30th Aug 2007 07:00
Hunting PLC30 August 2007 For immediate release30 August 2007 HUNTING PLC Half year results For the six months ended 30 June 2007 Hunting PLC ("Hunting", the "Group" or the "Company"), the international energyservices company, today announces its half year results for the six months ended30 June 2007. • Revenue of £877.2m (2006: £885.8m) -1%• Profit from operations before exceptional items of £42.5m (2006: £38.5m) +10%• Pre-tax profit before exceptional items of £38.9m (2006: £35.3m) +10%• Basic earnings per share before exceptional items of 18.1p per share (2006: 16.6p) +9%• Interim dividend of 2.55p per share (2006: 2.3p) +11% Pre-tax profits reported in US Dollars, as opposed to £-Sterling, showed anincrease of 21% over the prior period reflecting Hunting's strong growth and theimpact of currency fluctuations on the first half results. Commenting on the outlook for the Group, Dennis Proctor, Hunting's ChiefExecutive, said: "For 2007, the oil and gas industry did not expect as dramatic a growth asexperienced in 2005 and 2006 due to labour constraints and project timing. Weare pleased with our first half results and improvement should continue for thesecond half. Weather, currency fluctuations, gas prices, light and heavy crudeprice differentials and geopolitical dynamics can and will influence futureperformance. However, the fundamentals of diminishing reserves against growingdemand will provide your Company with the opportunity to utilise its excellentand strategically located assets for future benefit." For further information, please contact: Hunting PLC 020 7321 0123Dennis Proctor, Chief ExecutiveDennis Clark, Finance Director Hogarth Partnership Limited 020 7357 9477Andrew JaquesAnthony Arthur Notes to Editors: Hunting PLC is an international oil services company providing support solutionsto the world's largest oil and gas companies. Hunting PLC, the international energy services company, announces its half yearresults for the six months to 30 June 2007. INTRODUCTION The half year results reflect excellent operational improvements due to prioryear capital expenditures, productivity enhancements and cost containment. Thisis set against a background of a 20% reduction in drilling activity in Canada,low natural gas prices in North America, and a further weakening of the USdollar. In £-Sterling, pre-tax profits before exceptionals report a 10% increaseover the prior period; expressing these results in US dollars shows an increaseof 21%. Increased Canadian oil sands investment and global drilling activitycontinues to provide excellent growth opportunities for your Company's assets. RESULTS SUMMARY Revenue for the six months to 30 June 2007 decreased from £885.8m to £877.2m.Profit from operations before exceptionals increased by 10% to £42.5m (2006 -£38.5m). Pre-tax profits before exceptionals increased by 10% to £38.9m (2006 -£35.3m) and after exceptional items pre-tax profits increased by 3%. Profit forthe period was £23.7m (2006 - £22.9m) after a tax charge of £12.7m (2006 -£12.4m). Basic earnings per share before exceptionals of 18.1p were 9% higher (2006 -16.6p) and after exceptional items basic earnings per share decreased by 3%. An interim dividend of 2.55p per share (2006 - 2.3p) will be paid on 21 November2007 to shareholders on the register at the close of business on 2 November2007. OPERATIONAL REVIEW The revenue and operating results of each division are included in the financialanalysis in Note 2 of this report. GIBSON ENERGY Gibson Energy, based in Alberta, Canada and one of Canada's premier mid-streamservice companies providing marketing services, truck transportation, processingand distribution achieved a good result with profit from operations for the sixmonths of £19.6m. Conventional exploration and production drilling declinedapproximately 20% during the period, however, heavy oil projects continue toattract further investment. Truck transportation, pipelines and terminalscontinue to benefit from larger production drilling volumes. Moose Jaw Refinerycontinues to benefit from A grade asphalt prices as well as market shareimprovement for wellsite fluids. Differentials between heavy/sour and lightcrude oil pricing, as well as diluent, enables Gibson to maximise the synergiesof its terminals, pipeline and storage assets. Prior period expansion programmescoupled with growing volumes from tar sands development