20th Nov 2007 07:01
Hampson Industries PLC20 November 2007 20 November 2007 HAMPSON INDUSTRIES PLC Unaudited half year results for the six month period ended 30 September 2007 Hampson Industries PLC ("Hampson" or the "Group"), the international aerospaceand precision engineering group, announces half year results for the six monthperiod ended 30 September 2007. Key Highlights 30 Sept 2007 30 Sept 2006 Change £'000 £'000 --------------------- ------------ ------------ --------Continuing operations:Revenue 76,346 63,707 20Trading profit* 10,039 6,526 54Operating profit 8,258 3,491 137Profit before tax* 7,087 4,084 74Profit before tax - statutory basis 5,017 1,132 343Earnings per share* 4.89p 3.24p 51Earnings per share - statutory basis 3.37p 0.88p 283Dividend per share 0.50p 0.00p--------------------- ------------ ------------ --------Exchange rates (GBP 1 = USD):Average for period 2.00 1.85Period end 2.04 1.87--------------------- ------------ ------------ -------- * Trading profit, profit before tax and earnings per share are all stated toreflect the continuing operations of the Group before exceptional items,re-measurements and amortisation of intangible assets on acquisition The Boardconsiders that this measure of profit provides the best view of the underlyingtrading performance of the Group. Financial highlights • Strong half year results with growth in both revenue and margins • Revenue grew by 20% to £76.3 million • Organic revenue growth was 18% • Trading profit* increased by £3.5 million to £10.0m, rising 54% • Trading profit* margin exceeded 13% of revenue, compared with 10% last year • Results achieved despite £0.7m adverse currency movement • Resumption of interim dividend (0.50p) Corporate highlights • Core aerospace markets remain buoyant • Non-core Industrial division successfully divested • Major new contract to supply HondaJet • Recent acquisitions continue to perform above expectations Commenting on the first half results, Chairman Tony Gilroy said: "In my final statement as Chairman, I am pleased to announce that the half year results reflect another period of significant progress for the Group, with particular success in our Aerospace businesses. "In a period that has seen us complete the divestment of our non-core Industrial division and secure a major new contract to supply Honda Aircraft Company Inc., our growth strategy is continuing to deliver tangible positiveresults despite current dollar weakness. With continuing strong demand in ourcore markets, our efforts will remain focused on maintaining this momentum inthe second half and delivering outstanding value for our shareholders." Further information: Kim Ward, Chief Executive +44 (0)1384 472 941 Howard Kimberley, Finance Director +44 (0)1384 472 946 Jonathan Gollins/Marylene Guernier, M:Communications +44 (0)20 7153 1269 Hampson Industries PLCHalf Year Report 2007 Chairman's Statement In my final statement as Chairman, I am pleased to announce that the half yearresults reflect another period of significant progress for the Group, withstrong growth in revenue and profit despite further continued weakening of theUS dollar over the period. Revenue has increased by 20% compared to the first half of the previous year and trading profit* is 54% ahead. The strong first half results have enabled the Board to propose a resumption of interim dividend payments to shareholders. Our aerospace businesses have performed strongly despite the adverse currency headwinds. In particular, we continue to see the benefits of a culture of continuous and disciplined cost control by our management teams throughout the Group. There is a rigorous focus on operational improvement activities and cost and marketing synergies are leveraged across all of our Group operations. These efforts will remain a major priority going forward as we seek to maximise our returns on existing, as well as planned new investment in support of our growth strategy. All of our recent acquisitions continue to exceed our expectations and the outlook for our core markets is one of continuing growth. Against this background, the strong first half results provide a firm foundation on which to build and the Board therefore looks forward with continued confidence to another full year performance showing very positive progress. I am very pleased that during the four years that I have served as Chairman, Hampson has been transformed both in terms of profitability and strategic direction. The Group is now well positioned in high-growth niche businesses in both aerospace and automotive where good margins are achievable. As this will be my last statement as Chairman, it only remains for me to wish my successor, Chris Geoghegan and his Board and all of Hampson's employees and shareholders, every success for the future. Tony GilroyChairman20 November 2007 * In addition to the "statutory" measures of profit reference is made throughoutto the impact on the Group's profit and earnings of excluding the followingitems; restructuring and rationalisation charges, fixed asset impairments,amortisation of intangible assets arising on acquisition and changes in the netfair value of financial instruments. The Directors believe that exclusion ofthese items allows trends in the underlying performance of the Group's businessto be more easily identified and understood. Reference is made throughout to theterm "trading profit" which is defined as operating profit excluding all of thefore-going items. Cautionary Statement This Half Year Report and accompanying announcement contains forward-lookingstatements that are based on current expectations or beliefs, as well asassumptions about future events. These forward-looking statements can beidentified by the fact that they do not relate only to historical or currentfacts. Forward-looking statements often use words such as anticipate, target,expect, estimate, intend, plan, goal, believe, will, may, should, would, couldor other words of similar meaning. Undue reliance should not be placed on anysuch statements because they speak only as at the date of this document and, bytheir very nature, they are subject to known and unknown risks and uncertaintiesand can be affected by other factors that could cause actual results, andHampson's plans and objectives, to differ materially from those expressed orimplied in the forward-looking statements. There are a number of factors which could cause actual results to differmaterially from those expressed or implied in forward looking statements. Amongthe factors that could cause actual results to differ materially from thosedescribed in the forward-looking statements are: increased competition, the lossof or damage to one or more key customer relationships, changes to customerordering patterns, delays in obtaining customer approvals for engineering orprice level changes, the failure of one or more key suppliers, the outcome ofbusiness or industry restructuring, the outcome of any litigation, changes ineconomic conditions, currency fluctuations, changes in interest and tax rates,changes in raw material or energy market prices, changes in laws, regulations orregulatory policies, developments in legal or public policy doctrines,technological developments, the failure to retain key management, or the keytiming and success of future acquisition opportunities or major investmentprojects. Hampson undertakes no obligation to revise or update any forward lookingstatement contained within this announcement, regardless of whether thosestatements are affected as a result of new information, future events orotherwise, save as required by law and regulations. Business Review Group Performance Revenue was £12.6m (20%) higher than in the comparable period of the prior yearat £76.3m. In constant currency terms, the increase would have been 24%, ofwhich 18% was due to organic growth in existing operations, and 6% due to thecontribution of Composites Horizons Inc. ("CHI"), which was acquired in January2007 and continues to perform strongly. At £10.0m, trading profit for the six month period increased by £3.5m (54%). Atconstant rates of exchange, the increase compared to the first half of 2006would have been £0.7m greater, being an improvement of £4.2m (65%). Afterabsorbing the impact of currency translation, earnings per share on a managementbasis were 51% higher at 4.89p per share, with a positive contribution from CHIafter financing costs. Net Indebtedness Despite higher working capital levels required to support the growth in revenueduring