8th Jun 2010 07:00
8 June 2010 Umeco plc Preliminary results for the year to 31 March 2010 Resilient performance in challenging markets
Umeco plc (`Umeco'), an international provider of supply chain services and advanced composite materials primarily to the aerospace & defence industries, announces its preliminary results for the year to 31 March 2010.
Financial summary - continuing operations
Underlying 2010 2009 Change change £ million £ million Per cent Per cent Revenue* 409.4 410.9 -0.4 -5.6 Adjusted operating profit* 31.6 34.7 -8.9 -11.9 Adjusted profit before tax* 24.9 28.5 -12.6 n/a 2010 2009 Change Pence Pence Per cent Adjusted earnings per share* 36.6 39.7 -7.8 Final dividend per share 11.0 11.0 - 2010 2009 Change £ million £ million Per cent Net debt 79.6 120.2 -33.8
* a definition of adjusted measures is set out in note 1 to the press release.
Results for continuing operations exclude ACG South Africa, the trade and assets of which are to be divested.
Results highlights
- Resilient performance underpinned by cost reduction programme - Robust performance from Supply Chain reflecting contract wins and expansions in the prior year - As reported in February 2010, Composites' key markets of automotive, marine and wind energy sectors remained challenging. Operational improvements at IPM have been negated by lower than expected demand - Management teams have been strengthened in both Structural Materials and Process Materials - Significant reduction in net debt reflecting active working capital management - Ratio of net debt to EBITDA 2.14 times (2009: 2.59 times) compares to bank covenant of not more than 3.25 times
Clive Snowdon, Chief Executive, said:
"Umeco has continued to perform creditably despite the difficult and uncertain conditions prevailing in our markets and the macro economic environment.
We are weathering the effects of the economic downturn well and have significantly reduced our net debt through active working capital management and the restrictions on capital expenditure imposed during the year.
We have a good order book, underpinned by expanding relationships with our key Supply Chain customers, and there is a strong pipeline of new business opportunities available to us across all our operating segments.
Although trading conditions in our markets remain uncertain, the actions we have taken to reduce our cost base, and reduce debt, leave us strongly positioned. We continue to face a number of shorter term challenges, however the markets we serve are expected to demonstrate significant growth over the medium and long term."
There will be a meeting for analysts at 9.30am this morning at UBS, 1 Finsbury Avenue, London, EC2M 2PP. Should you wish to attend please contact Davina Marriott on 0207 567 4875.
For further information please contact:
Umeco plc Tel: +44 (0) 1926 331 800
Clive Snowdon, Chief Executive
Doug Robertson, Finance Director
www.umeco.com
Tulchan Communications Tel: +44 (0) 207 353 4200
John SunnucksLucy LeghNotes to the press release
1. Adjusted profit and earnings per share measures
Umeco uses adjusted figures as key performance indicators. Adjusted figures are stated before the results of discontinued operations, amortisation and impairment charges relating to intangible assets, significant items, the revaluation of financial instruments based on their market values and associated tax effects. The differences between the total and adjusted measures of operating profit, profit before tax and profit attributable to owners of the Company are reconciled in note 4 to the preliminary announcement of results. The narrative in this announcement is based on the adjusted measures of operating profit, profit before tax and earnings per share. These provide a more consistent measure of operating performance.
2. Discontinued operation
As at 31 March 2010, the Group held for resale the trade and assets of ACGSouth Africa. Its results have accordingly been presented separately fromcontinuing operations and are disclosed as a discontinued operation.Comparative data in the Consolidated Statement of Comprehensive Income, theConsolidated Statement of Cash Flows and certain notes to the preliminaryannouncement of results has been re-presented accordingly. The values ofselected key performance indicators, both including and excluding South Africa,are set out below: 2010 2009 £ million £ million Revenue - continuing operations 409.4 410.9 - including discontinued operation 411.5 415.3 Adjusted operating profit - continuing operations 31.6 34.7 - including discontinued operation 30.7 35.2 Adjusted profit before tax - continuing operations 24.9 28.5 - including discontinued operation 24.0 29.0 2010 2009 Pence Pence Adjusted earnings per share - continuing operations 36.6 39.7 - including discontinued operation 35.0 40.5
3. Further information on Umeco plc
Umeco is managed through three business streams:
Umeco Composites- Structural Materials
Development, manufacture and supply of advanced composite materials. Specialising in the manufacture of high performance composite materials for a diverse range of industries such as aerospace, marine, motor sport & automotive, construction, wind energy and leisure sports. Structural Materials has manufacturing operations in the UK and the US, and distributes its products worldwide. Customers include Boeing, Airbus, manufacturers of high performance super cars and Formula 1 teams.
Umeco Composites - Process Materials
Development, manufacture and supply of vacuum bagging materials to the composites industry and other markets, providing a wide range of materials and technical support to a growing number of international customers. Process Materials has manufacturing operations in Italy and France, and value-added distribution facilities in the UK and the US. It has a global distribution network. Customers include Airbus, Boeing and manufacturers of wind turbine blades.
Umeco Supply Chain
A leading international provider of value-added distribution and supply chain outsourcing services to customers in the aerospace & defence market. With its specialisation in the supply of small and medium value components and sophisticated IT systems, its growing global customer base can enjoy significant operational, cost and working capital benefits. The Supply Chain businesses trade globally as Pattonair. Customers include Rolls-Royce plc, BAE Systems, Safran Group, Parker Aerospace, Goodrich, Thales Aerospace, Turbomeca, ATK, Lockheed Martin and the US Department of Defense.
Chairman's Statement
Overview
Umeco has continued to perform creditably despite the difficult and uncertain conditions prevailing in its markets and in the macro economic environment. The impact of these factors on the Group's trading has been partly mitigated by the actions we have taken to reduce costs and raise efficiency. We anticipate softness and volatility in near term demand, but our longer term outlook remains positive, as new aircraft programmes go into production and the other markets in which we operate begin to recover.
Results and dividend
Revenue from continuing operations in the year to 31 March 2010 was £409.4 million (2009: £410.9 million) a decrease of 0.4 per cent. At constant exchange rates and adjusting for the effects of the acquisition of IPM in the prior year, the decrease in revenue was 5.6 per cent (the `underlying' decrease).
Operating profit from continuing operations fell by 8.9 per cent to £31.6 million (2009: £34.7 million) with margins reducing to 7.7 per cent (2009: 8.4 per cent). The underlying decrease in operating profit was 11.9 per cent.
