TIDMPRV
RNS Number : 0865E
Porvair PLC
05 July 2021
For immediate release
5 July 2021
Porvair plc
Half year results for the six months ended 31 May 2021
Porvair plc ("Porvair" or "the Group"), the specialist
filtration, laboratory and environmental technology group,
announces its half year results for the six months ended 31 May
2021.
Key points:
-- Revenue 5% lower at GBP69.7 million (2020: GBP73.2 million),
2% lower on a constant currency basis*;
o 33% growth in Laboratory offset by continued weakness in
Aerospace & Industrial.
-- Operating profit GBP9.3 million (2020: GBP9.3 million).
-- Adjusted operating profit* GBP9.1 million (2020: GBP9.0
million), 4% higher on a constant currency basis.
-- Profit before tax up 1% to GBP8.9 million (2020: GBP8.8 million).
-- Basic earnings per share were 16.4 pence (2020: 13.1 pence).
Adjusted basic earnings per share* were 14.8 pence (2020: 14.3
pence).
-- Net cash was GBP6.2 million (31 May 2020: GBP1.0 million)
after investing GBP2.0 million (2020: GBP2.0 million) in capital
expenditure and GBP1.7 million (net of cash acquired) on the
acquisition of Kbiosystems.
-- Interim dividend increased 0.1 pence per share to 1.8 pence (2020: 1.7 pence).
Commenting on the outlook, Ben Stocks, Chief Executive,
said:
" While demand in aerospace has remained markedly lower than
pre-pandemic levels, other segments are now showing signs of
recovery. The Group started 2021 with a sound balance sheet and is
now seeing the benefits of cost reductions made last year.
Investments in productivity, capacity and acquisitions have
continued and margins in 2021 are better as a result.
Looking ahead, the underlying drivers of growth for Porvair all
remain in place: tightening environmental regulations; the need for
clean water; expansion of analytical science; the drive for
manufacturing efficiency; the replacement of steel and plastic with
aluminium; and the development of carbon-efficient transport.
The order book for the second half looks healthy and whilst the
currently high levels of demand in Laboratory are likely to dampen
as the pandemic eases, there are signs that activity levels in
aerospace are starting to rebound."
*See notes 1, 2 and 3 for definition and calculations of
alternative performance measures
For further information please contact:
Porvair plc 01553 765 500
Ben Stocks, Chief Executive
James Mills, Group Finance Director
Buchanan Communications 020 7466 5000
Charles Ryland / Steph Watson
A sell side analyst briefing will take place at 9:30 a.m. on
Monday 5 July 2021, please contact Buchanan if you wish to join. An
audiocast of the meeting and the presentation will be made
available later today at www.porvair.com .
Operating summary
As reported last year, Group order books fell sharply in the
early months of the pandemic, reaching a low in June 2020, since
when there has been a steady recovery in most segments. While
aerospace demand remains low by historic standards, elsewhere the
Group has been getting busier. General industrial activity has
picked up in recent months. Metal Melt Quality has seen better
demand from aluminium and automotive customers. In Laboratory,
Covid-related diagnostic demand has been high, and while this might
be expected to subside as the pandemic eases, general laboratory
consumables and water quality demand is returning to more normal
levels.
Group operations in different parts of the world have seen
different levels of Covid restrictions, and management teams have
prioritised staff well-being through the period. In 2020 the most
volatile effects of the pandemic were on the demand side, but in
2021 it has been the supply side that has seen the greatest
disruption, particularly in the US. Some suppliers have found their
capacity constrained by Covid outbreaks in their plants. In some
markets there were clear signs of re-stocking, driving short-term
demand and lead-time elongation. Transport and shipping dislocation
has affected some supply chains and in some US states the labour
market has been more restricted than usual. As a result, cost
inflation and logistical challenges have been more common in 2021
than is usually the case and the Group is having to be disciplined
in passing price increases and lead-time effects through to
customers. It is not yet clear whether these are short-term,
post-pandemic inflationary effects that will subside, or whether we
should expect a period of more sustained inflation. The Group has
been through similar challenges before and is prepared for either
eventuality.
Margins however have improved where demand has started to
recover and cost levels remain lower than the pre-pandemic average.
In some categories this will not continue - travel and selling
costs for example have been very low for twelve months and will
climb as normal economic activity returns - but our operations were
busy in 2020 using quieter periods to invest in productivity and
other improvements, and in 2021 the benefits of that activity are
evident. Adjusted operating profit margins have reflected levels of
activity: 9.4% in Aerospace & Industrial, 16.3% in Metal Melt
Quality (a record), and 18.8% in Laboratory (also a record).
Financial Summary
H1 2021 H1 2020 Growth
GBPm GBPm %
Revenue 69.7 73.2 (5)
-------- -------- -------
Operating profit 9.3 9.3 -
-------- -------- -------
Adjusted operating profit* 9.1 9.0 1
-------- -------- -------
Profit before tax 8.9 8.8 1
-------- -------- -------
Adjusted profit before tax* 8.6 8.5 1
-------- -------- -------
Pence Pence
Earnings per share 16.4 13.1 25
-------- -------- -------
Adjusted earnings per share* 14.8 14.3 3
-------- -------- -------
GBPm GBPm
Net cash 6.2 1.0
-------- --------
*See notes 1, 2 and 3 for definition and calculations of
alternative performance measures
Revenue was 5% lower (2% at constant currency). Operating profit
was level at GBP9.3 million. Profit before tax increased by 1%.
Adjusted earnings per share increased 3% to 14.8 pence. Net cash at
31 May 2021 was GBP6.2 million.
The Group's record for growth, cash generation and investment is
as follows:
5 years 10 years 15 years
CAGR* CAGR* CAGR*
Revenue growth 5% 7% 7%
Earnings per share growth 6% 14% 11%
Adjusted earnings per share growth 7% 14% 11%
-------- --------- ---------
GBPm GBPm GBPm
Cash from operations 74.5 132.3 160.0
Investment in acquisitions and capital
expenditure 48.6 75.1 89.7
-------- --------- ---------
* Compound annual growth rate
Porvair's strategy and purpose has changed little since 2004, a
period that now encompasses two significant recessions. This
longer-term growth record gives the Board confidence that the Group
can weather difficult times and will return to historic growth
rates when economic conditions allow.
Strategic statement
Porvair's strategic purpose is the development of specialist
filtration, laboratory and environmental technology businesses for
the benefit of all stakeholders. Principal measures of success
include consistent earnings growth and selected ESG measures. The
Group publishes a full ESG report at the time of the annual
preliminary results.
The Group is positioned to benefit from global trends:
tightening environmental regulations; the need for clean water;
growth in analytical science; more carbon-efficient transport; the
replacement of plastic and steel by aluminium; and the drive for
manufacturing process efficiency.
