TIDMCTO
RNS Number : 3830S
TClarke PLC
14 July 2022
TClarke plc
Half year results for the six months ended 30 June 2022
TClarke posts record half year results as it closes in on
GBP500m revenue target
TClarke plc ("the Group" or "TClarke"), the Building Services
Group, announces its half year results for the period ended 30 June
2022.
Business Highlights:
-- First half year revenues exceed GBP200m for the first time
-- 2.9% operating margin achieved
-- Interim dividend increased by 67%
-- Full year 2022 revenues now expected to be circa GBP450m, ahead of market expectations
-- Record forward order book of GBP586m as at 30 June 2022
-- Bonding capacity increased to support GBP500m per annum revenues
-- Bank facilities extended to August 2026
Financial Highlights:
6 months to 30 June H1 2022 H1 2021
Revenue GBP206.2m GBP138.2m
Operating profit (EBIT) GBP6.0m GBP2.4m
Operating margin 2.9% 1.7%
Profit before tax GBP5.5m GBP1.9m
Earnings per share
(Basic) 10.24p 3.58p
Interim Dividend 1.25p 0.75p
Net Cash GBP7.2m GBP2.0m
Forward order book GBP586m GBP503m
---------- ----------
Earnings per share is calculated by dividing profit after tax by
the weighted average number of shares in issue
Trading
Trading has continued to be strong for the first six months of
2022 with revenue up 49% compared with the corresponding period
last year. Revenue growth has been experienced by all regions but
has been particularly strong in London where revenues at GBP125.1m
are 72% higher than in 2021. This growth is expected to continue
throughout the rest of 2022 with revenues for the full year now
expected to be circa GBP450m.
The growth in revenues has been supported by maintaining our
operating margin close to target levels at 2.9%; again driven by
the London business. London's operating margin for the first six
months of the current year is 4.6% (2021 1.4%), UK South operating
margin is 2.8% (2021 3.7%) and UK North operating margin is 2.7%
(2021 3.7%). After deducting group costs of GBP2.0m the overall
Group operating margin during the period is 2.9% (2021 1.7%).
Cash and Facilities
Good financial discipline is at the centre of our operations.
Net cash is GBP7.2m as at 30 June 2022; an increase of GBP5.2m
compared with 30 June 2021. Average month end net cash during H1
2022 is GBP3m.The principal cash movements are detailed in the
banking facilities section of this report.
In support of our growth strategy we have now put in place
banking facilities with NatWest comprising a GBP25m revolving
credit facility (RCF) which extends to August 2026 and a GBP5m
overdraft facility.
Many of our clients demand performance bonds to be in place as
part of the contract requirements. Due to the strength of the
business TClarke has at its disposal one of the largest bonding
capacities when compared to our recognised peer group. This too has
recently been increased to provide for a total bonding capacity of
GBP65.1m.
Dividend
The Board proposes an interim dividend of 1.25p per share (2021:
0.75p per share) to be paid on 30 September 2022 to shareholders on
the register at 2 September 2022. TClarke has a progressive
dividend policy and is also rebalancing the split between the
interim and final dividend. As a result the interim dividend now
proposed has been increased by the full amount of the expected
increase in total dividend for 2022.
Net Assets
Group net assets have increased by GBP8.6m in the six months to
30 June 2022 and now stand at GBP35.1m. This is principally due to
the increase in retained earnings and the post-tax reduction in
pension deficit.
Order Book
Our future confidence is underpinned with the success of the
Group's forward order book which has been replenished and expanded
and now stands at a new record of GBP586m. This is an GBP83m
increase compared to the position at 30 June 2021. In addition,
TClarke has many target projects and opportunities with our
pipeline of current bids exceeding GBP1bn.The split of the order
book is as follows:
30 June 30 June
Market Sector 2022 2021 Increase
GBPm GBPm %
-------- -------- ----------
Infrastructure 141 93 52%
-------- -------- ----------
Technology 184 132 39%
-------- -------- ----------
Residential &
Hotels 96 113 -15%
-------- -------- ----------
Engineering Services 151 153 -1%
-------- -------- ----------
Facilities Management 14 12 17%
-------- -------- ----------
Total 586 503 17%
-------- -------- ----------
Outlook
TClarke is moving rapidly towards achieving its 2023 GBP500m
annual revenue target whilst maintaining its operating margin. The
Board expects based upon the performance to date, revenues to
exceed current expectations for 2022 at circa GBP450m for the full
year.
