Interim results - CORRECTION

12 November 2013

Hayward Tyler Group plc

("Hayward Tyler Group", the "Group" or the "Company")

Unaudited interim results for the six months ended 30 September 2013 - CORRECTION

Further to the announcement issued earlier today, the percentage figure in the Financial Highlights section relating to the improvement in operating profit for the period should have read 116%, not 51%. A full copy of the adjust announcement is below.

Hayward Tyler Group plc

("Hayward Tyler Group", the "Group" or the "Company")

Unaudited interim results for the six months ended 30 September 2013

Hayward Tyler Group plc (AIM: HAYT), the specialist engineering group, today announces its interim results for the six month period ended 30 September 2013. Hayward Tyler is a market leader in the design, manufacture and service of critical application pumps and motors for the power generation and oil and gas markets.

Financial Highlights:

§ Revenues for H1 2013/14 up 39% to £20.3 million (6m to 30 September 2012: £14.6 million);

§ Operating profit up 116% to £2.2 million (6m to 30 September 2012: £1.0 million);

§ Trading profit before tax1 up 70% to £1.8 million (6m to 30 September 2012: £1.1 million);

§ Group net trading profit after tax up 99% to £1.5 million (6m to 30 September 2012: £0.8 million);

§ Fully diluted trading earnings per share of 3.39 pence (6m to 30 September 2012:1.80 pence);

§ Net debt at 30 September 2013 decreased to £8.5 million (30 September 2012: £10.4 million) giving a net debt to EBITDA ratio of 1.7 times (At 31 March 2013: 2.6 times on a pro rata basis), now below our target ratio of 2 times;

§ Net cash generated from operating activities of £1.1 million (6m to 30 September 2012: outflow of £0.9 million); and

§  Intention to commence dividend payments subject to shareholder approval. 

1 Trading profit before tax defined as profit before tax, adjusted for non trading costs of £0.02m (6m to 30 September 2012: £1.22m)

Business Highlights:

§ Order intake up 30% in H1 2013/14 at £25.7 million (6m to 30 September 2012: £19.8 million) with broad spread of contract wins across market sectors and geographic regions;

§ Revenue split between Aftermarket and Original Equipment continuing to rebalance to a 65%:35% split from 70%:30% (for the last period);

§ Increased investment in research and development, plant and machinery, and people (greater than £1.0 million invested during the period); and

§ On-going progress made in improving manufacturing process efficiencies at the Luton plant.

Ewan Lloyd-Baker, Chief Executive Officer, commented:

"It is deeply satisfying to see the hard work of our turnaround programme starting to bear fruit, which means our focus can now move onto exploring avenues to significantly scale the business so that meaningful value can be returned to shareholders over the long-term. As part of this commitment and as previously stated the Company will therefore be seeking shareholder approval to put in place the mechanism by which we can pay an inaugural dividend."

Enquiries:

Chief Executive's Operational Review

Introduction

"Hayward Tyler is a striking example of how a UK-based manufacturing business can both compete and win in international markets thanks to the excellence of its design and the quality of its manufacturing process."

Thus spoke Lord Green, UK Minister of State for Trade and Investment, during a visit to our newly refurbished facility in Luton in May. His statement underpins the progress we have made in the first half of this new financial year and the stable platform on which we now have the opportunity to build future growth.

Overview

Having been through the significant changes of the 15 month period to 31 March 2013 it is very encouraging to be able to report the positive progress that the Continuous Improvement Programme is having across our business. Revenues were up with an overall increase of 39% over the equivalent period last year driven in the main by a strong performance by the Luton-based business. As shareholders may remember this operation has traditionally been the "thorn in Hayward Tyler's side" and therefore it is particularly reassuring that its profitability is improving with further upside possible.

