1st Dec 2006 07:01
Hampson Industries PLC01 December 2006 1 December 2006 Hampson Industries PLC Unaudited interim results for the six month period ended 30 September 2006 Hampson Industries ("Hampson" or the "Group") announces interim results for thesix months to 30 September 2006. Key Highlights 30 September 2006 30 September 2005 Change £'000 £'000 % ------------ ----------- --------Continuing operations:Revenue 67,971 45,549 49Trading profit* 6,604 2,549 159Operating profit 3,679 1,970 87Profit before tax 1,250 688 82Earning per share - beforeexceptional items andamortisation of intangibleson acquisition 3.24p 1.59p 104Earning per share - basic 0.93p 0.89p 4--------------------- ------------ ----------- -------- Financial highlights • Interim results ahead of market expectations • Revenue grown by £22.4 million (49%). Organic growth of 26% excluding acquisitions • Trading profit* increased by £4.1 million (159%) • Trading profit* margin improved to c.10% • Cash generated from operations increased by £6.7 million • Adverse currency translational impact £0.4 million Corporate highlights • Acquisition of Composite Horizons Inc. expands portfolio in high-growth, high-margin sector • New manufacturing facility in Bangalore, India, commissioned and fully operational • 2005/06 acquisitions successfully integrated and accreting earnings • Eclipse 500 Very Light Jet in production, following September 2006 full FAA certification * Trading profit is defined as operating profit from continuing operationsbefore exceptional items and amortisation of intangible assets on acquisition.The Board considers that this measure of profit provides the best view of theunderlying trading performance of the Group. Commenting on the first half results, Chairman Tony Gilroy said: "The first six months represent another period of solid achievement for theGroup, with strong growth from Aerospace and a strengthened order book inAutomotive. "The Group continues to focus on generating value for our shareholders throughinvestment in growth programmes in our continuing businesses and by securingenhanced positions in niche, high growth, high margin areas that complement ourexisting capabilities and customer base. We look forward to the contributionthat Composite Horizons Inc. will make as we extend our presence in the rapidlyexpanding markets for advanced composite materials in the aerospace and defencesectors." Further information: Kim Ward, Chief Executive +44 (0)1384 472 941Howard Kimberley, Finance Director +44 (0)1384 472 946Jonathan Gollins/Marylene Guernier, M:Delta +44 (0)20 7153 1268 Hampson Industries PLC Unaudited interim results for the six month period ended 30 September 2006 Chairman's Statement Results We continue to realise the benefits of our clearly-focussed growth strategy andtrading performance for the six month period to 30 September 2006 was ahead ofexpectations. Revenue, at £68.0 million, was £22.4 million (49%) higher than in the comparableperiod of the prior year, and trading profit*, at £6.6 million, was £4.1 million(159%) ahead. The results for the six month period include a full contributionfrom the previous year's acquisitions, Coast Composites Inc. and Lamsco WestInc. Excluding our three recently acquired US subsidiaries, organic revenuegrowth in our existing businesses was 26% compared with the first half of theprevious year. Operating profit after impairment charges, other exceptional items and theamortisation of intangible assets relating to previous acquisitions, was 87%higher, at £3.7 million. Earnings per share after impairment charges, otherexceptional items and the amortisation of intangible assets relating to previousacquisitions increased to 0.93 pence. These results were achieved despite the results of our North American operationsbeing adversely affected on translation into sterling by the significantweakening of the value of the US dollar during the period. In constant currencyterms, trading profit would have been £0.4 million higher. * Trading profit is defined as operating profit from continuing operationsbefore exceptional items and amortisation of intangible assets on acquisition.The Board considers that this measure of profit provides the best view of theunderlying trading performance of the Group. Operational performance Aerospace Components & Structures Revenues in Aerospace Components & Structures, at £36.9 million, were £14.8million (67%) higher than in the same period of the prior year. Trading profitincreased to £3.3 million, compared to a loss in the comparable period of theprevious year. The improved results reflect a combination of continued strongdemand levels from commercial aerospace customers, operational efficiencyimprovements as development programmes have been progressively concluded, andthe realisation of the benefits of our targeted operational improvementactivities. Full certification was received for the Eclipse 500 Very Light Jet in September2006, which has allowed our facilities to move