17th Mar 2009 07:00
17 March 2009
Augean Plc
Preliminary results for the year ended 31 December 2008
Augean PLC ("Augean" or "the group"), one of the UK's market leaders in the management of hazardous waste, announces its preliminary results for the year ended 31 December 2008.
Financial highlights
Operational highlights
Commenting on the results, CEO Paul Blackler said:
"2008 saw another year of growth and development for Augean, with strong cash generation and growth in revenues and profit. We secured significant contracts for hazardous waste streams with our construction and infrastructure clients and have continued to do so into the current financial year.
The current global recession has affected all businesses and Augean is not alone in feeling the impact from the downturn in markets. The board believes however, that the business is positioned to provide unique solutions to the hazardous waste market and is focused on managing the group to ensure the best possible operation in these challenging times."
For further information, please contact:
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There will be a meeting for analysts at 0930 today at the offices of FD, Holborn Gate, 26 Southampton Buildings, London, WC2A 1PB.
Chairman's statement
I am pleased to be able to report that for the year ended 31 December 2008, revenue excluding landfill tax increased by 61% to £36.3m, with a 25% increase in both operating profit to £6.2m and in adjusted earnings per share to 7.1p. Importantly, in these times of global economic uncertainty, cash flow from operations increased by 51% to £11.6m allowing us to repay more debt than anticipated and reducing our net debt figure to under £17m by year end, £2m better than our budget.
The team have been working hard to secure some significant contractual revenue streams and after a quiet first half of the year, we were very pleased to secure a number of contracts in the second six months, allowing us to achieve our budgeted level of profits; though as the economic downturn worsened towards the year end, we fell slightly short of our final forecasts. The waste solutions and technology market is still evolving and in order to maintain our market leading position we spend considerable time reviewing the new technologies being trialled globally to ascertain which ones will improve the service we can offer to our customers as well as attracting new revenue streams.
Having shown that we can produce good returns and, more importantly, generate significant cash flow, we now face the challenge of tougher markets in a position of strength and stability as the business climate deteriorates around us. It remains to be seen how the downturn will affect waste streams but it is certain it will not be positive for the industry. However, we have expended capital required to provide the best facilities for our customers so we can be prudent where we utilise additional capital expenditure in the foreseeable future. Our valuable cash flow can therefore be retained to allow us to withstand the worst of the downturn and leave us positioned to benefit from the eventual improvement in market conditions.
I wish to thank our non-executive directors for their work ensuring that we comply with the ever increasing codes of conduct and corporate governance and of course our staff who continue to support our company with their hard work.
Business review
Introduction
The board has maintained a focused strategic direction for the business and 2008 saw the start of the asset development programme, converting planning into new capacities and capabilities on the ground. The largest example of this is the Waste Recovery Park development at Port Clarence in the North East of England. Construction commenced in 2008, coinciding with the exclusive agreement with MECO for the thermal recovery process which will provide services to the refinery and oil and gas markets. The year also saw success in securing some significant contracts which were awarded due to the group's unique asset base and service standards. Coupled with the strengthening of the management team, the business has delivered consistent cash generation, demonstrated by a reduction in the group net debt position, whilst maintaining capital investment programmes.
The group experienced a number of short term trading difficulties in the second half of the year, as business interruption affected certain parts of the treatment division. In particular the Cannock operation suffered due to construction works and waste stream restrictions as process modifications were installed. These short term issues will, in the long term, increase the group's capabilities beginning in 2009 as the new processes are introduced.
The current economic climate has affected so many markets that it has highlighted the importance of maintaining the group's focus on helping customers through these difficult times. In 2008, a specific business development team was established with a key focus on developing direct client relationships to create a balance between the important waste trading network and the site of waste origin, thus reducing further exposure to fluctuations in the markets. This has been a slow process but the group faces the current climate with a commercial structure capable of bringing sustained growth in the medium term at a regional level.
The group experienced a slowdown in trading towards the end of 2008 in the treatment division as the economic uncertainties impacted customers. This slowdown, coupled with the development disruption, has resulted in the profit for the full year being marginally lower than the forecast issued in October 2008. The business continues to review its cost base and is taking actions to ensure that it is appropriate for the current trading environment.