the period, net indebtedness at 30 September 2007, at £66.7m, wasmarginally lower than the position at the previous year end. This was achievedthrough the continued application of robust cash management disciplines combinedwith a lower level of capital expenditure. Dividend The Board recommends an interim dividend of 0.50p per share to be paid on oraround 15 February 2008 to those shareholders on the register on 25 January2008. This dividend is covered 4.54 times by earnings of the half year. Operational Review Aerospace Components & Structures Revenue in Aerospace Components & Structures was £42.8m, £5.9m (16%) higher thanin the same period of the prior year. Trading profit almost doubled to £6.4m,compared to £3.3m in the previous year. Against a background of continuing strong demand within the commercial aerospacesector in general, the strong half year results reflect across the boardoperational improvements at all sites, with fabrications & assemblies, machiningand shims all ahead of the equivalent period in the prior year. Following receipt of production certification from the FAA in April 2007,deliveries by Eclipse Aviation of their Eclipse 500 Very Light Jet continue torise progressively and production levels are being matched to programmerequirements. In September 2007 the Group won an exclusive life-of-programme contract withHonda Aircraft Company Inc. for the manufacture and supply of the completeempennage structural sub-assembly for the new HondaJet advanced light jet,expected to be worth over US$70m. First production deliveries are expected tocommence in 2010. Composites & Transparencies Revenue in Composites & Transparencies, at £23.2m, was £5.6m ahead of the prioryear, mainly as a result of the impact of including CHI for the full six months.Headline trading profit (after adverse currency effects) of £4.7m, was animprovement of £1.9m compared to the previous period, with £1.3m of this beingcontributed by CHI. Excluding the impact of CHI, first half trading profit increased by £0.6m (21%)despite more modest total revenue growth, mainly as a result of the mixture oftooling systems delivered to customers in the period. Stronger growth isexpected in the second half with demand levels in general remaining high andfurther new manufacturing capacity at Coast Composites in Santa Ana, USA,expected to come fully on line as final equipment is delivered and installed. Automotive Turbocharger With continuing pressures for more fuel efficient and environmentally-friendlyvehicles, the Automotive Turbocharger division saw demand for its core productscontinue to rise in the period. As a result, revenue in the period was £1.2m(13%) higher than in the first half of 2006. As previously reported, results for the first quarter were impacted by excesscosts as a result of new programme starts and production inefficiencies whichresulted in a trading loss for the six month period of £1.0m. Appropriatecorrective measures have now been taken with the result that during its mostrecent periods the division has traded profitably. Results for the second halfare therefore expected to show considerable improvement. Industrial On 27 June 2007, the Industrial division was disposed of in line with ourstrategy of focussing on those businesses which are positioned with thepotential to generate attractive growth and exceed the Group's minimum requiredrates of return on investment. As a result these operations, which generated asmall operating loss in the period, have been disclosed as discontinuedactivities. Prospects Aerospace markets in general remain very buoyant. Since the start of this financial year, the combined commercial backlog of Boeing and Airbus has grown by a further 18% with production rates continuing to rise. Compared to the same position twelve months ago, the increase is some 40%. Increased use of composite material technology continues to provide opportunities for further growth in both the military and commercial segments, and with the Group's capabilities now enhanced through the integration of CHI, we remain well positioned to see further benefit from this trend in both aero-structural components and now engines. Demand for tooling systems for large composite wing and fuselage structures also continues to climb as the result of rate tooling for aircraft entering production such as the B787, derivative versions of existing and new aircraft and pre-production tools for a number of large programmes still in development such as the A350. The increasing size and tolerance requirements of tooling systems now necessary to facilitate production of the large, monolithic structures required by the new generation of largely composite airframes are leading to capacity constraints in the traditional tool manufacturing supply chain. These market conditions are expected to provide a source of opportunity for the Group into the future. The outlook for the turbocharger business is for a marked improvement in results in the second half with demand levels expected to remain at current levels. Principal risks and uncertainties In common with all trading businesses, the Group is exposed to a variety ofrisks in the conduct of its normal business operations. Set out on pages 26 to27 of the Group's annual report for the year ended 31 March 2007 is a summary ofsome of the most important risks and uncertainties which, in the opinion of theDirectors, could impact its performance. These are equally applicable to thecurrent financial year. Although it is not possible to completely record orquantify every material risk that the group faces, on a short term forwardlooking basis over the remainder of this financial year, the main areas ofpotential risks and uncertainty include those related to cyclical markets,market competition, customer concentration, programme dependencies &relationships, commercial dispute resolution and litigation and interest rateand foreign exchange risk. The Group seeks to put in place strategies andactions to mitigate the potential effect of these risks wherever practical. Condensed Consolidated Income Statement Unaudited ------------------------------ Half year Half year Half year to 30 Sept 2007 to 30 Sept 2007 to 30 Sept 2007---------------------- ------ ------------ ----------- ----------- Before Exceptional Total exceptional items, items, re-measurements re-measurements and and amortisation of amortisation of intangibles* intangibles* Notes £'000 £'000 £'000---------------------- ------ ------------ ----------- ----------- Continuing operationsRevenue 3 76,346 - 76,346---------------------- ------ ------------ ----------- ----------- Operatingprofit 4 10,039 (1,781) 8,258---------------------- ------ ------------ ----------- -----------Analysed as:Trading profit 10,039 - 10,039Restructuringandrationalisation 5 - (1,384) (1,384) Impairmentcharges 5 - - -Changes in netfair value ofderivativefinancialinstruments -non interestinstruments 5 - - -Amortisationof intangibleassets onacquisition 5 - (397) (397)---------------------- ------ ------------ ----------- ----------- Financialincome 624 - 624Financialexpense (3,576) - (3,576)Changes in netfair value ofderivativefinancialinstruments -interestinstruments 5 - (289) (289)---------------------- ------ ------------ ----------- -----------Profit beforetaxation 7,087 (2,070) 5,017Taxation 6 (1,806)---------------------- ------ ------------ ----------- -----------Profit aftertaxation 3,211---------------------- ------ ------------ ----------- -----------Discontinued operationsPost taxresults fromdiscontinuedoperations 7 (1,048)---------------------- ------ ------------ ----------- -----------Profit for thefinancialperiod 2,163---------------------- ------ ------------ ----------- ----------- Attributable to:---------------------- ------ ------------ ----------- ------------ Equity shareholders 2,163- Minority interests - ---------------------- ------ ------------ ----------- ----------- 2,163 ---------------------- ------ ------------ ----------- ----------- Dividends per 25p ordinary share---------------------- ------ ------------ ----------- -----------Interimdividend pershare 8 0.50pFinal dividendper share 8 0.00p---------------------- ------ ------------ ----------- ----------- Earnings per 25p ordinary share---------------------- ------ ------------ ----------- -----------Continuing Operations:Earnings pershare beforeexceptionalitems,re-measurements andamortisationofintangibles* 9 4.89pBasic 9 3.37pDiluted 9 3.36p---------------------- ------ ------------ ----------- -----------Total Operations:Basic 9 2.27pDiluted 9 2.26p---------------------- ------ ------------ ----------- ----------- * Re-measurements relate to changes in net fair value of derivative financialinstruments required under IAS 39. Amortisation of intangibles relate toamortisation of intangible assets on acquisition required under IFRS 3. Condensed Consolidated Income Statement Unaudited ------------------------------ Half year Half year Half year to 30 Sept to 30 Sept to 30 Sept 2006** 2006** 2006** ----------- ------------ ----------- Before Exceptional Total exceptional items, items, re-measurements re-measurements and and amortisation of amortisation of intangibles* intangibles* Notes £'000 £'000 £'000---------------------- ------ ----------- ------------ ----------- Continuing operationsRevenue 3 63,707 - 63,707---------------------- ------ ----------- ------------ ----------- Operatingprofit 4 6,526 (3,035) 3,491---------------------- ------ ----------- ------------ -----------Analysed as:Trading profit 6,526 - 6,526Restructuringandrationalisation 5 - (528) (528)chargesImpairmentcharges 5 - (2,110) (2,110)Changes in netfair value ofderivativefinancialinstruments -non interestinstruments 5 - (110) (110)Amortisationof intangibleassets onacquisition 5 - (287) (287)---------------------- ------ ----------- ------------ ----------- Financialincome 186 - 186Financialexpense (2,628) - (2,628)Changes in netfair value ofderivativefinancialinstruments -interest 5 - 83 83instruments---------------------- ------ ----------- ------------ -----------Profit beforetaxation 4,084 (2,952) 1,132Taxation 6 (362)---------------------- ------ ----------- ------------ -----------Profit aftertaxation 770---------------------- ------ ----------- ------------ -----------Discontinued operationsPost taxresults fromdiscontinuedoperations 7 49---------------------- ------ ----------- ------------ -----------Profit for thefinancialperiod 819---------------------- ------ ----------- ------------ ----------- Attributable to:---------------------- ------ ----------- ------------ ------------ Equity shareholders 781- Minority interests 38 ---------------------- ------ ----------- ------------ ----------- 819---------------------- ------ ----------- ------------ ----------- Dividends per 25p ordinaryshare ------ ----------- ------------ ---------------------------------Interimdividend pershare 8 0.00pFinal dividendper share 8 0.00p---------------------- ------ ----------- ------------ ----------- Earnings per 25p ordinaryshare ------ ----------- ------------ ---------------------------------Continuing Operations:Earnings pershare before 9 3.24pexceptional items,re-measurements andamortisation of intangibles *Basic 9 0.88pDiluted 9 0.87p---------------------- ------ ----------- ------------ -----------Total Operations:Basic 9 0.94pDiluted 9 0.93p---------------------- ------ ----------- ------------ ----------- * Re-measurements relate to changes in net fair value of derivative financialinstruments required under IAS 39. Amortisation of intangibles relate toamortisation of intangible assets on acquisition required under IFRS 3. ** Re-presented following the sale of Lattimer Limited and I.S. PartsInternational Inc., see note 1. Condensed Consolidated Income Statement Year to 31 Year to 31 Year to 31 March 2007** March 2007** March 2007** ----------- ---------- --------- Before Exceptional Total exceptional items, items, re-measurements re-measurements and and amortisation of amortisation of intangibles* intangibles* Notes £'000 £'000 £'000 ------ ----------- ---------- --------- Continuing operationsRevenue 3 138,020 - 138,020---------------------- ------ ----------- ---------- --------- Operatingprofit 4 16,400 (3,968) 12,432---------------------- ------ ----------- ---------- ---------Analysed as:Trading profit 16,400 - 16,400Restructuringandrationalisation 5 - (1,073) (1,073)chargesImpairmentcharges 5 - (2,106) (2,106)Changes in netfair value ofderivativefinancialinstruments -non interestinstruments 5 - (110) (110)Amortisationof intangibleassets onacquisition 5 - (679) (679)---------------------- ------ ----------- ---------- --------- Financialincome 935 - 935Financialexpense (5,990) - (5,990)Changes in netfair value ofderivativefinancialinstruments - 5 - (1,164) (1,164)interest instruments---------------------- ------ ----------- ---------- ---------Profit beforetaxation 11,345 (5,132) 6,213Taxation 6 (2,689)---------------------- ------ ----------- ---------- ---------Profit aftertaxation 3,524---------------------- ------ ----------- ---------- ---------Discontinued operationsPost taxresults fromdiscontinuedoperations 7 461---------------------- ------ ----------- ---------- ---------Profit for thefinancial year 3,985---------------------- ------ ----------- ---------- --------- Attributable to:---------------------- ------ ----------- ---------- ---------- Equity shareholders 3,985 - Minority interests ----------------------- ------ ----------- ---------- --------- 3,985---------------------- ------ ----------- ---------- --------- Dividends per 25p ordinary share---------------------- ------ ----------- ---------- ---------Interimdividend pershare 8 0.00pFinal dividendper share 8 0.90p---------------------- ------ ----------- ---------- --------- Earnings per 25p ordinary share---------------------- ------ ----------- ---------- ---------Continuing Operations:Earnings pershare beforeexceptionalitems,re-measurements andamortisationofintangibles* 9 7.98pBasic 9 3.95pDiluted 9 3.93p---------------------- ------ ----------- ---------- ---------Total Operations:Basic 9 4.47pDiluted 9 4.44p---------------------- ------ ----------- ---------- --------- * Re-measurements relate to changes in net fair value of derivative financialinstruments required under IAS 39. Amortisation of intangibles relate toamortisation of intangible assets on acquisition required under IFRS 3. ** Re-presented following the sale of Lattimer Limited and I.S. PartsInternational Inc., see note 1. Condensed Consolidated Balance Sheet Unaudited ------------------ As at 30 Sept 2007 30 Sept 2006 31 March 2007 £'000 £'000 £'000------------------------ ---------- ---------- ----------AssetsNon-current assetsGoodwill 59,431 53,817 61,600Intangible assets 21,543 15,678 22,476Property, plant and equipment 39,919 39,243 41,305Deferred tax assets 4,070 2,274 4,877------------------------ ---------- ---------- ---------- 124,963 111,012 130,258------------------------ ---------- ---------- ----------Current assetsInventories 26,334 25,699 27,361Trade and other receivables -due within one year 34,264 28,083 35,206Financial assets - derivatives - 582 189Current tax assets 214 - 563Cash and cash equivalents 13,877 9,729 10,241------------------------ ---------- ---------- ---------- 74,689 64,093 73,560------------------------ ---------- ---------- ----------Total assets 199,652 175,105 203,818------------------------ ---------- ---------- ----------LiabilitiesCurrent liabilitiesTrade and other payables (31,886) (27,930) (36,787)Financial liabilities -derivatives (1,226) - (1,126)Provisions (2,343) (1,497) (3,073)------------------------ ---------- ---------- ---------- (35,455) (29,427) (40,986)------------------------ ---------- ---------- ----------Non-current liabilitiesFinancial liabilities -borrowings (79,031) (73,314) (75,568)Deferred tax liabilities (8,812) (4,136) (8,812)Retirement benefit liabilities (137) (993) (583)------------------------ ---------- ---------- ---------- (87,980) (78,443) (84,963)------------------------ ---------- ---------- ----------Total liabilities (123,435) (107,870) (125,949)------------------------ ---------- ---------- ----------Net assets 76,217 67,235 77,869------------------------ ---------- ---------- ---------- Shareholders' equityCalled up share capital 23,806 21,870 23,806Reserves 52,333 45,313 53,988------------------------ ---------- ---------- ----------Shareholders' equity 76,139 67,183 77,794------------------------ ---------- ---------- ---------- Total shareholders' equity 76,139 67,183 77,794Minority interest in equity 78 52 75------------------------ ---------- ---------- ----------Total equity 76,217 67,235 77,869------------------------ ---------- ---------- ---------- Condensed Consolidated Cash Flow Statement Unaudited --------------------- Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March 2007 £'000 £'000 £'000---------------------- ------------ ----------- ------------Cash flows from