will provide the companywith excellent growth opportunities. Marketing had an excellent result for the period. Oil prices in the 20-plus crude streams remained volatile and management expertly managed its inventories. However, profit from operations was lower than the corresponding period in 2006 by 29% at £5.5m (2006 - £7.8m). Truck Transportation had another exceptional year on year improvement due to higher activity levels, spot movements and synergies with other Gibson assets. Profit from operations increased by 32% to £5.4m (2006 - £4.1m). Terminals and Pipelines have continued to see increased overall activity in the region. Profit from operations increased 36% to £3.0m (2006 - £2.2m). Canwest Propane and Natural Gas Liquids ("NGL") benefited from a further acquisition and saw an increase of 33% in profit from operations to £2.4m (2006 - £1.8m). Moose Jaw Refinery results were slow due to delayed asphalt deliveries following adverse weather and the slump in US housing demand for roof flux. Sales for asphalt and well site fluids exceeded last year and second half deliveries should improve. Profit from operations for the period was £3.3m (2006 - £6.2m). The performance of Gibson's assets is leveraged to the continued development ofoil and gas in Western Canada including the vast tar sands in Alberta and heavyoil production which is expected to triple in the next 7-10 years. Marketingwill remain dependent upon crude differentials, diluent availability andblending opportunities. HUNTING ENERGY SERVICES Hunting Energy Services, with manufacturing facilities throughout the world, isa supplier of products and services to the upstream oil and gas companies.Profit from operations in the first half increased 51% from £15.4m to £23.3m. Current energy price levels are fueling drilling activity around the globe atlevels not seen since the early 1980s. Recent forecasts continue to support theadditional need for rigs and ancillary products to meet rising demand and severedepletion. As expected, growth in the Middle East and Asia has offset thedecline in Canada and the US Gulf of Mexico. New capacity in the US RockyMountains, Holland and Singapore has provided excellent profit gains. Well Completion - Profit from operations increased 73% to £16.3m (2006 - £9.4m). Well Construction - Profit from operations increased 8% to £4.3m (2006 - £4.0m). Exploration and Production - 5 out of 9 wells were successfully completed during the period - 3 gas, 1 oil and gas, 1 oil. Full production was not regained from the damage of Hurricane Katrina until the second quarter, which, combined with lower gas prices, resulted in an 11% decline in profit from operations to £1.6m (2006 - £1.8m). Hunting Energy France - Profit from operations increased to £1.1m (2006 - £0.2m). OTHER Gibson Shipbrokers had a decrease in profit from operations to £0.7m (2006 -£1.0m). On 12 July 2007, Aero Sekur, our former Italian defence company, was sold for£2.0m resulting in an exceptional loss on sale of £2.5m. The loss has beenrecognised in the half year result. KEY FINANCIAL POINTS • EBITDA £55.6m (2006 - £51.5m). • Capital expenditure £32.7m (2006 - £25.8m) which included £8.6m in Gibson Energy (2006 - £11.1m) and £22.8m in Hunting Energy Services (2006 - £13.7m). In total, £17.7m was replacement expenditure (2006 - £10.0m) and £15.0m was new business expenditure (2006 - £15.8m). • Acquisitions £11.8m (2006 - £0.9m). • Depreciation and amortisation £12.8m (2006 - £12.5m). • Net debt £138.8m (2006 - £109.6m) with working capital increasing by £40.6m (2006 - £22.0m). OUTLOOK For 2007, the oil and gas industry did not expect as dramatic a growth asexperienced in 2005 and 2006 due to labour constraints and project timing. Weare pleased with the first half results and improvement should continue for thesecond half. Weather, currency fluctuations, gas prices, light and heavy crudeprice differentials and geopolitical dynamics can and will influence futureperformance. However, the fundamentals of diminishing reserves against growingdemand will provide your Company the opportunity to utilise its excellent andstrategically located assets for future benefit. Richard Hunting Dennis ProctorChairman Chief Executive30 August 2007 Consolidated Income Statement(Unaudited) Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Notes £m £m £m Revenue 2 877.2 885.8 1,810.4Cost of sales (793.0) (801.9) (1,639.8)-----------------------------------------------------------------------------Gross profit 84.2 83.9 170.6Other operating income 3.8 1.6 7.5Operating expenses* (48.0) (47.0) (91.8)-----------------------------------------------------------------------------Profit from operations 2 40.0 38.5 86.3Interest income 5.0 3.4 8.3Interest expense and similar charges (8.9) (7.1) (16.4)Share of post-tax profits in associates 0.3 0.5 2.6-----------------------------------------------------------------------------Profit before tax 36.4 35.3 80.8Taxation 4 (12.7) (12.4) (28.6)-----------------------------------------------------------------------------Profit for the period 23.7 22.9 52.2-----------------------------------------------------------------------------Attributable to:Shareholders of the parent 21.0 21.3 48.4Minority interests 2.7 1.6 3.8----------------------------------------------------------------------------- 23.7 22.9 52.2-----------------------------------------------------------------------------Basic earnings per 25p ordinary share 5 16.1p 16.6p 37.6pDiluted earnings per 25p ordinary share 5 15.5p 15.7p 35.7pDividend declared per share - interim 6 2.55p 2.3p 2.3pDividend declared per share - final 6 - - 5.2p The above results relate to continuing operations. * Operating expenses include exceptional charges of £2.5m (six months ended 30June 2006 - £nil; year ended 31 December 2006 - £5.0m) as described in note 3.The earnings per share adjusted for these exceptional charges is disclosed innote 5. A 2007 interim dividend of 2.55p per share, which will absorb an estimated£3.3m, was approved by the Board, for payment on 21 November 2007. Consolidated Balance Sheet(Unaudited) At At At 30 June 30 June 31 December 2007 2006 2006 Notes £m £m £m ASSETSNon-current assetsProperty, plant and equipment 221.0 195.2 194.6Goodwill 57.7 56.8 53.0Other intangible assets 5.3 5.1 4.0Interests in associates 8.4 6.0 8.0Available for sale investments 0.2 0.2 0.2Retirement benefit assets 24.1 28.6 30.1Trade and other receivables 2.7 2.6 2.8Deferred tax assets 9.5 11.5 12.4----------------------------------------------------------------------------- 328.9 306.0 305.1-----------------------------------------------------------------------------Current assetsInventories 131.9 121.3 120.0Trade and other receivables 209.7 183.8 191.1Financial assets 0.6 0.6 0.6Cash and cash equivalents 112.9 113.6 118.5Assets classified as held for sale 8 18.8 - ------------------------------------------------------------------------------ 473.9 419.3 430.2-----------------------------------------------------------------------------LIABILITIESCurrent liabilitiesTrade and other payables 225.9 198.7 226.6Current tax liabilities 4.1 9.1 8.8Borrowings 150.3 131.2 108.5Provisions 4.1 1.9 4.2Liabilities associated with assets classified as held for sale 8 16.8 - ------------------------------------------------------------------------------ 401.2 340.9 348.1-----------------------------------------------------------------------------Net current assets 72.7 78.4 82.1-----------------------------------------------------------------------------Non-current liabilitiesBorrowings 92.7 92.6 79.9Deferred tax liabilities 76.4 70.8 76.3Retirement benefit obligations 1.3 3.1 2.4Other payables 2.3 4.5 1.9Provisions 15.1 15.9 15.2----------------------------------------------------------------------------- 187.8 186.9 175.7-----------------------------------------------------------------------------Net assets 213.8 197.5 211.5-----------------------------------------------------------------------------Shareholders' equityShare capital 9 32.9 32.5 32.8Share premium 9 87.2 84.7 85.6Other reserves 9 7.7 14.4 5.6Retained earnings 9 75.7 59.2 79.8----------------------------------------------------------------------------- 9 203.5 190.8 203.8Minority interests 9 10.3 6.7 7.7-----------------------------------------------------------------------------Total equity 9 213.8 197.5 211.5----------------------------------------------------------------------------- Consolidated Statement of Recognised Income and Expense(Unaudited) Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £m £m £m Profit for the period 23.7 22.9 52.2-----------------------------------------------------------------------------Exchange adjustments net of tax 3.4 (5.9) (15.8)Fair value (losses) gains net of tax:- on cash flow hedges - (0.2) 0.4Impairment