Porvair businesses have certain key characteristics in
common:
-- Specialist design or engineering skills are required;
-- Product use and replacement is mandated by regulation,
quality accreditation or a maintenance cycle; and
-- Products are typically designed into a system that will have
a long life-cycle and must perform to a given specification.
Orders are won by offering the best technical solutions for
these requirements at an acceptable commercial cost. Technical
expertise is necessary in all markets served. New products are
often adaptations of existing designs. Experience in specific
markets or applications is valuable in building customer
confidence. Domain knowledge is important, as is deciding where to
direct resources.
This leads the Group to:
1. Focus on markets where we see long-term growth potential.
2. Look for applications where product use is mandated and replacement demand is regular.
3. Make new product development a core business activity.
4. Establish geographic presence where end-markets require.
5. Invest in both organic and acquired growth.
Therefore:
-- We focus on three operating segments: Aerospace &
Industrial; Laboratory; and Metal Melt Quality. All have clear
long-term growth drivers.
-- Our products typically control emissions or protect complex
downstream systems and are replaced regularly. A high proportion of
our annual revenue is from repeat orders.
-- Through a focus on new product development we aim to generate
growth rates in excess of the underlying market. Where possible we
build intellectual property around our product developments.
-- Our geographic presence follows the markets we serve. In the
last twelve months: 46% of revenue was in the Americas; 23% in
Asia; 21% in continental Europe; and 10% in the UK. The Group has
plants in the US, UK, Germany, the Netherlands and China. In the
last twelve months, 49% of revenue was manufactured in the US; 28%
in the UK; 18% in Europe; and 5% in China.
-- We aim to meet dividend and investment needs from free cash
flow and modest borrowing facilities. In recent years we have
expanded manufacturing capacity in the UK, Germany, US and China,
and made several acquisitions. All investments are subject to a
hurdle rate analysis based on strategic and financial
priorities.
Environmental, Social and Governance ('ESG')
The Board understands that responsible business development is
essential for creating long-term value for stakeholders. Most of
the products made by Porvair are used to the benefit of the
environment. Our water analysis equipment measures contamination
levels in water. Industrial filters are typically needed to reduce
emissions or improve efficiency. Aerospace filters improve safety
and reliability. Nuclear filters confine fissile materials. Metal
Melt Quality filters reduce waste and help improve the strength to
weight ratio of metal components.
A full ESG report was published in February 2021 setting out the
Group's ESG management framework and goals. This will be updated in
February 2022.
Divisional review
Aerospace & Industrial
H1 2021 H1 2020 Growth
GBPm GBPm %
Revenue 26.0 35.7 (27)
Operating profit 2.1 7.5 (72)
-------- -------- -------
Adjusted operating profit* 2.5 4.8 (48)
-------- -------- -------
*See notes 1, 2 and 3 for definition and calculations of
alternative performance measures
The Aerospace & Industrial division designs and manufactures
a wide range of specialist filtration products, demand for which
grows as aerospace and industrial customers seek cleaner, safer or
more efficient operations. Differentiation is achieved through
design engineering; intellectual property; or quality
accreditations.
Revenue in the period reduced by 27%. No gasification spares
were shipped in the period, compared with GBP7.0 million in 2020.
Like-for-like revenue fell 23% in aerospace and 3% in industrial.
Porvair has had twelve months of aerospace revenue at these levels
and has used the time to upgrade our capacity and planning systems
in preparation for better times ahead. Aerospace orders are
stronger for the second half, but shipments will depend on how
pandemic restrictions on travel evolve. Industrial demand
strengthened towards the end of the period and the outlook for the
remainder of the year is better, with both petrochemical and
microelectronic filtration performing well in the year to date.
Laboratory
H1 2021 H1 2020 Growth
GBPm GBPm %
Revenue 25.2 19.0 33
-------- -------- -------
Operating profit 4.9 2.8 75
-------- -------- -------
Adjusted operating profit* 4.8 2.8 71
-------- -------- -------
*See notes 1, 2 and 3 for definition and calculations of
alternative performance measures
The Laboratory division has two operating businesses: Porvair
Sciences and Seal Analytical.
-- Porvair Sciences manufactures laboratory filters and
associated consumables. Differentiation is achieved through
proprietary manufacturing capabilities and filtration media.
-- Seal Analytical is a leading supplier of instruments and
consumables for environmental laboratories. Demand is driven by
water quality regulations. Differentiation is achieved through
active new product development.
Revenue grew by 33% in the period, with a helpful contribution
from Kbiosystems. Like-for-like revenue growth was 26%. The
division makes a range of products used in Covid testing and
analysis for which demand has been high. Order pressure in these
products has shortened new product qualification timescales and it
has been a good period for new product introductions. Additional
capacity investments have been made to meet demand which is
expected to remain strong until the pandemic recedes. Seal
Analytical sales were up 11%, with robust demand in both the US and
China.
In the US plants, supply chain dislocation and the hiring of
staff have been recurring challenges and where costs have risen,
price rises are being implemented.
Kbiosystems, acquired in February 2021, specialises in the
design and manufacture of laboratory instruments that complement
our growing range of microplate and sample preparation filters. We
will introduce their range to our US sales channels and use their
automation expertise for product development across the
division.
Metal Melt Quality
H1 2021 H1 2020 Growth
GBPm GBPm %
Revenue 18.4 18.6 (1)
-------- -------- -------
Operating profit/(loss) 3.6 (0.1) -
-------- -------- -------
Adjusted operating profit* 3.0 2.3 30
-------- -------- -------
*See notes 1, 2 and 3 for definition and calculations of
alternative performance measures
The Metal Melt Quality division manufactures filters for molten
metal, specialising in aluminium, ductile iron and nickel-cobalt
alloys. It has a well-differentiated product range based on
patented products.
Metal Melt Quality experienced better demand in 2021 for both
aluminium and automotive customers, but its aerospace-related
activities (around 12% of sales in a normal year) remained low.
Revenue at reported currencies were GBP18.4 million (2020: GBP18.6
million) and improved 6% at constant currency rates. Investments
carried out during the quieter months of 2020 resulted in better
margins yielding a 30% improvement in adjusted operating profit. It
should be noted that some of this improvement - seen across the
Group - is due to unprecedentedly low travel and sales related
costs, which will increase again as normal business conditions
return. Nonetheless, we are running at high levels of efficiency,
which is encouraging. Metal Melt Quality, the most global of the
three divisions, has seen the greatest supply side disruption in
the period, with supply chains and transportation dislocation
causing operational challenges and input price increases. These are
being passed on as they occur.
Order books going into the second half look reasonable, and
there has been a modest recent uptick in higher margin aerospace
related demand.