operatingactivitiesCash generated fromoperations 3,679 5,223 18,684Interest received 624 199 604Interest paid (3,395) (2,293) (5,506)Tax paid (565) (548) (1,571)---------------------- ------------ ----------- ------------Net cash from operatingactivities 343 2,581 12,211---------------------- ------------ ----------- ------------Cash flows from investingactivitiesAcquisitions (net ofcash acquired) - - (11,493)Disposals (net of cashdisposed) 2,751 30 30Purchase of property,plant and equipment (1,710) (2,456) (6,410)Purchase of intangibleassets (436) (213) (2,045)Proceeds on sale ofproperty, plant andequipment 683 - 70Development costs (83) (2,879) (6,883)---------------------- ------------ ----------- ------------Net cash used ininvesting activities 1,205 (5,518) (26,731)---------------------- ------------ ----------- ------------Cash flows from financingactivitiesNet proceeds from issueof ordinary sharecapital - - 11,347New borrowings 3,000 6,970 10,500Finance lease principalpayments (741) (759) (1,449)Finance lease interestpayments (60) (115) (191)Repayments of loans (20) - (1,914)---------------------- ------------ ----------- ------------Net cash flow used infinancing activities 2,179 6,096 18,293---------------------- ------------ ----------- ------------Currency variations oncash and cashequivalents (91) (206) (308)---------------------- ------------ ----------- ------------Increase in cash andcash equivalents 3,636 2,953 3,465---------------------- ------------ ----------- ------------Cash and cashequivalents at thebeginning of the period 10,241 6,776 6,776---------------------- ------------ ----------- ------------Cash and cashequivalents at the endof the period 13,877 9,729 10,241---------------------- ------------ ----------- ------------ Reconciliation of movement in cash and cash equivalents to movement in net debt Unaudited -------------------- Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March 2007 £'000 £'000 £'000---------------------- ----------- ----------- -----------Movement in cash andcash equivalents 3,636 2,953 3,465---------------------- ----------- ----------- -----------Net proceeds ofborrowings (2,980) (6,970) (8,586)Indebtedness acquiredas part of acquisition - - (1,850)Finance lease payments 741 759 1,449New finance leases (1,133) (287) (425)Other movements in netdebt (121) - 845---------------------- ----------- ----------- -----------Movement in period 143 (3,545) (5,102)Net debt at beginningof period (66,794) (61,692) (61,692)---------------------- ----------- ----------- -----------Net debt at end ofperiod (66,651) (65,237) (66,794)---------------------- ----------- ----------- ----------- Other movements in net debt reflect movements in the unamortised issuance costsin relation to borrowings within the Group. Condensed Statement of Recognised Income and Expense Unaudited ------------------- Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March 2007 £'000 £'000 £'000-------------------------- ---------- ----------- -----------Currency variations (3,077) (6,135) (10,362)Actuarialgains/(losses) onretirement benefitscheme - gross - - 304Deferred taxationrelated thereto - - (91)-------------------------- ---------- ----------- -----------Net gains/(losses) notrecognised in incomestatement (3,077) (6,135) (10,149)Profit for thefinancial period 2,163 781 3,985-------------------------- ---------- ----------- -----------Total recognisedincome/(expense) forthe period (914) (5,354) (6,164)-------------------------- ---------- ----------- ----------- Attributable to:-------------------------- ---------- ----------- ------------ Equity shareholders (914) (5,354) (6,164)- Minority interests - 38 --------------------------- ---------- ----------- ----------- (914) (5,316) (6,164)-------------------------- ---------- ----------- ----------- Notes to the Half Year Report 1. Basis of preparation Basis of preparation Hampson Industries PLC (the "Company") is a Company domiciled in the UnitedKingdom. The condensed consolidated half year financial statements for the sixmonths ended 30 September 2007 comprise of the Company and its subsidiaries. These half year condensed consolidated financial statements have been preparedin accordance with the Disclosure and Transparency Rules of the FinancialServices Authority and with IAS 34 'Interim Financial Reporting' as adopted bythe European Union. They do not include all information required for full annualfinancial statements, and should be read in conjunction with the auditedconsolidated financial statements of the Group for the year ended 31 March 2007.The comparative figures for the year ended 31 March 2007 do not constitutestatutory accounts for the purposes of section 240 of the Companies Act 1985. Acopy of the statutory accounts for the year ended 31 March 2007 has beendelivered to the Registrar of Companies. The report of the auditors was (i)unqualified, (ii) did not include a reference to any matters to which theauditors drew attention by way of emphasis without qualifying their report, and(iii) did not contain a statement under section 237(2) or (3) of the CompaniesAct 1985. Measurement and performance reporting In addition to the "statutory" measures of profit reference is made throughoutto the impact on the Group's profit and earnings of excluding the followingitems; restructuring and rationalisation charges, fixed asset impairments,amortisation of intangible assets arising on acquisition and changes in the netfair value of financial instruments. The Directors believe that exclusion ofthese items allows trends in the underlying performance of the Group's businessto be more easily identified and understood. Reference is made throughout to theterm "trading profit" which is defined as operating profit excluding all of thefore-going items. Changes in accounting policies Except as described below, the accounting policies and basis of consolidationapplied by the Group in these unaudited half year condensed consolidatedfinancial statements are the same as those applied by the Group in its auditedconsolidated financial statements for the year ended 31 March 2007. Amendments to IAS 1 "Presentation of Financial Statements: Capital Disclosures"and IFRS 7 "Financial Instruments: Disclosures" are effective for the Group forthe year ending 31 March 2008. These require the Group to provide disclosure ofthe significance of financial instruments on its financial position andperformance and additional qualitative and quantitative information aboutexposure to risks arising from financial instruments. There will be no effect onreported income or net assets. As this report only contains condensed financial statements, and as there are nomaterial financial instrument related transactions in the period, full IFRS 7disclosures are not required at this stage. The full IFRS 7 disclosures,including the sensitivity analysis to market risk and capital disclosuresrequired by the amendment to IAS 1, will be given in the annual financialstatements. IFRIC 8 "Scope of IFRS 2", IFRIC 9 "Re-assessment of embedded derivatives",IFRIC 10 "Interim financial reporting and impairment" and IFRIC 11 "IFRS 2 -Group and Treasury Share Transactions" are effective for the Group for the yearending 31 March 2008. Re-presentation of comparatives for presentation purposes Due to the disposal of Lattimer Limited and I.S. Parts International Inc. duringthe period, the results of these undertakings have been classified asdiscontinued operations and the comparatives for the half year to 30 September2006 and the year to 31 March 2007 re-presented accordingly. Critical accounting estimates and judgements In the process of applying the Group's accounting policies, management has madea number of judgements. The process of preparing these half year condensedconsolidated financial statements inevitably requires to Group to make estimatesand assumptions concerning the future and the resulting accounting estimateswill, by definition, seldom equal the related actual results. The estimates andjudgements that have the most significant effect on the amounts included withthese half year condensed consolidated financial statements were the same asthose that applied to the audited consolidated financial statements for the yearended 31 March 2007. Seasonality The Group does not have any revenue or results that are materially impacted byseasonality. Approval of half year condensed consolidated financial statements The half year condensed consolidated financial statements were approved forissue on behalf of the board of directors on 20 November 2007. 