TIDMALU
RNS Number : 8231B
Alumasc Group PLC
04 February 2020
THE ALUMASC GROUP PLC
INTERIM RESULTS ANNOUNCEMENT
Alumasc (ALU.L) the sustainable building products, systems and
solutions Group, announces results for the half year ended 31
December 2019.
Commenting on the interim results reported today, Paul Hooper,
Chief Executive of Alumasc said:
"In light of the challenging market conditions in 2019, we acted
swiftly to restructure and reposition the Group in the second half
of our last financial year. This underpinned a resilient H1 profit
performance.
The Group's pension deficit and cash funding requirement are
significantly reduced.
With an increased order book of GBP23.6 million, up over 10% on
six months ago, strong contract pipelines and the Group's usual
seasonal trading bias towards the second half referenced in the
Outlook Statement, the Board's expectations for full year
performance remain unchanged.
The Board remains confident in prospects for the medium and
longer-term performance of the Group in view of our leading
specialist market positions in water and energy management,
addressing climate change and the growing sustainability
agenda."
Financial Review:
-- A resilient H1 profit performance, despite weak UK trading in
the period leading up to the UK General Election in December:
- Revenue was GBP41.1 million (2018: GBP44.3 million);
- Underlying operating margins were ahead by 70 basis points to
6.1% (2018: 5.4%) reflecting better year on year selling price
realisation at Gatic in the Water Management division and fixed
cost savings across the Group;
- Underlying profit before tax was GBP2.3 million (2018: GBP2.3 million).
-- Statutory profit before tax was GBP2.1 million (2018: GBP3.4
million) mainly due to the non-repeat of the prior year gain on the
disposal of the Alumasc Facades business.
-- Underlying earnings per share were 5.1 pence (2018: 5.0
pence) and basic earnings per share 5.0 pence (2018: 8.4
pence).
-- Net debt at 31 December was GBP6.6 million (30 June 2019: 5.1 million)
-- The triennial pension deficit valuation at 31 March 2019 was
significantly lower at GBP22.4m (2016: GBP33.0 million). Company
deficit reduction funding has been reduced to GBP2.3 million pa
from GBP3.2 million pa, effective 1 January 2020 as part of a
7-year recovery plan.
-- The Interim dividend is being maintained at 2.95 pence per
share, reflecting the Board's confidence in the underlying strength
of the business and strategic opportunities available to it.
Operational Review:
-- Fixed cost savings of over GBP1 million have been delivered,
on track to meet the previously announced GBP2 million full year
target
-- The Water Management division's profits, representing circa
43% of Group revenues, were over 50% ahead of the prior first half
driven by gross margin improvement and cost savings.
-- Building Envelope divisional results were impacted by weak
new build commercial sector demand, project delays and below
expected profit from Levolux contracts entered into prior to the
restructuring in 2019.
-- Housebuilding Products' divisional results were marginally
ahead of the previous first half's record performance.
-- Whilst still at a relatively early stage, the Levolux
restructuring and turnaround programme is progressing largely as
expected. Following a break-even second quarter result, we expect
the business to return to modest profit in the second half. The
restructured business, increasingly focused on design and supply
work with installation carried out only where it adds value to
customers and to the Group, will be much simplified and lower
risk.
-- Alumasc is on track to reduce the number of operational sites
in the Group from ten a year ago to six by the financial year
end.
Outlook:
-- Whilst recognising that the market weakness prior to the
calendar year end has increased the task in the second half year,
the Board's expectations for full year performance are unchanged
for the reasons set out in the Outlook Statement.
Enquiries:
The Alumasc Group plc:
Paul Hooper (Chief Executive)
Tel: 01536 383821
Andrew Magson (Group Finance Director)
Tel: 01536 383844
Camarco:
Ginny Pulbrook
Tel: 020 3757 4992
Tom Huddart
Tel: 020 3757 4991
Email: alumasc@camarco.co.uk
Notes to Editors:
Alumasc is a UK-based supplier of sustainable building products,
systems and solutions. Almost 80% of Group sales are driven by
building regulations and specifications (architects and structural
engineers) because of the performance characteristics offered.
The Group has three business segments with strong positions and
brands in their individual markets: Water Management; Building
Envelope; and Housebuilding Products.
REVIEW OF INTERIM RESULTS
Strategy update
At the last financial year end we set out a number of key short
term strategic priorities, focused on:
-- Recovery of Levolux's financial performance back into a run
rate profit this financial year; and
-- Continuing to simplify, streamline and reduce fixed costs across the Group.
Good progress has been made on both objectives in the first
half:
The restructuring of the Levolux business remains on track, with
actions taken to deliver circa GBP1.5 million of fixed cost savings
this financial year. Design and supply only work, as opposed to
design supply and installation, is representing an increasing
proportion of order intake. Under-performing installation contracts
in the UK, which were entered into prior to the new management team
joining, should be largely complete by the final quarter of this
financial year. The business is expected to complete the
re-location from its two existing leased sites to the Group's
freehold site at St Helens in March. Order intake in the profitable
North American export business has been encouraging in recent
months. We expect Levolux to deliver a modest profit in the second
half.
The Group has delivered over GBP1 million of fixed cost savings
in the first half year and remains on track to realise GBP2 million
of savings for the year as a whole. The key elements of the cost
reduction were the successful relocation of Gatic Slotdrain from
Dover to Wade's factory in Halstead last summer and the
re-positioning of Levolux to focus on profitable design and supply
work. The Group remains on target to reduce its number of operating
locations from ten a year ago to six by this financial year end,
saving some GBP0.6 million of leased property costs in the
process.
Alongside these short term areas of focus, the Group has
continued to progress its long term strategy which is focussed on
delivering profitable growth through leveraging its strong
strategic positions in sustainable building products to outperform
the UK construction market whilst continuing development of export
markets.
Financial Performance Overview
Group revenues were GBP41.1 million (2018: GBP44.3 million). For
most of the six month period, Group revenues were tracking a little
ahead of the prior year, with increased export revenues mitigating
weakness in the UK construction market. However, the wet weather,
combined with Brexit and UK general election disruption led to a
marked slow-down in revenues in the weeks leading up to Christmas.