Alternative performance measures
H1 2021 H1 2020
Adjusted Adjustments Reported Adjusted Adjustments Reported
GBPm GBPm GBPm GBPm GBPm GBPm
Operating profit 9.0 0.3 9.3 9.0 0.3 9.3
Profit before
income tax 8.6 0.3 8.9 8.5 0.3 8.8
Profit for the
year 6.8 0.7 7.5 6.6 (0.6) 6.0
--------- ------------ --------- --------- ------------ ---------
The Group presents alternative performance measures to enable a
better understanding of its trading performance.
Adjusted operating profit and adjusted profit before tax exclude
items that are considered significant and where treatment as an
adjusting item provides a more consistent assessment of the Group's
trading. Adjusted operating profit excludes GBP0.3 million (2020
GBP0.3 million) of net income from operating profit. The details of
these adjustments are set out in note 1.
Interest
The Group incurred an interest charge of GBP0.5 million (2020:
GBP0.5 million). GBP0.2 million (2020: GBP0.2 million) relates to
the finance cost of the defined benefit pension scheme. GBP0.2
million (2020: GBP0.2 million) relates to the interest charge on
right-of-use assets. The remainder comprises undrawn commitment
fees and interest on the Group's banking facilities.
Tax
The Group tax charge was GBP1.3 million (2020: GBP2.7 million).
The adjusted income tax expense was GBP1.8 million (2020: GBP2.0
million). The underlying rate of income tax for the period on
adjusted measures was 21% (2020: 23%).
Earnings per share and dividends
The basic earnings per share for the period was 16.4 pence
(2020: 13.1 pence). Adjusted earnings per share was 14.8 pence
(2020: 14.3 pence).
The Board has declared an interim dividend of 1.8 pence (2020:
1.7 pence) per share.
Investment
In the last five years, GBP49.0 million has been invested in
acquisitions and capacity expansion. The Group invested GBP2.0
million (2020: GBP2.0 million) in capital expenditure in the first
half of 2021, together with GBP1.7 million (net of cash acquired)
on the acquisition of Kbiosystems.
Cash flow and net debt
Cash generated from operations in the six months to 31 May 2021
was GBP6.1 million (2020: GBP1.9 million). The Group normally sees
an outflow of working capital in the first half of the year.
Working capital increased by GBP3.8 million (2020: GBP11.5 million)
in the period.
Net cash at 31 May 2021 was GBP6.2 million (31 May 2020: GBP1.0
million; 30 November 2020: GBP4.9 million). Lease liabilities were
GBP12.8 million (31 May 2020: GBP15.0 million; 30 November 2020:
GBP13.6 million).
On 18 May 2021, the Group agreed a EUR28 million (GBP24 million)
four year secured revolving credit facility, with an option to
extend by one year, plus a EUR17 million (GBP15 million) accordion
facility, with Barclays Bank plc and Citibank N.A., London Branch.
The financial covenants continue to require the Group to maintain
interest cover of 3.5 times and net debt to be less than 2.5 times
EBITDA. The Group also has a GBP2.5 million overdraft facility
provided by Barclays Bank plc.
Provisions, contingent liabilities and performance bonds
The Group has GBP4.2 million (30 November 2020: GBP4.6 million)
of provisions for dilapidations and warranty risks.
The Group has outstanding performance bonds with customers on 31
May 2021 of $2.5 million (30 November 2020: $2.5 million) and
EUR0.8 million (30 November 2020: EUR1.0 million).
Return on capital employed
The Group's return on capital employed was 11% (2020: 13%).
Excluding the impact of goodwill, acquired intangible assets and
the pension liability, the return on operating capital employed was
29% (2020: 30%).
Outlook
While demand in aerospace has remained markedly lower than
pre-pandemic levels, other segments are now showing signs of
recovery. The Group started 2021 with a sound balance sheet and is
now seeing the benefits of cost reductions made last year.
Investments in productivity, capacity and acquisitions have
continued and margins in 2021 are better as a result.
Looking ahead, the underlying drivers of growth for Porvair all
remain in place: tightening environmental regulations; the need for
clean water; expansion of analytical science; the drive for
manufacturing efficiency; the replacement of steel and plastic with
aluminium; and the development of carbon-efficient transport.
The order book for the second half looks healthy and whilst the
currently high levels of demand in Laboratory are likely to dampen
as the pandemic eases, there are signs that activity levels in
aerospace are starting to rebound.
Ben Stocks
Group Chief Executive
2 July 2021
Related parties
There were no related party transactions in the six months ended
31 May 2021 (2020: none).
Principal risks
Each division considers strategic, operational and financial
risks and identifies actions to mitigate those risks. These risk
profiles are reviewed by the Board and updated at least annually.
Further details of the Group's risk profile analysis can be found
in the Strategic Report section of the Annual Report for the year
ended 30 November 2020.
The trading challenges associated with the current Covid-19
pandemic are considered in the operating review section above.
Certain elements of the Group's order position can change quickly
in the face of changing economic circumstances. The Metal Melt
Quality division, Laboratory division and general industrial
filtration within the Aerospace & Industrial division all have
relatively short lead times and order cycles and, therefore,
revenue is subject to fluctuations which could have a material
effect on the Group's results for the balance of 2021. These
effects are exacerbated by the current pandemic.
Forward looking statements
Certain statements in this half yearly financial information are
forward looking. Although the Group believes that the expectations
reflected in these forward looking statements are reasonable, it
can give no assurance that these expectations will prove to have
been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
We undertake no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Condensed consolidated income statement
For the six months ended 31 May
Six months ended 31
May
----------------------
2021 2020
Note Unaudited Unaudited
GBP'000 GBP'000
Revenue 1,2 69,654 73,236
Cost of sales (46,759) (48,862)
---------- ----------
Gross profit 22,895 24,374
Other operating expenses (13,566) (15,085)
------------------------------------------ ----- ---------- ----------
Adjusted operating profit 1,2 9,066 9,039
Adjustments:
Amortisation of acquired intangibles (402) (332)
Other acquisition-related adjustments (80) -
Settlement of project-related warranties - 3,791
Impairment of assets and restructuring
costs (592) (3,209)
Paycheck Protection Program 1,337 -
------------------------------------------
Operating profit 1,2 9,329 9,289
Interest payable and similar charges (479) (519)
Profit before income tax 8,850 8,770
------------------------------------------ ----- ---------- ----------
Adjusted income tax expense 1,2 (1,768) (1,958)
Adjustments:
Tax effect of adjustments 472 (771)
------------------------------------------ ----- ---------- ----------
Income tax expense 1,2 (1,296) (2,729)
---------- ----------
Profit for the period 7,554 6,041
Profit attributable to:
Owners of the parent 7,554 6,041
Non-controlling interests - -
Profit for the period 7,554 6,041
---------- ----------
Earnings per share (basic) 3 16.4p 13.1p
Earnings per share (diluted) 3 16.4p 13.1p
Adjusted earnings per share (basic) 3 14.8p 14.3p
Adjusted earnings per share (diluted) 3 14.8p 14.3p
Condensed consolidated statement of comprehensive income
For the six months ended 31 May
Six months ended 31
May
------------------------
2021 2020
Unaudited Unaudited
GBP'000 GBP'000
Profit for the period 7,554 6,041
----------- -----------
Other comprehensive income:
Items that will not be reclassified to profit
and loss
Actuarial gain / (loss) in defined benefit pension
plans net of tax 2,515 (1,473)
----------- -----------
Items that may be subsequently reclassified to
profit or loss
Exchange differences on translation of foreign
subsidiaries (4,301) 3,589
Changes in fair value of foreign exchange contracts
held as a cash flow hedge - (186)
(4,301) 3,403
Net other comprehensive income (1,786) 1,930
----------- -----------
Total comprehensive income for the period 5,768 7,971
----------- -----------
Comprehensive income attributable to:
Owners of the parent 5,768 7,971
Total comprehensive income for the period 5,768 7,971
----------- -----------
The accompanying notes are an integral part of this interim
financial information.
