27th Nov 2008 07:00
27 November 2008
CMH
CHAMBERLIN PLC
("Chamberlin" or "the Group")
Interim Results
For the six months to 30 September 2008
Key Points
Half year results in line with market expectations
Revenues of £23.5m (2007: £19.6m) - reflects 3% volume growth plus recovery of raw material cost increases
Underlying operating profit up 33% to £905,000* (2007: £680,000)
Underlying profit before tax and exceptionals* up 13% to £803,000 (2007: £712,000)
Underlying earnings per share* up 28% to 8.6p (2007: 6.7p) Basic earnings per share increased to 10.7p (2007: 9.8p)
Strong balance sheet with net assets of £11.6m (2007: £12.2m) at period end- equivalent to 156p per share (2007: 164p per share)
Interim dividend of 1.2p (2007: 3.85p)
Board intends to expand the Group's activities through the acquisition of engineering companies that fit the theme "difficult things done well" and meet its investment criteria
* Stated before exceptional costs of £193,000 and unrealised foreign currency income of £409,000 (2007: stated before exceptional income of £331,000 and unrealised foreign currency expense of £61,000)
Chairman, Tom Brown, commented:
"Over the past two years, the new management team has made fundamental changes to the business, modernising business practices and systems, strengthening the subsidiary management and streamlining the Group's activities. As these interim results show, these changes have enhanced the Group's performance and underlying profitability has risen significantly.
While trading in the first half was pleasing and progressed in line with our expectations, we expect the second half of the year to be challenging, reflecting the recent sharp deterioration in market conditions. At this stage it is difficult to predict demand with confidence but we believe that, once the instability caused by de-stocking is complete, order flow will stabilise at a new sustainable level. Despite the downturn, we will continue to invest in the business and implement measures to improve profitability and lay the right foundations for sustainable growth.
We remain committed to our stated objective to expand the Group's activities through the acquisition of engineering companies that meet our criteria and fit the theme "difficult things done well" and believe that Chamberlin is well placed to take advantage of opportunities in the downturn."
Enquiries
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Chamberlin plc |
T: 020 7448 1000 (today only) |
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Tim Hair, Chief Executive |
T: 01922 707100 |
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Mark Bache, Finance Director |
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Biddicks |
T: 020 7448 1000 |
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Katie Tzouliadis |
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Teathers (NOMAD) |
T: 020 7131 3000 |
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Gareth Price |
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Tom Hulme |
CHAIRMAN'S STATEMENT
Introduction
Over the past two years, the new management team has made fundamental changes to the business, modernising business practices and systems, strengthening the subsidiary management and streamlining the Group's activities.
As these interim results show, these changes have enhanced the Group's performance and underlying profitability has risen significantly. This is an especially creditable performance at a time when raw material and energy costs have been rising.
While the Group is now in a much stronger operational and financial position, trading conditions have deteriorated markedly in recent weeks, as we noted in our statement on 18 November 2008. Our view of the outlook for the second half of the year is therefore cautious. Nevertheless, we remain better placed than many in our sector to weather the downturn and believe that the specialist skills we offer and our focus on operational efficiency will help to mitigate the impact of a more difficult trading environment.
Results
Revenues for the six months ending 30 September 2008 increased by 20% to £23.5m from £19.6m last year. This increase reflects a 3% growth in volume together with price surcharges to cover our higher raw materials costs, notably for pig iron and steel scrap, as well as higher energy costs. Looking ahead, while falling commodity prices should reduce price surcharges in the second half, they will continue to have a distorting effect on overall revenue growth, and in particular on sales margin comparisons.
Underlying operating profit rose by 33% to £905,000 (2007: £680,000), demonstrating the improvements we have achieved in our subsidiaries. Underlying profit before tax and exceptional items for the first half rose to £803,000 from £712,000 last year, representing an increase of 13%. Underlying earnings per share increased by 28% to 8.6p (2007: 6.7p).
Net borrowings increased to £2.7m (2007: £0.5m) as at 30 September 2008 with gearing at 24%. Approximately £1.0m of the rise is accounted for by increased working capital requirements driven by higher raw material prices. The balance arises from ongoing capital investment to improve the businesses together with the settlement of the legal claim for alleged nuisance at our Walsall site.