UK revenues ended the six month period 11% down, but exports
(representing 12% of Group revenues) were 25% ahead. Order books
and pre-order pipelines remain healthy for Gatic's export markets
in Europe and the Middle/Far Fast as well as for Levolux's export
business in North America.
Despite the challenging environment for revenues, gross margins
of 29.8% showed improvement on the prior first half's 28.7% due to
better selling price realisation at Gatic and operational fixed
cost savings.
Fixed costs generally were well controlled and over GBP1 million
of cost savings were realised in the first half year, with the
business on-track to deliver the full year target of GBP2
million.
This enabled a resilient profit performance by the Group with
underlying profit before tax of GBP2.3 million unchanged on a year
ago in spite of the reduced revenues.
The statutory profit before tax of GBP2.1 million (2018: GBP3.4
million) was lower mainly due to the non-repeat of the prior period
gain on the disposal of the Alumasc Facades business. Deferred
consideration of GBP0.3 million relating to the sale of Alumasc
Facades was received in December 2019 and this has been recognised
as a non-recurring gain in the current year's first half income
statement. A full reconciliation of underlying to statutory results
is provided in note 4 to the accounts.
Underlying earnings per share of 5.1 pence (2018: 5.0 pence) and
basic earnings per share of 5.0 pence (2018: 8.4 pence) largely
reflect the changes in underlying and statutory profit before tax
described above.
The Interim dividend is being maintained at 2.95 pence per
share.
Operational review
As previously announced, the Group changed its operating
segments effective from 1 July 2019 to reflect the formation of the
Building Envelope division at that date. This division comprises
Alumasc Roofing and Levolux, which together are expected to enable
the Group to drive increased overall sales by offering specifiers
an integrated package of roofing, walling, balcony and solar
shading solutions, together with integrated aluminium detailing.
This not only provides full external building envelope solutions,
but allows us to work with clients, their agents and installers to
design out construction risk. In the prior financial year, Alumasc
Roofing was part of the Group's Water Management division. Prior
year segmental information has been re-stated accordingly.
(a) Water Management
GBPm 2019/20 H1 2018/19 H1
Revenue 17.6 19.0
----------- -----------
Operating profit 2.4 1.6
----------- -----------
Operating margin (%) 13.8% 8.3%
----------- -----------
Alumasc's Water Management division delivered a strong first
half performance, significantly increasing profit and operating
margin despite the challenging market backdrop. The drivers of the
improved performance were better realised selling prices relative
to the prior first half year at Gatic; increased export sales; the
successful restructure of the Gatic business, in particular the
relocation of Slotdrain production to Wade; and the combination of
certain Wade and Gatic support functions which has reduced fixed
costs by GBP0.5 million on an annualised basis. Alumasc Water
Management Solutions performed well with encouraging Alumasc
Rainwater and Skyline bespoke product revenues combining with good
cost control to grow operating margins.
(b) Building Envelope
GBPm 2019/20 H1 2018/19 H1
Revenue 18.2 19.7
----------- -----------
Underlying operating (loss)/profit (0.3) 0.3
----------- -----------
Underlying operating margin (%) (1.5)% 1.6%
----------- -----------
Operating (loss)/profit (0.4) 0.2
----------- -----------
This division sells principally into the UK commercial new build
construction market which continued to experience falling demand in
the six month period. This reflected economic and political
uncertainties including Brexit, exacerbated in the weeks leading up
to the UK General Election in December 2019, which in turn impacted
business decision making. Following the election and the recent EU
Withdrawal Agreement, we anticipate some confidence will now begin
to return to this market sector.
As described above, Levolux's turnaround plan is generally on
track, but the business was affected by below expected performance
on a handful of construction contracts entered into prior to the
restructuring of the business in Spring 2019 and relating mainly to
balcony work. This impacted profit contribution by GBP0.5 million
in the period, mainly in the first quarter. The business achieved
break-even in the second quarter.
Alumasc Roofing's performance was resilient in the refurbishment
sector. This was the most successful element of the division's
performance in the period.
Specification sales opportunities are growing from the new
integrated Building Envelope sales approach, in particular combined
roofing and walling and roofing and balcony opportunities. The
specification sales team was further strengthened in the
period.
(c) Housebuilding Products
GBPm 2019/20 H1 2018/19 H1
Revenue 5.3 5.6
----------- -----------
Operating profit 0.9 0.9
----------- -----------
Operating margin (%) 17.3% 15.8%
----------- -----------
Timloc, our housebuilding products business, continued to
perform well despite a slowing UK new build housing market and the
exit from some lower margin work, which facilitated further
operational efficiencies and benefited margins.
Timloc's success continues to be founded on best in class
customer service promoted by the "Trust Timloc to deliver"
campaign. The business is continuing to grow existing customer
accounts and win new work as new product development activity
accelerates, including the Invisiweep, Adapt-Air and RadSeal
products launched in recent months, supported by ongoing capital
investment in new tooling and machinery.
Financial review
(a) Cash flow
The Group's net cash outflow was GBP1.5 million in the period,
with net debt increasing to GBP6.6 million at 31 December 2019,
compared with GBP5.1 million at 30 June 2019. The cash outflow was
mainly due to one-off cash flows relating to recent restructuring
of Levolux and Gatic where provision for these costs was made in
the prior year's income statement, as well as higher inventory
levels to manage Brexit risks. These higher inventories are planned
to be managed out in the second half of the financial year.
Capital expenditure was GBP0.9 million in the period, in line
with depreciation and non-brand amortisation. The Group continues
to invest in new plant and machinery to support new product
development and to improve operational efficiency and environmental
performance. The expectation is that, in the shorter term, capital
expenditure needs will exceed depreciation/amortisation as the
Group invests in and renews assets to drive planned profitable
growth and margin improvement.