Net interest charges, excluding the revaluation of financial instruments, were £6.7 million (2009: £6.2 million). The increase reflects the full year funding effect of the acquisition of IPM and foreign exchange rate movements.
Profit before tax from continuing operations was £24.9 million (2009: £28.5 million), a decrease of 12.6 per cent. Earnings per share were 36.6 pence compared to 39.7 pence, a reduction of 7.8 per cent.
The Board is proposing an unchanged final dividend of 11.0 pence making a total for the year of 17.5 pence per ordinary share (2009: 17.5 pence). The final dividend is payable on 8 October 2010 to shareholders on the register on 10 September 2010.
Debt and financing
Net debt at 31 March 2010 was £79.6 million, a reduction of £40.6 million during the year. This significant reduction reflects an improvement in the Group's working capital management and also the restrictions on capital expenditure imposed during the year.
At 31 March 2010, the ratio of the Group's net debt to earnings before interest, tax, depreciation and amortisation (`EBITDA'), as computed under our banking agreements, was 2.14 times (2009: 2.59 times); this compares favourably to the covenant of 3.25. Interest cover was 4.97 times (2009: 5.63 times) and was comfortably over our banking covenant of 4.00 times.
The Group's principal banking facilities comprise a US$150.0 million revolving credit facility due for repayment in June 2014 and a term loan of US$87.7 million due for repayment in August 2011. The Board is confident that the Group has appropriate banking facilities in place to finance its continuing operations and dialogue with potential providers of funding is well advanced in respect of replacing the term loan.
Management and employees
Umeco's results demonstrate the talent and resilience of our employees, who have adapted to the unpredictable and challenging market conditions we continue to face. I thank them for their support and ongoing commitment to Umeco.
Board changes
I am delighted that, on 30 April 2010, we announced the appointment of Adrian Auer as Senior Independent Non-executive Director. Adrian's breadth of international corporate experience, both in Executive and Non-executive roles, is already proving invaluable to the Board.
Since joining Umeco in October 2009, I have been very impressed by the quality of the Group's businesses and management. Much of the credit for this must go to my predecessor, Brian McGowan, who retired in August 2009 having served as Chairman for over 12 years. Brian presided over a transformation of Umeco and I take this opportunity to thank him sincerely for his service to the Group during that period.
On behalf of the Board, I would also like to give my thanks to David Porter, who retired from the Board on 31 December 2009 having served as a Director for nine years. David made a significant contribution to Umeco and played a key role in the Group's development.
Strategy
In the period since joining the Board, I have visited the Group's principal operations, met with each of their management teams and spent time with some of our major customers. It is clear to me that we have three fine businesses within the Group. They have strong positions in their respective markets with considerable potential for further growth. They are well invested, with good facilities and experienced operating management teams. They enjoy the support of, and are valued by, their customers.
The Board's task is to ensure that the strength of our businesses is reflected in optimal value for our shareholders and the Board continues to review its strategy to ensure this is achieved. We will be encouraging each business to grow organically, improve efficiencies, invest in new technologies and, if appropriate, acquire relevant skills. We will seek to develop deeper partnerships with our customers. Each business will flourish by being totally focused on its markets.
Prospects
The indicators for long term demand in the civil aerospace market continue to be positive. Airbus and Boeing at 31 March 2010 had a backlog of 6,776 orders and it is expected they will deliver 946 aircraft in 2010 compared with 979 deliveries in 2009. More importantly, Boeing expects that delivery of the first B787 will occur in the fourth quarter of 2010 and Airbus continues to commit considerable resources to the development of the A350XWB. Both of these new programmes are expected to provide the Group with growing long term revenue across all of our business streams.
We are weathering the effects of the economic downturn well. We have a good order book, underpinned by expanding relationships with our key customers, and there is a good pipeline of new business opportunities available to us across all our operating segments. Although trading conditions in our markets remain uncertain, the actions we have taken to reduce our cost base, improve working capital management and reduce debt leave us strongly positioned.
Neil JohnsonChairman8 June 2010Chief Executive's ReviewOperations
Revenue in the year from continuing operations was £409.4 million, a decrease of 0.4 per cent. Foreign exchange rate movements, principally the US dollar and the Euro against sterling, had the effect of increasing reported revenue by £ 12.0 million. Adjusting for these effects and the full year contribution of IPM, acquired in December 2008, the underlying decrease in revenue was 5.6 per cent.
Operating profit from continuing operations was £31.6 million (2009: £34.7 million), a decrease of 8.9 per cent. Our operating margin fell to 7.7 per cent (2009: 8.4 per cent) reflecting lower revenues in our higher margin Composites businesses. The underlying decrease in operating profit was 11.9 per cent.
Changes in the Group's internal reporting and management structure, combined with the implementation of new accounting requirements in relation to segmental information, have led to Umeco Composites' results being analysed as two operating segments, Structural Materials and Process Materials.
Our business streams have seen mixed fortunes during the year. Supply Chain has benefitted from contracts won and extended in the previous year, which have compensated for lower underlying demand. Structural Materials' key markets remained depressed. Demand from Process Materials' customers in the wind energy sector was also subdued and consequently activity levels were below our expectations. Nevertheless, our Composites businesses remain well positioned in their markets due to continued investment in product development.
Umeco Composites - Structural Materials
2010 2009Continuing operations £ million £ million Revenue 101.7 116.1 Operating profit 7.9 11.9 Per cent Per cent Operating margin 7.8 10.2
Structural Materials develops, manufactures and supplies a broad range of advanced composite materials principally for the aerospace, motor sport & automotive and marine markets. Revenue by end market was:
2010 2009 Per cent Per cent Aerospace 32.7 25.2 Motor sport & automotive 23.0 20.2 Wind 0.3 1.0 Marine 11.8 12.0 Other 32.2 41.6 100.0 100.0
Structural Materials' management was strengthened during the year, with Hisham Alameddine being appointed President of its US operations, comprising JD Lincoln in Costa Mesa, California and ACG in Tulsa. Hisham Alameddine joined Umeco in 2006 having previously held senior management positions with Esterline.
Revenue from continuing operations decreased by 12.4 per cent or by 14.8 per cent on an underlying basis. Operating profit fell by 33.6 per cent or by 34.5 per cent on an underlying basis, resulting in a decline in margin from 10.2 per cent to 7.8 per cent due to operational gearing effects.
Many of ACG's key markets, such as automotive, marine and ballistics, have been difficult during the year. Activity levels at ACG's small South African operation, which supplied composite parts to the Mercedes McLaren SLR supercar programme, have reduced as the programme comes to an end. The trade and assets of this business are being divested. ACG South Africa's results have therefore been reclassified as a discontinued operation.