Condensed consolidated balance sheet
As at 31 May
As at 30
As at 31 May November
------------------------ ----------
Note 2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 20,427 21,503 20,716
Right-of-use assets 11,878 14,171 12,762
Goodwill and other intangible
assets 71,962 73,678 70,039
Deferred tax asset 1,257 2,639 2,614
105,524 111,991 106,131
Current assets
Inventories 24,418 24,832 23,355
Trade and other receivables 22,428 27,147 20,674
Derivative financial instruments 214 - 23
Cash and cash equivalents 15,501 11,830 15,563
----------- ----------- ----------
62,561 63,809 59,615
Current liabilities
Trade and other payables (23,429) (23,854) (20,197)
Current tax liabilities (469) (1,675) (192)
Borrowings (1,796) (1,489) (1,379)
Lease liabilities (2,071) (2,057) (2,007)
Derivative financial instruments - (608) -
Provisions 10 (3,884) (4,259) (4,365)
(31,649) (33,942) (28,140)
Net current assets 30,912 29,867 31,475
Non-current liabilities
Borrowings (7,553) (9,371) (9,303)
Deferred tax liability (2,835) (2,664) (2,839)
Retirement benefit obligations (10,871) (15,202) (15,395)
Other payables 9 (1,900) - -
Lease liabilities (10,682) (12,906) (11,609)
Provisions 10 (282) (255) (268)
----------
(34,123) (40,398) (39,414)
----------- ----------- ----------
Net assets 102,313 101,460 98,192
----------- ----------- ----------
Capital and reserves
Share capital 923 921 923
Share premium account 36,981 36,549 36,927
Cumulative translation reserve 3,344 12,947 7,645
Retained earnings 61,065 51,043 52,697
----------- ----------- ----------
Equity attributable to owners
of the parent 102,313 101,460 98,192
----------- ----------- ----------
Total equity 102,313 101,460 98,192
----------- ----------- ----------
The interim financial information was approved by the Board of
Directors on 2 July 2021 and was signed on its behalf by:
Ben Stocks James Mills
Group Chief Executive Group Finance Director
The accompanying notes are an integral part of this interim
financial information.
Condensed consolidated cash flow statement
For the six months ended 31 May
Six months ended 31
May
--------------------------------
Note 2021 Unaudited 2020 Unaudited
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 5 6,078 1,918
Interest paid (138) (202)
Tax paid (916) (1,146)
--------------- ---------------
Net cash generated from operating activities 5,024 570
--------------- ---------------
Cash flows from investing activities
Acquisition of subsidiaries (net of
cash acquired) 7 (1,694) -
Purchase of property, plant and equipment (1,987) (1,896)
Purchase of intangible assets (14) (59)
Net cash used in investing activities (3,695) (1,955)
--------------- ---------------
Cash flows from financing activities
Net proceeds from the issue of ordinary
shares 54 45
Purchase of Employee Benefit Trust
shares (332) (399)
Increase in borrowings 6 434 1,448
Repayment of lease liabilities (1,137) (1,115)
Net cash used in financing activities (981) (21)
--------------- ---------------
Net increase / (decrease) in cash and
cash equivalents 6 348 (1,406)
Effects of exchange rate changes (410) 347
--------------- ---------------
(62) (1,059)
Cash and cash equivalents at the beginning
of the period 15,563 12,889
--------------- ---------------
Cash and cash equivalents at the end
of the period 15,501 11,830
--------------- ---------------
The accompanying notes are an integral part of this interim
financial information.
Condensed consolidated statement of changes in equity
For the six months ended 31 May (Unaudited)
Share premium Cumulative
Share account translation Retained
capital GBP'000 reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
---------- -------------- ------------- ----------- ----------
Balance at 1 December
2019 921 36,504 9,358 48,552 95,335
---------- -------------- ------------- ----------- ----------
Profit for the period - - - 6,041 6,041
Other comprehensive income/(expense):
Exchange differences on
translation of foreign
subsidiaries - - 3,589 - 3,589
Changes in fair value
of foreign exchange contracts
held as a cash flow hedge - - - (186) (186)
Actuarial losses in defined
benefit pension plans
net of tax - - - (1,473) (1,473)
---------- -------------- ------------- ----------- ----------
Total comprehensive income
for the period - - 3,589 4,382 7,971
---------- -------------- ------------- ----------- ----------
Transactions with owners:
Consideration paid for
purchase of own shares
(held in trust) - - - (399) (399)
Proceeds from shared issued,
net of costs - 45 - - 45
Employee share option
schemes:
* value of employee services net of tax - - - (20) (20)
Dividends approved or
paid - - - (1,472) (1,472)
---------- -------------- ------------- ----------- ----------
Total transactions with
owners recognised directly
in equity - 45 - (1,891) (1,846)
---------- -------------- ------------- ----------- ----------
Balance at 31 May 2020 921 36,549 12,947 51,043 101,460
---------- -------------- ------------- ----------- ----------
Share premium Cumulative
Share account translation Retained
capital GBP'000 reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
---------- -------------- ------------- ----------- ----------
Balance at 1 December
2020 923 36,927 7,645 52,697 98,192
---------- -------------- ------------- ----------- ----------
Profit for the period - - - 7,554 7,554
Other comprehensive
income/(expense):
Exchange differences
on translation of foreign
subsidiaries - - (4,301) - (4,301)
Actuarial gains in
defined benefit pension
plans net of tax - - - 2,515 2,515
---------- -------------- ------------- ----------- ----------
Total comprehensive
income for the period - - (4,301) 10,069 5,768
---------- -------------- ------------- ----------- ----------
Transactions with owners:
Consideration paid
for purchase of own
shares (held in trust) - - - (332) (332)
Proceeds from shared
issued, net of costs - 54 - - 54
Employee share option
schemes:
* value of employee services net of tax - - - 148 148
Dividends approved
or paid - - - (1,517) (1,517)
---------- -------------- ------------- ----------- ----------
Total transactions
with owners recognised
directly in equity - 54 - (1,701) (1,647)
---------- -------------- ------------- ----------- ----------
Balance at 31 May 2021 923 36,981 3,344 61,065 102,313
---------- -------------- ------------- ----------- ----------
The accompanying notes are an integral part of this interim
financial information.