Mark Lawrence, Chief Executive, commented
"With the current economic conditions, the business is rightly
cautious, however the strategy we follow is of a disciplined
tendering approach with early engagement with our supply chain
partners and our clients which is ensuring we are not exposed to
unnecessary risks.
The record half year revenues and forward order book along with
the current visibility of future workloads in our target revenue
streams mean TClarke now expects to deliver GBP450m revenue in 2022
and achieve its GBP500m target in 2023."
-ends-
Date: 14 July 2022
For further information contact:
TClarke plc
Mark Lawrence
Chief Executive Officer
Trevor Mitchell
Finance Director
Tel: 020 7997 7400
www.tclarke.co.uk
Cenkos Securities plc (Corporate
Broker)
Ben Jeynes (Corporate Finance)
Alex Pollen (Sales)
Tel: 020 7397 8900
www.cenkos.com
RMS Partners
Simon Courtenay
Tel: 020 3735 6551
Operational Review
The Group is managed in three operational areas, London, UK
South and UK North, providing nationwide coverage from twenty
locations across the UK.
We focus on repeat customers and framework contracts in the
following key markets:
-- Infrastructure
-- Residential & Hotels
-- Facilities Management
-- Engineering Services
-- Technologies
TClarke - London
30 06 2022 30 06 2021
GBPm GBPm
Revenue 125.1 72.8
----------- -----------
Operating profit 5.8 1.0
----------- -----------
Operating profit margin 4.6% 1.4%
----------- -----------
Order book 3 81 346
----------- -----------
London is the most significant of our three operating divisions
and includes our combined engineering services London business, our
London technology business and our off-site prefabrication facility
at Stansted.
The growth in revenue has been primarily driven by our success
of our data centre offering. Having successfully delivered a major
data centre in the first half of the year, we expect to continue to
deliver on the remaining (and larger) live data centre projects in
the second half of the year.
Our core Engineering Services have also continued to perform
strongly, delivering a number of high profile shell and core
commercial and hotel developments, which is reflected in the 3.2%
increase in operating margin from the same period of 2021.
TClarke - UK South
30 06 2022 30 06 2021
GBPm GBPm
Revenue 43.6 35.4
----------- -----------
Operating profit 1.2 1.3
----------- -----------
Operating profit margin 2.8% 3.7%
----------- -----------
Order book 86 57
----------- -----------
UK South operates from our offices at Birmingham, Derby, Oxford,
Kimbolton, Newport, Peterborough, Portishead, Plymouth and St
Austell, and is able to target a vast range of construction and
facilities management opportunities across the region.
The first half of the year has seen good revenue growth compared
to 2021, with strong performances in both our Security and Climate
divisions. Our new Oxford office is now fully operational having
started to trade in the first half of the year and is expected to
deliver a profit in its first full year. Our expectation is for
margins to recover during the second half of 2022, back to the UK
South's normal operating margin of circa 3.7%.
TClarke - UK North
30 06 2022 30 06 2021
GBPm GBPm
Revenue 37.5 30.0
----------- -----------
Operating profit 1.0 1.1
----------- -----------
Operating profit margin 2.7% 3.7%
----------- -----------
Order book 1 19 100
----------- -----------
The UK North division operates from five principal locations;
Liverpool, Manchester, Leeds, Newcastle and Eurocentral
Scotland.
The North West has made the most significant contribution to the
GBP1.0m operating profit including the successful delivery of a
major engineering services project in Manchester. The operating
margin has decreased by 1% compared to 2021 due to the business mix
in the first half of the year. Our expectation is for the UK North
to maintain an operating margin of circa 2.7% in the second half of
2022.