into production. As indicatedpreviously, we expect a lower than originally planned volume outlook in thecurrent financial year as a result of the delayed certification process. Composites & Transparencies The contribution of six months' results from Coast Composites Inc. assisted inimproving revenue by £8.6 million (96%) and trading profit by £1.1 million (64%)compared to the same period in the previous year. Overall first half performancewas lower than original expectation as the result of the deferral of toolingorders for the Airbus A350, following various airframe redesigns and deferral ofthe originally planned launch by Airbus. In addition, certain orders originallyexpected to be received during the period from the US Department of Defense byTexstars Inc. have been subject to delays and are now expected to be receivedand delivered in the second half. Automotive Revenue was £1.3 million lower than in the first half of the previous financialyear, primarily as the result of a timing difference between model run-outs andthe build up of production of replacement models. Trading profit, includingstart-up costs associated with the new Bangalore plant, was £0.6 million loweras a result. The period saw the completion and commissioning of our new manufacturingfacility in Bangalore, India. The facility, which was inaugurated by the BritishDeputy High Commissioner, South India, on 16 November 2006, has alreadycommenced manufacturing operations and is expected to make a modest contributionto revenue in the current year. Going forward, it will form a key element of ourgrowth strategy. Specialist Engineering The Specialist Engineering businesses generated a modest improvement compared tothe first half of the previous year, with revenue and trading profit £0.3million and £0.1 million ahead, respectively. Finance and Dividend We continued to invest during the period in support of our growth strategy inboth Aerospace and Automotive, but also to maintain strong discipline over themanagement of our liquid resources. Net debt stood at £65.2 million at 30September 2006, compared with £61.7 million at the year end. In view of the need to continue to fund growth-related investment during therest of this financial year, the Directors recommend that no interim dividend ispaid. In line with previous guidance we have given, the Board does intend torecommend the payment of a modest final dividend out of 2006/07 earnings,subject to prevailing market and business conditions. Acquisition We have today announced the acquisition of Composite Horizons Inc. ("CHI"), foran initial consideration of US$ 22.8 million to be funded by a vendor placingand extension to our existing bank facilities. Based in California, USA, CHI isa specialist manufacturer of complex polymer composite components, primarily forcommercial and military aerospace applications, including both airframe andengine. CHI has particular expertise in high temperature polymer composites using thelatest resin and fibre technologies. The acquisition of CHI not only complementsour existing capability in lower temperature composites but brings access to anumber of important programmes such as the F-35 (Joint Strike Fighter), F/A-22(Raptor) and Boeing 777 on which the Group was previously not well represented,as well as various unmanned and space programmes. We look forward to welcoming the management and employees of CHI to the HampsonGroup and to capitalising together on the significant further opportunities thatare available from the increasing use of advanced composite materials inadvanced airframe and gas turbine engine manufacture. Prospects The outlook for the Group's key markets remains positive and is broadlyunchanged from the assessment made within our AGM statement. At current rates ofexchange, the anticipated rate of growth as reported will be adversely affectedby the currency translation impact on our US dollar earnings. The commercial aerospace market continues to remain buoyant and we expect theseconditions to continue, with further growth anticipated on certain programmes,particularly single aisle aircraft. After a slightly slower start to the year than expected in Automotive, primarilyas a result of model mix changes, the outlook for demand for turbochargercomponents has strengthened since our AGM statement with the gaining of newprogrammes and both confirmed orders and enquiry levels from customersincreasing to an all-time high. Growth in demand for next-generationdiesel-engined vehicles in North America is a key driver of this demand and ourplans for investment will position us strongly to capitalise on theopportunities available. We anticipate lower than originally expected sales volumes on the Eclipse 500programme in the current financial year as a result of delays by Eclipse inachieving aircraft certification. Timing of deliveries of the Airbus A380 hasbeen deferred which may impact some orders currently scheduled for delivery inthe second half. Confirmation of the status of the