JD Lincoln has seen some improvement in order levels as signs of a modest recovery in its markets appear. During the current financial year, JD Lincoln is relocating to new leasehold premises close to its existing operations in Costa Mesa, California. These new premises will improve efficiency levels and enable the business to develop its manufacturing operations, with the capacity to meet the expected growth in activity resulting from new aircraft programmes.
GRPMS also suffered from soft market conditions, but the business has successfully expanded its product range which is expected to drive revenue growth in the current financial year.
Umeco Composites - Process Materials
2010 2009Continuing operations £ million £ million Revenue 73.1 68.4 Operating profit 8.7 11.6 Per cent Per cent Operating margin 11.9 17.0
Process Materials develops, manufactures and supplies vacuum bagging materials to the composites industry and other markets. Revenue by end market was:
2010 2009 Per cent Per cent Aerospace 31.0 36.8 Wind 29.5 35.8 Motor sport & automotive 5.5 3.0 Marine 2.0 2.7 Other 32.0 21.7 100.0 100.0
Revenue from continuing operations increased by 6.9 per cent but fell by 11.7 per cent on an underlying basis. Operating profit fell by 25.0 per cent or by 32.0 per cent on an underlying basis, resulting in a decline in margin from 17.0 per cent to 11.9 per cent.
Tony Steels joined in May 2010 as Managing Director of our Process Materials business, replacing Tim Cooper who left the Group in December 2009. Tony Steels has extensive international business experience and has been based in China for the last four years.
Demand levels at Aerovac and Richmond have been significantly impacted by weakness of the wind energy sector. While the Chinese wind energy market has continued its progress, elsewhere demand levels have been lower than expected due to project funding constraints. This funding environment for wind energy projects has led to credit insurers taking a prudent stance on coverage. We have maintained tight credit control and sales to the wind energy sector have been withheld at times in order to ensure the Group's credit risk remains at an appropriate level.
IPM moved to a seven day working week in December 2009, which has improved efficiency through the use of longer production runs. However, the benefits accruing from this and other actions taken to improve efficiency have been offset by raw material cost increases and lower than expected volumes. Recovery at IPM is dependant upon a return to growth in the wind energy market and the introduction of new films for the aerospace sector.
Med-Lab had another excellent year, achieving good growth in its petrochemicalequipment revenue.Umeco Supply Chain 2010 2009Continuing operations £ million £ million Revenue 234.6 226.4 Operating profit 15.0 11.2 Per cent Per cent Operating margin 6.4 4.9
Umeco Supply Chain is a leading international provider of distribution and supply chain outsourcing services primarily to OEM customers in the aerospace & defence markets. With its specialisation in the supply of small and medium value components and its sophisticated IT systems, it creates and delivers significant operational cost and working capital benefits and above all improves customer service levels for its growing customer base. The Supply Chain businesses trade globally as Pattonair. Revenue by end market was:
2010 2009 Per cent Per cent Civil aerospace - OEM 55.8 61.6 - aftermarket 23.9 20.7 Defence 18.8 17.2 Marine 1.3 - Other 0.2 0.5 100.0 100.0
Revenue increased during the period by 3.6 per cent or by 1.2 per cent on an underlying basis. Operating profit increased by 33.9 per cent or by 33.0 per cent on an underlying basis. This growth in revenue and profits primarily reflects the full year effect of contract wins and expansions in the prior year, and a reduction in operating costs.
Pattonair Derby continues to achieve growth on its long term contract with Rolls-Royce, with the full year benefit being realised from the transfer to Pattonair of additional parts responsibility that occurred during the prior year. The Pattonair Derby facility is dedicated to Rolls-Royce and continues to operate very effectively with the customer receiving exceptionally high service levels. The value of inventory funded by Umeco fell during the year as a result of our continuing focus on improved working capital management. With Rolls-Royce growing their market share, the prospects for Pattonair Derby are strong.
Pattonair Woking suffered a fall in revenue primarily as a consequence of lower civil aftermarket demand. The business was highly cash generative in the year and started to see a recovery in its order intake towards the end of the year. In addition, it has a good pipeline of new business prospects.
Pattonair Italy also suffered from lower demand and has taken steps to broaden and strengthen its commercial and operating management during the year.
The performance of Pattonair France has significantly improved, with the business trading profitability during the year despite tough market conditions. The cost base of the company has continued to be reduced and management changes have been implemented to strengthen the business.
Pattonair's North American operations have benefitted from a full year of the long term contract with ATK, with revenue increasing by 27.7 per cent compared to the prior year. The ATK contract is operating well with high service levels being delivered to the customer. The business is poised for further growth.
Summary
The global economic downturn has continued to affect the Group's trading environment, with falling air travel causing reductions in airlines' capacities, leading to a reduction in aftermarket demand and de-stocking. The resulting deferrals of aircraft orders are expected to lead to delivery levels reducing until 2011. Despite these shorter term factors, Airbus and Boeing continue to report a significant backlog of orders of 6,776 (2009: 7,293 aircraft). Importantly for Umeco, progress on the development of the B787 and A350XWB continues. The first deliveries of the B787 are now within sight and this programme will add to our future revenue and profits. We are expecting a higher shipset value from the A350XWB than the B787; the former is due to enter service in 2013.
In the face of difficult and unpredictable market conditions, we reduced headcount by 7.3 per cent during the year, contained capital expenditure and focused on reducing working capital. We are well placed to benefit from recovery in our markets and the entry into service of new aircraft, and continue to seek to grow our market share through the development and delivery of innovative products and services.
For the current financial year, we expect modest growth in revenue due to the effects of new aircraft build programmes and a partial recovery in our markets, in particular we expect growth from the wind energy sector. We go into the new financial year with a good order book: at the end of March 2010 our order book was £227.4 million (2009: £218.9 million). Of this, £198.9 million (2009: £ 190.2 million) relates to Supply Chain, with order books in our Composites businesses reflecting the shorter term nature of orders placed by customers. Order book values reflect scheduled customer requirements for the next twelve months.
Although we continue to face a number of shorter term challenges, the markets we serve are expected to demonstrate significant growth over the medium and long term. Our experienced management team is committed to building on this recovery in order to deliver an enhanced performance for shareholders. We remain confident in our longer term prospects.