of revalued assets held for sale net of tax (1.0) - -Actuarial (losses) gains on defined benefit pension schemes net of tax (8.7) 0.9 2.0Tax on the discharge of share options 2.3 - 1.9-----------------------------------------------------------------------------Net expense recognised directly in equity (4.0) (5.2) (11.5)-----------------------------------------------------------------------------Total recognised income and expense for the period 19.7 17.7 40.7----------------------------------------------------------------------------- Attributable to:Shareholders of the parent 17.1 16.2 37.3Minority interests 2.6 1.5 3.4----------------------------------------------------------------------------- 19.7 17.7 40.7----------------------------------------------------------------------------- Consolidated Cash Flow Statement(Unaudited) Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £m £m £m Operating activitiesProfit from operations 40.0 38.5 86.3Exceptional charges 2.5 - 5.0Depreciation and amortisation 12.8 12.5 28.3(Profit) loss on disposal of property, plant and equipment (0.5) (0.4) 2.9Increase in inventories (16.6) (16.9) (25.3)(Increase) decrease in receivables (18.8) 8.1 (11.9)(Decrease) increase in payables (5.2) (13.2) 25.0Taxation paid (12.1) (7.2) (11.2)UK pension scheme contribution (5.6) (5.6) (5.6)Other non cash flow items (0.5) 0.7 (0.2)-----------------------------------------------------------------------------Net cash (outflow) inflow from operating activities (4.0) 16.5 93.3-----------------------------------------------------------------------------Investing activitiesDividends received from associates 0.1 - 0.2Purchase of subsidiaries net of cash and overdrafts acquired (11.8) (0.9) (0.9)Closure of a subsidiary - - (1.0)Purchase of associates (0.1) - (0.2)Loans to associates (2.0) - (0.6)Loans from associates 0.3 3.3 2.9Proceeds from disposal of property, plant and equipment 2.6 0.5 1.1Purchase of property, plant and equipment (32.7) (25.8) (54.2)Purchase of intangible assets (0.1) (0.4) (0.7)-----------------------------------------------------------------------------Net cash outflow from investing activities (43.7) (23.3) (53.4)-----------------------------------------------------------------------------Financing activitiesInterest received 4.1 2.7 6.4Interest paid (8.6 ) (7.5) (14.5)Equity dividends paid - (5.2) (8.2)Minority interest dividend paid - - (0.9)Share capital issued 0.1 2.3 3.3Purchase of treasury shares (16.8) (4.3) (12.4)Disposal of treasury shares 4.2 1.0 4.0Proceeds from new borrowings 54.9 23.7 11.9Repayment of borrowings (4.9) (1.2) (14.6)Purchase of deposits - (0.6) (0.6)Capital element of finance leases (0.2) (0.3) (0.6)-----------------------------------------------------------------------------Net cash inflow (outflow) from financing activities 32.8 10.6 (26.2)-----------------------------------------------------------------------------Net cash (outflow) inflow in cash and cash equivalents (14.9) 3.8 13.7Cash and cash equivalents at beginning of period 16.9 4.5 4.5Effect of foreign exchange rates (0.1) (0.3) (1.3)Re-classified as held for sale 3.2 - ------------------------------------------------------------------------------Cash and cash equivalents at end of period 5.1 8.0 16.9----------------------------------------------------------------------------- Cash and cash equivalents and bank overdrafts at the end of the periodcomprise:Cash and cash equivalents 112.9 113.6 118.5Bank overdrafts included in borrowings (107.8) (105.6) (101.6)----------------------------------------------------------------------------- 5.1 8.0 16.9----------------------------------------------------------------------------- Notes to the Half Year Report 1. BASIS OF ACCOUNTING The financial information contained in this half year report complies with IAS34 Interim Financial Reporting, as adopted by the European Union, and with theListing Rules of the Financial Services Authority. It has been prepared on thebasis of the accounting policies set out in the Group's 2006 Annual Report andAccounts with the exception that IFRIC 10 Interim Financial Reporting andImpairment was adopted for the six months ended 30 June 2007. Although theadoption represents a change in accounting policy, comparative figures for 2006have not been restated as it does not impact the results or financial positionof the Group. The following