Pension Obligations
In accordance with IAS 19 'Employee Benefits', an actuarial gain
of GBP5.5m, net of tax, has been recognised in reserves during the
period, with the pension scheme deficit decreasing to GBP15.9m
(30th June 2021: GBP24.5m). The decrease in the deficit is largely
the result of the discount rate increasing to 3.82% (30(th) June
2021: 2.0%), partially offset by the hedging strategy employed by
the scheme. In accordance with the Group's agreed deficit reduction
plan, described in detail in the most recent annual report, the
annual deficit reduction contribution is set at GBP1.5m for the
current year, and will remain at this amount until the review of
the output of the triennial actuarial valuation of the scheme which
is currently in progress.
The scheme is closed to new members and the Group continues to
meet its ongoing obligations to the scheme.
Banking Facilities and Cash Flow
The Group has recently renewed its banking facilities, which now
comprise a GBP5m overdraft facility (previously GBP10m), repayable
on demand, and a GBP25m revolving credit facility ("RCF")
(previously GBP15m) expiring 31st August 2026. At 30 June 2022 the
Group had drawn down GBP5m (2021: GBP15m) of the RCF and the
overdraft facility was unutilised. The gross cash balance was
GBP11.9m, resulting in net cash of GBP7.2m. The Group therefore has
up to GBP37.2m available to support the Group's working capital
flows and funding demands during the course of the year. The Group
has GBP65.1m bonding facilities in place of which GBP26.3m were
utilised at 30 June 2022.
The net cash figure of GBP7.2m is GBP5.2m higher than at the
same time in 2021 reflecting profit for the period and other
non-operating cashflows, as set out below:
GBPm
--------------------------- ------
Balance 1 July 2021 2.0
--------------------------- ------
Profit after tax 9.2
Dividends (2.1)
Pension deficit reduction (1.5)
Employee Share Trust
Share Purchase (0.5)
Other 0.1
Balance at 30 June
2022 7.2
--------------------------- ------
Net Assets and Capital Structure
The Group is funded by equity capital, retained reserves and
bank facilities, and there are no plans to change this.
Shareholders' equity is GBP35.1m; an increase of GBP16.1m compared
to 30 June 2021.
Condensed consolidated income statement
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Revenue 206.2 138.2 327.1
Cost of sales (181.5) (123.0) (286.6)
----------- ----------- -----------
Gross profit 24.7 15.2 40.5
Administrative expenses (18.7) (12.8) (31.7)
----------- ----------- -----------
Operating profit 6.0 2.4 8.8
Finance costs (0.5) (0.5) (1.0)
----------- ----------- -----------
Profit before taxation 5.5 1.9 7.8
Taxation (1.1) (0.4) (1.5)
----------- ----------- -----------
Profit for the period 4.4 1.5 6.3
Earnings per share
Attributable to owners of TClarke
plc
Basic 10.24p 3.58p 14.99p
Diluted 10.17p 3.38p 13.91p
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Profit for the period 4.4 1.5 6.3
Other comprehensive income
Items that will not be reclassified
to profit or loss
Actuarial gain on defined benefit
pension scheme, net of tax 5.5 4.4 6.0
Other comprehensive income for the
period, net of tax 5.5 4.4 6.0
Total comprehensive income for
the period 9.9 5.9 12.3
----------- ----------- -----------
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Non-current assets
Intangible assets 25.3 25.3 25.3
Property, plant and equipment 12.5 7.6 7.5
Deferred taxation 4.4 5.2 6.4
Trade and other receivables 4.9 3.2 4.9
Total non-current assets 47.1 41.3 44.1
----------- ----------- -----------
Current assets
Inventories 0.4 0.4 0.4
Amounts due from customers under construction
contracts 69.8 56.4 51.7
Trade and other receivables 39.9 37.3 52.5
Current tax receivables 0.2 0.6 0.2
Cash and cash equivalents 12.2 17.0 20.3
----------- ----------- -----------
Total current assets 122.5 111.7 125.1
----------- ----------- -----------
Total assets 169.6 153.0 169.2
----------- ----------- -----------
Current liabilities
Borrowings (5.0) (15.0) (15.0)
Amounts due to customers under construction
contracts (2.5) (1.8) (2.9)
Trade and other payables (101.9) (85.8) (96.3)
Obligations under leases (1.8) (1.2) (1.6)