Clive SnowdonChief Executive8 June 2010Finance Director's ReviewOperating results 2010 2009Continuing operations £ million £ million Revenue 409.4 410.9 Operating profit 31.6 34.7 Per cent Per cent Operating margin 7.7 8.4
Revenue from continuing operations was 0.4 per cent lower than last year. The full year effect of the acquisition of IPM during the prior year led to additional revenue of £10.2 million. Operating profit was £31.6 million, £3.1 million lower than the previous year. IPM's operating profit of £0.1 million compares to £0.5 million in the period from acquisition to 31 March 2009.
The reduction in revenues reflects the generally difficult market conditions the Group has experienced, with these effects only being partially mitigated by additional revenues from the expansion of Supply Chain contracts.
Operating margin reduced to 7.7 per cent from 8.4 per cent due to the sales mix being more heavily weighted towards Supply Chain and the decline in margins within Structural Materials and Process Materials.
Exchange ratesAverage rates 2010 2009 US dollar 1.596 1.718 Euro 1.130 1.203Closing rates 2010 2009 US dollar 1.517 1.433 Euro 1.121 1.080
Over 44.0 per cent of Group revenue is generated by overseas subsidiaries and a significant proportion of UK business is transacted in foreign currencies, principally the US dollar and the Euro. At constant exchange rates, the decrease in revenue from continuing operations for the year would have been 3.3 per cent, with revenue being £12.0 million lower than the reported figure.
Net financial expense
Net financial expense, excluding revaluations of financial instruments, was £ 6.7 million (2009: £6.2 million). The average interest rate payable in the year was 5.0 per cent (2009: 5.4 per cent) and average net debt was £118.9 million (2009: £112.8 million).
Intangible amortisation & goodwill impairment
The amortisation charge in the statement of comprehensive income was £6.3 million (2009: £4.2 million). This relates to the amortisation of intangible assets arising on acquisitions, principally the benefit of product approvals, order books and customer relationships on hand at the dates of acquisition. The increase in the charge compared to the prior year reflects a full year effect of amortisation on intangible assets relating to IPM. No impairment charges have been made in the year.
Significant items
Significant items of £1.3 million were incurred during the year (2009: £2.2 million), comprising costs relating to the restructuring of the Group's operations, principally redundancy.
Profit before tax
The weaker trading performance in the year led to adjusted profit before tax from continuing operations reducing to £24.9 million (2009: £28.5 million), a fall of 12.6 per cent. Total profit before tax from continuing operations was £ 17.6 million (2009: £22.3 million).
Tax
The effective tax rate on adjusted profit before tax from continuing operations was 29.1 per cent (2009: 33.0 per cent). The lower rate reflects the benefit of an international corporate restructuring that was implemented in December 2009.
Discontinued operation
In view of the intention to dispose of the business, ACG South Africa has been treated as a discontinued operation and its results have been reclassified accordingly. The loss from the discontinued operation before tax was £0.9 million (2009: £0.5 million profit). A contract for sale has now been signed and completion is expected to occur on or before 30 June 2010 subject to certain conditions precedent being satisfied. Consideration payable for the business and assets is ZAR5.4 million (£0.5 million), subject to adjustment for working capital balances at completion.
Earnings per share
Adjusted earnings per share from continuing operations were 36.6 pence, 7.8 per cent lower than last year (2009: 39.7 pence). Total earnings per share were 23.6 pence (2009: 30.4 pence).
Dividends
An interim dividend of 6.5 pence was paid in February 2010 and a final dividend of 11.0 pence is proposed, making a total of 17.5 pence for the year (2009: 17.5 pence). The value of the interim dividend was £3.1 million and the value of the proposed final dividend is £5.3 million.
Operating cash flow 2010 2009Continuing operations £ million £ million Operating profit 31.6 34.7 Significant items (1.3) (2.2) Depreciation 5.8 5.0 Loss on disposal of property, plant & equipment - 0.1 Share based payments and own shares held 0.3 0.1 Increase in inventories (0.8) (36.2) Decrease in debtors 19.5 7.9 Increase in creditors, provisions & retirement benefit 4.6 17.9obligations Operating cash flow 59.7 27.3 Per cent Per cent Operating cash flow conversion 188.9 78.7 Working capital ratio 21.2 27.8
Operating profit conversion to cash of 188.9 per cent rose from 78.7 per cent last year following a decrease in working capital and retirement benefit obligations. This principally comprised a £19.5 million decrease in debtors and a net increase of £4.6 million in creditors, provisions and retirement benefit obligations.
The small increase in inventories mainly supported the expansion of Supply Chain contracts. In aggregate, working capital, provisions and retirement benefit obligations reduced by £23.3 million in the year due to the management action taken to improve working capital efficiency. A tight credit control environment has been maintained during the year and shipments to certain participants in the wind energy sector in particular have been, and will continue to be, held back where appropriate in order to ensure the Group's exposure to credit risk remains at an acceptable level.
The ratio of working capital to revenue for continuing operations decreased from 27.8 per cent to 21.2 per cent.
Capital expenditure
Gross capital expenditure of £4.1 million (2009: £6.3 million) was £1.7 million lower than depreciation and reflects the controls imposed to restrict capital expenditure to essential projects. The expenditure included initial fit-out costs at the new JD Lincoln facility of £0.2 million.
Free cash flow
Operating cash flow less interest, tax and capital expenditure from continuing operations generated £44.7 million (2009: £6.9 million). Tax paid was £0.6 million below the charge in the financial statements due to refunds in respect of prior years.
Net debt, gearing and banking facilities
2010 2009 £ million £ million Net debt 79.6 120.2 Per cent Per cent Gearing 44.6 67.3
The Group has continued to reduce its gearing, with the ratio of net debt to equity falling from 67.3 per cent last year to 44.6 per cent, principally due to the efforts made to improve working capital management and restrict capital expenditure. Foreign exchange effects caused the sterling value of debt to fall by £6.0 million.
The Group's principal committed banking facilities comprise a US$150.0 million revolving credit facility expiring in June 2014 and a US$87.7 million term loan expiring in August 2011, both provided by Lloyds Banking Group plc. In addition, the Group has a £10.0 million overdraft facility giving total facilities of £166.7 million. Debt levels therefore remain well within the Group's facilities.
Dialogue with potential providers of funding is well advanced in respect of replacing the term loan.
Banking covenants
Covenants in place with Lloyds Banking Group plc are tested semi-annually on 31 March and 30 September. The covenants require interest cover to be not less than 4.00 times profit before interest and tax (as defined in the facility agreement), and require the ratio of net debt to EBITDA to be not more than 3.25 times at 31 March 2010 and 3.00 times thereafter. The calculation of the net debt to EBITDA covenant involves the translation of both net debt and EBITDA at the average exchange rates for the period.