As previously indicated we have also taken steps to increase the percentage of our business derived from original equipment manufacturing ("OE") as this is our opportunity to "seed" the market with future potential aftermarket services ("AM") business. Therefore, as expected, it is encouraging to see the mix fall from its peak of 70%:30% in the last period to a more balanced 65%:35% split in favour of the AM. Over the medium to long term we expect this divide to be closer to parity whilst maintaining our overall headline growth and margin aspirations. Given the change in mix it is encouraging that gross margins have improved to 37% although they are not expected to remain at such a high level for the full year. It is also positive to be able to present a set of numbers for the first time in 4 years clear of non-trading operating charges. As will be covered in the Financial Review below, total operating profit for the period was £2.2 million, over double that of the same period for last year (H1 2012/13: £1.0 million). Likewise trading net profit was almost double that of last year at £1.5 million (H1 2012/13: £0.8 million) giving a trading fully diluted earnings per share of 3.39 pence compared to 1.80 pence for H1 2012/13.

Strong contract wins likewise saw order intake in H1 2013/14 increase 30% to £25.7 million against £19.8 million for the equivalent period last year, which resulted in an order book of £33.6 million at 30 September 2013 (At 30 September 2012: £21.7 million), an increase of 55%. Particularly heartening is the broad spread of order intake across market sectors and geographical regions, which reflects strong activity in both OE (60% of intake) and AM (40% of intake). Significant wins in the period include over USD2.0 million of nuclear related work from North America, South Korea and Sellafield, UK. In addition, we have won over £3.5 million of oil and gas related contracts, over £2.0 million of boiler circulating pump business in China and a major contract win in South Africa worth over £2.0 million.

AM

Aftermarket services revenue increased to £13.1 million, an increase of 31% over the same period last year, driven by a strong performance from the UK based AM business and strong shop service output from our US operation. Gross profit margin improved as a result of the mix, which generated an operating profit of £3.1 million (H1 2012/13: £2.6 million). The strong performance of the AM business continues to demonstrate the benefit of having an installed base on which to provide a service offering.

OE

Revenue from original equipment manufacturing was £7.2 million, in the six months to 30 September 2013, an increase of 58% over the same period last year reflecting the higher levels of OE order intake in the second half of the last period. Gross profit margin rose, reflecting the first wave of benefits of the Continuous Improvement Programme started at the beginning of 2012. As a result, the operating losses that had become an historic characteristic of the manufacturing operation, have been reversed, the OE business returning a modest operating profit of £127,000 in the period compared to an operating loss of £0.4 million for the same period in 2012. The Board is confident that further significant gains will be delivered as a result of the on-going Continuous Improvement Programme - in particular from the reduced footprint initiative in Luton which was on-going during the period under review. This initiative is providing our main manufacturing facility with a new lease of life with increased investment spurring a more effective plant layout, greater utilisation, greater efficiencies and greater output per employee.

Continuous Improvement

Continuous improvement is at the heart of our ability to deliver on our aim "to be our customers' number one choice for the provision of mission critical motors and pumps within our chosen markets". In terms of our three core areas we have made good progress:

· Our people: Adoption of continuous improvement throughout all our business units including the roll-out of 5S training to our entire Luton based workforce. We continue to invest in our apprenticeship and graduate programmes with one of our recent graduates now shortlisted in the Young Manufacturer of the Year Awards.

· Our processes: Roll-out of a common Enterprise Resource Planning platform across all the business units with a common database and access to individual management information systems and highly visual dashboards. Our progress here has been such that we have also been shortlisted in this year's Manufacturer of the Year Awards in the information, communication and technology category. In addition, our Luton based business has also been presented with a Rolls Royce Nuclear Quality Improvement Award.

· Our products: Our reputation for reliability and a focus on providing the optimal lifecycle cost of ownership to our customers are important differentiators for the Group. Research and development is a key focus for the business both in terms of design for manufacture as well as new product and technical development. With the recent expansion of our technical team and investment in our main test facility we are planning for further growth to enhance our presence in the key end markets of civil nuclear, oil and gas and renewables.