2. Exchange rates The principal exchange rates used were as follows: ---------------------- ----------- ----------- ------------ Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March---------------------- ----------- ----------- 2007 ------------Sterling to US Dollar(GBP 1 = USD):Average for period 2.00 1.85 1.89Period end 2.04 1.87 1.97---------------------- ----------- ----------- ------------Sterling to Indian Rupee(GBP 1 = INR):Average for period 81.62 85.02 86.07Period end 81.15 85.73 85.80---------------------- ----------- ----------- ------------ Assets and liabilities of overseas undertakings are translated at the rate ofexchange ruling at the balance sheet date and the income statement is translatedat the average rate of exchange. 3. Segmental analysis By primary segment - business group Half year to 30 Aerospace Composites & Automotive Industrial Corporate & TotalSeptember 2007 Components & Transparencies Unallocated Structures Turbocharger---------------- £'000 £'000 £'000 £'000 £'000 £'000 --------- ---------- --------- -------- --------- -----------------------Continuingoperations:Segment revenue 42,790 23,173 10,383 - - 76,346---------------- --------- ---------- --------- -------- --------- -------Segmenttradingprofit/(loss) 6,423 4,674 (955) - (103) 10,039---------------- --------- ---------- --------- -------- --------- -------Restructuringand (1,132) - (182) - (70) (1,384)rationalisationchargesImpairment - - - - - -chargesChanges in fair - - - - - -value ofderivativefinancialinstrumentsAmortisationof intangible (82) (315) - - - (397)assets onacquisition --------- ---------- --------- -------- --------- -----------------------Segmentoperatingprofit/(loss) 5,209 4,359 (1,137) - (173) 8,258Net financingcosts - - - - (3,241) (3,241)---------------- --------- ---------- --------- -------- --------- -------Profit/(loss)beforetaxation 5,209 4,359 (1,137) - (3,414) 5,017Taxation - - - - (1,806) (1,806)---------------- --------- ---------- --------- -------- --------- -------Profit/(loss)for the periodafter taxation 5,209 4,359 (1,137) - (5,220) 3,211---------------- --------- ---------- --------- -------- --------- -------Discontinuedoperations:Post taxresults fromdiscontinuedoperations - - - (1,039) (9) (1,048)---------------- --------- ---------- --------- -------- --------- -------Profit - - - - - -attributable to --------- ---------- --------- -------- --------- -------minorityinterests----------------Netprofit/(loss)attributableto equityshareholders 5,209 4,359 (1,137) (1,039) (5,229) 2,163---------------- --------- ---------- --------- -------- --------- ------- Half year to Aerospace Composites & Automotive Industrial Corporate & Total Components & Transparencies Unallocated Structures30 September Turbocharger2006 - (note 1) £'000 £'000 £'000 £'000 £'000 £'000---------------- --------- ---------- --------- -------- --------- -----------------------Continuingoperations:Segment revenue 36,914 17,575 9,218 - - 63,707---------------- --------- ---------- --------- -------- --------- -------Segmenttradingprofit/(loss) 3,287 2,792 712 - (265) 6,526---------------- --------- ---------- --------- -------- --------- -------Restructuringand (309) - (195) - (24) (528)rationalisationchargesImpairmentcharges (2,110) - - - - (2,110)Changes infair value ofderivativefinancialinstruments - - - - (110) (110)Amortisationof intangibleassets onacquisition (93) (194) - - - (287)---------------- --------- ---------- --------- -------- --------- -------Segmentoperatingprofit/(loss) 775 2,598 517 - (399) 3,491Net financingcosts - - - - (2,359) (2,359)---------------- --------- ---------- --------- -------- --------- -------Profit/(loss)beforetaxation 775 2,598 517 - (2,758) 1,132Taxation - - - - (362) (362)---------------- --------- ---------- --------- -------- --------- -------Profit/(loss)for the periodafter taxation 775 2,598 517 - (3,120) 770---------------- --------- ---------- --------- -------- --------- -------Discontinuedoperations:Post taxresults fromdiscontinuedoperations (18) - - 82 (15) 49---------------- --------- ---------- --------- -------- --------- -------Profitattributableto minorityinterests - - - - (38) (38)---------------- --------- ---------- --------- -------- --------- -------Netprofit/(loss)attributableto equityshareholders 757 2,598 517 82 (3,173) 781---------------- --------- ---------- --------- -------- --------- ------- For the year Aerospace Composites & Automotive Industrial Corporate & Totalended Components & Transparencies Unallocated Structures31 March 2007 - Turbocharger(note 1) £'000 £'000 £'000 £'000 £'000 £'000---------------- --------- ---------- --------- -------- --------- -----------------------Continuingoperations:Segment revenue 80,279 36,573 21,168 - - 138,020---------------- --------- ---------- --------- -------- --------- -------Segmenttradingprofit/(loss) 11,002 6,659 1,457 - (2,718) 16,400---------------- --------- ---------- --------- -------- --------- -------Restructuringand (737) (47) (233) - (56) (1,073)rationalisationchargesImpairmentcharges (2,106) - - - - (2,106)Changes infair value ofderivativefinancialinstruments - - - - (110) (110)Amortisationof intangibleassets onacquisition (185) (494) - - - (679)---------------- --------- ---------- --------- -------- --------- -------Segmentoperatingprofit/(loss) 7,974 6,118 1,224 - (2,884) 12,432Net financingcosts - - - - (6,219) (6,219)---------------- --------- ---------- --------- -------- --------- -------Profit/(loss)beforetaxation 7,974 6,118 1,224 - (9,103) 6,213Taxation - - - - (2,689) (2,689)---------------- --------- ---------- --------- -------- --------- -------Profit/(loss)for the yearafter taxation 7,974 6,118 1,224 - (11,792) 3,524---------------- --------- ---------- --------- -------- --------- -------Discontinuedoperations:Post taxresults fromdiscontinuedoperations (18) - - 504 (25) 461---------------- --------- ---------- --------- -------- --------- -------Profit - - - - - -attributable to minorityinterests---------------- --------- ---------- --------- -------- --------- -------Netprofit/(loss)attributableto equityshareholders 7,956 6,118 1,224 504 (11,817) 3,985---------------- --------- ---------- --------- -------- --------- ------- For further details on discontinued operations, see note 7. 4. Operating profit Reconciliation of revenue to total operating profit: Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March (note 1) 2007 (note 1) £'000 £'000 £'000 ---------------------- ----------- ----------- -----------Revenue 76,346 63,707 138,020Cost of sales (55,275) (49,349) (100,516)---------------------- ----------- ----------- -----------Gross profit 21,071 14,358 37,504Other income 481 386 402Distributioncosts (1,955) (1,202) (2,856)Administrativeexpenses (11,339) (10,051) (22,618)---------------------- ----------- ----------- -----------Operatingprofit 8,258 3,491 12,432---------------------- ----------- ----------- ----------- 5. Exceptional items, re-measurements and amortisation of intangibles Restructuring and rationalisation charges These exceptional items reflect the Group's restructuring and rationalisationcosts primarily relating to employment termination and legal costs - £1,384,000(half year to 30 September 2006: £528,000, year to 31 March 2007: £1,073,000). Impairment charges During the year the Group undertook a review of the utilisation and carryingvalues of certain assets. As a result of this £nil (half year to 30 September2006: £2,110,000, year to 31 March 2007: £2,106,000) of impairment charges wereincurred, as follows: Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March 2007 £'000 £'000 £'000 --------------------- ----------- ------------ -----------Impairment ofintangible assets - 2,110 2,106--------------------- ----------- ------------ -----------Total impairmentcharges - 2,110 2,106--------------------- ----------- ------------ ----------- The impairment of intangible assets in the prior year was in respect of aterminated contract involving one of the Group's subsidiaries. Action is beingtaken to recover the value of those assets together with the reimbursement offurther costs incurred in relation to the contract that have been expensed as acomponent of trading profit. Changes in net fair value of derivative financial instruments IAS 39 requires derivative financial instruments to be valued at the balancesheet date and the fair value reflected in the balance sheet as an asset orliability. Any