A core commercial strategy established in 2008 was a focus on winning contracts with key clients in the infrastructure and construction sectors. This strategy has been successful in securing a number of contract wins which have provided a sustained level of business. The group has recently commenced an application to gain authorisation to receive waste streams from large Government decommissioning projects. The timetable for these authorisations is pre-determined and therefore the group anticipates the consents being issued towards the final quarter of 2009, positioning the business to develop new long term secure markets. Further updates on progress on the authorisations will be provided in the coming months.
The treatment division has been constructed to deliver an integrated network of services to the sector and offers solutions for a broad range of clients. The division operated through 2008 as a larger unit as integration of the acquired businesses continued. However, the development of certain key sites and a general weakening of the markets as the economic crisis took hold in the latter months of the year presented a difficult second half trading position. This trend has continued into 2009 as the impact of the global recession shocked certain markets, particularly where commodity prices fell rapidly as demand reduced. These markets are slowly recovering and trading in these areas has started to strengthen following the period end.
The hazardous waste market
The hazardous waste statistics generated by the Environment Agency for 2007 are the most recent data on the market in England & Wales. The statistics show growth in the production trends for hazardous waste between 2006 and 2007 of 7% to a total of 6 million tonnes per annum. The fate of wastes has seen a significant shift as more hazardous materials are being recycled or recovered with 1.2 million tonnes of hazardous waste treated in this way in 2007.
The hazardous waste market continues to evolve as the producers of waste and the bodies responsible for policy and implementation start to become effective. 2008 saw further policy impact with the cessation of mixing in open, below ground vessels; this ban came into effect in November 2008 and required all operators to build new and modern facilities. Augean was one of a select group of operators to construct a new process at its Cannock facility which has been authorised by the regulator. This investment positions the business to deliver new and sustainable long term services to clients.
The market continues to move towards more sustainable methods of managing waste and the development of treatment, recycling and recovery remains the key to the emerging market. Augean has been at the forefront of leading the development of waste infrastructure to deliver the long term objectives of the legislative frameworks.
The group continues to present a voice for the industry with the regulators and the Government and has continued to engage in the development of the Principles of Sustainable Hazardous Waste Management, together with the associated Road Map and proposals for a National Policy Statement.
Strategy
The board's priority continues to be the creation of long term shareholder value. Augean is building infrastructure and delivering services in a market newly created through legislation. This business will modernise the sector and deliver long term income streams as the market matures and standards are raised.
The strategy is on a critical path, as the group has now established a UK wide network of specialist facilities which are to be further developed to enhance the solutions provided to regional markets. The group has moved its development position from one of strategic acquisitions to the process of asset development, creating new processes which will deliver long term income.
The most significant example of this development programme is the Waste Recovery Park at Port Clarence in Teesside, a site which clearly demonstrates the potential for the group to extract maximum value from its portfolio of assets. Construction of the first phase of the Park commenced in the second half of 2008 together with the completion of an exclusive agreement with the US based technologists MECO, to install an indirect thermal treatment process. The technology separates organic wastes such as oils from solids and provides a service to the oil and gas markets. The group anticipates the operation contributing to income and profits during 2009. The process is currently being commissioned with the environmental permit expected to be issued and operations planned to commence in the second quarter of 2009.
In order to support the development programme and operational challenges of the business, a number of senior appointments were made in 2008 which strengthened the group's management team. The group has invested in the sales and commercial teams to capitalise further on regional markets and to continue to work to the highest standards in providing the most cost effective and compliant waste management solution.
Divisional review
Landfill division
Excluding landfill tax, revenue for the landfill division increased to £15.6m (2007: £13.8m) with hazardous waste volumes 37% higher than 2007 at 323,517 tonnes (2007: 235,461 tonnes). Operating profit increased to £4.9m (2007: £3.4m) and margin strengthened to 32% (2007: 25%).
A number of significant projects throughout 2008 delivered a strong second half to the year resulting in record tonnages into the group's landfill sites. One of the major successes in the year was an exclusive contract with Shanks group, which secured hazardous waste void for Shanks for the latter part of 2008 for significant contracted volumes. The group is continuing to work closely with its key customers in 2009.
The landfill division also established a new customer support centre in 2008 to deliver a rapid client facing service team, to provide effective solutions to the group's markets.
Terramundo
The joint venture between Augean and DEC NV continued to struggle to deliver volumes into the soil treatment centre in 2008 and also suffered from the deployment of the company's resources to the enabling works in Stratford for the Olympic site project. The business treated and recycled 20,480 tonnes of contaminated soil through the process but also provided an important capacity for filtercake residues arising from DEC's on-site treatment centres.