A350 XWB programme is presently awaited fromAirbus, but we anticipate little or no demand for tooling for this programme inthe current financial year. Subject to confirmation of launch, we expect, basedon the reported likely specification of the aircraft, to see enhanced demand forlarge, precision tools in subsequent periods which will benefit our futureresults. Overall, we expect to continue to make good progress for the year as a whole andto continue to create value for our shareholders. Tony GilroyChairman1 December 2006 Consolidated Income Statement Half year to 30 Half year to 30 Half year to 30 September September September 2006 2006 2006 ---------- ---------- ---------- Notes Before Exceptional Total exceptional items and items and amortisation of amortisation of intangibles* intangibles* £'000 £'000 £'000--------------------- ----- ---------- ---------- ----------Continuing operations--------------------- ----- ---------- ---------- ----------Revenue 3 67,971 - 67,971--------------------- ----- ---------- ---------- ----------Operatingprofit 4 6,604 (2,925) 3,679--------------------- ----- ---------- ---------- ----------Analysed as:Trading profit 6,604 - 6,604Restructuring andrationalisation charges 5 - (528) (528)Impairment charges 5 - (2,110) (2,110)Amortisation of intangible assets onacquisition 5 - (287) (287)--------------------- ----- ---------- ---------- ----------Interest payable (2,628) - (2,628)Interest receivable 199 - 199Other net financing charges - - ---------------------- ----- ---------- ---------- ----------Profit beforetaxation 4,175 (2,925) 1,250Taxation 6 (398)--------------------- ----- ---------- ---------- ----------Profit after taxation 852--------------------- ----- ---------- ---------- ----------Discontinued operationsPost tax results from discontinuedoperations 7 (33)--------------------- ----- ---------- ---------- ----------Profit for thefinancial period 819Profit attributableto minority interests (38)--------------------- ----- ---------- ---------- ----------Profit attributableto equityshareholders 781--------------------- ----- ---------- ---------- ----------Earnings per 25pordinary share --------------------- ----- ---------- ---------- ----------Earnings per share before exceptionalitems andamortisationof intangibles* 9 3.24pBasic 9 0.93pDiluted 9 0.93p--------------------- ----- ---------- ---------- ---------- * Amortisation of intangible assets on acquisition. There have been no dividends declared or proposed in the period (period to 30September 2005: £nil, year to 31 March 2006: £nil). Consolidated Income Statement Restated ----------------------------------------------- Half year to 30 Half year to 30 Half year to 30 September September September 2005 2005 2005 ---------- ---------- ---------- Notes Before Exceptional Total exceptional items and items and amortisation of amortisation of intangibles* intangibles* £'000 £'000 £'000--------------------- ----- ---------- ---------- ----------Continuing operations--------------------- ----- ---------- ---------- ----------Revenue 3 45,549 - 45,549--------------------- ----- ---------- ---------- ----------Operating profit 4 2,549 (579) 1,970--------------------- ----- ---------- ---------- ----------Analysed as:Trading profit 2,549 - 2,549Restructuring andrationalisation charges 5 - (407) (407)Impairment charges 5 - - -Amortisation of intangible assets onacquisition 5 - (172) (172)--------------------- ----- ---------- ---------- ----------Interest payable (1,299) - (1,299)Interest receivable 17 - 17Other net financing charges - - ---------------------- ----- ---------- ---------- ----------Profit before taxation 1,267 (579) 688Taxation 6 (266)--------------------- ----- ---------- ---------- ----------Profit after taxation 422--------------------- ----- ---------- ---------- ----------Discontinued operationsPost tax results from discontinuedoperations 7 12--------------------- ----- ---------- ---------- ----------Profit for thefinancial period 434Loss attributableto minority interests 66--------------------- ----- ---------- ---------- ----------Profit attributableto equityshareholders 500--------------------- ----- ---------- ---------- ----------Earnings per 25pordinary share --------------------- ----- ---------- ---------- ----------Earnings per share before exceptionalitems andamortisation ofintangibles* 9 1.59pBasic 9 0.89pDiluted 9 0.88p--------------------- ----- ---------- ---------- ---------- * Amortisation of intangible assets on acquisition. Consolidated Income Statement Year to 31 Year to 31 Year to 31 March 2006 March 2006 March 2006 ---------- ---------- -------- Notes Before Exceptional Total exceptional items and items and amortisation of amortisation of intangibles* intangibles* £'000 £'000 £'000----------------------- ------ ---------- ---------- ----------Continuing operations--------------------- ------ ---------- ---------- --------Revenue 3 103,936 - 103,936----------------------- ------ ---------- ---------- ----------Operating profit 4 8,274 (4,629) 3,645----------------------- ------ ---------- ---------- ----------Analysed as:Trading profit 8,274 - 8,274Restructuring andrationalisation charges 5 - (879) (879)Impairment charges 5 - (2,222) (2,222)Amortisation of intangible assets onacquisition 5 - (1,528) (1,528)----------------------- ------ ---------- ---------- ----------Interest payable (3,303) - (3,303)Interest receivable 492 - 492Other net financingcharges (101) - (101)----------------------- ------ ---------- ---------- ----------Profit before taxation 5,362 (4,629) 733Taxation 6 (390)----------------------- ------ ---------- ---------- ----------Profit after taxation 343----------------------- ------ ---------- ---------- ----------Discontinued operationsPost tax results fromdiscontinued operations 7 8----------------------- ------ ---------- ---------- ----------Profit for thefinancial year 351Profit attributable to -minority interests ----------------------- ------ ---------- ---------- ----------Profit attributableto equity shareholders 351----------------------- ------ ---------- ---------- ----------Earnings per 25p ordinaryshare ----------------------- ------ ---------- ---------- ----------Earnings per share before exceptionalitems andamortisationof intangibles* 9 5.32pBasic 9 0.53pDiluted 9 0.53p----------------------- ------ ---------- ---------- ---------- * Amortisation of intangible assets on acquisition. Consolidated Balance Sheet Restated------------------------------------ --------- --------- --------As at 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------AssetsNon-current assetsGoodwill 53,817 20,186 57,824Intangible assets 15,678 5,761 15,723Property, plant and equipment 39,243 32,121 39,409Deferred tax asset 2,274 1,002 2,238------------------------------------ --------- --------- -------- 111,012 59,070 115,194------------------------------------ --------- --------- --------Current assetsInventories 25,699 20,812 24,393Trade and other receivables 28,083 21,333 31,227Financial assets - derivatives 582 250 802Cash and cash equivalents 9,729 3,740 6,776------------------------------------ --------- --------- -------- 64,093 46,135 63,198------------------------------------ --------- --------- --------Total assets 175,105 105,205 178,392------------------------------------ --------- --------- --------LiabilitiesCurrent liabilitiesTrade and other payables (27,930) (21,802) (31,099)Current tax liabilities - (224) (35)Provisions (1,497) (404) (2,197)------------------------------------ --------- --------- -------- (29,427) (22,430) (33,331)------------------------------------ --------- --------- --------Non-current liabilitiesFinancial liabilities- Borrowings (73,314) (40,176) (66,890)Deferred tax liability (4,136) (74) (4,299)Provisions - (62) -Retirement benefit liabilities (993) (3,434) (1,391)------------------------------------ --------- --------- -------- (78,443) (43,746) (72,580)------------------------------------ --------- --------- --------Total liabilities (107,870) (66,176) (105,911)------------------------------------ --------- --------- --------Net assets 67,235 39,029 72,481------------------------------------ --------- --------- --------Shareholders' equityCalled up share capital 21,870 13,775 21,870Reserves 45,313 25,305 50,571------------------------------------ --------- --------- --------Shareholders' equity 67,183 39,080 72,441------------------------------------ --------- --------- --------Total shareholders' equity 67,183 39,080 72,441Minority interest in equity 52 (51) 40------------------------------------ --------- --------- --------Total equity 67,235 39,029 72,481------------------------------------ --------- --------- -------- Consolidated Cash Flow Statement Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------Cash flows from operating activitiesCash generated from operations 5,223 (1,476) 2,685Interest received 199 17 265Interest paid (2,293) (1,263) (3,305)Tax paid (548) (91) (1,280)------------------------------------ --------- --------- --------Net cash from operating activities 2,581 (2,813) (1,635)------------------------------------ --------- --------- --------Cash flows from investing activitiesAcquisitions (net of cash acquired) - - (43,763)Disposals (net of cash disposed) 30 - -Purchase of property, plant andequipment (2,456) (2,860) (6,298)Purchase of intangible assets (213) - (389)Proceeds on sale of property,plant and equipment - 169 289Development costs (2,879) (1,223) (4,831)------------------------------------ --------- --------- --------Net cash used in investingactivities (5,518) (3,914) (54,992)------------------------------------ --------- --------- --------Cash flows from financing activitiesNet proceeds from issue of ordinary share capital - 74 32,329Proceeds from minority interest - - 99New borrowings 6,970 8,250 64,839Finance lease principal payments (759) (1,068) (1,677)Finance lease interest payments (115) (132) (256)Repayments of