----------- ----------- -----------
Total current liabilities (111.2) (103.8) (115.8)
----------- ----------- -----------
Net current assets 11.3 7.9 9.3
----------- ----------- -----------
Non-current liabilities
Obligations under leases (5.7) (2.0) (1.3)
Deferred tax liabilities - (0.2) -
Trade and other payables (1.7) (3.5) (1.7)
Retirement benefit obligation (15.9) (24.5) (23.9)
Total non-current liabilities (23.3) (30.2) (26.9)
----------- ----------- -----------
Total liabilities (134.5) (134.0) (142.7)
Net assets 35.1 19.0 26.5
----------- ----------- -----------
Equity attributable to owners of the
parent
Share capital 4.4 4.3 4.4
Share premium 4.4 3.8 4.2
Revaluation reserve 0.7 0.9 0.7
Retained earnings 25.6 10.1 17.2
----------- ----------- -----------
Total equity 35.1 19.0 26.5
----------- ----------- -----------
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Net cash generated by / (used in) operating
activities (see note 5A) 5.3 (5.3) (0.6)
----------- ------------- -----------
Investing activities
Purchase of property, plant and equipment (0.6) (0.1) (0.4)
Net cash used in investing activities (0.6) (0.1) (0.4)
Financing activities
New shares issued 0.2 0.5
Facility fee - - (0.1)
Repayment of bank borrowing (10.0) - -
Equity dividends paid (1.8) (1.5) (1.9)
Acquisition of shares by ESOT (0.5) (0.5) (0.9)
Repayment of lease obligations (0.7) (0.8) (1.5)
Net cash used in financing activities (12.8) (2.8) (3.9)
----------- ------------- -----------
Net decrease in cash and cash equivalents (8.1) (8.2) (4.9)
Cash and cash equivalents at beginning
of period 20.3 25.2 25.2
----------- ------------- -----------
Cash and cash equivalents at end of period
(see note 5) 12.2 17.0 20.3
----------- ------------- -----------
Condensed consolidated statement of changes
in equity
For the six months ended 30th June 2022
Share Share Revaluation Retained
capital premium reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
At 1st January 2022 4.4 4.2 0.7 17.2 26.5
---------- ---------- ---- ------------ ----------- ---------
Comprehensive income
Profit for the period - - - 4.4 4.4
Other comprehensive income
Actuarial gain on retirement
benefit obligation - - - 7.5 7.5
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - (2.0) (2.0)
Total other comprehensive
income - - - 5.5 5.5
---------- ---------- ---- ------------ ----------- ---------
Total comprehensive income - - - 9.9 9.9
---------- ---------- ---- ------------ ----------- ---------
Transactions with owners
Share based payment debit - - - 0.8 0.8
Shares acquired by ESOT - - - (0.5) (0.5)
Allotted in respect of share
option schemes - 0.2 - - 0.2
Dividends paid - - - (1.8) (1.8)
---- ------------
Total transactions with owners - - - (1.5) (1.3)
---------- ---------- ---- ------------ ----------- ---------
At 30th June 2022 4.4 4.4 0.7 25.6 35.1
---------- ---------- ---- ------------ ----------- ---------
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2021
Share Share Revaluation Retained
capital premium reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
At 1st January 2021 4.3 3.8 0.9 6.8 15.7
--------- --------- ------------ ---------- -------
Comprehensive income
Profit for the period - - - 1.5 1.5
Other comprehensive income
Actuarial gain on
retirement
benefit obligation - - - 5.5 5.5
Deferred income tax on
actuarial gain on
retirement
benefit obligation - - - (1.1) (1.1)
Total other comprehensive
income - - - 4.4 4.4
--------- --------- ------------ ---------- -------
Total comprehensive income - - - 5.9 5.9
--------- --------- ------------ ---------- -------
Total transactions with
owners - - - (2.6) (2.6)
--------- --------- ------------ ---------- -------
At 30th June 2021 4.3 3.8 0.8 10.1 19.0
--------- --------- ------------ ---------- -------
Condensed consolidated statement of changes in equity
For the year ended 31st December 2021
Share Share Revaluation Retained
capital premium reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
At 1st January 2021 4.3 3.8 0.9 6.8 15.7
--------- --------- ------------ ----------- -------
Comprehensive income
Profit for the year - - - 6.3 6.3
Other comprehensive income
Actuarial gain on retirement
benefit obligation - - - 5.6 5.6