The Group retains a strong balance sheet, with net assets of £11.6m (2007: £12.2m), equivalent to 156p per share (2007: 164p per share).
In the 2008 Annual Report, we established the principle of separately disclosing unrealised foreign currency gains and losses in the Income Statement, to provide a clearer understanding of the trading performance of the Group. In the half year, this item that we consider to be non-trading amounted to a gain of £409,000 (2007: loss of £61,000).
Dividend
Reflecting current difficult market conditions, the Board has reviewed the Group's dividend policy and taken a prudent management decision, reducing the interim dividend to 1.2p per share (2007: 3.85p). This will be paid on 15 December 2008 to all shareholders registered on 5 December 2008. The Board intends to maintain a progressive dividend policy consistent with earnings.
Business Progress
Our foundries in Walsall, Leicester and Scunthorpe account for 85% of Group turnover. During the first half demand levels were sustained and all three foundries delivered improved performances, reflecting our measures to enhance efficiency, quality and service across the businesses.
Chamberlin & Hill Castings ("CHC"), our high volume foundry based in Walsall, continued to build on its success in the turbocharger industry as one of only three companies in Europe able to produce complex, high volume castings. The operations team is working closely with customers on the 2009 launch of the next generation of water-cooled turbochargers and our engineers are actively involved in the design of components for petrol engines planned for the market in 2010. New emissions legislation is driving the need for car manufacturers to utilise turbochargers in petrol engines and the turbocharger market is forecast to grow significantly in the years ahead. This underlying trend in the car market should benefit CHC. As previously stated, we are also focusing on diversifying the sectors which CHC supplies. To this end, we have achieved notable success in entering the market for complex hydraulics castings and these now account for over 14% of CHC's turnover.
More recently at CHC, we have had to react quickly to significantly reduced demand for the coming months, and de-stocking in the supply chain is making this particularly severe for November and December. We have taken swift action to minimise the impact of this with short-time working and reductions to the cost base at CHC.
Russell Ductile, our low volume heavy castings business, continued to show good recovery. Producing highly engineered components for demanding applications, this business has been turned around by changes to the management team, a clear focus on performance improvement and targeted investment in equipment.
Russell Ductile has a customer base which covers a wide range of industries and over 65% of its output is exported either directly or as part of a final product, reducing reliance on any particular sector. While first half sales to construction equipment manufacturers reduced as that market declined, this has been offset to some degree by increased demand from other areas, notably steel processing, hydraulics and train manufacturers.
Our two engineering businesses, Fred Duncombe and Petrel, account for 15% of the Group's turnover. During the last financial year, we put a new management team in place at Fred Duncombe, our emergency exit hardware business. The team has made significant improvements throughout the business but these have been overshadowed by the downturn in demand from the construction sector and, as this sector appears unlikely to recover quickly, we have cut costs to protect profitability. Petrel is continuing to grow its hazardous area lighting sales and its operational performance and profitability have both progressed very well since the re-focusing implemented last year.
Strategy
We remain committed to our stated objective to expand the Group's activities through the acquisition of engineering companies that meet our criteria and fit the theme "difficult things done well".
I am pleased that to report that we are now seeing potential deals of better quality and have made some indicative offers. While price expectations do not yet appear to have moved down, we expect the present economic environment to create increasing opportunities for us and will continue to seek suitable acquisitions which meet our investment criteria.
At the same time as focusing on building a specialist engineering group, we are reacting quickly to the tougher trading environment to ensure that the Group is correctly positioned for the downturn. This includes cost reduction measures, including short-time working, as well as leveraging our technical expertise and high service standards to stay ahead of our competition.
Outlook
While trading in the first half was pleasing and progressed in line with our expectations, we expect the second half of the year to be challenging, reflecting the recent sharp deterioration in market conditions. At this stage it is difficult to predict demand with confidence but we believe that, once the instability caused by de-stocking is complete, order flow will stabilise at a new sustainable level. Despite the downturn, we will continue to invest in the business and implement measures to improve profitability and lay the right foundations for sustainable growth.
The improvement programme of the past two years has fundamentally strengthened the business and will stand us in good stead. We therefore believe that Chamberlin is well placed to take advantage of opportunities and continue to look forward to the medium term future with confidence.