The results of the covenant calculations at 31 March 2010 were:
Actual Covenant Interest cover 4.97 times 4.00 times Net debt to EBITDA 2.14 times 3.25 times
Appropriate monitoring procedures are in place to ensure continuing compliance with banking covenants and, based on our current estimates, we expect to comply with the covenants for the foreseeable future.
Equity
Equity attributable to shareholders reduced from £178.7 million to £178.4 million. This results from the retained profit for the year of £11.4 million and a loss debited to the translation reserve of £2.8 million, less dividends paid of £8.4 million and actuarial losses arising in retirement benefit obligations of £0.7 million net of tax. An expense relating to share based payments of £0.2 million was credited directly to reserves.
Pensions
The Group operates a number of defined contribution pension schemes and two defined benefit plans. The defined benefit plans are closed to new entrants. The latest actuarial valuations of the defined benefit plans show a deficit of £3.7 million (2009: £4.0 million). The Board has agreed with the plans' trustees that the deficits will be funded over a five year period and, accordingly, special payments were paid to the plans during the year of £1.3 million (2009: £1.3 million).
The deficits of the defined benefit plans have been recognised on the balance sheet, with the IAS19 valuation of the plans at 31 March 2010 showing a shortfall in assets to liabilities of £4.4 million (2009: £4.4 million). The effects of a lower discount rate used to value the plans' liabilities has been offset by greater returns on assets.
Currency exchange risk
The Group seeks to hedge currency exchange risks by matching purchases and revenues that are denominated in foreign currencies. Where this is not possible, forward currency contracts may be taken out to protect exposures. Group policy prohibits speculation in currency management.
The retranslation of the Group's net investment in overseas businesses led to the net loss of £2.8 million being debited to the translation reserve.
Interest rate risk
Whilst the Group does not hedge the currency value of interest charges, it has partly protected the interest rate risk by the use of interest rate swaps. During the year to 31 March 2010, these financial instruments fixed the base rate on 58.4 per cent of the Group's average debt at 2.6 per cent. For the current financial year swaps in place will provide cover on a proportion of the Group's anticipated debt at an average LIBOR of 1.5 per cent.
Changes in the market value of interest rate swaps, together with the change in value of forward foreign exchange contracts, led to financial income of £0.3 million being recognised (2009: £0.2 million).
Doug RobertsonFinance Director8 June 2010
Consolidated Statement of Comprehensive Income
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For the year to 31 March 2010 2009 2010 Re-presented Note £ million £ million Continuing operations Revenue 2 409.4 410.9 Cost of sales (307.8) (303.1) Gross profit 101.6 107.8 Administrative expenses (77.6) (79.5) Operating profit 24.0 28.3 Financial income 3 1.4 1.4 Financial expense 3 (7.8) (7.4) Profit before tax 17.6 22.3 Income tax - UK 5 (4.2) (4.2) Income tax - overseas 5 (0.7) (3.9) Income tax - total (4.9) (8.1) Profit from continuing operations 12.7 14.2 Discontinued operations (Loss)/profit from discontinued operations (net of income tax) 12 (1.3) 0.4 Profit attributable to owners of the Company 11.4 14.6 Other comprehensive (expense)/income Foreign exchange translation differences on foreign operations (2.8) 12.1 Actuarial loss in pension schemes (1.0) (3.4) (3.8) 8.7 Income tax on other comprehensive (expense)/income 0.3 1.1 Other comprehensive (expense)/income (3.5) 9.8 Total comprehensive income attributable to owners of the Company 7.9 24.4
Consolidated Statement of Comprehensive Income (continued)
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For the year to 31 March 2010 2009 2010 Re-presented Note Pence Pence Earnings per share Total Basic earnings per share 7 23.6 30.4 Diluted earnings per share 7 23.5 30.4 Continuing operations Basic earnings per share 7 26.3 29.7 Diluted earnings per share 7 26.1 29.7 Discontinued operations Basic earnings per share 7 (2.7) 0.7 Diluted earnings per share 7 (2.6) 0.7Consolidated Balance Sheet
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As at 31 March 2010 2010 2009 Re-presented Note £ million £ million Assets Non-current assets Property, plant & equipment 46.5 49.8 Intangible assets 9 144.1 153.9 Deferred tax assets 2.4 3.4 193.0 207.1 Current assets Inventories 167.8 170.2 Trade & other receivables 79.9 101.2 Income tax receivable 4.9 4.3 Cash 56.5 51.8 Assets classified as held for sale 12 0.8 - 309.9 327.5 Total assets 502.9 534.6 Liabilities Current liabilities Trade & other payables (160.7) (157.2) Financial liabilities (0.9) (1.2) Income tax payable (7.8) (5.4) Loans & borrowings (1.4) (4.6) (170.8) (168.4) Non-current liabilities Other payables (0.7) (0.3) Deferred tax liabilities (10.4) (11.7) Retirement benefit obligation (4.4) (4.4) Loans & borrowings (134.7) (167.4) Provisions (3.5) (3.7) (153.7) (187.5) Total liabilities (324.5) (355.9) Net assets 178.4 178.7 Equity Share capital 12.0 12.0 Share premium 115.5 115.5 Translation reserve 8.6 11.4 Retained earnings 42.3 39.8 Equity attributable to owners of the 178.4 178.7Company
Consolidated Statement of Cash Flows
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For the year to 31 March 2010 2009 2010 Re-presented £ million £ million Cash flows from operating activities - continuing operations Profit for the year - continuing 12.7 14.2operations Depreciation 5.8 5.0 Amortisation & impairment charges 6.3 4.2 Loss on disposal of property, plant & - 0.1equipment Financial income (1.4) (1.4) Financial expense 7.8 7.4 Share based payments expense 0.2 0.1 Own shares held 0.1 - Income tax expense 4.9 8.1 36.4 37.7 Increase in inventories (0.8) (36.2) Decrease in trade & other receivables 19.5 7.9 Increase in trade & other payables 5.8 20.0 Decrease in other provisions (0.2) (0.3) Decrease in retirement benefit obligation (1.0) (1.8) Cash generated from operations 59.7 27.3 Net financial expense paid (7.0) (5.3) Tax paid (4.3) (9.2) Net cash flow from operating activities - continuing operations 48.4 12.8 Cash flows from investing activities - continuing operations Acquisition of property, plant & equipment (3.8) (6.1) Proceeds from sale of property, plant & equipment 0.1 0.2 Acquisition of subsidiaries, net of cash (0.2) (27.6)acquired Net cash flow from investing activities - continuing operations (3.9) (33.5) Cash flows from financing activities - continuing operations Proceeds from issue of share capital - 0.2 Drawdown of bank loans 8.6 82.6 Repayment of bank loans (37.0) (32.7) Repayment of lease finance liabilities (0.3) (0.3) Dividends paid to owners of the Company (8.4) (8.4) Net cash flow from financing activities - continuing operations (37.1) 41.4