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - 0.4 0.4
Total other comprehensive
income - - - 6.0 6.0
--------- --------- ------------ ----------- -------
Total comprehensive income - - - 12.3 12.3
--------- --------- ------------ ----------- -------
Transactions with owners
Transfer on depreciation of
freehold properties - - (0.1) 0.1 -
Share based payment credit - - - 0.8 0.8
Shares acquired by ESOT - - - (0.9) (0.9)
Allotted in respect of share
option schemes 0.1 0.4 - 0.5
Dividends paid - - - (1.9) (1.9)
Total transactions with owners 0.1 0.4 (0.1) (1.9) (1.5)
--------- --------- ------------ ----------- -------
At 31st December 2021 4.4 4.2 0.7 17.2 26.5
--------- --------- ------------ ----------- -------
Notes to the condensed consolidated financial statements for the
six months to 30 June 2022
Note 1 - Basis of preparation
TClarke plc (the 'Company') is a company incorporated and
domiciled in the United Kingdom. The nature of the Group's
operations and its principal activities are set out in Note 2 below
and in the interim management report. The consolidated interim
financial statements comprise the condensed financial statements of
the Company and its subsidiaries (together the 'Group').
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The statutory accounts for the year ended 31
December 2021 were approved by the Board of Directors on 08 March
2022 and have been delivered to the Registrar of Companies and a
copy has been made available on the Company's website at
www.tclarke.co.uk . The auditors' report on those accounts was
unqualified and did not contain any statement under section 498 of
the Companies Act 2006.
These condensed interim financial statements for the half year
ended 30 June 2022 have been prepared in accordance with the
UK-adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
They do not include all the information required for the full
annual financial statements and should be read in conjunction with
the financial statements of the Group as at and for the year ended
31 December 2021.
The interim financial statements have not been audited or
reviewed by the Company's auditors.
Accounting policies
Except as described below, the financial statements have been
prepared using the accounting policies and presentation that were
applied in the audited financial statements for the year ended 31
December 2021.
Taxes on income in the interim periods are accrued using the
estimated effective tax rate that would be applicable to expected
total annual earnings.
Estimates and financial risk management
The preparation of interim financial statements requires the
Directors to make judgements, estimates and assumptions about the
carrying amounts of assets and liabilities at the reporting date
and the amounts of revenue and expense incurred during the period
that may not be readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results
may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by the Directors in applying the Group's accounting
policies and the key sources of uncertainty together with the
Group's financial risk management objectives and policies were the
same as those that applied to the financial statements as at and
for the year ended 31st December 2021. The principal risks and
uncertainties continue to be those which are set out on pages 26-29
of the Group's annual report and accounts for the year ended 31st
December 2021.
Going concern
The Group has recently renewed its banking facilities, which now
comprise a GBP5m overdraft facility repayable on demand, and a
GBP25m revolving credit facility ("RCF") expiring 31st August 2026.
At 30 June 2022 the Group had drawn down GBP5m (2021: GBP15m) of
the RCF and the overdraft facility was. The gross cash balance was
GBP12.2m, resulting in net cash of GBP7.2m. The Group therefore has
up to GBP37.2m available to support the Group's working capital
flows and funding demands during the course of the year.
After making appropriate enquiries, the Directors are satisfied
that the Company and Group have adequate resources to continue
their operations for the foreseeable future. Accordingly, the
Directors continue to adopt the going concern basis in preparing
the financial statements.