subsequent change in value is reflected in the Income Statementunless hedge accounting is achieved. Such movements do not affect cash flow orthe economic substance of the underlying transaction, and thus to aid in year onyear comparability, the change in value has been identified separately. As aresult the changes in net fair value of derivative financial instruments were: Half year to 30 Half year to 30 Year to 31 Sept 2007 Sept 2006 March 2007 £'000 £'000 £'000 -------------------------- ----------- ----------- -----------Charges/(credits) includedwithinoperatingprofit - 110 110Charges/(credits) includedwithin netfinancingcosts 289 (83) 1,164-------------------------- ----------- ----------- ----------- 289 27 1,274 -------------------------- ----------- ----------- ----------- Amortisation of intangible assets on acquisition As required under IFRS 3 'Business Combinations' and IAS 38 'Intangible Assets',intangible assets identified on acquisition have been amortised during theperiod - £397,000 (half year to 30 September 2006: £287,000, year to 31 March2007: £679,000). Exceptional items are included within cost of sales £1,526,000 (half year to 30September 2006: £2,818,000, year to 31 March 2007: £3,717,000) andadministrative expenses £255,000 (half year to 30 September 2006: £217,000, yearto 31 March 2007: £251,000). The net cash outflow from exceptional items charged during the period amountedto £1,384,000 (half year to 30 September 2006: £528,000, year to 31 March 2007:£1,088,000). 6. Taxation The taxation charge for the half year to 30 September 2007 is based on theestimated effective tax rate for the full year to 31 March 2008 of 36% (halfyear to 30 September 2006: 32%, year to 31 March 2007 43%). 7. Discontinued operations Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March (note 1) 2007 (note 1) £'000 £'000 £'000Discharge ofliabilitiesassociatedwith (9) (15) (25)previously discontinuedoperationsPost taxresults ofdisposedbusinesses (28) 97 519Post tax losson disposal ofdiscontinuedoperations (1,011) (33) (33)------------------------ ----------- ----------- -----------Post taxresults fromdiscontinuedoperations (1,048) 49 461------------------------ ----------- ----------- ----------- Disposal of Lattimer Limited and I.S. Parts International Inc. On 27 June 2007 the Group disposed of its entire 100% shareholding in LattimerLimited and I.S. Parts International Inc. to Lattimer Holdings Limited. Inaccordance with IFRS 5 the results of these businesses have been reclassified asdiscontinued operations for the comparative periods. As part of the disposal of Lattimer Limited, Hampson Industries PLC disposed ofthe freehold interest in the property in Southport, UK occupied by the businessto Lattimer Limited. The carrying value of the property as at date of disposalwas £638,000, and was sold to Lattimer Limited for £620,000, creating a loss ondisposal of £18,000. Within the post tax loss on disposal of discontinued operations for the halfyear to 30 September 2007 is £81,000 in relation to legal and other professionalcosts associated with the disposal. Disposal of Lattimer Limited The results of the discontinued operations were as follows: ---------------------- ----------- ----------- ----------- Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March ---------------------- ----------- ----------- 2007 ----------- Total Total Total £'000 £'000 £'000 ---------------------- ----------- ----------- ----------- Revenue 670 2,467 4,426---------------------- ----------- ----------- ----------- Operating loss (103) (11) (198)---------------------- ----------- ----------- -----------Analysed as:Trading loss (103) (11) (183)Restructuring andrationalisation charges - - (15)---------------------- ----------- ----------- ----------- Financial income - 11 20Financial expense (2) - ----------------------- ----------- ----------- -----------Loss before taxation (105) - (178)Taxation 31 20 338---------------------- ----------- ----------- -----------Profit/(loss) aftertaxation (74) 20 160---------------------- ----------- ----------- ----------- The consideration and profit on disposal of Lattimer Limited was as follows: £'000-------------------------------- ---------Consideration - satisfied by cash 994Consideration - deferred 200-------------------------------- ---------Consideration - total 1,194-------------------------------- ---------Goodwill 61Intangible fixed assets 76Property, plant and equipment 512Inventories 1,311Trade and other receivables 1,031Cash and cash equivalents (2,083)Trade and other payables (520)-------------------------------- ---------Net assets disposed 388-------------------------------- ---------Profit on disposal of discontinued operations 806-------------------------------- --------- The deferred consideration is payable in 20 instalments commencing in December2007, and is not contingent on any future performance of the business. The net cash flows in relation to Lattimer Limited were £382,000 outflow fromoperating activities (half year to 30 September 2006: outflow £36,000, year to31 March 2007: outflow £467,000), £23,000 outflow from investing activities(half year to 30 September 2006: outflow £71,000, year to 31 March 2007: outflow£106,000) and £2,039,000 outflow from financing activities (half year to 30September 2006: outflow £54,000, year to 31 March 2007: outflow £116,000). Disposal of I.S. Parts International Inc. The results of the discontinued operations were as follows: ---------------------- ----------- ------------ ----------- Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March ---------------------- ----------- ------------ 2007 ----------- Total Total Total £'000 £'000 £'000 ---------------------- ----------- ------------ ----------- Revenue 1,039 1,797 3,851---------------------- ----------- ------------ ----------- Operating profit 74 116 254---------------------- ----------- ------------ -----------Analysed as:Trading profit 74 116 254---------------------- ----------- ------------ ----------- Financial income 1 2 6Financial expense (1) - ----------------------- ----------- ------------ -----------Profit before taxation 74 118 260Taxation (28) (56) 84---------------------- ----------- ------------ -----------Profit after taxation 46 62 344---------------------- ----------- ------------ ----------- The consideration and loss on disposal of I.S Parts International Inc. was asfollows: £'000-------------------------------- ---------Consideration - satisfied by cash 994Consideration - deferred 200-------------------------------- ---------Consideration - total 1,194-------------------------------- ---------Goodwill 37Intangible fixed assets 14Property, plant and equipment 563Inventories 1,358Trade and other receivables 770Cash and cash equivalents 1,239Trade and other payables (1,069)-------------------------------- ---------Net assets disposed 2,912-------------------------------- ---------Loss on disposal of discontinued operations (1,718)-------------------------------- --------- The deferred consideration is payable in 20 instalments commencing in December2007, and is not contingent on any future performance of the business. The net cash flows in relation to I.S. Parts International Inc. were £155,000inflow from operating activities (half year to 30 September 2006: inflow£28,000, year to 31 March 2007: outflow £214,000), £21,000 outflow frominvesting activities (half year to 30 September 2006: outflow £33,000, year to31 March 2007: outflow £81,000) and £1,084,000 inflow from financing activities(half year to 30 September 2006: inflow £26,000, year to 31 March 2006: inflow£56,000). Disposal of Bolsan West Inc. On 30 August 2006 the Group disposed of its entire 100% shareholding in BolsanWest Inc. to local management. In accordance with IFRS 5 the results of BolsanWest Inc. have been reclassified as discontinued operations for the comparativeperiods. The results of the discontinued operations were as follows: ---------- ----------- ------------ Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March ---------- ----------- 2007 ------------ Total Total Total £'000 £'000 £'000--------------------- ---------- ----------- ------------ Revenue - 191 191--------------------- ---------- ----------- ------------ Operating profit - 21 21--------------------- ---------- ----------- ------------Analysed as:Trading profit - 21 21--------------------- ---------- ----------- ------------ Profit before taxation - 21 21Taxation - (6) (6)--------------------- ---------- ----------- ------------Profit after taxation - 15 15--------------------- ---------- ----------- ------------ The consideration and loss on disposal of Bolsan West Inc was as follows: £'000-------------------------------- ---------Consideration - satisfied by cash 96-------------------------------- ---------Goodwill 15Plant, property and equipment 6Inventories 30Trade and other receivables 74Cash and cash equivalents 66Trade and other payables (62)-------------------------------- ---------Net assets disposed 129-------------------------------- ---------Loss on disposal of discontinued operations (33)-------------------------------- --------- The net cash flows in relation to Bolsan West Inc were £nil from operatingactivities (half year to 30 September 2006: inflow £78,000, year to 31 March2007: inflow £78,000), £nil from investing activities (half year to 30 September2006: £1,000 outflow, year to 31 March 2007: £1,000 outflow) and £nil fromfinancing activities (half year to 30 September 2006: £nil, year to 31 March2007: £nil). 