loans - - (35,304)------------------------------------ --------- --------- --------Net cash flow used in financingactivities 6,096 7,124 60,030------------------------------------ --------- --------- --------Currency variations on cash and cashequivalents (206) 116 146------------------------------------ --------- --------- --------Increase in cash and cashequivalents 2,953 513 3,549------------------------------------ --------- --------- --------Cash and cash equivalents at the beginning of the period 6,776 3,227 3,227------------------------------------ --------- --------- --------Cash and cash equivalents atthe end of the period 9,729 3,740 6,776------------------------------------ --------- --------- -------- Reconciliation of movement in cash and cash equivalents to movement in net debt Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------Movement in cash and cashequivalents 2,953 513 3,549------------------------------------ --------- --------- --------Net proceeds of borrowings (6,970) (8,751) (29,535)Indebtedness acquired as part ofacquisition - - (6,304)Finance lease principal payments 759 1,068 1,677New finance leases (287) (1,068) (1,314)------------------------------------ --------- --------- --------Movement in period (3,545) (8,238) (31,927)Net debt at beginning of period (61,692) (29,765) (29,765)------------------------------------ --------- --------- --------Net debt at end of period (65,237) (38,003) (61,692)------------------------------------ --------- --------- -------- Statement of Recognised Income and Expense Restated------------------------------------------------------------------------------ Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------Adjustment in respect of adoption ofIAS 39 - 234 234Currency variations (6,135) 1,917 2,516Actuarial gains/(losses) on retirementbenefit scheme - gross - - 827Deferred taxation related thereto - - (274)------------------------------------ --------- --------- --------Net gains/(losses) not recognisedin income statement (6,135) 2,151 3,303Profit for the financial period 781 500 351------------------------------------ --------- --------- --------Total recognised income for theyear (5,354) 2,651 3,654------------------------------------ --------- --------- --------Attributable to:------------------------------------ --------- --------- --------- Equity shareholders (5,354) 2,651 3,654- Minority interests 38 (66) ------------------------------------- --------- --------- -------- (5,316) 2,585 3,654------------------------------------ --------- --------- -------- Statement of Changes in Equity Restated------------------------------------------------------------------------------ Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------At start of period 72,441 36,380 36,380Total recognised income and expenses for period (5,354) 2,651 3,654Issue of ordinary share capital - - 32,329Share based payments 96 49 78------------------------------------ --------- --------- --------At end of period 67,183 39,080 72,441------------------------------------ --------- --------- -------- 1. Basis of preparation These interim consolidated financial statements have been prepared in accordancewith the Listing Rules of the Financial Services Authority. They have not beenprepared in accordance with IAS 34 'Interim Financial Reporting'. They do notinclude all information required for full annual financial statements, andshould be read in conjunction with the audited consolidated financial statementsof the Group for the year ended 31 March 2006. The comparative figures for theyear ended 31 March 2006 do not constitute statutory accounts for the purposesof section 240 of the Companies Act 1985. A copy of the statutory accounts forthe year ended 31 March 2006 has been delivered to the Registrar of Companiesand contained an unqualified auditors' report and did not contain statementsunder section 237(2) or 237(3) of the Companies Act 1985. The accounting policies and basis of consolidation applied by the Group in theseinterim consolidated financial statements are the same as those applied by theGroup in its audited consolidated financial statements for the year ended 31March 2006. The interim consolidated financial statements were approved for issue on behalfof the board of directors on 30 November 2006. 2. Restatement of results for half year to 30 September 2005 Under IFRS 3 'Business Combinations' intangible assets acquired as part of anacquisition should be separately valued and amortised. As part of finalisationof the provisional fair values of Texstars Inc. after the completion of the halfyear results, intangible assets of order backlog at date of acquisition andcustomer relationships were identified. As a consequence, in addition to the £548k system error on the valuation of partdelivered projects identified in the 2006 full year accounts, the results for 30September 2005 are restated to reflect the inclusion of these intangible assetsidentified upon acquisition within the balance sheet and the amortisation ofthese intangibles within the Income Statement. The earnings per share figuresfor 30 September 2005 have been restated accordingly, see note 9. In addition, to aid comparability within the half year results, the segmentalanalysis disclosures for 30 September 2005 have been restated into the businesssegments used within the 2006 full year accounts, see note 3. 