Standards, Interpretations and Amendments, which are effective forannual periods ending after 30 June 2007, have not been adopted early for theseinterim financial statements: IFRS 7 Financial Instruments: Disclosures, IFRS 8Operating Segments, Amendment to IAS 1 Presentation of Financial Statements,Amendment to IAS 23 Borrowing Costs, IFRIC 7 Applying the Restatement Approachunder IAS 29, IFRIC 8 Scope of IFRS 2, IFRIC 9 Re-assessment of EmbeddedDerivatives, IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions and IFRIC12 Service Concession Arrangements. This half year report does not constitute statutory accounts as defined insection 240 of the Companies Act 1985. A copy of the statutory accounts for theyear ended 31 December 2006 has been delivered to the Registrar of Companies.The auditors' report on those accounts was unqualified. 2. SEGMENTAL REPORTING Business Segments Results from operations Six months ended 30 June 2007 Inter- Total gross segmental Total Profit from revenue revenue revenue operations £m £m £m £m Gibson EnergyMarketing 599.4 (68.2) 531.2 5.5Truck Transportation 57.1 (5.0) 52.1 5.4Terminals and Pipelines 9.9 (2.3) 7.6 3.0Canwest Propane and Natural Gas Liquids 75.5 (41.1) 34.4 2.4Moose Jaw Refinery 58.7 (21.3) 37.4 3.3------------------------------------------------------------------------------ 800.6 (137.9) 662.7 19.6------------------------------------------------------------------------------Hunting Energy ServicesWell Completion 122.9 (11.7) 111.2 16.3Well Construction 38.7 (2.8) 35.9 4.3Exploration and Production 5.3 - 5.3 1.6Hunting Energy France 12.9 - 12.9 1.1------------------------------------------------------------------------------ 179.8 (14.5) 165.3 23.3------------------------------------------------------------------------------Other operating divisions 49.2 - 49.2 (2.9)------------------------------------------------------------------------------Total 1,029.6 (152.4) 877.2 40.0------------------------------------------------------------------------------ The other operating divisions segment includes an exceptional charge of £2.5mfor the six months ended 30 June 2007 (see note 3). Six months ended 30 June 2006 Inter- Total gross segmental Total Profit from revenue revenue revenue operations £m £m £m £m Gibson EnergyMarketing 632.0 (70.2) 561.8 7.8Truck Transportation 54.9 (4.4) 50.5 4.1Terminals and Pipelines 9.3 (2.0) 7.3 2.2Canwest Propane and Natural Gas Liquids 67.0 (35.0) 32.0 1.8Moose Jaw Refinery 73.0 (30.1) 42.9 6.2------------------------------------------------------------------------------ 836.2 (141.7) 694.5 22.1------------------------------------------------------------------------------Hunting Energy ServicesWell Completion 103.0 (9.9) 93.1 9.4Well Construction 40.1 (2.8) 37.3 4.0Exploration and Production 5.1 - 5.1 1.8Hunting Energy France 7.6 - 7.6 0.2------------------------------------------------------------------------------ 155.8 (12.7) 143.1 15.4------------------------------------------------------------------------------Other operating divisions 48.2 - 48.2 1.0------------------------------------------------------------------------------Total 1,040.2 (154.4) 885.8 38.5------------------------------------------------------------------------------ Year ended 31 December 2006 Inter- Total gross segmental Total Profit from revenue revenue revenue operations £m £m £m £m Gibson EnergyMarketing 1,294.9 (147.0) 1,147.9 13.0Truck Transportation 113.1 (9.3) 103.8 9.6Terminals and Pipelines 19.5 (3.9) 15.6 5.3Canwest Propane and Natural Gas 149.5 (80.3) 69.2 5.2LiquidsMoose Jaw Refinery 167.4 (74.9) 92.5 14.2------------------------------------------------------------------------------ 1,744.4 (315.4) 1,429.0 47.3------------------------------------------------------------------------------Hunting Energy ServicesWell Completion 213.4 (25.0) 188.4 24.9Well Construction 80.6 (7.1) 73.5 8.8Exploration and Production 10.0 - 10.0 2.0Hunting Energy France 16.0 - 16.0 1.2------------------------------------------------------------------------------ 320.0 (32.1) 287.9 36.9------------------------------------------------------------------------------Other operating divisions 93.5 - 93.5 7.1------------------------------------------------------------------------------Total 2,157.9 (347.5) 1,810.4 91.3-------------------------------------------------------------------Exceptional charges not apportioned to business segments (5.0) ---------Profit from operations 86.3 --------- Operating expenses include an exceptional charge of £5.0m in the second half ofthe year ended 31 December 2006 (see note 3). 