Note 2 - Segmental information
The Group provides electrical and mechanical contracting and
related services to the construction industry and end users.
For management and internal reporting purposes the Group is
organised geographically into three regional divisions; London, UK
South & UK North, reporting to the Chief Executive, who is the
chief operating decision maker.
30 June 2022 London UK South UK North Group costs Total
and Unallocated
GBPm GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 125.1 43.6 37.5 - 206.2
------- --------- --------- ----------------- ------
Operating profit 5.8 1.2 1.0 (2.0) 6.0
Finance costs - - - (0.5) (0.5)
------- --------- --------- ----------------- ------
Profit/(loss) before tax 5.8 1.2 1.0 (2.5) 5.5
Taxation expense - - - (1.1) (1.1)
------- --------- --------- ----------------- ------
Profit/(loss) for the period 5.8 1.2 1.0 (3.6) 4.4
------- --------- --------- ----------------- ------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Engineering 38.2 10.5 9.3 58.0
Facilities Management 1.5 9.7 5.8 17.0
Infrastructure 9.8 21.0 8.6 39.4
Residential 16.9 1.0 11.7 29.6
Technologies 58.7 1.4 2.1 62.2
Total revenue 125.1 43.6 37.5 206.2
--------- ----------- ----------- --------
30 June 2021 London UK South UK North Group costs Total
and Unallocated
GBPm GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 72.8 35.4 30.0 - 138.2
----------- ----------- --------- ----------------- ------------
Operating profit 1.0 1.3 1.1 (1.0) 2.4
Finance costs - - - (0.5) (0.5)
----------- ----------- --------- ----------------- ------------
Profit/(loss) before tax 1.0 1.3 1.1 (1.5) 1.9
Taxation expense - - - (0.4) (0.4)
----------- ----------- --------- ----------------- ------------
Profit/(loss) for the period 1.0 1.3 1.1 (1.9) 1.5
----------- ----------- --------- ----------------- ------------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
------------- ---------------- ----------------- --------
Facilities Management 1.0 1.1 4.4 6.5
Infrastructure 9.3 22.8 12.2 44.3
Engineering Services 37.2 6.0 1.8 45.0
Residential & Hotels 12.6 5.3 11.0 28.9
Technologies 12.7 0.2 0.6 13.5
Total revenue 72.8 35.4 30.0 138.2
------------- ---------------- ----------------- --------
31 December 2021 London UK South UK North Group costs Total
and Unallocated
GBPm GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 189.4 67.1 70.6 - 327.1
------- ----------- --------- ----------------- --------
Operating profit/(loss) 6.2 2.6 3.0 (3.0) 8.8
Finance costs - - - (1.0) (1.0)
------- ----------- --------- ----------------- --------
Profit/(loss) before tax 6.2 2.6 3.0 (4.0) 7.8
Taxation expense - - - (1.5) (1.5)
------- ----------- --------- ----------------- --------
Profit/(loss) for the year 6.2 2.6 3.0 (5.5) 6.3
------- ----------- --------- ----------------- --------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
---------------- ------------- ----------------- ----------
Facilities Management 2.7 13.6 9.7 26.0
Infrastructure 15.1 34.4 29.3 78.8
Engineering Services 91.7 14.3 10.9 116.9
Residential & Hotels 31.5 4.8 19.6 55.9
Technologies 48.4 - 1.1 31.5
Total revenue 189.4 67.1 70.6 327.1
---------------- ------------- ----------------- ----------
Note 3 - Taxation expense
The effective corporation tax rate applied for the period is
19.0% (30 June 2021: 19.0%).
Note 4 - Earnings per share
A. Basic earnings per share
The earnings per share represent the profit for the period
divided by the weighted average number of ordinary shares in
issue.