Consolidated Statement of Cash Flows (continued)
_________________________________________________________________________
For the year to 31 March 2010 2009 2010 Re-presented Note £ million £ million Discontinued operation Net cash flow from operating activities (1.2) 1.2 Net cash flow from investing activities - (0.1) Net cash flow from discontinued operation (1.2) 1.1 Net increase in cash 10 6.2 21.8 Cash at start of year 49.0 32.4 Effect of exchange rate fluctuations 1.3 (5.2) Net cash at end of year 56.5 49.0
Consolidated Statement of Changes in Equity
_________________________________________________________________________
For the year to 31 March 2010
Share Share Translation Retained capital premium reserve earnings Total £ million £ million £ million £ million £ million At 1 April 2009 12.0 115.5 11.4 39.8 178.7 Total comprehensive income/(expense) Profit attributable to owners of the Company - - - 11.4 11.4 Other comprehensive (expense)/income Foreign exchange translation differences on foreign operations - - (2.8) - (2.8) Actuarial loss in pension schemes - - - (1.0) (1.0) Income tax on other comprehensive income - - - 0.3 0.3 Total other comprehensive (expense)/income - - (2.8) (0.7) (3.5) Total comprehensive (expense)/income - - (2.8) 10.7 7.9 Transactions with owners, recorded directly in equity Cost of share based - - - 0.2 0.2payments Dividends paid - - - (8.4) (8.4) Total transactions with - - - (8.2) (8.2)owners At 31 March 2010 12.0 115.5 8.6 42.3 178.4
Consolidated Statement of Changes in Equity (continued)
_________________________________________________________________________
For the year to 31 March 2010
Share Share Translation Retained capital premium reserve earnings Total £ million £ million £ million £ million £ million At 1 April 2008 12.0 115.3 (0.7) 35.8 162.4 Total comprehensive income/(expense) Profit attributable to owners of the Company - - - 14.6 14.6 Other comprehensive income/(expense) Foreign exchange translation differences on foreign operations - - 12.1 - 12.1 Actuarial loss in pension schemes - - - (3.4) (3.4) Income tax on other comprehensive income - - - 1.1 1.1 Total other comprehensive income/(expense) - - 12.1 (2.3) 9.8 Total comprehensive - - 12.1 12.3 24.4income Transactions with owners, recorded directly in equity Share capital issued - 0.2 - - 0.2 Cost of share based - - - 0.1 0.1payments Dividends paid - - - (8.4) (8.4) Total transactions with - 0.2 - (8.3) (8.1)owners At 31 March 2009 12.0 115.5 11.4 39.8 178.7Notes to the preliminary announcement of results____________________________________________________________________________
For the year to 31 March 2010
1 Basis of preparation
Umeco plc (the `Company') is domiciled in the UK. The consolidated financial statements of the Company as at and for the year to 31 March 2010 comprise the Company and its subsidiaries (together referred to as the `Group') and have been prepared in accordance with IFRS adopted for use in the EU (`Adopted IFRS').
The financial information set out in this announcement, which was approved by the Board on 8 June 2010, does not constitute the Company's statutory accounts for the years to 31 March 2010 and 31 March 2009 but is derived from the 2010 statutory accounts. The statutory accounts for the year to 31 March 2009 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The statutory accounts for the year to 31 March 2010 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on the statutory accounts for the years to 31 March 2010 and 31 March 2009, their reports were unqualified, did not include references to any matter which the auditors drew attention to by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or (3) of the Companies Act 2006 (in respect of the statutory accounts for the year to 31 March 2010) or a statement under section 237 (2) or (3) of the Companies Act 1985 (in respect of the statutory accounts for the year to 31 March 2009).
In the process of applying the Group's accounting policies, management has made a number of judgements. The process of preparing these consolidated financial statements inevitably requires the Group to make estimates and assumptions concerning the future and the resulting accounting estimates may not equal the related actual results. The estimates and judgements that have the most significant effect on the amounts included within these consolidated financial statements were the same as those that applied to the audited consolidated financial statements for the year to 31 March 2009.
The comparative figures for the year to 31 March 2009 have been re-presented to reflect fair value adjustments to IPM assets acquired during the year to 31 March 2009 (leading to a reduction in goodwill arising on the acquisition of £ 0.3 million) and the divestment of ACG South Africa. Segmental information has also been restated following the adoption of IFRS8.
Following the decision to dispose of ACG South Africa, the results of this undertaking have been classified as a discontinued operation.
Notes to the preliminary announcement of results____________________________________________________________________________
For the year to 31 March 2010
2 Segmental reporting
The Group has three reportable segments, as described below, which are the Group's strategic business units. The strategic business units offer different products and services, and are managed separately as they require different technology and marketing strategies. For each of the strategic business units, the Chief Executive and Chief Operating Officer (who act jointly as the chief operating decision maker) review internal management reports on a monthly basis. The following summary describes the operations of each of the Group's reportable segments:
Umeco Composites
* Structural Materials - development, manufacture and supply of advanced composite materials; and * Process Materials - development, manufacture and supply of vacuum bagging materials.
Umeco Supply Chain
* provision of value-added distribution and supply chain outsourcing
services.
In presenting information on the basis of geographical segments, segment revenue is provided based on the geographical location of the customer.
Details of the calculation of adjusted operating profit are shown in note 4.