3. Segmental analysis By primary segment - business group Aerospace components Composites CorporateHalf year to and and Specialist and 30 September structures transparencies Automotive engineering unallocated Total2006 £'000 £'000 £'000 £'000 £'000 £'000------------------------------ --------- --------- -------- --------- --------- -------Continuing operations:Segment revenue 36,914 17,575 9,218 4,264 - 67,971------------------------------ --------- --------- -------- --------- --------- -------Segment trading profit/(loss) 3,287 2,792 712 105 (292) 6,604------------------------------ --------- --------- -------- --------- --------- -------Restructuring andrationalisation charges (309) - (195) - (24) (528)Impairment charges (2,110) - - - - (2,110)Amortisation of intangibleassets on acquisition (93) (194) - - - (287)------------------------------ --------- --------- -------- --------- --------- -------Segment operating profit/(loss) 775 2,598 517 105 (316) 3,679Net interest and finance costs - - - - (2,429) (2,429)------------------------------ --------- --------- -------- --------- --------- -------Profit/(loss) before taxation 775 2,598 517 105 (2,745) 1,250Taxation - - - - (398) (398)------------------------------ --------- --------- -------- --------- --------- -------Profit/(loss) for the yearafter taxation 775 2,598 517 105 (3,143) 852------------------------------ --------- --------- -------- --------- --------- -------Discontinued operations: ------------------------------ --------- --------- -------- --------- --------- -------Post tax results fromdiscontinued operations - - - - (33) (33)------------------------------ --------- --------- -------- --------- --------- -------Profit attributable to minority interests - - - - (38) (38)------------------------------ --------- --------- -------- --------- --------- -------Net profit/(loss) attributableto equity shareholders 775 2,598 517 105 (3,214) 781------------------------------ --------- --------- -------- --------- --------- ------- Restated-------------------------------------------------------------------------------------------------------------- Aerospace components Composites CorporateHalf year to and and Specialist and 30 September structures transparencies Automotive engineering unallocated Total2005 £'000 £'000 £'000 £'000 £'000 £'000------------------------------ --------- --------- -------- --------- --------- -------Continuing operations: Segment revenue 22,147 8,968 10,488 3,946 - 45,549------------------------------ --------- --------- -------- --------- --------- -------Segment trading profit/(loss) (55) 1,704 1,338 30 (468) 2,549------------------------------ --------- --------- -------- --------- --------- -------Restructuring andrationalisation charges (236) - (22) (144) (5) (407)Impairment charges - - - - - -Amortisation of intangibleassets on acquisition - (172) - - - (172)------------------------------ --------- --------- -------- --------- --------- -------Segment operating profit/(loss) (291) 1,532 1,316 (114) (473) 1,970Net interest and finance costs - - - - (1,282) (1,282)------------------------------ --------- --------- -------- --------- --------- -------Profit/(loss) before taxation (291) 1,532 1,316 (114) (1,755) 688Taxation - - - - (266) (266)------------------------------ --------- --------- -------- --------- --------- -------Profit/(loss) for the yearafter taxation (291) 1,532 1,316 (114) (2,021) 422------------------------------ --------- --------- -------- --------- --------- -------Discontinued operations: ------------------------------ --------- --------- -------- --------- --------- -------Post tax results fromdiscontinued operations - - - - 12 12------------------------------ --------- --------- -------- --------- --------- -------Loss attributable to minorityinterests - - - - 66 66------------------------------ --------- --------- -------- --------- --------- -------Net profit/(loss) attributableto equity shareholders (291) 1,532 1,316 (114) (1,943) 500------------------------------ --------- --------- -------- --------- --------- ------- Aerospace components Composites Corporate and and Specialist and Year to structures transparencies Automotive engineering unallocated Total31 March 2006 £'000 £'000 £'000 £'000 £'000 £'000------------------------------ --------- --------- -------- --------- --------- -------Continuing operations:Segment revenue 50,343 24,409 20,812 8,372 - 103,936------------------------------ --------- --------- -------- --------- --------- -------Segment trading profit/(loss) 207 5,037 3,297 353 (620) 