The future of the business is extremely important to the group as the market adapts to changes in the tax incentives for remediation of contaminated land. The phased removal of landfill tax exemptions by 2012 will put the permitted treatment operators at a competitive advantage against direct landfill. The Terramundo model, based on achieving planning and permitting consent to operate the treatment facility next to hazardous landfill, will further enhance the group's position as it results in effective treatment and disposal of the residues, which will enable growth in market share.
A second soil treatment centre has been constructed at the group's East Northants site (King's Cliffe), to deliver capacity for the southern region markets.
Treatment division
The treatment division revenue increased to £22.3m (2007: £10.5m), though operating profit was relatively unchanged at £1.2m (2007: £1.5m). This was disappointing and does not reflect the true long term value of the division but was caused by a number of short term factors in 2008. Firstly, the Cannock operation suffered from ongoing business interruption throughout the whole year, as the site had to restrict certain inputs and waste types due to infrastructure developments. The fully integrated new process has been delayed in commissioning and has disrupted the income, mix and value from the new markets the site will serve. The Cannock operation will start to bring improved operating profit later in 2009. Secondly, the integration of the Paisley and Ellesmere Port sites has been slower than anticipated due to the impact of the earnout period in place until May 2009. Finally, in the latter months of 2008 there was an overall market downturn as the sector felt the repercussions of the recession and waste producers either simply produced less waste or held back on despatch to preserve cash.
Financial review
Trading
Net revenue excluding landfill tax for the year ended 31 December 2008 increased by 61% to £36.3m (2007: £22.6m). This includes a contribution from the business acquired in the year of £0.4m. With the inclusion of landfill tax charged to customers, on which the group makes no margin, of £3.8m (2007: £3.7m), total group revenue grew by 52% to £40.1m (2007: £26.3m).
Operating margin and exceptional items
Operating profit before exceptional items increased by 25% to £6.2m (2007: £4.9m). The reduction in operating margin on turnover excluding landfill tax to 17% (2007: 22%) reflected the impact of the introduction of lower margin treatment businesses into the group and the weaker performance of the treatment division in the latter part of the year.
Statutory operating profit of £5.2m is stated after exceptional items relating to costs associated with the offer period (£0.2m) and a charge in respect of tax losses from acquisitions used in the year which had not previously been recognised (£0.8m).
Finance costs
In October 2007 the group extended its borrowing facilities in connection with the acquisition of treatment businesses. As a result, net finance costs in 2008 increased to £1.8m (2007: £1.1m), including £0.1m (2007: £0.1m) of unwinding of discount on provisions. Cash finance costs were covered 3.5 times (2007: 4.9 times) by underlying operating profit.
Jointly controlled entity
The group's Terramundo joint venture with DEC NV completed its first full year of trading in 2008. Its financial performance has been disappointing as the market for its services is still developing. This resulted in Augean's share of its loss for the year totalling £0.3m (2007: £0.1m). Both joint venture parties remain committed to this strategic venture, but in recognition of the market conditions, steps were taken at the end of 2008 to reduce Terramundo's cost base. This will enable the venture to operate profitably at much lower volumes of business in the future.
Tax
The group has continued to benefit from the utilisation of tax losses in its landfill businesses. This has resulted in no overall current tax charge in the year as in 2007. As the group now believes there to be greater certainty over the extent and timing of the remaining tax losses, a deferred tax asset in respect of these losses has been recognised, resulting in a credit to the income statement in the year of £0.6m. The group expects that it will continue to benefit from a reduced current tax rate in the short term.
Dividend
The board does not recommend the payment of a dividend for the year ended 31 December 2008. It continues to review the group's financial situation in order to ensure that dividends are paid to shareholders at an appropriate point in the group's development.
Earnings per share
Basic earnings per share adjusted to exclude the impact of exceptional items increased by 25% to 7.1p (2007: 5.7p). The weighted average number of shares in issue was unchanged at 65.5m. After exceptional items, earnings per share were 5.6p (2007: loss per share of 36.5p). There were no dilutive outstanding share options at either year end.