(b) Impact of adoption of IFRS 16: Leases
The Group adopted IFRS 16, Leases, in the period. The impact was
to bring the Group's leased properties onto the statement of
financial position for the first time. This increased both
property, plant and equipment and lease liabilities each by GBP5.0
million on 1 July 2019 when the new accounting standard was
adopted. Therefore, the Group's capital invested also increased by
GBP5.0 million, with no change to shareholders' funds at the date
of adoption. The expected full year pro forma impact on the Group's
income statement is to increase EBITDA by GBP0.5 million; increase
the depreciation charge by GBP0.4 million and increase financing
charges by GBP0.2 million, thereby reducing profit before tax by
GBP0.1 million. The impact on the income statement for the six
months to 31 December 2019, relative to the prior first half year,
was approximately half these amounts. Details are given in notes 1
and 14 to the interim accounts.
(c) Statement of financial position and return on investment
The Group's net assets and shareholders' funds reduced from
GBP25.4 million at the beginning of the financial year to GBP24.2
million at 31 December 2019, with the impact of pension scheme
actuarial losses and the payment of the prior year's final dividend
in October more than offsetting retained profit after tax in the
first half year. The Group's IAS 19 pension liability was GBP13.0
million at 31 December 2019, net unchanged on the last financial
year end, with an increase in the valuation of gross pension
liabilities due to reduced gilt yields offset by a good investment
performance including the benefit of interest rate hedging within
the investment portfolio and company deficit reduction
contributions.
Post tax return on investment, calculated on a trailing 12
months basis, with property leases included as part of capital
invested for the whole 12 month period, was 10.6% (2018: 9.8%,
re-stated to include property leases). The increase reflects a
combination of higher year-on-year operating profit and lower
average capital invested.
Triennial valuation of the Alumasc Group pension scheme and new
deficit recovery plan
The triennial valuation of the Group's legacy defined benefit
pension scheme as at 31 March 2019 was finalised in the period.
This showed a significantly improved deficit of GBP22.4 million
compared with GBP33.0 million in 2016, reflecting cash
contributions from Alumasc, above target investment returns,
mortality experience and changes to future mortality expectations
in the intervening period.
A shortened seven-year recovery plan has been agreed with the
Pension Trustees, with Alumasc reducing existing cash funding
levels from GBP3.2 million pa to the following:
-- GBP2.3 million pa commencing 1 January 2020 for the three years to 31 December 2022;
-- Up to GBP1.5 million of additional one-off contingent funding
payable in July 2022 if the pension deficit has not reduced to
GBP13 million by 31 March 2022; and
-- GBP2.7 million pa for the remainder of the recovery plan.
Board
Further to our announcement in September, Andrew Magson, Group
Finance Director, will step down from the Board on 6 February 2020.
The search for his successor is underway. We wish Andrew well for
the future.
Outlook and dividend
Whilst recognising that the market weakness prior to the
calendar year end has increased the task, a strong second half
performance is expected for the reasons set out below. Hence the
Board's previous expectations for full year performance are
unchanged.
Group order books in the six months to 31 December 2019 were up
by GBP3.0 million to GBP23.6 million, with encouraging trends
across the Group, except for Levolux where we are being
deliberately selective and cautious with order intake in line with
the turnaround plan. Contract pipelines are strong at both Alumasc
Roofing and Gatic, with a GBP1m project recently secured by Alumasc
Roofing expected to deliver a positive impact in the second half
year.
We anticipate that Alumasc should benefit from its usual
seasonal second half trading bias. This could be more marked in the
current financial year as we expect Levolux to return to profit in
the coming months as it trades out of underperforming contracts
from a significantly lower overhead base.
More broadly, with around two-thirds of Group revenues relating
to the management of the scarce resources of water and energy in
the built environment, and circa 75% of the Group's products
sourced from recycled or recyclable materials, the Group should
benefit from the growing sustainability agenda as well as from
increasing business confidence and positive market indicators in
the UK economy following the recent General Election and EU
Withdrawal Agreement.
In view of all the above, the Board has decided to declare an
unchanged interim dividend of 2.95 pence per share to be paid on 7
April to shareholders on the register on 6 March reflecting its
confidence in the Group's future performance.
Paul Hooper, Chief Executive
4 February 2020
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
for the half year to 31 December 2019
Year to
Half year to 31 December Half year to 31 December 30 June
2019 2018 2019
Non-underlying Non-underlying
Underlying Total Underlying Total Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Continuing Notes GBP'000 GBP'000 GBP'000 GBP'000
operations: GBP'000 GBP'000 GBP'000
Revenue 6 41,099 - 41,099 44,345 - 44,345 90,104
Cost of sales (28,854) - (28,854) (31,609) - (31,609) (63,255)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Gross profit 12,245 - 12,245 12,736 - 12,736 26,849
Net operating
expenses
Net operating
expenses
before
non-underlying
items (9,718) - (9,718) (10,334) - (10,334) (20,984)
IAS 19 past
service
pension cost &
settlement
gain 4 - - - - (1,111) (1,111) (787)
Other
non-underlying
items 4 - (313) (313) - (333) (333) (3,439)
Net operating
expenses (9,718) (313) (10,031) (10,334) (1,444) (11,778) (25,210)
4,
Operating profit 6 2,527 (313) 2,214 2,402 (1,444) 958 1,639
Finance expenses 7 (247) (160) (407) (143) (196) (339) (654)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit before
taxation 2,280 (473) 1,807 2,259 (1,640) 619 985
Tax expense 8 (447) 81 (366) (459) 102 (357) (256)
----------- -------------- ----------- ----------- -------------- ----------- ----------
Profit for the
period
from continuing
operations 1,833 (392) 1,441 1,800 (1,538) 262 729
Discontinued
operations:
Profit after
taxation
for the period
from
discontinued
operations 5 - 339 339 - 2,767 2,767 2,912
Profit for the
period 1,833 (53) 1,780 1,800 1,229 3,029 3,641
=========== ============== =========== =========== ============== =========== ==========
Other
comprehensive
income:
Items that will
not
be recycled to
profit
or loss:
Actuarial
(loss)/gain
on defined
benefit
pensions, net
of tax (1,271) (120) 123
----------- ----------- ----------
Items that are or
may be recycled
subsequently
to profit or
loss:
Effective
portion
of changes in
fair
value of cash
flow
hedges, net of
tax (167) 96 263
Exchange
differences
on
retranslation
of
foreign
operations (8) 16 4