8. Dividends Half year Half year Year to 30 Sept 2007 to 30 Sept 2006 to 31 March 2007 £'000 £'000 £'000------------------------ ----------- ----------- -----------Equity dividends paid in theperiod:Previous year final:0.90p (2006: 0.00p) per25p ordinary share 857 - -Current year interim: 0.00p - - -(2006: 0.00p) per 25p ordinary ----------- ----------- -----------share------------------------ 857 - ------------------------- ----------- ----------- ----------- In addition, the Directors propose that an interim dividend be paid in respectof the financial year ended 31 March 2008 of 0.50p per 25p ordinary share, at acost of approximately £476,000. 9. Earnings per share Basic Earnings per Share Basic earnings per share is calculated by dividing the profit attributable toordinary shareholders by the weighted average number of ordinary shares in issueduring the year. Diluted Earnings per Share Diluted earnings per share is calculated by dividing the profit attributable toordinary shareholders by the weighted average number of ordinary shares in issueduring the year, adjusted for any dilutive potential ordinary shares. Half year Half year Half year to 30 Sept 2007 to 30 Sept 2007 to 30 Sept2007 Earnings Weighted Earnings per 25 average number pence share of shares £'000 number pence----------------- ---------- ------------ -----------Continuing Operations:Basic EPS 3,211 95,227,416 3.37Dilutivepotentialordinaryshares - 491,623 (0.01)----------------- ---------- ------------ -----------Diluted EPS 3,211 95,719,039 3.36----------------- ---------- ------------ -----------Discontinued Operations:Basic EPS (1,048) 95,227,416 (1.10)Dilutivepotentialordinaryshares - 491,623 0.00----------------- ---------- ------------ -----------Diluted EPS (1,048) 95,719,039 (1.10)----------------- ---------- ------------ -----------Total Operations:Basic EPS 2,163 95,227,416 2.27Dilutivepotentialordinaryshares - 491,623 (0.01)----------------- ---------- ------------ -----------Diluted EPS 2,163 95,719,039 2.26----------------- ---------- ------------ ----------- Half year Half year Half year to 30 Sept 2006 to 30 Sept2006 to 30 Sept 2006 (note 1) (note 1) Earnings Weighted Earnings per 25 average number pence share of shares £'000 number pence----------------- ---------- ------------ -----------Continuing Operations:Basic EPS 770 87,482,318 0.88Dilutivepotentialordinaryshares - 501,048 (0.01)----------------- ---------- ------------ -----------Diluted EPS 770 87,983,366 0.87----------------- ---------- ------------ -----------Discontinued Operations:Basic EPS 49 87,482,318 0.06Dilutivepotentialordinaryshares - 501,048 0.00----------------- ---------- ------------ -----------Diluted EPS 49 87,983,366 0.06----------------- ---------- ------------ -----------Total Operations:Basic EPS 819 87,482,318 0.94Dilutivepotentialordinaryshares - 501,048 (0.01)----------------- ---------- ------------ -----------Diluted EPS 819 87,983,366 0.93----------------- ---------- ------------ ----------- Year Year Year to 31 March to 31 March to 31 March 2007 2007 2007 (note 1) (note 1) Earnings Weighted Earnings per 25 average number pence share of shares £'000 number pence----------------- ------------ ------------ ------------Continuing Operations:Basic EPS 3,524 89,179,874 3.95Dilutivepotentialordinaryshares - 551,514 (0.02)----------------- ------------ ------------ ------------Diluted EPS 3,524 89,731,388 3.93----------------- ------------ ------------ ------------Discontinued Operations:Basic EPS 461 89,179,874 0.52Dilutivepotentialordinaryshares - 551,514 (0.01)----------------- ------------ ------------ ------------Diluted EPS 461 89,731,388 0.51----------------- ------------ ------------ ------------Total Operations:Basic EPS 3,985 89,179,874 4.47Dilutivepotentialordinaryshares - 551,514 (0.03)----------------- ------------ ------------ ------------Diluted EPS 3,985 89,731,388 4.44----------------- ------------ ------------ ------------ Earnings per share based on continuing activities before exceptional items,re-measurements and amortisation of intangibles, which the Directors considergives a useful additional indication of the underlying performance of the Group,is calculated on the earnings adjusted as follows: Half year Half year to 30 Sept 2007 to 30 Sept 2007 Earnings Earnings per 25 pence share £'000 pence------------------------ ---------- -----------Continuing operations:Profit attributable to ordinaryshareholders 3,211 3.37Exceptional items, re-measurementsand amortisation of intangibles 2,070 2.17Taxation on exceptional items,re-measurements and amortisation ofintangibles (621) (0.65)------------------------ ---------- ----------- 4,660 4.89------------------------ ---------- ----------- Half year Half year to 30 Sept 2006 to 30 Sept 2006 (note 1) (note 1) Earnings Earnings per 25 pence share £'000 pence------------------------ ------------ -----------Continuing operations:Profit attributable toordinary shareholders 770 0.88Exceptional items,re-measurements andamortisation ofintangibles 2,952 3.37Taxation on exceptionalitems, re-measurementsand amortisation ofintangibles (886) (1.01)------------------------ ------------ ----------- 2,836 3.24------------------------ ------------ ----------- Year Year to 31 March to 31 March 2007 2007 (note 1) (note 1) Earnings Earnings per 25 pence share £'000 pence------------------------ ------------ -----------Continuing operations:Profit attributable to ordinaryshareholders 3,524 3.95Exceptional items, re-measurementsand amortisation of intangibles 5,132 5.76Taxation on exceptional items,re-measurements and amortisation ofintangibles (1,540) (1.73)------------------------ ------------ ----------- 7,116 7.98------------------------ ------------ ----------- 10. Intangible assets During the six months ended 30 September 2007 the Group acquired assets with acost of £519,000 (half year to 30 September 2006: £3,218,000, year ended 31March 2007: £8,928,000). No assets were acquired through acquisition ofsubsidiary undertakings (half year to 30 September 2006: £nil, year ended 31March 2007: £13,199,000). Assets with a net book value of £3,000 were disposed during the six months ended30 September 2007 (half year to 30 September 2006: £nil, year ended 31 March2007: £nil). In addition, assets with a net book value of £188,000 were disposedthrough the process of disposal of subsidiary undertakings (half year to 30September 2006: £15,000, year ended 31 March 2007: £15,000). During the six months ended 30 September 2007, no assets were subject toimpairment (half year to 30 September 2006: £2,110,000, year ended 31 March2007: £2,106,000). 11. Property, plant and equipment During the six months ended 30 September 2007 the Group acquired assets with acost of £2,843,000 (half year to 30 September 2006: £2,852,000, year ended 31March 2007: £6,835,000). No assets were acquired through acquisition ofsubsidiary undertakings (half year to 30 September 2006: £nil, year ended 31March 2007: £330,000). Assets with a net book value of £722,000 were disposed during the six monthsended 30 September 2007 (half year to 30 September 2006 £2,000, year ended 31March 2007 £70,000). In addition, assets with a net book value of £1,075,000were disposed through the process of disposal of subsidiary undertakings (halfyear to 30 September 2006: £6,000, year ended 31 March 2007: £6,000). During the six months ended 30 September 2007, no assets were subject toimpairment (half year to 30 September 2006: £nil, year ended 31 March 2007:£nil). As at 30 September 2007 the Group had entered into contractual commitments topurchase assets with a cost of £607,000 (30 September 2006: £946,000, 31 March2007: £746,000). 