Tom Brown
Chairman
27 November 2008
CHAMBERLIN plc
Summarised Consolidated Income Statement
for the six months ended 30 September 2008
|
Note |
Unaudited six months ended 30 September 2008 |
Reclassified - see note 1 Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|||||||||||
|
Before operating exceptionals |
Operating Exceptionals (note 9) |
Total |
Before operating exceptionals |
Operating exceptionals (note 9) |
Total |
Before operating exceptionals |
Operating exceptionals |
Total |
||||||
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
||||||
|
Revenue from continuing operations |
23,539 |
- |
23,539 |
19,607 |
- |
19,607 |
39,967 |
- |
39,967 |
|||||
|
Operating profit from continuing operations |
905 |
(193) |
712 |
680 |
331 |
1,011 |
1,323 |
(494) |
829 |
|||||
|
Finance (costs)/income |
3 |
(102) |
- |
(102) |
32 |
- |
32 |
81 |
- |
81 |
||||
|
Profit from continuing operations before tax and unrealised foreign currency (loss)/gain |
803 |
(193) |
610 |
712 |
331 |
1,043 |
1,404 |
(494) |
910 |
|||||
|
Unrealised foreign currency gain/(loss) |
409 |
- |
409 |
(61) |
- |
(61) |
(325) |
- |
(325) |
|||||
|
Profit from continuing operations before tax |
1,212 |
(193) |
1,019 |
651 |
331 |
982 |
1,079 |
(494) |
585 |
|||||
|
Income tax (expense) / credit |
4 |
(278) |
54 |
(224) |
(199) |
(56) |
(255) |
(181) |
190 |
9 |
||||
|
Profit for the period from continuing operations |
934 |
(139) |
795 |
452 |
275 |
727 |
898 |
(304) |
594 |
|||||
|
Attributable to equity holders of the parent company |
795 |
727 |
594 |
|||||||||||
|
Earnings per share: |
||||||||||||||
|
Basic |
6 |
10.7p |
9.8p |
8.0p |
||||||||||
|
Underlying |
6 |
8.6p |
6.7p |
15.1p |
||||||||||
|
Diluted |
6 |
10.5p |
9.6p |
7.9p |
||||||||||
|
Diluted underlying |
6 |
8.5p |
6.6p |
14.9p |
||||||||||
An interim dividend of 1.2p per share has been declared by the directors, payable on 15 December 2008 (note 5).
Summarised Consolidated Statement of Recognised Income and Expense
for the six months ended 30 September 2008
|
Note |
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|||
|
£000 |
£000 |
£000 |
||||
|
Actuarial gains on pension assets and liabilities |
7 |
170 |
1,524 |
729 |
||
|
Deferred tax charge on actuarial gains |
(48) |
(457) |
(204) |
|||
|
Net income recognised directly in equity |
122 |
1,067 |
525 |
|||
|
Profit for the period (before dividend) |
795 |
727 |
594 |
|||
|
Total recognised income and expense for the period attributable to equity holders of the parent company. |
917 |
1,794 |
1,119 |
|||
Summarised Consolidated Balance Sheet
At 30 September 2008
|
Unaudited 30 September 2008 |
Unaudited 30 September 2007 |
Audited 31 March 2008 |
||||
|
£000 |
£000 |
£000 |
||||
|
Non-current assets |
||||||
|
Property, plant and equipment |
8,648 |
7,991 |
8,349 |
|||
|
Intangible assets - goodwill |
201 |
201 |
201 |
|||
|
Intangible assets - software |
106 |
46 |
29 |
|||
|
Intangible assets - development costs |
126 |
171 |
149 |
|||
|
Deferred tax assets |
559 |
271 |
692 |
|||
|
9,640 |
8,680 |
9,420 |
||||
|
Current assets |
||||||
|
Inventories |
4,848 |
4,395 |
4,616 |
|||
|
Trade and other receivables |
9,679 |
8,492 |
8,719 |
|||
|
Income taxes receivable |
- |
- |
5 |
|||
|
Cash and cash equivalents |
- |
2 |
- |
|||
|
14,527 |
12,889 |
13,340 |
||||
|
Total assets |
24,167 |
21,569 |
22,760 |
|||
|
Current liabilities |
||||||
|
Financial liabilities |
2,728 |
531 |
1,031 |
|||
|