(175) 112 267
----------- ----------- ----------
Other
comprehensive
(loss)/gain for
the
period, net of
tax (1,446) (8) 390
----------- ----------- ----------
Total
comprehensive
profit for the
period,
net of tax 334 3,021 4,031
=========== =========== ==========
Earnings per Pence Pence Pence
share
Basic earnings
per
share
- Continuing
operations 4.0 0.7 2.0
- Discontinued
operations 1.0 7.7 8.1
11 5.0 8.4 10.1
=========== =========== ==========
Diluted earnings
per
share
- Continuing
operations 4.0 0.7 2.0
- Discontinued
operations 1.0 7.7 8.1
11 5.0 8.4 10.1
=========== =========== ==========
Alternative
Performance
Measures:
Underlying
earnings
per share
(pence) 11 5.1 5.0 12.4
=========== =========== ==========
Full reconciliations of underlying to statutory profits and
earnings per share are provided in notes 4 and 11 respectively.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
at 31 December 2019
31 December 31 December 30 June
2019 2018 2019
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment
- owned assets 11,652 10,825 11,693
Property, plant and equipment
- right of use assets 14 4,820 - -
Goodwill 18,705 18,705 18,705
Other intangible assets 3,335 3,606 3,416
Deferred tax assets 2,217 2,548 2,202
------------- ------------- -----------
40,729 35,684 36,016
Current assets
Inventories 10,732 9,584 10,488
Trade and other receivables 12,712 13,404 18,382
Contract assets 2,758 2,479 3,002
Cash and cash equivalents 12 4,238 5,685 2,762
Corporation tax receivable 31 - 283
30,471 31,152 34,917
Total assets 71,200 66,836 70,933
------------- ------------- -----------
Liabilities
Non-current liabilities
Interest bearing loans and
borrowings 12 (10,883) (5,982) (7,857)
Lease liability 14 (4,506) - -
Employee benefits payable (13,043) (14,989) (12,951)
Provisions (1,120) (1,355) (1,272)
Deferred tax liabilities (753) (974) (954)
------------- ------------- -----------
(30,305) (23,300) (23,034)
Current liabilities
Trade and other payables (13,719) (16,021) (19,816)
Contract liabilities (900) (374) (295)
Lease liability 14 (348) - -
Provisions (1,512) (811) (2,333)
Corporation tax payable - (351) -
Derivative financial liabilities (211) (211) (10)
(16,690) (17,768) (22,454)
Total liabilities (46,995) (41,068) (45,488)
------------- ------------- -----------
Net assets 24,205 25,768 25,445
============= ============= ===========
Equity
Called up share capital 4,517 4,517 4,517
Share premium 445 445 445
Capital reserve - own shares (416) (178) (416)
Hedging reserve (175) (175) (8)
Foreign currency reserve 82 102 90
Profit and loss account reserve 19,752 21,057 20,817
Total equity 24,205 25,768 25,445
============= ============= ===========
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the half year to 31 December 2019
Half year Half year
to to Year to
31 December 31 December 30 June
2019 2018 2019
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
Operating activities
Operating profit 2,214 958 1,639
Adjustments for:
Depreciation 750 597 1,335
Amortisation 334 356 514
Loss/(gain) on disposal of property,
plant and equipment 58 (6) (17)
IAS 19 settlement gain on merger
of pension schemes - - (324)
IAS 19 past service pension cost - 1,111 1,111
(Increase)/decrease in inventories (244) 179 (1,722)
Decrease/(increase) in receivables 5,914 7,796 (48)
(Decrease)/increase in trade and
other payables (5,452) (6,076) 1,229
Movement in provisions (973) (236) 1,637
Cash contributions to retirement
benefit schemes (1,601) (1,601) (3,202)
Share based payments - (15) (65)
------------- ------------- -----------
Cash generated by operating activities
of continuing operations 1,000 3,063 2,087
Cash generated/(absorbed) by operating
activities of discontinued operations - 223 (173)
Tax paid (34) (346) (634)
Net cash inflow from operating activities 966 2,940 1,280
------------- ------------- -----------
Investing activities
Purchase of property, plant and
equipment - continuing operations (645) (823) (2,296)
Purchase of property, plant and
equipment - discontinued operations - (15) (15)
Payments to acquire intangible fixed
assets (253) (49) (115)
Proceeds from sales of property,
plant and equipment 50 6 116
Net proceeds from sale of business
activity 5 339 4,175 3,886
Net cash (outflow)/inflow from investing
activities (509) 3,294 1,576
------------- ------------- -----------
Financing activities
Bank interest paid (150) (138) (232)
Equity dividends paid (1,574) (1,583) (2,628)
Draw down/(repayment) of amounts
borrowed 3,000 (3,500) (1,500)
Payment of lease liabilities (249) - -
Refinancing costs - - (156)
Purchase of own shares - - (238)
Net cash inflow/(outflow) from financing
activities 1,027 (5,221) (4,754)
------------- ------------- -----------
Net increase/(decrease) in cash
and cash equivalents 1,484 1,013 (1,898)
Net cash and cash equivalents brought
forward 2,762 4,656 4,656
Net increase/(decrease) in cash
and cash equivalents 1,484 1,013 (1,898)
Effect of foreign exchange rate
changes (8) 16 4
Net cash and cash equivalents carried
forward 12 4,238 5,685 2,762
============= ============= ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half year to 31 December 2019
Hedging Foreign Profit
Capital reserve currency and loss
Share Share - account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2019 4,517 445 (416) (8) 90 20,817 25,445
Profit for the period - - - - - 1,780 1,780
Exchange differences on retranslation
of foreign operations - - - - (8) - (8)
Net loss on cash flow hedges - - - (201) - - (201)
Tax on derivative financial liability - - - 34 - - 34
Actuarial loss on defined benefit
pension schemes, net of tax - - - - - (1,271) (1,271)
Dividends - - - - - (1,574) (1,574)
At 31 December 2019 4,517 445 (416) (175) 82 19,752 24,205
======= ======= =============== ======== ========== ========== =======
Hedging Foreign Profit
Capital reserve currency and loss
Share Share - account
capital premium own shares reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2018, as previously reported 4,517 445 (241) (271) 86 19,885 24,421
Impact of change in accounting policy
- IFRS 15 - - - - - (76) (76)
Adjusted balance at 1 July 2018 4,517 445 (241) (271) 86 19,809 24,345
Profit for the period - - - - - 3,029 3,029
Exchange differences on retranslation
of foreign operations - - - - 16 - 16
Net gain on cash flow hedges - - - 116 - - 116
Tax on derivative financial liability - - - (20) - - (20)
Actuarial loss on defined benefit
pension schemes, net of tax - - - - - (120) (120)
Dividends - - - - - (1,583) (1,583)
Share based payments - - - - - (15) (15)
Exercise of share based incentives - - 63 - - (63) -
At 31 December 2018 4,517 445 (178) (175) 102 21,057 25,768
======= ======= =============== ======== ========== ========== =======
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
for the half year to 31 December 2018
1. Basis of preparation
The condensed consolidated interim financial statements of The
Alumasc Group plc and its subsidiaries have been prepared on the
basis of International Financial Reporting Standards (IFRS), as
adopted by the European Union, that are effective at 31 December
2019.