12. Changes in shareholders' equity Reserves ------- ------ ------- ------- --------- Share capital Share premium Share based Exchange Other reserves Retained payment reserve reserve earnings £'000 £'000 £'000 £'000 £'000 £'000------------ ------ ------- ------ ------- ------- ---------At 1 April 23,806 56,337 321 (7,606) 2,062 2,8742007Issue of - - - - - -ordinaryshare capitalTransfer from - - - - - 2,163incomestatementDividends - - - - - (857)Actuarial - - - - - -gain onretirementbenefitliabilitiesnet ofdeferred taxrelatedtheretoShare based - - 116 - - -paymentsChanges in - - - - - -minority interestsExchange - - - (3,077) - -adjustment------------ ------ ------- ------ ------- ------- ---------At 30 23,806 56,337 437 (10,683) 2,062 4,180September2007------------ ------ ------- ------ ------- ------- --------- Equity interest Minority Total interest - equity £'000 £'000 £'000------------ --------- ----------- ----------At 1 April 2007 77,794 75 77,869Issue of ordinary - - -share capitalTransfer from 2,163 - 2,163income statementDividends (857) - (857)Actuarial gain on retirement benefit - - -liabilities net ofdeferred tax related theretoShare based 116 - 116paymentsChanges in minority interests - 3 3Exchange (3,077) - (3,077)adjustment------------ --------- ----------- ----------At 30 September 2007 76,139 78 76,217 ------------ --------- ----------- ---------- Reserves ------- ------ ------- ------ ------- Share capital Share premium Share based Exchange Other reserves Retained payment reserve reserve earnings £'000 £'000 £'000 £'000 £'000 £'000------------ ------ ------- ------ ------- ------ -------At 1 April 21,870 46,926 151 2,756 2,062 (1,324)2006Issue of - - - - - -ordinaryshare capitalTransfer from - - - - - 781incomestatementDividends - - - - - -Actuarial - - - - - -gain onretirementbenefitliabilitiesnet ofdeferred taxrelatedtheretoShare based - - 96 - - -paymentsChanges in - - - - - -minorityinterests Exchange - - - (6,135) - -adjustment------------ ------ ------- ------ ------- ------ -------At 30 21,870 46,926 247 (3,379) 2,062 (543)September2006------------ ------ ------- ------ ------- ------ ------- Equity interest Minority Total interest - equity £'000 £'000 £'000------------ -------- ---------- ----------At 1 April 2006 72,441 40 72,481Issue of ordinary - - -share capitalTransfer from 781 - 781income statementDividends - - -Actuarial gain on retirement benefit - - -liabilities net ofdeferred taxrelated theretoShare based 96 - 96paymentsChanges in - 12 12minority interestsExchange (6,135) - (6,135)adjustment------------ -------- ---------- ----------At 30 September 67,183 52 67,2352006------------ -------- ---------- ---------- Reserves ------ --------- ------- ------ ------- Share capital Share premium Share based Exchange Other reserves Retained payment reserve reserve earnings £'000 £'000 £'000 £'000 £'000 £'000------------ ------ ------ --------- ------- ------ -------At 1 April 21,870 46,926 151 2,756 2,062 (1,324)2006Issue ofordinary 1,936 9,411 - - - -share capitalTransfer from - - - - - 3,985incomestatementDividends - - - - - -Actuarialgainon retirementbenefitliabilities - - - - - 213net ofdeferred taxrelatedtheretoShare based - - 170 - - -paymentsChanges in - - - - - -minorityinterests Exchange - - - (10,362) - -adjustment----------- ------ ------ --------- ------- ------ -------At 31 March 23,806 56,337 321 (7,606) 2,062 2,8742007----------- ------ ------ --------- ------- ------ ------- Equity interest Minority Total interest - equity £'000 £'000 £'000------------ -------- ---------- ----------At 1 April 2006 72,441 40 72,481Issue of ordinary 11,347 - 11,347share capitalTransfer from 3,985 - 3,985income statementDividends - - -Actuarial gain onretirement benefitliabilities net of 213 - 213deferred tax related theretoShare based 170 - 170paymentsChanges in - 35 35minority interestsExchange (10,362) - (10,362)adjustment------------ -------- ---------- ----------At 31 March 77,794 75 77,8692007------------ -------- ---------- ---------- 13. Related party transactions On 1 April 2007, an Executive Committee of the Board of Directors of HampsonIndustries PLC was established, which includes, in addition to the ExecutiveDirectors, a number of other senior managers with operational or functionalresponsibility within the Group. As a result, the Group extended its definitionof key management personnel under IAS 24 "Related Party Disclosures" to includethose on the Executive Committee. Other than the remuneration of eachindividual, there have been no other transactions with key management personnel. During the six months ended 30 September 2007, the Company entered intotransactions with its subsidiary undertakings in respect of internal fundingloans and provision of normal group services (including IT, accounting andprocurement services). Recharges are made for group services based on theutilisation of those services on arms-length terms. Annual management recharges are levied by the Company to subsidiary undertakingsto cover services provided, which for the six months ended 30 September 2007amounted to £nil (half year to 30 September 2006: £nil, year ended 31 March2007: £4,374,000). In addition to these services the Company acts as a buyingagent for certain group purchases e.g. insurance, which are recharged on anarms-length basis based on utilisation by the subsidiary undertaking. Recharges are made to subsidiary undertakings for Group loans based on fundingprovided at an interest rate linked to the prevailing base rate of the countryin whose currency the loan is denominated. No recharges are made in respect ofbalances due to or from otherwise dormant companies. Total interest received bythe Company from subsidiary undertakings for the six months ended 30 September2007 amounted to £4,588,000 (half year to 30 September 2006: £3,833,000, yearended 31 March 2007: £8,008,000) and total interest paid by the Company tosubsidiary undertakings for the six months ended 30 September 2007 amounted to£65,000 (half year to 30 September 2006: £133,000, year ended 31 March 2007:£386,000). No dividends were received by the Company from subsidiary undertakings duringthe six months ended 30 September 2007 (half year to 30 September 2006: £nil,year ended 31 March 2007: £1,700,000). The amount outstanding from subsidiary undertakings to the Company at 30September 2007 totalled £112,435,000 (30 September 2006: £105,912,000, 31 March2007: £119,659,000). Amounts owed to subsidiary undertakings by the Company at30 September 2007 totalled £9,929,000 (30 September 2006: £9,275,000, 31 March2007: £6,503,000). The Company had no expense in respect of bad or doubtfuldebts of subsidiary undertakings during the six months to 30 September 2007(half year to 30 September 2006: £nil, year to 31 March 2007: £nil). The Company provides the Group's defined benefit pension schemes, which areclosed to accrual of further benefit. At 30 September 2007 both schemes were theresponsibility of Hampson Industries PLC. 14. Contingent liabilities A subsidiary of the Group is pursuing a commercial claim against a third partyfor wasted costs arising as a result of alleged repudiatory breach of contractand is defending a counterclaim alleging similar breach. Arbitration proceedingsare presently on-going and since the outcome remains uncertain at the date ofapproval of these financial statements it is not practical to estimate itsfinancial effect. It is likely that the outcome will be determined by the dateof approval of the Group's financial statements for the year ending 31 March2008 and any financial impact will be dealt with in those financial statements. 15. Other information This statement will be posted to shareholders on or around 20 November 2007 andwill be available for review at the Group's website shown below. Copies are alsoavailable from the Company's registered office, at the address shown below: Group Headquarters and Registered Office Hampson Industries PLC,7 Harbour Buildings,Waterfront West,Dudley Road,Brierley Hill,West Midlands,DY5 1LN. Tel: +44 (0)1384 485345Fax: +44 (0)1384 472962Website: www.hampsongroup.com Registrars and Transfer OfficeNeville Registrars Limited,Neville House,18 Laurel Lane,Halesowen,West Midlands,B63 3DA. Tel: +44 (0)121 585 1131 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HAMP.L