Notes to the condensed half-yearly consolidated financial
information
1. Alternative performance measures
The Group uses adjusted figures as alternative performance
measures in addition to those reported under IFRS, as management
believe that these measures provide a useful analysis of trends in
underlying performance compared with prior periods.
Alternative revenue measures
2021 2020 Growth
Aerospace & Industrial GBP'000 GBP'000 %
Revenue at constant currency 25,564 34,599 (26)
Exchange 481 1,113
-------- --------
Revenue as reported 26,045 35,712 (27)
-------- -------- -------
Laboratory
Underlying revenue 22,504 17,871 26
Acquisition 2,296 -
-------- -------- -------
Revenue at constant currency 24,800 17,871 39
Exchange 445 1,092
-------- -------- -------
Revenue as reported 25,245 18,963 33
-------- -------- -------
Metal Melt Quality
Revenue at constant currency 17,841 16,832 6
Exchange 523 1,729
-------- -------- -------
Revenue as reported 18,364 18,561 (1)
-------- -------- -------
Group
Underlying revenue 65,909 69,302 (5)
Acquisitions 2,296 -
-------- -------- -------
Revenue at constant currency 68,205 69,302 (2)
Exchange 1,449 3,934
-------- -------- -------
Revenue as reported 69,654 73,236 (5)
-------- -------- -------
Revenue at constant currency is derived from translating
overseas subsidiaries at budgeted fixed exchange rates. In 2021 and
2020, the rates used were $1.4:GBP and EUR1.2:GBP.
Underlying revenue is revenue at constant currency adjusted for
the impact of acquisitions made in the current and prior year.
Alternative profit measures
A reconciliation of the Group's adjusted performance measures to
the reported IFRS measures is presented below:
H1 2021 H1 2020
Adjusted Adjustments Reported Adjusted Adjustments Reported
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit 9,066 263 9,329 9,039 250 9,289
Finance costs (479) - (479) (519) - (519)
--------- ------------ --------- --------- ------------ ---------
Profit before income
tax 8,587 263 8,850 8,520 250 8,770
Income tax expense (1,768) 472 (1,296) (1,958) (771) (2,729)
Profit for the year 6,819 735 7,554 6,562 (521) 6,041
--------- ------------ --------- --------- ------------ ---------
An analysis of adjusting items is given below:
2021 2020
Affecting operating profit GBP'000 GBP'000
Amortisation of acquired intangible assets (402) (332)
Other acquisition-related adjustments (80) -
Settlement of project-related warranties - 3,791
Impairment of assets and restructuring costs (592) (3,209)
Paycheck Protection Program 1,337 -
263 250
----------- --------
Affecting tax
Tax effect of adjustments 472 (771)
Total adjusting items 735 (521)
----------- --------
Adjusted operating profit and adjusted profit before tax
exclude:
-- The amortisation of intangible assets arising on acquisition
of businesses of GBP0.4 million (2020: GBP0.3 million);
-- Other acquisition-related costs of GBP0.1 million (2020:
GBPnil) in relation to the acquisition of Kbiosystems;
-- Provision releases of GBPnil (2020: GBP5.1 million) arising
from the settlement of outstanding warranty issues and the
cancellation of performance bonds related to the large gasification
projects. Related to the release in the prior period, the Group
wrote-off a GBP1.3 million receivable due;
-- Covid-19 related impairment of assets and restructuring costs
of GBP0.6 million, principally within the Aerospace &
Industrial division. The prior period consisted of a GBP2.3 million
charge in relation to the Metal Melt Quality operations in China,
together with other Covid-related restructuring across the Group;
and
-- A net credit of GBP1.3 million (2020: GBPnil) relating to the
monies received in the prior year from the Truist Bank under the
Paycheck Protection Program ("PPP"). The PPP provided loans to
qualifying businesses for the purpose of maintaining payroll levels
during the pandemic in 2020. The criteria for forgiveness for these
loans was achieved by the Group in 2020 and the costs associated
with maintaining payroll levels were recognised in the prior year.
Formal forgiveness of the loan was granted in 2021, leading to a
mismatch in the accounts between the costs incurred and income
received.
2. Segmental analyses
The chief operating decision maker has been identified as the
Board of Directors. The Board of Directors has instructed the
Group's internal reporting to be based around differences in
products and services, in order to assess performance and allocate
resources. Management has determined the operating segments based
on this reporting.
As at 31 May 2021, the Group is organised on a worldwide basis
into three operating segments:
1) Aerospace & Industrial - principally serving the aviation, and energy and industrial markets;
2) Laboratory - principally serving the bioscience and
environmental laboratory instrument and consumables market; and
3) Metal Melt Quality - principally serving the global
aluminium, North American Free Trade Agreement (NAFTA) iron foundry
and super-alloys markets.
Other Group operations' costs, assets and liabilities are
included in the "Central" division. Central costs mainly comprise
Group corporate costs, including new business development costs,
some research and development costs and general financial costs.
Central assets and liabilities mainly comprise Group retirement
benefit obligations, tax assets and liabilities, cash and
borrowings.