Outlook

As highlighted above we can see first-hand the positive impact that continuous improvement is having across our business. It is very encouraging that whilst we are taking significant steps forward on our self-improvement journey so the wider markets in which we operate are also relatively buoyant. Our fortunes are tied to those of the energy sector but given how wide this is in terms of definition and geographical coverage we remain confident in our ability to continue to meet and exceed our Key Performance Indicators (KPIs) as highlighted in the Financial Review below.

Looking forward we have a much stronger financial footing with net debt now below our target KPI enabling the Board to seek to pay an inaugural dividend in recognition of the progress made and our supportive shareholder base. In particular, I'd like to thank the team, which is proving its ability to deliver, and each and every one of our employees for their unrelenting enthusiasm and drive to ensure that we continue to improve, to deliver and to take advantage of whatever opportunities arise in our chosen markets.

E Lloyd-Baker

Chief Executive Officer

12 November 2013

Financial Review

Introduction

I am pleased to report on a strong set of results for the first half of our new financial year, the 6 month period to 30 September 2013 (referred to below as H1 2013/14), which show further improvements in the financial performance of the Group. The results have been compared to those for the 6 month period to 30 September 2012 (H1 2012/13).

Basis of Reporting

The Group financial statements in this report have been prepared in accordance with International Financial Reporting Standards ("IFRSs"). To provide clarity to the results they have been analysed between trading and non-trading where trading represents the underlying business performance and non-trading represents non-recurring items. Unlike previous periods it is encouraging to report that there were no non-trading operating items in the period.

Trading Operating Results

Revenue for H1 2013/14 was up 39% to £20.3 million (H1 2012/13: £14.6 million) driven by both OE and AM. Gross profit margin increased to 37% (H1 2012/13: 36%), which delivered an overall profit before tax up 70% to £1.8 million (H1 2012/13: trading profit before tax £1.1 million). Operating profit for the period was £2.2 million (H1 2012/13: trading operating profit £1.4 million) an increase of 51%, which delivered a return on revenue of 10.7% (H1 2012/13: 9.9%).

The Group is exposed to the US Dollar through its operating business in the USA and from UK exports to China. On a constant exchange rate* basis revenue and profit before tax in H1 2012/13 would have been higher by less than £0.2 million and less than £40,000 respectively.

* constant exchange rate is calculated by rebasing prior year figures at current year rates

Non-Trading Operating Results

There were no non-trading items in the period (H1 2012/13: loss of £0.5 million). The operating loss in H1 2012/13 related to one-off costs of restructuring the Luton operations (£0.7 million) offset by a reduction in the provision for doubtful debts (£0.2 million).

Finance Charges

Finance costs in the period represent interest payable of £0.3 million (H1 2012/13: £0.4 million) and non-trading finance costs of £23,000 (H1 2012/13: loss of £0.5 million). The non-trading finance costs in the period represent re-banking costs that are being amortised over the life of the loans (six years) to which they relate. The non-trading finance costs in H1 2012/13 represent one-off costs associated with re-banking (£0.5 million). In addition, in H1 2012/13 there was a loss on the fair value of derivatives (£0.3 million) that were terminated as part of the re-banking process.

Tax

There is a trading tax charge for the period of £0.3 million (H1 2012/13: £0.3 million), which represents tax payable on profits in the USA and China. There is a non-trading tax charge of £0.6 million (H1 2012/13: credit of £0.4 million), which represents the non-cash reduction in the deferred tax asset from (1) profits generated in the UK (£0.2 million) and (2) the change in the UK corporation tax rate from 23% to 20% (£0.4 million).

Net Profit

The trading net profit for the period almost doubled to £1.5 million (H1 2012/13: £0.8 million), which delivered a trading fully diluted earnings per share up 88% over last year of 3.39 pence (H1 2012/13: 1.80 pence). The total profit for the period was £0.9 million (H1 2012/13: loss of £0.1 million), which delivered a fully diluted earnings per share of 2.00 pence (H1 2012/13: loss per share of 0.14 pence).