Trade and other payables |
8,308 |
7,650 |
8,811 |
|||
|
Income taxes payable |
98 |
13 |
- |
|||
|
11,134 |
8,194 |
9,842 |
||||
|
Non-current liabilities |
||||||
|
Defined benefit pension scheme deficit |
796 |
498 |
1,078 |
|||
|
Deferred tax liabilities |
632 |
658 |
594 |
|||
|
1,428 |
1,156 |
1,672 |
||||
|
Total liabilities |
12,562 |
9,350 |
11,514 |
|||
|
Capital and reserves |
||||||
|
Share capital |
1,859 |
1,859 |
1,859 |
|||
|
Share premium |
862 |
862 |
862 |
|||
|
Capital redemption reserve |
109 |
109 |
109 |
|||
|
Retained earnings |
8,775 |
9,389 |
8,416 |
|||
|
Total equity |
11,605 |
12,219 |
11,246 |
|||
|
Total equity and liabilities |
24,167 |
21,569 |
22,760 |
|||
Summarised Consolidated Cash Flow Statement
for the six months ended 30 September 2008
|
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
||||
|
Operating activities |
£000 |
£000 |
£000 |
|||
|
Profit for the year |
795 |
727 |
594 |
|||
|
Adjustments for: |
||||||
|
Taxation |
224 |
255 |
(9) |
|||
|
Net finance (income)/costs |
102 |
(32) |
(81) |
|||
|
Depreciation of property, plant and equipment |
563 |
578 |
1,104 |
|||
|
Amortisation of software |
21 |
12 |
42 |
|||
|
Amortisation of development costs |
23 |
23 |
46 |
|||
|
Profit on disposal of property plant and equipment |
(10) |
(477) |
(471) |
|||
|
Share based payments |
37 |
40 |
27 |
|||
|
Other pension payments in excess of income statement charge |
(112) |
(213) |
(428) |
|||
|
Operating cash flow before movements in working capital |
1,643 |
913 |
824 |
|||
|
(Increase) / decrease in inventories
|
(231) |
352 |
130 |
|||
|
Increase in Receivables |
(959) |
(1,122) |
(1,349) |
|||
|
(Decrease) / increase in payables |
(503) |
(88) |
1,074 |
|||
|
Cash flow from operations |
(50) |
55 |
679 |
|||
|
UK Corporation Tax received |
- |
68 |
84 |
|||
|
Net cash flow from operating activities |
(50) |
123 |
763 |
|||
|
Investing activities |
||||||
|
Purchase of property, plant and equipment |
(878) |
(626) |
(1,579) |
|||
|
Purchase of software |
(94) |
(1) |
(14) |
|||
|
Disposal of property, plant and equipment |
22 |
709 |
769 |
|||
|
Net cash flow from investing activities |
(1,000) |
82 |
(824) |
|||
|
Financing activities |
||||||
|
Interest paid |
(85) |
(38) |
(68) |
|||
|
Pension element of finance (costs)/income |
(17) |
70 |
149 |
|||
|
Equity dividends paid |
(595) |
(595) |
(881) |
|||
|
Issue of shares (including premium) |
- |
38 |
39 |
|||
|
Net cash used in financing activities |
(697) |
(525) |
(761) |
|||
|
Net decrease in cash and cash equivalents |
(1,697) |
(320) |
(822) |
|||
|
Cash and cash equivalents at the start of the period |
(1,031) |
(209) |
(209) |
|||
|
Cash and cash equivalents at the end of the period |
(2,728) |
(529) |
(1,031) |
Notes to the interim financial statements
1 General information and accounting policies
The abridged financial information set out above does not constitute the Group's statutory accounts as defined under Section 240 of the Companies Act 1985. The auditors made a report under Section 235 of the Companies Act 1985 on the financial statements for the year ended 31 March 2008, as filed at Companies House, from which part of the financial information is extracted. The report of the auditors on the accounts for the year ended 31 March 2008 was unqualified and there was no statement under either section 237(2) or section 237(3).
Basis of preparation
The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.