The segment results for the period ended 31 May 2021 are as
follows:
2021 Aerospace Laboratory Metal Melt Central Group
& Industrial Quality
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment
revenue 26,126 26,156 18,364 - 70,646
Inter-segment
revenue (81) (911) - - (992)
-------------- ----------- ----------- ---------- ----------
Revenue 26,045 25,245 18,364 - 69,654
-------------- ----------- ----------- ---------- ----------
Adjusted operating
profit/(loss) 2,455 4,753 2,994 (1,136) 9,066
Amortisation of
acquired intangibles (211) (191) - - (402)
Other acquisition-related
adjustments - - - (80) (80)
Impairment of
assets and restructuring (592) - - - (592)
Paycheck Protection
Program 407 295 635 - 1,337
Operating profit/(loss) 2,059 4,857 3,629 (1,216) 9,329
Interest payable
and similar charges - - - (479) (479)
-------------- ----------- ----------- ---------- ----------
Profit/(loss)
before income
tax 2,059 4,857 3,629 (1,695) 8,850
--------------------------- -------------- ----------- ----------- ---------- ----------
Adjusted income
tax expense - - - (1,768) (1,768)
Tax effect of
adjusting items - - - 472 472
--------------------------- -------------- ----------- ----------- ---------- ----------
Income tax expense - - - (1,296) (1,296)
Profit/(loss)
for the period 2,059 4,857 3,629 (2,991) 7,554
-------------- ----------- ----------- ---------- ----------
The segment results for the period ended 31 May 2020 are as
follows:
2020 Aerospace Laboratory Metal Melt Central Group
& Industrial Quality
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment
revenue 35,712 19,947 18,561 - 74,220
Inter-segment
revenue - (984) - - (984)
-------------- ----------- ----------- ---------- ----------
Revenue 35,712 18,963 18,561 - 73,236
-------------- ----------- ----------- ---------- ----------
Adjusted operating
profit/(loss) 4,755 2,849 2,279 (844) 9,039
Amortisation of
acquired intangibles (233) (99) - - (332)
Settlement of
project-related
warranties 3,791 - - - 3,791
Impairment of
assets and restructuring (824) - (2,385) - (3,209)
--------------------------- ----------
Operating profit/(loss) 7,489 2,750 (106) (844) 9,289
Interest payable
and similar charges - - - (519) (519)
-------------- ----------- ----------- ---------- ----------
Profit/(loss)
before income
tax 7,489 2,750 (106) (1,363) 8,770
--------------------------- -------------- ----------- ----------- ---------- ----------
Adjusted income
tax expense - - - (1,958) (1,958)
Tax effect of
adjusting items - - - (771) (771)
--------------------------- -------------- ----------- ----------- ---------- ----------
Income tax expense - - - (2,729) (2,729)
Profit/(loss)
for the period 7,489 2,750 (106) (4,092) 6,041
-------------- ----------- ----------- ---------- ----------
Segment assets and liabilities
At 31 May 2021 Aerospace Laboratory Metal Melt Central Group
- Unaudited & Industrial Quality
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental assets 72,098 51,639 26,542 2,305 152,584
Cash and cash
equivalents - - - 15,501 15,501
-------------- ----------- ----------- ----------- -----------
Total assets 72,098 51,639 26,542 17,806 168,085
-------------- ----------- ----------- ----------- -----------
Segmental liabilities (18,434) (15,983) (5,226) (5,909) (45,552)
Retirement
benefit obligations - - - (10,871) (10,871)
Bank overdraft
and loans - - - (9,349) (9,349)
-------------- ----------- ----------- ----------- -----------
Total liabilities (18,434) (15,983) (5,226) (26,129) (65,772)
-------------- ----------- ----------- ----------- -----------
At 31 May 2020 Aerospace Laboratory Metal Melt Central Group
- Unaudited & Industrial Quality
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental assets 82,270 44,022 34,763 2,915 163,970
Cash and cash
equivalents - - - 11,830 11,830
-------------- ----------- ----------- ----------- -----------
Total assets 82,270 44,022 34,763 14,745 175,800
-------------- ----------- ----------- ----------- -----------
Segmental liabilities (24,521) (12,871) (5,862) (5,024) (48,278)
Retirement
benefit obligations - - - (15,202) (15,202)
Bank overdraft
and loans - - - (10,860) (10,860)
-------------- ----------- ----------- ----------- -----------
Total liabilities (24,521) (12,871) (5,862) (31,086) (74,340)
-------------- ----------- ----------- ----------- -----------
At 30 Nov 2020 Aerospace Laboratory Metal Melt Central Group
- Audited & Industrial Quality
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental assets 73,459 42,926 30,860 2,938 150,183
Cash and cash
equivalents - - - 15,563 15,563
-------------- ----------- ----------- ----------- -----------
Total assets 73,459 42,926 30,860 18,501 165,746
-------------- ----------- ----------- ----------- -----------
Segmental liabilities (22,013) (11,875) (5,548) (2,041) (41,477)
Retirement
benefit obligations - - - (15,395) (15,395)
Bank overdraft
and loans - - - (10,682) (10,682)
-------------- ----------- ----------- ----------- -----------
Total liabilities (22,013) (11,875) (5,548) (28,118) (67,554)
-------------- ----------- ----------- ----------- -----------
Geographical analysis
Revenue
Six months ended 31 May
--------------------------------------------------------
2021 2020
Unaudited Unaudited
By destination By origin By destination By origin
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 6,717 19,840 7,452 24,216
Continental Europe 15,693 12,447 12,452 11,517
United States of America 29,949 34,550 28,351 34,298
Other NAFTA 1,529 - 3,218 -
South America 882 - 1,111 -
Asia 14,312 2,817 20,131 3,205
Africa 572 - 521 -
--------------- ---------- --------------- ----------
69,654 69,654 73,236 73,236
--------------- ---------- --------------- ----------
3. Earnings per share
Six months ended 31 May
--------------------------------------------------------------------------
As reported 2021 2020
Unaudited Unaudited
Earnings Weighted Per share Earnings Weighted Per share
average amount average amount
number number
GBP'000 of shares Pence GBP'000 of shares Pence
--------- ------------- ---------- --------- ------------- ----------
Basic EPS - earnings
attributable to
ordinary shareholders 7,554 6,041
Shares in issue 46,162,623 46,052,105
Shares owned by
the Employee Benefit
Trust (167,788) (103,543)
Basic earnings
per share 7,554 45,994,835 16.4 6,041 45,948,562 13.1
Effect of dilutive
securities - share
options - 20,457 - - 74,886 -
--------- ------------- ---------- --------- ------------- ----------
Diluted earnings
per share 7,554 46,015,292 16.4 6,041 46,023,448 13.1
--------- ------------- ---------- --------- ------------- ----------
2021 2020
Adjusted Earnings Weighted Per share Earnings Weighted Per share
average amount average amount
number number of
GBP'000 of shares Pence GBP'000 shares Pence
Earnings attributable
to ordinary shareholders 7,554 6,041
Adjusting items
(note 1) (735) 521
--------- ------------- ---------- --------- ------------- ----------
Adjusted earnings
attributable to
ordinary shareholders 6,819 6,562
--------- ------------- ---------- --------- ------------- ----------
Adjusted basic
earnings per share 6,819 45,994,835 14.8 6,562 45,948,562 14.3
Adjusted diluted
earnings per share 6,819 46,015,292 14.8 6,562 46,023,448 14.3
--------- ------------- ---------- --------- ------------- ----------
4. Dividends per share
Six months ended 31 May
------------------------------------------
2021 2020
Unaudited Unaudited
Per share GBP'000 Per share GBP'000
Final dividend approved 3.3p 1,517 3.2p 1,472
---------- -------- ---------- --------
The final dividend approved for the year ended 30 November 2020
was paid to shareholders on 4 June 2021.