Cash flow
The group continued to be highly cash-generative during the year. Cash generated from operations was £11.6m (2007: £7.7m). This represented a conversion rate of 196% of operating profit before non-cash exceptional items (2007: 165%). After deducting capital expenditure, finance costs and tax, free cash flow was £4.2m (2007: £3.2m). Following expenditure on purchase of businesses of £0.8m, net debt reduced by £3.4m to £16.8m (2007: £20.2m).
Capital expenditure
As previously indicated, capital expenditure increased in the year to £5.4m (2007: £3.6m). The majority of this expenditure was accounted for by investment in the group's treatment sites, including significant upgrades at Cannock and Avonmouth, together with preliminary investment in the Port Clarence Waste Recovery Park. While mindful of the current difficult economic climate, the group will continue to invest in proven technology to develop its infrastructure.
Banking facilities
The group's funding is comprised of £17m term loan facilities repayable over 5 years and a £17m revolving credit, overdraft and guarantee facility agreed in August 2008. This latter facility was undrawn at 31 December 2008 except for £5.6m of guarantees and is committed until December 2009. The group will open renewal negotiations in due course but maintains an ongoing dialogue with its bankers about its borrowing requirements.
Outlook
The group has started 2009 with new operations, more capacity and the capability to deliver enhanced income and profit streams for the future. The current global recession has affected all businesses and Augean is not alone in feeling the impact from the downturn in markets. The board believes however, that the business is positioned to provide unique solutions to the hazardous waste market and is focused on managing the group to ensure the best possible operation in these challenging times.
2009 has presented unique trading difficulties driven by the recession and with the impact of the exceptional weather problems in February on the movement of waste. The group's operational teams deserve much credit for keeping all sites open for business through those snow-laden weeks. Landfill tonnages continue to be consistent with expectations but the treatment division downturn in the latter part of 2008 has continued into 2009.
The uncertainty in the UK markets and the slower start makes forecasting so early in the financial year extremely difficult. The board will make further announcements to update shareholders when the picture becomes clearer, but the board's current view is that the first half of the year will be materially below the board's previous expectations.
Consolidated income statement
for the year ended 31 December 2008
|
Before |
Before |
||||||
|
exceptional |
Exceptional |
exceptional |
Exceptional |
||||
|
items |
items |
Total |
items |
items |
Total |
||
|
2008 |
2008 |
2008 |
2007 |
2007 |
2007 |
||
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue |
2 |
||||||
|
- Continuing operations |
39,676 |
- |
39,676 |
26,302 |
- |
26,302 |
|
|
- Acquisitions |
405 |
- |
405 |
- |
- |
- |
|
|
40,081 |
- |
40,081 |
26,302 |
- |
26,302 |
||
|
Operating expenses |
(33,924) |
(996) |
(34,920) |
(21,378) |
(27,617) |
(48,995) |
|
|
Operating profit/(loss) |
2 |
||||||
|
- Continuing operations |
6,051 |
(996) |
5,055 |
4,924 |
(27,617) |
(22,693) |
|
|
- Acquisitions |
106 |
- |
106 |
- |
- |
- |
|
|
6,157 |
(996) |
5,161 |
4,924 |
(27,617) |
(22,693) |
||
|
Finance charges |
(1,844) |
- |
(1,844) |
(1,096) |
- |
(1,096) |
|
|
Share of loss of jointly controlled entity |
(292) |
- |
(292) |
(124) |
- |
(124) |
|
|
Profit/(loss) before tax |
4,021 |
(996) |
3,025 |
3,704 |
(27,617) |
(23,913) |
|
|
Tax |
621 |
- |
621 |
- |
- |
- |
|
|
Profit/(loss) for the year attributable to equity shareholders |
4,642 |
(996) |
3,646 |
3,704 |
(27,617) |
(23,913) |
|
|
|
|||||||
|
Earnings per share |
|||||||
|
Basic and diluted |
3 |
7.1p |
(1.5p) |
5.6p |
5.7p |
(42.2p) |
(36.5p) |
There were no recognised gains or losses in the year other than the profit for the year and therefore no statement of recognised income and expenses is presented.