3. EXCEPTIONAL CHARGES Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £m £m £m Exceptional charges comprise the following:Impairment of assets classified as held for sale 2.5 - -Onerous leases - - 3.1Closure of a subsidiary - - 1.9----------------------------------------------------------------------------- 2.5 - 5.0----------------------------------------------------------------------------- 4. TAXATION The taxation charge for the six months ended 30 June 2007 is calculated byapplying the best estimate of the 2007 annual effective rate of tax to theprofit for the period. The tax expense comprises the following: Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £m £m £m UK 3.4 2.0 5.7Non-UK 9.3 10.4 22.9----------------------------------------------------------------------------- 12.7 12.4 28.6----------------------------------------------------------------------------- Included in the tax charge is a credit of £0.1m in respect of exceptionalcharges (six months ended 30 June 2006 - £nil; year ended 31 December 2006 -£1.4m credit). The tax recognised within the share of post-tax profits in associates, was acharge of £0.1m (six months ended 30 June 2006 - £0.1m; year ended 31 December2006 - £0.3m). 5. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period. For diluted earnings per share, the weighted average number of outstandingordinary shares is adjusted to assume conversion of all dilutive potentialordinary shares. The dilutive potential ordinary shares are those options wherethe exercise price is less than the average market price of the Company'sordinary shares during the period. These options do not impact the basicearnings attributable to ordinary shares. Reconciliations of the earnings and weighted average number of ordinary sharesused in the calculations are set out below: Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £m £m £m Basic and diluted earnings attributable to ordinaryshareholders 21.0 21.3 48.4----------------------------------------------------------------------------- millions millions millionsBasic weighted average number of ordinary shares 130.3 128.4 128.9Dilutive outstanding share options 5.2 6.6 6.4Long term incentive plans 0.3 0.4 0.5-----------------------------------------------------------------------------Adjusted weighted average number of ordinary shares 135.8 135.4 135.8----------------------------------------------------------------------------- pence pence penceBasic EPS 16.1 16.6 37.6Diluted EPS 15.5 15.7 35.7-----------------------------------------------------------------------------EPS adjusted for exceptional itemsis as follows: pence pence penceBasic EPS 16.1 16.6 37.6Add: exceptional charges after taxation 2.0 - 2.8-----------------------------------------------------------------------------Basic EPS before exceptional items 18.1 16.6 40.4-----------------------------------------------------------------------------Diluted EPS 15.5 15.7 35.7Add: exceptional charges after taxation 1.8 - 2.7-----------------------------------------------------------------------------Diluted EPS before exceptional items 17.3 15.7 38.4----------------------------------------------------------------------------- The weighted average number of ordinary shares is unaffected by the adjustmentfor exceptional items. 6. DIVIDENDS Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £m £m £mOrdinary dividends:2006 final - 5.2p 6.8 - -2006 interim - 2.3p - - 3.02005 final - 4.0p - 5.2 5.2----------------------------------------------------------------------------- 6.8 5.2 8.2----------------------------------------------------------------------------- 7. CHANGES IN NET DEBT Fair value Re- At At and classification 30 1 January Cash similar Exchange as held June 2007 flow movements movements for sale 2007 £m £m £m £m £m £m Cash and cash equivalents 118.5 (3.9) - (0.5) (1.2) 112.9Bank overdrafts (101.6) (11.0) - 0.4 4.4 (107.8)------------------------------------------------------------------------------------------ 16.9 (14.9) - (0.1) 3.2 5.1Investments 0.6 - - - - 0.6Current borrowings (6.6) (35.0) - (1.8) 1.1 (42.3)Non-current borrowings (79.8) (15.0) 0.1 (2.9) 5.0 (92.6)Finance leases (0.4) 0.2 - (0.1) - (0.3)Net debt classified