Working Capital

Management of working capital continues to be a key focus of the Group. While net working capital grew by £0.7 million from 31 March 2013 to 30 September 2013, reflecting high activity levels in the Group, this growth was kept in check so that working capital metrics, such as stock turn, trade debtor days and trade creditor days improved over the period. This focus enabled the Group to generate £1.1 million net cash from operating activities (H1 2012/13: outflow of £0.9 million) such that cash plus undrawn borrowing facilities at 30 September 2013 improved marginally to £3.3 million (At 31 March 2013: £3.2 million).

Borrowings

Net debt at 30 September 2013 remained unchanged from that at 31 March 2013 at £8.5 million (At 30 September 2012: £10.4 million) and comprised term borrowings of £3.1 million (At 30 September 2012: £3.7 million), finance leases of £0.6 million (At 30 September 2012: £0.3 million) and drawings under revolving credit facilities of £6.6 million (At 30 September 2012: £6.7 million) offset by cash of £1.8 million (At 30 September 2012: £0.3 million).

During the period the Company also finally exited from the services provided by its former bank. The borrowing and banking arrangements now sit with supportive banks that encourage and back our export led business.

Pensions

Within the UK, the Group operates a defined benefit plan, with benefits linked to final salary, and a defined contribution plan. With effect from 1 June 2003 the defined benefit plan was closed to future service accruals and new UK employees offered membership of the defined contribution plan. The majority of UK employees are members of one of these arrangements.

A full actuarial valuation of the defined benefit plan is produced every three years (the last one being as at 1 January 2011), however, a valuation is prepared at each period end for the purposes of the report and accounts by independent qualified actuaries. The net obligation at 31 March 2013 was £1.6 million and this has been maintained at 30 September 2013.

Further comment on pensions is given in note 9 to these financial statements.

Key Performance Indicators

As discussed in the Company's report and accounts for the 15 month period to 31 March 2013, we use various internal and external measures to assess our performance against our strategy. The key performance indicators (KPIs) set out below help to determine how successful we have been in achieving our strategic objectives:

Total Equity

Total equity increased by £0.8 million from 31 March 2013 to £10.6 million driven by the net profit in the 6 month period to 30 September 2013.

Dividend

In relation to our wish to pay an inaugural dividend, the Board will be writing to shareholders shortly to seek their authority to re-register the Company as a company governed by the Isle of Man Companies Act 2006 (as amended). This change will allow the Company to remove a block that currently would prevent the Company from being able to pay a dividend. At present the Company is incorporated under the Isle of Man Companies Acts 1931-2004 (as amended).

N Flanagan

Chief Financial Officer

12 November 2013

Consolidated interim income statement

for the period ended 30 September 2013

Consolidated interim statement of financial position

for the period ended 30 September 2013

Consolidated interim statement of comprehensive income

for the period ended 30 September 2013

Consolidated interim statement of changes in equity

for the period ended 30 September 2013

Consolidated cash flow statement

for the period ended 30 September 2013

Notes to the interim financial statements

for the period ended 30 September 2013

1. General Information

Hayward Tyler Group plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the ultimate parent company.

Established in 1815 in the UK, Hayward Tyler designs, manufactures and services a comprehensive range of fluid filled electric motors and pumps. These units are custom designed to meet the most demanding of applications and environments. Focused on the power generation (conventional and nuclear), oil & gas (topside and deep subsea) and industrial markets, Hayward Tyler is a market leader in its technology solutions. Furthermore, Hayward Tyler supplies and services a range of mission critical motors and pumps for the Royal Navy submarine fleet in the UK. Hayward Tyler also undertakes service, overhaul and upgrading of third party motor and pump equipment across all sectors.

In addition to the head office in Luton, England, Hayward Tyler has manufacturing and service support facilities in Kunshan (China), in Delhi (India), in East Kilbride (Scotland) and in Vermont (USA). These facilities and staff provide cover 24 hours 7 days a week for maintenance, overhaul and repair.