Consolidated balance sheet
at 31 December 2008
|
|
2008 |
2007* |
|
|
|
£'000 |
£'000 |
|
|
Non-current assets |
|||
|
Goodwill |
77,768 |
77,494 |
|
|
Other intangible assets |
217 |
380 |
|
|
Property, plant and equipment |
|
33,176 |
31,500 |
|
Deferred tax asset |
413 |
- |
|
|
|
|
111,574 |
109,374 |
|
Current assets |
|||
|
Inventories |
138 |
94 |
|
|
Trade and other receivables |
8,546 |
8,246 |
|
|
Cash and cash equivalents |
765 |
401 |
|
|
9,449 |
8,741 |
||
|
Current liabilities |
|||
|
Trade and other payables |
(10,232) |
(7,821) |
|
|
Current tax liabilities |
(1,540) |
(1,570) |
|
|
Financial liabilities |
(4,652) |
(4,056) |
|
|
|
|
(16,424) |
(13,447) |
|
Net current liabilities |
|
(6,975) |
(4,706) |
|
Non-current liabilities |
|||
|
Financial liabilities |
(12,894) |
(16,524) |
|
|
Provisions |
(3,885) |
(3,680) |
|
|
Trade and other payables |
(300) |
(750) |
|
|
Share of losses of jointly controlled entity |
(416) |
(124) |
|
|
Deferred tax liabilities |
- |
(208) |
|
|
|
(17,495) |
(21,286) |
|
|
Net assets |
|
87,104 |
83,382 |
|
Shareholders' equity |
|||
|
Share capital |
6,549 |
6,549 |
|
|
Share premium account |
106,222 |
106,222 |
|
|
Retained losses |
(25,667) |
(29,389) |
|
|
Total shareholders' equity |
87,104 |
83,382 |
*restated (note 6)
Consolidated cash flow statement
for the year ended 31 December 2008
|
2008 |
2007 |
||
|
|
Note |
£'000 |
£'000 |
|
Operating activities |
|||
|
Cash generated from operations |
4 |
11,631 |
7,714 |
|
Interest paid |
(2,031) |
(909) |
|
|
Tax paid |
(99) |
(59) |
|
|
Net cash generated from operating activities |
9,501 |
6,746 |
|
|
Investing activities |
|||
|
Proceeds on disposal of property, plant and equipment |
55 |
58 |
|
|
Purchases of property, plant and equipment |
(5,366) |
(3,578) |
|
|
Purchases of intangible assets |
(22) |
(17) |
|
|
Purchase of businesses |
(770) |
(11,708) |
|
|
Net cash used in investing activities |
(6,103) |
(15,245) |
|
|
Financing activities |
|||
|
Repayments of borrowings |
(2,000) |
(2,000) |
|
|
Drawdown of loan facilities |
1,000 |
11,000 |
|
|
Repayments of obligations under finance leases and hire purchase contracts |
(347) |
(151) |
|
|
Net cash (used in)/generated from financing activities |
(1,347) |
8,849 |
|
|
Net increase in cash and cash equivalents |
2,051 |
350 |
|
|
Cash and cash equivalents at beginning of period |
(1,286) |
(1,636) |
|
|
Cash and cash equivalents at end of period |
765 |
(1,286) |
1 Financial information
The financial information set out in this preliminary announcement does not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2008 will be dispatched to shareholders by 30 April 2009 for approval at the Annual General Meeting to be held on 2 June 2009. The statutory accounts contain an unqualified audit report, which did not include a statement under s237 (2) or (3) of the Companies Act 1985, and will be delivered to the Registrar of Companies in accordance with s242 of the Companies Act 1985.
2 Segmental information
For management purposes the group is currently organised into two operating divisions. These business segments are the basis on which the group reports its primary segmental information. As the group's business is entirely conducted within the United Kingdom, there are no geographical business segments and as a result no secondary reporting segmental information is presented.