Information regarding reportable segments
Structural Process Materials Materials 2010 2009 2010 2009 £ million £ million £ million £ million External revenue 101.7 116.1 73.1 68.4 Inter-segment revenue 0.2 0.2 0.1 0.1 Adjusted operating profit 7.9 11.9 8.7 11.6 Depreciation 2.3 2.1 1.4 0.8 Amortisation 4.2 3.7 2.1 0.5 Trading assets 29.7 34.2 23.8 26.4 Capital expenditure 1.5 3.1 1.8 1.2Notes to the preliminary announcement of results____________________________________________________________________________
For the year to 31 March 2010
2 Segmental reporting (continued)
Supply Chain Total 2010 2009 2010 2009 £ million £ million £ million £ million External revenue 234.6 226.4 409.4 410.9 Inter-segment revenue - - 0.3 0.3 Adjusted operating profit 15.0 11.2 31.6 34.7 Depreciation 2.0 1.9 5.7 4.8 Amortisation - - 6.3 4.2 Trading assets 82.6 107.0 136.1 167.6 Capital expenditure 0.8 2.0 4.1 6.3 2010 2009 £ million £ million Revenue Total revenue for reportable segments 409.7 411.2 Elimination of inter-segment revenue (0.3) (0.3) Group revenue 409.4 410.9 Depreciation Total depreciation for reportable segments 5.7 4.8 Corporate depreciation 0.1 0.2 Group depreciation 5.8 5.0 2009 2010 Re-presented £ million £ million Net assets Total trading assets for reportable segments 136.1 167.6 Corporate net assets and unallocated items (1.8) (3.6) Goodwill and intangible assets 144.1 153.9 Income tax and deferred tax (10.9) (9.4) Financial liabilities (0.9) (1.2) Provisions and retirement benefit (8.6) (8.4)obligations Net debt (79.6) (120.2) Group net assets 178.4 178.7
Notes to the preliminary announcement of results
_________________________________________________________________________
For the year to 31 March 2010
2 Segmental reporting (continued)
2010 2009 £ million £ million Revenue by location of customer UK 181.1 188.7 France 32.7 31.2 Italy 35.8 31.2 Rest of Europe 47.0 53.4 USA 77.4 75.5 Rest of world 37.5 36.1 Total 411.5 415.3 Less discontinued operation (2.1) (4.4) Continuing operations 409.4 410.9
3 Financial income and expense
2010 2009 £ million £ million Financial income Revaluation of financial instruments 0.3 0.2 Interest income 0.2 0.1 Expected return on pension scheme 0.9 1.1assets 1.4 1.4 Financial expense Interest on bank loans and overdrafts 6.5 6.1 Interest payable in respect of lease 0.1 0.1finance Interest cost on retirement benefit 1.2 1.2obligation 7.8 7.4
Notes to the preliminary announcement of results
_________________________________________________________________________
For the year to 31 March 2010
4 Reconciliation of adjusted profit measures
Umeco uses adjusted figures as key performance indicators. Adjusted figures are stated before the results of discontinued operations, amortisation and impairment charges relating to intangible assets, significant items, the revaluation of financial instruments based on their market values and associated tax effects. The differences between the total and adjusted profit measures are reconciled below. The narrative in this preliminary announcement is based on the adjusted measures of operating profit, profit before tax and earnings per share. These provide a more consistent measure of operating performance.
2010 2009 £ million £ million Operating profit - continuing operations Total operating profit 24.0 28.3 Exclude: - significant items 1.3 2.2 - amortisation of intangible 6.3 4.2assets Adjusted operating profit - continuing operations 31.6 34.7 Profit before tax - continuing operations Total profit before tax 17.6 22.3 Exclude: - significant items 1.3 2.2 - amortisation of intangible 6.3 4.2assets - revaluation of financial (0.3) (0.2)instruments Adjusted profit before tax - continuing operations 24.9 28.5 Profit attributable to owners of the Company Total profit attributable to owners of the Company 11.4 14.6 Exclude: - significant items 1.3 2.2 - amortisation of intangible 6.3 4.2assets - revaluation of financial (0.3) (0.2)instruments - loss/(profit) after tax of discontinued operation 0.8 (0.4) - loss on disposal of discontinued operation 0.5 - - associated tax effects (2.3) (1.3) Adjusted profit attributable to owners of the Company - continuing operations 17.7 19.1 Pence Pence Adjusted earnings per share - continuing operations 36.6 39.7Notes to the preliminary announcement of results_____________________________________________________________________________
For the year to 31 March 2010
4 Reconciliation of adjusted profit measures (continued)
Significant items of £1.3 million were incurred during the year. This comprised costs relating to the restructuring of the Group's operations, principally redundancy. Significant items of £2.2 million in the year to 31 March 2009 principally comprised costs of £0.7 million in relation to the restructuring of operations at Pattonair France and Pattonair USA, and £1.2 million of expenses associated with aborted acquisition projects.
5 Tax expense
The effective tax rate on profit before tax from continuing operations is 27.8 per cent (2009: 36.3 per cent). The effective rate of tax on adjusted profit before tax from continuing operations is 29.1 per cent (2009: 33.0 per cent), based on a tax expense on adjusted profit before tax of £7.2 million (2009: £ 9.4 million). These effective tax rates differ from the UK standard rate of corporation tax of 28.0 per cent (2009: 28.0 per cent) principally due to the effects of overseas earnings which are taxed at higher rates, offset by the benefit of an international corporate restructuring that was implemented in December 2009.
6 Dividends
The Board is proposing a final dividend of 11.0 pence per share, payable on 8October 2010 to shareholders on the register on 10 September 2010. The amountof this final dividend is £5.3 million. The following dividends were paid andproposed by the Company: 2010 2010 2009 2009 Pence per Pence per share £ million share £ million Dividends paid Previous year final 11.0 5.3 11.0 5.3 Current year interim 6.5 3.1 6.5 3.1 17.5 8.4 17.5 8.4 Dividends proposed Interim 6.5 3.1 6.5 3.1 Final 11.0 5.3 11.0 5.3 17.5 8.4 17.5 8.4Notes to the preliminary announcement of results_____________________________________________________________________________
For the year to 31 March 2010
7 Earnings per share
Earnings per share is calculated on profit attributable to owners of the Company of £11.4 million (2009: £14.6 million). Adjusted profit attributable to owners of the Company, which provides a consistent measure of operating performance, was £17.7 million (2009: £19.1 million) as shown in note 4.
Earnings per share from continuing operations is calculated on profit from continuing operations of £12.7 million (2009: £14.2 million). Earnings per share from discontinued operations is calculated on the loss from discontinued operations of £1.3 million (2009: £0.4 million profit).