as held for sale - - - - (9.3) (9.3)------------------------------------------------------------------------------------------Total net debt (69.3) (64.7) 0.1 (4.9) - (138.8)------------------------------------------------------------------------------------------ 8. ASSETS HELD FOR SALE The Group has classified the Aero Sekur business as held for sale at the periodend due to sale negotiations being at an advanced stage on 29 June 2007. Thebusiness was subsequently sold on 12 July 2007 to Aero Sekur Ltd for a grosscash consideration of £2.0m. As a result, the net assets have been written downby £3.5m to their fair value less costs to sell, of which £2.5m has been chargedto operating expenses (note 3) and £1.0m directly to the Consolidated Statementof Recognised Income and Expense. The fair value of the net assets held for sale at 30 June 2007 was as follows: At 30 June 2007 £m Assets classified as held for saleProperty, plant and equipment 2.3Inventories 6.8Trade and other receivables 8.5Cash and cash equivalents 1.2-------------------------------------------------------------------------- 18.8--------------------------------------------------------------------------Liabilities associated with the assets classified as held forsaleTrade and other payables 4.9Current tax liabilities 0.3Bank overdrafts 4.4Other current borrowings 1.1Non-current borrowings 5.0Retirement benefit obligations 1.1-------------------------------------------------------------------------- 16.8--------------------------------------------------------------------------Selling costs are provided for separately and included withinthe Group's current liabilities.The impairment of assets comprised the following: £mProperty, plant and equipment 1.5Inventories 0.8Trade and other receivables 0.7Deferred taxation (0.5)-------------------------------------------------------------------------- 2.5-------------------------------------------------------------------------- Aero Sekur had been previously recognised within the other operating divisionsbusiness segment. 9. STATEMENT OF CHANGES IN EQUITYSix months ended 30 June 2007 Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity £m £m £m £m £m £m £m At 1 January 2007 32.8 85.6 5.6 79.8 203.8 7.7 211.5------------------------------------------------------------------------------------------------Exchange adjustments - - 3.5 - 3.5 (0.1) 3.4Depreciation transfer for land and buildings - - (0.4) 0.4 - - -Actuarial losses on defined benefitpension schemes - - - (12.5) (12.5) - (12.5)Impairment of revalued assets held for sale - - (1.5) - (1.5) - (1.5)Tax on items taken directly to equity - - 0.6 6.0 6.6 - 6.6------------------------------------------------------------------------------------------------Net income recognised directly in equity - - 2.2 (6.1) (3.9) (0.1) (4.0)Profit for the period - - - 21.0 21.0 2.7 23.7------------------------------------------------------------------------------------------------Total net income for the period - - 2.2 14.9 17.1 2.6 19.7------------------------------------------------------------------------------------------------Dividends - - - (6.8) (6.8) - (6.8)Shares issued- share option schemes - 0.1 - - 0.1 - 0.1- LTIP awards 0.1 1.4 - - 1.5 - 1.5Purchase of Treasury shares - - - (17.2) (17.2) - (17.2)Disposal of Treasury shares - - - 4.3 4.3 - 4.3Share options- value of employee services - - 0.6 - 0.6 - 0.6- discharge - 0.1 - - 0.1 - 0.1Transfer between reserves - - (0.7) 0.7 - - -------------------------------------------------------------------------------------------------At 30 June 2007 32.9 87.2 7.7 75.7 203.5 10.3 213.8------------------------------------------------------------------------------------------------ Six months ended 30 June 2006 Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity £m £m £m £m £m £m £m At 1 January 2006 32.2 82.7 21.7 41.8 178.4 5.2 183.6------------------------------------------------------------------------------------------------Exchange adjustments - - (5.8) - (5.8) (0.1) (5.9)Depreciation transfer for land and buildings - - (0.5) 0.5 - - -Actuarial gains on defined benefit pensionschemes - - - 1.3 1.3 - 1.3Net losses on cash flow hedges - - (0.2) - (0.2) - (0.2)Tax on items taken directly to equity - - 0.2 (0.6) (0.4) - (0.4)------------------------------------------------------------------------------------------------Net income recognised directly in