The Directors have declared an interim dividend of 1.8 pence
(2020: 1.7 pence) per share to be paid on 27 August 2021 to
shareholders on the register at the close of business on 23 July
2021. The ex-dividend date is 22 July 2021.
5. Cash generated from operations
Six months ended 31
May
------------------------
2021 2020
Unaudited Unaudited
GBP'000 GBP'000
Operating profit 9,329 9,289
Adjustments for:
Post-employment benefits (1,459) (1,568)
Paycheck Protection Program (1,337) -
Fair value movement of derivatives
through profit and loss (191) 462
Share-based payments 306 (102)
Depreciation of property, plant and equipment
and amortisation of intangibles 1,938 1,959
Impairment of property plant and equipment 270 2,273
Depreciation of right-of-use assets 979 1,004
Loss on disposal of property, plant
and equipment - 67
Operating cash flows before movement
in working capital 9,835 13,384
----------- -----------
Increase in inventories (1,019) (960)
Increase in trade and other receivables (1,400) (1,376)
Decrease in trade and other payables (857) (3,920)
Decrease in provisions (481) (5,210)
Increase in working capital (3,757) (11,466)
----------- -----------
Cash generated from operations 6,078 1,918
----------- -----------
6. Reconciliation of net cash flow to movement in net cash
Six months ended 31
May
------------------------
2021 2020
Unaudited Unaudited
GBP'000 GBP'000
Net debt at 1 December (8,735) (11,204)
Increase / (decrease) in cash and cash equivalents 348 (1,406)
Paycheck Protection Program forgiven 1,337 -
Increase in borrowings (434) (1,448)
Decrease in lease liabilities 416 775
Effects of exchange rate changes 467 (710)
----------- -----------
Net debt at the end of the period (6,601) (13,993)
----------- -----------
Net cash 6,152 970
Lease liabilities (12,753) (14,963)
Net debt at the end of the period (6,601) (13,993)
--------- ---------
7. Acquisitions
On 25 February 2021 the Group purchased 100% of the share
capital of Kbiosystems Limited ("Kbiosystems"). Kbiosystems is
based in Basildon, UK and specialises in the design and manufacture
of laboratory instruments, with particular expertise in automated
microplate handling systems.
The total maximum consideration is GBP6.9 million; consisting of
initial, deferred and contingent consideration.
GBP3.0 million was paid in cash on acquisition. Deferred
consideration of GBP1.3 million, representing cash acquired and a
working capital adjustment, was paid in June 2021. Management has
forecast that payment of 100% of the contingent consideration is
the most probable outcome, of which GBP1.0 million was earned in
the period and also paid in June 2021. The balance is contingent on
Kbiosystems meeting profit targets for the years ending 31 March
2022 and 2023. The remaining consideration has been discounted to
GBP1.7 million using a discount rate of 10%.
In the period since acquisition, the business has contributed
GBP2.3 million of revenue and GBP0.6 million of adjusted operating
profit to the Group results. The direct costs of acquisition
charged to the income statement were GBP0.1 million and are
disclosed as adjusting items in note 1. Had the acquisition been
consolidated from 1 December 2020, the income statement would show
revenue of GBP72.0 million and adjusted operating profit of GBP9.6
million.
The following table sets out the initial consideration, together
with the provisional fair value of assets acquired and liabilities
assumed:
Total
Purchase consideration: GBP'000
Initial cash consideration 3,000
Deferred cash consideration 1,274
Contingent consideration 2,647
--------
Total purchase consideration 6,921
Provisional fair value of net assets acquired
(below) (3,831)
--------
Goodwill 3,090
--------
Fair value
Provisional fair value of identifiable assets GBP'000
acquired and liabilities assumed:
Property, plant and equipment 519
Customer order book and relationships (included
within intangible assets) 2,231
Inventory 823
Trade and other receivables 1,110
Cash 1,306
Trade and other payables and tax liabilities (2,158)
-----------
Provisional fair value of net assets acquired 3,831
-----------
Purchase consideration settled in cash 3,000
Cash acquired (1,306)
-----------
Net cash outflow on acquisition 1,694
-----------
An independent valuation of the identifiable intangible assets
has been carried out in the period. Acquisition-related intangible
assets comprise the customer order book of GBP0.1 million and
customer relationships of GBP2.1 million.
The goodwill is attributable to the non-contractual
relationships, the synergies between the business acquired and the
operations of the Group and the potential to develop the
technologies acquired. None of these meet the criteria for
recognition of intangible assets separable from goodwill. The
goodwill recognised is attributable to the Laboratory division and
is not expected to be deductible for income tax purposes.
The fair value of trade and other receivables of GBP1.1 million
includes net trade receivables of GBP0.9 million, all of which is
expected to be collectible.
These estimates of fair value may be adjusted in future in
accordance with the requirements of IFRS 3 Business
Combinations.
8. Contingent liabilities
At 31 May 2021, the Group has performance bonds totalling US$2.5
million and EUR0.8 million (30 November 2020: US$2.5 million and
EUR1.0 million). The bonds are released after a warranty period and
in any event no later than March 2023.
9. Deferred and contingent consideration
A summary of the movements in deferred and contingent
consideration on acquisitions is given below:
Kbiosystems Total
GBP'000 GBP'000
-------------- --------
At 1 December 2020 - -
Deferred consideration 1,274 1,274
Contingent consideration 2,647 2,647
Recognised in the income
statement:
* Unwinding discounted contingent consideration 68 68
At 31 May 2021 3,989 3,989
-------------- --------
Rohasys Total
BV
GBP'000 GBP'000
-------- --------
At 1 December 2019 948 948
Recognised in the income
statement:
* Unwinding discounted contingent consideration 17 17
Foreign exchange movement 53 53
-------- --------
At 31 May 2020 1,018 1,018
-------- --------
GBP2.1 million of the deferred and contingent consideration is
current (2020: GBP1.0 million), whilst GBP1.9 million is
non-current (2020: GBPnil).