The segmental results for the year ended 31 December 2008 are as follows:
|
|
Landfill |
Treatment |
Group |
|
|
£'000 |
£'000 |
£'000 |
|
Revenue |
|||
|
External sales net of landfill tax |
13,993 |
22,260 |
36,253 |
|
Landfill tax |
3,828 |
- |
3,828 |
|
External sales |
17,821 |
22,260 |
40,081 |
|
Inter-segment sales |
1,616 |
- |
1,616 |
|
Total revenue |
19,437 |
22,260 |
41,697 |
|
Result |
|||
|
Operating profit before exceptional items |
4,923 |
1,234 |
6,157 |
|
Exceptional items |
(996) |
- |
(996) |
|
Operating profit |
3,927 |
1,234 |
5,161 |
|
Finance charges |
(1,844) |
||
|
Share of loss of jointly controlled entity |
(292) |
||
|
Profit before tax |
3,025 |
||
|
Tax |
621 |
||
|
Profit for the year attributable to equity shareholders |
3,646 |
The segmental results for the year ended 31 December 2007 were as follows:
|
Landfill |
Treatment |
Group |
|
|
|
£'000 |
£'000 |
£'000 |
|
Revenue |
|||
|
External sales net of landfill tax |
12,091 |
10,474 |
22,565 |
|
Landfill tax |
3,737 |
- |
3,737 |
|
External sales |
15,828 |
10,474 |
26,302 |
|
Inter-segment sales |
1,756 |
- |
1,756 |
|
Total revenue |
17,584 |
10,474 |
28,058 |
|
Result |
|||
|
Operating profit before exceptional items |
3,445 |
1,479 |
4,924 |
|
Exceptional items |
(27,617) |
- |
(27,617) |
|
Operating (loss)/profit |
(24,172) |
1,479 |
(22,693) |
|
Finance charges |
(1,096) |
||
|
Share of loss of jointly controlled entity |
(124) |
||
|
Loss before tax |
(23,913) |
||
|
Tax |
- |
||
|
Loss for the year attributable to equity shareholders |
(23,913) |
3 Earnings per share
|
2008 |
2007 |
|
|
|
£'000 |
£'000 |
|
Profit/(loss) after tax for the purposes of basic and diluted earnings per share |
3,646 |
(23,913) |
|
Exceptional items |
996 |
27,617 |
|
Profit after tax for the purposes of basic and diluted adjusted earnings per share |
4,642 |
3,704 |
|
Number |
Number |
|
|
Number of shares |
||
|
Weighted average number of shares for basic earnings per share |
65,488,892 |
65,488,892 |
|
Effect of dilutive potential ordinary shares from share options |
- |
- |
|
Weighted average number of shares for diluted earnings per share |
65,488,892 |
65,488,892 |
|
Earnings per share |
||
|
Basic and diluted |
5.6p |
(36.5p) |
|
Adjusted earnings per share |
||
|
Basic and diluted |
7.1p |
5.7p |
4 Reconciliation of operating profit/(loss) to net cash generated from operating activities
|
2008 |
2007 |
|
|
|
£'000 |
£'000 |
|
Operating profit/(loss) |
5,161 |
(22,693) |
|
Other non-cash charge - goodwill tax adjustment |
765 |
533 |
|
Goodwill impairment |
- |
26,846 |
|
Amortisation of intangible assets |
185 |
113 |
|
Depreciation |
4,239 |
3,405 |
|
After-care provisions |
148 |
127 |
|
Earnings before interest, tax, depreciation and amortisation (EBITDA) |
10,498 |
8,331 |
|
Profit on sale of property, plant and equipment |
(13) |
(4) |
|
Share-based payments |
76 |
115 |
|
(Increase)/decrease in inventories |
(42) |
21 |
|
Decrease in trade and other receivables |
32 |
86 |
|
Increase/(decrease) in trade and other payables |
1,123 |
(213) |
|
Decrease in provisions |
(43) |
(622) |
|
Cash generated from operations |
11,631 |
7,714 |
|
Interest paid |
(2,031) |
(909) |
|
Tax paid |
(99) |
(59) |
|
Net cash generated from operating activities |
9,501 |
6,746 |
5 Analysis of changes in net financial liabilities
|
31 December |
|
31 December |
||
|
|
2007 |
Cash flow |
Acquisitions |
2008 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
401 |
(33) |
397 |
765 |
|
Overdraft |
(1,687) |
1,687 |
- |
- |
|
Bank loans due within one year |
(2,000) |
(2,400) |
- |
(4,400) |
|
Bank loans due after one year |
(16,000) |
3,400 |
- |
(12,600) |
|
Finance leases and hire purchase contracts |
(893) |
347 |
- |
(546) |
|
Net financial liabilities |
(20,179) |
3,001 |
397 |
(16,781) |
6 Prior year adjustment
The 2007 accounts included provisional fair values for the acquisition of Hitech Equipment Limited, completed in December 2007. Following finalisation of the fair values, the group has included an additional £264,000 in accruals with a corresponding increase in goodwill. IFRS 3 requires this adjustment to be shown as a prior year adjustment and the 2007 balance sheet has been restated accordingly. There is no impact on the income statement in either year.
Related Shares:
AUG.L