31 December 2015: £30.0 million).

12. Financial risk management and financial instruments

12.1 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 2015.

Since the date of that report, other than as set out in the Principal Risks and Uncertainties section of this Interim Report, there have been no significant changes in:

· the nature of the financial risks to which the Group is exposed;

· the nature of the financial instruments which the Group uses;

· the Group's contractual cash outflows and the committed facilities available to fund them; or

· the difference between book value and fair value of any financial instruments.

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.

Derivatives shown at fair value in the Group's balance sheet comprise level 2 interest rate swaps fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for level 2 derivatives.

The Group's other financial instruments are measured on bases other than fair value.

12.2 Level 2 fair values

At 30 June 2016 derivative financial assets of £0.08 million were categorised at level 2 (30 June 2015: liability of £0.1 million; 31 December 2015: liability of £0.09 million).

12.3 Fair value of financial assets and liabilities measured at amortised cost

The fair values of borrowings are as follows:

The fair values of trade and other receivables, cash and cash equivalents, and trade and other payables approximate their carrying amounts.

13. Business combinations

The provisional fair value amounts recognised in respect of identifiable assets acquired and liabilities assumed, and the consideration paid for acquisitions during the period are as follows:

On 3 March 2016, the Group's ERA Division acquired Response Electronics, a specialist sales, marketing and distribution business focused on wireless alarms, electronic access and smart home products. ERA paid an initial cash consideration of £0.9 million with a further capped payment to be made in 2019 determined on a multiple of the underlying EBITDA generated by Response in the year ending 31 December 2018.

On 7 March 2016, the Group's Schlegel International Division acquired Giesse, an Italian based manufacturer of hardware for aluminium windows and doors. Schlegel International paid a cash consideration of £33.4 million with deferred consideration of £5.9 million payable over the 12 month period from the date of acquisition.

Since the date of acquisition Giesse contributed revenue of £20.4 million and underlying operating profit of £3.0 million, which are included in the Group's interim income statement. After exceptional costs mainly relating to the non-cash fair value adjustment to inventory (see note 4) Giesse contributed a loss before tax of £2.3 million over the same period.

Had the acquisition of Giesse been completed on the first day of the financial year, additional revenue of £8.5 million, underlying operating profit of £0.4 million and profit before tax of £0.6 million would have been contributed to the Group.

The fair values of identifiable intangible assets recognised at acquisition include customer relations of £11.7 million, acquired brands of £10.5 million and other intangible assets of £0.6 million.

13. Business combinations (continued)

Other assets and liabilities provisionally valued at £3.6 million were acquired resulting in aggregate goodwill of £13.7 million attributable to the expected profitability of the acquired businesses and the synergies expected to arise post-acquisition.

The fair value of financial assets includes trade receivables with a gross contractual value of £21.0 million. The best estimate at the acquisition date of the contractual cash flows not recoverable is £1.6 million.

The Group incurred acquisition-related costs of £1.4 million for professional fees paid for due diligence, other general professional fees and legal advice. These costs have been included in exceptional costs in the Group's interim income statement (note 4).

The estimated value of intangibles, including goodwill, deductible for taxation purposes is £Nil.

Fair values remain provisional in relation to these acquisitions and the Group will complete its review of fair value in early 2017.

14. Adjustments to cash flows from operating activities

The following non-cash and financing adjustments have been made to profit before taxation to arrive at cash flow from operating activities:

15. Capital commitments

At 30 June 2016 the Group has capital commitments of £5.3m for the purchase of property, plant and equipment (30 June 2015: 1.5 million; 31 December 2015: £7.8 million).

16. Events after the reporting period

On 1 July 2016, the Group's AmesburyTruth Division acquired The Bilco Company, a North American manufacturer of engineered access and egress products for the commercial and residential markets. The Enterprise Value of the acquisition was US$71.0 million (approximately £53.0 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 2016.

Statement of Directors' responsibilities

The Directors confirm that these Interim Financial Statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair view of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

· an indication of important events that have occurred during the first six months and their impact on the condensed set of interim consolidated financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

· material related party transactions in the first six months and any material changes in the related party transactions described in the last Annual Report and Accounts.

The Directors of Tyman plc are listed in the Tyman plc Annual Report and Accounts for 31 December 2015. A list of current Directors is maintained at the Tyman plc website: www.tymanplc.com.

By order of the Board

Louis Eperjesi James Brotherton

Chief Executive Officer Chief Financial Officer

26 July 2016

Independent review report to Tyman plc

Report on the Interim Financial Statements

Our conclusion

We have reviewed Tyman plc's Interim Financial Statements (the "Interim Financial Statements") in the interim report of Tyman plc for the 6 month period ended 30 June 2016. Based on our review, nothing has come to our attention that causes us to believe that the Interim Financial Statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The Interim Financial Statements comprise:

· the Group balance sheet as at 30 June 2016;

· the Group income statement and Group statement of comprehensive income for the period then ended;

· the Group cash flow statement for the period then ended;

· the Group statement of changes in equity for the period then ended; and

· the explanatory notes to the Interim Financial Statements.

The Interim Financial Statements included in the interim report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2 to the Interim Financial Statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim report, including the Interim Financial Statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the Interim Financial Statements in the interim report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, 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 Ireland) 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.

We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Interim Financial Statements.

PricewaterhouseCoopers LLP

Chartered Accountants

London

26 July 2016

Notes:

a) The maintenance and integrity of the Tyman plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.

b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.