Unaudited Unaudited Audited
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Earnings
Profit attributable to owners of the
Company 4.4 1.5 6.3
Weighted average number of ordinary
shares (000s) 42,988 41,898 42,284
------------ ------------ -------------
Basic earnings per share 10.24p 3.58p 14.99p
------------ ------------ -------------
B. Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has two categories of dilutive potential ordinary shares: share
options granted under the Company's SAYE schemes, and conditional
share awards granted under the Long-Term Incentive Plan. Further
details of these schemes are given in note 18 of the 2021 annual
report and financial statements .
Unaudited Unaudited Audited
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Earnings
Profit attributable to owners of the
Company 4.4 1.5 6.3
4.4 1.5 6.3
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 42,988 41,898 42,284
Adjustments
SAYE Share Options (000s) 278 451 471
Long-Term Incentive Plan Conditional
share awards (000s) - 1,982 2,790
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 43,266 44,331 45,545
------------ ------------ -------------
Diluted earnings per share 10.17p 3.38p 13.91p
------------ ------------ -------------
Note 5 - Notes to the consolidated statement of cash flows
Unaudited Unaudited Audited
A. - Reconciliation of operating profit 30 06 2022 30 06 2021 31 12 2021
to net cash from operating activities GBPm GBPm GBPm
Operating profit 6.0 2.4 8.8
Depreciation charges 1.1 1.0 2.0
Equity settled share based payments 0.8 (0.6) 0.8
Additional pension contributions (0.8) (0.8) (1.5)
Defined benefit pension scheme movement 0.2 0.2 0.4
Operating cash flows before movements
in working capital 7.3 2.2 10.5
Increase in contract balances (18.1) (14.0) (8.2)
Decrease / (Increase) in operating trade
and other receivables 11.3 (2.4) (18.8)
Increase in operating trade and other
payables 5.0 9.2 16.4
------------ ------------ ------------
Cash generated by / (used in) operating
activities 5.5 (5.0) (0.1)
Interest paid (0.2) (0.3) (0.5)
------------ ------------ ------------
Net cash generated by / (used in) operating
activities 5.3 (5.3) (0.6)
------------ ------------ ------------
B. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank less bank
overdrafts.
Note 6 - Related party transactions
Transactions between the Company and its subsidiary
undertakings, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. Full disclosure
of the Group's other related party transactions is given in Note 21
to the Group's financial statements for the year ended 31 December
2021. There have been no material changes in these relationships in
the six months ended 30 June 2022 that have materially affected the
financial position or performance of the Group during that
period.
Note 7 - Pension commitments
The present value of the defined benefit retirement benefit
scheme and the related past and current service costs were measured
using the projected unit credit method. The amount included in the
statement of financial position arising from the Group's
obligations in respect of its defined benefit retirement benefit
scheme is as follows:
Unaudited Unaudited Audited
30 06 2022 30 06 2021 31 12 2021
GBPm GBPm GBPm
Present value of defined benefit
obligations 51.2 69.9 73.4
Fair value of scheme assets (35.3) (45.4) (49.5)
------------- ------------- -------------
Deficit in scheme recognised
in the statement of financial
position 15.9 24.5 23.9
Key assumptions used
Rate of increase in salaries 2.49% 2.90% 3.39%
Rate of increase of pensions
in payment 3.11% 3.10% 3.15%
Discount rate 3.82% 2.00% 1.89%
Inflation assumption (RPI) 3.19% 3.20% 3.25%
Inflation assumption (CPI) 1.99% 2.40% 2.05%
Unaudited Audited
Mortality assumptions (years) 30 06 2022 Unaudited 31 12 2021
30 06 2021
Life expectancy at age 65 for
current pensioners:
Men 21.2 21.8 21.5
Women 23.2 24.1 23.4
Life expectancy at age 65 for
future pensioners
(current age 45)
Men 22.1 22.8 22.5
Women 24.3 25.3 24.6
Statement of Directors' responsibilities
The Directors confirm that the condensed interim financial
statements have been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' and that the
interim management report 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 and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
On behalf of the Board
Iain McCusker - Chairman
Mark Lawrence - Chief Executive
Trevor Mitchell - Finance Director
14 July 2022
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END
IR ZZGMNFFDGZZM
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July 14, 2022 02:00 ET (06:00 GMT)
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