The condensed consolidated interim financial statements have
been prepared using the accounting policies set out in the
statutory accounts for the financial year to 30 June 2019 and in
accordance with AIM Rule 18.
The consolidated financial statements of the Group as at and for
the year ended 30 June 2019 are available on request from the
Company's registered office at Burton Latimer, Kettering,
Northants, NN15 5JP or on the website www.alumasc.co.uk.
The comparative figures for the financial year ended 30 June
2019 are not the Company's statutory accounts for that financial
year but have been extracted from those accounts. Those accounts
have been reported on by the Company's auditors and delivered to
the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements for the
half year ended 31 December 2019 are not statutory accounts and
have been neither audited nor reviewed by the Group's auditors.
They do not contain all of the information required for full
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 30 June 2019.
These condensed consolidated interim financial statements were
approved by the Board of Directors on
4 February 2020.
On the basis of the Group's financing facilities and current
financial plans and sensitivity analyses, the Board is satisfied
that the Group has adequate resources to continue in operational
existence for twelve months from the date of signing this report
and accordingly continues to adopt the going concern basis in
preparing these condensed consolidated interim financial
statements.
Changes in accounting policy
Except as described below, the accounting policies adopted in
the preparation of the unaudited condensed Group interim financial
statements to 31 December 2019 are consistent with the policies
applied by the Group in its consolidated financial statements as at
and for the year ended 30 June 2019. The changes in accounting
policies are also expected to be reflected in the Group's
consolidated financial statements as at and for the year ending 30
June 2020.
IFRIC 23 Uncertainty over Income Tax Treatments
The Group has applied IFRIC 23, which is effective for periods
beginning on or after 1 January 2019, from 1 July 2019 with no
impact on the disclosures made by the Group.
IFRS 16 Leases
The Group has applied IFRS 16 using the modified retrospective
approach and therefore the comparative information has not been
restated and continues to be reported under IAS 17 and IFRIC 4. The
impact of adopting the standard on 1 July 2019 was, in broad terms,
to bring the Group's property leases on to the consolidated
statement of financial position. Previously these were treated as
operating leases and were 'off balance sheet'. More specifically
the impact of adoption was:
- The recognition of a right of use asset and lease liability of
GBP5.0 million on the date of adoption with no impact on reserves
at that stage;
- The charge to the income statement increased by GBP0.03
million, reducing profit for the period by this figure in the
current financial half-year to 31 December 2019; and
- EBITDA increased by GBP0.3 million as the former lease expense
was re-classified as a depreciation charge and interest cost in the
six months to 31 December 2019.
The details of accounting policies under IAS 17 and IFRIC 4 are
disclosed separately below if they are different from those under
IFRS 16 and the impact of changes is disclosed in note 14.
1. Basis of preparation (continued)
Significant accounting policy
i) Identification of a lease
Policy applicable for contracts entered into from 1 July
2019
At inception of a contract the Group assesses whether a contract
is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an
identified asset the Group assesses whether:
- the contract involves the sole use of a specific identified
asset - this may be specified explicitly or implicitly, and should
be physically distinct or represent substantially all of the
capacity of a physically distinct asset. If the supplier has the
right to substitute the identified asset for a similar asset then
the asset is not identified;
- the Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
- the Group has the right to direct the use of the asset.
Policy applicable for contracts entered into prior to 1 July
2019
For contracts entered into before 1 July 2019, the Group
determined whether the arrangement was or contained a lease based
on the assessment of whether:
- fulfilment of the arrangement was dependent on the use of a specific asset or assets; and
- the arrangement had conveyed a right to use the asset. An
arrangement conveyed the right to use the asset if one of the
following was met:
o the Group had the ability or right to operate the asset while
obtaining or controlling more than an insignificant amount of the
output;
o the Group had the ability or right to control the physical
access to the asset while obtaining or controlling more than an
insignificant amount of the output; or
o facts and circumstances indicated that it was remote that
other parties would take more than an insignificant amount of the
output, and the price per unit was neither fixed per unit of output
nor equal to the current market price per unit of output.
ii) As a lessee
Policy applicable from 1 July 2019
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right-of-use assets
are determined on the same basis as those of property and
equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. The Group uses its incremental borrowing rate as
the discount rate.
Lease payments included in the measurement of the lease
liability comprise fixed payments. The Group does not make other
types of payment referred to in IFRS 16 for its leases.
Generally the lease liability represents the present value of
contractual future lease payments including optional renewal
periods where the Group is reasonably certain to exercise the
extension option. The Group does not typically enter into purchase
options or variable lease payments.
1. Basis of preparation (continued)
ii) As a lessee (continued)
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate,
if there is a change in the Group's estimate of the amount expected
to be payable under a residual value guarantee, or if the Group
changes its assessment of whether it will exercise a purchase,
extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.