The Income Statement for the period ended 30 September 2007 has been reclassified for comparative purposes. The impact of the currency adjustment has been disclosed as a separate entry for consistency with later periods.
Accounting policies
The principal accounting policies, based on IFRS, applied in preparing the Interim Financial Statements are consistent with the policies set out in the Annual Report and Accounts for the year ended 31 March 2008.
2 Segmental analysis
For management purposes, the Group is organised into two operating divisions: Foundries and Engineering, which are the primary segments for reporting purposes. The secondary segmental format is geographical.
|
Foundries |
Engineering |
Total |
|||||||
|
Unaudited6 months ended 30 Sep 2008 £000 |
Unaudited 6 months ended 30 Sep 2007 £000 |
Audited year ended 31 March 2008 £000 |
Unaudited 6 months ended 30 Sep 2008 £000 |
Unaudited 6 months ended 30 Sep 2007 £000 |
Audited year ended 31 March 2008 £000 |
Unaudited6 months ended 30 Sep 2008 £000 |
Unaudited 6 months ended 30 Sep 2007 £000 |
Audited year ended 31 March 2008 £000 |
|
|
Revenue |
19,902 |
15,974 |
32,800 |
3,637 |
3,633 |
7,167 |
23,539 |
19,607 |
39,967 |
|
Trading profit |
1,051 |
675 |
1,079 |
186 |
282 |
671 |
1,237 |
957 |
1,750 |
|
Shared costs |
(332) |
(277) |
(427) |
||||||
|
Exceptionals |
(193) |
331 |
(494) |
||||||
|
Operating profit |
712 |
1,011 |
829 |
||||||
|
Net finance (cost)/income |
(102) |
32 |
81 |
||||||
|
Profit before tax and unrealised foreign exchange gain / (loss) |
610 |
1,043 |
910 |
||||||
|
Unrealised foreign exchange gain / (loss) |
409 |
(61) |
(325) |
||||||
|
Profit before tax |
1,019 |
982 |
585 |
||||||
|
Tax(expense) /credit |
(224) |
(255) |
9 |
||||||
|
Profit for the year |
795 |
727 |
594 |
||||||
|
Net assets |
|||||||||
|
Assets |
17,721 |
15,310 |
16,407 |
5,311 |
5,441 |
5,592 |
23,032 |
20,751 |
21,999 |
|
Liabilities |
(6,039) |
(5,179) |
(6,717) |
(2,269) |
(2,202) |
(2,097) |
(8,308) |
(7,381) |
(8,814) |
|
Segmental net assets |
11,682 |
10,131 |
9,690 |
3,042 |
3,239 |
3,495 |
14,724 |
13,370 |
13,185 |
|
Unallocated net liabilities |
(3,119) |
(1,151) |
(1,940) |
||||||
|
Total net assets |
11,605 |
12,219 |
11,245 |
||||||
|
Movements in fixed asset |
|||||||||
|
capital additions |
|||||||||
|
PPE * |
775 |
569 |
1,499 |
103 |
57 |
80 |
878 |
626 |
1,579 |
|
Software |
19 |
1 |
14 |
75 |
- |
- |
94 |
1 |
14 |
|
Capital commitments |
- |
188 |
102 |
53 |
- |
- |
53 |
188 |
102 |
|
Depreciation / amortisation |
|||||||||
|
PPE * |
(446) |
(453) |
(884) |
(117) |
(125) |
(220) |
(563) |
(578) |
(1,104) |
|
Software |
(11) |
(10) |
(38) |
(10) |
(2) |
(3) |
(21) |
(12) |
(41) |
|
Development |
(13) |
(13) |
(26) |
(10) |
(10) |
(20) |
(23) |
(23) |
(46) |
* Property, plant and equipment
The Foundries segment is a supplier of iron castings, in raw or machined form, to a variety of industrial customers who incorporate the castings into their own products or carry out further machining or assembly operations on the castings before selling them on. The Engineering segment provides manufactured and imported products to distributors and end-users. The products fall into the categories of door hardware, hazardous area lighting and control gear, cable management and general ironmongery.