2. Basis of preparation

These unaudited condensed consolidated interim financial statements of Hayward Tyler Group plc are for the six months ended 30 September 2013. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of Hayward Tyler Group plc for the 15 months ended 31 March 2013. The financial information for the 15 months ended 31 March 2013 set out in these interim consolidated financial statements does not constitute statutory accounts as defined in the Isle of Man Companies Act 1931 to 2004. The Group's statutory financial statements for the year ended 31 March 2013 have been filed with the Companies Registry. The auditor's report on those financial statements was unqualified and did not contain a statement under section 15.4 of the Isle of Man Companies Act 1982.

3. Accounting policiesThe condensed interim consolidated financial statements have been prepared in accordance with the accounting policies adopted in the last audited financial statements for the 15 month period ended 31 March 2013.

4. Segmental reporting

Management currently identifies the Group's two service lines, original equipment manufacturing ("OE") and aftermarket services ("AM"), as operating segments.

The activities undertaken by the OE segment include the manufacture of pumps and motors. The activities of the AM segment include the servicing of, and provision of spares for, a wide range of pumps and motors.

The measurement policies the Group uses for segment reporting are the same as those used in its financial statements, except that:

- post-employment benefit expenses;

- expenses relating to share-based payments; and

- research costs relating to new business activities

are not included in arriving at the operating profit of the operating segments. In addition, corporate assets which are not directly attributable to the business activities of any operating segment are not allocated to a segment. The measurement methods used to determine

reported segment profit or loss are consistently applied. No asymmetrical allocations have been applied between segments.

Segmental information can be analysed as follows for the reporting periods under review:

The Group's revenues from external customers and its non-current assets (other than goodwill and deferred tax assets) are divided into the following geographical areas:

Revenues from external customers in the Group's domicile, United Kingdom, as well as its major market the USA have been identified on the basis of the customers' geographical location. Non-current assets are allocated based on their physical location.

5. Trading EBITDA

The trading earnings before interest, tax, depreciation and amortisation is as follows:

6. Finance costs

7. Earnings/(loss) per share

The calculation of the basic earnings per share is based on the earnings attributable to the shareholders divided by the weighted average number of ordinary shares of the Company in issue during the period. The calculation of diluted earnings/(loss) per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

* Anti-dilutive where there is a loss, therefore loss per share does not increase.

8. Tax

Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available in future against which deductible temporary differences can be utilised. This recognition is supported by the profitability of the trading operations of the business.

9. Pension

No interim valuation of the pension liability has been carried out at 30 September 2013. As a result no actuarial gain or loss has been recognised in the consolidated statement of other comprehensive income and no change has been made to the net obligation for pensions recognised in the statement of financial position from that at 31 March 2013. The gains and losses for the full year together with any surplus or deficit at the year-end will be presented in the Annual Report and Accounts of the Group for the year to 31 March 2014.

The net obligation for pensions recognised in the statement of financial position as at 31 March 2013 was £1.6 million. This obligation represented the difference between the value of the scheme assets and the scheme liabilities. The value of the scheme liabilities were determined using actuarial assumptions developed by management under consideration of expert advice provided by independent actuarial advisers. The assumptions included a discount rate of 4.6%, which was based on prevailing relevant bond yields at the time, and inflation rates of 2.5% per annum in respect of CPI and 3.3% per annum in respect of RPI, based on the market's expectation of future inflation at that time.

Taking together the value of the scheme assets, the discount rate and the expectation for inflation at 30 September 2013, the value of the pension liability is not expected to have changed materially from that at 31 March 2013 of £1.6 million. No valuation of the pension liability was carried out at 30 September 2012. A valuation was undertaken at 31 December 2012 and that valuation (£1.8 million) has been included in the statement of financial position at 30 September 2012.

10. Share capital

Shares authorised and issued are summarised below.

11. Share options

Details of the share options outstanding at 30 September 2013 are set out below.

None of the Directors hold any options.