The Group presents right-of-use assets that do not meet the
definition of investment property in 'Property, plant and equipment
- right of use assets' and discloses the corresponding "Lease
liability" in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases that have a lease term of
12 months or less and leases of low-value assets.
Further to this, the Group has taken advantage of the practical
expedient within IFRS 16 and excluded leases with a remaining term
of less than 12 months at the date of adoption.
The Group recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease
term.
Policy applicable under IAS 17 prior to 1 July 2019
In the comparative period, as a lessee the Group classified none
of its leases as finance leases as none were deemed to transfer
substantially all of the risks and rewards of ownership.
Payments made under operating leases were recognised in profit
or loss on a straight-line basis over the term of the lease.
iii) As a lessor
IFRS 16 lessor accounting requirements remain similar to
requirements under IAS 17 with the change in accounting standard
having no impact on the Group's financial statements.
When the Group acts as a lessor, it determines at lease
inception whether each lease is a finance lease or an operating
lease.
To classify each lease, the Group makes an overall assessment of
whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset. If this is
the case, then the lease is a
finance lease; if not, then it is an operating lease. As part of
this assessment, the Group considers certain indicators such as
whether the lease is for the major part of the economic life of the
asset.
When the Group is an intermediate lessor, it accounts for its
interests in the head lease and the sub-lease separately. It
assesses the lease classification of a sub-lease with reference to
the right-of-use asset arising from the head lease, not with
reference to the underlying asset. If a head lease is a short-term
lease to which the Group applies an exemption under IFRS 16 then it
classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, the
Group applies IFRS 15 to allocate the consideration in the
contract.
The Group recognises lease payments received under operating
leases as income on a straight-line basis over the lease term
within Net operating expenses.
The accounting policies applicable to the Group as a lessor in
the comparative period were not different from IFRS 16. However,
when the Group is an intermediate lessor the sub-leases are
classified with reference to the underlying asset.
2. Estimates
The preparation of condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amount of assets and liabilities, income and expense.
Actual results may differ from these estimates.
Except as described below, in preparing these condensed
consolidated 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 that applied to the consolidated financial statements
as at and for the year ended 30 June 2019, namely the valuation of
defined benefit pension obligations, the valuation of the Group's
acquired goodwill and the recognition of revenue and profit on
contracts with customers where revenue is recognised over time.
During the six months ended 31 December 2019, management
reassessed and updated its estimates in respect of retirement
benefit obligations based on market data available at 31 December
2019. The resulting impact was a GBP1.5 million pre-tax actuarial
loss, calculated using IAS 19 conventions, recognised in the six
month period to 31 December 2019.
3. Risks and uncertainties
A summary of the Group's principal risks and uncertainties was
provided on pages 22 and 23 of Alumasc's Report and Accounts 2019.
The Board considers these risks and uncertainties remain relevant
to the current financial year.
Specific risks and uncertainties relating to the Group's
performance in the second half year are:
1. Impact of economic and political risks
The Group expects strong second half trading for the reasons set
out in the Review of Interim Results.
Changes to the economic and political backdrop, for example
progress with the UK/EU free trade agreement, international trade
barriers and events in the Middle East could impact customer
demand, the timing of construction projects and/or inflation and
input costs, and therefore the Group's second half revenue
performance and/or profit realisation.
A prolonged period of bad UK weather (such as that experienced
in 2018) could also impact second half revenue and profit
realisation.
2. Impairment of assets risk
As set out in note 14 to the Group's 2019 annual report, there
is limited headroom between the value in use of the Levolux
business (cash generating unit) and its carrying value in the
balance sheet, which includes acquired goodwill of GBP10.2 million.
Should the ongoing restructuring and recovery plans at Levolux
result in a future business that is smaller and/or less profitable
than currently anticipated, the goodwill carried on the balance
sheet could become partially impaired. This position will be
re-assessed at the financial year end.
4. Underlying to statutory profit reconciliation
Half year Half year Year to
to 31 December to 31 December 30 June
Profit before tax 2019 2018 2019
GBP'000 GBP'000 GBP'000
Underlying profit before tax 2,280 2,259 5,584
Brand amortisation (119) (119) (238)
IAS 19 net pension scheme finance costs (160) (196) (373)
IAS 19 past service cost in respect
of GMP equalisation - (1,111) (1,111)
IAS 19 Settlement gain on merger of
pension schemes - - 324
AIM re-listing costs - - (180)
Restructuring & relocation costs (194) (214) (3,021)
Continuing operations 1,807 619 985
Profits/gains relating to discontinued
operations (note 5) 339 2,800 2,945
Statutory profit before tax 2,146 3,419 3,930
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
Operating profit 2019 2018 2019
GBP'000 GBP'000 GBP'000
Underlying operating profit 2,527 2,402 5,865
Brand amortisation (119) (119) (238)
IAS 19 past service cost in respect
of GMP equalisation - (1,111) (1,111)
IAS 19 Settlement gain on merger of
pension schemes - - 324
Restructuring & relocation costs (194) (214) (3,021)
AIM re-listing costs - - (180)
Continuing operations 2,214 958 1,639
Profits/gains relating to discontinued
operations (note 5) - 163 163
Statutory operating profit 2,214 1,121 1,802
=============== =============== ========
In the presentation of underlying profits, management treats the
amortisation of acquired brands and IAS 19 pension costs
consistently as non-underlying items because they are material
non-cash and non-trading items that typically would be excluded in
assessing the value of the business.
In addition, management has presented the following items as
non-underlying as they are non-recurring items that are judged to
be significant enough to affect the understanding of the underlying
trading performance of the business:
- The one-off profits and gains relating to the Alumasc Facades
business that was divested by the Group on 31 October 2018 and
treated as a discontinued operation (note 5);
- Restructuring and relocation costs in 2018/19 and 2019/20.