2010 2009 Million Million Weighted average number of shares in 48.1 48.1issue Dilutive effect of share 0.4 -options 48.5 48.1
8 Acquisition of property, plant & equipment
2010 2009 £ million £ million Funded by cash 3.8 6.2 Funded by lease finance 0.3 0.1 4.1 6.3Notes to the preliminary announcement of results_____________________________________________________________________________
For the year to 31 March 2010
9 Intangible assets Customer relationships, contracts & Goodwill orders Total £ million £ million £ million Cost At 1 April 2009 (re-presented) 127.1 35.7 162.8 Acquisitions - - - Foreign exchange translation (1.9) 0.5 (1.4) At 31 March 2010 125.2 36.2 161.4 Amortisation & impairment losses At 1 April 2009 0.8 8.1 8.9 Amortisation charge - 6.3 6.3 Foreign exchange translation - 2.1 2.1 At 31 March 2010 0.8 16.5 17.3 Net book value At 31 March 2010 124.4 19.7 144.1 At 1 April 2009 126.3 27.6 153.9(re-presented)
10 Reconciliation of net cash to movement in net debt
2010 2009 £ million £ million Net increase in cash 6.2 21.8 Bank loans taken on with acquisition - (6.0) Drawdown of bank loans (8.6) (82.6) Drawdown of lease finance (0.3) (0.1) Repayment of bank loans 37.0 32.7 Repayment of lease finance liabilities 0.3 0.3 34.6 (33.9) Effect of exchange rate fluctuations 6.0 (28.7) Movement in net debt 40.6 (62.6) Net debt at start of year (120.2) (57.6) Net debt at end of year (79.6) (120.2)
Net debt comprises cash balances, bank overdrafts, bank loans and lease finance obligations.
Notes to the preliminary announcement of results
_________________________________________________________________________
For the year to 31 March 2010
11 Acquisitions
The Group made no acquisitions in the year to 31 March 2010. During the year, fair value adjustments of £0.3 million were made to the net identifiable assets and liabilities relating to the acquisition of IPM. Payments of £0.2 million were made during the year in respect of expenses relating to the acquisition of IPM. Details of the acquisition made in the year to 31 March 2009 are set out below.
On 4 December 2008, the Group acquired the entire issued share capital of Industria Plastica Monregalese SpA (`IPM') for a cash consideration of €16.8 million. IPM is a manufacturer and supplier of vacuum bagging films for the composites industry and other markets. Consideration of €12.8 million was payable to the vendors on completion, with the remaining €4.0 million being paid by the Group into an escrow account pending any warranty claims.
In the period from acquisition to 31 March 2009, IPM achieved a profit before tax of £nil, after a charge of £0.5 million in respect of amortisation of acquired intangible assets. Had the acquisition completed on 1 April 2008, it is estimated that IPM would have contributed a further £10.0 million to revenue and £nil to profit before tax, after making certain non-recurring payments to the vendors and charges in respect of amortisation of acquired intangible assets. Other than the recognition of intangible assets of £6.4 million and a related deferred tax liability, the fair value adjustments made were the revaluation of property, plant & equipment, additional inventory and trade receivable provisions and the recognition of additional trade and other payables.
The re-presented fair value of net assets acquired were as follows:
Accounting policy & Acquired Carrying fair intangible Fair amount value assets value adjustments £ million £ million £ million £ million Property, plant & equipment 5.6 1.7 - 7.3 Intangible assets 0.1 - 6.4 6.5 Inventories 4.1 (0.4) - 3.7 Trade & other receivables 8.8 (0.2) - 8.6 Bank overdraft (6.5) - - (6.5) Trade & other payables (7.2) (1.3) - (8.5) Loans & borrowings (6.0) - - (6.0) Income tax receivable 0.3 - - 0.3 Deferred tax liabilities - - (2.2) (2.2) Net identifiable assets and (0.8) (0.2) 4.2 3.2liabilities Goodwill 12.1 Consideration 15.3 Satisfied by: Cash consideration paid 14.4 Expenses paid 0.6 Consideration and expenses 0.3accrued 15.3
Notes to the preliminary announcement of results
_________________________________________________________________________
For the year to 31 March 2010
11 Acquisitions (continued)
The goodwill recognised on the acquisition of IPM is attributable to the skills and technical capabilities of IPM's employees and synergies expected to be generated from establishing links between IPM and the Group's existing composites activities.
Amounts recognised for intangible assets and goodwill is provisional and subject to change for the period of one year from the date of acquisition. Intangible assets have been recognised in respect of customer relationships and order books on hand at acquisition.
In addition to the acquisition of IPM, £6.1 million was paid during the year to31 March 2009 in respect of acquisitions made in prior years. The valuecomprised £3.7 million in respect of the final payment of deferredconsideration due under the terms of the acquisition of Pattonair Srl (formerlyProvest Srl) and a final earnout payment of £2.4 million under the terms of theacquisition of J.D. Lincoln, Inc. The total increase in net debt relating tothe acquisition of subsidiaries in the year to 31 March 2009 thereforecomprises: IPM Other Total £ million £ million £ million Cash consideration paid 14.4 - 14.4 Expenses paid 0.6 - 0.6 Bank overdraft at acquisition 6.5 - 6.5 Bank loans at acquisition 6.0 - 6.0 Pattonair Srl - deferred - 3.7 3.7consideration J.D. Lincoln, Inc. - earnout - 2.4 2.4payment 27.5 6.1 33.612 Discontinued operation
As at 31 March 2010, the Group held for resale the business and assets of ACG South Africa. Its results have accordingly been presented separately from continuing operations and are disclosed as a discontinued operation. ACG South Africa was previously reported as part of the Composites - Structural Materials reportable segment. The results of the discontinued operation included in the Consolidated Statement of Comprehensive Income were as follows:
2010 2009 £ million £ million Revenue 2.1 4.4 Cost of sales (2.2) (3.3) Gross (loss)/profit (0.1) 1.1 Administrative expenses (0.8) (0.6) (Loss)/profit before tax (0.9) 0.5 Income tax - overseas 0.1 (0.1) (Loss)/profit after tax (0.8) 0.4 Loss on disposal (0.5) - (Loss)/profit from discontinued (1.3) 0.4operation
Notes to the preliminary announcement of results
_________________________________________________________________________
For the year to 31 March 2010
12 Discontinued operation (continued)
At 31 March 2010, the following assets attributable to ACG South Africa have been classified on the Consolidated Balance Sheet as being held for resale:
£ million Property, plant & equipment 0.5 Inventories 0.3 Total assets held for resale 0.8
The consideration payable for the business and assets of ACG South Africa is ZAR5.4 million (£0.5 million), subject to adjustment for working capital balances at completion. Completion of the divestment is expected to occur on or before 30 June 2010 and is subject to certain conditions precedent being satisfied.
13 Details of Annual General Meeting
The Annual General Meeting of the Company will be held at The Falstaff Hotel, 16-20 Warwick New Road, Leamington Spa, CV32 5JQ at 1.00pm on 28 July 2010.
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