Transactions between business segments are minimal and transfer prices are set on an arm's length basis in a manner similar to transactions with third parties. The Group's geographical segments are determined by the location of the Group's customers. The group's assets and costs incurred are all located within the United Kingdom.
|
Turnover by geographical location |
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
|
£000 |
£000 |
£000 |
||
|
United Kingdom |
17,174 |
15,605 |
32,050 |
|
|
Rest of Europe |
5,356 |
3,411 |
6,508 |
|
|
Other countries |
1,009 |
591 |
1,409 |
|
|
23,539 |
19,607 |
39,967 |
3 Finance income and costs
|
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
|
£000 |
£000 |
£000 |
|
|
Net interest on bank accounts |
(75) |
(38) |
(68) |
|
Finance (cost)/income of pension scheme (note 7) |
(17) |
70 |
149 |
|
Other Interest |
(10) |
- |
- |
|
(102) |
32 |
81 |
4 Income tax expense
An effective rate of tax for the six months to 30 September 2008 of 23% has been used in these interim statements.
5 Dividends
|
Dividends comprise:
Pence per share |
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
£000 |
£000 |
£000 |
|
|
2006/07 final dividend paid July 2007 8.00 |
595 |
595 |
|
|
2007/08 interim dividend paid December 2007 3.85 |
286 |
||
|
2007/08 final dividend paid July 2008 8.00 |
595 |
||
|
595 |
595 |
881 |
|
|
2008/09 interim dividend declared 1.2 |
89 |
The interim dividend of 1.2p pence per share (2007: 3.85p) will be paid on 15 December 2008 to all shareholders on the register as at close of business on 5 December 2008.
6 Earnings per share
The calculation of earnings per share is based on the profit attributable to shareholders and the weighted average number of ordinary shares in issue. In calculating the diluted earnings per share, adjustment has been made for the dilutive effect of outstanding share options. Underlying earnings per share, which excludes operating exceptionals and unrealised foreign exchange movements, as analysed below, has been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group.
Operating exceptionals are detailed in note 9.
|
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
|
£000 |
£000 |
£000 |
|
|
Earnings for basic earnings per share |
795 |
727 |
594 |
|
Operating exceptionals |
193 |
(331) |
494 |
|
Taxation effect of operating exceptionals |
(54) |
56 |
(190) |
|
Unrealised foreign currency (gain)/loss |
(409) |
61 |
325 |
|
Taxation effect of unrealised foreign currency (gain)/loss |
115 |
(18) |
(99) |
|
Earnings for underlying earnings per share |
640 |
495 |
1,124 |
|
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
|
000 |
000 |
000 |
|
|
Weighted average number of ordinary shares |
7,438 |
7, 426 |
7,432 |
|
Adjustment to reflect shares under option |
122 |
143 |
132 |
|
Diluted weighted average number of ordinary shares |
7,560 |
7,569 |
7,564 |
7 Pensions
The Group operates a defined benefit pension scheme and a number of defined contribution pension schemes on behalf of its employees. For defined contribution schemes, contributions paid in the period are charged to the income statement. For the defined benefit scheme, actuarial calculations are performed in accordance with IAS 19 in order to arrive at the amounts to be charged in the income statement and recognised in the statement of recognised income and expenses. The defined benefit scheme is closed to new entrants and future accrual.
Under IAS 19, the Company recognises all movements in the actuarial funding position of the scheme in each period. This is likely to lead to volatility in shareholders' equity from period to period.
The IAS 19 figures are based on a number of actuarial assumptions as set out below, which the actuaries have confirmed they consider appropriate. The projected unit credit actuarial cost method has been used in the actuarial calculations.
|
30 September 2008 |
30 September 2007 |
31 March 2008 |
|
|
Discount rate |
6.9% |
5.6% |
6.1% |
|
Salary increases |
n/a |
3.4% |
n/a |
|
Pension increases (pre '97) |
2.5% |
2.5% |
2.5% |
|
Pension increases (post 1988 GMP) |
3.0% |
3.0% |
3.0% |
|
Pension increases (April 1997 to April 2006) |
3.7% |
3.4% |
3.6% |
|
Pension increases (post April 2006) |
2.5% |
2.5% |
2.5% |
|
Inflation (RPI) |
3.7% |
3.4% |
3.6% |
The demographic assumptions used for 30 September 2008, 31 March 2008 and 30 September 2007 are the same as used in the last full actuarial valuation performed as at 1 April 2007.