8,274------------------------------ --------- --------- -------- --------- --------- -------Restructuring andrationalisation charges (401) - (104) (183) (191) (879)Impairment charges (2,119) - (102) - (1) (2,222)Amortisation of intangibleassets on acquisition (266) (1,262) - - - (1,528)------------------------------ --------- --------- -------- --------- --------- -------Segment operating profit/(loss) (2,579) 3,775 3,091 170 (812) 3,645Net interest and finance costs - - - - (2,912) (2,912)------------------------------ --------- --------- -------- --------- --------- -------Profit/(loss) before taxation (2,579) 3,775 3,091 170 (3,724) 733Taxation - - - - (390) (390)------------------------------ --------- --------- -------- --------- --------- -------Profit/(loss) for the yearafter taxation (2,579) 3,775 3,091 170 (4,114) 343------------------------------ --------- --------- -------- --------- --------- -------Discontinued operations: ------------------------------ --------- --------- -------- --------- --------- -------Post tax results fromdiscontinued operations - - - - 8 8------------------------------ --------- --------- -------- --------- --------- -------Loss attributable to minority interests - - - - - ------------------------------- --------- --------- -------- --------- --------- -------Net profit/(loss) attributableto equity shareholders (2,579) 3,775 3,091 170 (4,106) 351------------------------------ --------- --------- -------- --------- --------- ------- By secondary segment - geographical region Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- -------- Revenue Revenue Revenue £'000 £'000 £'000------------------------------------ --------- --------- --------Continuing operations:UK 31,995 25,290 52,728Europe 9,939 5,288 13,920North America 23,710 13,519 32,361Rest of World 2,327 1,452 4,927------------------------------------ --------- --------- -------- 67,971 45,549 103,936------------------------------------ --------- --------- -------- 4. Operating profit Reconciliation of revenue to total operating profit: Restated------------------------------------------------------------------------------ Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------Revenue 67,971 45,549 103,936Cost of sales (52,750) (34,818) (81,688)------------------------------------ --------- --------- --------Gross profit 15,221 10,731 22,248Other income 386 85 798Distribution costs (1,500) (803) (1,924)Administrative expenses (10,428) (8,043) (17,477)------------------------------------ --------- --------- --------Operating profit 3,679 1,970 3,645------------------------------------ --------- --------- -------- 5. Exceptional items 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 - £528,000(half year to 30 September 2005: £407,000, year to 31 March 2006: £879,000). Impairment charges During the year the Group undertook a review of the utilisation and carryingvalues of certain assets. As a result of this £2,110,000 (half year to 30September 2005: £nil, year to 31 March 2006: £2,222,000) of impairment chargeswere incurred, as follows: Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------Impairment of inventories - - 1,958Impairment of receivables throughcustomer insolvency - - 70Impairment of plant, property andequipment - - 194Impairment of intangible assets 2,110 - ------------------------------------- --------- --------- --------Total impairment charges 2,110 - 2,222------------------------------------ --------- --------- -------- An impairment in the carrying value of intangible assets of £2,110,000 has beencharged in respect of a terminated contract involving one of the Group'ssubsidiaries. Action is being taken to recover the value of those assetstogether with the reimbursement of further costs incurred in relation to thecontract that have been expensed as a component of trading profit. 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 - £287,000 (half year to 30 September 2005: £172,000, year to 31 March2006: £1,528,000). Exceptional items are included within cost of sales £2,818,000 (half year to 30September 2005: £407,000, year to 31 March 2006: £4,383,000) and administrativeexpenses £107,000 (half year to 30 September 2005: £172,000, year to 31 March2006: £246,000). The net cash outflow from exceptional items charged during the period amountedto £528,000 (half year to 30 September 2005: £407,000, year to 31 March 2006:£879,000). Non-operating exceptional items Post-tax non-operating exceptional items of £15,000 (half year to 30 September2005: £nil, year to 31 March 2006: £28,000) were incurred in relation to thedischarge during the period of liabilities associated with a previouslydiscontinued operation. 6. Taxation The taxation charge for the half year to 30 September 2006 is based on theestimated effective tax rate for the full year to 31 March 2007 of 32% (halfyear to 30 September 2005: 30%). 