- The one-off IAS 19 past service pension cost relating to
Guaranteed Minimum Pension ("GMP") equalisation between men and
women, following a High Court decision on 26 October 2018;
- The one-off settlement gain arising from the merger of the
Group's pension schemes on 5 March 2019;
- The one-off professional fees incurred in connection with the
re-listing of Alumasc's shares from the main market to the
Alternative Investment Market ("AIM") on 25 June 2019;
5. Discontinued operations
The Alumasc Facades business, divested by the Group on 31
October 2018 has been classified as a discontinued operation. The
income in the current period relates to deferred consideration:
Half year Half year Year to
to 31 December to 31 December 30 June
2019 2018 2019
GBP'000 GBP'000 GBP'000
Revenue - 3,763 3,763
Operating profit - 163 163
Net gain on disposal of discontinued
operation 339 2,637 2,782
Profit before taxation 339 2,800 2,945
Tax charge - (33) (33)
Profit after taxation 339 2,767 2,912
=============== =============== ========
Half year Half year Year to
to 31 December to 31 December 30 June
2019 2018 2019
GBP'000 GBP'000 GBP'000
Gross sales proceeds 339 4,500 4,500
Transaction costs of disposal - (100) (100)
Cash cost of consequential restructuring/decommissioning - (225) (514)
Net sales proceeds at period end 339 4,175 3,886
Provisions for restructuring/decommissioning - (777) (343)
Sales proceeds after restructuring/decommissioning 339 3,398 3,543
Net assets disposed of:
Plant & equipment - (84) (84)
Working capital at completion - (677) (677)
Net gain on disposal 339 2,637 2,782
=============== =============== ========
6. Segmental analysis - continuing operations
In accordance with IFRS 8 Operating Segments, the segmental
analysis below follows the Group's internal management reporting
structure.
As described in the Operational Review, the Group changed its
operating segments effective from 1 July 2019 to reflect the
previously announced formation of the Building Envelope division at
that date. This division comprises Alumasc Roofing and Levolux.
Internal management reporting to the Chief Operating Decision Maker
has been realigned accordingly. Previously Alumasc Roofing was part
of the Roofing & Water Management division and Levolux was a
separate segment. Comparative information has been re-stated to
reflect the new segments.
The Group sold the Alumasc Facades business on 31 October 2018.
This was treated as a discontinued operation (note 5). Revenues and
operating results from this business have been excluded from the
segmental analysis below.
Segmental
operating
Revenue result
Half Year to 31 December 2019 GBP'000 GBP'000
Water Management 17,619 2,436
Building Envelope 18,178 (269)
Housebuilding Products 5,302 919
------- ----------
Sub-total 41,099 3,086
Unallocated costs (559)
Total 41,099 2,527
======= ==========
6. Segmental analysis - continuing operations (continued)
GBP'000
Segmental operating result 2,527
Brand amortisation (119)
Restructuring & relocation costs (194)
Total operating profit 2,214
=======
Segmental
operating
Revenue result
Half Year to 31 December 2018 (re-stated) GBP'000 GBP'000
Water Management 19,002 1,572
Building Envelope 19,749 320
Housebuilding Products 5,594 883
------- ----------
Sub-total 44,345 2,775
Unallocated costs (373)
Total 44,345 2,402
======= ==========
GBP'000
Segmental operating result 2,402
Brand amortisation (119)
Past service cost in respect of GMP equalisation (1,111)
Restructuring & relocation costs (214)
Total operating profit 958
==========
Segmental
operating
Revenue result
GBP'000 GBP'000
Full Year to 30 June 2019 (re-stated)
Water Management 38,902 4,256
Building Envelope 39,804 555
Housebuilding Products 11,398 1,732
------- ----------
Sub-total 90,104 6,543
Unallocated costs (678)
Total 90,104 5,865
======= ==========
GBP'000
Segmental operating result 5,865
Brand amortisation (238)
Past service cost in respect of GMP equalisation (1,111)
Settlement gain on merger of pension schemes 324
Restructuring & relocation costs (3,021)
AIM re-listing costs (180)
Total operating profit 1,639
=======
7. Finance expenses
Half year Half year
to to Year to
31 December 31 December 30 June
2019 2018 2019
GBP'000 GBP'000 GBP'000
Finance costs - Bank overdrafts 17 11 38
- Revolving credit facility 154 132 243
- Interest on lease liabilities 76 - -
------------ ------------ --------
247 143 281
- IAS 19 net pension scheme finance
costs 160 196 373
407 339 654
============ ============ ========
8. Tax expense
Half year Half year Year to
to 31 December to 31 December 30 June
2019 2018 2019
GBP'000 GBP'000 GBP'000
Current tax:
UK corporation tax - continuing operations 300 263 (69)
- discontinued operations - 33 33
Overseas tax - - 3
Amounts over provided in previous years (10) - (21)
Total current tax 290 296 (54)
Deferred tax:
Origination and reversal of temporary
differences 99 94 406
Amounts over provided in previous years (23) - (20)
Rate change adjustment - - (43)
Total deferred tax 76 94 343
Total tax expense 366 390 289
---------------- ---------------- ---------
Tax charge on continuing operations 366 357 256
Tax charge on discontinued operations - 33 33
Total tax expense 366 390 289
---- ---- ----
Deferred tax recognised in other comprehensive
income:
Actuarial (losses)/gain on pension
schemes (262) (24) 24
Cash flow hedges (34) 20 54
Tax (credited)/charged to other comprehensive
income (296) (4) 78
Total tax charge in the statement of
comprehensive income 70 386 367
====== ===== ====
9. Dividends
The Directors have approved an interim dividend per share of
2.95 pence (2018/19: 2.95 pence) which will be paid on 7 April 2020
to shareholders on the register at the close of business on 6 March
2020. The cash cost of the dividend is expected to be GBP1,055,000.
In accordance with accounting requirements, as the dividend was
approved after the statement of financial position date, it has not
been accrued in the interim consolidated financial statements. A
final dividend per share of 4.4 pence in respect of the 2018/19
financial year was paid at a cash cost of GBP1,574,000 during the
six months to 31 December 2019.
10. Share Based Payments
During the period the Group awarded 160,000 options (2018/19:
90,000) under the Executive Share Option Scheme ("ESOS"). These
options have an exercise price of 82.5 pence and require certain
criteria to be fulfilled before vesting. No existing options
(2018/19: none) were exercised during the period and 130,000
existing options lapsed (2018/19: 200,000).