The defined benefit scheme funding has changed under IAS 19 as follows:
|
Funding status |
Unaudited 6 months to 30 September 2008 £000 |
Unaudited 6 months to 30 September 2007 £000 |
Audited year to 31 March 2008 £000 |
|
Movement in scheme assets |
|||
|
Fair value at start of period |
12,719 |
13,952 |
13,952 |
|
Expected return on scheme assets |
394 |
450 |
911 |
|
Actuarial losses |
(1,485) |
(139) |
(1,856) |
|
Employer contributions |
129 |
184 |
334 |
|
Member contributions |
- |
35 |
46 |
|
Estimated benefits paid |
(345) |
(350) |
(668) |
|
Fair value at end of period |
11,412 |
14,132 |
12,719 |
|
Funding status |
Unaudited 6 months to 30 September 2008 £000 |
Unaudited 6 months to 30 September 2007 £000 |
Audited year to 31 March 2008 £000 |
|
Movement in scheme liabilities |
|||
|
Benefit obligations at start of period |
13,797 |
16,187 |
16,187 |
|
Current service cost |
- |
41 |
55 |
|
Interest cost |
411 |
380 |
762 |
|
Member contributions |
- |
35 |
46 |
|
Actuarial gain |
(1,655) |
(1,663) |
(2,585) |
|
Estimated benefits paid |
(345) |
(350) |
(668) |
|
Benefit obligations at end of period |
12,208 |
14,630 |
13,797 |
|
Deficit in scheme |
(796) |
(498) |
( 1,078) |
|
Related deferred tax asset |
223 |
139 |
302 |
|
Net pension liability |
(573) |
(359) |
(776) |
|
Components of pension cost |
|||
|
Current service cost |
- |
41 |
55 |
|
Total charge disclosed in operating profit |
- |
41 |
55 |
|
Expected return on pension scheme assets |
394 |
450 |
911 |
|
Interest on pension liabilities recognised as finance cost |
(411) |
(380) |
(762) |
|
Net return disclosed in finance (cost)/ income |
(17) |
70 |
149 |
|
Analysis of amount recognised in consolidated Statement of Recognised Income and Expense ("SORIE") |
|||
|
Actual return less expected return on assets |
(1,485) |
(139) |
(1,856) |
|
Experience gain on liabilities |
1,655 |
1,663 |
2,585 |
|
Actuarial gain recognised in SORIE |
170 |
1,524 |
729 |
8 Consolidated statement of changes in equity
|
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
|
£000 |
£000 |
£000 |
|
|
Equity at start of period |
11,246 |
10,942 |
10,942 |
|
Total recognised income and expense for the period |
917 |
1,794 |
1,119 |
|
Dividends paid (see note 5) |
(595) |
(595) |
(881) |
|
Share based payments |
37 |
40 |
27 |
|
Shares issued and allotted |
- |
38 |
39 |
|
Equity at end of period |
11,605 |
12,219 |
11,246 |
Shares issued and allotted relate to shares issued to satisfy the exercise of share options during the period.
9 Exceptional items
Operating exceptional items in the six months to 30 September 2008 and which, in the opinion of the directors, do not form part of the underlying operating costs/(income) of the businesses, comprise:
|
Unaudited six months ended 30 September 2008 |
Unaudited six months ended 30 September 2007 |
Audited year ended 31 March 2008 |
|
|
£000 |
£000 |
£000 |
|
|
Profit on disposal of property plant and equipment |
- |
468 |
468 |
|
Legal costs |
(193) |
(72) |
(897) |
|
Inventory write down |
- |
(65) |
(65) |
|
(193) |
331 |
(494) |
|
On 4 April 2007 the Group disposed of a surplus property at Fred Duncombe Ltd for proceeds of £705,000. The net book value of the property was £219,000 and the costs of disposal amounted to £18,000.
Legal costs relates to the final costs of settling the claim for alleged nuisance which has been noted in the last two years' accounts. This together with an amount provided at 31 March 2008, comprises the Group's own legal expenses plus the cost of settlement with the claimants and their lawyers.
The inventory write down relates to items that had been incorrectly valued in Russell Ductile Castings Limited as at 31 March 2007.
Related Shares:
CMH.L