7. Discontinued operations Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000------------------------------------ --------- --------- --------Discharge of liabilities associatedwith previously discontinued operations (15) - (28)Post tax results of disposed businesses 15 12 36Post tax loss on disposal ofdiscontinued operations (33) - ------------------------------------- --------- --------- --------Post tax results from discontinuedoperations (33) 12 8------------------------------------ --------- --------- -------- 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 to 30 Half year to 30 Year to 31 September September March 2006 2005 2006------------------------------------ --------- --------- -------- Total Total Total £'000 £'000 £'000------------------------------------ --------- --------- --------Revenue 191 243 520------------------------------------ --------- --------- --------Operating profit 21 18 52------------------------------------ --------- --------- --------Analysed as:Trading profit 21 18 52Restructuring and rationalisation charges - - -Impairment charges - - -Amortisation of intangible assets on acquisition - - ------------------------------------- --------- --------- --------Interest payable - (1) (2)Interest receivable - - -Other net financing charges - - ------------------------------------- --------- --------- --------Profit before taxation 21 17 50Taxation (6) (5) (14)------------------------------------ --------- --------- --------Profit after taxation 15 12 36------------------------------------ --------- --------- -------- 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 £78,000 inflow fromoperating activities (half year to 30 September 2005: outflow £5,000, year to 31March 2006: inflow £19,000), £1,000 outflow from investing activities (half yearto 30 September 2005: £nil, year to 31 March 2006: £nil) and £nil from financingactivities (half year to 30 September 2005: £nil, year to 31 March 2006: £nil). 8. Dividends Half year to 30 Half year to 30 Year to 31 September September March 2006 2005 2006 £'000 £'000 £'000--------------------------- ---------- ---------- ---------Dividends on equity shares - - ---------------------------- ---------- ---------- --------- - - ---------------------------- ---------- ---------- --------- No interim dividend has been approved by the Board. 9. Earnings per share Basic earnings per share are calculated by dividing the profit attributable toordinary shareholders from continuing operations of £814,000 (half year to 30September 2005: £488,000, year to 31 March 2006: £343,000) by 87,482,318 (halfyear to 30 September 2005: 55,101,366*, year to 31 March 2006: 64,505,150)ordinary shares, being the average number of ordinary shares in issue during theperiod. Earnings per share based on continuing activities before exceptional items andamortisation of intangibles on acquisition, which the directors consider gives auseful additional indication of the underlying performance of the Group, iscalculated on the earnings of the period adjusted as follows: Restated Restated----------------------------------------------------------------------------------------------------------------------- Half year to 30 Half year to 30 Year to 31 Half year to 30 Half year to 30 Year to 31 September September March September September March 2006 2005 2006 2006 2005 2006 Earnings Earnings Earnings Earnings per Earnings per Earnings per 25 pence 25 pence 25 pence share share share £'000 £'000 £'000 pence pence pence--------------------- ---------- ---------- -------- ---------- ---------- --------Continuing operations:Profit attributableto ordinary shareholders 814 488 343 0.93 0.89 0.53Exceptional items andamortisation of intangibles on acquisition 2,925 579 4,629 3.34 1.05 7.18Taxation on exceptionalitems andamortisation of intangibles on acquisition (909) (191) (1,541) (1.03) (0.35) (2.39)--------------------- ---------- ---------- -------- ---------- ---------- -------- 2,830 876 3,431 3.24 1.59 5.32--------------------- ---------- ---------- -------- ---------- ---------- -------- Diluted earnings per share are calculated by dividing the profit attributable toordinary shareholders from continuing operations of £814,000 (half year to 30September 2005: £488,000, year to 31 March 2006: £343,000) by 87,983,366 (halfyear to 30 September 2005: 55,309,040*, year to 31 March 2006: 65,005,252)ordinary shares, being 87,482,318 (half year to 30 September 2005: 55,101,366*,year to 31 March 2006: 64,505,150) as above, adjusted by existing share optionsof 501,048 (half year to 30 September 2005: 207,674*, year to 31 March 2006:500,102). * As a consequence of the 1:5 share consolidation which took effect on 16December 2005, the number of shares and share options has been rebased bydividing by 5. 10. Other information This statement will be posted to shareholders on 1 December 2006. Copies areavailable from the Company's registered office, at the address shown below: Group Headquarters and Registered OfficeHampson 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:
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