Total awards granted under the Group's Long Term Incentive Plans
("LTIP") amounted to 219,078 (2018/19: 373,267). LTIP awards have
no exercise price but are dependent on certain vesting criteria
being met. No existing LTIP awards were exercised during the period
(2018/19: 42,166) and 253,208 existing LTIP awards lapsed (2018/19:
222,464).
11. Earnings per share
Basic earnings per share is calculated by dividing the net
profit for the period attributable to ordinary equity shareholders
of the parent by the weighted average number of ordinary shares in
issue during the period. Diluted earnings per share is calculated
by dividing the net profit attributable to ordinary equity
shareholders of the parent by the weighted average number of
ordinary shares in issue during the period, after allowing for the
exercise of outstanding share options. The following sets out the
income and share data used in the basic and diluted earnings per
share calculations:
Half year Half year Year to
to 31 December to 31 December 30 June
2019 2018 2019
GBP'000 GBP'000 GBP'000
Net profit attributable to equity
holders of the parent - continuing
operations 1,441 262 729
Net profit attributable to equity
holders of the parent - discontinued
operations 339 2,767 2,912
---------------- ---------------- -------------
1,780 3,029 3,641
---------------- ---------------- -------------
000s 000s 000s
Basic weighted average number of
shares 35,764 35,983 35,956
Dilutive potential ordinary shares
- employee share options 16 23 153
Diluted weighted average number of
shares 35,780 36,006 36,109
================ ================ =============
Half year Half year Year to
to 31 December to 31 December 30 June
2019 2018 2019
Pence Pence Pence
Basic earnings per share:
Continuing operations 4.0 0.7 2.0
Discontinued operations 1.0 7.7 8.1
5.0 8.4 10.1
================ ================ =============
Diluted earnings per share:
Continuing operations 4.0 0.7 2.0
Discontinued operations 1.0 7.7 8.1
5.0 8.4 10.1
================ ================ =============
11. Earnings per share (continued)
Calculation of underlying earnings per share from continuing
operations:
Half year Half year Year to
to 31 December to 31 December 30 June
2019 2018 2019
GBP'000 GBP'000 GBP'000
Reported profit before taxation from
continuing operations 1,807 619 985
Brand amortisation 119 119 238
IAS 19 net pension scheme finance
costs 160 196 373
Pension GMP equalisation - 1,111 1,111
Winding up lump sums - - (324)
Restructuring & relocation costs 194 214 3,021
AIM re-listing costs - - 180
Underlying profit before taxation
from continuing operations 2,280 2,259 5,584
Tax at underlying Group tax rate
of 19.6%
(2018/19 first half year: 20.3%;
full year: 20.4%) (447) (459) (1,139)
Underlying earnings from continuing
operations 1,833 1,800 4,445
---------------- ---------------- -------------
Weighted average number of shares 35,764 35,983 35,956
---------------- ---------------- -------------
Underlying earnings per share from
continuing operations 5.1p 5.0p 12.4p
================ ================ =============
12. Movement in net bank cash/(debt)
Cash and Bank Net bank
bank overdrafts loans debt
GBP'000 GBP'000 GBP'000
At 1 July 2018 4,656 (9,468) (4,812)
Cash flow movements 1,013 3,500 4,513
Non-cash movements - (14) (14)
Effect of foreign exchange rates 16 - 16
At 31 December 2018 5,685 (5,982) (297)
================ ======= =========
Cash and Bank Net bank
bank overdrafts loans debt
GBP'000 GBP'000 GBP'000
At 1 July 2019 2,762 (7,857) (5,095)
Cash flow movements 1,484 (3,000) (1,516)
Non-cash movements - (26) (26)
Effect of foreign exchange rates (8) - (8)
At 31 December 2019 4,238 (10,883) (6,645)
================ ======== =========
13. Related party disclosure
The Group has a related party relationship with its Directors
and with its UK pension schemes. There has been no material change
in the nature of the related party transactions described in the
Report and Accounts 2019. Related party information is disclosed in
note 28 of that document.
14. IFRS 16 impact of transition and first half year
Transition
The Group applied IFRS 16 using the modified retrospective
approach, under which the cumulative effect of initial application
would be recognised in retained earnings at 1 July 2019.
Impact on 6 months to 31 December 2019
On transition to IFRS 16, the Group recognised an additional
GBP5.0 million of right-of-use assets and lease liabilities with no
net amount required to be recognised in retained earnings. In
summary, the impact on the statement of financial position at 31
December 2019 is set out below. The impact on the interim statement
of comprehensive income is to reduce the reported profit for the
period by GBP34,000, being an improvement in operating profit of
GBP42,000 offset by an increase in interest expense of GBP76,000.
The net impact on the Group's cash flows is GBPnil, however cash
flows from operating activities have improved by GBP249,000 with
cash flows from financing activities reducing by the same amount.
Further details of the impact are shown within note 1.
As would have As reported
under IFRS
been reported Effect 16
As at 31 December 2019: GBP'000 GBP'000 GBP'000
Property, plant & equipment 11,652 4,820 16,472
Lease liabilities - (4,854) (4,854)
Other net assets 12,587 - 12,587
Net Assets 24,239 (34) 24,205
============= ======= ===========
When measuring lease liabilities, the Group discounted lease
payments using its incremental borrowing rate at 1 July 2019. The
weighted-average rate applied is 3.1%.
The following reconciles the operating lease commitment
disclosed at 30 June 2019 with the amount recognised on the balance
sheet at 1 July 2019:
1 July 2019
GBP'000
Operating lease commitment at 30 June 2019 7,466
Discounted using the incremental borrowing rate at 1
July 2019 (1,629)
Recognition exemption for:
* Short term leases (438)
* Leases of low-value assets (372)
Lease liabilities recognised at 1 July 2019 5,027
===========
Responsibility Statement
The Directors confirm that, to the best of their knowledge the
condensed consolidated interim financial statements have been
prepared in accordance with Alternative Investment Market ("AIM")
Rule 18.
On behalf of the Board
G P Hooper A Magson
Chief Executive Group Finance Director
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR KKNBPFBKDNBK
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