equity - - (6.3) 1.2 (5.1) (0.1) (5.2)Profit for the period - - - 21.3 21.3 1.6 22.9------------------------------------------------------------------------------------------------Total net income for the period - - (6.3) 22.5 16.2 1.5 17.7------------------------------------------------------------------------------------------------Dividends - - - (5.2) (5.2) - (5.2)Shares issued- share option schemes 0.3 2.0 - - 2.3 - 2.3Purchase of Treasury shares - - - (4.3) (4.3) - (4.3)Disposal of Treasury shares - - - 5.1 5.1 - 5.1Share options - value of employee services - - 0.7 - 0.7 - 0.7- discharge - - (0.2) (2.2) (2.4) - (2.4)Transfer between reserves - - (1.5) 1.5 - - -------------------------------------------------------------------------------------------------At 30 June 2006 32.5 84.7 14.4 59.2 190.8 6.7 197.5------------------------------------------------------------------------------------------------ Year ended 31 December 2006 Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity £m £m £m £m £m £m £m At 1 January 2006 32.2 82.7 21.7 41.8 178.4 5.2 183.6------------------------------------------------------------------------------------------------Exchange adjustments - - (16.0) - (16.0) (0.4) (16.4)Depreciation transfer for land and buildings - - (0.2) 0.2 - - -Actuarial gains on defined benefit pension schemes - - - 2.6 2.6 - 2.6Net gains on cash flow hedges - - 0.6 - 0.6 - 0.6Tax on items taken directly to equity - - 0.6 1.1 1.7 - 1.7------------------------------------------------------------------------------------------------Net income recognised directly in equity - - (15.0) 3.9 (11.1) (0.4) (11.5)Profit for the year - - - 48.4 48.4 3.8 52.2------------------------------------------------------------------------------------------------Total net income for the year - - (15.0) 52.3 37.3 3.4 40.7------------------------------------------------------------------------------------------------Dividends - - - (8.2) (8.2) (0.9) (9.1)Shares issued- share option schemes 0.6 2.7 - - 3.3 - 3.3Purchase of Treasury shares - - - (12.4) (12.4) - (12.4)Disposal of Treasury shares - - - 4.0 4.0 - 4.0Share options- value of employee services - - 1.4 - 1.4 - 1.4- discharge - 0.2 (0.8) 0.6 - - -Transfer between reserves - - (1.7) 1.7 - - -------------------------------------------------------------------------------------------------At 31 December 2006 32.8 85.6 5.6 79.8 203.8 7.7 211.5------------------------------------------------------------------------------------------------ 10. ACQUISITIONS During the six months ended 30 June 2007, the Group acquired 100% of the sharecapital of three companies in Canada: Boychuk Energy Inc. on 1 June for a grossconsideration of £6.1m; Del's Propane Ltd on 1 February for a grossconsideration of £2.7m and Western Propane & Gas Services Ltd on 31 May for agross consideration of £1.3m. Combined details of these acquisitions are set out below: Pre-acquisition Provisional carrying values fair values £m £m Property, plant and equipment 2.6 6.8Intangible assets - 1.3Trade and other receivables 1.1 1.1Trade and other payables (0.3) (0.3)Bank overdrafts (0.2) (0.2)Deferred taxation (0.1) (1.8)--------------------------------------------------------------Net assets acquired 3.1 6.9------------------------------------------------Goodwill 3.2 ---------Consideration 10.1 --------- The consideration for all three acquisitions was in cash. In addition, £1.5m ofdeferred consideration was paid in respect of the 2005 acquisition of CromarLtd. 11. DEFINED BENEFIT PENSION SCHEME During the six months ended 30 June 2007, the Group's UK pension schemepurchased annuity policies to match a substantial part of the scheme's pensionliabilities. The impact of this, together with other actuarial gains and losses,has been to reduce the carrying value of the retirement benefit asset by £12.5m,which after deferred tax of £3.8m, reduces Group net assets by £8.7m. Thisreduction has been recognised in the Consolidated Statement of Recognised Incomeand Expense with no impact on the Consolidated Income Statement. 12. CAPITAL COMMITMENTS Group capital expenditure committed, for the purchase of property, plant andequipment, but not provided for in these financial statements amounted to £9.7m(at 30 June 2006 - £7.0m; at 31 December 2006 - £4.0m). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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