10. Provisions Dilapidations Warranty Total
GBP'000 GBP'000 GBP'000
-------------- --------- ---------
At 1 December 2020 268 4,365 4,633
Charged to/(released from)
the consolidated income statement:
* Unwinding of discount 14 - 14
* Warranty released - (82) (82)
Utilised:
* Warranty - (399) (399)
At 31 May 2021 282 3,884 4,166
-------------- --------- ---------
Dilapidations Warranty Total
GBP'000 GBP'000 GBP'000
-------------- --------- --------
At 1 December 2019 242 9,526 9,768
Charged to/(released from)
the consolidated income statement:
* Unwinding of discount 13 - 13
* Warranty released - (5,091) (5,091)
* Warranty charged - 601 601
Utilised:
* Warranty - (777) (777)
-------------- --------- --------
At 31 May 2020 255 4,259 4,514
-------------- --------- --------
The provisions arise from a discounted dilapidations provision
for property, which is expected to be utilised in 2023, and sale
warranties.
The warranty provision includes amounts that will be utilised or
released as these contracts approach completion. Matters that could
affect the timing and quantum of the utilisation of the provisions
include the impact of any remedial work, claims against the
outstanding performance bonds, and the demonstrated life of the
filtration equipment installed. Any future residual release to the
income statement would be a non-cash item.
In December 2019, a $0.9 million (GBP0.8 million) performance
bond was called by the customer, the amount was paid and charged to
provisions. Subsequently progress was made on resolving warranty
risks and $5.0 million of performance bonds lapsed. Consequently
GBP5.1 million of provisions were no longer considered necessary
and were therefore released.
11. Exchange rates
Exchange rates for the US dollar and Euro during the period
were:
Average rate Average rate Closing rate Closing rate
to 31 May to 31 May at 31 May at 30 Nov
21 20 21 20
Unaudited Unaudited Unaudited Unaudited
US dollar 1.38 1.27 1.42 1.34
Euro 1.14 1.15 1.16 1.12
12. Seasonality
The results for the six months ended 31 May 2021 are impacted by
a lower number of working days in the first six months of the year
than in the second half of the year.
13. Basis of preparation
Porvair plc is a public limited company registered in the UK and
listed on the London Stock Exchange.
This unaudited condensed half-yearly consolidated financial
information for the six months ended 31 May 2021 has been prepared
in accordance with the Disclosure and Transparency Rules ('DTR') of
the Financial Conduct Authority and with IAS 34 Interim Financial
Reporting as adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union. The condensed half-yearly
consolidated financial information should be read in conjunction
with the annual financial statements for the year ended 30 November
2020, which have been prepared in accordance with IFRSs as adopted
by the European Union.
The accounting policies applied in these interim financial
statements are consistent with those applied in the Group's
consolidated financial statements for the year ended 30 November
2020. A number of other new standards and amendments are effective
from 1 December 2020 but they do not have a material effect on the
Group's financial statements.
Taxes on income in the interim period are accrued using the tax
rate that would be applicable to expected total annual
earnings.
This condensed half-yearly consolidated financial information
has been prepared on a going concern basis under the historical
cost convention, as modified by the revaluation of certain current
assets, financial assets and financial liabilities held for trading
and derivative contracts, which are held at fair value.
The preparation of condensed half-yearly consolidated financial
information, in conformity with generally accepted accounting
principles, requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the condensed half-yearly consolidated financial information,
and the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual
results may ultimately differ from those estimates. In preparing
the condensed interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the consolidated financial statements for
the year ended 30 November 2020, with the exception of changes in
estimates that are required in determining the provision for income
taxes, together with the estimates and judgements within the
Kbiosystems acquisition accounting.
After having made appropriate enquiries, including a review of
progress against the Group's budget for 2021, its current trading
and medium term plans; and taking into account the banking
facilities available until May 2026, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for at least twelve months from
the date of approval of the condensed half yearly consolidated
financial information. Accordingly, they continue to adopt the
going concern basis in preparing this condensed half-yearly
consolidated financial information.
This condensed half-yearly consolidated financial information
and the comparative figures do not constitute full accounts within
the meaning of Section 434 of the Companies Act 2006. Statutory
accounts for the year ended 30 November 2020, which were approved
by the Board of Directors on 29 January 2021, and which include an
unqualified audit report, no emphasis of matter paragraph and no
statements under sections 498(2) or (3) of the Companies Act 2006,
have been delivered to the Registrar of Companies. This condensed
half-yearly consolidated financial information has been reviewed,
not audited.
The condensed half-yearly consolidated financial information
does not include all financial risk management information and
disclosures required in the annual financial statements; it should
be read in conjunction with the Group's annual financial statements
for the year ended 30 November 2020. There have been no changes in
any risk management policies since the year end.
This report will be available at Porvair plc's registered office
at 7 Regis Place, Bergen Way, King's Lynn, PE30 2JN and on the
Company's website, www.porvair.com .
Statement of directors' responsibilities
The Directors confirm that this condensed half-yearly
consolidated financial information has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union,
and that the interim management report herein includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
-- an indication of important events that have occurred during
the first six months of the year, their impact on the condensed
half-yearly consolidated financial information and a description of
the principal risks and uncertainties for the remaining six months
of the financial year; and
-- material related party transactions in the first six months
of the year and any material changes in the related party
transactions described in the last annual report.
The Directors of Porvair plc are listed in the Porvair plc
Annual Report for the year ended 30 November 2020. A list of
current Directors is maintained on the Porvair plc website,
www.porvair.com . Since the publication of the Annual Report for
the year ended 30 November 2020, James Mills has joined the Group
as Group Finance Director. This followed the decision by Chris
Tyler to step back from his position as Group Finance Director and
continue, in a part-time role, as Company Secretary. Both changes
became effective following the Company's AGM in April 2021.
By order of the board
Ben Stocks James Mills
Group Chief Executive Group Finance Director
2 July 2021
INDEPENT REVIEW REPORT TO PORVAIR PLC
Introduction
We have been engaged by the Company to review the interim
financial information in the half-yearly financial report for the
six months ended 31 May 2021 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated cash flow statement, the condensed
consolidated statement of changes in equity and related notes 1 to
13. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the interim
financial information.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for the preparation and presentation of interim financial
information that gives a true and fair view of the financial
position of the Company as at 31 May 2021 and of the financial
performance of the Group and the cash flows of the Group for six
month period then ended in accordance with the applicable law and
International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
As disclosed in note 13, the annual financial statements of the
Group are prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act
2006 and international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting" as adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the interim financial information in the half-yearly financial
report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying interim financial
information does not give a true and fair view of the financial
position of the Group as at 31 May 2021 and of the financial
performance of the Group and the cash flows of the Group for the
six month period then ended in accordance with the applicable law
and International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
Use of our report
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our review work has been undertaken so that we might state
to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
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END
IR SSDFALEFSEEW
(END) Dow Jones Newswires
July 05, 2021 02:00 ET (06:00 GMT)
Grafico Azioni Porvair (AQSE:PRV.GB)
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Grafico Azioni Porvair (AQSE:PRV.GB)
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